Sompo Holdings, Inc.

Business Details

With Sompo Japan Insurance Inc. as the main operating company, this segment conducts non-life insurance underwriting, asset management, and related operations in Japan. It offers a wide range of insurance lines, including Fire Insurance, Marine Insurance, Accident Insurance, Automobile Insurance, and Compulsory Automobile Liability Insurance, providing services that contribute to "safety, security, and health" for individual and corporate customers. As the core segment accounting for approximately half of the Group's total insurance revenue, it is driving the transformation of its business and profit foundations through the SJ-R Project.

Recent Overview

Net income attributable to owners of the parent surged approximately 4.6x year on year to ¥268,112 million.

In the Domestic Property & Casualty Insurance Business for FY2026 (ending March 2026), insurance revenue (including inter-segment transactions) increased by ¥96,094 million year on year to ¥2,730,572 million. Net income attributable to owners of the parent expanded approximately 4.6-fold, from ¥58,338 million in the prior year to ¥268,112 million. While the prior year had seen a significant profit decline due to deteriorating domestic equity market conditions and the impact of natural disasters, the current year benefited from the penetration of premium rate revision effects, a recovery in investment gains and losses, and the absence of one-time loss factors that had occurred in the prior year. Segment assets increased by ¥132,192 million year on year to ¥6,444,135 million.

Key Products

Growth Drivers

• Sustained growth in insurance revenue driven by the penetration of premium rate revision effects for Fire Insurance and Automobile Insurance (Automobile Insurance: ¥1,412,948 million; Fire Insurance: ¥1,093,695 million)
• Emerging effects of profit foundation transformation through the SJ-R Project (portfolio and underwriting transformation, sales transformation)
• Improvement in investment gains and losses and enhanced capital efficiency through accelerated sales of strategic shareholdings
• Strengthened underwriting focused on profitability to improve Sompo Japan's combined ratio
• Revenue diversification through expanded sales of new insurance products and corporate insurance

Risks

• Rising claims payment unit costs and repair costs for Automobile Insurance due to continued inflation
• Risk of increased insurance claims payments due to the intensification and increased frequency of natural disasters (Sompo Japan's projected net incurred losses from domestic natural disasters for FY2027 (ending March 2027) are estimated at ¥110,000 million)
• Trust recovery costs and compliance risks associated with multiple business improvement orders issued to Sompo Japan (premium rate coordination practices, fraudulent automobile insurance claims, and inappropriate management of insurance contract information)
• Impact on investment gains and losses from fluctuations in domestic equity markets, interest rates, and foreign exchange rates
• Medium- to long-term risk of contraction in the domestic insurance market due to the declining birthrate and aging population

Business Details

Centered on Sompo International Holdings Ltd., this segment conducts Property, Casualty, and Specialty insurance and reinsurance operations in the United States, the United Kingdom, Continental Europe, Latin America, the Middle East, Asia, and other regions. Starting from FY2026 (ending March 2026), Aspen Insurance Holdings Limited has been added to the scope of consolidation, significantly expanding the scale of business. The segment provides high-quality insurance and insurance-related services globally to both Commercial and Consumer customers, continuing to expand in both business scale and profitability as a growth driver for the SOMPO Group. Agricultural Insurance and liability insurance are also included as major products.

Recent Overview

Business scale expanded significantly following completion of the Aspen acquisition, with profit surging 65.7% year on year.

Aspen Insurance Holdings Limited was newly consolidated in FY2026 (ending March 2026), leading to a substantial expansion of segment assets, which increased by ¥2,921,150 million from the prior fiscal year-end (from ¥5,243,189 million to ¥8,164,339 million). Insurance revenue increased by ¥213,448 million year on year to ¥2,441,152 million, and net income attributable to owners of the parent increased by ¥116,718 million year on year to ¥294,489 million, driving profit growth for the Group as a whole. Reinsurance contract assets also increased substantially, reflecting the effects of the Aspen integration on the financial position.

