Upload
vanthien
View
213
Download
0
Embed Size (px)
Citation preview
Sampo Group Debt Investor Presentation Prepared May 13, 2013 Figures March 31, 2013
www.sampo.com/debtpresentation
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.
14/05/2013
2
Nordic Financial Group with Strong Brands
14/05/2013
4
MARKET POSITION
STRATEGY
INVESTMENT ASSETS
RETURN TARGET
21.2%
• The largest Pan-Nordic Financial Services group
• Profit oriented • Cost, Risk & Capital
~ EUR 663bn B/S
• Top league ROE • RoE 15% in a normalised economic environment
• Unit-linked products & Wealth Management
• Leading life & pension insurer in Finland with Baltic operations
~ EUR 5.6bn
• RoE 17.5%
• The largest Pan-Nordic P&C insurer
• Underwriting focus • Pan-Nordic synergies
~ EUR 12bn
• RoE 17.5% • CoR 89-92% (2013) • CoR < 95% (long-term)
> 26%
100% 100%
• Long-term Investor • Manager of Capital Structure & Liquidity • Listed Company Sampo Plc
37 841
21 940
21 855
20 699
17 987
17 901
17 728
14 125
5 942
5 563
4 240
4 084
2 682
2 242
1 598
482
0 10000 20000 30000 40000
Nordea Handelsbanken
Swedbank DnB
Sampo SEB
Investor Danske Bank
Gjensidige Industrivärden
Pohjola Tryg
Topdanmark Jyske
Storebrand Alm.Brand
Largest Nordic Financial with Insurance Focus
5
Source: ReutersEcoWin
>26%
>21%
Solidium*,14.16%
Varma Mutual Pension, 8.52%
Ilmarinen Mutual Pension, 0.86%
Björn Wahlroos, 2.1%
Kaleva Mutual Insurance, 0.95%
Other domestic owners, 18.93%
Foreign and nominee registered owners, 54.48%
Ownership structure April 30, 2013
*100 % owned by the Republic of Finland
Market cap May 10, 2013, EURm
14/05/2013
• If generated EUR 204m (198) in pre-tax profits • Excellent combined ratio of 90.9% (91.7%)
– Risk ratio 67.7% (69.0%) – Cost ratio 23.2% (22.7%) – Expense ratio 17.0% (16.4%)
• Resilient business model over the cycle
If P&C ― Well-diversified and Profitable Pan-Nordic Non-life Insurer
• If P&C provides insurance solutions and services in Finland, Sweden, Denmark, Norway, Baltics (and Russia)
for corporates and private persons
• Major Lines of Business - motor - workers´ compensation - liability - accident - property - cargo
Well-established Insurance Subsidiaries
• Mandatum Life is a leading life and pension insurer in Finland • Mandatum has a strong market position in Finland
with ca. 20% of the market • Mandatum contributed with EUR 36m (33) in pre-tax profit to the Group
Mandatum Life ― Leading Finnish Life and Wealth Management Service Provider
• Provides comprehensive Wealth Management & Life insurance solutions in Finland and Baltics for corporates and private persons
• Services provided - pensions & savings - wealth management - reward commitment - risk insurance
14/05/2013
6
Nordea Profitable & The Most Diversified Nordic Bank
895
978
932
1 0
78
885
883
847
781
833
818
832
592
878
730
960
1 0
71
1 0
03
949
566
1 0
29
1 0
37
1 0
99
922
1 0
59
1 0
60
21
36
89
320 35
6
425
358
347
261
245
207 16
6
242
118
112
263
218 21
7
254 24
4
199
-13 -28 -13 -6
171
-300
0
300
600
900
1 200
1 500
1Q07
2Q
07
3Q07
4Q
07
1Q08
2Q
08
3Q08
4Q
08
1Q09
2Q
09
3Q09
4Q
09
1Q10
2Q
10
3Q10
4Q
10
1Q11
2Q
11
3Q11
4Q
11
1Q12
2Q
12
3Q12
4Q
12
Q113
EURm Restructuring provision Write backs Loan losses Operating profit
14/05/2013
7
Group Strategy: Value Creation in Nordic Financials
14/05/2013
8
LONG TERM VALUE CREATION
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.
