Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Q1 2024 Earnings Presentation
66 slides from Sampo Oyj's earnings presentation, May 7, 2024
Slide 1: Investor Presentation January–March 2024
Investor Presentation January–March 2024 1
Slide 2: 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 3: Sampo Group Q1/2024 results
Sampo Group Q1/2024 results 7 May 2024 7 May 2024 3
Slide 4: Q1/2024: Solid underlying performance offset by severe weather
Q1/2024: Solid underlying performance offset by severe weather Q1/2024 operating EPS Continued strong FX-adjusted top line growth of 10%, supported by all business areas 0.51 -12% 0.50 +10% -1% +2% Underlying margin trends remained positive, with stable-to- easing claims inflation Underwriting resul
Slide 5: Strong top line growth in all business areas
Strong top line growth in all business areas Group FX-adjusted top line growth • Group top line development driven by record high Q1 growth in the Nordics and continued strong development in the UK Group total 10% • Growth in Private supported by personal insurance and property, while retention rema
Slide 6: First quarter Nordic severe weather claims highest since 2010
First quarter Nordic severe weather claims highest since 2010 Severe weather claims of EUR 100 million in Q1 in If P&C, driven by prolonged cold weather, heavy snow, storms and freeze cycles with high precipitation EUR 100 mn Norway and Sweden were most affected, together accounting for nearly 90% o
Slide 7: Key developments in Sampo's P&C operations
Key developments in Sampo’s P&C operations Premium growth and pricing Claims cost development ✓ The Nordic P&C market remains disciplined, with dynamics ✓ Nordic claims inflation remained stable in the lower part of the broadly unchanged year-to-date 4-5% range ✓ Nordic price increases ahead of clai
Slide 8: Solid underlying development offset by severe weather
Solid underlying development offset by severe weather Group underwriting result, EURm Group combined ratio • Group underlying combined ratio improved by 1.1%-p, driven by solid development both in the Nordics and in the UK 292 87.1% 84.0% 260 • Challenging winter conditions had a 6.0%-p effect on Gr
Slide 9: Accelerated growth in Private, driven by non-motor lines
Accelerated growth in Private, driven by non-motor lines GWP, EURm Underwriting result, EURm • GWP growth driven by continued strong momentum in non-motor 744 785 lines, while retention remained high and stable at 89 per cent 126 78 • Strong growth of 14% in personal insurance +7.2% -38% • Property
Slide 10: UK growth driven by price increases implemented in 2023
UK growth driven by price increases implemented in 2023 • Continued strong top line growth on the back of stabilised pricing GWP & brokerage, EURm Underwriting result, EURm environment and further policy growth 560 445 32 • Total live customer policies up 6% year-on year, driven by 2% growth in Moto
Slide 11: Solid growth in corporate lines, driven by 1 January renewals
Solid growth in corporate lines, driven by 1 January renewals Commercial • GWP growth supported by successful 1 January renewals and high and stable retention – more than 40% renewed in Q1 GWP, EURm Underwriting result, EURm 753 52 54 • Outcome in line with expectations, with high acceptance rates 7
Slide 12: Investment returns driven by higher running yields and equities
Investment returns driven by higher running yields and equities • Net investment income increased 16% to EUR 295 million, Group investment returns and investment mix supported by higher running yields and strong start of the year EURm 119 140 52 288 6% for equities 8% Fixed 10.9% income • Total inve
Slide 13: Solvency and leverage remained well within target
Solvency and leverage remained well within target Sampo Group Solvency II ratio, pro forma, % Sampo Group financial leverage, % Own funds: EURm 5,856 EURm 6,201 IFRS equity: EURm 7,687 EURm 7,971 SCR: EURm 3,217 EURm 3,338 Financial debt: EURm 2,604 EURm 2,594 200% 28% Target: <30% 2.3 % 26.8 % 8% -
Slide 14: Performance against financial targets
Performance against financial targets Target for 2024-2026 Q1/2024 Operating EPS growth (period average): >7% -1% Combined ratio: <85% (annual) 87.1% Deployable capital generation: >EUR 4 billion (cumulative) Progressing in line with target Solvency II ratio: 150-190% 180% (pro forma, incl. dividend
Slide 15: Outlook for 2024
Outlook for 2024 Following the first quarter result, Sampo has narrowed its 2024 outlook and now expects to deliver a Group combined ratio of 83–85 per cent. Previously, the outlook for the 2024 Group combined ratio was below 85 per cent, as per the stock exchange release published on 6 March 2024.
