Debt Investor Presentation. PREPARED February 8, 2018 FIGURES January-December, 2017

Transcription

1 Debt Investor Presentation PREPARED February 8, 2018 FIGURES January-December, 2017

2 DEBT INVESTOR CONTACTS Markku Pehkonen, CRO tel Peter Johansson, CFO tel Jarmo Salonen, Head of Investor Relations and Group Communications tel FINANCIAL CALENDAR /02/2018 Financial Statement Release for 2017 Silent period 08/01/ /02/2018 Week 11 Annual Report /04/2018 AGM 09/05/2018 Interim Statement Q1/2018 Silent period 09/04/2018-9/05/ /08/2018 Half-Year Financial Report 2018 Silent period 09/07/ /08/ /11/2018 Interim Statement Q3/2018 Silent period 08/10/ /11/2018 Issuer Rating Moody's Standard and Poor's Rating Outlook Rating Outlook Sampo plc Baa1 Stable A- Stable If P&C Insurance (Sweden) A1 Stable A+ Stable If P&C Insurance Co. (Finland) A1 Stable A+ Stable 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 Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified Nordic P&C Insurer Mandatum Life A Finnish Financial Services Company Sampo plc Parent Company with Capacity to Generate Funds Appendix Separate Supplementary Information

4 Sampo Group Nordic Financial Group with Strong Brands Sampo Group structure Long-term investor Manager of capital structure and liquidity Pay-out ratio 50% 100% > 45% 100% 21.2% Subsidiary Subsidiary Subsidiary Associated Company Market position The leading P&C insurer in the Nordic region with full service offering and a strong European presence The second largest P&C insurer in Denmark One of Finland s most respected and best capitalised financial services providers to private & corporate customers The most diversified banking in the Nordics with strong capital generation Strategy Focus areas: Customer value Focused insurance expertise Nordic business platform Investment strategy with balanced risk Customer satisfaction Pricing Efficiency Digitalisation, Process optimisation, transformation Distribution efficiency Unit-linked products Wealth management Personal Risk insurance Group pension & Reward Services Transformation to be the Future Relationship Bank Efficient and scalable Fast and agile Resilient and compliant Investment assets ~ EURbn 11.5 ~ EURbn 2.9 (P&C) ~ EURbn 6.3 ~ B/S EURbn 582 ~ AuM EURbn 330 Return / profit target RoE above 17.5% CR% below 95% Profit margin of 10% CR% 91% RoE above 17.5% ROE above the Nordic peer average 4

5 Sampo Group Nordic Financial Group with Strong Brands Efficient and Stable Operations as Basis for Value A Mixed Financial Conglomerate Market cap January 31, 2018, EURbn Strong relative performance 10Y Total Shareholder Return Nordea Danske DNB Sampo Swedbank SHB SEB Investor Gjensidige Industrivärden Tryg Jyske Topdanmark Storebrand Alm.Brand Protector Nordax Source: Thomson Reuters >45% >21% Bank Insurance Investment company 40.2 In total over 100,000 owners Sampo ownership structure Foreign and Nominee registered 62.40% Solidium 12.00%* Varma Mutual Pension Ins.Co. 5.39% Björn Wahlroos 1.80% The State Pension Fund 0.70 Ilmarinen Mutual Pension Ins.Co. 0.67% Other domestic owners 17.03% *100% owned by the Republic of Finland;

6 Sampo Group Nordic Financial Group with Strong Brands If P&C A Diversified Nordic P&C Insurer Diversified and profitable subsidiary Provides insurance solutions and services in the Nordic and Baltic regions as well as to Nordic customers with international operations As an only company business activities are operated on a pan-nordic basis The business is divided into customer segments Private, Commercial and Industrial The Baltic countries comprise a separate business area More than 3.7 million customers Employees ~6,400 Leading Nordic insurer with a Nordic market share of 17%, 22% with Topdanmark EURm 1,200 1, Strong & Stable Annual Profit Development , Profit before tax Comprehensive income 1-12/2017 Result Pre-tax profit EURm 818 (824) Comprehensive income EURm 581 (655) Excellent combined ratio of 85.3% (84.4) Risk ratio 63.3% (62.3); Cost ratio 22.0% (22.1) Expense ratio 16.4% (16.6) ROE%: 21.3% (25.3%) % Combined Ratio Development Cost ratio Risk ratio Target CR 6

