The GIAJ Chairman's Statement (Translation)
March 18, 2021
I would like to report and comment on our activities since my last press briefing in December 2020.
1. Introductory remarks
Only within the first two months of this year, Japan has been struck by a series of natural disasters, including the earthquake off the coast of Fukushima Prefecture and the heavy snowfall and storm losses caused by a low pressure system. I wish to express my sincerest sympathies to all who were affected.
To support those affected by disasters, GIAJ established the “General Insurance Contracts Inquiry System for Natural Disasters” and has been responding earnestly to customers’ inquiries and concerns.
Our member companies have been striving to make prompt insurance claims payments while taking measures to prevent the spread of Covid-19 when handling claims, including damage surveys. The general insurance industry of Japan is committed to fulfilling its mission of helping everyone affected by the disasters to resume their normal lives as quickly as possible.
2. Response to Covid-19
In January, the government of Japan once again declared a state of emergency in areas where the infection was spreading. While the number of new infections has been decreasing with the help of the declaration, continued efforts are being made by healthcare professionals to fight the pandemic.
Under these circumstances, customers' interest and demand for insurance are increasing as the industry responds to Covid-19. Our member companies have been taking measures to prevent the spread of infection in their activities, such as promoting remote working and non-face-to-face sales. They have also implemented special measures for those customers affected by Covid-19, such as allowing a moratorium for renewal of insurance contracts and premium payment due dates. In addition, we are also working intently to review coverage of existing products and develop new products related to Covid-19. In January, some companies revised their products for business owners so that certain amounts of claims payments can be made if business owners are forced to close due to infections. The general insurance industry will continue to carry out its role while taking thorough measures to prevent the spread of infection.
3. Key initiatives of this fiscal year
(1) Strengthening responses to natural disasters
a. Work regarding earthquake disasters
1. Response to the earthquake off the coast of Fukushima Prefecture
GIAJ has been responding in cooperation with our member companies through the "2020 Natural Disaster Central Command" headed by the Chairman of GIAJ. Special measures that allow a moratorium for renewal of insurance contracts and premium payment due dates until the end of August this year have been implemented for customers who suffered losses in the affected areas which came under the Disaster Relief Act.
In addition, it has been a standard practice for insurance companies to strengthen their claims payment services in times of large-scale earthquake disasters by dispatching a large number of employees from all over the country to the affected areas to conduct face-to-face onsite surveys of the affected properties. However, because of the pandemic and to minimize psychological burden on customers, measures have been taken to minimize face-to-face activities.
Specifically, our member companies have been actively utilizing the "self-declaration method" instead of onsite surveys. For the self-declaration method, insurance companies evaluate the extent of damage based on reports filed by customers. Furthermore, in cases where onsite surveys are necessary, our member companies have been taking preventive measures to shorten the onsite survey time such as using mobile devices (Earthquake App). We will continue our efforts to provide prompt insurance claims payments by utilizing digital technologies.
2. Ten years since the Great East Japan Earthquake
March 11, 2021 marked the tenth anniversary of the Great East Japan Earthquake, and GIAJ held a webinar, "Preparing for Major Earthquakes: Ten Years Since the Great East Japan Earthquake " on March 2 in cooperation with relevant authorities and organizations. In the seminar, to raise awareness of a future large-scale earthquake that may occur, speakers and panelists looked back at their experiences from the Great East Japan Earthquake and spoke about the importance of being prepared for major earthquakes.
Besides hosting such seminars, GIAJ has also been supporting agents in their sales activities as part of GIAJ’s various communication activities to promote earthquake insurance. As we are commemorating the tenth anniversary of the Great East Japan Earthquake during the outbreak of Covid-19, we are hosting online seminars for agents across the country and cooperating with local agents to promote earthquake insurance with the catch-phrase "Make this milestone year a chance to review your coverage."
b. Work on wind and flood disasters
To ensure quick damage assessment and prompt claims payments in the event of a large-scale flood disaster, GIAJ has been working to establish a mechanism for industry-wide joint damage surveys utilizing satellite technology. Our recent achievement includes the initiative we will implement in April in partnership with Kokusai Kogyo Co., Ltd., in which we will combine SNS information etc. and satellite images to accurately grasp the extent and depth of inundation and share the information with our member companies. GIAJ will continue to support its member companies to utilize this data for faster claims payments. Furthermore, this initiative is also effective in terms of promoting non-face-to-face activities during Covid-19.
