Outgoing Sompo CEO apologizes to customers for loss of trust

TOKYO (Kyodo) -- Major Japanese insurance firm Sompo Holdings CEO Kengo Sakurada said Friday he will step down at the end of March to take responsibility for the company's involvement in used car dealer Bigmotor's insurance fraud scandal.

The announcement comes after Japan's financial watchdog ordered Sompo on Thursday to improve its operations. In the scandal, Bigmotor was found to have been charging excessive repair fees by intentionally damaging customers' cars and padding insurance claims.

Sompo, one of Japan's biggest nonlife insurers, sold a large portion of its auto insurance through Bigmotor, and is accused of purposely ignoring the fraudulent practices to avoid damaging the business relationship.

In the order issued by the Financial Services Agency, the watchdog demanded that the management of Sompo Holdings and its major subsidiary Sompo Japan Insurance consider their responsibility for the issue.

"It is extremely regrettable that we lost everyone's trust. We apologize for causing tremendous trouble to our customers," Sakurada told a press conference in Tokyo. "My oversight was not enough."

Sakurada, who has led the group for over 10 years, will resign from his post on March 31 and be replaced by Chief Operating Officer Mikio Okumura.

The incident sparked outrage last year in Japan, after a third-party panel report showed employees at Bigmotor damaging cars in a number of ways, including using screwdrivers and golf balls.

Although major insurance firms stopped doing business with Bigmotor in 2022 after a whistleblower within the dealership reported fraudulent insurance claims, Sompo resumed business with the company later that year, drawing a barrage of criticism.

Sompo Japan Insurance President Giichi Shirakawa will