The GIAJ Chairman's Statement (Translation)
（Sep. 19, 2013）
It has been around three months since I was appointed chairman of the GIAJ. I would like to report on our activities and related events since my last press conference in June.
Firstly, I wish to extend our sincerest sympathies to all those affected by the numerous natural disasters, such as the typhoons, record heavy rainfalls, and tornados, that have occurred across the country since July.
By ensuring prompt and appropriate payment of claims, we, general insurers, will spare no effort to service and take care of those customers affected by such disasters.
2. Our key activities so far and issues to be addressed going forward
(1) Reduction in social losses due to accidents, disasters, and crimes to build a safer society
i. Prevention of insurance fraud and fraudulent claims
We launched the 'Insurance Fraud Prevention Office' in January 2013, and have been strengthening measures to prevent misuse of the insurance system, including insurance fraud and fraudulent claims.
As part of our efforts, we have created posters in collaboration with the National Police Agency to promote proper understanding among consumers of the serious criminality of fraudulent claims, regardless of the amount of such claims, and to prevent such crimes.
Since the launch of the office, the number of cases added to the industry-wide database on fraudulent and false claims has been steadily growing. As our consumer enlightenment and data collection activities are still in the developmental stage, we will further enhance industry-wide efforts to gain consumer understanding of the issues and to improve the database on fraudulent and false claims. Taking relevant successful initiatives already conducted abroad into consideration, we will continue to implement our measures more effectively than before.
ii. Promoting safer bicycle riding
Since a court ordered payment of a large amount of reparation regarding a bicycle accident, the concern of consumers in risks related to cycling has been growing. We have been holding seminars across the country to promote understanding of the fact that bicycle riders can be perpetrators in traffic accidents. We are also striving to offer information on insurance products that cover bicycle-related claim payments, including personal liability insurance and personal accident insurance, to encourage worry-free bicycle riding.
iii. 'Theft Prevention Day'
On October 7, 'Theft Prevention Day', we will engage in auto theft awareness-raising activities. The number of known vehicle thefts in 2012 was 21,070, a decrease of almost 70% from the record high. However, the number of recognized cases has increased for the period January through July 2013 compared to the same period last year.
Given such circumstances, we will highlight that taking multiple measures to prevent auto theft is effective.
On the day, we will hand out leaflets and other promotional goods at various locations in cooperation with the police and the Independent Insurance Agents of Japan Inc.
iv. Promoting Residential Earthquake Insurance
Since late August, we have been running an advertisement campaign through various media outlets, such as television, the Internet, and radio, to raise public awareness of Residential Earthquake Insurance as well as the level of its penetration nationwide.
Residential Earthquake Insurance is a legislated private and public sector risk sharing scheme that serves an important role in providing financial means to those affected by earthquakes to get back on their feet as soon as possible.
In the advertisements, we use an animated mascot character to explain the earthquake insurance system and how to take out a policy in an easy-to-understand manner.
(2) Improving comprehensibility and instilling a greater sense of security for worry-free general insurance
i. Pursuing comprehensibility of general insurance
Over the past year, we have advanced measures to make explanatory materials on important matters, which customers look at when concluding an insurance contract, more comprehensible. As a result of concerted efforts, we have completed prototypes of explanatory materials for automobile, fire, and medical insurance, and reflected them in the 'Guidelines for Policy Overview and Warning Information' and the 'Guidelines for Description of Solicitation Materials, etc.' in September.
Additionally, we will further harmonize and standardize rules and forms, including administrative procedures on insurance solicitation and application forms that customers fill in.
With the aim of improving comprehensibility of general insurance, we will further work on revision of solicitation materials and application forms from the perspective of consumers.
ii. Improving the standards of agents and solicitors
As of the end of August, the 'General Insurance College Course' had accredited over 42,000 sales staff as 'General Insurance Planners'. In April 2013, we launched a new educational program 'Consulting Course' to develop accredited 'General Insurance Total Planners' with more practical knowledge and business skills. Currently, about 800 sales staff are taking the course to enhance their skills.
