Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Investor Day (May 2013)
65 slides from Sampo Oyj's investor day presentation, May 30, 2013
Slide 1: CMD Agenda, 30 May 2013
CMD Agenda, 30 May 2013 12.30 - 12.45 Welcome - Kari Stadigh, Group CEO and President, Sampo Group 12.45 - 13.15 Torbjörn Magnusson, Head of P&C Insurance, Sampo Group 13.15 - 13.45 Christian Sagild, CEO of Topdanmark 13.45 - 14.15 Break 14.15 - 14.45 Torsten Hagen Jørgensen, Group CFO of Nordea Ban
Slide 2: Welcome – Sampo Group, Capital Market Day 2013
Welcome Sampo Group, Capital Market Day 2013 Kari Stadigh, Group CEO and President
Slide 3: Internal dividends 2008–2012
Internal dividends 2008–2012 EURm 900 800 744 756 768 Dividend payout ratio 700 100 224 for 2008–2012 (average): 568 204 600 511 80 250 500 P&C insurance: 83.2% 400 200 Nordea: 40.6% 300 544 130 488 540 200 406 Life insurance: 56.8% 100 181 0 2008 2009 2010 2011 2012 P&C insurance (total 2,159) Nord
Slide 4: Welcome – Sampo Group, Capital Market Day 2013
Welcome Sampo Group, Capital Market Day 2013 Kari Stadigh, Group CEO and President
Slide 5: If P&C
If P&C Sampo Capital Market Day May 30, 2013 TORBJÖRN MAGNUSSON, CEO
Slide 6: If at a glance
If at a glance The leading Nordic P&C insurer • GWP EUR 4.7bn • Nordic market share of 19%* • Solvency of 77% and S&P A rating • 6,225 employees Industrial; Baltic; 2% 14% Commercial; 29% Private; 55% * Including share of associated companies 2
Slide 7: Performance over time
Performance over time Combined ratio (%) ROE (%) and ROI (%) 53,2% 12,4% 39,8% 39,7% 36,9% 7,4% 6,1% 92,8% 92,0% 90,6% 91,8% 92,1% 88,9% 88,7% 19,2% 12,4% 2,6% 1,8% 1,4% -0,8% 2007 2008 2009 2010 2011 2012 2013 2007 2008 2009 2010 2011 2012 2013 -3,1% Q1 Q1 (R12) Average ROE 2007-2012 of 25.1% Avera
Slide 8: Performance update – Q1 2013
Performance update – Q1 2013 (EURm) Q1 - 13 Q1 - 12 Change (%) GWP 1,775 1,701 4.4% Technical result 122 120 1.7% Investment result 102 113 -9.7% Operating result 204 198 3.0% Result for the period 161 155 3.9% Risk ratio 67.7% 69.0% -1.3%-p Cost ratio 23.2% 22.7% 0.5%-p Combined ratio 90.9% 91.7% -
Slide 9: Results by Business Area - Q1 2013
Results by Business Area - Q1 2013 Combined ratio and GWP growth Private Commercial 4,1% 94,8% 91,5% 90,6% 92,0% 88,1% 89,0% 3,2% 4,1% 3,3% 2,6% 2,7% Q1-12 2012 Q1-13 Q1-12 2012 Q1-13 Industrial Baltic 1,3% 5,7% 95,8% 94,6% 92,5% 92,0% 89,0% 87,1% 3,7% 0,8% 0,6% Q1-12 2012 Q1-13 Q1-12 2012 Q1-13 -3,
Slide 10: Nordic P&C – market size of EUR 24bn
Nordic P&C – market size of EUR 24bn Nordic market shares (%) If ; 18% Other; 35% Tryg; 11% Topdanmark; 5% RSA Scandinavia; 9% Pohjola; 4% LF; 9% Gjensidige; 9% Note: If market share including holding in Topdanmark 19% 6
Slide 11: Nordic market mix
Nordic market mix GWP 2012 (EURbn) If market share 25% 26% Sweden 7,7 19% Nordic 19% Denmark* 6,7 10% Norway 6,5 Sweden Norway Denmark* Finland Finland 3,9 Note: Including holding in Topdanmark *2011 figures 7
Slide 12: Market profitability
