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Sampo´s Property & Casualty Insurance Companies to become a part of the If Group
Stock Exchange Release - 7 Nov 2001 at 12:15 PM
Sampo's property & casualty (P&C) insurance companies and P&C insurance company If will combine their business operations to form the largest P&C insurer in the Nordic countries with a market share of 24%. Sampo plc, Varma-Sampo Mutual Pension Insurance Company, Skandia Insurance Company Ltd (publ), Livförsäkringsaktiebolaget Skandia and Storebrand ASA have today agreed on the transaction primarily on the basis of the agreement of 20 May 2001. In addition, If's capital base will be strengthened considerably.
The holdings in If will be formed on the basis of those agreed on in May. After the share issue directed to Varma-Sampo and the capitalisation of If, the ownership will be divided as follows: Sampo 38.05%, Varma-Sampo 10.06%, Skandia 19.36%, Skandia Liv 10.06% and Storebrand 22.47%. In addition to its holding, Sampo will receive a cash consideration of EUR 209 million for its P&C insurance business. Sampo and Varma-Sampo will together hold 50 per cent of the votes in If.
The parties have agreed to elect to the company's Board three Sampo representatives (incl. Chairman), one representative from Varma-Sampo and two from Skandia and Storebrand, respectively. Kari Stadigh will be elected the Chairman of the Board of Directors. The company's CEO and President will continue to be Bo Ingemarson. Hannu Kokkonen will become his deputy and Knut W Francke will become Senior Executive Vice President.
The shareholders have agreed to strengthen the balance sheet of If by a capital contribution totalling EUR 306.1 million. Varma-Sampo will contribute EUR 174.0 million via a directed primary share issue. Sampo, Skandia and Storebrand will make cash injections of EUR 37.9 million, EUR 58.8 million and EUR 35.4 million, respectively. A minimum of EUR 254.9 million will be used to strengthen the equity capital. The remaining portion will be used towards reinforcing the technical provisions and the reserve strength of If.
"After the capitalisation decisions made and the inclusion of Sampo's P&C operations, If, the leading Nordic P&C insurer, is a stronger operator than before, in the whole Nordic area. Both measures together represent a new basis for the company to also endure unstable market conditions. We also believe that an internationally competitive P&C insurer is a good investment for Sampo", says Björn Wahlroos, CEO of Sampo.
"In their new role as owners, Sampo and Varma-Sampo will influence If's operating policy. The same profitability and efficiency targets which have been required from Sampo domestic P&C insurance will apply to the whole If Group", states Kari Stadigh, the future Chairman of the If Board of Directors.
If's aim is to provide the best price-quality ratio in the Nordic countries through a modern and flexible product range.
The ownership arrangement does not require any measures from Sampo's P&C insurance customers. Their insurance policies will remain with the current companies which, even after these arrangements, remain Finnish and subject to Finnish insurance supervision.
In Finland, Sampo's P&C insurance customers will continue to be served under the Sampo brand. In other Nordic Countries, If will use its own brand which in Finland will also be maintained in If's current call centres, and broker and Internet service channels.
Pro forma gross premiums written of the enlarged If during the first 9 months of 2001 amounts to approx. EUR 3.0 billion and the net assets amount to EUR 1.8 billion. The combined ratio of the new Group was 108.6% (pro forma; excluding SII). The number of employees is approx. 8,000. The company's market share in Norway is 37% (1.), in Finland 34% (1.), in Sweden 23% (2.) and in Denmark 5% (6.). In Estonia, the market share is 39% (1.).
The merger with If is expected to be completed by the year-end 2001, provided that the necessary approvals from the authorities have been received.
Sampo was advised by Goldman Sachs International and Mandatum & Co.
in connection with this transaction.
Head of Group Communications
FOR FURTHER INFORMATION, PLEASE CONTACT:
Kari Stadigh, the future Chairman of the If Board of Directors,
tel. +358 10 514 0004
Jarmo Salonen, Head of Investor Relations, tel. +358 10 514 0030
A press conference will be held on 7 November at 5.00 p.m. Finnish time at the address Eteläesplanadi 8, Helsinki, Finland. Björn Wahlroos, CEO of Sampo; Kari Stadigh, future Chairman of the If Board of Directors, and Hannu Kokkonen, future Deputy CEO of If, will attend the conference.
A teleconference will be held at 5.30 PM CET. Kari Stadigh, Deputy CEO Sampo, Idar Kreutzer, CEO Storebrand, Ulf Spång, CFO Skandia and Bo Ingemarson, CEO If will be present. Please call +46 8 500 521 36 at 5.25 PM. For presentation, please visit www.if-insurance.com.
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