Nordea Market s Insurance Seminar January 10, 2011 Group CFO Peter Johansson

Transcription

1 Nordea Market s Insurance Seminar 2011 January 10, 2011 Group CFO Peter Johansson

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 forwardlooking 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. 11/01/2011 2

3 Sampo Group 11/01/2011 3

4 Sampo Group Introduction Group structure Exceptionally strong business portfolio Sampo plc Finland If P&C Insurance Sweden Nordea Bank Sweden *as of Mandatum Life Finland 100% 20,54%* 100% Sampo Group is a pan-nordic financial group based in Helsinki Sampo Group is well diversified across the financial industry with presence in non-life, life and banking Sampo plc is a holding company with limited operating activities If P&C is the largest P&C insurer in the Nordic region with significant market shares in Norway, Sweden and Finland (20% overall market share) If has strong and resilient cash flow generation capabilities with stable and attractive combined ratio If is the largest contributor to Group pre tax profits with 54% in Q1-Q Mandatum Life is a leading life and pension insurer in Finland with 26% market share with unit-linked focus Mandatum Life generated EUR 100m in pre tax profit in Q1-Q3 2010, contributing 10% of Group profit Mission Create value in Nordic financials Today Sampo plc holds ca. 20.5% of Nordea, the leading bank in the Nordic region Nordea has robust profitability and diversified loan book and a limited exposure to the Baltics and other Eastern European markets Stable AA- ratings throughout the crisis highlights the resilience of the bank Nordea s share in Q1-Q Group profit was 39% 11/01/2011 4

5 Market Cap of Nordic Financial Groups Nordea DnB NOR Handelsbanken S E B Danske Bank Swedbank Investor Sampo ,485 Market cap Pref.shares Industrivärden Gjensidige Storebrand Pohjola Bank Tryg Jyske Bank Topdanmark Alm.Brand 303 Source: Reuters Ecowin 11/01/2011 5

6 Strong Ownership Structure Solidium Oy* 14.12% Varma Mutual Pension 8.50% Foreign and nominee registered owners 49.13% Ilmarinen Mutual Pension 2.63% Björn Wahlroos 2.09% Kaleva Mutual Insurance 1.09% Other domestic owners 22.43% *100 % owned by the Republic of Finland 11/01/2011 As per 31 October,

7 Stable Profit Development EURm Highlights Stable Group profits on the back of strong performance for If P&C Largest profit contributors for Group profit in 2010 are If P&C and Nordea, accounting for 54% and 39% of Q1-Q Group profits respectively Group profit by segment before taxes Jan-Sep /09 1-9/ EURm Group profit before taxes by quarters P&C Life Nordea Holding Sampo Group /01/2011 7

8 If P&C 11/01/2011 8

9 If P&C Insurance Introduction Geographical presence If P&C provides insurance solutions and services in: Finland Sweden Denmark Norway Baltics (and Russia) Facts about If 1-9/2010 (1-9/2009) If generated EUR 519m (476) in pre tax profits Excellent combined ratio of 93.0% (92.0) Risk ratio 69.5% (68.1) Cost ratio 23.5% (23.8) Expense ratio 17.0% (17.3%) Average ROE Q % Average number of staff 6,415 (6,863) Business model resilient over the cycle Diversified and low risk business Gross premiums written by If 1-9/2010 by business area by country Private Norway Commercial Industrial Baltic and Russia Sweden Finland Denmark Baltic and Russia /01/2011 9

10 If is the Largest P&C Insurer in the Nordic Area NORWAY Q3/2010 Gjensidige 28% If 26% Tryg 17% Sparebank 1 10% FINLAND 2009 Pohjola 28% If 25% Tapiola 19% Fennia 10% DENMARK 2008 Tryg 21% Topdanmark 18% Codan (RSA) 14% Alm. Brand 10% If 5% SWEDEN Q3/2010 Länsförsäkringar 29% If 19% Trygg-Hansa (RSA) 16% Folksam 15% BALTIC REGION Q3/2010 RSA 21% If 15% BTA 15% Ergo 14% Gjensidige 7% Source: National insurance associations statistics 11/01/

