Sampo Group Debt Investor Presentation. Prepared June 16, 2016 Figures March 31, 2016

Transcription

1 Sampo Group Debt Investor Presentation Prepared June 16, 2016 Figures March 31, 2016

2 DEBT INVESTOR CONTACTS Markku Pehkonen, CRO tel Peter Johansson, CFO tel Jarmo Salonen, Head of IR Relations and Group Communications tel FINANCIAL CALENDAR /02/2016 Financial Statement Release for 2015 Silent period 13/01/ /02/2016 Week 11 Annual Report /04/2016 AGM 11/05/2016 Interim Statement Q1/2016 Silent period 13/04/ /05/ /08/2016 Half-year report 2016 Silent period 11/07/ /08/ /11/2016 Interim Statement Q3/2016 Silent period 04/10/ /11/2016 Rated Company Moody's Standard and Poor's Rating Outlook Rating Outlook Sampo plc Baa2 Positive A- Stable If P&C Insurance (Sweden) A2 Positive A+ Stable If P&C Insurance Co. (Finland) A2 Positive A+ Stable Disclaimer This 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

3 Mission Value Creation in the Nordic Financials 3-10 If P&C The Leading Nordic P&C Insurer Mandatum Life A Finnish Financial Services Company Sampo Group A Diversified Business Portfolio with Strong Capitalization Sampo plc Portfolio Manager with Capacity to Generate Funds Appendix Separate Supplementary Information

4 Sampo Group Value creation in the Nordic financials Nordic Financial Group with Strong Brands Listed company Sampo plc Long-term investor Manager of capital structure and liquidity Pay-out ratio 50% 100% 21.2% 100% > 30% MARKET POSITION The leading P&C insurer in the Nordic region The second largest P&C insurer in Denmark The largest financial services group in the Northern Europe The leading provider of cover against health and life risks, well-respected manager of customer wealth STRATEGY Focus on customer value Most professional & innovative people Stable profitability Underwriting excellence Operational efficiency Customer satisfaction Pricing Efficiency Distribution power Share buy-back Simplification Core Banking Platform Group Common Data Legal Structure Programme Digital strategy Unit-linked products Wealth management Personal Risk insurance Group pension & Reward Services INVESTMENT ASSETS ~ EUR 11.1bn ~ EUR 2.5bn P&C ~ B/S EUR 676bn ~ AuM EUR 291bn ~ EUR 5.2bn+1.2bn* ~ EUR 5.6bn U-L AuM RETURN / PROFIT TARGET RoE above 17.5% CR% below 95% Profit margin of 10% CR% 91% ROE above the Nordic peer average RoE above 17.5% 4 * Segregated assets

5 Sampo Group Value creation in the Nordic financials Sampo Group Steering Model and Principles Three separate and independent business areas, and Parent Company acting merely as a Portfolio Manager General Principles of Business activities Straightforward and transparent legal structure combined with limited intragroup exposures Clear responsibilities Simple and flat operational structures Parent company gives guidance to the subsidiaries by setting Targets for their capitalization and return on equity (RoE) Group-wide principles for Risk Management, Remuneration, Compliance, Code of Conduct 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 5

6 Sampo Group Value creation in the Nordic financials Well-established Insurance Subsidiaries If P&C Well-diversified and Profitable Pan-Nordic Non-life Insurer If generated EUR 216m (200) in pre-tax profits Excellent combined ratio of 83.0% (89.2) Risk ratio 60.7% (66.6) Cost ratio 22.3% (22.6) If P&C provides insurance solutions and services in the Nordic and Baltic regions as well as to Nordic customers with international operations 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. Expense ratio 16.9% (16.8) Resilient business model over the cycle Topdanmark Danish non-life, life insurance and pension funds as an associate company Mandatum Life Respected Finnish Expert in Wealth Management, Investments, Rewards and Risk Insurance Mandatum Life Provides a comprehensive range of services in Finland and Baltics for private and corporate customers Services provided - wealth management - savings - personal risk insurance - pension and incentive & reward services. Mandatum Life is a leading life and pension insurer in Finland Mandatum has a strong market position in Finland with ca.20% of the market Mandatum contributed with EUR 53m (39) in pre-tax profit to the Group 6