(2) Improving general insurance and financial literacy
a. The first issue of "Sonpo Journal", a general insurance educational magazine
In April 2022, the educational teaching guidance for high schools will be amended to take account of changes such as the revision of the Civil Code to lower the maturity age, and a new curriculum titled "The Public" will be created. Recognizing the importance for high school teachers who actually teach the students to understand the role and importance of general insurance, we launched the "Sonpo Journal" magazine. The purpose of the journal is to provide reference for teachers by sharing the voices of teachers who have actually used GIAJ's educational materials, and to highlight GIAJ's general insurance education activities. GIAJ will continue to provide teachers with more comprehensible information through this journal, as well as the financial literacy portal site "Sonpo Learning Navi" to convey the role and importance of general insurance and thereby improve insurance literacy.
b. Sharing information through the "Sonpo Disaster Prevention Web"
GIAJ provides disaster prevention information that can be accessed through our "Sonpo Disaster Prevention Web". This portal site provides contents unique to the general insurance industry, such as a database that matches the disaster data of related authorities with general insurance companies’ claims payments data and disaster prevention information for earthquakes, volcanic eruptions, winds, floods etc. We are working to enhance the contents of the portal by adding disaster prevention experiment videos and hazard maps and will continue to actively provide useful disaster prevention information through the portal site.
(3) Promoting efficiency through harmonization and standardization
To improve efficiency and thereby achieve a higher level of convenience for customers, GIAJ is strengthening the harmonization and standardization of various general insurance procedures. We are working to harmonize and standardize the operations of member companies to the best extent possible, such as reviewing the necessity of paper documents, personal seals, and face-to-face procedures. We have been promoting the “development of a standardized system for earthquake insurance premium deduction certificates, which are used for year-end adjustments and tax returns”, and the "examination of an industry-wide system for exchanging information on co-insurance among member companies", and plan to launch the services this fall. We will continue to work on identifying issues that need to be improved in business processes for customers as well as processes within the industry.
(4) Work on other various issues
a. Work to prevent fraudulent insurance claims
To maintain soundness of the insurance system, GIAJ is working to eliminate insurance fraud and fraudulent claims. Since October 2018, we have been operating a fraud detection system which collates past fraudulent claims data with current insurance claims data. In March, we released a new feature to the system that automatically links information of highly suspect cases to participating companies’ systems. This will lead to the establishment of a more effective system for preventing fraudulent claims.
At the Commissioner of Consumer Affairs Agency’s press conferences held on February 17th and March 10th, a warning was issued regarding fraudulent businesses seeking undue gains during the earthquake off the coast of Fukushima Prefecture. In cooperation with the Consumer Affairs Agency and National Police Agency, as well as the Independent Insurance Agents of Japan and Loss Adjusting Association of Japan, we will work to inform citizens of fraudulent billing of repair costs by unscrupulous repair companies that seek undue gain in the aftermath of disasters.
b. Appropriate responses to international standards
GIAJ has engaged in advocacy activities such as making recommendations and proposals in response to the globalization of the insurance market and expansion of overseas business of GIAJ member companies. In January and February of this year, we submitted our comments to a series of International Association of Insurance Supervisors’ (IAIS) consultations on issues including capital standards, resolution, climate-related risks etc. We will continue efforts which will lead to harmonization of international rules and reduction of trade barriers.
c. Work to support general insurance development in emerging markets
In October 2019, GIAJ signed a cooperation memorandum with the Thai General Insurance Association (TGIA) and has subsequently been working towards the development of insurance markets and improvement of economies and citizens’ lives in both countries. We have continued our efforts during Covid-19 and held a webinar on prevention of fraudulent claims for automobile insurance in January. In March, we started the second half of the ‘Advanced Course’ of the Insurance School (Non-Life) of Japan (ISJ), which is a technical assistance and training program for employees of general insurance companies and insurance regulatory bodies in Asian countries and regions. We will continue providing assistance tailored to the needs of the general insurance industries of Asian countries and regions.
d. Work regarding autonomous driving technology etc.
