Tatsuya Matsuura (AOA):

Welcome and thank you very much for joining the AOA Webinar today. I’m Tatsuya Matsuura of AOA and a moderator of the webinar.

Min Hyun-Seok:

I am working at the Planning Department of Nonghyup Life Insurance. And so first let me explain my company, that is NH Life Insurance. It has about three million customers, 65 trillion won of the asset, which is the $546.1 billion. And among the 26 insurance companies, it is number five. And there is whole life insurance and also for the agricultural cooperatives dedicated the marketing company. And we use channels such as mobile and internet. And so I’d like to explain the Safety Insurance for Farmers, this product today.

So, if you could turn to the third slide. This product, the Safety Insurance for Farmer, right now we are the only one selling this product. And so it’s not that this is a monopoly, rather, the other companies are not selling this product. In other words, it is because it’s not that profitable. So this product is based on the Act on Safety Insurance. And it is an insurance product, so naturally the insurance law will also apply.

And the objective of this product is as you see here, that is, it will protect farmers from harm caused by injuries, diseases, and disabilities. And it is for the stabilization of business management in agriculture. And the business operator would be the Korean Government and NH Life is a marketing arm, and we ask the member cooperatives to sell. And there are two major types of insurance. That is, it depends on whether you are self-employed or you are working for someone else.

And it’s not that different in terms of the content, but Safety Insurance for Farmers is applicable for the entire year. And the characteristic of agriculture, one of it is that you have to have more workers when you are busy, and then in the winter, there is less crops, therefore you don’t need to hire that many workers. So it is not necessary for those workers to be insured one year, therefore, it is from one to 89 days, and you can determine the period yourself and join in this Insurance for Agricultural Workers. And then for the self-employed workers, they would be applicable for the Safety Insurance for Farmers.

Now, depending on the law, the national government will pay 50% for the insurance premium. And on average, the local governments, they are 26% and then the cooperatives, 14% or so, that will be their support. That means that the farmers themselves will be paying about 10%. And this is based on the average insurance premium in 2020. And the local government subsidies vary from 10% to 40%.

Now, in terms of the government subsidies, there will be differences depending on which local government will apply. So we show the history of the product. Initially it was under the National Agricultural Cooperative Federation, but from 1996, it became a government supported product. And the related laws changed from the Agricultural Cooperatives Act to the Framework Act on the Agricultural, Rural Community and Food Industry. And then in 2012, the NACF had changed its business structure, and this was separated and the name was changed, and the insurance law is now applicable.

Therefore, it is now possible for the private sector insurance companies to also enter the Insurance for Agricultural Workers. In 2009, there was a test pilot in nine cities and counties, and then after five years, in 2014, it expanded to the entire nation.

Now, Safety Insurance for Farmers and the Insurance for Agricultural Workers are compared here, and the insurance period differs. For the Safety Insurance for Farmers it’s one year, however, in the case of the Insurance for Agricultural Workers, it’s one day to 89 day, and you can choose. The age is the same, and Safety Insurance for Farmers, depending on the insurance payment, there are about four types and the industrial accident type pays out the most, but that means that the premium is higher. Maybe there is a difference of about two times compared to type one.

Now, as for the Insurance for Agricultural Workers, the benefit is the same but the premium will change depending on the insurance period. And if you are a farmer, then you can get support, but you have to meet the standards. And this qualification has to do with, cultivated area has to be over 1000 square meters, and the farmer period has to be 130 days or more. Annual sales has to be more than 1.2 million won. So you have to be able to meet these qualifications going on.

So the Safety Insurance for Farmers, if we look at the benefits, there is the survivors’ benefit upon the death, from 60 million won to 120 million won depending on the type. There’s also the funeral service expense, also the disablement on injury. And again, you see some differences. And of course that will depend on the premium. As I explained earlier, the Insurance for Agricultural Workers benefit is the same, but depending on the period, there is a range from 31 million to 3.06. And the Safety Insurance for Farmers dedicated to injured workers, it’s the same as the General Type 1 insurance. And it is for the working farmers.

So there is an All-day Guarantee, which is a little bit lower for the premiums. And then the Holiday Guarantee also covers weekends. So that’s holidays excluding the weekday. This one is just for the weekends and the holidays. And there’s no subsidy from the government for this one.