7 Sampo Group Value creation in the Nordic financials Nordea Diversified and Stable Nordic Bank Pan-Nordic platform with scalability Simplification Digitalisation AuM EUR 291 bn Superior Nordic distribution power Cost efficiency Capital efficiency Efficiency initiatives Quarterly net profit volatility Nordea and peers 2006-Q3/2015,% Nordea Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Strong capital generation Stable returns Low risk profile Actively managed business portfolios Lowest volatility of quarterly net profits 7

8 Sampo Group Value creation in the Nordic financials Topdanmark - Insurer with a Robust Business Model 8

9 Sampo Group Value creation in the Nordic financials Value Creation in the Nordic Financials as Group Strategy LONG-TERM VALUE CREATION CONSERVATIVE PARENT WITH PROFIT FOCUS OPERATIONAL EXCELLENCE IN SUBSIDIARIES CENTRALIZED INVESTMENT MANAGEMENT GROUP LEVEL PORTFOLIO BENEFITS 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. 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. Subsidiaries have focus on continuous development of services. Economies of scale. Pan-Nordic diversification & operational excellence facilitate low volatility. Company specific liabilities and solvency driving risk profiles, supported by a Group-wide investment philosophy. Common investment infrastructure facilitates effective monitoring and fast actions, also at the Group level. 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 9

10 Sampo Group Value creation in the Nordic financials Efficient and Stable Operations as Basis for Value A Mixed Financial Conglomerate Market cap June 14, 2016, EURbn Strong relative performance 10Y Total Shareholder Return Source: Datastream Nordea Danske Swedbank Sampo SHB DnB SEB Investor Gjensidige Tryg Industrivärden Jyske Topdanmark Storebrand Alm.Brand Protector Aktia >30% 24.3 >21% Bank Insurance Inv.company 33.3 Sampo ownership structure Foreign and Nominee registered 61.11% Solidium 11.90%* Varma Mutual Pension 6.35% Björn Wahlroos 2.10% Ilmarinen Mutual Pension 0.71% Kaleva Mutual Insurance 0.78% Other domestic owners 17.05% 10 *100% owned by the Republic of Finland;

12 If P&C Leading Nordic P&C Insurer with Synergies Market Shares by Country Nordic Market Shares Norway 2015 Gjensidige 25% If 22% Tryg 14% Sparebank 1 10% Sweden 2015 LF 30% If 18% RSA (T-H) 14% Folksam 16% Finland 2015 Pohjola 32% LähiTapiola 25% If 24% Fennia 10% LähiTapiola 4% Total GWP ~EUR 25bn Other 29% Pohjola 5% Folksam 5% If 17% LF 9% Expense Ratios 2015, % Topdanmark 5% Tryg 9% Gjensidige 8% RSA 9% Denmark 3/2015 Tryg 18% Topdanmark 17% Codan (RSA) 11% Alm. Brand 10% If 6% Baltics 2015 PZU 24% If 14% BTA 12% Ergo 12% Gjensidige 7% If P&C* Nordic peer group Generali Zürich AXA Allianz RSA Scandinavia Aviva (*incl. one-off)

13 If P&C Nordic P&C Insurance Market CONSOLIDATED MARKET LOYAL CLIENTS The four largest companies account for 75-90% of the markets in Norway, Finland and Sweden. In Denmark the market is less consolidated. Renewal rates are around 80-90%. DISTRIBUTION LOW EXPENSE RATIOS GOOD PROFITABILITY In addition to the traditional channels, Internet continues to grow in importance both as a distribution and as a service channel. Also, distribution via partnerships with banks and car-dealers etc. is increasingly important. The market is characterized by low expense ratios in the rage of 15-20%. European competitors' expense ratios are usually considerably higher. The Nordic P&C market has generally experienced good profitability. The low interest rate environment and hence the low return on investments has made the industry to focus on profitability in the insurance operations. 13

14 If P&C Diversified Client Base Gross Written Premiums, EUR 1,616 Industrial, 282, 17% Commercial, 640, 40% By Business Area Baltic, 36, 2% Private, 657, 41% Finland, 503, 31% Denmark, 150, 9% By Country Baltic, 36, 2% Norway, 461, 29% Sweden, 466, 29% Technical Results, EUR 184m Industrial, 3, 2% Commercial, 36, 19% By Business Area Baltic, 3, 2% Other, 4, 2% Private, 139, 75% By Country Baltic, 3, 2% Other, 4, 2% Norway, 8, 4% Denmark, 4, 2% Finland, 28, 15% Sweden, 138, 75% 14

