Financial information

New GIAJ President outlines agenda and key policies for non-life sector

In the current uncertain environment in which natural disasters and cybersecurity issues are on the rise, it is important for the general insurance industry not only to help build the resilience of society, but also to increase the value to the community by addressing these issues as a new source of business growth, says Mr. Giichi Shirakawa, the new president of the General Insurance Association of Japan (GIAJ).

Mr. Shirakawa, who assumed the chairmanship of the association on June 30, outlines its main program and main policies for the coming year as follows:

1. Environmental changes surrounding the general insurance industry

The effects of climate change, such as the increasing intensity and frequency of natural disasters, are becoming increasingly apparent. Thus, the roles of the general insurance industry are becoming increasingly important, not only in terms of emergency preparedness, but also disaster prevention and mitigation. The industry is also taking countermeasures against the unscrupulous home repairers that have become more prominent in recent years. They try to make unfair profits by taking advantage of natural disasters.

While the progress of digital transformation (DX) brings positive effects such as improved customer experience and business efficiency, the need to take countermeasures against cyber attacks, etc. increase.

2. The GIAJ policy for advancing initiatives

Mr. Shirakawa said that as the GIAJ enters the second year of its 9th Medium Term Basic Plan, it will continue its initiatives focusing on “climate change and natural disasters” and “digital transformation (DX) ” in accordance with the following priority issues:

(1) Development of a sustainable business environment,

(2) Realization of a disaster resilient society, and

(3) Improved general insurance knowledge.

3. Measures for implementing the initiatives

(3.1) Climate change and natural disasters

GIAJ will take the following steps to promote prompt and proper payment of claims to customers affected by natural disasters, and also to continue to contribute to building a society resilient to natural disasters.

a. Disaster prevention and reduction measures

The GIAJ will promote:

– disaster prevention and reduction efforts tailored to the risk characteristics of each respective region (e.g., risk map dissemination and awareness-raising activities in cooperation with Japan’s independent insurance agents, local governments, etc.). );
-education for the next generation (eg, help in learning hazard maps for high school students); and
– activities to raise awareness of existing projects such as “Sonpo (General Insurance) Disaster Prevention Web” and “Explore your town – Disaster prevention hotspots”.

b. Countermeasures against unscrupulous home repairers who try to profit unfairly by taking advantage of natural disasters

The GIAJ will promote:

– collaboration with relevant ministries and local governments;
– raising awareness through alert flyers and the GIAJ website;
– detecting claims involving unscrupulous home repairers using AI tools; and
– sharing information on issues and best practices within the general insurance industry.

vs. Responses to issues related to climate change and sustainability

The GIAJ:
– organize study sessions for member companies on topics of increasing importance related to ESG, etc. ; and
– participate in national and international discussions concerning the establishment of standards related to sustainable development, such as the discussions of the International Sustainability Standards Board (ISSB) on the proposed disclosure requirements for financial information related to sustainable development, by submitting the GIAJ comments for public consultation.

(3.2) Digital transformation (DX)

The GIAJ will continue to promote its services and initiatives aimed at improving customer convenience and creating new values, as well as addressing the challenges posed by the digital society, such as the increasing number of cyberattacks and other emerging risks, through the following measures:

a. Acceleration of the harmonization and standardization of business procedures

The GIAJ will promote:

– the procedures for modifying/cancelling a distance contract and the cashless receipt of premium payments for the Compulsory Automobile Civil Liability Insurance (CALI);
– omission of the procedures for noting the non-exercise by the financial institutions of the pledges on the fire insurance of the mortgaged dwellings (by the conclusion of complete letters of approval with the financial institutions)
– introduction of loss assessment standards for exclusive areas of co-ownerships in earthquake insurance;
– the dematerialized exchange of information between insurance companies concerning the settlement of compulsory and voluntary claims in motor insurance; and
– dematerialized requests between insurance companies concerning the rating applied to customers’ previous motor insurance contracts, etc.

b. Countermeasures against emerging risks

The GIAJ:

– improve the responsiveness of the general insurance industry to risks by carrying out surveys on the level of awareness of SMEs and the countermeasures they have in place against the risks that surround them, such as cyberattacks;
– promote the dissemination of risk preparedness measures through the expansion of information sharing content and public relations activities using the media, etc. ; and
– conduct educational activities for SMEs, focusing on cooperative efforts with Japan’s independent insurance agents and other related organizations.

vs. Digitization of training on solicitation in general insurance

GIAJ will improve the quality of soliciting insurance agents by promoting education for them using digital technology, such as the revision of manuals for qualifying examinations (from paper to digital), and will also study the validity of the introduction of the IBT (examinations via Internet).

(3.3) Other major ongoing efforts

The GIAJ:

– improve the culture of general insurance among young people (through videos, seminars organized jointly by the life and general insurance industries, etc.);
– taking appropriate action to improve the environment surrounding insurance business (for example, making inquiries and proposals on various standards that affect the business of member companies, attending meetings and providing feedback to surveys and public consultations of the International Association of Insurance Supervisors (IAIS), the OECD and other organisations, and cooperating with and supporting the Financial Services Agency, which will host the IAIS Annual General Meeting (and other related meetings) in Tokyo in 2023;
– strengthen its support for emerging segments (for example, organize events to commemorate the 50th anniversary of the ISJ); and
– improve the quality of insurance solicitation.

Mr. Shirakawa’s message can be read in full here.