Supplementary Financial Information Sampo Group January - March 2009
Sampo Group in January March 2009 Sampo Group s profit before taxes amounted to EUR 169 million (142). EPS amounted to EUR 0.23 (0.18), at market values EPS was EUR -0.12 (-0.39). Net asset value per share amounted to EUR 8.17 (8.28). In P&C insurance profit before taxes amounted to EUR 144 million (64), combined ratio was 94.2 per cent (94.0). In life insurance profit before taxes decreased to EUR 27 million (64). Segment Holding reported a loss before taxes of EUR -21 million (14) as a result of Sampo plc selling its Topdanmark shares to its fully-owned subsidiary If P&C Insurance Holding Ltd at a loss of EUR -19 million. The sales loss is eliminated in the consolidated accounts of Sampo Group. 2
Sampo Group s results Profit before taxes and net profit Profit before taxes by quarters EURm 169 EURm 300 279 150 100 142 106 127 200 142 242 206 169 50 100 0 1Q/2008 1Q/2009 0 Q108 Q208 Q308 Q408 Q109 Pre-tax profit Net profit 3
Earnings per share Reported EPS and EPS incl. change in the fair value reserve Reported EPS by quarter EUR EUR 0.2 0.18 0.23 0.5 0.4 0.42 0.0-0.2 Q1/08 Q1/09-0.12 0.3 0.2 0.1 0.18 0.31 0.27 0.23-0.4-0.39 0.0 Q108 Q208 Q308 Q408 Q109 EPS (reported) EPS (incl. change in FVR) 4
Sampo Group s net asset value per share EUR 13.49 12 8 7.67 9.21 8.28 8.17 4 0 12/2005 12/2006 12/2007 12/2008 3/2009 5
Sampo Group s net asset value, 31 March 2009 EURm 5,000 4,000 3,000 2,715 2,000 226 4,589 1,000 1,649 0 P&C insurance Life insurance Holding Sampo Group (incl. eliminations) 6
Sampo Group s profit before taxes, January March 2009 EURm 169 150 144 142 100 64 64 50 27 14 0-50 P&C insurance Life insurance -21 Holding Sampo Group Q1/2008 Q1/2009 7
P&C insurance profit before taxes, January March 2009 EURm 1,500 1,429 1,327 750 0-750 Premiums written, net Claims incurred 12 102 and change in ins. liabilities Costs 64 144 Investment income, net -230-216 Profit before taxes -1,500-1,065-1,149 Q1/2008 Q1/2009 8
Life insurance profit before taxes, January March 2009 EURm 150 123 144 75 0-75 Premiums written, net 50-41 Investment income, net Claims incurred and change in liabilities 5-20 Costs -22 64 27 Profit before taxes -150-142 Q1/2008 Q1/2009 9
Holding profit before taxes, January March 2009 EURm 28 20 14 0-6 -3-2 -4-6 -9-9 -20-40 Investment income, net Staff costs Other operating expenses Finance costs Q1/2008 Q1/2009-21 Profit before taxes 10
Sampo Group s equity, EURm 4,631 4,573 5,365 5,504 Fair value reserve Retained earnings Restricted capital 1,629 1,629-2,364-2,561 31 December 2008 31 March 2009 11
Sampo Group s fair value reserve development EURm 600 486 531 497 503 316 0-9 -600-1,200-544 -884-1,800-2,400-3,000-2,364-2,560 12/06 03/07 06/07 09/07 12/07 03/08 06/08 09/08 12/08 03/09 Sampo Group fair value reserve, after tax 12
Fair value reserve development by segment EURm 3/2009 12/2008 12/2007 P&C insurance -463.5-413.8 0.0 Life insurance -244.2-191.6 289.4 Holding -1,839.5-1,759.3 26.4 Sampo Group* -2,560.1-2,363.5 317.0 *Eliminations included and figures after tax 13
Fair value reserve by segment and asset class, 31 March 2009 EURm Fixed income Equity Derivatives held for hedging Deferred taxes FVR net P&C Insurance -329.9-304.9-171.3-463.5 Life Insurance -62.5-290.5 23.1 85.8-244.2 Holding -9.0-1,833.1-2.6-1,839.5 Sampo Group* -400.9-2,446.8 23.1 264.5-2,560.1 *Figures after tax 14