OPERATIONAL EXCELLENCE IN SUBSIDIARIES
Subsidiary companies have focus on continuous development of services. Economics of scale Pan-Nordic diversification & operational excellence facilitate low volatility.
CONSERVATIVE PARENT WITH PROFIT FOCUS
Conservative capital structure, low leverage and strong liquidity. Parent company steers affiliated companies through Boards by setting (in Nordea by contributing to) strategies, guiding principles and ROE-targets.
GROUP LEVEL PORTFOLIO BENEFITS
Profitable companies, mostly with 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
Expense Ratios 2011 (2012)
Largest Nordic P&C Insurer with Synergies
10
Norway 2012 GWP EUR 6.7bn Gjensidige 25% If 25% Tryg 15% Sparebank 1 10%
Denmark 2011 GWP EUR 5.9bn Tryg 21% Topdanmark 18% Codan (RSA) 13% Alm. Brand 10% If 6%
Finland 2012 GWP EUR 4.1bn Pohjola 29% LähiTapiola 27% If 26% Fennia 10%
Sweden 2012 GWP EUR 7.5bn LF 30% If 19% RSA (T-H) 16% Folksam 15% Baltics Q3/2012
GWP ~EUR 1bn RSA 22% If 14% BTA 12% Ergo 14% Gjensidige 8%
Nordic Market shares Total GWP EUR 22bn (-11) Market Shares by Country
* Peer group excl. If 2012, other 2011
If 18 %
Topdanmark 5 %
Tryg 12 %
Gjensidige 9 % RSA
10 %
LF 9 %
Pohjola 5 %
Other 32 %
14/05/2013
17
17
28
28
28
28
28
32
IF Nordic peer group*
Zürich Generali
AXA RSA
Allianz Aviva
Nordic P&C Insurance Market
11
CONSOLIDATED MARKET
LOW EXPENSE RATIOS
The Internet continues to grow in importance as both a distribution and a service channel in the Nordic insurance market. Also, distribution via partnerships with banks and car-dealers etc. are increasingly important channels, in addition to traditional distribution.
GOOD PROFITABILITY
Good profitability since the beginning of 2000. After the last year(s) intense competition and a few years of weather related claims and decreasing profitability for some competitors, profitability has improved again in 2012. Low interest rate environment has made the Industry focus on profitability in the insurance operations.
Renewal rates are around 80-90%.
LOYAL CLIENTS
DISTRIBUTION
The market is characterized by low expense ratios of less than 20% in average compared to the European companies with expense ratios approx 10%-points higher.
The four largest companies account for 77-81% of the markets in Norway, Finland and Sweden. In Denmark the market is less consolidated.
14/05/2013 14/05/2013
By Business Area
Norway; 620
Sweden; 456
Finland ; 501
Denmark; 159
Baltic; 32
By Country
Private; 73
Commercial; 32
Industrial; 11
Baltic; 2
Technical Results, EUR 122m
Norway; 55
Sweden; 38
Finland ; 16
Denmark; 7 Baltic; 2
Gross Written Premiums, EUR 1,775m
By Business Area By Country
Sound Underwriting is Basis for Strong Result
14/05/2013
12
Private; 673
Commercial; 729
Industrial; 334
Baltic; 32
If - Total If Sweden If Norway If Finland If Denmark
Well-diversified Nordic P&C Insurer
14/05/2013
13
Geographical Diversification in CR
Combined Ratio - If P&C and Nordic Peers
Combined Ratio Development
60.0%65.0%70.0%75.0%80.0%85.0%90.0%95.0%
100.0%
2009 MA -09 2010 MA -10 2011 MA -11
IF,CR% Nordic Market Average,CR%
2.5%
5.4%
5.4%
5.8%
5.3%
Standard deviation
74,3 67,0 66,2 65,9 66,9 68,1 68,0 69,1 68,4 65,9 69,0 67,7
26,6 25,6 24,3 24,0 23,7 23,7 24,1 23,7 23,5 23,0 22,7 23,2
100,9 92,6 90,5 89,9 90,6 91,8 92,1 92,8 92,0 88,9 91,7 90,9
0
20
40
60
80
100 %
Risk ratio Cost ratio Target CR
Strong & Stable Annual Profit Development
800 730
534 549 644
707 636
864
-267
1 127
943
308
978
-400
-200
0
200
400
600
800
1 000
1 200
2005 2006 2007 2008 2009 2010 2011 2012
Profit before tax Comprehensive income
14/05/2013
14
EURm Q1/2013 Q1/2012 Profit before taxes 204 198 Compr. Income 279 328
