Annual Report2008 5/24

Annual Report2008

3ANNUAL REPORT 2008Kazumi ImaoPresident of the Board of DirectorsPursuing Steady and Sound Business Management, and Building a Strong Financial BaseBusiness PerformanceThe Japanese economy followed a gradual growth path during the reporting term, driven by robust corporate earnings. However, amid turmoil in international capital markets from the start of 2008, corporate earnings deteriorated and fears of an economic downturn began to grow. The primary problem facing Japan’s agricultural sector is that the number of farmers is in constant decline, and the average age is rising. On top of this are the worldwide problems of rising food prices and a shortfall in supply. In response to these issues, there is a pressing need to increase understanding among the public of the importance of agricultural self-sufficiency. It is here that the JA Group has an important role to play. Looking back at our insurance operations during the term under review, thanks to business initiatives pursued by the entire JA Group our nationwide sales of life insurance policies reached the initial goal, posting a particularly large increase over the previous year, while sales of pension insurance policies also grew year-on-year. In short-term insurance policies, sales of automobile insurance policies recorded weak results against the background of a fall in vehicle sales, but automobile liability insurance sales reached our start-of-term target. However, long-term insurance policies in force totaled ¥340,948 billion (down ¥10,733.4 billion from the beginning of the term), despite our efforts to maintain the amount insured. Insurance payouts for claims paid at maturity and for accidents reached an all-time high of ¥3,884.2 billion in fiscal 2007. With these payments, we were able to help our members and policyholders provide for their living security, and restore houses and other facilities damaged by natural disasters.Fiscal 2008 is the second year in our three-year plan, executed under the slogan of “Strengthening Ties and Finding Partners: Actions to Win Support for Zenkyoren.” Under this plan, we will conduct the 3Q Visit Project and take other steps to increase the frequency of communications with our members, and increase the number of visits in an attempt to provide better coverage for our members and policyholders. At the same time, we will further our efforts to lay the foundations for business in the future.Offering Comprehensive and In-Depth Coverage to Support the Lives of All Members and PolicyholdersEnsuring Sound and Reliable ManagementTo maintain the trust of members and policyholders and protect the funds that they entrust us with, we are committed to ensuring that our management is sound and our operations secure. We are doing this by reinforcing our fund management capabilities, increasing profitability by reducing operating expenses and other measures, and by steadily accumulating the reserves necessary for insurance payments in the future by keeping them in balance with profit returns to members and policyholders. As a result of these efforts, our solvency margin reached 879.1%* (885.7% in the previous fiscal year), giving us sufficient ability to meet future payment obligations. Basic profits totaled ¥418.7 billion, down from ¥421.6 billion in the previous term. This is attributable to declines in loading profit and risk premium, primarily as a result of the decrease in the balance of insurance policies in force, despite an improvement in the negative spread due to a higher investment yield.* Please note that a simple comparison of this figure with the corresponding indicator for Japanese life and non-life insurance companies is not possible due to differences in the scope of business.- Kazumi Imao, President of the Board of DirectorsMESSAGE FROM THE MANAGEMENT