<figure id="attachment_324129" aria-describedby="caption-attachment-324129" style="width: 6000px" class="wp-caption alignnone"><a href="#" data-ident_hash="a6565393"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/07/ef3b0d5392664349f688437bb09220f9.jpg" alt=""></a><figcaption id="caption-attachment-324129" class="wp-caption-text">On July 25, Big Motor held its first press conference on the issue of fraudulent insurance claims, and President Hiroyuki Kaneshige (second from the front) announced his resignation. President Hiroyuki&#8217;s son, Koichi, who resigned as vice president, did not attend (Photo by Hiroto Kato).</figcaption></figure>
<h3> Why Big Motor Insurance Fraud Claims Have Been Silently Considered</h3>
<p> On July 5, Big Motor admitted that it had filed fraudulent insurance claims, and on July 18, the full text of the investigation report by the third-party committee was made public. Then, on July 25, President Kaneshige and others suddenly held a press conference and announced the resignation of President Hiroyuki Kaneshige and Vice President Koichi Kaneshige. Shinji Izumi (Senior Managing Director) was named the new president, and Kunimitsu Ishibashi (Director, General Manager of Sales Division, Store Development Division) was named the new vice president.</p>
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<p> In the fall of 2021, a tip-off from a Big Motor employee revealed that the company had <strong>been charging</strong> insurance <strong>companies more for car repairs than the actual cost, under the direction of a supervisor, and padding the bill</strong>. The non-life insurers on the side that was charged with the fraudulent insurance claims, which had a quota of around ¥140,000, are furious with Big Motor and are demanding that the padded claims be returned. Big Motor has already begun making restitution to the non-life insurers.</p>
<p> On the surface, it appears that the non-life insurers are the &#8220;victims,&#8221; but there is a growing number of people on the ground who are wondering, &#8220;Didn&#8217;t they realize that the claims were fraudulent? However, the number of people saying that they were aware of the fraudulent claims was steadily increasing, and even so, the fact that they were not strictly enforcing the law was revealed.</p>
<p> Interviews with related parties revealed that over the past five years alone, the total amount of fraudulent claims by multiple companies, including padded claims, is said to be close to 10 billion yen. Naturally, they knew about it and &#8220;tacitly approved&#8221; of it.</p>
<p> Then, why did they &#8220;tacitly approve&#8221; the fraudulent claims, even though they knew they were fraudulent? The reason is that P&amp;C insurers receive big rewards from Big Motor in exchange for &#8220;tacit approval&#8221; of fraudulent claims. One of the rewards was the &#8220;acquisition of liability insurance. A source at Big Motor revealed the following.</p>
<p><strong> There was a secret agreement from P&amp;C Insurance to use CALI insurance in proportion to the number of cases that Big Motor&#8217;s sheet metal shop induced to enter the shop. For every one entry, there are five CALI cases. In some cases, depending on the non-life insurance company, it was seven cases.&#8221;</strong></p>
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<p> In other words, the insurance company that induced one car accident to come into Big Motor would, in return, contract CALI insurance for five cars, or seven cars depending on the non-life insurance company, with that insurance company.</p>
<p> What is the &#8220;inducement to enter the garage&#8221; mentioned in the testimony of Big Motor officials?</p>
<p> When an accident occurs, the first thing to do is to rescue injured people, if any, and call the police. While waiting for the police to arrive, many people call the &#8220;Accident Reporting Center&#8221; of their non-life insurance company. Regardless of whether they use insurance or not, the purpose of the call is to report the accident and arrange for a tow truck to take the car that cannot be driven on its own.</p>
<p> When reporting an accident, one question is always asked, &#8220;Have you decided on a factory to take the car to? Most people are asked &#8220;Yes, I have decided on a factory. Most people reply, &#8220;No, I don&#8217;t have a specific one in mind. Then, the insurance company&#8217;s receptionist will suggest, &#8220;Well, how about Big Motor 00 store? If you agree, a wrecker will come and tow your car. If the customer agrees, a wrecker will come and take the vehicle to Big Motor. This is called &#8220;entry inducement.</p>
<div data-friday-nextpage-lead=" Big Motor offers a reward to the non-life insurance company."></div>