Slide 16: Sampo Group
Sampo Group 7 May 2024 16
Slide 17: Financials
SAMPO = GROUP Financials 7 May 2024 17
Slide 18: Results and key figures by quarter
Results and key figures by quarter EURm Q1/2024 Q4/2023 Q3/2023 Q2/2023 Q1/2023 FY 2023 FY 2022 GWP & brokerage income 3,297 1,864 1,909 2,081 3,016 8,870 8,375 Insurance revenue, net (incl. Brokerage) 2,020 1,939 1,911 1,857 1,828 7,535 7,277 Claims incurred and claims handling costs, net -1,387 -1
Slide 19: Operating result by quarter
Operating result by quarter EURm Q1/2024 Q4/2023 Q3/2023 Q2/2023 Q1/2023 FY 2023 Underwriting result 260 281 284 306 292 1,164 Interest and dividend income 143 137 119 140 126 522 Realised gains 46 6 73 40 38 156 Unwind of discounting -59 -81 -53 -54 -60 -248 Finance and other items (incl. non-opera
Slide 20: Key result movements Q1/2024
Key result movements Q1/2024 Q1/2024 Q1/2023 Comments - Solid underlying improvement of 1.1%-p Group combined ratio, % 87.1 84.0 - Severe weather had a 6.0%-p effect, partly offset by 2.0%-p better large claims outcome vs budget - UW result of EUR 260 million negatively affacted by challenging Nordi
Slide 21: Top line development
Top line development GWP and brokerage income Insurance revenue, net (incl. brokerage) EURm EURm IFRS 4 IFRS 17 IFRS 4 IFRS 17 10,000 8,000 7,535 8,870 7,337 7,277 9,000 6,887 8,375 7,000 1,251 8,136 6,516 1,010 998 7,644 8,000 2,063 830 7,241 1,636 805 1,313 6,000 7,000 1,127 1,326 1,255 1,288 1,10
Slide 22: Underwriting result and combined ratio development
Underwriting result and combined ratio development Underwriting result Combined ratio EURm IFRS 4 IFRS 17 IFRS 4 IFRS 17 1,400 88% 87.1% 1,314 1,282 104 85.8% 1,164 86% 1,200 164 84.6% 84.0% 1,087 224 128 84% 83.3% 1,031 103 1,000 227 128 81.4% 82.1% 194 82% 182 800 230 80% 600 78% 985 891 76% 842 4
Slide 23: Net insurance liabilities
Net insurance liabilities Q1/2024 LIC per country and durations 2023 year-end EURm If P&C Topdanmark Hastings Sampo If Sampo Group Group LIC, % Duration, years LIC, % Duration, years Liability for remaining coverage, net 1,184 560 526 2,270 Sweden 31 6.3 22 6.3 Liability for incurred claims, net 5,6
Slide 24: Key sensitivities under IFRS
Key sensitivities under IFRS Quarterly P&L effects, Q1/2024 Sampo EURm If Hastings Group¹ • Loss and combined ratio Combined ratio effect ² ³ Discount rate ±100 bps ± 60-70 bps ± 50 bps ± 60-70 bps sensitive to changes in discount rates Insurance finance income & expense, net Discount rate +100 bps
Slide 25: Share count development
Share count development Total share count, million Average number of shares 555.4 546.8 1-12/2020 555,351,850 514.4 501.8 501.8 1-12/2021 554,316,818 1-12/2022 530,296,202 1-3/2023 511,856,292 1-6/2023 509,913,142 1-9/2023 507,335,008 1-12/2023 505,939,064 1-3/2024 501,796,752 2020 2021 2022 2023 Q1
Slide 26: Share buybacks development
Share buybacks development Buyback programmes Buybacks by quarter Announced, Executed, Launch Start End EURm EURm Shares repurchased EURm 1. programme 1 Oct 2021 4 Oct 2021 25 Mar 2022 750 750 Q4/2021 8,539,956 380 2. programme 30 Mar 2022 31 Mar 2022 17 May 2022 250 228 Total 2021 8,539,956 380 3.
