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This glossary includes the most essential property and casualty insurance and life insurance terminology as well as financial statement's terms and risk management terms used in Sampo Group.

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Acquisition costs


The acquisition costs for insurance and investment contracts (direct insurance commissions, commissions for reinsurance assumed and other acquisitions costs).

Allocated investment return transferred to the technical account

Vakuutustoimintaan kohdistettu sijoitustoiminnan nettotuotto

Return on average insurance liabilities in P&C insurance, after deducting the capital employed in insurance operations in the form of premium receivables, reinsurance deposits and net of other receivables and liabilities plus half of the technical result before allocated investment return.

The allocated investment return is based on risk-free interest.

Asset and liability management risk (ALM risk)


The company is exposed to ALM risks (also called as balance sheet risks) when changes in different market variables (e.g. interest rates, inflation, foreign exchange rates) cause a change in the fair value of investment assets and derivatives that is of different size than the respective change in the economic value of insurance liabilities.

The cash flows of insurance liabilities are modelled estimates and therefore uncertain in relation to both their timing and amount. This uncertainty is a central source of ALM risk as well.

Assumed reinsurance

Tuleva jälleenvakuutus

Reinsurance business received from another insurance company.

Available-for-sale assets (AFS)

Myytävissä olevat varat

Financial assets that are designated as available for sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss (IFRS).

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Beneficiary named by policyholder or an unnamed third party.

Biometric risks

Biometriset riskit

Biometric risks refer to the risk that the company has to pay more mortality, disability or morbidity benefits than expected, or the company has to keep paying pension payments to the pension policyholders for a longer time (longevity risk) than expected when pricing the policies.



Bonuses are possibly granted to with profit policies (life insurance policies) according to the principle of fairness. The bonus consists of the surplus generated by the life insurance company.

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Capital redemption policy


Commonly used life policy without any insurable risk. Policy consists purely of savings.

Catastrophe risk


Catastrophe Risk can be seen as an extreme case of premium risk. It is the risk of extreme or exceptional events, such as natural catastrophes, where the pricing and setting of provisioning assumptions include significant uncertainty. These events may lead to significant deviations between actual claims and the total expected claims resulting into a loss or adverse changes in the value of insurance liabilities.

Ceded reinsurance

Menevä jälleenvakuutus

Part of insurance risk transferred to reinsurers.



Direct insurance company that reinsures a part of its direct business to a reinsurer.

Change in fair value reserve

Käyvän arvon rahaston muutos

Change in the fair value reserve includes potential cash flow hedges as well as unrealised profits and losses i.e. changes in the fair value of financial instruments classified as available-for-sale investment assets.

These changes in value are recognized in the income statement when the investments are sold or they expire. The change in the fair value reserve includes also the change in the tax liability related to value changes. Change in the fair value reserve is an important element in analyzing the result, especially in life insurance business.

Change in liabilities for insurance and investment contracts

Vakuutus- ja sijoitussopimusten velkojen muutos

In life insurance business the insurance portfolio is classified as either insurance contracts or investment contracts depending on, whether they carry insurance risk or not. In life insurance business area "investment contracts" comprise only capital redemption policies. In other cases the liabilities are insurance liabilities.

The amount of technical provisions is determined at every balance sheet date. The change in liabilities for insurance and investment contracts is the difference between the value at the balance sheet date in year x and the value a year earlier.

Claims frequency


The observed relationship during a specific period between the number of claims arising within a certain category of insurance (a certain insurance portfolio) and the number of insurance policies within the same category (the portfolio). Does not include large claims.

Claims handling


Activities in connection with the investigation, settlement and payment of claims from the time of their occurrence until settlement.

Claims incurred


The sum of paid claims and change in provision for claims outstanding. Includes the claims costs for the insured events during the year regardless if they have been paid during the same year or not.

Claims paid

Maksetut korvaukset

When the insured event occurs the benefit paid to the named beneficiaries in insurance contracts or to the unnamed third party.

