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IR Blog

Why invest in Sampo?
IR Blog provides information about Sampo as an investment case and the Group's businesses and markets.

17 December 2019


In this blog entry we answer investors questions collected from different channels. Thank you for the good questions!

How will Sampo create shareholder value over the next ten years?

Sampo creates shareholder value through its profitable businesses. Particularly, in P&C business, digitalization and economies of scale create favorable opportunities for steady improvement trend. Sampo’s ability to participate in mergers and acquisitions remains good.

What are Sampo’s key growth drivers in the coming years?

Insurance business is rather defensive and steady and one should not expect any rapid growth leaps. In P&C insurance, premiums can be expected to grow roughly at the same pace as GDP. However, If’s growth has been exceptionally strong recently, partly due to the favorable competitive environment in the Nordics. Low interest rates make it difficult to achieve good investment returns, which has forced all insurance companies to focus on technical profitability. This has reduced the aggressive price competition, which has positively reflected in If’s premium and customer volume growth.

In life insurance, the premium growth can be expected to be faster than the GDP growth. For the coming years, one key growth driver is the increasing importance of personal savings and financial safety net as unfavorable demographic trend create pressure on the public social security and pension system.

In the short-term, the biggest single profit potential relates to Nordea’s new business plan and targets.

What is Sampo’s strategy in Nordea? Is the intention to exit the investment at some point?

We welcome Nordea’s business plan and targets announced in October. Nordea, like Sampo’s all holdings, is for sale if the price is right.

Could Sampo exit Nordea by distributing the whole ownership in dividends to its shareholders?

In theory, yes, but it would have a significant negative impact on the Group’s solvency. In addition, it would cause noteworthy one-off tax consequences for the shareholders. 

What kind of M&A opportunities does Sampo see in its core markets?

We are constantly looking at potential M&A projects that could create shareholder value. Because Sampo is a big investor, various opportunities are presented to us regularly. However, it is hard to say anything concrete about this subject because opportunities can come quickly and unexpectedly and must always be considered case-by-case.

On a general level, it is clear that large-scale M&As are unlikely in the Nordics in both insurance and banking sector. In insurance sector, all the big players are currently in quite good shape and company valuations are high, and this reduces the likelihood of M&As. In both the insurance and banking sectors, competition regulations can come into play for larger deals. On the other hand, smaller deals, where a small player merges with another or a larger player takes over smaller players, may well continue to occur in both sectors.

What kind of value creation potential does Sampo plc’s direct financial investments have?

The direct financial investments made by the parent company Sampo plc (Saxo Bank, Nets, Nordax, Asiakastieto, Intrum and Bank Norwegian) are normal investments from which Sampo will exit at some point. What unites all the companies is that they operate in the financial sector and fintech sector, which Sampo knows well. There are also a lot of consolidation taking place within the sector and Sampo can give its own contribution and create shareholder value. For example, Sampo participated Saxo Bank’s takeover bid for BinckBank corresponding to its ownership.

The value creation potential and exit points vary case by case. Of these investments, Saxo Bank, Nets and Nordax are private equity investments, where the investment horizon is usually longer than in publicly traded investments.

Why has Sampo invested in Nordax and Bank Norwegian, which are specialized in consumer credit? Are these investments in conflict with Sampo’s responsibility considerations?

We have invested in Nordax and Bank Norwegian because we see them as interesting players in the changing financial sector and see potential for value creation.

The investments are not in conflict with our responsibility considerations. We are aware that the companies operate in a sector, where is a lot of problems and negative attitude. However, both Nordax and Bank Norwegian operate by all the laws and regulations. The companies have clear requirements and conditions under which loans can be granted to clients.

To which companies does Sampo compare itself and its businesses?

Sampo’s primary benchmark companies are other major P&C insurers in the Nordics. These include, for example, Tryg, Gjensidige, LF, OP and LähiTapiola. Due to the large ownership in Nordea, we usually use benchmark indices that include both insurance and banking companies when comparing stock price development.

Why was Sampo so strongly speaking for increasing the dividend instead of taking more cautious approach in August?

Two key events occurred after the Q2 results in August. Nordea announced its new dividend policy, which will have a significant impact on Sampo’s internal dividends in the coming years. In addition, interest rates fell sharply after the ECB meeting in September and markets expect them to remain low for even longer period of time than previously expected, which affects Sampo’s investment activities. If these things had been known in August, the communication would certainly have been different. Thanks to our strong balance sheet, it would be possible to increase the dividend in spring 2020, but would not serve our shareholders nor the company’s interest because the matters will have a longer-term effect on ability to pay dividend.

