Market overview

Sampo Group operates in the insurance sector in Finland, Sweden, Norway, Denmark, Estonia, Lithuania, Latvia and the United Kingdom.

P&C insurance markets

Property and casualty insurance (or non-life insurance) is a collective term that is used for property insurance, liability insurance, reinsurance, and accident and sickness insurance.

In other words, it refers to insurance that protects against physical or economic damage. P&C insurance covers various risks and uncertain events that may cause damage to the property of an individual. Typical examples of P&C insurances include household, homeowner, motor, and accident insurance. Supplementary insurances include travel, marine, forest, and livestock insurance. When determining premium costs, the insurance companies must price in both known and unknown (emerging) risks, and also be able to price in these risks accurately in what is a competitive insurance market.

Megatrends in P&C insurance

The P&C insurance sector is increasingly relying on robotic process automation (RPA) and artificial intelligence (AI). In particular, the underwriting procedure is being transformed by automated processes and new technologies that help with regard to accelerating operations and supporting growth by improving both risk assessment accuracy and pricing precision. Automation is also assisting the development of data-driven strategies, which contribute to improving profitability and competitive advantage.

Source: Capgemini 2023

For P&C insurers that are making increased use of advanced technologies, cybersecurity is essential to ensure the protection of customer data. As insurance companies manage confidential customer data, they represent attractive targets for those conducting cyberattacks. In response to this threat, insurers are continuously investing in modern technologies and developing cybersecurity processes to prevent any data security threats. They are also improving their strategies regarding both protecting and encrypting data and regularly updating their security protocols. These measures are critical for insurers in terms of maintaining customer confidence and reducing financial risks.

Source: Capgemini 2023

As the very important issue of climate change has raised huge concerns across our planet, the transition to environmental consciousness is also reshaping the P&C insurance field. Recent research showed that 44 per cent of insurance executives have highlighted climate risk as a primary concern for profitability and insurability, while more than 65 per cent of customers have expressed an interest in climate risk prevention and mitigation services. As global economic losses from climate change continue to surge, insurers are having to adapt to a new landscape. This shift involves re-evaluating business models to align risk prevention, integrating environmental, social, and governance (ESG) principles into strategies, collaborating with investors for sustainable investments, and driving behavioural change by providing more green product offerings.

Source: Capgemini 2022 & 2023 

In response to evolving risk landscapes shaped by volatile geopolitics, climate change, and rapidly advancing technologies, many customers have become more interested in safeguarding against potential risks. As a result, there has been an increased demand for risk analysis, benchmarking, and mitigation consultation. These resilience services help customers to take recommended actions to mitigate risks and, in turn, reduce paid claims.

Source: Capgemini 2023

P&C insurance companies are increasingly replacing traditional manual methods by using advanced imaging and video technology in loss adjustment and underwriting. New technologies have helped to reduce claims settlements from days to just hours by significantly expediting the first notice of loss (FNOL), minimising adjuster exposure to hazards and accidents during inspections, as well as significantly reducing staffing costs.

Source: Capgemini 2023

Nordic P&C insurance markets

The Nordic insurance market is in many ways a special market and it is considerably different from the rest of the European insurance markets. The Nordic P&C insurance market is relatively concentrated, which means that a fairly small number of major insurers have a large share of the Nordic P&C insurance market. Many insurance companies have developed inter-Nordic corporate structures. One reason for this is the goals of the insurance companies to derive benefits from the similarities that exist in the Nordic insurance markets and their regulatory frameworks.

Nordic market shares

The four largest P&C players account for approximately 70 - 90 per cent of the various markets in Norway, Finland, and Sweden. Conversely, the market is less concentrated in Denmark. The largest insurance companies are often established in more than one Nordic country. Whilst the competitive situation is largely unchanged, it varies somewhat across the Nordic countries and the different product lines.

Chart: Nordic market shares, 2022

Premiums by country

In the Nordic region, customer retention levels are high, with renewal rates of approximately 80 - 90 per cent. Furthermore, the market is also characterized by positive macroeconomic development and low expense ratios in the range of 15 - 20 per cent, which means that the P&C insurance companies are very efficient. The internet penetration is high in the Nordic market. Nordic P&C market is also characterized by low combined ratios.

Chart: Premiums by country, 2022

Premiums by insurance class
Nordics, 2022

The Nordic P&C market has grown steadily over recent years with the average market growth since 2005 amounting to 3 per cent. The biggest insurance class in the Nordic P&C insurance markets is motor vehicle insurance. In the Nordic countries, the motor vehicle insurance class consists of compulsory motor vehicle insurance as well as complementary motor vehicle insurance.

Chart: Premiums by insurance class in Nordics, 2022