The Japan Financial Services Agency published the results of the 152nd and 153rd Automobile Liability Insurance Council meetings, which concluded that compulsory automobile liability insurance rates should be raised from November 2026 to bring premiums more closely into line with the scheme’s income and expenditure. Based on the new standard rate notified by the Non-Life Insurance Rate Calculation Organization, the increase will average 6.2% across all vehicle types. For private passenger cars, the standard rate for a two-year policy will rise to JPY 18,560 from JPY 17,650, a 5.2% increase, in areas outside remote islands and Okinawa Prefecture. Supporting data presented to the council showed verified loss ratios of 128.7% for contract year 2025 and 127.3% for 2026, compared with a planned loss ratio of 133.5% used in the previous April 2023 revision. The council cited a slowdown in the decline in accident frequency, higher average claim costs driven in part by medical expenses, and a fall in the balance of outstanding funds to about JPY 521.5 billion at end-FY2025 from about JPY 724 billion at end-FY2022. It also noted rising company expenses and agency fees, which form part of additional premiums, leaving the current premium level insufficient. At the 153rd meeting, the council also considered changes to the premium and liability reserve calculation method, including using the expense calculation standard when calculating the surcharge reserve fund and requiring council consultation if a revised expense calculation standard is applied. It raised no special objections to approval requests linked to the introduction of the One-JIBAI underwriting and contract management system and the s-JIBAI claims investigation system, as well as legal changes to enable digitization of claim-related documents between cooperatives and insurance companies. The General Insurance Association of Japan separately reported that non-face-to-face procedures such as transfers and cancellations had exceeded the 40% quantitative threshold, prompting the establishment of a third-party committee to review expense calculation standards.
Japan Financial Services Agency 2026-05-11
Japan Financial Services Agency council backs November 2026 compulsory automobile liability insurance rate increase averaging 6.2%
The Japan Financial Services Agency published results of the 152nd and 153rd Automobile Liability Insurance Council meetings, which concluded that compulsory automobile liability insurance premiums should be raised from November 2026, with an average increase of 6.2%. For private passenger cars, the standard two-year policy rate will rise by 5.2% to JPY 18,560, reflecting higher loss ratios, rising claim costs and expenses, and declining funds. The council also reviewed premium and liability reserve calculation methods, endorsed system and legal changes to support digitalisation, and noted that non-face-to-face procedures now exceed 40%, triggering a third-party review of expense calculation standards.