TOKYO -- Japanese general insurer Sompo Holdings has embarked on a major push into Southeast Asia's giant retail market as western rivals such as the US's AIG and Insurance Australia Group retreat.
Sompo's focus on the retail business in Asia contrasts with those of its Japanese peers -- Tokio Marine Holdings and MS&AD -- which are focused on commercial businesses such as insurance for factories, buildings and marine cargo. Raising its brand recognition will be key if Sompo were to succeed in the retail market dominated by local players.
Sompo's foray comes as Western insurers exit Asia in droves, creating an opening for Japanese financial services.
In the past two years, Insurance Australia Group, the largest general insurer of Australia, sold its operations in Thailand and Indonesia to Tokio Marine and is in talks to sell its India joint venture. Australia's No. 2 insurer QBE also sold its Indonesia unit to Singapore's Great Eastern last year.
Meanwhile, American International Group divested its stake in People's Insurance Co. of China in February, while British insurer Aviva is mulling a possible exit from Asia.
This creates an opening for aspiring global players, such as Sompo, which aims to become a top retail insurer in Asia. Sompo's Asia business is 70% commercial and 30% retail. In 10 years, the company wants to reverse the ratio.
"Asia is all about people," said Daniel Neo, CEO of Sompo Holdings (Asia), referring to the vast population in the region. "We want to become part of people's life all over Asia... We really have to bring the Sompo brand into the minds of all the consumers in Asia."
In fiscal 2018, Asia Pacific produced 3.7 billion yen ($34 million) in net profit for the company. Sompo aims to raise that to 10 billion yen in fiscal 2023.
Speed and cost competitiveness will be key to success in less developed insurance markets, such as India and Indonesia, which Neo identified as having the most potential. Technology is seen as an answer to the challenge.
In travel insurance, in which Sompo aims to become the No. 1 player in Southeast Asia, up from No. 6, many of the products and most claims are already handled online. The company is also working with the National Research Foundation Singapore to develop a technology to separate simple claims from complex ones. This will allow speedy payments for straightforward claims so that insurance agents can focus on difficult cases. Travel insurance claims tend to be small in value but large in volume.
Artificial intelligence is also used to assist operations at its call center. It analyzes conversations with customers and proposes answers on screen for its customer service officers.
Sompo is also looking to partner with major online platforms, such as Grab of Singapore and Gojek of Indonesia.
"I see them not as competitors but as partners," Neo said, noting that such platforms have neither insurance licenses nor large balance sheets to support financial services operations. "We have to find a way to use them as part of our ecosystem to distribute our products to our customers," he said.
Sompo already has such a partnership in Indonesia. The company teamed up with online retail platform Bukalapak and sold three million shipping insurance policies in just three months, acquiring one million new customers.
The company is also looking to boost its presence in the auto insurance segment by teaming up with distributors of Japanese cars, which dominate the regional car market, and by offering products for customers of auto loans from partner bank CIMB Group Holdings of Malaysia.
"We are more thinking about how to grow locally. We cannot be just serving Japanese corporate customers. We have to think about serving Indonesians, Singaporeans and Malaysians," Neo said. "We are a global company."