And by year we see the number of insured people. Every year, the insured rate goes up and also there is some statistics for foreigners. 2020, it went down a bit, the growth rate dropped because of COVID-19, but the society is aging in Korea, meaning that there are quite a number of foreigners, therefore the growth rate is increasing.

And by age, if you look at the number of insured people, the elderly over 60, is 75% and higher. So this is with regards to the insurance payouts, the payment amount. In other words, the industrial accident case that is introduced in 2018, so that gradually from this year, the amount goes up and similarly, well, in comparison to that, the number of deaths does not increase, but the number of payments have increased.

The insurance upon death will be the largest payment, but it’s not the number of people paid, but rather number of payments is larger because of the industrial accidents. And the percentage is getting higher from 2018 when it was introduced to 2020. And the payment rate is about 2% in terms of when you get ill or injured during work. In other words, there will be no payment if it is an injury at home, for example.

Now, as for the Agricultural Workers Insurance, for example, let’s say that you are covered until the 10th of December, but it seems a lot of people will make the claim even if it’s past that date. Annual profit and loss, it’s not profitable. It’s in red ink. That’s why the private sector is not entering in this market. Next.

This is looking at the cumulative accidents. In the case of injury, the falling accident is 36.7% highest in terms of death. What is highest, is the agricultural machinery-related accidents. So more than 50% of the mortality is due to agricultural machinery, according to the statistic.

And if you look at this map, it shows for the entire nation, the status of the elderly population. Red is 65 or higher. So you see the areas in red and the red areas are the agricultural areas. In other words, what is the biggest difficulty for us is the fact that the agricultural areas have lots of elderly, and that means that there will be a lot of claims.

And for example, if you’re aged, then you get back pains and it might be difficult to judge if it’s due to the agricultural work. So you need to have the time and cost to check this out. However, what’s most important is that gradually the subscriber base will be shrinking. Right now, 75% are over 65. So in two or three decades, it will be only one quarter of those people who can subscribe. That is for our company, the biggest headache.

And next page. As we have been seeing, the Safety Insurance for Farmers, it’s not really an insurance policy. The insurance for farmers has different objectives than other insurance because the other insurance pursues profit, and there are a lot of obstacles to sign up, but Safety Insurance for Farmers put priority on protecting farmers. If you are a farmer, you can apply, even if you’re elderly, because in other insurance, usually it’s only up to 65 that you can join. In the case of the insurance for farmers, the highest age is 87. And if you are a farmer, anyone can join.

Therefore, the Safety Insurance for Farmers is not insurance, but rather we can say is public assistance. And Safety Insurance for Farmers is essential safety net that helps farmers stabilize their lives and contributes to creating sustainable agriculture and rural areas by guaranteeing all kinds of accidents and diseases that occur during farming. So I’d like to end my presentation here. Thank you very much.

Yoon Hyun-Sung:

First, let me introduce myself. I work for an NH P&C Insurance company now. And I had been working for crop insurance claim team for three and a half years, and I moved to crop insurance support team, which is my current team. And I’m in charge of crop reinsurance part. Here’s my email address. So if you have any question, feel free to email me. Please go to next page.

This is my contents and I’m going to start with crop insurance program overview. Okay. Next page. History. In 2001, we introduced the crop insurance program for the first time in Korea. We started with apple and pear as a pilot program. So next year, 2002, we had very severe Typhoon Rusa, and we had the loss ratio of 433%. To help you understand, loss ratio represents the ratio of losses to premiums. So the loss ratio of 433% means that insurance company earned premiums 100 and paid claim 433. In this case, the insurance company realized the deficit as 333.

And 2003, we had another huge Typhoon Maemi, resulting in loss ratio of 290%. So after we introduced crop insurance in Korea, we had great damage for two consecutive years. As a result, reinsurance company decided not to participate in Korea Crop Program. Globally, crop insurance is very large, so reinsurance companies are really essential factor to keep crop insurance, but in Korea, 2004, we don’t have any reinsurance company. NH was the only company which took part in crop insurance.

2005, government reinsurance system was introduced and reinsurance company made decision to return to the program. After 2005, we kept our crop insurance program without big problem. But 2012, we had huge Typhoon Bolaven, and the loss ratio was 357%. To ease the burden on insurance company, the new government reinsurance program was introduced.

