Japan's Sompo to focus on integration after acquisition spree
26/04/2023 03:37
By Makiko Yamazaki and Ritsuko Shimizu
TOKYO, April 26 (Reuters) - Sompo Holdings Inc 8630.T
will place more focus on integrating domestic and overseas
operations for further growth after a spell of acquisitions
abroad boosted the global presence of Japan's No. 3 non-life
insurer group, a senior executive said.
"We rapidly shifted capital allocations to overseas to
secure a foothold in growth markets, with a sense of emergency
over a rapidly aging home market," the group's chief operating
officer Mikio Okumura told Reuters.
"Now that our non-life insurance business overseas has grown
almost to the size of the domestic business, we no longer have
to differentiate strategies for overseas and domestic
operations," he said.
Sompo accelerated its global push through its $6.3 billion
acquisition of U.S. property and casualty insurer Endurance
Specialty Holdings in 2017, which gave the Japanese company a
much-needed U.S. foothold.
It also bought five more companies over the last five years,
including U.S. agriculture insurance company Diversified Crop
Insurance Services in 2020.
Sompo forecast adjusted consolidated profit of 100 billion
yen ($746 million) for the overseas insurance business in the
year ended in March. The group's overall adjusted consolidated
profit is estimated at 160 billion yen.
Okumura said he does not see an imminent need for further
acquisitions.
"We could achieve organic revenue growth of some tens of
billions of yen in a year or two by hiring a team of
professionals instead of rushing for more deals," he said.
To deepen integration within the group, it plans to
globalise capital allocations and product launches, as well as
to conduct analyses of risks on a global basis such as cyber
attacks, he said.
At home, Sompo is working to grow nursing care services for
the elderly as a future pillar and to eventually sell its
software-driven data platform globally for predictive care that
helps improve productivity of care services.
The nursing care business is targeting annual revenue of
about 30 billion yen by 2030. "We want to present our own
solutions to the aging society," Okumura said.
($1 = 134.0700 yen)
(Reporting by Makiko Yamazaki and Ritsuko Shimizu; Editing by
Jacqueline Wong)
((Makiko.Yamazaki@thomsonreuters.com; +81-3-4563-2805;))