The financial sector has traditionally targeted economies of scale as the industry enjoys significant scale benefits. Efficiency, discipline, economies of scale, cross-border supply, risk assessment and risk management have together been the cornerstones for the success. On the other hand, there are additional factors such as agility, local presence and closeness to the customers that have laid the basis for the success of several small companies. Digitalization has removed these boundaries between operation models: a major service supplier becomes local and always accessible, if necessary, while even a minor player is able to reach the global markets more easily.
In spite of the reforms and increasing regulation, as well as the low interest rate environment, Nordea’s result after taxes was its best ever, as was the dividend of EUR 0.64 per share for 2015. Nordea will pay a dividend of over EUR 550 million to Sampo this spring.
insurer in the Baltic region and market leader in Estonia, with approximately 350,000 customers.
companies’ personnel, such as personnel funds, are a key component of the service Mandatum Life provides companies.
In terms of new business, Mandatum Life set more than ten years ago unit-linked insurance and personal risk insurance as its core business areas. Back then, the company’s technical provisions were almost exclusively related to with-profit products and the share of the with-profit portfolio with particularly high (3.5 per cent and 4.5 per cent) guarantees of the total technical provisions was close to 90 per cent. As a result of the relatively strong decline in the with-profit portfolio with high guarantees and with the strong growth in other technical provision items, the withprofit portfolio with high guarantees only constitutes less than 30 per cent of the company’s technical provisions.
The idea of the movie was to give a better understanding of why If P&C is here: to ensure that customers are correctly insured and to help them when something happens.
In addition, a traffic researcher has been employed to analyze all incoming data from traffic-related accidents to gain more knowledge on how accidents happen and how to avoid them. This information is widely spread throughout the society by various communication projects.
RReuse of Maeuse of Matterials in Verials in Vehicle Rehicle Repairsepairs If P&C, 2007-2015
Responsibility for personnel means improving the financial security of personnel and preparing for health and financial risks. Mandatum Life also takes care of the well-being of its employees during offworking hours and after their career. The company sees that employees that thrive in their jobs create the foundation for the achievement of the company’s long-term goals. That is why employee satisfaction is one of Mandatum Life’s strategic targets.
personnel and their families from accident related disability or death. Also a considerable amount of staff has permanent disability cover and life insurance.
The company strives to reduce the negative environmental impacts of its operations by, among other measures, developing its digital services and by decreasing the use of paper in customer communications.
Member of the Board of Directors of Sampo plc since 9 April 2003. Brunila holds 8,848 Sampo plc shares directly or through a controlled company.
The Audit Committee convened four times in 2015 and the attendance of members at the meetings was 100 per cent.
PPositions of Tositions of Trusrust, 12/31/2015t, 12/31/2015 If P&C Insurance Holding Ltd, Board Member; Mandatum Life Insurance Company Limited, Board Member
PPositions of Tositions of Trusrust, 12/31/2015t, 12/31/2015 If P&C Insurance Ltd, Chairman of the Board; If P&C Insurance Company Ltd, Chairman of the Board; Topdanmark A/S, Vice President of the Board; Swedish Insurance Federation, Board Member; Swedish Insurance Employer Association, Board Member; AcadeMedia Aktiebolag, Board Member; Insurance Europe, Vice President
Ivar Martinsen Head of Business Area Commercial, If P&C Insurance Born 1961
In accordance with the decision of the Annual General Meeting in 2015, the following annual fees will be paid to the members of the Board of Directors for their Board and committee work up to the close of the
The Board proposes to the Annual General Meeting to be held on 21 April 2016 a dividend of EUR 2.15 per share (1.95). The proposed dividend payment amounts in total to EUR 1,204 million (1,092).
If P&C is the leading property and casualty insurance company in the Nordic region, with insurance operations that also encompass the Baltic countries. The P&C insurance group’s parent company, If P&C Insurance Holding Ltd, is located in Sweden, and the If subsidiaries and branches provide insurance solutions and services in Finland, Sweden, Norway, Denmark and the Baltic countries. If ’s operations are divided into four business areas: Private, Commercial, Industrial and Baltic. The Danish insurance company Topdanmark is If P&C's associated company.
Average number of staff (FTE) 6,176 6,173 3 *Two significant non-recurring items were booked for If P&C’s result in the second quarter of 2015 – the reform of the pension system in If Norway and the lowering of the interest rate used in discounting annuities in Finland from 2.0 per cent to 1.5 per cent. The former had a positive effect of EUR 155 million and the latter a negative effect of EUR 110 million on the total result.
