Support for Customer Disaster Prevention

Collaboration with Development Bank of Japan (DBJ)

Sompo Japan works with the Development Bank of Japan (DBJ) to support the disaster risk reduction measures of corporate clients.
This comprehensive financial service draws upon both the DBJ’s accurate rating capabilities and non-life insurance and risk management expertise. Sompo Japan offers an insurance service that covers loss of earnings and expenses in the event of operational suspension due to a natural disaster. Companies evaluated by the DBJ as having a high Business Continuity Management (BCM) rating, so called DBJ BCM rating, can receive 20% discount at a maximum on their insurance premium. Sompo Risk Management provides assistance service to DBJ clients who wish to bolster disaster risk countermeasures in their business continuity planning (BCP). We will continue to provide total financial solution services by exploring further opportunities for high-synergy collaboration projects with external partners.

First in the industry to provide compensation for loss of personal power consumption in the event of a solar power generation system accident.

To promote the spread of energy-saving and renewable energy homes aimed at creating a carbon-free society, we became the first in the industry to start offering indemnity for loss of personal power consumption in the event of accidental damage to solar power generation systems.

The feed-in tariff for solar power generation has been declining year by year, and there is a growing trend for customers to consume the electricity they generate for their own homes instead of selling it (“personal consumption”). In addition, the recent sharp rise in electricity prices has also led to a surge in electricity costs that customers must pay when their home solar power generation system is damaged by accident and is unable to generate electricity for personal consumption.
Meanwhile, in August 2018, in order to promote the spread of next-generation energy-efficient homes such as smart houses and ZEH^* (Net Zero Energy House), Sompo Japan Insurance Inc. became the first to launch the IoT Home Expense Electricity Sales and Cyber Risk Rider to indemnify expenses incurred from the manifestation of cyber risks and loss of electricity sales income in the event of accidental damage to solar power generation systems. However, the policy only covered the customer's loss of electricity sales income in the event of damage to the home solar power generation system, thus failing to provide sufficient indemnity to customers who had switched from electricity sales to personal consumption.

In light of this situation, we expanded the indemnity coverage of this rider to include the electricity costs incurred due to the customer's inability to generate electricity for personal consumption. As a result, customers are now eligible for indemnity whether they sell electricity or use it for personal consumption.

• Houses designed to achieve a net zero annual primary energy consumption by achieving substantial energy savings while maintaining the quality of the indoor environment, and by introducing renewable energy sources.

Development of a Comprehensive Hazard Map Service Using the Latest Digital Technology

Sompo Japan has developed unique hazard maps, the Sumai no Hazard Map, by combining its insurance payment data with the hazard maps issued by public institutions. We started providing these maps at agencies nationwide in April 2018.

1. Aims and concept

• In recent years, Japan has been increasingly prone to natural disasters, such as earthquakes and typhoons, and disaster awareness among customers is increasing. Based on this trend, we have developed a unique comprehensive hazard map service that uses the latest digital technology to visualize natural disaster risks, including the probability of an earthquake, the estimated depth of inundation from flooding, and areas liable to landslides.
• This service is an information tool that staff at our agencies explain to customers when proposing new policies or renewal of fire and earthquake insurance. The service aims to encourage customers to correctly understand the risks of natural disasters in their own communities and to further convince them of the need for the insurance policy.

2. Service outline

(1) Main functions and features

• GIS (Geographic Information System) is a technology that comprehensively organizes, processes, and visually displays location data (spatial data) based on geographical location to facilitate sophisticated analysis and quick judgments.

Rider to Fully Compensate for Buildings and Household Belongings Destroyed or Washed Away in Earthquakes, Eruptions, and Tsunami

In April 2019, Sompo Japan launched the sale^* at its agencies throughout Japan of an earthquake and other hazards surcharge rider that fully covers buildings and household belongings destroyed or washed away in earthquakes, eruptions, and tsunami.

• We first started selling this rider in October 2015 at a limited number of agencies.

1. Background

• The earthquake insurance provided jointly by the Japanese government and insurance companies compensates only for up to 50% of the fire insurance proceeds.
• When the 2011 earthquake and tsunami occurred, double loans, one for the home that was lost and one for the home that was rebuilt, became a social issue. Rebuilding a home and repurchasing household property requires far more capital than the insurance proceeds from earthquake insurance. After the 2011 disaster, many of our customers expressed a desire for an insurance product to cover the portion not covered by household earthquake insurance.
• We developed this rider in response to such requests.

