The GIAJ Chairman's Statement (Translation)
(March 16, 2012

 I would like to report progress on our major initiatives since my previous statement published in December, and offer my views as follows:

1. Introduction

 One year has passed since the Great East Japan Earthquake.

 On March 11, I attended the memorial ceremony to mark the first anniversary of the disaster, hosted by the Japanese government. On the same day, the GIAJ conducted activities to call for disaster preparation and further understanding of Earthquake Insurance on Dwelling Risks (Earthquake Insurance) in 11 cities where our branch offices are located, namely Sapporo, Sendai, Tokyo, Shizuoka, Kanazawa, Nagoya, Osaka, Hiroshima, Takamatsu, Fukuoka, and Naha. We distributed handy guidebooks on disaster prevention, leaflets on Earthquake Insurance, and work gloves made of recycled materials to passersby.

 Many from the industry, such as the GIAJ, our member companies, and members of the Independent Insurance Agents of Japan, INC., participated in the March 11 activities. We believe the first anniversary was a valuable opportunity for us to commemorate the victims of the earthquake and reflect on the industry's responsibilities and roles.

Mr. Shuzo Sumi, Chairman 
The General Insurance Association of Japan
Mr. Shuzo Sumi, Chairman
 As the third-quarter results of our 25 member companies indicate, net premiums written for the main insurance products increased, including Compulsory Automobile Liability Insurance for which premium rates were revised. However, the results also show that net claims payments rose sharply due to increased payments of fire insurance claims following the occurrence of natural disasters, such as the Great East Japan Earthquake, typhoons, and floods. The business environment for the industry remains very severe.

 When we look at the economic climate in Japan, the real GDP growth rate for the October-December period turned negative for the first time in two quarters. We see that there is little room for optimism amid growing concerns about the declining external demand and increasing current account deficit. We hope that proper monetary policies and reconstruction-related demand will help Japan's economy to emerge gradually from the current situation.

2. Specific measures based on response to the Great East Japan Earthquake

 So far, we have taken the following measures to enhance preparation for the probable occurrence of large-scale earthquakes and other disasters as well as to promote the market penetration of general insurance including Earthquake Insurance:

(1) Improving the market penetration of Earthquake Insurance

 We have been engaged in promotional activities, such as the Earthquake Insurance Promotion Campaign, and have reached out to various related parties to enhance the promotion in cooperation with local municipalities.

 As a result, we have held open lectures on "Lessons from the Great East Japan Earthquake - now is the time to consider our disaster prevention at home" in all six prefectures of the Tohoku region, with the support of the Tohoku Local Finance Bureau of the Ministry of Finance and the local associations of independent insurance agents.

 We have also steadily conducted relevant activities in other areas, including an open seminar in Kagawa Prefecture on disaster prevention, co-hosted with the Crisis-management Research Center of Kagawa University and the association of independent insurance agents in the prefecture.

 Raising public awareness of Earthquake Insurance is an important part of our social mission, along with proper and prompt payment of insurance claims. We will continue to enhance various community-based promotional activities.

(2) For the stable operation of the Earthquake Insurance system

 An increased limit for total payments under the Earthquake Insurance system and a review of burden sharing between the government and the industry have been factored into the fiscal 2012 fiscal budget to further stabilise the system. Moreover, the Cabinet approved the continuance of the Special Account for Earthquake Reinsurance in January. Thus the Earthquake Insurance system is making steady progress in attaining the confidence of policyholders, as it adheres to the original purposes of the Earthquake Insurance Law, while improving the market penetration and contributing to the stabilisation of the lives of the affected people.

 We will strive to fulfill our social responsibility by continuing discussions with experts in order to further strengthen the system and solve product-related issues.

 As to our measures for proper and prompt payment of Earthquake Insurance claims, we received "the eco disaster recovery award" at "eco japan cup 2011", a contest to discover and nurture the green shoots of eco businesses. The contest is hosted by the Ministry of the Environment, the Ministry of Land, Infrastructure, Transport, and Tourism, the Ministry of Internal Affairs and Communications, and other organisations. The award is a special feature added to the 2011 event designed to recognise supporting measures for the recovery and reconstruction in the disaster-affected areas, which will serve as a model for future post-disaster support.

 We will continue to promote our measures for proper payment of Earthquake Insurance claims, and advance our industry's unified efforts for a more secure, safer society.

3. Specific measures for other key issues

 The following are our key activities so far and subjects henceforth:

(1) Addressing environmental issues

 We held a promotional campaign for the use of recycled automobile parts in November and December, supported by relevant ministries and agencies and co-sponsored by interested organisations.

 We broadly publicised the campaign through our member companies and agents toward the reduction of waste and CO2 emissions. Our member companies also strengthened their efforts by using recycled automobile parts for their company-owned vehicles.

 We will further enhance measures to promote the use of recycled automobile parts, aiming at contributing to a zero-waste economy and low-carbon society.