Is Sampo going to renew its dividend possibility and if so, how?

Sampo’s Board will review the company’s dividend policy in February 2020. No comments can be given before that.

Can If still be more efficient or is the profit growth only dependent on premiums growth?

If has successfully reduced its cost ratio (operating expenses and claims adjustment expenses divided by premiums earned) by at least 0.1 percentage points for several consecutive years. In 2018, the cost ratio was 21.9 per cent compared to, for example, 23.5 per cent in 2011. Such steady improvements can be expected in the future as well. The trend is supported by digitalization and economies of scale.

If focuses on profitability and does not seek growth at the expense of profitability. Growth must always be profitable, and If’s premium growth has been very strong recently. In January-September 2019, If’s premium growth was 5.0 per cent in local currency.

At what point will Sampo reach the limits of growth in its current markets?

As mentioned above, Sampo will focus on profitability rather than in growth in its businesses and growth must be profitable. In terms of market shares, there are no limits in sight for organic growth. On the other hand, bigger single growth leaps through M&As are less likely due to competition regulations.

Why wouldn’t If expand its operations, for example, to Central Europe?

We constantly monitor developments in other markets and in the insurance industry if there are opportunities to enter new markets. However, expanding into a new market always involves a lot of risks and we only take risks that are manageable and justified from the point of view of shareholder value. There is no reason to expand just for the joy of expansion. In addition, we want to be a major player in every market in order to be able to benefit from economies of scale. Thus, any expansion into new markets would more likely to take place through an acquisition, which involve its own risks.

What kind of added value the Viking acquisition announced on November brings to If?

The Viking acquisition is relatively small for If (the enterprise value is EUR 114 million), but it adds value in many ways. Through the acquisition, If can offer more comprehensive service to its customers and partners such as car manufacturers that includes both insurance and roadside assistance. A more comprehensive service enables better customer contact in the events of accident, which makes processes more efficient and faster for both If and the customer. In the event of accident, the information reaches both the roadside assistance company and If at the same time, which makes it easier, for example, to arrange a rental car, recommend a suitable repair shop and start the claim procedure.

What is Sampo’s view of the consolidation development in the Nordic financial sector?

At a general level, it is likely that there will be consolidation, particularly amongst small and medium-sized players, which are subject to regulatory pressure. However, consolidation between the big players is less likely due to competition regulations.

What is Sampo’s view of the future interest rate development? How has Sampo positioned itself against the changes?

We do not know in which direction interest rates will go, nor can we forecast the weather for the next Summer. The duration of our fixed income investments is still short. Thus, rising interest rates would have only a small momentary negative impact on our portfolio and we would benefit from higher interest rates faster. Higher interest rates would therefore be very positive for Sampo.

Sampo’s subsidiaries If and Topdanmark compete with each other in Denmark. Is there a contradiction?

If and Topdanmark are both independent companies and compete with each other as they as they should do. However, their target customers are somewhat different, which reduces the overlapping. Topdanmark is strong on the household and agricultural side, whereas If focuses more on the corporate side in Denmark.

How often does Sampo attend IR events and meet foreign investors?

About 65 per cent of Sampo’s shares are foreign-owned, which means a lot of meetings abroad. Sampo’s management and IR have approximately 250-300 meetings with foreign investors and analysts each year. This will be followed by numerous meetings with domestic institutional investors. In addition, we do our best to serve our domestic private shareholders through investor events and increasingly through social media.

How does Sampo use its owner’s control in companies, in which it’s a minority shareholder?

Sampo is an active owner and exercises its voting rights trough Board work. For example, three of the six members elected by the AGM of Topdanmark are representative of Sampo, including the Chairman. In Nordea, Torbjörn Magnusson, the Group CEO and President of Sampo as of 1 January 2020, is the Chairman of the Board. In addition, Sampo has a representative in several companies in which we have invested by the parent company Sampo plc.

Does Sampo any short-term trades or short sell assets?


Mirko Hurmerinta

IR and Communications Specialist, Sampo plc

28 November 2019

If acquires Nordic roadside assistance company Viking

Sampo’s subsidiary If has agreed to acquire the Nordic roadside assistance company Viking Redningstjeneste TOPCO A/S. The acquisition price for 100 per cent ownership of the company is EUR 32 million, which will be paid in cash. The enterprise value of the transaction is EUR 114 million.

The transaction is subject to approval by competition authorities in Norway and Sweden. The transaction is expected to be finalized in early 2020.