15 If P&C Disciplined Underwriting and Diversification works 100 % Combined Ratio Development Geographical Diversification in CR Risk ratio Cost ratio Target CR If- Total If Sweden If Norway If Finland If Denmark % Combined Ratio If P&C and Nordic Peers If P&C Nordic Market (incl.if) Standard deviation % 3.5% 3.7% 4.7% 4.4% 15

16 If P&C Conservative Investment Portfolio Investment Allocation Mark-to-Market Investment Return Equities 13% Total EUR 11.1bn Private Equity 0.2% Real Estate 0.2% Money Market 6% Public sector 13% 14% 11% 9% 6% 4% 1% -2% -4% 4.3% 5.8% 4.4% 2.6% 1.8% -3.1% 12.4% 1-3/ % 7.4% 6.1% 5.0%4.1% 1.5% Investment Return, EURm Other fixed income 68% Duration 1.5 years Average Maturity 2.8 years Fixed Income Running Yield 1.8% 1, /2016 EUR -17m

17 If P&C Strong & Stable Annual Profit Development EURm 1,200 1, Profit before tax Comprehensive income , EURm 3M/16 3M/15 Profit before taxes Comprehensive Income

18 If P&C Seasonality in Quarterly Results and CR% EURm 350 Technical result Investment result Operating result Q4 Q3 Q2 Q1 Average Quarterly CR%, Year 2015 CR% Year 2016 CR% 83.0* 18 * incl.one-off

20 Mandatum Life Finnish Life Insurer with Wealth Management Focus Client Segment Underlying Market Critical Success Factors Sales & Client Services Cross-selling Corporate Customers HNWI Private Customers Employee Benefit Wealth Management Savings and Insurance Products Expertise in Rewards and Incentives, Pension & Risk Life Solutions and Asset Management Professional Wealth Management Management of Client Relationships Distribution Power Mandatum Life Mandatum Life Danske Bank 20

21 Mandatum Life Mandatum Life Business Volumes Premiums Written, total EUR 245m Insurance Savings, total EUR 9,837m With-Profit EUR 34m U-L EUR 211m With-Profit EUR 4,103 3,865 1,691 2,124 1, Unit-linked life Unit-linked pension Unit-linked capital redemption Unit-linked Baltic Other life Other pension Other capital redemption Other Baltic 194 Technical Provisions, EUR 10,676m U-L EUR 5,734m EURm 12,000 10,000 8,000 6,000 4,000 2, ,262 1,752 2,071 1,637 2,359 3,124 3,054 3,833 4,616 5,312 5,858 5,737 1,228 1,196 1,184 4,652 4,626 4,738 4,695 4,621 4,487 4,431 4,410 4,249 4,071 3,927 3,837 3,818 3, /2016 Guaranteed interest rates Segregated funds Unit-linked Focus area 21

22 Mandatum Life Finnish With-Profit Life Insurance Market PRINCIPLE OF FAIRNESS SMOOTHENED BONUSES AND DIVIDENDS OVER TIME There is no exact rule on profit sharing (e.g. 90%/10%). In the current markets, the principle in ML is reflected in policyholdersʼ reasonable expectations for total accrual, which is an average annual yield of Finnish government bonds over time. When company decides on bonuses and dividends, it takes into account (i) policyholdersʼ reasonable expectations, (ii) realized investment returns and current solvency and (iii) uncertainty about the future market environment => Bonuses and dividends can be smoothened over time. BETTER POSITION FOR RISK TAKING BENEFITS STAKEHOLDERS Finnish Profit sharing mechanism facilitates and encourages for active investment strategies and risk taking. Profit sharing mechanism has benefited both policyholders and shareholders over the years. 22

23 Mandatum Life Absolute Return Investment Portfolio Investment Allocation Mark-to-Market Investment Return Biometric 0 % Unlisted Equity 0% Private Equity 4 % Real Estate 4 % Total EUR 6.4bn Commodities 0 % Other Alternative 6 % Money Trading Market Derivatives Securities 0 % and Cash 5 % Government Bonds 1 % 20% 15% 10% 5% 0% -5% 12.0% 9.7% 8.3% 5.0% 1-3/ % 16.8% 11.1% 9.4% 7.1% 4.6% 6.9% -1.4% Listed Equity 26% -10% -7.8% Credit Bonds, Funds and Loans 53% Investment Return, EURm Policy Loans 0 % Duration 2.4 years Average Maturity 3.2 years Fixed Income Running Yield 3.1% /2016 EUR 5m

