Supplementary Financial Information Sampo Group. January-December 2010

Transcription

1 Supplementary Financial Information Sampo Group January-December 2010

2 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 assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors. Important factors that may cause such a difference for Sampo include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate and (iii) developments in capital markets. This presentation does not imply that Sampo has undertaken to revise these forward-looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided. 2

3 KEY FINANCIAL FIGURES 3

4 Sampo Group s results EURm Profit before taxes and net profit Profit before taxes by quarters EURm Pre-tax profit Net profit 4

5 Sampo Group profit before taxes January-December 2010 EURm P&C Life Nordea Holding Sampo Group *) 5 *) excl. Nordea

6 Profit before taxes and comprehensive income 2009 and 2010 EURm Profit before taxes Comprehensive income P&C Life Nordea Sampo Group 6

7 Earnings per share EUR EPS and Comprehensive result EPS EUR Reported EPS by quarter 7,00 6,00 5,00 5,88 0,60 0,40 0,44 0,48 0,51 0,54 4,00 3,00 2,00 1,00 1,14 1,97 3,22 0,20 0,26 0, ,00 Q4/09 Q1/10 Q2/10 Q3/10 Q4/10 EPS (reported) EPS (comprehensive result) 7

8 Total dividends EURm *) *) proposed dividend 8

9 Sampo Group s equity, EURm Fair value reserve Retained earnings Invested unrestricted equity Restricted capital Dec Dec

10 Sampo Group s net asset value per share EUR 18,00 17,79 15,00 13,49 14,63 12,00 9,00 6,00 5,97 7,67 9,21 8,28 3,00 0,

11 Net asset value by quarters December December 2010 EURm Other items Nordea at FV./. Group BV Group equity

12 Sampo Group s net asset value 31 December 2010 EURm Nordea at FV P&C insurance Life insurance Nordea Sampo plc & eliminations Sampo Group 12

13 Return on equity in Sampo Group s business areas % 75 % P&C insurance Life insurance Sampo Group 97,6% 50 % 25 % 0 % -25 % 24,1% 39,0% 28,4% 22,0% 30,0% 22,6% 19,2% 9,1% 52,6% -0,8% -32,4% 53,2% 55,7% 39,8% 36,2% 21,8% 26,3% 23,9% 24,8% Target P&C and Life >17.5% -50 % -68,8% -75 % Average 13

14 Fair value reserve by segment EURm 12/ / /2008 P&C insurance Life insurance Holding ,759.3 Sampo Group**) ,363.5 *) *) Nordea not included in FVR as of 2009 **) Eliminations included and figures after tax 14

15 Fair value reserve development by segment and asset class, 31 December 2010 EURm Fixed income Equity Derivat. held for trading Deferred taxes FVR net P&C insurance Life insurance Holding Sampo Group*) *) Eliminations included and figures after tax 15

16 Sampo plc s ownership structure, 31 January 2011 Foreign and nominee registered owners 48,6% Solidium* 14,1% Other domestic owners % 23,1% Varma Mutual Pension 8,5% Ilmarinen Mutual Pension 2,5% Björn Wahlroos 2,1% Kaleva Mutual Insurance 1,1% * Entirely owned by the Finnish State 16

17 Sampo Group staff, 31 December 2010 *) Sampo Group staff *) 31 December December 2009 P&C INSURANCE 6,305 6,583 Finland 1,722 1,763 Sweden 1,843 1,880 Norway 1,506 1,587 Baltics, Russia, Denmark and other 1,234 1,353 LIFE INSURANCE Finland Baltics and other HOLDING Sampo plc (Finland) TOTAL SAMPO GROUP 6,844 7,087 *) Full-time equivalents 17

