January-March 2025 results - Q&A

Sampo Group had a strong start to the year 2025 with continued robust top-line growth and favourable claims environment driving underwriting result growth during the first quarter.

Gross written premiums (GWP), including brokerage income, increased to EUR 3,616 million (3,297) and insurance revenue grew to EUR 2,188 million (2,020). The underwriting result came in at EUR 336 million (260) and the group combined ratio amounted to 84.6 per cent (87.1).

Profit before taxes was EUR 377 million (465), while operating EPS increased to EUR 0.11 (0.10).

Following the strong first quarter performance, the outlook for 2025 underwriting result has been increased to EUR 1,400–1,500 million from EUR 1,350–1,450 million, representing 6-14 per cent growth year-on-year. In addition, the outlook for 2025 insurance revenue was raised to EUR 8.8–9.1 billion from EUR 8.7–9.0 billion, implying growth of 5–9 per cent year-on-year.

Gross written premiums and insurance revenue include broker revenues. Net profit for the comparison period refers to Net profit for the equity holders. Per share figures for the comparison period are adjusted for the share split in February 2025. The figures in this report have not been audited.

Private Nordic enjoyed a very strong top-line growth of 8.5 per cent on a currency adjusted basis. What drove this?

Private Nordic was firing on all cylinders in Q1. The growth was supported by high and slightly improved retention and continued strong momentum in growth areas such as personal insurance, property and digital sales. In addition, motor saw solid growth, partly helped by early signs of recovery in Nordic new car sales. Geographically, growth was particularly strong in Norway, which saw 17 per cent top-line growth.

Private UK saw a top-line growth of 26 per cent on a constant currency basis. What where the key drivers behind this?

The growth in Private UK was driven by increase in new customer policies and good renewal volumes. Live customer policies grew by 17 per cent year-on-year and by 5 per cent from the end of 2024, driven by positive development across all products. In total, the policy count increased by 210,000 policies to over 4 million.

Within motor, growth was focused towards bike, van and telematics. Motor policies that use telematics have been benefiting from new technology that allows insurance companies to measure customers’ driving performance. This enables better risk assessment and pricing, and reduces cost of cover for good drivers.

Top-line growth in Nordic Industrial was flat despite price increases in connection with 1 January renewals. Why is that?

In Nordic Industrial, we had a strong outcome on renewals with high-single digit price increases, which allowed us to continue our opportunistic de-risking actions to reduce exposures to large properties. This led to some loss of volume in Q1, but it is expected to improve underwriting result stability.

What were the key drivers behind the 30 per cent underwriting result growth on a currency adjusted basis?

The underwriting result was supported by continued strong top-line growth and positive underlying trends, but it was the favourable claims environment that made the biggest impact compared to prior year.

In the Nordics, Norway saw a proper winter with some local weather events, but all the other countries benefitted from benign winter conditions, in a stark contrast to the very harsh winter in the prior year comparison period. In addition, the large claims outcome came in better than budget. As a result, severe weather and large claims had a positive effect of 1.5 percentage points on the Group’s Nordic risk ratio, whereas the comparison period saw a negative effect of 4.2 percentage points.

The group combined ratio improved to 84.6 per cent (87.1), and combined with strong growth, led to an underwriting result growth of 30 per cent on a currency adjusted basis and 29 per cent on a reported basis.

How did claims inflation develop in Sampo’s core markets?

In the Nordics, claims inflation remained stable at around 4 per cent. In the UK, claims inflation continued to tick down from the high-single digit levels at the end of 2024 and has now fallen back into the long-term range of mid-single digit percent.

What kind of impact could the potential US tariffs have on claims inflation?

It’s very difficult to speculate as the situation seems to change almost on a daily basis. However, we are not materially reliant on supply chains involving the US. In addition, we usually have long-term agreements with the contractors, suppliers and repair shops, which provides us time to monitor the situation and make adjustments to pricing if needed.

What drove the 62 per cent decrease in net financial result?

The big swing in net financial result was primarily driven by softer net investment income compared to the prior year. Last year, the investment portfolio benefitted from a strong equity market performance, translating into EUR 122 million net gains from equities. The year 2025 had a solid start but the good momentum faded towards the end of the quarter due to concerns on US tariffs. As a result, the investment portfolio saw mark-to-market net losses of EUR -24 million from equities. Meanwhile, the fixed income portfolio kept providing stable interest income of EUR 124 million.

The estimated run-rate synergies from the Topdanmark integration were increased to EUR 140 million in 2028 from EUR 95 million (pre-tax). Where will the new synergies come from?

Following the completion of the exchange offer for Topdanmark in October 2024, we now have a full insight into the business that enabled more detailed assessment of the synergy potential. The increase comes from higher than originally expected cost synergies, particularly related to IT transformation, while the estimate for revenue synergies remains unchanged.

As a result of higher cost synergies, we also raised the operational ambition for the Nordic operating cost ratio reduction to 40 basis points annually from the around 20 basis points set at the Capital Markets Day in March 2024.

Sampo raised its underwriting result outlook for 2025 right after Q1. Did the initial outlook turn out to be too conservative already in the beginning?

The increase in outlook was mainly driven by favourable claims experience in Q1, and to a lesser degree, higher Topdanmark synergies in 2025. The outlook for Q2-Q4 remains fairly unchanged, expect higher Topdanmark synergies, with no material change in conservatism over Q1.

What is the status on buybacks?

A new buyback programme is expected to be launched later in 2025, as communicated in connection with the full-year 2024 results. We will give an update on this no later than with our second quarter 2025 results.