Viking was founded in 1956 in Norway and it is today one of the leading roadside assistance companies in the Nordics with operations in Norway, Sweden, Denmark and Finland. Viking offers assistance services to all types of vehicles and is the preferred partner of most car manufacturers, several insurance companies and a number of foreign partners.

The company has over 3,000 employees in its franchise network with 320 stations all over the Nordics. In 2018, Viking covered 4 million vehicles, answered 1,4 million calls and made 460 000 assistances and transports.

In 2018, Viking’s revenue was NOK 774 million (approximately EUR 77 million) and adjusted ebitda was NOK 70 million (EUR 7 million). In the first half of 2019, revenue was NOK 422 million (EUR 42 million) and adjusted ebitda NOK 59 million (EUR 6 million).

After the transaction is finalized, Viking will continue its operations and serve its customers normally as an independent company with its current organization.

If and Viking have a long history of co-operation and a favorable geographical fit. In addition, both companies have determinedly invested in digitalization to make services simple to use and to create customer value. The acquisition will further improve If’s position as the leading Nordic insurance and service provider within the mobility area.

For more information about Viking, visit  

Mirko Hurmerinta

IR and Communications Sepcialist, Sampo plc

6 November 2019

Results burdened by Nordea-related one-offs

Sampo Groups profit before taxes for January-September 2019 was EUR 1,073 million compared to EUR 1,643 million a year ago. In the third quarter, profit before taxes decreased to EUR 92 million from 490 million a year ago and earnings per share was only EUR 0.01 (0.70)

The result was burdened by large non-recurring items. The distribution of an extra dividend in the form of Nordea shares in August caused a negative impact of EUR 155 million. In addition, Nordea booked in total of EUR 1.3 billion one-offs for the third quarter pushing the result to a negative territory. Sampo’s share of Nordea’s net result was EUR -75 million.

Key figures, EURm 1-9/
Profit before taxes 1,073 1,643 -35 92 490 -81
If 655 626 5 215 211 2
Topdanmark 180 170 6 34 65 -47
Associates 164 535 -69 -72 138 -
Valuation loss on distribution of Nordea shares -155 - - -155 - -
Mandatum 212 385 -45 75 72 4
Holding (excl. associates) 26 -42 - -6 4 -
Profit for the period 848 1,397 -39 22 414 -95
      Change     Change
Earnings per share, EUR 1.38 2.38 -1.00 0.01 0.70 -0.69
EPS (based on OCI), EUR 1.44 1.92 -0.48 -0.24 0.78 -1.02
NAV per share, EUR* 18.90 20.60 -1.70 - - -
Average number of staff, FTE 9,769 9,504 265 - - -
Group solvency ratio, %* 178 140 38 - - -
RoE, % 9.2 11.2 -2.0 - - -

* Comparison figure from 31 December 2018
The figures are not audited. Income statement items are compared on a year-on-year basis and comparison figures for balance sheet items are from 31 December 2018 unless otherwise stated.

The good momentum for Sampo’s insurance businesses continued in the third quarter. If’s profit before taxes for January-September increased to EUR 655 million (626) and combined ratio improved to 84.3 per cent (85.8).

In addition, If’s premium growth remained at very strong level. In local currency, If’s premiums grew 5.0 per cent in January-September, accelerating the growth pace from 4.3 per cent in the first half of the year. Premiums increased in all markets and business areas. Growth was particularly strong in Norway, 9.1 per cent, and in business area Industrial, 13.9 per cent.

However, If’s net investment income decreased by 13 per cent in January-September and 39 per cent in the third quarter, reflecting the challenging investment environment, especially in the fixed income markets.

The guidance for If’s combined ratio for 2019 remained unchanged at 84-86 per cent.

Topdanmark and Mandatum Life keep up the good work

Topdanmark’s profit before taxes for January-September was EUR 180 million compared to EUR 170 million a year ago. However, in the third quarter, the profit decreased clearly compared to the very strong period last year, partly due to lower discount rates and weaker investment income. Combined ratio for January-September was 80.5 per cent (82.7).

In January-September, Topdanmark’s premiums grew 2.4 per cent in non-life business and 13.5 per cent in life business.

Topdanmark updated its profit forecast model for 2019. The model forecasts combined ratio excluding run-offs to be 84-85 per cent (previously 85-86) and net profit to be DKK 1.30-1.40 billion (previously 1.25-1.35).

In the third quarter, Topdanmark and Nordea entered into a new non-life agreement for distribution on the Danish market. The agreement comes into force on 1 January 2020. From 2021, it is expected that the Nordea agreement in terms of premiums will compensate fully for the terminated distribution agreement with Danske Bank, which was terminated at the end of June 2019.