18 CAPITAL POSITION 18

19 Group capital and minimum requirement EURm Group solvency ratio 167% Basel II 187% Sampo plc Nordea Life P&C 19

20 Sampo Group 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 99.5 per cent EC at company level EC is calculated in IF P&C and Mandatum Life using a set of calculation methods, which have been developed for the specific needs of each company In IF P&C and Mandatum Life EC accounts for market, credit, insurance and operational risks, as well as the diversification effect between these risks EC figure calculated and reported by Nordea is used in Sampo-Group reporting. Because Nordeas reported figures are expressed at 99.97% confidence level they are converted by Sampo into 99.5% confidence level EC at Group Level Correlations between companies risks are assessed and diversification effect is calculated Group wide EC is sum of Companies EC and their diversification effect 20

21 Group economic capital and solvency, 31 December 2010 EURm If s subloan not included in adjusted Group capital 81 Liability side adjustment, If and Mandatum Life P&C Life Nordea Diversific. Group EC Adj. group solv. capital 21

22 P&C insurance economic capital split by risk type, 31 December 2010 EURm Subord. loans *) Liability side adjustment **) Insurance risk Market risk Credit risk Operat. risk Diversific. Total Adj. solv. capital *) Part of If s subordinated loans not included in the current regulatory capital **) Discount effect less risk margin 22

23 Life insurance economic capital split by risk type, 31 December 2010 EURm Liability side adjustment

24 Sampo Group economic capital 12/ /2010 EURm / /2010 6/2010 9/ / P&C Life Sampo plc (Nordea stake) Sampo Group (incl. diversification effect) 24

25 Sampo Group s economic capital split by risk type, 31 December 2010 Operational risk 11 % Market risk 39 % Insurance risk 12 % Credit risk 38 % 25

26 INVESTMENTS 26

27 Sampo Group's investment allocation, 31 December 2010 Total EUR 18.3 billion Real Estate 1 % Other 3 % Equities 18 % Bonds 69 % Money Market 9 % Investments of Sampo plc, Mandatum Life and If P&C 27

28 Sampo Group asset allocation Total Group (EURm) 17,755 16,979 17,784 18,301 14,000 12,000 11,339 11,188 11,770 11,661 10,000 8,000 6,000 5,657 5,547 5,781 5,957 4,000 2,000 0 If P&C Mandatum Life 759 Sampo Plc If P&C Mandatum Life 245 Sampo Plc If P&C Mandatum Life 233 Sampo Plc If P&C Mandatum Life 683 Sampo Plc 03/10 06/10 09/10 12/10 Money Market 7% 14% 84% 7% 13% 66% 9% 14% 62% 5% 10% 85% Bonds 80% 53% 9% 80% 51% 15% 78% 50% 20% 80% 51% 9% Equity 12% 25% 2% 12% 25% 7% 12% 27% 8% 14% 28% 3% Private Equity 0% 4% 2% 0% 4% 8% 0% 4% 8% 0% 4% 2% Other 0% 5% 2% 1% 6% 3% 1% 5% 3% 1% 6% 1% 28

29 Investment returns, January-December 2010 Yield-% EURm ML If Plc Total ML If Plc Total Fixed Equities 5.4 % 4.9 % 6.1 % 5.0 % (31) (77) 22.0 % 23.2 % 4.4 % 22.5 % (62) (73) Other 9.8 % 11.1 % 8.7 % 10.1 % Total (incl. FX net result) *) 11.1 % 7.4 % 13.8 % 8.7 % ,520 *) incl. FX result and therefore differs from the sum of asset classes (realized gains and losses in parenthesis) 29

30 Fixed income investment allocation Sampo Group, 31 December 2010 Total EUR 14.2 billion US 6 % Other 1 % Europe Money Market 6 % Scandinavia Money Market 5 % Scandinavia 61 % Europe 20 % 30

31 Fixed income investment allocation by sector Sampo Group, 31 December 2010 Total EUR 14.2 billion Corporate 29 % Money Market 12 % Banks 23 % Government 9 % Covered Bonds 26 % 31

32 Government debt investment allocation by country Sampo Group, 31 December 2010 Total EUR 1.3 billion Norway 7 % Netherlands Belgium 1 % 3 % Denmark 6 % France 10 % Sweden 40 % Finland 14 % USA 18 % 32

