～生命保険の魔法のちから～

Gibraltar Life’s
Response to the Great
Eastern Japan Earthquake
May 24, 2012
SAKAGUCHI, Tetsuya
Corporate Vice President
Customer Service Operations GroupThe Gibraltar Life Insurance Co.

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Table of Contents
1.The Great East Japan Earthquake
2.Significant Past Natural Catastrophes
3.Basic Concept of Our Action for the Disaster
4.Initial Response to the Disaster
5.Safety Confirmation of Customers
6.Quick Payment of Death Benefits
7.Supportive Measures for Policyholders
8.Why Japanese Insurers Focus on Claim Payment
9.Lessons Learned
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1. The Great East Japan Earthquake

Time：14:46PM
March 11, 2011
Epicenter： Off theCoastof Sendai

Depth: 24km
Seismic Degree：M9.0
Loss:（As of 3/11/2012）
Dead： 15,854
Missing：3,155
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2. Significant Past Catastrophes around the Globe($ billion)

Disaster (year)

Area

Great East Japan Earthquake (2011) Japan

LossesFatalities

240

15,854(Missing) 3,155

Haiti Earthquake (2010)

Haiti

8

222,570

Sichuan Earthquake (2008)

China

85

84,000

Hurricane Katrina (2005)

US

125

1,322

Indian Ocean Earthquake (2004)

Indonesia, Thai,
Malaysia etc

1

220,000

Chuetsu Earthquake (2004)

Japan

28

46

Izmit Earthquake (1999)

Turkey1217,127921 Earthquake (1999)

Taiwan14

2,400Great Hanshin Earthquake (1995)

Japan

100

6,430
Source: Cabinet Office, Munich Re

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3. Basic Concept of Our Action for the Disaster
Fundamental Policy
Immediate(expedited) response/action regarding safety
confirmation of all customers and payout of life insurance
death/medical benefits, providing financial relief andpeace of mind as soon as possible＜Pillar of Action＞＜Initial Action＞ Disastermanagement program
initiated

Safety confirmation of employees (mobility check forcontacting/visiting customers, communications enhancement)① Safety confirmation of customers / Communication Enhancement② Quick and heartfelt death benefit payout (simplified measures)③ Implementation of supportive measures for affected policyholders
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4. Initial Response to the Disaster
Gibraltar Life Case
Start

Contents

Mar.11

Earthquake occurred

At 2.46 PM on Friday, March 11, 2011

Disaster Recovery(BCP) plan activated

President as head of committee pulled together all majorarea senior management together at the home office toenact the disaster recovery plan.

Announcement of nonapplication ofearthquake-related
exemption clause

Made announcement that they will not apply earthquakerelated exemption clause on their website (full payment ofaccident-related death benefits and accident-related
hospitalization benefits)

Special Ｔｏｌｌ-Free
Number for evacuees

Established special toll-free phone number for evacuees andextended hours of operation to Sundays and national
holidays

Ｓearch forpolicyholders by Head
Office & Field Agents

Head office made research throughout policyholders
database based on information on casualties provided bynewspapers and internet. In case the home office detected
potential policyholders, they contacted the branch offices incharge and notify the related parties as soon as possible.

Mar.12

Mar.14

Detail6

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5. Safety Confirmation of Customers
The number residents subject to safety confirmation= 2.93 million (as of October, 2011)

Gibraltar customers subject to safety
confirmation = 230,000 policies

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5. Safety Confirmation of Customers
Gibraltar Life took following actions for safety confirmation of
more than 230,000 policies, over 150,000 customers.
Start

Contents

DetailMar.11

Earthquake occurred

At 2.46 PM on Friday, March 11, 2011

Mar.14

Safety confirmation
StartedOn policies with assigned agents, agents either
visited or called customers to confirm safety.

Mar.29Started to makeconfirmation on orphan
policyOn policies without assigned agents (Orphan
policies), agents called customers from their Call
Center to confirm safety.

