Supplementary Financial Information JANUARY SEPTEMBER 2017

Transcription

1 Supplementary Financial Information JANUARY SEPTEMBER

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 Table of Contents Sampo Group... 4 Key Financial Figures...5 Investments 17 Capital Position. 25 If Key Financial Figures 28 Investments Capital Position.. 41 Topdanmark.45 Investments...46 Mandatum Life Key Financial Figures...49 Investments 56 Capital Position. 60 Holding. 63 Nordea..71 Outlook.81 Appendix

4 SAMPO GROUP

5 Key Financial Figures Sampo Group 5

6 Sampo Group results Profit before taxes and net profit Profit before taxes by quarters EURm EURm 2,000 1,500 1, Includes 706 EURm from valuing of Topdanmark to fair value 1,343 1,179 2, ,340 1, ,169 1,400 1,200 1, Includes 706 EURm from valuing of Topdanmark to fair value , / / Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Profit before taxes Net profit 6

7 EURm Sampo Group profit before taxes 2,200 2,046 2,000 1,800 1,600 1,400 Includes 706 EURm from valuing of Topdanmark to fair value 1, ,200 1,340 1,

8 Sampo Group profit before taxes by quarter EURm 1,200 Includes 706 EURm from valuing of Topdanmark to fair value 1,181 1,

9 Profit before taxes and comprehensive income EURm Profit before taxes Comprehensive income 2,500 2,000 1,500 1, Includes 706 EURm from valuing of Topdanmark to fair value ,343 1,212 2,046 1, If Topdanmark Mandatum Life Nordea Sampo Group 9

10 Sampo Group gross written premiums If Topdanmark Mandatum Life Sampo Group Total 3,621 EURm 156 Total 1,822 EURm 71 Total 634 EURm 1, Total 6,077 EURm 660 1,006 3, ,628 Non-life Unit linked With profit Non-life Unit linked With profit Non-life Unit linked With profit Non-life Unit linked With profit 10

11 Earnings per share EPS and Comprehensive result EPS Reported EPS by quarter EUR EUR Includes 1.26 EUR from valuing of Topdanmark to fair value Includes 1.26 EUR from valuing of Topdanmark to fair value / / Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 EPS (reported) EPS (comp. result) 11

12 Sampo Group net asset value per share EUR /9/

13 Net asset value per segment, 30 September 2017 EURm 20,000 18,000 16,000 14,000 12,000 10,000 Nordea book value in Group accounts EURm 7,493 + valuation difference EURm 2,352 9, ,000 6,000 4,000 1,398 1,396 15,030 2, ,289 If Topdanmark Mandatum Life Nordea Sampo plc & eliminations Sampo Group 13

14 Return on equity in Sampo Group s business areas 120% 100% If Mandatum Sampo Group 80% 60% 40% 20% 53.2% 97.6% 55.7% 39.8% 36.2% 21.8% 12.4% 7.7% 36.9% 28.5% 19.9% 24.4% 18.3% 13.8% 18.1% 11.4% 10.9% 21.5% 12.7% 14.0% 25.3% 15.9% 15.0% 24.6% 15.6% 21.4% 25.0% 15.0% 18.2% 0% -20% -40% -60% -0.8% -68.8% -32.4% -11.7% -80% /2017 Average 14

15 Fair value reserve development by segment EURm 9/ / / /2014 If Mandatum Life 616.6**) 595.7**) 532.1**) Holding Sampo Group *) 1,248.7**) 1,108.1**) 931.9**) 1,016.7 *) Eliminations included and figures after tax **) Excluding the segregated portfolio 15

16 Fair value reserve by segment and asset class, 30 September 2017 EURm Fixed income Equity Deferred taxes The share transferred to the segregated portfolio FVR net If Mandatum Life Holding Sampo Group *) , ,248.7 *) Eliminations included and figures after tax 16

17 Investments Sampo Group 17

18 Investment allocation Sampo Group, 30 September 2017 By sector Total EUR 22.7 billion By company Money market 12% Public sector 6% Covered Bonds 22% Other fixed income 40% Equities 15% Private equity 1% Real estate 2% Other 3% If 55% Topdanmark (P&C) 13% Mandatum Life 28% Sampo plc 5% Investments of If, Topdanmark (excluding life insurance), Mandatum Life and Sampo plc 18

