sampo plc debt presentation q4 2014 final 4 3 2015 (2 ...€¦ · debt investor contacts markku...

SampoGroupDebtInvestorPresentationPreparedMarch4,2015FiguresDecember31,2014

www.sampo.com/debtpresentation

DEBTINVESTORCONTACTS

MarkkuPehkonen,[email protected]

PeterJohansson,[email protected]

JarmoSalonen,HeadofIRRelationsandGroupCommunicationstel.+358105160030jarmo.salonen@sampo.fi

FINANCIALCALENDAR

07/05/2015 InterimReportQ1/2015Silentperiod09/04/2015‐07/05/2015



Rated Company Moody's StandardandPoor's

Rating Outlook Rating Outlook

Sampoplc Baa2 Stable Notrated ‐

If P&CInsurance (Sweden) A2 Stable A Stable

If P&CInsuranceCo. (Finland) A2 Stable A Stable

DisclaimerThispresentationmaycontainforward‐lookingstatementsthatreflectmanagement’scurrentviewswithrespecttocertainfutureeventsandpotentialfinancialperformance.AlthoughSampo believesthattheexpectationsreflectedinsuchforwardlookingstatementsarereasonable,noassurancecanbegiventhatsuchexpectationswillprovetohavebeencorrect.Accordingly,resultscoulddiffermateriallyfromthosesetoutintheforward‐lookingstatementsasaresultofvariousfactors.ImportantfactorsthatmaycausesuchadifferenceforSampo include,butarenotlimitedto:(i)themacroeconomicdevelopment,(ii)changeinthecompetitiveclimateand(iii)developmentsincapitalmarkets.ThispresentationdoesnotimplythatSampo hasundertakentorevisetheseforward‐lookingstatements,beyondwhatisrequiredbyapplicablelaworapplicablestockexchangeregulationsifandwhencircumstancesarisethatwillleadtochangescomparedto thedatewhenthesestatementswereprovided.

2

Sampo Group BasicFacts 3‐8IfP&C LargestNordicP&Cinsurer 9‐16MandatumLife Finnish LifeInsurer withAsset ManagementFocus 17‐24Sampo Group Results,CapitalisationandInvestments 25‐33Sampo plc ThelistedHoldingcompany 34‐41Appendix 42‐55

3

MARKETPOSITION

STRATEGY

INVESTMENTASSETS

RETURN/PROFITTARGET

21.2%

• Unit‐linkedproductsandwealthmanagement

• TOP3companyinlife&pensioninFinlandwithBalticoperations

~ EUR5.3bn

• RoE above17.5%

• ThelargestPan‐NordicP&Cinsurer

• Underwritingfocus• Pan‐Nordicsynergies

~ EUR11.5bn

• RoE above17.5%• CR%below95%

>30%

100%100%

• ListedcompanySampoplc• Long‐terminvestor•Managerofcapitalstructureandliquidity• Pay‐outratio≥50%

•ThelargestPan‐Nordicfinancialservicesgroup

• Profitoriented• Cost,riskandcapital

~ EUR669bnB/S

• ROEof13%attherequiredCET1

• ThesecondlargestP&CinsurerinDenmark

• Economiesofscale•Expenses,riskmanagement

~ EUR2.5bn

• Profitmarginof10%• CR%91%

Nordic FinancialGroupwith Strong Brands

Sampo Group―BasicFacts

4

48701

28010

26257

25202

23870

23751

16149

7805

6636

4825

3406

1435

928

561

512

0 10000 20000 30000 40000 50000 60000

Nordea

Handelsbanken

Swedbank

Sampo

DanskeBank

DNB

Investor

Gjensidige

Tryg

Industrivärden

Topdanmark

Storebrand

Alm.Brand

Protector

Aktia

Solidium*,11.9%

VarmaMutualPension,6.35%

IlmarinenMutualPension,1.0%

BjörnWahlroos,2.1%

KalevaMutualInsurance,0.89%

Otherdomesticowners,17.89%

Foreignandnomineeregisteredowners,59.84%

SampoGroupisaMixed FinancialConglomerate

Source:Datastream

>30%

>21%

Sampo ownershipstructure

*100%ownedbytheRepublicofFinland

MarketcapFebruary27,2015,EURm Strongrelativeperformance

5


BankInsurance

10YTotalShareholder Return

• IfgeneratedEUR931m(929)inpre‐taxprofits• Excellentcombinedratioof 87.7%(88.1)

– Riskratio65.1%(65.4)– Costratio22.5%(22.8)– Expenseratio16.7%(16.8)

• Resilientbusinessmodeloverthecycle

IfP&C―Well‐diversifiedandProfitablePan‐NordicNon‐lifeInsurer

• IfP&CprovidesinsurancesolutionsandservicesinFinland,Sweden,Denmark,Norway,Baltics (andRussia)forcorporates andprivatepersons

• MajorLinesofBusiness‐ motor‐ workers´ compensation‐ liability‐ accident‐ property‐ cargo

Well‐established InsuranceSubsidiaries

• MandatumLifeisaleadinglifeandpensioninsurerinFinland

• MandatumhasastrongmarketpositioninFinlandwithca.18%ofthemarket

• MandatumcontributedwithEUR163m(153)inpre‐taxprofittotheGroup

Mandatum Life―LeadingFinnishLifeandWealthManagementServiceProvider

• ProvidescomprehensiveWealth Management&Lifeinsurance solutions inFinlandandBaltics forcorporates andprivate persons

• Servicesprovided‐ pensions &savings‐ wealth management‐ reward commitment‐ risk insurance


6Topdanmark – aDanish player• Focus onpersonal,agricultural andlower SMEmarkets


7

Leading Nordic bank asanAssociate

GroupStrategy:Value Creation inNordic Financials

8


LONGTERMVALUECREATION

•ValuecreationthroughinvestmentsinNordicfinancialsbasedonknowledgeofNordicmarkets,Nordicfinancialinstitutions&Nordicpeople.