Seasonality in Quarterly Results and C/R
Average Quarterly C/R Q4 Q3 Q2 Q1 2005-2012 ,% 90.4 89.7 89.9 94.5
14/05/2013
EURm Q1/13 Q4/12 Q3/12 Q2/12 Q1/12 Q4/11 Q3/11 Q2/11 Q1/11
Premiums earned 1,115 1,121 1,121 1,054 1,066 1,045 1,029 1,017 1,003
Claims incurred -824 -801 -809 -729 -802 -759 -771 -752 -777
Operating expenses -190 -198 -189 -177 -175 -184 -178 -174 -170
Other technical income and expenses 1 0 -1 1 2 0 1 1 2
Allocated investment return transferred from the non-technical account 20 14 21 25 29 21 26 36 42
Technical result 122 136 143 175 120 124 106 128 100
Investment result 102 84 93 107 113 78 -23 119 178
Allocated investment return transferred to the non-technical account -34 -27 -35 -40 -44 -35 -39 -50 -57
Other income and expenses 14 11 7 12 9 4 0 3 0
Operating result 204 205 208 254 198 171 43 200 221
Risk ratio, % 67.7 65.5 66.2 62.9 69.0 66.2 68.9 67.8 71.0
Combined ratio, % 90.9 89.1 89.0 85.9 91.7 90.2 92.3 91.1 94.4
15
Conservative Investment Portfolio
• Duration 1.1 years • Average Maturity 2.3 years • Fixed Income Running Yield 3.4 %
Mark-to-Market Investment Return Investment Allocation of Total EUR 12.0bn
4,3% 5,8%
4,4% 2,6%
-3,1%
12,4%
7,4%
1,8%
6,1%
1,4%
-4 %
-2 %
1 %
4 %
6 %
9 %
11 %
14 % Money Market
7%
Long-term fixed
income 81%
Equities 11%
Real Estate 1%
14/05/2013
16
If ’s Financial Strength Rating History If P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland)
The Sampo Group’s P&C insurance companies became part of If January 2002.
AA-/Aa3
A+/A1
A/A2
A-/A3
BBB+/Baa1
BBB/Baa2
Poss
ible
dow
ngra
de Ja
n 03
Moody´s S&P
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Stab
le F
eb 0
2
Neg
ativ
e Au
g 02
Stab
le A
pr 0
3
Poss
ible
upg
rade
Feb
04
Stab
le M
ay 0
4
Posi
tive M
ay 0
6
Stab
le N
ov 0
8
A- F
eb 0
2
Neg
ativ
e Ju
l 03
Stab
le A
ug 0
3
Wat
ch n
eg F
eb 0
4 St
able
Apr
04
Stab
le S
ep 0
4
Stab
le O
ct 0
5
14/05/2013
17
Finnish Life Insurer with Asset Management Focus
19
Client Segment
Underlying Market
Critical Success Factors Sales & Client Services
Corporates Employee Benefit Expertise in Incentive-, Pension- and Life Risk Solutions, Expertise in Asset Management, Management of Client Relationship
Mandatum Life
HNWI Wealth Management
Professional Wealth Management, Management of Client Relationship
Mandatum Life
Retail Clients Bankassurance Distribution Power Danske Bank
14/05/2013
Premiums Written*, total EUR 264m Insurance Savings, total EUR 7,876m
*) Direct insurance
92
28 96
6 29
12
1
Unit-linked life Unit-linked pension Unit-linked capital redemption Unit-linked Baltic Other life Other pension Other capital redemption Other Baltic
1 375
1 321
1 213
137
248
3 560
5 18
Mandatum Life Business Volumes
U-L EUR 4,045m
With-Profit EUR 3,831m
U-L EUR 222m
With-Profit EUR 42m
Focus area
4 652 4 626 4 738 4 695 4 621 4 487 4 431 4 410 4 249 4 071 4 044
607 884 1 262 1 752 2 071 1 637 2 359 3 124 3 054 3 833 4 050
0
2 000
4 000
6 000
8 000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1/2013 Guaranteed interest rates Unit-linked
14/05/2013
20
Technical Reserves, EUR 8,094m
EURm
17,9 19,5 20,4 19,8 19,3
24,8 22,0
24,9 24,5
18,2
25,5
20,8
25,2 22,4 21,5
27,9 28,2 26,8 26,2
18,9
0
5
10
15
20
25
30 %
All products
Unit-linked
Strong Market Position
14/05/2013
21
Market Share in Finland
30.4%
Group Pension
18.9%
Unit-Linked
33.7%
Corporates
15.3 %
Private Customers
Market Shares of Premiums Written
Finnish with-profit Life Insurance Market
14/05/2013
22
PRINCIPLE OF FAIRNESS
There is no exact rule on profit sharing (e.g. 90%/10%). In the current markets, the principle is reflected in policyholders´ reasonable expectations for total accrual, which is average annual yield of Finnish government bonds over time.
