Sampo’s new service approach aims to offer customers solutions that suit their lifestyle and savings, while helping them prepare for their future. Sampo offers customers the chance to discuss the whole range of financial matters – housing, preparing for retirement, increasing savings and investing, and preparing for unexpected expenses. In 2002, Sampo introduced its new service concept, “an hour with the customer”, to characterise the discussions carried out between the customer and a Sampo’s advisor. Sampo will be introducing a new web tool to support these discussions in 2003.
Realty World (Kiinteistömaailma) is Finland’s second largest real estate agency chain. The central unit of the chain is owned by Sampo Bank but all the real estate agencies themselves are independently owned and operated firms. The chain operates nation-wide, serving its customers in the selling, buying and letting of property.
The Investment Committee is responsible for preparing the Group’s investment policy for approval by the Board, preparing investment decision authorisations for the Boards of Group 18 Corporate Governance
The retirement age of the members of the Group Executive Commitee is 60 years, and the pension to be paid to them corresponds to the full amount permitted under the Employees’ Pensions Act (TEL).
Member of the Legal Committee of the Central Chamber of Commerce, Chairman of the Delegation of the Investors’ Compensation Fund, member of the Delegation of the Deposit Insurance Fund of the Commercial Banks and Postipankki Oy, and member of the Delegation of the Deposit Insurance Fund.
Baltic and Polish companies 194 0 194 280 –86 *) Sampo Fund Management, Mandatum Asset Management, Mandatum Private Equity Funds and 3C Asset Management **)
was the importance of open and frank communication by supervisors. A co-operation committee, comprised of the company’s management and staff representatives, assembled to discuss matters affecting the staff. As a result of the negotiations that ended in the spring, the number of staff was reduced by nearly 10 per cent. Despite this, the staff survey showed that staff are generally satisfied with Sampo Group and its way to work.
As a result of the on-going authorization to buy back Sampo’s own shares, Group companies owned 2,434,400 shares in the parent company at the end of the financial year. A wholly owned Sampo subsidiary, Satura, held 23,175 warrants issued by the parent company.
In the year under review, the Group’s life insurance companies gathered EUR 613 million in premiums written (755). The majority of this was written by Sampo Life, whose premium income was EUR 602 million (747). Sampo Life’s premiums written decreased from 2001, because the company ceased to actively market certain products such as capital redemption contracts. In the comparison figures for 2001 capital redemption contracts and portfolio transfers of pension foundations accounted for EUR 264 million of premiums written, whereas the corresponding figure for the year under review was EUR 54 million.
Sampo Group’s life insurance companies operating in the Baltic states strengthened their market positions. The companies’ premiums written totalled about EUR 4 million (2). Sampo Group also includes Sampo TU Zycie, a Polish company that sells unit-linked insurance. The company’s operations were substantially reorganised during the year under review. The company’s premiums written grew only a little in the difficult market environment in Poland and totalled about EUR 7 million (6). All four companies have operated only a short time and their impact on the Group’s operating profit is insignificant.
The life insurance business recorded an operating profit of EUR 86 million (79) for the year under review. The cost of operations was cut in particular by streamlining administrative and support functions. Operating expenses were reduced to EUR 53 million (67).
Measurement of credit risks Sampo Bank has utilised a credit portfolio model since 1999 to quantify its credit risks. The model estimates expected credit losses and economic capital for credit risk based on a large number of scenarios concerning the evolution of counterparty ratings and defaults. The estimate for risk capital is over a three year horizon and based on a confidence level of 99.9 per cent. The counterparty level inputs to the model are the default and transition probabilities implied by Sampo ratings and the estimated loss given default. The latter is a function of the counterparty’s exposure and collateral position, and its estimated other recoverables. The loss given default estimate has been designed to take into account the expected depression in collateral values during recessions.