•Commitmenttothelong‐termdevelopmentofaffiliatedcompanies.

OPERATIONALEXCELLENCEINSUBSIDIARIES

•Subsidiarieshavefocusoncontinuousdevelopmentofservices.•Economiesofscale.•Pan‐Nordicdiversification&operationalexcellencefacilitatelowvolatility.

CONSERVATIVEPARENTWITHPROFITFOCUS

•Conservativecapitalstructure,lowleverageandstrongliquidity.•ParentcompanysteersaffiliatedcompaniesthroughBoardsbysetting(inNordeaandTopdanmark bycontributingto) strategies,guidingprinciplesandROE‐targets.

GROUPLEVELPORTFOLIOBENEFITS

•Profitablecompanies,mostlywiththelowestvolatilityinthepeergroup.•Profitsofaffiliatedcompanieshavelowcorrelationcreatingdiversificationbenefitsatthegrouplevel.

LONG‐TERMVALUEFORSHAREHOLDERS&BONDHOLDERS

CENTRALIZEDINVESTMENTMANAGEMENT

•Companyspecificliabilitiesandsolvencydrivingriskprofiles,supported byaGroup‐wideinvestmentphilosophy.Commoninvestmentinfrastructurefacilitateseffectivemonitoringandfastactions,alsoattheGrouplevel.

9


Expense Ratios 2013,%

LargestNordicP&CInsurerwithSynergies

Norway2014GWPEUR6.1bnGjensidige 25%If 23%Tryg 14%Sparebank 1 10%

DenmarkQ3/2013GWPEUR6.8bn(‐12)Tryg 19%Topdanmark 17%(ofwhichIf´sshare4%)Codan (RSA) 13%Alm.Brand 10%If 6%

Finland2013GWPEUR4.1bnPohjola 31%LähiTapiola 26%If 26%Fennia 10%

Sweden2014GWPEUR7.3bnLF 30%If 18%RSA(T‐H) 16%Folksam 16% Baltics2013

GWP~EUR0.8bnRSA 23%If 14%BTA 14%Ergo 13%Gjensidige 8%

MarketShares by Country

If;18 Topdanmark;5

Tryg;10

Gjensidige;9

RSA;9LF;9Folksam;5

Pohjola;4LähiTapiola;4

Other;27

16,8

17

27,1

27,2

26,5

28,4

30,1

32,8

IFNordicpeergroup*

GeneraliZürichAXA

AllianzRSAAviva

IfP&C

10*2012

NordicMarketsharesTotalGWP~EURbn 25

NordicP&CInsuranceMarketCONSOLIDATEDMARKET

LOWEXPENSERATIOS

• Inadditiontotraditionalchannels,theInternetcontinuestogrowinimportancebothasadistributionandasaservicechannel.

•Also,distributionviapartnershipswithbanksandcar‐dealersetc.isincreasinglyimportant.

GOODPROFITABILITY

•TheNordicP&Cmarkethasgenerallyexperiencedgoodprofitabilitysincethebeginningof2000.Thelowinterestrateenvironmentandhencelowreturnoninvestmentshasmadetheindustryfocusonprofitabilityintheinsuranceoperations.

•Renewalratesarearound80‐90%.LOYALCLIENTS

DISTRIBUTION

•Themarketischaracterizedbylowexpenseratiosintherageof15‐20%.Europeancompetitors'expenseratiosareusuallyconsiderablyhigher.

•Thefour largestcompaniesaccountfor75‐90%ofthemarketsin Norway,FinlandandSweden.InDenmarkthemarketislessconsolidated.

11

IfP&C

ByBusinessArea ByCountry

Private;349;61%

Commercial;153;27%

Industrial;51;9%

Baltic;17;3%

TechnicalResults,EUR588m

Norway;301;53

%

Sweden;106;19

%

Finland;81;14%

Denmark;65;11%

Baltic;17;3%

GrossWrittenPremiums,EUR4,634m

ByBusinessArea ByCountry

Private;2621;57%

Commercial;1286;28%

Industrial;570;12%

Baltic;122;3%

Norway;1538;33

%

Sweden;1514;33

%

Finland;1022;22

%

Denmark;404;9%

Baltic;122;3%

IfP&C

12

GoodDiversificationinSalesandResults

If- Total If Sweden If NorwayIf Finland If Denmark

GeographicalDiversificationinCR

Combined Ratio ―IfP&CandNordic Peers

CombinedRatioDevelopment

Standarddeviation2008‐2014

2.1%

4.6%

4.2%

4.7%

3.8%

74,3 67,0 66,2 65,9 66,9 68,1 68,0 69,1 68,4 65,9 65,4 65,1

26,625,6 24,3 24,0 23,7 23,7 24,1 23,7 23,5 23,0 22,8 22,5

100,9 92,6 90,5 89,9 90,6 91,8 92,192,8 92,0 88,9 88,1 87,7

0

20

40

60

80

100%

Riskratio Costratio TargetCR

13

IfP&C

92,1 92,8 9288,9 88,1

9396,1 95,2

90,7 90,6

80859095100

2009 2010 2011 2012 2013

%

IfP&C NordicMarket(incl.If)

