debt investor presentation - sampo group · • roe%: 24.6% (2016: 25.3%) if p&c ‒ a...

Debt Investor Presentation

PREPARED November 8, 2017FIGURES September 30, 2017

DEBT INVESTOR CONTACTS

Markku Pehkonen, CROtel. +358 10 516 [email protected]

Peter Johansson, CFOtel. +358 10 516 [email protected]

Jarmo Salonen, Head of Investor Relations and Group Communicationstel. +358 10 516 [email protected]

FINANCIAL CALENDAR 2017

08/02/2017 Financial Statement Release for 2016Silent period 09/01/2017-08/02/2017

Week 12 Annual Report 201627/04/2017 AGM11/05/2017 Interim Statement Q1/2017

Silent period 11/04/2017-11/05/201709/08/2017 Half-Year Financial Report 2017

Silent period 10/07/2017-09/08/201702/11/2017 Interim Statement Q3/2017

Silent period 03/10/2017-02/11/201707/02/2018 Financial Statement Release for 2017

Issuer Rating Moody's Standard and Poor's

Rating Outlook Rating Outlook

Sampo plc Baa1 Stable A- Stable

If P&C Insurance (Sweden) A1 Stable A+ Stable

If P&C Insurance Co. (Finland) A1 Stable A+ Stable

DisclaimerThis presentation may contain forward-looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Sampo believes that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of various factors.Important factors that may cause such a difference for Sampo include, but are not limited to: (i) the macroeconomic development,(ii) change in the competitive climate and (iii) developments in capital markets.This presentation does not imply that Sampo has undertaken to revise these forward-looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to changes compared to the date when these statements were provided.

2

Sampo Group Nordic Financial Group with Strong Brands 3-17

If P&C Diversified Nordic P&C Insurer 18-23Mandatum Life A Finnish Financial Services Company 24-28Sampo plc Parent Company with Capacity to Generate Funds 29-35Appendix Separate Supplementary Information 36-47

3

4

Sampo Group structure

The leading P&C insurer in the Nordic region with full service offering and a strong European presence

Focus areas:• Customer value• Focused insurance expertise• Nordic business platform• Investment strategy with

balanced risk

~ EURbn 12.4

• RoE above 17.5%• CR% below 95%

The second largest P&C insurer in Denmark

Customer satisfaction• Pricing• Efficiency

• Digitalisation, Processoptimisation, transformation

• Distribution power

~ EURbn 2.7 (P&C)

• Profit margin of 10%• CR% 91%

One of Finland’s most respected and best capitalised financial services providers to private & corporate customers

• Unit-linked products• Wealth management• Personal Risk insurance • Group pension & Reward

Services

~ EURbn 6.3

• RoE above 17.5%

• Long-term investor• Manager of capital structure and liquidity

• Pay-out ratio ≥ 50%

Market position

Strategy

Investmentassets

Return /profit target

Subsidiary Subsidiary

100% > 45% 100%

The most diversified bankingin the Nordics with strong capital generation

Simplification• Cost & capital efficiency• One operating model• Compliance• Digital Offering

~ B/S EURbn 615~ AuM EURbn 331

• ROE above the Nordic peer average

Associated Company

21.2%

Sampo Group ― Nordic Financial Group with Strong Brands

Subsidiary

42.030.3

27.225.2

24.323.5

22.919.3

8.16.2

5.64.3

3.33.2

1.50.80.6

NordeaDanske

DNBSampo

SwedbankSHBSEB

InvestorGjensidige

IndustrivärdenTryg

JyskeStorebrand

TopdanmarkAlm.Brand

ProtectorNordax

Efficient and Stable Operations as Basis for Value

Source: Thomson Reuters

>45%

*100% owned by the Republic of Finland; 30.9.2017

A Mixed Financial ConglomerateMarket cap October 31, 2017, EURbn

BankInsuranceInvestment company

Foreign and Nominee registered 62.06%

Solidium 11.90%*

Varma Mutual Pension Ins.Co. 5.35%

Björn Wahlroos 1.79%

The State Pension Fund 0.70

Ilmarinen Mutual Pension Ins.Co. 0.66%

Other domestic owners 17.55%

>21%

In total over100,000 owners 5

Strong relative performance10Y Total Shareholder Return

Sampo ownership structure


1-9/2017 Result • Pre-tax profit EURm 603 (624)• Comprehensive income EURm 556 (472)• Excellent combined ratio of 85.9% (84.0)

– Risk ratio 64.2% (62.0); Cost ratio 21.8% (22.1)– Expense ratio 16.2% (16.6)

• ROE%: 24.6% (2016: 25.3%)

If P&C ‒ A Diversified Nordic P&C Insurer• Diversified and profitable subsidiary• Provides insurance solutions and services

in the Nordic and Baltic regions as well asto Nordic customers with international operations

• As an only company business activities are operated on a pan-Nordic basis

• The business is divided into customer segments Private, Commercial and Industrial