33 Bank investment allocation by country Sampo Group, 31 December 2010 Total EUR 8.7 billion France 2 % United States 2 % Denmark 5 % Norway 11 % Estonia Germany 1 % 1 % Switzerland 1 % Netherlands 1 % Finland 14 % Sweden 60 % 33

34 Sampo Group Bank investments by country and investment class Covered bonds Money market Long-term senior debt Long-term subord.debt Total % Sweden 3, ,235 60% Finland ,199 14% Norway ,004 11% Denmark % United States % France % Estonia % Germany % Switzerland % Netherlands % United Kingdom % Austria % Russia % Luxembourg % Belgium % Italy 4 4 0% Ireland 4 4 0% Czech Republic 2 2 0% Latvia 1 1 0% Total 3,700 1,729 2,153 1,147 8, % 34

35 Equity investment allocation by geography Sampo Group, 31 December 2010 Total EUR 3.4 billion Japan 2 % Far East 11 % Latin America 3 % North America 10 % Scandinavia 35 % East Europe 5 % Western Europe 12 % Finland 22 % 35

36 Sensitivity of Group investments to market risks on 31 December 2010 EURm If P&C Mandatum Life Sampo plc Sampo Group Equities -10% % Interest rates -100 bps bps Alternative -10% % Currency -5% 2 (SEK) 44 (EUR) 2(EUR) - +5% -2 (SEK) -44 (EUR) -2(EUR) - The changes of interest rates have a strong effect to the reinvestment risk of the insurance companies. The sensitivities include the effects of derivative positions, but do not capture indirect effects, like the impact of the changes of the discount rates in the value in force. All sensitivities are before taxes. The scenario definitions assume an uniform movement of the whole underlying market. 36

37 P&C INSURANCE 37

38 P&C insurance profit before taxes and comprehensive income, EURm Other comprehensive income items Exchange differences Profit before taxes Profit for the period *) *) incl. exchange differences EUR 248 m 38

39 If P&C result by quarters Profit and loss account, EURm Q4/10 Q3/10 Q2/10 Q1/10 Q4/09 Premiums earned Claims incurred Operating expenses Other technical income and expenses Allocated investment return transferred from the non-technical account Technical result Investment result Allocated investment return transferred to the non-technical account Other income and expenses Operating result

40 If P&C s combined ratio development % ,9 26,6 92,6 90,5 89,9 90,6 91,8 92,1 92,8 25,6 24,3 24,0 23,7 23,7 24,1 23,7 Long-term CoR target < 95% ,3 67,0 66,2 65,9 66,9 68,1 68,0 69, Risk ratio Cost ratio 40

41 If P&C s investments, 31 December 2010 Investment allocation Total EUR 11.7bn AFS investments Unrealized gains before taxes Equity 14 % Private Equity 0,2 % Real Estate 0,7 % Money Market 5 % Bonds 80 % EURm Total Equities Bonds -750 Duration 1.72 years Fixed income running yield 3.9 % 41

42 If P&C mark-to-market investment returns Fixed income running yield Q3/09 Q1/09 Q1/10 Q2/10 Q3/10 Q % 15 % 13 % 12,4% 10 % 8 % 5 % 3 % 4,3% 5,8% 4,4% 2,6% 7,4% 0 % -3 % -5 % -3,1%

43 Breakdown of gross written premiums in If P&C Total EUR 4,189 million by business area by country Private Commercial Industrial Baltic and Russia Norway Sweden Finland Denmark Baltic and Russia 43

44 If GWP change by business area 2010 vs. 2009, % IF GROUP -3,2% 1,3% 7,8% PRIVATE -1,1% 3,8% 10,0% COMMERCIAL -1,8% 0,8% 9,2% INDUSTRIAL -7,7% -2,5% 2,7% BALTIC AND RUSSIA -23,5% -15,5% -14,9% -30,0% -20,0% -10,0% 0,0% 10,0% Growth in SEK Growth in EUR Growth excluding currency effects 44

45 If P&C s technical result by business area 2010 EURm (72) 15(22) 6(5) (143) (488) (246 in 2009) Private Commercial Industrial Baltic & Russia Other Group 45

