BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’Reportand
FinancialStatements
Contents
REPORTS FOR THE YEAR 2022
WWW.SAMPO.COM/YEAR2022
Board of Directors’ Report 2022 ..................... 3
Sampo Group
...................................................... 4
Outlook
.............................................................. 7
Outlook for 2023
............................................ 7
The major risks and uncertainties
for the Group in the near-term
......................... 7
Dividend proposal
............................................... 8
Dividend
........................................................ 8
Adjustment to Sampo Group’s
dividend policy
............................................... 9
Operating environment
.......................................10
Nordic P&C insurance market
..........................10
UK P&C insurance market
............................... 11
Business areas
.................................................... 12
If
.................................................................. 12
Topdanmark
..................................................15
Hastings
.......................................................16
Mandatum
....................................................18
Holding
........................................................19
Financial standing
.............................................. 20
Group solvency
............................................ 20
Financial leverage position
............................ 20
Ratings
........................................................ 20
Other developments
........................................... 21
Exit from Nordea
........................................... 21
Strategic review of Mandatum
......................... 21
Dual listing on Nasdaq Stockholm
................... 21
Share buyback programmes
........................... 21
Effects of external events on Sampo Group
..... 22
Shares, share capital and shareholders
................. 23
Shares and share capital
................................ 23
Authorisations granted to the Board
............... 25
Shareholders
................................................ 26
Holdings of the Board and
Executive Management
................................. 27
Governance and related issues
............................ 28
Governance
................................................. 28
Annual General Meeting
................................ 28
Sustainability
............................................... 29
Risk management
......................................... 30
Remuneration
.............................................. 30
Changes in Group structure
............................ 31
Organisation 31 December 2022
..................... 32
Personnel
.................................................... 34
Events after the end of the reporting period
......... 35
Share buyback programme
............................ 35
Proposal for the new Chair of the Board
.......... 35
Key figures
........................................................ 36
Calculation of the key figures
......................... 39
Group’s IFRS Financial Statements ............... 43
Statement of profit and
other comprehensive income
.............................. 44
Consolidated balance sheet
................................ 45
Statement of changes in equity
........................... 46
Statement of cash flows
..................................... 47
Group’s notes to the financial statements .... 49
Summary of significant accounting policies
.......... 50
Segment information
......................................... 78
Material partly-owned subsidiaries
...................... 84
Group’s other notes to the financial
statements 1–35
................................................. 86
Sampo plc’s Financial Statements ................ 187
Sampo plc’s income statement
........................... 188
Sampo plc’s balance sheet
................................. 189
Sampo plc’s statement of cash flows
..................190
Sampo plc’s notes to
the financial statements ..................................191
Summary of significant accounting policies
......... 192
Notes to the income statement 1–4
..................... 193
Notes to the assets 5–9
.....................................194
Notes to the liabilities 10–14
............................... 195
Note to the income taxes 15
............................... 196
Notes to the off-balance sheet liabilities
and commitments 16–18
..................................... 197
Notes to the staff and management 19–21
........... 197
Approval of the Financial Statements
and the Board of Directors’ Report .............. 199
Auditors’ report .............................................. 200
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
2
BOARD OF DIRECTORS’ REPORT AND FINANCIAL STATEMENTS 2022
Sampo Group ..............................................4
Outlook .......................................................... 7
Outlook for 2023 ................................................ 7
The major risks and uncertainties
for the Group in the near-term .....................7
Dividend proposal ..................................... 8
Dividend ................................................................8
Adjustment to Sampo Group’s
dividend policy ...................................................9
Operating environment ......................... 10
Nordic P&C insurance market .....................10
UK P&C insurance market .............................. 11
Business areas ............................................12
If .............................................................................. 12
Topdanmark ....................................................... 15
Hastings ............................................................... 16
Mandatum ........................................................... 18
Holding ................................................................. 19
Financial standing ................................... 20
Group solvency ................................................ 20
Financial leverage position ..........................20
Ratings ................................................................20
Other developments ................................21
Exit from Nordea .............................................. 21
Strategic review of Mandatum .................... 21
Dual listing on Nasdaq Stockholm ............ 21
Share buyback programmes ....................... 21
Effects of external events
on Sampo Group ............................................. 22
Shares, share capital and
shareholders ...............................................23
Shares and share capital .............................. 23
Authorisations granted to the Board ...... 25
Shareholders .....................................................26
Holdings of the Board and
Executive Management ................................ 27
Governance and related issues ...........28
Governance ....................................................... 28
Annual General Meeting ............................... 28
Sustainability .................................................... 29
Risk management ...........................................30
Remuneration ...................................................30
Changes in Group structure ......................... 31
Organisation 31 December 2022 ............... 32
Personnel ...........................................................34
Events after the end of
the reporting period ...............................35
Share buyback programme ........................ 35
Proposal for the new Chair
of the Board ...................................................... 35
Key figures ..................................................36
Calculation of the key figures .................... 39
Board of Directors’ Report
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
BOARD OF DIRECTORS’ REPORT 2022
3
Board of Directors’ Report 2022
Sampo Group
Sampo Group’s core business, P&C insurance had another
strong year and reported an underwriting result of EUR
1,314 million (1,282), representing year-on-year growth
of 2 per cent or 13 per cent adjusted for COVID-19 effects
reported in 2021. The Group combined ratio was solid at
82.1 per cent (81.4), supported by excellent performance
in Nordic P&C and benefits from higher discount rates.
Excluding the reported COVID-19 effects in 2021, the
combined ratio would have improved by 1.0 percentage
points year-on-year. Gross written premiums increased
by 6 per cent to EUR 8,136 million (7,644), driven by
strong renewals, high retention and disciplined pricing.
Sampo targets mid-single digit per cent underwriting
profit growth on average and a combined ratio below
86 per cent for 2021–2023.
If P&C’s underwriting profit increased by 11 per cent to
EUR 985 million (891) and the combined ratio improved
to 80.3 per cent (81.3). The result was driven by a 7.2 per
cent currency adjusted premium growth and continued
strong underlying performance. Premium development
was supported by broad-based growth across all business
areas, with Industrial and the Baltics seeing the most
notable positive development. In the largest business
area, Private, currency adjusted premium growth
remained solid at 3.5 per cent despite a decline in
Nordic new car sales. The adjusted risk ratio improved
by approximately 0.5 percentage points year-on-year.
In addition to the strong underwriting development,
the significant changes in the interest rate environment
during 2022 increased If’s fixed income running yield
to 3.2 per cent (1.5). Profit before taxes increased to
EUR 1,217 million (1,077).
Topdanmark’s profit before taxes for 2022 in Sampo
Group’s profit and loss account decreased to EUR 220
million (346), as the investment result was affected by the
adverse market environment. The sale of Topdanmark life
insurance business supported the result by EUR
72 million. The combined ratio stood at 83.1 per cent (82.3).
Hastings reported solid top-line growth with resilient
margins in a challenging UK motor insurance market, in
which the claims inflation remained elevated throughout
the year. Gross written premiums grew by 15 per cent
on a currency adjusted basis in 2022, supported by high
retention and disciplined pricing. Live customer policies
increased by 2 per cent year-on-year to over 3.2 million,
driven by a 33 per cent growth in home insurance, while
motor policy count was stable. Hastings’ operating ratio
increased to 89.7 per cent (80.3). Profit before taxes
amounted to EUR 73 million (127), or EUR 131 million
(168) excluding the non-operational depreciation and
amortisation.
The Mandatum segment’s profit before taxes for 2022
decreased to EUR 207 million (291), reflecting lower
realised gains and an increase in the group contribution
to Sampo plc to EUR 29 million (15). Mandatum’s net
flows in third-party assets remained positive in every
quarter, but were outweighed by the decline in market
values, leading to AUM of EUR 10.3 billion at the end of
2022, down from EUR 11.1 billion at the year-end 2021.
Mandatum Life’s Solvency II ratio increased to 248 per
cent (190), driven by higher interest rates and lower
solvency capital requirement.
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
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4
BOARD OF DIRECTORS’ REPORT 2022
In 2022, Sampo sold its remaining Nordea holding of
246 million shares. In total, 46 million shares were
sold in the open market during the first and the second
quarter of 2022 and 200 million shares through an
accelerated bookbuild offering on 29 April 2022. In
total, the transactions generated total gross proceeds of
EUR 2.3 billion. The positive accounting effect from the
transactions on Sampo’s consolidated statement of profit
and loss was EUR 103 million.
Sampo Group’s profit before taxes for 2022 amounted to
EUR 1,863 million (3,171). The profit before taxes includes
EUR 138 million (982) of accounting effects defined as
extraordinary items in accordance with Sampo Group’s
dividend policy. Excluding these items, the profit before
taxes declined to EUR 1,725 million (2,189), mainly as
a result of Nordea no longer being consolidated as an
associate. Earnings per share amounted to EUR 2.69
(4.63), or EUR 2.41 (2.86) excluding extraordinary items.
The total comprehensive income, which takes changes in
the market values of assets into account, was affected by
the adverse capital markets environment and amounted
to EUR -26 million (3,448).
On 7 December 2022, Sampo plc announced that the
Board of Directors had decided to undertake a strategic
review of Mandatum, with the aim to evaluate whether a
separation of Mandatum could create shareholder value.
At the publishing of the full-year results on 10 February
2023, the review was still ongoing.
Sampo Group’s year-end 2022 Solvency II ratio stood at
210 per cent, up from 185 per cent at the year-end 2021.
The financial leverage was 25.6 per cent at the end of 2022,
up from 23.8 per cent at the end of 2021. Sampo targets a
solvency ratio of 170–190 per cent and a financial leverage
ratio below 30 per cent.
On 10 February 2023, Sampo plc’s Board of Directors
proposed a dividend of EUR 2.60 per share for the
2022 financial year to the Annual General Meeting
to be held on 17 May 2023. This consists of a regular
dividend (formerly known as the insurance dividend as
introduced at the 2021 CMD) of EUR 1.80 per share (1.70),
representing growth of 6 per cent, and an extra dividend
of EUR 0.80 per share. In addition, Sampo announced
that management is to propose to the Board a new EUR
400 million buyback programme.
The implementation of IFRS 17 and 9 on 1 January 2023
will bring asset and liability side mark-to-market effects
into Sampo’s reported net income. As a result, the Sampo
Board has decided to adjust the Group’s dividend policy,
such that the minimum payout ratio of 70% is measured
against a newly defined operational result rather than
net profit excluding items defined as extraordinary,
as previously. The change is not expected to have any
significant effect on the size and trajectory of dividends.
The adjusted dividend policy is described in the section
Dividend proposal.
In 2022, Sampo repurchased its own shares through
three buyback programmes. Of the latest buyback
programme of EUR 1 billion, launched on 9 June 2022,
EUR 845 million had been executed at year-end 2022.
The programme was completed on 8 February 2023.
In total, Sampo repurchased 32 million shares for a
total of EUR 1.4 billion in 2022.
Sampo Group will issue a report on non-financial
information in accordance with Chapter 3a, Section 5
of the Accounting Act. A separate report, Sustainability
Report 2022, will be published in May 2023.
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
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Sampoplc’snotestothefinancialstatements
BoardofDirectors’
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5
BOARD OF DIRECTORS’ REPORT 2022
Key figures
Sampo Group, 2022
EURm 2022 2021 Change, %
Profit before taxes 1,863 3,171 -41
If 1,217 1,077 13
Topdanmark 220 346 -36
Hastings 73 127 -43
Mandatum* 207 291 -29
Holding* 146 1,331 -89
Profit for the period 1,541 2,748 -44
Underwriting profit 1,314 1,282 2
Change
Earnings per share, EUR 2.69 4.63 -1.94
EPS (without eo. items), EUR** 2.41 2.86 -0.45
EPS (including OCI), EUR -0.26 5.9 -6.16
RoE (including OCI), % -1.3 26.8 -28.1
* After Mandatum’s group contribution of EUR 29 million in 2022 and EUR 15 million in 2021 to Sampo plc.
** The accounting effects treated as extraordinary items in accordance with Sampo Group’s dividend
policy amounted to EUR 138 million in 2022. In 2021, the, extraordinary items were EUR 982 million.
Sampo Group financial targets for 2021–2023
Target 2022
Group
Mid-single digit UW profit growth
annually on average (excluding
COVID-19 effects) 13% (2% on a reported basis)
Group combined ratio: below 86% 82.1%
Solvency ratio: 170-190% 210%
Financial leverage: below 30% 25.6%
If Combined ratio: below 85% 80.3%
Hastings
Operating ratio: below 88% 89.7%
Loss ratio: below 76% 83.7%
January-December 2022 effects related to the COVID-19 pandemic have been very limited; hence, these
will not be reported separately. For further information, please see section Other developments.
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
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6
BOARD OF DIRECTORS’ REPORT 2022
Outlook for 2023
Sampo Group’s P&C insurance operations are expected
to achieve underwriting margins that meet the annual
targets set for 2021–2023. At Group level, Sampo targets
a combined ratio of below 86 per cent, while the target
for its largest subsidiary, If P&C, is below 85 per cent.
Hastings targets an operating ratio of below 88 per cent.
The combined and operating ratios of Sampo Group’s
P&C insurance operations are subject to volatility driven
by, among other factors, seasonal weather patterns,
large claims and prior year development. These effects
are particularly relevant for individual segments and
business areas, such as the Danish and UK operations.
The mark-to-market component of the net financial
result will be significantly influenced by capital markets’
developments, particularly in life insurance.
With regard to Topdanmark, reference is made to the
profit forecast model that the company publishes on a
quarterly basis.
The major risks and
uncertainties for the Group
in the near-term
In its current day-to-day business activities, Sampo Group
is exposed to various risks and uncertainties, mainly
through its major business units.
Major risks affecting the Group companies’ profitability
and its variation are market, credit, insurance and
operational risks. At the Group level, sources of risks are
the same, although they are not directly additive due to
the effects of diversification.
Uncertainties in the form of major unforeseen events
may have an immediate impact on the Group’s
profitability. The identification of unforeseen events
is easier than the estimation of their probabilities,
timing, and potential outcomes. During 2022 the global
economy was hit by the war in Ukraine and, at the same
time, inflation pressures intensified and broadened,
forcing central banks to raise interest rates sharply.
This may lead to both a further significant slowdown in
economic growth and a deterioration in the debt service
capacity of businesses, households and governments.
Furthermore, the re-alignment of energy supplies in
Europe takes time and the energy crisis could continue
for several years. These developments are currently
causing significant uncertainties in economic and
capital market development. At the same time rapidly
evolving hybrid threats create new challenges for states
and businesses. There are also a number of widely
identified macroeconomic, political and other sources
of uncertainty which can, in various ways, affect the
financial services industry in a negative manner.
Other sources of uncertainty are unforeseen structural
changes in the business environment and already
identified trends and potential wide-impact events. These
external drivers may have a long-term impact on how
Sampo Group’s business will be conducted. Examples of
identified trends are demographic changes, sustainability
issues, and technological developments in areas such as
artificial intelligence and digitalisation including threats
posed by cybercrime.
Outlook
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BOARD OF DIRECTORS’ REPORT 2022
Dividend proposal
Dividend
Under Sampo Group’s capital management framework,
Sampo will return ongoing surplus capital generation
from its insurance operations through a regular dividend.
Other forms of surplus capital generation, including
possible proceeds from disposals of financial investments,
are returned through additional dividends and/or
buybacks, to the extent that the funds are not utilised to
support business development. Sampo targets a Solvency
II ratio of 170–190 per cent and financial leverage below
30 per cent.
According to Sampo plc’s Dividend Policy applied for
distribution of 2022 earnings, total annual dividends
paid shall represent at least 70 per cent of Sampo Group’s
net profit for the year (excluding extraordinary items).
In 2022, accounting items related to the sale of Nordea
shares, the sale of Topdanmark life insurance operations
and the reclassification of Nordax from an associated
company to fair value investment have been defined
as extraordinary in accordance with Sampo’s dividend
policy.
The parent company’s distributable capital and reserves
totalled EUR 6,716 million of which profit for the financial
year 2022 was EUR 1,780 million. Based on the policies
outlined above, the Board proposes to the Annual General
Meeting that a total dividend of EUR 2.60 per share be
paid to all shares except for the shares held by Sampo
plc on the dividend record date of 22 May 2023. The total
dividend includes a regular dividend of EUR 1.80 per
share as well as an extra dividend of EUR 0.80 per share.
As earnings per share excluding extraordinary items
amounted to EUR 2.41 per share, the payout ratio for the
total dividend equates to 108 per cent. The remainder of
the distributable funds are left in the company’s equity
capital. After adjusting for the proposed dividend, Sampo
Group’s 2022 year-end distributable funds amounted to
EUR 5,378 million, Group Solvency II ratio to 210 per cent
and financial leverage to 28.6 per cent.
Dividend payment
The dividend is proposed to be paid to the shareholders
registered in the register of shareholders held by Euroclear
Finland Oy as at the record date of 22 May 2023. The Board
proposes that the dividends be paid on 31 May 2023.
The issuer of the Swedish depository receipts shall ensure
that the dividend is paid to the depository receipt holders
registered in the securities depository and settlement
register maintained by Euroclear Sweden AB as at the
record date of 22 May 2023, which payment shall be made
in Swedish kronor.
Financial position
No significant changes have taken place in the company’s
financial position since the end of the financial year. The
company’s liquidity position is good and in the view of
the Board, the proposed distributions do not jeopardise
the company’s ability to fulfil its obligations.
Auditor’sReportGroup’sIFRSFinancialStatements
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BoardofDirectors’
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BOARD OF DIRECTORS’ REPORT 2022
Adjustment to Sampo Group’s
dividend policy
The implementation of IFRS 17 and 9 on 1 January
2023 will bring asset and liability side mark-to-market
effects into Sampo’s reported net income. As a result, the
Sampo Board has decided to adjust the Group’s dividend
policy, such that the minimum payout ratio of 70 per
cent is measured against a newly defined operational
result rather than net profit excluding items defined as
extraordinary, as previously. The change is not expected
to have any significant effect on the size and trajectory of
dividends. The adjustment is effective to payouts made in
respect of the 2023 and later financial years’.
According to the updated dividend policy, Sampo is to
pay a stable and sustainable regular dividend that grows
in line with the Group’s earnings over time. Total annual
dividends paid will be at least 70 per cent of Group’s
operational result.
The operational result is similar to net profit excluding
items defined as extraordinary used under IFRS 4,
with the main differences being that it excludes all
result effects from discount rate changes as well as
non-operational amortisation in Sampo’s P&C operations,
and that Mandatum’s profit is replaced with the dividend
stream that it provides to Sampo plc. The full definition
of the operational result can be found at
www.sampo.com/dividend.
Sampo is committed to operating a strong and efficient
balance sheet, as defined by the Group’s capital
management framework. To enable this, regular
dividends can be complemented with distributions of
excess capital via share buybacks and/or extra dividends.
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Group’snotestothefinancialstatements
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BOARD OF DIRECTORS’ REPORT 2022
Nordic P&C insurance market
In 2022, the Nordic P&C insurance market remained
relatively stable despite the challenging macroeconomic
environment with rising inflation and interest rates.
The market continued to be highly competitive, but the
larger players maintained strong financial discipline
and the year saw many players implementing price
increases to combat inflation. In general, the Nordic P&C
market continued to deliver better profitability and lower
combined ratios than other European P&C markets.
Managing and monitoring claims inflation and repricing
was on top of every insurer’s agenda in 2022. All Nordic
countries and P&C insurance segments were affected by
the inflation surge, with the highest claims inflation seen
in property and motor. This was mostly driven by more
expensive building materials and spare parts following
raw material shortages and increasing transportation
and energy costs. The increase in claims inflation started
to show already in 2021 due to supply shortages in the
wake of the pandemic but was further fuelled by the
challenging macroeconomic environment following the
war in Ukraine.
Operating environment
Historically, the Nordic P&C market has experienced
higher and more stable retention levels than other
European P&C markets with some 85–90 per cent
retention rates. This trend continued in 2022 with strong
retention rates despite price increase, due to a general
public acceptance of an inflationary environment.
Despite the slowdown in the economy, the demand for
insurance has been relatively stable with some increased
market activities noted towards the end of the year. Some
targeted growth efforts were seen among the Nordic
players in various areas.
In 2022, the Nordics experienced some weather-related
claims. In the beginning of the year, the region was
affected by some winter storms typical for the season.
The last quarter of the year saw some heavy snowing
and a short period with freezing temperatures, which
resulted in weather related claims. Climate change and
sustainability remain important for the Nordic P&C
industry with most large players now having incorporated
and communicated climate/ESG targets in their strategy.
During the year, Nordic insurers continued their focus
on digital with investments in core systems and online
platforms to further digitalise sales, service, and claims.
Despite the region being digitally advanced, there is
potential for further margin improvement to be gained
from digitalisation. The Nordic countries continuously
rank top in the annual Digital Economy and Society
Index (DESI), which ranks the digital competitiveness of
European countries.
In 2022, claims frequencies increased across the Nordic
region as society opened up after the pandemic. At the
beginning of the year there were still some pandemic-
related restrictions affecting claims frequencies. As the
restrictions were gradually lifted during the year, motor
claims continued to normalise with traffic returning to
closer to normal levels. 2022 also saw an uptick in travel
claims frequencies as people started travelling again.
The weak new car sales seen in 2021 continued in 2022
with a decline of 9.5 per cent for the full year, but the year
ended on a positive note with new car sales growth in the
fourth quarter. The negative effect from the pandemic-
related semi-conductor shortages was amplified by
the war in Ukraine and the ensuing general economic
downturn affected new car sales development adversely.
