Measurement of Results
Main elements of Sampo Group's consolidated income statement
Sampo Group measures the result of its businesses in a consolidated income statement format. The main income statement items are illustrated below. The relative sizes are determined on the basis of 2010 figures and can be considered indicative. For the latest figures see the consolidated comprehensive income statement, which can be found from Sampo Group's Annual Report.
Sampo Group income statement items explained
Insurance premiums written represents the total volume of insurance payments during the accounting period.
In P&C insurance premiums are recognised in premiums written when the premium is charged. In Life insurance premiums are recognised in premiums written either when the premium is charged, or when the premium has been paid, depending on the type of insurance.
The breakdown of insurance premiums by business area is shown below:
Net income from investments shows the result made through investment activities. It mainly consists of interest earned on debt securities, dividends received, rental income and expenses on real estate investment properties and realised gains and losses on investments.
Net income from investments also includes the investment result from investments related to unit-linked contracts, but the corresponding effect is recognised as an increase in insurance liabilities for unit-linked contracts.
Unrealised gains or losses on the majority of investments are not immediately recognised in the income statement. In stead, they are recognised in equity and only affect profit or loss at the time the investments are sold.
Claims incurred include claims or benefits payments made during the accounting period. It may relate to insured events that have incurred during the period or earlier periods.
It also includes the change in the provision for outstanding claims (i.e. liabilities related to claims already incurred). The provision is intended to cover the anticipated future claims payments and costs of claim settlements.
Change in liabilities for insurance and investment contracts shows the change in the provision for unearned premiums. The provision for unearned premiums is intended to cover anticipated claims costs and operating expenses in the future, often after several years. In P&C Insurance, this is normally calculated on a strictly proportional basis over time. In Life Insurance, various methods are applied involving assumptions on e.g. mortality, morbidity, investment yield and future operating expenses. The provision for unearned premiums generally increases when premiums are written and decreases when claims are paid. The provision may also change when changes are made in actuarial assumptions.
Staff costs include wages and salaries to employees as well as pension and other social security costs.
Other income and expense items include administrative expenses (e.g. rental costs) and depreciation on tangible and intangible assets as well as finance costs and also any items of income that are not included in premiums written or investment income.
Finance costs means interest accrued for outstanding debt instruments and related swaps (CPs and bonds issued). This line also includes mark-to-market changes in the value of aforementioned swaps.
Share of associates’ profits/losses means the share of Nordea’s and Topdanmark’s profits/losses corresponding to Sampo Group’s holding in these companies.
Profit before taxes shows the profit from Sampo's operations before taxes. The breakdown of Sampo Group's profit before taxes by business area is shown below: