Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Debt Investor Presentation (February 2018)
49 slides from Sampo Oyj's debt investor presentation, Feb 8, 2018
Slide 1: Debt Investor Presentation
Debt Investor Presentation PREPARED February 8, 2018 FIGURES January-December, 2017
Slide 2: Debt Investor Contacts, Financial Calendar 2018
DEBT INVESTOR CONTACTS FINANCIAL CALENDAR 2018 Markku Pehkonen, CRO 07/02/2018 Financial Statement Release for 2017 tel. +358 10 516 0014 Silent period 08/01/2018-07/02/2018 [email protected] Week 11 Annual Report 2017 19/04/2018 AGM Peter Johansson, CFO 09/05/2018 Interim Statement Q1/2018 t
Slide 3: Sampo Group: Nordic Financial Group with Strong Brands
Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified Nordic P&C Insurer 19-24 Mandatum Life A Finnish Financial Services Company 25-29 Sampo plc Parent Company with Capacity to Generate Funds 30-37 Appendix Separate Supplementary Information 38-49 3
Slide 4: Sampo Group structure
Sampo Group ― Nordic Financial Group with Strong Brands Sampo Group structure • Long-term investor • Manager of capital structure and liquidity • Pay-out ratio ≥ 50% 100% > 45% 100% 21.2% Subsidiary Subsidiary Subsidiary Associated Company Market position The leading P&C insurer in the The second la
Slide 5: Efficient and Stable Operations as Basis for Value
Sampo Group ― Nordic Financial Group with Strong Brands Efficient and Stable Operations as Basis for Value A Mixed Financial Conglomerate Strong relative performance Market cap January 31, 2018, EURbn 10Y Total Shareholder Return Nordea 40.2 Danske 30.6 DNB 26.5 >21% Sampo 26.2 Swedbank 23.2 SHB 22.
Slide 6: If P&C ‒ A Diversified Nordic P&C Insurer
Sampo Group ― Nordic Financial Group with Strong Brands If P&C ‒ A Diversified Nordic P&C Insurer Strong & Stable Annual Profit Development • Diversified and profitable subsidiary EURm • Provides insurance solutions and services 1,200 in the Nordic and Baltic regions as well as 1,000 to Nordic custo
Slide 7: Topdanmark – A Danish Non-life and Life Insurer
Sampo Group ― Nordic Financial Group with Strong Brands Topdanmark – A Danish Non-life and Life Insurer • A profitable subisdiary with robust business model Profit before taxes, DKKm • Carries out Danish non-life insurance, life insurance and pension fund business 800 Parent company etc. Life insura
Slide 8: Mandatum Life ‒ A Finnish Financial Service Company
Sampo Group ― Nordic Financial Group with Strong Brands Mandatum Life ‒ A Finnish Financial Service Company • Provides a comprehensive range of services Profit Development, EURm in Finland and Baltics for private and 500 corporate customers • Services provided 250 Profit before ‒ Wealth management t
Slide 9: Nordea – A Nordic Banking Group
Sampo Group ― Nordic Financial Group with Strong Brands Nordea – A Nordic Banking Group • The Largest financial services group in the Nordic Low Quarterly Result Volatility, EURm region and one of the biggest banks in Europe 1,600 Restructuring/ • Diversified and stable returns 1,400 • Global presen
Slide 10: Diversified Companies & Diversified Portfolio
Sampo Group ― Nordic Financial Group with Strong Brands Diversified Companies & Diversified Portfolio* 1 0.27 1 0.15 0.85 1 0.37 0.67 0.69 1 P/L CONTRIBUTIONS* LOW VOLATILITY EARNINGS LOW VOLATILITY C/R FOCUS ON U-L & WM LOW VOLATILITY C/R PBT 2010-17 • Geographical diversification • Geographical di
Slide 11: Steady Development of Profit before Taxes
Sampo Group ― Nordic Financial Group with Strong Brands Steady Development of Profit before Taxes • If P&C • If P&C • If P&C • If P&C • Mandatum Life • Mandatum • Topdanmark / Associated • Topdanmark • Sampo Bank Life • Mandatum Life • Mandatum Life • Nordea / • Nordea / Associated • Nordea / Associ
Slide 12: Risk Profiles of Investments
Sampo Group ― Nordic Financial Group with Strong Brands Risk Profiles of Investments Total Group (mEUR) 26,524 * 20,813 20,111 19,786 25,286 14,000 12,192 12,337 12,319 12,367 12,000 11,459 10,000 8,000 6,582 6,547 6,507 6,331 6,263 5,816 5,944 6,000 4,000 1,933 1,929 1,620 2,000 1,285 1,088 0 P&C P
Slide 13: Investments & Counterparty Exposures excl. Topdanmark
Sampo Group ― Nordic Financial Group with Strong Brands Investments & Counterparty Exposures excl. Topdanmark * 31.12.2017 Fixed Derivatives Change AA+ - A+ - BBB+ - BB+ - Non AAA D Income Equities Other (Counterparty Total from AA- A- BBB- C Rated Total Risk) 30.9.2017 Basic Industry - - 44 66 25 -
Slide 14: Mandatum Life – Solvency II Capital Requirement (SCR)
Sampo Group ― Nordic Financial Group with Strong Brands Mandatum Life – Solvency II Capital Requirement (SCR) With transitional measures, December 31, 2017 EURm SF with transitional measures Solvency ratio 182% 2,500 2,000 408 297 1,500 38 121 68 272 1,000 1,977 * 1,263 500 1,087 272 0 14 * Own Fund
Slide 15: If P&C Solvency Capital Requirement December 31, 2017
Sampo Group ― Nordic Financial Group with Strong Brands If P&C Solvency Capital Requirement December 31, 2017 Standard Formula Solvency Ratio 197% Internally assessed Solvency ratio 257% EURm EURm 4,000 4,000 3,500 3,500 S&P TTC for A rating 3,098 EURm S&P TTC for A rating 3,098 EURm 3,000 3,000 2,5
Slide 16: Topdanmark Solvency Capital Requirement December 31, 2017
Sampo Group ― Nordic Financial Group with Strong Brands Topdanmark Solvency Capital Requirement December 31, 2017 Standard Model Solvency ratio 166% Partial Internal Model Solvency ratio 204% EURm EURm 1,400 1,400 1,200 181 1,200 1,000 62 1,000 122 376 62 201 446 800 27 800 27 446 600 92 600 72 856
Slide 17: Group Solvency Capital by Financial Conglomerate Rules
Sampo Group ― Nordic Financial Group with Strong Brands Group Solvency Capital by Financial Conglomerate Rules December 31, 2017 Group solvency ratio 154% / SII Standard Formula applied for Insurance Subsidiaries EURm 12,000 10,000 8,000 184 6,000 3,441 11,021 4,000 514 7,163 1,087 2,000 1,938 0 If
Slide 18: Value Creation in the Nordic Financials as Group Strategy
Sampo Group ― Nordic Financial Group with Strong Brands Value Creation in the Nordic Financials as Group Strategy LONG-TERM • Value creation through investments in Nordic financials based on knowledge VALUE of Nordic markets, Nordic financial institutions & Nordic people. CREATION • Commitment to th
Slide 19: Sampo Group: Nordic Financial Group with Strong Brands
Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified Nordic P&C Insurer 19-24 Mandatum Life A Finnish Financial Services Company 25-29 Sampo plc Parent Company with Capacity to Generate Funds 30-37 Appendix Separate Supplementary Information 38-49 19
Slide 20: Diversified Client Base
If P&C – Diversified Nordic P&C Insurer Diversified Client Base 1-12/2017 By Business Area By Country 12% 3% 9% 3% Norway Gross Written Private 31% Sweden Premiums, Commercial 21% Finland EURm 4,526 26% 59% Industrial Denmark Baltic Baltic 36% 2% 2% 2% 1% 2% Norway 8% Private 17% Sweden Technical Re
Slide 21: Disciplined Underwriting and Diversification work
If P&C – Diversified Nordic P&C Insurer Disciplined Underwriting and Diversification work If P&C and BA Combined Ratios and deviation Expense ratio 2016, % 12 Topdanmark 16.4 CR % Standard deviation Finland Denmark 10 If P&C 16.6 Q1/2008-Q4/2017 Norway Industrial Nordic market excl. If 17.2 8 RSA Sc
Slide 22: Conservative Investment Portfolio
If P&C – Diversified Nordic P&C Insurer Conservative Investment Portfolio Investment Allocation Mark-to-Market Investment Return, % Total EUR 11.5bn 14% 12.4% 11% Real Estate 9% 7.4% 6.1% Private Equity 0.2 % 5.8% 5.0% 0.2 % 6% 4.3% 4.4% 4.1% 2.9%2.6% Other 0.0 % 4% 2.6% 1.8% 1.5% Equities Money 1%
Slide 23: Seasonality in Quarterly Results and CR%