And please go to next page. Is distinct characteristics. The first one is asymmetric information, absolute predominance about information of property insured. Frequency and severity of accident, production history, farmer’s ability of cultivation. So there is a potential risk of adverse selection. In fact, this applies to all areas of insurance. And the second one is loss adjusting. Because the natural disaster focused on short harvest season, there is a burden of loss adjustment. When catastrophic disaster occurred, there is a shortage of the manpower.

And next page please. And the third one is, high possibility of program failure. There is threat of catastrophic disaster such as typhoon. Because of high volatility of loss ratio, we need effective risk pooling program such as government reinsurance system.

And the next thing is government subsidy. In Korea, crop insurance, we have government supported premium subsidy. For risk premium, 50% from central government and 30% from local government. And for loading cost, 100% from central government. So farmer only pay about 10% of premium.

Please go to next page. And the last thing is about government reinsurance. And I’m going to tell you about government reinsurance system in the last part of this lecture in detail.

So please go to next page. Now, I’m going to explain about Crop Insurance Program in detail. Korea crop insurance is pre-assessed insurance, to understand it, there’s an important definition that is, guaranteed yield. The guaranteed yield is calculated by weighting averages of the actual yield and standard yield of the farms over the past five years. For your information, standard yield is calculated based on yield statistics by crop. The reason why guaranteed yield is necessary, is the yield of insured farmland are different from standard yield under various condition.

So before the insured, which is farmer, buy an insurance, they have their own guaranteed yield. And when it’s a harvest season, we measure the actual yield and compare the guaranteed yield and the actual yield, and we decide the amount of claim.

And the next is deductible. Deductible is very important definition in all insurance area. Straight deductible means the amount paid by insured before the insurer pays any money. For example, the insured can choose the deductible ratio and in the event of an insurance accident, the insured get paid over deduction.

And now I’m going to show you how the crop insurance works. First one is named, Peril Policy. It provides coverage on incurred losses that listed in the policy. In this policy, we perform the loss adjusting every single time when natural disaster occurs. So let me explain with the pictures below. The white one is the guarantee yield and we have two different natural disaster frost and freezing and typhoon.

We perform both assessments two times, and you got to know the claim amount of each disaster. And the sum of the two claim, we have the total loss amount and we deduct the deductible amount and pay final claim amount. So in the picture, the final claim amount is the red one.

next page. This is about Open Peril Policy. It provides coverage on loss from all kinds of natural disaster. So its premium rate is much higher than the named Peril Policy which means that the farmer have to pay more money to buy Open Peril Policy. In this policy, we perform loss adjusting only once to get the actual yield. So we get the loss amount by calculating the guaranteed yield minus actual yield. And then we deduct the deductible amount and pay the final claim amount.

And next page is about premium rate. The premium comes from multiplying the premium rate by insured amount. So the way, how we calculate the premium rate is very important. In the case of the new crop, we use pure premium method, and when experience statistics are accumulating through the insurance business, rate adjustments are made to reflect those statistics by loss ratio method.

Now I’m going to talk about business performance, its annual performance. The table below shows statistics for the last five years. As you can see, penetration ratio is steadily going up. It’s because we introduce new items every year. Also, we have government premium subsidy, so the farmer have low burden for the premium. Last three years, we have high loss ratio due to natural disaster, such as typhoon and frost.

And if you go to next slide, it’s about gross premium. Age of 2020, we have almost 60 items, but major four crops dominate 72.5% of the total premium. Apples make up the largest portion followed by greenhouse and rice.

And if you go to next page, I’m going to talk about loss assessment. First, let me explain about the insurance subscription for crops. Insured crops are apple, pear, sweet persimmon, astringent persimmon, and insured risk are typhoon, hail, spring frost, heavy rain and others, then the peril. Please, the rest of it, refer to the page and please go to next page. This is our procedure of insurance subscription. This is a procedure of insurance subscription. So the farmer should visit the local NH office and check their own qualification and condition. And then employee of NH, we visit each field to check the exact insured amount, including area and number of fruit trees. And then we have an explanation of main terms of insurance product.

On the next page it shows the insured risk. Basically both natural disasters could be covered by insurance, such as typhoon, hail, fire spring frost.

The table below shows related organization and their roles. This is quite a long story so please refer to the page. And if you go to next page, yes, this is about the category of loss adjusters group. The first one is certified loss adjusters. The number of this group is about 857. These days, the number of, expected to exceed about almost 2000.

