Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Debt Investor Presentation (September 2014)
52 slides from Sampo Oyj's debt investor presentation, Sep 1, 2014
Slide 1: Sampo Group Debt Investor Presentation
Sampo Group Debt Investor Presentation Prepared September 1, 2014 Figures June 30, 2014 www.sampo.com/debtpresentation
Slide 2: Debt Investor Contacts and Financial Calendar
DEBT INVESTOR CONTACTS FINANCIAL CALENDAR Markku Pehkonen, CRO 07/05/2014 Interim Report Q1/2014 tel. +358 10 516 0014 Silent period 09/04/2014‐07/05/2014 markku.pehkonen@sampo.fi 13/08/2014 Interim Report Q2/2014 Silent period 16/07/2014‐13/08/2014 Peter Johansson, CFO 06/11/2014 Interim Report Q3/
Slide 3: Sampo Group Basic Facts
Sampo Group Basic Facts If P&C Largest Nordic P&C insurer Mandatum Life Finnish Life Insurer with Asset Management Focus Sampo Group Results, Capitalisation and Investments Sampo plc The listed holding company 3
Slide 4: Nordic Financial Group with Strong Brands
Sampo Group ― Basic Facts Nordic Financial Group with Strong Brands • Listed company Sampo plc • Long‐term investor • Manager of capital structure and liquidity • Pay‐out ratio ≥ 50% 100% 100% 21.2% > 25% • TOP3 company in life & MARKET • The second largest • The largest Pan‐Nordic • The largest Pan
Slide 5: Largest Nordic Financial with Insurance Focus
Sampo Group ― Basic Facts Largest Nordic Financial with Insurance Focus Market cap July 30, 2014, EURm Sampo and EuroSTOXX indices 0 10 000 20 000 30 000 40 000 50 000 Nordea 41 687 Handelsbanken 22 791 DnB 22 106 >21% Danske 22 102 SEB 22 054 Swedbank 21 952 Sampo 20 921 Ownership structure Gjensid
Slide 6: Well-established Insurance Subsidiaries
Sampo Group ― Basic Facts Well‐established Insurance Subsidiaries If P&C ― Well‐diversified and Mandatum Life ― Leading Finnish Life and Profitable Pan‐Nordic Non‐life Insurer Wealth Management Service Provider • If P&C provides insurance • Provides comprehensive solutions and services in Wealth Man
Slide 7: Profitable & The Most Diversified Nordic Bank
0 300 600 900 1 200 1 500 1Q08 885 21 EURm 2Q08 883 36 Nordea 3Q08 847 89 4Q08 781 320 1Q09 833 356 2Q09 818 425 3Q09 832 358 4Q09 592 347 1Q10 878 261 Restructuring provision 2Q10 730 245 3Q10 960 207 4Q10 1 071 166 1Q11 1 003 242 2Q11 949 118 Write backs 3Q11 566 112 4Q11 1 029 263 1Q12 1 037 218
Slide 8: Group Strategy: Value Creation in Nordic Financials
Sampo Group ― Basic Facts Group Strategy: Value Creation in Nordic Financials LONG TERM Value creation through investments in Nordic financials based on knowledge VALUE CREATION of Nordic markets, Nordic financial institutions & Nordic people. Commitment to the long‐term development of affiliated co
Slide 9: If P&C
Sampo Group Basic Facts If P&C Largest Nordic P&C insurer Mandatum Life Finnish Life Insurer with Asset Management Focus Sampo Group Results, Capitalisation and Investments Sampo plc The listed holding company 9
Slide 10: Largest Nordic P&C Insurer with Synergies
If P&C Largest Nordic P&C Insurer with Synergies Market Shares by Country Nordic Market shares Total GWP ~EUR 25bn Norway 2013 Other If GWP EUR 6.4bn 30% Topdanmark 19% Gjensidige 25% Finland 2013 5% If 24% GWP EUR 4.3bn Folksam Tryg Tryg 14% Pohjola 31% 5% 11% Sparebank 1 10% LähiTapiola 26% Pohjol
Slide 11: Nordic P&C Insurance Market
