(Issued in August 2022)

Strategy/Capital

Overview of Mid-Term Management Plan and Key Financial Performance Indicators

Overview of Mid-Term Management Plan

Sompo Holdings launched the current Mid-Term Management Plan in fiscal 2021. Since it is difficult to predict the future with certainty in the VUCA age, this plan covers a three-year period through FY2023.

In order to realize the vision for society outlined in SOMPO’s Purpose, the Mid-Term Management Plan details the initiatives that we will undertake by the end of FY2023. By carefully executing our three core strategies of Scale and Diversification, New Customer Value Creation, and New Work Style, we aim to achieve the goals of an adjusted consolidated profit of ¥300.0 billion or more, and an adjusted consolidated ROE of 10% or higher.

Mid-Term Management Plan (FY2021-2023)

Goals

Realizing “A Theme Park for Security, Health & Wellbeing”

Adjusted consolidated profit: ¥300.0 billion or more
Adjusted consolidated ROE: 10% or higher
Increase the risk diversification effect
A solution provider that goes beyond the boundaries of insurance

Three Core Strategies

1Scale and Diversification

To ensure that the company has a resilient business foundation capable of withstanding rapid changes in the environment, such as increasingly severe natural disasters and the spread of COVID-19, we will work to improve profitability and productivity and expand our customer base, with a focus on the insurance business. We will also expand businesses and grow profits by utilizing M&As and other means, and thereby change our business portfolio and improve capital efficiency.
2New Customer Value Creation

To deliver unprecedented value, we are focusing on establishing the Real Data Platform which organically links real data from various businesses and domains by recognizing the transformative power of digital technology and data. We are also engaged in new business development in areas with a high affinity to our existing businesses.
3New Work Style

It is essential to increase job satisfaction and happiness of all employees and achieve high productivity for sustainable growth of the Group. We aim to build a group of talent practicing the Three Core Values (Mission-Driven, Professionalism, and Diversity & Inclusion) by reforming various systems and developing human resources.

Key Financial Performance Indicators

		FY2020 actual	FY2021 actual	FY2022 forecast	FY2023 plan
Adjusted consolidated profit		¥202.1 billion	¥261.3 billion	¥260.0 billion	¥300.0 billion or more
Adjusted consolidated ROE		8.0%	9.4%	9.2%	10% or higher
Diversification effects	Risk diversification ratio	39.4%	41.1%	42.2%	Improvement on FY2020
Diversification effects	Overseas business ratio	14.9%	23.7％	38.5％	30% or higher
New Customer Value Creation		—	—	—	External sales and monetization of products and services (in two businesses or more)

Domestic P&C Insurance
	FY2020 actual	FY2021 actual	FY2022 forecast	FY2023 plan
Adjusted profit	¥130.1 billion	¥157.4 billion	¥120.0 billion	¥150.0 billion or more
Net premiums written^*1	¥1,903.4 billion	¥1,941.7 billion	¥1,987.6 billion	¥2,000.0 billion
E/I combined ratio^*1	94.3%	93.5%	93.7%	91.7%
Reduction of strategic shareholdings	¥70.3 billion	¥50.1 billion	¥50.0 billion	¥50.0 billion (three-year total: ¥150.0 billion)

Overseas Insurance and Reinsurance
	FY2020 actual	FY2021 actual	FY2022 forecast	FY2023 plan
Adjusted profit	¥30.0 billion	¥61.8 billion	¥100.0 billion	¥100.0 billion or more
GWP growth rate^*2	+37.8%	+31.1%	+4.7%	Annual rate of approx. +9%
E/I combined ratio^*2	97.8%	93.9%	90.7%	88–89%

Domestic Life Insurance
	FY2020 actual	FY2021 actual	FY2022 forecast	FY2023 plan
Adjusted profit	¥32.5 billion^*3	¥33.6 billion	¥35.0 billion	¥40.0 billion or more
Annualized new premiums^*4	¥29.8 billion	¥35.6 billion	¥46.0 billion	¥50.0 billion
Policies in force	4.26 million	4.45 million	4.72 million	5.00 million
Investment for ALM matching^*5	—	¥329.4 billion	¥300.0 billion	¥300.0 billion

Nursing Care and Seniors
	FY2020 actual	FY2021 actual	FY2022 forecast	FY2023 plan
Adjusted profit	¥7.3 billion	¥5.9 billion	¥6.0 billion	¥8.0 billion or more
Revenue	¥131.8 billion	¥136.1 billion	¥151.1 billion	¥162.0 billion
Occupancy rate^*6	89.4%	91.1%	92.9%	93.8%

New Customer Value Creation
FY2023 plan		External sales and monetization of products and services that utilize RDP			Two businesses or more
Mid- to longterm target		Group revenue generated by the utilization of RDP			¥500.0 billion or more

*1 Sompo Japan (excl. CALI, household earthquake insurance) *2 Sompo International commercial business *3 Recalculated according to current definitions *4 Based on sales performance *5 30-year maturity equivalent *6 As of the end of the fiscal year