Topdanmark also introduced a new crop insurance, which covers up to 80 per cent of farmer’s normal crop yield if the crop yield is below average. Topdanmark is the market leader on the agricultural insurance market with approximately 50 per cent market share measured by the number of farms.

Mandatum Life’s profit before taxes for January-September amounted to EUR 212 million compared to EUR 385 million a year ago. The comparison figure contains a non-recurring profit item of EUR 197 million related to Mandatum Life’s co-operation agreement with Danske Bank.

Mandatum Life’s premium income increased to EUR 824 million (681), of which unit-linked premiums were 87 per cent. Net investment income, excluding unit-linked contracts, increased to EUR 280 million (196).

Technical reserves increased increased to EUR 11.7 billion (11.2), of which unit-linked reserves were at a record-high level of EUR 7.8 billion. With-profit reserves with higher guarantees (4.5% and 3.5%) continued to decrease as planned to EUR 2.2 billion, which is EUR 198 million less than at the end of 2018.

In September, Mandatum Life issued a Tier 2 bond of EUR 250 million due 2049 and received a long-term issuer credit rating of A+ from Standard & Poor’s.

In the field of wealth management, Mandatum Life’s determined work on socially responsible investing has received international recognition. In August, Mandatum Life Wealth Management received an excellent overall score of A+ (Strategy & Governance) in the 2019 UNPRI assessment. One fourth of all members of the UN’s Responsible Investment (PRI) organization worldwide achieve this score.

Change in Sampo’s view on expected dividends

Sampo’s management announced on 24 October 2019 that it has changed its view on expected dividends. This is due to Nordea’s new dividend policy and dividend guidance for 2019 and increasingly difficult operating environment, with government bond yields expected to remain negative for some time.

Sampo’s management expects to propose to the Board a dividend of EUR 2.10 – 2.30 a share for 2019. The Board will review the dividend policy in early February 2020.

Mirko Hurmerinta

IR & Communications Specialist, Sampo plc

21 October 2019

Q&A – Termination of FICO

The Finnish Financial Supervisory Authority has today approved Sampo’s application for the termination of the financial and insurance conglomerate (FICO). Henceforth, Sampo Group’s solvency will be calculated only by Solvency II rules. In other words, Sampo becomes an insurance group again. 

Release, 21 October 2019

Background in brief

Sampo’s ownership in Nordea exceeded 20 per cent at the end of 2009. Since 2010, the Finnish Financial Supervisory Authority has considered Sampo Group as a financial and insurance conglomerate and Nordea as an associated company of Sampo. Thus, Sampo Group’s solvency has been calculated by both Solvency II rules for insurance companies and FICO rules.

In 2018, Nordea’s Annual General Meeting decided to re-domicile the company’s headquarters to Finland from Sweden. Due to the re-domiciliation, capital requirements for Sampo’s Nordea ownership have increased significantly. This is because, as part of the decision of the European Central Bank on Nordea’s capital requirement, risk-weighted items (REA) were transferred from non-binding Pillar I to Pillar II, which are binding when calculating the capital requirement for financial and insurance conglomerates as well. Sampo Group’s factual risk position has not changed, but its share of Nordea’s capital requirement increased as Nordea’s Pillar I capital requirement increased. Since the end of 2018, Sampo’s capital requirement has increased by roughly EUR 800 million by the end of June 2019. The adoption of the Systemic Risk Buffer as of 1 July 2019 has further increased Nordea’s capital requirement.

To counter the impacts of the increased capital requirements, Sampo’s Board proposed the AGM in Spring 2019 that the Board be authorized to distribute an extra dividend in cash and/or in financial instruments. The Board received the authorization by the AGM and in the summer, the Board announced that it plans to distribute an extra dividend in the form of Nordea shares with the aim of reducing Sampo’s ownership below 20 per cent. By going below 20 per cent, Sampo Group would no longer be considered as a financial and insurance conglomerate nor Nordea as an associated company in the Group’s solvency calculations. The change was subject to the approval of the Finnish Financial Supervisory Authority.

On 7 August 2019, the Board resolved on the distribution of an extra dividend. As a result of the distribution, Sampo’s ownership in Nordea decreased to 19.87 per cent. On the same day, Sampo filed an application with the Finnish Financial Supervisory Authority for the termination of FICO. The Finnish Financial Supervisory Authority approved the application on 21 October 2019. Henceforth, Sampo Group’s solvency will be calculated only by Solvency II rules and Nordea is treated as an ordinary equity investment instead of an associated company. The change will significantly improve Sampo’s solvency.

