Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Q1 2022 Earnings Presentation
70 slides from Sampo Oyj's earnings presentation, May 4, 2022
Slide 1: Investor Presentation January–March 2022
Investor Presentation JANUARY – MARCH 2022 1
Slide 2: Sampo Group Q1/2022 results
Sampo Group Q1/2022 results 4 May 2022 4 May 2022 2
Slide 3: Disclaimer
Disclaimer This presentation may contain forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Sampo believes that the expectations reflected in such forward looking statements are reasonable, no assuran
Slide 4: Q1/2022: Good start to the year
Q1/2022: Good start to the year GWP growth supported by strong renewals and high retention Solid underlying underwriting margins in Nordic P&C Solvency remained strong amid uncertain market environment New buyback programme of up to EUR 250 million launched Nordea-exit completed in April, plan to la
Slide 5: Solid results in a volatile quarter
Solid results in a volatile quarter Profit before taxes, EURm P&C underwriting profit, EURm Combined ratio, % -8% 700 350 85% +2.3%-p -0.1%-p 632 317 566 290 600 300 84% 83.6 % 500 250 83.5 % 83.5 % 400 200 83% 300 150 200 100 82% 81.2 % 100 50 81% 0 0 Q1/2021 Q1/2022 Q1/2021 Q1/2022 80% Q1/2021 Q1/
Slide 6: Nordea-exit successfully completed
Nordea-exit successfully completed • Nordea-exit fully completed through an ABO of 200 million shares with a strong market demand, Total value created in line with Sampo’s P&C focused strategy EUR 7 billion • Around 46 million shares sold in the open market in February-April • Total gross proceeds o
Slide 7: If P&C: excellent underwriting result
If P&C: excellent underwriting result Q1 2022 combined ratio • Q1 2022 underwriting result of EUR 234m (213) driven by strong profitability and healthy growth • Improvement from rate increases particularly in Industrial and Commercial • In Q1 2022 no quantitative estimate of COVID-19 effects provide
Slide 8: If P&C: premium growth driven by rate and volume
If P&C: premium growth driven by rate and volume Q1 2022 GWP growth • Continued positive organic growth (excl. currency effects) of 6.9% (2.6%) If total 6.9% • Particularly strong momentum in Industrial and Baltic due to rate increases and good business momentum Private 3.4% • Positive 1/1 renewal o
Slide 9: If P&C: strong customer growth and satisfaction, with continued high retention in BA Private
If P&C: strong customer growth and satisfaction, with continued high retention in BA Private Number of customers, million Customer satisfaction, NPS Customer retention, % households 2% CAGR 90% 90% 90% 90% 61 61 3.3 60 59 2019 2020 2021 Q1-22 2019 2020 2021 Q1-22 2019 2020 2021 Q1-22 4 May 2022 9
Slide 10: If P&C: expected inflation carefully monitored and actively priced-in
If P&C: expected inflation carefully monitored and actively priced-in Key considerations Claims cost split Property Claims cost split Motor • Claims inflation is separate from CPI inflation ~ 1/3Material ~ 1/2 Material ~33% Labour ~45% Labour • Claims inflation is one of several elements in average
Slide 11: Hastings: disciplined performance in challenging conditions