19 Fixed income investment allocation Sampo Group excluding Topdanmark, 30 September 2017 By geography Total EUR 15.7 billion By sector Europe money market 11% Scandinavia money market 3% Europe 18% Scandinavia 56% North America 11% Other 1% Money market 14% Public sector 8% Covered bonds 22% Banks 27% Corporate 30% 19

20 Fixed income investments in public sector Sampo Group excluding Topdanmark, 30 September 2017 EURm Government Government guaranteed Public sector, other Total Sweden Norway Finland Germany Japan Denmark Total ,208 20

21 Financial sector fixed income investments by country and investment class Sampo Group excluding Topdanmark, 30 September 2017 Covered bonds Money market Long-term senior debt Long-term subord. debt Total % Sweden 2, ,806 40% Finland 89 1, ,415 15% Norway ,218 13% United States % Denmark % United Kingdom % France % Netherlands % Canada % Switzerland % Australia % Other % Total 3,387 2,116 3, , % 21

22 Equity investment allocation Sampo Group excluding Topdanmark, 30 September 2017 By geography Total EUR 3.3 billion By company Scandinavia 35% Finland 17% If 47% North America 14% Western Europe 24% Emerging Markets 9% Latin America 1% Mandatum Life 50% Sampo plc 3% 22

23 Investment returns excluding Topdanmark, January September 2017 Yield, % EURm ML*) If Group ML*) If Group Fixed income 2.4% 1.9% 2.0% 97 (4) 200 (12) 321 Equities 15.3% 12.3% 13.9% 242 (161) 181 (103) 436 Other (incl. FX net result) -0.6% -66.6% -7.9% -5 (0) Total 5.0% 2.8% 3.2% Realized sales gains and losses in parenthesis *) Including the segregated portfolio 23

24 Market risk sensitivity of Group investments excluding Topdanmark, 30 September 2017 EURm If Mandatum Life*) Sampo plc Sampo Group Equities -10% % Interest rates -100 bps bps Other -10% % Local currency -5% % The changes of interest rates have a strong effect on 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. *) Including the segregated portfolio 24

25 Capital Position Sampo Group 25

26 Group capital and minimum requirement, Solvency II applied to insurance co s, 30 September 2017 EURm 14,000 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, ,322 4,512 2,425 11,236 Group solvency ratio 156% Group capital Intangibles and other Sectoral items Group's own funds Total capital requirement 7, ,508 1,089 2, Sampo plc Topdanmark Nordea Mandatum Life If 26

27 IF 27

28 Key Financial Figures If 28

29 If profit before taxes and comprehensive income EURm / /2017 Profit before taxes Profit for the period Comprehensive income 29

30 If combined ratio development % Claims ratio Expense ratio % Risk ratio Cost ratio

31 If combined ratio development 110.0% 100.0% Combined ratio excluding the one-offs is 86.1%. Combined ratio excluding the one-offs is 86.5%. Combined ratio excluding the one-offs is 86.3%. 90.0% 80.0% % 94.9 % 91.9 % 89.9 % 90.6 % 91.8 % 92.1 % 92.8 % 92.0 % 88.9 % 88.1 % 87.7 % 85.4 % 84.4 % 84.0 % 85.9 % 70.0% 31

32 If GWP growth by business area and by country*, 1-9/2017 vs. 1-9/2016 Total 1.5% Private 1.9% Commercial 0.5% Industrial 1.2% Baltic 4.7% Sweden 3.9% Norway 1.7% Finland -2.9% Denmark 2.4% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% *excluding currency effects 32

33 If technical result by business area and by country, 1-9/2017 vs. 1-9/2016 EURm By business area (10) (11) (36) 50 (106) By country 7 (16) 11 8 (10) (11) (121) 161 (226) (514) (514) (337) 225 (145) 0 33

34 If results by quarter EURm Q3/17 Q3/16 Premiums earned 1,086 1,080 Claims incurred Operating expenses Other technical income and expenses -1-1 Allocated investment return transferred from the non-technical account 4-3 Technical result Investment result Allocated investment return transferred to the technical account Other income and expenses -1 4 Operating result

