CONTENTS
REPORTS FOR THE YEAR 2020
WWW.SAMPO.COM/YEAR2020
Board of Directors’ Report for 2020 ............... 3
SampoGroup ............................................................ 4
EconomicEnvironment............................................. 7
EectsofCOVID-onSampoGroup ..................... 8
If .......................................................................... 9
Topdanmark ........................................................ 9
Hastings .............................................................. 9
Mandatum Life ..................................................10
Investment Activities ........................................10
Solvency Positions ............................................10
BusinessAreas ........................................................ 11
If ........................................................................ 11
Topdanmark ......................................................13
Hastings ............................................................14
Nordea ..............................................................14
Mandatum Life ..................................................15
Holding ..............................................................17
OtherDevelopments...............................................18
Disposal of Nordea Shares ................................ 18
Hastings Acquisition .........................................18
GovernanceandRelatedIssues .............................. 21
Changes in Group Management ....................... 21
Governance .......................................................23
Annual General Meeting ....................................23
Corporate Responsibility ..................................24
Personnel ..........................................................25
Remuneration ....................................................25
Risk Management ..............................................27
SharesShareCapitalandShareholders .................28
Shares and Share Capital ..................................28
Authorizations Granted to the Board ...............30
Shareholders .....................................................30
Holdings of the Board and
Executive Management .....................................32
FinancialStanding ..................................................33
Internal Dividends .............................................33
Ratings ..............................................................33
Solvency .................................................................34
Group Solvency .................................................34
Solvency Position in the Subsidiaries ...............34
Debt Financing ..................................................35
Outlook ..................................................................36
Outlook for 2021 ...............................................36
The Major Risks and Uncertainties for
the Group in the Near-term .............................36
Dividends ...............................................................37
Dividend Proposal .............................................37
KeyFigures .............................................................38
Calculation of the Key Figures .......................... 41
Group’s IFRS Financial Statements .............43
StatementofProfitandOtherComprehensive
IncomeIFRS .......................................................... 44
ConsolidatedBalanceSheetIFRS .........................45
StatementofChangesinEquityIFRS ....................46
StatementofCashFlowsIFRS ..............................47
Group’s Notes to the Accounts .......................48
SummaryofSignificantAccountingPolicies ........ 49
SegmentInformation ........................................ 67
MaterialPartly-OwnedSubsidiaries .................... 74
BusinessCombinations ..................................... 76
NotestotheIncomeStatement– .................. 78
Sampo plc’s Financial Statements ............. 185
Sampoplc’sIncomeStatement ........................... 186
Sampoplc’sBalanceSheet .................................. 187
Sampoplc’sStatementofCashFlows ................ 188
Sampo plc’s Notes to the Accounts ........... 190
SummaryofSignificantAccountingPolicies ....... 190
NotestotheIncomeStatement– .................... 190
NotestotheAssets– ....................................... 191
NotestotheLiabilities– .............................. 192
NotetotheIncomeTaxes ............................... 193
Notes to the O-Balance Sheet Liabilities and
Commitments 15–16 .............................................. 194
NotestotheStaandManagement– ......... 194
NotetotheSharesHeld .................................. 195
Approval of the Financial Statements
and the Board of Directors' Report ...........196
Auditor’s Report ........................................... 197
BOARD OF
DIRECTORS’ REPORT
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF DIRECTORS’ REPORT AND FINANCIAL STATEMENTS 2020 2
BOARD OF DIRECTORS’ REPORT
Sampo Group .................................................... 4
Economic Environment ................................. 7
Effects of COVID-19 on Sampo Group ......... 8
If ................................................................................ 9
Topdanmark .............................................................. 9
Hastings .................................................................... 9
MandatumLife ........................................................10
InvestmentActivities ..............................................10
SolvencyPositions .................................................. 10
Business Areas ............................................... 11
If .............................................................................. 11
Topdanmark ............................................................ 13
Hastings ..................................................................14
Nordea ....................................................................14
MandatumLife ........................................................ 15
Holding ...................................................................17
Other Developments ..................................... 18
DisposalofNordeashares ...................................... 18
HastingsAcquisition ...............................................18
Governance and Related Issues .................. 21
ChangesinGroupManagement ............................21
Governance .............................................................23
AnnualGeneralMeeting .........................................23
CorporateResponsibility ........................................24
Personnel ................................................................25
Remuneration ........................................................25
RiskManagement ...................................................27
Shares, Share Capital and Shareholders ... 28
SharesandShareCapital ........................................28
AuthorizationsGrantedtotheBoard .....................30
Shareholders ...........................................................30
Holdings of the Board and Executive Management ..32
Financial Standing ......................................... 33
InternalDividends ...................................................33
Ratings ....................................................................33
Solvency ........................................................... 34
GroupSolvency ................................................ 34
Solvency Position in the Subsidiaries .....................34
DebtFinancing .......................................................35
Outlook ............................................................36
Outlookfor .....................................................36
TheMajorRisksandUncertaintiesfor
theGroupintheNear-term ....................................36
Dividends ........................................................ 37
DividendProposal ..................................................37
Key Figures ...................................................... 38
CalculationoftheKeyFigures ................................41
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
3BOARD OF DIRECTORS’ REPORT 2020
Sampo Group’s largest business area If had an extremely
strong year 2020 in all respects. The combined ratio for
the full-year 2020 was 82.1 per cent (84.5). This is the
strongest combined ratio If has ever reported. Because of
the impairment loss of EUR 899 million and the sales loss
of EUR 262 million on Nordea shares, Group’s reported
profit before taxes for 2020 decreased to EUR 380 million
(1,541). Without the extraordinary items relating to the
Nordea holding, the profit before taxes would have been
EUR 1,541 million for 2020 and EUR 1,696 million for
2019. The total comprehensive income for the period,
taking changes in the market value of assets into account,
amounted to EUR 434 million (1,565).
