January 30, 2009

Customer Service Innovation Project (Business Improvement Plan)

Progress Report
Nippon Life (President: Kunie Okamoto) today submitted to the Japanese Financial Services
Agency (FSA) a progress report for its Business Improvement Plan, which started from
August 1, 2008.
Nippon Life has implemented a Business Improvement Plan (Customer Service Innovation
Project) in line with a Business Improvement Order dated July 26, 2006 based on Article 132,
paragraph 1 of the Insurance Business Law. Nippon Life also implemented measures to
prevent recurrence of insufficient payment of claims and benefits in a report dated February 1,
2007 based on Article 128, paragraph 1 of Insurance Business Law, and integrated those
measures into its Business Improvement Plan. Nippon Life has been making efforts in its
Business

Improvement

Plan

to

comprehensively

improve

governance,

payment

administration and solicitation management.

We take the subsequent Business Improvement Order on July 3, 2008 with the utmost
seriousness. Along with continuing and strengthening measures thus far, we will include
improving verification of effectiveness in our Business Improvement Plan and reconstituting
our plan into improvement and reinforcement of governance system, improvement and
reinforcement of internal audit system, and necessary review and improvement of measures
to prevent recurrence of insufficient claim payment as a response to the Business
Improvement Order on July 3, 2008, and are working to further entrench and bolster our
measures with strong determination.
Regarding improvement and reinforcement of governance system, by strengthening the
function of the Board of Directors, in addition to regularly confirming the progress of the
Business Improvement Plan, we verify the effectiveness of the measures and review it
periodically, as a series of business improvement cycles, together with monitoring by our
Operations Oversight Committee, which is an independent body. This will enable us to
establish a more extensive business improvement cycle.
Regarding improvement and reinforcement of internal audit system, we are upgrading and
strengthening the system and function of our Auditing Department. The Auditing
Department is confirming the implementation of preventative measures that were
formulated based on analysis of reasons for occurrence of insufficient claim and benefit

Nippon Life Insurance Company

payments, and verifying the effectiveness qualitatively and quantitatively.

Regarding necessary review and improvement of measures to prevent recurrence of
insufficient claim payment, we have taken various preventative measures against
insufficient payments. Among those measures, regarding the items that are possible to verify
at present, departments excluding the Auditing Department are verifying

effectiveness

qualitatively through the viewpoint of personnel involved on a practical basis, as well as

quantitatively through data. Furthermore, Recurrence Prevention Measure Verification
Team within our Auditing Department, which is independent from all other departments,
confirms the implementation status, and conducts comprehensive verification qualitatively
and quantitatively. As a result, we can see the positive effect of prevention measures for all
items possible to verify at present.
We will continue and bolster preventative measures, such as expanding sales of
Comprehensive Medical Rider that simplifies payment assessment through coordination of
surgical coverage with public medical insurance system, and promoting Policy Details
Confirmation Activities by explaining to customers about policy details and claim/benefit
payment requests, and monitor the effectiveness of those measures. We will steadily advance
unfinished preventative measures, such as introducing New Integrated System that
drastically rebuild the fundamental system for all areas and processes of customer service
from insurance proposals/applications until receipt of claim/benefit.
To gain the true trust of customers, our management team will take initiative to steadily
carry out our Customer Service Innovation Project, and improve and implement a precise
strategy on a timely basis that always considers the customer perspective.
The main content of measures for our Customer Service Innovation Project is as follows.

Improvement and reinforcement of governance system

Improvement of effectiveness verification by Board of Directors
Our management team is unified in taking initiative to prevent insufficient claim and
benefit payments. To confirm the improvement of the payment management, the
Board of Directors regularly discusses progress of Policy Details Confirmation
Activities and sales of Comprehensive Medical Rider, thereby improving
verification of the effectiveness of preventative measures. (since August 2008)

Nippon Life Insurance Company

Improvement of discussions by the Risk Management Committee

Regarding the Risk Management Specialist Committee, which is an advisory body of
the Risk Management Committee, we increased meeting frequency from twice a year
to quarterly, to discuss analysis of reasons for occurrence of insufficient payment and
preventative measures. Also, we determined that the Risk Management Specialist
Committee shall report to the Risk Management Committee twice per year, to verify
details of preventative measure effectiveness and to make evaluations toward
formulation of highly effective preventative measures.
Our Risk Management Division statistically verifies trends and reasons for
occurrence of insufficient payment, and

the Board of Directors shall discuss the

results of the verification twice a year. (since July 2008)

