Several motor insurance providers in Japan are promoting more affordable policies aimed at younger consumers, as part an effort to increase new car sales amid declining interest among Japanese youth.
According to industry officials, more young people in Japan have been losing interest in owning a car, and one of the most regularly cited reasons is high insurance premiums.
“We are seeking to encourage [young people] to buy cars by reducing the financial burden for them to sign up for collision coverage,” a Sompo Japan official told Japan Today. The official added that the number of insurance policies has seen year-on-year increases since the insurer introduced the expanded discounts in January.
Meanwhile, Aioi Nissay Dowa Insurance has released a simplified car insurance policy for younger drivers. It offers only the most basic coverage, leading to premiums that are around 10% lower than the company’s regular products.
The insurer also released a temporary auto insurance policy, for young drivers who do not have a car of their own, but drive a rental car or borrow a friend’s car from time to time. The “One Day Support” policy is valid only for one day and costs just ¥1,500 with collision coverage and ¥500 without.
Usually, younger drivers pay higher premiums due to the perception by insurance companies that they are inexperienced and high-risk drivers. This leads to a decline in car ownership, affecting both automakers and auto insurers.
In 2017, Sony Assurance Inc. surveyed 1,000 18-year olds and it found out that 56.3% had driving licences, but just 16.8% had their own car. While almost half (48.9%) said that they were interested in buying a car, close to seven in 10 (68.4%) said that they could not afford it.
Related stories:
Tesla offers lifetime insurance and maintenance for its vehicles
This sock puppet will sell you car insurance
Increased car safety could hurt auto insurers