24 Mandatum Life Profit Development EURm EURm 3M/16 3M/15 Profit before taxes Comprehensive Income Profit before taxes Comprehensive income 24

25 Mandatum Life Mandatum Life Profit by Components EURm 1-3/ /2015 Net investment income Transferred to expense result Return on Unit-linked policies Return on With-profit policies* INVESTMENT RESULT EXPENSE RESULT** RISK RESULT OTHERS PROFIT BEFORE TAXES Change in the market value of investments PROFIT AT MARKET VALUES Mandatum Life Group, expense ratio Total expense ratio, % Incl. kick backs, % * Includes guaranteed interest, bonuses and change in the reserves of the above items ** Result of Unit-linked business EUR 3.6 million

26 Mission Value Creation in the Nordic Financials 3-10 If P&C The Leading Nordic P&C Insurer Mandatum Life A Finnish Financial Services Company Sampo Group A Diversified Business Portfolio with Strong Capitalization Sampo plc Portfolio Manager with Funds Generating Capacity Appendix Separate Supplementary Information

27 Sampo Group Diversified Companies & Diversified Portfolio* P/L CONTRIBUTIONS LOW VOLATILITY EARNINGS LOW VOLATILITY C/R FOCUS ON U-L & WM PBT Geographical diversification Geographical diversification Finland & Baltics IF 45% ML 10% Nordea 45% Strong Retail Banking Franchise Diversified earnings base: -Banking (Retail, Wholesale) -Wealth Management (Asset Management, Private Banking, Life & Pensions) Low earnings volatility & stable ROE over the cycle Strong Retail P&C Franchise Several Lines of Businesses -Motor, Cargo -Workersʼ compensation -Liability -Accident -Property Low C/R volatility and Conservative Investments Strong Finnish Position Product areas -Wealth Management -Unit-linked Business -With-profit Business -Remuneration services -Risk insurance Dependency on Capital Markets 27 * Correlations of quarterly Reported Profits Q1/2005 Q1/2016

28 Sampo Group Steady Development of Profit before Taxes EURm 4,000 3,500 3,000 2,500 2,000 1,500 1, If P&C Mandatum Life Sampo Bank 948 1,295 1,353 3,833 * If P&C Mandatum Life Nordea / Investment ,320 1,228 EURm 3M/16 3M/15 P&C Life Nordea Holding Group If P&C Topdanmark / Associated Mandatum Life Nordea / Associated 1,622 1,668 1,759 1, P&C Life Banking Nordea dividends Other 28 * One-off item sale of Sampo Bank

29 Sampo Group Different Risk Profiles of Investments Sampo Group Asset allocation (consolidated) Total Group (MEUR) If P&C Mandatum Life Sampo Plc If P&C Mandatum Life Sampo Plc If P&C Mandatum Life Sampo Plc If P&C Mandatum Life Sampo Plc 06/15 09/15 12/15 03/16 Money Market 12% 19% 22% 14% 10% 15% 12% 8% 56% 6% 5% 72% Long-Term Fixed Income 75% 40% 29% 74% 50% 39% 74% 52% 27% 80% 54% 17% Equity 13% 26% 46% 12% 25% 43% 13% 26% 15% 13% 26% 10% Private Equity 0% 4% 1% 0% 4% 1% 0% 4% 0% 0% 4% 0% Other 0% 11% 3% 0% 11% 3% 0% 11% 1% 0% 11% 1% 29

30 Sampo Group Investments & Counterparty Exposures* AAA AA+ - AA- A+ - A- BBB+ - BBB- BB+ - C D Non Rated Fixed Income Total Equities Other Derivatives (Counterparty Risk) Total Change from Basic Industry Capital Goods Consumer Products Energy Financial Institutions Governments Government Guaranteed Health Care Insurance Media Packaging Public Sector, other Real Estate Services Technology and Electronics Telecommunications Transportation Utilities Others Asset-backed Securities Covered Bonds Funds Total Change from EURm Note: Category Other includes private equity, unlisted equity and non-listed real estate. Category Derivatives includes only OTC derivatives and corresponding collaterals. 30 * In Exposure tables the calculation rules may differ slightly from Allocation tables in some areas.

