The GIAJ Chairman's Statement (Translation)
(Dec. 21, 2017

Noriyuki Hara, ChairmanNoriyuki Hara, Chairman

 Nearly six months have passed since I assumed office as Chairman of the GIAJ in June. I would like to report on our activities and related events over this period.

1. Introduction

 This year, the world economy has grown at a moderate pace. The upward trend is evident in Japan's economy as well due to the easing financial environment and the government's economic measures. Sustained by these signs of recovery, the general insurance market has shown gradual growth.

 On the other hand, numerous natural disasters such as heavy rainfall and typhoons continue to hit the country in ever-increasing ferocity. In July, a record large-scale torrential downpour hit northern Kyushu, causing serious damage in (mainly) Fukuoka Prefecture and Oita Prefecture. In October, "super" typhoon 21 caused damage over wide swathes of the country from Okinawa to Hokkaido. The general insurance industry is fully committed to making swift claim payments through sincere responses to customer consultations and inquiries.

 Meanwhile, the world was hit by major ransomware cyber-attacks. In recent years, computer networks have become more closely linked to society through the rapid evolution of the Internet of Things (IoT). The ransomware incident highlights the threat of cyber-attacks as an emerging risk in today's society.

 The general insurance industry has continuously promoted initiatives to respond to natural disasters and emerging risks such as cyber risks. The various events that have occurred throughout this year reaffirm the importance of these efforts.

 By working towards and supporting a worry-free and safe society, our industry is determined to advance initiatives to contribute to the sustainable growth of our country.

2. Commemorative event for the GIAJ's 100th anniversary

 Our association celebrated the 100th anniversary of its foundation in May. On November 6th, we held a commemorative event with the aim of reflecting on our path over the past 100 years and looking towards the future of general insurance.

 About 430 industry professionals participated in the event, most of them were young practitioners who will lead the industry's next generation. Following a keynote speech entitled "The 100-year History and the Future of the GIAJ", panel discussions were held under the theme of "The Future of General Insurance - the Impact of Technological Innovation and Future Evolution of General Insurance Business". Experts in socio-economics, science technology, and insurance and finance presented their views and offered suggestions on ways for our industry to make great strides in the future.

 As "risk bearers", we will continue to develop ourselves in response to the ongoing transformation of society. In light of the future vision shared at this event, we will advance our industry's unified efforts more firmly to respond to environmental transformations.

3. Development of the Eighth Mid-Term Business Plan

 At today's board meeting, we adopted the outline of the Eighth Mid-Term Business Plan (from fiscal 2018 to 2020). Reflecting on our 100-year history and looking towards the future, we crystallized the direction for the general insurance industry to head towards as four pillars, including "swift and proper responses to environmental changes". For each pillar, we decided upon the priority issues that should be addressed over the next three years.

 By arranging concrete measures to deal with each priority issue, we will accelerate efforts towards the development of the Plan in March 2018.

Outline of the Eighth Mid-Term Business Plan's priority issues
Directions Priority issues

Swift and proper responses to environmental changes

Technological innovation

More diverse and larger risks

Changes in social environment including super-aging society

Promotion of customer-oriented business operations

Enhancing the quality of business operation at insurance companies and agents

Raising customers' awareness of risks

Strengthening dialogue with customers

Establishment of a more robust and stable general insurance system

Development of readiness for large-scale earthquakes

Strengthening anti-insurance fraud measures and the prevention of fraudulent claims

Further roles in international insurance markets

Proper responses to international standards

Level-playing field in each overseas market

Strengthening support activities to assist emerging markets

4. Other activities

(1) Responding to natural disasters

(i) Disaster prevention and reduction

a. Educational events to promote disaster prevention

 On November 26th and 27th, the Cabinet Office of Japan held a national convention related on disaster prevention called the "Bosai Kokutai 2017" gathering relative associations and agencies from public and private sectors. Our association held a symposium under the theme of "Disaster Prevention Education, from the Past to the Future - Disaster Prevention Education Interfacing with Communities, Good Practices and Challenges" in which we introduced the "Exploration for Disaster Prevention", an educational program for elementary-school pupils. We also promoted awareness-raising activities for the general public through participation in a number of programs during the event. Our association's managing director joined the closing session as one of the panelists.