46 If P&C - key figures by business area Q4/2010 PRIVATE Combined ratio COMMERCIAL Combined ratio 92,5% 93,0% 92,9% 92,4% 92,6% 93,5% 91,2% 94,2% Q4/09 Q4/10 HIGHLIGHTS GWP increased slightly, NPE by 5.1% Combined ratio improved by 0.5 %-points compared to Q4 last year KEY FIGURES GWP: EUR 528 m (518) NPE: EUR 539 m (513) Technical result: EUR 58 m (60) Risk ratio: 66.9% (68.6%) Cost ratio: 25.5% (24.3%) Insurance margin: 10.8% (11.7%) Q4/09 Q4/10 HIGHLIGHTS Risk ratio deteriorated by 5.1 %-points compared to Q4/09 due to the severe winter Cost ratio improved by 2 %-points GWP went up by 8% (in euros) KEY FIGURES GWP: EUR 213 m (198) NPE: EUR 299 m (283) Technical result: EUR 25 m (37) Risk ratio: 71.0% (65.9%) Cost ratio: 23.2% (25.2%) Insurance margin: 8.5% (13.3%) 46

47 If P&C - key figures by business area Q4/2010 INDUSTRIAL Combined ratio BALTIC AND RUSSIA Combined ratio 99,6% 97,5% 90,7% 90,6% 89,9% 85,2% 91,7% 93,4% Q4/09 Q4/ Q4/09 Q4/10 HIGHLIGHTS GWP increased by 20.4% in euro compared to Q4 last year Combined ratio improved by 4.7 %-points from Q4/09 KEY FIGURES GWP: EUR 64 m (53) NPE: EUR 107 m (101) Technical result: EUR 20 m (17) Risk ratio: 66.1% (69.7%) Cost ratio: 19.1% (20.3%) Insurance margin: 18.9% (16.7%) HIGHLIGHTS Combined ratio improved by 2.1%-points due to strong improvement of risk ratio, offset partly by deterioration in cost ratio Premiums decreased slightly KEY FIGURES GWP: EUR 28 m (30) NPE: EUR 30 m (36) Technical result EUR 2 m (3) Risk ratio: 56.5% (61.9%) Cost ratio: 41.0% (37.7%) Insurance margin: 6.9% (7.6%) 47

48 If P&C s technical result by country 2010 EURm (37) 15(22) 6(5) (118) (128) 449 (488) (177 in 2009) Norway Sweden Finland Denmark Baltic & Russia Other Group 48

49 If P&C - key figures by country Q4/2010 Combined ratio Combined ratio 92,0% 92,1% 83,4% 88,6% 95,2% 93,3% 96,9% 89,4% Q4/09 Q4/ Q4/09 Q4/10 NORWAY GWP: EUR 316 m (313) NPE: EUR 357 m (347) Technical result: EUR 54 m (74) Risk ratio: 65.8% (61.4%) Cost ratio: 22.8% (22.0%) Insurance margin: 15.0% (21.5%) SWEDEN GWP: EUR 296 m (277) NPE: EUR 298 m (272) Technical result: EUR 47 m (27) Risk ratio: 64.6% (73.5%) Cost ratio: 24.8% (23.4%) Insurance margin: 15.8% (9.9%) Combined ratio Combined ratio 88,5% 90,4% 98,6% 95,8% 93,7% 101,4% 96,7% 108,4% Q4/09 Q4/ Q4/09 Q4/10 FINLAND GWP: EUR 122 m (112) NPE: EUR 207 m (201) Technical result: EUR 8 m (7) Risk ratio: 72.5% (71.5%) Cost ratio: 23.3% (27.1%) Insurance margin: 3.8% (3.3%) DENMARK GWP: EUR 71 m (68) NPE: EUR 83 m (77) Technical result: EUR -5 m (6) Risk ratio: 79,9% (67.9%) Cost ratio: 28.5% (28.9%) Insurance margin: -5.5% (8.4%) 49

50 If P&C s solvency capital EURm 31 December December 2009 Shareholders equity 2,545 2,199 Subordinated notes Deferred tax assets and liabilities, net Solvency capital 3,373 2,943 50