7 Sampo Group Nordic Financial Group with Strong Brands Topdanmark A Danish Non-life and Life Insurer A profitable subisdiary with robust business model Carries out Danish non-life insurance, life insurance and pension fund business Non-life business is divided to 700 Personal segment (~500,000) 600 SME & Agricultural segment (~ ) Life insurance (~ ) 500 Employees ~2, Market shares in Denmark: P&C insurance 17%, 300 life insurance 9% 200 Strategic focus 100 to achieve primarily organic growth, supplemented 0 by close co-operation with alliance partners, and opportune acquisitions (100) to develop and improve customer service to optimise shareholders' return / risk profile % to be a dynamic organisation 100 to align the goals of its stakeholders 80 Sampo s ownership of shares 46.7% and of votes 49.3% /2017 Result 40 Topdanmark s contribution to Group Pre-tax profit EURm 848 (59) including EURm 706 from valuing of Topdanmark to fair value 20 Combined ratio 82.0% (85.1) 0 Claims ratio 65.8% (68.7); Expense ratio 16.1% (16.4) Profit before taxes, DKKm 800 Parent company etc. Life insurance Non-life insurance Combined Ratio,% Expense ratio Claims ratio Target CR 7

8 * Unit-linked Technical Provisions EUR 7,066m Sampo Group Nordic Financial Group with Strong Brands Mandatum Life A Finnish Financial Service Company Provides a comprehensive range of services in Finland and Baltics for private and corporate customers Services provided Wealth management Savings Personal risk insurance Pension and incentive & reward services Customers ~275,000 (Finland) Employees ~520 A leading life and pension insurer in Finland with ca 20% market share Profit Development, EURm Profit before taxes Comprehensive income 1-12/2017 Result Pre-tax profit EURm 236 (210) Comprehensive income EURm 188 (232) ROE%: 13.3% (15.9%) Finnish Profit sharing mechanism principle of fairness facilitates active investment strategies and risk taking. Profit sharing mechanism has benefited both policyholders and shareholders over the years. Smoothened bonuses and dividends over time. With-Profit Technical Provisions Forecast *, EURm Current 5,000 Other WP-liabilities 4,500 Segregated Group Pension 4,000 WP-liabilities (3,5% guarantee) 3,500 3,000 WP-liabilities (4,5% guarantee) 2,500 2,000 1,500 1,

9 Sampo Group Nordic Financial Group with Strong Brands Nordea A Nordic Banking Group The Largest financial services group in the Nordic region and one of the biggest banks in Europe Diversified and stable returns Global presence, local expertise: a full-service universal bank Business areas: Personal Banking, Commercial Banking & Business Banking, Wholesale Banking and Wealth Management Present in 17 countries incl. four Nordic home markets: Denmark, Finland, Norway and Sweden Customers: households 10 million corporates and institutionals 0.5 million Employees ~32,000 Sampo s ownership of shares and votes 21.2% 1-12/2017 Result Nordea s contribution to the Group Pre-tax profit EURm 616 (773) Comprehensive income EURm 559 (791) Excellent C/I ratio of 54% (48) Common Tier1 ratio 19.5% (18.4) ROE%: 9.5% (2016:11.5) Nordea book value in Group accounts EURm 7,578 (+positive valuation difference EURm 1,102) Low Quarterly Result Volatility, EURm 1,600 Restructuring/ 1,400 impairment 1,200 charges/gains 1,000 Loan losses Operating 200 profit Nordea and Peers Quarterly Net Profit Volatility,% Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 9

10 Sampo Group Nordic Financial Group with Strong Brands Diversified Companies & Diversified Portfolio* P/L CONTRIBUTIONS* LOW VOLATILITY EARNINGS LOW VOLATILITY C/R FOCUS ON U-L & WM LOW VOLATILITY C/R PBT Geographical diversification Geographical diversification Finland & Baltics Denmark IF 45% ML 10% Nordea 45% *Topdanmark will be included in 2018 Strong Retail Banking Franchise Diversified earnings base: Banking (Retail, Wholesale) Wealth Management (Asset Management, Private Banking, Life & Pensions) Low earnings volatility & stable ROE over the cycle Strong Retail P&C Franchise Several Lines of Businesses Motor, Cargo Workersʼ compensation Liability Accident Property Low C/R volatility and Conservative Investments Strong Finnish Position Product areas Wealth Management Unit-linked Business With-profit Business Remuneration services Risk insurance Dependency on Capital Markets Second largest insurance company Nation-wide businesses Non-life insurance Life insurance Pension fund Stable insurance risk and low C/R volatility 10 * Correlations of quarterly Reported Profits Q1/2005 Q4/2017

