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Corporate Governance Framework


Sompo Singapore has common philosophy with its ultimate parent company, Sompo Holdings, Inc.

The Company will at all times carefully consider the interests of its customers when making decisions that shape its business. Sompo Singapore will strive to contribute to the security, health, and wellbeing of its customers and society as a whole by providing insurance and related services of the highest quality possible.


The Company is 100% owned indirect subsidiary of Sompo Japan of which head office is in Tokyo, Japan, and the ultimate parent company is Sompo Holdings, Inc. which is listed in Tokyo Stock Exchange.

Governance Framework in the Group

As a member of the Sompo Group, the Company shares the common Group’s philosophy, action guidelines and vision. The Sompo Group’s Basic Policy on the Business Management of Group Companies applies to the Company. In accordance with the policy, Sompo Japan and the Company have Memorandum of Understanding on Business Management which specifies required approvals and reporting, and requirements in shareholders meeting, board of directors meeting, election of directors and performance monitoring.

Board of Directors

The Company’s Board of Directors (BOD) exercises control and management over the Company, and comprises of 5 members. The Chairman is President / Managing Director of the direct wholly owned parent company, Sompo Holdings (Asia) Pte. Ltd. The BOD comprises of two independent directors under the Monetary Authority of Singapore’s Insurance (Corporate Governance) Regulations 2013, the Chairman and two executive directors including the Company’s CEO and Managing Director (MD).

The BOD meetings are held every quarter.

Board of Management

The Board of Management (BOM) shall discuss the issues that are important for the operation of the Company with authority delegated from the Board of Directors. The BOM comprises of CEO, MD and Heads of Division and is chaired by the CEO. There are limits in CEO’s authority and the BOM has the authority to approve issues that exceed CEO’s authority limit. Such cases will be subsequently reported to the BOD.

The BOM meetings are held monthly.

Audit Committee

In cooperation with the BOD, the BOM and internal/external auditors, the Audit Committee oversees financial reporting process, system of internal control, management of financial risks and audit process. The committee comprises of non-executive directors and is chaired by Mr Tan Chuan Lye, one of the independent directors.

The committee meetings are held at least twice a year. The meeting is held with invitation extended to executive directors, internal and external auditors, and certifying actuary.

Investment Committee

In accordance with Investment Policy approved by the BOD, the committee is established to monitor investment activities and make investment decisions. The members include CEO, MD, Chief Financial Officer (CFO) and an investment manager from Head Office. The chairperson is the MD.

The committee meetings are held quarterly, and take place concurrently or jointly with the BOD meetings.

Risk Management Committee

In accordance with its charter approved by the BOD, the committee’s role is to discuss risk management strategy of the Company and monitor its risk profile. The members include the independent directors, CEO, MD, Chief Underwriting Officer and CFO.

The committee meetings are held quarterly, and take place concurrently or jointly with the BOD meetings.

Compliance Committee

In accordance with its charter approved by the BOD, the committee is established to oversee the Company’s compliance with the laws, regulations, and the Company’s policies and rules. The committee includes the independent directors and is chaired by head of Corporate Planning division.

The committee meetings are held quarterly, and take place concurrently or jointly with the BOD meetings.

Internal Audit

The company conducts internal audit to validate the appropriateness and effectiveness of the Company’s business activities and to determine if the company complies with the laws, regulations and policies. In order to adapt to the best practice in the market and to ensure continuity, the Company engages KPMG as its internal auditor. Internal audit plans are reviewed and approved by the Audit Committee and internal audit reports are also reviewed by the committee. The internal auditor reports to the Chairman of the Audit Committee.


In order to provide avenues for all individuals to disclose a wrongdoing that may adversely impact the Company and its stakeholders, the Company has a Whistleblowing policy and framework for employees to raise concerns in an effective manner. The Company also provides an e-mail address on its website for external parties to inform the Company of its wrongdoing.

Enterprise Risk Management

Sompo Singapore’s risk management strategy is to identify, assess, control and manage all reasonably foreseeable and relevant material risk within a comprehensive enterprise risk management framework. Established by the Company’s Risk Management Committee, this framework specifies the practices and processes to ensure the Company’s financial and non-financial risks are properly managed and its business is soundly run.

Under the Company’s enterprise risk management framework, the most central risks to its business are summarized as follows:

1. Insurance Risk

The Company’s main insurance risk is derived from writing a book of general insurances comprising Property, Marine Cargo, Motor, Workmen’s Compensation and General Accident.

The insurance risk is managed through a comprehensive risk management policy where key performance and risk indicators are clearly defined and monitored. The underwriting guidelines set out the Company's underwriting strategy, direction and risk appetite by product lines.

The Company relies on its reinsurance arrangements to protect its liquidity and solvency when large losses arise. The risk of reinsurance failure is mitigated by a strict reinsurance management policy governed by two key criteria, namely reinsurance usage selection and reinsurance usage concentration. The Company monitors these indicators actively and takes corrective action whenever the need arises.

2. Financial Risk

The Company is exposed to financial risk arising from its operations and the use of financial instruments. Its key financial risk is failure to provide sufficient funding for the company’s obligations arising from its insurance contracts through the proceeds of its financial assets.

The Company’s key financial risks include:

A. Credit Risk

Credit risk is risk of loss that arises when an obligor fails to perform its obligations under a contract or when its ability to perform such obligations is impaired.

The Company’s significant credit risk exposure is managed as follows:


Reinsurance is placed with highly rated reinsurers and concentration of risk is monitored periodically. The Company reviews the creditworthiness of reinsurers before renewing the reinsurance arrangements annually as well as monthly, in accordance to the prevailing reinsurance strategy and guidelines.

Investment securities

The Company limits its exposure by setting maximum limits of portfolio securities with a single or group of issuers. The Company also mitigates its risk through use of institutions with high creditworthiness.


The Company does not enter into derivative contracts.

Insurance receivables

The credit risk in respect of the customer balances incurred on the non-payment of premiums or contributions will only persist during the grace period specified in the policy document. To reduce the risk of doubtful debts, commission paid to intermediaries is netted off against amounts receivable from them.

B. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet cash commitments associated with financial instruments. Liquidity risk may result from either the inability to sell financial assets quickly at their fair values or counterparty failing on repayment of a contractual obligation or insurance liability falling due for payment earlier than expected or inability to generate cash inflows as anticipated.

The Company is exposed to daily cash calls on its available cash resources mainly from claims arising from short term insurance contracts. Liquidity risk is the risk that cash may not be available to pay obligations when due at a reasonable cost.

The Company sets limits on the minimum proportion of maturing funds available to meet such calls that should be in place to cover these claims.

C. Currency Risk

Currency risk is the risk of loss resulting from changes in foreign currency exchange rates. Fluctuations in exchange rates between the Singapore dollar and the other currencies in which the Company conducts business may affect its financial condition and results of operations. The Company seeks to limit its exposure to foreign currency risk by minimizing its net foreign currency position.

D. Interest Rate Risk

Interest rate risk is the risk that the value/future cash flows of a financial instrument will fluctuate because of the changes in interest rate.

The Company's exposure to market risk for changes in interest rates arises from surplus funds that are placed with reputable banks and/or invested in bonds and government securities. The exposure to interest rate risk is closely monitored to maximize the returns on these surplus funds.