Shuzo Sumi

Chairman of the Board
Tokio Marine Holdings Inc. Japan

Shuzo Sumi joined Tokio Marine & Fire Insurance Co., Ltd. in 1970 and has dedicated his whole career spanning over 46 years to the development of the insurance industry of Japan and the world. At Tokio Marine, he mainly spent his career in commercial underwriting and product development.

After becoming General Manager of the Commercial Lines Underwriting Department in 1998, Mr. Sumi has led the group as a central figure in the overseas expansion of the Tokio Marine Group. In 2000, Mr. Sumi was assigned as Director and head of European business in London, and subsequently became President & Chief Executive Officer of Tokio Marine Group in 2007. With subsequent acquisitions of U.S and European insurance companies, Mr. Sumi has transformed the Tokio Marine Group into a truly major global insurance group.

In June 2011, he was appointed Chairman of The General Insurance Association of Japan at a difficult time in the wake of the East Japan Earthquake, and led the initiative to further develop the Japanese nonlife insurance industry by focusing on modernizing Japan’s earthquake insurance regime to help make a resilient society as well as providing relief for people affected by the disaster.

After becoming Chairman of Tokio Marine Group, he has led research in the fields of climate change and natural catastrophe risks in his capacities as Vice Chairman of The Geneva Association which comprises major global insurance companies, and as Co-Chair of the Extreme Events and Climate Risk Working Group.

Recently, his activities go beyond the insurance industry, and he serves as directors of major industry groups of Japan and as independent directors of major Japanese companies.

Major Achievements and Contributions

Mr. Sumi graduated from Waseda University in 1970 with a Bachelor’s degree in Science and Engineering and entered Tokio Marine. After joining the company, he advanced his career mainly in the commercial underwriting field underwriting products such as construction insurance for dams, tunnels and bridges, natural catastrophe insurance for earthquake and typhoons, and project-related insurance in the Middle East for oil, LNG and power generation projects by Japanese plant manufacturers.

Overseas expansion

Mr. Sumi’s greatest contribution to the Tokio Marine Group is the significant increase of scale and profitability of the international insurance business through active overseas expansion. Mr. Sumi, upon his appointment as General Manager of the Commercial Lines Underwriting Dept. in 1998, began searching for opportunities with the conviction that the company’s future depended on global expansion. As the first step, the Group entered the reinsurance market by establishing Tokio Millennium Re in Bermuda in 2000. Mr. Sumi then moved to London as Director and Chief Representative and cultivated the network that would later lead to further overseas expansion.

In 2007, Mr. Sumi became President & Chief Executive Officer of Tokio Marine Group, and in December of that year, the acquisition of Kiln for 442 million Pounds, the first major M&A deal outside of Japan, was announced. Shortly thereafter, Mr. Sumi embarked on the next large scale acquisition of Philadelphia Consolidated Holding Corp. (PHLY) for 4.7 billion U.S. Dollars, which was announced in July 2008. Together with the Kiln acquisition, a significant increase in international specialty line insurance business was realized, as well as establishing a solid operational base in the major markets of U.S. and London to enable the sustainable future growth of the Tokio Marine Group.

Furthermore, the acquisition of Delphi Financial Group, Inc. (DFG), which runs both life and non-life insurance businesses in the US, for 2.7 billion U.S. Dollars was complete in May 2012. Combined with the active development of the life and non-life businesses in emerging markets such as India and Brazil, a solid foundation and risk diversification was achieved for the Tokio Marine Group to further grow on a global scale. These actions sent a message both at home and abroad that the Tokio Marine Group has established a firm position in the global insurance market.

Mr. Sumi also actively engaged in improving the societies of developing and emerging countries. For example, the Group entered markets in Islamic countries where people did not purchase traditional insurance products due to religious reasons, and strived to develop and spread Islamic style insurance. For India, which has a large farming population and often suffered from droughts, the Group developed weather insurance jointly with a local partner which mitigated weather risks. Mr. Sumi spearheaded these efforts to solve problems in other countries. In addition to that, he established an Islamic insurance company in Saudi Arabia through a joint venture with Islamic Finance Bank.

As a result of Mr. Sumi’s leadership, the Tokio Marine Group has grown into a world-class insurance group currently consisting of 179 subsidiaries and 25 affiliates under Tokio Marine Holdings, Inc. and has a presence in 37 countries and 469 cities, engaging widely in non-life/life insurance and financial/general businesses. Also, earnings from international insurance business was only about 30 million U.S. Dollars back in 2004 and only 3% of total earnings, whereas last year it was 1.5 billion U.S. Dollars and has grown to 35% of total earnings of the Group.

Mr. Sumi’s DNA has been handed on to his successors, leading to the acquisition of HCC for 7.5 billion U.S. Dollars, which was consummated in October, 2015.

The East Japan Earthquake

The East Japan Earthquake which occurred off the coast of north-eastern area on March 11, 2011 was the largest recorded in history around Japan, and along with the tsunami and Fukushima Dai-ichi nuclear power plant accident, brought about devastating damage to Japan’s eastern pacific coastal line in the Tohoku region making it an unprecedented catastrophe with casualties and missing totalling 21,000 people.

Mr. Sumi established response headquarters with himself as head just 47 minutes after the earthquake occurred, and immediately started to take action. Beginning with confirming the safety of employees, agents and their families, and sending relief supplies to the disaster areas, Mr. Sumi put forth a bold policy to complete most of the claims handling within two months of the earthquake to provide insurance payments to people in the affected areas as soon as possible. This was for a catastrophe of a scale never before experienced, and the Group deployed a total of over 9,000 staff to support the response.