35 If key figures by quarter Q3/17 Q2/17 Q1/17 Q4/16 Q3/16 Risk ratio, % Cost ratio, % Expense ratio, % Combined ratio, % Insurance margin, %

36 If key figures by business area, Q3/2017 (Q3/2016) Private Commercial Industrial Baltic GWP, EURm 638 (628) 155 (153) 88 (77) 33 (31) NPE, EURm 660 (654) 290 (292) 101 (100) 34 (33) Technical result, EURm 103 (92) 62 (50) -1 (15) 4 (3) Risk ratio, % 63.9 (64.2) 56.8 (60.0) 81.5 (62.4) 60.0 (61.6) Cost ratio, % 20.7 (21.6) 22.5 (22.6) 20.0 (21.7) 28.5 (28.2) Combined ratio, % 84.6 (85.8) 79.2 (82.6) (84.1) 88.5 (89.8) Insurance margin, % 15.7 (14.2) 21.3 (16.8) -1.1 (14.6) 11.5 (10.1) 36

37 If key figures by country, Q3/2017 (Q3/2016) Norway Sweden Finland Denmark GWP, EURm 259 (253) 382 (362) 149 (155) 91 (88) NPE, EURm 333 (332) 381 (368) 238 (249) 100 (96) Technical result, EURm 63 (60) 64 (47) 40 (42) -3 (6) Risk ratio, % 60.4 (60.5) 63.7 (66.3) 61.9 (59.3) 77.9 (66.9) Cost ratio, % 21.7 (22.4) 19.5 (20.8) 21.5 (21.0) 24.5 (26.4) Combined ratio, % 82.1 (82.9) 83.1 (87.1) 83.5 (80.3) (93.4) Insurance margin, % 18.9 (18.1) 17.0 (13.2) 16.5 (16.8) -2.4 (6.3) 37

38 Investments If 38

39 If investments, 30 September 2017 Investment allocation, Total EUR 12.4 billion AFS investments unrealized gains before taxes EURm Money market 7% Fixed income 54% Covered Bonds 26% Equities 12% Other 0.3% Duration 1.4 years Average maturity 2.7 years Fixed income running yield 1.5% /14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 Fixed income Equities 39

40 If mark-to-market investment returns 14.0 % 12.0 % Fixed income running yield Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 % % 10.0 % 8.0 % 6.0 % 4.0 % 2.0 % 7.4 % 1.8 % 6.1 % 5.0 % 4.1 % 1.5 % 2.9 % 2.8 % 0.0 % -2.0 % -4.0 % -3.1 % /

41 Capital Position If 41

42 If Solvency Capital Requirement (SCR), Standard Formula (SF), 30 September 2017 EURm 4,500 4,000 Group solvency ratio 193% 3,500 3, , ,000 1, ,867 1, ,000 2, ,164 Market risk Counterparty risk Insurance risk Operational risk Diversification LAC of DT SCR SII own funds 42

43 If, Solvency II stresses, Test on Standard Formula Solvency II EOF ratio with transitional Equity Measures 250% 200% 193% 203% 206% 180% 176% 202% 182% 182% 188% 175% 150% 100% 50% +30% -30% +100 bps -100 bps +100 bps -100 bps 0% Solvency II ratio Q3/2017 Equity Interest rate Spread 1 in 10y run-off loss 1 in 10y Nat CAT +100 bps claims inflation 43

44 If rating capital requirement, 30 September 2017 EURm 4,500 4,000 3,500 3, ,500 1,849 2,000 4,057 1,500 3,184 1, ,590 Asset risks Liability risks Diversification Total A capital charge S&P capital base 44

45 TOPDANMARK 45

46 Investments Topdanmark 46

47 Topdanmark investments, 30 September 2017 Investment allocation Total EUR 2.9 bn Public Sector 1% Covered Bonds 54% Other Fixed Income 2% Money Market 18% Equities 5% Real Estate 5% Private Equity 1% Other 15% 47

48 MANDATUM LIFE 48

49 Key Financial Figures Mandatum Life 49

50 Mandatum Life profit before taxes and comprehensive income EURm / /2017 Profit before taxes Profit for the period Comprehensive income 50

