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A R T I C L E S 82

The role of insurance in

addressing protection gaps

In an age of increasing political and economic uncertainty, more earthquakes, but because of these experiences accumulated over the
individuals tend to seek the comfort of protection from various perils decades, Japan has had time to build “resilience” in the public and private Mr. Toyonari
– such as financial, health and natural catastrophes. Society expects sectors. In practice, the government works as the main bulwark for SASAKI
the government or the public sector to primarily function as providing preventing and mitigating the initial or further loss of economic protection
Representative Executive
protection through a wide range of services related to social security, as through enforcing strict building codes and designating risk areas, as
Director / The Board of
the private sector or insurers also complement these services in tandem. well as offering reinsurance for the public-private earthquake insurance. Directors
Needless to say, enforcing strict building codes ensures durable The Life Insurance
However, “protection gaps,” generically defined here as the amount of structures that can withstand severe natcat events, and designating Association of Japan
insurable losses that are not insured, exist or persist as rapidly changing disaster risk areas leads to sturdier homes being built in safer locations. (LIAJ)
environments caused by climate change, for example, accentuates the As for reinsurance, insurers in Japan offer residential earthquake
Regional Representative
widening of the gaps, challenging public and private sector efforts as insurance, as the government reinsures a portion of the earthquake risks
Executive Committee
solutions are sought for actual relief. So, how should the government being ceded by these insurers. Since large-scale earthquakes generally Member
and insurers work together to confront this challenging issue? I would require an enormous amount of payments, this enables private insurers The Global Federation of
like to share the perspective and approach that highlight Japan’s such to offer earthquake protection to people. However, more could be done Insurance Associations
efforts. in terms of informing the public about the risks of natural catastrophes (GFIA)
Japan is usually seen as prone to natural catastrophes such as through disaster management education focusing on preparedness