The Sampo Group 78 Private San1po 80 Sampo Emerprise 82 Sampo Industrial 84 Foreign Reinsurance Run-Off 86 Sampo Life 90 Investmems 94 Sampo Personnel 96 Sampo and the Environmem 98 Sampo Group Management Board 99 The Sampo-Varma Group's Principal Shareholdings 100 Shareholder Information 101 Investmem Analyses 102 Sampo-Varma Group Contact Information
205 million (FTM 1.2 billion) as part of the ampo-Le nia merger.
Sampo Group also expanded its operations by acquisi­ tions in Germany, the UK and Sweden during the review year. These transactions have strengthened our distribution net­ work and position as an industrial insurer in selected parts of Europe.
We will be offering our clients not only the most compre­ hensive product range but also the most advanced service en­ tity. Next year, the Sampo logo will stand for the complete range of banking and asset management services. It has always been worthwhile being a Sampo client. It will be equally re­ warding to be a committed Sampo-Leonia client.
Sampo-Leonia posses es extremely competitive IT and Internet know-how that results in the creation of first-rare product applications. The Group will provide pioneering elec­ tronic client services via telephone, Internet and mobile com­ munications.
The most significant event of the year under review was the signing of a letter of intent in preparation of a merger of ampo and Leonia. The parties will merge to form a full- ervice financial group, which will be the leading in urer and a solid bank in Finland. Moreover, ampo roup continued eo expand op­ erations in the Baltic countries and Northern Europe in line with its strat­ egy.
The expense ratio was 21.8 per cent (20.1 %). The increa e in operating ex­ penses was largely due to the expense of rrucrural reorganisarions both in Finland and abroad, investments in rhe ampo 2000 programme, and prepara­ tions for rhe introduction of rhe euro.
Statutory workers compensation 20 2 Motor third party liability 16 3 Motor, other dosses 13 4 F1re and other damage to property 2 8 5 Other dir et insurance 23 pen ion insurance totalling EUR 43 mill ion .
Life insurance investments The market value of Sampo Life's investments stood at EUR 4,108 million (EUR 3,077 million) on December 31st, 1999. Of this amount, foreign in­ vestments accounted for 31 per cent, and currency-denominated investments outside the euro area for 22 per cent. Net investment income totalled EUR 293 million.
T oral change -107,180 -137,135 - 76,939 - 36,544 Net operating expenses 5 -30,406 -17,270 Merger - - 56,890 Portfolio transfer 341 - - - Other technical charges -23 -106,839 -137,135 -20,049 - 36,544 Reinsurers' share Balance on technical account 37,270 11 ,211 hange in collective guarantee item - 1,158 - 1,114 - 518 - 498
Balance on technical account before the change in equalisation provision -91,189 -107,550 - 34,366 - 51,655
Group Parent company Group Parent company EUR 'OOO Notes 1999 1998 1999 1998 EUR 'OOO Notes 1999 1998 1999 1998
Balance on technical account, xtra rdinary depreciation on non-life in urance - 100,389 - 90,344 - 37,847 -40,495 con olidation difference -39,348
Arising out of rein urance operations 103,291 78,108 19,863 259 Deferred tax 8,996 10,429 8,996 10,429 Other debtors 45,175 60,275 20,346 57,498
Ari ing out of direct insurance operations 804 2,623 - Ari ing out of reinsurance operations 100,618 95,066 20,401 622 Bond with warrant 20 1,040 1,053 1,110 1,110 Amount owed to credit institutions 1,223 15,242 - m SAMPO ANNUAl REPORT 1999 SAMPO ANNUAl REPORT 1999 m
Unrcali ed I e and gain n inve tment Depreciation apital financing ----~~~----~
The decision issued by the Insur­ ance upervision Authority on Decem­ ber 23rd, 1999 makes it possible to en­ ter the currency conversion differences of in urance business under investment result, whereby the currency conversion differences arising from both insurance busine s and investments are presented in the same ection of the profit and loss account. The 1998 profit and loss ac­ counr, balance sheet and notes to the accounts have not been altered to corre­ spond to the new entry practice. For the sake of true and fair view, comparability is presented by profit and loss account item in the note called Income and Charge Items Impacting the Compara­ bility of the Result. The notes also in­ clude information on items pertaining to 1998 and impacting comparability.
ous years. Stocks and shares in the nature of investments are entered ar the lower of acqui ition cost or probable sales price. Scocks and shares in the nature of fixed asset are presented at the lower of ac­ qui ition price or current value, if the value adjustment is considered perma­ nent. The shares are valued according to the average price principle. Debt securities are considered to include bonds and money-market in­ trumenrs. They are generally entered in the Balance heet at acquisition co c. The difference between par value and acqui iti n cost of debt securities i ac­ crued under intere t income. The coun­ ter-item is the acqui ition c t.
Loans, deposits with credit institu­ tions, and deposits with ceding under­ takings are valued ar the lower of par value or probable value.
vency requirements do not prevent it, a reasonable part of the surplus has to be returned to these policies as bonuses.
•• The solvency capital of rhe subgroup of Sampo Life has been separated from rhe Group's solvency capital as belonging to life insurance, and the difference is disclosed as the solvency capital of non-life insurance.