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BOARD OF DIRECTORS’ REPORT 2022
UK P&C insurance market
The UK P&C Insurance market has experienced regulatory
changes and elevated claims inflations during the
last 12 months. The FCA’s general insurance pricing
practices reforms were implemented on 1 January 2022
and significantly impacted renewal premiums for some
insurers. Market new business prices increased, but not
sufficiently to offset the reduction in renewal prices
across the industry. Price comparison websites, Hastings’
primary distribution channel, remain by far the largest
sales channel for UK car and home insurance customers.
The UK motor market experienced elevated claims
inflation during 2022, estimated to be 12 per cent for
the year. Claims severities increased as a result of rising
second hand car prices due to supply chain disruption
in the new car market, increases in repair, energy and
labour costs, and general UK inflation. Claims frequencies
increased post pandemic as restrictions were reversed
and traveling increased. Adverse weather and train strikes
in November and December resulted in further increased
frequencies in the fourth quarter.
The home insurance market was in particular, impacted
by the FCA’s General Insurance Pricing Practices review
with participants with significant back books taking
sizeable rate reductions on retained business. Home
claims frequency was also subject to adverse December
weather conditions and underlying claims severity
suffered from general inflationary pressures.
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
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BOARD OF DIRECTORS’ REPORT 2022
Business areas
If
If P&C is the leading property and casualty insurer in
the Nordic region, where it offers solutions in all major
lines of business through its four business areas; Private,
Commercial, Industrial and Baltic. If P&C’s business
model is based on high customer satisfaction, best in
class underwriting and leveraging the scale benefits that
its unified Nordic model offers. Excellent digital sales
and service capabilities are a core part of If’s strategy,
particularly in the Private and SME Commercial market
segments.
Underwriting result
If P&C reported an underwriting result of EUR 985
million (891) for 2022, representing 11 per cent growth
year-on-year. This was driven by a 1.0 percentage points
improvement in the combined ratio to 80.3 per cent (81.3)
and currency adjusted organic premium growth of 7.2
per cent. The result is ahead of If P&C’s financial targets
for 2021-2023 of mid-single digit growth in underwriting
profit and a combined ratio of below 85 per cent.
Results
If, 2022
EURm 2022 2021 Change, %
Gross written premiums 5,432 5,134 6
Net earned premiums 5,002 4,772 5
Claims incurred -2,963 -2,860 4
Operating expenses -1,054 -1,021 3
Underwriting result 985 891 11
Other technical income and expenses -9 -3 245
Allocated investment return transferred from
the non-technical account 11 14 -24
Technical result 987 902 9
Investment result 273 234 16
Allocated investment return transferred to the technical account -44 -36 24
Other income and expenses 1 -24 —
Profit before taxes 1,217 1,077 13
Key figures 2022 2021 Change
Combined ratio, % 80.3 81.3 -1.0
Risk ratio, % 59.2 59.9 -0.7
Cost ratio, % 21.1 21.4 -0.3
Expense ratio, % 15.4 15.8 -0.4
Large losses vs. normal*, % 0.8 0.8 —
Prior year development**, % 6.7 3.6 3.2
*
Positive large loss figures indicate above-normal large losses. Adjusting for an increase in the large claims budget in the second quarter of
2022, the large claims deviation would have been 0.2 percentage points in 2021.
**
Positive figures for prior year development indicate positive reserve run-off.
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BOARD OF DIRECTORS’ REPORT 2022
Premium development
If P&C reported gross written premiums, GWP, of EUR
5,432 million (5,134) in 2022. Excluding currency effects,
premiums grew by 7.2 per cent year-on-year, driven by
strong development in business areas Industrial and
Baltic, in particular. Growth was robust across the board
and driven primarily by rate increases, strong customer
retention and an increase in customer count year-on-year.
Business Area (BA) Private delivered GWP growth of 3.5
per cent for the full year, driven by rate increases covering
claims inflation, strong retention and a growing customer
base. Geographically, growth was strongest in Norway and
Finland.
During 2022, BA Private’s GWP was negatively affected by
continued slow new car sales. The weak Nordic new car
sales seen in the second half of 2021 continued for most of
2022 with a decline of 9.5 per cent year-on-year. Excluding
the Swedish mobility business, currency adjusted GWP
growth in 2022 was 5.5 per cent in Private and 8.7 per cent
for If.
During the year, If P&C’s Private customer base continued
to grow and now stands at 3.3 million households,
many of whom have multiple products with If. This
development was supported by strong retention at 90 per
cent and high customer satisfaction with NPS at 62.
In 2022, digital customer KPIs continued to improve
following consistent investments into this area over many
years. Digital share of incoming sales increased to more
than 50 per cent and online claims continued to develop
positively. Also, self-service through My Pages increased
by 16 per cent year-on-year to over 13 million logins
during the year with good development in all countries.
Currency adjusted GWP growth in BA Commercial in 2022
was 6.0 per cent, driven primarily by Sweden and Norway.
Rate actions, high and stable retention, and positive
development in number of customers contributed to
growth. At the end of the year nearly 45 per cent of
Commercials’ customers used the digital login solution
MyBusiness.
BA Industrial’s GWP grew by 20.4 per cent in 2022 on a
currency adjusted basis. Growth was primarily driven by
significant rate increases, strong renewals and improved
retention. Inflation driven rate increases continued in all
countries, with the largest contribution coming from the
property segment. Geographically, each country showed
double-digit GWP growth year-on-year with the strongest
development in Denmark.
During the year, digital engagement and self-service
increased among Industrial customers. Approximately 55
per cent of clients now have access to If Login and of those
more than 90 per cent were active users viewing policies,
invoices, claims and issuing certificates online.
The Baltic business delivered currency adjusted GWP
growth of 21.9 per cent in 2022. Growth was strong in all
three Baltic countries with continued rate increases to
mitigate claims inflation, high retention, and growing
customer base year-on-year.
Combined ratio development
If P&C’s 2022 combined ratio of 80.3 per cent was 1.0
percentage points better year-on-year (81.3), benefiting
from increased discount rates and an improved adjusted
risk ratio, partly offset by a non-repeat of COVID-19 effects
and adverse large claims.
In 2022 large claims were 0.8 percentage points worse
than expected – a deterioration of 0.6 percentage points
compared to the same period last year. The large claims
reported in 2022 were mainly related to property claims in
business areas Industrial and Commercial.
Severe weather claims during 2022 were 0.6 percentage
points worse than expected mainly due to harsh winter
weather. This is 0.2 percentage points better than prior
year, which was negatively affected by severe weather
losses related to floods in Germany and Sweden.
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BOARD OF DIRECTORS’ REPORT 2022
The unwind of COVID-19 effects had an adverse effect
on the combined ratio development relative to the prior
year. In the comparison period January–December
2021, COVID-19 effects supported the combined ratio by
approximately 2 percentage points. No separate COVID-19
effects were reported in 2022.
In 2022 the development of prior year claims reserves
supported the combined ratio by 6.7 percentage points
(3.6). The main drivers were the changes in the mortality
model in Finland in the first quarter, increased discount
rates in Sweden, and a gradual increase in the annuity
discount rate in Finland. The Finnish discount rate was
increased from 0.75 percentage points at the end of 2021
to 2.50 per cent, bringing this closely into line with market
interest rates. The total positive profit effect of increases
in discount rates of EUR 379 million was partly offset
by an increase in the claims reserve of EUR 123 million
consistent with If’s prudent reserving approach.
In total, the risk ratio improved by 0.7 percentage points
to 59.2 per cent (59.9) in 2022. The adjusted risk ratio,
which excludes the impact of large losses, severe weather,
reported COVID-19 effects and prior year development,
improved by approximately 0.5 percentage points
year-on-year.
The cost ratio improved by 0.3 percentage points to 21.1
per cent (21.4). The 2022 cost ratio development compares
favourably to If P&C’s target for 2021-2023 of a ~20bps
yearly cost ratio reduction.
Investment result
For the full year 2022, If P&C reported an investment
result of EUR 273 million (234). Mark-to-market return
on investments stood at -4.4 per cent (4.3), driven by
increased interest rates and volatile credit and equity
markets.
During the year, the investment portfolio was gradually
reinvested at higher rates, improving the running yield.
At the end of December, the fixed income running yield
was 3.2 per cent (1.5).
Profit before taxes
In total, If P&C reported profit before taxes for 2022 of
EUR 1,217 million (1,077), representing an increase of 13
per cent year-on-year. Total comprehensive income for
the year was EUR 182 million (1,090).
Combined ratio, % Risk ratio, %
2022 2021 Change 2022 2021 Change
Private 81.7 78.6 3.1 60.6 57.3 3.3
Commercial 74.6 83.2 -8.6 52.7 61.2 -8.5
Industrial 85.8 93.4 -7.6 68.5 74.3 -5.8
Baltic 89.9 86.8 3.1 62.8 58.7 4.1
Sweden 84.2 75.8 8.4 64.8 56.9 7.9
Norway 89.8 84.6 5.2 69.4 63.3 6.1
Finland 46.6 81.8 -35.2 24.5 59.5 -35.0
Denmark 104.3 90.9 13.4 79.1 63.4 15.7
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BOARD OF DIRECTORS’ REPORT 2022
Topdanmark
Topdanmark is Denmark’s third largest non-life insurance
company with a 16 per cent market share. It focuses on the
private, agricultural, and SME markets. The company was
previously engaged in life insurance business but the life
business was divested on 1 December 2022. The company
is listed on Nasdaq Copenhagen.
Sampo plc held 43,676,975 shares in Topdanmark at 31
December 2022. The holding corresponds to an ownership
of 48.5 per cent of all shares and 49.3 per cent of related
voting rights. The market value of the holding was EUR
2,146 million.
Topdanmark’s profit before taxes for 2022 declined to
EUR 220 million (346) in Sampo Group’s profit and loss
account as the company suffered a weak investment
result in 2022. The result included a gain of EUR 127
million from the disposal of Topdanmark’s life business
partly offset by the derecognition of EUR 55 million
of intangibles on Sampo’s balance sheet, leading to a
positive accounting effect of EUR 72 million.
The combined ratio for 2022 was 83.1 per cent (82.3). The
expense ratio for the same period was 16.3 per cent (15.6).
In connection with its full-year results, Topdanmark
disclosed that its Board of Directors will recommend
to the AGM a total dividend of DKK 4,815 million,
representing DKK 53.5 per share. The total dividend
constitutes an ordinary dividend of DKK 11.0 per share
and an extra dividend of DKK 42.5 per share based
on the sale of Topdanmark Liv Holding A/S. Subject
Results
Topdanmark, 2022
EURm 2022 2021 Change, %
Premiums, net 2,511 2,694 -7
Net income from investments -1,119 1,359 —
Other operating income 76 1 —
Claims incurred -1,778 -1,947 -9
Change in insurance liabilities 1,004 -1,398 —
Staff costs -296 -294 1
Other operating expenses -163 -138 18
Finance costs -19 -11 66
Share of associates’ profit/loss 4 79 -95
Profit before taxes 220 346 -36
Key figures 2022 2021 Change
Combined ratio, % 83.1 82.3 0.8
Loss ratio, % 66.8 66.7 0.1
Expense ratio, % 16.3 15.6 0.7
to the approval from the AGM, Sampo will receive
approximately EUR 314 million in dividends from
Topdanmark after the AGM on 26 April 2023.