If P&C Nordic P&C Insurance Market CONSOLIDATED The four largest companies account for 75‐90% of the markets in Norway, MARKET Finland and Sweden. In Denmark the market is less consolidated. LOYAL CLIENTS Renewal rates are around 80‐90%. DISTRIBUTION In addition to traditional channels, the Internet
Slide 12: Sound Underwriting is Basis for Strong Result
If P&C Sound Underwriting is Basis for Strong Result Gross Written Premiums, EUR 2,812m By Business Area By Country Industrial; Baltic; 65 435 Denmark; Baltic; 65 230 Norway; 922 Finland ; Commercial; Private; 1 723 917 378 Sweden; 855 Technical Results, EUR 286m By Business Area By Country Industri
Slide 13: Well-diversified Nordic P&C Insurer
If P&C Well‐diversified Nordic P&C Insurer Combined Ratio Development Geographical Diversification in CR % 100,9 100 92,6 90,5 89,9 90,6 91,8 92,192,8 92,0 88,9 88,1 88,3 26,6 80 25,6 24,3 24,0 23,7 23,7 24,1 23,7 23,5 23,0 22,8 22,6 60 40 74,3 67,0 66,2 65,9 66,9 68,1 68,0 69,1 68,4 65,9 65,4 65,7
Slide 14: Strong & Stable Annual Profit Development
If P&C Strong & Stable Annual Profit Development H1/2014 H1/2013 EURm Profit before taxes 483 473 Compr.hensive Income 392 312 1 200 Profit before tax 1 127 Comprehensive income 943 978 1 000 929 864 800 800 730 707 689 644 636 600 534 549 400 308 200 0 ‐200 ‐267 ‐400 2005 2006 2007 2008 2009 2010 2
Slide 15: Seasonality in Quarterly Results and CR%
If P&C Seasonality in Quarterly Results and CR% EURm Technical result Investment result Operating result 350 300 250 200 150 100 50 0 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 ‐50 Q4 Q3 Q2 Q1 Average Quarterly CR%, 2006‐2013 90.5 89.5 89.3 93.9 Year 2013 CR% 87.9 87.2 8
Slide 16: Conservative Investment Portfolio
If P&C Conservative Investment Portfolio Investment Allocation of Total EUR 11.9bn Mark‐to‐Market Investment Return 14% 12,4% 11% 7,4% Private Real Estate 9% 5,8% 6,1% Equity 0,2% 6% 4,3% 4,4% 5,0% 0,2% Money 2,6% 3,1% Equities 4% 1,8% Market 11% 1% 16% ‐2% ‐4% ‐3,1% Public sector 18% Investment Ret
Slide 17: Mandatum Life
Sampo Group Basic Facts If P&C Largest Nordic P&C insurer Mandatum Life Finnish Life Insurer with Asset Management Focus Sampo Group Results, Capitalisation and Investments Sampo plc The listed holding company 17
Slide 18: Mandatum Life Cross-sales
Mandatum Life Finnish Life Insurer with Asset Management Focus Client Underlying Critical Success Factors Sales & Client Segment Market Services Corporates Employee Benefit • Expertise in Rewards and Incentives, Mandatum Life Pension & Risk Life Solutions and Asset Management Cross‐sales HNWI Wealth
Slide 19: Mandatum Life Business Volumes
Mandatum Life Mandatum Life Business Volumes Premiums Written*, total EUR 585m Insurance Savings, total EUR 8,699m 1 17 3 With‐Profit 50 EUR 94m 43 1 665 153 19 U‐L With‐Profit 3 356 U‐L EUR 491m EUR 3,605m EUR 5,094m 1 577 64 254 228 1 699 153 Unit‐linked life Unit‐linked pension Unit‐linked capita
Slide 20: Market Position
Mandatum Life Market Position Market Share in Finland Market Shares of Premiums Written % 30 27,9 28,2 Group Pension Corporates 26,8 26,2 25,5 25,2 25 22,4 21,5 45.7 20,8 24,9 24,5 53,7 % 24,8 19,3 20 22,0 19,5 20,4 19,8 19,3 19,2 15 17,9 10 Unit‐Linked Private Customers All products 5 18,2 11.7 Uni
Slide 21: Finnish with-profit Life Insurance Market
Mandatum Life Finnish with‐profit Life Insurance Market PRINCIPLE There is no exact rule on profit sharing (e.g. 90%/10%). OF FAIRNESS In the current markets, the principle is reflected in policyholders´ reasonable expectations for total accrual, which is average annual yield of Finnish government b