Combined ratio

Yhdistetty kulusuhde

One of the most significant key figures in P&C insurance describing the efficiency of operations. It is calculated as the sum of loss ratio and expense ratio. Combined ratio is expressed as a percentage.

Calculation formula:




Adherence to laws, regulations, code(s) of conduct and standards of good practice in the industry. Sampo plc's Board of Directors has issued Sampo Group Compliance Principles on 8 May 2019.

Compliance risk


Compliance risk is the risk of legal or regulatory sanctions, material financial loss or loss of reputation, resulting from a company failure to comply with laws, regulations and administrative orders applicable to its activities.

Compliance risk is usually a consequence of internal misconduct and hence it can be seen as a part of operational risk.

Concentration risks


Concentration risks arise when the company’s risk exposures are not diversified enough and as a result of this for instance an individual large claim or financial market event may threaten the solvency or the financial position of the company.

Direct concentrations can evolve within separate activities – large single name or industry specific insurance or investment exposures – or across the activities when a single name or an industry is contributing widely on profitability and risks of the company through both insurance and investment activities. Concentration risk may materialize also when profitability and the capital position react similarly to general economic developments or to structural changes in the institutional environment in different areas of business. In that case concentration risk can be seen as part of strategic risk.

Consolidated Group SCR

Ryhmän konsolidoitu SCR

Solvency capital requirement calculated for the Solvency II regulated group. In Sampo's case, this group consists of Sampo plc, If P&C, Topdanmark, Hastings and Mandatum.

Cost ratio


Operating expenses and claims adjustment expenses divided by premiums earned in P&C insurance company. The ratio is expressed as a percentage.

Calculation formula:

Counterparty default risk


The risk that a counterparty is unable to fulfill its obligations. In case of counterparty default risk (also called as counterparty risk), final loss depends on the positive mark-to-market value of derivatives or reinsurance recoverables at the time of default, the collaterals received, and on the recovery rate. Counterparty risk is one subclass of credit risk.

Credit risk


Credit risk refers to negative impact in the financial results arising from increased probability of, or already occurred defaults of debtors (Issuer risk) or, in case of derivative and/or reinsurance contracts, other counterparties (Counterparty default risk).

Currency risk


Currency risk refers to fluctuations in the financial results and capital caused by changes in market values of financial assets and liabilities, as well as by changes in the economic value of insurance liabilities, after currency exchange rates change. Further information: Market risks

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Part of cost of insured event which is not covered by insurance company, but policyholder has to cover this part him/herself.

Defined benefit plan

Etuusperusteinen järjestelmä

Life insurance policy, where premiums are calculated based on agreed benefits such as income level. Alternative to 'Defined contribution plan'.

Defined contribution plan

Maksuperusteinen eläkejärjestelmä

Life insurance policy, where benefits are calculated based on premiums. Alternative to 'Defined benefit plan'.

Direct insurance


Insurance business where insurer and insured enter into insurance contract. The insurance company is directly responsible to the insured.

Discount rate


Future outflows and inflows of life insurance contracts are changed to present value of money by using discount rate. This present value is used to calculate the liability for insurance company from its insurance contracts. Also in P&C Insurance the provision for claims outstanding pertaining to annuities is discounted.

Dividend per earnings


Part of earnings distributed to shareholders as dividends. Rest of the result stays in the company and is invested in future business.

Calculation formula:

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Earnings per share (EPS)

Osakekohtainen tulos (EPS)

The earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. The EPS is thus profitability measure. It is especially useful when comparing subsequent years' EPS figures and their development. If the amount of shares changes from year to year (e.g. due to a split), this change has to be taken into account when EPS comparison is made.

Calculation formula:

Economic value of insurance liabilities

Vakuutusvelkojen markkinaperusteinen arvo

Sampo Group calculates the economic value of insurance liabilities for internal purposes by discounting expected liability cash flows with market rates.

