Japan's Sompo Holdings To Focus On Domestic Businesses Post Acquisition Spree

Sompo Holdings Inc would focus more on merging domestic and foreign businesses for future growth, a top executive said, following a period of acquisitions abroad that increased Japan's No. 3 non-life insurer group's global reach.

"We quickly shifted capital allocations to overseas to secure a foothold in growth markets, with a sense of emergency over a rapidly ageing home market," said the group's chief operating officer Mikio Okumura to Reuters.

"Now that our non-life insurance business overseas has nearly equaled the size of our domestic business," he remarked, "we no longer need to differentiate strategies for overseas and domestic operations."

Sompo intensified its worldwide push in 2017 with the $6.3 billion acquisition of Endurance Specialty Holdings, a U.S. property and casualty insurer that provided the Japanese company with a much-needed U.S. footprint.

It also acquired five other companies in the last five years, including Diversified Crop Insurance Services in the United States in 2020.

Sompo expects an adjusted consolidated profit of 100 billion yen ($746 million) from its overseas insurance business in the fiscal year ending March. The total adjusted consolidated profit of the group is anticipated to be 160 billion yen.

Okumura believes there is no immediate need for additional purchases.

"By hiring a team of professionals instead of rushing for more deals, we could achieve organic revenue growth of tens of billions of yen in a year or two," he said.

To further integrate the firm, it intends to globalise capital allocations and product launches, as well as perform global risk evaluations, such as cyber attacks, he said.