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Big Motor's Insurance Scandal and Mishandled Press Conference Cause Public Outrage

Big Motor's Insurance Scandal and Mishandled Press Conference Cause Public Outrage

On July 25th, Big Motor held a press conference to address their fraudulent insurance claims scandal. The conference, which should have minimised the loss of trust and positioned it as the first step in restoring trust, failed to do so due to poor timing, structure, and expression. Big Motor is a large company with approximately 5,000 employees, 300 stores, and sales of around 600 billion yen. The company mainly buys and sells used cars, conducts vehicle inspections, general maintenance, sheet metal painting, and non-life insurance agency business.

 

The company was made aware of the problem in June 2022 when three non-life insurance companies requested that they investigate the actual situation regarding automobile repairs. The companies received information from the Non-life Insurance Crime Prevention Council that inappropriate insurance claims were being made by repairing undamaged parts or pretending that they had been repaired even though they were not. Big Motor explained that it lacked experience in the field, but a special investigation committee was established to investigate the matter from January 30, 2023, to June 20, 2023. The investigation report was created on June 26th, received by the company on July 5th, posted on the company's website on July 18th, and the press conference was held on July 25th.

 

The investigation report revealed that the company was aware of the issue on June 6th, 2022. A hearing of the president by the investigative committee was held on May 15 of this year. At the press conference, President Kaneshige stated that he didn't know about the issue until he received the report on June 26th, which was a clear lie. The company's response to the scandal shifted the responsibility from management to employees.

 

The Special Investigation Committee conducted 125 interviews with 121 people, conducted a questionnaire survey of 390 people involved in automobile sheet metal and painting work. Half of the respondents, 172 (45%), have been involved in, or have heard of, fraud. The response from President Kaneshige was that the fraud was not organised, and he believed the factory manager ordered it. He also made other personal remarks, which drew criticism.

 

The press conference was poorly organised. The new president was on stage, which made it difficult to convey an apology. The president and vice-president should have made a firm apology, and the new president should have taken the stage to create an image of a fresh start. Big Motor does not have a public relations department or representative, which is a fundamental cause of failure. A system that relies on external sources only in times of crisis will not be able to control risks and, as a result, will not be able to achieve continuous business growth.

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