The GIAJ Chairman's Statement (Translation)
（June 13, 2019）
I would like to report on the progress made on our major initiatives during my one-year tenure and offer my views.
Over the past year, massive natural disasters such as The Northern Osaka Earthquake, The Heavy Rain Event in July 2018, Typhoon No. 21 (Jebi), The 2018 Hokkaido Eastern Iburi Earthquake and Typhoon No. 24 (Trami) have inflicted severe damage and losses nationwide. I wish to once again extend my sincerest condolences to the victims and my sympathies to all those who were affected. The general insurance industry has been making unified efforts to ensure payments of insurance claims are made. The total amount of claims paid has reached 1.7 trillion yen (including estimates). As forecast, there have been various changes to our business environment, such as the ongoing phenomenon of climate change. This has been a year in which I was reminded once again that our industry must fulfill its role as an integral part of the nation's social infrastructure. We must continue working towards building a safer, more secure and sustainable future for Japan.
As we look at the political/economic situation on both the domestic and international fronts, we recognize various issues that require our close attention. Despite its continued steady growth over the past decade, we are keenly aware of rising uncertainty over the prospects of the world economy. In particular, if trade friction between the US and China is further prolonged, we could experience a more exaggerated slowdown. Business and individual corporations need to take various measures in response to the economic situation while keeping in mind the turning points of the economic expansion phase.
2. Our initiatives over the last 12-months
The GIAJ launched the Eighth Mid-Term Business Plan last 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 have made steady progress with our initiatives during the first year of the Eighth Mid-Term Business Plan.
(1) Contribution to promoting the realization of a sustainable society (achieving SDGs)
(i) Direction of our initiatives
Given that changes to the environment such as the aging population, climate change and the advancement of digital innovation may bring new risks to society in various ways, the GIAJ reviewed the roles that the general insurance industry should play towards achieving a sustainable society from an SDGs standpoint. Following the review, we revised our Code of Conduct. The GIAJ and the Life Insurance Association of Japan cohosted the "SDGs Forum" in January and reaffirmed the roles and issues to be undertaken by the industry to achieve SDGs. Also, in May, the GIAJ expressed support for the recommendations of the Task Force on Climate- Related Financial Disclosure (TCFD) from the viewpoint of further contributing to the realization of a sustainable society. We will continue to promote efforts to achieve the SDGs from a broad perspective.
(ii) Responding to natural disasters
a. Enhancing the pre-event catastrophe loss reserve system
General insurers set aside catastrophe loss reserves to ensure all claims can be properly paid even in the event of a major natural catastrophe. However, following withdrawals from the reserves due to a succession of disasters in recent years, they are currently at a low level.
In order to enable swift restoration of the reserves by each insurer, the GIAJ made "enhancement of the pre-event catastrophe loss reserve system" a priority among our tax reform requests to the government. We also advanced our industry-wide efforts to reach out to various related parties and called for the realization of our requests. In response to this particular request, the fiscal 2019 tax revision package includes measures which allow raising the accumulation rate of catastrophe loss reserves to six percent (from the current five).
b. Disaster prevention and reduction
In cooperation with relevant government authorities and municipalities, the GIAJ held a total of 35 activities aimed at strengthening regional disaster prevention capabilities across the country. On a number of occasions, including last October's "National Conference for Promoting Disaster Risk Reduction (Bosai-Kokutai) 2018", our association held panel discussions which highlighted the possibility of a Tokyo Inland Earthquake. Last November, the GIAJ co-hosted a symposium on disaster recovery jointly with the Japan Society for Disaster Recovery and Revitalization, and for the first time took part in two special TV programs which emphasized the importance of being prepared for large-scale earthquakes. In January, the GIAJ held an awards ceremony for the winners of our annual 'Exploration for Disaster Prevention' map-making competition, which marked its 15th anniversary this year. Through these activities, we promoted education for disaster prevention and reduction. We will continue to improve our efforts to help protect society from natural disasters.
c. Promoting earthquake insurance
The GIAJ launched a special website called "Earthquake Insurance Workbook for Fathers", which includes digital content. As well as holding experience-oriented disaster prevention events in Tokyo and Osaka, we also held earthquake insurance seminars intended for insurance agents at 13 locations nationwide. As a result of these efforts, the number of earthquake insurance contracts in force has hit around nineteen million(*), and their diffusion rate is steadily rising.