The earnings per share were EUR 0.07 (2.04) and marked-
to-market earnings per share were EUR 0.65 (2.63).
The earnings per share excluding the Nordea-related
extra ordinary items were EUR 2.16 per share (2.31). In
accordance with the dividend policy, this figure has been
used as basis when calculating the dividend proposal.
The return on equity for the Group amounted to 3.1 per
cent (12.0) for 2020. The net asset value per share on 31
December 2020 was EUR 19.82 (20.71).
Sampo plc’s Board of Directors has today, after applying
management judgement, decided to impair the book
value of Nordea to EUR 7.50 per share from EUR 8.90 per
share in Sampo Group’s consolidated accounts at the end
of December 2020.
Sampo plc’s Board of Directors has proposed to the
Annual General Meeting to be held on 19 May 2021 a
dividend of EUR 1.70 per share (1.50). The proposed
dividend payment amounts in total to EUR 944 million
(833).
If segment’s profit before taxes rose to EUR 901 million
(884) and insurance technical result improved to EUR
811 million (685). The return on equity remained at a
high level at 33.3 per cent (34.5). Premiums grew in all
business areas in the Nordics amounting to almost 5 per
cent with fixed currencies. If paid a dividend of SEK 6.3
billion (approximately EUR 600 million) to Sampo plc in
December 2020.
Topdanmark segment’s profit before taxes for 2020 was
EUR 167 million (238). The combined ratio amounted to
85.2 per cent (82.1) in 2020. The expense ratio was 16.2 per
cent (16.0). The Board of Directors of Topdanmark will
recommend to the AGM on 25 March 2021 that in total a
dividend of DKK 20 per share will be paid. If approved,
Sampo plc’s share of the dividend payment is EUR 113
million.
Sampo announced on 5 August 2020 that the company
and Rand Merchant Investment Holdings (RMI) had
made a recommended cash offer, through a jointly owned
company, to acquire all issued and to be issued shares
in Hastings Group Holdings Plc not already owned by
Sampo and RMI.
Sampo holds 70 per cent of Hastings Group (Consolidated)
Limited, which became Sampo plc’s subsidiary and forms
a separate segment in the Group’s financial reporting as
of 16 November 2020. The consolidated last six weeks of
2020 comprise a number of one-off expense items.
Board Of Directors’ Report For 2020
Sampo Group
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
4BOARD OF DIRECTORS’ REPORT 2020
Sampo’s share of Nordea’s net profit for 2020, excluding
the accounting impacts of the sale of Nordea shares in
November 2020 and the impairment of the holding in
Sampo Group’s consolidated accounts 2020, amounted
to EUR 429 million (290). The reported loss after these
measures was EUR -734 million (290). Nordea is progress-
ing well towards meeting its 2022 financial targets.
On 4 February, Nordea’s Board proposed a dividend of
EUR 0.39 per share for 2020. In addition, the Board will
decide on 18 February to distribute EUR 0.07 per share as
the first instalment of the delayed 2019 dividend of EUR
0.40 per share. The Board also proposes that the Annual
General Meeting authorize it to pay out the remaining
part of the 2019 dividend (EUR 0.33 per share) and the
2020 dividend (EUR 0.39 per share) – a total of EUR
0.72 per share – after September 2021, in line with the
European Central Bank recommendation. Sampo plc’s
share of the proposed dividend payments is EUR 508
million.
Profit before taxes for segment Mandatum was EUR
154 million (280). The reserves related to the higher
guarantees of 4.5 and 3.5 per cent decreased by EUR 268
million to EUR 1.9 billion at the end of 2020. Mandatum
Life has supplemented the discount rate reserve and the
rate used for 2021 - 2023 is 0.25 per cent. This had a nega-
tive impact of EUR 77 million on the result. The return on
equity amounted to 14.4 per cent (23.5). Mandatum Life’s
Board proposes a dividend of EUR 200 million to Sampo
plc in February 2021.
Sampo Group’s total investment assets, excluding
Topdanmark’s life insurance assets, on 31 December 2020
amounted to EUR 22.6 billion (21.8), of which 78 per cent
was invested in fixed income instruments (76), 14 per cent
in equities (16) and 8 per cent in other assets (8). If’s share
of assets was 49 per cent (50), Topdanmark’s 13 per cent
(13), Hastings’s 4 per cent, Mandatum Life’s 25 per cent
(26) and Sampo plc’s 9 per cent (11).
Sampo Group’s equity as at 31 December 2020 amounted
to EUR 11,418 million (11,908), excluding the minority
share of EUR 840 million (635). The main changes in the
equity were the dividend payment of EUR 885 million
reducing the equity and the comprehensive income for
the year of EUR 322 million increasing it.
Sampo Group’s Solvency II capital ratio at the end of 2020
was 176 per cent (174) and the Group solvency amounted
to EUR 4,308 million (4,513).
