Shar­ing Best Prac­tice with Neigh­bor­ing Asian Gen­eral In­sur­ance Mar­kets through the In­sur­ance School (Non-Life) of Ja­pan

Help­ing de­velop a sound gen­eral in­sur­ance in­dus­try un­der a dereg­u­lated mar­ket.

Insurance - - CONTENTS - Text Hiroy­asu Miyazaki | Man­ager (Pro­mo­tion of re­gional co­op­er­a­tion in Asia) | In­ter­na­tional Depart­ment | The Gen­eral In­sur­ance As­so­ci­a­tion of Ja­pan


The Gen­eral In­sur­ance As­so­ci­a­tion of Ja­pan (GIAJ) and the Gen­eral In­sur­ance In­sti­tute of Ja­pan (GIIJ) have jointly been pro­vid­ing an in­sur­ance pro­gram called the In­sur­ance School (Non-Life) of Ja­pan (ISJ) for staff and man­age­ment of gen­eral in­sur­ance com­pa­nies and reg­u­la­tory of­fices in East Asian re­gions. The ISJ pro­gram in­cludes Gen­eral and Ad­vanced cour­ses, to which in­sur­ance prac­ti­tion­ers from the 15 ISJ par­tic­i­pat­ing re­gions are in­vited to Tokyo to at­tend. Ad­di­tion­ally, an in­sur­ance sem­i­nar called the Over­seas Sem­i­nar is held in dif­fer­ent cities cho­sen in turn from among the re­gions, on themes that cover re­spec­tive mar­kets' con­cerns.


The ISJ is an in­ter­na­tional in­sur­ance ed­u­ca­tion pro­gram, which was founded in 1972 by the Ja­panese gen­eral in­sur­ance in­dus­try in re­sponse to ad­vice by the United Na­tions Con­fer­ence on Trade and De­vel­op­ment (UNCTAD) and a re­quest by the East Asian In­sur­ance Congress (EAIC). The ISJ Gen­eral and Ad­vanced Cour­ses are in­tended to deepen par­tic­i­pants’ un­der­stand­ing of the ex­pe­ri­ences of the Ja­panese gen­eral in­sur­ance mar­ket, as well as topics of mu­tual

con­cern through lec­tures and dis­cus­sions, while the Over­seas Sem­i­nar pro­vides in­for­ma­tion tai­lored to the re­gion in which the sem­i­nar is held.


Clearly, mu­tual un­der­stand­ing and co­op­er­a­tion within the Asian re­gion is be­com­ing more im­por­tant than ever. We hold these ISJ cour­ses and sem­i­nars to pro­mote in­ter­na­tional ex­change and mu­tual un­der­stand­ing by in­tro­duc­ing Ja­panese in­sur­ance sys­tems and prac­tices, and by of­fer­ing a fo­rum for the ex­change of in­for­ma­tion and opin­ions. I be­lieve the ties es­tab­lished through the ISJ are help­ful in fur­ther­ing these goals of mu­tual un­der­stand­ing and co­op­er­a­tion.


To date, the to­tal num­ber of grad­u­ates from the Gen­eral and Ad­vanced Cour­ses has reached 1,813, while Over­seas Sem­i­nar par­tic­i­pants now ex­ceed 4,200. We are de­lighted to hear that many ISJ grad­u­ates are now work­ing ac­tively in im­por­tant posts in gen­eral in­sur­ance com­pa­nies and in­sur­ance reg­u­la­tory bod­ies. Hap­pily, many grad­u­ates con­tinue to keep in touch with other par­tic­i­pants, the GIAJ, the GIIJ and their mem­ber com­pa­nies, some­times sev­eral decades af­ter their par­tic­i­pa­tion in the ISJ. We also try our best to main­tain and pro­mote com­mu­ni­ca­tion with and among the grad­u­ates by pro­vid­ing con­tin­u­ous in­for­ma­tion through the ISJ Grad­u­ates Bul­letin and reg­u­lar ISJ Grad­u­ates' Re­union Par­ties. Pro­mot­ing a co­op­er­a­tive re­la­tion­ship be­tween the Malaysian & Ja­panese gen­eral in­sur­ance mar­kets through the ISJ We have wel­comed 205 par­tic­i­pants from Malaysia on the Gen­eral and Ad­vanced Cour­ses of the ISJ. Fur­ther­more, we held the ISJ Over­seas Sem­i­nars in Kuala Lumpur in 1994, 2001, and 2007 and ex­changed in­for­ma­tion and opin­ions on topics of mu­tual con­cern. We look for­ward to wel­com­ing many more par­tic­i­pants to fu­ture ISJ cour­ses and to see­ing ac­tive dis­cus­sions held that lead to the steady and ef­fec­tive im­prove­ment of re­spec­tive mar­kets.


