Integrated Annual Report 2024(Online Ver.)
Group Core Strategies
We intend to leverage our global network of digital labs and the capabilities of our diverse pool of digital talent to create innovative and unique solutions by incorporating the digital technologies that we expect will dramatically expand in the future, such as AI and LLMs (large language models). We will transform ourselves and continue to achieve sustained growth by improving the operational efficiency and quality of our existing businesses and by launching new products and services that generate new customer experience value for our customers.
Achievements of the previous Mid-Term Management Plan
Having launched our digital strategy in 2016, we have since sought to streamline our businesses and establish new customer touchpoints with the use of digital technologies.
During the period of the previous Mid-Term Management Plan, we achieved operational efficiency improvements by implementing digitalization initiatives centered on proof of concept <Digitization/Digitalization>.
We pursued results from core business operations (DX effect). For example, our digital transformation efforts significantly contributed to real earnings improvements in the Domestic P&C Insurance Business <Digital transformation>.
We also made forays into new business areas to drive growth through digital innovation. Notably, we established SOMPO AUX Inc. to enter the auto auction market and we formed a joint venture Palantir Technologies Japan K.K. (Palantir) with US-based Palantir Technologies Inc. <Digital innovation>.
Going forward, we will spearhead the Group’s transformation and continue to embrace the challenge of enhancing corporate value mainly by leveraging SOMPO’s business foundation, utilizing new technologies, and collaborating with partners.
Overview of the data and digital strategy in the new Mid-Term Management Plan
We will continue to evolve our data and digital strategy in the Mid-Term Management Plan that kicked off in FY2024.
In our existing businesses, we will enhance quality and productivity in order to carry out a data-driven portfolio transformation by refining risk exposures from various angles, such as customers and specific segments, enhance customer experience value by reassessing, from the customer’s point of view, the provision of services and the processing of claim payments, and minimize the manual operations required of employees.
Also, in July 2024, we established a new company called REVortex, Inc. to take on the challenge of revitalizing the circular economy business of reusing and recycling electric vehicles. Going forward, we will continue to work on creating businesses that leverage the benefits of digital technology.
Along with the data integration analysis and AI/LLM capabilities of our strategic partners Palantir and ABEJA, by forming other partnerships with companies possessing cutting-edge technology, we will draw on SOMPO’s unique strengths to create new value and solve issues in society.
Key initiatives
Contributing to the Domestic P&C Insurance Business
In the Domestic P&C Insurance Business, we are working on utilizing AI for conducting checks in connection with insurance claim services, including damage assessments and estimates. In addition, by utilizing Palantir’s technology, we have organized and integrated, in advance, the data necessary for various operations during large-scale disasters. This approach enabled us to quickly pay out insurance claims and streamline our disaster response operations in the wake of the Noto Peninsula Earthquake in January 2024.
Contributing to the nursing care business
Using the various data generated from Sompo Care’s nursing facility operations, we have improved nursing facilities’ operations and developed a system to quickly detect subtle changes in the vitals of care recipients that are usually difficult to notice in daily care and then relay this information to medical services and the like.
As demand for, and the expansion of, the nursing care business continues, we will need to further streamline and standardize the management of nursing facilities and caregiving services in order to maintain and improve the quality of care and transition to a business model with which we can sustainably provide such services. We are attempting to improve service quality primarily by utilizing generative AI and other tools to enable less experienced caregivers handle difficult tasks.
Uniqueness of the digital business
In September 2020, we established SOMPO AUX and entered the auto auction business. SOMPO AUX has developed, and currently operates, a platform called AUX Board, which facilitates the proper sale of total loss and damaged vehicles. Since its launch, the platform has steadily grown, and through its partnerships with car dealerships, car leasing companies, and other non-life insurers, it now features around 50,000 vehicle listings annually.
In May 2024, SOMPO AUX leveraged external financing with the aim of expanding the business foundation and generating further growth. They aim to bring in a new senior management team and bolster business management and to realize an industry-standard platform in the reuse-related business (circular economy) for the proper and efficient distribution of used parts through the recycling of damaged vehicles.
Message from the Group CDO
Koichi Narasaki
Group CDO
In our data and digital strategy, the Group is supported by a global network of digital teams, including SOMPO Digital Labs in Japan, the US (Silicon Valley), and Europe, SOMPO Light Vortex, SOMPO AUX, Palantir, and ABEJA. Over 400 members in all, including engineers and data scientists with wide-ranging capabilities, are fully committed to driving a Group-wide digital transformation (DX) by leveraging and deploying cutting-edge digital technologies.
As a concrete example, by utilizing Palantir’s technology, in the area of nursing care, we have improved various operations and enhanced the quality of caregiving services. In the Domestic P&C Insurance Business too, Palantir’s technology has helped us improve profitability and productivity in the areas of underwriting and widespread disaster management.
The digital technologies we possess are providing value not only within the Group but also to Japanese society.
After the Noto Peninsula Earthquake struck in January 2024, Sompo Japan utilized digital technology to quickly finalize insurance claim payments. At the same time, Palantir collaborated with local governments and other authorities to consolidate information on victims of the disaster and worked together to support the victims and the affected areas by assisting in the management of evacuation centers and the proper distribution of relief supplies.
As Group CDO, it is my mission to ensure that we provide value not only within the Group, but to society at large through these kinds of data and digital initiatives. I believe this approach will help enhance the value of the Group.
In the Mid-Term Management Plan that commenced in FY2024, we will harness our data and digital expertise and HR capabilities to further accelerate business efficiency and earnings improvements in our existing businesses in order to realize the SOMPO's Purpose - For a future of health, wellbeing and financial protection. We will also waste no time in deploying the technologies across the Group that can have a tremendous impact on business, such as AI and LLMs. By providing training to employees on how to apply these technologies and establishing the necessary infrastructure, we will aim to create an environment where humans and AI can coexist so that work tasks can be streamlined and business outcomes maximized.
In February 2024, Sompo Japan deployed its own optimized generative AI chat system and has been running training programs to teach employees how to use it.
Moving forward, we will continue to facilitate collaboration between Group businesses and work with other companies to deliver new services to our customers and support the creation and expansion of business opportunities for the Group.