• The Baltic countries comprise a separate business area

• More than 3.7 million customers• Employees ~6,400• Leading Nordic insurer with a Nordic

market share of 17%, 22% with Topdanmark

549

644

707

636

864

929

931

960

883

-267

1,12

7

943

308

978

689

526

624

714

-400-200

0200400600800

1,0001,200

Profit before tax

Comprehensiveincome

Strong & Stable Annual Profit DevelopmentEURm

68.1

68.0

69.1

68.4

65.9

65.4

65.1

66.6

62.3

64.2

23.7

24.1

23.7

23.5

23.0

22.8

22.5

18.8

22.1

21.8

91.8

92.1

92.8

92.0

88.9

88.1

87.7

85.4

84.4

85.9

020406080

100%

Cost ratio

Risk ratio

TargetCR

Combined Ratio Development

6


1-9/2017 Result• Topdanmark’s contribution to Group Pre-tax profit EURm 796 (35)including EURm 706 from valuing of Topdanmark to fair value• Combined ratio 81.9% (85.3)

– Claims ratio 65.9% (69.0); Expense ratio 16.0% (16.3)

• A profitable subisdiary with robust business model• Carries out Danish non-life insurance,

life insurance and pension fund business• Non-life business is divided to

‒ Personal segment (~500,000)‒ SME & Agricultural segment (~100.000)

• Life insurance (~130 000)• Employees ~2,600• Market shares in Denmark: P&C insurance 17%,

life insurance 8%• Strategic focus

‒ to achieve primarily organic growth, supplemented by close co-operation with alliance partners, and opportune acquisitions

‒ to develop and improve customer service‒ to optimise shareholders' return / risk profile ‒ to be a dynamic organisation‒ to align the goals of its stakeholders

• Sampo’s ownership of shares 46.7% and of votes 49.3%

(100) 0

100 200 300 400 500 600 700 800 Parent

company etc.

Lifeinsurance

Non-lifeinsurance

2012 2013 2014 2015 2016

Pre-tax Profit Quarterly, DKKmDKKm

Combined Ratio,%

72.2 75.4 70.3 70.9 68.7

15.8 16.2 15.7 15.9 16.4

020406080

100

2012 2013 2014 2015 2016

%

ExpenseratioClaimsratioTarget CR

85.186.886.091.588.0

Topdanmark – A Danish Non-life and Life Insurer

7


1-9/2017 Result• Pre-tax profit EURm 180 (157) • Comprehensive income EURm 163 (193)• ROE%: 15.6% (2016: 15.9%)

140

121

142

137

136

153

163

181

210

-378

495

332

-115

286

220

149

168

232

-500

-250

0

250

500

Profit beforetaxes

Comprehensiveincome

Profit Development, EURm

• Finnish Profit sharing mechanism – principle of fairness ‒ facilitates active investment strategies and risk taking.

• Profit sharing mechanism has benefited both policyholdersand shareholders over the years.

• Smoothened bonuses and dividends over time. 0

2,000

4,000

6,000 Other WP-liabilitiesSegregated Group PensionWP-liabilities (3.5% guarantee)WP-liabilities (4.5% guarantee)

With-Profit Technical Provisions Forecast *, EURmCurrent

* Unit-linked Technical Provisions 30.9.2017 EUR 6,909m

8

• Provides a comprehensive range of servicesin Finland and Baltics for private and corporate customers

• Services provided‒ Wealth management‒ Savings‒ Personal risk insurance‒ Pension and incentive &

reward services• Customers ~275,000 (Finland)• Employees ~520• A leading life and pension insurer in Finland

with ca 20% market share


Mandatum Life ‒ A Finnish Financial Service Company

• The Leading Bank in the Nordics and a major European Bank company

• Diversified and stable returns• Offers a full range of banking services• Business areas: Personal Banking, Commercial

Banking & Business Banking, Wholesale Bankingand Wealth Management

• Operates in 8 home markets: The Nordic region, the Baltics and Russia

• Customers:‒ households 10 million‒ corporates and institutionals 0.5 million

• Employees ~32,000• Sampo’s ownership of shares and votes 21.2%

1-9/2017 Result• Nordea’s contribution to Group

‒ Pre-tax profit EURm 491 (546)‒ Comprehensive income EURm 467 (517)

• Excellent C/I ratio of 52% (49)• Common Tier1 ratio 19.2% (17.9)• ROE%: 10.1% (2016:11.5)• Nordea book value in Group accounts EURm 7,493

(+positive valuation difference EURm 2,352)

-2000

200400600800

1,0001,2001,4001,600 Restructuring/

impairmentcharges/gainsLoan losses

Operatingprofit

-08 -09 -10 -11 -12 -13 -14 -15 -16

18 23 36 54 73

127

Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5

Nordea and Peers 2006-2016Quarterly Net Profit Volatility,%

Low Quarterly Result Volatility, EURm

-17

Nordea – A Nordic Banking Group

9


• Geographical diversification• Strong Retail P&C Franchise• Several Lines of Businesses

‒ Motor, Cargo‒ Workersʼ compensation‒ Liability ‒ Accident‒ Property

• Low C/R volatility and Conservative Investments

Diversified Companies & Diversified Portfolio*

• Geographical diversification• Strong Retail Banking Franchise• Diversified earnings base:

‒ Banking (Retail, Wholesale)‒ Wealth Management (Asset

Management, Private Banking, Life & Pensions)

• Low earnings volatility & stableROE over the cycle

• Finland & Baltics• Strong Finnish Position• Product areas

‒ Wealth Management‒ Unit-linked Business‒ With-profit Business ‒ Remuneration services‒ Risk insurance