Hastings: disciplined performance in challenging conditions Live customer policies (million) • Solid currency adjusted GWP growth of 10%, live customer policies remained stable 3.1 3.1 3.2 2.7 2.8 2.6 2.3 2.0 • UK motor insurance market challenging with competitive pricing and elevated claims inflat
Slide 12: Mandatum: robust performance amid market turbulence
Mandatum: robust performance amid market turbulence Mandatum Life solvency II ratio, % Unit-linked and other client assets, EURbn 240% 12 11.1 10.9 220% 216% 10 9.2 8.7 200% 190% 188% 8 182% 180% 176% 176% 6 160% 4 140% 120% 2 100% 0 2017 2018 2019 2020 2021 3/2022 2019 2020 2021 3/2022 • Solvency p
Slide 13: Performance in line with 2021-2023 financial targets
Performance line with 2021-2023 financial targets Financial target 1-3/2022 result • Mid-single digit growth in UW profit • -8% (4% excluding reported COVID-19 effects in annually on average (ex COVID-19 effects) Q1/2021) • Group combined ratio <86% • 83.5% • Mid-single digit growth in UW profit • 1
Slide 14: Strong capital position despite volatile market environment
Strong capital position despite volatile market environment Sampo Group Solvency II ratio, % Sampo Group financial leverage, % Own funds: EURm 10,924 EURm 10,757 IFRS equity: EURm 13,464 EURm 12,828 SCR: EURm 5,905 EURm 5,275 Financial debt: EURm 4,210 EURm 4,241 30% 4.2 % 29.0 % Target: <30% 210% 2
Slide 15: Well positioned for higher interest rates
Well positioned for higher interest rates Interest rate effects on Solvency II ratio 7% • Positive solvency effect of 6 percentage points from rising interest rates in Q1 6% • Short durations enable fast rotation into higher yielding instruments, quickly offsetting the negative effects from changes
Slide 16: Outlook for 2022
Outlook for 2022 Sampo Group’s P&C insurance operations are expected to achieve underwriting margins that meet the annual targets set for 2021-2023. At Group level, Sampo targets a combined ratio of below 86 per cent, while the target for its largest subsidiary, If P&C, is below 85 per cent. Hasting
Slide 17: Sampo Group
SAMPO => GROUP SAMPO GROUP 4 May 2022
Slide 18: Financials
SAMPO = GROUP Financials 4 May 2022 18
Slide 19: Group key figures
Group key figures EURm 1-3/2022 1-3/2021 Change, % Profit before taxes 566 632 -10 If 283 257 10 Topdanmark 37 137 -73 Hastings 2 46 -95 Mandatum 80 76 5 Holding 164 115 42 Profit for the period 483 526 -8 Underwriting profit 290 317 -8 EPS, EUR 0.86 0.82 5 EPS (based on OCI), EUR -0.12 1.39 - 4 May
Slide 20: Profit before taxes and EPS by quarters
Profit before taxes and EPS by quarters EURm EUR 1,500 2.50 1,197 1.89 2.00 1,000 1.50 710 0.99 632 632 0.93 0.86 566 1.00 0.82 485 0.70 500 407 0.55 0.50 0.26 162 0.00 0 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 -0.50 -500 -1.00 -1.5
Slide 21: Underwriting
SAMPO = GROUP Underwriting 4 May 2022 2
Slide 22: Group underwriting profit and combined ratio development
Group underwriting profit and combined ratio development EURm 1,400 90% 88% 1,200 164 86% 84.6% 103 84.0% 1,000 227 84% 83.3% 83.5% 182 82% 81.4% 81.2% 800 210 202 80% 600 78% 891 76% 400 802 682 317 290 635 74% 200 72% 0 70% 2018 2019 2020* 2021 Q1/2021 Q1/2022 2018 2019 2020* 2021 Q1/2021 Q1/2022
Slide 23: Group underwriting profit and combined ratio 1-3/2022