SMOOTHENED BONUSES AND DIVIDENDS OVER TIME
When company decides on yearly bonuses and dividends it takes into account (i) policy holders´ reasonable expectations, (ii) realized investment returns and current solvency and (iii) uncertainty about the future market environment => Bonuses and dividends can be smoothened over time.
BETTER POSITION FOR RISK TAKING BENEFITS STAKEHOLDERS
Finnish Profit sharing mechanism facilitates and incentives for active investment strategies and risk taking. Profit sharing mechanism have benefited both policyholders and shareholders over the years.
Profit Development
295 342
140 121 142 137 136
286
80
-378
495
332
-115
286
-500
-250
0
250
500
2006 2007 2008 2009 2010 2011 2012
EURm
Profit before taxes Comprehensive income
14/05/2013
23
Q1/2013 Q1/2012 Profit before taxes 36 33 Compr. Income 66 172
Profit by Components
14/05/2013
24
EURm 1-3/2013 1-3/2012 Net investment income 188.8 271.3
- Transferred to expense result -4.8 -4.4 - Return on unit-linked policies -109.2 -185.0 - Return on with-profit policies* -46.1 -48.3
INVESTMENT RESULT 28.7 33.7 EXPENSE RESULT** 0.2 -0.2 RISK RESULT 6.7 4.5 OTHERS*** 0 -4.9 PROFIT BEFORE TAXES 35.6 33.0 Change in the market value of investments 50.1 192.6 PROFIT AT MARKET VALUES 85.7 225.6
* Includes guaranteed interest, bonuses and change in the reserves of the above items ** Result of unit-linked business EURm 1.6 *** Includes operating expenses for Innova Pension and Personnel Fund Services
Total expense ratio, % 119.1 112.7(2012) Incl. kick backs, % 98.0 93.4 (2012)
Mandatum Life, Group Life expense ratio
Absolute Return Investment Portfolio
14/05/2013
25
• Duration 1.7 years • Average Maturity 2.0 years • Fixed Income Running Yield 4.4%
Mark-to-Market Investment Returns Investment Allocation of Total EUR 5.6bn
8,3%
12,0% 9,7%
5,0%
-7,8%
16,8%
11,1%
-1,4%
9,4%
2,3%
-10 %
-5 %
0 %
5 %
10 %
15 %
20 %
Money Market 14%
Long-term fixed income
44%
Equities 28%
Private Equity 4%
Real Estate 3%
Other 6%
948
1 295 1 353
3 833
870 825
1 320 1 228 1 616
-500
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2004 2005 2006 2007 2008 2009 2010 2011 2012
P&C Life Banking Nordea dividends Other
14/05/2013
27
Stable Development of Profit before Taxes
* One-off item – sale of Sampo Bank
EURm *
•If P&C •Mandatum Life •Sampo Bank
•If P&C •Mandatum Life •Nordea / Investment
•If P&C •Mandatum Life •Nordea / Associated
Q1/2013 Q1/2012 P&C 204 198 Life 36 33 Nordea 162 158 Holding -30 -19 Group 370 370
Stable Companies & Group Level Diversification*
14/05/2013
28
LOW VOLATILITY EARNINGS • Geographical diversification • Strong Retail Banking Franchise • Diversified earnings base: -Banking (Retail, Wholesale) -Transaction Services -Asset Management -Markets Operations -Life Insurance • Low earnings volatility & stable
ROE over the cycle
LOW VOLATILITY C/R • Geographical diversification • Strong Retail P&C Franchise • Several Lines of Businesses -Motor, Cargo -Workers´ compensation -Liability -Accident -Property • Low C/R volatility and
Conservative Investments
FOCUS IN U-L & WM • Finland & Baltics • Strong Finnish Position • Focus changed 2005 -Wealth Management -Unit-linked Business -With-profit Business • Dependency on Capital
Markets
1 0.23 1 0.16 0.87 1
* Correlations of quarterly Reported Profits 2005–Q1/2013