Effective dividend yield

Efektiivinen osinkotuotto

Effective dividend yield shows how much the dividend was in relation to the value of the share at the end of the year. This figure added to the share value development shows the direct monetary return on the share investment in the company.

Calculation formula:

Eligible own funds

Hyväksyttävä oma varallisuus

The own funds that are eligible for covering the regulatory capital requirements (Solvency II).

Endowment insurance

Yhdistetty henki- ja pääomavakuutus

The compensation (that can consist out of voluntary pension insurance or savings life insurance and term life) is paid if the insured is alive at the end of the period covered by the insurance contract. If the insured dies before the maturity of the policy term, death benefit is paid to the beneficiary.

EPS including change in the fair value reserve

Osakekohtainen tulos mukaan lukien käyvän arvon rahaston muutos

Earnings per share in case market value changes in available-for-sale investment portfolios would be recorded in the income statement instead of balance sheet.

Calculation formula:

Equalization provision


Buffer against fluctuations of risk results.

Equity per share

Osakekohtainen oma pääoma

Equity per share indicates the amount of capital per share.

Calculation formula:

Equity risk


Equity risk refers to fluctuations in the financial results and capital caused by changes in market values of financial assets and liabilities, as well as by changes in the economic value of insurance liabilities, after equity price change. Further information: Market risks

Equity/assets ratio


Company's equity in relation to its total assets.

Calculation formula:


Excess of assets over liabilities

Ylijäämä, jonka verran varat ovat velkoja suuremmat

The excess of assets over liabilities as reported in the Solvency II balance sheet. Value of the assets minus liabilities. This corresponds with equity in the IFRS balance sheet with most important differences being in the valuation of technical provisions and investment assets and treatment of intangible assets.

Expense ratio (life insurance)

Liikekustannussuhde (henkivakuutus)

In life insurance expense ratio means expenses divided by load income. Expense ratio measures the effectiveness of life insurance activities.

Calculation formula:

Expense ratio (P&C insurance)

Liikekulusuhde (vahinkovakuutus)

In property and casualty insurance expense ratio is a ratio between operating expenses and premiums earned expressed as a percentage.

Calculation formula:

Expense result

Kustannusliikkeen tulos

Load income minus operating expenses (life insurance terminology).

Expense risk

Kustannusriski (kuluriski)

Expense risk arises from the fact that the timing and/or the amount of expenses related to management of insurance policies incurred differs from those expected at the timing of pricing. As a result expense charges originally assumed may not be enough to cover the realized expenses.

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Fair value reserve

Käyvän arvon rahasto

Fair value reserve in equity include unrealized changes in fair value of available for sale investments after deferred tax.

Financial assets designated as at fair value through profit or loss

Käypään arvoon tulosvaikutteisesti kirjattavaksi määritetyt rahoitusvarat

Financial assets that are classified as held for trading or upon initial recognition are designated by the entity as at fair value through profit or loss.

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Group pension policy


Pension insurance where the policyholder is company and insureds are a named group of company's employees.

Group solvency

Konsernin vakavaraisuus

Group solvency describes the amount of solvency capital exceeding minimum requirements for own funds.

Calculation formula:

Group solvency capital requirement (Group SCR)

Ryhmän SCR

The Group solvency capital requirement is the sum of the consolidated Group SCR and the SCR for entities included (Sampo plc, If P&C, Topdanmark, Hastings and Mandatum) with deduction and aggregation method in Sampo Group (Solvency II). (Solvency II).

Group solvency ratio

Konsernin vakavaraisuussuhde

Group's own funds in relation to the minimum requirement set by the regulators. Regulators define what items can be included in the eligible own funds.

Calculation formula:

Guaranteed interest


With profit life insurance policies have guaranteed fixed interest rates.

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Held to maturity investments (HTM)

Eräpäivään asti pidettävät sijoitukset

Financial assets with fixed maturity that an entity has the positive intention and ability to hold to maturity.

