Sompo (8630) Status update summary

Strategic direction and financial targets

• Aims to redefine its purpose around health, wellbeing, and financial protection, focusing on a highly efficient P&C business and solutions for retirement concerns over the medium term.

• Targets adjusted consolidated ROE of 13%-15% and adjusted EPS CAGR of 12%+ by FY2026.

• Focuses on efficient capital use, strengthened governance, and strategic capital allocation with a 100% remittance ratio and risk reduction.

• Will invest JPY 30 billion in talent and promote data-driven management to strengthen expertise and diversity.

• Plans to enhance resilience, customer connectivity, and capital circulation through combined financial strategies, including remittance, ESR targets, disciplined growth investments, and strategic shareholding sales.

Domestic P&C insurance business transformation

• Focuses on enhancing resilience and profitability, aiming for uniqueness and resilience by FY2026.

• Implements portfolio and underwriting reforms to improve profitability, targeting ROE above 8% and a combined ratio below 95% by FY2026.

• Plans JPY 70 billion in rate revision effects and JPY 17 billion from micro-segmentation and portfolio management, targeting JPY 87 billion total improvement.

• Reduces exposure to long-term contracts and accelerates product development cycles to adapt to environmental changes.

• Pursues operational reforms in underwriting, portfolio, sales, and claims service, alongside non-financial reforms like cultural change and governance.

Operational and sales reforms

• Reduces exposure to high-risk properties and solar power contracts, turning fire insurance profitable.

• Aims to lower long-term contract ratios and halve product development time via SOMPO-MIRAI system renewal.

• Eliminates dual structure with agents, revises commission systems, and centralizes back-office operations to seven areas, targeting a 15% reduction in branch back-office activities.

• Adopts digital technology and overseas best practices to improve claims detection, payment adequacy, and fraud prevention, expecting a -0.5 point combined ratio improvement.

• Pursues direct sales, digitalization, and alliances to expand customer base and enhance service delivery.