Management Message

I am Mikio Okumura and I took up the position of Group COO, President and Representative Executive Director in April. First, I would like talk about the most important thing and my mission as the Group COO of Sompo Holdings, Inc.

When I reflect on my journey so far, I feel that life is full of encounters and unimaginable experiences, each with a profound meaning, and that luck and connections can bring success. So, what I value most are the encounters I have had and the connections that I have made with people. I am improving myself to be able to build long-term connections, look at things from the other person’s viewpoint, and always think about what I can offer.

I think that connections are not only part of personal net-works, such as friendships, but also the timeless “connections” between us living now and future generations. To use an analogy, it is like a relay race. I want to forge ahead on my leg of the race with a willingness to bet my life on it, then pass the baton to the next generation in the best possible way. I have enjoyed my life so far, and would like to pass on to the next generation a society where everyone can enjoy their life too.

I believe that the major challenges we must address before passing the baton to the next generation and later generations are demographics and climate change. These are exactly the social challenges that SOMPO must address. These challenges are hard to address in such a short time, but it is crucial to do everything we can while we are alive—even more so because we are living in difficult times. Therefore, the role of SOMPO is to pass on to the next generation a sustainable society that ensures security, health, and wellbeing.

To make this happen, SOMPO needs to embrace diversity, ever-changing customer needs, and social challenges, then deliver solutions to address them. The key phrase is “connecting, making connections, and being connected.” Our goal is to develop solutions by building connections among the business units of SOMPO, our business partners, local communities, and data, not just people and society. We need to be with customers on their journeys and use the data we obtain to develop solutions that can meet even deeper needs.

To accomplish our goals, we must evolve into a corporate group that can deliver solutions for ever-changing and increasingly diverse customer requirements and social challenges. The important elements for delivering solutions are diversity and inclusion (D&I) as well as a corporate culture that supports new challenges.

I have a sense of urgency that D&I is essential for companies to survive. This is because companies can make bad management decisions when employees do not have a wide range of experience and values. In a standardized workplace, employees cannot understand what is happening in the world, what the customers think about SOMPO and business, and fully understand customers’ needs. In this sense, our biggest hurdle to overcome is understanding our ever-changing customers, not our competitors. The value of customer experience (CX) has increased dramatically due to the entry into the insurance industry of companies from different industries and start-ups. This includes being able to buy insurance with just a few taps on a smartphone. Since customer expectations are evolving, we cannot meet their expectations if we are satisfied with past improvements and we continue to operate as a traditional insurer or financial institution. I am not glossing this over; D&I is very important in business management. All executives and employees should ask themselves why D&I is important, or more simply put, why it is not enough to just have “men in suits.” We must work hard to promote D&I, not just treat it as a formality.

Next is corporate culture. I worked for another company in the past and think it is important to see ourselves and our company objectively from the outside. In fact, I was able to see the culture of the Sompo Group very clearly. Every employee at SOMPO has worked diligently and we now have a corporate culture built up over more than 130 years that is characterized by stability and trust, as well as a solid business foundation and connections with our customers. However, I have serious concern that just like the Japanese economy that failed to grow over the past three decades even though everyone worked hard, SOMPO might devolve and decline if we just continue to work in the same way. This is why we need to take on new challenges. Being complacent could become an obstacle. We are entering into the unknown of population decline where conventional wisdom and past successes do not apply. This could be possible for Japan as a whole, but the challenge for SOMPO is to put past successes behind us and change the corporate culture so that employees can take on new challenges without hesitating, something that we need to seriously work on.

As the Group COO of the Sompo Group, I will take up this challenge and work hard to foster a corporate culture where employees seriously consider why something could not be accomplished, then take on new challenges without fear, praise each other’s success, learn from one another, and give honest opinions. Therefore, my mission as the Group COO is to deliver solutions as a partner in our customers’ lives, work on D&I to make this possible, and create a culture of openness with a vibrant workplace that supports new challenges.

