The value provided by nursing care & seniors business is geared towards achieving SOMPO’s Purpose
As Japan’s population continues to be transformed by an aging population and a declining birthrate, demand for nursing care services is growing. On the other hand, the country’s labor force is shrinking, fueling concerns of a significant imbalance between the number of people who can provide care and those who require it. And Japan is facing other major challenges; for example, the sustainability of its social security system is under threat because financial resources are being squeezed by the ballooning cost of paying social security benefits. Moreover, the environment that surrounds us is changing rapidly, highlighted by the emergence of new risks, like the COVID-19 pandemic, and advancements in digital technology.
In light of those environmental factors and with a brand slogan of “changing the future of nursing care” we will aim to grow further as a nursing care operator by making full use of digital technology and real data, and strive to improve the sustainability of the nursing care industry and provide support to even more elderly citizens in need by drawing on the know-how of Sompo Care to build a nursing care ecosystem. On top of this, we will take steps to contribute to the realization of a future society filled with health and happiness by taking up the challenge of extending the health life expectancy by working to prevent dementia and supporting the social and economic activities of active seniors.
Looking back on the previous MTMP
The Sompo Group entered in the nursing care business prior to the rollout of the long-term care insurance scheme, and we made a full-fledged entry into the nursing care business in the second half of fiscal 2015 after closing an M&A deal with two major nursing care operators with abundant experience and achievements in the industry. Under the previous Mid-Term Management Plan, we quickly set about merging those two companies, ramped up staff recruitment and training in order to maximize synergies with the Group, bolstered internal control systems and corporate governance, and prioritized the improvement of occupancy rates at existing facilities.
With the objective of strengthening hiring and personnel training, in fiscal 2017 we set up the in-house Sompo Care University for caregivers in order to enhance the systems used to provide new employee training and regular follow-up training sessions. Moreover, in fiscal 2019 we endeavored to attract highly talented personnel mainly by raising the compensation for nursing care professionals to the highest level in the industry in some regions. Such measures yielded steady results during the period of the previous Mid-Term Management Plan with the turnover rate among full-time employees improving roughly seven percentage points to 11.4%.
In terms of enhancing internal control systems and corporate governance, we took steps to establish an internal reporting channel with the aim of preventing serious incidents such as the maltreatment of elderly customers and we also put in place in-house rules on reporting such incidents. Furthermore, we gradually advanced the management and business integration between the two acquired nursing care operators—eventually becoming the current Sompo Care Inc. in July 2018.
Particularly since fiscal 2018, we have focused on sowing the seeds of future growth. In July 2018 we launched the SOMPO Dementia Support Program to tackle the issue of dementia on a Group-wide basis. The program aims to realize a society that is prepared for the challenges of dementia and gives people the opportunity to live as they please even if they have been diagnosed with the disease. In February 2019 we started to explore the possibilities of IoT in the nursing care business by establishing the Future Care Lab in Japan as a future nursing care project for creating new nursing care solutions. The lab has so far tested over 350 types of technology, with 10 of those actually being put to use in the field of nursing care. In addition, in April 2020 we provided other nursing care operators with the business management know-how and services built up by Sompo Care, which marked the start of a new solutions business that seeks to contribute to the sustainability of the industry overall. Plus, we steadily undertook measures initiatives that lead to the current Mid-Term Management Plan. For example, in December 2020 we acquired Tokyo Tatemono Senior Life Support, a company that we expect will generate strong synergy effects with the Sompo Group as we target further growth in the nursing care business.
As a result of these measures, the occupancy rate for existing facilities recovered to 89.4% in fiscal 2020 from 83.7% in fiscal 2016. Revenue (one of our management targets) increased from ¥110.7 billion in fiscal 2016 to ¥131.8 billion in fiscal 2020 and adjusted profit grew to ¥7.3 billion from a loss of ¥2.9 billion.
New Mid-Term Management Plan
Vision of the new MTMP
|Enhancing the Sustainability of the Nursing Care Industry and
Supporting the Lives of More Elderly people
|Extend the healthy life expectancy of more elderly people
|Create a future society for healthy and happy lives
To accomplish the SOMPO’s Purpose, in the nursing care & seniors business we aim to solve social issues concerning the graying of Japan’s population and so-called “new normal,” and provide two social values in the process: (1) enhancing the sustainability of the nursing care industry and supporting the lives of more elderly people; and (2) extend the healthy life expectancy of more elderly people. To that end, we are committed to three actions: (1) provide support as a nursing care operator; (2) support by ecosystem; (3) and support active seniors. By doing so, we aim to contribute to Japan’s status as a world-class, affluent society of longevity and create a future society brimming with health and happiness.
Specific strategies in the new MTMP
1 Providing Support as a Nursing Care Operator
We intend to construct a nursing care model for the future by promoting the use of safe, sophisticated technology substantiated by the Future Care Lab in Japan, as well as science-based nursing care powered by real data. We will also boost our ability to supply nursing care services by providing better compensation in order to attract highly proficient workers. Based on this strong capacity to supply services, we will aim to support the growing demand for nursing care through our own growth mainly by effectively combining inhouse development with strategic M&As and expanding our full lineup of services encompassing both home- and facility-based care.
2 Supporting by the ecosystem
By combining real data generated from a database of approximately 80,000 users with the data analysis technology of Palantir, we will aim to commercialize our Real Data Platform (RDP) for nursing care to bring forth new solutions. We will also expand our solutions business of providing the business knowhow and services Sompo Care has honed thus far to other nursing care business operators. We will look to build an ecosystem by extending our real data and real services to nursing care business operators and adjacent industries, contribute to the sustainability of the industry as a whole, and provide assistance to as many senior citizens as possible.
3 Supporting Active Seniors
By extending our services to not only those who require nursing care, but also to the elderly population in general prior to such needs arising, we will embrace the challenge of contributing to a society in which seniors can lead fulfilling lives in any way they please, extension of healthy life expectancy, and keeping a lid on the cost of social security benefits. Our concrete measures for achieving this will revolve around the dual axes of a smart community business and the SOMPO Dementia Support Program. In the former, we will aim to encourage a change in mindset and behavior among active seniors and support their participation in society so they may enjoy a state of well-being. Through the latter, we hope to create a society that is prepared for dementia and gives people the opportunity to live as they please even if they have been diagnosed with the disease, so starting in fiscal 2021 we plan to launch in earnest some services that should prove useful in preventing the impairment of cognitive functions.
Families, etc. who give nursing care at home