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Individual life insurance

Yksilöllinen henkivakuutus

Life policy, in which a person is insured. The life policy can be a with profit policy or a unit-linked policy.

Individual pension insurance

Yksilöllinen eläkevakuutus

Pension policy, in which a person is insured. The pension policy can be a with profit policy or a unit-linked policy.

Inflation risk


Inflation risk refers to unexpected changes in future expected cash flows of insurance contracts and financial assets causing changes in the market values of financial assets and liabilities as well as by changes in the economic value of insurance liabilities. Ultimately there are fluctuations in the financial results and capital.

Insurance margin (IM)

Vakuutusliikkeen tuotto

Technical result less other technical income and expense in relation to net premiums earned, expressed as a percentage (P&C Insurance). Further information: Technical result.

Insurance policy


IFRS-category for policy, where considerable insured risk is transferred from policyholder into insurance company.



Person or company, who is insured against event described in insurance contract.

Interest rate risk


The interest rate risk refers to fluctuations in the financial results and capital caused by changes in market values of financial assets and liabilities, as well as by changes in the economic value of insurance liabilities, after interest rates change. Further information: Market risks

Internal model

Sisäinen malli

Risk management system of an insurer for the analysis of the overall risk situation of the insurance undertaking, to quantify risks and/or to determine the capital requirement on the basis of the company specific risk profile. Further information: Partial internal model

Investment assets


Company invests the coverage of insurance liabilities and own equity for example in stocks, bonds and properties.

Investment contract


IFRS-category for life insurance policy with no insurance risk (capitalisation policy).

Investment result

Sijoitustoiminnan tulos

Net income from investments less the amount credited to policies based on guaranteed interest and possible bonuses (life insurance).

Issuer risk


The risk that an issuer is unable to fulfill its obligations. When the risk materializes, the size of the final loss depends on the investors holding of the security at the time of default, mitigated with the potential recovery rate.

In most cases, issuer risk has already been fully priced as a higher spread and respectively as a lower market value of the security before the event of default has occurred. In essence, credit spread is the market price of default risk for issued tradable securities. Similar with other earnings risks, spread risk can be actively managed. Therefore, Issuer risk is categorized in Sampo Group as being part of spread risk under investment portfolio market risks. Further information: Credit risk.

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Lapse risk


Lapse risk is related to the policyholders' right to cease paying premiums. Further information: Policyholder behavior risk

Juridinen riski

The risk of loss due to unpredictable or unknown legal development or uncertain interpretations of regulations.

Liabilities for insurance and investment contracts

Velat vakuutus- ja sijoitussopimuksista

Amount of liability covering the insured risk the company has undertaken. Provisions for unearned premiums, unexpired risks and claims outstanding in insurance company.

Liabilities for unit-linked insurance and investment contracts

Velat sijoitussidonnaisista vakuutus- ja sijoitussopimuksista

Unit-linked insurance and investment contracts are policies in which the benefits are determined by reference to the value of investments linked to each contract. Unit-linked investment contracts comprise only capital redemption policies.

Liabilities of unit-linked insurance and investment contracts at each balance sheet date are determined by using the market values of the underlying investments.

Liability adequacy test

Vastuuvelan riittävyystesti

Test required in IFRS to ensure that liabilities for insurance and investment contracts are adequate to cover insured events.

Life insurance


Insurance, which usually consists of two components 1) savings part (endowment) and 2) risk life cover. In addition other supplementary covers can also be included like cover for permanent and temporary disability, medical expenses cover etc.

Life insurance underwriting risks


In life insurance underwriting risks include biometric risks, policyholder behavior risks and expense risk.

Liquidity risk


Liquidity risk is the risk that Group companies are, due to lack of available liquid funds and/or access to relevant markets, unable to conduct their regular business activities in accordance with the strategy, or in extreme cases, are unable to settle their financial obligations when they fall due.

