SINGAPORE - Sompo International, the global insurance arm of Japan’s Sompo Holdings, is forging ahead with expansion plans in Singapore and the region, regardless of how interest rates in Japan move.
Mr Julian James, the chief executive officer of global markets at the insurer’s commercial business insurance division, said this in an exclusive interview with The Straits Times on March 21.
The Bank of Japan ended 17 years of negative interest rates when it raised its policy rate on March 19 to between 0 per cent and 0.1 per cent.
The move was well-signalled, Mr James said, and because the Japanese take a long-term view of around 10 years, interest rate changes will not affect their investment decisions.
Furthermore, Sompo International does business around the world, so rising interest rates in Japan do not really have an impact, Mr James added.
The firm’s global footprint spans 28 countries plus several regions including the Americas, Europe, Asia and the Middle East, where it provides property and casualty insurance in both the commercial and consumer space.
Parent Sompo Holdings made the strategic decision 10 years ago to venture outside the home market and has been successful in building up commercial business insurance operations in Europe and North America over the past four to five years, Mr James said.
“We have taken the size of the company from about US$9 billion (S$12.1 billion) of gross written premiums back in 2019, to around about US$16 billion today,” he added.
Gross written premiums refer to the total amount of premiums clients pay for insurance coverage and are the main source of an insurer’s revenues.
The next stop is Asia, which is emerging as an engine of global growth, Mr James said.
Many companies have global headquarters in Asia. At the same time, new risks are emerging in the region, including from cyber attacks and from the transition towards cleaner energy sources.
Natural catastrophes and supply chain disruptions also continue to pose challenges for companies, Mr James added.
Sompo International is expanding its commercial business insurance operations to Asia so it can serve these companies better.
The insurer already has a retail business in the region, which offers personal insurance for travel, motor, the home and for maids.
Singapore will be the regional headquarters for its 12 Asian markets, which include Vietnam, Thailand, Indonesia, the Philippines, China and India.
“Singapore has established itself as an important financial services centre in the region,” Mr James said.
The regulatory and legal framework and the talent base are all very important factors in Singapore’s favour, he added.
Sompo International is building up its team in the Republic and targets to have about 56 employees by the end of the fourth quarter of 2024, said Mr Paul O’Neill, who is the president of commercial lines for the Asia-Pacific region.
The company has a staff of 40 currently.