2.Service outline

• By combining with the proceeds from the earthquake insurance, the rider can compensate for up to 100% of the fire insurance proceeds (replacement costs).
• The rider can be set with our package fire insurance for individuals or package insurance for apartment buildings. We are the first insurer to offer compensation that can cover package insurance for apartment buildings (common areas of condominium buildings).

Support for Corporate and Municipal BCP and Disaster Preparedness

＜Corporate offering＞
Following the Great East Japan Earthquake and other natural disasters and COVID-19, corporate initiatives for disaster prevention and mitigation as well as business continuity have shifted to a phase of formulating business continuity plans that anticipate a wide variety of risks, conducting education and training to improve effectiveness in a variety of scenarios, and establishing disaster prevention, mitigation and business continuity systems that support new work style. Sompo Risk Management provides comprehensive support for companies with various concerns through a service lineup that includes formulating an all-hazards approach business continuity plan, planning and implementing a variety of training and drills tailored to specific issues and needs, and providing a disaster headquarters management kit (HONBU-kun), on top of its existing consulting services.

＜Local government offerings＞
In Japan, there have been various crises such as a series of major natural disasters, the COVID-19 pandemic, and ballistic missile launches. Local governments are expected to formulate response plans and conduct education and training to improve their crisis response capabilities in order to protect the lives of residents from these crises.
Sompo Risk Management supports the development of disaster- and crisis-resilient communities through formulating plans and manuals (regional disaster prevention plans, operational continuity plans, support plans, regional plans for national land resilience, national protection plans, etc.), planning and conducting education and training, operating councils for people unable to return home, and conducting surveys and research related to disaster countermeasures and other issues.

Collaborative Research on Sophisticating the Evaluation of Long-Period Ground Motion Risks

Sompo Risk Management aims to provide new insurance services and risk consulting services as countermeasures against earthquake risks, one of the major types of natural disaster, and has been researching and developing ways to evaluate such risks in Japan and throughout the world.

As part of the efforts, they conducted collaborative research with the National Research Institute for Earth Science and Disaster Resilience and Kobori Research Complex Inc., aiming to improve the accuracy of long-period ground motion^*1 risk evaluations. Long-period ground motion has attracted attention as the cause of damage to high-rise buildings and large-scale structures in plains and basins far from the epicenter, such as ceiling boards collapsing in skyscrapers in Osaka City during the Tohoku-Pacific Ocean Earthquake in 2011. Similar damage to high-rise buildings concentrated in the Kanto, Nobi, and Osaka plains is likely to occur in the event of Nankai Trough or Sagami Trough earthquakes, and in fiscal year 2007 the Japanese government started investigation and research of long-period ground motion.

This research was mainly focused on sophisticating monetary risk evaluations of relevant damage to high-rise buildings, based on long-period ground motion generation and propagation simulations by the National Research Institute for Earth Science and Disaster Resilience and high-rise building response analysis by Kobori Research Complex.

Going forward, they will use the results of this research to develop insurance and derivative products and enhance risk consulting services, including business continuity planning (BCP), contributing to the creation of their customers’ risk management systems.

1. Seismic ground motion with a period longer than around 2 second

Results of analysis of energy spectrum (Vᴇ) distribution and velocity response spectrum (SV)
distribution, indicators of long-period ground motion (Sagami Trough Earthquake)

Risk Management for Global Business Operations

In response to the shrinking domestic market and intensifying price competition due to low birthrate and population aging, an increasing number of Japanese companies have begun to expand their overseas bases or consider new locations for expansion. On the other hand, as risks become more complex under the uncertain international climate, many companies are encountering crises overseas.

Sompo Risk Management supports the risk management activities of companies expanding into overseas markets by providing the Global Risk Management System Development Support Service, which identifies and assesses risks at overseas bases, the Overseas Subsidiary Management Risk Assessment Service, which diagnoses management risks at overseas bases from the perspective of governance, risk management, and compliance, the Overseas Risk Consulting Service, which includes Risk Management and Compliance Training for Overseas Bases and On-site Security Surveys, among other services. We also serve as a one-stop shop, providing a range of services related to overseas crisis management, including predictive analysis support and crisis response training, to meet the needs of customers who are expanding their businesses overseas.

Addressing Cyberattacks

We strive to solve social issues by turning cyber risks, which are difficult to visualize, into something tangible by using advanced technologies.

