Endurance parent Sompo sets out ambitious plans


The parent of Bermuda reinsurer Endurance has said it wants to become a top 10 global insurance group in terms of earnings and return on equity (ROE) after 2020.

Sompo Holdings said it plans to grow its business organically and through acquisitions to achieve this.

The Japanese firm which has recently acquired Endurance for $6.3 billion wants to build a “sustainable growth cycle by capturing opportunities to execute growth investments, with organic growth as our fundamental premise,” according to a November investor presentation.

While the expected adjusted consolidated profit for the 2017 financial year is ¥195 billion ($1.72 billion), the group aims to grow this number to a ¥300 billion level.

Similarly, the adjusted consolidated return on equity (ROE) is to grow from an expected 7.6 percent in 2017 to over 10 percent.

In order to achieve these goals Sompo wants to enhance the profitability in existing businesses, for example by organically linking the nursing care business and insurance businesses using services related to extending healthy life expectancy, such as dementia prevention, according to the presentation.

At the same time, the group plans to invest in growth fields, considering selective mergers and acquisitions. In developed countries, Sompo is interested in deals that offer risk diversification such as business fields targeting corporate customers, where profit contribution is possible at an early stage and capital efficiency is higher. In direct property/casualty (specialty) the group will focus on large market scale and stable market growth areas such as North American corporate business. In reinsurance, Sompo is evaluating options while closely monitoring the hardening reinsurance market and other trends.

In emerging countries Sompo is looking into investments that offer prospects for future market expansion in the retail business and will help to increase market share. In Asia and Middle East large populations offer high growth potential and stable profitability. Similarly, in Latin America, a large population offers high growth potential, according to the presentation.

Sompo Holdings, M&A, Insurance, Reinsurance, Growth, Bermuda, Endurance, Global

Bermuda Re