Further information on Topdanmark A/S and
its January–December 2022 result is available at
www.topdanmark.com.
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BOARD OF DIRECTORS’ REPORT 2022
Hastings
Hastings is one of the leading digital general insurance
providers in the UK predominantly focused on serving UK
car, van, bike and home insurance customers. Hastings
has over 3 million customers and operates via its two
main trading subsidiaries, Hastings Insurance Services
Limited in the UK and Advantage Insurance Company in
Gibraltar.
The UK motor market has seen significant pressure
during 2022, including high levels of competition, driving
behaviour returning toward pre-COVID-19 levels, double
digit claims cost inflation, and the impact of the FCA’s
GIPP renewal pricing reforms. Against this environment,
Hastings has delivered a resilient set of results.
Gross written premium (GWP) increased 15 per cent year-
on-year on a currency adjusted basis to EUR 1,313 million
(1,127), reflecting early rate increases applied by Hastings
as elevated levels of inflation were observed. The increase
in GWP, together with a decrease in quota share from 50
per cent to 35 per cent led to a 46 per cent increase in net
written premiums to EUR 728 million (495). Net earned
premiums increased by 18 per cent year-on-year on a
currency adjusted basis.
Results
Hastings, 2022
EURm 2022 2021 Change, %
Gross written premiums 1,313 1,127 16
Net earned premiums 594 499 19
Other operating income 416 331 26
Total revenue 1,010 830 22
Net insurance claims -497 -310 60
Operating expenses -409 -356 15
Underwriting profit 104 164 -37
Investment income 17 11 52
Non-operational amortisation -58 -41 41
Finance costs 10 -7 —
Profit before taxes 73 127 -43
Key figures 2022 2021 Change
Live customer policies (million) 3.2 3.1 2
Loss ratio, % 83.7 62.2 21.5
Operating ratio, % 89.7 80.3 9.4
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BOARD OF DIRECTORS’ REPORT 2022
Total live customer policies (LCP) numbers grew by 2.4
per cent year-on-year to over 3.2 million driven by a 33
per cent increase in home insurance policies to 412,000,
while motor policy count was stable. The growth in home
insurance policies was supported by a favourable market
environment after the GIPP reforms, and by new data and
pricing capabilities introduced by Hastings.
The calendar year loss ratio for 2022 was 83.7 per cent
(62.2). The increase on prior year was driven by a reversal
of COVID-19 restrictions, increasing accident frequency
and claims inflation. The market experienced elevated
claims inflation throughout 2022, estimated at 12 per cent
for the year, mainly driven by general inflation in the UK
and supply chain issues leading to increases in second
hand car costs, repair costs including parts and labour
and hire car costs. The UK also experienced an extended
period of adverse cold weather in December, contributing
to increased claims frequencies and higher claims costs
above that usually experienced in recent years’ fourth
quarters.
The operating ratio for 2022 increased to 89.7 per cent
(80.3), with written premium growth offset by the increase
in the loss ratio and, in particular, the fourth quarter
weather events.
On 13 September 2022, Hastings redeemed its GBP 250
million (approximately EUR 290 million) bond in full,
giving rise to a positive accounting effect of EUR 17
million for the year.
Hastings generated profit before taxes of EUR 73 million
(127) for 2022, net of a EUR 58 million (41) charge for
amortisation of non-operational intangibles arising from
the Sampo acquisition, which will continue until 2028.
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BOARD OF DIRECTORS’ REPORT 2022
Results
Mandatum, 2022
EURm 2022 2021 Change, %
Premiums written 1,390 1,367 2
Net income from investments -821 1,831 —
Other operating income 36 40 -10
Claims incurred -883 -1,127 -22
Change in liabilities for insurance and investment contracts 680 -1,642 —
Staff costs -74 -65 13
Other operating expenses -110 -100 10
Finance costs -12 -14 -11
Share of associates’ profit/loss — 1 -85
Profit before taxes 207 291 -29
Key figures 2022 2021 Change
Return on equity (including OCI), % -17.3 18.4 —
Mandatum
Mandatum is a leading Finnish financial services provider
offering savings, asset management, personal risk and
employee reward and retention services to private, corporate
and institutional clients. Mandatum products are sold
primarily in Finland, through advisers and partnership
channels, but it also offers certain services, such as asset
management, across the Nordic countries.
The Mandatum segment’s profit before taxes for 2022
amounted to EUR 207 million (291), after a group
contribution of EUR 29 million (15) that effectively
acts as a distribution of profit to Sampo plc. The total
comprehensive income, which reflects changes in the
market, was EUR -264 million (338) after taxes in 2022.
The year 2022 was characterised by adverse and volatile
capital market movements, which affected Mandatum’s
investment returns. The investment result taken through
the P&L decreased to EUR 149 million (187), whereas
the fair value investment result amounted to EUR -400
million (319). The mark-to-market investment return was
-9.0 per cent (10.2) in 2022.
Mandatum Life’s Solvency II ratio was 248 per cent at the
end of 2022, up from 190 per cent at the year-end 2021,
as higher interest rates and decreased solvency capital
requirement offset the effect of the weak mark-to-market
investment results.
Mandatum’s third-party assets under management
amounted to EUR 10.3 billion at the end of 2022, down
from EUR 11.1 billion at the year-end 2021. Despite the
challenging market environment, Mandatum’s inflows
achieved an all-time high and net flows remained positive
in every quarter of 2022, adding to a total of EUR 538
million for the year, highlighting Mandatum’s position as
a leading financial services provider in Finland.
Mandatum’s operational result (expense result and result
from Asset Management) for 2022 remained solid at
EUR 49 million (45). The risk result decreased to EUR 32
million from a very strong comparison figure of EUR 43
million.
Mandatum’s with-profit liabilities with guarantees of
3.5 and 4.5 per cent decreased by EUR 143 million to
EUR 1.6 billion (1.7) at the end of 2022. In total, with-profit
reserves were EUR 3.0 billion (3.2).
Mandatum’s Board of Directors intends to propose a
dividend of EUR 150 million to be paid to Sampo plc
in the first quarter of 2023. Combined with the group
contribution of EUR 29 million, total distributions from
Mandatum to Sampo plc amounted to EUR 179 million
with respect to the 2022 financial year.
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BOARD OF DIRECTORS’ REPORT 2022
Results
Holding, 2022
EURm 2022 2021 Change, %
Net investment income 177 146 21
Other operating income 132 12 —
Staff costs -29 -25 14
Other operating expenses -19 -5 300
Finance costs -96 -107 -10
Share of associates’ profit -19 328 —
Valuation difference on disposal of associate shares — 84 —
Reversal of impairment losses on Nordea shares — 899 —
Profit before taxes 146 1,331 -89
Holding
Sampo plc is the parent company of Sampo Group
and responsible for the Group’s strategy and capital
management activities. In addition to the Group’s
insurance subsidiaries, a small number of direct
investments are held in the holding company. Sampo’s
previous ownership in Nordea was consolidated into the
P&L as an associated company until 25 October 2021 and
fully exited on 29 April 2022.
The Holding segment’s profit before taxes for 2022
decreased to EUR 146 million (1,331). The result includes a
group contribution of EUR 29 million (15) from Mandatum.
Sampo completed the exit from Nordea during the second
quarter, and the positive accounting effect from the
transactions on Sampo’s consolidated statement of profit
and loss was EUR 103 million in total.
Sampo’s share of Nordax’s profit amounted to EUR
-19 million (9) in January-December 2022. The profit
included a negative accounting effect of EUR -37 million
in the fourth quarter due to Nordax’s reclassification from
an associated company to a fair value investment. The
share of Nordax’s profit will no longer be consolidated
into Sampo Group’s P&L from the start of 2023.
The accounting effects related to Nordea and Nordax are
treated as extraordinary items in accordance with Sampo
Group’s dividend policy.
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BOARD OF DIRECTORS’ REPORT 2022
Financial standing
Group solvency
Strong capital generation from robust underwriting
profits, market effects in the form of rising interest
rates and a lower symmetrical adjustment, as well as
simplification of the group structure, including the
Nordea exit, supported the solvency ratio development in
2022. Hence, Sampo Group’s Solvency II ratio increased
to 210 per cent (185) at 31 December 2022, allowing for the
proposed dividend of EUR 2.60 per share and the impact
of the planned new share buyback programme of EUR
400 million. Sampo Group targets a Solvency II ratio
between 170 and 190 per cent.
Sampo Group’s Solvency II own funds decreased to EUR
8,083 million (10,924). The solvency capital requirement
(SCR) was EUR 3,857 million (5,905) at the end of
December 2022.
Financial leverage position
Sampo Group targets financial leverage below 30 per cent.
Financial leverage is calculated as Group’s financial debt
divided by the sum of IFRS equity and financial debt. On
31 December 2022, the financial leverage ratio for Sampo
Group was 25.6 per cent, up 1.8 percentage points from
23.8 per cent at the year-end 2021. The rise in financial
leverage was driven by a reduction in shareholders’ equity
related to the dividend payment, the execution of buyback
programmes and the negative mark-to-market result on
investments (taken mainly through other comprehensive
income). On the other hand, financial leverage was
positively impacted by the repurchase of Sampo plc senior
debt via a tender offer and the redemption of Hastings’
senior bond in September 2022.
Sampo Group IFRS equity amounted to EUR 9,543 million
at the end of December 2022 compared to EUR 13,464
million at the year-end. Gross debt was at EUR 3,288
million, decreasing by EUR 922 million from year-end.
More information on Sampo Group’s outstanding debt
issues is available at www.sampo.com/debtfinancing.
Financial debt
Sampo Group, 31 December 2022
EURm Sampo plc If Topdanmark Hastings Mandatum Eliminations Group total
Sub/hybrid 1,489 224 148 — 350 -228 1,983
Senior bonds 1,306 — — — — — 1,306
Total 2,794 224 148 — 350 -228 3,288
Ratings
Relevant ratings for Sampo Group companies on 31 December 2022 are presented in the table below.
Moody’s Standard & Poor’s Fitch Ratings
Rated company Rating Outlook Rating Outlook Rating Outlook
Sampo plc – Issuer Credit Rating A3 Positive A Stable - -
If P&C Insurance Ltd
– Insurance Financial Strength Rating A1 Positive AA- Stable - -
If P&C Insurance Holding Ltd (publ)
– Issuer Credit Rating - - A Stable - -
Mandatum Life Insurance Company Ltd
– Issuer Credit Rating - - AA- Stable - -
Hastings Group (Finance)
- Issuer default rating - - - - A- Positive
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BOARD OF DIRECTORS’ REPORT 2022
Other developments
Exit from Nordea
In 2022, Sampo sold its remaining Nordea holding of 246
million shares. In total, 46 million shares were sold in
the open market, of which 19 million in the first quarter
and 27 million in the second quarter. The remaining
200 million shares were sold through an accelerated
bookbuild offering on 29 April 2022.
