The GIAJ Chairman's Statement (Translation)
（June 29, 2018）
As the newly appointed Chairman of the GIAJ, I would like to express my opinions as follows:
I wish to express my deepest condolences to the victims and extend our sincerest sympathies to all who were affected by the earthquake that hit northern Osaka on June 18.
Over ten days have passed since the earthquake hit the Osaka region. While lifelines and supply chains have reportedly been recovered, the region still bears deep scars.
The general insurance industry will continue with efforts to ensure proper claim payments.
2. Situation in the general insurance industry
The world economy is continuing its steady growth. As the IMF World Economic Outlook projects, it is predicted to continue to achieve high growth due to increases in capital investments globally, and household consumption driven by expansionary fiscal policies and an easy monetary policy. On the other hand, with the aim of unwinding accommodative financial conditions, a trend towards stepwise monetary tightening is emerging in the United States and Europe. Concerns are being raised that an interest rate hike accompanying monetary tightening could expose vulnerabilities in some countries and regions and lead to a slow down in the world economy.
Encouraged by various government stimulus policies and the strong world economy, the Japanese economy is growing moderately and steadily. Corporate earnings reported record profits and the employment and income situation is improving. Despite uncertainty stemming from the impact of a planned October 2019 consumption tax hike, the Japanese economy is expected to grow at a pace exceeding predicted growth rates thanks to increasing internal demand, which is being fuelled by the construction demands of the 2020 Tokyo Olympic and Paralympic Games.
When we look from a mid- to long-term standpoint, Japan is facing urgent social issues ahead of its peers. Soaring social welfare costs and growing concern over the decline in economic and social vitality due to an aging society, and an ongoing decline in the working population, are serious concerns. However, if we look at these issues from a different perspective, we could say that we are in a position to take advantage of the situation. We are able to design a new future and set examples for the world by facilitating breakthroughs such as further promotion of technological innovations and the reform of social systems.
Under these circumstances, a broad range of measures are being put forward both in public and private domains in Japan towards implementing the "UN Sustainable Development Goals (SDGs)", which are internationally agreed developmental goals to achieve a sustainable society. Measures include the realization of "Society 5.0", a super-smart society which balances economic development with a solution to social challenges by making full use of leading-edge technologies, realizing a resilient and environment-friendly community, and responding to an aging population and other common international issues. On June 15, the Japanese Cabinet adopted "Basic Policies for the Economic and Fiscal Management and Reform 2018" and "Investments for the Future Strategy 2018". These policies are expected to promote mid- to long-term economic and social growth in Japan.
3. Our strategic direction
Our association celebrated its 100th anniversary last May.
Taking a step forward towards the next 100 years, we launched the Eighth Mid-Term Business Plan this April. The Plan focuses on the following four pillars: "Swift and proper responses to environmental changes", "Promotion of customer-oriented business operations", "Establishment of a more robust and stable general insurance system", and "Further roles in international insurance markets". With the aim of contributing to the realization of a sustainable society (SDGs) and the promotion of innovation ("Society 5.0"), we will advance cohesive efforts across the industry towards achieving eleven priority issues based on the four pillars during this first year of the Eighth Mid-Term Business Plan.
(1) Contribution to promoting the realization of a sustainable society
We have been committed for many years to various activities which are deeply related to SDGs, such as disaster prevention and reduction, and the prevention of traffic accidents in collaboration with relevant government authorities, local police departments, municipalities and media.
Given changes to the environment such as the aging population, the increase in natural disasters due to the effects of climate change, and the potential threat of large-scale earthquakes, the expectations on the general insurance industry to contribute to the realization of a sustainable society is increasing. In order to promote the steady implementation of the Eighth Mid-Term Business Plan, we will review the roles that the industry should exercise in the context of SDGs, and continue to implement concrete measures.
