Sompo hints at massive M&A deals for its $5.3bn war chest

Re/insurance group Sompo is actively pursuing M&A opportunities, including some possible 12-digit deals, for the ¥600 billion ($5.3 billion) investment war chest it wields to pursue the strategic goals of scale and diversification, officials told a recent investor day conference.

"We will continue to seek opportunities for M&A," said Kengo Sakurada (pictured), group chief executive officer.

"We have a list of many opportunities we are screening, with discipline, including cases with a magnitude of a few hundred billion yen," he added.

The group has already named a ¥600 billion target for growth investments, including M&A, under its current mid-term strategy. Some ¥40 billion has been deployed in the strategy's short life to date, including purchase of an Italian crop insurer and several tech ventures.

"We expect to use it actively," Sakurada said of the sum. "We will definitely focus on discipline with a firm eye to long-term future growth."

Signals remain mixed on the most likely direction of attack.

Officials spent the bulk of the presentation ballyhooing successes and plans for the senior care and nursing operations, including the real data platform (RDP) tech element.

But asked about capital deployment under the ¥600 billion investment targets, Meyumi Yamada spoke to "insurance as well as digital" as targets of the ¥600 billion war chest.

Whatever targets come into Sompo sights, a key goal will be risk diversification where Sompo has set mid-term KPIs for the group.

Diversification is also the mantra for foreign retail insurance operations, where "new channels and new markets is what we are working on," one official said of needs following problems in Brazil or even a recent currency devaluation in Turkey.

Sompo can handle a deal. The group is capital-flush, bolstered by recent sale of a stake in tech partner Palantir that even motivated additional shareholder remuneration, officials noted.

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