11 Sampo Group Nordic Financial Group with Strong Brands Steady Development of Profit before Taxes EURm 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1, If P&C Mandatum Life Sampo Bank 1,295 1,353 3,833* If P&C Mandatum Life Nordea / Investment ,320 1,228 1,616 1,668 1,759 1,888 1,871 2,482 ** Topdanmark Holding Banking Life P&C * One-off item sale of Sampo Bank If P&C Topdanmark / Associated Mandatum Life Nordea / Associated If P&C Topdanmark Mandatum Life Nordea / Associated ** Includes 706 EURm from valuing of Topdanmark to fair value (with share price DKK 247.7) 11

12 Sampo Group Nordic Financial Group with Strong Brands Risk Profiles of Investments Total Group (meur) * 26,524 20,813 20,111 19,786 25,286 14,000 12,000 12,192 12,337 12,319 12,367 11,459 10,000 8,000 6,000 6,582 5,816 6,547 6,507 6,331 6,263 5,944 4,000 2,000 1,933 1,929 1,285 1,088 1,620 0 If P&C Mandatum Life Sampo Plc Topdanmark If P&C Mandatum Life Sampo Plc If P&C Mandatum Life Sampo Plc If P&C Mandatum Life Sampo Plc If P&C Mandatum Life Sampo Plc Topdanmark 12/16 03/17 06/17 09/17 12/17 Money Market 8% 13% 75% 4% 5% 6% 73% 6% 11% 35% 7% 11% 57% 3% 14% 74% 4% Long-Term Fixed Income 79% 47% 20% 67% 82% 53% 21% 81% 51% 55% 80% 50% 33% 84% 49% 18% 68% Equity 13% 26% 5% 12% 13% 27% 4% 13% 25% 5% 12% 26% 8% 13% 25% 7% 10% Private Equity 0% 4% 0% 1% 0% 4% 0% 0% 3% 0% 0% 3% 0% 0% 3% 0% 3% Other 0% 10% 1% 16% 0% 10% 1% 0% 9% 5% 0% 9% 2% 0% 8% 1% 15% * consolidated 12

13 Sampo Group Nordic Financial Group with Strong Brands Investments & Counterparty Exposures excl. Topdanmark * AAA AA+ - AA- A+ - A- BBB+ - BBB- BB+ - C D Non Rated Fixed Income Total Equities Other Derivatives (Counterparty Risk) Total Change from Basic Industry Capital Goods , Consumer Products , Energy Financial Institutions - 1,895 3, , , Governments Government Guaranteed Health Care Insurance Media Packaging Public Sector, other Real Estate Services Technology and Electronics Telecommunications Transportation Utilities Others Asset-backed Securities Covered Bonds 3, , , Funds , , Clearing House Total 4,000 2,583 4,140 2, ,869 15,417 3, , Change from EURm * In Exposure tables the calculation rules may differ slightly from Allocation tables in some areas. 13

14 Sampo Group Nordic Financial Group with Strong Brands Mandatum Life Solvency II Capital Requirement (SCR) With transitional measures, December 31, 2017 EURm 2,500 SF with transitional measures Solvency ratio 182% 2,000 1,500 1, ,977 * 500 1,263 1, * Own Funds without transitional measures EUR 1,555m LAC = Loss Absorbing Capacity, TP = Technical Provision, DT = Deferred Taxes 14

15 Sampo Group Nordic Financial Group with Strong Brands If P&C Solvency Capital Requirement December 31, 2017 Standard Formula Solvency Ratio 197% Internally assessed Solvency ratio 257% EURm 4,000 EURm 4,000 3,500 3,000 S&P TTC for A rating 3,098 EURm 3,500 3,000 S&P TTC for A rating 3,098 EURm 2,500 2,000 1,500 1, ,358 1, ,938 3,818 2,500 2,000 1,500 1, , ,510 3, LAC = Loss Absorbing Capacity, DT = Deferred Taxes, SCR= Solvency Capital Requirement

16 Sampo Group Nordic Financial Group with Strong Brands Topdanmark Solvency Capital Requirement December 31, 2017 Standard Model Solvency ratio 166% Partial Internal Model Solvency ratio 204% EURm 1,400 EURm 1,400 1,200 1,200 1, , LAC = Loss Absorbing Capacity, DT = Deferred Taxes, SCR= Solvency Capital Requirement

17 Sampo Group Nordic Financial Group with Strong Brands Group Solvency Capital by Financial Conglomerate Rules December 31, 2017 Group solvency ratio 154% / SII Standard Formula applied for Insurance Subsidiaries EURm 12,000 10,000 8,000 6,000 3, ,021 4,000 2, ,938 If P&C (SF*) 1,087 Mandatum Life (SCR**) 514 Topdanmark Sampo plc's share of Nordea Sampo plc 7,163 Total capital requirement Group Solvency Capital 17 *) Standard formula, **) SCR with transition rules