51 Mandatum Life Group profit by components EURm 1-9/ /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

52 Mandatum Life breakdown of unit-linked and with profit business Premiums written, total EURm 634 Insurance savings, total EURm 10,652 With profit EURm , , UL EURm 563 With profit EURm 3,747 2,140 UL EURm 6, ,154 Unit-linked life Unit-linked pension Unit-linked capital redemption Unit-linked Baltic Other life Other pension Other capital redemption Other Baltic Note: Excluding reserves for decreased discount rate, future bonus reserves and longevity reserve 52

53 Mandatum Life technical reserves EURm 12,000 10,000 8,000 6,000 4,000 2,000 Unit-linked Segregated fund (0.5% after ) Reserve for decreased discount rate Other with-profit excl. segregated fund Guaranteed 3.5% Guaranteed rate 4.5% 5,312 5,858 6,440 6,909 3,124 1,262 1,752 2,071 2,359 3,054 3,833 4, , ,228 1, , , ,915 2,984 2,925 2, , ,824 2,843 2, ,821 2,719 2, ,475 2,360 2,245 2,108 1,996 Focus area 0 1,467 1,447 1,475 1,515 1,516 1,453 1,330 1,289 1,217 1,152 1,087 1, /

54 Mandatum Life s gross written premiums by policy type in Finland EURm / / / / /2017 Unit linked With profit 54

55 Mandatum Life s new premiums written by distribution channel in Finland EURm / / /2017 Danske Bank Mandatum Life Other 55

56 Investments Mandatum Life 56

57 Mandatum Life investments, 30 September 2017 Investment allocation, Total EUR 5.2 billion* AFS investments unrealized gains before taxes Duration 2.1 years Average maturity 2.3 years Fixed income running yield 2.8% Money market 12% Fixed Income 43% Covered Bonds 2% Equities 30% Private equity 4% Other 9% EURm /14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 Fixed income Equities * Excluding the segregated fund 57

58 Allocation of investments of the segregated assets, 30 September 2017 Investment allocation Total EUR 1.1 bn Money market 9% Fixed income 71% Covered Bonds 4% Equities 9% Private equity 2% Other 5% Duration 2.6 years Average maturity 3.4 years Fixed income running yield 2.1% 58

59 Mandatum Life mark-to-market investment returns* Fixed income running yield Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 % % 16.8% 15.0% 10.0% 5.0% 11.1% 9.4% 7.1% 4.6% 6.9% 7.2% 5.7% 0.0% -5.0% -10.0% -1.4% -7.8% /2017 * Excluding unit-linked and segregated fund assets 59

60 Capital Position Mandatum Life 60

61 Mandatum Life, Solvency II Capital Requirements with transitional measures, 30 September 2017 EURm 2,400 2,200 2,000 Group solvency ratio 193% 1,800 1,600 1,400 1,200 1, , ,229 1, Market risk Counterparty risk Life risk Diversification Operational risk LAC of TP LAC of DT SCR Own funds 61

62 Mandatum Life, SCR Coverage Ratio, Estimated sensitivities, 30 September % 200% 193% 185% 200% 189% 189% 150% 100% 50% 0% Base case 30/09/2017 Interest rates -25 bps Interest rates +25 bps Equity -10% Credit spread +50% 62

63 HOLDING 63

64 Holding segment profit before taxes EURm 1-9/ / Income Operating costs Finance costs Nordea Profit before taxes 64

65 Sampo plc investments, 30 September 2017 Investment allocation (unconsolidated) Total EUR 1.3 bn Money market 46% Fixed income 43% Equities 7% Other 5% Duration 1.1 years Average maturity 4.0 years Fixed income running yield 2.5% 65

66 Sampo plc participates in the voluntary offer on Nets A/S Sampo plc will participate as an indirect minority co-investor in the voluntary takeover offer announced 25 September 2017 by Evergood 5 AS to acquire Nets A/S offering DKK 165 for each share in cash. The size of Sampo's investment would be EUR 230 million. Nets is the leading payment services utility provider in the Nordics with an integrated position across the entire payments value chain. It has a highly resilient business that is deeply engrained in the financial ecosystem in the Nordics with significant economies of scale. 66

