I would like to extend my greetings as we enter the new year, and also express my sincerest condolences to all those affected by the Great East Japan Earthquake and my heartfelt wish for a rapid recovery.
2011 marked another “year of turbulence” with major challenges both on the domestic front, with the complex disaster resulting from the earthquake, tsunami and nuclear accident, exacerbated by the subsequent power shortages and substantial appreciation of the yen, as well as on the international front, with massive natural catastrophes and the European financial crisis, culminating in the slowing economy.
Meanwhile, in the Japanese life insurance industry we were reminded of our social responsibilities.
Seeing the harsh reality in the areas affected by the disaster, we renewed our commitment that “it is time to respond to the trust of our customers, accomplishing our social responsibility to support the security of people's lives through the timely payment of insurance benefits”.
We also felt increasingly confident that the role of private life insurance as complementing the social security system would be indispensable in the whole life security system, as Japan has faced increasing necessity for the comprehensive reform of social security and taxation systems, given the rising sovereign risks on a global scale and the impact of the reconstruction cost on the national budget.
Even as we celebrate the New Year, the financial and economic outlook remains uncertain both in Japan and overseas. Therefore, the life insurance industry in Japan would like to contribute to reconstruction in the affected areas and revitalization of Japanese economy as well as to support to create a “dynamic and secure society” by fulfilling our social responsibilities as a provider of security and an institutional investor.
With these recognitions, we will continue to focus efforts on the "two objectives” I noted in my message in July.
The first objective is “ensuring the satisfaction of affected customers.”
Almost 10 months have passed since the disaster. The Japanese life insurance industry puts top priority on paying insurance benefits for our customers without delay to support their lives. We have already paid out a total of \146 billion for 19,000 contracts.
We have also extended the grace period for paying premiums for affected customers who had difficulty in paying premiums due to the damages of disaster, and this measure has been applied to about 230,000 contracts. In addition, each member company has made sincere efforts to offer their respective customers several options to continue their contracts based on their circumstances.
We are committed to helping our customers by serving their needs more closely and carefully through paying insurance benefits and continuing their policies.
Furthermore, after the disaster, we recognized that conveying the necessity of having security in one's life is one of our critical responsibilities. We will actively reiterate the whole population the importance of life insurance as a means of planning for the future through various media.
The second objective is “helping to build a reliable life protection system.”
While I referred to the role of private life insurance from a standing point of financial risks earlier, the second objective addresses substantial changes in social structure, namely the declining birth rate and the ageing population. It is indispensable for the government and the private sector to jointly develop a "reliable life protection system” in which the private sector complements the public system, and so the Life Insurance Association of Japan (LIAJ) continues its active communication and engagement with all those concerned.
With regard to tax relief measures, the new life insurance tax reduction gets off to a smooth start this month, thanks largely to our consistent request last year for its introduction as planned. The tax relief scheme, which was introduced to encourage self-help, is expected to become increasingly important in the years ahead, in light of the rising demand for medical and nursing care services. We will continue our efforts to raise awareness and utilization of this new scheme.
Turning to the issue of a better business environment including deregulation, last year saw the first activity of the Financial System Council in about two years. The life insurance industry will closely monitor relevant developments from our stated viewpoint that regulation on insurance group management should strike a balance between increased efficiency and policyholder protection.
As regards the revision of the “safety net” to protect customers, exchanges of views with the relevant authorities culminated in the retention of the government subsidy to the Life Insurance Policyholders Protection Corporation of Japan, based on various factors including the current financial landscape.
Finally, this year marks the "Year of the Dragon", according to the Oriental Zodiac. The Dragon is the only mythical being in the twelve zodiac signs, a sacred animal said to bring good luck. In concluding my New Year remarks, I would like to wish you a very happy new year, hoping that the Japanese economy, and each one of you, will fly high like the dragon over the abyss of mounting challenges.
|
