The overall risk management and internal control principles as well as divisions of responsibilities of the insurance subsidiaries are defined on the Sampo Group level. The insurance subsidiaries organise their operations according to these principles while taking into account the specific characteristics of the respective business area.
Risk Management Principles
The core competences of Sampo Group´s business are skillful pricing of risks, selection of risks and proper risk management. A high quality risk management process is a necessary prerequisite for successful business.
In Sampo Group, the key objectives for risk management are:
- to ensure that risks affecting our profitability and other material risks are identified, assessed and analyzed;
- to ensure that capitalisation - in the form of capital and foreseeable profitability of businesses - is adequate in terms of current risks inherent in business activities and existing business environment;
- to ensure that risk bearing capacity is allocated into different business-areas according to chosen strategies
- to ensure that insurance risks are properly priced and return on investment risks is adequate;
- to limit and mitigate fluctuations in the economic values of group companies; and
- to ensure the overall efficiency, quality, security and continuity of operations.
To meet these objectives, Sampo Group's risk management process includes the tasks described in the figure.
The reporting of Sampo Group is divided into three segments, which are P&C insurance, life insurance and holding. These segments correspond to the legal entities of If P&C, Mandatum Life and Sampo plc respectively.
If P&C and Mandatum Life organise their activities autonomously but in accordance with the Group level risk management principles. The Board of Directors of the parent company defines return and capitalisation targets of the subsidiaries. The risk exposure and capitalisation reports of the subsidiaries are consolidated on Group level on a quarterly basis and reported to the Board and Audit Committee of Sampo plc. Sampo Group's overall corporate governance and system of internal control is described in the Corporate Governance section.
The roles and responsibilities of different governing bodies in Sampo Group and individual subsidiaries are described in more detail in figure "Risk management governance framework in Sampo Group".
The roles and responsibilities of different governing bodies in Sampo Group and individual subsidiaries are described in more detail in Sampo's Annual Report.
Sampo Group's Risk Management Principles were approved by the Sampo plc Board of Directors on 13 February 2013.