The total comprehensive income, taking changes in the market value of assets into account, amounted to EUR 34 million (-97%) for the first half of 2020.
Earnings per share was EUR 0.81 (-41%) and mark-to-market earnings per share was EUR 0.02 (1H2019: 1.68). Return on equity for the Group amounted to 0.2% (1H2019: 15.4%) for the first half of 2020. Meanwhile, the net asset value per share on 30 June 2020 was EUR 16.99 (-18%).
Sampo confirmed on 29 July 2020 after market rumours started to circulate that it is, together with Rand Merchant Investment Holdings Limited (RMI), in discussions with Hastings Group Holdings Plc regarding a possible cash offer to acquire the issued and to be issued share capital of Hastings not already owned or controlled by Sampo and RMI. Sampo and RMI have announced a recommended cash offer, through a newly-formed jointly owned company, to acquire Hastings.
Sampo 1H2020 preliminary figures, y-o-y changes
- Insurance premiums written: EUR 4,754 million (+3.8%)
- If: EUR 2,671 million (+2.0%)
- Topdanmark: EUR 1,585 million (+10.7%)
- Mandatum: EUR 498 million (-5.9%)
- Gross claims paid: EUR 2,967 million (+5.0%)
- RoE: 0.2% (1H2019: 15.4%)
- Solvency ratio: 187% (+20 pp.)
- Profit before taxes: EUR 569 million (-42%)
- Profit for the period: EUR 469 million (-45%)
Profit before taxes for January - June 2020 for the If segment was EUR 383 million (-13%). The total comprehensive income for the period after tax was EUR 106 million (-77%). The combined ratio for the period was 82.1% (-2.6 pp.) and the risk ratio was 61.4% (-1.6 pp.).
Net releases from the technical reserves relating to the prior year claims were EUR 103 million (-5%) in January-June. The technical result increased to EUR 398 million (+19%). The insurance margin (the technical result in relation to the net premiums earned) increased to 18.3% (+2.6 pp.).
Large claims were EUR 47 million, worse than the company expected in the first half of 2020. The Norwegian market was particularly impacted by large loss development in the first half.
Gross written premiums increased to EUR 2,846 million (+3%) in January - June 2020. Adjusted for currency, premium growth was 5.2% compared to the corresponding period a year ago. Furthermore, growth was positive in all business and market areas - it was highest in Denmark where it accelerated to 12.0%. Gross written premiums grew by 6.6% in Norway, 4.6% in Sweden, and 2.0% in Finland. In BA Industrial, premium growth amounted to 9.4%, in BA Commercial it was 6.6%, in BA Baltic it reached 2.1%, and in BA Private 3.2%.
The risk ratio 59.3% (-1.9 pp.) for the second quarter improved compared to last year. This was driven by an underlying improvement and due to the COVID-19 which resulted in a significant reduction in traffic and lower activity especially at the beginning of the quarter. The cost ratio was 20.8 per cent (21.7) and the expense ratio was 15.2 per cent (16.2).
On 30 June 2020, the total investment assets of If amounted to EUR 10.8 billion (+0%).
For January - June 2020, Mandatum segment's profit before taxes amounted to EUR 39 million (-72%). The total comprehensive income for the period after tax reflecting the changes in market values of assets decreased to EUR -90 million (1H2019: 190). Return on equity was -13.3% (1H2019: 30.1%).
Mandatum Life Group's premium income amounted to EUR 498 million (-6%) for the first half of 2020. Unit-linked premiums were EUR 439 million, 88% of total premiums.
Net investment income, excluding income on unit-linked contracts, decreased to EUR 30 million (-85%) due to the market turmoil in the first quarter of 2020. In April - June, net investment income, excluding unit-linked contracts, was EUR 53 million.
Net income from unit-linked contracts decreased to EUR -312 million (1H2019: 523). In the second quarter of 2020, net income from unit-linked contracts amounted to EUR 572 million. In January - June of 2020 fair value reserve decreased to EUR 316 million (438).
Mandatum Life Group's total technical reserves amounted to EUR 11.5 billion (-4%). Unit-linked reserves decreased to EUR 7.8 billion (-4%) at the end of June 2020. The amount corresponds to 67% (1H2019: 68%) of total technical reserves. Since the end of March 2020, unit-linked reserves increased by almost EUR 600 million.
At the end of June 2020, Mandatum Life's investment assets, excluding the assets of EUR 7.8 billion (-4%) covering unit-linked liabilities, amounted to EUR 5.3 billion (-7%) at market values.
The expense result in the first half of 2020 amounted to EUR 10 million (+43%). Risk result was EUR 11 million (+10%).
Torbjorn Magnusson, Group CEO and President of Sampo, commented:
"The second quarter was a strong quarter for Sampo Group, despite the uncertainty related to COVID-19. Firstly, we continued to excel in P&C insurance underwriting, the backbone of our profit generation, and secondly, the investment markets reversed the negative experience from March and April, as the equity markets surged and bond spreads narrowed during May and June. (...)
We have also been able to focus on project Dorset. The code name refers to the offer we have published, together with RMI, to acquire all shares in the UK motor insurance company Hastings Group Holdings Plc. The offer is of course a step in the strategy to allocate more capital to P&C insurance, and Hastings is a unique company which we have followed for some time. (...) The UK is certainly an interesting insurance market. (...)
If P&C posted a technical result that improved further from the already excellent level. (...) Topdanmark also recovered from the difficult first quarter of this year. (...) Nordea's progress in the second quarter was encouraging. (...) Of all our business areas, Mandatum Life is the most exposed to the volatility in the financial markets. At the same time Mandatum is the one to benefit most from the upturn in the equity markets as witnessed in the second quarter of this year."
More financial information about Sampo Group can be found at www.sampo.com/investors