The GIAJ Chairman's Statement (Translation)
（March 20, 2014）
It has been around nine months since I was appointed Chairman of the GIAJ, and I would like to report on our activities and related events since.
1. Looking back on the Great East Japan Earthquake
(1) Promoting Residential Earthquake Insurance
Three years have passed since the Great East Japan Earthquake. We wish to once again extend our sincerest condolences to all who were affected by the disaster.
On March 11, I attended a memorial ceremony hosted by the Japanese government to mark the third anniversary of the quake. While reaffirming the significant impact that the earthquake had on this country, I renewed my awareness of the weight of our responsibility in promoting Residential Earthquake Insurance.
Various disaster reduction measures have been taken mainly at local community levels based on the lessons learned from the Great East Japan Earthquake. We, the general insurance industry, are also striving to utilise the numerous lessons from the disaster in enhancing our preparation for the probable occurrence of future large-scale disasters.
(2) Responses to the challenges of the Residential Earthquake Insurance system
The Ministry of Finance's 'Residential Earthquake Insurance Project Team' published a report in November 2012 highlighting issues to be improved regarding the Residential Earthquake Insurance system. Following this, measures such as a review of burden sharing between the government and the industry to prepare for the consecutive occurrence of giant earthquakes, and promotion of earthquake insurance to mortgage borrowers and condominium associations, have been implemented. In addition, a review of earthquake insurance rates is scheduled in July.
At the project team's follow-up meetings since November 2013, we have reported on the progress made by the general insurance industry on the issues identified in the above-mentioned report, including a review of damage assessment procedures and damage assessment of common utilities within condominiums.
The GIAJ, in collaboration with the government, will continue fulfilling our social responsibility to build public trust and confidence in the Earthquake Insurance system.
2. Implementation of the Sixth Mid-Term Business Plan
(1) Reduction in social losses due to accidents, disasters, and crimes to build a safer society
i. Prevention of insurance fraud and fraudulent claims
Our efforts to prevent insurance fraud and fraudulent claims are centred around the following three measures: 'Establishment and enhancement of an industry-wide database', 'Development of investigation and response systems', and 'Promotion of awareness-raising activities'.
As we have accumulated various types of information about insurance claims, we are studying how and to what extent to utilise these resources. For example, if we can analyse and 'visualise' connections among fraudulent claimants who work on an organised basis, we will be able to alert our member companies to possible fraud.
We are at the developmental stage in terms of prevention of insurance fraud and fraudulent claims. Referring to relevant initiatives already taken in other countries such as the United States and Korea, we will continue to implement our measures more effectively than before.
ii. Measures to reduce bicycle accidents
Given the fact that 40% of bicycle accident casualties are aged 24 or younger, we send lecturers to high schools and universities to provide students with information on safer bicycle riding, accident liability, etc., using our educational booklet. We also offer information about general insurance products that cover bicycle-related accidents.
Recently there have been cases where courts of law have ordered payment of large amounts of reparation regarding bicycle accidents. Liability in damages related to bicycle accidents is covered by personal liability insurance, which can usually be added as a special clause to personal accident, fire, and automobile insurance contracts. We will try to raise awareness about bicycle-related risks and the importance of insurance while continuing to promote personal liability insurance.
(2) Improving comprehensibility and instilling a greater sense of security for worry-free general insurance
i. Promoting financial and economic education
The GIAJ, as a provider of financial and insurance education, is participating in discussions at the Financial Services Agency's 'Council on Promotion of Financial and Economic Education', which was established in June 2013 under the Central Council for Financial Services Information.
As a concrete action initiated by the council, a series of lectures on various financial sectors, including insurance, will be launched at two universities in fiscal 2014. We will contribute to this measure by dispatching lecturers. Taking advantage of the know-how we have acquired through our ongoing lecture series offered at universities across the country, we will further cooperate in the council activities.
ii. Improving the standards of agents and solicitors
In July 2012, the GIAJ and the Independent Insurance Agents of Japan Inc. launched an accreditation system called the 'General Insurance College Course', to develop 'General Insurance Planners' and 'General Insurance Total Planners'.
Currently, 800 people are taking our newly-created 'Consulting Course'. Upon passing the accreditation examination, they will be the first 'General Insurance Total Planners' at the end of June.
In order to increase customer confidence in general insurance, it is essential to enhance the knowledge and skills of general insurance solicitors. We will strive to continue the above measures.
iii. Promotional activities for Compulsory Automobile Liability Insurance (CALI) and support activities utilising
profits from managing CALI premiums
Having a CALI policy, which is designed to assist traffic accident victims, is compulsory for both registered vehicles and motorbikes.
In conducting public information activities on CALI mainly during March, Rei Okamoto (an actress) calls for better understanding and recognition of the system. This year we are emphasising three key messages concerning CALI: 'Drivers must have it', 'CALI provides relief to victims', and 'Policy renewal is necessary'.
Since 1971, we have been engaged in enlightening activities by utilising profits from managing CALI premiums and in fiscal 2014, we will concentrate mainly on providing assistance to victims of car accidents and promoting accident prevention measures.
iv. 'Customer's Voices and Experts Advisory Council'
On February 27, we held a meeting of the 'Customer's Voices and Experts Advisory Council'. At the event, we exchanged views on topics ranging from the industry's measures to remove anti-social forces, responses to the aging population, and activities to reduce bicycle accidents.
Given that population aging is a national issue with the postwar baby-boom generation being aged 75 or older in 2025, opinions were raised on the necessity of examining measures to deal with the increasing number of senior drivers and their insurance as early as possible. We will identify issues to tackle from a broad perspective and work on addressing them.
(3) Future measures for the industry’s sustainable development and sound growth
i. Enhancing rules regarding insurance solicitation and sales
Following a report by the Financial System Council’s 'Working Group on Insurance Products and Services' and other relevant discussions, an investigation will be required as to whether all agent employees actually fulfill their requirements, and, by the end of March 2015, to take necessary steps to ensure that these employees match the enhanced requirements clarified in the revised 'Comprehensive Guidelines for the Supervision of Insurance Companies' issued this month.
Considering the necessity of making industry-wide efforts on this matter, we established a project team to respond to the working group's report in order to provide assistance to the related measures taken by our member companies and agents.
In this ordinary session of the Diet, a bill to revise the Insurance Business Act has been presented. Revisions entail a review of rules regarding insurance solicitation and sales. Our project team will sort out possible challenges and coordinate information-sharing, so that our member companies and agents can appropriately deal with practical changes.
ii. Voicing our opinions on international regulatory issues
New global frameworks and regulations have been discussed in international organisations such as the Financial Stability Board (FSB) and the International Association of Insurance Supervisors (IAIS).
Currently, the IAIS is working on the development of capital regulations including the global Insurance Capital Standard (ICS). Opinions we have submitted to the IAIS so far include one on the necessity of reconsidering the requirements, based on the results of future field testing exercises and the development of international accounting standards.
I have three months to go before the end of my tenure as the GIAJ Chairman. Considering that the government's growth strategy will go into high gear as well as its economic and fiscal policies, while the consumption tax rate will be raised from 5% to 8% in April, 2014 will be a very important year for Japan.
We are determined to contribute to the country's economic growth and a more worry-free, safer society, by understanding customer needs and offering better products and services.
Your continued support and cooperation are both greatly appreciated.