Andrew Bibby



Andrew Bibby is a professional writer and journalist, working as an independent consultant for a number of international and national organisations, and as a regular contributor to British national newspapers and magazines. He is also the author of a number of books.

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Profile of a chief executive:

Mr Tamotsu Ishikawa, President of Zenrosai (Japan)

This article by Andrew Bibby, in a slightly different form, was first published by ICMIF (International Cooperative & Mutual Insurance Federation) in Voice magazine, 2007

This is an important year for Mr Tamotsu Ishikawa, the President of Japan's second biggest cooperative insurer Zenrosai, and for his colleagues, for 2007 marks the fiftieth anniversary of the founding of their organisation in 1957.

From small beginnings, Zenrosai has grown into a giant. The cooperative currently has almost fourteen million members, who between them have taken out thirty-six million policies. One tenth of Japan 's population, in other words, looks to Zenrosai to help them overcome the risks of everyday life.

Zenrosai's roots are in Japan 's strong trade union movement, and indeed the General Council of Japanese Trade Unions was one of the organisations which helped set it up. Mr Ishikawa himself has had close links with trade unions, having held a senior position with the Japanese Electrical, Electronic & Information Union in Shizuoka prefecture before being elected as director of the Shizuoka region of Zenrosai in 1998. He became Zenrosai's vice-president in 2003 and was elected as president in August 2005.

Naturally enough, Zenrosai intends to celebrate its fiftieth birthday in style, but Mr Ishikawa is concerned to ensure that the cooperative builds on its strengths for the future. “If an organisation stands still, this means retreat,” he says. “Although there have been many reforms in the past, I think we need to keep improving our business operation. We need to ensure that we give our members the security they need to improve their lives.”

Much of Zenrosai's core business is based on its links with affinity groups, most importantly (though not exclusively) trade unions. Over half of Japan 's 61,000 union organisations have links with Zenrosai and the cooperative has an active presence in many workplaces where committed organisers are given the responsibility of promoting the insurance products. Zenrosai also has a similar system of organisers in local community neighbourhoods. Currently, there are about 23,000 workplace organisers and about 6,200 community organisers. Their role, Mr Ishikawa explains, is not just to act as agents but also as leaders coordinating events and meetings for members.

Looking back over the last fifty years, one event in particular inevitably has to be given prominence in any account of Zenrosai's development. The world woke up on the morning of January 17 th 1995 to learn of the terrible Hanshin-Awaji earthquake, close to the major city of Kobe . Approaching 6,500 people lost their lives in the earthquake which measured about seven on the Richter scale, and total damage was estimated at ten trillion yen, or about 2.5% of Japan 's then GDP. Zenrosai rose to the occasion, paying claims which in total were more than 18 billion yen. “We were able to demonstrate the real value of our principle of ‘Zenrosai for the members',” Mr Ishikawa says. “We helped members who were caught up in the earthquake and its aftermath rebuild their lives.”

In fact, Zenrosai did much more. The earthquake showed up alarming gaps in the way that the Japanese state had prepared for major disasters, and Zenrosai became actively engaged in coordinating a major popular campaign to ensure things were improved for the future. The petition associated with the Comprehensive Disaster Recovery Assistance Citizen's Conference collected 25 million signatures, and directly led to the passing of the Disaster Relief Bill by the Japanese Diet in 1998.

If the Kobe earthquake has been the single worst natural disaster in Japan in recent years, it has unfortunately not been the only one. Indeed, it was a major fire in the city of Niigata in 1955 which helped demonstrate the value of the idea of mutual insurance cooperatives in the country, at that stage just beginning to become established for the first time. Thanks to members' efforts, the claims – which totalled more than income from premiums - were all honoured without delay. These days Zenrosai has, as you would expect, a detailed procedure in place for claims handling after large-scale disasters. “A series of typhoons, heavy rain and snow in the past few years, including the Niigata-Chuetsu earthquake of 2004, has demonstrated the ability of our staff throughout the country to handle claims and make payments promptly,” Mr Ishikawa says.

