Chapter 4
"Sony Needs a Financial Business"
Part 1 Chicago Dreams of a Financial Business
Visiting Chicago in the late 1950s to expand sales for Sony's transistor radios, Morita was shocked when he saw the massive office building of the then-largest life insurance company in the United States, The Prudential Insurance Company of America. "How could a life insurance company need such a giant building?" he wondered. Morita finally arrived at a single conclusion: the building was the store of Prudential's product - in other words, money.
At the same time, a dream began to arise within Morita's mind, which was far too grand and audacious for even Sony at the time, given the relatively small group of companies that it was back then. "Having a financial business within Sony Group would be crucial for stabilizing and building trust in our business, enabling us to evolve into a new business group in the future. If we could achieve this, perhaps we too could build a building that tall someday," he thought.
The path for this dream to come to fruition would only begin many years down the road, in the spring of 1975. The owner of that same office building in Chicago that Morita had gazed so wondrously at in the 50s - Prudential Chairman Donald MacNaughton - was to pay Morita a visit. Prudential was one of Sony's major shareholders and the two businessmen were longtime acquaintances by then, going so far as to call each other by their nicknames. When Morita brought up the proposition of starting a life insurance business in Japan, Chairman MacNaughton was quick to take him up on the offer, launching a new business collaboration between these two companies from utterly different industries.
Despite being unfamiliar with the field of life insurance, Morita had faith in Sony. "We talk about life insurance in terms of products that people purchase, whether it be in English or Japanese. As long as we're developing a new product and sending it out to market, then the fundamentals are the same as with electronics. We'll develop a product and market it our way," he thought.
Under Morita's supervision, future Sony Life executives Tamotsu Iba and Kunitake Ando would begin studying the life insurance industry and surveying the Japanese market. Upon adding more members to the team, including head of the International Division Tetsuro Yotsumoto, the group soon began preparations for the new company as the "International Capital Acquisition Team." The process to officially launch the joint venture together with Prudential began the next year, in 1976.
Part 2 Overcoming the "Convoy System"
From left, Morita and Prudential Chairman Beck on a Visit to Japan (1981)
There were two main issues on the project team's plate: acquiring the necessary permissions from the Ministry of Finance and determining the new company's management philosophy. Since several similar approvals had been issued by the Ministry of Finance at this point, Morita and the other team members initially considered this to be a fairly simple assignment. In the end, however, it took three years for the new Sony Prudential Life Insurance Co. to be established on paper alone;
it took an additional two years for the business to finally receive the necessary licenses to begin operations fully. Making a dream come true never ends up being easy, it seems.
A major cause of these difficulties stemmed from protective policies enacted by the Ministry of Finance at the time, referred to as the "convoy system," which promoted the coexistence of large corporations and smaller companies in the finance sector by curbing excessive competition. The American insurance market, in stark contrast, was an open battlefield characterized by fierce competition - and when Prudential, one of that battlefield's titans, decided to enter the Japanese market, people could not help but be wary of the move.
Sony and Prudential's joint venture primarily aimed to create a professional life planning service which provided an "order-made life insurance" plan adaptable to each customer's needs - a system that was entirely new to Japan. This was inevitably interpreted, however, as direct competition to the traditional forms of life insurance that were already common in Japan. To dispel these concerns, Morita and the project team members made countless visits to the Ministry of Finance, arguing that their new business venture was meant to create new markets instead of competing in old ones.
Finally in February 1981, five long years after the project was first conceived, the Ministry of Finance at last gave their approval. Amidst the project team's delight, Morita remained vigilant: "An insurance company is certainly a very stable financial business once it's established its customer base, but the road to that point is long and hard. It could take up to twenty years to get to the point I first envisioned for this business, but I believe that we'll be able to look back one day and agree that doing this was the right decision," he stated.
Part 3 The Rise of the Life Planner and the Creation of Sony Life
Advertisement for Sony Prudential Life Insurance Co. Beginning Operations (1981)
Sony City, Headquarters for the Sony Group
"Life insurance changes today. Let the Life Planner do the changing." Readers opened their newspapers to see these words on April 1st, 1981, as Sony Prudential Life Insurance Co. opened its doors. With a starting capital of three billion yen, Chairman Morita, President Tatsuaki Hirai, and Executive Director Kunitake Ando celebrated the company's founding with only approximately ninety employees split across the company's headquarters and four locations established across the Tokyo urban area. Inheriting Prudential's business philosophy of providing need-based-services in addition to their sales model and expertise, the new company added Sony's own ideas and ways of doing business to the mix, creating a hitherto unique business which diverted from mainstream Japanese life insurance businesses.
To be able to provide order-made insurance, the company would first need to train a cadre of salespeople with extensive financial knowledge who could sell both high-quality and cost-effective insurance which met the needs of their customers. With an aging population already in view on the horizon, these employees would need to analyze the needs of their customers, taking into account various aspects of their life in order to draw out an appropriate insurance plan for them - leading to them being named Life Planners.
Twenty-seven people with sales experience in other fields formed the first generation of Life Planners for the company, operating under a fully commission-based remuneration system. These Life Planners formed the backbone of Sony Prudential's growth by truly embodying the spirit of the entrepreneur, taking to their work with more fervor than salespeople at other companies in the industry.
The company was renamed Sony Pruco Life Insurance in September 1987, due to Prudential's desire to fully acquire the company as a Japanese subsidiary. After Prudential made an offer to buy up the company's remaining shares, Morita began fierce negotiations with both Prudential and the Ministry of Finance. It was ultimately decided that Sony, along with its subsidiaries and financing bank, would purchase seventy percent of the company's shares. Prudential meanwhile would hold the remaining thirty percent, agreeing to no longer involve itself with the company's management thereafter. The new Sony Pruco Life Insurance thus functionally became Sony's wholly owned subsidiary, taking Sony one step closer to Morita's thirty-year-old dream of having a financial institution in the group.
Before long, the company entered the 1991 fiscal year. Boasting two trillion yen in sales from insurance contracts alone and with ninety billion yen of capital, it was in this momentous year that the Pruco name was formally retired, resulting in the company's new and current name, Sony Life. Two years later, in March 1993, the company finally achieved its first profitable full year of business in the company's thirteenth year of operations. The company had beaten Morita's expected twenty-year deadline by quite a margin, and from then on would continue acting as Sony's financial backbone into the future. After the 2008 global financial crisis, it would be Sony Life that came to Sony Group's rescue during the most uncertain times in the Group's history.
At the opening ceremony for Sony Prudential all those years ago, Morita had made a speech to the company's employees, saying, "Japan has countless insurance companies that have lasted the test of time for decades. If we do things the way they do - if we let their companies define what an insurance company can be - then we have no hope of success. My earnest wish is to create a new, never-before-seen type of insurance company for Japan, together with all of you."
Embodying the Sony spirit of doing what others would not, Sony Life's continuing success would lead to the construction of the Sony City building in 2006, eventually becoming the headquarters building for the entire Sony Group. After fifty long years since that trip to Chicago, Morita's dream of "building a building that tall" finally came true.
Now, in 2026, Sony Life continues to serve as a crucial and central pillar to Sony's financial business segment.