Market profitability Combined ratio (%) Share of total market 98,8 96,6 97,1 95,3 94,2 92,8 93,3 92,3 90,9 90,3 88,9 88,2 88,0 86,6 85,4 85,3 56% If Tryg Topdanmark RSA Gjensidige Pohjola Scandinavia Share of total market 102,0 102,0 100,0 99,0 99,0 96,5 97,0 18% LähiTapiola Länsförsäkringar Folksam
Slide 13: Market development Sweden
Market development Sweden Developments Market share (%) • 5th biggest company (Tryg) only 3% market share 19% 21% 20% 14% 15% 15% • New bancassurance agreement 2013 – Nordea/If 17% 16% 16% • Volkswagen/Audi-If agreement 31% 29% 30% renewed 2013 19% 19% 19% • Price increases in excess of inflation in
Slide 14: Market development Norway
Market development Norway Developments Market share (%) • Growing economy and 17% 20% insurance market 25% 10% 10% 10% • Several new entrants 2008- 18% 17% 2010, stable market since 2011 15% 29% 28% • Period of high inflation, since 25% 2012 replaced by period of low claims frequency 28% 25% 25% • N
Slide 15: Market development Finland
Market development Finland Developments Market share (%) • Acquisition of Tryg branch 9% 9% 8% 11% 10% 10% • New bancassurance agreement 2013 – Nordea/If 27% 28% 27% • Further consolidation – 28% 28% 29% LähiTapiola • No significant new entrants 26% 25% 26% • No aggregators, however 2008 2010 2012 i
Slide 16: UW focus
UW focus Relax, we'll help you. @ 12
Slide 17: UW focus in practice
UW focus in practice • UW policy with very clear and enforced limitations • UW committee with real power as an active challenger • Models cannot replace experience and risk aversion in top management • Gross underwriting principle • Explicit accountability for each underwriting decision • Willingnes
Slide 18: Pricing: Unrivalled pricing skills
Pricing: Unrivalled pricing skills Example of price build-up and pricing criteria Car Objective criteria Make Objective criteria Customer product choices Age Young driver Deductible Customer behavior Customer product choice Claims Price Customer behavior Correct customer pricing strongly supports sa
Slide 19: Performance & underwriting culture
Performance & underwriting culture Incentivised organisation Skills in focus • Incentive systems including all employees linked to performance • Accountability of results • Continuity in management Annual If Pen Award 15
Slide 20: Strong pricing and underwriting control
Strong pricing and underwriting control Implementation of low interest rate environment Financial discipline 4,1% 3,8% 93% 92% 92% 3,0% 92% 3,3% 2,9% 2,8% 2,4% 89% 2,0%89% 2,4% 2,4% 1,9% 1,2% 2008 2009 2010 2011 2012 R12 2008 2009 2010 2011 2012 2013 Q1 2013 Q1 CR Technical interest Prior year gains
Slide 21: Average Combined Ratio & Standard Deviation
Average Combined Ratio & Standard Deviation 2007-E2014 7 Sub-group 2 Sub-group 3 6 Munich Re 5 Standard deviation, % Swiss Re Gjensidige 4 Tryg SCOR Topdanmark Hannover Re 3 AVERAGE Aviva 2 Zig Allianz AXA 1 Sampo Generali Sub-group 1 Sub-group 4 0 90 91 92 93 94 95 96 97 98 99 100 Combined ratio, %
Slide 22: Creating shareholder value
Creating shareholder value • Stable return through underwriting excellence and scale advantage • Financial discipline • Management commitment to continuous improvement 18
Slide 23: Relax, we'll help you.
Relax, we'll help you.