Slide 22: Profit Development
Mandatum Life Profit Development Profit before taxes H1/2014 H1/2013 73 69 Comprehensive income 113 25 EURm 495 500 342 332 295 286 286 250 220 140 142 137 136 153 121 80 0 ‐115 ‐250 Profit before taxes Comprehensive income ‐378 ‐500 2006 2007 2008 2009 2010 2011 2012 2013 22
Slide 23: Mandatum Life Profit by Components
Mandatum Life Mandatum Life Profit by Components EURm 1‐6/2014 1‐6/2013 Net investment income 354.4 176.5 ‐ Transferred to expense result ‐10.5 ‐9.8 ‐ Return on unit‐linked policies ‐202.3 ‐31.2 ‐ Return on with‐profit policies* ‐83.7 ‐78.9 INVESTMENT RESULT 57.9 56.6 EXPENSE RESULT** 7.6 3.5 RISK R
Slide 24: Absolute Return Investment Portfolio
Mandatum Life Absolute Return Investment Portfolio Investment Allocation of Total EUR 5.4bn Mark‐to‐Market Investment Returns 20% 16,8% Other 6% Real estate 4% 15% 12,0% 11,1% 9,7% 9,4% Money market 10% 8,3% 7,1% Private equity 20% 5,0% 5% 5% 3,9% 0% ‐1,4% Public sector ‐5% 6% ‐10% ‐7,8% ML Investme
Slide 25: Group Results, Capitalisation and Investments
Sampo Group Basic Facts If P&C Largest Nordic P&C insurer Mandatum Life Finnish Life Insurer with Asset Management Focus Sampo Group Results, Capitalisation and Investments Sampo plc The listed holding company 25
Slide 26: Stable Development of Profit before Taxes
Sampo Group ― Results, Capitalisation and Investments Stable Development of Profit before Taxes H1/2014 H1/2013 EURm P&C 483 473 Life 73 69 4 000 3,833 Nordea 309 319 Holding ‐3 ‐34 3 500 * Group 861 825 3 000 •If P&C •If P&C •If P&C •Mandatum Life •Mandatum Life •Mandatum Life 2 500 •Sampo Bank •No
Slide 27: Stable Companies & Group Level Diversification
Sampo Group ― Results, Capitalisation and Investments Stable Companies & Group Level Diversification* 1 0.27 1 0.13 0.85 1 P/L CONTRIBUTIONS LOW VOLATILITY EARNINGS LOW VOLATILITY C/R FOCUS IN U‐L & WM • Geographical diversification • Geographical diversification • Finland & Baltics • Strong Retail
Slide 28: Strong Group Solvency
Sampo Group ― Results, Capitalisation and Investments Strong Group Solvency EURm 10 000 9,499 Internal Treatment ≈ S II 409 ** • Economic Capital need (EC) is 9 000 69 * measured at 99.5% conf. level 8 000 • By nature SII framework is similar to 7 000 EC techniques used by Sampo • EC models are deve
Slide 29: Internal Capital Base above Capital Needs
EURm 10 000 12 000 0 2 000 4 000 6 000 8 000 1 976 2 294 4 109 2 657 3 054 6 401 3 279 3 738 7 666 3 783 4 245 7 076 4 024 4 600 7 565 4 131 4 722 7 168 4 189 4 799 7 279 4 281 4 954 EC,Diversified 8 521 4 281 4 947 8 432 4 222 4 858 8 120 4 394 5 076 6 830 4 374 5 015 7 262 4 629 5 262 7 875 4 619
Slide 30: Investment Allocations by Risk Profile
Sampo Group ― Results, Capitalisation and Investments Investment Allocations by Risk Profile Total Group (MEUR) 17,715 17,878 18,353 17,611 14,000 12,029 11,666 11,851 11,925 12,000 10,000 8,000 6,000 5,443 5,452 5,339 5,405 4,000 2,000 760 1,162 243 281 0 Mandatum Mandatum Mandatum Mandatum Sampo S
Slide 31: Investment & Counterparty Exposures
Sampo Group ― Results, Capitalisation and Investments Investment & Counterparty Exposures* AA+ - A+ - BBB+ - BB+ - Non Fixed Income Derivatives Change from 30.6.2014 AAA AA- A- BBB- C D Rated Total Equities Other (Counterparty Risk) Total 31.3.2014 Basic Industry - - - 108 334 - 123 565 237 - - 802
Slide 32: Fixed Income Investments in the Financial Sector