Disclipined Underwriting andDiversification works

Strong&StableAnnualProfitDevelopment

800730

534 549644

707636

864929 931

‐267

1127

943

308

978

689

526

‐400

‐200

0

200

400

600

800

1000

1200

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

ProfitbeforetaxComprehensiveincome

EURm

14

IfP&C

0

50

100

150

200

250

300

350

Q4/11Q1/12Q2/12Q3/12Q4/12Q1/13Q2/13Q3/13Q4/13Q1/14Q2/14Q3/14Q4/14

Technicalresult Investmentresult Operatingresult

SeasonalityinQuarterlyResultsandCR%

Q4 Q3 Q2 Q1Average Quarterly CR%, 2006‐2014 90.1 89.2 86.5 93.5Year 2013CR% 87.9 87.2 86.7 90.9Year 2014CR% 87.1 86.9 86.5 90.3

IfP&C

15

EURm

ConservativeInvestmentPortfolio

•Duration1.0years•Average Maturity 2.4years•FixedIncomeRunningYield2.4%

Mark‐to‐Market Investment ReturnInvestment Allocation ofTotalEUR11.5bn

4,3%5,8%

4,4%2,6%

‐3,1%

12,4%

7,4%

1,8%

6,1%5,0%4,1%

‐4%

‐2%

1%

4%

6%

9%

11%

14%

MoneyMarket13%

Publicsector18%

Otherfixedincome57%

Equities12%

PrivateEquity0,2%

RealEstate0,2%

16

IfP&C

821

113

689558

459

0200400600800

1000

2010 2011 2012 2013 2014

InvestmentReturn,EURm

17


Finnish LifeInsurer with Asset ManagementFocus

ClientSegment

UnderlyingMarket

Critical Success Factors Sales &ClientServices

Corporates Employee Benefit •Expertise inRewards andIncentives,Pension&Risk LifeSolutionsandAsset Management

MandatumLife

HNWI WealthManagement

•ProfessionalWealth Management•ManagementofClientRelationships

MandatumLife

Retail Clients Savings andInsuranceProducts

•Distribution Power DanskeBank

Mandatum Life

18

Cross‐sales

PremiumsWritten*,totalEUR1,106m InsuranceSavings,totalEUR9,617m

*)Directinsurance

346

141437

3868

74

2

Unit‐linkedlife Unit‐linkedpension Unit‐linkedcapitalredemptionUnit‐linkedBaltic Otherlife OtherpensionOthercapitalredemption OtherBaltic

1 810

1 656

1 677

153

217

4 082

4 17

MandatumLifeBusinessVolumes

U‐LEUR5,296m

With‐ProfitEUR4,321

U‐LEUR962m

With‐ProfitEUR144m

Focus area

4652 4626 4738 4695 4621 4487 4431 4410 4249 4071 3927 5065607 884 1262 1752 2071 1637 2359 3124 3054 3833 4616

5312

020004000600080001000012000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Guaranteedinterestrates Unit‐linked

TechnicalReserves,EUR10,377mEURm

Mandatum Life

19

17,919,5 20,4 19,8 19,3

24,822,0

24,9 24,5

19,217,9

25,5

20,8

25,222,4 21,5

27,9 28,226,8 26,2

19,317,9

0

5

10

15

20

25

30%

Allproducts

Unit‐linked

MarketPositionMarketShareinFinland

17,9

Unit‐Linked

39,5

Corporates

12,6PrivateCustomers

MarketShares ofPremiumsWritten

Mandatum Life

20

43,8

GroupPension

FinnishWith‐ProfitLifeInsuranceMarketPRINCIPLEOFFAIRNESS

•Thereisnoexactruleonprofitsharing(e.g.90%/10%).• Inthecurrentmarkets,theprincipleisreflectedinpolicyholders´reasonableexpectationsfortotalaccrual,whichisanaverageannualyieldofFinnishgovernmentbondsovertime.

SMOOTHENEDBONUSESANDDIVIDENDSOVERTIME

•Whencompanydecidesonbonusesanddividends,ittakesintoaccount(i)policyholders´ reasonableexpectations,(ii)realizedinvestmentreturnsandcurrentsolvencyand(iii)uncertaintyaboutthefuturemarketenvironment=>Bonusesanddividendscanbesmoothenedovertime.

BETTERPOSITIONFORRISKTAKINGBENEFITSSTAKEHOLDERS

•FinnishProfitsharingmechanismfacilitatesandincentivesforactiveinvestmentstrategiesandrisktaking.

•Profitsharingmechanismhavebenefitedbothpolicyholdersandshareholdersovertheyears.