Group underwriting profit and combined ratio 1-3/2022 1-3/2022 1-3/2021 GWP, EURm 2,833 2,657 NPE, EURm 1,754 1,690 Underwriting profit 290 317 Combined ratio, % 83.5 81.2 4 May 2022 23
Slide 24: Investments
SAMPO = GROUP Investments 4 May 2022 24
Slide 25: Sampo Group investments by sector, 31 March 2022
Sampo Group investments by sector, 31 March 2022 If Topdanmark P&C Hastings Mandatum* Sampo plc Sampo Group Money market 13% 18% 17% 13% 74% 25% Fixed income 59% 4% 81% 47% 10% 43% Covered bonds 16% 63% 0% 0% 0% 14% Equities 12% 5% 0% 23% 9% 12% Private equity 0% 0% 0% 7% 7% 3% Real estate 0% 4% 0%
Slide 26: Fair value reserves, 31 March 2022
Fair value reserves, 31 March 2022 The share transferred to EURm Fixed income Equity Deferred taxes Cash flow hedges FVR net the segregated portfolio If -28 658 -148 483 Mandatum Life** 6 565 -114 -8 449 Hastings -25 1 -25 Holding 0 184 -27 157 Sampo Group* -47 1,429 -293 1 -8 1,081 *) Eliminations
Slide 27: If & Mandatum mark-to-market investment returns
If & Mandatum mark-to-market investment returns If Mandatum 12% 10.2% 9.4% 9.2% 10% 8% 7.1% 6.9% 7.2% 6.1 % 6.5% 6.5% 6% 5.0 % 4.6% 5.0 % 4.1 % 4.3 % 4% 2.9 % 2.6 % 2.3 % 1.5 % 2% 0% -2% -0.8 % -4% -2.4% -2.1 % -4.0% -6% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1-3/2022 Fixed income running
Slide 28: Solvency
SAMPO = GROUP Solvency 4 May 2022 28
Slide 29: Sampo Group Solvency II ratio development
Sampo Group Solvency II ratio development Including dividend accrual based on the insurance dividend of EUR 1.70 per share for 2021 220% 204% 200% 200% 185% 180% 174% 176% 160% 155% 156% 140% 140% 120% 100% 2016 2017 2018 2019 2020 2021 3/2022 3/2022, adj. Solvency II ratio Target range for 2021-202
Slide 30: Sampo Group Solvency II, 31 March 2022
Sampo Group Solvency II, 31 March 2022 EURm 12,000 Solvency II ratio 204% 10,000 8,000 337 -1,150 -429 6,000 1,964 -678 393 45 10,757 4,000 4,793 5,275 2,000 0 4 May 2022 30
Slide 31: Sampo Group Solvency II, estimated sensitivities on market risk factors
Sampo Group Solvency II, estimated sensitivities on market risk factors 31 March 2022 211% 210% 214% 207% 204% 200% 195% 200% 150% 100% 50% 0% Base case 3/2022 RFR -100 bps RFR +100 bps Spread +100 bps Equity prices -10% Equity prices -20% Equity prices -30% The Solvency II symmetric adjustment of t
Slide 32: Financial leverage
Financial leverage 4 May 2022 32
Slide 33: Sampo Group financial leverage
Sampo Group financial leverage Including DPS of EUR 4.10 and EUR 250 million buyback Total debt, EURm 3,924 4,531 4,616 4,905 4,210 4,241 programme IFRS equity, EURm 13,508 13,014 12,542 12,258 13,464 12,828 35% 28.6% 29.0% 30% 25.8% 26.9% 22.5% 23.8% 24.8% 25% 20% 15% 10% 5% 0% 2017 2018 2019 2020
Slide 34: Sampo Group financial debt, 31 March 2022
Sampo Group financial debt, 31 March 2022 Sampo plc If Topdanmark Hastings Mandatum Eliminations* Group, total Sub/hybrid 1,487 241 255 - 349 -320 2,014 Senior bonds 1,879 - - 348 - - 2,227 Total 3,366 241 255 348 349 -320 4,241 *) Mandatum EUR 100 million held by Sampo plc and Topdanmark EUR 220 mi
Slide 35: Sampo Group debt instruments, 31 March 2022
Sampo Group debt instruments, 31 March 2022 Sampo Plc If Instrument & Principal Coupon Maturity Instrument & Principal Coupon Maturity Senior Bond 118 SEKm 0.875% 23 May 2022 Subordinated, Tier1 1,000 SEKm Stibor 3M + 2.75% 22 Mar 2023 Senior Bond 250 SEKm Stibor 3M+0.75% 23 May 2022 Subordinated 1,