18 Sampo Group Nordic Financial Group with Strong Brands Value Creation in the Nordic Financials as Group Strategy LONG-TERM VALUE CREATION CONSERVATIVE PARENT WITH PROFIT FOCUS OPERATIONAL EXCELLENCE IN SUBSIDIARIES CENTRALIZED INVESTMENT MANAGEMENT GROUP LEVEL PORTFOLIO BENEFITS Value creation through investments in Nordic financials based on knowledge of Nordic markets, Nordic financial institutions & Nordic people. Commitment to the long-term development of affiliated companies. Conservative capital structure, low leverage and strong liquidity. Parent company steers subsidiaries through Boards by approving (in Nordea and Topdanmark by contributing to) strategies, guiding principles and ROE targets. Continuous development of services => excellence in underwriting and risks. Economies of scale and high retail/consumer content. Pan-Nordic diversification & operational excellence facilitate low volatility. Company specific liabilities and solvency driving risk profiles, supported by a Group-wide investment philosophy. Common investment infrastructure facilitates effective monitoring and fast actions, also at the Group level. Profitable companies, mostly with the lowest volatility in the peer group. Profits of affiliated companies have low correlation creating diversification benefits at the Group level. LONG-TERM VALUE FOR SHAREHOLDERS & BONDHOLDERS 18

19 Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified Nordic P&C Insurer Mandatum Life A Finnish Financial Services Company Sampo plc Parent Company with Capacity to Generate Funds Appendix Separate Supplementary Information

20 If P&C Diversified Nordic P&C Insurer Diversified Client Base 1-12/2017 By Business Area By Country Gross Written Premiums, EURm 4,526 12% 3% Private Commercial 26% 59% Industrial Baltic 21% 9% 3% Norway 31% 36% Sweden Finland Denmark Baltic Technical Results, EURm % 8% 2% 2% 65% Private Commercial Industrial Baltic Other 17% 2% 1% 2% Norway 36% 42% Sweden Finland Denmark Baltic Other 20

21 If P&C Diversified Nordic P&C Insurer Disciplined Underwriting and Diversification work CR % Standard deviation Q1/2008-Q4/2017 If P&C and BA Combined Ratios and deviation Finland Denmark Norway Industrial 8 Baltic Sweden 6 4 Private Commercial If P&C Average CR% Q1/2008-Q4/ Topdanmark If P&C Nordic market excl. If RSA Scandinavia Direct Line AXA Generali Allianz ZFS Aviva Expense ratio 2016, % Combined Ratio If P&C and Nordic Weighted Average % If P&C Nordic Market (excl.if) Standard deviation % 3.9% 3.7% (->2016) 4.8% 4.3% 21

22 If P&C Diversified Nordic P&C Insurer Conservative Investment Portfolio Private Equity 0.2 % Equities 13% Investment Allocation Total EUR 11.5bn Real Estate 0.2 % Other 0.0 % Money Market 3% Public Sector 9% 14% 11% 9% 6% 4% 1% -2% -4% Mark-to-Market Investment Return, % 4.3% 5.8% 4.4% 2.6% -3.1% 12.4% 7.4% 6.1% 5.0% 4.1% 1.8% 1.5% 2.9% 2.6% Covered Bonds 27% Duration 1.4 years Average Maturity 2.7 years Fixed Income Running Yield 1.5% Other Fixed Income 48% 1, Mark-to-Market Investment Return, EURm

23 If P&C Diversified Nordic P&C Insurer Seasonality in Quarterly Results and CR% EURm Investment result Technical result Operating result 0 Q4 Q3 Q2 Q1 Average Quarterly CR%, Year 2016 CR% * Year 2017 CR% * incl. positive one-off 23

24 If P&C Diversified Nordic P&C Insurer Nordic P&C Insurance Market Nordic Market Shares, % If P&C Market Shares by Country, % Other 25% LähiTapiola 4% OP 6% Folksam 6% Gjensidige 8% If 18% Codan 9% Total premiums EUR 26 bn If + Topdanmark 23% Topdanmark 5% Tryg 9% LF 10% Finland Norway Sweden Denmark/ If P&C + Topdanmark Baltics Consolidated markets Loyal clients Direct sales dominates the market Various other distribution channels Low expense ratios Good profitability 24 Latest available data

25 Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified Nordic P&C Insurer Mandatum Life A Finnish Financial Services Company Sampo plc Parent Company with Capacity to Generate Funds Appendix Separate Supplementary Information