To be a member of this group, they must obtain a government recognize certificate. This system is introduced in 2016. The next group is private loss adjustment company. The number of this group is about 480. In fact, the people in this group have the most professional skills, and this group engaged those adjustment since the introduction of crop insurance in 2001. Their history is quite long.

And the last group are general loss adjusters. Actually they are farmers and employee of NH local office. The number of this group is about 12,000, but now their number is expected to be around 14,000. Even if their numbers are a lot, when the natural disaster occurs, they tend not to be caught aware because they are interested in their own farmland.

This is the table of procedure of loss assessment. To sum up briefly, in the event of a natural disaster, the farmer go to the local NH office and notify the claim occurrence, and then the employee of local NH office refer to NH P&C, and we allocate loss adjusters. And after loss adjusters finish field survey, NH P&C, we calculate and pay the insured claim.

This is a criteria of loss assessment, but we don’t have much time. So I will pass this part.

On the page, this is a reinsurance part, that’s our last section. Reinsurance is very important factor for crop insurance sustainability. In the event of natural disaster, such as typhoon, hail, the claim payment is very huge. So spread of risk is essential for stable operation in the long term.

Summary on reinsurance. First, primary insurer is NH P&C and re-insurer, we have government re-insurer, and also domestic re-insurer. And the government reinsurance structure is profit and lost sharing system. The definition of reinsurance is the practice whereby re-insurer transfer its portion for risk to other reinsure for reducing its risk.

And if we go to next page, it shows the change of government protection cover by year. From 2001 to 2004, we don’t have government reinsurance. And 2005, government reinsurance system was introduced. If the loss ratio exceeds 180%, the government reinsurance takes loss over 180. That means, insurance company is only responsible for the loss under 180%. Reinsurance like this is called stem loss system. But after 2019, the new government reinsurance system was introduced. That was profit and loss sharing system that we are using right now.

This slide explain about the stem loss system. So I will pass this part because we don’t use this system anymore. So if you go to next page, this is a government system, profit and loss sharing system. The main point of this way is that government and insurance company share the profit and the loss.

The biggest advantage of this method is that it reduces the volatility of insurance companies, financial burden. The detailed application method is divided into three steps. The first step is for the government and insurance company to decide its stake. The second step is to allocate profit and loss according to the loss ratio. And the last step is additional settlement of the profit and loss at the rate of 6.5%.

So if you go to our next page, you can refer to the profit and loss distribution table. And if you go to next page, this is example, how it works. So please refer to examples. Actually it is very complicated. So you don’t have to understand all of this, but just, I want to explain the way how it works.

This is the end for crop insurance Korea. As I said before, if you have any questions, please feel free to ask me or email me, that’s fine. So thank you so much.

Tatsuya Matsuura (AOA):

Thank you for your presentation, HyunSung. And I found some comments in the chat, but sorry. Now, due to time constraints, I will move on next presentation now and later I will pick them up in Q&A session.

Ravinda in Sri Lanka is going to make a presentation titled, Case Study on Development of Inclusive Climate Insurance in Sri Lanka.

Ravinda Herath:

Good morning and good afternoon to all. I’m Ravinda Herath, I’m working as an assistant general manager for Sanasa Insurance. Sanasa is a leading microinsurance company in Sri Lanka. So my educational background, I got a master of business administration from Bolton University, UK, and also I graduated as a BSc in agriculture. And also I’m the member also for Chartered Insurance Institute in UK, and holding a diploma insurance.

That’s all about my educational background. So let’s move into the presentation. So I’m talking about the, Case Study on Development of Inclusive Climate Insurance in Sri Lanka.

What is climate insurance? Climate insurance is, actually, it is a risk transferring solution for the negative impact of climate change. So it can be seen in different formats, but briefly the climate risk insurance is a risk transferring solution for negative impact of climate changes. So with that, I would like to give you some brief introductions about how this climate insurance related to the sustainable development.

Then once they increase their living standard by adding their incomes to their families, but once the disaster comes, what will happen? So again, they will go down to the poverty life. So the continuous impact of disasters will bring them to the very bad situations or very unfavorable situations according to their income. So because they don’t have any risk transferring mechanisms to bring their income to higher when the disaster comes. So this is the scenario, the people who are living under the poverty line and also frequently they are who are affected by the disasters.