67 Sampo plc will buy a stake in Saxo Bank Saxo Bank was established in 1992 and is a pioneer in developing an internet based information and trading platform across international financial markets. Today, Saxo Bank is a fully licensed bank regulated by the Danish FSA. The Bank is headquartered in Copenhagen and has offices in 19 locations around the world, clients from more than 180 countries. The Bank enables private and institutional clients to trade FX, CFDs, Options, Futures, Fixed Income, Cash Equities and ETCs/ETFs, offering more than 35,000 tradable intruments. The Bank has an unique trading facilitation business model that enables deep liquidity, speed and reliability of execution and competitive and transparent pricing. Sampo plc will buy 19.9 per cent of shares in Saxo Bank Group for EUR 265 million. The transactions are pending regulatory approvals and are expected to be finalised during the next six months. 67

68 Sampo plc balance sheet, 30 September 2017 Assets total, EURm 10,354 Liabilities total, EURm 10,354 Liquidity 624 CPs issued 293 Investment assets 210 LT senior debt 2,885 Real estate 2 Private placements 128 Fixed income 60 Bonds issued 2,757 Equity and private equity 148 Pension insurance loans 0 Subordinated loans 500 Subordinated debt 0 Equity holdings 8,958 Capital 7,092 Subsidiaries (If, ML, Topdanmark) 3,401 Undistributable capital 98 Associates (Nordea) 5,557 Distributable capital 6,994 Other assets 62 Other liabilities 84 68

69 Net debt in Sampo plc EURm Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 + Gross debt 3,178 3,279 2,932 3,548 2,845 2,461 2,483 2,302 2,284 2,332 2,171 Bonds & notes 2,885 2,884 2,399 2,877 2,142 2,157 2,183 1,997 1,984 1,994 1,873 Domestic CP s Interest bearing assets Liquidity buffer + fixed income 1,184 1,137 2,112 2, ,058 2,137 1, , ,471 1, , ,336 Subordinated loans Net debt 1,994 2, ,443 1,853 1, ,654 1,

70 Sampo plc debt instruments, 30 September 2017 Instrument & Principal Coupon Swap Effective Rate Maturity CP s issued 394 EURm Euribor + Margin 0,2500% Average 3M Senior Bond 2,000 SEKm Stibor3M % Euribor3M+1.375% 1,0460% 29/05/2018 Senior Bond 500 EURm % --- 1,1640% 24/05/2019 Senior Bond 2,000 SEKm Stibor3M % Euribor3M % 0,2571% 28/05/2020 Senior Bond 1,000 SEKm % EUR 1.007% 1,0070% 28/05/2020 Senior Bond 500 EURm % --- 1,5920% 16/09/2021 Senior Bond 750 EURm % --- 1,0060% 18/09/2023 Senior Bond 500 EURm 1.25% EUR6M % 0,4810% 20/05/2025 Public debt 3,151 EURm 0,9216% Private placements 128 EURm 1,1829% Total 3,279 EURm 0,9321% Key Credit Metrics Net debt, EURm 1,994 Equity, EURm 7,092 Gross Debt to Equity 45% Financial Leverage 31% 70

71 NORDEA 71

72 Nordea s book value on Sampo Group s consolidated balance sheet, 30 September 2017 Nordea in Sampo Group s balance sheet EURm Acquisition price 5,557.3 Retained earnings 2,044.8 Accumulated other changes in Nordea s equity Share of Nordea s net profit Amortization Deferred tax 5.8 Dividends Share of Nordea s other comprehensive income Share of Nordea s other changes in equity 30.8 Share of Nordea s goodwill change 17.4 Total 7,493.0 Shares 860,440,

73 Nordea share price and book value EUR /31/2009 3/31/2010 6/30/2010 9/30/ /31/2010 3/31/2011 6/30/2011 9/30/ /31/2011 3/31/2012 6/30/2012 9/30/ /31/2012 3/31/2013 6/30/2013 9/30/ /31/2013 3/31/2014 6/30/2014 9/30/ /31/2014 3/31/2015 6/30/2015 9/30/ /31/2015 3/31/2016 6/30/2016 9/30/ /31/2016 3/31/2017 6/30/2017 9/30/2017 Share price, lhs Book value, lhs 73