Sampo Group ― Results, Capitalisation and Investments Fixed Income Investments in the Financial Sector* Long‐term EURm Covered Money Long‐term subord. bonds market senior debt debt Total % Sweden 1,771 967 816 123 3 676 48% Finland 211 1,614 116 13 1 955 26% Norway 658 158 393 99 1 308 17% Denmark 1
Slide 33: Sampo plc
Sampo Group Basic Facts If P&C Largest Nordic P&C insurer Mandatum Life Finnish Life Insurer with Asset Management Focus Sampo Group Results, Capitalisation and Investments Sampo plc The listed holding company 33
Slide 34: Straightforward Cash Flows & Strong Balance Sheet
Sampo plc Straightforward Cash Flows & Strong Balance Sheet Flow of Funds Balance Sheet Dividends Income Assets EURm 8,569 Liabilities EURm 8,569 • If P&C • Interest on Liquidity Liquidity 108 CPs Issued 300 • Mandatum Life • Income on other • Nordea investments Investment assets 100 LT Senior Debt
Slide 35: Dividends & Reported Profits
Sampo plc Dividends & Reported Profits EURm 1‐6/2014 1‐6/2013 Dividends 471.4 393.4 Operating expenses ‐9.3 ‐10.8 Net financial expenses/income 5.1 ‐23.9 Profit before taxes 467.2 358.7 EURm 900 879 * 832 800 773 747 762 2009 2010 2011 2012 2013 737 702 683 700 600 569 522 500 400 300 200 100 0 ‐16
Slide 36: Dividends Received by Payment Year
Sampo plc Dividends Received by Payment Year EURm 1 600 Net Debt Q2/2014 EUR 1,549m vs. stable Dividend Inflows 1 406 1 400 75 1 200 300 1 000 878 754 756 768 800 744 35 293 600 200 568 204 250 224 490 511 470 1 031 80 100 400 141 130 100 ** 100 519 200 540 544 370 488 485 200 406 249 181 100 0 2005
Slide 37: Sampo plc Debt Instruments
Sampo plc Sampo plc Debt Instruments Instrument & Principal Coupon Swap Effective Rate Maturity Senior Bond 300 EURm (EMTN) 3.2500% ‐‐‐‐ 3.0377% 03.10.2014 Senior Bond 2,000 SEKm (EMTN) Stibor3M+ 0.75% ‐‐‐ 1.6570% 28.05.2015 Senior Bond 300 EURm (EMTN) 4.2500% Euribor3M + 1.4727% 1.7907% 22.02.2016
Slide 38: Sampo plc Key Credit Considerations
Sampo plc Sampo plc Key Credit Considerations Stable Dividend Flow from Affiliated Companies with strong Brands Diversification through Insurance & Banking in the Nordic Region Conservative Financial Profile, strong Capitalization and Liquidity Management has a proven Track Record in long‐term Value
Slide 39: Appendix
SAMPO S GROUP Appendix
Slide 40: Sampo Group's outlook for 2014
Appendix Sampo Group’s outlook for 2014 • Sampo Group’s business areas are expected to report good operating results for 2014. • However, the mark‐to‐market results are, particularly in life insurance, highly dependent on capital market developments. The low interest rate level also creates a challe
Slide 41: IF P&C Quarterly Results and C/R
Appendix IF P&C Quarterly Results and C/R EURm Q2/14 Q1/14 Q4/13 Q3/13 Q2/13 Q1/13 Q4/12 Q3/12 Q2/12 Premiums earned 1,121 1,104 1,112 1,139 1,140 1,115 1,121 1,121 1,054 Claims incurred ‐783 ‐811 ‐791 ‐802 ‐800 ‐824 ‐801 ‐809 ‐729 Operating expenses ‐187 ‐186 ‐186 ‐191 ‐188 ‐190 ‐198 ‐189 ‐177 Othe
Slide 42: IF Regulatory Solvency Capital & Ratio
Appendix IF Regulatory Solvency Capital & Ratio* EURm % 4 500 92% 100% 88% 81% 4 000 79% 75% 77% 72% 3 500 74% 71% 80% 70% 66% 3 000 54% 60% 2 500 2 000 40% 1 500 1 000 20% 500 0 0% Solvency capital (lhs) Solvency ratio (rhs) + solvency capital 42 * Solvency ratio, (IFRS) % = x 100% + premiums earne
Slide 43: Mandatum Life Regulatory Solvency Ratio
