Boring is still good

Five years ago, Sampo Group published its Half-Year Financial Report for January–June with a title "Boring is good". The title is still valid and describes well the performance for the first half of the year 2018: good growth and strong results with no drama.

*Comparison figure from 31 December 2017
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 2017 unless otherwise stated.

The good performance was driven by strong results in our insurance businesses. If's profit before taxes increased to EUR 415 million in January–June and combined ratio amounted to 85.8 per cent.

If's premiums and the number of customers enjoyed good growth. In local currency basis, If's premiums grew 3.4 per cent in January-June. Premiums grew in all business areas and the growth accelerated during the second quarter. In addition, the number of private customers increased 2.1 per cent in the first half of the year. The growth was strongest in Sweden, where the number of customers increased 3.0 per cent. The growth in the number of customers provides good base for future profit growth.

During the summer, the large forest fires dominated the news in Finland and especially in Sweden. The share of forest insurances policies is very small in If's insurance portfolio. Thus, the fires have no significant effect on If's operations, as long as the fires keep away from buildings.

Topdanmark's results for the first half of the year were good, even though last year's comparison period was very strong. Topdanmark's profit before taxes amounted to EUR 105 million in Sampo Group's consolidated accounts and combined ratio was 84.1 per cent.

Like If, Topdanmark enjoyed good growth in premiums in the first half of the year. Premiums increased 2.2 per cent in non-life insurance business and 20.2 per cent in life insurance business.

The first half of the year was favorable also for Mandatum Life. Profit before taxes amounted to EUR 313 million for January–June. The profit 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 on own account increased 25 per cent to EUR 528 million in January–June. Mandatum Life's core focus area, unit-linked premiums were EUR 465 million, i.e. 88 per cent of total premiums. Unit-linked technical reserves rose to an all-time high of EUR 7.1 billion at the end of June 2018. The total technical reserves were EUR 11.5 billion.

Nordea stayed on the right path during the second quarter, which reflected on results. Sampo's share of Nordea's net profit for the first half on 2018 amounted EUR 388 million compared to EUR 322 a year ago. At the end June, Nordea's balance sheet was stronger than ever with a Common Equity Tier 1 ratio of 19.9 per cent.

In spring, we started to treat NDX Intressenter as an associated company. NDX Intressenter reported loss for the second quarter due to costs related to the takeover bid and delisting of Nordax. Nordax itself reported an operating profit of SEK 98 million for the second quarter.

Profit before taxes for the Holding segment, excluding Nordea, amounted to -48 million in January–June. The profit was burdened by weak Swedish Krona, which caused losses for the first quarter. During the second quarter Krona showed some stabilization.

Financial markets have somewhat calmed down during the summer, although political risks and the threat of trade war are on the carpet. Interest rates are still low, which is an inconvenience for our investment activities.

We specified the 2018 outlook for If's combined ratio target. We now expect If to reach a combined ratio target of 86 – 88 per cent for the full-year 2018.