Deep Connection between Car Dealer and Insurance Company

A series of insurance frauds conducted by a used car dealer Bigmotor was developed to resignation of the president of major insurance company. Sompo Japan President Giichi Shirakawa announced on Friday that he would step down as the president, taking responsibility of mishandling the relationship with Bigmotor. Not only the fabricated insurance claims but deep connection between dealer and insurance company shocked the car owners in Japan.

Shirakawa explained his decision as a big mishandling in management when he decided to resume dealings with Bigmotor in July last year. In January 2022, it was revealed with whistle-blowing that Bigmotor had been requesting insurance company excessive amount of payment by fabricating damages on the cars. Among all the insurance companies that stopped the dealings with Bigmotor, Sompo Japan alone restarted the business six months later, being afraid of going beyond the point of no return in the relationship with Bigmotor.

 

But the fabrications made by Bigmotor were too inappropriate to maintain the business. According to the investigation report of the special team, the dealer’s wrong requests for insurance payment included intensively making tires flat, breaking headlight, scratching car body with screw driver and hitting car body with golf ball wrapped in a sock fabricating the damage by fall of hail.

 

Bigmotor and Sompo Japan has been sharing an interdependent relationship. Insurance company introduces its customers to car dealer for repairing the car with accident. Car dealer introduces its customers compulsory automobile liability insurance or arbitrary car insurance. According to the report of Mainichi, there was an understanding that one car repairing worth five liabilities between Sompo Japan and Bigmotor. Bigmoter worked as an agent of Sompo Japan and Sompo Japan has sent a number of its workers to Bigmotor. The share of Sompo Japan in insurance business of Bigmotor was about 60%, ¥12 billion.

 

Car owners have been victimized by close business relationship between car dealer and insurance company. Although the cost of repairing a car with accident may be covered by the insurance, monthly insurance payments of car owner will be increased afterward. If the damage of a car is intensified with fabrication, the monthly payment will be raised without any fault of the car owner. Damaging someone’s car should be a crime, anyway.

 

In the press conference of announcing president’s resignation, Kengo Sakurada, Chairman of the parent company Sompo Holdings, told that he would not say that he was not responsible,” regretting the late report from its subsidiary. Financial Services Agency is going to exercise an inspection against Sompo Japan later this month. It is possible that long time irresponsibility ignoring car owners’ interest is developed to a big scandal of insurance business in Japan.