Sompo teams up with Zego as it joins $28m fundraising

Sompo and UK digital motor insurer Zego have entered into a partnership to examine and build telematics-based insurance products for Japan.

The agreement was announced alongside a $28m (£20.6m) funding round, in which Sompo participated together with Zego’s existing backers.

The tie-up is intended to combine the Japanese major’s insurance experience and understanding of the market with Zego’s technology platform and AI capabilities.

Together, the companies plan to work on technology-driven telematics insurance products and AI-based solutions.

For Zego, Sompo’s investment marks a further step in its expansion into the consumer motor insurance segment, where the company already has a presence in the UK.

Established in the UK in 2016, Zego grew by providing “flexible” motor insurance, with premiums linked to driving time and behaviour, Sompo said.

Its initial focus was on gig economy drivers including those working in food delivery and ride-hailing.

The business has since moved into the personal motor insurance market.

Sompo direct insurance business senior vice-president Katsuhito Nakagawa said: “By partnering with Zego, we are combining our local expertise and established proposition with world-class technology to push the boundaries of what telematics insurance can offer.

“We look forward to building on our shared foundations and delivering the next generation of motor insurance to Japanese drivers.”

Zego CEO Sten Saar said: “We couldn’t ask for a better partner than Sompo to test and develop our telematics proposition in Japan. Sompo Group’s experience and commitment to telematics aligns perfectly with our own, and this partnership is a strong validation of the technology and customer proposition we have built.”

Among its products is the Zego Sense app, which uses smartphone sensors to assess driving behaviour without requiring a separate in-car device.

The company also uses features such as game-style functions and a points system aimed at encouraging safer driving and maintaining customer engagement.

Zego has also developed a risk model based on more than 50 data points to support the assessment and management of accident risk, noted Sompo.