Liquidity risk deals with potential illiquidity of investments and unexpected non-renewal of insurance policies. In addition, the availability and cost of refinancing and the offered price for financial derivates affect the Group companies' ability to carry out normal business activities. 

Load income


To cover its expenses, life insurance company deducts loading from its policies. The sum of deducted loadings is load income.

Longevity risk


The risk of having to pay pension payments to the pension policyholders for a longer time than expected when pricing the policies.

Long-term incentive scheme

Pitkäaikainen kannustinjärjestelmä

Long-term incentive schemes are used to commit Executive Management and Key Persons to the Group for a longer period of time. Further information: The terms of Sampo Group's long-term incentive schemes

Loss ratio (Claims ratio)


Loss ratio (also called as claims ratio) is a P&C insurance term expressed as a percentage.

Calculation formula:

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Market capitalisation

Osakekannan markkina-arvo

Market value of the company.

Calculation formula:

Market risks


Market risks refer to fluctuations in the financial results and capital base caused by changes in market values of financial assets and liabilities as well as by changes in the economic value of insurance liabilities.

The changes in market values and economic values are caused by movements in underlying market variables such as interest rates, inflation, foreign exchange rates, credit spreads and share prices. Furthermore, market risks include also risk of worsening market liquidity in terms of widening bid-ask spreads and the risk of unexpected changes in repayment schedules of assets. In both cases the market value of financial instruments in investment portfolio can change.

Minimum consolidated Group SCR

Ryhmän konsolidoitu vähimmäis-SCR

Minimum solvency capital requirement calculated for the Solvency II regulated group. In Sampo's case, this group consists of Sampo plc, If P&C, Topdanmark, Hastings and Mandatum.

Minimum requirements for own funds

Omien varojen vähimmäismäärä

The sum of minimum requirements for own funds in all Group companies calculated according to sectoral rules.

Minimum solvency capital requirement (Minimum SCR)

Vähimmäisvakavaraisuuspääomavaatimus (Vähimmäis-SCR)

Under the Solvency II regime the capital level representing the final threshold that triggers ultimate supervisory measures in the event that it is breached.

Morbidity risk


The risk of having to pay more morbidity benefits than expected when pricing the policies.

Mortality risk


The risk of having to pay more mortality benefits than expected when pricing the policies.

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Net asset value per share (NAV/share)

Osakekohtainen substanssi

Similar figure with 'equity per share' figure but in NAV per share all investments are valued at market prices. If a NAV per share is higher than share price the market does not believe in the company's ability to generate profit. If the NAV per share is lower than the share price, the market believes in company's ability to generate profit in the future and this can be seen in the share price.

Calculation formula:


Net income from investments

Sijoitustoiminnan nettotuotot

Return on investment assets less expenses generated by investment assets.

Net premiums written

Omalla vastuulla oleva maksutulo

Premiums written less reinsurers' share of premiums written. Also known as Premium income on own account.

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Operating expenses


Operating expenses include expenses for the acquisition, management, administrative and investment management of insurance contracts and also commissions on reinsurance ceded.

Operating expenses in insurance operations


Expenses related to the acquisition or renewal of insurance contracts plus corporate administration costs in property and casualty insurance.

Operational risks

Operatiiviset riskit

Operational risk refers to the risk of loss arising from inadequate or failed processes or systems, from personnel, or from external events. The definition includes legal risks but excludes risks resulting from strategic decisions.

The risks may realise for instance as a consequence of internal misconduct, external misconduct, insufficient HR management, insufficiencies in operating policies, damage to physical property, interruption of activities and system failures, and defects in the operating process. 

Own funds

Oma varallisuus

An undertaking's own funds consist of basic own funds and ancillary own funds. The basic own funds consist of ordinary share capital, reconciliation reserve and some other items such as subordinated liabilities and deferred tax assets. There are no ancillary own funds in Sampo Group (Solvency II).

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P&C insurance underwriting risks


In non-life insurance underwriting risk is often divided in premium risk and reserve risk in order to distinguish between the risks related to unexpired and expired contracts.


