In 2026, motorists in Japan can expect a significant rise in auto insurance premiums, driven by escalating repair costs and a surge in traffic accidents exacerbated by inflation.
The General Insurance Rating Organization of Japan, representing non-life insurers, is planning to increase its reference premium rates for optional insurance by an average of 5.7%, sources informed The Japan News on Monday. These adjustments are expected to be implemented by insurance companies across the country starting January 2026.
The annual review conducted by the rating organization considers insurance payment data and other relevant factors to determine these rates. The proposed increase, aimed at addressing rising payment trends, will soon be submitted to the Financial Services Agency for approval.
China’s Motor Insurance Market Set for Growth
Meanwhile, in China, the motor insurance market is projected to expand steadily, with gross written premiums (GWP) forecasted to grow from CNY 912.2 billion (US$127.4 billion) in 2024 to CNY 1,125.7 billion (US$158.9 billion) by 2028, reflecting a compound annual growth rate (CAGR) of 5.4%.
GlobalData’s Insurance Database highlights a growth rate of 5.2% in 2024, driven by increased vehicle sales, rising demand for new energy vehicles (NEVs), and favorable regulatory changes.
Sutirtha Dutta, an insurance analyst at GlobalData, noted, “The Chinese motor insurance market rebounded with 5.6% growth in 2022 and 2023, following a decline in 2021. Economic recovery post-COVID-19 and robust vehicle sales have bolstered this growth trend, expected to continue through 2024 and 2025.”
Rise in Vehicle Sales and NEV Adoption
The China Association of Automobile Manufacturers (CAAM) reported a 10.6% increase in vehicle sales in the first quarter of 2024, reaching 6.72 million units. This growth is attributed partly to the rising popularity of NEVs, supported by government incentives promoting electric and hybrid vehicles.
Dutta highlighted, “NEVs, benefiting from a 10% purchase tax exemption and a CNY 10,000 vehicle trade-in subsidy, have seen substantial adoption. Their higher insurance premiums due to costly batteries and parts will further bolster motor insurance growth.”
In the first ten months of 2023, NEVs comprised 30% of total vehicle sales in China, underscoring the country’s global leadership in new energy passenger vehicles, with market share increasing from 41% in 2020 to 65% in 2023.