26 Mandatum Life - A Finnish Financial Services Company Mandatum Life Business Volumes 1-12/2017 Premiums Written, EURm 966 Insurance Savings EURm 10,784 With-Profit EURm 116 With-Profit EURm 3, , , ,489 2,178 U-L EURm 850 U-L EURm 7,062 EURm 12,000 10,000 8,000 6,000 4,000 2, , ,626 1,262 4,738 Technical Provisions, EURm 11,638 Portfolio to be transferred to Danske Bank Group Unit-linked Guaranteed interest rates 1,752 4,695 2,071 4,621 1,637 4,487 2,359 4,431 3,124 4,410 Note: Excluding reserves for decreased discount rate, future bonus reserves and longevity reserve 3,054 4,249 3,833 4,071 4,616 3,927 5,312 5,065 5,858 5,014 6,440 4,821 3,966 3,100 4,572 Unit-linked life Unit-linked capital redemption Other life Other capital redemption Unit-linked pension Unit-linked Baltic Other pension Other Baltic 26

27 Investment Portfolio covering With-Profit liabilities Mandatum Life - A Finnish Financial Services Company Investment Allocation Mark-to-Market Investment Return, % Asset Allocation , EURm 20% 16.8% Unlisted Equity 0 % Private Equity 3 % Real Estate 3% Listed Equity 25 % Commodities Other Biometric 0 % Alternative 0,3% 4 % Trading Derivatives 0 % Money Market Securities and Cash 15 % Government Bonds 1 % 15% 10% 5% 0% -5% -10% 12.0% 9.7% 8.3% 5.0% -7.8% 11.1% 9.4% -1.4% 6.9% 7.1% 4.6% 6.70% 5.60% Duration 2.1 years Average Maturity 2.5 years Fixed Income Running Yield 2.3% Credit Bonds, Funds and Loans 48% Mark-to-Market Investment Return, EURm

28 Mandatum Life - A Finnish Financial Services Company Mandatum Life Profit by Components EURm 1-12/ /2016 Net investment income Transferred to expense result Return on Unit-linked policies Return on With-profit policies* INVESTMENT RESULT EXPENSE RESULT** RISK RESULT OTHERS PROFIT BEFORE TAXES Change in the market value of investments PROFIT AT MARKET VALUES Mandatum Life Group, expense ratio Total expense ratio, % Incl. kick backs, % * Includes guaranteed interest, bonuses and change in the reserves of the above items ** Result of Unit-linked business EURm

29 Mandatum Life - A Finnish Financial Services Company Life insurance Market Finland Market Shares, % Market Shares by Country, % Sp- Henkivakuutus 3% Fennia 5% LähiTapiola 9% Aktia 2% Other 4% Nordea 31% Baltics/ Mandatum Life Danmark/ Topdanmark 7 8 OP Life 22% Total premiums EUR 4.5 bn Mandatum Life 24% Various distribution channels Bankassurance Unit-linked products Markets sensitive for regulation, tax changes, interest rate movements 29 Latest available data

30 Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified Nordic P&C Insurer Mandatum Life A Finnish Financial Services Company Sampo plc Parent Company with Capacity to Generate Funds Appendix Separate Supplementary Information

31 Sampo plc - Parent Company with Capacity to Generate Funds Simple Cash Flows, low leverage and adequate liquidity Flow of Funds Balance Sheet, EURm Dividends If P&C Mandatum Life Nordea Topdanmark Sampo plc Income Interest on Liquidity Income from other investments Internal Administration Costs Discretionary Dividends for Shareholders Interest Expenses for Bondholders Assets 10,939 Liabilities 10,939 Liquidity 1,199 CPs Issued 293 Investment assets 235 LT Senior Debt 2,884 - Real Estate 2 - Private Placements Fixed Income 58 - Bonds Issued 2,746 - Equity & Private Equity Pension Insurance loans Subordinated Loans 496 Subordinated Debt 0 Equity Holdings 8,958 Capital 7,714 - Subsidiaries 3,401 - Undistributable 98 - Associated 5,557 - Distributable 7,616 Other Assets 50 Other Liabilities 48 Key Credit Metrics well in Single A range Sampo plc Gross Debt, EURm 3,177 Gross Debt to Equity 41% Financial Leverage 29% (= Debt/(Debt+Equity) Sampo Group, EURm Q4/2017 Shareholders' Equity 13,508 Hybrid Bonds 376 Senior Debt 3,177 Financial leverage 22.9% 31

