Strategy

Narasaki　We have talked a lot about Web3 and AI, but what are your thoughts on Web3 and AI in the three horizons of the Sompo Group’s digital strategy?

Albert　The beginning of technological innovation in Silicon Valley is, as the name suggests, silicon. There have been several technological waves since then, including the PC, the Internet, and mobile devices. The next wave that we can clearly see now is Web3 we and AI. Web3 differs from the existing internet (Web2.0), which is based on a few tech giants, who dominate the majority of search, e-commerce, social media and how we interact with the internet. Web3 will transform the way we utilize data. Web3 is powered by technologies like blockchain and smart contracts, which will make the world more decentralized and transparent.

Web3 brings changes to many industries. In a Web3 world, everyone owns their own data and will choose who can have access to the data.

The exponential growth of AI in the past year can be attributed to generative AI, which can generate largescale language models.

We build a model using data published on the Internet as training material. There is so much information on the internet that any question you ask an AI chatbot will almost certainly be answered. You may not know what is right and wrong, yet they give good answers.

Narasaki　Interesting, isn’t it?

Albert　The ability to produce new sentences, such as Shakespeare-style essays, is an example aspect generative AI.

Narasaki　In Shakespearean style?

Albert　Right. I believe that generative AI will have an impact on a wide range of businesses, including finance, insurance, healthcare, and even content creation and entertainment. For example, in the field of customer service, many customers phone the call center or use chat applications to get information, all of which can be done more efficiently with the help of generative AI. In other words, it is feasible to construct an AI model that can deliver more accurate and faster answers by creating a database of all the information that the company has, such as how to repair it, and having the AI learn from it. When a customer asks a very difficult question, generative AI can assist customer agents respond swiftly.

Narasaki　Since everything is dispersed and there is no center of gravity, there is no need for tech giants there. AI will also be open-sourced, commoditized, and free to use. The asymmetry of value and information in the conventional software model will be broken. In other words, real data obtained from actual business is important on the user side.

Albert　Absolutely. Experts in the relevant subject matter of that data are required to collect real data. So our expertise is an asset.

Narasaki　Exactly.

Albert　Many people are concerned that AI may cause them to lose their jobs. However, in my opinion, AI can assist people do their tasks first, making their work more efficient. Because AI can integrate real data with a vast amount of experience and knowledge, it will benefit professionals. But in the end, final decisions on specific tasks will need to be judged by the professional. As a result, I believe that professionals are still very vital and they will use AI as a productivity enhancer.

Narasaki　Like it or not, the paradigm shift brought about by AI is a huge disruption. I think SOMPO is better prepared for the coming disruption than other companies. How are you dealing with disruption?

Albert　We’re ready because we anticipate disruption, which is why we take a three-horizon digital strategy. Horizon 1 is DX (Digital Transformation), and Horizon 2 is the utilization of the data generated from it to create new business opportunities. Horizon 3 is about projecting disruption through specific technologies that will change the industry, such as blockchain, smart contracts, and AI. So we’re now preparing to understand these disruptive technologies, experiment with them, bring them into our daily use cases to see how we can improve our productivity and create new services based on Web3 and AI.

Thus, because we have a vision for the future, we can be prepared for transformation and disruption. But it’s hard to work to realize our vision.

Albert　Over the past years, SOMPO has demonstrated its commitment to implementing its vision and digital strategy. Palantir is one example of this. We’ve realized that data is critical, but we need a modern, best-in-class platform to ingest and analyze all of that data. And as Mr. Narasaki, CEO of Palantir Technologies Japan, is well aware, we not only do capture data, but we also effortlessly transfer it into Palantir’s Foundry. You can now create new analysis and tools that can accelerate towards this new disruptive world of Horizon 3.

Narasaki　The first is nursing care. The Real Data Platform “egaku” is based on Palantir’s Foundry. Currently, generative AI is being built on top of it, and the knowledge of experts and specialists in specialized fields can be incorporated into “egaku.” You can take advantage of the expertise of specialists in this area. It will revolutionize the care industry, including home care, so that everyone can benefit.

In addition, in the underwriting of non-life insurance, we are already showing significant improvement in profitability through “Foundry.”

Albert　SOMPO is expanding globally and creating exciting opportunities worldwide. AI and Web3 are global technologies — not just Japanese or American. As a result, the tools and models we develop can readily become global, accelerating our ability to work worldwide more quickly and efficiently. “Oshiete SOMPO!” and “Oshiete Himawari Life!” are examples of where we are using AI today. Can you tell us more about that?

Narasaki　“Oshiete SOMPO!” and “Oshiete Himawari Life!” are an internal FAQs that provide sales employees and agents with answers to all questions about insurance products, including detailed terms and conditions. They incorporate AI technology to provide an easier user interface. Like a smart friend, you can ask, “I’m in this situation, what should I do?”