• Dependency on Capital Markets

* Correlations of quarterly Reported Profits Q1/2005–Q3/2017

PBT 2010-16

IF 45%ML 10%Nordea 45%

P/L CONTRIBUTIONS LOW VOLATILITY EARNINGS LOW VOLATILITY C/R FOCUS ON U-L & WM

0.26

0.14

1

0.86 1

1

10


0.38 0.68 0.69 1

• Denmark• Second largest insurance

company• Nation-wide businesses

‒ Non-life insurance‒ Life insurance‒ Pension fund

• Stable insurance riskand low C/R volatility

LOW VOLATILITY C/R

948

1,295 1,353

870 825

1,320 1,228

1,616 1,668 1,7591,888 1,871

-2000

200400600800

1,0001,2001,4001,6001,8002,0002,200

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016P&C Life Banking Holding

Steady Development of Profit before Taxes

* One-off item – sale of Sampo Bank

EURm

*

• If P&C• Mandatum Life• Sampo Bank

• If P&C• Mandatum

Life• Nordea /

Investment

• If P&C• Topdanmark / Associated• Mandatum Life • Nordea / Associated

3,833

EURm 9M/17 9M/16If P&C 603 624Topdanmark 796* 35Life 180 157 Nordea 491 546Holding -27 -19Group 2,046* 1,343

11


* Includes 706 EURmfrom valuing of Topdanmarkto fair value

Risk Profiles of Investments

* non-consolidated

*

12


Total Group (MEUR) 20,708 20,813 20,111 19,786

12/16 03/17 06/17 09/17

Money Market 8% 13% 75% 5% 6% 73% 6% 11% 35% 7% 11% 57%Long-Term Fixed Income 79% 47% 20% 82% 53% 21% 81% 51% 55% 80% 50% 33%Equity 13% 26% 5% 13% 27% 4% 13% 25% 5% 12% 26% 8%Private Equity 0% 4% 0% 0% 4% 0% 0% 3% 0% 0% 3% 0%Other 0% 10% 1% 0% 10% 1% 0% 9% 5% 0% 9% 2%

12,192

6,582

1,933

12,337

6,547

1,929

12,319

6,507

1,285

12,367

6,331

1,088

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

IfP

&C

Man

datu

mLi

fe

Sam

poPl

c IfP

&C

Man

datu

mLi

fe

Sam

poPl

c IfP

&C

Man

datu

mLi

fe

Sam

poPl

c IfP

&C

Man

datu

mLi

fe

Sam

poPl

c

Investments & Counterparty Exposures*

* In Exposure tables the calculation rules may differ slightly from Allocation tables in some areas.13


30.9.2017AAA AA+ -

AA-A+ - A-

BBB+ - BBB-

BB+ - C D Non

RatedFixed Income

Total Equities OtherDerivatives

(Counterparty Risk)

TotalChange

from 30.6.2017

Basic Industry - - 45 43 34 18 116 256 95 - - 350 + 15Capital Goods - 31 105 62 - - 128 326 708 - - 1,034 + 30Consumer Products - 132 326 397 20 - 86 961 596 - - 1,557 - 8 Energy - 69 30 - 61 - 172 331 14 0 - 345 - 61 Financial Institutions - 2,176 2,699 1,158 32 - 16 6,081 99 1 11 6,193 + 166Governments 96 - - - - - - 96 - - - 96 - 1 Government Guaranteed 76 78 - - - - - 153 - - - 153 + 0

Health Care 7 40 51 49 46 - 56 249 105 - - 354 - 22

Insurance - - 42 122 17 - 63 245 3 37 - 284 - 23 Media - - 15 - - - 39 53 - - - 53 - 2 Packaging - - - - 23 - 23 46 1 - - 47 - 6 Public Sector, other 693 223 42 - - - - 959 - - - 959 - 60 Real Estate - 6 94 102 3 - 516 720 - 210 - 930 + 7Services - - - 90 69 - 152 310 120 0 - 430 - 10 Technology and Electroni 23 - 81 - 26 - 36 167 138 - - 306 + 2Telecommunications - - 5 167 9 0 75 256 96 0 - 352 + 5Transportation - 61 11 57 11 - 223 363 35 - - 398 + 9Utilities - 2 33 369 70 - 62 536 - - - 536 - 5 Others - 26 - - 4 - 15 45 0 41 - 86 - 11 Asset-backed Securities - - - - - - - - - - - - + 0Covered Bonds 3,234 129 14 10 - - - 3,387 - - - 3,387 + 38Funds - - - - - - 140 140 1,274 530 - 1,945 - 45 Clearing House - - - - - - - - - - 21 21 - 2

Total 4,129 2,973 3,594 2,626 424 18 1,917 15,681 3,284 819 33 19,817 + 17

Change from 30.6.2017 - 56 + 158 - 43 + 77 - 117 + 18 - 1 + 36 + 26 - 41 - 3 + 17 EURm

Mandatum Life – Solvency II Capital Requirement (SCR)With transitional measures, September 30, 2017