If P&C – Diversified Nordic P&C Insurer Seasonality in Quarterly Results and CR% EURm 350 300 250 200 Investment result 150 Technical result 100 Operating result 50 0 Q4 Q3 Q2 Q1 Average Quarterly CR%, 2006-2016 89.5 88.3 87.9 92.2 Year 2016 CR% 85.6 84.6 84.5 83.0* Year 2017 CR% 83.6 84.8 85.7 87.4
Slide 24: Nordic P&C Insurance Market
If P&C – Diversified Nordic P&C Insurer Nordic P&C Insurance Market Nordic Market Shares, % If P&C Market Shares by Country, % If + Finland 23 Other Topdanmark 23% 25% If Norway 21 18% Topdanmark Sweden 18 LähiTapiola 5% 4% Tryg Denmark/ If P&C + 6 17 OP 9% Topdanmark 6% LF Folksam Baltics 12 10% 6%
Slide 25: Sampo Group: Nordic Financial Group with Strong Brands
Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified Nordic P&C Insurer 19-24 Mandatum Life A Finnish Financial Services Company 25-29 Sampo plc Parent Company with Capacity to Generate Funds 30-37 Appendix Separate Supplementary Information 38-49 25
Slide 26: Mandatum Life Business Volumes
Mandatum Life - A Finnish Financial Services Company Mandatum Life Business Volumes 1-12/2017 Technical Provisions, EURm 11,638 2 With-Profit EURm 116 48 EURm 66 22 243 12,000 Portfolio to be transferred to Danske Bank Group Premiums Written, 3,100 U-L Unit-linked EURm 850 10,000 EURm 966 131 Guaran
Slide 27: Investment Portfolio covering With-Profit liabilities
Mandatum Life - A Finnish Financial Services Company Investment Portfolio covering With-Profit liabilities Investment Allocation Mark-to-Market Investment Return, % Asset Allocation 31.12.2017, 6 263 EURm 20% 16.8% Commodities Other Trading 15% Biometric 0% Alternative Derivatives 12.0% 11.1% Unlist
Slide 28: Mandatum Life Profit by Components
Mandatum Life - A Finnish Financial Services Company Mandatum Life Profit by Components EURm 1-12/2017 1-12/2016 Net investment income 780.8 632.4 - Transferred to expense result -26.2 -24.6 - Return on Unit-linked policies -405.0 -276.0 - Return on With-profit policies* -171.4 176.1 INVESTMENT RESU
Slide 29: Life insurance Market
Mandatum Life - A Finnish Financial Services Company Life insurance Market Finland ‒ Market Shares, % Market Shares by Country, % Aktia Other Sp- 2% 4% Baltics/ Henkivakuutus 7 Nordea Mandatum Life 3% Fennia 31% 5% LähiTapiola 9% Danmark/ 8 Topdanmark OP Life 22% Mandatum Life • Various distribution
Slide 30: Sampo Group: Nordic Financial Group with Strong Brands
Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified Nordic P&C Insurer 19-24 Mandatum Life A Finnish Financial Services Company 25-29 Sampo plc Parent Company with Capacity to Generate Funds 30-37 Appendix Separate Supplementary Information 38-49 30
Slide 31: Simple Cash Flows, low leverage and adequate liquidity
Sampo plc - Parent Company with Capacity to Generate Funds Simple Cash Flows, low leverage and adequate liquidity Flow of Funds Balance Sheet, EURm Dividends Income Assets 10,939 Liabilities 10,939 • If P&C • Interest on Liquidity • Mandatum Life • Income from other Liquidity 1,199 CPs Issued 293 •
Slide 32: Cash and tradable financial investments 31.12.2017
Sampo plc - Parent Company with Capacity to Generate Funds Cash and tradable financial investments 31.12.2017 Market Value/ Running Call Instrument Nominal Amount Yield Date Cash 1 199 Investment Assets 235 Sub-Ordinated Loans 496 5,10 % - Mandatum Life T1 Perpetual EUR 100 4,42 % Annual - IF T2 30N
Slide 33: Sources and Uses of Funds, First Half 2018
Sampo plc - Parent Company with Capacity to Generate Funds Sampo plc Sources and uses of Funds / First Half Year 2018 Sources EUR Uses EUR Cash balance (as of 31.12.2017) 1 199m Nets 230m Sale of liquid assets 76m Saxo Bank 265m Bond issued 500m Nordax 249m Mandatum Life dividend 150m Sampo dividend
Slide 34: Sampo Group ― Conservative Leverage
Sampo plc - Parent Company with Capacity to Generate Funds Sampo Group ― Conservative Leverage EURm 16,000 40% Sampo plc Net debt Net debt/NAV 14,000 35% Group NAV 12,000 Group Equity 30% 10,000 8,000 25% 6,000 20% 4,000 15% 2,000 10% 0 -2,000 5% -4,000 0% Q1/05 Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Q