Sampo Group s economic capital 12/2005-3/2009 EURm 3,000 2,000 1,000 0 1,502 1,690 1,661 949 990 781 1,173 1,031 692 693 12/2005 12/2006*) 12/2007 12/2008**) 3/2009 382 180 1,157 534 611 3,148 2,695 3,395 1,895 1,976 P&C *)New methodology since 2008 Life Holding Sampo Group (incl. diversification effect) **) 99.5% VaR since 2008 15
Sampo Group s economic capital split by risk type, 31 March 2009 8% 28% 52% Market risk Credit risk Insurance risk Operational risk 12% 16
P&C insurance economic capital split by risk type, 31 March 2009 EURm 2,500 2,000 Liability side adjustments 2,546 125 *) 331 1,500 1,000 LOB Diversification 275 164 171 258 2,090 500 637 990 0 Insurance risk Market risk Credit risk Operational Diversification Total Adjusted risk solvency capital *) Part of If s subordinated loans not included in the current regulatory capital base (but allowed for in QIS 4) 17
Life insurance economic capital split by risk type, 31 March 2009 EURm 1,000 19 750 129 219 500 250 548 507 253 693 257 295 Liability side adjustments 0 Insurance risk Market risk Credit risk Operational risk Diversification Total Adjusted solvency capital 18
Sampo Group Economic Capital, 31 March 2009 EURm 3,000 2,400 Market risk Insurance risk Diversification Credit risk Operational risk Total 190 1,800 1,200 171 687 293 1,976 600 0 19 637 257 129 164 275 507 611 990 693 611-116 -207-318 1,278-600 If Mandatum Sampo plc Diversification Sampo Group Life total 19
Group economic capital and solvency, 31 March 2009 According to Solvency II EURm 4,500 Liability side adjustments, If and Mandatum Life 4,109 125 331 253 3,000 Excess capital EUR 2,1bn 1,500 693 611 318 1,976 3,400 0 990 P&C Life Holding Diversif. Group Economic Capital Adj. Group Solv. Capital 20
Sampo Group s solvency capital EURm 3 000 2 000 434% of minimum requirement 3 452 3 400 424% of minimum requirement 1 000 0 796 802 31 December 2008 31 March 2009 Group solvency capital Regulatory minimum capital requirement 21
Return on equity in Sampo Group s business areas P&C insurance Life insurance 20% 14.4% 0% -20% -40% -60% -52.0% Target RoE RoE Q1/2009 (annualised) 22
Sampo Group's investment allocation, 31 March 2009 Total EUR 16.8 billion 1 % 2 % 12 % 7 % 16 % Money Market 16% Bonds 63% Nordea 12% Equities other 7% Real Estate 1% Other 2% 63 % Investments of Sampo plc, Mandatum Life and If P&C 23
Fixed income allocation Sampo Group, 31 March 2009 Total EUR 13.3 billion 2 % 6 % 23 % 26 % Short term 23% Scandinavian 43% Euro 26% U.S. 6% Other 2% 43 % 24
Fixed Income Allocation by sector, 31 March 2009 Total EUR 13.3bn Corporate 20% Money Market 22% Government 16% Banks 21% Banks Covered Bonds 21% 25
Equity allocation Sampo Group, 31 March 2009 Total EUR 3.0 billion 2%2% 1%4% 3% 14% 10% 64% Scandinavia 14% Nordea 64% Finland 10% Western Europe 3% East Europe 1% North America 4% Japan 2% Far East 2% 26
Sampo plc s investment allocation, 31 March 2009 Total EUR 2.8 billion 1%1% 30% Fixed Income 30% Nordea 69% Real Estate 1% Private Equity 1% 69% 27
