The GIAJ Chairman's Statement (Translation)
Sep. 20, 2018
Nearly three 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.
Numerous natural disasters have hit Japan in recent months, including the earthquake that hit northern Osaka, The Heavy Rain Event of July 2018, Typhoon 21 (Jebi), and The 2018 Hokkaido Eastern Iburi Earthquake. On behalf of the GIAJ, I wish to express my deepest condolences to the victims and extend my sincerest sympathies to all who were affected.
The general insurance industry is making unified efforts to ensure prompt payment of insurance claims. I sincerely hope that the daily lives of all who were affected are restored as soon as possible.
2. Our key activities so far
(1) Contribution to promoting the realization of a sustainable society (contributing to the realization of a sustainable society (achieving SDGs))
(i) Direction of our initiatives
Given changes to the environment such as the increase in natural disasters due to the effects of climate change, the advancement of digital innovation, and the aging population, expectations on the general insurance industry to contribute to the realization of a sustainable society are increasing. In addition to consistent implementation of our Eighth Mid-Term Business Plan, we are reviewing industry-wide initiatives and the activities of the GIAJ from an SDGs standpoint and have commenced verification of our Code of Conduct.
In addition, we will carefully consider which of our current activities should be further strengthened and which new initiatives align with our roles. We will hold an "SDGs Forum (provisional name)" on January 23rd next year. Its aim is to disseminate information about our activities, which relate to the realization of SDGs, and to deepen discussions about the initiatives with an eye towards 2030.
(ii) Responding to natural disasters
a. Enhancing the pre-event catastrophe loss reserve system
In July, we set out requests for tax reforms for fiscal 2018 and submitted them to the relevant authorities. As a priority, we are calling for enhancement of the existing pre-event catastrophe reserve system concerning fire insurance, etc. In line with Insurance Business Act requirements, general insurers set aside reserves to ensure all claims can be properly paid even in the event of a major natural catastrophe.
However, following recent payouts due to a succession of disasters including torrential rains in Northern Kyushu and Typhoon Lan last year, the earthquake that hit northern Osaka and the heavy rains of July 2018, the catastrophe reserves are currently at a low level. In order to continue to ensure proper claim payments, insurers need to swiftly restore the catastrophe reserves.
Therefore, it is essential to raise the accumulation rate to six percent from the current five. We will advance our industry-wide efforts to reach out to various related parties and call for the realization of our requests.
b. Promoting earthquake insurance
The national earthquake insurance attach rate (the number of earthquake insurance policies attached / the number of fire insurance policies) at the end of fiscal 2017 was 63.0%, a year-on-year increase of 0.9%. Considering the potential threat of events such as a Tokyo Inland Earthquake and a Nankai Trough Earthquake, we are working on further improving the market penetration of earthquake insurance as an effective self-help tool designed to ease the economic burden of policyholders. As part of new promotional activities started on August 22nd, we launched a special website which includes digital content entitled "Earthquake Insurance Workbook for Fathers", which is intended to enable users to learn about earthquake insurance and disaster prevention easily by introducing a game element. In addition, we will hold experience-oriented disaster prevention learning events in Tokyo, which are intended to help consumers understand the importance of earthquake insurance.
(iii) Prevention of traffic accidents involving senior citizens
With the aim of reducing the number of traffic accidents involving senior citizens and pedestrians, we are promoting awareness-raising activities and disseminating information regarding dangerous intersections nationwide. Along with the Autumn National Traffic Safety Campaign, we have publicized a video entitled "SHARE THE ROAD", which emphasizes the importance of being considerate of and generous towards other road users. Moreover, taking account of findings that indicate more than half of all road accidents take place near intersections, we have updated the contents of our "Introduction to Traffic-Accident-Prone Intersections" webpage map. Listing the most dangerous intersections in terms of number of accidents, the map has had over 5.6 million views. Making best use of digital contents, leaflets and reflectors, we will continue to work together with relevant government authorities, local police departments, municipalities and the media.
(2) Contribution to promoting Technological Innovations (Contribution to the realization of "Society 5.0")
(i) Measures to address advances in self-driving technology
A government study group under the Ministry of Land, Infrastructure and Transport (MLIT), which discussed liability for traffic accidents involving autonomous cars, concluded that during the transitional period when cars with different levels of autonomous driving technology coexist on the road (from 2020 to around 2025), the current liability system, which works well in providing prompt compensation to traffic accident victims, should be maintained.
In order to have autonomous driving widely accepted by society, it is important not only to advance technological developments and legal systems, but also to further enhance their social receptivity by improving consumer awareness and understanding and relieving concerns about what will happen following an accident.
Against this backdrop, we set up a webpage dedicated to autonomous driving on our website as part of our efforts to provide information to consumers. As well as providing information such as definitions of different levels of autonomous driving, it also intends to promote safe driving by emphasizing that levels 1 and 2, which are already in practical use, require monitoring by drivers, and that overconfidence in autonomous driving systems could lead to accidents.
(3) Other issues
(i) Prevention of fraudulent claims
In October, we will launch an updated fraudulent claim detection system to enable insurers to refer to records of past insurance claims more efficiently and identify suspicious 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. The new system also expands the information items to be exchanged.
We have been working to enhance an industry-wide database of fraudulent claims, and to utilize the database to analyze connections among fraudulent claimants. With the establishment of this new system, we will ensure more effective prevention of insurance fraud.
(ii) Auto theft prevention measures
In 2003, the GIAJ set October 7th as "Theft Prevention Day". Since then it has been engaged in annual awareness-raising activities against crimes such as auto theft and car break-ins, etc. at various locations. The number of known vehicle thefts between January and July this year was 5,163, a decrease of 14.9% compared with the same period last year. However, constant countermeasures are essential as particular areas are still troubled by frequent vehicle thefts. On October 5th this year, we will conduct nationwide awareness-raising activities in cooperation with the police and the Independent Insurance Agents of Japan Inc., including handing out leaflets at various locations.
(iii) Support activities to assist emerging markets
We hosted the Insurance School (Non-Life) of Japan (ISJ) Overseas Seminar in Yangon, Myanmar on September 6th and 7th. While the ISJ is an insurance centered technical exchange program for insurance practitioners based in East Asia which the GIAJ has been hosting in Tokyo every year since 1972, the ISJ Overseas Seminar has been held in various regions every year since 1993.
Furthermore, we also proposed a support plan and dispatched one of our staff as Japan International Cooperation Agency (JICA) expert to Myanmar in August.
In collaboration with relevant authorities and parties we will continue to contribute to the sound development and growth of general insurance markets globally.
Since I was appointed Chairman of the GIAJ in June, we have steadily implemented the Eighth Mid-Term Business Plan which covers a three-year period starting this April. Its particular focus is on contributing to the realization of SDGs and "Society 5.0".
As we continue to witness an unprecedented series of natural disasters, I believe this year will hold a special place in the pages of history. We are forced to realize again that disasters well beyond our assumptions and experience could occur anytime, anywhere and that we must always be prepared for them.
We will continue to work on promoting the importance of insurance as an effective self-help tool designed to ease the economic burden of policyholders. In addition, we will also continue to work on promoting accident and disaster prevention measures consistent with local characteristics in cooperation with various related parties. We will continue to make positive, unflagging efforts which contribute to a worry-free, safe and sustainable society.
We would highly appreciate your continued support and cooperation.