Bearing in mind the potential threat of a huge earthquake hitting Japan, we will continue to promote earthquake insurance.
(*) The number of earthquake insurance contracts: 19,005,841
(at the end of fiscal 2018・The General Insurance Rating Organization of Japan (GIROJ))
Year on year +4.1％（+747,914）
(iii) Prevention of traffic accidents involving senior citizens
As Japan's super-aged society continues to expand, traffic accidents by senior drivers have become a social problem. In cooperation with relevant municipalities and local police departments, we have conducted a total of 122 educational events across the country. Making use of tools such as the "Introduction to Traffic-Accident-Prone Intersections" webpage and educational movies, the activities have been well received by related parties. We will continue to utilize every opportunity to promote our educational activities.
(2) Contribution to promoting Technological Innovations (Contribution to the realization of "Society 5.0")
(i) Measures to address advances in self-driving technology
Last September, as part of our efforts to raise consumer awareness, the GIAJ set up a webpage dedicated to autonomous driving on our website. The GIAJ is continuing to study how the cause of accidents involving self-driving cars should be analyzed. We are making requests and recommendations through public consultations and participating in dialogues with the relevant Ministries and organizations. The GIAJ will continue to contribute to the realization of a worry-free, safe, autonomous-vehicle-using society by making recommendations on effective measures regarding a legal framework and various rules related to autonomous driving.
(ii) Response to emerging risks and enhancement of cybersecurity
In order to gauge their awareness of cyber risks and promote enhancement of industry responses to cybersecurity, the GIAJ conducted a survey of domestic corporations. In addition to summarizing issues and measures for its penetration, we also set up a special webpage on cyber insurance. We will utilize the results of the survey and undertake measures to enhance corporate cybersecurity.
(iii) Measures on harmonization, standardization and enhancement of the operational efficiency of our industry
The GIAJ continued to broadly study ways of utilizing new technologies to improve customer convenience and to enhance the operational efficiency of insurance agents and insurers. While we identified priority areas among various themes in which we will deepen our discussions, we also sorted out possible measures. We will continue to have in-depth discussions and examine the viability of respective measures.
(3) Other issues
(i) Enhancing the quality of business operations at insurance companies and agencies to promote a customer-oriented mindset
With the aim of promoting high-quality insurance solicitation, the GIAJ has moved forward with various measures in cooperation with the Independent Insurance Agents of Japan, Inc., to increase the number of "General Insurance Total Planners", the most prestigious qualification of the "General Insurance College Course". As a result, the number of applicants for the "Consulting Course", which to be certified as a "General Insurance Total Planner" is a requirement, hit 2,055, the second highest figure ever. In order to promote high-quality insurance solicitation, we will continue calling for wide participation in this educational program.
(ii) Enhancement of consumer consultations, complaints, and dispute settlement
The GIAJ operates "General Insurance Counseling and ADR Centers" in 10 cities across the country where experts respond to general consumer consultations and complaints. These centers provide support in solving disputes between customers and insurers from a neutral and fair standpoint. This fiscal year, we implemented various measures including introducing a new IT system which strengthens security and business continuity, and by analyzing cases selected under defined themes, informs member companies of possible causes of particular complaint categories. We will continue to improve the quality of operations throughout the industry by strengthening our abilities and functions.
(iii) Helping consumers understand general insurance
Leveraging a network of 11 branch offices nationwide, the GIAJ has been promoting measures to improve consumer understanding of general insurance. This year, in addition to holding various lectures and disaster prevention-related events, we dispatched lecturers to present a series of courses at 13 universities nationwide, which attracted 104,736 attendees. While promoting various initiatives to inform people of the necessity of being prepared for the diverse risks that surround our lives, we will continue to expand our roster of lecturers, focusing on former employees of member companies.
