Sompo Holdings Uses AI to Address Japan’s Elderly Care Worker Shortage
Sompo Holdings, Inc., one of Japan’s largest insurance companies, is turning to artificial intelligence to help confront a significant shortage of workers in the country’s elderly care sector. This initiative comes as Japan grapples with a rapidly aging population and a declining birth rate.
Japan’s elderly population reached a record high of 36.25 million in 2024, coinciding with the country’s lowest-ever birth rate. This demographic shift has created a pressing need for innovative solutions to support the care of the elderly.
Mikio Okumura, Group CEO and President of Sompo Holdings, explained to CNBC that AI and other technologies can provide solutions by automating tasks typically performed by human workers while also improving the quality of nursing care. He cited the example of sleep measurement sensors.
“In the past, our caregivers [had to] visit each room to check sleep status … But instead of visiting, by caregivers, we set a sensor in a bed so that we can monitor from the office,” he said.
“Also, we can check the quality of sleep every minute, so if it deteriorates — the quality of sleep — we can check what we can change, for example, meal or activities.”
Okumura noted that a considerable amount of nursing care workers’ time, approximately 20% to 25%, is spent on paperwork.
“We are introducing some digital technology to eliminate paperwork so that caregivers can focus,” he explained. “We are trying to improve the efficiency, and also we are trying to improve the quality of services using technology.”
Sompo Holdings announced a restructuring plan in February, effective April 1, which will consolidate its four business units into two: “Sompo Property and Casualty” and “Sompo Wellbeing.” Sompo Wellbeing encompasses the company’s Japan-based nursing services and life insurance businesses.
Okumura indicated that the property and casualty arm is expected to achieve the most significant growth, primarily through international markets. The company plans to double its profit and market capitalization by 2030.
“By 2030, we plan to double profit, and also market cap … maybe 80% will come from Sompo P&C and 20% from Wellbeing,” he said, adding that “40% of the profit will come the from domestic market in Japan, and 60% from outside of Japan.”
Okumura also highlighted that one of the primary challenges for the company is Japan’s shrinking population. He pointed out that the number of newborns has decreased dramatically.
“When I was born, in 1965, the number of new babies was 1.8 million. But today only 700,000,” he stated. “It’s impossible to see a growing population in the future, so … we expect the overseas business is the growth driver for Sompo.”
He added that Sompo does not plan to expand its wellbeing services internationally due to cultural, regulatory, and social security system differences.