31 Sampo Group Principles of Capital Management 1. Sub-Groups are adequately capitalized to ensure normal business operations 2. At Group level the following issues are managed/monitored non-manageable direct risk concentrations correlations of the sub-groupsʼ profits sub-groups do not cross-capitalize each other, 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 31

32 Sampo Group If P&C Solvency, Standard Formula Solvency Ratio 154% Internally assessed Solvency Ratio 198% EURm 3,500 3,000 EURm 3,500 S&P TTC (A rating) EUR 2,999m 3,000 S&P TTC (A rating) EUR 2,999m 2,500 2,000 1,500 1, , ,058 3,169 2,500 2,000 1,500 1, , ,693 3, LAC = Loss Absorbing Capacity, DT = Deferred Taxes, SCR= Solvency Capital Requirement

33 Sampo Group Mandatum Life Solvency with Transitional Measures, EURm Solvency Ratio 152% 1,800 1, , ,200 * 1, ,259 1,117 1, * Own Funds without transitional measures EUR 1,227m 33 LAC = Loss Absorbing Capacity, TP = Technical Provision, DT = Deferred Taxes

34 Sampo Group Mandatum Life Technical Provisions Forecast EURm 6,000 Expected Changes in Insurance Liabilities - Growth of Unit-Linked AuM will create own funds - Capital consuming High Guarantee Liabilities will decrease to EUR 1 bn and their portion of all WPliabilities will decrease 5,000 4,000 Own Funds decrease slower than the SCR Solvency stays at adequate level although the effect of Transitional Measures decreases over time 3,000 2,000 1, WP-liabilities (4.5% guarantee) Segregated Group Pension WP-liabilities (3.5% guarantee) Other WP-liabilities 34

35 Sampo Group Calculation of Sampo Group Solvency Group Solvency Capital: Under FiCo rules, capital is Group equity with some additional items added or deducted (subordinated loans, deferred tax assets, planned dividends, ) Under SII capital referred to as Own funds (OF) consists mainly of excess of assets over liabilities Under normal circumstances Group OF by Solvency II and FiCo rules are close to each other. SCR by Financial Conglomerate Rule: The Group s SCR is the sum of the separate sub-group s requirements (sectoral rules) Banking rules are applied for 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 and Mandatum Life. This includes diversification effects and also capital requirement for the translation risk related to SEK denominated equity of If P&C Nordea s and Topdanmark 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 35

36 Sampo Group Group Solvency Ratios EURm 12,000 EURm 143% by FiCoD method 12, % by S II method 10,000 10,000 8, ,000 6,000 6,000 4,000 2, ,058 1,117 3,744 6,988 10,024 4,000 2, , ,744 6,786 9, *) incl. Topdanmark

38 Sampo plc Straightforward Cash Flows, low leverage and liquidity Flow of Funds Balance Sheet Dividends If P&C Mandatum Life Nordea Income Interest on Liquidity Income from other investments Assets EURm 10,384 Liabilities EURm 10,384 Liquidity 1,494 CPs Issued 300 Investment assets 297 LT Senior Debt 2,183 -Real Estate 2 -Private Placements 148 -Fixed Income 34 -Bonds Issued 2,035 Sampo plc Internal Administration Costs Discretionary Dividends for Shareholders Interest Expenses for Bondholders -Equity & Private Equity 261 -Pension Insurance Loans Subordinated Loans 609 Subordinated Debt 0 Equity Holdings 7,928 Capital 7,810 -Subsidiaries 2,370 -Undistributable 98 -Associated 5,557 -Distributable 7,712 Other Assets 56 Other Liabilities 91 Key Credit Metrics well in Single A range Sampo plc Gross Debt, EURm 2,483 Gross Debt to Equity 31.8% Financial Leverage 24.1% (= Debt/(Debt+Equity) Sampo Group, EURm Q1/2016 Q4/2015 Shareholders' Equity 11,620 11,411 Hybrid Bonds Senior Debt 2,335 2,143 Financial leverage 20.1% 18.8% 38

39 Sampo plc Liquid Investments as Buffer Instrument & Principal Running Yield Call/ Maturity Mandatum Capital Loan 100 m 4.57% Every year IF 30NC m 4.71% IF 30NC10 99 m 6.07% Nordea AT1 PerpNC5 171 m$ 5.95% Nordea AT1 PerpNC5 98 m$ 6.48% Topdanmark Tier1 33 m 6.01% Topdanmark 10NC5 135 mdkk 2.92% Topdanmark 10NC mdkk 2.60% Subordinated Loans 609 m 5.30% Cash / Other FI 1528 m Other Investments 246 m TOTAL * 2,383 m In case subordinated loans are sold, both liquidity and Own Funds are generated This buffer of liquidity and Own Funds comes with positive interest margin 39 * Before dividend payment

