The GIAJ Chairman's Statement (Translation)

As the newly appointed Chairman of the GIAJ, I would like to express my views as follows:

Shinichi Hirose, Chairman

1. Introductory remarks

 Covid-19 continues to spread around the world. I wish to express my deepest condolences to the victims of Covid-19 and extend my sincerest sympathies to the victims’ families and to those who have been affected. On behalf of the general insurance industry of Japan, I also wish to extend my sincere gratitude to and honor all the health care workers who are risking their lives at work, as well as all the essential workers of various fields who support our social infrastructure.

 In Japan, while the emergency declaration has been lifted, the situation remains critical. We must prepare for potential second and third waves while resuming economic activities in a steady and phased manner, keeping the lives and health of the citizens as the highest priority.

 GIAJ will continue to carry out our mission while preventing further spread of the infection so that citizens can live a safe, secure, and healthy life in spite of an environment with lingering effects of Covid-19.

2. Response to Covid-19 and Recognition of the external environment

 GIAJ set out the “Basic Policy for Covid-19 Control” and established a framework to counter the infectious disease. The Policy provides for specific measures to prevent infections to employees etc. in workplaces, and guidance when there are confirmed cases. We shared the Policy with member companies and continue our efforts to prevent the spread of infection.

 In addition, our member companies, as corporate citizens, are continuing to provide necessary services to their customers as best they can while taking utmost precaution to prevent the spread of infection to customers, agents, and employees etc. Flexible measures are being taken to introduce processes without face-to-face interaction such as active use of phones and online communication. Furthermore, to assist policyholders who have been affected by Covid-19, special measures are taken to allow a moratorium for renewal of insurance contracts and premium payment due dates. Also, our member companies are reviewing to extend coverage on existing products to cover losses due to Covid-19 and offering products that cover risks such as cyber risks that arise from the shift to remote working as the result of Covid-19.

 GIAJ will utilize the experience learned from the responses to Covid-19 and incorporate the post Covid-19 lifestyle while fulfilling our role as social infrastructure. As instructed by the Japanese Government, GIAJ plans to review the existing paper-based processes, use of personal seals, and face-to-face procedures.

 Furthermore, our country recently has faced numerous large-scale natural disasters such as earthquakes, typhoons, and torrential rains, and the general insurance claim payments regarding natural disasters has been increasing. The past 2 years have been particularly significant, and we have made general insurance claims payments of more than one trillion yen for two consecutive years. We recognize the increasingly important role the general insurance industry plays in supporting citizens to prepare for natural disasters that is increasing in severity in the recent years. At the same time, we face another challenge of making insurance claim payments regarding natural disasters amid the impact of Covid-19. In addition, it is becoming more important than ever to prepare for new risks, such as cyber risks. The general insurance industry must swiftly and properly adapt to the changing environment associated with technological advancements such as digitalization.

 None of the challenges which the general insurance industry is faced with can be delayed, and while we continue to strive steadily to solve each issue, we will contribute to a safe and secure society by providing products and services that will protect customers in their times of need.

3. Strategic direction

 We set the “Eighth Mid-Term Business Plan (for fiscal years 2018-2020)” to contribute to “creating a safe and secure society” through the “prudent development of general insurance” and “increasing trust for our industry.” The Plan is based on the following four pillars: "Prompt and precise responses to societal changes," "Promoting customer-oriented business operations," "Establishment of a more robust and stable general insurance system," and "Increased involvement of GIAJ in international insurance markets." Along with the 4 pillars, we have also incorporated aspects of the Sustainable Development Goals (SDGs) in our work.

 Fiscal year 2020 marks the final year of the “Eighth Mid-Term Business Plan.” Along with drafting the next Mid-Term Business Plan for fiscal years 2021-2023, we will focus on the following 3 key issues: “Strengthening responses to natural disasters,” “Improving financial and general insurance literacy,” and “Promoting operational efficiency through harmonization and standardization.” We plan to work towards resolving the issues taking into account the impact of Covid-19 on society.

4. Specific Initiatives

(1) Strengthening responses to natural disasters

 We aim to build a society more resilient to natural disasters by ensuring appropriate and prompt claims payment in any situation.

 In December 2019, GIAJ established the “Natural Disaster Response Review Project Team” to study and resolve various industry issues relating to natural disaster response in recent years. The project team has already started discussing solutions to issues surrounding natural disasters, and we will identify areas which need further work and proceed accordingly.

 First, we plan to improve our insurance claims systems in case of large-scale natural disasters, such as creating smart phone apps that will enable policyholders to make claims promptly from their evacuation shelters.

 Moreover, in order to provide prompt and proper insurance claims payments, we will continue to explore quick damage assessment from various perspectives, cooperate with both national and local governments to promote the use of hazard maps, and contribute to increase awareness of natural disaster prevention and mitigation among the citizens through contents created by GIAJ.