But if you have a climate insurance safety net, so what will happen, so it will provide some backup for the income losses or the impact to the climate. So then they will be able to become best positions than without insurance, because they’re having some safety from the insurance, right?

This is my key message. Without good insurance, the cycle of poverty continues and sustainable development is hampered, because if we are talking about the sustainable development, there should be insurance because otherwise that poverty cycle will continue.

Let’s move into our journey, because throughout our insurance implementation periods, we had a very good experiences and we started this climate insurance in 2010. And also first time we introduced index insurance for tea in 2012, and in 2015, actually we had some peer exchange program. We exchanged our experiences with the 14 countries.

Let’s talk about our journey. So then we started our journey in 2010, we’re adding some climate insurance to the product portfolio. In 2012, we have developed index insurance for tea, first time in the world. And in 2015, actually we had a peer exchange program to exchange our experiences with 14 countries, members from the 14 countries. These are some snaps of the event.

In 2016, actually we had a problem with the data. So then we introduced our own weather station network for the communities. It calls that community based weather stations concept in Sri Lanka. And 2018, we used satellite data for development of index insurance in Sri Lanka. And later on in 2019, we have piloted the application of blockchain technology for climate insurance. And 2019, we introduced some mobile technology, the mobile application called iFarm for the agriculture insurance farmers. So the iFarm has many facilities, not only the insurance, but also there are some market place where a farmer can sell their products.

Next, I would like to talk about the type of climate insurance products available in the world. So there are many available in climate insurance, and some are discussed in the previous presentation, like area yield index and some other insurance product. But there are many products available in the world like weather index insurance, pasture index, area yield index, and also some kind of hybrid crop insurance, and also some kind of vegetation index. There are many more, moisture-based index.

Because why this all insurance, because that, as we all know that the claim ratio for the climate insurance is considerably high. So then, that we need some better mechanisms for managing the risk. So that’s why these all insurance are in place to mitigate the… to manage the risk, actually.

To design the best products, because we want to manage our risk very well. So then what we do, we followed our product development process and do some innovations during that product development process of climate insurance. So first step is actually, we did some institutional assessment and we recruited 30 agriculture graduates to employ with Sanasa insurance to implement these climate insurance in Sri Lanka. Then we conducted market research for more than 2000 farmers because we need really to see that how demand side views and demand side data to develop the product.

Then we actually developed the prototype product and we implemented the testing environment and exposed the testing environment to get the feedback from farmers and do some necessary changes after first prototype product. Then we developed a comprehensive product, including the policies and procedure, and also that the premium rates and all the product features in this product, but it is simple and affordable. And also we created some many accessing point because farmers can access in many places to this insurance.

We conducted the pilot test for 100 farmers to get the real feedback from the farming, real environment. And we roll out it and conducted a training and staff development. And also we developed our system and also developed some marketing material for roll out. And we still, we are reviewing this product and do some changes, and we have a continuous reviewing process of this product development process in index insurance.

When we talk about the climate insurance, there are key players in the index insurance and as well as the climate insurance. So as previous presenter talk about the reinsurance, reinsurance is a crucial point in climate insurance, because if we don’t have any reinsurance support, we are not able to implement this project, this kind of climate insurance successfully in any country.

So insurer plays a major role in transferring risk of climate. So then it is a leading part of this climate insurance and for delivering solutions. And they are having more experiences of climate insurance. And technical assistance providers, because we need very good technical experts to deal with this risk management expert to develop the climate insurance product.

Governance also plays a major role because without any subsidiary program, so this cannot be successful because at the beginning stage, we need some subsidiary for farmers to take over this climate insurance program successfully.

Government as a regulator, they also do very good role in climate insurance, because they’re doing some policies and some kind of regulatory interventions to protect the clients. So among this, the distribution channel is another player to do a key role in distribution, this climate insurance in any country.

We have identified key challenges during our implementation of this climate insurance. It is in four scenarios like product related, client related and insurance company related issues, and also distribution related issues. We feel some product development process will take more time it’s around sometime, one to two years to develop best product for climate insurance.

And basis risk issue is there, and also availability of historical data is limited and also not in a good quality or sometime their reliability is the problem.