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<p><a href="#" data-ident_hash="3f6ffaca"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/07/e12c246ace437be84cafeedaf5c12a5c.png" alt=""></a></p>
<figure id="attachment_324144" aria-describedby="caption-attachment-324144" style="width: 1600px" class="wp-caption alignnone"><a href="#" data-ident_hash="17723847"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/07/417ca30137f4b6239eefc744920057ff.jpg" alt=""></a><figcaption id="caption-attachment-324144" class="wp-caption-text"> The Big Motor Shisui branch, which was the origin of the whistle-blowing. In the past, many non-life insurance companies other than Sompo Japan introduced the shop as a &#8220;designated repair shop,&#8221; &#8220;excellent shop,&#8221; &#8220;affiliated shop,&#8221; etc.</figcaption></figure>
<p><span style="font-size: 1.125rem;"> A company that repaired a car without an adjuster present, even though the repair cost was over 500,000 yen.</span></p>
<p> After the car is safely entered into the Big Motor Sheet Metal Works through the &#8220;entry guidance,&#8221; the damaged parts of the car are checked. Usually, an adjuster from the non-life insurance company will appear in the case of a major accident involving more than ¥200,000 to ¥300,000. The adjuster plays an important role in the insurance repair process, and his/her primary job is to fairly calculate the amount of the insurance claim. The adjuster checks the damage against the estimated situation and makes an &#8220;agreement&#8221; with the repair shop on the amount to be repaired.</p>
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<p> Recently, non-life insurance companies have become more reluctant to pay out, and even if the estimated repair cost is 300,000 yen, the adjuster&#8217;s job is to lower the cost to about 150,000 yen. However, this was not the case for Big Motor.</p>
<p> Mr. A, who was in charge of the sheet metal department at Big Motor until a few years ago, told us the following.</p>
<p><strong> When the contractor was a specific insurance company, such as Sompo Japan, the repair cost was determined according to Big Motor&#8217;s instructions, without an adjuster&#8217;s presence or even an agreement. Sompo Japan and Kyoei Fire &amp; Marine were the two most lenient, and in some cases there was no attendance even if the cost exceeded ¥500,000.</strong></p>
<p><strong> At MSI and Tokio Marine, the response was not necessarily determined by the estimated amount, but on a case-by-case basis. For example, even in the case of an estimate of 500,000 yen for repairs, there were times when only images were required, and other times when an adjuster was present even if the cost was 300,000 yen. My impression is that cases where damage was difficult to see or where there were many parts of the front end that could not be seen were attended to.</strong></p>
<p><strong> Aioi was present in all cases where the repair cost was more than 150,000 yen. The standards varied depending on the P&amp;C insurance company, but we attended all cases where the customer asked us to check the car, including those of Sompo Japan and Kyoei Fire &amp; Marine, regardless of the amount or damage,&#8221; he said.</strong></p>
<p> Special rewards were offered to insurance companies like Sompo Japan and Kyoei Fire &amp; Marine that were willing to accept Big Motor&#8217;s padded estimates at its behest. That was, to repeat what I said earlier, to sign a liability insurance policy for five cars per case with the insurance company that directed the incoming cars to Big Motor.</p>
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<p> Car owners are required to sign up for liability insurance at the time of their regular vehicle inspections, and although it is inexpensive at around 17,000 yen for 24 months, it is mandatory for all car owners. At Big Motor, which inspects 260,000 vehicles a year, the liability insurance issued at the time of vehicle inspections alone amounts to about 4.5 billion yen a year.</p>
<p> The Big Motor official mentioned above indicates that the company was involved with at least five non-life insurance companies that handle liability insurance, but the winds changed in mid-July, just about a year ago now. Such a notice was issued to Big Motor&#8217;s nationwide stores and directly operated sheet metal shops.</p>
<div data-friday-nextpage-lead=" The shocking &quot;instruction e-mail&quot; that had been sent out to employees"></div>
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<figure id="attachment_324140" aria-describedby="caption-attachment-324140" style="width: 605px" class="wp-caption alignnone"><a href="#" data-ident_hash="78efd862"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/07/128e228d57c88e920c3fc11ef8a727b4.jpg" alt=""></a><figcaption id="caption-attachment-324140" class="wp-caption-text">An email of instructions issued to employees. It seems clear that this is an instruction to the two companies, Tokio Marine and Mitsui Sumitomo, to stop CALI contracts after July 14 of last year.</figcaption></figure>
<p> This e-mail, dated July 14, contains the following statement. <br>
&lt;This is a request for CALI issuance for July. <br>
For this month, after today, <br>
Tokio Marine <br>
Mitsui Sumitomo Insurance <br>
We have stopped issuing the above two companies&#8230;.</p>
<p> In other words, of the three companies that were Big Motor&#8217;s main interlocutors, it seems clear that the two companies, Tokio Marine and Mitsui Sumitomo, were instructed to stop issuing CALI contracts on and after July 14, 2022. Why was this so?</p>
<p> The non-life insurance companies involved with Big Motor conducted their own internal investigations into the fraudulent insurance claims that were discovered in the fall of 2021.</p>
<p> However, because Sompo Japan had a relationship with Big Motor and earned billions of yen or more a year from CALI and other insurance products, the company did not conduct a strict internal investigation like the two aforementioned companies, and quickly resumed business with Big Motor.</p>
<p> The e-mail implicitly instructed employees to stop issuing CALI to Tokio Marine and Mitsui Sumitomo, with whom they had previously had a relationship, after July 14, and instead to continue their contract with Sompo Japan. (Later, however, Sompo Japan again removed Big Motor from its list of affiliated factories and suspended its inducements to enter its facilities in response to the massive bashing it received from the industry.)</p>
<p> On the 26th, the day after Big Motor held its press conference, Sompo Japan Insurance Inc. issued a release titled &#8220;Establishment of External Investigation Committee on Response to Big Motor. The company apologized to its customers, agents, and other concerned parties, and announced its policy to release the results of the external investigation committee&#8217;s findings, but it remains to be seen to what extent it will be able to disclose the truth.</p>
<p> We hope you now understand that the P&amp;C insurers cannot have been unaware of the large amount of padding of their claims. The insurance companies knew that the repair costs were much higher than necessary, but they turned a blind eye to it without strictly enforcing the law because they wanted the liability insurance policy. In the sense that they knew of Big Motor&#8217;s wrongdoings, but by tolerating them, they increased the number of insurance contracts, thereby sucking in sweet profits, they were &#8220;accomplices&#8221; to the crime.</p>
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<figure id="attachment_324132" aria-describedby="caption-attachment-324132" style="width: 6000px" class="wp-caption alignnone"><a href="#" data-ident_hash="dbe6d4b3"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2023/07/3caa0dc29d8734e852cd4c942add13b2.jpg" alt=""></a><figcaption id="caption-attachment-324132" class="wp-caption-text"> Shinji Izumi, the new president, showed tears at the press conference. Will he be able to restore confidence in the company?</figcaption></figure>
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 Kumiko Kato

 One after another, new facts have come to light regarding the fraudulent insurance claims made by Big Motor, a major used car sales company. Why did the company's insurance claims balloon to such a huge amount? A surprising "promise" was made between Big Motor and non-life insurance companies.

Big Motor padded its liability claims to non-life insurers by nearly 10 billion for every 1 case of CALI.

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