Slide 24: Sampo CMD 2013 – Presentation of Topdanmark
SAMPO CMD 2013 PRESENTATION OF TOPDANMARK BY CHRISTIAN SAGILD, CEO 30 MAY 2013 1 1
Slide 25: Agenda
Agenda • The Danish non-life market • Profitable growth – in that order • How to grow profitably • Highlights in Q1 2013 • Share buy-back 2 2
Slide 26: The Danish non-life market
The Danish non-life market • All of the 6 largest players representing a market share of 73% are quoted on the stock exchange • Efficient players • Operating with an expense ratio of ~ 17% • Expense ratio for EU peers around 25-30% • Low interest rates increase focus on technical result • Provisions
Slide 27: Entry barriers
Entry barriers • Disciplined market – efficient players • Already direct market • Low expense ratio • Relatively small market • Micro rating • Takes time to build a profitable portfolio The best way to penetrate the Danish market is to make an acquisition 4 4
Slide 28: Entry barriers
Entry barriers Example based on experience from Topdanmark: - Premium volume DKK 1,000m – portfolio in personal market - CR = 90 or a profit of DKK 100m - Expense ratio 18%, of which 10% new business Premium profile (%) Combined ratio 16 200 14 12 150 10 8 100 6 4 50 2 0 0 0 2 4 6 8 10 12 14 16 18 2
Slide 29: Entry barriers
Entry barriers Example based on experience from Topdanmark: - Premium volume DKK 1,000m – portfolio in personal market - CR = 90 or a profit of DKK 100m - Expense ratio 18%, of which 10% new business Accumulated profit shows result of new business after x years Profit (DKKm) kr. Accumulated profit (
Slide 30: Agenda
Agenda • The Danish non-life market • Profitable growth – in that order • How to grow profitably • Highlights in Q1 2013 • Share buy-back 7 7
Slide 31: Profitable growth – in that order
Profitable growth – in that order • In non-life nothing is easier than top line growth • What is difficult is growing without diluting CR • Topdanmark is primarily exposed to personal, agricultural and SME segments • Segments with high claims frequency and low average claims • Relatively low volatil
Slide 32: Agenda
Agenda • The Danish non-life market • Profitable growth – in that order • How to grow profitably • Highlights in Q1 2013 • Share buy-back 9 9
Slide 33: Our criteria of success
Our criteria of success Distribution power Customer satisfaction Pricing Efficiency 10 10
Slide 34: Risk-based prices
Risk-based prices Micro rating – How it works! Risk premium Basis for pricing 0 0 A B C D E F G H A B C D E F G H Company without price differentiation Company with price differentiation 11 11
Slide 35: Micro rating
MICRO RATING How it works! 180 Premium increase 180 Lower turnover 160 160 140 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 A B B E E F G H A C C D D F G H Company without segmentation Company with segmentation 12 12
Slide 36: Distribution power
Distribution power Strong distribution power in mass market • Topdanmark has a multi-distribution strategy • Improved distribution agreement with Danske Bank • Previously Danske Bank was responsible for the sale of Topdanmark’s non-life insurance products to its customers • Now Danske Bank only refe
Slide 37: Customer satisfaction
Customer satisfaction mono = Total group Survival function 9 Annual churn 4% Share of customers 39% Annual churn 7% Share of customers 34% Annual churn 10% Share of customers 22% Annual churn 14% Share of customers 2% 1 and 2 Annual churn 24% Share of customers 3% Days Ambassador B high C Medium D L
Slide 38: Improved customer measurements
Improved customer measurements 10% 45% 9% 42% 8.1% 8% 40% 7.7% 39% 7% 6.8% 37% 6% 35% 34% 5.6% 5% 4% 30% 2010 2011 2012 YTD 30 April 2013 Unsatisfied customers Ambassadors Source: ASMA telephone measurements – 30 April 2013 15 15