Improvement and reinforcement of internal audit system

Reinforcement of verification of implementation status and effectiveness of recurrence
prevention measures
Establishment of Recurrence Prevention Measure Verification Team
We established a Recurrence Prevention Measure Verification Team within our
Auditing Department, which verifies the implementation status and effectiveness of
measures to prevent recurrence of insufficient claim/benefit payments. Also, by
having the members of the Auditing Office also serve as members of the Recurrence
Prevention Measure Verification Team, our auditors can confirm how the Team
functions are being carried out. (since August 2008)
Reinforcement of selected inspection of payment assessments
We added more personnel to our Claims Examination Management Office

to

increase rate of inspections on existence of insufficient payment/guidance, and are

prioritizing verification of this. (since August 2008)

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Necessary review and improvement of measure to prevent recurrence of insufficient

claim payment

Release of Comprehensive Medical Rider

For hospitalization and surgery costs, we will combine the complex six medical rider
coverage into one rider a Comprehensive Medical Rider that provides
wide-ranging coverage for hospitalization and surgery costs, as well as necessary
hospital visit cost before and after that hospitalization and surgery.
The Comprehensive Medical Rider will widely introduce guidelines such as
setting surgery coverage scope according to the public medical insurance system, and
simplifying the determination of surgery benefit multiplier for facilitating the
understanding of customers and sales representatives, as well as preventing
insufficient payment in the

assessment procedure.

We established a system to enable switching the existing medical related riders in

their overall coverage to Comprehensive Medical Rider. Not only new customers,
but also customers already enrolled in medical riders are eligible to enroll in the
Comprehensive Medical Rider.(since October 2008)
As of the end of December 2008, we have seen support of this product by many
customers, with about 740,000 policies signed.

Advance of large-scale system development (Introduction of New Integrated System)

We are constructing a radical preventative measure through introduction of
our New Integrated System, by maintaining and unifying customer data,
introducing

business

process

management,

promoting

visualization

of

administration, and also by building a system base that provides products that are
easy for customers to understand and minimize the occurrence of insufficient
payment. (scheduled for fiscal 2011)

Construction of a customer database that can manage unified computer assisted

name identification
We are proceeding with upgrade of measures for response to customers by
constructing a customer database that can manage unified computer assisted

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name identification, gathering customer data, from the standpoint of various

possible customers such as policyholders, insured, beneficiaries, and designated
representatives.
Currently, we are proceeding with data accumulation and maintenance for the
database. In the future, we will use that data to provide guidance to customers
on requesting payment. On our official website, we are introducing a mechanism
that enables each customer to register his or her own data. (since October 2008)

Ongoing implementation and improvement of Policy Detail Confirmation

Activities
For our Policy Details Confirmation Activities since August 2007, as of the end of
July 2008 we have completed visits to about 7,900,000 customers. Including direct
mailing to customers who do not want to be visited, we have contacted all our
customers.
From August 2008, through review of explanation materials, we will further
improve the content of explanations for requesting claim and benefit payments.
In fiscal year 2008, we visited about 5,310,000 customers and explained coverage
details. (as of the end of December 2008)
In our Customer Satisfaction Survey (*) dated November 2008, among customers
that answered I received a visit and explanation through the Policy Detail
Confirmation Activities, 91.8% were satisfied, which shows praise by customers.
(*)The Customer Satisfaction Survey is a questionnaire that asks customers for their
evaluation and opinion regarding our products, administration and services.
Reinforcement of underwriting education
To bolster our payment assessment capability, we are strengthening underwriter
education by implementing the underwriting education system within the
company-wide education system, and improving underwriter training.
1,096 of our employees passed the Life Insurance Payment Specialist examination
held by the Life Insurance Association of Japan in October 2008, increasing our
cumulative total employees with that qualification to 1,548.

Nippon Life Insurance Company