Going Beyond Traditional Insurance to Deliver Leading-Edge Solutions (Part 2)

As we are all aware, Japan is one of the world's largest natural disaster countries. The 2024 Noto Peninsula earthquake, which occurred at the beginning of the new year in 2024, is fresh in our minds, and we are still halfway through reconstruction. Furthermore, we are seeing an increasing occurrence in climate related Natural Catastrophes, bothin Japan and overseas.

On the other hand, it is also true that Japan has firmly accumulated know-how and experience in dealing with disasters. As a global company originating in Japan, we strongly felt the need for the Tokio Marine Group to take the next step in dealing with the rising risk of natural disasters.

Since our founding in 1879, we have faced changing social issues with the times under the purpose of "protecting our customers and society in times of need." However, in light of the increasing severity of natural disasters in recent years, we cannot fully fulfil our responsibilities simply by paying insurance claims in the event of a disaster. We have positioned natural disasters (disaster prevention and mitigation) as an important social material issue and have provided product services that lead to peace of mind and safety in the areas before and after a disaster. To accelerate these efforts, we have established Tokio Marine Resilience as a new company specializing in new businesses in the areas of disaster prevention and mitigation, with the aim of evolving into an entity that can not only protect the customers and society "in times of need" but also support at all times.

In relation to the background of the establishment of Tokio Marine Resilience, we believe that climate change will have a significant impact on the severity of disasters in promoting disaster prevention and mitigation projects. A concrete example is the case of a company building a new factory. Of course, each company conducts disaster prevention assessments, but in reality, they often use current standards (under the current climate conditions), and their assessments and measures are not based on the assumption that more severe disasters will occur 20 or 30 years from now.

It is also important to note that, as a recent trend, requests for information on climate change responses are increasing. In many cases, the discussion is in the context of carbon neutrality, etc. However, by disclosing information on disaster prevention and mitigation efforts and risk management, we can improve our corporate value.

In this way, we hope to create momentum to view disaster prevention and mitigation as strategic investments and corporate value creation, rather than recognized as a cost like in the past.

The business of Tokio Marine Resilience is divided into two main categories. First, "pre-disaster domain," the Tokio Marine Group visualizes risks specific to each company based on disaster data cultivated by the group and conducts business activities during normal times to prepare for natural disasters. And as a "post-disaster domain," the Group supports early recovery in the event of a disaster.

Initiatives in the disaster prevention and mitigation domain started as an activity within the Tokio Marine Group. In November 2021, 13 companies from across the industry joined hands to establish the Disaster Prevention Consortium “CORE”.

We have been the hub, appropriately connecting the strengths and solutions of individual companies, and building a system in cooperation with the national and local governments. This has enabled us to provide a comprehensive solution for the four elements of disaster prevention and mitigation (assessment, preparedness, evacuation, recovery/reconstruction), which we call the disaster prevention and mitigation value chain. Today, we have grown to include more than 110 corporations and organizations.

With the Disaster Prevention Consortium CORE as our backbone, Tokio Marine Resilience is also one of our strengths in promoting comprehensive disaster prevention and mitigation solutions.

Based on what Harada said, here are some concrete solutions.

In the event of a water disaster, real-time hazard maps, which use surveillance video to confirm the disaster situation and visualize the flooding situation in real time, enable more effective evacuation orders. In addition, the “Resilient Information distribution service”, which visualizes weather information and centrally manages the risk situation at registered locations, sends alerts according to the risk level. Moreover, we are working on a solution that can provide early recovery support by using 3D simulation results, by photographing and collecting data on the damage situation using drones.

We will develop advanced solutions that utilize these advanced technologies, mainly in large companies and local governments.

We also serve as a conduit between the government and the private sector, including the participation of the Disaster Prevention Consortium CORE as a board member of the Disaster Prevention DX Public-Private Co-Creation Council, which was established through a public-private partnership with the Japanese government Digital Agency. In addition to close information collaboration, we also contribute to the promotion of the public interest by providing knowledge beyond business.

On the other hand, we are planning to create a business of Tokio Marine Resilience while responding to the needs of local governments by combining subsidies and subsidy systems.

There is a clear difference between what we and our customers can work on in the "pre-" and "post-" disaster domains. That's why I think it's important to have each solution strategically.

I think quantifying the effectiveness of disaster prevention measures is going to be the key to our business going forward, especially in the pre-disaster domain for private companies. Surprisingly, quantifying the effectiveness of countermeasures is not widespread, although many companies are undertaking risk assessment. By calculating the maximum possible damage amount, called PML (Probable Maximum Loss), and showing how much difference can be made in the reduction of damage amount by taking different countermeasures, I hope to promote disaster prevention decision-making by our clients.

The other day, I had an opportunity to share the vision and solutions of Tokio Marine Resilience with about 500 employees at a gathering of international group companies. When I told the business story, I was surprised to hear more responses than I had imagined. I want to create new synergies by building a system in which Japanese domestic and international group companies, which have different strengths and market environments, bring ideas and opinions together and collaborate globally.

We are proud that Tokio Marine Resilience is a highly advanced and unique business model, not only in Japan but also internationally. There are experts in disaster prevention and mitigation in specific areas, but from the customer's perspective, it is reassuring to have a single provider of all services and solutions.

Just as Tokio Marine & Nichido underwrote the first automobile insurance in Japan more than 100 years ago, we will continue to collaborate with a variety of external partners so that we can stand out as a pioneer in the area of disaster prevention and mitigation.

We hope that more customers will become aware of Tokio Marine Resilience's solutions for disaster prevention and mitigation and use them and therefore help to contribute to the creation of a more resilient society.