Mandatum Life

21

ProfitDevelopment

295342

140 121 142 137 136 153 163

286

80

‐378

495

332

‐115

286220

149

‐500

‐250

0

250

500

2006 2007 2008 2009 2010 2011 2012 2013 2014

EURm

ProfitbeforetaxesComprehensiveincome

Mandatum Life

22

Mandatum LifeProfitbyComponents

Mandatum LifeGroup,expenseratio

Mandatum Life

23

Totalexpenseratio,% 103.0 105.4Incl.kickbacks,% 84.2 86.2*Includesguaranteedinterest,bonusesandchangeinthereservesoftheaboveitems**Resultofunit‐linkedbusinessEURm 19.4

EURm 2014 2013Netinvestmentincome 539.8 569.3‐ Transferredtoexpenseresult ‐22.7 ‐20.2‐ Returnonunit‐linkedpolicies ‐267.3 ‐270.1‐ Returnonwith‐profitpolicies* ‐121.2 ‐170.0

INVESTMENTRESULT 128.6 108.9EXPENSERESULT** 18.5 14.2RISKRESULT 23.3 24.0OTHERS ‐7.7 5.8PROFITBEFORETAXES 162.8 152.9Changeinthemarketvalueofinvestments 20.2 96.6PROFITATMARKETVALUES 183.0 250.0

AbsoluteReturnInvestmentPortfolio

• Duration1.6years• Average Maturity 1.9years• FixedIncomeRunningYield3.1%

Mark‐to‐MarketInvestmentReturnsInvestmentAllocationofTotalEUR5.3bn

8,3%12,0%

9,7%

5,0%

‐7,8%

16,8%

11,1%

‐1,4%

9,4%7,1%

4,6%

‐10%

‐5%

0%

5%

10%

15%

20%

Mandatum Life

24

615

‐59

504391

251

‐2000

200400600800

2010 2011 2012 2013 2014

MLInvestmentReturn,EURm

Moneymarket23%

Publicsector3%

Otherfixedincome29%

Equities30%

Privateequity5%

Realestate4%Other6%

25


9481295 1353

870 825

1320 12281622 1668 1759

‐500

0

500

1000

1500

2000

2500

3000

3500

4000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

P&C Life Banking Nordeadividends Other

Stable Development ofProfit before Taxes

*One‐off item – sale ofSampoBank

EURm

*

•If P&C•MandatumLife•SampoBank

•If P&C•MandatumLife•Nordea/Investment

•If P&C•MandatumLife•Nordea/Associated

Sampo Group―Results,CapitalisationandInvestments

26

3,833

Stable Companies &GroupLevel Diversification*

LOWVOLATILITYEARNINGS• Geographical diversification• Strong Retail Banking Franchise• Diversified earnings base:‐Banking (Retail,Wholesale)‐Transaction Services‐Asset Management‐Markets Operations‐Life Insurance

• Low earnings volatility &stableROEover thecycle

LOWVOLATILITYC/R• Geographical diversification• Strong Retail P&CFranchise• Several LinesofBusinesses

‐Motor,Cargo‐Workers´ compensation‐Liability‐Accident‐Property

• LowC/RvolatilityandConservativeInvestments

FOCUSINU‐L&WM• Finland&Baltics• Strong Finnish Position• Productareas‐Wealth Management‐Unit‐linked Business‐With‐profit Business

• Dependency onCapitalMarkets

1

0.25 1

0.10 0.85 1

*Correlations ofquarterly Reported Profits Q1/2005–Q4/2014

PBT2010‐13

IF 45%ML 10%Nordea 45%

P/LCONTRIBUTIONS


27

FixedIncomeInvestmentsintheFinancialSector*

*Exposure tables vs.Allocation tables – small differences.


28

EURm Coveredbonds

Moneymarket

Long‐termseniordebt

Long‐termsubord.

debt Total %Sweden 1,666 1,286 690 241 3,883 45%Finland 223 2,403 118 11 2,754 32%Norway 684 413 77 1,174 13%Denmark 183 45 183 74 486 6%theUnitedStates 78 25 1 104 1%France 36 0 2 20 59 1%Switzerland 48 12 60 1%theNetherlands 2 0 44 46 0.5%Austria 32 32 0.4%Iceland 32 32 0.4%Germany 0.01 25 26 0.3%Others 17 29 4 9 60 1%Total 2,844 3,842 1,584 445 8,715 100%

1764

1246

3301

‐801

5510

9183

P&C841‐449

366

‐10000

10002000300040005000600070008000900010000

P&C Life Nordea Diversific. GroupEC GroupASC Regulatoryminimum

StrongGroupSolvency

• EconomicCapital(EC)needismeasuredat99.5%confidencelevel

• Bynature,SIIframeworkissimilartoECtechniquesusedbySampo

• ECmodelsaredevelopedtobeinlinewithregulatoryrequirementsforInternalmodels

• CurrentRatioofAdjustedSolvencyCapitalandECis165%(9,100/5510)

EURm

Nordea3,746

InternalTreatment≈SII

•Minimumrequirement(4,901)issumofIF,ML(SI)andNordea (BII)withtransitionrules

• Additivefiguredoesnotincludediversificationeffects.Nordea´srequirementiscalculatedat99.90%confidencelevel

• CurrentRatio186%(9,100/4,901)

RegulatoryTreatment=SI

Sampo plc,40

*)Liabilitysideadjustmentswhichequaldiscounteffectlessriskmargin**)Finnish equalisation provisions