51 Solvency capital & solvency ratio for If P&C EURm % 100 % % 88 % 74 % 71 % 66 % 77 % 79 % 80 % 60 % 54 % 40 % % % Solvency capital (lhs) Solvency ratio (rhs) 51

52 If P&C s reserve strength 300 % 250 % 200 % 245 % 246 % 254 % 257 % 240 % 240 % 236 % 150 % 100 % 135 % 192 % 144 % 152 % 161 % 166 % 170 % 172 % 173 % 50 % 0 % Reserves/NWP Reserves/Claims paid 52

53 If P&C - key figures by quarter Q410 Q310 Q210 Q110 Q409 Q309 Q209 Q109 Q408 Premiums earned, net (EURm) Technical result (EURm) Risk ratio (%) Cost ratio (%) Expense ratio (%) Combined ratio (%) Insurance margin (%)

54 LIFE INSURANCE 54

55 Mandatum Life Group s profit before tax and comprehensive income EURm 500 Profit before taxes Comprehensive income

56 Life Insurance profit by components EURm Investment result Expense result** Risk result Others Profit before taxes Change in the market value of investments Profit at market values before taxes **result of unit-linked business EUR 1.5 m 56

57 Mandatum Life Group s expense ratio % ,9 101,0 111,3 109,3 110, ,3 80,6 89,6 91,8 90, Total expense ratio Incl. kick backs 57

58 Mandatum Life breakdown of premiums written & insurance savings Premiums written, EURm 1-12/2010 *) 3 Insurance savings, EURm 12/ Unit-linked life Unit-linked pension Unit-linked capital redemption Unit-linked Baltic Other life Other pension Other capital redemption Other Baltic *) differs from P/L due to eliminations within Life group 58

59 Mandatum Life - Net premiums EURm

60 Mandatum Life s market share in Finland % ,5 17,9 20,8 19,5 25,2 22,4 21,5 20,4 19,8 19,3 27,9 28,2 24,8 22,0 10 All products 5 Unit-linked

61 Mandatum Life technical reserves traditional vs. unit-linked EURm Guaranteed interest rates Unit-linked 61

62 Result of Mandatum Life s unit-linked business EURm Total expense loadings, premiums Total expense loadings, savings Fee and commission income Income total Commissions Other acquisition costs Other operating expenses Expenses total Expense result Return on minimum solvency margin Other items Result before taxes Taxes Result after taxes

63 Mandatum Life s investments, 31 December 2010 Equity 28 % Private Equity 4 % Investment allocation Total EUR 6.0bn Hedge Funds 3 % Real Estate 3 % Money Market 10 % Bonds 51 % EURm AFS investments Unrealized gains before taxes Equities Bonds *) Duration 2.67years Fixed income running yield 5.2% 63 *)excl. hedging derivatives

64 Mandatum Life MTM Investment returns Fixed income running yield Q3/09 Q4/09 Q1/10 Q2/10 Q3/10 Q % 20 % 16,8% 15 % 10 % 9,5% 8,3% 12,0% 9,7% 11,1% 5 % 5,0% 0 % -5 % -10 % -7,8%

65 Solvency of Mandatum Life Group, EURm Solvency capital Capital and reserves Dividend payment 0 0 Subordinated capital Unrealised gains Deferred taxes from Fair Value Reserve Deferred taxes on profit brought forward Other items Total 1, Technical provisions Technical provisions on own account 7,530 6,786-75% of t/p in unit linked insurance -2,343-1,769 Total 5,187 5,017 Solvency ratio % of technical reserves