Albert　Earlier, I mentioned that SOMPO has a global footprint. In addition, we have SOMPO Digital Labs not only in Tokyo, but also in Silicon Valley and Tel Aviv, creating global tech ecosystems for SOMPO. What are your thoughts on our global network?

Narasaki　Our global network, Palantir, and strategic partners such as ABEJA, which went public in June 2023, enable us to leverage each technology. And at the same time, we have a common vision, and there are probably other start-ups and other allies.

Albert　Another great asset we have are the business unit CDOs inside our Group. The CDOs of Sompo Japan Insurance, Sompo International, Sompo Himawari Life Insurance, and Sompo Care, together with SOMPO Light Vortex and SOMPO Digital Lab, have formed the CDO Alliance. Through this CDO Alliance, we can collaborate and develop synergies across all digital and data initiatives.

For example, all CDOs are working on AI initiatives. Because what one business CDO is doing with AI can be applied to another business, different AI cases can be shared and collaborated across businesses — and also being to create new solutions. This not only eliminates the need for businesses to start from scratch, but it also opens up new potential beyond what each CDO can do on their own.

Narasaki　“egaku” is a pioneering example of this. Mr. Iwamoto, CDO of Sompo Care, is working on RDP for Nursing Care, and together with us, he came up with a service that could meet the needs of people outside the group. This is the first successful example, and I think there will be more in the future.

The other is Palantir, Palantir Technologies Japan. For them, SOMPO is one of many Japan customers and a pilot customer case.

Albert　Essentially, we realize the power of real data. With AI and Web3, we go beyond SOMPO and can provide these solutions to rest of the industry. It’s important to have this vision, isn’t it?

Narasaki　You are right.

Albert　“egaku” has already started to build a platform for the nursing care industry. Mr. Sakurada’s vision of creating platform-driven business is being realized and deployed.

The world is flattening because it is becoming more global. If someone makes something in the U.S. or Japan, it can be sold it all over the world. I think technologies like AI and Web3 are creating a more digital, flatter world.

Narasaki　Let’s see. Everything is flat, blockchain and decentralized, so if you make something as software, whatever solution it is, you can sell it to anyone in the world without any hurdles. That’s how a flattened world works.

Albert　This, I think, can also be applied to insurance. As a global property and casualty insurance company, SOMPO may be able to develop next-generation insurance products based on new technologies such as blockchain, smart contracts and digital payments.

Narasaki　Insurance underwriting itself will be entirely AI-based, making it simpler and more comprehensive in terms of user experience. Even the framework of insurance products may become more sophisticated and provide complete coverage of all risks, even invisible ones.

Albert　A SOMPO LLM (Large Language Model) platform, for example, may create intelligent assistants for care workers and their work in the nursing care sector. As we mentioned earlier, we may be able to establish a platform and APIs that are open for third parties to create new products and services. And while you can help them in accelerating their vision, you also can participate in their business model.

Narasaki　In this open platform-like effort, I think LLMs can use APIs to interface beyond silos and leverage each other’s capabilities. The platforms are independent in a way, but still interconnected. So it’s like a cloud archetype, and basically it helps everyone who uses them to be a winner.

Albert　SOMPO addresses social issues not only in Japan, but around the world. Ageing is not simply a concern in Japan; it will become even more prevalent in other countries in Europe, the United States and China in the near future. The platform we build must be global in scope to create an ecosystem.

Narasaki　We will build an ecosystem on which application services for several different industries will be implemented. That’s the image, isn’t it?

Albert　What we can do is leverage AI and Web3 to solve social issues while also benefiting SOMPO’s customers. That, I believe, is our role in the advancement of AI and Web3.

Narasaki　I think we are very lucky. We have real data, we have a traditional business in a good way, we have customers and we have enormous resources.

Coupled with the advent of Web3 and AI, I think our future is very bright.

Albert　Indeed, with Web3 and AI, we are now like where the internet stood 25 years ago. In 1998, Yahoo, Amazon and Google had just started. It’s astounding to witness how much change has taken place since then. This serves as a strong reminder of the rapid pace at which the future unfolds. To successfully navigate this journey, we much always be on the cutting edge, be agile and adaptable, see what’s happening and incorporate it into our vision. I think that’s a point of differentiation for SOMPO, as we set ourselves apart with our digital vision.

Narasaki　That’s a very good point. We have a lot of experience and we bring positivity to SOMPO.

I consider myself very lucky and grateful to SOMPO and its purpose, as well as the decision that SOMPO made to establish a digital division seven years ago.

Albert　I, too, am grateful. When I worked at Apple was, one of my mottos was “The journey is the reward.” We’re on this journey together. It’s not just the destination that’s important, it’s the journey itself. And this fits very well with my purpose. My purpose is to harness technology to change society. I believe that by taking this journey together, we can once again change the world.

Narasaki　Also, my purpose has always been altruistic to benefit others. The basis of insurance is to benefit society, and that’s why I do that. I am proud to be in SOMPO.