GIAJ Chairman's Statement released on December 16, 2010

"General insurance sincerely interacting with society in the spirit of mutual support -Challenge together with local communities-"
(Dec. 29, 2010

 I would like to report on our major initiatives since the last press interview in September, and express my views as follows:

1. Introduction

 According to the first half business results of our 26 member companies for fiscal 2010, net premiums written, which could be equivalent to sales revenue of general business companies, increased by 0.6% compared to the corresponding period last year thanks to the government policy effects such as the subsidies on eco-friendly cars. As for net claims payments, automobile insurance, which is a mainstay product in our market, registered an increase of 4.0% while the total amount for all classes of insurance decreased by 0.1%. Accordingly, a "combined ratio" which stands for the business balance of core general insurance business exceeded 100%, and it makes it quite difficult for us to make profits in an environment where asset investment would not turn up.

 For the second half of fiscal 2010, it is expected that the growth rate of the domestic general insurance market will slow down because of the sluggish sales of new cars caused by the termination of such subsidies on eco-friendly cars and other factors, and that an increasing loss ratio of automobile insurance will hover at a higher level. Thus our general insurance industry finds itself in a much more severe situation.

Mr. Hisahito Suzuki, Chairman

 As for the domestic economy, kinds of negative environmental factors at home and abroad have also cast a shadow over it Above all, the Japanese yen has become stronger at a rapid pace in the foreign exchange markets since later in the year. Although this appreciation of the Japanese yen has come to a standstill following the actions taken by the government and the Bank of Japan in the foreign exchange and financial markets, financial deregulation in the U.S, and the G20 statement as well. However, the level has remained in a severe situation compared to the level which many exporting companies expect.

 Moreover, people's anxiety over the progress of deflation in Japan and signs of deceleration of favorable overseas markets have made the economic outlook even more uncertain.

 In addition, a resurgence of people's anxiety over the financial situation in Europe and growing strains in diplomatic affairs in Japan and neighboring countries have become a factor of instability for the global economy, and it is concerned that this might be a new "headwind" for the Japanese economy.

 Against the background of these factors, it has been quite difficult for domestic corporations to draw a picture of perspectives for the future. This is symbolized by the fact that the percentage of university students graduating next spring who found work has registered a record-low level due to a significant reduction in corporations' hiring interests. With the advancement of an aging society with fewer children, there is growing concern that the vigor of the Japanese society as a whole will slow down due to decreasing chances for young people to forge the future of Japan.

 We, the general insurance industry, consider it important to fulfill our mission to "support the stability of society and development of the economy" and to "provide the public with security and safety" as well, all the more because we are now in a difficult situation. Furthermore, our member companies and the GIAJ itself intend to make efforts to address various issues by reconfirming the purpose of their roles.

2. Specific measures and actions

 Our major initiatives for the past three months and challenges for the future are as follows:

(1) Promotion of educational activities for consumers

 Under the policy of "supporting the growth of the young and children who are major players in the future", we have actively promoted educational activities for the "young and children".

 As for a "study course on general insurance for university students", we held a total of 156 courses as of the end of November this year as a result of having encouraged universities to provide it, which exceeds the last year's level. We recognize that this also reflects the increasing needs of universities and their students. In addition, with respect to a "series of study courses on general insurance" where university students can receive more systematic learning, we have so far received a favorable response from three more universities regarding the introduction of such study courses since the press interview in September this year.

 With respect to a "lecture program on general insurance for high school students", which is a new initiative for this year, the number of high schools which have decided to introduce such programs has shown steady growth as a result of our consistent appeal to local educational boards.

 As for the "Exploration for Disaster Prevention program for elementary school children", we have continued to encourage local fire-fighting groups of young people, mothers' groups for traffic safety, and other related groups so as to increase the number of participants in a map contest, and as a result of such efforts, we have received a record-high application of 1,607 maps from every prefecture just like last year.

 In the "contest of advertisements which are beneficial to consumers" held by the "Japan Advertisers Association Inc", a radio advertisement by the GIAJ has won a silver prize. I believe that this prize-winning is a result of our efforts to "provide consumers with easy-to-understand information on general insurance".

 It can be said that these results of our educational activities reflect consumers' higher interest in general insurance, and we intend to strengthen our initiatives focusing on local communities so that the general insurance industry can be more "consumer-friendly" for more people in the future.

(2) Strengthening of the GIAJ's capacity to respond to consultations and opinions from consumers

 On October 1 this year, the "General Insurance ADR Support Center", which is an ADR (Alternative Dispute Resolution) organization designated under the Insurance Business Law, started their operations. More than two months have passed since its inception, and the number of complaints and disputes which the center has been requested to resolve has significantly exceeded what we originally expected. I think that this shows consumers' high expectations towards the ADR system.

