Secom and the Business of Safety

TYO:9735

In 1962, Japan had no private security industry. There was no word for it in everyday speech, no regulation, and no customers who thought they needed one. Secom created all three. Sixty years later the company earns roughly ¥1.2 trillion a year, monitors about 2.75 million homes and businesses in Japan, and is quietly turning the skills it built for burglar alarms into services for the country’s fastest-growing customer group: people living alone in old age.

A business idea heard over dinner

The origin story is told inside the company almost like a parable. In the winter of 1961, two young men in their late twenties, Makoto Iida and Juichi Toda, were having dinner with a friend just back from Europe. The friend mentioned that companies there sold security as a service. Japan at the time relied on neighbours, night watchmen employed directly by each building, and the police. Iida and Toda decided on the spot that this was the business they had been looking for.

On 7 July 1962 they founded Nihon Keibi Hosho (Japan Security Patrol), the country’s first security services company. Early customers were hard to find: selling protection meant first convincing owners that paying an outside firm to guard their premises was normal. Two events changed that. In 1964 the company won the contract to guard the athletes’ village at the Tokyo Olympics, which gave it national credibility. The following year, a hit TV drama modelled on the company’s guards, The Guardman, made “security company” a household concept.

The pivot from guards to machines

Iida’s most important decision came only four years after founding. Human guards were expensive, hard to recruit and difficult to supervise at night. In 1966 the company launched SP Alarm, Japan’s first online security system: sensors installed at a customer’s site detected an intrusion, sent a signal down a dedicated line to a central monitoring station, and a response crew was dispatched.

That architecture — sensors on site, a central control room, and trained responders on the road — is still the core of Secom’s business. It turned security from a labour service into a subscription. Each installed system generates monthly fees for years, and every new customer makes the dispatch network denser and cheaper to run. The brand name SECOM (from “security communication”) appeared in 1973, the company listed on the Tokyo Stock Exchange in 1974, and it adopted the Secom name formally in 1983.

Key milestones

The numbers today

For the fiscal year ended March 2025, Secom reported consolidated net sales of ¥1,199.9 billion (up 3.9%), operating profit of ¥144.2 billion and net profit attributable to shareholders of ¥108.1 billion. It forecast sales of about ¥1.25 trillion for the following year.

Security services remain the engine, producing about ¥633 billion, or a little over half of group revenue. As of March 2025 the company had roughly 2.75 million domestic subscribers: about 1.12 million commercial accounts and 1.62 million residential ones. Industry estimates put its share of Japan’s security market at around 30%, well ahead of its nearest rival, ALSOK (Sohgo Security Services).

More than alarms

Over the decades Iida pushed the company into adjacent businesses that share the same customer relationship or the same infrastructure. The group today spans:

• Fire protection — through listed subsidiaries Nohmi Bosai and Nittan, making Secom a major player in fire detection and suppression systems
• Medical services — home nursing, pharmacies, hospital support and elderly care facilities
• Insurance — Secom General Insurance, built on a non-life insurer acquired in 1998, which prices policies using the risk data from installed systems
• Geospatial information — aerial surveying and mapping through Pasco
• BPO and ICT — data centres (AT TOKYO), cybersecurity and back-office services

The company brands this collection as “social system industry”: a set of services that keep daily life running safely. The logic is that a firm already trusted with the keys to a customer’s building is well placed to sell fire safety, insurance and care to the same customer.

Selling safety to an ageing country

Japan’s demographics are the most important reason Secom matters beyond its home market. More than 29% of the population is aged 65 or over, and the number of elderly people living alone keeps rising. For a security company, this changes what “protection” means. The biggest risk in many households is no longer a burglar but a fall, a stroke, or a week of nobody noticing that something is wrong.

Secom’s response reuses its monitoring backbone. Emergency pendants and wearable devices connect elderly users to the same control centres that watch for intrusions, and responders can be sent to a home within minutes. Families living far away can subscribe to watch-over services for a parent. Combined with the group’s home nursing and pharmacy businesses, Secom can move from “someone is at the door” to “someone needs medical help” inside one company.

Labour shortages push in the same direction. Guard jobs are among the hardest in Japan to fill, so Secom is investing in drones, AI-assisted camera monitoring, a “virtual guard” system that uses on-screen AI characters at reception desks, and the cocobo patrol robot, which in 2025 became certified to operate on public roads. Each of these replaces hours of human patrol with remote supervision.

Overseas footprint

Secom began expanding abroad early, starting in Taiwan and South Korea, where its affiliates grew into market leaders. It now operates in a range of Asian markets as well as the UK and Australia. Overseas operations remain a small share of group revenue, but they give Secom a template it can reuse wherever cities densify and populations age — which describes much of East and Southeast Asia over the next two decades.

What it means for overseas partners

• Investors — Secom (TYO: 9735) is a recurring-revenue business with a very large installed base, steady margins and a net cash balance sheet. Growth is modest, but the subscription model makes earnings unusually predictable for a Japanese services company.
• Technology suppliers — sensors, computer vision, robotics and health-monitoring devices can reach millions of Japanese homes and businesses through one partner that already owns the monitoring centres and the response teams.
• Care and insurance players — Secom’s combination of monitoring, nursing and insurance under one roof is a working model of how “ageing-in-place” services can be packaged and priced.

Conclusion

Secom did not win a market; it invented one, and then kept redefining it. The move from human guards to online alarms in 1966 set the pattern: take a labour-heavy service, put sensors and a control centre in the middle, and charge a monthly fee. Six decades later the same pattern is being applied to Japan’s biggest social problem. If the company can make watching over elderly people as routine as watching over shop doors, its next sixty years may look a lot like its first.