In total, the transactions generated total gross proceeds of
EUR 2.3 billion. The positive accounting effect from the
transactions on Sampo’s consolidated statement of profit
and loss was EUR 103 million. The effect was treated as an
extraordinary item in the calculation of Sampo’s dividend
payout ratio for 2022.
Strategic review of Mandatum
On 7 December 2022, Sampo plc announced that the
Board of Directors had decided to undertake a strategic
review of Mandatum in line with Sampo’s strategic
focus on P&C insurance. The Board continues to review
a number of different options, with the aim to evaluate
whether a separation of Mandatum could create
shareholder value.
The Board of Directors of Sampo plc is content with the
current Group structure as it offers diversification in
terms of business exposures as well as capital and cash
generation. Sampo expects to provide a further update on
the strategic review by the end of the first quarter of 2023.
Dual listing on Nasdaq
Stockholm
Sampo finalised its dual listing process during the fourth
quarter, and trading in Sampo Swedish Depositary
Receipts (SDRs) began on Nasdaq Stockholm on 22
November 2022. Sampo did not raise new capital or make
any offering as part of the dual listing.
Share buyback programmes
In 2022, Sampo repurchased its own A shares under three
different buyback programmes based on the authorisation
granted by the Annual General Meetings of 2021 and 2022.
On 1 October 2021, Sampo announced a buyback
programme of EUR 750 million. The repurchase of shares
began on 4 October 2021 and ended on 25 March 2022.
During that period, Sampo repurchased 17,128,505 of its
own A shares at an average price per share of EUR 43.79.
The amount corresponded to 3.1 per cent of all Sampo
plc’s shares. In line with the decision by the Board of
Directors, these shares were cancelled at the end of March
2022.
On 30 March 2022, Sampo launched a new buyback
programme of EUR 250 million at maximum. The share
repurchases began on 31 March 2022 and ended on 17 May
2022. During that period, Sampo repurchased 4,961,994 of
its own shares at an average price per share of EUR 45.85
with the total purchase price being EUR 228 million. The
amount corresponded to 0.9 per cent of all Sampo plc’s
shares. In line with the decision by the Board of Directors,
these shares were cancelled in May 2022.
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Group’snotestothefinancialstatements
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Sampoplc’snotestothefinancialstatements
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21
BOARD OF DIRECTORS’ REPORT 2022
On 9 June 2022, Sampo’s Board resolved to launch
a EUR 1 billion buyback programme based on the
authorisation granted by the Annual General Meeting of
2022. The maximum number of Sampo shares that can
be repurchased is 30 million, corresponding to 5.6 per
cent of the total number of shares in Sampo. The buyback
programme started on 10 June 2022 and will end no later
than 8 February 2023. By the end of December 2022, in
total 18,892,036 shares had been repurchased under this
programme at an average price per share of EUR 44.75,
with the total purchase price being EUR 845 million. The
amount corresponded to 3.5 per cent of all Sampo plc’s
shares based on the share count prior to the start of this
programme. In line with the decision by the Board of
Directors, in total 16,681,839 shares that were bought by
the end of November 2022 were cancelled in December
2022.
By the end of 2022, Sampo had repurchased 41 million
shares since the start of the first buyback programme
in October 2021, corresponding to 7.4 per cent of the
total numbers of shares prior to the first share buyback
programme launched in October 2021. Of these, 32 million
shares were repurchased during 2022, with the total
purchase price being EUR 1.4 billion.
Effects of external events
on Sampo Group
The uncertainty in the geopolitical and macroeconomic
environment observed in 2022 affects Sampo Group
primarily through the market risk exposures it carries
via its insurance company investment portfolios and
liabilities and through strategic investments. Over time,
adverse macroeconomic effects could also have an impact
on Sampo’s operational business, for example by reducing
economic growth or increasing claims costs. However,
Sampo’s insurance business has remained resilient to
these effects throughout 2022.
Sampo Group’s insurance exposures in Russia or Ukraine
are limited to certain Nordic industrial line clients, with
coverage subject to war exclusions. On the asset side,
Sampo has no material direct investments in Russia or
Ukraine. Given the limited direct exposure, the biggest
risk from the war in Ukraine to Sampo relates to the
second order capital markets and macroeconomic effects
outlined above.
In 2022, there were no material COVID-19 effects in the
Nordic and Baltic countries. Given the limited impact
of COVID-19 and the increasing difficulty in reliably
estimating associated effects, Sampo has no longer
disclosed quantitative COVID-19 effects in 2022 financial
reporting.
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BoardofDirectors’
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22
BOARD OF DIRECTORS’ REPORT 2022
Shares, share capital and shareholders
Shares and share capital
As at 31 December 2022, Sampo plc had 516,579,512 shares,
which were divided into 516,379,512 A shares and 200,000
B shares. The total number of votes attached to the shares
is 517,379,512. Each A share entitles the holder to one vote
and each B share entitles the holder to five votes at the
General Meeting of Shareholders.
In 2022, Sampo cancelled 38,772,338 of its own A shares
that were repurchased under the share buyback
programmes. These shares were cancelled in March, May
and December 2022.
On 13 June 2022, Sampo announced that a total of
1,000,000 of its B shares have been converted into A
shares in accordance with the conversion clause of
Section 4 in Sampo’s Articles of Association. The decision
to convert was made by the Board of Directors of Sampo
plc on the request of Kaleva Mutual Insurance Company,
the holder of Sampo’s B shares. After the conversion,
Kaleva held 200,000 B shares in Sampo plc.
According to the company’s Articles of Association, the
number of A shares must number at least 179,000,000
and no more than 711,200,000. Meanwhile, the number
of B shares must number at least zero and no more than
4,800,000. As at 31 December 2022 Sampo plc’s share
capital amounted to EUR 98 million (98) and the equity
capital in total to EUR 9,543 million (13,464).
Sampo plc’s Articles of Association contain a redemption
obligation (16§) according to which a shareholder whose
holding of all shares or of all votes relating to the shares
reaches or exceeds 33 1/3 per cent or 50 per cent, is
obliged to redeem, at the presentation of claims by other
shareholders, their shares and the documents giving
entitlement to the shares, as stipulated in the Finnish
Companies Act, in the manner prescribed in the Article.
The Article contains further provisions on calculating the
shareholder’s holding and redemption price.
Sampo A shares have been quoted on the main list of
Nasdaq Helsinki since 1988 and all of the B shares are held
by Kaleva Mutual Insurance Company. B shares can be
converted into A shares at the request of the holder.
Shareholders by the number of shares held
Sampo plc, 31 December 2022
Number of shares
Shareholders,
number
Share-
holders, %
Shares,
number Shares, %
Voting rights,
number
Voting rights,
%
1–100 104,844 52.91 4,410,170 0.85 4,410,170 0.85
101–500 63,120 31.86 15,357,473 2.97 15,357,473 2.97
501–1,000 14,587 7.36 10,860,002 2.10 10,860,002 2.10
1,001–5,000 13,054 6.59 27,270,449 5.28 27,270,449 5.27
5,001–10,000 1,478 0.75 10,409,499 2.02 10,409,499 2.01
10,001–50,000 857 0.43 16,717,498 3.24 16,717,498 3.23
50,001–100,000 93 0.05 6,769,669 1.31 6,769,669 1.31
100,001–500,000 74 0.04 14,329,465 2.77 14,329,465 2.77
500,001– 36 0.02 410,455,287 79.46 411,255,287 79.49
Total 198,143 100 516,579,512 100 517,379,512 100
of which nominee registered 12 317,450,882 61.45 317,450,882 61.36
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BoardofDirectors’
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BOARD OF DIRECTORS’ REPORT 2022
2018 2019 2020 2021 2022 2023
Share price performance
Sampo plc, 2018–2022
€
55
50
45
40
35
30
25
20
2018 2019 2020 2021 2022 2023
Monthly trading volume
Sampoplc–
Shares
● VolumeNasdaqHelsinki ● Volumeothermarketplaces





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BoardofDirectors’
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BOARD OF DIRECTORS’ REPORT 2022
Authorisations granted
to the Board
The Annual General Meeting held on 18 May 2022
authorised the Board to repurchase a maximum of
50,000,000 Sampo A shares. The authorisation will be
valid until the close of the next Annual General Meeting,
expected to be held on 17 May 2023, nevertheless not more
than 18 months after AGM’s decision.
The Board of Sampo plc made a decision on share
repurchases on 9 June 2022 and the company started
share buybacks on 10 June. By the end of 2022, a total
of 18,892,036 shares were repurchased under this
programme, corresponding to 3.5 per cent of all Sampo
plc’s shares based on the share count prior to the start
of this programme. Prior to this programme, Sampo
had already repurchased 13.6 million shares under two
buyback programmes in 2022, based on the authorisation
granted by the Annual General Meeting of 2021.
In total, Sampo repurchased 32.4 million shares in 2022,
based on the authorisation granted by the Annual General
Meetings of 2021 and 2022.
Shareholders
Sampo plc, shareholders registered in Finland, 31 December 2022
A and B shares Number of shares % of share capital % of votes
Solidium Oy 33,278,580 6.44 6.43
Varma Mutual Pension Insurance Company 22,248,420 4.31 4.30
Ilmarinen Mutual Pension Insurance Company 6,458,683 1.25 1.25
Elo Mutual Pension Insurance Company 3,171,000 0.61 0.61
Oy Lival AB 3,110,000 0.60 0.60
The State Pension Fund 2,900,000 0.56 0.56
Sampo plc 2,081,071 0.40 0.40
OP Life Assurance Company Ltd 1,883,843 0.36 0.36
OP-Finland Fund 1,711,839 0.33 0.33
Svenska litteratursällskapet i Finland r.f. 1,619,150 0.31 0.31
Nordea Nordic Fund 1,590,000 0.31 0.31
Nordea Pro Finland Fund 1,109,194 0.21 0.21
Åbo Akademi University Foundation 1,063,872 0.21 0.21
Föreningen Konstsamfundet rf 950,000 0.18 0.18
Nordea Life Assurance Finland Ltd. 913,469 0.18 0.18
Danske Invest Finnish Equity Fund 910,000 0.18 0.18
Samfundet folkhälsan i Svenska Finland rf 848,402 0.16 0.16
Säästöpankki Kotimaa 840,001 0.16 0.16
OMX Helsinki 25 Exchange Traded Fund 808,764 0.16 0.16
Sigrid Jusélius Foundation 766,150 0.15 0.15
Foreign and nominee registered total 318,542,828 61.66 61.57
Other total 109,774,246 21.25 21.37
Total 516,579,512 100 100
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BOARD OF DIRECTORS’ REPORT 2022
Shareholders
The number of Sampo plc’s Finnish-registered
shareholders increased during 2022 by 7,100 shareholders
to 198,143 as at 31 December 2022. The holdings of
nominee-registered and foreign shareholders stood stable
at 61.7 per cent (61.6) of the shares and 61.6 per cent of the
votes (61.1).
