Transformation through Qualitative Evolution and Mid-Term Management Plan

The Sompo Group has been steadily advancing the transformation (qualitative evolution) of the entire Group and each business with the aim of realizing “A Theme Park for Security, Health & Wellbeing.” After it was established in 2010, the Sompo Group has built its current business foundation by entering the nursing care business and proactively shifting management resources to growth fields, while focusing efforts on enhancing earnings capabilities by integrating the domestic P&C insurance business. Under the current Mid-Term Management Plan, which commenced in 2016, Sompo Holdings has accelerated the development of products, services, and new businesses untethered to existing businesses, transforming its business portfolio and diversifying business domains and earnings sources. In fiscal 2020, the final year of the current Mid-Term Management Plan, we are making a final push at transformation (qualitative evolution) toward the realization of “A Theme Park for Security, Health & Wellbeing.”

Building a Foundation for Growth

Basic Strategy

Maximize synergies from business integration

Strategies and Outcomes

  • Increase business efficiency by integrating management of two core companies in domestic P&C insurance business
  • Provide high-quality products and services by sharing and refining know-how
  • Strengthen asset management capabilities
  • Facilitate the early and smooth integration of two companies in domestic life insurance business
  • Boost earnings by developing local markets and pursuing M&A and tie-ups in overseas underwriting business
  • Establish assistance business and expand earnings sources through Group-wide sharing of financial services, etc.

Issues

  • Increase profitability and build a highly integrated model by merging two companies in domestic P&C insurance business
  • Monetize and share business foundation, including Group businesses

Establishing a Business Foundation

Basic Strategy

Proactively shift management resources to growth fields while improving profitability of existing businesses

Strategies and Outcomes

  • Creation of Sompo Japan Nipponkoa Insurance (now Sompo Japan Insurance) through merger of two core companies in domestic P&C insurance business
  • Realization of higher business efficiency through early unification
  • Earnings improvement on changes to rating system for automobile insurance
  • Expansion of customer base by utilizing direct channels
  • Higher weighting and greater scale in protection-type products in domestic life insurance business
  • Execution of balanced M&A in specialty fields in Europe and the U.S. and retail fields, centered on automobile insurance in emerging markets, in overseas insurance business
  • Full-scale entry into services business, including nursing care business and remodeling business acquisitions
  • Begin advance into truly service-oriented industry by providing various progressive services

Issues

  • Stopping at bolstering profitability in domestic insurance businesses, pursuit of scale and efficiency on a par with global players, and transforming structure to align with service-oriented industry

Accelerating of Qualitative Evolution

Basic Strategy

Build a business foundation for realizing
"A Theme Park for Security, Health & Wellbeing"

Strategies and Outcomes

[ Establish and Sharpen Advantages in Each Business ]

  • In the domestic P&C insurance business, reform the earnings structure by reviewing pricing strategy, etc., enhance preparations for natural catastrophe risks, and manage risk by unwinding cross-shareholdings
  • In the overseas insurance business, make steady progress on post-merger integration with major acquisition Endurance (now Sompo International), launch retail platform concept, etc.
  • In the domestic life insurance business, begin transformation into health support company centered on Insurhealth®
  • In the nursing care & healthcare business, quickly turn profitably by improving productivity and merging / integrating Group companies

[ Group-Wide Strategy ]

  • Advance digital strategy, build a global trilateral structure, and enter the cybersecurity business (Sompo Risk Management)
  • Introduction of Business Owner system and Group Chief Officer (CxO) system, build a Group governance platform for transition to Company with Committees structure

Issues

  • Earnings remained weak due to external factors, such as major natural catastrophes, despite steady growth at the outset of the plan. Issues include profit contributions and monetization with built-up business foundation.

Realizing Strong Growth

Basic Strategy

Implement measures to realize
“A Theme Park for Security, Health & Wellbeing”

Strategies

[ Establish and Sharpen Advantages in Each Business ]

  • In the domestic P&C insurance business, reform earnings structure by optimizing pricing strategy and thoroughly reviewing business expenses, create new points of contact with customers, and establish new sources of earnings
  • In the overseas insurance business, accelerate growth using global platforms and expand business foundation through bolt-on M&A
  • In the domestic life insurance business, expand Insurhealth®, a combination of insurance and services to help maintain and improve health
  • In the nursing care & healthcare business, increase productivity, turn a profit in peripheral businesses, and build a Sompo brand strong in dementia healthcare

[ Group-Wide Strategy ]

  • Advance digital technology in existing businesses and proceed with data-driven business strategy
  • Change the business portfolio, diversify business domains, and secure stable earnings sources
  • Promote the globalization of management, mission-based work styles, and productivity by reforming the corporate culture

Issues

  • Identify future issues and trends caused by changes in society and people's behavior during and after COVID-19

These reforms align with the Sompo Group’s aim of becoming "A Theme Park for Security, Health & Wellbeing," and we will continue to pursue Group reforms.

Progress on KPIs (Adjusted Consolidated Profit and Adjusted Consolidated ROE)