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.

• 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.

• Focuses on three business segments: new Sompo Japan, overseas, and wellbeing.

Domestic P&C insurance business transformation

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

• Plans to boost earnings by JPY 87 billion through rate revisions, micro-segmentation, and operational reforms in sales and claims.

• Reduces exposure to high-risk and long-term contracts, especially old properties and solar power, and accelerates product development cycles.

• Reforms sales and back-office operations, eliminates dual agent structure, centralizes operations, and pursues direct sales and digitalization.

• Leverages overseas best practices (e.g., Sompo Sigorta) to enhance claims management and fraud detection.

Overseas insurance business growth and capital management

• Drives geographic expansion in the US, Europe, Canada, and Southeast Asia, aiming for $1.5 billion operating income and $1B+ GWP growth by FY2026.

• Targets operating ROE of 13%+ and 10% annual operating income growth, supported by disciplined underwriting and capital optimization.

• Maintains strong capital ratios, redeploys excess capital for growth, and manages risk-adjusted returns with ECR solvency ratios above 200%.

• Achieves combined ratio improvements, expense discipline, and investment income growth through portfolio and operational enhancements, including a 5.8pt improvement in combined ratio and reduced catastrophe risk exposure.

• Investment income is expected to provide a significant tailwind, with book yields rising and net investment income projected to exceed $1.25B by FY2026.