32 Sampo plc - Parent Company with Capacity to Generate Funds Cash and tradable financial investments Instrument Market Value/ Nominal Amount Running Yield Call Date Cash Investment Assets 235 Sub-Ordinated Loans 496 5,10 % - Mandatum Life T1 Perpetual EUR 100 4,42 % Annual - IF T2 30NC10 EUR 99 6,07 % Nordea AT1 PerpNC5 USD 171 5,95 % Nordea AT1 PerpNC5 USD 98 6,48 % Topdanmark T2 PerpNC5 DKK 135 2,92 % Topdanmark T2 PerpNC5.5 DKK 270 2,40 % Total In case subordinated loans are sold, both liquidity and Own Funds at Group level are generated This buffer of liquidity and Own Funds comes with positive interest margin 32

33 Sampo plc - Parent Company with Capacity to Generate Funds Sampo plc Sources and uses of Funds / First Half Year 2018 Sources EUR Uses EUR Cash balance (as of ) 1 199m Nets 230m Sale of liquid assets 76m Saxo Bank 265m Bond issued 500m Nordax 249m Mandatum Life dividend 150m Sampo dividend 1 444m Nordea dividend 585m Repayment of CP 293m Topdanmark dividend 107m Total Sources 2 617m Total Uses 2 481m Cash Balance as of May 2018: 136m 33

34 Sampo plc - Parent Company with Capacity to Generate Funds Sampo Group Conservative Leverage EURm 16,000 14,000 12,000 10,000 8,000 Sampo plc Net debt Group NAV Group Equity 40% 35% 30% 25% Net debt/nav 6,000 20% 4,000 2, ,000 15% 10% 5% -4,000 0% Q1/05 Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 Q1/17 Q1/18 Q1/05 Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 Q1/17 Q1/18 Loan-To-Values based on above figures is low Parent Companyʼs Financial Leverage is 29% => Sampoʼs position to refinance its debt is strong 34

35 Sampo plc - Parent Company with Capacity to Generate Funds Dividends Received by Payment Year EURm 1,600 1,400 1,200 1, , , Topdanmark Nordea Mandatum Life Extra Dividend Mandatum Life If P&C Extra Dividend 1,067 If P&C ,220 1,555 1, ** * *) Extra dividend **) Nordea Bank AB s Board of Directors proposes to the Annual General meeting to be held on 15 March 2018, a dividend of EUR 0.68 per share. With its current holding Sampo plc s share amounts to EUR 585 million. The dividend is proposed to be paid on 26 March A dividend of EUR 150 million is planned to be paid by Mandatum Life during the first quarter of If normally pays its dividend towards the end of the calendar year. 35 Sampo Bank , Nordea 2007->

36 Sampo plc - Parent Company with Capacity to Generate Funds Reported Profits facilitates Debt Servicing EURm 1,700 1,500 1,300 1, ,069 1,226 1,567 1,453 * Dividend income Operating expenses Net financial expenses Profit before taxes 1,050 1,229 1,567 1,396 * Parent Company is not equal to Holding Segment; Dividend Income includes also dividends from Private Equity investments 36

37 Sampo plc - Parent Company with Capacity to Generate Funds Issued Debt Instruments Instrument & Principal Coupon Swap Effective Rate Maturity CPs issued EURm 293 Euribor + Margin % Average 3M Senior Bond SEKm 2,000 (EMTN) Stibor3M % Euribor3M+1.375% % Senior Bond EURm 500 (EMTN) % % Senior Bond SEKm 2,000 (EMTN) Stibor3M % Euribor3M % % Senior Bond SEKm 1,000 (EMTN) % EUR 1.007% % Senior Bond EURm 500 (EMTN) % % Senior Bond EURm 750 (EMTN) % % Senior Bond EURm % EUR6M % % Public debt EURm 3, % Private placements EURm % Total EURm 3, % EURm CP s Senior under EMTN Senior Retail Private

38 Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified P&C Insurer Mandatum Life A Finnish Financial Services Company Sampo plc Parent Company with Capacity to Generate Funds Appendix Separate Supplementary Information

39 Appendix Separate Supplementary Information Sampo Group s Outlook for the rest of 2018 Sampo Group s business areas are expected to report good operating results for However, the mark-to-market results are, particularly in life insurance, highly dependent on capital market developments. The continuing low interest rate level also creates a challenging environment for reinvestment in fixed income instruments. If is expected to reach its long-term combined ratio target of below 95 per cent in 2018 by a margin. With regard to Topdanmark reference is made to the profit forecast model that the company publishes quarterly. Nordea s contribution to the Group s profit is expected to be significant. 39

