Sompo Japan Nipponkoa Holdings ANNUAL REPORT 2016
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ANNUAL REPORT 2016 (INTEGRATED REPORT) ANNUAL REP O RT 2016 (I NTEGR AT 26-1, Nishi-Shinjuku 1-chome, Shinjuku-ku, ED REPOR Tokyo 160-8338, Japan URL: http://www.sompo-hd.com/en/ T) (16080807) 16.09 501494 -0300 Printed in Japan In this age of uncertainty, we strive to bring peace of mind to your tomorrow. To achieve this we are constantly innovating. From safety and security to health, we seek to promote wellbeing in every aspect of your life. Supporting you in Japan and throughout the world. Innovation for Wellbeing: SOMPO HOLDINGS 1 Contents Management page 4 Strategies In this section, we will explain To Our Stakeholders 4 the Group’s vision and the Our Vision 6 strategies for realizing this vision. Our Initiatives 8 A Message from the Group CEO 10 An Interview with Outside Directors 18 Review of Operations page 21 Here, we will look at the strategies and initiatives of each business. Financial and Non-Financial Highlights 22 Domestic P&C Insurance Business 26 Domestic Domestic Life Insurance Business 32 Life Insurance Business Nursing Care & Healthcare Business 36 Domestic Overseas Insurance Business 42 P&C Insurance Overseas Strategic Businesses 48 Business Insurance Business Nursing Care & Healthcare Business Editorial Policy This report aims to provide stakeholders with an outline of the Group, its business performance, and its management strategies in an easily understood manner. From the 2014 edition, we adopted the International Integrated Reporting Framework issued by the IIRC* as a guideline in preparing this integrated report that features both the financial and non-financial aspects of the Group’s business accomplishments, challenges, and strategies. * International Integrated Reporting Council: Established in 2010 to prepare an international reporting framework for businesses. 2 Sompo Japan Nipponkoa Holdings, Inc. Management Strategies Strategies for page 51 Sustainable Growth This section illustrates the strategies Strategic Risk Management (ERM) underpinning the Group’s growth. and Capital Policy 52 Our Strategy for Digital and IT 58 Group HR Strategy 60 CSR 64 Review of Operations Strategies for Sustainable Growth Corporate Governance page 69 Explanations of the corporate governance systems and initiatives instituted to improve corporate value Directors and Audit & can be found in this section. Supervisory Board Members 70 Corporate Governance Corporate Governance 72 Management Members 81 Compliance 88 Information Disclosure 90 Financial Section 91 Corporate Data 169 Financial Section CSR- and ESG-Related Information Forward-Looking Statements This report contains information related to corporate social The forecasts included in this document are based on the Corporate Data responsibility (CSR) and environmental, social, and gover- currently available information and certain assumptions that nance (ESG) issues, which has been selected and arranged we believe are reasonable. Accordingly, the actual results based on topics we wish to communicate to shareholders may differ materially from those projected herein depending and other investors. For a more detailed look at our CSR- on various factors. and ESG-related initiatives as a whole, please refer to CSR Communication Report 2016, which is available on Sompo Holdings’ corporate website. ANNUAL REPORT 2016 (INTEGRATED REPORT) 3 To Our Stakeholders Build a “Theme Park for the Security, Health, and Wellbeing of Customers” I would like to express my gratitude for the continued support of all our stakeholders. Fiscal 2015, the year ended March 31, 2016, was the final year of the Sompo Holdings Group’s previous Mid-Term Management Plan. Through a concerted effort, the Group realized initial targets. Looking ahead, we have begun a new Mid-Term Management Plan covering the five years from fiscal 2016. Volatility, uncertainty, complexity, and ambiguity (VUCA) are features of the current era. Based on the new plan, we aim to evolve into a group that has the strength and agility to adapt to and win out in challenging business conditions characterized by discontinuous changes and uncertainty. The new Mid-Term Management Plan sets out building a “theme park for the security, health, and wellbeing of customers” as an overriding goal. We set this goal to realize the Group Management Philosophy, which calls on us to “contribute to the security, health, and wellbeing of customers and society as a whole by providing insurance and related services of the highest quality possible.” We will develop appealing, differentiated services and businesses by advancing digital strategies, seeking new business opportunities, enhancing the quality of existing businesses, extending service areas, and realizing collaboration