After the end of November 2013, sales staff dealing with automobile, fire, and personal accident and health insurance will be no longer allowed to sell them, unless they pass examinations conducted by GIAJ since October 2011 for each line of business.
To increase customers’ confidence in general insurance, we will plow ahead with measures to enhance general insurance solicitors’ knowledge and skills.
iii. Promoting financial education
On June 7, the inaugural meeting of the Financial Services Agency's 'Council on Promotion of Financial and Economic Education' was held. The council was established under the Central Council for Financial Services Information to examine approaches to challenges outlined in a report complied by the agency's 'Research Group on Financial and Economic Education'. The GIAJ, as a provider of financial and insurance education, is participating in discussions at the council.
Catering to a wide range of people, including elementary, junior high, high school, and university students, working adults, and elderly citizens, we have various types of educational tools to achieve better understanding of the risks in daily life as well as the roles and necessity of insurance.
We will further promote our enlightenment activities to deepen consumers' understanding of insurance products and the coverage they actually need.
(3) Future measures for the industry’s sustainable development and sound growth
i. Enhancing rules regarding insurance solicitation and sales
Calling for a broad review of rules regarding insurance solicitation and sales, the Financial System Council’s 'Working Group on Insurance Products and Services' published its report in June.
The report's intent is to develop 'an institutional framework where consumers receive easy-to-understand explanations of insurance products that match their true needs, and can take out a policy after gaining sufficient understanding and satisfaction'. We recognize that the development of such a framework and steady responses to it by agents and solicitors are essential preconditions for the general insurance industry’s sustainable growth.
Within our project team established this month, the GIAJ will hold discussions to ensure that the business practices of our member companies and agents conform to the new system. Based on the discussions, we will further enhance related measures such as delivering the industry's requests to the government and examining industry-wide voluntary guidelines.
ii. Tax reform petitions for fiscal 2014
We set out our requests for tax reforms for fiscal 2014 at our board meeting on June 13, and submitted them to the relevant authorities. We requested as a priority issue the elimination of double taxation on dividend income, etc. This was later taken up as a Financial Services Agency request.
iii. The ISJ (Insurance School of Japan) overseas seminars
We hosted ISJ overseas seminars in Vietnam from September 5 through 9. The ISJ is a program designed to provide Asian regions with technical assistance on insurance, with a view to promote mutual understanding and exchanges among respective general insurance industries. We have held courses in Japan for 41 years and overseas seminars for 20 years.
The overseas seminars in Vietnam were held as part of a governmental project to commemorate the 40th anniversary of the establishment of diplomatic relations between Japan and Vietnam. In addition to regular programs on the education of agents and solicitors, rating calculation, natural disasters, measures against insurance fraud, and other topics, we held a workshop for the first time on a rating system and an atomic energy insurance pool, to which we invited top officials of local insurance companies and insurance supervisory authorities. The workshop was very well received by the participants.
iv. Providing support to Asian regions and countries
Since fiscal 2012, we, together with the General Insurance Rating Organization of Japan and the Non-Life Insurance Institute of Japan, have been providing support for the establishment of an Indonesian rating organization, as part of our measures to offer soft infrastructure and know-how to Asian regions. Discussions on the establishment of a rating organization in Indonesia are expected to become more active, following the issuance of a cooperation request from the Financial Services Authority of Indonesia to the country's general insurance association at the end of July. The GIAJ will continue to proactively support the relevant parties.
We have steadily advanced our efforts on the main initiatives laid out in our Sixth Mid-Term Business Plan. The business environment for the industry is changing with new challenges constantly emerging. We will strive to promptly address these challenges to ensure the industry's sustainable development and solid growth.
Meanwhile, our member companies will offer better products and services, so that we can contribute to the country's sound economic growth.
Your continued support and cooperation are both greatly appreciated.