40 Structural changes of Sampo Group to the position as the leading Nordic financial group Appendix Separate Supplementary Information Mandatum Bank joins the Group, and the Group s name is shortened to Sampo. Sampo Group divests Sampo Bank Group to Danske Bank A/S. Following the transaction, Sampo s business areas are: P&C insurance and life insurance. Sampo Group s (If P&C s) Topdanmark holding exceeds 23 per cent and Topdanmark becomes If s associated company. Sampo Group (Mandatum Life) acquires Suomi Mutual s with-profit group pension portfolio. The portfolio transfer takes place on 30 Decenber Mandatum Life ends distribution agreement with Danske Bank. Sampo Insurance Company and Leonia merge into the Sampo-Leonia financial services group. The Group s business areas are long-term savings (life insurance, asset management and mutual funds), banking, investment banking, and P&C insurance. Sampo s P&C insurance operations are merged with If (2002). Following the transaction, Sampo owns 38 per cent of If. If becomes fully owned by Sampo (2004). Following the transaction, Sampo has three core businesses: P&C insurance, banking and long-term savings. Sampo s Nordea holding exceeds 20 per cent and Nordea becomes an associated company. Sampo Group (If P&C) acquires Tryg s Finnish Business and the acquisition was closed in May If P&C signs a partnership agreement with Nordea. Sampo plc s ownership of Topdanmark exceeds per cent after the acquisition of shares from If P&C and in the market and hence Sampo is obliged to make a mandatory offer for the shareholders of Topdanmark. As a result Sampo plc owns 46.7 per cent of Topdanmark s shares and 49.3 per cent of votes.. Topdanmark now becomes Sampo s associated company. Topdanmark becomes Sampo plc s subsidiary as of 30 Sept

41 Appendix Separate Supplementary Information Sampo Group Legal Supervision Structure SAMPO FICO GROUP SAMPO SII GROUP Sampo plc (FI) IF INSURANCE GROUP If P&C Insurance Holding Ltd (SE) MANDATUM INSURANCE GROUP Mandatum Life Ltd (FI) TOPDANMARK INSURANCE GROUP Topdanmark A/S (DK) 49.3% NORDEA BANKING GROUP Nordea Bank AB (SE) 21.3% IF P&C Insurance Ltd (SE) IF Livförsäkring AB (SE) Estonia Topdanmark Forsikring A/S (DK) Topdanmark Kapitalforvaltning A/S (DK) Various subsidiaries Autovahinkokeskus Oy (FI) 33.5% Finland Norway Denmark Urzus Group AS (NO) 30% IF P&C Insurance AS (EE) Latvia Lithuania If IT Services A/S (DK) Svithun Assurance AS (NO) 33% CAB Group AB (SE) 22% Latvia Lithuania Mandatum Life Services Oy (FI) Mandatum Life Investment Services Ltd (FI) Mandatum Life Fund Manag. Services Ltd (LU) Danske Forsikring A/S (DK) Topdanmark Liv Holding A/S (DK) Topdanmark Livforsikring A/S (DK) Nykredit Livforsikring A/S (DK) Topdanmark Invest A/S (DK) Topdanmark Ejendom A/S (DK) NORDEA INSURANCE GROUP Nordea Life Holding AB (SE) Various subsidiaries Source: FSA Finland, February 2018 FICO GROUP Insurance SII GROUP Investment Services INSURANCE GROUP Banking BANKING GROUP Other Branch Subsidiary Associated Company Branch 41

42 Appendix Separate Supplementary Information Fixed Income Investment Segementation excl. Topdanmark Fixed Income Investments in the Financial Sector Fixed Income Investments in the Public Sector EURm Covered bonds Money market Long-term senior debt Long-term subordinated debt Total % EURm Government Government guaranteed Public sector, other Total Sweden 2, ,221 34% Finland 108 1, ,942 20% Norway ,285 13% U.S % Denmark % UK % France % Netherlands % Canada % Switzerland % Australia % Other % Total 3,247 2,348 3, , % Exposure tables vs. Allocation tables small differences. Sweden Norway Finland Germany Japan Denmark Total ,120 42

43 Appendix Separate Supplementary Information Sampo Group Steering Model and Principles Four separate and independent business areas and Sampo plc an active owner General Principles of Business activities Straightforward and transparent legal structure combined with limited intragroup exposures Clear responsibilities Simple and flat operational structures Personnel incentivized to increase shareholder value and guard profitability Parent company gives guidance to the subsidiaries by setting/contributing Strategy Targets for their capitalization and return on equity (RoE) Group-wide principles for Risk Management, Remuneration, Compliance, Code of Conduct and HR framework Subsidiaries organize underwriting activities independently taking into account The specific characteristics of their operations The above guidance from the parent company The stakeholders expectations and external regulations 43