among businesses. The domestic P&C insurance business will heighten quality and efficiency and remain the Group’s core business and growth driver. Positioning the period of the new Mid-Term Management Plan as a “second founding” phase, the domestic life insurance business aims to transcend the boundaries of life insurance and evolve into a health support enterprise that helps customers become healthy. Further, we entered the nursing care and healthcare business in earnest in fiscal 2015. Among listed nursing care providers, we have the largest number of residential rooms for seniors in the industry and the second- highest sales. By simultaneously ensuring the dignity and independence of the elderly and providing safer and more reliable nursing care services, we will help realizing “Japan, an affluent country that can boast to the world of a long and quality life.” The overseas insurance business aims to maximize earnings in developed countries and emerging countries by further strengthening operations, growing organically, and implementing mergers and acquisitions (M&A) in a disciplined manner. These efforts will include Sompo Canopius, which became a subsidiary in 2014 and operates mainly in the United Kingdom—and entail strengthening operations in countries and regions where we already have foundations, such as Brazil, Turkey, and South Asia. In addition, the name of the Group’s holding company will change to Sompo Holdings, Inc., on October 1, 2016. In the Group and on a global basis, we will further strengthen SOMPO as a brand synonymous with “security, health, and wellbeing.” Continuing to evolve with a view to realizing a “theme park for the security, health, and wellbeing of customers,” the Group’s employees will make a concerted effort to meet the expectations of stakeholders. As we take on new challenges, we sincerely ask for your continued support and encouragement. September 2016 Kengo Sakurada President & CEO Sompo Japan Nipponkoa Holdings, Inc. 4 Sompo Japan Nipponkoa Holdings, Inc. Management Strategies 5 Our Vision In accordance with its “Innovation for Wellbeing” brand slogan, the Sompo Holdings Group has positioned the insurance business at its core while expanding business areas by developing the nursing care business, the home remodeling business, and so on. With a view to sustaining growth amid business conditions that are likely to continue changing, we began a new Mid-Term Management Plan in fiscal 2016. Based on this plan, we aim to realize the Group Management Philosophy and evolve into a “theme park for the security, health, and wellbeing of customers” that brings happiness into their lives. April 2016~ New Mid-Term Management Plan Achieve a structural transformation into the best customer service provider based on the theme of “security, health, and wellbeing of customers,” in Previous Mid-Term conjunction with steering a course to establish a Management Plan position where we are able to compete effectively against global players. Established a foundation for sustain- able growth by proactively shifting business resources to growth fields, beginning with improving its earnings capabilities in the domestic P&C insurance business. 6 Sompo Japan Nipponkoa Holdings, Inc. Management Strategies Nice Home Our Vision “Theme Park for the Security, Health, and Wellbeing of Customers” Challenge Based on the theme of “security, health, and wellbeing of customers,” we will endeavor to bring happiness to our customers’ lives by developing a wide range of businesses beyond the boundaries of insurance, harnessing digital technologies, and providing them with the highest- quality services to while constantly remaining by their side. Healthy Life Happy Preparation Retirement for Disasters Realize the Group Management Philosophy Group Management Philosophy We will at all times carefully consider the interests of our customers when mak- ing decisions that shape our business. We will strive to contribute to the security, health, and wellbeing of our customers and society as a whole by providing insurance and related services of the highest quality possible. ANNUAL REPORT 2016 (INTEGRATED REPORT) 7 Our Initiatives Under the new Mid-Term Management Plan, we will heighten the appeal of each business rigorously, expand and improve services, strengthen customer contact using advanced digital technologies, and create collaborations among businesses. Through initiatives to realize this vision, in the future, we aim to attain an earnings size and capital efficiency on par with the top 10 global publicly listed insurance companies. We have established numerical management targets for fiscal 2018, the midway point of the new Mid-Term Management Plan. To achieve these targets, we will drive the growth of each business department as well as push ahead with M&A activity,