Sampo Group will issue a report on non-financial
information in accordance with Chapter 3a, Section
5 of the Accounting Act. A separate report, Corporate
Responsibility Report 2020, will be published in May 2021.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
5BOARD OF DIRECTORS’ REPORT 2020
Exchange Rates Used in Reporting
- - - - - -
EURSEK
Income statement
(average)
Balance sheet
(at end of period)
DKKSEK
Income statement
(average)
Balance sheet
(at end of period)
NOKSEK
Income statement
(average)
Balance sheet
(at end of period)
EURDKK
Income statement
(average)
Balance sheet
(at end of period)
EURGBP
Income statement
(average)
Balance sheet
(at end of period)
Key Figures
Sampo Group, 2020
EURm Change
Profit before taxes
*)
-
If
Topdanmark -
Hastings - - -
Associates
*)
- -
Mandatum -
Holding(exclAssociates) - - -
Profit for the period -
Earnings per share, EUR -
EPS (without eo. items) EUR -
EPS (based on OCI) EUR -
NAV per share, EUR -
Average number of sta (FTE)
Group solvency ratio, %
RoE, % -
*)
The reported loss related to the sale of Nordea shares in November 2020 and the impairment of
Nordea holding made in the consolidated Group accounts 2020, together EUR 1,161 million is included
in the 2020 figure. The comparison figure includes a valuation loss of EUR 155 million related to Nordea
shares.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
6BOARD OF DIRECTORS’ REPORT 2020
The global economy is expected to have shrunk by 3.5 per
cent in 2020, primarily due to the shock caused by the
COVID-19 pandemic. While some areas of the economy
continue to be depressed, others have weathered the
crisis relatively well. The sectors most negatively affected
by the shock have been those dependent on in-person
spending and sectors dependent on international travel
and tourism. In contrast, some of the sectors that have
shown resilience – or even gained from the crisis – have
been areas of the economy linked to manufacturing and
the digital economy, such as the technology and online
retail sectors. Going forward, much will depend on the
pace of the rollout of vaccines and the effectiveness of
coordinated monetary and fiscal policy responses.
Following the setbacks of 2020, the Nordics are on track
towards recovery. While the second wave of the pandemic
is still hindering the recovery, vaccines and the summer
are expected to bring long-awaited relief and a prospect
of a return to normal. Compared to most other European
countries, the Nordics have been among the most resilient
in withstanding the crisis. The contraction of GDP is
expected to have been much smaller than in most other
countries as a consequence of favourable export composi-
tion and smaller exposure to tourism related shocks.
In Finland, the economy is expected to have contracted
by 3.0 per cent in 2020, although the 2021 growth forecast
of 3.0 per cent will put the economy on track to pare most
of the losses towards the end of the year. As is the case
with the other Nordic countries, the developments in the
economy will largely depend on the pace of reopening
sectors affected by COVID-19 restrictions. As long as
the service sector is able to reopen, Finland’s economic
recovery this year will be robust. Private consumption,
boosted by recovering employment, will act as a driver
for growth. Exports and investments will benefit from
the global economic recovery, while the increased levels
of public debt present budgetary challenges moving
forward.
In Sweden, the economy is expected to have contracted
by 2.9 per cent in 2020, yet grow by a solid 4.0 per cent in
2021. Similar to Finland, the first quarter of 2021 is likely
to be challenging for the Swedish economy due to rising
COVID-19 infection rates and tighter restrictions. How-
ever, the growth rate is expected to pick up towards the
end of the year driven by pent-up demand, revitalisation
of export markets and positive spill over effects stemming
from fiscal policy measures taken across the globe. The
Riksbank is likely to keep its rates unchanged at zero and
continue its asset purchases to support the recovery. The
low interest rate environment has kept borrowing costs
down and has been one of the key factors in driving up
house prices to record levels.
In Norway, the economy is expected to have contracted
by 3.4 per cent in 2020 and expand by 2.7 per cent in
2021, putting the Norwegian economy on track to reach
pre-crisis GDP levels in early 2022. The Norwegian
economy has already regained most of the ground lost
during the initial COVID-19 shock in March last year,
during which mainland activity shrunk by a massive 14
per cent. The unemployment rate has already recovered
back to 4 per cent from the crisis high of 10 per cent and is
likely to continue to recover further in 2021. House prices
are likely to retain their upward momentum in the first
half of 2021 before gradually slowing down. Higher oil
prices and signals from the Norges Bank of upcoming rate
hikes will contribute to a stronger NOK going forward.
In Denmark, the economy is expected to have contracted
by 3.7 per cent in 2020, and the growth projection of 2.5
per cent for 2021 is more modest compared to Denmark’s
Nordic peers. However, Denmark’s public finances have
stayed relatively stable due to increased tax revenue from
returns on pension investments and actual stimulus
spending being noticeably smaller than the funds
allocated to the package. In 2021, the economic upswing
will be initially driven by rising private consumption
supported mainly by a sharp pick-up in the housing
market and accumulated savings. Later in the year,
Denmark’s key export markets are likely to grow, bringing
GDP back to pre-crisis levels in 2022.
Economic Environment
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
7BOARD OF DIRECTORS’ REPORT 2020
Year 2020 will be remembered for the COVID-19 pandemic
and its effects on society, economy, businesses and the
lives of ordinary people. Despite the turbulence, Sampo
Group’s insurance operations continued their good
performance.
When the COVID-19 pandemic hit the Nordic countries
in the first quarter of 2020, priority in Sampo Group was
given to maintaining service level and to supporting
customers in the best possible way in the changed
working conditions. The safety of customers and person-
nel has been ensured through following the instructions
and recommendations given by the local authorities and
by utilizing digital technology.
