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.
THE JAPANESE GENERAL INSURANCE INDUSTRY HAS BEEN ACTIVELY PROMOTING THE EXCHANGE OF INSURANCE TECHNOLOGY AND EXPERTISE OVERSEAS, PARTICULARLY IN EAST ASIAN REGIONS.
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.
HISTORY & COURSES OF THE ISJ
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.
OBJECTIVES OF THE ISJ
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.
NETWORK OF GRADUATES
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.
IMPROVING FUTURE COURSES & SEMINARS
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.
WHAT JAPAN HAS LEARNED FROM "DEREGULATION"
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.