Strategy and financial targets

Sampo is an insurance group with operations in the Nordics, Baltics, and the UK. The Group’s strategic focus area is P&C insurance, where it is the Nordic market leader.

Sampo’s P&C insurance strategy is based on disciplined underwriting, strong operational capabilities and customer centricity. Combined with careful risk management, this enables Sampo to deliver attractive margins and strong financial resilience, both of which Sampo considers essential to value creation.

Sampo’s M&A appetite is limited to bolt-on transactions in P&C insurance. When assessing transactions, Sampo looks to add new capabilities, for example, in the form of distribution or technology, rather than pure volume, which can often be achieved more economically and with less risk through organic investments. Valuation plays a central role in the analysis of M&A opportunities.

Sampo believes that good capital management is essential to value creation. The Group has set balance sheet targets that aim to balance resilience with capital efficiency. Ongoing surplus capital generation is mainly distributed through the dividend, which is paid once a year, but this can be complemented with additional capital returns in the form of additional dividends or buybacks should Sampo find itself in an excess capital position.

Sampo Group’s strategic framework and new financial targets for 2021-2023 were presented in more detail at the Capital Markets Day held in February 2021.

Strategy in different areas

Sampo is the leading P&C insurance group in the Nordics with a market share of approximately 20 per cent across the region. Sampo leverages its regional scale, digital capabilities, and unique underwriting culture to attain competitive advantages that allow it to create a superior customer proposition.

The integrated pan-Nordic operating platform that is built within If P&C plays a key role in Sampo’s Nordic P&C insurance strategy. If offers a full range of P&C insurance solutions and services to a broad customer base, from private individuals to large corporate customers.

If's operations are divided into Nordic business areas by customer segments; Private, Commercial, Industrial, and the Baltic. Private is If's largest business area and it is the Nordic market leader in this area with more than three million individual customers. Meanwhile, Commercial insures companies with up to 500 employees. It is also the largest in the Nordic region with approximately 340,000 customers. Industrial is one of the leading insurers for large corporate customers in the Nordic region and it includes approximately 1,500 customers. These customers are companies with annual turnovers of more than EUR 50 million and over 500 employees.

The backbone of If's strategy is focus on underwriting. This involves understanding risk better than its competitors, setting the right prices, and offering the best products and services. In addition, If aims to continuously improve its operational efficiency.

In Denmark, Sampo operates through both If and the Danish insurer Topdanmark, in which Sampo has a 48,9 per cent stake. Topdanmark has a 16 per cent market share in the Danish P&C insurance market and it focuses on the private and SME markets, which also include agricultural businesses. The two business areas, Private and SME, are, broadly speaking, equally split by premium volume. Topdanmark offers a full range of insurance products to private households, with its main products being motor, home, and contents insurance. Topdanmark's more specialised insurance portfolio includes travel, animal, and electronics insurance, as well as change of ownership insurance. With regard to SMEs, Topdanmark serves approximately 110,000 Danish small and medium-sized enterprises and agricultural customers.

In November 2020, Sampo acquired a 70 per cent stake in Hastings, which it increased to 100 per cent in December 2021. Hastings is a digital-only P&C insurer that offers motor and home insurance, mainly through price comparison websites. Hastings has over 3 million customers.

Sampo aims to grow in the UK personal lines P&C insurance market by leveraging Hastings’ already strong competitive position and by further developing this through investments in technology and other operational capabilities. Sampo’s long-term mindset also helps Hastings navigate the volatile UK motor insurance market as its short-term fluctuations often present strategic challenges for less diversified groups.

Hastings benefits from a simple and straightforward business model, digitally focused distribution, and advanced pricing and fraud detection systems and processes. In line with the rest of Sampo Group, the company is focused on prudent underwriting and risk management, which is supported by the extensive use of data.

Financial targets for 2021-2023

P&C insurance operations

  • Ambition to grow underwriting profits by mid-single digit percentage per annum on average from the 2020 level, excluding COVID-19 effects
  • Group combined ratio below 86 per cent
  • If P&C combined ratio below 85 per cent
  • Hastings operating ratio* below 88 per cent & calendar year loss ratio** below 76 per cent

*) Calculation formula: (claims + operating expenses + operational D&A)/net revenue excluding investment income
**) Consistent with historical Hastings disclosures, equivalent to If risk ratio.


Group capital management

  • Solvency II ratio 170–190 per cent
  • Financial leverage* below 30 per cent
  • Dividend payout ratio of at least 70 per cent of net profit excluding extraordinary items
  • Progressive regular dividend**
  • Return excess capital to shareholders

*) Calculation formula: financial debt/(financial debt + IFRS equity)
**) Formerly insurance dividend