LAC = Loss Absorbing Capacity, TP = Technical Provision, DT = Deferred Taxes

*

* Own Funds without transitional measures EUR 1,663m

EURm SF with transitional measures Solvency ratio 193%

1,229

60391 282

36 72272

1,089

272

2,100

0

500

1,000

1,500

2,000

2,500

14


EURm

698

1,47

8

296

842

176 217

1,58

9

3,89

7

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1,39

6

1,16

4

11951

8

176 332

2,00

4

3,86

70

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Internally assessed Solvency ratio 245%Standard Formula Solvency Ratio 193%

LAC = Loss Absorbing Capacity, DT = Deferred Taxes, SCR= Solvency Capital Requirement

EURm

S&P TTC for A rating 3,184 EURm S&P TTC for A rating 3,184 EURm

If P&C Solvency Capital Requirement September 30, 2017

15


2,004

1,089509

3,508105

7,215

11,236

0

2,000

4,000

6,000

8,000

10,000

12,000

If P&C (SF*) MandatumLife (SCR**)

Topdanmark Sampo plc'sshare ofNordea

Sampo plc Total capitalrequirement

GroupSolvencyCapital

Group Solvency Capital by Financial Conglomerate Rules September 30, 2017

EURmGroup solvency ratio 156% / SII Standard Formula applied for Insurance Subsidiaries

*) Standard formula, **) SCR with transition rules

16


Value Creation in the Nordic Financials as Group Strategy

LONG-TERM VALUE CREATION

• Value creation through investments in Nordic financials based on knowledge of Nordic markets, Nordic financial institutions & Nordic people.

• Commitment to the long-term development of affiliated companies.

OPERATIONAL EXCELLENCE IN SUBSIDIARIES

• Continuous development of services => excellence in underwriting and risks.• Economies of scale and high retail/consumer content.• Pan-Nordic diversification & operational excellence facilitate low volatility.

CONSERVATIVE PARENT WITH PROFIT FOCUS

• Conservative capital structure, low leverage and strong liquidity.• Parent company steers subsidiaries through Boards by approving (in Nordea

and Topdanmark by contributing to) strategies, guiding principles and ROE targets.

GROUP LEVEL PORTFOLIO BENEFITS

• Profitable companies, mostly with the lowest volatility in the peer group.• Profits of affiliated companies have low correlation creating diversification

benefits at the Group level.

LONG-TERM VALUE FOR SHAREHOLDERS & BONDHOLDERS

CENTRALIZEDINVESTMENT MANAGEMENT

• Company specific liabilities and solvency driving risk profiles, supported bya Group-wide investment philosophy. Common investment infrastructure facilitates effective monitoring and fast actions, also at the Group level.

17




18

56%28%

13%3%

PrivateCommercialIndustrialBaltic

By Business Area By Country

68%

22%

6%2%2%

PrivateCommercialIndustrialBalticOther

Technical Results,EURm 463 49%

35%

11%1%

2%2% Norway

SwedenFinlandDenmarkBalticOther

Gross WrittenPremiums, EURm 3,621

30%

35%

23%

9%3% NorwaySwedenFinlandDenmarkBaltic

If P&C – Diversified Nordic P&C Insurer

Diversified Client Base

19

9M/2017

Expense ratio 2016, %

Combined Ratio ‒ If P&C and Nordic Weighted Average

If P&C and BA Combined Ratios and deviation

Standard deviation 2008-20163.1%

4.3%

4.9%

3.7%

3.5%

92.8 92

88.9

88.1

87.7

85.4

84.4

96.1

96.1

91.5

91.3

88.5

88.9

87.6

75

80

85

90

95

100

2010 2011 2012 2013 2014 2015 2016If P&C Nordic Market (excl.If)

Disciplined Underwriting and Diversification work

%

16.416.617.218.2

25.326.927.428.7

31.831.9

TopdanmarkIf P&C

Nordic market excl. IfRSA Scandinavia

Direct LineAXA

GeneraliAllianz

ZFSAviva

Private Commercial

IndustrialBaltic

If P&C

Norway

Sweden

Finland

Denmark

0

2

4

6

8

10

12

14

86 88 90 92 94 96 98

CR

% S

tand

ard

devi

atio

nQ

1/20

07-Q

3/20

17

Average CR% Q1/2007-Q3/2017

20


http://www.topdanmark.dk/

http://www.topdanmark.dk/

Conservative Investment Portfolio

• Duration 1.4 years• Average Maturity 2.7 years• Fixed Income Running Yield 1.5%

Mark-to-Market Investment Return, %Investment Allocation

4.3%5.8%

4.4%2.6%

-3.1%

12.4%

7.4%

1.8%

6.1%5.0%

4.1%1.5%

2.9%

-4%-2%1%4%6%9%

11%14%

2004200520062007200820092010201120122013201420152016

Mark-to-Market Investment Return, EURm

821

113

689558

459

190334

0200400600800

1,000

2010 2011 2012 2013 2014 2015 2016

Total EUR 12.4bn

1-9/2017 EUR 338m

1-9/2017 2.8%

21


Money Market 7%

Public Sector 9%

Other Fixed

Income45%

Covered Bonds26%

Equities12%

Private Equity 0.2 % Real Estate0.2 %

Other 0.0 %

0

50

100

150

200

250

300

350

Investment result

Technical result

Operating result

Seasonality in Quarterly Results and CR%

Q4 Q3 Q2 Q1Average Quarterly CR%, 2006-2016 89.5 88.3 87.9 92.2Year 2016 CR% 85.6 84.6 84.5 83.0*Year 2017 CR% 84.8 85.7 87.4

