In 2018, major P&C insurance company Sompo Holdings founded a Digital Lab in Israel.
We have been interested and paid attention to this traditional Japanese firm, which at first sight, has nothing in common with the High-Tech industry. And today, we had a great opportunity interviewing the Head of Sompo Digital Lab Tel Aviv, Yinnon Dolev. We learned that the company is implementing interesting strategic challenges and have achieved diverse outcomes in a brief period of 3 years. We will do our best to report what Dolev told us accurately.
―――Firstly, please tell us about SOMPO Digital Lab.
Our mission statement is to create a theme park for wellbeing, health, safety and security, which aims to complement insurance or develop an innovative, impactful new business for society through technology. We want to create a new engine and a new solution for insurance enterprise, with services that could also be implemented in markets unrelated to the insurance business. In order to do that, we have labs in 3 destinations: Tokyo, Silicon Valley, and Tel Aviv. Each Lab collaborates to develop new solutions and partnerships.
―――Does each lab have distinctive roles?
Tokyo is the headquarters and supports Tel Aviv and Silicon Valley. Tel Aviv is in charge of Israel and Europe's technology, Silicon Valley is responsible for US’s technology. However, when marketing for a new technology trend that affects us as a whole company, we collaborate with each other and work together. For example, when Sompo’s division requests some kind of technology, each hub investigates information and technologies they could procure, but in order to develop the best solution, we cooperate and bring this information together.
―――We heard that SOMPO operates business in 30 countries worldwide, excluding Japan, but will the new business created at the digital lab be offered in other countries as well?
We will first focus on the Japanese Market. Our strength, including the “brand” and its ability, is the strongest in Japan. By utilizing this strength, we can affiliate with digital health and startups with great mobility. When favorable outcomes begin to show, we’ll consider expanding business to other regions.
―――I understand that digital health and mobility are familiar with insurance enterprises. However, for an older Japanese person like me, Sompo is a major P&C insurance company, not an IT company. How is Sompo going to expand their new business?
Insurance is something that functions when some kind of “event”, like accidents, happen. However, we believe that there are more useful options we can provide to customers. For example, through technology, we can prevent accidents, support driving, or maybe advise users to use public transportation instead of driving. Sompo also operates a chain of nursing facilities, and considers what we can do to enrich elderly people's lives. For example, there are possibilities to support elderly people who cannot drive anymore, by making transport easier. If these technologies decrease the number of accidents, they will bring merits for insurance as well. It has become clear that various areas are related to the insurance industry. Insurance can do more than just help after something happens; it can proactively prevent things from happening.
Another issue is natural disasters. In fact, natural disaster-associated insurance applicants dominate a great percentage of insurance enterprise costs. If we could take apt measures through Big Data analysis and prediction of natural disasters, this service could be not only valuable for the insurance industry, but also impactful for society. We strongly aim to develop such valuable services.
―――Do you have any ideas for a new business that doesn't directly relate to insurance?
Yes, we do. For example, the agriculture industry. One of the problems Japan's agricultural market is facing is its dependence on elderly workers and the shortage of heirs. We are looking for solutions that can increase the efficiency of agriculture by technology. There are issues, like how elderly people are not familiar with digital technologies, but judging by cases like smartphones, it’s possible that everyone will be able to use it. This can also be a solution for food shortage.
―――大変興味深いですが、日本では農業や医療の分野には様々な規制があります。規制の問題は技術だけでは解決できません。この点はどのようにお考えでしょうか？
Well, I don't think there's a perfect solution for this but there are approaches we could take. Most of the technologies we believe to be available in Japan are already tried in other countries. Therefore, most of the projects are solutions that meet regulatory constraints in other countries that have similar issues like Japan. In addition, the Japanese Regulatory Authority greatly understands what kind of regulations are implemented in other countries. So, for example, technology approved by the US FDA is not automatically approved by the Ministry of Health, Labour and Welfare in Japan, but it is highly possible.
