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The head of one of the largest and most conservative insurance groups in Japan is looking for nursing and preventive health care services in aging societies around the world, to become a world giant.
Kengo Sakurada, CEO of Sompo Holdings, told the Financial Times that the group’s focus is shifting away from its traditional accidents and disasters. “VUCA”. The term was coined by the U.S. military to refer to volatility, uncertainty, complexity, and ambiguity.
“There is enough room for us to change ourselves and transform ourselves into something new,” Sakurada said. ‘Because if we just stay a traditional insurance player, I do not think we can be number one in the world.
Sakurada added that it will also consider overseas transactions in an effort to attract more customers. Sompo has allocated ¥ 600 billion ($ 5.4 billion) for ‘growth investments’ over the next three years.
In 2016, Sompo rival Endurance bought in Bermuda for $ 6.3 billion, a transaction that changed its portfolio and became a model for the company’s technique to quickly rebrand and integrate its brand. It has historically not been a strong point of Japanese groups when it comes to mergers and acquisitions abroad. Through M&A, the group wants to double the ratio of revenue it generates outside of Japan to more than 30 percent by the financial year ending in March 2024.
‘We have to be huge to survive in this insurance world. Our size, already a third of [Japanese] market share is not enough at all, ”Sakurada said.
Sompo invested $ 500 million last year in the US data analytics group Palantir, which was put together by billionaire Peter Thiel. The two have set up a joint venture because the insurer aims to leverage Palantir’s technology to transform Japan’s fast-growing but loss-making $ 90 billion nursing industry.
Sompo entered the industry at the end of 2015 through a flood of household acquisitions that made the group the second largest provider of nursing care services in the country.
With Palantir, he uses numerous data collected in nursing homes to improve the productivity of caregivers and analyze the well-being of patients.
Sompo intends to draw up an insurance package at some point in the future that can predict the progression of dementia and enable patients to plan how long they can drive without ending up in an accident.
In the long run, the company hopes to build a $ 5 billion business using various data platforms, including the one it works on for the nursing industry.
According to Sakurada, Japan’s rapidly aging society presents both a challenge and an opportunity to set up businesses that could eventually take on China and other countries experiencing similar social issues.
“If we are successful in Japan, this model and knowledge can be exported to developed countries as well as developing countries,” he said.