Business / Corporate

Japan Post likely to scrap insurance sales quotas during current fiscal year

JIJI

Japan Post Co. is planning to scrap sales quotas assigned to post office workers for products of Japan Post Insurance Co. in fiscal 2019, which ends next March, it was learned Sunday.

Japan Post hopes to put priority on dealing with customers who have been placed at a disadvantage due to inappropriate sales practices involving such products at post offices, informed sources said.

Executives of Japan Post Holdings Co. will explain the plans at a news conference on Wednesday.

It has not been decided yet whether sales quotas will be assigned in and after fiscal 2020, according to the sources.

Japan Post sells on commission products of Japan Post Insurance including endowment insurance through its network of about 20,000 post offices nationwide.

It has a new contract target of ¥45 billion in terms of insurance premiums for fiscal 2019. The figure has been allocated to post offices and their workers as sales quotas.

Following the revelation of sales irregularities, Japan Post has announced a temporary suspension of Japan Post Insurance products until the end of August.

The suspension is expected to continue into September, as it has taken longer than expected to check whether existing insurance contracts are in line with customers’ demands.

Therefore, Japan Post is discussing whether sales quotas for fiscal 2019 should be withdrawn.

Demanding sales quotas have been singled out as a factor that prompted post office workers to encourage customers to switch to new contracts disadvantageous to them.

As scrapping sales quotas will likely have significant effects on the business management of the Japan Post Holdings group, some in the group are cautious about scrapping them, the sources said.