Policy changes into paid-up status, if it agreed, that policyholder stops paying premiums.

Partial internal model (PIM)

Osittainen sisäinen malli

Partial internal model is referred to when some of the risks are quantified by company's internal model and some are measured by regulatory standard formula. Further information: Internal model.

Pension insurance


Insurance for pension cover.



Person or company, who has underwritten an insurance contract with an insurance company.

Policyholder behavior risk

Vakuutuksenottajien käyttäytymisriski

Policyholder behavior risks arise from the uncertainty related to the policyholders' behaviour in regards to premium payments and preferred maturity of policies and hence to the size and timing of future claims payments.

Premium income

Maksutulo (henkivakuutus)

Premiums paid by life insurance policyholders.

Premium risk


Premium Risk relates to future claims resulting from expected insured events which have not occurred by the balance sheet date. The frequency, severity and timing of insured events and hence future claims may differ from those expected.

As a result, the claims cost for future claims exceeds the expected level and there is a loss in financial accounting or adverse changes in the value of insurance liabilities.

Premiums earned


That portion of gross premiums written in P&C insurance that pertains to the financial year, meaning premiums written adjusted for changes in the provision for unearned premiums.

Premiums written

Vakuutusmaksutulo (vahinkovakuutus)

P&C insurance premiums for insurance periods that have started during financial year regardless if they have been invoiced or paid.

Price/Earnings ratio (P/E)

Hinta/voittosuhde (P/E-luku)

A company's share price in relation to its earnings. A high P/E ratio usually indicates growth expectations in the market.

Calculation formula:

Principle of fairness


Life insurance company distributes a part of eventual profit generated by insurance policies as bonuses to its policyholders according to company's interpretation of Principle of Fairness, if company and policyholder have agreed on this and if company's solvency is not endangered.

In division of bonuses generation of profit in different lines of insurance and from policies with different interest rate guarantees is taken into account.

Profit at market values

Tulos käyvin arvoin

Profit before taxes +/- valuation differences on investments less deferred tax.

Property and casualty insurance


Collective term for property insurance, liability insurance, reinsurance and accident & sickness insurance. Property insurance involves the type of insurance that covers the economic value of one or several objects (such as movable property in a home, car, boat, factory building or warehouse). .

Other types of property and casualty insurance mainly cover various interests (such as, business interruption insurance or liability insurance), where only a specific economic interest is covered, not the economic value of one or several objects

Provision for claims outstanding


Provision for claims outstanding consists of unpaid claims due to insurance events that have already occurred, the claims handling costs and reserves.

Provision for unearned premiums


Amount of liability covering the insured risk the company has undertaken.

Provision for unexpired risks

Siirtovastuun täydennys

A provision for unexpired risks shall be established if the net of claims, acquisition costs and expenses relating to the unearned premium exceeds the unearned premium.

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Ratio of eligible own funds to Group SCR

Hyväksyttävän oman varallisuuden ja ryhmän SCR:n suhdeluku

Solvency ratio calculated as the total eligible own funds divided by Group SCR, including other financial sectors and undertakings treated according to deduction and aggregation method. Solvency ratio for the whole group (Solvency II).

Reconciliation reserve


The total reconciliation reserve is own funds item, which results mainly from excess of assets over liabilities deducted e.g. by foreseeable dividends and other distributions (Solvency II).

Regular premium


Several regular premiums are paid in regular premium insurance.



Insurance company doesn't bear all the insurance risks by itself and therefore company buys insurance cover for part of its risks from another insurance company.

Reinsurers' share

Jälleenvakuuttajan osuus

Insurer has bought reinsurance cover from reinsurer, and reinsurer is liable for the part of insurer's paid claims and provision for claims outstanding that corresponds to the bought reinsurance.

Reputational risk


Reputational risk refers to the risk that adverse publicity regarding the company’s business practices or associations, whether accurate or not, causes a loss of confidence in the integrity of the institution.

