The GIAJ Chairman's Statement (Translation)
June 28, 2019
As the newly appointed Chairman of the GIAJ, I would like to express my views as follows:
I wish to extend my sincerest sympathies to everyone who was affected by "the earthquake with its epicenter off the coast of Yamagata Prefecture" on June 18th.
In addition to responding sincerely to customers affected by the disaster, the general insurance industry will continue to focus on providing prompt and proper claim payments to victims.
The current situation within the general insurance industry
With the current trend in increased personal consumption and capital investment backed by the Tokyo Olympic and Paralympic Games, which is just a year away, the Japanese economy is continuing its moderate recovery. In addition, Expo 2025 Osaka, Kansai, Japan, which is expected to stimulate the economy further, is scheduled to be held in 2025. On the other hand, although the world economy has been gradually recovering as a whole, the future has become unclear due to various risk factors such as the trade friction between the US and China, the Brexit issue, and the Middle East situation. All of these factors are causing anxiety and affecting the Japanese economy.
Regarding Japan's natural environment, last year, due to the impact of climate change, the heavy rain event in July 2018, Typhoon No.21(Jebi), and Typhoon No.24(Trami) inflicted severe damage and losses nationwide. Also, diverse region-centric disasters, such as frequent localised heavy rains continue to occur. Furthermore, the recent "the earthquake with its epicenter off the coast of Yamagata Prefecture", the Northern Osaka Earthquake, and the 2018 Hokkaido Eastern Iburi Earthquake have forced us to re-recognize that Japan is a country constantly exposed to natural disaster risks. For this reason, it is more important than ever to accelerate disaster prevention and reduction activities appropriate to each region in preparation for future large-scale natural disasters.
On the social front, current estimates suggest that Japan will be a super-aged society by 2040, which means that the ratio of elderly people (at least 65 years old) will account for approximately 35% of the total population. Although longevity itself is of course welcome, the number of traffic accidents that senior drivers are causing is continuing to rise, which has led to it becoming a social issue.
Also, the impact of the low birthrate means that the total population will be reduced to about 110 million by 2040. There is concern that labor shortages arising from the decline in the working population will have a negative impact on economic activity. As a result, following the amended Immigration Control and Refugee Recognition Act being enacted, it is thought that a smooth transition to a society in harmony with foreign residents, the number of whom is expected to increase, is necessary.
In addition, international attention on Japan has been growing due to the G20 Osaka Summit 2019. Also, it is expected that the number of foreign visitors to Japan will further increase due to the Rugby World Cup 2019, which starts in September, and the Tokyo Olympic and Paralympic Games next year. Given that according to the Key Performance Indicators of the government's "Growth Strategy (2019)", the number of foreign visitors coming to Japan will reach 40 million in 2020 and 60 million in 2030, development of the acceptance system is an issue.
Some of the various issues facing Japan are so serious that addressing them cannot be delayed any longer. We believe that "now", while the country's economy hovers solidly, is the time to take steady steps towards solving the issues.
Our strategic direction
In order to develop a bright future of the nation while responding appropriately to various issues as well as environmental changes, nationwide efforts and carrying out each industry's own duties are necessary.
Based on their respective characteristics, each member company within the general insurance industry will continue to prop up society and the economy by developing new products that correspond to various risks, improving their underwriting ability against natural disaster risks, making prompt claim payments and incorporating ingenuity in management.
The General Insurance Association of Japan (hereinafter referred to as the "GIAJ") will support the activities of our member companies. The GIAJ will also contribute to realizing a "safe, secure and sustainable society" while "stabilizing and improving the economy, and people's lives" through promoting industry-wide efforts to raise awareness of risks, providing information, expressing opinions and through other activities.
In fiscal 2019, the second year of the association's Eighth Mid-Term Business Plan, with the aim of contributing to the realization of a sustainable society (SDGs) and the promotion of innovation ("Society 5.0"), we will set two themes and focus on them as priority issues: "Responses to natural disasters" and "Responses to Senior citizens and foreign nationals" based on the environment surrounding Japan and the mission and functions of the general insurance industry.
1. Priority Issues in 2019
(1) Responses to natural disasters
In recent years large-scale natural disasters have been occurring on an annual basis, so it is no exaggeration to say that Japan is a so-called "disaster-prone country". As such, it is necessary to constantly work on disaster prevention and reduction according to the characteristics of each area, and prepare for earthquakes, typhoons, floods and other disasters.
Based on our experience in dealing with the natural disasters of recent years, this year the GIAJ will carry out disaster prevention and reduction activities at all of its branch offices according to each area's actual situation. In particular, in Okayama Prefecture, where major flood damage occurred, and in Hokkaido, where an earthquake with an intensity of 7 on the Japanese scale occurred for the first time in recorded history, we are planning to hold events aimed at enhancing risk awareness. Along with making efforts in cooperation with meteorological observatories around the country, we will utilize "Sonpo Bosai", a web-based portal on disaster prevention that takes in wind and flood damage data from the Japan Meteorological Agency.
In addition, to further promote diffusion of the "Exploration for Disaster Prevention" activities, which is a practical educational program that aims to improve traffic safety awareness, disaster prevention, crime awareness, and improvements to safe and secure areas, we will work with local governments and elementary schools in cooperation with the Independent Insurance Agents of Japan, Inc.
We will continue to focus on improving the earthquake insurance system, conducting awareness-raising for earthquake risks, and improving the market penetration of earthquake insurance.