Sensitivity of Group investments to market risks on 31 March 2009 EURm If P&C *Eliminations included and figures after tax Mandatum Life Sampo plc Sampo Group Equities -10% -55-57 -191-303 +10% 55 57 191 303 Interest rates -100 bps 226 100 0 327 +100 bps -211-96 0-308 Alternatives -10% -5-47 -4-56 +10% 5 47 4 56 Currency -5% -5 (SEK) 2 (EUR) 73(EUR) - +5% 5 (SEK) -2 (EUR) -73 (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. 28
Sampo plc s ownership structure, 30 April 2009 14.1 % 52.2 % 8.5 % 2.7 % 2.1 % 1.1 % 19.3 % Solidium* 14.1% Varma Mutual Pension 8.5% Ilmarinen Mutual Pension 2.7% Björn Wahlroos 2.1% Kaleva Mutual Insurance 1.1% Other domestic owners 19.3% Foreign and nominee registered owners 52.2% * Entirely owned by the Finnish State 29
Sampo Group staff, 31 March 2009 31 March 2009 31 December 2008 P&C INSURANCE 6,920 6,924 Finland Sweden Norway Baltics, Russia, Denmark and other LIFE INSURANCE Finland Baltics and other HOLDING Sampo plc (Finland) 1,786 1,891 1,680 1,563 466 341 125 57 57 1,805 1,875 1,644 1,600 480 354 126 54 54 TOTAL SAMPO GROUP 7,443 7,458 The number of part-time employees has been changed to correspond to full-time employees according to working hours (Full-time equivalent). 30
P&C INSURANCE Figures in this section represent If operations as stand alone unless otherwise stated. This creates minor deviations from consolidated Sampo Group figures.
Breakdown of gross premiums written in If P&C, January March 2009 by business area Total EUR 1,422 million by country 297 43 500 130 43 442 444 583 363 Private Commercial Industrial Baltic and Russia Norway Sweden Finland Denmark Baltic and Russia 32
If premium change in euros and in SEK by business area, Q1/2009 vs. Q1/2008, % EUR SEK IF GROUP -8.1% 7.0% PRIVATE -8.9% 6.0% COMMERCIAL -7.0% 8.3% INDUSTRIAL -9.4% 5.4% BALTIC AND RUSSIA -4.0% 11.8% -12% -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 33
If P&C insurance result Profit and loss account*, EURm 1-3/2009 1-3/2008 Premiums earned 892 950 Claims incurred -687-731 Operating expenses -153-162 Other technical income and expenses 0 3 Allocated investment return transferred from the nontechnical account 53 53 Technical result 105 113 Investment result 109 19 Allocated investment return transferred to the technical account -68-68 Other income and expenses -2-1 Operating result 144 64 *According to consolidated Sampo Group figures 34
If P&C s technical result by business area, January March 2009 EURm 120 100 80 17 6 3 60 40 30 105 20 50 0 Private Commercial Industrial Baltic and Russia Other Group 35
If P&C s technical result by country, January March 2009 EURm 120 6 3 90 15 60 28 105 30 32 0 20 Norway Sweden Finland Denmark Baltic and Russia Other Group 36
If P&C s combined ratio development % 100 80 26.6 25.6 24.3 24.0 23.7 23.7 23.5 23.5 60 40 20 74.3 67.0 66.2 65.9 66.9 68.1 70.5 70.7 0 2003 2004 2005 2006 2007 2008 Q1/08 Q1/09 Risk ratio Cost ratio 37
If P&C s solvency capital EURm 31 March 2009 31 December 2008 Shareholders equity 1,649 1,577 Subordinated notes 413 413 Deferred tax assets and liabilities, net 216 231 Solvency capital 2,278 2,221 38
Solvency capital & solvency ratio for If P&C EURm % 3 000 66 2 000 100 85 70 55 40 1 000 25 0 2003 2004 2005 2006 2007 2008 03/31/2009 10-5 Solvency capital Solvency ratio 39
If P&C s reserve strength 300% 250% 200% 245% 256% 277% 261% 250% 250% 150% 100% 135% 192% 144% 157% 173% 170% 177% 178% 50% 0% 2003 2004 2005 2006 2007 2008 03/31/2009 Reserves/NWP Reserves/Claims paid 40