Appendix Mandatum Life Regulatory Solvency Ratio* 35% 29,8% 30% 27,7% 27,6% 25,8% 25% 21,3% 20,9% 20,1% 20% 17,7% 18,5% 16,5% 15% 10% 7,9% 5% 0% * Solvency ratio, % of technical provision, (IFRS) = + solvency capital x 100% + liabilities for insurance and investment contracts ‐ reinsurers’ share of
Slide 44: Nordea BV on Consolidated Balance Sheet
Appendix Nordea BV on Consolidated Balance Sheet Nordea in Sampo Group’s B/S EURm Acquisition price 5,557.3 Retained earnings 1,428.3 Figures Per Share EUR Accumulated other changes in Nordea’s equity ‐79.5 Share of Nordea’s net profit 322.4 Acquisition price 6.46 Book value 7.94 Amortisation ‐17.7
Slide 45: Sampo Group Public Sector Fixed Income Investments
Appendix Sampo Group Public Sector Fixed Income Investments ― no Periphery* Government Public sector, EURm Governments Total guaranteed other Netherlands 681 681 Sweden 196 796 992 Germany 210 71 281 France 206 206 Norway 162 162 Finland 11 79 20 110 Denmark 36 36 Total 1,304 186 978 2,468 * Exposur
Slide 46: Structural changes of Sampo Group to leading Nordic financial group
Appendix Structural changes of Sampo Group to the position as the leading Nordic financial group 2000 2001 2002 2004 2007 2010 2011 2012 2013 2014 Sampo Insurance Mandatum Sampo’s P&C insurance Sampo Group divests Sampo’s Nordea Sampo Group’s Sampo Group Sampo Group Company and Bank joins operations
Slide 47: Financial Strength Rating History
Appendix Financial Strength Rating History If P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland), Sampo plc Possible downgrade Jan 03 AA‐/Aa3 Moody´s If P&C Possible upgrade Feb 04 S&P If P&C Moody´s Sampo plc Negative Aug 02 Positive May 06 Stable May 04 Stable Nov 08 A+/A1 Stable A
Slide 48: IF P&C Reinsurance Programmes
Appendix IF P&C Reinsurance Programmes IF is using reinsurance to: ‐ Utilize its own capital base efficiently and reduce cost of capital ‐ Limit large fluctuations of underwriting results ‐ Get access to reinsurers´ competence base IF has following Reinsurance Programmes in place Catastrophe per Pro
Slide 49: Principles of Capital Management
Appendix Principles of Capital Management • Risk Capital Available > Risk Capital needed – Risk Capital Available = SI Capital + Other items absorbing economic losses. – Risk Capital Need = Measured Economic Capital + ”Non‐measurable” risks. – Buffer between measures under constant considerations. –
Slide 50: Economic Capital Reporting Principles
Appendix Economic Capital Reporting Principles • Definitions – Economic capital (EC) is used as an internal measure of capital required for measurable risks the Group is exposed to. – EC is defined as the amount of capital to protect the solvency over a one year time horizon with a probability of 99
Slide 51: Principles of Investment Management
Appendix Principles of Investment Management • Company specific needs form the basis for all investments – Liabilities intensively analysed and modelled. – Regulatory requirements. • Strategy – Absolute Return targets taking into account the liabilities and general business targets. – Direct Investm
Slide 52: Appendix: Group structure and supervision
Appendix Sampo FiCo Coordination Duties 0 2 |-FSA I FSASweden 21.3% * Parent Company of the Financial Conglomerate * Holding company ~ . mrrtconsanotcoup | If P&C * Holding company as Holding Ltd (SE) * Parent Companyof Nordea Bank Nordea Bank AB Nordea Banks and subsidiaries (DK) (Fl) (NO) * Parent
Sampo Group — Debt Investor Presentation (September 2014) on 6ix