How much will Sampo’s solvency improve?

At the end of June 2019, Sampo’s Solvency II ratio was 137 per cent. If Nordea would have been treated as an equity investment, Sampo’s pro forma Solvency II ratio would have been 170 per cent on 30 June 2019. The change released roughly EUR 1 billion of capital. Solvency figures for the end September 2019 will be published normally in the Interim Statement for January-September on 6 November 2019.

At what level does Sampo want its solvency to be at least?

Sampo started to take action when its solvency ratio was, for the reasons mentioned above, decreasing below 140 per cent. However, Sampo does not have any specific minimum level for solvency ratio target, but we aim to maintain a level that, in addition to our normal operations, provides room to seize opportunities that may arise in the markets.

Nordea is now treated as an equity investment in Solvency II calculation. How does this differ from the previous treatment as an associated company?

The solvency ratio is calculated by dividing Sampo Group’s own funds by its solvency capital requirement. Going forward, Sampo's own funds will no longer include a share of Nordea’s own funds as defined in banking regulations and corresponding to Sampo's share of ownership in Nordea. Instead, Sampo’s own funds will include the market value of the Nordea shares owned by Sampo. Similarly, going forward, Sampo's capital requirement will no longer include a share of Nordea’s capital requirement as defined in banking regulations and corresponding to Sampo's share of ownership in Nordea. Instead, the capital requirement for the Nordea shares owned by Sampo will be determined by equity market risk as defined in insurance company regulations and in a similar way with other equity investments made by Sampo.

How will the changes in Nordea’s share price affect Sampo’s solvency?

Since Nordea is now treated as an ordinary equity investment, an increase in the share price will improve Sampo’s solvency and decline will weaken it. A 10 per cent increase in Nordea’s share price from the dividend payment date level (EUR 5.661) would improve Sampo’s solvency ratio roughly by 3-4 per cent.

How does the change affect Nordea’s treatment in Sampo’s financial statement?

The consolidation of Nordea as an associated company in Sampo Group’s financial statement (IFRS) remains unchanged. Thus, Sampo’s share (19.87 %) of Nordea’s net profit will be consolidated in Sampo’s results.

Why is Nordea still treated as an associated company in Sampo’s financial statement?

Solvency II, FICO and IFRS rules are independent, separate regulatory frameworks and the definition for an associated company is different in each. Thus, a change in one regulatory framework does not necessarily lead to a corresponding change in another.

How does the distribution of an extra dividend affect Sampo’s results?

Sampo will book a non-recurring loss of EUR 155 million for January-September 2019. The loss consists of a loss of EUR 143 million from the valuation difference between the value of the share dividend (5.661) and the book value of Nordea share in our balance sheet (EUR 8.238) and a loss of EUR 12 million from recycling of previous OCI items trough P&L. The loss has no impact in cashflow.

Mirko Hurmerinta

IR & Communications Specialist, Sampo plc

19 August 2019

Sampo continues its financial investments by acquiring a share of Norwegian Finans Holding

Nordic Capital and Sampo have agreed to acquire in total 17.47 per cent of Norwegian Finans Holding, which is the parent company of Bank Norwegian. The transaction price is NOK 68 per share, in total NOK 2,218 million.

Completion of the acquisition will occur in two tranches, whereby the first (9.97%) will be acquired with expected settlement on August 26, 2019. The second tranche (7.50%), which is subject to approval by the Norwegian Financial Supervisory Authority, will be acquired once regulatory approval has been obtained.

Following completion of the whole transaction, Sampo will hold approximately 6,3 per cent of the company. The size of Sampo's investment will be EUR 80 million.

Bank Norwegian offers, among other products, consumer credit and deposit accounts via its digital platform and has over 1.6 million clients in Norway, Sweden, Finland and Denmark. In 2018, Bank Norwegian’s total income was NOK 4.7 billion or approximately EUR 465 million. Norwegian Finans Holding is listed on the Oslo Stock Exchange.

This is the sixth financial investment made by the parent company Sampo plc in the Nordic fintech and financial sector where we see buy & build opportunities characteristic to Sampo’s investment style. Previously we have invested in Asiakastieto, Nets, Saxo Bank, Nordax and Intrum. In total, Sampo has invested over one billion euros in these companies.

Nordic Capital, one of the leading private equity investors in the Nordics, is a familiar investor partner to Sampo since we made a joint bid offer for Nordax in Spring 2018. Nordic Capital is also the largest shareholder in Intrum.

Nordic Capital’s press release regarding the transaction

Mirko Hurmerinta

IR and Communications Specialist, Sampo plc