66 Mandatum Life s solvency ratio 30 % 25 % 25,8% 21,3% 20,1% 20 % 17,8% 17,7% 16,5% 18,5% 15 % 10 % 7,9% 5 % 0 %

67 HOLDING 67

68 Holding segment profit before taxes 2010 EURm Income Operating costs Finance costs Nordea Profit before taxes 68

69 Dividends received by Sampo plc in EURm Banking*) Mandatum Life If *) Sampo Bank Nordea

70 Sampo plc balance sheet 31 December 2010, EURm Assets total 8,553 Liabilities total 8,553 Liquidity 570 CPs issued 576 Investment assets 40 LT senior debt 1,156 Real estate 4 Private placements 82 Private equity 16 Bonds issued 944 Other investments 20 Pension insurance loans 130 Subordinated loans 145 Subordinated debt 0 Equity holdings 7,674 Capital 6,696 Subsidiaries (If, ML) 2,370 Undistributable capital 98 Associated (Nordea) 5,304 Distributable capital 6,598 Other assets 124 Other liabilities

71 NORDEA 71

72 Change in Sampo s Nordea ownership EURm ,2% 19,8% 20,1% 20,3% 20,5% 20,5% 20,5% 21,3% ,4% 1,7% 44 3,1% 81 3,7% 97 7,6% 196 9,6% ,3% ,3% ,1% ,2% ,5%

73 Nordea s book value on Sampo Group consolidated balance sheet Nordea in Sampo s B/S EURm Acquisition price 5,303.6 Share of Nordea s net profit (2,663) Depreciation Deferred tax 8.7 Dividends Share of Nordea s other comprehensive income (EUR 372m) 76.4 Share of Nordea s other changes in equity (EUR 91m) 18.6 Share of Nordea s goodwill change( EUR 139m) Total 5,688.3 EUR 6.85/share 73

74 Sampo s Nordea stake fair value reserve/valuation differences *) 12/ /2010 EURm MTM in FVR Valuation differences /08 3/09 6/09 9/09 12/09 3/10 6/10 9/10 12/10 *) Valuation differences = Nordea MTM./. consolidation value 74

75 OUTLOOK 75

76 Sampo Group s outlook for the rest of 2011 Growth in the global economy is expected to pick up momentum and deleveraging to continue as markets prove their resilience and adaptiveness. The European debt crisis, if properly managed, is expected to abate gradually. All in all the economic landscape in 2011 is expected to be fairly benign. Sampo Group is expected to report a good result for P&C and life insurance operations are expected to report good and stable results and the contribution to profit of associated company Nordea Bank is anticipated to remain strong. The continuing rise of short term interest rates will also further strengthen Sampo Group s profits. If P&C is expected to reach its long-term combined ratio target of below 95 per cent in Profit is expected to remain very good. Nordea s contribution to the Group s profit is expected to be significant. Mandatum Life s profitability is expected to remain good although it is highly dependent on capital market developments. 76

77 Appendix 77

78 Sampo Group income statement by quarters Q4/09-Q4/10 EURm Q4/10 Q3/10 Q2/10 Q1/10 Q4/09 Insurance premiums written 1,127 1,007 1,198 1,764 1,077 Net income from investments Other operating income Claims incurred Change in liab. for insurance and investment contracts Staff costs Other operating expenses Finance costs Share of associates' profit/loss Profit for the period before taxes Taxes Profit for the period

79 P&C insurance income statement by quarters Q4/09-Q4/10 EURm Q4/10 Q3/10 Q2/10 Q1/10 Q4/09 Insurance premiums written , Net income from investments Other operating income Claims incurred Change in liab. for insurance and investment contracts Staff costs Other operating expenses Finance costs Share of associates' profit/loss Profit for the period before taxes Taxes Profit for the period

80 Life insurance income statement by quarters Q4/09-Q4/10 EURm Q4/10 Q3/10 Q2/10 Q1/10 Q4/09 Insurance premiums written Net income from investments Other operating income Claims incurred Change in liab. for insurance and investment contracts Staff costs Other operating expenses Finance costs Share of associates' profit/loss Profit for the period before taxes Taxes Profit for the period

81 Holding income statement by quarters Q4/09-Q4/10 EURm Q4/10 Q3/10 Q2/10 Q1/10 Q4/09 Insurance premiums written Net income from investments Other operating income Claims incurred Change in liab. for insurance and investment contracts Staff costs Other operating expenses Finance costs Share of associates' profit/loss Profit for the period before taxes Taxes Profit for the period