Slide 36: If
SAMPO => GROUP If 4 May 2022
Slide 37: If combined ratio development
If combined ratio development 90% 85% 88.9% 80% 88.1% 87.7% 86.5% 86.1% 85.3% 85.2% 84.5% 82.1 % 81.5 % 81.3 % 80.8% 75% 70% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1-3/2021 1-3/2022 Combined ratio Target for 2021-2023 (<85%) Note: 2015 and 2016 excluding one-offs 4 May 2022 37
Slide 38: If results by quarter
If results by quarter EURm Q1/2022 Q4/2021 Q3/2021 Q2/2021 Q1/2021 Gross written premiums 1,923 1,057 1,031 1,243 1,802 Net earned premiums 1,216 1,229 1,202 1,189 1,152 Claims incurred -735 -742 -716 -700 -702 Operating expenses -247 -276 -248 -260 -236 Underwriting result 234 210 238 230 213 Other
Slide 39: If key figures by quarter
If key figures by quarter Q1/22 Q4/21 Q3/21 Q2/21 Q1/21 Q4/20 Q3/20 Q2/20 Q1/20 Risk ratio, % 60.5 60.4 59.6 58.8 61.0 57.6 62.4 59.3 63.4 Cost ratio, % 20.3 22.5 20.6 21.9 20.5 23.8 20.5 21.2 20.4 Expense ratio, % 14.9 17.2 15.2 15.9 14.9 17.4 15.2 15.4 15.0 Combined ratio, % 80.8 82.9 80.2 80.7 81
Slide 40: If key figures by business area and country
If key figures by business area and country 1-3/2022 (1-3/2021) Private Commercial Industrial Baltic Sweden Norway Finland Denmark GWP, EURm 762 (741) 714 (680) 392 (335) 55 (45) 524 (523) 637 (576) 484 (460) 223 (198) NPE, EURm 719 (694) 323 (306) 132 (115) 42 (37) 412 (411) 401 (361) 242 (233) 118
Slide 41: If GWP quarterly growth by business area and country
If GWP quarterly growth by business area and country* Private Commercial Industrial Baltic Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2.6 3.9 1.6 0.9 0.8 3.1 8.5 3.1 2.2 16.2 -1.8 6.7 11.5 9.6 4.6 2.5 2019 3.3 3.9 5.9 7.3 1.6 3.3 4.0 5.1 11.7 12.6 22.6 38.3 -1.9 2.2 0.1 -0.3 2020 6.4 0.4 4
Slide 42: If large claims and prior year gains
If large claims and prior year gains EURm Q1/22 Q4/21 Q3/21 Q2/21 Q1/21 Q4/20 Q3/20 Q2/20 Q1/20 Large claims 18 35 -29 32 1 4 37 27 20 (above expected) Large claims vs expected, % 1.5% 2.8% -2.4% 2.7% 0.1% 0.3% 3.2% 2.4% 1.8% Prior year gains 97 38 39 48 47 50 33 41 62 Prior year gains, % 7.9% 3.1%
Slide 43: Nordic market for new car sales declined by 20% in Q1 2022
Nordic market for new car sales declined by 20% in Q1 2022 Number of new cars sold, Changes in number of new cars sold, Number of new cars sold, thousand YoY thousand Nordic Sweden Norway -20% Q1 Q1 91 70 203 2021 2022 36 32 162 Sweden +37% -23% Norway +12% -11% Q1 2021 Q1 2022 Q1 2021 Q1 2022 Finla
Slide 44: Q1 2022 COVID-19 effects lower than 2021 and not separately disclosed
Q1 2022 COVID-19 effects lower than 2021 and not separately disclosed Positive COVID-19 effect, approximation in percentage points 4% 4% • At the start of 2022, pandemic-related restrictions were 3% 3% 3% 3% reintroduced, leading to lower claims frequencies across the Nordic region 2% 2% • After res
Slide 45: If discount rate development
If discount rate development 2.0% 1.6% 1.2% 0.95% 0.75% 0.75% 0.75% 0.8% Finland 0.4% 0.0% -0.72% -0.55% -0.77% Sweden -0.4% -0.24% -0.8% Denmark -1.2% -0.97% -1.6% -2.0% -1.59% -1.74% -1.81% -2.4% Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Slide 46: Topdanmark