11 If P&C s Combined Ratio below Long-Term Target % ,6 Long-term combined ratio target < 95% 25,6 24, ,7 23,7 24,1 23,8 23, , ,2 65,9 66,9 68,1 68,0 68,1 69, /09 1-9/10 Risk ratio Cost ratio 11/01/

12 If P&C Strong Profits based on Market Leadership If P&C profit before taxes and MTM profit Q3/10 Profit before taxes MTM profit, Jan-Sept 2009 and 2010 comprehensive result /09 1-9/ /01/

13 If P&C Mark-to-Market Investment Returns 15 % 12,4 % 10 % 5 % 3,6% 2,5% 2,1% 4,6% 4,3% 5,8% 4,4 % 2,6 % 5,7 % 0 % -5 % -3,1 % 11/01/

14 Solvency Capital & Solvency Ratio for If P&C EURm % 100 % % 88 % 74 % 71 % 66 % 77 % 86 % 80 % 60 % 54 % 40 % % Q3/10 0 % Solvency capital (lhs) Solvency ratio (rhs) 11/01/

15 Mandatum Life 11/01/

16 Mandatum Life Introduction Geographical presence Mandatum Life provides life and pension insurance in: Finland Baltics Facts about Mandatum 1-9/10 (1-9/09) Mandatum Life is a leading life and pension insurer in Finland Mandatum has a strong market position in Finland with ca. 25% of the market Mandatum contributed with EUR 100m (85) in pre tax profit to the Group Average ROE Q % Average number of staff 465 (459) Premiums written, 1-9/2010, EURm* Insurance savings, 9/2010, EURm 219 Unit-linked life insurance Traditional life insurance *) differs from P/L due to eliminations 11/01/2011 within Life group 16

17 Mandatum Life s Market Position Market share in Finland Technical reserves: guaranteed rate vs. unit-linked % EURm , ,5 25,2 22,4 20,8 21,5 24,8 24,9 17,9 19,5 20,4 19,8 19,3 All products Unit-linked Focus area Limited new sales 0 Guaranteed interest rates Unit-linked 11/01/

18 Mandatum Life Profit Development EURm Profit before taxes MTM profit, 1-9/09 and 1-9/10 comprehensive result /09 1-9/10 11/01/

19 Mandatum Life Mark-to-Market Investment Returns and 10Y Gvmt bond yield 16,8 % 12,0 % 7,9 % 9,5 % 8,6 % 9,7 % 8,0 % 5,3 % 0,5 % 2,8 % -7,8 % 19

20 Mandatum Life s Solvency Ratio 25,0 % 23,4 % 20,0 % 20,1 % 16,5 % 18,5 % 15,0 % 10,0 % 7,9 % 5,0 % 0,0 % Q/ /01/

21 Nordea 11/01/

22 Change in Sampo s Nordea Ownership Shares, million % 0.4% 1.7%3.1% 11,2 43,9 81,1 97,2 9.6% 10.3%10.3%11.1% 7.6% 196,3 249,6 266,9 266,9 287,8 12.2% 318,4 15.5% 402, % 19.8% 20.1% 20.5% 18.2% 734, ,4 830,4 830,4 Highlights Nordea has excellent earnings quality, a diversified loan book and a limited exposure to Baltic countries and other Eastern Europe Similar to If P&C, Nordea has strong retail franchise thus creating diversification benefits to Sampo s business portfolio Nordea has maintained a solid AA rating and access to capital markets throughout the financial crisis and its capital base was strengthened through a rights issue in in /01/

23 Nordea s Low Volatility Adds to Stability EURm Nordea s quarterly operating profit Q1/07 Q3/ Write backs Loan losses Operating profit Highlights Sampo s ownership in Nordea provides a stable source of income Nordea s operating profit has remained stable throughout the financial crisis Furthermore, it is Sampo management s strong understanding that banking provides diversification benefits for Sampo plc - 11/01/