Apr.22

Letters of sympathy

Gibraltar sent out letters of sympathy to thosewith whom they could not establish contact.

July.11

Repetition of safety
confirmation calls

Gibraltar made calls to those whose safety they
could not confirm either by visiting or phone calls.
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5. Safety Confirmation of Customers

1．Telephone contact by Life Plan Consultant
2．Out-bound call from the Home Office
3．Home/Refuge Shelter Visitation
4．Policyholder expedited notice mailing
5．Dispatch of Investigation Specialists
6．Outreach to Local Government Agencies
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5. Safety Confirmation of Customers¾ Telephone contact by Life Plan Consultant

On March 11th, soon after evacuating fromthe tsunami themselves, Gibraltar’s Life Plan
Consultants didn’t waste time.

Although having difficulty with the mobile
phone network, they started contacting all
their customers.
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5. Safety Confirmation of Customers¾ Out-bound call from the Home Office

On March 29th(and in July), all of the homeoffice employees worked together to makeout-bound calls to all orphan policyholders in
the affected area.

Out-bound calling continued 7days a week for
2 weeks. Many employees received words ofappreciation from customers.
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5. Safety Confirmation of Customers¾ Home/Refuge Shelter Visitation

Life Plan Consultants and home officesupport/assistance team specially pulled
together across all areas, began visitation ofcustomer homes and refuge shelters in hopeof confirming the safety of every lastcustomer and their family.

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5. Safety Confirmation of Customers¾ Policyholder expedited notices/mailing

In April over 100,000 safety confirmation andletter of sympathy mailings were sent out.

Letters informed customers of Gibraltar’s
monetary, policy conservation support details
in addition to a reply postcard confirming
policyholder safety and contact information.
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5. Safety Confirmation of Customers¾ Dispatch of Investigation Specialists

In August, we contracted with a special
investigation company to help our search formissing policyholders.
【Comment from one investigator in filed report】“… West Kaitsu was in horrible condition leaving me at lost for adequate words. I
went to the ward office and was told the policyholder’s address is still valid. I had
to walk through neck-high snow and mountainous terrains. Even such areas had
been cleared of snow with many signs of reference for those evacuating from thequake and Tsunami. I could clearly see the determination of many people andthe local government to do all that they can to help.
I was relieved to finally reach the policyholders temporary housing(a tent) andconfirm his safety as well as inform him that Gibraltar is here to help in any way.”14

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5. Safety Confirmation of Customers¾ Outreach to Local Government Agencies

At Gibraltar, we reached out to almost anybody(government agencies, local newspaper, local
TV networks, etc.) in search of our missing
policyholders【Comment from staff in charge of policyholder search】“… we constantly brainstormed of different ways to locate and track down any
surviving policyholder. It was extremely heartwarming when calling and asking local
wards for their support in searching for our policyholders, although many ofthemselves just lost their homes and families, they were extremely helpful and kind.
Some even when through a list of a hundred or so policyholder names with me overthe phone since she said it may take a few weeks to process via mail.”15

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5. Safety Confirmation of Customers【What ALL Life Insurance Companies Did】
・For policies with agent assigned, agent visitation/contact to all customers【 What SOME Life Insurance Companies Did】
・For orphan policies, made out-bound calls of safety confirmation from homeoffice/call center (roughly 18,000 customers safety was confirmed)
・For all customers unable to be reached, sent out letters with free return postcard to confirm safety and inform customer about special support measures.

【What ONLY Gibraltar Did 】
・Searched online refuge shelter name lists for possibility of contacting missing
customers. Any possibility info. was shared with field for direct confirmation.
・For all customers on coast-line, contacted local government ward for support
in finding/contacting our customers (confirmed 408 customers safety).
・Contracted with investigation specialist vendor to visit affected area andresearch via neighbors, phone book, refuge name list, etc. to find/contact our
missing customers (confirmed 106 customer safety）
16

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5. Safety Confirmation of Customers
As of 5/23/2012:49
policyholders
still missing17

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6. Quick and Complete Payment of Death Benefits
Our mission is to provide financial protection & peace of mind –that is exactly what we intended to do, Fast and with Passion.
Start

Contents

DetailMar.11

Earthquake occurred

At 2.46 PM on Friday, March 11, 2011

Mar.12

Began constructing
customer deaths

National newspapers, TV news, Japan Police
website monitoring for names deaths due to the
Earthqauke and Tsunami.

