Underwriting risks

Underwriting risks are priced to reflect their inherent risk levels. Furthermore, the related risk exposures are adjusted continuously and their impact on the capital need is assessed regularly. Successful management of underwriting risks is the main source of earnings for Sampo Group companies.  Day-to-day management of earnings risks, i.e. maintaining them within given limits and authorizations is the responsibility of the business areas.

Sampo Group conducts property and casualty insurance operations in a geographically diverse area in the Nordic and Baltic countries as well as in the United Kingdom. In the Nordic and Baltic countries, Sampo Group offers a full range of insurance solutions and services to private and corporate customers with Nordic corporate customers having global operations also being served by branch offices in France, Germany, the Netherlands and in the United Kingdom as well as through internationally operating partners. In the United Kingdom, Sampo Group offers motor and home insurance solutions solely to private customers using digital distribution channels such as price comparison websites. Sampo Group’s underwriting business is thereby well diversified across different countries, lines of business and customer segments.

Sampo Group’s most significant reserve risks are higher than expected claims inflation, increased retirement age, increased life expectancy and the occurrence of severe claims caused by catastrophic events, such as natural catastrophes like windstorms or floods. The risks stemming from the higher than expected claims inflation, increased retirement age and increased life expectancy are managed by monitoring the levels of reserves within the Sampo Group and ensuring that the reserve levels comply with the internal and regulatory guidelines. The risks related to the occurrence of severe claims caused by catastrophic events are mitigated by having a well-diversified underwriting portfolio and a group-wide and a properly assessed reinsurance program in place. The reinsurance programme is partly modelled by the approved Sampo Group Partial Internal Model. The actuarial functions within the Sampo Group continuously monitor the reserve levels within the Sampo Group and develop methods and systems to support the reserve risk monitoring processes.

Over time, adverse macroeconomic effects, potentially also following economic policy actions or geopolitical risks, could also have an impact on Sampo’s operational business, for example by reducing economic growth or increasing claims costs.

More up-to-date information on the major risks and uncertainties for Sampo Group in the near-term: Outlookinternal link