Cyber Insurance

Businesses play a key role in the economy, and in order to support their cybersecurity measures, Sompo Japan offers Cyber Insurance with expanded coverage for the cost of investigating the causes of leaks as well as lost profits, caused by digital data corruption, information leaks, and disconnection of network. In the event of an information leak or other incident, it is crucial to minimize losses, so urgent responses are increasingly important: Rapid investigation of the source and causes, and efforts to control the extent of losses. They have tied up with specialized businesses that provide this kind of support, and offer services to support smooth business recovery for all Cyber Insurance policy holders.

Optimized One-Stop Services Against Cyberattacks

Three key points

1. Escort
We conduct interviews, systemic diagnoses, and surveys to visualize the assets to be protected and potential risks, and help customers independently prioritize security measures.

2. Optimize
To take security measures that best fit your organization, it is important to identify, analyze, and evaluate risks, compare them to the value of what you need to protect, and prioritize them. We provide advanced solutions from Israel and other countries procured through our own channels, as well as various assessment and diagnostic services, in order to visualize risks in the digital domain, which are difficult to see, and to optimize costs and countermeasures.

3. Cyber security shift left
By incorporating the "shift-left" approach used in conventional software development into cyber security measures, we support proactive action at an early stage of cyber attacks.

Sequence of events in a cyber-attack

＜Organizational risk visualization support service＞

■Incident response
To respond to incidents caused by cyber-attacks such as unauthorized access and malware transmission, we provide incident response support to our customers based on our know-how in risk assessment and experience in insurance claims service.

■Investigation and diagnosis (security diagnosis)
Our engineers with a wealth of experience investigate and diagnose risks in IT infrastructure, using their deep expertise to cover a wide range of areas, including web applications, networks, and cloud services, as well as simple diagnostics and pseudo-penetration testing to meet various customer needs.

■Investigation and diagnosis (risk monitoring)
We provide services such as threat intelligence, supply chain cyber risk assessment, and other services that provide visibility and continuous monitoring of organizational risks by leveraging cutting-edge overseas solutions.

■Consulting
We provide compliance support for various information security regulations and risk assessments to gain an understanding of the current situation. By conducting a survey of the actual situation using technical methods, we are able to visualize potential risks.

■Training and exercises
To address systemic risks as well as the human vulnerabilities that come with it, we offer a variety of training and exercise services, customized according to the size and requirements of customer organizations.

Launch of Free Disaster-related Services to Partners in China

Sompo China, one of our group companies, is the first insurer in China to start providing the following disaster-related services free of charge to its business partners.

Paper Drill Services to Enhance Effectiveness of Business Continuity Plans (BCPs)

As globalization advances, companies have expanded their supply chains to foreign markets. In line with this trend, companies are now expected to formulate scenarios in disasters that could strike their facilities outside Japan and to ensure the effectiveness of those scenarios.

Many companies have set up key sites in China due to factors such as the country’s large market. Meanwhile, China presents numerous risks that differ from those in Japan, including abrupt legislative changes, IT infrastructure vulnerabilities, and the possibility of unexpected natural disasters and explosions. Accordingly, there has been a growing need for companies to formulate China-specific scenarios and to enhance the effectiveness of those scenarios.

Against this backdrop, Sompo China has started to provide paper drills, free of charge, to its business partners in order to help them prevent disruption to their critical operations during disasters, and to help them minimize damage and rapidly restore operations in the event of a disruption.

●Service outline

Target: Sompo China business partners (all industries)
Service: Predictive paper drill service

1. Schematic training assuming fire and explosion risks
2. Graphic training assuming the risk of logistics accidents
3. Graphic training assuming environmental legal compliance risks
4. Schematic training assuming the risk of the spread of new infectious diseases
5. Graphic training assuming information security and cyber risk

• Other scenarios will be added according to needs.
  Supported languages: Chinese, Japanese, English

VR Disaster Drill Service

Sompo China has partnered with NK Hatsuta (Shanghai) International Trading, a group company of the major Japanese firefighting equipment company, Hatsuta Seisakusho, to provide a disaster drill service using VR technology to its business partners, free of charge, from April 2019.

●Service outline

Target: Sompo China business partners (all industries)
Service: Virtual disaster drill service
The service uses VR to simulate a fire in a factory, warehouse or skyscraper and offers a virtual reality experience for company employees to evacuate from the disaster area. This virtual reality drill enables participants to experience the tense atmosphere when a fire breaks out and to understand the importance of disaster drills and first response drills for when a disaster occurs that comply with Chinese laws and regulations.
Supported languages: Japanese, Chinese, English

Sompo China will continue to contribute to the security, health, and wellbeing of customers by providing products and services of the highest quality possible.