 In addition, we also delivered a series of educational events across the country in collaboration with related parties. At the symposium we held with Nagoya University in Aichi Prefecture on November 11th, we promoted the strengthening of networks among people engaged in disaster prevention and reduction. On December 2nd in Ehime Prefecture, in collaboration with the Prefectural Government and Matsuyama City Hall, we held a seminar aimed at enhancing disaster prevention capabilities at the local level, and also called the public's attention to the necessity of preparing for the possibility of a Nankai Trough earthquake. We will continue to provide various programs for disaster prevention and reduction.

b. "Exploration for Disaster Prevention"
 This year, we held our 14th annual "Safety Map-Making Campaign". To date, 16,370 elementary-school pupils have participated in the program. In line with heightened public awareness of natural disasters, we have steadily expanded the range of the campaign. This time, 538 entries consist a total of 2,582 maps, far exceeding the previous years. 17 winners will be selected and invited to an awards ceremony on January 27th, 2018.

c. Donation of lightweight fire engines to local municipalities
 Our association annually donates lightweight fire engines to local municipalities in order to strengthen and improve firefighting capabilities across the country. Since these are designed to make it easier to maneuver on rough, narrow roads, firefighting and lifesaving can be carried out in the shortest possible timeframe, improving the effectiveness of operations. This year we provided lightweight fire engines to a total of 17 cities and remote islands, including Itoigawa City in Niigata Prefecture where a huge fire broke out last year. Since the launch of the program in 1952, we have donated a total of 3,429 fire engines. Given the increasing concern regarding the possibility of massive earthquakes, strengthening firefighting capabilities is critical to minimize any resultant fire damage. We will continue to contribute to the enhancement of firefighting capabilities at the local level through such efforts.

(ii) Promoting earthquake insurance

 In July this year, our association set up a prefectural council together with related organizations to promote earthquake insurance and cooperative earthquake insurance in Nagano Prefecture. The council's efforts since November include campaigning through poster displays and awareness-raising activities which took place at Nagano station and Matsumoto station on November 7th. Ensuring the public's accurate understanding of earthquake risks in respective local areas is essential in promoting the dissemination of earthquake insurance. We will continue our efforts in cooperation with local municipalities with the aim of achieving higher market penetration.

 In addition, our association participated in the "Disaster Prevention for Everyone", an educational campaign that took place at twelve shopping malls across the country from September onward. Our involvement includes offering participants the opportunity to experience a simulated earthquake as well as handing out emergency contact cards with family photos printed on them. Our exhibition booth proved to be a popular attraction, drawing attention from about 13,761 visitors in total. We will continue to convey our message regarding earthquake risks and the necessity of earthquake insurance in an easy-to-understand manner in order for the public to develop further interest.

(2) Globalization

(i) Technical assistance for other Asian countries and regions

 In November, our association agreed to conclude a cooperation memorandum with the ASEAN Insurance Council (AIC). Consisting of all the region's insurance associations (13 associations in 8 countries), the AIC was established in order to promote cooperation among private insurance industries in ASEAN member countries. Our association is the only one from outside the region that has been granted permission to participate in the main council meetings. Whilst we have deepened our ties with the AIC by providing know-how, we jointly decided to conclude a comprehensive memorandum of cooperation to strengthen our relationship in line with the expectation of further developments.

 Moreover, in October, Myanmar officially launched the Myanmar Insurance Association. Prior to its establishment, our association provided support by holding workshops and seminars in collaboration with relevant organizations. We are delighted to have made a contribution to the country and will continue with efforts to strengthen our relationship with the Association by providing know-how together with other related parties.

(ii) Issuing opinions on international regulatory issues

 In July, the International Association of Insurance Supervisors (IAIS) released the first version of the risk-based global insurance capital standard (ICS Version 1.0), a quantitative capital standard developed for application to Internationally Active Insurance Groups (IAIGs), after considering feedbacks received from stakeholders through public consultations. In response to this release, our association submitted comments to the IAIS in regards to ICS Version 2.0 which is due to be implemented in 2020. In one of our comments, we proposed using ICS Version 2.0 as a "soft" standard such as a "monitoring measure" in the initial stage. At the annual conference held in Kuala Lumpur on November 2nd, the IAIS agreed that the implementation of ICS Version 2.0 will begin with a five-year "monitoring period", which is in consonance with our opinion. We will continue to actively express our opinions on issues as and when they arise to lead discussions on the international front.