SAMPO => GROUP Topdanmark 4 May 2022
Slide 47: Topdanmark financial highlights
Topdanmark financial highlights (as reported by Topdanmark stand-alone) 2017 2018 2019 2020 2021 1-3/2021* 1-3/2022* P&C premiums earned, mDKK 8,985 9,135 9,397 9,732 10,154 2,333 2,428 Life premiums earned, mDKK 8,525 10,111 11,106 10,981 10,360 - - Profit on P&C insurance, mDKK 1,909 1,420 1,601 1
Slide 48: Topdanmark combined ratio development
Topdanmark combined ratio development (as reported by Topdanmark stand-alone) 95% 91.5% 90.3% 90% 88.0% 86.8% 86.5% 86.9% 86.0% 85.1% 85% 83.6% 83.7% 83.7% 83.4% 82.0% 80% 75% 70% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1-3/2021 1-3/2022 4 May 2022 48
Slide 49: Topdanmark profit before taxes by quarter (consolidated)
Topdanmark profit before taxes by quarter (consolidated) EURm 140 137 120 100 92 89 82 80 71 58 60 53 52 46 48 40 34 37 20 0 Q1/19 Q2/19 Q3/19 Q4/19 Q1/20 Q2/20 Q3/20 Q4/20 Q1/21 Q2/21 Q3/21 Q4/21 Q1/22 -20 -13 4 May 2022 49
Slide 50: Hastings
SAMPO => GROUP Hastings 4 May 2022
Slide 51: Hastings operating ratio and loss ratio development
Hastings operating ratio and loss ratio development Operating ratio Loss ratio 100% 90% 95% 92.5 % 85% 82.6 % 90% 87.5 % 87.4 % 80% 76.5 % 85% 75% 80.3 % 80% 70% 68.2 % 66.9 % 75.1 % 75% 65% 62.2 % 70% 60% 65% 55% 60% 50% 2019 2020 2021 Q1/2021 Q1/2022 2019 2020 2021 Q1/2021 Q1/2022 Target for 2021-
Slide 52: Hastings private car market share development
Hastings private car market share development 9% 8.4% 8.3% 8.3% 8% 7.5% 7.7% 7.3% 7% 6.5% 6% 5.8% 5% 4% 3% 2% 1% 0% 2015 2016 2017 2018 2019 2020 2021 3/2022 4 May 2022 52
Slide 53: Mandatum
SAMPO => GROUP Mandatum 4 May 2022
Slide 54: Mandatum profit by components
Mandatum profit by components EURm 1-3/2022 1-3/2021 Investment result 59 61 Expense result 5 6 Risk result 8 6 Other items -6 3 Total Life result 67 75 Asset Management result 7 - Group items -1 - Mandatum Group profit before taxes* 72 76 Change in fair value -243 58 Mandatum Group profit before ta
Slide 55: Mandatum's profit components
Mandatum’s profit components EURm 300 250 200 187 192 221 178 150 158 129 107 86 100 109 102 18 33 27 27 50 25 35 24 59 24 61 14 19 6 38 43 6 7 24 23 33 31 35 33 35 19 6 5 0 8 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1-3/2021 1-3/2022 Risk result Expense result Asset Management Investment r
Slide 56: Mandatum unit-linked and other client assets
Mandatum unit-linked and other client assets EURm 12,000 11,000 10,000 9,000 8,000 7,000 6,000 11,090 10,884 5,000 9,192 8,655 4,000 7,260 7,149 6,567 3,000 5,981 5,332 4,617 2,000 3,833 1,000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 3/2022 Other client assets added on top of unit-linked
Slide 57: Mandatum Life with-profit liabilities
Mandatum Life with-profit liabilities EURm 6,000 5,000 1,228 1,196 1,142 4,000 385 1,065 439 135 244 1,008 439 273 964 499 325 545 232 875 Segregated fund 3,000 547 751 230 743 556 570 218 2,598 2,475 274 259 Reserve for decreased 2,360 534 discount rate 2,000 2,245 491 496 2,108 1,957 Other with-pr
Slide 58: Holding & other
SAMPO => GROUP Holding & other 4 May 2022
Slide 59: Sampo plc balance sheet, 31 March 2022