74 Sampo s Nordea holding valuation differences EURm 3,500 3,000 2,500 2,000 1,500 1, , ,507 2,132 2,008 1,811 1,260 2,999 2,621 1,439 1, ,570 2,008 2,267 2, , /12 6/12 9/12 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/15 3/16 6/16 9/16 12/16 3/17 6/17 9/17 74

75 NORDEA Transformation 75

76 Strong Nordea track record Strong capital generation and stable returns at low risk* Acc. dividend EURbn Acc. equity EURbn CAGR* 13% CET1 ratio (%) 5.9** Q317 CET1 ratio (%) 19.2 Leverage ratio (%) * CAGR 2015 vs. 2005, adjusted for EUR 2.5bn rights issue in Equity columns represents end-of-period equity less dividends for the year. No assumption on reinvestment rate for paid out dividends ** Calculated as Tier 1 capital excl. hybrid loans

77 We are ready to take the next step in our transformational journey Illustrative timeline Success factors 3 OPTIMISATION 1 RAMP UP ( ) Ambitious investments to build the foundation Fast & agile Efficient and Scalable Resilient and compliant 2 EXECUTION 2 EXECUTION ( ) Distribution/Channels/Service model Credit Processes & Products IT & Ops Key support functions 1 OPTIMISATION ( ) RAMP UP 3 Future relationship bank

78 Expected cost development ~ in 2018 ~300 Comments Significant underlying cost pressure of m driven by: ~5,100-5, ~ Increasing running expenses for IT systems following the substantial development agenda/digital transformation and compliance -75 <4,800 Annual underlying salary increases and inflation on non-staff expenses -900 Increasing depreciations & amortisations following substantial product/investments in IT infrastructure / solution platforms Estimated 2017 Cost incl. Transformational costs Baltics & Redomicilation Run cost effects of ramp-up, reinvestments and inflation Depreciation & Amortisation Group projects ramp-down Transformational 2021 Cost incl. driven gross Transformational savings costs Gross savings driven by transformation, as well as lower project costs, more than counteracting the upward pressure 78

79 Gross cost savings of around 900 EURm expected through transformation Estimated savings effects* Distribution/ Channels/ Service model Ramp up speed of migration to digital (mobile), remote meetings, and closing down branches Segmentation and stronger Nordic coordination of client coverage and build up of global competence center ~ 30% (~250 EURm) Credit processes & Products Implementation of pre-approved credit limits and automated credit decisions Functional centralisation to achieve scale and enhanced capacity Implementation of common standards for risk assessments Strict product prioritisation, production location (in-house, outsourced or white labelled) and centralise workforce/processes to improve efficiency ~ 15% (~150 EURm) Information Technology & Operations Higher degree of centralisation and nearshoring/outsourcing and shared platforms Automatization and Robotics Reduce complexity and establish future technological platform ~ 45% (~400 EURm) Key support functions Optimised service model for People (i.e. Learning), Finance and consolidation of support staff Higher degree of nearshoring in relevant areas Streamlining sourcing strategy ~ 10% (~100 EURm) Total 100% (~900 EURm) 79 * Numbers rounded to closest 5%

80 FTE and consultants effects (incl cost to transform) Comments The transformation will include a reduction of FTEs of >4.000 New hirings to support competence shift and centralisation Number of consultants to be reduced by ~2.000 over the period >6 000 ~2000 Consultants The transformation is expected to generate a total cost to transform of ~5-600m over the period Absolute majority of cost to transform consists of redundancy costs The costs are mainly related to: Transformation of Personal Banking and CBB including the migration to Digital Gross reductions New hirings Net reductions IT & Operations (nearshoring and automation & process optimisation) 80

81 OUTLOOK 81

82 Sampo Group s outlook for the rest of 2017 Sampo Group s business areas are expected to report good operating for However, the mark-to-market results are, particularly in Mandatum Life, 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 a combined ratio of per cent for the full-year 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. 82