(2) Improving the quality of insurance business administration

a. Strengthening functions to respond to consultations, complaints, and disputes
 The General Insurance ADR (Alternative Dispute Resolution) Center has dealt with various cases of complaints and disputes concerning general insurance since its launch in October 2010. There has been an increase in the number of cases handled amid the heightened recognition of the center. In addition to the center in Tokyo, we decided to launch ADR services on April 1 in other cities where our branch offices are located, to increase our capacity to resolve complaints and disputes.

 We will also integrate the General Insurance Counseling Offices and the Automobile Insurance Claims Counseling Centers into the General Insurance ADR Center. With a single contact point to enhance user-friendliness, we will strive to strengthen our functions to respond to consultations, complaints, and disputes.

b. Advisory Panel to Listen to Consumers' Voices
 Since 2006, the GIAJ has utilised the Advisory Panel to Listen to Consumers' Voices as part of our efforts to improve the quality of insurance business administration. This panel offers a very important opportunity for us to receive opinions from external experts from the consumer's perspective and reflect them in the business administration of the GIAJ, as well as our member companies, in various ways.

 The latest session of the panel was held on February 29. We received valuable feedback on issues to be tackled based on lessons learned from the Great East Japan Earthquake, the GIAJ's Sixth Mid-term Business Plan starting in April, and our measures to deal with bicycle accidents. As bicycle accidents are increasingly being recognised as a social problem, we will strengthen our existing initiatives on bicycle accident prevention and call for a need of risk preparedness by means of insurance.

 We will strive to improve the quality of insurance business administration by working toward smooth resolution of complaints and disputes as well as by upgrading our business processes based on consumers' voices.

(3) Financial System Council

 The working group on regulations related to insurers' group management, which was established last March, discussed the following four issues on which the council's conclusions in December would lead to deregulation where relevant:

1) A review of the regulation on the scope of business of subsidiaries regarding an acquisition of a foreign insurance company

2) A review of the regulation on large credit limit in terms of the relations between a parent insurance company and its subsidiary

3) Re-commissioning of insurance solicitation to an insurer in the same group

4) A review of the regulation on insurance policy transfer including an abolition of the provision on suspension of the sale

 The final report was issued at the plenary session of the Financial System Council on January 27. Following the Cabinet's decision on the same day, a bill to revise the Insurance Contract Law was submitted to the Diet. We look forward to an early enactment of the bill including the deregulation of the above-mentioned issues. We believe that the revisions and deregulation will enable general insurance companies to further improve customer convenience and corporate value.

(4) Compulsory Automobile Liability Insurance

 Compulsory Automobile Liability Insurance (CALI) is a highly public class of insurance designed to assist traffic accident victims. It is compulsory for all registered vehicles and motorbikes to have a CALI policy.

 The GIAJ established a joint committee on a review of the ratio of load charge to CALI premiums. With third-party committee members, we conducted a survey on actual operations for a review of corporate expenses and commissions paid to agents. On January 31, we reported the findings to the CALI Council.

 Since 1971, we have supported various activities to provide relief to victims of car accidents and prevent traffic accidents, by utilising profits from managing the CALI premiums.

 On March 1, we launched a CALI promotion campaign to raise public awareness of policy expirations.

 We will continue to work on the promotion, and more effective management, of the CALI system.

(5) Responding to international standard-setting activities

 There are ongoing discussions to introduce new supervisory and regulatory frameworks on a global level. In the insurance sector, the IAIS (International Association of Insurance Supervisors) is examining a methodology for identifying G-SIFIs (Global Systemically Important Financial Institutions) as well as supervisory standards for them. The IAIS is also discussing the Common Framework for the Supervision of Internationally Active Insurance Groups (ComFrame).

 We will closely monitor the developments and participate in constructive discussions to help establish international supervisory and regulatory frameworks which adequately reflect the unique features of general insurance.

4. The Sixth Mid-term Business Plan and approaches to priority issues

 We will embark on the Sixth Mid-term Business Plan in April. The plan stems from the severe circumstances surrounding the industry as well as issues and our roles that have been reaffirmed since the Great East Japan Earthquake.

 We will focus on the following five pillars to improve customer convenience, enhance the industry growth in a sound manner, and further improve the quality of business processes:

The five pillars

1) Reducing social loss by preventing / reducing damage by accidents, disasters, and crimes

2) Improving customer convenience and promoting the efficiency of business processes by enhanced standardisation where relevant

3) Improving the quality of business administration based on consumers' voices

4) Maintaining and improving the business environment by strengthening our functions to make requests and proposals

5) Improving the market penetration of Earthquake Insurance and enhancing preparation for the probable occurrence of large-scale disasters based on the experience of the Great East Japan Earthquake

5. Conclusion

 I have about three months left in office as Chairman of the GIAJ.

 We are determined to contribute to a more secure, safer society by striving to meet social expectations for general insurance through better products and services. For this purpose, we will make utmost efforts to deal with various issues to ensure improved quality of business administration as well as sound and sustainable development of the industry, through the Sixth Mid-term Business Plan in light of the circumstances surrounding us.

 We would highly appreciate your continued support and cooperation.