If P&C - key figures by quarter Premiums earned, net (EURm) Q109 892 Q408 Q308 Q208 Q108 Q407 Q307 Q207 Q107 924 972 962 950 969 964 935 928 Technical result (EURm) Risk ratio (%) Cost ratio (%) Expense ratio (%) Combined ratio (%) Insurance margin (%) 105 70.7 23.5 17.2 94.2 11.8 129 67.4 24.5 18.2 91.9 14.0 158 67.3 23.3 17.1 90.6 16.2 147 67.2 23.6 17.2 90.9 15.3 113 70.5 23.5 17.0 94.0 11.6 160 65.4 24.3 17.2 89.8 16.1 161 65.9 23.0 17.0 88.8 16.7 139 66.5 23.8 17.3 90.3 15.0 105 70.0 23.8 17.0 93.8 11.1 41
If P&C - key figures by business area Q1/2009 PRIVATE Combined ratio COMMERCIAL Combined ratio 90.1% 91.3% 93.2% 94.8% 90.8% 92.4% 95.7% 95.6% Jan-Dec 07 Jan-Dec 08 Q108 Q109 Jan-Dec07 Jan-Dec08 Q1/08 Q1/09 HIGHLIGHTS Premiums decreased by -8.9 per cent from Q1/2008 in euros Technical result decreased by -18.7% from Q1/2008 KEY FIGURES GWP: EUR 500 m (549 ) NPE: EUR 468 m (509) Technical result: EUR 50 m (61) Risk ratio: 71.0% (70.0%) Cost ratio: 23.8% (23.2%) Insurance margin: 10.6% (11.9%) HIGHLIGHTS Premiums decreased by -7.0% from Q1/2008 Technical result decreased by -2.7% from Q1/2008 KEY FIGURES GWP: EUR 583 m (626) NPE: EUR 277 m (299) Technical result: EUR 30 m (30) Risk ratio: 71.6% (71.4%) Cost ratio: 24.0% (24.3%) Insurance margin: 10.5% (9.9%) 42
If P&C - key figures by business area Q1/2009 INDUSTRIAL Combined ratio BALTIC AND RUSSIA Combined ratio 97.6% 94.1% 93.4% 92.8% 90.8% 92.6% 89.1% 81.0% Jan-Dec 07 Jan-Dec 08 Q108 Q109 HIGHLIGHTS Premiums decreased by 9.4% Technical result increased by 42.4% Risk ratio improved from 78.4% in Q1/2008 to 73.3% KEY FIGURES GWP: EUR 297 m (328) NPE: EUR 105 m (104) Technical result: EUR 17 m (12) Risk ratio: 73.3% (78.4%) Cost ratio: 19.5% (19.2%) Insurance margin: 15.9% (11.2%) Jan-Dec 07 Jan-Dec 08 Q108 Q109 HIGHLIGHTS Premiums decreased by 4.0% from Q1/2008 Risk ratio deteriorated from 49.7% in Q1/08 to 54.6% Insurance margin decreased from 22% in Q1/08to 15.6% KEY FIGURES GWP: EUR 43 m (45) NPE: EUR 41 m (38) Technical result: EUR 6 m (8) Risk ratio: 54.6% (49.7%) Cost ratio: 34.5% (31.3%) Insurance margin: 15.5% (22.0%) 43
If P&C - key figures by country Q1/2009 Combined ratio 89.8% 93.3% 95.4% 99.6% 86.0% 92.0% 97.3% 95.3% Jan- Dec 07 Jan- Dec 08 Q108 Q109 Jan-Dec 07 Jan-Dec 08 Q108 Q109 NORWAY GWP: EUR 442 m (515) NPE: EUR 321 m (353) Technical result: EUR 20 m (35) Risk ratio: 75.6% (72.3%) Cost ratio: 23.9% (23.1%) Insurance margin: 6.3% (9.9%) SWEDEN GWP: EUR 363 m (401) NPE: EUR 255 m (289) Technical result: EUR 32 m (30) Risk ratio: 73.3% (75.5%) Cost ratio: 22.1% (21.9%) Insurance margin: 12.4% (10.1%) 90.9% 89.4% 89.6% 90.0% 115.9% 91.9% 92.6% 85.6% Jan-Dec 07 Jan-Dec 08 Q108 Q109 Jan-Dec 07 Jan-Dec 08 Q108 Q109 FINLAND GWP: EUR 444 m (457) NPE: EUR 201 m (199) Technical result: EUR 28 m (29) Risk ratio: 66.5% (64.9%) Cost ratio: 23.5% (24.7%) Insurance margin: 14.0% (14.0%) DENMARK GWP: EUR 130 m (130) NPE: EUR 74 m (71) Technical result: EUR 15 m (10) Risk ratio: 60.5% (68.8%) Cost ratio: 25.1% (23.8%) Insurance margin: 21.0% (13.7%) 44
If P&C s investment allocation, 31 March 2009 Total EUR 9.4 billion 6% 6% 1% Bonds 88% Money Market 6% Equities 6% Other 1% 88% 45
LIFE INSURANCE