With regards to self-driving, GIAJ has been working on solving issues related to self-driving, advocacy activities, and research and studies on the causes of accidents related to self-driving. When handling insurance claims for accidents involving self-driving vehicles under Compulsory Automobile Liability Insurance (CALI), it is necessary to accurately understand the state of the self-driving system at the time of an accident. Therefore, for new contracts starting on April 1st of this year, we will revise CALI policies so that the policy clearly specifies that insurance companies may request insureds etc.to cooperate in investigations. We will continue to contribute to a safe and secure society through effective measures to address issues around legal systems and various rules.
e. Initiatives financed by CALI premium profits
Since 1971, we have been utilizing premium profits from CALI for various activities such as automobile accident prevention and assistance to victims of traffic accidents etc. For fiscal 2021, we have decided to utilize a total of 1,852.28 million Yen to support 42 projects, including 5 new projects, such as a pilot program to enable online traffic safety classes for elementary and junior high schools across the country. In addition to the original role of CALI providing compensation to traffic accident victims, we will continue to conduct research on traffic accident prevention and to provide support in the development of emergency medical systems and complimentary consultation services for traffic accidents etc.
4. Development of the Ninth Mid-Term Business Plan
At today's meeting of the Board of Directors, the Ninth Mid-Term Business Plan starting from fiscal 2021 was officially adopted. The plan identifies the priority issues that GIAJ will undertake over the next 3 years, namely "Development of a sustainable business environment", "Realization of a disaster-resilient society", and "Improvement of general insurance literacy," and highlights the measures to be taken to address those issues.
(1) Development of a sustainable business environment
The business environment surrounding our industry is rapidly changing. For instance, Covid-19 led to the acceleration of non-face-to-face, non-contact, paperless operations utilizing digital technology. In addition, from the perspective of transition to a carbon-neutral and sustainable society, there is growing public interest in climate change, which has a significant impact on both the global environment and economic activities.
The general insurance industry supports society and customers "in their time of need." To continue fulfilling its role of "providing safety and security to the world" and "solving social problems", it is essential for the general insurance industry to develop a sustainable business environment by appropriately responding to changes in society and nature, and to changes in the needs of the world. Particularly with respect to climate change, the general insurance industry of Japan will continue contributing to the transition to a decarbonized and sustainable society, and GIAJ will support member companies on that path.
(2) Realization of a disaster-resilient society
To fulfill the social role expected from the general insurance industry, we will further strengthen our ability to respond to the natural disasters whose frequency and severity are increasing due to climate change. Specifically, in the event of a natural disaster, we will continue to engage in industry-wide efforts to ensure appropriate and prompt claims payments. We will also strengthen our response to fraudulent business practices that seek undue gain during disasters and develop systems to ensure appropriate claims payments. In addition, we will strengthen our cooperation with related authorities to implement highly effective disaster prevention and mitigation measures. Furthermore, we will contribute to the realization of a disaster-resilient society by promoting insurance for businesses.
(3) Improvement of general insurance literacy
General insurance helps customers "in their times of need" and has a highly public nature. To increase the resilience of citizens’ lives, we believe that it is crucial for citizens to deeply understand the risks that surround them and utilize general insurance to prepare for those risks. Accordingly, in cooperation with educational institutions, government, and other financial sector organizations, we will work to increase citizens’ literacy of general insurance. In addition, we will also promote the digitalization of various educational tools we have been providing, in light of the increased ICT utilization in education along with the increased usage of PCs and tablets.
5. Concluding remarks
Since I assumed office as Chairman of the Association, we have focused our efforts on “Strengthening responses to natural disasters”, “Improving general insurance and financial literacy”, and “Promoting operational efficiency through harmonization and standardization” while flexibly responding to environmental changes including Covid-19. In the remaining three months of my term as Chairman, the general insurance industry will make a concerted effort and work steadily with a focus on the 3 key initiatives.
Your continued support and cooperation would be greatly appreciated.