GIAJ Submits a Report on the Underwriting Reserves for Natural Catastrophic Risks (Translation)
released on April 1, 2004
(April 26, 2004

GIAJ set up a working group in March 2003 and studied a new underwriting reserve system for natural hazards. The working group picked up contentions and drew up an interim report for the FSA last July. The working group has continued to study substantial plans for an introduction of a new reserve system and submitted the final report to the FSA on March 31.

The risks of natural hazards tend to increase worldwide. Protection against future natural disasters is an urgent issue for the industry as insurance products which cover risks of natural hazard have increased and their term of policies are lengthening. To cope with the situation, GIAJ has been studying an underwriting reserve system set aside as a liability for insurance claims from the aspect of an insurance company's financial health and for policyholder protection in the above working group.

Representatives from FSA, Non-Life Insurance Rating Organization and FNLIA participated in the discussion as observers. The attached is a summary of the report entitled "Study on the Underwriting Reserves for Natural Catastrophic Risks".

Report on the Underwriting Reserves for Natural Catastrophic Risks (PDF 74KB)