[Finance Embracing Seniors]③"Care as a Business"... Real-World Advice from Japan's SOMPO, a Pioneer in an Aging Society

Interview with Kazuhiro Saito, SOMPO Care Korean Project Leader


Is "Old-Old Care" Sustainable? Structural Limitations of Family-Based Care

"If Seniors Do Less for Themselves, Frailty Follows Quickly... 'Support for Independent Living' Is Essential"

Editor's NoteAs the pace of population aging accelerates, the roles of financial companies are also shifting. Finance, which once focused on wealth accumulation and risk mitigation before retirement, is now expanding its scope to encompass not only how to manage and utilize retirement assets but also how to prepare for health and care throughout customers' lives. In Korea, efforts to connect finance and eldercare are gaining traction, while overseas financial firms are expanding their services to include health, medical care, and lifestyle support, with some directly entering the care business. The task of making senior business a sustainable venture in a super-aged society is becoming increasingly important. The Asia Business Daily takes a three-part look at senior strategies at financial companies in Korea, Singapore, and Japan, examining the extent to which finance and care have converged and identifying challenges the Korean financial sector must address.

"We must not see care solely as a social responsibility, but make it a sustainable business. Only if companies can operate in the black and continue their businesses will we be able to respond to rapid population aging."

Kazuhiro Saito, Korea Project Leader of Overseas Business Office, Wellbeing Division at SOMPO Care. SOMPO Care

Kazuhiro Saito, Korean Project Leader at SOMPO Care Wellbeing Business Division Overseas Business Office, made these remarks during a recent interview with The Asia Business Daily about what changes are necessary to expand care infrastructure as Korea gears up for a super-aged society.

Japan entered a super-aged society ahead of Korea, and the roles of financial and insurance companies have transformed in response. In particular, insurance companies have broadened their business areas beyond merely providing insurance payouts, now offering preventive services to help customers stay healthy, as well as elderly care and lifestyle support.

Sompo Group formally entered the eldercare business in 2015. Today, it operates around 29,000 senior living units and has established a system that supports its customers from disease prevention to end-of-life. As a group, its wellbeing business—which encompasses health, care, and retirement funds—has become a core business pillar alongside its non-life insurance operations.

Saito stressed that, based on Japan's earlier experiences, Korea needs changes beyond simply increasing the number of eldercare facilities. He noted, "Instead of seeing care only as volunteer work, we must shift to recognizing it as a business. It is important to foster talent capable of balancing economic profitability with the moral imperative of senior care."

From After-the-Fact Care to 'Prevention and Asset Management'... Changing Needs of Japanese Seniors

Saito observed that over the past 10 to 20 years, the needs of Japanese seniors have changed significantly. Whereas in the past care was centered on receiving insurance benefits or physical help once someone needed support, now prevention and asset management—aimed at maintaining independent living for as long as possible—are the main focus. "In Japan, the difference between average life expectancy and healthy life expectancy is about 8.7 years for men and 12.1 years for women," he explained. "Many people want to live as long as possible in a healthy state."

He also explained that Japan's public long-term care insurance system, similar to Korea's, has undergone changes. Long-term care ('kaigo') here refers to care helping elderly or disabled people with daily life. Saito said, "Since the introduction of long-term care insurance, the focus has shifted from 'provision-type benefits' to 'prevention-type benefits,' and now local governments play a greater role in the financing and management of benefits."

Changes in family structure have also affected insurance and care services. In Japan, nuclear families and aging are leading to the issue known as 'old-old care,' where elderly people care for other elderly people. Saito noted, "It has become structurally difficult to rely solely on family for both care and asset management. Insurance payouts or facility and service provision alone are insufficient; comprehensive solutions are needed."

"Insurance Payouts Alone Are Not Enough"... Why Sompo Entered Elderly Care Directly

Saito explained the rationale behind Sompo's decision to operate its own care facilities and in-home care services, rather than just selling insurance or partnering with other providers: "We determined that after-the-fact monetary compensation alone could not address the anxiety surrounding a super-aged society at its root." He added, "We decided to secure a foundation for tangible services that can reach people's daily lives in retirement."

In fact, Sompo has built a support system that covers the entire lifespan of seniors, from disease prevention to care needs and end-of-life. Saito emphasized, "One key lesson we've learned is that simply scaling up in size is not enough to ensure business sustainability."

The biggest barrier was a 'workforce shortage.' He pointed out that in Japan, it is estimated that about 570,000 more care workers will be needed by 2040 compared to 2022. "Given the far more severe-than-anticipated labor shortage," he said, "it became clear that we could not rely on human labor alone. We had to shift to a structure that improves productivity through technology and the use of onsite data." He added, "We're also working to improve the status of care workers by improving efficiency onsite, freeing up capacity, and using that to enhance worker treatment and their social standing."

