A report revolving around the recent scandal involving Sompo Japan and disgraced car dealer Bigmotor has revealed a corporate culture at the Japanese insurer that favoured market share over customer interests.
This finding was part of a report released by lawyers investigating the issue on behalf of Sompo Holdings, the parent company of Sompo Japan.
According to a Nikkei Asia report, the investigation found that employees at Sompo Japan prioritised the company's revenue growth over the welfare of their policyholders. The scandal came to light in late 2021 when it was discovered that Bigmotor, an important auto insurance agent for Sompo, was overcharging customers for bodywork and repairs. In some instances, vehicles were deliberately damaged to inflate repair costs.
The fraudulent practices occurred during Bigmotor's aggressive sales expansion campaign and resulted in inflated insurance claims, consequently leading to higher insurance premiums for Sompo policyholders. Sompo Japan's management was reportedly made aware of the fraud at Bigmotor in May 2022 following a whistleblower's report to an insurance industry group in 2021.
Despite this knowledge, Sompo continued its business relationship with Bigmotor, which eventually led to investigations by the Financial Services Agency, a regulatory body, last year. The report indicated that Sompo's leniency towards Bigmotor was driven by competition with rival insurers and the desire to retain insurance business from Bigmotor.
In September, Giichi Shirakawa, president of Sompo Japan, resigned, assuming responsibility for the scandal. The investigation also scrutinised the role of Sompo Holdings, the parent company.
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