Retiree Surge Amid Sompo Japan’s Final Report

On January 16, SOMPO Holdings, the parent company of Sompo Japan, received and released a report from an external investigation committee. This investigation summarized the series of events related to fraudulent insurance claims at Big Motor, including the response after the discovery of the fraud. The investigation has been ongoing since July 26, 2023. The final report follows the interim report published on October 10 of the same year. Details are available on the official website of Sompo Japan.

 

The author quickly checked the final report as soon as it was released. One particular point of interest was the involvement of employees who were dispatched to Big Motor as adjusters responsible for calculating repair costs. In previous interviews, it was mentioned by multiple sources that most of the Sompo Japan employees with adjuster qualifications who were dispatched to Big Motor were highly capable individuals with a strong sense of justice. In fact, the report also states:

“After careful examination of relevant documents and the results of interviews, no evidence was found to indicate the involvement of dispatched personnel in the fraudulent insurance claims in question.”

The report, however, does not mention this. On the other hand, however, there was one entity that was not mentioned at all in the report. That is the company’s outside adjusters, who are said to have been commissioned by Sompo Japan. Some of the contents of the report are hard to believe. A former employee of Big Motor Co.

A former employee of Big Motor revealed, “Study sessions were often conducted by adjusters dispatched by Sompo Japan, and it was around that time that fraudulent acts began to stand out. At our company, the stick used to set the glue gun was rubbed against the damaged car to make it appear as if it had been scratched. Other instances of such practices to increase the number of scratches were observed almost daily, such as intentionally scratching the left fender adjacent to the bumper, even though only the right front end was damaged. Initially, this was carried out solely by the plant manager, but as the number of incoming cars increased, new staff members were also asked to assist with photography and other activities. Of course, there is no concrete evidence that this advice came from adjusters.”

Another source also spoke about the dependency between the adjusters involved with Sompo Japan and the Big Motor factory manager.

“The adjusters commissioned by Sompo Japan started visiting the body shop more frequently, and eventually, they began performing maintenance tasks such as oil changes and tire replacements on their own cars. The workshop manager would say, ‘We’re always grateful for their help, so let’s do a little something for them.’ It escalated gradually to the point where they were painting other Sompo Japan adjusters’ cars for free and even handling repairs for their acquaintances’ vehicles. The on-site staff started harboring a sense of disgust towards the adjusters from Sompo Japan.”

Even if external adjusters were involved, and even if the seconded employees mentioned in the report were unaware, it would be understandable. The scale of the fraudulent insurance claims carried out by Big Motor makes it hard to believe that adjusters from insurance companies were not involved. Whether it’s Sompo Japan or other insurance companies, the reality of fraudulent involvement by external adjusters dispatched by various insurers may come under scrutiny in the future.

The other side, Big Motor, announced a new salary system for January to March 2024 in early December of last year. The content included margin cuts and the absence of winter bonuses, making it harsh. As a result, there has been a mass exodus of employees from Big Motor. An active employee reveals the situation.

“About 320 people resigned in December and January. Finally, by the end of December, two executives, including Koichi Kaneshige, the former vice president (35) who had entrenched the fraudulent culture with ‘Royal Family,’ left Big Motor. Managers, deputy managers, store managers, and senior staff are also leaving one after another. There seems to be a movement to headhunt employees as well.”

 

On the other hand, another current employee also laments the current situation.

“Older veteran members seem to have no choice but to stay. There are examples of former employees forming new companies together, but it doesn’t seem to be going very well.”

Since April of this year, Big Motor is in the midst of a review to receive support from Itochu. Itochu is said to be positive about the support, and although salaries have been reduced due to margin cuts from January to March, the situation may improve from April onwards. However, the number of retirees is expected to continue to increase.

“Not all employees are necessarily positive about becoming a part of Itochu. There are actually some employees who fear it. After April, if Big Motor becomes part of Itochu, it will likely adopt a compliance-focused system in a different dimension from before. Naturally, there may be dismissals of employees who are deemed not useful. As the new system takes over and before they lose their place, there will likely be an increase in people who think it’s better to change jobs to a similar industry even if the conditions are somewhat worse.”

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