83 APPENDIX 83

84 Sampo Group structure Long-term investor Manager of capital structure and liquidity Pay-out ratio 50% 100% > 45% 21.2% 100% Subsidiary Subsidiary Associated Company Subsidiary 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 The most diversified bankin the Nordics with strong capital generation One of Finland s most respected and solvent financial services providers to private & corporate customers Strategy Focus areas: Customer value Focused insurance expertise Nordic business platform Investment strategy with balanced risk Customer satisfaction Pricing Efficiency Distribution power Simplification Cost & capital efficiency One operating model Compliance Digital Offering Unit-linked products Wealth management Personal Risk insurance Group pension & Reward Services Investment assets ~ EUR 12.4bn ~ EUR 2.7bn P&C (2016) ~ B/S EUR 615bn ~ AuM EUR 317bn ~ EUR 6.3bn Return / profit target RoE above 17.5% CR% below 95% Profit margin of 10% CR% 91% ROE above the Nordic peer average RoE above 17.5% 84

85 Structural changes of Sampo Group to the position as the leading Nordic financial group 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 41.1 per cent of Topdanmark s shares. Topdanmark now becomes Sampo s associated company. 85

86 Sampo plc s ownership structure, 30 September 2017 Solidium 11.90%* Varma Mutual Pension 5.35 Björn Wahlroos 1.79% The State Pension Fund 0.70% Ilmarinen Mutual Pension 0.66% Other domestic owners 17.55% Foreign and nominee registered owners 62.06% * Entirely owned by the Finnish state 86

87 Sampo Group staff Sampo Group staff (FTE) 30 September September 2016 If 6,415 6,226 Finland 1,763 1,674 Sweden 1,933 1,884 Norway 1,326 1,359 Denmark Baltic and other countries Topdanmark 2,439 - Denmark 2,439 - Mandatum Life Finland Baltic countries Holding Sampo Group, total 9,436 6,837 87

88 P&C insurance Market shares by country, % Norway Q2/2017 Total GPE EUR 6 bn Gjensidige 26% If 21% Tryg 13% Sparebank1 10% DnB 5% Eika 4% RSA 3% Storebrand 3% Protector 3% Other 12% Sweden Q2/2017 Total GPE EUR 8 bn LF 30% If 18% Trygg-Hansa 15% Folksam 17% Moderna 3% Dina-gruppen 3% Gjensidige 2% Other 13% Finland 2016 Total GPE EUR 4 bn OP 32% LähiTapiola 26% If 23% Fennia 10% Other 10% Denmark 2016 Total GPE EUR 7 bn Baltics 2016 Nordics 2016 Total GPE EUR 26 bn Tryg 18% Topdanmark 17% If 6% Codan (RSA) 11% Alm.Brand 10% Gjensidige 7% Other 31% PZU 24% If 12% VIG 19% Ergo 13% Gjensidige 11% Seesam 6% Other 8% If 18% Topdanmark 5% Tryg 9% LF 10% RSA Scand. 9% Gjensidige 8% Folksam 6% OP 6% LähiTapiola 4% Other 25% 88

89 Life insurance Market shares by country, % Norway Q2/2017 Total premiums EUR 5 bn Sweden Q2/2017 Total premiums EUR 21 bn Finland 2016 Total premiums EUR 5 bn DnB 16% Storebrand 18% KLP 32% Nordea Liv 12% Sparebank 16% Gjensidige 3% If 1% Tryg 1% Other 11% Skandia 13% SEB 8% Folksam 15% Swedbank 7% AMF Pension 9% Avanza 7% Nordea Liv 7% LF 5% Nordnet 3% Alecta 9% SHB 5% SPP 3% Danica 6% Other 2% OP Life 22% Mandatum Life (+Kaleva) 24% Nordea 31% LähiTapiola 9% Fennia 5% Aktia 3% Other 7% Denmark 2015 Total premiums EUR 14 bn Baltics 2016 PFA Pension 39% Danica Pension 22% Nordea Liv & Pension 16% SEB Pension 8% Topdanmark 8% AP Pension 6% Alm.Brand 1% Other 1% Mandatum Life 7% Other 93% 89

90 Supplementary Financial Information JANUARY SEPTEMBER 2017 Sampo plc Fabianinkatu Helsinki, Finland Phone: Business ID: sampo-plc 90