40 Sampo plc Sampo Group Conservative Leverage EURm 16,000 14,000 12,000 10,000 8,000 Sampo plc Net debt Group NAV Group Equity 40% 35% 30% 25% Net debt/nav 6,000 20% 4,000 2, ,000 15% 10% 5% -4,000 Q1/05 Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 0% Q1/05 Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 Loan-To-Values based on above figures is low Parent Companyʼs Financial Leverage is 24% => Sampoʼs position to refinance its debt is strong 40

41 Sampo plc Dividends Received by Payment Year EURm 1,600 1,400 1,200 1, , , , , If Mandatum Life Banking* *) Sampo Bank , Nordea 2007-> 41

42 Sampo plc Reported Profits facilitates Debt Servicing EURm 1,300 1,100 1,069 * 1,226 Q1/2016 Q1/2015 Dividends Operating expenses Net financial expenses/income Profit before taxes ,050 1, Dividend income Operating expenses Net financial expenses Profit before taxes * Parent Company is not equal to Holding Segment; Dividend Income includes also dividends from Private Equity investments 42

43 Sampo plc Issued Debt Instruments Instrument & Principal Coupon Swap EURm 600 Effective Rate Maturity Senior Bond 500 EURm (EMTN) % Euribor3M % % Senior Bond 2,000 SEKm (EMTN) Stibor3M % % Senior Bond 500 EURm (EMTN) 1,1250% --- 1,1640% Senior Bond 2,000 SEKm (EMTN) Stibor3M % % Senior Bond 1,000 SEKm (EMTN) % % Senior Bond 500 EURm (EMTN) % % CPs issued 300 EURm Euribor + Margin % Average 3M Public debt 2,335 EURm % Private placements 148 EURm % Total 2,483 EURm % CP s Senior under EMTN Senior Retail Private 43

44 Sampo plc Sampo plc Key Credit Considerations Stable Dividend Flows from Affiliated Companies with strong Brands Diversification through Insurance & Banking in the Nordic Region Conservative Financial Profile, strong Capitalization and Liquidity Management with a proven Track Record in long-term Value Creation Bondholder Value Created 44

45 Appendix Separate Supplementary Information

46 Appendix Sampo Group s Outlook for 2016 Sampo Group s business areas are expected to report good operating results for However, the mark-to-market results are, particularly in life insurance, highly dependent on capital market developments. The continuing low interest rate level also creates a challenging environment for reinvestment in fixed income instruments. The P&C insurance operations are expected to reach a combined ratio of per cent excluding the release from the Swedish MTPL reserves. Nordea s contribution to the Group s profit is expected to be significant. 46

47 Appendix Fixed Income Investments in the Financial Sector Covered bonds Money market Long-term senior debt Long-term subordinated debt Total % Sweden 1, ,198 35% Finland 162 1, ,267 25% Norway ,488 16% Denmark % United Kingdom % Switzerland % the United States % Canada % the Netherlands % France % Iceland % Other % Total 3,078 2,470 2, , % 47 Exposure tables vs. Allocation tables small differences.

48 Appendix Public Sector Fixed Income Investments EURm Government Government guaranteed Public sector, other Total Sweden ,006 Norway Finland Germany Denmark Japan Total ,144 1, Exposure tables vs. Allocation tables small differences

49 Appendix Principles of Investment Management 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. 49

50 Appendix 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 For more detailed description of Sampo Group s Risk Management Principles, see 50

51 Appendix Sampo Group Through Structural Changes to the Leading Nordic Financial Group Mandatum Bank is merged into Sampo-Leonia, and the Group s name is shortened to Sampo. Sampo divests Sampo Bank to Danske Bank. Business areas: P&C insurance, Life insurance & Wealth Management Sampo Group s(if P&Cʼs) Topdanmark holding exceeds 23%. Topdanmark becomes If s associated company. Sampo Group (Mandatum Life) acquires Suomi Mutualʼs With-Profit Group Pension portfolio Sampo Insurance Company and Leonia Bank merge into Sampo-Leonia Financial Group. Business areas: P&C insurance, Long-term savings (life insurance, asset management, mutual funds); Banking, Investment banking 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). Business areas: P&C insurance, Long-term savings, Banking Sampo s Nordea holding exceeds 20%. Nordea becomes an associated company. Sampo Group (If P&C) acquires Tryg s Finnish Business. If P&C signs a partnership agreement with Nordea. 51

