Progress under the Mid-Term Management Plan
Through the five-year Mid-Term Management Plan that began in fiscal 2016, the Sompo Holdings Group will realize transformation into the type of organization that I have been outlining.
The current fiscal year is the plan’s third fiscal year. We will further evolve the foundations that we have built, achieve benefits steadily, and accelerate initiatives to realize a “theme park for the security, health, and wellbeing of customers.” Also, at an early stage in the period from fiscal 2020 onward we want to attain a business scale and capital efficiency on a par with the level of the top 10 global publicly listed insurance companies. Specifically, we are targeting adjusted consolidated profit of over ¥300.0 billion and adjusted consolidated ROE of over 10.0%. To these ends, with stable earnings generation and a robust capital base as foundations, we will establish a continuous growth cycle by increasing the profitability of existing businesses and realizing investment opportunities through the transformation of and collaboration among businesses.
In fiscal 2017, adjusted consolidated profit declined ¥20.5 billion year on year, to ¥162.7 billion, reflecting the effects of natural disasters, such as the hurricanes in North America, and large-scale accidents in Japan and overseas. In fiscal 2018, however, we expect adjusted consolidated profit to reach a record ¥220.0 billion* thanks to higher earnings from businesses.
Regarding returns to shareholders, in fiscal 2017 we increased dividends per share by ¥20 year on year and implemented total share buybacks of ¥39.1 billion, thereby realizing our medium-to-long-term target of a total payout ratio of 50% for the fourth consecutive year. Moreover, in line with earnings, we expect to increase dividends for the fifth straight year in fiscal 2018.
During the two fiscal years since launching the Mid-Term Management Plan, the initiatives of each business have made solid progress. Going forward, we will continue to steadily implement strategies aimed at realizing a “theme park for the security, health, and wellbeing of customers.”
- Adjusted profit and ROE in FY2018 is 113.5 billion yen and 4.5% because the natural disasters exceeding our assumptions on measures to control cat risks.
On the other hand, we achieved record-high adjusted profit and ROE with normalized impact of natural disasters.
The Domestic P&C Insurance Business
We aim to sustain growth by revising business processes developed over many years and reforming a corporate culture that has a 130-year history. We are innovating to grow existing businesses and create new value. As well as using AI, robotic process automation (RPA), and other digital technologies to increase productivity, we are partnering with progressive companies outside the insurance industry to develop mold-breaking products and services.
The Overseas Insurance Business
In developed countries, we have completed a reorganization centered on Sompo International, acquired in March 2017, and this effort is already bearing fruit. For example, our underwriting has become more sophisticated. Also, we have established AgriSompo, which is rolling out crop insurance globally. Further, we intend to build a platform that encompasses insurance businesses in the retail fields of emerging markets. We are building the world’s first truly integrated global insurance platform.
The Domestic Life Insurance Business
By rolling out “Insurhealth,” which integrates traditional insurance services and health care, we are offering new value and transforming into a health support enterprise that aids people in leading healthy lives. More specifically, we established the health service brand Linkx (pronounced “link cross”). Under this brand, we have launched new type income compensation product, which reduces the premiums of customers whose health improves and provides them with a reimbursement of the difference between the former and reduced premiums dating back to the time of policy enrollment. Through such products and services, we will offer new value in the form of health maintenance and promotion.
The Nursing Care & Healthcare Business
Thanks to a steady rise in the occupancy rate, this business achieved its goal of moving into the black in fiscal 2017. Also, we will simultaneously heighten service quality and reduce costs through the merger of the two main operating companies, which we began implementing in July 2018*. In addition, anticipating the rapid aging of society, we are taking measures to extend healthy life expectancy. As part of these efforts, we have established the basis for industry–academia–government partnerships tasked with reducing and preventing dementia. Thus, our focus will not just be on growing the Group but on addressing social issues and helping make “Japan, an affluent country that can boast to the world of a long and quality life.”
- Former Sompo Care Message Inc. and Sompo Care Next Inc. merge to Sompo Care Inc.
- Revised adjusted consolidated profit and adjusted consolidated ROE, assuming an incurred loss on domestic natural disasters of \48.0 billion (equivalent to the historical average and estimated amount in initial forecasts for FY2018)
- For details regarding ROE,please refer to the link below.
Definition of Adjusted Consolidated Profit, Etc.（PDF/246KB）