Sompo (8630) Status Update summary

Progress on Financial and Strategic Targets

• EPS growth is surpassing expectations, with a CAGR of 18% projected and ROE improving toward the 13–15% target, with further enhancement targeted.

• Adjusted consolidated profit for FY2025 is forecast at ¥440.0 bn, significantly above the initial forecast, and all KPIs for FY2025 are expected to surpass initial forecasts.

• Combined ratio and adjusted profit are improving, with domestic P&C KPIs exceeding targets and a combined ratio forecast at 95.6% for FY2025.

• Strategic shareholding sales target increased to JPY 250 billion for FY2025, supporting capital recycling and future M&A.

• Medium-term goals include JPY 500 billion adjusted profit and JPY 6 trillion market cap by fiscal 2030, with discussions on achieving these earlier.

Operational and Cultural Transformation

• Integration of Japan and overseas P&C operations has created a unified management structure, enhancing negotiation power and efficiency.

• Operational efficiencies are being realized through system integration, vendor rationalization, and a JPY 30 billion cost-saving target over three years.

• Corporate culture is shifting toward underwriting discipline, data-driven decision-making, and increased investment in human capital, including a new stock compensation plan for up to 50,000 employees.

• 75% of 183 business improvement initiatives have reached effect-lasting status, supporting sustainable growth.

• Digital, data, and AI transformation (DDAX) is underway, with AI agent tools to be introduced group-wide by end-FY2025.

Investment and Capital Management

• Capital is managed with an ESR of 251% as of September 2025, ensuring readiness for further growth investments.

• Shareholder returns are set to accelerate, with 12 consecutive years of dividend increases and a payout ratio rising to 37%.

• A new investment committee is optimizing strategic asset allocation, targeting up to $50 million in pre-tax profit enhancement.

• Sale of strategic shareholdings is being accelerated, with proceeds balanced between growth investments and shareholder returns.

• Capital available for investment post-Aspen is JPY 0.9 trillion, with an additional JPY 1 trillion expected in 18 months.