Life insurance profit by components EURm Net investment income - Transferred to expense result - Return on unit-linked policies - Return on with-profit policies* Q1/2009 Q1/2008 50-42 -2-4 17 158-35 -50 INVESTMENT RESULT EXPENSE RESULT RISK RESULT OTHERS PROFIT BEFORE TAXES Change in the market value of investments PROFIT AT MARKET VALUES 30-3 4-4 27-70 -44 63 1 2-1 64-136 -72 *Includes guaranteed interest, bonuses and change in the reserves of the above items 47
Mandatum Life breakdown of premiums written & insurance savings Premiums written, EURm 1-3/2009 Insurance savings, EURm 3/2009 22 5 19 1 15 30 Unit-linked life Unit-linked pension Unit-linked capital redemption Unit-linked Baltic Other life 3,806 5019 903 550 143 59 369 43 Other pension Other capital redemption Other Baltic 48
Mandatum Life technical reserves traditional vs. unit-linked EURm 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 2003 2004 2005 2006 2007 2008 3/2009 Guaranteed interest rates Unit-linked 49
Mandatum Life s market share in Finland % 30,0 25,0 20,0 15,0 10,0 5,0 0,0 2004 2005 2006 2007 2008 Q1/2009 All products Unit-linked 50
Solvency of Mandatum Life Group EURm SOLVENCY CAPITAL Q1/2009 2008 Capital and reserves 212 243 Dividend payment 0 0 Subordinated capital 100 100 Unrealized gains 22 21 Deferred taxes from Fair Value Reserve -86-67 Deferred taxes on profit brought forward 115 102 Other items -15-14 TOTAL 348 384 TECHNICAL PROVISIONS Technical provisions on own account 6,115 6,119-75% of t/p in unit linked insurance -1,244-1,227 TOTAL 4,871 4,891 SOLVENCY RATIO % OF TECHNICAL RESERVES 7.1 7.9 51
Mandatum Life s investment allocation, 31 March 2009 Total EUR 4.6 billion 5% 4% 2% Money Market 29% 1% 12% 48% 29% Bonds 48% Nordea 1% Equities other 12% Private Equity 5% Real Estate 4% Other 2% 52
OUTLOOK
Sampo Group s outlook for the rest of 2009(1) Conditions in the investment market were extremely demanding in the first quarter of 2009. It now appears that most of the negative news on the economy was already then discounted in asset values. Developments in March-April 2009 have been more encouraging and a clear change of sentiment seems to have taken place in the market. The global economy will, however, continue to suffer for some time still. Although improving asset values will reflect on valuations of Sampo Group s investment assets and the returns achieved, the Group s result for 2009 will largely depend on the proceeds of the P&C insurance operation. The reported profit is expected to remain on a good level. The volatility of capital markets makes it impossible to estimate the return on investments at any level of accuracy. 54
Sampo Group s outlook for the rest of 2009(2) The macroeconomic situation will only have a small negative impact on premium growth in P&C insurance and the insurance technical result of If P&C is not expected to suffer in 2009 from the economic downturn. If P&C is expected to reach its long-term combined ratio target with a combined ratio of 91-94 per cent. Mandatum Life s profit is to a very large extent dependent on investment markets and it is impossible to reliably estimate the results for 2009. Holding segment s profit will mostly consist of dividends of EUR 80 million received from Nordea in April 2009. With its current asset composition Sampo plc s profit contribution will be small in the Group context. Sampo plc may increase its holding in Nordea further provided that market conditions remain favourable. 55