Reputational risk is often a consequence of a materialized operational risk or compliance risk and realizes often as a deterioration of reputation amongst customers and other stakeholders.

Reserve risk


Reserve risk only relates to incurred claims, i.e. existing claims, and originates from claim sizes being greater than expected, differences in timing of claims payments from expected, and differences in claims frequency from those expected.

As a result technical provisions are not sufficient to cover the cost for already incurred claims and there is a loss or adverse changes in the value of insurance liabilities.



That part of the insurance business for which the insurance company assumes the risk and which is thus not reinsured with other companies. (Property and casualty insurance terminology.)

Return on assets (RoA)

Kokonaispääoman tuotto (RoA)

Return on Assets (RoA) indicates how much return the company generates to assets invested in the company, i.e. both equity and liabilities. RoA may vary substantially depending on the industry and the amount of tied-up assets. Therefore RoA comparisons between different industries are not necessarily relevant.

Calculation formula for Return on assets (at fair values):

Return on capital at risk

Riskisopeutetun pääoman tuotto

Return on capital at risk = Average profit on operations for the period / average Sampo Group Economic Capital

Return on equity (RoE)

Oman pääoman tuotto (RoE)

Return on equity (RoE) indicates how much return the company is able to generate for the money shareholders have invested (simplified formula: profit after tax/average equity during the year). The more liabilities company has in relation to equity, the more sensitive RoE is to variations in profit. RoE is useful for comparing profitability in companies on the same branch.

Calculation formula for Return on equity (at fair values):

Risk life policy


Policy for insured's death cover.

Risk policy


Policy covering different risks such as death, permanent disability, medical cover, and accident.

Risk ratio


In property and casualty insurance, ratio of claims incurred (claims adjustment expenses are excluded) and premiums earned, expressed as a percentage. Risk ratio shows how well the insurance company has succeeded in pricing the insurance risk. The lower the ratio, the better.

Calculation formula:


Risk result

Riskiliikkeen tulos

Risk premiums charged by life insurance company less the risk benefits paid/to be paid to beneficiaries.

Risk selection


The insurer's selection of the type of risks to be included in his portfolio. Risk selection is of major importance to an insurance company, in part because it facilitates, to the extent possible, a balanced business, which normally has a favorable impact on operating results.

Run-off result


P&C company's profit or a loss that arises when claims originating from a prior year are either finally settled or revalued.

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Settlement Risk


Settlement risk realizes when one party fails to deliver the terms of a contract at the time of settlement, when the other party has already delivered its part. Settlement risk is generally caused by an event of default of one party together with timing differences in settlement between the two parties. Settlement risks are mitigated effectively by centralized settlement and clearing systems used by Sampo Group companies.

Short-term incentive program

Lyhytaikainen kannustinohjelma

Short-term incentive programs are based on each beneficiary's contribution to the company's profitability. Performance criteria and contribution assessment are based on individual performance analysis combined with relevant business unit performance.

Single premium


Policy with premiums paid with one installment.

Solvency capital requirement (SCR)

Vakavaraisuuspääomavaatimus (SCR)

The amount of capital to be held by an insurer to meet the Pillar I requirements under the Solvency II regime. Based on 99.5 % confidence level at 1-year horizon. Breaching this level triggers supervisory measures.

Solvency II

Solvenssi II

The Solvency II regime is followed by If P&C, Topdanmark, Hastings, Mandatum Life and Sampo Group. The Solvency II Directive harmonises the EU insurance regulation and primarily this concerns the amount of capital that insurance companies must hold. Within the Sampo Group companies the main effects are on solvency and reporting.

Solvency margin ratio


Solvency margin in relation to minimum solvency margin.

Spread risk


Spread risk refers to fluctuations in the financial results and capital caused by changes in market values of financial assets and liabilities, as well as changes in the economic value of insurance liabilities, after spread changes. Further information: Market risks, credit risks

Standard formula


In the context of the Solvency II regime, a set of calculations prescribed by the regulator for generating the Solvency Capital Requirement.