Slide 39: Topdanmark's CR excl. run-off is relatively stable
Topdanmark’s CR excl. run-off is relatively stable 110.0 Topdanmark Tryg Codan1) Alm Brand 105.0 Combined ratio 100.0 95.0 95.7 93.6 92.0 90.0 90.3 91-92 85.0 80.0 2009 2010 2011 2012 2013 E 1) Scandinavian business 16 16
Slide 40: Agenda
Agenda • The Danish non-life market • Profitable growth – in that order • How to grow profitably • Highlights in Q1 2013 • Share buy-back 17 17
Slide 41: Highlights – Q1 2013
Highlights – Q1 2013 • Q1 2013 profit of DKK 505m (Q1 2012: DKK 561m) • Profit per share declined from DKK 4.3 to DKK 4.1 • CR improved to 89.6 (Q1 2012: 90.2) • CR excl. run-off increased to 93.9 (Q1 2012: 92.2) • Premiums increased by 0.8% in non-life insurance and 3.1% in life insurance • Investm
Slide 42: Agenda
Agenda • The Danish non-life market • Profitable growth – in that order • How to grow profitably • Highlights in Q1 2013 • Share buy-back 19 19
Slide 43: Buy-back for 2013
BUY-BACK FOR 2013 • Increase from DKK 2,000m to DKK 2,150m • Buy-back yield of 12.2 % • To date in 2013 shares of DKK 704m bought back • Leaving a balance of DKK 1,446m of buy-back for 2013 • Since 1998 Topdanmark has cancelled 69.7% of outstanding shares • Average price per share: DKK 41 • From 200
Slide 44: Average yield of 9.3% (2000-2012)
AVERAGE YIELD OF 9.3% (2000-2012) 20 19 18 16 Yield 14 14 13 12.2 12 10 10 10 10 9 Average 9 9.3 8 8 7 7 6 4 3 2 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 E 21 21
Slide 45: Any questions?
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Slide 46: Disclaimer
Disclaimer This presentation includes statements relating to the future. Such statements are uncertain and involve both general and specific risks. Many factors may cause a significant deviation from the forecasts and assumptions set out in the presentation. Such factors could be, for example, cycli
Slide 47: Nordea's financial plan 2013-2015
Nordea’s financial plan 2013-2015 Sampo Capital Markets Day 2013 Torsten Hagen Jørgensen, Group CFO
Slide 48: Disclaimer
Disclaimer This presentation contains forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Nordea believes that the expectations reflected in such forward-looking statements are reasonable, no assurance
Slide 49: The financial plan; Q1 2013 result highlights
• The financial plan • Q1 2013 result highlights
Slide 50: 2015 plan – progress against our published goals
2015 plan – progress against our published goals Nordea market commitments Key initiatives and levers Strong capital generation Capital initiatives to maintain CT1 ratio and return of excess capital >13% to our shareholders Initiatives for income generation ROE target of 15% at a CT1 ratio >13% and
Slide 51: Well balanced plan to reach ambitious ROE target
Well balanced plan to reach ambitious ROE target Return on equity, % ~2p.p. >15% ~1p.p. >13% ~1p.p. 11.6% ~1p.p. >10% ~(1) p.p. 2012 Equity Regulation, Capital RoE Income Cost Lower loan 2015 ROE Normalised ROE at net capital 1 calibration adjusted generation efficiency, losses forecast 2 interest n
Slide 52: Initiatives for supporting NII growth and margin expansion
Initiatives for supporting NII growth and margin expansion Nordea Group income split Initiatives Blended margin Normalised 1,30% interest rates 23% 20% Repricing of 1,25% lending margins 19% 24% 1,20% More business with 1,15% existing customers 1,10% 58% 56% 1,05% Other (e.g. deposit margins Current
Slide 53: Ancillary income growth driven by product capabilities
Ancillary income growth driven by product capabilities Nordea Group income split Initiatives Non NII-Income vs. Nordic peers 140 20% Nordea 23% Risk products 130 120 19% 24% Asset 110 management Nordic peers 100 58% 56% Transaction 90 related 80 70 Q4/07 Q2/08 Q4/08 Q2/09 Q4/09 Q2/10 Q4/10 Q2/11 Q4/