Client related one, lack of trust on insurance, and also inability to pay premium upfront and lower literacy about insurance and lack of confidence on reliability of data. So those are the client related issues we have faced, and also limited numbers of distribution channel, and also high rate of distribution costs like commission, and also reliability of some of the issues relating to the distributions.

From the insurance company side, we faced some lack of skilled staff for agriculture insurance and also arranging reinsurance facilities is challengable at the beginning of the program because reinsurance seek scale for insurance, but at the beginning, we couldn’t provide the large scales for reinsurance. So, that’s what the insurance faced difficulties at the beginning of developing climate insurance.

To work on these challenges, we find some solution for these issues. First, what we did, as I explained before, we established our own community based weather stations, we established 35, our automated stations, and it is supported by the web portal and also SMS facilities to the farmers. And also, International Water Management, they provided satellite data for product development. Recently we started a project with IWMI in 2018 and we have developed the tele drama for giving awareness about index insurance. So it is very important and very significant in index and climate insurance because the farmer education.

We have to give more effort to educate farmers, so then we need to use comprehensive marketing material, marketing strategies to educate farmers. So then we develop a tele drama to educate our farmers. iFarm mobile application for agriculture insurance, actually, as I explained previously, it provides many facilities from enrollment to claim settlement. Not only that, but also there are many facilities including marketplace, consultancy type also, the discussion forum. There are many more facilities a farmer can enjoy.

And also premium subsidiary, so at the beginning of the program, we were able to provide some premium subsidiary with the support of some donors. We provided some premium subsidiaries for farmers to their part of the premium.

Key learnings, actually as an insurer, the insurance program have a significantly high success rate when introduced as a part of the ongoing agricultural program. So we added this as the part of the ongoing agricultural program, it’ll be success for the climate insurance.

Successful introduction and execution of insurance scheme depend on intensive informal and educational campaigns. It is needed actually, this has to be taken in place as an ongoing basis. And also we need consistency in the approach in crucial importance for the success, because we need some long term perspective, otherwise we can’t guarantee the sustainability of the climate insurance.

The inclusion of farmers in all aspects, like contribution to the understanding and acceptance, and also ownership of the process should be taken by all. All steps should be taken with the contribution of the farmers.

Establish partnership and relationship with the relevant state and public and private sectors. So it should be done because this should be taken as a part of the whole parties, because otherwise, as an insurer, we can’t do alone the climate insurance implementation.

And also we need full transparency of the process. So because in that case, actually client can be convinced. And also introduce of the innovative technologies for the sustainability and also to reduce some cost, because when we are delivering this product, the cost is considerably high. And also creativity is needed. It is exactly because we are living in the digital world, so then digital inclusion is very much needed in delivering of this kind of climate insurance.

For this process and this innovation, we got some recognition, Sanasa Insurance won the National Agribusiness Award for the consecutive four years, from 2012, as innovative product development in finance and insurance sector in Sri Lanka. And also we won some National Business Excellence Award in 2018 and 2019, for the introducing innovative product in agriculture sector in Sri Lanka.

Not only that, we won some international award from ILO for winning video of 10th anniversary of ILO impact insurance facility. So these are some recognition we have received for implementation of climate insurance in Sri Lanka. So that’s all about my presentation and thank you very much. If there is any questions, we will be able to discuss in the Q&A and a session. Thank you very much

Koji Kawamura:

And good afternoon everyone. I’m Koji Kawamura. Thank you for giving me this opportunity today. Originally I would have liked to meet and speak with you in person yet unfortunately, that’s not the case today. If the following seminar is to be held in Korea, I’m looking forward to visiting the locations of the popular Netflix series, Squid Game with Nu san and Syu san. Now I would like to talk about our contribution to sustainable agriculture.

I am told that since there are many non-Japanese speaking participants, I will switch to my original Japanese and have the translator translate my word into English.

I would like to talk about the JA Kyosai initiative for SDGs with a focus of sustainable agriculture. Two gentlemen, they are not our employees. They are comedians. These two comedians, they have become so popular by repeating, “We can do it if we try.” The repetition of, “We can do it if we try,” made them very famous. We think alike. We believe that we can do it if we tried. And with that, we are trying to contribute better to the community.

A few words about our organization, JA Kyosai. Our mission philosophy is, mutual aid. And by providing insurance and contributed to local community, we are playing a part in creating a safe and secure community and their livelihood. As is shown here, we believe that insurance and community contribution activities form two wheels of a cart, if one is missing, JA Kyosai’s business cannot go forward. We have to have two wheels, insurance provision and community contribution activities. There are two equally very important pillars of our organization.