52 Appendix AA-/ Aa3 A+/ A1 A/ A2 Financial Strength Rating History If P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland), Sampo plc Stable Feb 02 Negative Aug 02 Possible downgrade Jan 03 Stable Apr 03 Possible upgrade Feb 04 Stable May 04 Moodyʼs If P&C S&P If P&C Moodyʼs Sampo plc S&P Sampo plc Positive May 06 Stable Nov 08 Positive Dec 15 A-/ A3 BBB+/ Baa1 BBB/ Baa2 Apr 04 First-time issuer rating The Sampo Groupʼs P&C insurance companies became part of If in January 2002.

53 Appendix If P&C Quarterly Results and C/R EURm Q1/16 Q4/15 Q3/15 Q2/15 Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 Q2/13 Q1/13 Premiums earned 1,059 1,077 1,087 1,103 1,076 1,108 1,124 1,122 1,104 1,112 1,139 1,140 1,115 Claims incurred Operating expenses Other technical income and expenses Allocated investment return transferred from the non-technical account Technical result Investment result Allocated investment return transferred to the technical account Other income and expenses Operating result Risk ratio, % Combined ratio, %

54 Appendix If Solvency Capital & Ratio* EURm 4,500 4,000 3,500 70% 88% 74% 71% 66% 77% 79% 72% 75% 81% 82% 75% 79% % 100% 80% 3,000 2,500 54% 60% 2,000 1,500 40% 1, % 0 0% Solvency capital (lhs) * Solvency ratio, (IFRS) % = Solvency ratio (rhs) + solvency capital + premiums earned from 12 months x 100% 54

55 Appendix 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 Programmes in place In Millions Catastrophe/ Event Property/ Risk Casualty Personal Accident Motor TPL Cargo Reporter Capacity SEK 6,300 SEK 2,000/3,500 SEK 500/ 50/$50 SEK 1,100 Unlimited SEK 850 Retention SEK 250 SEK 250 SEK 100/ 10/$15 SEK 100 SEK 100 SEK 100 In Millions Marine Hull Reporter Small Vessels Clash Cover Marine Hull I.V. Reporter Marine Hull War Risk Reporter US Terrorism Risk Capacity SEK 400 SEK 250 SEK 310 USD 60 USD 200 Retention SEK 100 SEK 100 SEK 100 USD 0,25 USD 25 Casualty/Cyber Event SEK 400/ 40/$50 SEK 200/ 20/$25 Largest & most diversified portfolio in the Nordics Focus purely on underwriting Specialised Reinsurance Unit Reinsurance partners having reinsurance as core business Relatively high retentions Stable reinsurance program Efficient pricing and broad terms 55

56 Appendix Mandatum Life Solvency Ratio* 30% 25% 20% 15% 17.7% 21.3% 20.1% 16.5% 27.7% 27.6% 25.8% 22.9% 23.6% 20.9% 19.5% 18.5% 10% 7.9% 5% 0% Solvency ratio, % of technical provision, (IFRS) = + solvency capital x 100% + liabilities for insurance and investment contracts - reinsurers share of insurance liabilities - 75% x technical provisions relating to Unit-linked insurance 56

57 Nordea Profitable & The Most Diversified Nordic Bank ,071 1, ,029 1,037 1, ,059 1,041 1,048 1,021 1,006 1, ,126 1,157 1,408 1,235 1,033 1,027 1, ,000 1,200 1,400 1,600 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 EURm Restructuring/impairment charges Loan losses Operating profit Appendix 57

58 Appendix Nordea BV on Consolidated Balance Sheet Nordea in Sampo Group s B/S EURm Acquisition price 5,557.3 Retained earnings 1,804.2 Accumulated other changes in Nordea s equity Share of Nordea s net profit Amortisation -8.8 Deferred tax 1.9 Dividends Share of Nordea s other comprehensive income Share of Nordea s other changes in equity 4.3 Share of Nordea s goodwill change -5.1 Total 6,888.8 Figures Per Share EUR Acquisition price 6.46 Book value 8.01 Market Value* 8.45 No. of shares 860,440,497 * As of 31/03/