24 Nordea on Sampo Consolidated Balance Sheet Nordea on Sampo s B/S EURm Acquisition price 5,303.6 Share of Nordea s net profit (1,893) Depreciation Deferred tax 6.5 Dividends Share of Nordea s other comprehensive income (EUR 266m) 53.4 Share of Nordea s other changes in equity (EUR 58m) 17.0 Nordea is accounted as an associated company on Sampo Group balance sheet as of 31 December 2009 Net effect on Group equity ca. 200m Share of Nordea s goodwill change( EUR 89m) Total (as of Sep 30, 2010) 5, /share ( 7.63/share market value) 11/01/

25 Sampo plc 11/01/

26 Sampo Parent Company Balance Sheet Assets total Liabilities total Liquidity 150 CP s issued 580 Investment Assets 41 LT Senior Debt Real Estate 4 Private Placements 86 Private Equity 19 Bonds issued 940 Other Investments 18 Pension insurance loans 130 Subordinated Loans Equity Holdings 145 Subordinated Debt Capital Subsidiaries (IF, ML) Undistributable Capital 98 Associated (Nordea) Distributable Capital Other Assets 104 Other Liabilities 110 as of Sep 30, /01/

27 Parent Company Financials Sampo plc profit before taxes Financial Years & Q1-Q3/ Highlights Sampo plc has limited costs arising from operating activities Income for Sampo plc consists of dividends paid by operating companies If P&C, Mandatum Life and Nordea Main outgoing items are dividends paid to shareholders and interest expenses According to Sampo s dividend policy at least 50% of net profit will be paid to shareholders Dividends are discretionary 11/01/

28 Dividends Received by the Parent Company , Banking* Mandatum Life If Highlights Sampo plc s main liquidity source are the dividends paid by its subsidiaries and Nordea Dividend stream has remained strong through the financial crisis and is based on the strong cash generation of If P&C Following the increase in the ownership, Nordea s importance as a source of cash flow is expected to increase *) Sampo Bank Nordea /01/

29 Sampo plc Current Debt Profile Issued Debt instruments Swap Book Value Coupon Margin Current Maturity Senior Bond Eur 3M % EUR 750m % % % Senior Bond SEK (1,750m) Eur 3M % EUR 191m Stibor 3M % % CP's issued EUR 560m Euribor ~0.400% ~1.400% ~3M Public debt EUR 1,501m % Private placements EUR 86m % TEL-pension loan Eur 6M % EUR 130m 4.15% (sa) 1.725% % Total EUR 1,717m % Highlights Strong dividend flows from operating companies to Sampo plc support strong debt service Cumulative dividend since 2005 have amounted to EUR 3,953 million Key credit figures Double Leverage (Equity Holdings / Capital) 122 % Average Debt Rate 3.29 % Gross Debt Equity EURm Gross Debt to Equity 27.4 % 11/01/

30 Strong Capitalization Internal perspective Regulatory perspective EURm Part of If Hybrids not included in Solvency capital Nordea Life 231 If 722 Highlights Excess capital of EUR 3bn Sampo Group has maintained excellent solvency position, both from internal and regulatory perspective Capitalization is strong also after the inclusion of the respective proportion of Nordea s solvency capital requirement Strong Group Solvency ratio at 167% Solvency ratio has decreased from 433% in YE 2008 due to the inclusion of Nordea to the calculation as an associate -500 P&C Life Nordea Diversific. Group EC Adj. group solv. Figures as per 30 September 2010 capital Minimum requirement Liability side adjustment, If and Mandatum Life /01/

31 Correlations and diversification effect Quarterly results for 2005-Q3/2010 in EUR: If and Mandatum: Profit before taxes incl. change in fair value reserve Nordea: Operating profit Correlations Nordea If Mandatum Nordea 1 If Mandatum Economic capital Q3/2010 EC EC^2 If Mandatum Nordea TOTAL TOTAL incl. diversification effect Group Economic Capital based on stand-alone ECs and correlation matrix: EURm => Diversification effect 27%

32 Sampo plc profit distribution Dividend yield, % ,1 5,9 6,6 6 5,9 Profit Distribution According to Sampo's dividend policy, total annual dividends paid will be higher than 50 per cent of Group's net profit for the year (excluding extraordinary items). In addition, share buy-backs can be used to complement the cash dividend /01/