Let me start with insurance portion. We provide coverage to life, automobile and home. For life, the life insurance, we have 21.9 policies in force. The total sum insured is 97 trillion, 160 billion yen. So much of a responsibility.

Now, 2020, 8.84 trillion yen of money had been paid out. We hope that those monies were well-spent to support the people. Now, let me talk about how we are contributing to the community. Again, in addition to people, vehicle, home, we are also trying to support livelihood and farming. In the area, people, health management and promotion, we’re trying to promote the exercise. And also we also donate nursing care and welfare related equipment. And at times of typhoon and earthquake, we have provided shelters, temporary housing for free, and in the area of vehicles.

And for children and for the seniors, we tried accident prevention seminars, or workshops, or training. And also for agriculture area, we have the events for the children to help them deepen the understanding of farming, and also we have donated drones to the Agriculture High School. Now how does, or how do activities relate to SDG goals. For more than 70 years, we have promoted mutual aid by providing insurance and contributing to the society. We believe that each of our efforts indeed are in reality, the practicing of SDG goals. So JA Kyosai’s initiative that has continued for long relates to the envisaged world of SDGs.

And we have set up a direction and policy, how are we going to address SDGs? By providing services, protection and insurance issues, sustainability of agriculture and local communities for its business foundation, providing insurance and services and engaging in community contribution activities. In doing so, we have set four goals. One is contributing to healthy and productive lifestyles. Second is realization of safe and secure local communities. The third is the focus of today’s webinar, contributing to the sustainable agriculture, last, not the least, contribution to the global environment.

And I would like to go into more detail. Let me talk about contributing to healthy and productive lifestyle or livelihood. As an insurance, we provide coverage of illness, injury, retirement, but also we provide support for health living through health management. And also we provide social integration support for traffic accident victims rehabilitation. And also we provide culture assistance for children who will lead the next generation.

Now realization of safe and secure local community. We suffer from natural disasters, typhoon, earthquake, therefore we provide coverage against natural disasters, including earthquakes and typhoon, and also we support disaster prevention and reduction. And also disaster relief and risk construction assistance will be provided. And also we try to provide prevention for traffic accident.

Next is about sustainable agriculture. We provide insurance coverage to ensure business and livelihood stability of farmers. And also we do provide agricultural work accident prevention, and we also promote agriculture per se. And the fourth is the contribution to global environment, reducing the footprint to reduce the CO2 emission, we are making EAC investments.

And also we promote and support for local production for local consumption toward food mileage reduction. So providing insurance and providing support the community activities. Through those two wheels, we try to strengthen the base of agriculture in the local community so that they are both sustainable.

Now let me further zoom into the sustainable agriculture, the third point that I have talked about. And I would like to focus on how we are trying to prevent the farming accidents. We conducted the analysis of the data, agriculture work accident prevention activities.

You may be surprised, you may not know about the discourse by agriculture work accident is quite high. Of the 100,000 farmers, there are 16.2 cases of fatal accident, which is twice as high as construction industry. And if you look at the whole industry average, the agricultural farmers’ accident, fatal accident rate is 10 times high. We find that to be truly traumatic. To have the farmers continue the farming with a sense of security and safety, we have to make sure that we reduce the accidents, and in that way, we can also contribute to the local community.

Now, we didn’t really know very much about how the agricultural farming accidents occur. This is the data possessed by Ministry of Agriculture, Fishery and Forestry. They have discussed the total number of deaths, but they did not give the detailed disclosure of the accidents. But look at on the right hand side, we tried to extract the data from the base data that can be identified as an agriculture work accident. And for last four years, we have, tens of thousands of data had been analyzed. And the findings was that the serious disability accidents were twice as high as fatal accident, and injury accidents was 224 times as high as a fatal, death accidents.

So if you look at the agriculture-related accidents, 71,040 accidents occurred in a year. 312 deaths that has been disclosed by the ministry’s statistics is just a tip of the iceberg. They only talked about the deaths, but if you look at the totality, the accidents occurred so frequently. And also we look at the causes of the accident.