A large majority of Sampo Group’s personnel has been
working remotely since mid-March. After the summer, a
gradual opening of offices was initiated within the limits
set by social distancing recommendations by authorities
but the return to the office was stopped after the pan-
demic surged again in Europe. As COVID-19 infection
rates increased drastically in Northern Europe during
October and November, Sampo’s subsidiaries adapted
to the tighter restrictions and the share of employees
working from home increased further. At the end of the
fourth quarter 80–95 per cent of If employees and the vast
majority of the employees of Sampo’s other subsidiaries
worked remotely as well.
Despite the challenging situation, all the subsidiaries
have been able to offer normal service level and customer
satisfaction has remained at a high level, in Mandatum Life
the customer satisfaction even reached a new record high.
There have been no COVID-19 related lay-offs among
Sampo Group personnel and none of the group companies
has required any government funding support during the
COVID-19 pandemic.
Sick leave and personnel turnover were lower during the
COVID-19 crisis than before the crisis. During 2020 If’s
sick leave figures improved from 3.3 per cent to 3.0 per
cent and personnel turnover fell from 11.6 per cent to 10.1
per cent. In Mandatum, the turnover decreased from 11.3
per cent to 8.1 per cent.
The Group is prepared for an extended period of remote
work and an eventual return to normality will be slow and
gradual and even long term we expect the share of remote
and digital work to be substantially higher than before the
pandemic. We are working very actively to prepare for the
new situation.
Eects of COVID-19 on Sampo Group
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
8BOARD OF DIRECTORS’ REPORT 2020
If
Claims cost for 2020 was negatively impacted from travel
insurance policies primarily following imposed travel
restrictions from governments due to COVID-19. At the
end of the reporting period, the total number of reported
claims amounted to approximately 50,000 claims
corresponding to a gross claims cost of EUR 35 million,
mostly in BA Private and Norway. For this event, If had a
reinsurance cover with a net retention of approximately
EUR 10 million.
Government restrictions and in general low activity level,
especially during the second quarter, had a positive effect
on claims frequency. The situation varied somewhat
during the third and fourth quarter, but positive effects
continued throughout the year, affecting especially motor
insurance. The effect of COVID-19 on If’s risk ratio was
approximately 4 percentage points positive in the fourth
quarter and approximately 3 percentage points for the
full year. Going forward repair costs might increase due
to a lack of material, delays in transportation of material
or shortage of personnel following implemented govern-
ment travel restrictions.
During the fourth quarter premium volume was slightly
impacted by the COVID-19 situation, primarily by
travel insurance in Private business and with continued
negative impact related to decommissioning of vehicles
and lower sums insured in the Commercial segment, but
as a whole the effects were not very significant. There
is still some uncertainty with regard to possible lagging
effects to premiums through, for example, lower insurable
sums and lower turnover in the corporate segments.
Topdanmark
Topdanmark has reported on the impacts of the COVID-19
pandemic in its announcement of 2020 annual results
published on 22 January 2021. The report is available at
www.topdanmark.com.
Hastings
Overall, motor claims frequencies reduced during the
year, reflecting reduced motor vehicle usage following
national and local restrictions resulting from COVID-19.
Claim severities increased due to interruptions in the
repair networks and supply of parts caused by COVID-19
and increased car rental costs, with repairs typically
taking longer than anticipated.
Hastings does not provide insurance for any business
lines which have been negatively impacted by COVID-19,
such as travel or business interruption.
Significant actions have been taken to support customers,
colleagues and the community throughout the pandemic,
including premium reductions, the waiving of fees and
charitable donations. The Group has continued to employ
all colleagues on full salaries during the pandemic.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
9BOARD OF DIRECTORS’ REPORT 2020
Mandatum Life
The COVID-19 virus created a short-term shock in capital
markets in March 2020. The unusual situation caused
Mandatum Life to change its focus from new sales to
existing customers for several months starting from spring
and this, together with the uncertain capital market
situation, was reflected in the premium income in 2020
as premiums did not quite meet the record level of the
comparison year.
The volatility of claims costs did not differ from the
normal level. All in all, looking at the entire year of 2020,
the COVID-19 related impacts on the company’s business
remained small.
Investment Activities
A strong sell-off took place in the capital markets after the
outbreak of the pandemic crisis in March and resulted in
negative returns across asset classes. Listed equities and
high yield credit were the worst hit asset classes. However,
swift monetary responses by central banks and govern-
ments helped to stabilize the financial markets during
the second quarter. Leading equity indices rebounded
strongly and credit spreads on bonds narrowed.
Sampo Group companies have enjoyed good investment
returns since the second quarter of 2020 and as the
market did not expect any major shocks in the third
quarter, Sampo Group achieved a positive investment
return by the end of the summer.
In the fourth quarter, particularly in November and
December, good news about the COVID-19 vaccines and
continued central bank stimulus sparked strong increases
in equity values. While equity portfolios brought the
best investment returns, fixed income investments also
generated a solid return in the fourth quarter, which
gave Sampo a good opportunity to cautiously repatriate
investment profits. Looking at the Group’s total invest-
ment result reported for 2020, a significant portion of the
very good returns came during the last few months of the
year.