EURm

* incl. positive one-off

22


Nordic P&C Insurance Market

23

21

18

6

12

17

Finland

Norway

Sweden

Denmark/ If P&C +Topdanmark

Baltics

If18%

Topdanmark5%

Tryg9%

LF10%

Codan9%

Gjensidige8%

Folksam6%

OP6%

LähiTapiola4%

Other25%

If + Topdanmark 23%

Total premiums EUR 26 bn

• Consolidated markets• Loyal clients• Direct sales dominates the market• Various other distribution channels• Low expense ratios• Good profitability

Latest available data

Nordic Market Shares, % If P&C Market Shares by Country, %

23




24

Premiums Written, EURm 634

Insurance SavingsEURm 10,652

169

84297

1355 15

1

2,448

2,140

2,154163

166

3,536

28 17

Unit-linked life Unit-linked pensionUnit-linked capital redemption Unit-linked BalticOther life Other pensionOther capital redemption Other Baltic

Mandatum Life Business Volumes

U-LEURm 6,905

With-ProfitEURm 3,747

U-L EURm 563

With-ProfitEURm 71

4,65

2

4,62

6

4,73

8

4,69

5

4,62

1

4,48

7

4,43

1

4,41

0

4,24

9

4,07

1

3,92

7

5,06

5

5,01

4

4,82

1

4,62

9

607

884

1,26

2

1,75

2

2,07

1

1,63

7

2,35

9

3,12

4

3,05

4

3,83

3

4,61

6 5,31

2

5,85

8

6,44

0

6,90

9

0

2,000

4,000

6,000

8,000

10,000

12,000Guaranteed interest rates Unit-linked

Technical Provisions, EURm 11,538

EURm

Mandatum Life - A Finnish Financial Services Company

Note: Excluding reserves for decreased discount rate, future bonus reserves and longevity reserve

25

9M/2017

Investment Portfolio covering With-Profit liabilitiesMark-to-Market Investment Return, %Investment Allocation

8.3%

12.0%9.7%

5.0%

-7.8%

16.8%

11.1%

-1.4%

9.4%7.1%

4.6%

6.9%6.70%

-10%

-5%

0%

5%

10%

15%

20%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

615

-59

504391

251

427 440

-1000

100200300400500600700

2010 2011 2012 2013 2014 2015 2016

• Duration 2.2 years• Average Maturity 2.6 years• Fixed Income Running Yield 2.6%

Mark-to-Market Investment Return, EURm1-9/2017 EUR 335m

1-9/2017 5.0%

26


Asset Allocation 30.9.2017, 6 331 EURm

Money Market Securities and

Cash12 %

Government Bonds

1 %

Credit Bonds, Funds and

Loans50%

Listed Equity26 %

Real Estate4%

Private Equity3 %

Unlisted Equity0 %

Biometric0,2%

Commodities0 %

Other Alternative

4 %

Trading Derivatives

0 %

Mandatum Life Profit by Components

Total expense ratio, % 98.4 101.8Incl. kick backs, % 78.5 82.5

EURm 1-9/2017 1-9/2016Net investment income 645.2 359.4

- Transferred to expense result -20.0 -18.2- Return on Unit-linked policies -334.7 -135.3- Return on With-profit policies* -140.4 -79.6

INVESTMENT RESULT 149.9 126.3EXPENSE RESULT** 21.3 16.8RISK RESULT 20.9 15.1OTHERS -11.9 -1.3PROFIT BEFORE TAXES 180.3 156.9Change in the market value of investments 27.7 86.3PROFIT AT MARKET VALUES 208.0 243.2

Mandatum Life Group, expense ratio

* Includes guaranteed interest, bonuses and change in the reserves of the above items** Result of Unit-linked business EURm 22.7

27


Life insurance Market

OP Life22%

Mandatum Life24%

Nordea31%

LähiTapiola9%

Fennia5%

Sp-Henkivakuutus

3%

Aktia 2%

Other4%

Total premiums EUR 4.5 bn

• Various distribution channels• Bankassurance• Unit-linked products• Markets sensitive for regulation, tax changes,

interest rate movements

7

8

Baltics/Mandatum Life

Danmark/Topdanmark

Latest available data

Finland ‒ Market Shares, % Market Shares by Country, %

28




29

Simple Cash Flows, low leverage and adequate liquidity

Dividends • If P&C• Mandatum Life• Nordea• Topdanmark

• Internal Administration Costs• Discretionary Dividends for Shareholders• Interest Expenses for Bondholders

Income• Interest on Liquidity • Income from other

investments

Sampo plc

Assets 10,354 Liabilities 10,354

Liquidity 624 CPs Issued 293

Investment assets 210 LT Senior Debt 2,885

- Real Estate 2 - Private Placements 128

- Fixed Income 60 - Bonds Issued 2,757

- Equity & Private Equity 148 - Pension Insurance loans

Subordinated Loans 500 Subordinated Debt 0

Equity Holdings 8,958 Capital 7,092

- Subsidiaries 3,401 - Undistributable 98

- Associated 5,557 - Distributable 6,994

Other Assets 62 Other Liabilities 84

Flow of Funds Balance Sheet, EURm

Key Credit Metrics well in Single A rangeSampo plc 30.9.2017Gross Debt, EURm 3,178Gross Debt to Equity 45%Financial Leverage 31% (= Debt/(Debt+Equity)