Key Products

Growth Drivers

• Significant expansion of business scale and strengthening of the profit foundation through the consolidation of Aspen Insurance Holdings Limited
• Expansion of insurance revenue at Sompo International Holdings Ltd. driven by local currency-denominated revenue growth and foreign exchange effects
• Improved profitability through the construction of a diversified portfolio based on disciplined underwriting
• Increase in investment income driven by rising interest rates and growth in invested assets (higher reinvestment yields)
• Growth across segments in the Commercial field (North America, UK, EMEA, Reinsurance) and the Consumer field
• Investment in geographic expansion (focused investment in personnel, technology, and infrastructure)

Risks

• Increased insurance claims payments due to the occurrence of large-scale natural disasters
• Risk of decline in crop prices and reduced reinsurance recoveries in Agricultural Insurance
• Foreign exchange risk (translation differences from overseas operations affecting business performance)
• Deterioration of the business environment due to changes in international trade and commercial policy or geopolitical risk
• Impact on investment gains and losses from fluctuations in financial and capital markets
• Increase in goodwill and intangible assets associated with the Aspen integration, and future impairment risk
• The need to respond to major changes in the insurance market and economic environment

Business Details

Centered on SOMPO Himawari Life Insurance, Inc., this segment is responsible for life insurance underwriting and asset management operations in Japan. It offers the unique concept of "Insurhealth®," which combines the core insurance function (Insurance) with health support functions (Healthcare), promoting the expansion of policies in force centered on protection-type products and the encouragement of health behavior changes for both individual and corporate customers. As part of SOMPO Wellbeing, the business aims to establish itself as a "health support company" in collaboration with the Nursing Care Business.

Recent Overview

Insurance revenue increased 3.9% year on year, while segment profit surged 129.6% year on year.

In the Domestic Life Insurance Business for FY2026 (ending March 2026), insurance revenue grew steadily to ¥258,707 million (up ¥3,991 million year on year). Net income attributable to owners of the parent increased by ¥38,729 million from ¥29,876 million in the prior year to ¥68,605 million, achieving a substantial increase of approximately 2.3 times year on year. Segment assets decreased by ¥362,702 million from the prior fiscal year-end to ¥3,029,729 million. Note that the prior year saw a significant profit decline mainly due to foreign exchange effects, and the current year's profit level recovered substantially as a rebound from that decline.

Key Products

Growth Drivers

• Expanded adoption of Insurhealth® through the steady increase in policies in force centered on protection-type products
• Acquisition of new customers, including the senior demographic, through the introduction of the limited-disclosure medical insurance (M²)
• Increase in "Himawari Fans" through synergies with health support services for both corporate and individual customers
• Establishment of a customer referral system between the Nursing Care Business and other Group companies within SOMPO Wellbeing
• Improved profitability through the expansion of new policies utilizing digital technology, data, and AI, and restructuring of the cost structure

Risks

• Risk of valuation fluctuations in investment securities (such as government bonds) due to interest rate and market fluctuations (segment assets decreased by ¥362,702 million from the prior fiscal year-end)
• Impact of foreign exchange fluctuations on profit levels (foreign exchange effects were the primary cause of a substantial profit decline in the prior year)
• Long-term risk of contraction in the domestic life insurance market due to the declining birthrate and demographic changes
• Risk of increased operating expenses in pursuit of the targets under the Medium-Term Management Plan (adjusted profit of ¥70 billion or more and ROE of 8% or more by segment for FY2026)
• Impact on financial soundness from fluctuations in the solvency margin ratio on a non-consolidated basis

Business Details

This business primarily involves the provision of nursing care and related services operated by SOMPO Care Inc. It is structured around three pillars: the Operator Business, based on residential and home-based nursing care operations; the Platform Business, including nursing care software; and the Wellbeing Business, which addresses concerns related to nursing care, health, and retirement funds on a one-stop basis. In the domestic market amid a declining birthrate and aging population, the segment is promoting quality-based productivity improvement through its "Future Nursing Care" model, aiming to contribute to the transformation and development of the nursing care industry as a whole.

