Japan’s Sompo hopes to launch nursing services in an aging society around the world

Japan Business and Finance Update

The head of one of Japan’s largest and most conservative insurance groups is seeking to launch nursing and preventive medical services in an aging global society to become a global giant.

Kengo Sakurada, CEO of Sompo Holdings, told the Financial Times that the group’s focus on getting rid of accidents and disasters will focus on expressing “VUCA”. This term was coined by the US military to refer to volatility, uncertainty, complexity, and ambiguity.

“We have enough room to change ourselves and transform ourselves into something new,” Sakurada said. “Because if we continue to be traditional insurers, I don’t think we can become the number one in the world.”

Sakurada added that he will also consider overseas transactions to attract more customers. Sompo has allocated 600 billion yen ($5.4 billion) for “growth investment” over the next three years.

In 2016, Songpa Acquisition of Bermuda-based competitor Endurance At $6.3 billion, this transaction changed its investment portfolio and became a template for the company to quickly rebrand and integrate acquired technologies. As far as overseas mergers and acquisitions are concerned, this is not historically the strength of Japanese groups. Through mergers and acquisitions, the group hopes to double the proportion of its revenue generated outside Japan to more than 30% before the fiscal year ending in March 2024.

“In order to survive in this insurance world, we must become huge. Our scale is already one-third [Japanese] The market share is simply not enough,” Sakurada said.

Sompo invested US$500 million in the US data analysis group Palantir last year, which was co-founded by billionaire Peter Thiel. The two insurance companies formed a joint venture that aims to use Palantir’s technology to transform Japan’s fast-growing but $90 billion loss-making care industry.

Sompo entered the industry through a series of domestic acquisitions at the end of 2015, which made the group the second largest provider of care services in the country.

Palantir is using large amounts of data collected in nursing homes to improve the efficiency of caregivers and analyze the health of patients.

At some point in the future, Sompo envisions creating an insurance package that can predict the progression of dementia and allow patients to plan how long they can continue to drive without an accident.

In the long run, the company hopes to build a $5 billion business using various data platforms, including the data platform it is developing for the nursing industry.

Sakurada believes that Japan’s rapidly aging society is both a challenge and an opportunity to create companies that can eventually be taken to China and other countries facing similar social problems.

“If we succeed in Japan, this model and technology can be exported to developed and developing countries,” he said.

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