*

Life274

9,100

4,901

**


29

Internal CapitalBase above CapitalNeeds1976

2657

3279

3783

4024

4131

4189

4281

4281

4222

4394

4374

4629

4619

4678

4560 5389

5276

5380

5361

5490

5430

5647

5510

2294 3054

3738

4245

4600

4722

4799

4954

4947

4858

5076

5015

5262

5234

5317

5179 6221

6088

6205

6107

6241

6157

6403

6311

4109

6401 7666

7076

7565

7168

7279 8521

8432

8120

6830

7262

7875

7581

8075

8197 8872

9039

9391

9417

9697

9499

9586

9100

0

2000

4000

6000

8000

10000

1200031.3.09

30.6.09

30.9.09

31.12.09

31.3.10

30.6.10

30.9.10

31.12.10

31.3.11

30.6.11

30.9.11

31.12.11

31.3.12

30.6.12

30.9.12

31.12.12

31.3.13

30.6.13

30.9.13

31.12.13

31.3.14

30.6.14

30.9.14

31.12.14

EC,Diversified EC,Undiversified ASC

EURm


30

Investment Allocation by Risk Profile


31

TotalGroup(MEUR) 18353 17611 18409 19215

03/14 06/14 09/14 12/14

MoneyMarket 9% 8% 90% 16% 20% 41% 14% 19% 66% 11% 25% 73%Long‐TermFixedIncome 79% 48% 6% 73% 36% 28% 75% 36% 21% 76% 35% 19%Equity 11% 29% 3% 11% 30% 19% 11% 30% 8% 12% 26% 5%PrivateEquity 0% 5% 1% 0% 5% 12% 0% 5% 4% 0% 4% 3%Other 0% 9% 0% 0% 10% 1% 0% 10% 0% 0% 10% 0%

11851

5339

1162

11925

5405

281

12293

5343

774

11513

6644

1058

0

2000

4000

6000

8000

10000

12000

14000If 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

Investments &Counterparty Exposures*

*InExposure tables thecalculation rules may differ slightly from Allocation tables insome areas.


32

31.12.2014 AAA AA+ - AA-

A+ - A-

BBB+ - BBB-

BB+ - C

D NonRated

Fixed Income Total

Equities Other Derivatives (Counterparty Risk)

Total Change from 30.9.2014

Basic Industry - - 0 102 240 - 124 466 233 - - 700 - 104

Capital Goods - - 1 50 30 - 77 158 562 - - 720 + 46

Consumer Products - - 41 41 154 - 150 387 484 - - 871 - 5

Energy - 7 - 21 99 - 320 446 2 - - 448 - 90

Financial Institutions 2 2,658 2,363 497 342 - 10 5,871 95 22 29 6,018 + 839

Governments 1,027 254 - 23 - - - 1,304 - - - 1,304 + 38

Government Guaranteed 105 80 - - - - - 185 - - - 185 - 4

Health Care - - 1 5 47 - 74 128 62 - - 190 + 6

Insurance - - 11 65 - - 41 118 45 - - 163 + 8

Media - - - - 13 - 46 59 - - - 59 - 1

Public Sector, other 857 130 - - - - - 987 - - - 987 - 60

Real Estate - 9 - 1 - - 536 546 - 280 - 826 + 210

Services - - 0 5 130 - 33 169 39 - - 208 - 28

Technology and Electronics 1 - - 1 2 - 36 40 92 2 - 134 + 12

Telecommunications - - 102 26 52 - 42 223 80 0 - 303 - 37

Transportation - 97 7 23 24 - 175 325 10 - - 335 - 90

Utilities - - 197 163 1 - 79 440 - - - 440 - 10

Others - - - - 6 - 10 16 7 11 - 33 + 2

Asset-backed Securities - - - - - - - - - - - - -

Covered Bonds 2,631 200 13 - - - - 2,844 - - - 2,844 - 220

Funds 7 - 95 50 24 - 154 331 1,441 678 - 2,450 + 337

Total 4,630 3,434 2,832 1,075 1,164 - 1,907 15,042 3,153 994 29 19,218 + 848

Change from 30.9.2014 + 106 - 21 + 540 - 59 - 118 - + 78 + 526 + 183 + 117 + 21 + 848 EURm

Note: Category Other includes private equity and non-listed real estate. Category Derivatives includes only OTC derivatives and corresponding collaterals.

Sampo GroupPublicSectorFixedIncomeInvestments―noPeriphery*

*Exposure tables vs.Allocation tables – small differences33


EURm GovernmentGovernmentguaranteed

Publicsector,other Total

Sweden 244 726 970

the Netherlands 422 422Germany 347 71 419

France 224 4 228Norway 242 242Finland 28 76 19 123Denmark 33 33Italy 20 20Belgium 12 12Austria 3 3Russia 2 2Slovenia 1 1Total 1,304 185 987 2,476

34


StraightforwardCashFlows&StrongBalanceSheet

Dividends• IfP&C•Mandatum Life• Nordea

• InternalAdministrationCosts• DiscretionaryDividendsforShareholders• Interest Expenses forBondholders