Solvency Positions
The solvency positions of Sampo Group and its subsidiaries
were strong at the end of 2020. More information is
available in the section Solvency.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
10BOARD OF DIRECTORS’ REPORT 2020
Business Areas
If
If is the leading property and casualty insurance company
in the Nordic region, with insurance operations that
also encompass the Baltic countries. The P&C insurance
group’s parent company, If P&C Insurance Holding Ltd, is
located in Sweden, and the If subsidiaries and branches
provide insurance solutions and services in Finland,
Sweden, Norway, Denmark and the Baltic countries. If’s
operations are divided into four business areas: Private,
Commercial, Industrial and Baltic.
The profit before taxes for 2020 for the If segment
amounted to EUR 901 million (884). The total comprehen-
sive income for the period after tax was EUR 866 million
(836).
The combined ratio for 2020 improved to 82.1 percent
(84.5) and the risk ratio to 60.7 per cent (62.7). The cost
ratio was 21.5 per cent (21.8). The effect of COVID-19 on
the combined ratio was approximately 3 percentage
points positive in January-December 2020 and 4 percent-
age points in the fourth quarter.
In 2020 EUR 186 million (190) was released from the tech-
nical reserves relating to prior year claims. The return on
equity was 33.3 per cent (33.4) and the fair value reserve
on 31 December 2020 amounted to EUR 557 million (457).
Results
If, 2020
EURm Change
Premiums, net
Net income from investments -
Other operating income
Claims incurred - - -
Change in insurance liabilities - -
Sta costs - -
Other operating expenses - -
Finance costs - -
Share of associates’ profit/loss -
Profit before taxes
Key figures Change
Combined ratio, % -
Risk ratio, % -
Cost ratio, % -
Expense ratio, % -
Return on equity, % -
Average number of sta (FTE)
The technical result amounted to EUR 811 million (685)
and the insurance margin (technical result in relation to
net premiums earned) was 18.2 per cent (15.9).
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
11BOARD OF DIRECTORS’ REPORT 2020
Combinedratio Riskratio
Change Change
Private - -
Commercial - -
Industrial
Baltic -
Sweden - -
Norway - -
Finland
Denmark - -
Large claims were EUR 88 million worse than expected in
2020. In BA Commercial, they were EUR 3 million worse
and in BA Industrial EUR 85 million worse than expected.
The claims related to the landslide in Gjerdrum, Norway,
at the end of December 2020 amounted to EUR 18 million.
The Swedish discount rate for the annuity reserves was
-0.72 per cent (-0.77) at the end of 2020 and had a positive
effect of EUR 5 million on the full-year results. The
discount rate used in Finland, was lowered to 0.75 per cent
in the third quarter and had a negative impact of EUR 51
million.
Gross written premiums amounted to EUR 4,823 million
(4,675) in 2020. Excluding the currency effects, premiums
grew 4.7 per cent (5.7) in January – December 2020.
Premiums grew in all markets and business areas.
Within business areas, the growth was highest in BA
Industrial, at 10.4 per cent, followed by BA Commercial
at 4.2 per cent. In BA Private, the growth was 3.7 per cent.
Geographically, premiums grew 10.6 per cent in Denmark,
5.0 per cent in Norway, 4.4 per cent in Sweden and 2.5 per
cent in Finland.
Customer retention continued to be high and stable
across all business areas. The number of customers
increased in all countries.
On 31 December 2020, the total investment assets of If
amounted to EUR 11.0 billion (10.8), of which fixed income
investments constituted 85 per cent (86), money market
3 per cent (2) and equity 12 per cent (12). Net income from
investments amounted to EUR 126 million (229). Invest-
ment return marked-to-market for the full-year 2020 was
2.3 per cent (5.0). Duration for interest bearing assets was
1.4 years (1.3) and average maturity 2.8 years (2.8). Fixed
income running yield without taking into account the FX
hedging cost as at 31 December 2020 was 1.5 per cent (1.8).
If’s solvency position is described in the section Solvency.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
12BOARD OF DIRECTORS’ REPORT 2020
Topdanmark
Topdanmark is Denmark’s second largest non-life
insurance company and it is also one of the country’s
major life insurance companies. Topdanmark has a 16 per
cent market share in non-life insurance and a 11 per cent
market share in life insurance in Denmark. Topdanmark
focuses on the private, agricultural, and SME markets.
The company is listed on the Nasdaq Copenhagen.
At the end of 2020 Sampo plc held 41,997,070 Topdan-
mark shares, corresponding to 46.7 per cent of all shares
and 48.0 per cent of related voting rights in the company.
The market value of the holding was EUR 1,491 million on
31 December 2020.
The Board of Directors of Topdanmark will recommend
to the AGM on 25 March 2021 that a dividend of DKK 1,035
million will be distributed for 2020, representing DKK 11.5
per share. In addition, the Board of Directors will recom-
mend to the AGM that the remaining dividend of DKK 8.5
per share (DKK 765 million) for 2019 will be distributed as
an extraordinary dividend. Given the AGM approval, the
total dividend distributed in connection with the AGM
will be DKK 1,800 million or DKK 20 per share.
Topdanmark’s profit before taxes for 2020 amounted in
Sampo Group’s profit and loss account to EUR 167 million
(238). The combined ratio amounted to 85.2 per cent
(82.1) in 2020. The expense ratio was 16.2 per cent (16.0).
The increase in expense ratio is impacted by high sales
Results
Topdanmark, 2020
EURm Change
Premiums, net
Net income from investments -
Other operating income -
Claims incurred - -
Change in insurance liabilities - - -
Sta costs - -
Other operating expenses - -
Finance costs - - -
Share of associates’ profit/loss -
Profit before taxes -
Key figures Change
Combined ratio, %
Loss ratio, %
Expense ratio, %
Average number of sta (FTE)
through new distribution partner Nordea, and COVID-19
related expenses.
