Press Conference by Yuji Yamamoto, Minister for Financial Services

(Excerpt)

June 1, 2007

[Minister's Statement]

Good morning. I would like to report on the Cabinet meeting. The Minister for Disaster Management and Food Safety made remarks on the overview of disaster prevention measures and the FY 2007 disaster prevention plan. The Minister of Health, Labour and Welfare reported on the FY 2006 measures implemented for the purpose of helping single mothers find jobs and the FY 2007 measures with the same purpose. The minister also reported on anti-measles measures. The Minister for Science and Technology reported on the Innovation 25 long-term strategy guideline and the creation of the Innovation Promotion Headquarters. The Prime Minister reported on the Innovation 25 long-term strategy guideline and the creation of the Innovation Promotion Headquarters. The Minister of the Environment reported on the ''Strategy on Becoming a Leading Environmental Nation in the 21st Century.'' The Chief Cabinet Secretary reported on the ''Strategy on Becoming a Leading Environmental Nation in the 21st Century.'' The Minister of the Environment reported on the Environment Month. That summarizes the Cabinet meeting. I have one more thing to announce. It is about the ''challenge-again'' assistance. Yesterday, on May 31, we compiled the ''Future Direction of Challenge-Again Assistance Measures,'' and I would like to announce the report here. This reviews progress for the comprehensive challenge-again assistance plan and puts forward the direction of measures to be taken in future. As for details, the direction is based on Britain's ''Connections'' and includes the promotion of a double-track life or multi-habitation so as to enhance support for young people in rural areas. That concludes my remarks.

[Questions and Answers]

Q.

By this week, major life insurance companies announced their financial reports for the year to March 2007. Overall, these companies posted their first fall in revenue in the past two years. How do you interpret their financial reports?

A.

The financial statements for the year to March, as announced by the nine major life insurance companies, have some distinct features. The first is an increase in interest, dividend and other revenues based on an improvement in investment performances. As the demographic structure and social needs have changed, needs have changed for insurance products. Specifically, insurance policies have been falling in value as needs have shifted from death benefits to living benefits. This has resulted in a decline in premium revenues. Basic revenues thus decreased by 1.5 trillion yen, as you noted. In the meantime, basic costs declined by 1.7 trillion yen as benefits and other payments decreased due to corporate pension funds' termination of public pension fund management services. As a result, basic profits on core insurance services scored an increase from the year to March 2006. Some companies recorded their respective highest ever basic profits. Overall, financial performances were robust. However, this investment performance improvement is partly attributable to Japan's macroeconomic upturn. From the perspective of business performance, we are seeing a continued decline in the value of insurance policies and other thorough structural changes that are affecting insurance companies. This is our understanding. Therefore, I think that life insurance companies should take advantage of their good macroeconomic environment so as to overcome problems in future business management reform. I would like to see life insurance companies enhance their financial infrastructure and promote the development of attractive products, improvements in sales channels and enhancement of corporate governance. Furthermore, I would like to see them improve protection and convenience for insured people.

Q.

Yesterday, an employee of Sumitomo Mitsui Banking Corp. was arrested for alleged collaboration with gangsters in a murder case. What do you think of this incident?

A.

Irrespective of any specific company, given the groups that should be condemned by society and the fact that the employee in question belongs to a company close to the public sector, it scarcely needs saying that we think we must stand up against antisocial elements.

Q.

Minister, how do you like your kariyushi summer wear?

A.

It's cool today. The Justice Minister who sat next to me said there is a long-sleeve version of this garment as well. We had believed that only short-sleeve versions were available because kariyushi was produced in Okinawa. Frankly, I feel that I should have worn the long-sleeve version today. This clothing is very light-weight and breathes well. Now, I feel nice and cool with this on. Even if the sun gets hotter, this kariyushi may allow us to set room temperatures at higher levels. I think it's an effective tool in environmental preservation.

(End)

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