Exceptional Q1

The first quarter of 2020 will be remembered as a very exceptional period as the whole world suddenly stopped. The coronavirus pandemic (COVID-19) and the massive containment measures have directly or indirectly affected everyone’s lives.

The biggest effect of the coronavirus to Sampo Group has come through its investments. In March, the financial markets experienced an extreme turmoil, which took its toll on Sampo’s investment income. The Group’s total comprehensive income, taking changes in the market value of assets into account, plunged to a loss of EUR 954 million from a profit of 561 million a year ago. In addition, Sampo’s NAV per share decreased to EUR 15.36 from 20.71 at the end of 2019. After the first quarter, markets have somewhat recovered and lifted Sampo’s key figures as well.

Sampo’s insurance businesses have been affected by the coronavirus both negatively and positively. For example, If received about 26,000 claims in January-March, mostly related to travel. By the end of April, the figure had already increased to almost 48,000 claims. On the other hand, in motor insurance, the sharp decline in traffic due to the restrictions has naturally reduced the number of claims.

The overall effect of the coronavirus on Sampo Group’s insurance businesses was limited during the first quarter. However, the longer the crisis will last, the more it will drag down the economic activity and affect insurance companies as well.

Most of the Group’s over 10,000 professionals have worked from home in the past weeks, which has required adjustments. Despite that, our subsidiaries have been able to serve our customers almost normally throughout the crisis, and we have received lots of positive customer feedback. The effects of the coronavirus on Sampo Group’s operations are described in the interim report.

Key figures, EURm	1-3/2020	1-3/2019	Change, %
Profit before taxes	162	475	-66
If	129	198	-35
Topdanmark	-13	92	-
Associates	86	83	3
Mandatum	-16	72	-
Holding (excl. associates)	-24	29	-
Profit for the period	139	398	-65
			Change
Earnings per share, EUR	0.26	0.64	-0.38
EPS (incl. change in FVR), EUR	-1.71	0.94	-2.65
NAV per share, EUR*	15.36	20.71	-5.35
Average number of staff, FTE	10,303	9,670	633
Group solvency ratio, %*	179	167	12
RoE, %	-33.2	16.5	-49.7
* Comparison figure from 31 December 2019

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 2019 unless otherwise stated.

Sampo Group's profit before taxes amounted to EUR 162 million (475) and earnings per share to EUR 0.26 (0.64) in January-March. The profit included impairments of investments assets worth almost EUR 200 million.

If’s profit before taxes decreased to EUR 129 million (198) due to poor investment income. However, from a technical point of view, the first quarter was excellent. Technical result strengthened to EUR 180 million (147) and for the first quarter, combined ratio was record-strong at 83.7 per cent (86.5).

In addition, If’s strong premium growth continued during the first quarter. In local currency, premium growth was 7.0 per cent (3.9). Premiums increased in all markets and business areas. The growth was exceptionally strong in Denmark and Norway.

Topdanmark’s result before taxes amounted EUR -13 million (92) and combined ratio was 88.7 per cent (78.2).

In addition to weak investment income, Topdanmark’s result was burdened by lower run-off gains, increased claims due to coronavirus and weather-related claims above normal level.

Mandatum Life’s result before taxes for January-March decreased to EUR -16 million (72) due to poor investment income.

Thanks to strong January-February, Mandatum Life’s premiums increased to EUR 287 million (238), although it decreased in March.

Mandatum Life’s technical reserves were burdened by the market turmoil and amounted to EUR 11.0 billion from EUR 12.0 billion at the end of 2019. Unit-linked reserves were EUR 7.2 billion (8.1). The with-profit portfolio with higher guarantees (3.5% and 4.5%) continued to shrink as planned and decreased by EUR 65 million to EUR 2.1 billion.

Sampo’s share of Nordea’s net profit amounted to EUR 84 million. Despite the significantly changed market environment, Nordea’s businesses continued to develop in the right direction and towards the targets set for 2022.

Sampo expects its insurance businesses to report good insurance technical results for 2020. The investment results are at this point in time more uncertain than usual. The mark-to-market results for 2020 are highly dependent on capital market developments, particularly in life insurance.

If is expected to reach a combined ratio of 84 - 87 per cent in 2020. Previous outlook, in February, was 85 - 89 per cent.

New dividend proposal of EUR 1.50 per share

Sampo’s Board has today decided to cancel its previous dividend proposal of EUR 2.20 per share and to announce a new proposal of EUR 1.50 per share. In total, the dividend is proposed to be EUR 883 million.