Sampo Group, EURm Q3/2017Shareholders' Equity 13,322Hybrid Bonds 343Senior Debt 3,194Financial leverage 23.4%

Sampo plc - Parent Company with Capacity to Generate Funds

30

Cash and tradable financial investments 30.9.2017

Instrument Running Yield Call/ Maturity

Cash EURm 624

Investment Assets EURm 210

Subordinated loans (MV) EURm 500 ≈ 5.00%

- Mandatum Capital Loan EURm 100 4.42% Every year

- IF 30NC10 EURm 99 6.07% 08.12.2021- Nordea AT1 PerpNC5 USDm 171 5.95% 23.9.2019- Nordea AT1 PerpNC5 USDm 98 6.48% 13.9.2021- Topdanmark 10NC5 DKKm 135 2.92% 11.12.2020- Topdanmark 10NC5.5 DKKm 270 2.40% 11.6.2021

TOTAL * EURm 1,334

• In case subordinated loans are sold, both liquidity and Own Funds at Group level are generated• This buffer of liquidity and Own Funds comes with positive interest margin

31


Sampo Group ― Conservative Leverage

-4,000-2,000

02,0004,0006,0008,000

10,00012,00014,00016,000

Q1/

05

Q1/

06

Q1/

07

Q1/

08

Q1/

09

Q1/

10

Q1/

11

Q1/

12

Q1/

13

Q1/

14

Q1/

15

Q1/

16

Q1/

17

Sampo plc Net debtGroup NAVGroup Equity

EURm

0%

5%

10%

15%

20%

25%

30%

35%

40%

Q1/

05

Q1/

06

Q1/

07

Q1/

08

Q1/

09

Q1/

10

Q1/

11

Q1/

12

Q1/

13

Q1/

14

Q1/

15

Q1/

16

Q1/

17

Net debt/NAV

• ”Loan-To-Values” based on above figures is low• Parent Companyʼs Financial Leverage is 31% => Sampoʼs position to refinance its debt is strong

32


Dividends Received by Payment Year

EURm

249

1,031

519

181

488 540406

544 490597 587 586

6,000SEKm

293

100

300

200

200

100100

100 100

125

125

150

141

75

35

13080

204 250 224293

370533

551559

490

1,406

754

511 568

744 756 768883

1,067

1,220

1,555~ 1,456

0

200

400

600

800

1,000

1,200

1,400

1,600

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

NordeaMandatum Life Extra DividendMandatum LifeIf P&C Extra DividendIf P&C

Sampo Bank 2005-2006, Nordea 2007->

*

*) Extra dividend

33


*

Reported Profits facilitates Debt Servicing

* Parent Company is not equal to Holding Segment; Dividend Income includes also dividends from Private Equity investments

747

-8 -37

702762

-10-70

683773

-17 -20

737

879

-20 -26

832

1,069

-18 -1

1,050

1,226

-14

17

1,229

1,567

-17

17

1,567

-100

100

300

500

700

900

1,100

1,300

1,500

1,700

Dividend income Operating expenses Net financial expenses Profit before taxes

2010 2011 2012 20132014 2015 2016

*

EURmEURm 9M/2017 9M/2016Dividends 838.1 980.3Operating expenses -10.6 -8.3Net financial expenses/income -20.0 -23.3Profit before taxes 807.5 948.7

34


Issued Debt InstrumentsE

UR

m

Instrument & Principal Coupon Swap Effective Rate Maturity

CPs issued EURm 293 Euribor + Margin 0.2500% Average 3M

Senior Bond SEKm 2,000 (EMTN) Stibor3M + 1.45% Euribor3M+1.375% 1.0460% 29.05.2018

Senior Bond EURm 500 (EMTN) 1.1250% --- 1.1640% 24.05.2019

Senior Bond SEKm 2,000 (EMTN) Stibor3M + 0.77% Euribor3M+0.586125% 0.2571% 28.05.2020

Senior Bond SEKm 1,000 (EMTN) 1.2500% EUR 1.007% 1.0070% 28.05.2020



Senior Bond EURm 500 1.25% EUR6M + 0.735% 0.4810% 20.05.2025

Public debt EURm 3,050 0.9216% Private placements EURm 128 1.1829%Total EURm 3,178 0.9321%

35


0200400600800

2017 2018 2019 2020 2021 2022 2023 2024 2025CP´s Senior under EMTN Senior Retail Private


If P&C Diversified P&C Insurer 18-23Mandatum Life A Finnish Financial Services Company 24-28Sampo plc Parent Company with Capacity to Generate Funds 29-35Appendix Separate Supplementary Information 36-47

36

Sampo Group’s Outlook for the rest of 2017

Appendix – Separate Supplementary Information

Sampo Group’s business areas are expected to report good operating results for 2017.

However, the mark-to-market results are, particularly in Mandatum Life, highly dependent on capital market developments. The continuing low interest rate level also creates a challenging environment for reinvestment in fixed income instruments.

