GIAJ Chairman's Statement released on December 18, 2008 (Summary translation)(Dec. 19, 2008

Mr. Makoto Hyodo, Chairman
Mr. Makoto Hyodo, Chairman

1. Introduction

According to the business results of the 26 GIAJ member companies for the first-half of fiscal 2008, net premiums written decreased by 2.6% over the previous year due to the decline of auto sales. Ordinary profits also decreased by 57.3% due to losses on revaluation of securities resulting from the global financial crisis, thus bringing quite severe results to the Japanese general insurance industry as a whole.

With the economic downturn accelerating at home and abroad, we suppose that this severe business environment will last for the time being. Nevertheless, we will continuously improve the quality of business processes and customer inter-relations and contribute to social safety and security, aiming at "consumer and socially-friendly general insurance".

2. Specific Measures and Actions

(1) Aiming at "consumer-friendly" general insurance (initiatives to improve the quality of business processes and customer inter-relations)

A. Holding an "Advisory Panel to Listen to Consumers' Voices"

On December 1, 2008, the "Advisory Panel to Listen to Consumers' Voices" met to discuss the GIAJ's main missions and the way forward as well as its activities so far. Based on the panel's views and proposals, we will steadily carry out our initiatives to improve the quality of business processes and customer inter-relations so as to provide consumers with high quality services.

B. Strengthening information service to consumers and customers

In September 2008, a hands-on learning session was held at a high school in Tokyo using "Freshers' Guide", a general insurance buyers' guidebook for the young, and we have received positive feedbacks from the students. Through such efforts, we will actively work on promoting consumers' better understanding of general insurance.

C. Enhancing the quality of agents and solicitors

A total of approximately 13,000 general insurance solicitors have passed the first expert examination on insurance products conducted in November 2008. In addition, under a new framework where solicitors are required to renew their credentials every five years, a total of around 82,000 solicitors have passed the renewal examinations which have been conducted six times so far.

D. Improving the quality of business processes and customer inter-relations based on consumers' voices

The GIAJ issued a leaflet for agents, entitled "Toward the Enhanced Quality of Soliciting Services", which has compiled information on customers' complaints filed with the GIAJ and the prevention measures. This leaflet is intended for general insurance agents and solicitors. We intend to prevent the same kind of complaints by making the most of this leaflet, and further enhance the quality of soliciting services of general insurance agents.

(2) Aiming at socially-friendly general insurance

A. Contributing to environmental protection

We participated in an environmental exhibition "Eco-Products 2008" which was held in Tokyo in December 2008. In the exhibition, we introduced an "Eco-Safe Driving" program which the GIAJ has continuously made efforts to promote so far.

B. Contributing to social safety and security

As part of contributing to social safety and security, the GIAJ conducted the following activities:

a. Holding a "Forum for Introduction to Traffic Accident-prone Intersections" in Fukuoka prefecture in October 2008.

b. Donation of 27 mini fire engines, 9 water pumps, and 10 high-tech ambulances to local governments and/or fire headquarters.

c. Holding of a fifth session of the "Exploration for Disaster Prevention Map Contest".

(3) Other initiatives

A. Strengthening the GIAJ's capacity to resolve consumer complaints

In light of discussions on consumer complaints and dispute resolution and an alternative dispute resolution (ADR) system across the Japanese financial industry as a whole, which have been taking place at the Financial Service Dispute Resolution Liaison Group and the Financial System Council, we will make every effort to increase the convenience of customers through the initiatives to enhance the effectiveness of the GIAJ's capacity to resolve consumers complaints.

B. Contributing to the global community

At the Annual Conference of the International Association of Insurance Supervisors (IAIS) held in October 2008, international supervisory papers were adopted including the standards and guidance papers related to solvency regulation. The GIAJ has so far actively expressed its views and opinions in the various IAIS committees as an observer, and will continue to support the setting up of better international supervisory standards.

C. Policy Requests and Proposals

The GIAJ's priority issues in its tax reform requests for fiscal 2009, i.e. "elimination of double taxation on dividends income" and "creation of new premium tax deduction system", were both adopted and included in the large package of tax revisions drawn up by the ruling parties. Furthermore, we submitted our requests for regulatory reform to the government in November 2008.

3. Conclusion

The Japanese financial and capital markets have been apparently affected by the global financial crisis especially for the last three months.

Even under such circumstances, the GIAJ will make best efforts to fulfill a social role in providing consumers with peace of mind in a steady manner by further ensuring appropriate risk management and maintaining financial strength.