At the end of 2022, Sampo held 2,210,197 own A shares,
corresponding to 0.43 per cent of the total number of
shares of Sampo plc. The deviation from the figure in the
Shareholders by Sector
Sampo plc (A and B shares), 31 December 2022
Sector Number of shares %
Corporations 19,183,848 3.71
Financial institutions and insurance corporations 19,157,841 3.71
Public institutions 70,181,755 13.59
Non-profit institutions 14,485,127 2.80
Households 75,028,113 14.52
Foreign ownership and nominee registered 318,542,828 61.66
Total 516,579,512 100
table above is explained by the repurchases during the
last two trading days of the year, which were not included
in the year-end shareholder register due to the T+2 days
settlement time for stock trades.
On 31 December 2022, the total number of Sampo A
shares owned directly, indirectly or through financial
instruments by BlackRock Inc. and its funds was above
5 per cent of Sampo’s total stock. The total number of
voting rights attached to Sampo A shares was above 5 per
cent of Sampo’s total voting rights.
During 2022, Sampo plc received 17 notifications of
change in holding pursuant to Chapter 9, Section 5 of
the Securities Markets Act, according to which the total
number of Sampo A shares or related voting rights owned
by BlackRock, Inc. and its funds directly or through
financial instruments had decreased below 5 per cent or
increased above 5 per cent. The details of the notifications
are available at www.sampo.com/flaggings.
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Group’snotestothefinancialstatements
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Sampoplc’snotestothefinancialstatements
BoardofDirectors’
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BOARD OF DIRECTORS’ REPORT 2022
Shares owned by the Board of Directors and the Group Executive Committee
Sampo plc, 31 December 2022 and 31 December 2021
Board of Directors 31 Dec 2022 31 Dec 2021
Wahlroos 9,229 3,778,362
Fagerholm 7,597 6,647
Clausen 37,819 22,299
Clutterbuck 2,853 2,185
Ehrnrooth 128,681 127,962
Lamminen 2,695 2,055
Langan* 673 —
Murto 4,449 3,853
Rauramo 1,668 1,083
Total 195,664 3,944,446
Board of Directors ownership of shares, % 0.04 0.7
Board of Directors share of votes, % 0.04 0.7
Group Executive Committee 31 Dec 2022 31 Dec 2021
Magnusson 46,480 51,496
Alsaker 39,646 36,105
Janbu Holthe 1,875 733
Lapveteläinen 276,423 272,261
Niemisvirta 93,470 89,443
Thorsrud 61,344 57,670
Wennerklint 45,200 41,836
Total 564,438 549,544
Group Executive Committee’s ownership of shares, % 0.1 0.1
Group Executive Committee’s share of votes, % 0.1 0.1
* Member of the Board of Directors of Sampo plc since 18 May 2022.
Holdings of the Board and
Executive Management
The following table presents the Board’s and Group
Executive Committee’s holdings of Sampo A shares.
At the end of 2022, members of Sampo plc’s Board of
Directors and their close family members owned either
directly or indirectly 195,644 (3,944,446) Sampo A shares.
Their combined holdings constituted 0.04 per cent (0.7) of
the share capital and 0.03 (0.7) per cent of votes. During
2022, Chair of the Board of Directors Björn Wahlroos
transferred a majority of his holdings in Sampo to his
children.
Members of the Group Executive Committee and their
close family members owned either directly or indirectly
564,438 (549,544) Sampo A shares representing 0.1 per
cent (0.1) of the share capital and related votes.
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Group’snotestothefinancialstatements
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BoardofDirectors’
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27
BOARD OF DIRECTORS’ REPORT 2022
Governance and related issues
Governance
During 2022, Sampo complied in full with the Finnish
Corporate Governance Code 2020 approved by the
Securities Market Association on 19 September 2019,
effective from 1 January 2020 (the “CG Code 2020”).
In compliance with the Corporate Governance Code,
Sampo publishes a separate Corporate Governance
Statement on its website in fulfilment of the requirement
referred to in the Finnish Securities Markets Act
(746/2012), Chapter 7, Section 7.
The statement will be available at
www.sampo.com/statement and
www.sampo.com/year2022.
Annual General Meeting
The Annual General Meeting of Sampo plc, held on 18
May 2022, decided to distribute a dividend of EUR 4.10
per share for 2021. The record date for dividend payment
was 20 May 2022 and the dividend was paid on 31 May
2022. The Annual General Meeting adopted the financial
accounts for 2021 and discharged the Board of Directors
and the CEO from liability for the financial year.
The Annual General Meeting increased the number of
the members of the Board of Directors to nine members.
Christian Clausen, Fiona Clutterbuck, Georg
Ehrnrooth, Jannica Fagerholm, Johanna Lamminen,
Risto Murto, Markus Rauramo and Björn Wahlroos
were re-elected to the Board. Steve Langan was elected
as a new member to the Board. The Members of the Board
were elected for a term continuing until the close of the
next Annual General Meeting.
At its organisational meeting, the Board elected Björn
Wahlroos as Chair and Jannica Fagerholm as Vice Chair.
Christian Clausen, Risto Murto, Markus Rauramo and
Björn Wahlroos (Chair) were elected to the Nomination
and Remuneration Committee. Fiona Clutterbuck, Georg
Ehrnrooth, Jannica Fagerholm (Chair), Johanna Lamminen
and Steve Langan were elected to the Audit Committee.
All the Board members have been determined to be
independent of the company and its major shareholders
under the rules of the Finnish Corporate Governance
Code 2020. The curriculum vitaes of the Board Members
are available at www.sampo.com/board.
The Annual General Meeting decided to pay the following
fees to the members of the Board of Directors until the
close of the 2023 Annual General Meeting: the Chair of
the Board will be paid an annual fee of EUR 190,000 and
other members of the Board will be paid EUR 98,000
each. Furthermore, the members of the Board and its
Committees will be paid the following annual fees: the
Vice Chair of the Board EUR 27,000, the Chair of the Audit
Committee EUR 27,000 and the member of the Audit
Committee EUR 6,200 each. A Board member shall, in
accordance with the resolution of the Annual General
Meeting, acquire Sampo plc’s A shares at the price paid
in public trading for 50 per cent of his/her annual fee
excluding taxes and similar payments.
The Annual General Meeting accepted Sampo plc’s
Remuneration Report for Governing Bodies. The
resolution is advisory.
Deloitte Ltd was re-elected as Auditor. The Auditor will
be paid a fee determined by an invoice approved by
Sampo. Jukka Vattulainen, APA, will act as the principally
responsible auditor.
There were 326,496,211 shares (60.66 per cent of shares)
and 331,296,211 votes (61.01 per cent of all votes) in the
company represented, including advance voting and a
proxy representation, at the Annual General Meeting.
The minutes of the Annual General Meeting are available
for viewing at the AGM website and at Sampo plc’s head
office at Fabianinkatu 27, Helsinki, Finland.
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Group’snotestothefinancialstatements
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BOARD OF DIRECTORS’ REPORT 2022
Sustainability
Sampo Group has a sustainability programme, which
drives the sustainability work on a group level. The
programme consists of strategic sustainability themes and
under each of the themes the most material sustainability
topics have been identified.
The Group’s sustainability themes are Sustainable
business management and practices, Sustainable
corporate culture, Sustainable investment management
and operations, Sustainable products and services,
and Sustainable communities. During the year, Sampo
continued to work on sustainability in line with the themes.
Sampo Group will issue a report on non-financial
information in accordance with Chapter 3a, Section
5 of the Accounting Act. The report, Sampo Group
Sustainability Report 2022, will be separate from the
Board of Directors’ Report and published in May 2023 at
www.sampo.com/year2022. In addition to the group
level report, further information on If, Topdanmark,
Hastings, and Mandatum’s sustainability work can be
found in the companies’ respective reports. All the reports
are available at www.sampo.com/year2022.
Sampo Group will integrate the Group’s sustainability
reporting into the Board of Directors’ report according
to the requirements of the Corporate Sustainability
Reporting Directive (CSRD) in 2025 covering the reporting
year 2024.
Highlights from year 2022
Business management and practices
In 2022, Sampo plc conducted an annual update of the
Group’s Code of Conduct. The document was reviewed
especially from the sustainability point of view to improve
the group level guidance on material topics, such as
data privacy, anti-corruption and bribery, human rights,
and climate and environment. The individual Group
companies also took steps to develop their supplementary
governance structures, policies, guidelines, and related
training. In 2022, the Group companies focused, for
example, on strengthening information security and
cybersecurity practices, and working towards setting
science-based climate targets for own operations.
Corporate culture
In 2022, the Sampo Group companies focused on
sustainable corporate culture, for example, by updating
relevant policies, introducing new employee surveys,
launching new employee initiatives, and expanding
competence development offering. The results of the
continued efforts are visible, as for example, Mandatum
received a Future Workplaces certificate based on Siqni’s
employee survey for proven highly rated employee
experience, If and Topdanmark exceeded their employee
engagement targets, and Hastings was ranked 9th in the
Inclusive Top 50 UK employers list.
Investment management and operations
During 2022, the Sampo Group companies strengthened
their investment policies by adding further instructions
on how to take environmental, social, and governance
(ESG) issues into account in their investment processes.
Climate-related considerations were especially in focus
during the year, as all the Group’s non-life insurance
businesses are committed to set science-based climate
targets approved by the Science Based Targets initiative
(SBTi). In 2022, Hastings also signed the UN Principles for
Responsible Investment (PRI) and as a result all Sampo
plc’s fully owned businesses are committed to the PRI.
Products and services
In 2022, the Sampo Group companies focused on
sustainable supply chain management. For example, If
introduced a new self-assessment questionnaire for its
suppliers and increased the share of suppliers in claims
that have signed If’s Supplier Code of Conduct to 96 per
cent. Topdanmark worked steadily towards the company’s
goals set for 2025 by, for example, screening suppliers for
ESG risks and integrating supplier codes of conduct to
supplier contracts. Also, Hastings strengthened its supply
chain management by introducing an ESG due diligence
questionnaire for all new and existing suppliers and
working on several new sustainability initiatives with its
supply chain.
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BOARD OF DIRECTORS’ REPORT 2022
During the year, in particular If and Topdanmark,
continued to work on structured integration of ESG
considerations into insurance underwriting. Topdanmark
established internal procedures for ESG screening of
commercial and agricultural customers, and the first
screening was conducted in December 2022. If has
integrated sustainability directly into its underwriting
standards and into the existing Customer Due Diligence
(CDD) process for corporate clients, and since the
implementation in June 2021 up until November 2022,
the company has assessed a total of 590 corporate clients.
Risk management
Sampo’s capital management framework aims to support
value creation by enabling its strategy. Quantitative
targets are set for group solvency and group financial
leverage, but other metrics are also steered, such as
adequate liquidity buffers. Subsidiary balance sheets
are calibrated to cover needs for business plans and to
provide a stable dividend. Potential risk concentrations
and adequate diversification of risks are generally
monitored closely, and their sources are analysed. To
the extent possible risk concentrations are proactively
prevented by strategic decisions.