The following text is based on Topdanmark’s full-year 2020
result release published on 22 January 2021.
The profit after tax was better than assumed in the
latest model profit forecast in the third quarter report.
The profit improvement was mainly due to a higher
investment return, run-off profits and a lower level of
weather-related claims in the fourth quarter of 2020 than
assumed.
On motor insurance, the claims trend, adjusted for the
COVID-19 effect, improved due to higher average premi-
ums. The development on motor improved the claims
trend by 0.8 percentage points.
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SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
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Topdanmark’s premiums increased by 3.6 per cent in
non-life insurance and decreased by 1.1 per cent in life
insurance in 2020. The private segment accounted for a
1.3 per cent increase, and the SME segment accounted for
a 6.2 per cent increase. Adjusted for a change in segmen-
tation, premium growth was 2.1 per cent and 5.3 per cent
in the private segment and SME segment respectively.
On 1 October, Sydbank terminated the distribution
agreement with Topdanmark. The termination of the
agreement became effective by the end of 2020. As
Topdanmark has good momentum in new sales and low
churn rates, the terminated distribution agreement with
Sydbank only has a marginal negative impact on the
premium growth in 2021.
Topdanmark’s solvency position is described in the
section Solvency.
Further information on Topdanmark A/S and its
January-December 2020 result is available at
www.topdanmark.com.
Hastings
Sampo plc owns 70 per cent of the shares of Hastings and
the Group started to consolidate the UK insurance group
as a subsidiary as of 16 November 2020. In Sampo Group’s
consolidated accounts Hastings is reported as a separate
segment. Hastings profit and loss items are recognized
line-by-line in the Group’s consolidated financial state-
ments.
During the next seven and half years the annual amortiza-
tion of intangibles will amount to approximately EUR 40
million, i.e. EUR 10 million per quarter. The short period
consolidated in 2020 also contains items which are not
recurring.
Hastings’ agility and digital capability has enabled
operations to continue with minimal interruption despite
the unprecedented disruption to UK society and the
economy as a result of COVID-19. Progress continues on
its strategic initiatives, delivering profitable growth, with
the total number of customer policies growing 8 per cent
to 3.1 million. The growth in customer policies has been
supported by continued strong retention rates throughout
2020. Home insurance customer policies also continue to
grow, up 28 per cent to 0.3 million.
The full year 2020 loss ratio reduced compared to 2019
due to a reduction of claims frequencies resulting from
the lockdown restrictions, partially offset by inflation in
the cost of claims. The reserving position as at 31 Decem-
ber 2020 reflects the increased claims uncertainties
caused by the pandemic.
Hastings continues to build on its digital capabilities,
resulting in more customers choosing to make contact
through the Mobile App. This has had over 1.2 million
downloads to date and customer engagement and
feedback on the App continue to be positive. Hastings’
claims transformation initiatives continue to develop and
progress, with initiatives spanning accidental damage,
third party property damage and bodily injury.
Nordea
Nordea is a leading Nordic universal bank. Nordea
shares are listed on the Nasdaq exchanges in Stockholm,
Helsinki, and Copenhagen. In the context of Sampo
Group’s financial reporting, Nordea is treated as an
associated company and it is included in the segment
entitled ‘Holding’.
On 31 December 2020 Sampo plc held 642,924,782 Nordea
shares corresponding to a holding of 15.87 per cent.
Sampo’s holding decreased 4 percentage points after
Sampo successfully sold 162 million Nordea shares in an
accelerated book-build offering to institutional investors
on 10 November 2020.
The average purchase price per share amounted to EUR
6.46. Nordea’s book value in the Group accounts is, after
AUDITOR’S
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SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
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14BOARD OF DIRECTORS’ REPORT 2020
Results
Mandatum Life, 2020
EURm Change
Premiums written -
Net income from investments -
Other operating income
Claims incurred - - -
Change in liabilities for inv. and ins. contracts - - -
Sta costs - -
Other operating expenses - -
Finance costs - -
Profit before taxes -
Keyfigures Change
Expense ratio, % -
Return on equity, % -
Average number of sta (FTE)
the impairment, EUR 7.50 per share. As disclosed on 11
February 2021, the book value was impaired from EUR
8.90 per share by a decision by Sampo’s Board based on
management judgement. Nordea’s closing price as at 31
December 2020 was EUR 6.67.
Sampo’s share of Nordea’s 2020 profit before taxes,
excluding the accounting impacts of the sale of Nordea
shares on 10 November 2020 and the impairment of the
holding in Sampo Group’s consolidated accounts 2020,
amounted to EUR 429 million (290).
On 4 February, Nordea’s Board proposed a dividend of
EUR 0.39 per share for 2020. In addition, the Board will
decide on 18 February to distribute EUR 0.07 per share as
the first instalment of the delayed 2019 dividend of EUR
0.40 per share. The Board also proposes that the Annual
General Meeting authorise it to pay out the remaining
part of the 2019 dividend (EUR 0.33 per share) and the
2020 dividend (EUR 0.39 per share) – a total of EUR
0.72 per share – after September 2021, in line with the
European Central Bank recommendation.
Further information on Nordea’s full-year results is
available at www.nordea.com.