There are three major factors. First, location and environment. The second is object-related, such as agriculture equipment and creatures, little animals. And the third is the cause by humans, person as worker. But one of it, or the combination of two or three of them trigger the accidents. So piling up these factors cause serious accidents.

And we also found out the object-related accidents cause very serious accidents. We also look at the number of accidents and also the severity. On the vertical, we have that total number of accidents, and on the horizontal line, we have the severity. Top right, look at the riding tractor, riding tractor. There are many accidents caused and the consequence is very severe, the severity is high.

So if you look at this quadrant on the right top, you have to focus and you have to prioritize this area in preventing the risks. So this is a risk that you had focused and promote prevention. So we decided that this area of work should be on top of priority. By conducting the analysis of the agriculture related accidents, we learned the following. By knowing the whole picture of agriculture work accidents, we found out that there was many as 70,000 agricultural work accidents in the air, including serious disability and injury accidents.

And we found out that we know where to put a focus on, where the priority should be, the object, the agricultural equipment. Work accidents could lead to very serious results. And the third is by analyzing the data of accidents, the characteristics of agricultural machinery accidents became clear. So by knowing that, we were able to get a clue or an idea for preventing, avoiding future accidents. So we shared analysis and findings with as many relevant organizations as possible, so that as a society, we can work in concert collectively to prevent and reduce the number of farming accidents.

Let me explain what we have done. Now, we developed the first ever virtual reality, VR equipment for experiencing agricultural accidents. You can experience five experiences in three areas. One is if the riding-type agricultural machinery turned, and the second is controlling working-type agricultural machinery. The third is if you’re trapped in a speed sprayer. So we worked on those three. So those are the one, two, three, the contents that we have developed for virtual reality. First deep learning program for causes and measures of agricultural work accident. We had the farmers use the VR and try to learn how to extend it.

And also for the learning, we also had a program for training to check the cause of accident and safety measure. There are two types for the training. First, we have the full-fledged experience with speed VR goggle, the one. For group trainings, and at the harvesting fair, that would go through a real experience using VR goggle. The second is we use VR glasses with the smartphones and we have many staff and have them use on occasion of visiting farmers. So through two approaches, we have deployed the VRS on a nationwide basis. Even under the COVID-19 constraints, the many tried this. 18 months since we have started this program, and in 27 prefectures, we were able to conduct 166 workshops.

Also, we were acknowledged as contributing to the sustainable society, and we were rewarded the Good Design Award for 2020. We can reduce the accidents little by little, but of course we cannot zero the risk. We cannot removed the risk entirely. So as a third effort, we have developed the agriculture risk diagnosis to further mitigate and reduce the risk.

First, one has to have the awareness that farming can cause many accidents. There are many risks. So learning that there are many potential risks and the accident ratio in the farming is high. So this awareness campaign, having the farmers realize this fact, is one, and also we conduct checking of risks. We comprehensively indicate typical risks surrounding agricultural farmers and take interest in preparation against these risks.

We will ask, “Are you prepared for eventual risks? If the agrichemicals sprayed to the next door and if the next door farmer cannot harvest the product, you’ll be held liable. Can you have means and resources to pay and provide a compensation?” We ask those questions. And if they say that they do not have their own ways and means to prevent or mitigate or overcome the risks, then we suggest that they obtain the insurance coverage.

So by conducting the diagnosis and the farmers will understand that there’s a need to be covered by insurances. So we provide the insurance protection and also we try to support in other ways to subsidize the farmers’ foundation for livelihood and business.

Now lastly, I would like to reflect back the three points. The first is we have learned through the analysis of agricultural work accident that we now know the whole picture of agricultural work accident and we were able to put on the priorities on what we should do.

The second we have developed the Japan’s first ever virtual reality equipment experiencing agricultural work accident. Therefore, we were able to suggest that they take preventive measure by experiencing simulated agricultural machinery against accidents that may cause serious risk. Learning the seriousness, they’ll be prepared to prevent them accidents, preventing measures. And also certainly by development of agriculture risk diagnosis activities will provide peace of mind through insurance provision for insufficient preparation against risks.

So through such efforts we’ll like to contribute to the community, providing insurance coverage and activities to support the local community. So by making sure that two wheels run smoothly, those are the key pillars of the JA Kyosai. As friends and comrades and colleagues, we would like to work together with you collectively to collectively support the welfare of the world and the people. Thank you very much.

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