(iii) Promoting exchanges among overseas insurance associations

 In December, as Chairman of our association I visited the General Insurance Association of Malaysia (PIAM), following visits to the Association of British Insurers in July and the General Insurance Association of Indonesia in August. In the context of motor-insurance liberalization that has begun in Malaysia, I shared with the chairman of PIAM our experiences of the liberalization process in Japan. We reaffirmed the close ties between our associations.

 In addition, as well as the opportunity to visit and strengthen our relationship with the Association of Spanish Insurers being taken by one of our board members, a representative of our association was invited to be a panelist at a seminar held by the General Insurance Association of Indonesia. We were also invited to Thailand to be guests at a commemorative event celebrating the 50th anniversary of Thai General Insurance Association. These opportunities reaffirmed and furthered good relationships between our associations. We will continue to strengthen relationships with overseas insurance associations in order to work towards the enhancement of the standing of the Japanese general insurance industry internationally.

(3) Crime prevention and traffic safety

(i) Prevention of traffic accidents involving senior citizens

 In October, we concluded the nation's first comprehensive agreement addressing senior needs with the Prefectural Police Department of Akita Prefecture which has the highest aging rate in Japan. The agreement includes wide raging measures in terms of crime prevention as well as traffic safety to secure a worry-free, safe environment for the elderly. By promoting further cooperation with other related parties under the agreement, we will advance cohesive efforts across the industry towards reducing the number of traffic accidents that involve senior citizens in the area.

 As part of our effort to prevent nighttime pedestrian crashes, we are distributing safety reflectors to the elderly across the country. In Tokushima Prefecture, we published about twenty thousand leaflets with reflectors attached, and are encouraging senior citizens to use them in collaboration with the Prefectural Police Department. We will continue to plan and employ various measures towards preventing traffic accidents involving the elderly.

(ii) Auto theft prevention measures

 Since setting October 7th as "Theft Prevention Day" in 2003, our association has been engaged in awareness-raising activities against crimes such as auto theft, car break-ins, etc. This year we conducted activities in twelve areas that are troubled by frequent auto thefts, and called on 26,000 people to pay greater attention to such crimes.

 Although the number of known auto thefts has been decreasing generally, particular areas are still hot spots. There have even been cases of thieves stealing car navigation systems and license plates rather than the vehicle itself. As such, our association has developed activities that reflect local characteristics. For example, in Osaka where a large number of license plate thefts are observed, we conducted a campaign to offer free installation of crime-prevention screws for license plates at 377 locations in cooperation with the Prefectural Police Department.

 We will continue promoting our measures to contribute to the eradication of auto thefts.

(4) Other activities

(i) Tax reform petitions for fiscal 2018

 On December 14th, the fiscal 2018 tax reform package drawn up by the ruling party was released. Our association has been calling for revision of international taxation rules to reflect the characteristics of the general insurance business, given that many of our member companies have expanded their businesses overseas in recent years. This request is incorporated into the newly unveiled package.

(ii) Project on self-driving cars

 Discussions on self-driving technology are under way in both the public and private arenas. Last year, our association released a report based on studies conducted with external experts, which addresses legal challenges concerning self-driving cars centered on liability issues involved in the case of accidents caused by such vehicles. Our association has expressed opinions appropriately taking into consideration the discussions held within central ministries in line with discussions on the international front.

 Given the expectation that self-driving technology will have profound impact on general insurance business operations, we set up a Project Team to identify industry-wide issues relating to practical and legal aspects, and consider ways to tackle them. In preparation for the advent of self-driving vehicles, we will advance our studies in a forward-thinking manner.

5. Conclusion

 As expressed in my comments upon being appointed chairman almost six months ago, this year is an important term with respect to solidifying our foundations before embarking on our 101st year. In this regard, we have made steady progress on our initiatives.

 General insurance provides the infrastructure to support building a worry-free and safe society. To fulfill this role, it is essential to ensure that general insurers further improve the quality of their business operations from a customer-oriented perspective. We will continue to make efforts towards the implementation of the Seventh Mid-Term Business Plan and development of the Eighth Mid-Term Business Plan in a timely manner. Through such efforts, we expect to further consolidate our base for dramatic progress in the new era.

 We would highly appreciate your continued support and cooperation.