Mandatum Life
Mandatum Life Group comprises Mandatum Life Insur-
ance Company Ltd., a wholly-owned subsidiary of Sampo
plc, operating in Finland, Estonia, Latvia and Lithuania,
and its subsidiaries. The parent company, Mandatum Life,
is responsible for sales functions and all the functions
required by the Insurance Companies Act. The operating
subsidiaries are Mandatum Life Services Ltd, Mandatum
Life Investment Services Ltd. and Mandatum Life Fund
Management S.A.
The profit before taxes for Mandatum Life in 2020
amounted to EUR 154 million (280). The total comprehen-
sive income for the period after tax reflecting the changes
in market value of assets, was EUR 213 million (308). The
return on equity amounted to 14.4 per cent (23.5).
The expense result increased to EUR 27 million (24). The
risk result increased to EUR 38 million (35).
Premium income on own account was EUR 1,051 million
(1,596), of which unit-linked premiums were EUR 960
million (1,476). In 2019 both premium income and claims
paid included around EUR 400 million one-off items
caused by changes in the tax treatment of life insurance
products.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
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15BOARD OF DIRECTORS’ REPORT 2020
The net investment income, excluding income on
unit-linked contracts amounted to EUR 189 million (358).
The net income from unit-linked contracts was EUR 397
million (908). During 2020 the fair value reserve increased
to EUR 534 million (438).
The total technical reserves of Mandatum Life Group
increased to EUR 12.3 billion (12.0). The unit-linked
reserves increased to highest ever EUR 8.8 billion (8.1) at
the end of 2020. The unit-linked reserves corresponded to
72 per cent (67) of total technical reserves.
The with-profit reserves decreased as planned during
2020 and amounted to EUR 3.5 billion (3.9) on 31 Decem-
ber 2020. The with-profit reserves related to the higher
guarantees of 4.5 and 3.5 per cent decreased by EUR 268
million to EUR 1.9 billion at the end of 2020.
Mandatum Life has overall supplemented its technical
reserves with a total of EUR 218 million (230). The figure
does not take into account the reserves relating to the
segregated fund. The discount rate used for 2021 - 2023
is 0.25 per cent. The new discount rates for years 2022
and 2023 had a negative impact of EUR 77 million on the
result.
The discount rate of segregated liabilities is 0.0 per cent
and the discount rate reserve of the segregated liabilities
amounted to EUR 232 million (263).
The assets covering Mandatum Life’s original with-profit
liabilities at the end of 2020 amounted to EUR 4.6 billion
(4.7) at market values. 49 per cent (46) of the assets were
in fixed income instruments, 9 per cent (15) in money
market, 28 per cent (25) in equities and 14 per cent (14) in
alternative investments. The investment return marked-
to-market for 2020 was 6.5 per cent (9.2). The duration
of fixed income assets at the end of 2020 was 2.7 years
(2.8) and average maturity 2.9 years (2.9). Fixed income
running yield without taking into account the FX hedging
cost was 2.8 per cent (2.4) on 31 December 2020.
The assets covering the segregated fund amounted to
EUR 0.9 billion (1.0), of which 80 per cent (68) was in fixed
income, 9 per cent (13) in money market, 6 per cent (13)
in equities and 5 per cent (4) in alternative investments.
Segregated fund’s investment return marked-to-market
was 1.5 per cent (6.4). On 31 December 2020 the duration
of fixed income assets was 3.1 years (2.8) and average
maturity 3.6 years (3.2). Fixed income running yield
without taking into account the FX hedging cost was 2.1
per cent (1.9).
Mandatum Life’s solvency position is described in the
section Solvency.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
16BOARD OF DIRECTORS’ REPORT 2020
Results
Holding, 2020
EURm Change
Net investment income - -
Other operating income
Sta costs - -
Other operating expenses - -
Finance costs - -
Share of associates’ profit
Valuation/Sales loss associate shares - - -
Impairment loss on Nordea shares - - -
Profit before taxes - -
Keyfigures Change
Average number of sta (FTE)
Including the impairment loss and the sales loss on
Nordea shares, Sampo’s share of profits of associated
companies Nordea and Nordax Holding for January
– December 2020 amounted to, EUR -722 million. The
one-off items excluded, the share of the profits of the
associates was EUR 439 million (298), of which Nordea’s
share was EUR 427 million (290) and Nordax’s share was
EUR 12 million (8).
Holding
Sampo plc owns and controls its subsidiaries engaged in
P&C and life insurance. In addition, Sampo plc held on 31
December 2020 approximately 15.9 per cent of the share
capital of Nordea, the largest bank in the Nordic countries.
Nordea is an associated company to Sampo plc. As of
March 2018 Sampo plc has also treated Nordax Holding AB
(formerly NDX Intressenter AB), of which Sampo plc owns
36.25 per cent, as an associate.
Holding segment’s profit before taxes for January -
December 2020 decreased to EUR -826 million (139),
including two Nordea-related one-off items of EUR
1,161 million. The comparison period includes a EUR
-155 million valuation loss incurred in connection with
distribution of Nordea shares as dividends to Sampo
shareholders in the third quarter of 2019.
After the impairment, Sampo plc’s holding in Nordea was
booked in the consolidated balance sheet on 31 December
2020 at EUR 4.8 billion, i.e. EUR 7.50 per share. The
market value of the holding was EUR 4.3 billion, i.e. EUR
6.67 per share, on 31 December 2020.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
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Other Developments
Disposal of Nordea Shares
On 10 November 2020, Sampo sold 162 million Nordea
shares, 4.0 per cent of the outstanding shares, in an
accelerated bookbuild offering to institutional investors.