(2) Contribution to promoting Technological Innovations
Digital innovations such as self-driving cars, Artificial Intelligence, Big Data and the expansion of the sharing economy, are advancing rapidly. While the sophistication of mobility services and productivity are expected to improve dramatically, responses to emerging risks including enhancement of cybersecurity and of legal systems are becoming a priority. We will implement concrete measures to contribute to the realization of "Society 5.0", which will help enable us to balance economic development and resolve social challenges.
4. Specific initiatives
(1) Contribution to promoting the realization of a sustainable society
(i) Responding to natural disasters
Due to the character of its geographical profile (location, topography, geology, and climate), Japan is prone to various natural disasters. Over the past year, torrential rains in Northern Kyushu and Typhoon Lan, which brought intense winds and flooding, and heavy snowfall across the Hokushinetsu region, inflicted severe damage and caused substantial losses. The effects of climate change including the rise in the number of the torrential downpours, increased risk of heatstroke and infection and an unstable harvest of agricultural crops are emerging. Under these circumstances, the approval of "Adaptation to Climate Change Act" at the 196th ordinary Diet session shows that it is increasingly important for all corners of society to prepare for and work together to respond to disasters.
In collaboration with the relevant authorities and local municipalities, this year we will continue to promote disaster prevention and reduction that takes local characteristics into account. We will also continue to encourage activities at the local level by making use of the "Sonpo Bosai Web", a web portal on disaster prevention launched last March. In addition, we will promote the "Exploration for Disaster Prevention" activity which focuses on children. This activity, which is marking its 15th anniversary, is a practical educational safety program designed to heighten children’s awareness of disaster prevention. Children enjoyably explore their neighborhoods to discover facilities and equipment used for disaster/crime prevention and traffic safety. Children create maps and make presentations based on their findings, which provide the opportunity to think about safety and security.
(ii) Preparation for large-scale earthquakes
In our country, which is prone to earthquakes, we face the potential threat of events such as a Tokyo Inland Earthquake and a Nankai Trough Earthquake. The government decided last September that it will no longer implement its anti-disaster policy based on the assumption that quake forecasts are accurate. Last November, it launched the "Nankai Trough earthquake-related information" service in place of the previous "Earthquake Alert" forecast service. The government is examining proper evacuation procedures and corporate activities after "Nankai Trough earthquake-related information" has been publicly delivered.
We have conducted awareness-raising activities for earthquake disaster prevention and reduction, as well as promoting Residential Earthquake Insurance, which is an effective self-help tool designed to ease the economic burden of the policyholder, we have conducted awareness-raising activities for earthquake disaster prevention and reduction. We have also strengthened the functions for proper and prompt payment of earthquake insurance claims in order to contribute to the early recovery of those affected. This was achieved by considering measures to improve efficiency of the joint investigation conducted by the general insurance industry as a whole, and by simplifying the damage assessment procedures for large-scale earthquakes.
(iii) Prevention of traffic accidents involving senior citizens
Due to ongoing increases in the number of senior citizens, they account for over 50% of the total ratio of traffic accident fatalities. In order to prevent accidents involving elderly drivers and pedestrians, we are promoting awareness-raising activities and disseminating information regarding dangerous intersections nationwide. We will continue to work together with relevant government authorities, local police departments, municipalities and the media.
(2) Contribution to promoting Technological Innovations
(i) Measures to address advances in self-driving technology
While self-driving technology is expected to make up for labor shortages in the logistics field, ensure a means of transportation for the elderly in rural area and reduce traffic accidents, it is also expected to alter the way damage liability is considered in the event of an accident.
In 2016, our association released a report based on studies conducted with external experts. We have expressed our views in consultative committees hosted by relevant government Ministries/Agencies.
In order to realize a safe and secure society with self-driving technology, we will continue to conduct research on the developments and trends in self-driving technology. Holding discussions with relevant government authorities, organizations and consumers will help us fulfill our role as the representative of the general insurance industry.