Recent Overview

Achieved growth in both revenue and profit, with net income attributable to owners of the parent up approximately 50% year on year to ¥7,951 million

In the Nursing Care Business for FY2026 (ending March 2026), other operating revenue reached ¥186,220 million (up ¥4,852 million year on year), and net income attributable to owners of the parent reached ¥7,951 million (up ¥2,648 million year on year), achieving growth in both revenue and profit. Meanwhile, impairment losses increased to ¥4,061 million (prior year: ¥2,420 million), and capital expenditures also expanded to ¥30,105 million (prior year: ¥23,447 million), reflecting continued investment in facility development and equipment.

Key Products

Growth Drivers

• Improvement in occupancy rates through proactive sales activities (94.7% as of the end of March 2025, the highest since entering the business)
• Quality-based productivity improvement through the rollout of the "Future Nursing Care" model
• Expansion of the Platform Business through synergy creation with N-Data Software
• Diversification of the revenue base through the full-scale rollout of private services outside the scope of public nursing care insurance
• Strengthening of facility and service infrastructure through expanded capital expenditures (¥30,105 million)

Risks

• Widening gap between supply and demand for nursing care labor due to the declining working-age population (chronic labor shortage)
• Rising labor and facility costs due to soaring prices and inflation
• Impact on profit from external environmental changes such as tax system reforms
• Risk related to revisions to nursing care fee schedules (impact on revenue from policy changes to the nursing care insurance system)
• Impairment loss risk (impairment losses of ¥4,061 million were recorded in FY2026 (ending March 2026), an increase from the prior year)

Business Details

The "Other" segment includes Sompo Holdings, Inc. (the insurance holding company) itself, as well as the Digital-Related Business, the Asset Management Business, and other operations. It aggregates business segments not included in the reportable segments (Domestic Property & Casualty Insurance, Overseas Insurance, Domestic Life Insurance, and Nursing Care). Holding company costs associated with the allocation of management resources, strategic planning, and governance functions for the Group as a whole were the primary loss factor, but the segment returned to profitability in FY2026 (ending March 2026). Note that from the current fiscal year, the extended warranty business has been excluded from the composition of "Other."

Recent Overview

Segment profit returned to positive territory due to a substantial improvement in equity-method investment gains and losses

In the "Other" segment for FY2026 (ending March 2026), segment profit improved substantially to ¥1,319 million from ¥(27,551) million in the prior year, returning to profitability. The primary factor was an improvement of approximately ¥26,492 million in equity in earnings of affiliates, from ¥(24,786) million to ¥1,706 million. Revenue from external customers also increased from ¥39,184 million to ¥41,989 million. Note that from the current fiscal year, the extended warranty business has been excluded from the segment composition. As a subsequent event, in April 2026 the company issued US$1.3 billion in US dollar-denominated senior unsecured bonds, which are planned to be used for a subordinated loan to Sompo Japan Insurance.

Key Products

Growth Drivers

• Stabilization of segment revenue through the improvement in equity in earnings of affiliates (from ¥(24,786) million to ¥1,706 million)
• Contribution to strengthening the Group's overall business foundation through digital and AI investment
• Potential revenue contribution through the investment balance in equity-method affiliates (¥24,912 million) in the Asset Management Business
• Increasing trend in revenue from external customers (from ¥39,184 million to ¥41,989 million)
• Expansion of future business foundation investment through the recovery in capital expenditures (from ¥1,524 million to ¥3,130 million)

Risks

• Volatility risk in equity-method investment gains and losses: as demonstrated by the substantial loss of ¥(24,786) million in the prior year, the structure whereby segment profit and loss can be significantly affected continues
• Persistently high holding company costs: Group management and administrative expenses remain a recurring expense factor for the segment
• Increased foreign exchange risk and interest rate risk associated with the issuance of US$1.3 billion in US dollar-denominated senior unsecured bonds
• Potential for reorganization costs and changes to segment composition (such as the exclusion of the extended warranty business) associated with changes in Group strategy
• Income tax expense is negative (¥(749) million), indicating the existence of tax-related uncertainty