By Arata Hashizume

Yomiuri Shimbun Staff Writer

Satoru Komiya, president and CEO of Tokio Marine Holdings Inc., in a recent interview with The Yomiuri Shimbun, expressed the company's intention to consider mergers and acquisitions (M&As) mainly in the United States.

"The next two to three years will provide us with some great opportunities for M&As. The population of the United States is growing, and its market is expanding," Komiya said.

The following is taken from the interview.

Growth achieved

The Yomiuri Shimbun: You will step down as president and become chairman after a shareholders meeting in June.

Satoru Komiya: As CEO, I have thought more than anything about how to create new value for the company and deliver it to our customers, and I have worked to translate those thoughts into actions. We have achieved growth in such (indicators) as profits, return on equity $(ROE)$ and market capitalization. I feel that (my efforts) have definitely had an effect.

The non-life insurance industry (in Japan) is at a once-in-a-century turning point. Global management is becoming increasingly important, and it will be necessary, going forward, to develop competitive, specialized human resources.

Yomiuri: What were the key factors that led to the company's growth?

Komiya: There are two main factors. The first is business risk diversification. We were able to diversify our business by spreading it out in terms of geography, projects and products, while also incorporating new growth foundations.

The second is the promotion of "group-wide integrated management," which unites the various strengths of the Tokio Marine group.

Yomiuri: What are your expectations for (Managing Executive Officer) Masahiro Koike, who has been appointed as your successor as president?

Komiya: Koike has unwavering convictions and the ability to transform the company. He is also well versed in overseas operations. By approaching things from a different angle and perspective than I do, he will be able to further accelerate the company's growth and reform.

As chairman, I will fully support the new Koike administration. Koike will be in charge of the entire group, but I will provide backup support when necessary.

Expanding overseas operations

Yomiuri: There have been no major M&As in recent years.

Komiya: A merger or acquisition is not an end in itself, but a means to an end. The goal is to strengthen risk diversification while incorporating new growth platforms. We have reviewed more than a dozen (potential M&As) over the past three years, but none of them have matched our vision.

The market is changing, and there is a growing movement in the United States to attract investment. I believe the next two to three years will provide us with some great opportunities for M&As. We will continue to carefully review our list of potential investment targets and engage in thorough dialogue with them.

Yomiuri: Your overseas operations are growing quickly. They will soon account for 70% of the group's revenue.

Komiya: Considering our existing insurance business, Japan is facing a declining population and a decrease in the number of automobiles owned. On the other hand, the population of the United States is growing, and its market is expanding. The same applies to Asia. It is only natural that the importance of overseas operations would increase.

Selling cross-held shares

Yomiuri: Your sales of cross-held shares are progressing smoothly.

Komiya: It is a basic premise that (proceeds from the sales) must be used to enrich all stakeholders, including shareholders. We (use them to) make growth investments and business investments that contribute to improving our ROE. If there are no good targets for investment, however, we return the proceeds to shareholders. This policy will not change.

Exploring Japanese market

Yomiuri: Please tell us about the outlook for the domestic non-life insurance business.

Komiya: The model of the Japanese non-life insurance business, relying heavily on automobile and fire insurance, has remained unchanged for many years. The existing domestic insurance business will not be able to increase profits or grow in the future.

For example, in the United States and other overseas markets, the penetration rate of cyber insurance is high. New types of insurance that address such emerging risks have significant growth potential. We are also developing new insurance products centered on disaster damage prevention and mitigation. It is essential to promote insurance products that meet customer needs. We believe the Japanese insurance market is a growth industry.

Yomiuri: Could you explain about disaster prevention and mitigation, which you have positioned as a new business?

Komiya: Integrated Design & Engineering (ID&E) Holdings Co., a construction consulting firm we acquired in May, provides consulting services in such areas as urban planning and energy business, mainly for public works projects. We will leverage this expertise to take on the challenges of operating in this new business domain.

While details are still under wraps, we aim to undertake initiatives such as, for example, using former factory sites to improve city disaster prevention functions and supporting the development of disaster-resistant communities. The Tokio Marine group will take a comprehensive approach, covering everything from assessing current disaster preparedness levels and implementing countermeasures to paying insurance claims, taking recurrence prevention measures and supporting recovery and reconstruction efforts. We want to create a unique service.

Learning lessons

Yomiuri: During your tenure, issues such as (working with other companies) to prearrange insurance premiums came to light.

Komiya: I feel deeply ashamed. I sincerely apologize to all of the people involved and stakeholders for the inconvenience caused. We will completely reform the company, including its business practices, work culture and evaluation systems for employees and agents. We must build a company where self-cleansing mechanisms can identify and address issues on their own.

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This article is from The Yomiuri Shimbun. Dow Jones Newswires and The Wall Street Journal were not involved in the creation of this content.

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May 22, 2025 04:38 ET (08:38 GMT)

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