PBT 2010-12
IF 50% ML 10% Nordea 40%
P/L CONTRIBUTIONS
1 645
1 126
3 450
-832
5 389
8 511
876 -37
398
-1 000
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
9 000
P&C Life Nordea Diversific. Group EC Group ASC Regulatory minimum
Strong Group Capitalization
14/05/2013
29
• Economic Capital need (EC) is measured at 99.5% conf. level
• By nature SII framework is similar to EC techniques used by Sampo
• EC models are developed to be in line with regulatory requirements for Internal models
• Current Ratio of Adjusted Solvency Capital and EC is 164% (8,872/5,389)
EURm
Nordea 3,698
Internal Treatment ≈ S II
• Minimum requirement (4,841) is sum of IF, ML (SI) and Nordea (BII) with transition rules
• Additive figure does not include diversification effects and Nordea´s requirement is calculated at 99.90% conf.level
• Current Ratio 176% (8,511/4,841)
Regulatory Treatment = S I
Sampo plc 41
*) Liability side adjustments which equal discount effect less risk margin **) Finnish equalisation provisions
*
**
Life 226
8,872
4,841
Sampo Group Capital Base above Capital Needs
14/05/2013
30
1 89
5
1 97
6 2 65
7 3 27
9
3 78
3
4 02
4
4 13
1
4 18
9
4 28
1
4 28
1
4 22
2
4 39
4
4 37
4
4 62
9
4 61
9
4 67
8
4 56
0 5 38
9
2 17
5
2 29
4 3 05
4 3 73
8
4 24
5
4 60
0
4 72
2
4 79
9
4 95
4
4 94
7
4 85
8
5 07
6
5 01
5
5 26
2
5 23
4
5 31
7
5 17
9 6 22
1
4 02
3
4 10
9
6 40
1
7 66
6
7 07
6
7 56
5
7 16
8
7 27
9
8 52
1
8 43
2
8 12
0
6 83
0
7 26
2 7 87
5
7 58
1
8 07
5
8 19
7 8 87
2
0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000
10 000
EC,Diversified EC,Undiversified ASC
Increase of Nordea holding
EURm
Investment Allocations by Risk Profile
14/05/2013
31
Total Group (MEUR) 17,523 18,237 18,164 18,623
06/12 09/12 12/12 03/13
Money Market 10% 9% 82% 11% 9% 81% 7% 10% 89% 7% 14% 94%Bonds 78% 52% 8% 77% 51% 12% 81% 48% 8% 81% 44% 4%Equity 10% 26% 4% 10% 27% 4% 11% 29% 2% 11% 28% 2%Private Equity 0% 5% 4% 0% 5% 2% 0% 5% 1% 0% 4% 1%Other 1% 9% 1% 1% 8% 1% 1% 9% 1% 1% 9% 1%
11,638
5,421
464
12,245
5,519
473
11,717
5,519
928
11,986
5,577
1,060
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
If P&C
Man
datu
m
Life Sam
po
Plc If P&
C
Man
datu
m
Life Sam
po
Plc If P&
C
Man
datu
m
Life Sam
po
Plc If P&
C
Man
datu
m
Life Sam
po
Plc
Investment & Counterpart Exposures*
14/05/2013
32 * In Exposure tables the calculation rules may differ in some areas from Allocation tables
31.3.2013 AAA AA+ - AA-
A+ - A-
BBB+ - BBB-
BB+ - C
D NonRated
Fixed Income Total
Equities Other Derivatives (Counterparty Risk)
Total Change from 31.12.2012
Basic Industry - - 4 127 336 - 195 662 250 - - 911 - 38
Capital Goods - 3 91 56 20 - 117 287 513 - - 800 + 25
Consumer Products - - 32 312 31 - 172 547 397 - - 944 - 30
Energy - 6 80 19 101 - 438 645 43 - - 687 + 4
Financial Institutions 28 1,915 2,725 476 492 - 16 5,652 54 21 21 5,747 + 47
Governments 45 - - - - - - 45 - - - 45 - 3
Government Guaranteed 228 - - - - - - 228 - - 3 231 + 2
Health Care - - - - 43 - 43 86 37 - - 123 + 123
Insurance - - 27 21 - - 21 69 34 - - 103 - 1
Media - - - - 12 - 42 54 10 - - 64 - 3
Public Sector, Other 555 32 - - - - - 587 - - - 587 + 136
Real Estate - 10 - - - - 205 216 - 262 - 478 + 100
Services - - - 18 36 - 23 78 42 12 - 131 - 16
Technology and Electronics - - - - 34 - 16 50 54 - - 104 + 29
