Sompo seeks profit boost from international business
Japan’s Sompo is planning for a sharp increase in the profit contribution to the group from its overseas business Sompo International Holdings (SI), Mike McGuire, chief financial officer of Sompo International, said in a presentation.
Sompo International is expected to diversify the group’s portfolio and expand its overseas business to make Sompo “a global top 10 insurance group.” SI was formed out of Endurance Specialty Holdings which Sompo acquired for an aggregate purchasing price of ¥637.5 billion ($6.3 billion) in 2017.
The overseas business profit contribution to the group is expected to jump to around 40 percent of a total of $2.8 billion in the “near future” compared to 27 percent of a total of $1.5 billion in the 2017 full year. At the same time, domestic P&C’s profit contribution is expected to fall to 40 percent from 52 percent over the period while the contribution from domestic life is set to shrink to around 15 percent from 18 percent over the period.
SI is a specialty provider of property/casualty (P&C) re/insurance and currently manages Sompo’s commercial property, casualty and specialty products outside of Japan.
In order to boost profits, SI is expanding geographically and into additional lines of business with a focus on the specialty insurance segment, according to the presentation. In September 2018 it launched SomPro, a global financial and professional lines platform encompassing insurance and reinsurance capabilities. In the same month it launched a Continental European insurance subsidiary in Luxembourg.
Furthermore, in June 2018 Sompo International acquired US based Lexon Surety Group and in March 2018 it acquired Italian agriculture provider A&A.
SI is also building an integrated global platform comprised of the current commercial P&C platform and a retail platform.
In addition, SI has launched a new retail platform to bring in remaining overseas businesses under SI by the end of 2020. The personal lines focus of SI Retail complements SI’s existing commercial P&C business and brings new opportunities for growth, scale and diversity, according to the presentation.
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