Income• InterestonLiquidity• Incomefromotherinvestments

SampoplcSampoplc

Assets EURm 9,351 Liabilities EURm 9,351

Liquidity 768 CPs Issued 305

Investment assets 92 LTSeniorDebt 1,888

‐Real Estate 2 ‐Private Placements 169

‐Private Equity 27 ‐Bonds Issued 1,719

‐Other investments 63 ‐Pension InsuranceLoans 0

Subordinated Loans 465 Subordinated Debt 0

Equity Holdings 7,928 Capital 7,014

‐Subsidiaries 2,370 ‐Undistributable 98

‐Associated 5,557 ‐Distributable 6,916

Other Assets 99 Other Liabilities 145

Flow ofFunds Balance Sheet

KeyCreditMetricswellinSingleA‐range

Sampo plc 31.12.2014

GrossDebt,EURm 2,192GrossDebttoEquity 31%FinancialLeverage* 24%

SampoGroup,EURm Q4/2013 Q4/2014Shareholders'Equity 10,643 10,924Hybrid Bonds 119 111SeniorDebt 2,027 2,192Financialleverage 16.8% 17.4%

Sampo plc

35*=Debt/(Debt+Equity)

Dividends &Reported Profits

*ParentCompanyisnotequaltoHoldingSegment;DividendIncomeincludesalsodividendsfromPrivateEquityinvestments

747

‐8 ‐37

702762

‐10‐70

683

773

‐17 ‐20

737

879

‐20 ‐26

832

1069

‐18 ‐1

1050

‐100

100

300

500

700

900

1100

Dividendincome Operatingexpenses Netfinancialexpenses

Profitbeforetaxes

2010 2011 2012 2013 2014*

EURm

Sampo plc

36

DividendsReceivedbyPaymentYear

*)Sampo Bank2005‐2006,Nordea 2007‐>**)Nordea:aproposaltotheAGM;MandatumLife:plannedinQ1/2015

EURm

**

249

1031

519

181

488 540406

544 490597100

300

200

200

100100

100

100

141

75

35

13080

204 250 224293

370

533

490

1406

754

511 568

744 756 768883

1067

633

0

200

400

600

800

1000

1200

1400

1600

If MandatumLife Banking*

Sampo plc

37

NetDebt Q4/2014EUR960mvs.stable Dividend Inflows

Sampoplc Debt Instruments,31December 2014

KeyCreditMetrics

Instrument&Principal Coupon Swap EffectiveRate Maturity

Senior Bond2,000SEKm (EMTN) Stibor3M+0,75% ‐‐‐ 1,0210% 28.05.2015

SeniorBond300EURm (EMTN) 4,2500% Euribor3M +1,4727% 1,5537% 22.02.2016

SeniorBond500EURm (EMTN) 4,2500% Euribor3M +2,7910% 2,8720% 27.02.2017

SeniorBond2,000SEKm (EMTN) Stibor3M+1,45% ‐‐‐ 1,7210% 29.05.2018

SeniorBond500EURm (EMTN) 1,50% ‐‐‐ 1,5920% 16.9.2021

CP’sissued305EURm Euribor +Margin 0,5900% Average 3M

Publicdebt2,023EURm 1,7042%

Privateplacements 169EURm 2,1053%

Total2,192EURm 1,7351%

DoubleLeverage(EquityHoldings/Capital) 113%EquityEURm 7,014GrossDebttoEquity 31%FinancialLeverage 24%

38

0

200

400

600

2015 2016 2017 2018 2019 2020 2021

CP´s Senior under EMTN Senior Retail Private

Sampo plc

SampoGroup―Conservative leverage

‐4000

‐2000

0

2000

4000

6000

8000

10000

12000

14000Q1/05

Q2/05

Q3/05

Q4/05

Q1/06

Q2/06

Q3/06

Q4/06

Q1/07

Q2/07

Q3/07

Q4/07

Q1/08

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

Q3/09

Q4/09

Q1/10

Q2/10

Q3/10

Q4/10

Q1/11

Q2/11

Q3/11

Q4/11

Q1/12

Q2/12

Q3/12

Q4/12

Q1/13

Q2/13

Q3/13

Q4/13

Q1/14

Q2/14

Q3/14

Q4/14

Q1/15

SampoplcNetdebt GroupNAV GroupEquity

39

Sampo plc

EURm

0%

5%

10%

15%

20%

25%

30%

35%

40%Q1/05

Q2/05

Q3/05

Q4/05

Q1/06

Q2/06

Q3/06

Q4/06

Q1/07

Q2/07

Q3/07

Q4/07

Q1/08

Q2/08

Q3/08

Q4/08

Q1/09

Q2/09

Q3/09

Q4/09

Q1/10

Q2/10

Q3/10

Q4/10

Q1/11

Q2/11

Q3/11

Q4/11

Q1/12

Q2/12

Q3/12

Q4/12

Q1/13

Q2/13

Q3/13

Q4/13

Q1/14

Q2/14

Q3/14

Q4/14

Q1/15

Netdebt/NAV

40

SampoGroup―”Loan‐to‐Value”

Sampo plc

Sampo plcKeyCreditConsiderations

DiversificationthroughInsurance&BankingintheNordicRegion

ManagementwithaprovenTrackRecordinlong‐termValueCreation

ConservativeFinancialProfile,strongCapitalizationandLiquidity

StableDividendFlowfromAffiliatedCompanieswithstrongBrands

BondholderValueCreated

Sampo plc

41

42

Appendix 42‐55

Sampo’s P&CinsuranceoperationsaremergedwithIf(2002).Followingthetransaction,Sampoowns38percentofIf.IfbecomesfullyownedbySampo (2004).Followingthetransaction,Sampo hasthreecorebusinesses:P&Cinsurance,bankingandlong‐termsavings.