Telecommunications - - 192 116 46 - 22 376 86 - - 462 - 12
Transportation - 28 6 - - - 294 328 12 - - 340 - 4
Utilities - - 329 151 - - 62 541 81 - - 622 - 9
Others - - - - - - 16 16 12 0 - 28 - 15
Asset-backed Securities - - - - - - - - - - - - -
Covered Bonds 3,871 187 11 10 - - - 4,080 - - - 4,080 + 141
Funds - - - - - - 282 282 1,265 591 - 2,137 - 6
Total 4,728 2,182 3,498 1,307 1,150 - 1,963 14,828 2,888 885 23 18,625 + 470
Change from 31.12.2012 + 329 + 157 + 16 - 128 + 36 - + 30 + 440 + 45 - 14 - 0 + 470 EURm
Note: Category Other includes private equity and non-listed real estate. Category Derivatives includes only OTC derivatives and corresponding collaterals.
Fixed Income Investments in the Financial Sector*
14/05/2013
33
*Exposure tables vs. Allocation tables – small differences
EURm Covered
bonds Money
market Long-term
senior debt Long-term
subord. debt Total %
Sweden 3,104 805 1,127 220 5,256 54% Finland 250 1,597 157 18 2,022 21% Norway 515 120 648 111 1,394 14% Denmark 94 164 141 399 4% France 61 73 17 151 2% United States 24 103 9 136 1% Netherlands 102 102 1% Switzerland 82 11 94 1% Germany 10 41 51 1% Austria 34 1 35 0% United Kingdom 30 2 32 0% Estonia 23 0 24 0% Luxembourg 11 11 0% Belgium 5 5 10 0% Iceland 10 10 0% Jersey 5 5 0% Grand Total 4,080 2,570 2,543 540 9,732 100 %
Fixed Income Investments in the Public Sector - no Periphery*
14/05/2013
34 * Exposure tables vs. Allocation tables – small differences
EURm Governments Government
guaranteed Public sector,
other Total
Sweden 16 56 335 407 Norway 27 141 168 Finland 12 55 83 150 Germany 79 79 Denmark 12 27 40 Netherlands 17 17 Total 45 228 587 860
Straightforward Cash Flows & Strong Balance Sheet
14/05/2013
36
Dividends • If P&C • Mandatum Life • Nordea
• Internal Administration Costs • Discretionary Dividends for Shareholders • Interest Expenses for Bondholders
Income • Interest on Liquidity • Income on other
investments
Sampo Plc
Assets EURm 9,268 Liabilities EURm 9,268
Liquidity 984 CPs Issued 385
Investment assets 28 LT Senior Debt 1,723
-Real Estate 4 -Private Placements 148
-Private Equity 7 -Bonds Issued 1,575
-Other investm. 18 -Pension Ins. Loans 0
Subordinated Loans 231 Subordinated Debt 0
Equity Holdings 7,928 Capital 7,061
-Subsidiaries 2,370 - Undistributable 98
-Associated 5,557 - Distributable 6,962
Other Assets 97 Other Liabilities
100
Flow of Funds Balance Sheet
Key Credit Metrics well in Single A -range
Sampo plc Q1/2013 Gross Debt EUR 2,108 m Gross Debt to Equity 29.9% Financial Leverage 23.0%
Sampo Group 2011 2012 Shareholders' Equity 8 ,920 10,113 Hybrid Bonds 202 200 Senior Debt 2,329 2,162 Financial leverage 22.1% 18.9% Allianz Group / FL* 28.5% 26.0% * Company´s own information
Dividends & Reported Profits
14/05/2013
37 * Parent Company is not equal to Holding Segment; Dividend Income includes also dividends from Private Equity investments
514
-15
65
564 569
-16 -31
522
747
-8 -37
702 762
-10 -70
683
773
-17 -20
737
-100
0
100
200
300
400
500
600
700
800
Dividend income Operating expenses Net financial expenses
Profit before taxes
2008 2009 2010 2011 2012
* EURm
EURm 1-3/2013 1-3/2012 Dividends 293 224 Operating expenses -5.4 -4.0 Net financial expenses -24.8 -16.0 Profit before taxes 262.8 205.0
Dividends Received by Payment Year