Sampo Group companies operate in business areas where
specific features of value creation are the pricing of risks
and the active management of risk portfolios in addition
to sound customer services. Successful management
of underwriting risks and investment portfolio market
risks is the main source of earnings for Sampo Group
companies.
In Sampo Group the risks associated with business
activities fall into three main categories: business risks
associated with external drivers affecting the competitive
environment or resulting from lack of internal operational
flexibility, reputational risk associated with the
company’s business practices or associations and risks
inherent in business operations.
A more detailed description of Sampo Group’s risk
management activities, governance, risks, and
capitalisation is available in the Risk Management
Report 2022 at www.sampo.com/year2022.
Remuneration
Sampo plc’s Board of Directors has established the Sampo
Group Remuneration Principles, which apply to all Sampo
Group companies. The Remuneration Principles are
available at www.sampo.com/remuneration.
Sampo Group’s remuneration strategy shall be responsible
towards employees and shareholders. This means that the
long-term financial stability and value creation of Sampo
Group shall guide the remuneration design.
The different forms of remuneration used in Sampo
Group are the following:
(a) Fixed Compensation
(b) Variable Compensation
(c) Pension
(d) Other Benefits
The starting point of any compensation mechanism
shall be to encourage and stimulate employees to do
their best and surpass their targets. Remuneration
packages shall be designed to reward fairly for prudent
and successful performance. At the same time, however,
in order to safeguard the interest of other stakeholders,
compensation mechanisms shall not generate conflicts
of interest and shall not entice or encourage employees to
excessive or unwanted risk taking. Thus, compensation
mechanisms cannot be separated from risk management
objectives and practices.
The relative proportions of fixed and variable
compensation reflect the responsibilities of individual
executives and employees. Fixed salary shall represent a
sufficiently high share of the total remuneration. Variable
compensation may be based on the contribution to the
company’s profitability and on individual performance or
linked to committing employees to Sampo Group.
The decision on payout of variable compensation shall
be based on the assessment of the incurred risk exposure
and the fulfillment of solvency capital requirements.
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
30
BOARD OF DIRECTORS’ REPORT 2022
Furthermore, the payment of a certain portion of the
variable compensation payable to the Senior Executive
Management and to certain key persons shall be deferred
for a defined period of time as required in the regulatory
framework applicable to each Sampo Group company.
After the deferral period, a retrospective risk adjustment
review shall be carried out and the Board of Directors of
each Sampo Group company shall decide whether the
deferred variable compensation shall be paid/released in
full, partly or cancelled in whole. In 2022, a total of EUR
7.0 million (5.1) of short-term and long-term incentives
has been deferred.
The Board of Directors decides on the launch of long-term
incentive schemes based on financial instruments of
Sampo plc to the management and other key employees
of Sampo Group. The Sampo Board members are not
included in the schemes. The third allocation of the
long-term incentive scheme 2020 was in August 2022, in
accordance with the terms and conditions of the scheme,
directed to new recruits or current employees with
materially changed circumstances or holding a position
of increased strategic importance. The total number
of participants in the third allocation of the long-term
incentive scheme 2020 is 16 and a total of 208,000 units
were allocated in August 2022. The scheme will vest in
three instalments starting from three years from each
allocation.
In the long-term incentive scheme 2017, a total of 29,750
allocated incentive units remain. The third and last
instalment of the first allocation vested in 2022. The
second allocation of the long-term incentive scheme 2017
had its second instalment in 2022 and the last instalment
will vest in 2023.
The value of one incentive unit is calculated as the
difference between the trade-weighted average price
of the Sampo A share at the time of payment and the
starting price. In addition to the share price development
and paid dividends, the calculation of the value of one
incentive unit takes into account the performance of the
insurance margin of If P&C and/or the return on capital
at risk as further specified in the terms of the respective
incentive scheme. Both incentive schemes contain a cap
for maximum payout. The terms and conditions of the
incentive schemes are available at www.sampo.com/
incentiveterms.
A deferral rule applies to incentive rewards paid to the
Senior Executive Management and to certain key persons.
Persons subject to the deferral rule shall at payout from
the schemes acquire Sampo A shares with a certain part
of the installment after deducting income tax and other
comparable charges. The shares are subject to disposal
restrictions for three years, after which the Board of
Directors shall decide on the possible release.
In 2022, a total of EUR 77 million (70), including social
costs, was paid as short-term incentives. During the same
period, a total of EUR 35 million (16), including social
costs, was paid from long-term incentive schemes. The
result impact of the long-term incentive schemes in force
in 2022 was EUR 43 million (46).
The 2021 Remuneration Report for Governing Bodies
was presented to the Annual General Meeting in May
2022. The General Meeting resolved, in accordance with
the voting result, to accept the presented Remuneration
Report. The resolution was advisory.
Sampo Group will in the beginning of April 2023 publish
the Remuneration Report for Governing Bodies for
the financial year 2022 at www.sampo.com/year2022.
The Remuneration Report for Governing Bodies provides
information on the remuneration paid to the Board
of Directors and the Group CEO during the previous
financial period and has been prepared in accordance
with the Corporate Governance Code 2020 issued by the
Securities Market Association, effective as of 1 January
2020. The Corporate Governance Code 2020 can be
viewed in full on the website of the Securities Market
Association at www.cgfinland.fi/en.
Changes in Group structure
The divestment of Topdanmark’s life insurance business
(Topdanmark Liv Holding A/S and its subsidiaries),
to Nordea was completed on 1 December 2022. The
divestment was announced on 18 March 2022 and was
subject to customary regulatory approvals. Further
information is available in note 33.
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
31
BOARD OF DIRECTORS’ REPORT 2022
KAAVIO N.O 1
Groupstructure
31 December 2022
IfP&CInsuranceLtd
(publ)
Sweden
IfP&CInsuranceAS
Estonia
IfLivförsäkringAB
Sweden
IfP&CInsurance
HoldingLtd(publ)
Sweden




Topdanmark
AS
Denmark
Topdanmark
ForsikringAS
Denmark

Sampoplc
Finland

HastingsGroup
(Consolidated)Ltd
England and Wales
HastingsGroup
HoldingsLtd
England and Wales





HastingsGroup
(Finance)plc
Jersey
HastingsGroup
Ltd
Jersey
Hastings
Insurance
ServicesLtd
England and Wales
Advantage
Insurance
CompanyLtd
Gibraltar
Mandatum
HoldingLtd
Finland
MandatumAsset
ManagementLtd
Finland
MandatumIncentivesLtd
Finland
MandatumLife
InsuranceCompanyLtd
Finland



MandatumAM
AIFMLtd
Finland
MandatumFund
ManagementSA
Luxembourg




Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
32
BOARD OF DIRECTORS’ REPORT 2022
KAAVIO N.O 2
Organisation
31 December 2022
Knut Arne Alsaker
Group Finance
Ingrid Janbu Holthe
Private
Klas Svensson
Commercial
Poul Steffensen
Industry
Andris Morozovs
Baltics
Patrick Lapveteläinen
Investments
Morten Thorsrud
If
Ricard Wennerklint
Strategy
Petri Niemisvirta
Mandatum
Kai Sotamaa
Risk Management
Peter Hermann
Topdanmark
Sami Taipalus
Investor Relations
Johanna Tynkkynen
Sustainability
Johan Börjesson
Human Resources
Toby van der Meer
Hastings
Torbjörn Magnusson
Group CEO
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
33
BOARD OF DIRECTORS’ REPORT 2022
Number of personnel
Sampo Group
Average personnel
(FTE) 2022 %
Average personnel
(FTE) 2021 %
By company
If 7,496 55 7,223 54
Hastings 3,021 22 3,005 23
Topdanmark 2,381 18 2,395 18
Mandatum 603 4 589 4
Sampo plc* 50 0.4 63 0.5
Total 13,550 100 13,274 100
By country
United Kingdom 3,000 22 2,980 22
Denmark 2,969 22 2,965 22
Finland 2,437 18 2,270 18
Sweden 2,381 18 2,336 17
Norway 1,580 12 1,534 12
Other countries 1,183 9 1,190 9
Total 13,550 100 13,274 100
*
At the end of 2022, the total personnel (FTE) at Sampo plc amounted to 51 (45), of which 49 (44) worked at the headquarters in Finland
and 2 (1) at the branch office in Sweden.
Personnel
The average number of Sampo Group’s employees (FTE)
in 2022 amounted to 13,550 (13,274). On 31 December 2022,
the total number of staff in Sampo Group was 13,490
(13,340).
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
34
BOARD OF DIRECTORS’ REPORT 2022
Share buyback programme
Sampo’s share buyback programme of EUR 1 billion
announced on 9 June 2022 continued after the end of the
reporting period. The buyback programme was completed
on 8 February 2023, when at market close, the company
held in total 5.4 million Sampo A shares representing
1.05 per cent of the total number of shares in Sampo plc.
Sampo bought altogether 22.1 million A shares under
the share buyback programme from 10 June 2022 to
8 February 2023, of which 16.7 million shares were
cancelled on 8 December 2022. Further information
on the buyback programme is available on
www.sampo.com/sharebuyback.
Proposal for the new Chair
of the Board
Sampo disclosed on 30 January 2023 that its Nomination
and Remuneration Committee plans to propose previous
Board member Antti Mäkinen as a new member of the
Board of Directors of Sampo plc at the Annual General
Meeting on 17 May 2023, and to nominate him as Chair of
the Board of Directors. Björn Wahlroos, the current Chair
of the Board of Directors, has previously notified that he is
not available for re-election.
Mäkinen has managerial experience of over 20 years in
the financial services industry, including Nordea, eQ plc
and SEB Enskilda Securities. He was previously CEO of
Solidium, and he has been on the Board of Directors of
e.g. Sampo and Metso Outotec and the Chair of Stora
Enso. Mäkinen was born in 1961 and holds a diploma of
Master of Laws from University of Helsinki.
This proposal made by the Nomination and
Remuneration Committee will be discussed by Sampo
plc’s Board of Directors. The Board will publish its full
proposal for the members of the Board of Directors for
the AGM on 29 March 2023.