―――From agriculture to security, Sompo focuses on a wide range of regions but are there teams of specialists for each field?
In our teams, there are experienced people who have skill-sets in each field. We have experts from Maccabi, a health insurance service provider, and TEVA, a pharmaceutical company. We also have people who have experience in agriculture or startups. There are 13 employees in our branch today, but we're trying to gain more. Initially, we fundamentally developed things through partnership with others, but today we are considering in-house development, implementing both solutions.
In July this year, an organization called SOMPO Light Vortex was founded in Japan. Its purpose is to create and purpose new services and products. We are eager to create an R&D Team, implement product development with skillful Israeli human resources, and work on incubation. In Israel, it is a keen competition to secure excellent human resources. Major enterprises such as Amazon and Google have also set up R & D centers in Israel, with a lot of funds coming in, and startup activities are accelerating. In such a situation, it’s not an easy thing to discover the best HR, so we will work harder in this field.
―――In such a difficult situation, what kind of “attractive point” does SOMPO have?
There aren't many companies that intend to transform and build things from scratch like Sompo. The goal we aim for is contribution to society, and people who are involved can develop new products’ R&D from scratch. We are appealing to applicants’ curiosity and knowledge. Moreover, people have been interested in the position that we are standing; in between Japan and Israel. Israelis have just started to have interest in Japan, so maybe next year if direct flights start and if people start to travel again, curiosity would increase. Our story and development from scratch have been stimulating people’s curiosity. Also, we give priority to diversity. We are hiring women, Arabs, and employees from north and south areas.
―――Traditional major enterprises in Japan tend to have a conservative culture and take time to make decisions. I personally have an experience of letting down Israeli people in business. Do Sompo have any kind of difficulties here?
It is true that major Japanese companies don’t have agileness like startups have. However, a few years ago, Sompo Holdings’ CEO, Sakurada, strongly recognized that “we have to change”. Then, we truly understood the necessity of making changes, and decided to recruit unique, talented human resources at the management level who have understanding of world startups. We've learned a lot from startups and so there is nothing bureaucratic in the Digital Lab. Last year, we announced a project with Israeli startup “Parametrix,” which is a digital insurance startup. It only took 6 months from our first communication with them to pilot testing. Sompo is a major enterprise but has a fast decision making process and it’s successful.
―――Finally, please tell us more about you. You formerly worked at GE, so why did you decide to work for SOMPO?
I was in charge of the startup partnership program at GE Digital. In 2018, Narazaki was looking for a digital lab leader and because I knew really well about the Israeli business world, I was introduced to him through two VCs. I've never thought of working for a Japanese country or an insurance enterprise, but after listening to Narazaki’s story, I got really interested and decided to work for the company.
In these 3 years, I have successfully attained several outcomes. I already told you about Parametrix, but we also contracted a partnership with a company called “Planck.” They have an IT engine. Insurance companies underwrite insurance in various types of businesses, and this AI engine will have a huge impact on this process. Additionally, we have created several solutions with another company, “Binah.ai.” We enabled a solution to check heart rate and breathing rate signs through mobile phones. Another success was with a project measuring indicators of COVID-19.
It was a short conversation but I heard a lot of stories about the foundation of the company, organizations they developed partnership with, and what kind of accomplishments they have made in these 3 years. I just had an image that property insurance is helpful when issues like natural disasters happen. However, after hearing about their plans to take productive actions to prevent problems, I now realize that the insurance industry has a probability of contributing additional value to our daily lives and businesses, and that digital technology can greatly contribute to this factor. Looking back at the history of Israel, this country made drinkable water from salt, enabling agriculture in deserts. As you can see, Israelis have solved many problems with their technology. Sompo Digital Lab is trying to fully utilize Israel’s technological strength, which is highly expected to contribute to solving various issues in Japan.
Written by Hitoshi Arai
Translated by ISRAERU Editor