*) Sampo Bank 2005-2006, Nordea 2007->
EURm
**
249
1 031
519
181
488 540 406
544 100
300
200
200
100
100
141
75
35
130 80
204 250 224
293
490
1 406
754
511 568
744 756 768
0
200
400
600
800
1 000
1 200
1 400
1 600
2005 2006 2007 2008 2009 2010 2011 2012 2013 If Mandatum Life Banking*
14/05/2013
38
Sampo Plc Debt Instruments
14/05/2013
39
Comments on Debt
• Most of the debt tied to short-term indices - mitigation of group level interest rate risk - use of swaps
• Diversification is actively sought over
- maturities - investor base
• Private Placements
- targeted for a Finnish retail investors - related to Mandatum Life´s services
Maturity Structure
0
200
400
600
800
1 000
2013 2014 2015 2016 2017
CP´s Senior under EMTN Senior Retail Private
EURm
Instrument & Principal Coupon Swap Effective Rate Maturity Senior Bond 4,000 SEKm (EMTN) Stibor3M + 1,5000% ---- 2,7360% 16.09.2013
Senior Bond under EMTN 300 EURm (EMTN) 3,2500 % ---- 3,0377% 03.10.2014
Senior Bond under EMTN 300 EURm (EMTN) 4,2500 % Euribor3M + 1,4727% 1,6937% 22.02.2016
Senior Bond 500 EURm (EMTN) 4,2500% Euribor3M + 2,7910% 3,0040% 27.02.2017
CP’s issued 385 EURm Euribor + Margin 0,7900% 3M
Public debt 1,959 EURm 2,3095%
Private placements 148 EURm 2,5655%
Total 2,108 EURm 2,3275%
Sampo plc Key Credit Considerations
40
Diversification through Insurance & Banking in the Nordic Region
Management has a proven Track Record in long-term Value Creation
Conservative Financial Profile, strong Capitalization and Liquidity
14/05/2013
Stable Dividend Flow from Affiliated Companies with strong Brands
Bondholder Value Created
Nordea BV on Consolidated Balance Sheet
14/05/2013
Figures Per Share EUR Acquisition price 6.46 Book value 7.57 Market Value* 9.34 No. of shares 860,440,497
42 * As of 7/05/2013
Nordea in Sampo Group’s B/S EURm
Acquisition price 5,557.3
Retained earnings 1,156.0
Accumulated other changes in Nordea’s equity -25.9
Share of Nordea’s net profit 169.2
Amortisation -8.8
Deferred tax 1.9
Dividends -292.5
Share of Nordea’s other comprehensive income 8.9
Share of Nordea’s other changes in equity -57.2
Share of Nordea’s goodwill change 3.2
Total 6,512.1
Principles of Capital Management • Risk Capital Available > Risk Capital needed
– Risk Capital Available = SI Capital + Other items absorbing economic losses – Risk Capital Need = Measured Economic Capital + ”Non-measurable” risks – Buffer between measures under constant considerations – Pro-Active management of Risks/Capitalisation
• Economic Capital at 99.5% as a basis for Risk Capital Need
– Economic capital is an estimate of Risk Capital needed to keep the Group solvent – EC is calculated at 99.5% confidence level and 1 year risk horizon – ”Non-measurable” risks include liquidity, market , illiquidity and business environment risks
• Adjusted Solvency Capital is a measure of Risk Capital Available – Solvency I capital items included as such – The difference between Undiscounted technical provisions in balance sheet and their
discounted value (so called Liability Side adjustment) – Capital instruments excluded from regulatory capital in Solvency I
14/05/2013
43
Economic Capital Reporting Principles • Definitions
– Economic capital (EC) is used as an internal measure of capital required for measurable risks the Group is exposed to.
