Risk Management
Risk is an essential and inherent element of Sampo Group's business activities and operating environment. Clearly defined strategies and responsibilities, together with a strong commitment to the risk management process, are Sampo's tools for managing and mitigating risks.
The Board of Directors of Sampo plc is responsible for ensuring that the Group's risks are properly managed and controlled. The Board sets the risk management policies and provides guidance on the organization of risk management and internal control in the business areas. The Board makes decisions on strategy, the risk-taking of subsidiaries, and policies relating to capital allocation and return targets. The Board is also responsible for decisions on risk appetite and capital management.
The Audit Committee is responsible, on behalf of the Board of Directors, for the preparation of Sampo Group's risk management policies and related guidelines.
Risk Management Process
High-quality, comprehensive risk management ensures that Sampo's corporate executives and Board of Directors are continually aware of the company's business-related risks and its ability to carry the financial and other risks related to business activities.
At Sampo, the risk management process is divided between risk control and risk management. Risk control consists of formulating risk management principles, setting risk limits and granting authorizations, as well as monitoring the development of risks in relation to the limits. Risk control also includes risk calculation and reporting, and assessing the economic capital needed to carry out the business and bear the risks related to it. Risk control also involves overseeing the functioning of the risk management process.
One of the tasks of risk management is to identify the risks related to business activities. Risk calculation is an integral part of annual business planning in Sampo, where the key risks related to strategic plans are identified. Risk management supports the allocation of capital to businesses with the most attractive risk-to-return opportunities. Risk management also supports decisions regarding risk-taking and how the risk portfolio can be managed in the most effective way.
Risk Management Reporting
Sampo Group risk management reporting is divided into three segments, which are P&C Insurance (If P&C), Life Insurance (Mandatum Life), and the Holding Company (Sampo plc). Sampo plc's Board of Directors and the Audit Committee, together with the Boards of Directors of the subsidiaries, share the overall responsibility for the risk management process. The business units - risk owners - are responsible for day-to-day risk management decisions. In If P&C, risks are managed by separate committees, such as the Underwriting Committee and the Reinsurance Committee. In Mandatum Life, the Investment Committee manages investment risks, while the management team members take care of business-related risks, each in their own business area and/or function.
A more detailed description of Sampo Group's risk management organization and activities is available in the Risk Management section of the Annual Report.