Since 1972, when the ISJ was in­au­gu­rated, risks sur­round­ing so­ci­ety have in­creased and di­ver­si­fied. To cope with this, in­sur­ance mar­kets in Asia have achieved sig­nif­i­cant de­vel­op­ment in terms of both ca­pac­ity and va­ri­ety of prod­ucts and ser­vices pro­vided. While the back­ground of re­spec­tive in­sur­ance in­dus­tries dif­fer from mar­ket to mar­ket, is­sues to be

ad­dressed by each, with re­spect to fur­ther sound de­vel­op­ment, are very sim­i­lar. Roles played by plat­forms for ex­chang­ing in­for­ma­tion and opin­ions among in­sur­ance ex­perts, such as the ISJ, are gain­ing greater sig­nif­i­cance, as it is more ef­fi­cient to learn from the ex­pe­ri­ences of other mar­kets than try­ing to find so­lu­tions within a given mar­ket. To bet­ter an­swer such ex­pec­ta­tions from ISJ par­tic­i­pat­ing re­gions, we have en­deav­ored to im­prove the ISJ pro­gram, based on re­quests from pre­vi­ous par­tic­i­pants and the re­sults of hear­ings that have been held in re­spec­tive re­gions.


Here, we would like to share our ex­pe­ri­ences re­gard­ing "dereg­u­la­tion" in Ja­pan. As you may know, the Ja­panese gen­eral in­sur­ance mar­ket has un­der­gone var­i­ous dereg­u­la­tions since the over­all re­vi­sion of the In­sur­ance Busi­ness Act in 1996 and the abo­li­tion of the obli­ga­tion for mem­bers to use pre­mium rates cal­cu­lated by rat­ing or­ga­ni­za­tions in 1998. In re­sponse to these changes, the Ja­panese mar­ket has in­tro­duced new reg­u­la­tory sys­tems and im­proved

Fair com­pe­ti­tion among re­spec­tive in­sur­ance com­pa­nies is im­por­tant in ben­e­fit­ing cus­tomers. On the other hand, there are cer­tain ar­eas in which co­op­er­a­tion among in­sur­ance com­pa­nies can lead to a more ef­fi­cient in­sur­ance in­dus­try, while also ben­e­fit­ting cus­tomers.

ex­ist­ing ones in or­der to en­sure its sound­ness and trans­parency, while re­spec­tive in­sur­ance com­pa­nies have ex­panded their businesses based on their own strate­gies. Be­fore dereg­u­la­tion, in­dus­try-wide, iden­ti­cal in­sur­ance prod­ucts, pre­mium rates and agency sys­tems were used. They were dis­cussed by com­mit­tees at the GIAJ and/or the rat­ing or­ga­ni­za­tion. Fol­low­ing dereg­u­la­tion, in­sur­ance prod­ucts and pre­mium rates be­came dif­fer­en­ti­ated. Ad­di­tion­ally, in the wake of the strength­en­ing of the en­force­ment of the Anti-Mo­nop­oly Act, in­dus­try-wide con­certed ac­tiv­i­ties be­came limited. Un­der these cir­cum­stances, the GIAJ aban­doned ac­tiv­i­ties re­lated to core in­sur­ance busi­ness prac­tices, such as in­sur­ance prod­ucts and pre­mium rates, and fo­cused on con­sumer­centered ac­tion such as pub­lic re­la­tions, com­mu­ni­ca­tion with cus­tomers, the pro­mo­tion of com­pli­ance, and oth­ers. With the role of the GIAJ re­lat­ing to core in­sur­ance busi­ness prac­tices di­min­ish­ing, the in­dus­try-wide com­mon base of dis­ci­pline be­gan to de­cline. Ex­ces­sive di­ver­si­fi­ca­tion made in­sur­ance prod­ucts dif­fi­cult to un­der­stand, not only for con­sumers, but also for agents and in­sur­ance com­pa­nies them­selves. This caused mishaps, such as in­ad­ver­tent non­pay­ment of claims and over­charg­ing of in­sur­ance pre­mi­ums in early 2000. While we can­not con­duct con­certed ac­tiv­i­ties, which may re­strict com­pe­ti­tion, the ne­ces­sity of in­dus­try­wide ac­tiv­i­ties re­lated to core in­sur­ance busi­ness prac­tices and the as­so­ci­ated roles to be played by the GIAJ have been re­dis­cov­ered. Fair com­pe­ti­tion among re­spec­tive in­sur­ance com­pa­nies is im­por­tant in ben­e­fit­ing cus­tomers. On the other hand, there are cer­tain ar­eas in which co­op­er­a­tion among in­sur­ance com­pa­nies can lead to a more ef­fi­cient in­sur­ance in­dus­try, while also ben­e­fit­ting cus­tomers. We have to pay at­ten­tion to a few points: The first one is to de­ter­mine ar­eas in which play­ers should com­pete and ones in which they should co­op­er­ate prop­erly. Nat­u­rally, we have to avoid any ini­tia­tives that lead to com­pet­i­tive re­stric­tions. The sec­ond one is to fo­cus on ac­tiv­i­ties that can pro­duce re­sults more ef­fi­ciently and ef­fec­tively through in­dus­try-wide ef­forts rather than in­di­vid­ual ones by each com­pany. Last, but not least, we have to pro­mote these ef­forts through fair and trans­par­ent op­er­a­tions. We look for­ward to on­go­ing dis­cus­sions based on such ex­pe­ri­ences be­tween our two mar­kets through ISJ cour­ses and on other oc­ca­sions.

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