Insurance Giant to Transform Japan's Billion Dollar Nursing Care Industry

19 Aug, 2021 –

The head of one of Japan’s biggest and most conservative insurance groups is looking to roll out nursing and preventive healthcare services in ageing societies around the world in a bid to become a global giant. Kengo Sakurada, chief executive of Sompo Holdings, told the Financial Times that the group’s pivot away from its traditional business of accidents and disasters would be shaped around the expression “Vuca”. The term was coined by the US military to refer to volatility, uncertainty, complexity and ambiguity.

“There is plenty of room for us to change ourselves and transform ourselves into something new,” Sakurada said. “Because if we continue to be just a traditional insurance player, I don’t think we can be number one in the world.” Sakurada added that he would also consider overseas deals in a quest to capture more customers. Sompo has allocated ¥600bn ($5.4bn) for “growth investments” over the next three years. In 2016, Sompo bought Bermuda-based rival Endurance for $6.3bn, a deal that transformed its portfolio and became a template for the company’s technique of rapidly rebranding and integrating its acquisitions.

That has historically not been a strength of Japanese groups when it comes to overseas mergers and acquisitions. Through M&A, the group wants to double the ratio of revenue it generates outside of Japan to more than 30 per cent by the fiscal year ending in March 2024. “We have to be gigantic to survive in this insurance business world. Our size, already one-third of [Japanese] market share, is not enough at all,” Sakurada said. Sompo last year invested $500m in US data analytics group Palantir, co-founded by billionaire Peter Thiel. The two have formed a joint venture as the insurer aims to leverage Palantir’s technology to transform Japan’s fast-growing but lossmaking $90bn nursing care industry.

Sompo entered that industry in late 2015 through a spate of domestic acquisitions that have made the group the country’s second-largest provider of nursing care services. With Palantir, it is using troves of data collected in nursing homes to improve the productivity of care workers and analyse the wellbeing of patients. At some point in future, Sompo envisions creating an insurance package that can predict the progression of dementia and allow patients to plan how long they can keep driving for without getting into an accident. Long-term, the company hopes to build a $5bn business using various data platforms including the one it is working on for the nursing care industry.

According to Sakurada, Japan’s rapidly ageing society provides both a challenge and an opportunity to create businesses that can eventually be taken to China and other countries facing similar social issues. “If we’re successful in Japan, that model and knowhow can be exported to developed countries and also developing countries,” he said.

(Source: The Financial Times | Pic: Old Man Near Tulips, Aaron Shumaker)

 

Related Articles

General
News
Japan’s long-running mission to get casino resorts off the ground has been delayed not only because of the coronavirus but also due to related political scandals and public opposition. As Yokohama prepares for a mayoral election on Aug. 22, it and other localities hoping for a casino resort are moving forward with plans to formally finalize their proposals, which the central government will accept from October until April 28, 2022.
General
Information, News
Foreign companies and individuals in China and Hong Kong are targeting Japan’s real estate, including areas of forest and land with access to water resources in the Kyushu region, prompting concerns from local governments and residents.
Investors/Business
Information
At any given time, there are over 50,000 US army & navy troops stationed all around Japan, in 24 different bases & related military facilities - from the tropical islands of Okinawa in the South-West, and all the way up to Aomori, in the North-East. Taking into account dependents, such as spouses and children, and another 5-6,000 non-enlisted US expat civilians working at the bases, this amounts to approximately 100,000 foreigners, spread all around the country, who all need a place to live...
General, Investors/Business
Information
If and when a property becomes vacant, the owner would normally aim to have it cleaned up, renovated or repaired if required, then re-leased as soon as humanly possible, to allow the steady income-stream to resume ASAP. There are, however, certain periods of time, locations and property profiles which make re-populating a property a bit more challenging - and these events can require some creative thinking and solutions...