 March 11, 2021 marks the tenth anniversary of the Great East Japan Earthquake. GIAJ plans to review our work over the past decade and consider hosting seminars to emphasize the importance of precautions against future large-scale natural disasters in order to protect the lives and property of the citizens.

(2) Improving financial and general insurance literacy

 With the impact of Covid-19 as well as the increasing severity and frequency of natural disasters, social uncertainty is on the rise. In such circumstances, in order to ensure safety and security of the citizens and for corporations to actively engage in business, it is becoming increasingly important for citizens to properly understand risks and develop their ability to manage risks appropriately through the selection and use of insurance products (general insurance literacy).

 We regard the improvement of the general insurance literacy of the citizens as our important role and will compile and offer essential information on the risks surrounding their lives, as well as their prevention and mitigation.

 Furthermore, leveraging the insights from Covid-19, we will provide useful information without face-to-face interaction to improve general insurance literacy, such as developing/updating a portal site and proactively utilizing online learning and educational tools.

(3) Promoting efficiency through harmonization and standardization

 In this era of accelerating technological advances, our industry must incorporate new technologies and promote harmonization and standardization of processes provided by our member companies, thereby improving work efficiency to offer more convenient services to customers.

 During the fiscal year, we will discuss within GIAJ to improve systems in areas such as insurance products, insurance claims services, and administrative procedures. For example, we will discuss improving efficiency within the industry by standardizing the issuing of insurance premium deduction certificates that are used for year-end adjustments and tax returns. Currently, the certificates are issued by each product, but through standardization, the industry will benefit from operational efficiencies, and we will be able to achieve a higher level of convenience for customers.

 Moreover, to prevent the spread of Covid-19, with regard to Compulsory Automobile Liability Insurance (CALI), we have implemented special measures allowing a moratorium regarding amendments and cancellation processes as well as enabling them to be conducted by post, having previously only been available by meeting face-to face. We realize that some processes require review to adapt to the new lifestyle going forward and will explore potential improvements.

 We will work continuously to review operational processes towards harmonization and standardization, identifying issues from a modern day viewpoint as well taking into account the mid to long- term challenges.

(4) Our work on various issues

Work regarding senior citizens and foreign nationals

 GIAJ will further enhance last year’s work and continue to raise awareness among senior citizens by providing relevant information on prevention of traffic accidents, and information tools for foreign nationals.

Work regarding cyber risks

 GIAJ will continue activities to raise awareness to strengthen cyber security response for small and medium-sized enterprises through the "special webpage on cyber insurance" on our website. The risk of cyber-attacks to insurance agents are also increasing, and we plan to widely engage in cyber security response for insurance agents.

Work regarding increased quality of agents’ sales practices

 To support the improvement of the quality of sales practices of agents, GIAJ created certification of "General Insurance Total Planner", the highest qualification of the "General Insurance College Course,” and there are more than 14,000 certified agents nationally. We will continue our work to raise the attractiveness of this certification scheme.

Work regarding prevention of fraudulent claims

 GIAJ is working to raise awareness of fraudulent claims through the utilization of fraud detection systems and partnering with the police to hold “general insurance crime prevention and response conferences.” We will continue to further upgrade the general industry's common database with the aim of eliminating insurance fraud and fraudulent claims that impair the soundness of the insurance system.

Work regarding consumer consultations, complaints, and dispute settlements

 GIAJ operates the "General Insurance Counseling and ADR Centers" to provide customers with support, to handle complaints regarding general insurance, and to resolve disputes between customers and insurers. The Centers will continue to provide support in solving disputes between customers and insurers from a neutral and fair standpoint.

Appropriate response to international standards etc.

 Globalization of the insurance market is progressing as well as overseas expansion of GIAJ members, and we will continue engagement that will lead to harmonization of international rules and reduction of trade barriers through various advocacy activities such as requests and recommendations to the International Association of Insurance Supervisors (IAIS), relevant ministries and the Organization for Economic Co-operation and Development (OECD) etc.

Activities to support the general insurance markets of emerging markets

 GIAJ collaborates with relevant organizations and government bodies such as the Financial Services Agency, the General Insurance Rating Organization of Japan, and the General Insurance Institute of Japan, and engages in insurance-related technical cooperation that support financial infrastructure development in the Asian region. For the stable and sound development of general insurance markets in Asia, we will continue to provide support that meets the needs of each country/region.

5. Concluding remarks

 In its history of more than 100 years, the general insurance industry has overcome numerous tribulations such as countless large-scale natural disasters and responding to various societal changes.

 Although we continue to face uncertainty due to Covid-19, we are mindful that the global spread of the infection is accelerating the trend of digitalization by increasing the importance of online services and working. We regard this as an opportunity to review our industry practices to drive changes and will proactively work to solve challenges. We will strive to meet your expectations through our steady work to address challenges and external changes, thereby continuing to fulfil our role as social infrastructure which supports the safety and security of citizens.

 Your continued support and cooperation would be greatly appreciated.