The decision was affected by the high level of uncertainty in the financial markets and changes in Sampo’s internal dividends. During 2020, Sampo has received internal dividends only from Topdanmark, EUR 48 million. Under normal circumstances, internal dividends would have been expected to be EUR 568 million at this stage.

Mandatum Life decided not to pay the dividend of EUR 150 million planned for March. In light of the ECB recommendation, Nordea plans to postpone the dividend until after 1 October 2020. Topdanmark paid half of its dividend and left the other half to be decided later this year, when there’s more clarity in the markets. If normally pays its dividend towards the end of the year.  

In its decision the Board has considered the recent statements by the supervisors. The Board’s view is that the proposed dividend will not jeopardize the company’s operations or ability to fulfill its obligations to the policyholders.

With the new dividend proposal, Sampo’s solvency will clearly improve. Based on preliminary figures, the Group’s solvency ratio was 187 per cent at the end of April 2020. Calculated with the previous dividend proposal, the solvency ratio would have been 178 per cent.

The ex-dividend date of the proposed dividend is 3 June 2020 and date of payment 11 June 2020.

The most boring AGM in Sampo’s history – and this time it is a good thing

Sampo’s Annual General Meeting has traditionally been very popular, especially among private investors, which makes us sincerely happy. It is gratifying that so many of our shareholders find the AGM interesting and worthwhile event. Unfortunately, this year’s AGM differs from the previous ones in almost every way.

Due to the prevailing coronavirus pandemic, on 24 April 2020, the Finnish Parliament passed a temporary law that allows for general meetings to be held as remote meetings only without shareholders’ presence. The purpose of the law is to enable the company to hold a quorate AGM, and at the same time, obey the current meeting restrictions and other recommendations in order to minimize the risk of infection.

Sampo’s Board has today decided that the AGM will be held as a remote only meeting based on the temporary law. In other words, it is going to be the most boring AGM in Sampo’s history – and it is a good thing for the health of the company’s shareholders, staff and other stakeholders.

AGM 2020 Q&A

When and where will the AGM be physically held?

The AGM will be held on 2 June 2020 at 2:00 pm Finnish time at Sampo’s headquarter in Helsinki.

Why will the AGM be held as a remote meeting?

The AGM will be held as a remote meeting in order to prevent the spread of the coronavirus and to ensure the health and safety of Sampo’s shareholders, staff and other stakeholders.

Is it legal to hold the AGM as a remote only meeting?

Yes, it is. The extraordinary procedures are based on the temporary legislation approved by the Finnish parliament on 24 April 2020.

Can I attend the AGM in person?

No, you cannot.That is best for your and others’ safety.

Will there be any addresses by members of the Board or the Management?

A pre-recorded address by the Chairman of the Board Björn Wahlroos will be published at www.sampo.com/agm on the day of the Annual General Meeting.

Will the members of Sampo’s Board or Management attend the AGM in person?

No, they will not. Many of the Board and Management members live abroad and traveling to Finland would be very difficult in these exceptional circumstances.   

Who will physically be present at the AGM?

Only the Chairman of the meeting, the secretary of the meeting and the scrutinizer of the minutes will physically be present at the meeting.

Will the AGM be webcasted?

No, it will not. Nothing that interesting will happen at the physical meeting place.

What will actually happen at the physical meeting place?

As all items on the agenda have already been voted on in advance and no addresses will be given at the meeting, the physical meeting will only be a technicality i.e. the legality of the AGM will be recorded, the voting results will be verified and the minutes will be scrutinized.

Can I use my voting rights?

Yes, you can. Shareholders may use the advance voting service or vote by way of proxy presentation. The voting will begin on 12 May 2020 at 10:00 am. Please see detailed instructions in the Notice to the AGM. 

Can I make counter-proposals?

Shareholders who hold at least one percent of all the company’s shares (i.e. at least 5,553,519 shares) are entitled to make counter-proposals subject for voting to the agenda points of the AGM. Please see detailed instructions in the Notice to the AGM. 

Can I ask questions?

Yes, you can. Shareholders may ask questions on topics included in the meeting agenda in advance until 18 May 2020 at 2:00 pm. Questions can be sent by email to agm@sampo.fi or by mail to Sampo plc, Fabianinkatu 27, 00100 Helsinki, Finland. Questions and answers will be published at www.sampo.com/agm at the latest on 22 May 2020.

What is the ex-dividend date and when will the dividend be paid?

The ex-dividend date will be 3 June 2020 and the dividend will be paid on 11 June 2020.

In order to receive the dividend, when I must own Sampo’s shares?

The dividend will be paid to shareholder who owns the shares as at the AGM date i.e. 2 June 2020.