Mar.14

Life Plan Consultants
began claims process

Many customers were in need of money(cash)
after losing their homes and everything. FNB
claim and early/partial payout claims via
telephone helped expedite our response tocustomer needs.

Dec.

Home office support
team visitation ofcustomer homes

A special home office team was sent out tovisit/help claims process of customers having
trouble collecting necessary documents,etc..
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6. Quick and Complete Payment of Death Benefits
As of 5/23/2012:

Policyholders¥1.47 billionof Death Benefits
Payable19

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6. Quick and Complete Payment of Death Benefits
There are still over 1,000 missing people whose safety
or death remain unconfirmed.

In law, presumption of death involving a catastrophic
event or disaster shall be for not less than 1 year.

Since Japanese government started to simplify theprocedure for registering death, life insurancecompanies decided to pay insurance money inaccordance with this new procedure, without removal offamily register.
20

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6. Quick and Complete Payment of Death Benefits¾ Gibraltar always finds a way to go Above & Beyond

Policyholders do not have documents
necessary for insurance claims (Ins.
certificate, personal seal, bank stmt, etc.)

Local government offices are affectedHospitals are affected21

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6. Quick and Complete Payment of Death Benefits¾ Simplicity is key
Most customers lost their homes and everything inside (bankcard, family seal, cash, identification, etc.).

Simple and quick payment of insurancemoney and benefits without requiring someusual necessary documents.
Special treatment of hospitalization(deemed hospitalization)

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6. Quick and Complete Payment of Death Benefits¾ We will always find a way to deliver on our promises【Funeral Needs Benefit(FNB) Payment】
Miyagi Prefecture, Sendai Area
The policyholder/insured worked at Japan’s self defense force. His body was
unfortunately found on March 16th by a rescue team.
Moritani LC was contacted by the beneficiary(wife) same day the body wasrecovered, requesting payout of the funeral needs benefit, in order to provide herhusband with a proper funeral.
However, the wife had no documentation of death, proper family seal, or any
identification documents since she lost her home by the Tsunami.
Moritani LC took initiative to contact our Claims Team directly (not usual
procedure) to look for any way to help her customer (bypass regular procedures).
Claims Team staff looked through local newspaper obituaries and police
website and was able to confirm the policyholder’s death – hence, bypass death
documentation amongst other usually necessary documentation.
3 million yen of funeral needs benefit was delivered to the wife on March 22nd,
and a proper burial/funeral was carried out.
23

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6. Quick and Complete Payment of Death Benefits¾ We will always find a way to deliver on our promises【Policyholder & entire family’s death】
Iwate Prefecture, Morioka Area
Both the policyholder(husband) and beneficiary(wife) were killed in the
Tsunami. Both bodies have not been recovered but death was confirmed by
local government.
Gibraltar’s LC searched for the children (４ year old girl) but unfortunately
confirmed her death as well.
Next legal line of inheritance was the policyholder’s parents. After rigorous
search, unfortunately, both parents (of both policyholder and beneficiary) had
also deceased due to the Tsunami.
Gibraltar LC did not give up. Working together with the home office andlocal government, we were able to find and contact the child of the beneficiarywith ex-husband living in Ibaragi Prefecture.
However, the prior marriage child did not want to claim such a benefit not
originally meant for himself. Hence the search for the next-in-line inheritence
beneficiary continued for another 7 months. Finally, we tracked down thebeneficiary and were able to deliver on our promise with the policyholder.
24