Slide 35: Dividends Received by Payment Year
Sampo plc - Parent Company with Capacity to Generate Funds Dividends Received by Payment Year EURm Topdanmark 1,600 1,555 Nordea 1,452 1,406 1,400 Mandatum Life Extra Dividend 75 Mandatum Life 1,220 551 1,200 300 If P&C Extra Dividend 557 1,067 1,000 If P&C 883 533 125 756 768 370 800 754 744 * 107
Slide 36: Reported Profits facilitates Debt Servicing
Sampo plc - Parent Company with Capacity to Generate Funds Reported Profits facilitates Debt Servicing EURm 2010 2011 2012 2013 1,700 1,567 1,567 2014 2015 2016 2017 1,500 1,453 * 1,396 1,300 1,226 1,229 1,069 1,050 1,100 879 900 832 747 762773 702683737 700 500 300 100 17 17 -100 -8 -10 -17 -20 -18
Slide 37: Issued Debt Instruments
Sampo plc - Parent Company with Capacity to Generate Funds Issued Debt Instruments Effective Instrument & Principal Coupon Swap Maturity Rate 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 50
Slide 38: Sampo Group: Nordic Financial Group with Strong Brands
Sampo Group Nordic Financial Group with Strong Brands 3-18 If P&C Diversified P&C Insurer 19-24 Mandatum Life A Finnish Financial Services Company 25-29 Sampo plc Parent Company with Capacity to Generate Funds 30-37 Appendix Separate Supplementary Information 38-49 38
Slide 39: Sampo Group's Outlook for the rest of 2018
Appendix – Separate Supplementary Information Sampo Group’s Outlook for the rest of 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
Slide 40: Structural changes of Sampo Group to the leading Nordic financial group
Appendix – Separate Supplementary Information Structural changes of Sampo Group to the position as the leading Nordic financial group 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sampo Group’s (If P&C’s) Mandatum Life Sampo Group divests Sampo Topdan
Slide 41: Sampo Group ‒ Legal Supervision Structure
Appendix – Separate Supplementary Information Sampo Group ‒ Legal Supervision Structure SAMPO FICO GROUP SAMPO SII GROUP Sampo plc (FI) IF If P&C Insurance MANDATUM Mandatum Life TOPDANMARK Topdanmark A/S NORDEA INSURANCE INSURANCE INSURANCE BANKING Nordea Bank AB Holding Ltd (SE) Ltd (FI) (DK) 49.3
Slide 42: Fixed Income Investment Segmentation excl. Topdanmark
Appendix – Separate Supplementary Information Fixed Income Investment Segementation excl. Topdanmark Fixed Income Investments in the Financial Sector Fixed Income Investments in the Public Sector Long-term Long-term Covered Money senior subordinated Government Public sector, EURm bonds market debt d
Slide 43: Sampo Group Steering Model and Principles
Appendix – Separate Supplementary Information 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 exposure
Slide 44: Principles of Investment Management excl. Topdanmark
Appendix – Separate Supplementary Information 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 liabil
Slide 45: Principles of Capital Management
Appendix – Separate Supplementary Information 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
Slide 46: Calculation Principles of Sampo Group Solvency
Appendix – Separate Supplementary Information 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 – re
Slide 47: Risk Management Principles
Appendix – Separate Supplementary Information 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
Slide 48: Financial Strength Rating History
Appendix – Separate Supplementary Information Financial Strength Rating History If P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland), Sampo plc Moodyʼs If P&C Possible downgrade Jan 03 S&P If P&C Moodyʼs Sampo plc Possible upgrade Feb 04 Stable Dec 16 AA-/ Aa3 S&P Sampo plc Negative
Slide 49: If P&C Reinsurance Programmes
Appendix – Separate Supplementary Information If P&C Reinsurance Programmes If 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