A hundred days have passed since I took up the position of Group COO. Whichever business unit I look at, as anticipated, SOMPO is a corporate group where employees work hard and honestly with customers. For example, when an earthquake struck in March this year in Fukushima Prefecture, safety reports of the customers, agencies, and employees started to come in one after another immediately, even before the executives gave instructions. I believe this is because quick action to deal with disasters, etc. is part of our corporate DNA. I was reminded once again of the strength of our abilities, when I saw employees taking action to help those affected by the disaster recover as quickly as possible.

As a result of these strong frontline actions and the hard work of every employee, good progress has been made on the Medium-Term Management Plan. For example, in FY2021, SOMPO posted record profits for a second consecutive year. However, these results were also affected by one-off positive factors, such as lower auto insurance losses due to fewer people driving and less traffic volume following the spread of COVID-19 as well as higher-than-expected investment income due to a strong stock market. So, I always try to stay calm and evaluate the real earnings after eliminating any unique or temporary factors.

When setting goals for FY2022, we removed the effects of the one-off positive factors in FY2021 and discussed many times with our staff how far the level of performance had actually progressed. And we currently expect real earnings in FY2022 to reach a level equivalent to FY2021. Now that our businesses are performing well, we must remain vigilant, keep our head clear, accurately grasp changes in society, and think about the next moves. We need to keep asking ourselves whether we are fully aware of the impact on our lives and businesses of global warming and population decline as well as well as the continually changing needs of our customers and society.

We must continue to ask ourselves if we are becoming insensitive to social changes and the need for a response. If we become complacent about our strong financial performance and fail to notice changes with our customers, they will eventually give up on us, and we will be unable to grow. So, we need to boost our resilience and achieve sustainable growth to meet customer needs and fulfill our role in society. To overcome our challenges, we need to focus not only on our current business plan, but also on medium- and longterm initiatives for the future.

The Group is now are working to create a conglomerate premium based on the “Group Best” concept. We intend to transform into a “Theme Park for Security, Health & Wellbeing” and to reform governance to support this transformation. We need to increase the “centripetal force” of the Group and take risks rationally using the “Group Best” concept to continue to grow. Simply put, we will take risks on the basis of what each company should do if we were a single company, rather than a group of companies.

We will focus on three areas of the insurance business where we expect to reap benefits and where we can have a A Message from the Group COO positive impact early on: retention & cession”, “investment”, and multinational business.

To capitalize on these three areas, under the Group Best concept, it is necessary to design systems in detail, not only for our ideals, but also systems for the organizational structure, evaluations, and other details. Therefore, a steering committee for which I am responsible was set up under the Global Executive Committee which is the advisory board for the Group CEO and the highest level of the executive Committee. A framework was established for the Business CEOs to participate and the working groups of the aforementioned three areas to exhaustively pursue the Group Best concept. We will then incorporate their findings into additional initiatives and actions to generate higher profits. I think an insurance group that truly created a conglomerate premium is rare around the world. We are committed to delivering results that will be highly appreciated by our stakeholders.

My take on a conglomerate premium is that we create more value than a simple summing up, such as 1 + 1 + 1 equals 3, by linking all business units as a single company using the Group Best concept as represented by the keywords connecting, making connections and being connected. We will deliver new services and solutions that help to create a society that ensures security, health, and wellbeing by using SOMPO’s world-class data, and by listening to the voices of customers (VOC) on the world’s leading seniors market to develop nonlife and life insurance solutions.

We have so far focused on medium- to long-term strategies, but all SOMPO employees will work hard to accomplish the Medium-Term Management Plan, with only two years remaining. I am committed to transforming SOMPO into a corporate group where diverse talent can shine in a vibrant workplace and take on new challenges without fear of failure, as well as to pass on the baton to the next generation by helping to ensure security, health, and wellbeing by delivering solutions that meet our customers’ needs. We look forward to your continuing support.