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6. Quick and Complete Payment of Death Benefits¾ We will always find a way to deliver on our promises【Rigorous Search for Beneficiary】
Miyagi Prefecture, Sendai Area
Initial death of policyholder was confirmed via search through the life
insurance association. However, due to privacy law, beneficiary and family
information was not shared.
Takahashi LC contacted the home office Claims Team for support in finding
the beneficiary. Through the home office, Takahashi LC contacted the local
government(ward) office and was able to confirm that the beneficiary survived
the Tsunami and was living. However, once again, due to privacy law, wasunable to obtain contact information.
Takahashi LC searched every refuge shelter knocking on each door for
more information, and was finally able to get in contact with the beneficiary.
The beneficiary was surprised of the visit, in addition to Takahashi LC’s
determination to search her out and deliver on his promise to the policyholder.
After working through various challenges with documentation, we were able
to deliver the death benefits to the policyholder’s family.
25

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6. Quick and Complete Payment of Death Benefits
As of 5/23/2012:

9
Death benefits
left to be claimed
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BREAK

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7. Supportive Measures for Policyholders

１．Non-application of Exemption Clause
Full payment of accident-related insurance money and benefits

２．Extension of the Grace Period for
Paying Premiums

３．Reduction or Exemption of Loan
Interest

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7. Supportive Measures for Policyholders¾ Non-application of Exemption Clause
Full payment of accident-related insurance money and benefits

Policy conditions of life insurance generally statesthat accident-related insurance money and benefits
will be reduced or not be paid in case of earthquakes.
However, all life insurers in Japan announced
through LIAJ that they do not apply this clause andmake full payment of accident-related insurancemoney and benefits at this time.

29

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7. Supportive Measures for Policyholders¾ Extension of the Grace Period for
Paying Premiums
 Life Insurers extend the grace period for paying premiums up
to nine months (until the end of December 2011) upon therequest of the customer.
 Given the policyholder continuously pays the premiums fromJanuary 2012, the paying period of premiums for the grace
period can be extended until the end of October 2012 in casepaying the full amount of premiums at once is difficult.
 The number of contracts in the grace period is 130,818 as of
October 20.
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7. Supportive Measures for Policyholders¾ Reduction or Exemption of Interest
Response to customer’s immediate need for cash to evacuatefrom disaster area.

 Establishment of Special Interest Rate for Policy
Loans.
e.g. 2.75% => 1.50%
 Modification of grace period or conditions of
repayment for entities in the affected area.

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7. Supportive Measures for Policyholders
1.Premium payment on installment
Monthly Premium

2. New contracts on non-selective basis
Old Policy

3.Correction of contract date

Grace Period
New Policy
New contract w/o health check. Old
policies cancelled upon new policies.

Grace Period
Grace Period

Contract Date32

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7. Supportive Measures for Policyholders【What ALL Life Insurance Companies Did】
・Extension of grace period for premium payment (up through 12/31/2011)
・Non application of exemption clause for death & medical payments
・Reduction of policy load interest rate (1.50%)【 What SOME Life Insurance Companies Did】
・Monitoring of newspaper obituary and policyholder check. If there is a hit ofname/age, send information to field office to confirm.
・Premium payment by installment, non-selection for new contracts, correctionof contract date to maintain coverage but lessen premium burden.
・Simplification/reduction of necessary documentation for claims processing【What ONLY Gibraltar Did 】
・Flexibility on premium payment methods/alternatives per customer
・Funeral Needs Benefit (FNB) payout period extension (usually 2 weeks)
・Flexible safety confirmation and policy inquiry from family members

33

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8. Why Japanese Insurers Focus on Claim Payment

Why did Japanese insurers became sodetermined to pay for the claims?
It stems from the notorious "non payment
problem", to be discussed in a moment,
happened in 2005.
The trouble led to the Japanese life
insurance industry to reaffirm that “themission of an insurance company is to pay
claims.”34