 We, the GIAJ, will strive to further improve our business processes by activating a PDCA cycle based on consultations and complaints and by strengthening our capacity to resolve complaints and disputes from a neutral and fair standpoint, so that we can meet the expectations of consumers.

(3) Establishment of a new examination and educational system for general insurance solicitors

 From October 2011, we will launch a new "general examination system for general insurance solicitors" by unifying the current "examination for general insurance solicitors (qualification renewal system)" and the "insurance product learning system". Under the current system, it depends on individual member companies how they treat their solicitors who have not passed or completed an examination or a training course. Under the new system, as an industry-wide rule, we will make the passing of the examination as a "precondition for insurance distribution". As we also continue a qualification renewal system, we believe that the quality of business processes of general insurance solicitors will be further improved accordingly.

 With respect to the introduction of an "approval system for general insurance solicitors (tentative name)" where general insurance solicitors passing the new examination can aim to move up by themselves, we have been considering introducing it in cooperation with the Independent Insurance Agents of Japan, Inc.

 We will make continuous efforts to enhance the quality of business processes of the general insurance industry as a whole, and to ensure the protection of consumers.

(4) Traffic safety, and disaster and crime prevention

 The GIAJ sets October 7 as "Theft Prevention Day", and this year, we conducted activities to raise public awareness of automobile theft, car break-ins, and burglaries in all prefectures.

 For this year, we distributed a leaflet appealing to the necessity of strengthening measures against automobile thefts at drive-through windows of hamburger franchises in five prefectures where automobile theft frequently occurs. The number of leaflets distributed through this initiative increased to 590,000, three times more than last year's, and we think that the effects of our appeals have been significantly improved by handing leaflets directly to drivers.

 As for measures for traffic safety, and disaster and crime prevention, we have also conducted unique activities to raise public awareness in local communities taking into account their local characteristics. We will continue these initiatives in a steady manner in the future.

(5) Promotion of earthquake insurance on dwelling risks

 With the objective of increasing the ownership of earthquake insurance policies on dwelling risks, we have made efforts to promote consumers' better understanding of the necessity of taking out such policy through public relations activities such as appearances on TV programs and press advertising especially in areas where the ownership rate is relatively low. We, the GIAJ, have long conducted these activities, and as a result, the number of contracts signed has been increasing for 15 consecutive years, and the number is now over 12 million contracts.

 Earthquake insurance is essential for consumers to ensure stable life in our "country where earthquakes frequently occur". We will strive to further increase the ownership of earthquake insurance policies on dwelling risks, under the recognition that it is a social mission of the general insurance industry to increase the ownership.

(6) Contribution to the global community

 We participated in the Annual Conference of the "IAIS (International Association of Insurance Supervisors)" held in Dubai, United Arab Emirates, this October, and participated in a panel discussion under the theme of "Financial Stability and Systemic Risk", thus contributing to the enhancement of the presence of the Japanese general insurance industry.

 In addition, on December 14, we signed a cooperation memorandum with the Mongolian Insurers Association. We would like to take this opportunity to promote an exchange of views and information and personnel exchanges, thus deepening mutual understanding and cooperative relationships. We have so far concluded such cooperation memorandums with 10 insurance associations including the Mongolian Insurers Association this time.

 We intend to actively work on such international advocacy and exchange of views and information in a similar way.

(7) Donation of fire engines and ambulances

 From the viewpoint of the general insurance industry's social mission to contribute to safe and secure communities, we, the GIAJ, have donated fire engines and fire fighting materials to local governments since 1952. This year, we donated a total of 28 light fire engines with small pumps to 20 local municipalities and to 8 cities in isolated islands, and a total of 10 high-performance ambulances to local fire headquarters throughout the country.

3. Conclusion

 The year 2010 draws to a close in two weeks. Almost half a year has passed since I took office as Chairman of the GIAJ this June. For the past period, we have focused on further activation of the GIAJ's initiatives all over the country with its policy to realize "consumer friendly general insurance" and to support the growth of "the young and children" who are major players in the future.

 As I mentioned before, our educational activities for consumers are paying off mainly regarding our activities based on local communities. However, it is difficult for us to attain a certain level of effects within a short period, and we really have a "long way to go" in this matter. We think we need to continue these activities step by step for the years to come.

 Our general insurance industry will find itself in a very severe and uncertain situation for the time being, and we anticipate that we will continue to experience a difficult situation. However, the whole industry is now making efforts for the development of the Japanese economy and society. I would highly appreciate it, therefore, if you would kindly continue to render us your continued support and cooperation.