Sompo Holdings’ Kengo Sakurada, the current CEO, is preparing to leave his position at the end of March following issues related to automobile insurance fraud at used-car dealer Bigmotor, reports suggest.
According to sources reported on by The Japan Times, the Financial Services Agency (FSA) is poised to issue business improvement orders to Sompo Holdings and its subsidiary Sompo Japan Insurance. These orders are expected to be issued as early as Thursday, addressing the companies’ responses to the misconduct by Bigmotor. The FSA concluded its on-site inspections of both Sompo Holdings and Sompo Japan this Monday.
The forthcoming orders from the FSA will likely prompt both firms to address management responsibility regarding the fraud case. The parent company is also considering whether Sakurada should resign from his role as chairman, contingent on the actions taken by the FSA, as per the sources.
Mikio Okumura, currently serving as president of Sompo Holdings, is expected to be appointed as the new CEO, succeeding Sakurada, as indicated by these sources.
It is worth noting that Sompo Japan was the only major non-life insurer to continue referring its auto insurance customers to Bigmotor, despite being aware of the dealer’s misconduct. The company later reported this decision to resume referrals to its parent company, Sompo Holdings.
An independent panel, established by Sompo Holdings to investigate the matter, found fault with Sompo Japan’s decision to resume customer referrals to Bigmotor, citing a lack of a customer-focused approach.
The panel also highlighted shortcomings in Sompo Holdings’ oversight, noting the absence of proactive measures and inadequate guidance to its subsidiary in handling the issue.
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