Half-Year Financial Report 2018, 8 August 2018
Outlook for 2018
Sampo Group's business areas are expected to report good operating results for 2018.
However, the mark-to-market results are, particularly in life insurance, highly dependent on capital market developments. The continuing low interest rate level also creates a challenging environment for reinvestment in fixed income instruments.
If P&C is expected to reach a combined ratio target of 86 - 88 per cent for the full-year 2018.
With regard to Topdanmark, reference is made to the profit forecast model that the company publishes quarterly.
Nordea's contribution to the Group's profit is expected to be significant.
The major risks and uncertainties to the Group in the near-term
In its current day-to-day business activities Sampo Group is exposed to various risks and uncertainties mainly through its separately managed major business units. Parent Company Sampo's contribution to risks is a minor one.
Major risks affecting the Group companies' profitability and its variation are market, credit, insurance and operational risks that are quantified independently by the major business units. At the group level sources of risks are the same, but they are not directly additive because of diversification effects.
Uncertainties in form of major unforeseen events may have an immediate impact on the Group's profitability. Identification of unforeseen events is easier than estimation of their probabilities, timing and potential outcomes. Currently there are a number of widely identified macro-economic, political and other sources of uncertainty which can, in various ways, affect financial services industry negatively. Especially the political risks are at an elevated level at the moment.
Other sources of uncertainty are unforeseen structural changes in the business environment and already identified trends affecting business environment. These external drivers may have long-term impact on how business shall be conducted. Examples of already identified trends are technological development in general, digitalization and sustainability issues that may have profound effects on financial sector companies through the changes in client behavior and entry of new competitors.