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8. Why Japanese Insurers Focus on Claim Payment¾ Non-Payment Problem in Japan
Huge social issue triggered by M Life’s “unfair
insurance payments” revealed in Feb. 2005

FSA

Ordered investigationof payment records
over the past 5 years

The investigation resulted in an
additional payment of 1.35 million
cases or 97.3 billion yen by a total of
38 insurers （Dec. 2007）

All Insurers

The Insurers
completely lostthe society’s
trust!
35

Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ What we mean by “Non-Payment” here is:
１．Intentional and malicious non-payments

Identified only in
the M Life where
the problem wasrevealed for the
first time

◆ Refusal to pay claims on the ground of
fraud or invalidity even after the period
when the insurers are allowed torescind policies due to violation ofdeclaration had passed.
◆ Refusal to pay claims on the ground of
violation of declaration duty whileadvising customers not to declare attime of solicitation.

M Life tried to boost profits bywithholding payments !
36

Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ What we mean by “Non-Payment” here is:
２．Non-Payments due to the Insurer’s
Mistake or Negligence

All other insurers
fell under thiscategory of nonpayments◆ Insurers failed to provide enoughguidance regarding claim request.
◆ Insurers failed to check medical
certificates sufficiently.

37

Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ Reflection on Non-Payment Problem #1
What is the most fundamental andessential responsibility of an insurancecompany?

Payment
Payment ofof Claims
ClaimsThe
TheInsurers
Insurerslacked
lackedthis
thisrecognition
recognition38

Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ Reflection on Non-Payment Problem #2
More Complex Insurance Products
Policyholder

Not understanding
benefit details

Insurer
Insufficient explanation
at time of solicitation

Insufficient after-sales
follow up

Not aware of eligibility
for payments

Incomplete guidance whenclaim request is received

39

Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ Reflection on Non-Payment Problem #3
Need to move away from the habit ofplacing the policy provisions above anything else
Description in thepolicy provisions isenoughMake sure the customer fully
understands contract details

Claims are paid out
when it is requested

If there is even the slightest
possibility of insured event, ask thecustomer about the fact for making
payment request
40

Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ Preventive Measures #1
Develop Easy-to-understand Products-Simple and straightforward products for prevention of
missed claim requests or overlooked payments

Call on Existing Policyholder- Provide an explanation of product details again including benefits- Confirm if there have been any event eligible for payments such as
hospitalization

Enhance Services and Simplify Procedures for Claim Payment- Expand contents of brochures regarding claim payment- Create an environment for an easier claim request, such as
insurers shouldering the costs of obtaining medical certificates41Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ Preventive Measures #2
Employee Training- Training of personnel responsible for claim examination
for prevention of a misreading or an oversight of medical
certificates- Training of sales agents so as to provide
sufficient explanation to customers
Computerization of Medical Certificates
Computerization of medical certificates created by doctors isunderway being led by Life Insurance Association42

Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ Preventive Measures #3
Establishment of Payment Examination Committee
When a customer complaint is filed, the Payment Examination
Committee, an objective entity, verifies the result of claim examination
performed by the Company

Consisting of external experts
such as doctors and lawyers

43Non-Payment Problems～生命保険の魔法のちから～

8. Why Japanese Insurers Focus on Claim Payment¾ Positive/Negative Effects of Non-Payment Problem• Insurers lost all at once the society’s trust that had
Negative been fostered over a long period of time
Effects • Failure to pay out claims caused many customers
inconveniences• The problem took out in the open all related issues
Positive that had been hidden
Effects • The problem allowed the insurers to go back to
the principle that it is their mission to pay out
claims and benefits to the customers.
• A series of reforms for better customer usability
and policyholder protection have been carried out
44

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9. Lessons Learned¾Importance of periodic contact with all
customers, including orphan policies¾In situations of large-scale natural
disasters, the importance of field &home office communication
 The importance of Life Insurance andneeds-based sales(average death benefit paid = ¥6 mil)45

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The End46