SampoInsuranceCompanyandLeoniamergeintotheSampo‐Leoniafinancialservicesgroup.TheGroup’sbusinessareasarelong‐termsavings(lifeinsurance,assetmanagementandmutualfunds),banking,investmentbanking,andP&Cinsurance.

MandatumBankjoinstheGroup,andtheGroup’snameisshortenedtoSampo.

Sampo GroupdivestsSampo BankGrouptoDanske BankA/S.Followingthetransaction,Sampo’sbusinessareasare:P&Cinsuranceandlifeinsurance.

Sampo’s Nordeaholdingexceeds20%andNordeabecomesanassociatedcompany.

20072004200220012000 2010 2011

Sampo Group’s(IfP&C´s)Topdanmarkholdingexceeds23%andTopdanmarkbecomesIf´sassociatedcompany.

2012

Sampo Group(IfP&C)acquiresTryg’s FinnishBusinessandtheacquisitionwasclosedinMay2013.IfP&CsignsapartnershipagreementwithNordea.

StructuralchangesofSampo GrouptothepositionastheleadingNordicfinancialgroup

2013 2014

Sampo Group(MandatumLife)acquiresSuomi Mutual´swith‐profitgrouppensionportfolio.Theportfoliotransfertookplaceon30Dec2014.

43

Appendix

IFP&CQuarterlyResultsandC/REURm Q4/14 Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 Q2/13 Q1/13 Q4/12

Premiumsearned 1,108 1,124 1,122 1,104 1,112 1,139 1,140 1,115 1,121

Claimsincurred ‐776 ‐793 ‐783 ‐811 ‐791 ‐802 ‐800 ‐824 ‐801

Operatingexpenses ‐189 ‐183 ‐187 ‐186 ‐186 ‐191 ‐188 ‐190 ‐198

Othertechnicalincomeandexpenses ‐1 0 1 1 1 0 0 1 0

Allocatedinvestmentreturntransferredfromthenon‐technicalaccount

5 7 10 15 12 16 17 20 14

Technicalresult 147 155 162 124 148 161 170 122 136

Investmentresult 81 75 139 88 104 89 115 102 84

Allocatedinvestmentreturntransferredtothetechnicalaccount

‐16 ‐18 ‐21 ‐27 ‐25 ‐30 ‐31 ‐34 ‐27

Otherincomeandexpenses 8 16 9 9 3 6 15 14 11

Operatingresult 219 228 289 194 230 227 269 204 205

Risk ratio,% 64.4 64.7 64.0 67.5 65.1 64.7 64.2 67.7 65.5

Combined ratio,% 87.1 86.9 86.5 90.3 87.9 87.2 86.7 90.9 89.1

Appendix

44

IFRegulatorySolvencyCapital&Ratio*

54%

70%

88%

74% 71%66%

77%79%

72%

75% 81% 82%

0%

20%

40%

60%

80%

100%

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

%EURm

Solvencycapital(lhs) Solvencyratio(rhs)*Solvencyratio,(IFRS)%= +solvencycapital

+premiumsearnedfrom12monthsx100% 45

Appendix

IFP&CReinsuranceProgrammes

46

IFisusing reinsurance to:‐ Utilize its own capitalbase efficiently andreduce cost ofcapital‐ Limit large fluctuations ofunderwriting results‐ Get access toreinsurers´ competence base

IFhas thefollowing ReinsuranceProgrammes inplace

• Largest &most diversifiedportfoliointheNordics

• Focus purely onunderwriting

• Specialised ReinsuranceUnit

• Long‐termreinsurancepartnershavingreinsuranceascorebusiness

• Relativelyhighretentions

• Stablereinsuranceprogram• Efficientpricingandterms

In MillionsCatastrophe per

EventProperty per

Risk CasualtyPersonal Accident Motor TPL Cargo Reporter

Capacity SEK 6,300 SEK 2,000 / 3,500 SEK 500 SEK 1,100 Unlimited SEK 850

Retention SEK 250 SEK 250 SEK 100/€10/$15 SEK 100 SEK 100 SEK 100

In MillionsMarine Hull Reporter

Small Vessels Clash Cover

Marine Hull I.V. Reporter

Marine Hull War Risk Reporter

Energy Offshore Per Event US Terrorism

Capacity SEK 300 SEK 200 SEK 310 USD 60 USD 40 USD 150

Retention SEK 100 SEK 100 SEK 100 USD 0,25 USD 25 USD 25

Appendix

MandatumLifeRegulatorySolvencyRatio*

*Solvencyratio,%oftechnicalprovision,(IFRS)= +solvencycapital+liabilitiesforinsuranceandinvestmentcontracts‐ reinsurers’shareofinsuranceliabilities‐ 75%xtechnicalprovisionsrelatingtounit‐linkedinsurance