(ii) Response to emerging risks such as cyber attacks
Cyber attacks on public institutions and companies are occurring more frequently than ever. As methods become more sophisticated due to easier access to the intelligence behind cyber attack techniques, their threat is heightening. Targets are diverse and include the theft of money and information, manifestation, terrorism and vandalism. We will conduct research and study emerging risks, including the threat of cyber attacks, and continue our efforts to improve the ability to respond to such risks.
(iii) Measures on harmonization and standardization
With the aim of improving customer convenience and creating new values, we will work on the harmonization and standardization of business operations at insurance companies and agents to enhance their efficiency. This year, we will advance our basic study on new technologies and discuss how we can make use of them.
(3) Other issues
(i) Enhance the quality of business operations at insurance companies and agents to promote a customer-oriented mindset
To help them acquire further knowledge and business skills we have been operating an accreditation program for general insurance solicitors called the "General Insurance College Course" together with the Independent Insurance Agents of Japan Inc. About 11,000 certified solicitors are actively engaged in business nationwide as "General Insurance Total Planners", the most prestigious qualification of the "General Insurance College Course". With the aim of improving customer satisfaction by providing proposals and offers on products and services, which are based on practical knowledge and skills learned on the "General Insurance College Course", we will continue with its promotion.
(ii) Enhancement of consumer consultations, complaints, and dispute settlement
To respond to general consumer consultations and complaints, our Association operates "General Insurance Counseling and ADR Centers" in 10 cities across the country. In addition, as a designated dispute resolution organization under the Insurance Business Law, these centers provide support in solving disputes between customers and insurers from a neutral and fair standpoint. This year, we will continue to provide prompt solutions to customer claims and strengthen their functions by a careful examination of customer voices.
(iii) Prevention of fraudulent claims
In order to maintain and improve a sound insurance system, we contribute to implement various measures. Established the "Insurance Fraud Prevention Office" in January 2013 and making use of information reported to the "Insurance Fraud Hotline" are examples of such measures. This year, we will further strengthen anti-fraud measures by launching a new network system and updating our information and knowledge of criminal techniques.
(iv) Proper responses to international standards
As the globalization of financial and insurance sectors continues, Japanese general insurance groups are accelerating their overseas businesses. Within this context, we are making efforts towards the harmonization of regulations and the relaxation of international trade barriers. We are taking part in various international fora such as the IAIS and the OECD, and responding to their public consultations, and participating in their discussions.
As we call for international convergence of financial and insurance regulation, development of international supervisory and regulatory standards for Global Systemically Important Insurers (G-SIIs), and Internationally Active Insurance Groups (IAIGs), is reaching a major milestone. With the aim of reflecting the practices of the Japanese general insurance industry within international standards, we will continue our active engagement in the process of international standards development.
(v) Strengthening support activities to assist emerging markets
With a view to offering technical assistance and promoting exchanges among the general insurance industries of East Asia, we have been hosting the ISJ (Insurance School (Non-Life) of Japan) programs since 1972. In addition, to deal with natural disasters and to improve the systems for insurance solicitors, we offer support to different general insurance markets in Asia through assistance programs. In collaboration with the relevant authorities and organizations, we will continue to contribute to the sound development and growth of general insurance markets in Asia.
Through the course of our long history, we have striven to offer new insurance products and services to deal with evermore complicated and diversified risks caused by social and environmental changes.
It is now more important than ever to contribute to the development of a securer and safer society, and to the sustainable growth of the country's future economy by dealing steadily with ongoing changes, including the rapid evolution of technological innovation, the increasing risk of natural disasters due to the effects of climate change, and the potential threat of large-scale earthquakes.
As Chairman of the GIAJ, I am committed to working sincerely during my one-year tenure of office to ensure that the general insurance industry fulfils its role in supporting the society and economy of Japan as an integral part of its social infrastructure.
Your support and cooperation are greatly appreciated.