Slide 27: Investments
SAMPO = GROUP Investments 7 May 2024 27
Slide 28: Sampo Group investment mix, March 2024
Sampo Group investment mix, 31 March 2024 If Topdanmark Hastings Sampo plc Sampo Group Fixed income total 88% 91% 98% 61% 86% Credit bonds, funds and loans 57% 2% 73% 7% 44% Covered bonds 18% 82% 0% 0% 23% Government bonds 7% 0% 4% 0% 4% Index-linked bonds 4% 3% 0% 0% 3% Money market and cash 3% 4%
Slide 29: Net investment income Q1/2024
Net investment income Q1/2024 EURm If P&C Topdanmark Hastings Holding Eliminations Sampo Group Fixed income 97 11 10 7 -2 123 Equities 13 3 0 0 0 16 Funds 1 2 1 0 0 3 Interest & dividend income 111 16 11 7 -2 143 Fixed income -18 1 -1 -1 0 -19 Equities 84 6 0 32 0 122 Funds 35 0 0 0 0 35 Net gains o
Slide 30: Net financial result bridge Q1/2024
Net financial result bridge Q1/2024 350 -59 300 14 -8 -8 -5 -43 34 250 138 200 143 150 5 295 IFIE 11 EUR -30 million 265 16 100 50 111 0 Interest & dividend Net gains or losses Other Net investment Unwind of Changes in discount Indexation of Net financial result income income discounting rates annui
Slide 31: Financial position
Financial position 7 May 2024 31
Slide 32: Solvency II ratio development
Solvency II ratio development 220% 210% 200% 185% 186 % 182 % 180 % 180% 174% 176% 160% 140% 120% 100% 2019 2020 2021 2022 2023* Q1/2024* Q1/2024 adj.** Solvency II ratio Target range for 2021-2023 (170-190%) Target range for 2024-2026 (150-190%) *) pro forma of demerger-related transactions. **) pr
Slide 33: Solvency II SCR and own funds, March 2024, pro forma
Solvency II SCR and own funds, 31 March 2024, pro forma EURm 7,000 Solvency II ratio 186% 6,201 6,000 121 1,429 5,000 287 218 22 -859 4,000 -441 0 22 T3 2,055 T2 3,000 T1 restricted 4,630 T1 unrestricted 2,000 3,338 1,000 2,057 0 Market risk Insurance risk Counterparty Operational risk Diversificati
Slide 34: Estimated Solvency II ratio sensitivities on market risk factors
Estimated Solvency II ratio sensitivities on market risk factors Pro forma, 31 March 2024 200% 186% 182% 189% 187% 187% 185% 179% 150% 100% 50% 0% Base case 2023 RFR -100 bps RFR +100 bps Spread +100 bps Equity prices -10% Equity prices -20% Equity prices -30% Scenario Symmetric adjustment The Solve
Slide 35: Financial leverage development
Financial leverage development IFRS 4 IFRS 17 Total debt, EURm 4,905 4,210 3,288 3,288 2,604 2,594 IFRS equity, EURm 12,258 13,464 9,543 10,178 7,687 7,971 35% 28.6% 23.8% 25.6% 24.4% 25.3% 24.6% 26.8% 30% 25% 20% 15% 10% 5% 0% 2020 2021 2022 2022 2023 Q1/2024 Q1/2024 adj.* Senior Sub/hybrid Target
Slide 36: Financial debt, March 2024
Financial debt, 31 March 2024 Sampo plc If Topdanmark Hastings Eliminations* Group, total Sub/hybrid 1,490 130 147 - -127 1,640 Senior bonds 954 - - - - 954 Total 2,464 130 147 - -127 2,594 * Topdanmark EUR 127 million held by If. Key credit Metrics Financial debt, EURm 2,594 IFRS equity, EURm 7,971
Slide 37: Outstanding debt instruments, March 2024
Outstanding debt instruments, 31 March 2024 Sampo Plc Subsidiaries Instrument & Principal Coupon Maturity/call Instrument & Principal Coupon Maturity/call Senior Bond 162 EURm 1.250% 30 May 2025 If P&C - Subordinated 1,500 SEKm Stibor 3M + 1.30% 17 Mar 2026 Senior Bond 313 EURm 1.625% 21 Feb 2028 To
Slide 38: If
If 7 May 2024 38
Slide 39: GWP growth driven by increased rates and high retention
GWP growth driven by increased rates and high retention Q1/2024 GWP growth Key developments GWP by Business Area If total 7.6% • Strong organic GWP growth of 7.6% in Q1 2024 Baltic 4% (excl. currency effects) Industrial Private 7.2% • Positive development in all business areas and countries, 18% sup