44 Appendix Separate Supplementary Information Principles of Investment Management excl. Topdanmark 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 Investments into Nordic countries mainly, outside Nordics mainly Funds No diversification for the sake of diversification Centrally Managed Sampo plc Chief Investment Officer is responsible for all investments, all portfolio managers have a direct reporting line to him Common infrastructure for investment administration and reporting Investment strategies coordinated and streamlined, no overlapping activities to prevent Group-wide concentrations 44

45 Appendix Separate Supplementary Information Principles of Capital Management Subgroups are adequately capitalized to ensure normal business operations At Group level the following issues are managed/monitored Direct risk concentrations Correlations of the subgroups' profits Sub-groups do not cross-capitalize each others, parent is the source of capital The funds generating capacity of the parent company is maintained by having low leverage and adequate liquidity buffers in normal situations => Sampo Group is well-capitalized 45

46 Appendix Separate Supplementary Information Calculation Principles of Sampo Group Solvency Group Solvency Capital Under FICOD rules, capital is Group equity with some additional items added or deducted (subordinated loans, deferred tax assets, planned dividends ) Under SII rules capital referred to as Own funds (OF) consists mainly of excess of assets over liabilities Under normal circumstances Group OF by Solvency II and FICOD rules are close to each other SCR by Financial Conglomerate Rules The Group s SCR is the sum of the separate sub-groups requirements (sectoral rules) Banking rules are applied for the parent company No diversification effect between the companies SCR by Solvency II rules One capital requirement is calculated for the insurance group including the parent company Sampo plc, If P&C, Topdanmark and Mandatum Life. This includes diversification effects and also capital requirement for the translation risk related to SEK denominated equity of If P&C and DKK nominated equity of Topdanmark. Nordea s capital requirements are added to the requirement The SII SCR takes into account diversification only within the insurance group => Sampo Group Solvency Ratios are not comparable with most Insurance Groupsʼ solvency ratios 46

47 Appendix Separate Supplementary Information Risk Management Principles* Scope Sampo s Board of Directors requires that all activities involving the exposure of any Sampo Group company to risks, as well as activities controlling those risks, are arranged to comply with these general guidelines and related instructions as well as with applicable legislation and regulations The Board of Directors will supervise the risk taking and risk control activities The Principles apply to all Sampo Group companies The Key Objectives Balance between risks, capital and earnings Cost efficiency and high quality processes Strategic and operational flexibility The Central Tasks Identification of risks Assessment of required capital Pricing of risks Managing risk exposures, capital positions and operative processes Measuring and reporting risks *Topdanmark is in a process to align its business practices with Sampo Group principles 47

48 Appendix Separate Supplementary Information Financial Strength Rating History If P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland), Sampo plc AA-/ Aa3 A+ A1 A/ A2 Stable Feb 02 Negative Aug 02 Possible downgrade Jan 03 Stable Apr 03 Possible upgrade Feb 04 Stable May 04 Moodyʼs If P&C S&P If P&C Moodyʼs Sampo plc S&P Sampo plc Positive May 06 Stable Nov 08 Positive Dec 15 Stable Dec 16 A-/ A3 BBB+/ Baa1 BBB/ Baa2 Apr 04 First-time issuer rating The Sampo Groupʼs P&C insurance companies became part of If in January

49 Appendix Separate Supplementary Information 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 the following Reinsurance Programmes in place In Million Catastrophe/ Event Property/ Risk Casualty Personal Accident Motor TPL Cargo Reporter Capacity SEK 6,300 SEK 2,500/4,750 SEK 500/ 50/$50 SEK 1,100 Unlimited SEK 1,000 Retention SEK 250 SEK 250 SEK 100/ 10/$15 SEK 100 SEK 100 SEK 100 In Million Marine Hull Reporter Small Vessels Clash Cover Marine Hull I.V. Reporter Marine Hull War Risk Reporter US Terrorism Risk Capacity SEK 550 SEK 250 SEK 310 SEK 600 USD 250 Retention SEK 100 SEK 100 SEK 100 SEK 2.5 USD 25 Casualty/ Cyber Event SEK 400/ 40/$50 SEK 200/ 20/$25 Largest & most diversified portfolio in the Nordics Focus purely on underwriting Specialised Reinsurance Unit Reinsurance partners having reinsurance as core business Diversified financially strong panel of reinsurers Stable reinsurance program Efficient pricing and broad terms Additional reinsurance purchased for risks with property value accumulations according to Solvency II requirements. 49