Slide 54: Cost efficiency to further improve in the 2015 plan
Cost efficiency to further improve in the 2015 plan Nordea total expenses (Excl. FX and variable pay), EURm Comments 1 210 1 164 1 203 1 173 1 193 1 163 1 177 1 168 1 196 Flat costs will be maintained throughout 2014 (excluding effect of FX and variable salaries, including profit sharing) Gross
Slide 55: Loan losses expected to decrease
Loan losses expected to decrease Actual loan losses, bps Comments Average loan loss ratio approximately 16bps 30 20 For 2012, Banking Denmark and Shipping constituted more than half of 10 loan losses 0 Loan losses expected to revert to (10) around historical average during 2013- (16) 2015, fol
Slide 56: Expectations in summary
Expectations in summary Nordea financial plan and expectations 2013-2015 CAGR ~4% Income growth Including normalised interest rates, CAGR ~6% CAGR ~0% 2012-14 (excl. FX and variable salaries) Cost growth Some cost growth 2015 if supported by income growth Approach 16bps during the period L
Slide 57: The financial plan; Q1 2013 result highlights
• The financial plan • Q1 2013 result highlights
Slide 58: Financial results Q1/13
Financial results Q1/13 EURm Q1/13 Q4/12 Change % Q1/12 Change % Net interest income 1 400 1 429 (2) 1 420 (1) Net fee and commission income 632 692 (9) 596 6 Net fair value result 444 444 0 469 (5) Total income1 2 558 2 630 (3) 2 531 1 Staff costs (769) (764) 1 (771) 0 Total expenses (1 299) (1 327
Slide 59: Stable Net Interest Margin but lower volumes
Stable Net Interest Margin but lower volumes Blended net interest margin development, % Comments 1,5% Largely unchanged margin, up 2 bps to 107 bps in Q1 1,2% 107 bps Lower interest rates put pressure on deposit margins 0,9% Lending margins up somewhat in quarter 0,6% Improved in Finland and
Slide 60: Robust credit quality
Robust credit quality Total net loan losses, EURm Comments 263 254 Underlying credit quality remains robust 242 244 218 217 199199 Stabilisation in level of impaired loans 118 Provisioning ratio increased to 43% 112 Credit quality remains solid in Finland, Norway, Sweden, Baltics and Poland
Slide 61: Risk weighted assets
Risk weighted assets Risk-weighted assets , EURbn* Comments RWA flat on previous quarter 183 185 182 180 182 181 - Increase due to yearly update of operational risk 179 168 168 - Higher risk weights for commercial and residential real estate exposures due to expired regulatory transition rules. In
Slide 62: Core Tier 1 ratio
Core Tier 1 ratio Core Tier 1 capital ratio, %* Comments Improved ratio 10 bps sine Q4/12 due to increased core 13.1 13.2 tier 1 capital driven by strong profit generation and reduced shortfall reduction 12.2 11.6 11.8 Compliant with our capital policy of a Core Tier 1 ratio of 11.2 10.7 11.0 11
Slide 63: RoE development YoY
RoE development YoY - challenging macro environment and increased capital offset strong underlying business performance RoE, per cent, Q1/Q1 Comments Strong re-pricing of lending margins Return on Equity since January 2012, and lower loan Q1 2012 – Q1 2013 losses Lower interest rates, higher sta
Slide 64: Progress in summary
Progress in summary Progress on Nordea financial plan 2013-2015, in Q1 2013 CT1 ratio Core Tier 1 ratio +10 bps in Q1 to 13.2% RWA RWA development in Q1 approx. flat Income growth Income holding up () Costs Underlying costs flat for 10th consecutive quarter Loan losses Decreasing in
Slide 65: Nordea's financial plan 2013-2015
Nordea’s financial plan 2013-2015 Sampo Capital Markets Day 2013 Torsten Hagen Jørgensen, Group CFO