If is expected to reach a combined ratio of 85-87 per cent for the full-year 2017.

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.

37

Structural changes of Sampo Group to the position as the leading Nordic financial group

Sampo Group’s (If P&C’s) Topdanmark holding exceeds 23 per cent and Topdanmark becomes If’s associated company.

Sampo Group (Mandatum Life) acquires Suomi Mutual’swith-profit group pension portfolio. The portfolio transfer takes place on 30 Decenber 2014.

Mandatum Life ends distribution agreement with Danske Bank.

Sampo Insurance Company and Leonia merge into the Sampo-Leonia financial services group. The Group’s business areas are long-term savings (life insurance, asset management and mutual funds), banking, investment banking, and P&C insurance.

Sampo’s P&C insurance operations are merged with If (2002). Following the transaction, Sampo owns 38 per cent of If. If becomes fully owned by Sampo (2004). Following the transaction, Sampo has three core businesses: P&C insurance, banking and long-term savings.

Sampo’s Nordea holding exceeds 20 per cent and Nordea becomes an associated company.

Sampo Group (If P&C) acquires Tryg’s Finnish Business and the acquisition was closed in May 2013. If P&C signs a partnership agreement with Nordea.

Sampo plc’s ownership of Topdanmarkexceeds 33.34 per cent after the acquisition of shares from If P&C and in the market and hence Sampo is obliged to make a mandatory offer for the share-holders of Topdanmark. As a result Sampo plc owns 46.7 per cent of Topdanmark’s shares and 49.3 per cent of votes. . Topdanmark now becomesSampo’s associated company.

Sampo Group divests SampoBank Group to Danske Bank A/S. Following the transaction, Sampo’s business areas are: P&C insurance and life insurance.

20052003200220012000 2008 2011 2012 2013 2014 2016 20172004 20072006 20102009 2015

Mandatum Bank joins the Group, and the Group’s name is shortened to Sampo.

38


Topdanmarkbecomes Sampo plc´ssubsidiary

SAMPO FICO GROUP

NORDEABANKINGGROUP

TOPDANMARK INSURANCEGROUP

Nordea Bank AB(SE) 21.3%

SIIGROUP

BANKINGGROUP

FICO GROUP

INSURANCE GROUP

Insurance BankingInvestmentServices

Other(non-regulated

unit)

Topdanmark A/S(DK) >41%

If IT Services A/S(DK)

IF P&C Insurance AS(EE)

IFINSURANCE GROUP

If P&C InsuranceHolding Ltd (SE)

IF P&C Insurance Ltd(SE)

IF P&C InsuranceCompany Ltd (FI)

Svithun Assurance AS(NO) 33%

Autovahinko-keskus Oy(FI) 33.5%

Latvia

Lithuania

Denmark

Norway

MANDATUMINSURANCE GROUP

Mandatum LifeServices Oy (FI)

Innova PensionServices Oy (FI)

Mandatum LifeLtd (FI)

Mandatum LifeBaltic SE (EE)

Mandatun LifeInvestment

Services Ltd (FI)

Mandatun LifeFund Manag.

Services Ltd (LU)

Latvia

Lithuania

IF Livförsäkring AB(SE)

CAB Group AB (SE) 22%

Urzus Group AS(NO) 30%

Various subsidiaries

Various subsidiaries

SAMPO SII GROUP

Source: FSA Finland, January 2017

Sampo Group ‒ Legal Supervision Structure

Sampo plc (FI)

Subsidiary Associated CompanyBranch

39


Fixed Income Investments in the Financial Sector

Exposure tables vs. Allocation tables – small differences.

EURmCovered

bondsMoney market

Long-term senior

debt

Long-term subordinated

debt Total %

Sweden 2,216 406 764 424 3,806 40%

Finland 89 1,061 259 6 1,415 15%

Norway 675 331 213 1,218 13%

U.S. 670 670 7%

Denmark 234 -1 279 66 579 6%

UK 12 381 46 1 440 5%

France 21 261 59 3 344 4%

Netherlands 247 17 264 3%

Canada 113 115 228 2%

Switzerland 166 10 176 2%

Australia 17 93 111 1%

Other 10 11 194 0 216 2%

Total 3,387 2,116 3,224 741 9,468 100%

EURm GovernmentGovernment guaranteed

Public sector,other Total

Sweden 96 632 728

Norway 221 221

Finland 78 89 166

Germany 65 65

Japan 17 17

Denmark 11 11

Total 96 153 959 1,208

Fixed Income Investments in the Public Sector

40


Fixed Income Investment Segementation excl. Topdanmark

Sampo Group Steering Model and Principles• Four separate and independent business areas and Sampo plc an active owner

• General Principles of Business activities • Straightforward and transparent legal structure combined with limited intragroup exposures • Clear responsibilities• Simple and flat operational structures• Personnel incentivized to increase shareholder value and guard profitability

• Parent company gives guidance to the subsidiaries by setting/contributing • Strategy • Targets for their capitalization and return on equity (RoE) • Group-wide principles for Risk Management, Remuneration, Compliance, Code of Conduct and HR framework

• Subsidiaries organize underwriting activities independently taking into account• The specific characteristics of their operations• The above guidance from the parent company• The stakeholders’ expectations and external regulations 41