(iv) Promoting understanding of the Compulsory Automobile Liability Insurance (CALI) system
Since 1966, the GIAJ has been carrying out public relations activities to promote understanding of the Compulsory Automobile Liability Insurance (CALI) system and prevent uninsured automobiles being driven on public roads. This year, in addition to setting up a special webpage dedicated to CALI promotion, we promoted initiatives utilizing various media. Investment income generated by general insurance companies' CALI business is used to promote measures to prevent automobile accidents and help support automobile accident victims. In 2019, 38 businesses received a total of 1,854.17 million yen to support these measures. We will continue to contribute to the protection of automobile accident victims and the realization of a safe and secure driving culture through conducting various initiatives related to liability insurance.
(v) Auto theft prevention measures
The GIAJ is engaged in awareness-raising activities against crimes such as auto theft and car break-ins. We act as the secretariat of the private-sector in the "Private-Public Joint Project Team on the Prevention of Automobile Theft", which is composed of four Ministries including the National Police Agency and 19 private-sector groups. The GIAJ designated October 7th as "Theft Prevention Day" and conducted various awareness-raising activities in cooperation with the police and other parties, putting special emphasis on the 10 areas where most auto theft cases are known to occur. The National Police Agency reported that the number of known vehicle thefts in 2018 was 8,628, the first time below 10,000 in 59 years. With the aim of further reducing the figure, we will promote initiatives in cooperation with related parties.
(vi) Prevention of fraudulent claims
The GIAJ has been working to prevent fraudulent claims by utilizing a network-based system which helps to detect suspicious claimants. Last October, we launched an updated fraudulent claim detection system to enable insurers to refer to records of past insurance claims. While the previous system covered only personal accident and third-party liability/automobile personal injury insurance, the new system covers all lines of insurance. We have also been sharing our knowledge regarding insurance-related crime prevention within the industry by holding seminars all over the country. We will continue to further strengthen anti-fraud measures through enhancing our research on criminal techniques.
(vii) Responses to international standards
Whilst the GIAJ has been working to reflect its opinion in relation to the development of international supervisory and regulatory standards, it has also been dealing with trade issues in terms of securing an equitable and fair business environment with competitive conditions in the global general insurance market by taking every opportunity, such as attending international conferences and responding to public comments made by relevant organizations. More specifically, we have been submitting comments based on the current situation of the Japanese general insurance industry in various consultations conducted by the International Association of Insurance Supervisors (IAIS), including development of the "Common Framework (ComFrame)" to supervise Internationally Active Insurance Groups (IAIGs). We continue to express our opinions. In the future, we will work to strengthen our position to enable us to respond reliably to the expanding and accelerating debates on the various themes discussed within the IAIS, such as climate change, cyber security, fintech, etc.
(viii) Support activities to assist emerging markets
The GIAJ is always looking into ways to better promote and support the sound development of general insurance markets in Asia. Last November, we concluded a cooperation memorandum with the ASEAN Insurance Council (AIC). We also held the Insurance School (Non-Life) of Japan (ISJ) Overseas Seminar in Yangon, Myanmar. The ISJ is an insurance-centered technical exchange program for insurance practitioners based in East Asia. We held a seminar on January 24th in Tokyo on insurance distribution and insurance solicitors training systems in which representatives of the Ministry of Planning and Finance, Myanmar, participated. We also held a seminar on automobile insurance claims handling in Ulaanbaatar, Mongolia. We will continue to contribute to the further growth and development of general insurance markets in Asia by promoting human and information exchanges with insurance supervisors, associations and other parties in the region.
As we witness the beginning of the new "Reiwa" Era, the environment surrounding us, including both the domestic and international political/economic situation, and the rise in the frequency of natural disasters, is about to change dramatically. The general insurance industry will continue to contribute to realizing a safer and more secure society, along with the sustainable growth of Japan.
Last but not least, I would like to express our hearty gratitude for your support and cooperation. Going forward, your continued understanding and cooperation with the Japanese General Insurance industry and the General Insurance Association of Japan would be greatly appreciated.