There are likely about 400,000 cases of benefits not being paid to postal life insurance customers before postal privatization began in October 2007, Internal Affairs and Communications Minister Kunio Hatoyama said Friday.
The total is estimated at “between 300,000 and 400,000,” Hatoyama told reporters after Japan Post Insurance Co. presented a report on the matter to the ministry.
Japan Post Insurance is examining some 13.01 million cases in which payouts should have been made by Japan Post, the state-run postal company that existed before privatization split it into four entities. Japan Post operated between April 2003 and September 2007.
Japan Post Insurance, one of the four entities, has so far found that 223,000 customers may have been short-changed, if payments related to claims made under policy riders are included, the report says.
The investigation is expected to find more failures before it is completed.
In addition, the amount of unpaid postal insurance benefits for reasons such as the absence of claims from policyholders totaled ¥292.1 billion as of the end of March.
Japan Post Insurance will start informing the policyholders concerned in July.
Life insurers in red
Earnings at the nation’s top 10 life insurers plummeted in fiscal 2008 on losses caused by the global financial crisis, sending four of them into the red, earnings reports issued through Friday show.
Total losses linked to the global financial turmoil collectively amounted to ¥2.64 trillion, according to the reports.
The insurers that reported losses in 2008 were Mitsui Life Insurance Co., Daido Life Insurance Co., Taiyo Life Insurance Co. and Asahi Mutual Life Insurance Co.
Five others, including top insurer Nippon Life Insurance Co., reported net profits, but only because they tapped internal reserves to compensate for the losses.
Others that evaded losses in that manner were Dai-ichi Mutual Life Insurance Co., Meiji Yasuda Life Insurance Co., Sumitomo Life Insurance Co. and Sony Life Insurance Co.
The only insurer that effectively secured a profit was Fukoku Mutual Life Insurance Co.
On the basis of core operating profit — a key gauge of an insurer’s profitability — Mitsui and Daido had losses and seven others suffered sharp profit declines. Sony Life was the only one that saw core operating profit rise.
Given the deterioration in earnings, Asahi and Mitsui will cancel dividend payments to policyholders for the first time in four years. Dai-ichi and Fukoku will reduce dividends.
Most of the 10 insurers saw their solvency margin ratios, a key indicator of their ability to pay out on policyholders’ claims, fall from the previous year. But they still maintained solvency margin ratios well above the 200 percent line, suggesting they are financially sound.
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