InInvvesestment Allocatment Allocationtion If P&C, 31 December 2015, Total EUR 11.4 Billion
If the AGM approves the Board’s dividend proposal, Sampo plc will receive a dividend of EUR 551 million from Nordea on 30 March 2016.
The assets covering the segregated fund amounted to EUR 1.2 billion (1.2), of which 71 per cent (48) was in fixed income, 9 per cent (33) in money market, 12 per cent (8) in equities and 8 per cent (11) in alternative investments. Segregated fund’s investment return marked-to-market for January – December 2015 was 3.8 per cent. At the end of December 2015 the duration of fixed income assets was 2.3 years (2.1) and average maturity 3.8 years (3.6). Fixed income (incl. money market) running yield was 1.4 per cent (1.3).
Risk result was exceptionally good and amounted to EUR 33 million (23).
The Annual General Meeting decided to pay the following fees to the members of the Board of Directors until the close of the 2016 Annual General Meeting: the Chairman of the Board will be paid an annual fee of EUR 160,000, the Vice Chairman of the Board will be paid EUR 100,000 and the other members of the Board of Directors will be paid EUR 80,000 each. A Board member shall in accordance with the resolution of the Annual General Meeting acquire Sampo plc's A shares at the price paid in public trading for 50 per cent of his/her annual fee excluding taxes and similar payments.
The starting point of any compensation mechanism shall be to encourage and stimulate employees at all levels to do their best and surpass their targets. Remuneration packages shall be designed to reward employees on all levels, compensating them fairly for prudent and successful performance. At the same time, however, in order to safeguard the interest of other stakeholders, compensation mechanisms shall neither entice nor encourage employees to excessive or unwanted risk taking. Thus, compensation mechanisms cannot be separated from risk management practices.
The Annual General Meeting of 2015 authorized the Board to repurchase a maximum of 50,000,000 Sampo A shares. Shares will be repurchased in other proportion than the shareholders' proportional shareholdings (directed repurchase). The maximum price to be paid will be highest market price quoted during the authorization period. The authorization will be valid until the close of the next Annual General
Sampo plc, Sampo Group’s parent company, received EUR 1.220 billion in dividends from its subsidiaries and associated company Nordea Bank AB during 2015. The following dividend payments were received: • 25 March 2015; Mandatum Life; EUR 100 million, • 30 March 2015; Nordea Bank AB; EUR 533 million and • 8 December 2015; If P&C; SEK 5.5 billion (EUR 587 million).
Senior Bond 1,000 SEKm (EMTN) 1.2500% - 1.2950% 28 May 2020
The Board proposes to the Annual General Meeting a dividend of EUR 2.15 per share to company’s 560,000,000 shares. The dividends to be paid are EUR 1,204,000,000.00 in total. Rest of funds are left in the equity capital.
SolvSolvencency capital (IFRS)y capital (IFRS) + equity after proposed profit distribution
Underwriting RiskUnderwriting Riskss .............................................................................................................................................................................. 111111 111Non-life Insurance Underwriting Risks 116Life Insurance Underwriting Risks
• The persons responsible for managing the subsidiaries’ investments report directly to Sampo
The regulatory SCR sets the level of capital at which a company is able to conduct its business without regulatory interventions. Hence, it is the starting point when the needed level of actual amount of capital is considered. Regardless of whether the regulatory capital requirement is calculated using the internal model or the standard formula, it reflects a 99.5 per cent confidence level which implies the same probability of default as a Triple-B rating from major rating agencies. In case the company’s clients and counterparties prefer a higher than Triple-B creditworthiness from their insurance company, the level of capital must preferably be higher than the SCR, to ensure the company’s ability to serve its client base.
Group level translation risk differs from the other economic risks in the following ways: • The risk has no effect on any separate legal entity’s profits or their own funds. Hence hedging translation risks by a single legal entity is, if not impossible, at least problematic.
• Parent company’s liquidity portfolio and leverage: the parent company’s ability to generate funds is dependent on the size and the liquidity of the investment portfolio, as well as the company’s leverage. The better this ability is, the smaller is the need for the buffer at group level. For these reasons Sampo plc strives to withhold a strong liquidity and a low leverage.
Leverage can be assessed also by ratios Net Debt to Group Equity and Net Debt to Group NAV. Sampo plc’s Gross Debt was EUR 2,302 million and EUR 1,343 million of its total financial assets of EUR 1,593 million were in interest bearing instruments. Hence, net debt was EUR 959 million.
