cooperative insurance as a mitigation device against natural disaster

Cooperative Insurance as

a Mitigation Device against Natural Disaster

～Zenrosai’s Natural Disaster Insurance～

AOA Seminar

August 25~２７, 2014

Katsuhiro Sampa

Non-life Insurance Section

Product Development Department

Zenrosai

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Zenrosai’s Natural Disaster Insurance

１．Great Hanshin Earthquake of 1995

２．Towards Protection against Natural Disasters

（１）Popular Movement for Establishing a Social

Security System

（２）Development of Natural Disaster Insurance

３．Great East Japan Earthquake of 2011

４．Future Approach Considering Apparent Problems

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１． Great Hanshin Earthquake

July 17, 1995 Epicenter - Southern Part of Hyogo Prefecture

Over 6,400 Dead, 40,000 Injured

More than 390,000 Houses Damaged

A Total of 3,672 Staff Members Visited Policyholders

and Investigated Damages (over about a 3-month

period）

Number of Claim Payments: 93,958

Value of Claims Paid: 18,539 JPY million

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２． Towards Protection against Natural Disasters

Action Plan of fiscal 1995, Based on the

Experience of the Great Hanshin Earthquake

＜Approach Plan＞（１）Establish a Social Security System

as Basic Coverage for Natural Disasters

（２） Development of Insurance Scheme

to Support Social Security

and to Enhance Self-Help

Social Security

Mutual Help

Self-Help

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“National Congress toward Social Protection

against Natural Disasters” Established by 6

organisations （July,1996）

- Zenrosai Group, Hyogo Pre, Rengo, JCCU,

and JPC-SED

Petition by 24 million Individuals and 43,000 Group

Bodies Put to the Prime Minister (Feb,1997)

２．（１） Popular Movement for Establishing

a Social Security System

Act Concerning Support for Rebuilding

Livelihoods of Disaster Victims （May,1998）

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Overview of the Act （1998） Up to 1 JPY million for Complete Destruction

Amount Depends on Conditions such as Age, Annual Salary etc.

Must be used for Fixed Purposes

Continued Effort for Further Enhancement of the Act

Revised Act of 2004

（Up to 3 JPY million for Complete Destruction）

■Revised Act of 2007

（Conditions for Purpose, Age, Annual Salary Removed）

２．（１） Popular Movement for Establishing

a Social Security System

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２．（２） Development of Natural Disaster Insurance

＜Launch＞

Started to Sell in 2000

＜Overview & Characteristics ①＞

Collateral Contract to Fire Insurance

Ｒｅｆ：Fire Insurance & EQ Insurance of Non-Life Insurers

Fire Insurance（For Fires）

Natural Disaster Insurance（For Storms & Floods, EQ, Theft）

Fire Insurance（For Fires, Storms & Floods, Theft）

EQ Insurance（For EQ）

※Reinsured by Gov.

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＜ Overview & Characteristics ②＞

Uniform Premium・Two Structures （Wooden or Fire-Resistant Construction）

Coverage Level

Storm & Flood Damages: 50％ of Fire Insurance

EQ Damages: １７％ of Fire Insurance

※ Insured Amount is determined by Damage Level

Use of Reinsurance, Total Limit of Claim Payment

２．（２） Development of Natural Disaster Insurance

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＜Revision in 2005＞

Coverage Level Increased to 20％ of Fire Insurance

＜ Revision in 2010＞

Larger-Type Coverage

Storm & Flood Damages: 50％ of Fire Insurance

EQ Damages: 30％ of Fire Insurance

２．（２） Development of Natural Disaster Insurance

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※Natural Disaster after the Launch of

Natural Disaster Insurance （until. 2010）

Year &

MonthEvent

Claim Paid

Num.JPY

billion

2004

Jun to

Nov9-Typhoon （Inc. tornados & Gust) 16,700 7.9

July Cloudburst in Niigata & Fukui 360 1.0

Oct Niigata Prefecture Chuetsu Earthquake

(M6.8)

3,200 1.7

2005

Mar Off West Fukuoka Earthquake (M5.1) 820 0.2

Sep Typhoon Nabi （Kyushu） 3,400 1.8

Dec Heavy Snowfall （Tohoku） 3,300 1.1

2006 Sep Typhoon Shanshan （Northen Kyushu） 3,900 1.4

2007 July Niigataken Chuetsu-oki Earthquake (M6.8) 2,800 1.9

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３． Great East Japan Earthquake of 2011

Afternoon, March 11, 2011

15,900 Dead, 3,300 Missing

Over 370,000 Houses Damaged

A Total of 35,685 Staff Members Visited

Policyholders and Investigated Damages (over

about a 3-year period）

Number of Claim Payments: 344,231

Value of Claims Paid: 125.7 JPY billion（As of end of May）

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＜Future Challenges＞

Business Continuity Planning for a Major

Disaster

Damage Investigation for a Major Disaster

Stable Risk Management of the Scheme

３． Great East Japan Earthquake of 2011

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４． Revision of Natural Disaster Insurance

＜Main Points in Revision＞

Increase Total Limit & Premium in order to fulfill

Responsibility of Payment

Add large-scale Partial Destruction to the

Damage Classification of EQ Cover

（Coincides with Act Concerning Support for

Rebuilding Livelihoods of Disaster Victims）

Revised to Fire Insurance （Renewal ofStructures Classification, e.g. Exclusive Plan for

Apartments）

Thank you