Slide 40: Solid underlying development offset by severe weather
Solid underlying development offset by severe weather Q1/2024 combined ratio Key developments • First quarter underwriting result of EUR 171 million (217) supported by strong FX- adjusted GWP growth and solid underlying margins • Continued improvement from targeted rate increases to mitigate claims
Slide 41: Results by quarter
Results by quarter EURm Q1/2024 Q4/2023 Q3/2023 Q2/2023 Q1/2023 FY 2023 FY 2022 Gross written premiums 2,095 1,095 1,100 1,307 1,966 5,468 5,432 Insurance revenue, net 1,290 1,266 1,263 1,231 1,235 4,996 5,024 Claims incurred, net -926 -772 -802 -761 -759 -3,093 -3,267 Operating expenses and claims
Slide 42: Key figures by quarter
Key figures by quarter Q1/2024 Q4/2023 Q3/2023 Q2/2023 Q1/2023 FY 2023 FY 2022 Combined ratio, % 86.8 83.1 84.1 82.9 82.4 83.1 86.6 Cost ratio, % 20.6 22.2 20.7 21.1 21.0 21.2 21.6 Risk ratio, % 66.2 60.9 63.4 61.8 61.5 61.9 65.0 Large claims -2.9 1.2 3.7 3.1 -2.8 1.3 0.6 Severe weather 8.0 2.6 5.6
Slide 43: Combined ratio and cost ratio development
Combined ratio and cost ratio development Combined ratio Cost ratio IFRS 4 IFRS 17 ~20bps IFRS 4 IFRS 17 21.8% If P&C cost ratio 86.6% 86.8% 21.6% reduction p.a. 21.5% 21.4% 84.5% 21.2% 83.1% 21.1% 82.1% 82.4% 21.0% 81.3% 80.3% 20.6% 2019 2020 2021 2022 2022 2023 Q1/2023 Q1/2024 2019 2020 2021 2022
Slide 44: Key figures by business area and country
Key figures by business area and country Q1/2024 (Q1/2023) Private Commercial Industrial Baltic Sweden Norway Finland Denmark Other GWP, EURm 785 (744) 753 (740) 477 (418) 69 (64) 553 (514) 667 (650) 557 (525) 238 (214) 11 (0) Insurance revenue, net, EURm 729 (702) 335 (326) 165 (155) 59 (51) 423 (4
Slide 45: FX-adjusted GWP quarterly growth by business area and country
FX-adjusted 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 2020 6.4 0.4 4.9 3.6 7.3 4.4 -1.0 -1.5 7.6 13.0 17.7 6.2 6.6 -2.7 3.5 1.9 2021 3.9 5.8 2.7 2.2 0.6 10.2 3.7 11.8 3.8 8.6 3.2 8.6 4.9 11.3 13.7 14.7 2022
Slide 46: Number of customers, customer satisfaction and retention in Private
Number of customers, customer satisfaction and retention in Private Number of customers, million Customer satisfaction, NPS Customer retention, % households 3.3 3.3 62 3.2 3.2 61 90% 90% 60 89% 89% 58 2021 2022 2023 Q1/2024 2021 2022 2023 Q1/2024 2021 2022 2023 Q1/2024 7 May 2024 46
Slide 47: Nordic new car sales
Nordic new car sales Number of new cars sold, annual development Number of new cars sold, first quarter development If P&C had a market share of 878,000 24% in Q1/2024 841,000 838,000 221,000 213,000 208,000 199,000 -10% 761,000 176,000 728,000 158,000 153,000 692,000 677,000 137,000 2017 2018 2019
Slide 48: Topdanmark
Topdanmark 7 May 2024 48
Slide 49: Results and key figures
Results and key figures EURm Q1/2024 Q4/2023 Q3/2023 Q2/2023 Q1/2023 FY 2023 FY 2022 Gross written premiums 653 241 252 242 604 1,339 1,308 Insurance revenue, net 361 333 321 317 318 1,288 1,255 Claims incurred, net -241 -242 -217 -200 -203 -862 -809 Operating expenses and claims handling costs -63
Slide 50: Hastings
Hastings 7 May 2024 50
Slide 51: Results and key figures by quarter
Results and key figures by quarter EURm Q1/2024 Q4/2023 Q3/2023 Q2/2023 Q1/2023 FY 2023 FY 2022 Gross written premiums 467 440 467 435 363 1,706 1,314 Brokerage revenue 93 88 90 97 83 357 322 Insurance revenue, net (incl. brokerage) 369 340 327 309 275 1,251 998 Claims incurred and claims handling c
Slide 52: Operating ratio and underwriting profit development
Operating ratio and underwriting profit development Operating ratio, % Underwriting profit, EURm 10-15% 164 UK UW profit 93.3% growth p.a. on 91.4% average 89.7% 89.8% 87.4% 87.2% 128 128 103 104 80.3% 32 19 2020 2021 2022 2022 2023 Q1/2023 Q1/2024 2020 2021 2022 2022 2023 Q1/2023 Q1/2024 7 May 2024