BrBreakeakdodown of Grwn of Grososs Ws Writtritten Pren Premiums bemiums by Businesy Business Ars Areaea If P&C, 2015, total EUR 4,559 million
The item Other (including group eliminations) is not shown in the breakdowns above but it is included in total gross written premiums. There are minor differences between the figures reported by Sampo Group and If P&C due to differences in foreign exchange rates used in consolidation.
The actuarial estimates are based on historical claims and existing exposures that are available at the balance sheet date. Factors that are monitored include loss development trends, the level of unpaid claims, changes in legislation, case law and economic conditions. When setting provisions, the Chain Ladder and Bornhuetter-Fergusson methods are generally used, combined with projections of the number of claims and the average claim costs.
TTechnical Prechnical Proovisions bvisions by Line of Businesy Line of Business and Major Geogrs and Major Geographical Araphical Areaea If P&C, 31 December 2015
ExpectExpected Maed Maturity of Insurturity of Insurancance and Ine and Invvesestment Ctment Controntracts befacts befororee RReinsureinsurancancee
Risk definitions related to investment portfolio market risks may be found in Appendix 2 (Risk Definitions).
CConsolidaonsolidatted Ined Invvesestment Allocatment Allocationtion If P&C, Mandatum Life, Sampo plc and Sampo Group, 31 December 2015
In Sampo Group companies the net foreign currency exposure is considered as a separate asset class and it is managed within investment portfolio activities. Open transaction risk positions are identified and measured separately for each subsidiary. The net position in each currency consists of the assets, liabilities and foreign exchange transactions denominated in the particular currency.
The listed equity investments of Sampo Group totaled EUR 3,431 million at the end of year 2015 (EUR 3,105 million in 2014). At the end of year 2015, the listed equity exposure of If P&C was EUR 1,498 million (EUR 1,367 million in 2014). The proportion of listed equities in If P&C’s investment portfolio was 13.1 per cent. In Mandatum Life, the listed equity exposure was EUR 1,732 million at the end of year 2015 (EUR 1,698 million in 2014) and the proportion of listed equities was 26.0 per cent of the investment portfolio.
In addition, counterparty default risk arises from receivables from policyholders and other receivables related to commercial transactions. Risk exposure towards policyholders is very limited, because nonpayment of premiums generally results in the cancellation of the insurance policies. Also, the risk exposures arising from other receivables related to commercial transactions are minor in Sampo Group.
Risk definitions related to ALM risks may be found in Appendix 2 (Risk Definitions).
The long-term target for investments is to provide sufficient return to cover the guaranteed interest rate plus bonuses based on the principle of fairness as well as the shareholder’s return requirement with an acceptable level of risk. In the long run, the most significant risk is that fixed income investments will not generate adequate return compared to the guaranteed rate. In addition to investment and capitalization decisions, Mandatum Life has implemented active measures on the liability side to manage the balance sheet level interest rate risk. The company has reduced the minimum guaranteed interest rate in new contracts, supplemented the technical provisions with discount rate reserves and adjusted policy terms and conditions as well as policy administration processes to enable more efficient interest rate risk management.
• Underwriting risks are priced to reflect their inherent risk levels, expected returns from investment activities are in balance with their risks, and consequential risks are mitigated sufficiently.
The Boards of Directors of If P&C and Mandatum Life are the ultimate decision making bodies of the respective companies and have the overall responsibility for the risk management process in If P&C and Mandatum Life respectively. The Boards of Directors appoint the If P&C ORSA Committee and the Mandatum Life Risk Management Committee and are responsible for identifying any need to change the policies, principles and instructions related to risk management.
Non-life insurance underwriting risks are often divided into premium and catastrophe risks and reserve risk in order to separate the risks related to future claims of current insurance contracts and already incurred claims.
ApprApproovval of the Financial Sal of the Financial Statattements and the Boarements and the Board of Dird of Directectors’ors’
3) The amount recognised in equity from available-for-sale financial assets for the period totalled EURm 244 (177). The amount transferred to p/l amounted to EURm -318 (-120). EURm 10 was transferred to the Segregated Suomi portfolio.
AAdditional infdditional informaormation ttion to the so the statattement of cash floement of cash flowws:s: 20152015 20142014
The following exchange rate was applied in the consolidated financial statements: BalancBalance sheete sheet dadattee
InsurInsurancance and ine and invvesestment ctment controntractact liabilities and rliabilities and reinsureinsurancance ase assetssets
Defined benefit plans are both funded and unfunded. The amounts reported as pension costs during a financial year consist of the actuarially calculated earnings of old-age pensions during the year, calculated straight-line, based on pensionable income at the time of retirement. The calculated effects in the form of interest expense for crediting/appreciating the preceding years’ established pension obligations are then added. The calculation of pension costs during the financial year starts at the beginning of the year and is based on assumptions about such factors as salary growth and price inflation throughout the duration of the obligation and on the current market interest rate adjustedto take into account the duration of the pension obligations.