(2) Responses to senior citizens and foreign nationals
(i) Responses to senior citizens
As Japan's aging society continues to expand, environments in which elderly citizens can live safely and securely in their familiar areas are required, even after decreased mobility and illness in old age.
The GIAJ will provide traffic accident prevention tools including high-visibility reflectors for senior pedestrians to wear when they go out. In addition, we will carry out educational activities, such as events for senior citizens and their families, in cooperation with the police, local governments and relevant organizations.
(ii) Responses to foreign nationals
In response to the advancing internationalization of Japan, there will be an urgent need to maintain safe and secure living environments for foreign residents and also to bring Japan to the attention of foreign nationals. In addition, we are required to ensure safety support for the increasing numbers of foreign tourists to Japan.
In cooperation with the relevant Ministries and local governments, the GIAJ will work on the multilingualization of traffic accident prevention tools and the expansion of the information tools foreign nationals need in the event of disasters. As part of this initiative, as a first trial, we will analyze accident data involving foreign drivers and then publish a leaflet to draw attention to the distinguishing features of such accidents. We will promote awareness raising activities utilizing such leaflets while focusing on traffic accident prone areas.
(1) Responses to technological innovations
(i) Responses to self-driving technology
Various efforts in both the public and private sectors with regard to self-driving technology are underway, Examples include securing transportation in rural areas, smooth transportation in urban areas and the streamlining of logistics. The GIAJ will provide industry opinions through participating in council meetings, which relevant ministries hold, and will also provide information on self-driving technology to consumers. We will continue to study and discuss with the related ministries the issue of claim payments following accidents involving automated vehicles.
(ii) Responses to new technologies
The GIAJ is studying efficiency measures through harmonization and the standardization of the general insurance business by utilizing new technologies. We are also conducting wide-ranging educational activities to prepare for cyber risks. We will provide information to society, collect related information and conduct investigative research.
(2) Enhancing the quality of business operations at insurance companies and agencies
With the aim of promoting high-quality insurance solicitation, the GIAJ has authorized the system of "General Insurance Total Planners", the most prestigious qualification of the "General Insurance College Course". There are currently about 12,000 certified solicitors actively engaged in business nationwide as "General Insurance Total Planners". In order to raise the attractiveness of becoming a "General Insurance Total Planner" and promote high-quality insurance solicitation which can satisfy consumers, we will continue to support the acquisition of practical knowledge and skills by enriching education and testing systems for solicitors in cooperation with the Independent Insurance Agents of Japan, Inc., which is an educational institute designated by the GIAJ.
(3) Responses to consumer consultations, complaints, and dispute settlements
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 will continue to provide prompt solutions to consumer consultations and complaints. In addition, we will continue to improve the quality of operations throughout the industry by informing member companies of complaint and dispute cases.
(4) Responses to the necessity of preparing for the occurrence of large scale earthquakes
The GIAJ has established a system to make smooth and prompt claim payments to disaster victims by preparing for the occurrence of large-scale earthquakes. In order to strengthen the payment system in the event of an earthquake disaster occurring, we will continue to work on developing a cooperative survey system within the industry, simplifying damage investigations, and further integrating IT innovations.
(5) Prevention of fraudulent claims
The GIAJ has been working on educational activities regarding the prevention of fraudulent claims by utilizing a network-based system, which helps to detect suspicious claimants, and by establishing "General Insurance Crime Prevention Councils" in cooperation with the police. In order to secure general insurance system stability and fairness among policyholders, we will continue to work on consumer awareness in relation to the prevention of fraudulent claims.
(6) Responses to international standards
The GIAJ will continue to express appropriate opinions in cooperation with related domestic and international parties. We will continue discussions with International Association of Insurance Supervisors (IAIS) to ensure that the international supervisory and regulatory standards for the business of general insurance are in line with Japan's circumstances. Also, in order to develop domestic rules that are in harmony with international standards, we will continue to closely exchange views with relevant authorities.
(7) Activities to enhance the general insurance markets of Asia
Based on Japan's experience and knowledge, the GIAJ will continue to promote support of financial infrastructure development in Asia in order to stabilize, develop and improve trust in the area's general insurance markets. We will continue to work to strengthen relationships with insurance supervisors and associations in Asia by promoting information exchanges.
As mentioned above, Japan is prone to various natural disasters. It is also a forerunner among the countries that face other challenges, such as responding to its declining population and super-aging society.
In order to solve these challenges, innovative technologies, such as AI and robotics, which are designed to help carve out a path in the new era, are emerging. Social implementation of innovative technologies, which are at various stages of research and currently undergoing trials, are likely to be effective measures in the future development of Japan. As this process continues, new risks are expected to be identified, and we are confident that opportunities to fulfill the function of general insurance in providing cover for such risks will increase.
The GIAJ continues to work towards fulfilling the social mission of "realizing a safe, secure and sustainable society" while "stabilizing and improving the economy, and people's lives". We believe that in this way our role remains unchanged.
Through an era, which has known various issues, we strongly recognize more than ever before the necessity of performing our role in further supporting Japan's development and growth.
This year is the first year of the Reiwa era, and Japan has made a fresh start. Our member companies and the GIAJ will work together to contribute to a bright future for Japan so that all its people, from youths to senior citizens, can be active and live soundly.
We would highly appreciate your continued support and cooperation.