Slide 53: Live customer policies development
Live customer policies development Million 4.0 3.5 3.5 3.5 3.1 3.2 2.8 3.1 0.54 0.57 3.0 0.27 0.31 0.41 2.6 2.7 0.21 2.3 0.17 0.16 2.5 0.17 2.0 2.0 0.13 1.5 2.9 2.9 2.8 2.8 2.8 2.5 2.6 2.5 2.2 1.0 1.9 0.5 0.0 2015 2016 2017 2018 2019 2020 2021 2022 2023 Q1/2024 Motor Home 7 May 2024 53
Slide 54: Holding
Holding 7 May 2024 54
Slide 55: Results by quarter
Results by quarter EURm Q1/2024 Q4/2023 Q3/2023 Q2/2023 Q1/2023 FY 2023 FY 2022 Net investment income 50 -38 5 18 -22 -37 177 Other income 0 0 1 0 0 1 132 Other expenses -13 -28 -9 -12 -7 -57 -48 Finance expenses -17 -12 -18 -20 -16 -66 -96 Share of associates’ profit or loss - - - - - - -19 Profit
Slide 56: Sampo plc balance sheet, March 2024
Sampo plc balance sheet, 31 March 2024 Assets total, EURm 7,985 Liabilities total, EURm 7,985 Liquidity 1,342 CPs issued 0 Investment assets 979 LT senior debt 954 Tangible assets 2 Private placements 0 Fixed income 101 Bonds issued 954 Equity and private equity 876 Subordinated debt 1,490 Equity ho
Slide 57: Sampo Group overview
Sampo Group overview 7 May 2024 57
Slide 58: Sampo's P&C operations have a uniquely attractive profile
Sampo’s P&C operations have a uniquely attractive profile Top line: EUR 8.9 billion Private Commercial Industrial Baltic UK EUR 3.6 bn EUR 2.0 bn EUR 1.0 bn EUR 0.2 bn EUR 2.1 bn Combined ratio: 84.6% Underwriting profit: EUR 1.2 bn UW profit CAGR: 8% ✓ Leading digital sales and ✓ Strong pricing pow
Slide 59: Financial targets, ambitions and capital management framework
Financial targets, ambitions and capital management framework Financial targets Operational ambitions Capital management ➢ Operating EPS growth: >7% • If P&C cost ratio reduction: ~20bps (annual) ➢ Solvency II target range: 150-190% (period average) • If P&C GWP growth in PI: >7.5% (period average)
Slide 60: P&C Insurance market shares
P&C Insurance market shares Norway Q4/2023 Sweden Q4/2023 Nordics Gjensidige 26% LF 30% If & Topdanmark 20% If 21% If 18% Tryg 15% Fremtind 15% Tryg 17% LF 9% Tryg 13% Folksam 16% Gjensidige 9% Storebrand 5% Others 19% OP 5% Others 19% Others 41% Denmark Q1/2023 Finland 2022 Finland Tryg 23% OP 33%
Slide 61: Sampo's ownership structure March 2024
Sampo’s ownership structure 31 March 2024 Largest Finnish-registered shareholders Ownership development 230,000 70% 210,000 Solidium Oy 6.63%* 68% 190,000 Varma Mutual Pension Insurance Company 4.43% 66% 170,000 Ilmarinen Mutual Pension Insurance Company 1.22% 150,000 64% Oy Lival AB 0.80% 130,000 6
Slide 62: Sampo Group ESG overview
Sampo Group ESG overview 7 May 2024 62
Slide 63: Sampo has committed to set group-level SBTi targets
Sampo has committed to set group-level SBTi targets • Sampo joined the Science Based Targets initiative (SBTi)* in October 2023 to If P&C’s targets approved by SBTi set group-level near-term greenhouse gas emission reduction targets aligned with the Paris Agreement • Sampo’s subsidiaries If, Topdanm
Slide 64: Allocation of 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 2024 Weighted average ESG risk rating of Sampo Group’s direct fixed income and equity investments (0-100) 18 Market value of Sampo Group’s direct fixe
Slide 65: 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 Industry best is B-. Rating of Sampo plc: 55/100 Percentile rank of Sampo plc: 87 Indus
Slide 66: Sampo plc contact details
Sampo plc Fabianinkatu 27 00100 Helsinki, Finland Phone: +358 10 516 0100 Business ID: 0142213-3 www.sampo.com @Sampo_plc sampo-plc sampo_oyj 66