As Japan’s population ages and its workforce shrinks, Sompo Holdings is leveraging AI and technology to transform elderly care—and setting a global example.
- Japan’s aging population has reached a record high of 36.25 million, while its birth rate has hit a record low, creating a critical shortage of caregivers.
- Sompo Holdings, one of Japan’s largest insurance companies, is using AI and digital technology to improve elderly care efficiency and quality, reducing the burden on human workers.
- While Sompo focuses on domestic elderly care innovation, its future growth strategy emphasizes international markets, particularly in property and casualty insurance, due to Japan’s declining population.
Japan is facing a demographic crisis unlike any other. With a record-high elderly population of 36.25 million in 2024 and a birth rate that has plummeted to historic lows, the country is grappling with a critical shortage of workers to care for its aging citizens. This challenge has spurred innovation, with companies like Sompo Holdings, Inc., one of Japan’s largest insurance firms, stepping up to address the issue through cutting-edge technology. By integrating artificial intelligence (AI) and digital tools into elderly care, Sompo is not only alleviating the strain on caregivers but also redefining what it means to provide quality care in an aging society.
The Aging Crisis: A Perfect Storm
Japan’s demographic challenges are well-documented. The country boasts one of the longest life expectancies in the world, with older generations living longer than ever before. While this is a testament to advancements in healthcare and quality of life, it also places immense pressure on the nation’s caregiving infrastructure. The number of elderly citizens continues to rise, while the working-age population shrinks, creating a stark imbalance.
Mikio Okumura, Group CEO of Sompo Holdings, highlighted the severity of the situation in a recent interview with CNBC’s Managing Asia. “When I was born in 1965, there were 1.8 million new babies. Today, there are only 700,000,” he said. “It’s impossible to see a growing population in the future.” This stark reality has forced companies like Sompo to rethink traditional approaches to elderly care and explore innovative solutions.
AI and Technology: Transforming Elderly Care
Sompo’s response to the caregiving crisis has been to harness the power of AI and digital technology. By automating routine tasks and improving the efficiency of care services, the company is freeing up caregivers to focus on what truly matters: providing compassionate, personalized care.
One example of this innovation is the use of sleep measurement sensors. In traditional care settings, caregivers would need to visit each resident’s room to check on their sleep status—a time-consuming and labor-intensive process. With AI-powered sensors embedded in beds, caregivers can now monitor sleep patterns remotely from a central office. These sensors provide real-time data on sleep quality, allowing caregivers to make adjustments to meals or activities if a resident’s sleep deteriorates.
Another area where technology is making a significant impact is paperwork. According to Okumura, administrative tasks consume 20%-25% of nursing care workers’ time. By introducing digital tools to eliminate paperwork, Sompo is enabling caregivers to dedicate more time to their primary role: caring for the elderly. “We are trying to improve efficiency and also enhance the quality of services using technology,” Okumura explained.
Domestic Innovation and Global Growth
While Sompo is deeply invested in addressing Japan’s elderly care challenges, the company’s growth strategy extends far beyond its domestic market. In February 2024, Sompo announced a restructuring plan that consolidates its four business units into two: “Sompo Property and Casualty” and “Sompo Wellbeing.” The latter includes the company’s nursing services and life insurance businesses in Japan.
However, Okumura sees the greatest growth potential in the company’s property and casualty arm, particularly in international markets. “By 2030, we plan to double our profit and market cap,” he said. “Maybe 80% will come from Sompo P&C and 20% from Wellbeing.” He added that 60% of the company’s profits are expected to come from outside Japan, reflecting the challenges posed by the country’s shrinking population.
Despite its focus on global expansion, Sompo has no plans to export its wellbeing services overseas. Okumura cited differences in culture, regulation, and social security systems as key barriers. Instead, the company’s international strategy will center on property and casualty insurance, where it sees significant opportunities for growth.
A Blueprint for the Future
Sompo’s innovative approach to elderly care offers a blueprint for other nations facing similar demographic challenges. As populations age worldwide, the demand for caregiving services will only increase, placing unprecedented pressure on healthcare systems and workforces. By leveraging AI and digital technology, companies like Sompo are demonstrating how innovation can bridge the gap between supply and demand, ensuring that elderly citizens receive the care they deserve.
Japan’s experience serves as a cautionary tale and an inspiration. While the country’s aging population presents significant challenges, it also drives innovation and creativity. As Sompo continues to pioneer new solutions in elderly care, it is not only addressing a pressing domestic issue but also setting a global standard for how technology can transform the way we care for our aging populations.
In the words of Mikio Okumura, “We expect the overseas business to be the growth driver for Sompo.” But perhaps the company’s greatest legacy will be its contribution to redefining elderly care—a legacy that transcends borders and benefits us all.