x100%

17,7%

21,3%20,1%

16,5%

7,9%

18,5%

25,8%

20,9%

27,7% 27,6%

22,9%

0%

5%

10%

15%

20%

25%

30%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

47

Appendix

NordeaProfitable&TheMostDiversifiedNordicBank

885

883

847

781

833

818

832

592878

730960 1071

1003

949

566

1029

1037

1099

922 1059

1041

1048

1021

1006

1106

935 1126

1157

21 36 89 320 356

425

358

347

261

245

207 16

6242

118

112

263

218 217

254244

198

186

171

180 15

8135

112 129

0

300

600

900

1200

1500

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

Q113

Q213

Q313

Q413

Q114

Q214

Q314

Q414

EURmRestructuringprovision Writebacks Loanlosses Operatingprofit

48

Appendix

Nordea BVonConsolidatedBalanceSheet

Figures PerShare EUR

Acquisition price 6.46Book value 8.16MarketValue* 12.17

No.ofshares860,440,497

*Asof2/3/2015

Nordea inSampo Group’sB/S EURm

Acquisitionprice 5,557.3

Retained earnings 1,428.3

Accumulated other changes inNordea’s equity ‐79.5

ShareofNordea’s netprofit 708.1

Amortisation ‐35.4

Deferredtax 7.8

Dividends ‐370.0

ShareofNordea’s othercomprehensiveincome ‐221.40

ShareofNordea’s otherchangesinequity 16.8

ShareofNordea’s goodwillchange 53.3

Total 7,065.3

Appendix

49

FinancialStrengthRatingHistoryIfP&CInsuranceLtd(Sweden),IfP&CInsuranceCompanyLtd(Finland),Sampo plc

TheSampoGroup’sP&CinsurancecompaniesbecamepartofIfinJanuary2002.

AA‐/Aa3

A+/A1

A/A2

A‐/A3

BBB+/Baa1

BBB/Baa2

Possibledow

ngradeJan03 Moody´sIfP&C

S&PIfP&C

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

StableFeb02

NegativeAug02

StableApr03

PossibleupgradeFeb04

StableMay04

PositiveMay06

StableNov08

50

Moody´s Sampoplc

Apr04First‐timeissuerrating

Appendix

Principles ofCapitalManagement• Risk CapitalAvailable >Risk Capitalneeded

– Risk CapitalAvailable =SICapital+Other items absorbing economic losses.– Risk CapitalNeed =Measured Economic Capital+”Non‐measurable”risks.– Buffer between measures under constant considerations.– Pro‐ActivemanagementofRisks/Capitalisation.

• Economic Capitalat99.5%asabasis forRisk CapitalNeed– Economic capitalisanestimate ofRisk Capitalneeded tokeep theGroupsolvent.– ECiscalculated at99.5%confidence level and1year risk horizon.– ”Non‐measurable”risks include liquidity,market ,illiquidity andbusinessenvironment risks.

• Adjusted Solvency Capitalisameasure ofRisk CapitalAvailable– Solvency Icapitalitems included assuch.– Thedifference between Undiscounted technical provisions inbalance sheet andtheir

discounted value (so called Liability Sideadjustment).– Capitalinstruments excluded from regulatory capitalinSolvency I.

Appendix

51

EconomicCapitalReportingPrinciples• Definitions

– Economiccapital(EC)isusedasaninternalmeasureofcapitalrequiredformeasurableriskstheGroupisexposedto.

– ECisdefinedastheamountofcapitaltoprotectthesolvencyoveraoneyeartime‐horizonwithaprobabilityof99.5percent.

• ECatcompanylevel– ECiscalculatedinIfP&CandMandatumLifeusingasetofcalculationmethods,

whichhavebeendevelopedforthespecificneedsofeachcompany.– InIfP&CandMandatumLifeECaccountsformarket,credit,insuranceand

operationalrisks,aswellasthediversificationeffectbetweentheserisks.– ECfigurecalculatedandreportedbyNordeaisusedinSampoGroupreporting.

BecauseNordea’sreportedfiguresareexpressedat99.97%confidenceleveltheyareconvertedbySampointo99.5%confidencelevel.

• ECatGroupLevel– Correlationsbetweencompanies’risksareassessedanddiversificationeffect

iscalculated.– GroupwideECisasumofCompanies’ECandthediversificationeffects. 52

Appendix

PrinciplesofInvestmentManagement• Companyspecificneedsformthebasisforallinvestments

– Liabilitiesintensivelyanalysedandmodelled.– Regulatoryrequirements.

• Strategy– AbsoluteReturntargetstakingintoaccounttheliabilitiesandgeneralbusinesstargets.– DirectInvestmentsintoNordiccountriesmainly,outsideNordicsFundsmainly.– Nodiversificationforthesakeofdiversification.

• CentrallyManaged– Sampo plcChiefInvestmentOfficerresponsibleforallinvestments,allportfolio

managershaveadirectreportinglinetohim.– Commoninfrastructureforinvestmentadministrationandreporting.– Investmentstrategiescoordinatedandstreamlined,nooverlappingactivitiesto

preventGroupWideconcentrations.

53

Appendix

54

Appendix

SampoFiCoCoordination duties asof31.12.2014

54

55

Appendix

SampoGroup’soutlookfor2015

• SampoGroup’sbusinessareasareexpectedtoreportgoodoperatingresultsfor2015.

• However,themark‐to‐marketresultsare,particularlyinlifeinsurance,highlydependentoncapitalmarketdevelopments.Thecontinuinglowinterestratelevelalsocreatesachallengingenvironmentforreinvestmentinfixedincomeinstruments.

• TheP&Cinsuranceoperationsareexpectedtoreachtheirlong‐termcombinedratiotargetofbelow95percentin2015byamargin.

• Nordea’s contributiontotheGroup’sprofitisexpectedtobesignificant.

sampo plc debt presentation q4 2014 final 4 3 2015 (2 ...€¦ · debt investor contacts markku...

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