Sampo plc balance sheet, 31 March 2022 Assets total, EURm Liabilities total, EURm 12,478 12,478 Liquidity 3,913 CPs issued 0 Investment assets 753 LT senior debt 1,879 Real estate 2 Private placements 45 Fixed income 22 Bonds issued 1,834 Equity and private equity 729 Subordinated loans* 110 Subordi
Slide 60: Sampo Group overview
Sampo Group overview 4 May 2022 60
Slide 61: Sampo's strategy is focussed on P&C insurance
Sampo’s strategy is focussed on P&C insurance P&C insurance: Invest and develop Life & investments: Manage for value ~40% of ~ 30% group GWP: €7.6bn COR: 81.4% UW profit: €1.3bn group capital earnings Invest to build high quality Nordic and UK private/SME P&C operations Optimise return on capital Pr
Slide 62: P&C Insurance market shares
P&C Insurance market shares 20% Nordics If & Topdanmark 20% Tryg 11% Norway Q4/2021 Sweden Q4/2021 LF 10% Gjensidige 26% LF 31% 18% Gjensidige 9% 22% If 18% If 22% RSA Scand. 7% Fremtid 15% Folksam 16% Others 43% Tryg 13% Trygg-Hansa 14% Others 24% Others 21% Finland 2020 21% OP 33% Norway Sweden Fi
Slide 63: Sampo plc's ownership structure
Sampo plc’s ownership structure Registered shareholders, 31 March 2022 Solidium Oy 6.18%* Varma Mutual Pension Insurance Company 4.13% Ilmarinen Mutual Pension Insurance Company 1.38% Elo Mutual Pension Insurance Company 0.65% The State Pension Fund 0.54% Other domestic shareholders 25.69% Foreign a
Slide 64: Sampo Group ESG overview
Sampo Group ESG overview 4 May 2022 64
Slide 65: Allocation of direct fixed income and equity investments according to ESG risk categories
Allocation of direct fixed income and equity investments according to the ESG risk categories, Sampo Group excluding Topdanmark and Hastings 31 March 2022 Weighted average ESG risk rating of Sampo Group’s Severe Risk direct fixed income and equity investments (0-100) 17 High Risk 1% 2% Market value
Slide 66: Examples of initiatives and commitments
Examples of initiatives and commitments Sampo Group If Topdanmark Hastings Mandatum Sampo plc 4 May 2022 66
Slide 67: Sampo plc's ESG ratings
Sampo plc’s ESG ratings Target: To be rated in the top quartile within the industry among the leading rating agencies’ rankings. Examples of ESG rating agencies Rating and scale Rating distribution and/or ranking Prime Rating of Sampo plc: 59/100 Percentile rank of Sampo plc: 78 (Average of responde
Slide 68: If P&C – ESG in underwriting and ambitious climate targets
If P&C – ESG in underwriting and ambitious climate targets ESG framework for underwriting Science Based Target initiative (SBTi) SBTi is a joint initiative between the UN, WWF, CDP and World Resources Institute If’s internal framework for ESG in underwriting: If P&C has committed to the Science Base
Slide 69: If's strong ESG credentials supported by launch of ESG in underwriting
If’s strong ESG credentials supported by launch of ESG in underwriting • Increased ambition level regarding ESG in investment operations • Sector-based screening and Investments norms-based research implemented • In Q2/2021 If started to • If’s Supplier Code of systematically integrate ESG into Cond
Slide 70: Investor Presentation
Investor Presentation JANUARY – MARCH 2022 www.sampo.com Sampo plc Phone: +358 10 516 0100 Sampo_plc Fabianinkatu 27 Business ID: 0142213-3 sampo_oyj 00100 Helsinki sampo-plc Finland 70