Another major issue in Japan is supporting not only the elderly themselves but also their children who care for them. Saito highlighted, "Family support is now not just an individual matter, but a challenge that affects the sustainability of companies and the country as a whole." According to Japan's Ministry of Economy, Trade and Industry, there will be an estimated 3.18 million 'business carers'—people who work while providing eldercare—in 2030. The resulting economic loss from reduced productivity and job turnover is estimated at about 9.1 trillion yen (approximately 78.4 trillion won).

In fact, around 106,000 people in Japan quit their jobs each year because of family care responsibilities. The fact that many of these individuals are in their 40s or 50s and in responsible positions at companies places a further burden on businesses. Saito said, "We provide services to help companies support the work-care balance, including dedicated counseling services for families, so that workers can protect their careers while caring for family members."

The Challenge of Integrating Finance and Care: Regulation and Compliance

Reuters Yonhap News

Saito pointed out that, in Japan, when financial groups expand into the care and senior business, they must address multiple regulatory and compliance challenges—including not only the public long-term care insurance system but also personal data protection and consumer protection regulations. Regarding the public long-term care insurance system, he said, "The profitability of eldercare businesses is determined by government-set fees. When providing both public-funded and private-pay services, the Ministry of Health, Labour and Welfare enforces strict boundaries, making it difficult to flexibly design pricing and services."

There are also issues surrounding personal information. Sensitive data such as physical and cognitive function are handled during care, but group affiliates within the same financial group are not allowed unrestricted use. Saito explained, "Information on physical functions acquired onsite cannot be used directly in insurance or financial product sales or screening. A strict consent process and 'firewall' governance to block information flows are essential."

Protecting financial consumers is also crucial. When recommending financial products to seniors with cognitive decline, strict procedures in accordance with government guidelines are necessary. Saito stated, "Procedures such as family participation or multiple meetings are required. It is essential to build a high level of compliance so that the trust gained through the care process is not used for cross-selling financial products, which could be seen as a conflict of interest."

"Care Must Also Be a Profitable Business"

Saito identified a fundamental mindset shift as the top priority for Korea when expanding its senior business: shifting from "caring for" to "supporting independence." He called this "most important," noting, "To support a single older adult in a system that does everything for them requires a great deal of manpower." With low birthrates and a rapidly aging population, increasing the care workforce in Korea is difficult, making "caring for" an unsustainable model. "If people lose the ability to do things for themselves, frailty can set in rapidly," he said. "It's important to rethink care so that people do for themselves, to the extent possible, under their own responsibility."

He also discussed the need to shift mentality from 'family-centered' to 'individual-centered.' Saito said, "If it's something the family wants but the older adult doesn't, the burden on frontline workers increases. Instead of focusing on the family's expectations, it's vital to center services on the person actually receiving care." He added, "Care services must be provided primarily for one's happy life above all else."

Saito especially pointed out that Korea's rate of aging is about 2.5 times faster than Japan's. He observed, "At the current pace, Korea urgently needs to develop care infrastructure to accommodate seniors, making the participation of large private companies essential."

However, he warned that without profitability, sustained investment cannot be expected. "If private, for-profit companies cannot make a profit, they won't participate, or if they do, they won't supply enough capacity. The system must at least allow businesses to operate in the black and earn enough to ensure sound operations if we are to keep up with the pace of aging," he emphasized.

"We Must Foster People Who Understand Both Economics and Ethics"

Kazhiro Saito, Project Leader of Sompo Care Korea, emphasized, "Care services must be provided primarily for the individual's happy life." The image contains the phrase, "I want to support daily lives lived authentically." Sompo Care

Saito underscored that, when conglomerates and financial firms move into the senior and eldercare business, "a balance between economics and ethics" is critical. It is difficult to operate such businesses if too much emphasis is placed on either economic sustainability or the social value of caring for the elderly alone. "Fostering talent capable of balancing these two is an urgent priority," he said. "The nature of care businesses is unique. It is best to recognize that this is fundamentally different from general business operations."

He further explained that large corporations cannot solve everything by themselves; small and medium-sized enterprises, sole proprietors, and social welfare foundations each have their roles to play. "Only when each player understands its role and collaborates locally does a welfare society become meaningful. Although competition is necessary, this is a phase where collaboration is as important as competition," he noted.

Ultimately, he emphasized, the most pressing issue is not just expanding elite senior services for the wealthy, but ensuring there is enough care infrastructure for the general public. "The urgent task now is to provide care infrastructure for the ordinary middle class, not just the wealthy, so that the nation is not destabilized by the costs of care," he said. "I hope that by working together across different sectors, we can overcome the national challenge of low birthrates and rapid aging."

This content was produced with the assistance of AI translation services.