The transaction price was EUR 7.25 per share, resulting in
gross proceeds of EUR 1,174 million.
After the transaction, Sampo held 642,924,782 Nordea
shares, corresponding to 15.9 per cent of all shares and
voting rights in Nordea.
Sampo incurred a reported loss of EUR 262 million from
the transaction for the last quarter of 2020. Nordea’s
status as an associated company of Sampo remained
unchanged.
In connection with the offering, Sampo entered into
a lock-up undertaking, under which it has, subject to
certain exceptions, agreed not to sell any Nordea shares
for a period ending at 9 May 2021.
Hastings Acquisition
Sampo and Rand Merchant Investment Holdings (RMI)
announced on 5 August 2020 that they had made a
recommended cash offer, through a jointly owned
company, to acquire all issued and to be issued shares
in Hastings Group Holdings Plc not already owned by
Sampo and RMI.
The offer price was GBp 250 for each Hastings share,
valuing Hastings’ share capital at approximately GBP
1.66 billion or approximately EUR 1.84 billion. The offer
price represents a premium of approximately 37.5 per
cent to the volume-weighted average price of GBp 182 per
Hastings share for the three-month period ended 28 July
2020, the last business day before Hastings announced it
had received an approach from Sampo and RMI.
Sampo and RMI formed a new jointly-owned company for
the purposes of acquiring Hastings. Following completion
of the offer, Sampo and RMI own and control 70 per cent
and 30 per cent respectively of the shares and votes in the
jointly-owned company. Sampo and RMI have entered
into a long-term partnership in relation to Hastings.
The governance of the company reflects the relative
shareholdings of Sampo and RMI, recognizing Sampo’s
controlling position, but protecting RMI’s interest with
customary minority protections. The shareholders
agreement includes customary exit arrangements for joint
investments of this type.
The size of Sampo’s investment, based on its 70 per cent
stake, was GBP 1.16 billion or EUR 1.29 billion valued
at the offer price. Sampo funded the acquisition costs
with EUR 1 billion of hybrid Tier 2 capital issued on 3
September 2020 with the residual amount coming from
existing cash resources.
Strategic Rationale for Acquisition
Sampo has a strategic ambition to expand further into
non-life insurance, a segment where it has extensive
experience and expertise. As part of this strategy, and in
the context of its leading market positions in the Nordic
markets, Sampo has been considering a geographic
expansion beyond its current footprint. Sampo believes
that the UK, as one of the largest retail P&C markets in
Europe, offers an attractive scale opportunity.
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SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
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In this context, the acquisition of Hastings represents an
attractive opportunity for Sampo to advance its strategy
and accelerate its repositioning towards retail P&C
insurance. Hastings is a leading motor insurer in the UK
and has recently been diversifying into other non-life
insurance products including home insurance. Both
motor and home insurance represent large markets in the
UK with growth potential for the Hastings business.
The acquisition of Hastings provides an attractively
positioned platform in one of the most digitally advanced
markets globally. The UK is characterized by its high
levels of digital distribution and Hastings is one of the
leading distributors of motor insurance policies in
this market. Sampo believes that, under its ownership
together with that of RMI, Hastings will be able to further
develop its agile and digital business model to create
long-term value.
Sampo and RMI intend for Hastings to continue to be
operated on a standalone but unlisted basis and the
current management is expected to continue in their
position after the closing of the deal. Sampo believes
that a private partnership with RMI provides an optimal
structure for Hastings to fulfil its potential and build
long-term value for its stakeholders. As a private
company, Sampo believes Hastings will benefit from a
more long-term approach to decision making.
Sampo and RMI believe with their experience and under
private ownership there are a number of areas of Hastings’
operations that can be improved, including claims
handling sophistication, expansion into home insurance,
customer retention and the reinsurance strategy.
Financial Impact of anAcquisition
on Sampo Group
The Sampo Board expects the acquisition of Hastings
to be accretive to earnings per share and RoE from the
first full year following completion. Sampo estimates the
transaction will have a positive impact on earnings per
share in the mid-single digits (%).
Both S&P and Moody’s have maintained Sampo’s credit
ratings with stable outlook. The Sampo Board does not
expect the acquisition to impact Sampo’s dividend policy
in the short-term but is expected to enhance the dividend
potential in the long-term.
Timetable for Transaction
and Consolidation
The offer was recommended by Hastings’ independent
directors. The offer was being implemented by way of a
court-sanctioned scheme of arrangement under English
law, which was approved by the requisite majorities at the
Hastings shareholder meetings on 29 September 2020.
All of the conditions relating to regulatory and antitrust
approvals were satisfied by 27 October 2020 and the
scheme was effective following completion of the Court
Hearing procedure held on 13 November 2020.
The jointly-owned company of Sampo and RMI, currently
known as Hastings Group (Consolidated) Limited, became
Sampo plc’s subsidiary and formed a separate segment in
the Group’s financial reporting as of 16 November 2020.
Hastings’s profit and loss items were recognized line-by-
line in the Group’s consolidated financial statements.
AUDITOR’S
REPORT
SAMPO PLC’S FINANCIAL STATEMENTS
Sampo plc’s Notes to the Accounts
GROUP’S IFRS FINANCIAL STATEMENTS
Group’s Notes to the Accounts
BOARD OF
DIRECTORS’ REPORT
19BOARD OF DIRECTORS’ REPORT 2020