Sompo HDs’ Sakurada Planning to Resign as CEO

Jiji Press

18:05 JST, January 23, 2024

TOKYO (Jiji Press) — Sompo Holdings Inc.’s Kengo Sakurada is planning to step down as its CEO at the end of March, over automobile insurance fraud at used car dealer Bigmotor Co., informed sources said Tuesday.

The Financial Services Agency is expected to issue business improvement orders to the holding company and subsidiary Sompo Japan Insurance Inc. as early as Thursday regarding their responses to the wrongdoing by Bigmotor. The FSA ended its on-site inspections of Sompo Holdings and Sompo Japan on Monday.

The orders will likely urge the two companies to clarify their management responsibility over the matter. The group will hold a press conference shortly.

The parent company will consider whether Sakurada, 67, should also quit as its chairman, based on the upcoming FSA actions, the sources said.

Sompo Holdings President Mikio Okumura, 58, is expected to succeed Sakurada as CEO, according to the sources.

Sompo Japan was the only one among major nonlife insurers to resume referring its auto insurance customers to Bigmotor although it was aware of the used car dealer’s misconduct. Sompo Japan later notified Sompo Holdings of the resumption.

An independent investigation panel set up by Sompo Holdings has criticized Sompo Japan’s decision on the restart of customer introduction to Bigmotor as “lacking customer-oriented thinking.” Sompo Holdings did not take any proactive measures and failed to properly instruct the unit to deal with the matter, the panel also said, pointing to flaws in the parent company’s supervisory system.

Sakurada joined Yasuda Fire & Marine Insurance Co., now Sompo Japan, in 1978. He assumed the current positions in April 2022 after serving in such posts as president of NKSJ Holdings Inc., now Sompo Holdings.

Sakurada was chairman of the Japan Association of Corporate Executives, or Keizai Doyukai, from April 2019 to April 2023.

Okumura, who joined Yasuda Fire & Marine Insurance in 1989, became Sompo Holdings president in 2022.

Meanwhile, Sompo Japan will promote Senior Vice President Koji Ishikawa, 55, to its president to succeed outgoing Giichi Shirakawa, 53. Shirakawa announced last September his intention to resign as president to take responsibility for the scandal.