A project team formed by the General Insurance Association of Japan (GIAJ) in March 2024 to promote fundamental business reform is discussing the relationship between member companies and agents, and reviewing business practices to create an appropriately competitive environment.
This was disclosed by Mr Keisuke Niiro, GIAJ chairman, on 13 June in his report on the major initiatives he had taken over the past year since assuming office.
The project team’s establishment is a response to price-fixing practices by some member companies and fraudulent insurance claims by the former Bigmotor Co, which significantly damaged public trust in the non-life sector. Mr Niiro said that while the sector has formulated and implemented measures to prevent a recurrence of both types of malpractices, further initiatives are needed for the industry to be “reborn".
To incorporate external perspectives, the team also exchanged views with the Independent Insurance Agents of Japan and the "Customer’s Voices and Experts Advisory Council" members in May. The project team followed up with member companies on their efforts to prevent a recurrence of the malpractices. The results were shared among all member companies.
Mr Niiro said that at a board meeting on 13 June, the top management of all member companies was requested to upgrade their recurrence prevention initiatives, based on the results of the follow-up, in an attempt to improve the level of the industry as a whole. Follow-ups will continue, and examples of each company's initiatives will be shared among all member companies.
He said, “Looking ahead, our industry must take necessary action based on the contents of the final report of the Financial Services Agency's Expert Committee, which will be released later.”
Member companies will also consider further improvement measures with originality and ingenuity based on the business improvement plans submitted by each company.
Furthermore, in April, the GIAJ revised the Basic Unit of the educational textbook, “The General Examination for General Insurance Solicitors”, which agents and solicitors must take. The association added a description that provides basic knowledge of the Anti-monopoly Act and points to keep in mind when soliciting insurance. The GIAJ expanded contents on misconduct cases in the educational text will include them in the examination scope with effect from July 2024.
Initiatives for personal data protection
Regarding the information leakage at multi-representative agents announced by some of member companies in May, the GIAJ is investigating the leaks and their root causes. To raise awareness and knowledge of personal data protection among member company employees, GIAJ reminded its members at a Compliance Committee meeting of the rules for personal data protection that it has developed as an Accredited Personal Information Protection Organisation. In addition, a document was sent to each member company, requesting that the rules be made known and thoroughly enforced and that an investigation into the cause and prevention of recurrence be conducted to ensure that a similar incident does not occur again.
Other matters mentioned by Mr Niiro included Nat CAT events, public awareness, and international cooperation.
Turning point
In concluding his report, Mr Niiro said, ”First, regarding the restoration of trust, using the past year as a turning point, we have been working to rebuild our industry with the following in mind: Customer-oriented with changing business practices within the industry, and correcting what needs to be corrected. However, we are only halfway to restoring society's trust in our industry. We must work tirelessly to quickly develop an appropriate competitive environment and ensure discipline in our activities. In addition, as the FSA Expert Committee has pointed out the structural issues facing our industry, we need to continue discussions with the FSA, including institutional measures, to change our industry's fundamentals.
“Next, regarding educational activities and our response to the 2024 Noto Peninsula Earthquake, we have been making every effort while also strengthening our ability to disseminate information to inform people of the importance of disaster prevention/ mitigation and insurance against natural disasters, and to fulfil the essential function of general insurance by promptly paying claims in the event of a disaster. However, given the possibility of an earthquake directly under the Tokyo metropolitan area or a Nankai Trough earthquake, we need to continue to devise further strategies and take more robust measures for prompt insurance claim payments and educational activities.
“Lastly, we have promoted educational activities to "communicate the importance of disaster prevention/mitigation and insurance against natural disasters, and to help victims mitigate damage and rebuild their lives following a disaster”. However, we regret that the penetration rate of earthquake insurance in Ishikawa Prefecture, where the 2024 Noto Peninsula Earthquake occurred, was lower than the national average, and the industry needs to continue to make more vigorous efforts in various educational activities.”
In his report, Mr Niiro divided his comments into two segments — between the date of his assumption of office and a press conference held on 21 March 2024; and the period between 21 March and 13 June.
Initiatives of the GIAJ under Mr Niiro’s chairmanship undertaken up to 21 March 2024 can be read here while those continued thereafter till 13 June can be found here.