– EC is defined as the amount of capital to protect the solvency over a one year time horizon with a probability of 99.5 per cent.
• EC at company level – EC is calculated in If P&C and Mandatum Life using a set of calculation methods, which have been
developed for the specific needs of each company. – In If P&C and Mandatum Life EC accounts for market, credit, insurance and
operational risks, as well as the diversification effect between these risks. – EC figure calculated and reported by Nordea is used in Sampo Group reporting.
Because Nordea’s reported figures are expressed at 99.97% confidence level they are converted by Sampo into 99.5% confidence level.
• EC at Group Level – Correlations between companies’ risks are assessed and diversification effect is calculated. – Group wide EC is a sum of Companies’ EC and the diversification effects.
14/05/2013
44
Principles of Investment Management • 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 Funds mainly – No diversification for the sake of diversification
• Centrally Managed
– Sampo plc Chief Investment Officer 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
14/05/2013
45
IF Regulatory Solvency Capital & Ratio*
54%
70%
88%
74% 71% 66%
77% 79%
72%
75%
79%
0%
20%
40%
60%
80%
100%
0
1 000
2 000
3 000
4 000 % EURm
Solvency capital (lhs) Solvency ratio (rhs)
14/05/2013
47 * Solvency ratio, (IFRS) % = + solvency capital + premiums earned from 12 months
x 100%
Mandatum Life Regulatory Solvency Ratio*
14/05/2013
48
* Solvency ratio, % of technical provision, (IFRS) = + solvency capital + liabilities for insurance and investment contracts - reinsurers’ share of insurance liabilities - 75% x technical provisions relating to unit-linked insurance
x 100%
17,7%
21,3% 20,1%
16,5%
7,9%
18,5%
25,8%
20.9%
27,7% 27,3%
0 %
5 %
10 %
15 %
20 %
25 %
30 %
Average C/R & Standard Deviation 2007-E2014
49
0
1
2
3
4
5
6
7
90 91 92 93 94 95 96 97 98 99 100
Gjensidige
Topdanmark
Swiss Re
Tryg
Sampo
Munich Re
Generali AXA
Aviva Zig
SCOR Hannover Re
Stan
dar
d d
evia
tion
, %
Combined ratio, %
Sub-group 1
Sub-group 2 Sub-group 3
Sub-group 4
AVERAGE
Allianz
Source: Macquarie, European Insurance, 22.01. 2013
14/05/2013
Latest History of Sampo Group
Sampo’s P&C insurance operations are merged with If. Following the transaction, Sampo owns 38 per cent of If’.
Sampo Insurance Company and Leonia merge into the Sampo-Leonia financial services 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. Sampo´s business areas are P&C insurance and life insurance.
Sampo´s Nordea holding exceeds 20% and Nordea becomes an associated company.
2007 2004 2002 2001 2000 2010 2011
Sampo Group´s (If P&C´s) Topdanmark holding exceeds 23% and Topdanmark becomes If´s associated company.
2012
Sampo Group (If P&C) acquires Tryg´s Finnish business. If P&C signs a partnership agreement with Nordea.
Finland If becomes fully owned by Sampo. Sampo has three core businesses: P&C insurance, banking and long-term savings.
14/05/2013
50