Customer service and administration generally has been a major area of strategic attention in recent months, with the creation of a separate customer service department in January 2006 directly responsible to the Board of Directors. The cooperative has established new business centres where claims handling and policy administration and customer liaison can be centralised and staff at both Zenrosai's head office and its network of branch offices have been encouraged to focus on ways of achieving high levels of member satisfaction. It is, Mr Ishikawa says, a fundamental aspect of Zenrosai's structure as a member-owned cooperative, based on the principle of mutual self-help.

Zenrosai's strategic plan, the Zenrosai 21 st Century Vision, was adopted by the cooperative's general assembly in 1999 and the current phase of the strategy includes an emphasis on improving the range of products on offer, to meet members' changing needs. One big innovation has been the introduction of whole-life medical insurance policies, offering medical treatment and nursing care as well as death benefits. In response to members' requests, the cover available has recently been extended to include longer periods of hospitalisation and extra protection for dependents. Zenrosai has also been reviewing its term life insurance products, offering extended cover and also extending the age limit for life cover.

Product innovations like these are a direct response to demographic changes in Japanese society, which is seeing a rapidly ageing population and a decline in the birth rate. The needs of Japan 's post-war baby boomer generation are also changing as they get older. When they were in the 30s and 40s, they insured themselves against death through term life insurance. Now, as they approach the end of their working lives, their focus is on the financial risks they face in what may be a long period of retirement. Mr Ishikawa points out that Zenrosai has to be able to respond. Among other things, Zenrosai is extending the consultancy advice service it offers for baby-boomers as they come to retire.

This sort of development away from Zenrosai's core business is necessary, not least because the trade union movement in Japan now has fewer members than in the past. “The affinity market, such as trade unions, will continue to be important for Zenrosai but will become more difficult from now on, because of the decline in union membership,” Mr Ishikawa explains. Currently about 53% of Zenrosai's members come through affinity groups such as unions, with the other 47% recruited through organisers or via other sales channels such as banks.

With a declining population and strong competition, innovation is essential. The share of the Japanese insurance market held by mutuals is a significant one, with more than 20% of life insurance business and 25% of non-life policies, making it a tempting target for non-mutual insurers, particularly US multinationals who have been aggressively entering the market in recent years. The American Chamber of Commerce in Japan has recently been lobbying the Japanese government to change the insurance regulatory regime, to benefit non-mutuals. Zenrosai is working with other insurers in the Japan Cooperative Insurance Association to defend the legislative and regulatory systems which apply to mutuals.

“Competition will be tougher, and if we don't respond in time this could have a negative impact on our business. This is why it is so important to us to operate our business soundly and stably, and to keep providing the best service we can to our members,” says Mr Ishikawa.

Operating as a cooperative means more than simply running a profitable business, of course. Zenrosai has for many years supported a range of civil activities, and recent areas of support have included social welfare, a drama festival, and support for the course on workers' welfare at Japan Women's University. The environment is particularly central to Zenrosai's concerns. It tries to ensure that it follows best practice in its own operations and gained accreditation under the ISO14001 environmental management standard in 2000. It also supports others in Japan who are trying to look after the environment. “Last year Zenrosai supported 88 organisations working on environmental issues, to the tune of 29.4 million yen,” says Mr Ishikawa.

It's a theme, too, of the activities to mark the 50th anniversary, where Zenrosai is working on activities with children, designed to encourage them to grow up so that they will ensure that they protect the natural environment. “The theme is to help children who will be contributing to society over the next fifty years maintain a healthy and abundant environment,” Mr Ishikawa says. One of the overall themes for this year's anniversary is to work to develop harmony in society in the future, and harmony with nature is a key feature of this aspiration.

Zenrosai also takes its international responsibilities seriously, contributing to help cooperative and mutual organisations worldwide. It has been a member of ICMIF (and its predecessor ICIF) since 1962, and is also active in the International Cooperative Alliance. “With globalisation it is becoming more important to keep in touch with other cooperative organisations and international bodies, in order to share information and experiences with each other. We're pleased to contribute to developing cooperatives and mutuals worldwide,” Mr Ishikawa says.


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