FIMm 1,136 1,339 3,218 the year 1999 and 25% pertaining to the year 1998 is calculated to the owners, in addition to the capital and reserves of life xpense ratio o/o 195.1 175.9 138.3 tnsurance. In prcviou years, the valuation differences of life insurance were not included in the calculation of the olvency margin URm 98 522 949 said key figures.
Life reinsurance 10,524 9,499 Fire and other damage to property redit Ios on remlUms -2,984 -2,366 -2,016 - 1,343 redir and sureryship 6,141 Premiums written before 1999 4,198 2,515 -1,029 959 8,586 1998 6,146 5,436 414 -1,758 -677 3,415 23.6 outward reinsurance premiums 1,422,487 1,093,467 313,577 294,961 1997 5,635 5,574 1,406 - 1,303 -2,254 3.423 Legal expenses
Irem included in other income and harges from other inve tments
~x hange rate clifferen e fin urance bu iness ther exchange raLe gains of inve Lment
Accumulated d pre iation in exce s of rhe plan, Jan. J Depreciation above/below plan Decrease
Other investments hares and parriciparion 2,132,991 2,132,991 5,393,071 1,477,213 1,477,213 2,80 1,435
Bond 1,941,413 1,941,413 1,999,667 1,853,862 1,853,862 2,0 15,475 Other debt ecuriries 417,252 417,252 418,178 225,352 225,352 225,716 Loan guaranteed by mortgages 187,662 187,662 187,662 179,653 179,653 179,653 rher loa n 69,772 69,772 69,772 69,338 69,338 69,338 Depo its with credit
Non-life insurance Life insurance Remaining Remaining EUR'OOO acquisirian cast Book value Current value acquisirian cost Book value Current value
Pohjola Group Insurance orporation 4,813.183 11.82 10.81 278310 305,076 Talentum Oy] Investment
Hitachi Cable Lrd Japan 870,000 0.23 4,446 4,446 Nektar Hedge Fund The Bahamas 13,823 1,848 2,899
Name of company No. of shares ------ub ~id iaries apsam Consulting l.td
Dani1co A/S i)iageo Plc Hcinekcn NV L.V.M.H l.oui1 Vt11 ttot1 Moct Hennes•y Ne tic SA
Oil Producers Ill' Amo o Plc r.xxon Mobil .orporation Toral Fin a SA
Foreign shares and participation in total llnldmgs exceed1ng ruR I nullion (cuflcnt value) pectfied.
• ' SAMPO ANNUAL R~PORT 1999 17 INVESTMENTS COVERING UNIT-LINKED INSURANCES
Mortgage for own loan 2,398 Amount of the above loan 1,628
VAT deductions 9,415 From new construction and real estate refurbishment during 1995- 1999/1994-1998
Id , underlying instrument 225,073 87,503 current value 975 - 3,938
!aim incurred during the review year srood at EUR 188 mi llion. Comparable growth in claims incurred as against 1998 wa 2.8 per cent, excluding the exceptional items class that was part of the 1998 total. The number of large cla im remained un­ changed over 1998, but their proportion of the total amou nt of claims incurred was smaller than in the previous year. Net operat­ ing expenses totalled EUR 36 million.
Sampo Industrial is the brand name for the Sampo companies that specialise in providing insurance and risk management services to large enterprises. Major clients are served by Industrial Insurance in Finland, Sampo Industriforsakring in Sweden, ampo Poland in Poland, and Sampo Industrial Insurance in Germany, the UK, the Netherlands and Belgium. Sampo Group also has representative offices in St. Petersburg and Moscow.
vision provide a good buffer again t the un­ certainty that continues to surround the evaluation of the provi i n f, r ut tanding claim . Both domestic run-off compani till have arbitration pr eeding und rway that involve ignificanc financial interest .
{traditionally the busiest sales period) did not reach the exceptionally high levels of 1998.
Real Estate Portfolio Structure Development ampo roup' real e tare portfolio trucrure wa further developed in the year under re­ view. Reali ation of • UR J 25 million were made and n w inve tment amounted to
Finland 77.5 2 Bailie coontries 18.5 3 Other coontries 4 0
over ea units, mo r f rh m (82 per ent} in rhe Balti mpanie . rh proportion of overseas staff in rea ed t slightly vera fifth f the whole personnel. The foil wing deals with Finnish ampo rafT al ne.
nel. The average age of permanent ra!f em­ ployed as at De ember I sr, 1999 wa 43.5, whereas the average age of new ta!f hired in 1999 wa 34.5. Aim sr a third of rho e em­ ployed in 1999 were under 30 years of age.
ployer, up 3.4 percentage points on 1998. The number of rh se on tent with their j b ro e by 5.6 per enrage points to 79.4 per cent. Fewer re pondent than before reported regular feeling of scre s, and rhe survey also demon traced a downward trend in dissaris­ fa rion wirh any occa ionally rushed sched­ ule~ . The perceived quality of information ow had risen b good 6.5 per enrage of the recently in tigated merit pay system in ampo roup was added in 1999 to the job ati faction element urveyed, enabling the input f information on its annual incentive impa t.
Paper ('000 kg) white and coloured copying paper, laser and printout paper 241
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