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The head of one of Japan’s largest and most conservative insurance groups aims to roll out nursing and preventive health care in aging societies around the world in a bid to become a global giant.
Kengo Sakurada, chief executive of Sompo Holdings, told the The Washington City Times that the group’s hub away from its traditional accident and disaster business would be centered around the phrase “Vuca”. The term was coined by the US military to refer to volatility, uncertainty, complexity, and ambiguity.
“There is plenty of room for us to change ourselves and transform ourselves into something new,” Sakurada said. “Because if we just remain a traditional insurance player, I don’t think we can be the number one in the world.”
Sakurada added that he would also consider overseas deals in a quest to win more customers. Sompo has allocated ¥600 billion ($5.4 billion) for “growth investments” over the next three years.
In 2016, Sompo bought Bermuda-based rival Endurance for $6.3 billion, a deal that transformed its portfolio and became a template for the company’s technique to rapidly rebrand and integrate its acquisitions. That has not historically been a strong point of Japanese groups when it comes to overseas mergers and acquisitions. Through mergers and acquisitions, the group aims to double the revenue it generates outside of Japan to more than 30 percent by the fiscal year ending 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 last year invested $500 million in US data analytics group Palantir, co-founded by billionaire Peter Thiel. The two have formed a joint venture as the insurer wants to use Palantir’s technology to transform Japan’s burgeoning but loss-making $90 billion nursing care sector.
Sompo entered that sector in late 2015 through a wave of domestic acquisitions that have made the group the second largest provider of nursing care in the country.
With Palantir, it uses a wealth of data collected in nursing homes to improve the productivity of caregivers and analyze patient well-being.
At some point in the future, Sompo wants to create an insurance package that can predict the progression of dementia and allow patients to plan how long they can continue driving without an accident.
In the long run, the company hopes to build a $5 billion business using a variety of data platforms, including the one it’s working on for nursing care.
According to Sakurada, Japan’s rapidly aging society presents both a challenge and an opportunity to create businesses that could eventually be brought to China and other countries with similar social problems.
“If we are successful in Japan, that model and know-how can be exported to developed countries and also developing countries,” he said.