Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Merger or Acquisition (August 2020)
16 slides from Sampo Oyj's merger presentation, Aug 5, 2020
Slide 1: Acquisition of Hastings
Acquisition of Hastings 5 August 2020
Slide 2: Disclaimer
Disclaimer This presentation and its contents are not for release, publication or distribution, in whole or in part, directly or indirectly, in or into or from any jurisdiction where to do so would constitute a violation of the relevant laws of that jurisdiction. The offer will be made in compliance
Slide 3: Majority acquisition of Hastings Group Holdings Plc
Majority acquisition of Hastings Group Holdings Plc (“Hastings”) • Hastings is a retail P&C insurance provider in the UK with a focus on motor and home insurance • Sampo plc (“Sampo”) partnering with Rand Merchant Investment Holdings Ltd (“RMI”), the largest shareholder in Hastings • Sampo and RMI t
Slide 4: Rationale and financial impact on Sampo
Rationale and financial impact on Sampo Strategic rationale Financial impact Further repositioning of the Sampo Group towards • Transaction benefits include: retail P&C insurance, a core area of expertise • Increased insurance risk retention expected to generate an attractive return on capital deplo
Slide 5: Attractive opportunity to expand retail P&C footprint
Attractive opportunity to expand retail P&C footprint • Strategic objective to expand in retail P&C • Inorganic growth in Nordic region constrained by leading market positions and scarcity of targets Why UK? Why Hastings? One of the largest P&C markets in Europe Pure play retail P&C insurer, pos
Slide 6: Hastings adds a growth platform in one of Europe's largest P&C markets
Hastings adds a growth platform in one of Europe’s largest P&C markets #2 in Norway Q3/2019 #1 in Nordics 2018 21% 21% Market size €5.3bn Market size €23.2bn #2 in Sweden Q3/2019 #3 in Finland 2018 18% 22% Finland Norway Market size €5.9bn Sweden Market size €3.9bn Estonia #6 in UK motor 2018³ #4 in
Slide 7: Hastings is an agile, data and digitally focused retail P&C insurer
Hastings is an agile, data and digitally focused retail P&C insurer Business description GWP product split Net revenue breakdown 2% 1% 1% Net earned Car • Offers car, bike, van and home insurance products Bike 38% premiums Reinsurance Van commission 2019 2019 Home Investment income • Optimised for d
Slide 8: Hastings historical performance and share price development
Hastings historical performance and share price development Share price performance since Hastings’ IPO¹ compared to UK motor peer index² (rebased to Hastings IPO price) 3.50 Hastings UK motor peer index 3.00 RMI acquired its Hastings stake in 2017 for 248p per share 2.50 IPO price 2.00 13.0% 1.70 0
Slide 9: Hastings brings leading digital capabilities to the Sampo Group
Hastings brings leading digital capabilities to the Sampo Group The UK is a highly digitally focused insurance market Hastings continues to expand market share through (% of PCW1 motor insurance market penetration) digital distribution (Hastings market share2) 75% 7.7% 66% 56% 5.8% 3.6% 24% 2007 201
Slide 10: Sampo brings excellence in retail P&C underwriting
Sampo brings excellence in retail P&C underwriting Strong customer orientation If retention rate >90% Personal risk 15% GWP (Business Motor Diverse product range area Private) Property 30% 55% 92.8% 93.3% Superior underwriting track If combined ratio 84.5% Topdanmark combined 83.7% record developmen
Slide 11: Sampo will leverage its expertise to drive further upside in Hastings
Sampo will leverage its expertise to drive further upside in Hastings Selected UK and Nordic P&C players (2019) Select areas of upside potential combined ratios • Claims handling sophistication driving both lower 100% 98.0% 94.8% claims costs and increased customer satisfaction 90% 15.4% 84.5% 83.7%
Slide 12: A strategic transaction with attractive financial upside
A strategic transaction with attractive financial upside Sharing of best practices Value to Sampo Financial value levers • Transferable Operational digital pricing and value levers Bid premium sales capabilities Standalone value • Lower funding and upside reinsurance costs • Accelerated growth • Inc
Slide 13: Appendix
SAMPO = GROUP Appendix 5 August 2020 12
Slide 14: Overview of partnership with RMI
Overview of partnership with RMI Partnership highlights RMI Group structure • Comprehensive and long term partnership built on shared • RMI is a South African based investment holding company that vision for the strategic direction of Hastings invests in emerging and established financial services •
Slide 15: Transaction and funding structure
Transaction and funding structure Transaction structure Transaction funding (€bn) 1.8 Rand Merchant Investment Sampo plc Holdings Ltd 0.5 1.3 70% 30% T2 bond 1.0 Dorset Bidco Limited 1.3 issuance 100% Balance Hastings Group Holdings 0.3 Sheet cash Plc Implied transaction RMI consideration1 Sampo cas
Slide 16: UK market overview
UK market overview Hastings operates in a large market¹… …with favourable dynamics, creating opportunities for focused, nimble players • Consumer switching focus Total size of market 32m3 21m4 • Ongoing price comparison websites growth Current market price • Technological change, including digital p