Policyholder terminates his/her policy, which has savings, before maturity date and the company pays the surrender value of policy to the policyholder.

Surrender risk


Surrender Risk is related to the policyholder's possibility to interrupt their policies and withdraw their savings. Further information: Policyholder behavior risk.

Surrender value


Calculated value for an insurance policy, savings less a penalty fee for the termination before maturity date.

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Technical provisions


Provisions for unearned premiums, unexpired risks and claims outstanding.

Technical result

Vakuutustekninen tulos

Company’s result before return on investment, other income, costs and taxes (P&C insurance terminology).

Technical result before the transfer of return of allocated investment return

Vakuutustekninen tulos ennen sijoitustoiminnan nettotuotto-osuuden siirtoa

Item in the technical accounts comprising premiums earned less claims and operating costs (P&C insurance terminology).

Term life insurance


The agreed compensation is paid to the beneficiary if the insured dies during the validity of insurance.

Total comprehensive income

Kauden laaja tulos

Total comprehensive income is calculated adding together profit and other comprehensive income (OCI) for the period after taxes. OCI includes changes in exchange differences, available-for-sale financial assets, cash flow hedges, share of associate's other comprehensive income as well as actuarial gains and losses from defined pension plans.

Total eligible own funds to meet the Group SCR

Ryhmän SCR:n täyttämiseksi hyväksyttävä oma varallisuus yhteensä

The total eligible own funds, including the own funds from the undertakings included via deduction and aggregation method, to meet the Group SCR (Solvency II).

Total technical reserves on own account

Vastuuvelka omalla vastuulla

Liabilities for insurance and investment contracts after reinsurers' share.

Transfer of liability


Transfer of insurance portfolio from insurance company/pension fund into another insurance company.

Transitional rules


Solvency II capital requirement calculation rules have not yet come into full force due to transitional rules (also known as transitional measures) developed by the financial supervisory authorities.

The relevant transitional rules for Sampo Group are related to the calculation of technical provisions and the equity risk. The application of the former requires approval from the authorities whereas the latter may be applied at the company’s own discretion. Mandatum Life applies the transitional measures on the technical provisions, whereas If, Topdanmark and Hastings do not apply neither of the transitional rules.

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The risk assessment and pricing conducted when insurance contracts are drawn up. In accounting contexts, the term is also used more broadly to designate the operations of an insurance company that do not have the character of asset management.

Underwriting result


The insurer's profit on the insurance sale after all expenses and losses have been paid. When premiums are not sufficient to cover claims and expenses, the result is an underwriting loss.

Unit-linked insurance policy

Sijoitussidonnainen vakuutussopimus

Life policy, in which the value of savings depends on development of an external instrument such as an investment fund. The policy holder bears the risk of value changes.

Unit-linked reserves of total technical reserves

Sijoitussidonnaisiin vakuutuksiin liittyvä vastuuvelka

Liabilities from unit-linked contracts.

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Valuation differences


Difference between fair value and book value of investments.

Variable compensation

Muuttuva palkitseminen

Variable compensation in Sampo Group can be divided into two main groups, which are a) variable compensations based on the contribution to the company's profitability and b) variable compensations linked to committing employees to the Group.

Voluntary pension insurance

Vapaaehtoinen eläkevakuutus

Voluntary pension insurance schemes are savings for retirement and are usually used to supplement statutory pension cover. These insurance contracts are often long-term and last for several decades. Voluntary pension insurances mainly consist either from unit-linked insurance policies or guaranteed-return policies or combinations of both.

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With profit policy

Laskuperustekorkoinen sopimus

Life policy, in which policy holder's savings are credited by guaranteed interest and possible bonuses.

With profit technical provisions

Laskuperustekorkoinen vastuuvelka

Liabilities for traditional insurance and investment contracts.