A risk-adjusted performance measurement system for Sampo Bank’s corporate business (including SME) was implemented in 2001–2002. Risk-adjusted profitability is measured both at the level of customer relationships and business units, and is used to guide the evaluation of customer relationships and in pricing decisions. The risk-adjusted performance measure- > Risk Management
Exposures are primarily categorised according to customers or counterparties. However, in cases where the credit decision was based on the creditworthiness of a guarantor, they are categorised according to the guarantor. The reporting of credit risks covers all agreements and derivative contracts, both on and off-balance sheet, with which they are associated.
Exposures to corporate and institutional customers by creditworthiness category ratings equivalents EUR m % EUR m %
The investment committee ensures compliance with the principles specified in the investment policy and reports to the Board on investment activities.
The aim of the EU’s capital adequacy framework reform is to increase the risk sensitivity of banks’ capital adequacy calculations, and to encourage banks to develop their internal risk management systems in line with the recommendations of the Basel Committee. According to the proposal on capital adequacy, banks can select the method of calculating capital adequacy that best corresponds to the level of their risk management systems. The reform aims at maintaining the capital base in the banking system at their present levels.
The Group’s interest in the associated undertaking, If, is treated as follows: The Group’s holding in If and income from it are included in the consolidated accounts using fair values, according to the Swedish accounting practice applied in If.
“Extraordinary income” in the consolidated profit and loss account. The deferred tax liability recognised corresponds to the tax, which would have arisen, if the arrangement had been carried out as a taxable disposal. The deferred tax liability will be adjusted in accordance with If’s profit performance after the acquisition.
Foreign subsidiaries The accounts of foreign subsidiaries have been translated into euro at the European Central Bank’s middle rate on the balance sheet date, and the exchange rate differences arising from consolidation have been included in capital and reserves.
Derivative contracts have been treated in the balance sheet as shown in “Off-balance sheet items and derivative contracts”.
In direct insurance, the premium reserve is calculated by policy, while in reinsurance it is calculated on the basis of a disclosure of the ceding company or the company’s own bases of calculation.
In calculating the claims reserve of direct insurance, discounting is applied only in connection with the technical provisions of pensions whose payment has commenced. The technical provisions of assumed reinsurance are based on the disclosure of the ceding company and on an estimate of claims, which have not yet been settled.
which, according to the insurance contract, entitle their holders to bonuses and rebates granted on the basis of any surplus yielded by the policies. If the solvency requirements do not prevent it, a reasonable part of the surplus has to be returned to these policies as bonuses.
Residential and business premises and offices 20–60 years Industrial premises and warehouses 30–60 years Components of buildings 0–15 years IT equipment and cars 3–5 years Other equipment 5–10 years
A specific provision can be made against an individual loan or against a certain group of loans pooled by customer or by country. A provision against a group of loans pooled by customer will be made, if impaired loans are judged to be present in the loan portfolio but have not yet been identified individually. A specific provision is made when it is considered that recovery is doubtful and the estimated sales value of the asset pledged as collateral security does not cover the principal of the loan.
Net asset value per share, no deferred tax liability deduction EUR 12.69 6.52
Number of shares at 31 Dec. 1,000 1,200 1,200 1,200 – 1,200 1,200
Other bonds and notes 1,291 2,911 33 Shares and participations Book value of shares and participations, total 36 36
39 Changes in intangible and tangible assets Goodwill Group goodwill Other Negative long- Intangible group term rights goodwill expenditures Equipment Total
EQT Northern Europe UK No. I L.P. UK – – 13 13
For other purposes underlying instruments 602 598 fair value 3 3 continues >
Included in the Group undertakings’ balance sheets 0 3 0 2
87 Assets pledged as collateral security and secured liabilities as well as other assets pledged on behalf of the company and other group undertakings
Retro Life Insurance Company Limited 2 Helsinki, Finland 24.21 – 2
Head Office If P&C Insurance Holding Ltd Visiting address: Barks väg 15, S-10350 Solna, Sverige Postal address: S-10680 Stockholm, Sverige www.if.se