Dividends are recognised in equity in the period when they are approved by the Annual General Meeting. When the parent company or other Group companies purchase the parent company’s equity shares, the consideration paid is deducted from the share capital as treasury shares until they are cancelled. If such shares are subsequently sold or reissued, any consideration received is included in equity.
1951952 Net income from investments 1991993 Claims incurred 2022024 Change in liabilities for insurance and investment contracts 2032035 Staff costs 2042046 Other operating expenses 2052057 Result analysis of P&C insurance 2062068 Performance analysis per class of P&C insurance 2072079 Earnings per share 20720710 Financial assets and liabilities 20820811 Property, plant and equipment 21021012 Investment property 21221213 Intangible assets 21321314 Investments in associates 21521515 Financial assets 22022016 Fair values 22122117 Determination and hierarchy of fair values 22422418 Movements in level 3 financial instruments measured at fair value 22622619 Sensitivity analysis of level 3 financial instruments measured at fair value 22622620 Investments related to unit-linked insurance contracts 22722721 Deferred tax assets and liabilities 22922922 Taxes 22922923 Components of other comprehensive income 23023024 Tax effects relating to components of other comprehensive income 23023025 Other assets 23223226 Cash and cash equivalents 23323327 Liabilities from insurance and investment contracts 23923928 Liabilities from unit-linked insurance and investment contracts 23923929 Financial liabilities 24124130 Provisions 24124131 Employee benefits 24524532 Other liabilities 24624633 Contingent liabilities and commitments 24824834 Equity and reserves 24924935 Related party disclosures 25025036 Incentive schemes 25125137 Auditors' fees 25125138 Legal proceedings 25125139 Investments in subsidiaries 25225240 Investments in shares and participations other than subsidiaries and associates 25725741 Events after the balance sheet date
TTotal claims cotal claims cosost at attributable tttributable to curro current-yent-yearear operoperaationstions
The provision for annuities is valued in accordance with normal actuarial principles taking anticipated inflation and mortality into consideration, and discounted to take the anticipated future investment return into account. To cover costs for the costs for the upward adjustment of annuity provisions required for the gradual reversal of such discounting, an anticipated return is added to the annuity results. Provisions for incurred but not reported losses pertaining to annuities in Finland are discounted. The provisions in 2015 amounted to EURm 261 (257). The non-discounted value was EURm 351 (388). The exchange effect on the discounted provisions was a decrease of EURm 6. The real increase was EURm 8, explained by the decrease in the discount rate from 2.0 percent to 1.5 percent.
The recoverable amounts for If have been determined by using a discounted cash flow model. The model is based on Sampo’s management’s best estimates of both historical evidence and economic conditions such as volumes,interest rates, margins, capital structure and income and cost development. The value in use model for Mandatum Life is greatly influenced by the longterm development of insurance liabilities, affecting e.g. the required solvency capital and thus the recoverable amount. That is why the forecast period is longer for Mandatum Life, 10 years. The derived cash flows were discounted at the pre-tax rates of the weighted average cost of capital which for If was 7.8% and for Mandatum Life 8.4%. These are somewhat lower than last year due to the decrease in interest rates.
AsAssociasociattes thaes that hat havve been ace been acccountounted fed for bor by the equity method ay the equity method at 31 Dec. 2014t 31 Dec. 2014
Financial assets available-for-sale for life insurance include impairment losses EURm 19 (41).
Financial assets available for sale / shares and participations: Listed equity securities include EURm 831 (632) listed equities. Unlisted equity securities include EURm 768 (708) investments in capital trusts.
EURmEURm LLeevvel 1el 1 LLeevvel 2el 2 LLeevvel 3el 3 TTotalotal
InInvvesestment rtment relaelatted ted to unit-linko unit-linked ced controntracts, tacts, totalotal 5,8655,865 5,2825,282
PPension liabilities:ension liabilities: At the beginning of the year 664 580
Dividend-adjusted starting price at 31 Dec. 2015 12.22 19.12 36.31 43.38
LUX Mandatum Life European Small & Mid Cap Equity Fund SICAV-SIF G EUR Share Class
The registration for the Annual General Meeting will finish at 4 pm (CET+1)