Sompo Holdings, a Japanese insurance and financial services conglomerate, and car insurtech Zego formed a strategic partnership to develop telematics-based insurance products in Japan.
The announcement coincides with a $28 mn funding round, where Sompo invested alongside Zego’s existing backers, reinforcing confidence in its AI-led platform.
Zego is a UK-based digital-first motor insurance company focused on flexible, usage-based and telematics-driven cover for personal and commercial drivers. It serves private car drivers, delivery couriers and gig-economy workers, using app-based technology to price policies based on real driving behavior rather than just demographics.
The collaboration combines Sompo’s local market knowledge and insurance expertise with Zego’s data-driven technology stack.
Both companies plan to advance usage-based insurance models built on telematics and AI, targeting more precise pricing and improved risk management.
The initiative focuses on data-led insurance models that adjust premiums based on driving behaviour. According to Beinsure analysts, insurers continue shifting toward usage-based structures as telematics adoption increases and pricing accuracy improves across motor portfolios.
Katsuhito Nakagawa said the partnership supports Sompo’s goal of improving customer outcomes and road safety in Japan. He noted that combining local expertise with advanced technology allows both firms to expand what telematics insurance offers to drivers.
Sompo Group has long been committed to serving our customers better and improving road safety in Japan. 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.
Katsuhito Nakagawa, Senior Vice President, Direct Insurance Business at Sompo Holdings
“We look forward to building on our shared foundations and delivering the next generation of motor insurance to Japanese drivers.”
Zego emerged as an insurtech targeting professional drivers in the on-demand economy who needed insurance that matched irregular working patterns. Its products include pay-as-you-go, short-term, and annual policies that can be activated only while working, helping drivers avoid paying for cover they don’t use.
Over time, Zego expanded beyond gig-economy delivery to broader commercial motor and personal car insurance, while maintaining a digital, mobile-first experience for quoting, purchasing and managing policies.
Sten Saar said Sompo provides a strong platform to test and scale Zego’s telematics proposition in a new market. He added that the partnership validates the company’s technology and customer-focused model built around data and behavioural insights.
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.
Sten Saar, CEO of Zego
Telematics insurance links pricing directly to driving performance, rewarding safer behaviour with lower premiums. This approach aims to improve road safety while offering more personalised pricing structures for policyholders.
Zego has already introduced similar models in the UK, including its rewards-based programme that offers benefits to safe drivers throughout their policy period.
A key differentiator is Zego’s telematics platform, branded Sense. Instead of installing a physical black box, drivers use a smartphone app whose sensors monitor factors like speed, braking, acceleration, cornering and rest.
This data generates a driver score that influences renewal pricing, rewarding safer driving with lower premiums.
Zego positions this as a more transparent, convenient alternative to traditional black box insurance, particularly attractive to new drivers facing high premiums. The app also offers feedback and insights designed to help drivers improve their habits over time.
The company continues expanding into consumer motor insurance, using telematics data to refine underwriting and pricing decisions.
The partnership with Sompo provides access to the Japanese market, where both companies plan to adapt the model to local driving conditions and regulatory requirements.
This expansion supports Zego’s broader strategy to scale technology-enabled motor insurance beyond its home market while strengthening Sompo’s digital capabilities in usage-based insurance.
Zego is taking a swing at traditional telematics. Instead of relying on black box devices fitted to cars, the company has rolled out an app-based system that uses smartphone sensors to track driving behaviour in real time.
For years, black box cover has been a route for younger and high-risk drivers to access fairer pricing.
But it came with drawbacks: installation costs, hardware hassles, and limited visibility into how data shaped premiums. Zego argues its new model strips away that complexity while giving drivers more control over the process.
The app records speed, braking, and cornering directly through the phone’s sensors. Each journey feeds into a driver profile, creating a data trail that reflects actual behaviour behind the wheel.