Mr. Sumi went to great lengths to pay insurance claims as soon as possible to disaster victims and suspended normal procedures and rules by negotiating with regulators whenever necessary. In just two months, most of the disaster related claims were nearly completed amounting to approximately 100,000 payments. Mr. Sumi’s leadership reverberated widely through the non-life insurance industry, and a total of 10 billion U.S. Dollars was paid within three months of the earthquake, giving a strong boost to the disaster victims to take the first step to restart their lives. At that time, even the donations by the government, local municipalities or the Red Cross had barely reached the affected regions.

Mr. Sumi was subsequently appointed Chairman of The General Insurance Association of Japan in June 2011. Japan’s economy at that time was facing severe problems. The non-life insurance industry was also faced with an extremely difficult business environment with an increase in natural catastrophe insurance claims and high loss ratio levels for auto insurance. Under such circumstances, Mr. Sumi not only continued the industry-wide earthquake response but also focused on further promotion of personal lines earthquake insurance. Also, in order to be prepared for the next major earthquake and to enhance the strength and stability of the earthquake insurance scheme, he exerted leadership as Chairman to revise the government sponsored reinsurance scheme and improve the product profile.

Fundamental business process reforms

Another major achievement by Mr. Sumi within the Tokio Marine Group was the fundamental business process reforms. In the early 2000s, deflation was continuing and Japan’s insurance industry was struggling under declining revenues and earnings from increased competition due to deregulation, and there was a sense of stagnation within the Tokio Marine Group as well. It was a dire situation where increased complexity of products and administration hindered employees and agents from explaining the product accurately to customers. Furthermore, IT systems had become a cumbersome labyrinth due to repeated customization.

In July of 2003, Mr. Sumi became the executive officer responsible for the areas of product development, business processes and IT. Out of a sense of crisis that the Tokio Marine Group risked becoming redundant, he resolved to carry out a fundamental reform in his areas of responsibility. He was met with various adversities such as objections from agents and internal conflicts during the reform, but he forged through with the reforms under the conviction that advanced business processes is the strongest competitive edge which other companies could not follow. Specifically, he carried out a fundamental organizational reform spanning product development to systems foundations which effectively reset the value chain of an insurance company and restructured it from scratch.

Full scale reforms started in 2005, and although it took 5 to 6 years for the new business processes supported by new systems to start, the result of the process reform was remarkable, and there was a dramatic decrease in the administrative workload both internally and externally with Tokio Marine’s agents. Internal administrative workload decreased by 40% and agents’ administrative workload decreased by 50%, greatly changing the work profile. Notably, the decreased workload freed up time and resources of female employees who traditionally handled back office administrative work, enabling them to focus more on productive functions such as outward marketing activities in the personal lines segment. Currently, nearly half of such marketing function is carried out by female employees.

Mr. Sumi became Chairman of the Board of Tokio Marine Group in June, 2013. Since then, he has led research in critical challenges facing the insurance industry such as regulations, risk management and climate change as Vice Chairman of the The Geneva Association, a leading international think tank of the insurance industry comprising CEOs of approximately 80 major insurance companies of the world. In particular, as Co-Chair of the Extreme Events and Climate Risk Working Group, he has led research in the field of climate change and natural catastrophe risks, contributing greatly to the global insurance industry.

Other Achievements

• Mr. Sumi plays an active role on the global stage in such capacities as member of the Asia Pacific Group of The Trilateral Commission, member of the China Development High Level Forum, international economic advisor to the Mayor of People’s Government of Chongqing, and member of the Asia Business Council.
  
  
• Mr. Sumi serves key positions in Japan’s business community such as Vice-Chair of the Board of Councilors of the Japan Business Federation (Keidanren), Vice-Chairman of the Board of Directors of the Japan Association of Corporate Executives (Keizai Doyukai) and actively seeks solutions for challenges on the state level such as revitalizing local regions and population issues.
  
  
• As Chairman of the Board of the Japan Investor Relations Association, Mr. Sumi plays a leading role in promoting the IR activities of Japanese companies and to improve the quality of IR activities.
  
  
• Mr. Sumi is deeply interested in the increasingly critical threat of cyber risks, and is a Director of the Japan Cybercrime Control Center (JC3), an organization jointly established by the public, private and academic sectors to deal with the increase in cyber crime.
  
  
• Mr. Sumi serves as an outside director of the Bank of Tokyo-Mitsubishi UFJ, one of the megabanks of Japan, and Toyota Industries Corporation, the originating company of Toyota Motor Corporation.
  
  
• Mr. Sumi is also deeply engaged in inclusion of people with disabilities, and is a Director of The Japan Deafblind Association.
  
  
• Mr. Sumi is an avid sports player and fan, especially rowing and rugby (Chairman of Mitsubishi Boat Club).
  
  

Awards and Honours

• January 2014 Mr. Sumi was awarded Manager of the Year for fiscal year 2013 by Japanese business magazine “Zaikai”
  
  The award was established in 1955 to honor significant industry figures who widely drove the Japanese economy and who exerted superior management abilities combined with a high sense of integrity and appreciation evidencing a valuable asset to society. A Manager of the Year is awarded from a unique viewpoint to finance and industry leaders with the spirit to forge ahead in the face of great adversity and to revive Japan.
  
  
• May 8, 2014 Mr. Sumi was awarded the Freedom of the City of London
  
  Mr. Sumi was conferred with the Freedom of the City of London upon recommendation from “The Worshipful Company of Insurers (WCI),”an organization with early origins of an insurance guild in the City. This is the first instance that the WCI recommended a foreign national to the Award. The main reason for Mr. Sumi being honored is the significant contribution he has made to raising the status of London as a global insurance market through his close relation with London while engaging in global insurance business, such as leading the integration of Kiln, a prominent company at Lloyd’s, into the Tokio Marine Group.