Principles of Investment Management excl. Topdanmark• Company specific needs form the basis for all investments

• Liabilities intensively analysed and modelled• Regulatory requirements

• Strategy• Absolute Return targets taking into account the liabilities and general business targets• Direct Investments into Nordic countries mainly, outside Nordics mainly Funds• No diversification for the sake of diversification

• Centrally Managed • Sampo plc Chief Investment Officer is responsible for all investments, all portfolio managers have a direct reporting line to him• Common infrastructure for investment administration and reporting• Investment strategies coordinated and streamlined, no overlapping activities to prevent Group-wide concentrations

42


Principles of Capital Management• Subgroups are adequately capitalized to ensure normal business operations

• At Group level the following issues are managed/monitored • Direct risk concentrations

• Correlations of the subgroups' profits

• Sub-groups do not cross-capitalize each others, parent is the source of capital

• The funds generating capacity of the parent company is maintained by having low leverage and adequate liquidity buffers

in normal situations

1 + 2 => Sampo Group is well-capitalized

43


Calculation Principles of Sampo Group Solvency• Group Solvency Capital

• Under FICOD rules, capital is Group equity with some additional items added or deducted (subordinated loans, deferred tax assets, planned dividends…)

• Under SII rules capital – referred to as Own funds (OF) – consists mainly of excess of assets over liabilities

• Under normal circumstances Group OF by Solvency II and FICOD rules are close to each other

• SCR by Financial Conglomerate Rules• The Group’s SCR is the sum of the separate sub-groups’ requirements (sectoral rules)

• Banking rules are applied for the parent company

• No diversification effect between the companies

• SCR by Solvency II rules • One capital requirement is calculated for the insurance group including the parent company Sampo plc, If P&C, Topdanmark and

Mandatum Life. This includes diversification effects and also capital requirement for the translation risk related to SEK denominated equity of If P&C and DKK nominated equity of Topdanmark.

• Nordea’s capital requirements are added to the requirement

• The SII SCR takes into account diversification only within the insurance group

=> Sampo Group Solvency Ratios are not comparable with most Insurance Groupsʼ solvency ratios 44


Risk Management Principles*• Scope

• Sampo’s Board of Directors requires that all activities involving the exposure of any Sampo Group company to risks, as well as activities controlling those risks, are arranged to comply with these general guidelines and related instructions as well as with applicable legislation and regulations

• The Board of Directors will supervise the risk taking and risk control activities • The Principles apply to all Sampo Group companies

• The Key Objectives • Balance between risks, capital and earnings• Cost efficiency and high quality processes• Strategic and operational flexibility

• The Central Tasks • Identification of risks• Assessment of required capital• Pricing of risks• Managing risk exposures, capital positions and operative processes• Measuring and reporting risks 45


*Topdanmark is in a process to align its business practices with Sampo Group principles

Financial Strength Rating HistoryIf P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland), Sampo plc

The Sampo Groupʼs P&C insurance companies became part of If in January 2002.

2002 2003 2004 2005 2006 2007 2008 2009 -10 -11 -12 -13 -14 -15 -16 -17

Poss

ible

dow

ngra

de J

an 0

3

Stab

le F

eb 0

2

Neg

ativ

e Au

g 02

Stab

le A

pr 0

3

Poss

ible

upg

rade

Feb

04

Stab

le M

ay 0

4

Posi

tive

May

06

Stab

le N

ov 0

8

Apr 04 First-time issuer rating

Aa3

A1

A2

A3

Baa1

Baa2

Posi

tive

Dec

15

Moodyʼs If P&CS&P If P&CMoodyʼs Sampo plcS&P Sampo plc

Stab

le D

ec 1

6AA-/

A+

A/

A-/

BBB+/

BBB/

46


If P&C Reinsurance ProgrammesIf is using reinsurance to‒ Utilize its own capital base efficiently and reduce cost of capital‒ Limit large fluctuations of underwriting results‒ Get access to reinsurers’ competence base

If has the following Reinsurance Programmes in place

• Largest & most diversifiedportfolio in the Nordics

• Focus purely on underwriting• Specialised Reinsurance Unit

• Reinsurance partners having reinsurance as core business

• Diversified financially strong panel of reinsurers

• Stable reinsurance program • Efficient pricing and

broad terms

Additional reinsurance purchased for risks with property value accumulations according to Solvency II requirements.

In MillionCatastrophe/

EventProperty/

Risk CasualtyPersonalAccident Motor TPL Cargo Reporter

Capacity SEK 6,300 SEK 2,500/4,750 SEK 500/€50/$50 SEK 1,100 Unlimited SEK 1,000

Retention SEK 250 SEK 250 SEK 100/€10/$15 SEK 100 SEK 100 SEK 100

In MillionMarine HullReporter

Small VesselsClash Cover

Marine Hull I.V. Reporter

Marine Hull WarRisk Reporter

US TerrorismRisk

Capacity SEK 550 SEK 250 SEK 310 SEK 600 USD 250

Retention SEK 100 SEK 100 SEK 100 SEK 2.5 USD 25

Casualty/Cyber Event

SEK 400/€40/$50

SEK 200/€20/$25

47


debt investor presentation - sampo group · • roe%: 24.6% (2016: 25.3%) if p&c ‒ a...

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