SAMPO PLC
Board of Directors
Events after the end of the reporting period
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
35
BOARD OF DIRECTORS’ REPORT 2022
Key figures
Group key figures 2022 2021 2020 2019 2018
Profit before taxes EURm 1,863 3,171 380 1,541 2,094
Return on equity (at fair values) % -1.3 26.8 3.1 12.0 7.5
Equity/assets ratio % 21.3 20.9 20.2 23.0 25.1
Group solvency
1
EURm 4,226 5,019 4,308 4,513 2,942
Group solvency ratio
1
% 210 185 176 174 140
Average number of staff 13,550 13,274 13,227 9,509 9,364
If 2022 2021 2020 2019 2018
Premiums written before reinsurers’ share EURm 5,432 5,134 4,823 4,675 4,502
Premiums earned EURm 5,002 4,772 4,484 4,388 4,290
Profit before taxes EURm 1,217 1,077 901 884 848
Return on equity (at fair values) % 6.1 37.0 33.3 34.5 11.2
Risk ratio
2
% 59.2 59.9 60.7 62.7 63.3
Cost ratio
2
% 21.1 21.4 21.5 21.8 21.9
Claims ratio
2
% 64.9 65.5 66.4 68.4 68.8
Expense ratio
2
% 15.4 15.8 15.8 16.1 16.4
Combined ratio % 80.3 81.3 82.1 84.5 85.2
Average number of staff 7,496 7,223 7,182 6,603 6,367
Topdanmark 2022 2021 2020 2019 2018
Premiums written before reinsurers’ share, life insurance EURm 1,210 1,393 1,473 1,487 1,357
Premiums written before reinsurers’ share, P&C insurance EURm 1,391 1,383 1,315 1,272 1,235
Premiums earned, P&C insurance EURm 1,326 1,285 1,227 1,178 1,144
Profit before taxes EURm 220 346 167 238 199
Claims ratio
2
% 66.8 66.7 69.0 66.2 66.0
Expense ratio
2
% 16.3 15.6 16.2 16.0 16.3
Combined ratio % 83.1 82.3 85.2 82.1 82.3
Average number of staff 2,381 2,395 2,428 2,322 2,314
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
36
BOARD OF DIRECTORS’ REPORT 2022
Hastings 2022 2021
16 Nov–31 Dec
2020 2019 2018
Premiums written before reinsurers’ share EURm 1,313 1,127 103 — —
Net premiums written EURm 727 495 137 — —
Premiums earned EURm 594 499 63 — —
Profit before taxes EURm 73 127 -16 — —
Average number of staff 3,021 3,005 2,974 — —
Mandatum 2022 2021 2020 2019 2018
Premiums written before reinsurers’ share EURm 1,399 1,376 1,059 1,603 1,082
Profit before taxes EURm 207 291 154 280 450
Return on equity (at fair values) % -17.3 18.4 14.4 23.5 8.7
Expense ratio % 84.9 87.1 95.6 98.4 91.7
Average number of staff 603 589 576 563 531
Holding 2022 2021 2020 2019 2018
Profit before taxes EURm 146 1,331 -826 139 618
Average number of staff 50 63 67 63 61
Per share key figures 2022 2021 2020 2019 2018
Earnings per share EUR 2.69 4.63 0.07 2.04 3.04
Earnings per share without extraordinary items
3
EUR 2.41 2.86 2.16 2.31 —
Earnings per share, incl. items in other comprehensive income EUR -0.26 5.9 0.65 2.63 1.7
Equity per share EUR 17.44 23.39 20.56 21.44 22.30
Net asset value per share EUR 18.74 25.48 19.82 20.71 20.60
Dividend per share
4
EUR 2.60 4.10 1.70 1.50 2.85
Dividend per earnings
3
% 96.7 88.6 78.7 73.5 93.8
Effective dividend yield % 5.3 9.3 4.9 3.9 7.4
Price/earnings ratio
3
18.1 9.5 16.0 19.1 12.6
Number of shares at 31 Dec 1,000 514,369 546,812 555,352 555,352 555,352
Average number of shares 1,000 530,296 554,317 555,352 555,352 555,352
Weighted average number of shares 1,000 530,296 554,317 555,352 555,352 555,352
Market capitalisation EURm 25,112 24,093 19,199 21,609 21,331
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
37
BOARD OF DIRECTORS’ REPORT 2022
A shares 2022 2021 2020 2019 2018
Number of shares at 31 Dec 1,000 514,169 545,612 554,152 554,152 554,152
Average number of shares 1,000 530,096 553,117 554,152 554,152 554,152
Weighted average number of shares 1,000 530,096 553,117 554,152 554,152 554,152
Weighted average share price EUR 44.25 40.50 32.35 39.15 43.11
Adjusted share price, high EUR 49.97 47.33 42.46 43.38 48.92
Adjusted share price, low EUR 35.85 33.82 21.34 34.45 37.61
Adjusted closing price EUR 48.82 44.06 34.57 38.91 38.41
Share trading volume during the financial year 1,000 257,879 243,763 376,964 250,282 239,051
Relative share trading volume % 48.6 44.1 68.0 45.2 43.1
B shares 2022 2021 2020 2019 2018
Number of shares at 31 Dec 1,000 200 1,200 1,200 1,200 1,200
Average number of shares 1,000 200 1,200 1,200 1,200 1,200
1
The group solvency for Sampo is calculated according to the consolidation method as defined in the Solvency II Directive (2009/138/EC) and the Finnish Insurance Companies Act (521/2008). As Sampo plc is the
ultimate parent of the Solvency II group, the solvency is calculated at the group level.
2
Key figures for P&C insurance are based on activity based costs and cannot, therefore, be calculated directly from the consolidated income statement.
3
Will be used as basis for setting dividends in accordance with the dividend policy. For 2020, the dividend per share and PE ratios have also been calculated on the basis of adjusted EPS.
4
The Board of Director’s proposal to the Annual General Meeting for the accounting period 2022.
In calculating the key figures the tax corresponding to the result for the accounting period has been taken into account.
In the net asset value per share, the Group valuation difference on the listed subsidiary Topdanmark has been taken into account. The comparison years include also the valuation differences of Nordea, an associate
at the time.
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
38
BOARD OF DIRECTORS’ REPORT 2022
Calculation of the key figures
The key figures have been calculated in accordance with the decree issued by the Ministry of Finance and the specifying
regulations and instructions of the Financial Supervisory Authority. The Group solvency is calculated according to the
consolidation method defined in the Solvency II Directive (2009/138/EC) and Insurance Companies Act (521/2008).
Additional information on the Group’s alternative performance measures is on the Group’s website www.sampo.com.
Group key figures
Profit before taxes for the Group
+ property & casualty insurance profit before taxes
+ life insurance profit before taxes
+ holding business profit before taxes
± Group elimination items with result impact
Property & Casualty and Life Insurance
+ insurance premiums written
+ net income from investments
+ other operating income
- claims incurred
- change in liabilities for investment and
insurance contracts
- sta costs
- other operating expenses
- finance costs
± share of associates’ profit/loss
Holding
+ net income from investments
+ other operating income
- sta costs
- other operating expenses
- finance costs
± share of associates’ profit/loss
Return on equity (fair values), %
+ total comprehensive income attributable to
parent company equity holders
± change in valuation dierences on investments
less deferred tax
X 100%
+ total equity attributable to parent company
equity holders (average of values on 1 Jan
and 31 Dec)
± valuation dierences on investments less
deferred tax (average of values on 1 Jan
and 31 Dec)
Equity/assets ratio (at fair values), %
+ total equity (attributable to parent
company’s equity holders)
± valuation dierences on investments less
deferred tax
X 100%
+ balance sheet total
± valuation dierences on investments
Financial leverage
financial debt
X 100%
equity + financial debt
Average number of staff
Average of month-end figures, adjusted for part-time
sta.
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
39
BOARD OF DIRECTORS’ REPORT 2022
Property & casualty insurance
key figures
Underwriting profit
+ insurance premiums earned
+ other income (Hastings)
- claims incurred
- operating expenses
underwriting profit, net
Risk ratio, %
+ claims incurred
- claims settlement expenses
X 100%
premiums earned
Cost ratio, %
+ operating expenses
+ claims settlement expenses
X 100%
premiums earned
Loss ratio, %
claims incurred
X 100%
premiums earned
Expense ratio, %
operating expenses
X 100%
premiums earned
Combined ratio, %
Loss ratio + expense ratio X 100%
Operating ratio for Hastings, %
+ claims incurred
+ acquisition costs
+ other operating expenses
+ depreciation and operational amortisation
X 100%
+ insurance premiums earned
+ other revenue
Loss ratio for Hastings, %
claims incurred
X 100%
insurance premiums earned
Life insurance key figures
Expense ratio, %
+ operating expenses before change in deferred
acquisition costs
X 100%
+ claims settlement expenses
premiums earned
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
40
BOARD OF DIRECTORS’ REPORT 2022
Per share key figures
Earnings per share
profit for the financial period attributable to the parent
company’s equity holders
adjusted average number of shares
Earnings per share, incl. change in
fair value reserve
total comprehensive income for the financial period
attributable to the parent company’s equity holders
adjusted average number of shares
Equity per share
equity attributable to the parent company’s
equity holders
adjusted number of shares at balance sheet date
Net asset value per share
+ equity attributable to the parent company’s
equity holders
± valuation dierences on listed Group companies
adjusted number of shares at balance sheet date
Dividend per share, %
X 100%
dividend for the accounting period
adjusted number of shares at balance sheet date
Dividend per earnings, %
dividend per share
X 100%
earnings per share
Effective dividend yield, %
X 100%
dividend per share
adjusted closing share price at balance sheet date
Price/earnings ratio
adjusted closing share price at balance sheet date
earnings per share
Market capitalisation
number of shares at balance sheet date
x closing share price at balance sheet date
Relative share trading volume, %
number of shares traded through the stock
exchange
X 100%
adjusted average number of shares
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
41
BOARD OF DIRECTORS’ REPORT 2022
Exchange rates used in reporting
1–12/2022 1–9/2022 1–6/2022 1–3/2022 1–12/2021
EURSEK
Income statement (average) 10.6286 10.523 10.4746 10.4837 10.1465
Balance sheet (at end of period) 11.1218 10.8993 10.7300 10.337 10.2503
DKKSEK
Income statement (average) 1.4288 1.415 1.4085 1.4086 1.3643
Balance sheet (at end of period) 1.4956 1.4656 1.4424 1.3898 1.3784
NOKSEK
Income statement (average) 1.0522 1.052 1.0499 1.056 0.9983
Balance sheet (at end of period) 1.0578 1.0298 1.0369 1.0645 1.0262
EURDKK
Income statement (average) 7.4396 7.44 7.4402 7.4408 7.4371
Balance sheet (at end of period) 7.4365 7.4365 7.4392 7.4379 7.4364
EURGBP
Income statement (average) 0.8527 0.8468 0.842 0.8363 0.8599
Balance sheet (at end of period) 0.8869 0.883 0.8582 0.846 0.8403
Auditor’sReportGroup’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
BoardofDirectors’
Report
42
BOARD OF DIRECTORS’ REPORT 2022
Group’s IFRS Financial Statements
Statement of profit and other
comprehensive income
.....................................................................44
Consolidated balance sheet
..........................................................45
Statement of changes in equity
..................................................46
Statement of cash flows
................................................................... 47
BoardofDirectors’
Report
Auditor’sReport
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
Group’sIFRSFinancialStatements
TILINPÄÄTÖS 2022
43
EURm Note 1–12/2022 1–12/2021
Other comprehensive income for the financial year
Items re-classifiable to profit or loss 9
Exchange differences -253 80
Available-for-sale financial assets -1,670 460
Share of associates’ other comprehensive income — 186
Taxes 331 -83
Total items re-classifiable to profit or loss, net of tax -1,592 643
Items not re-classifiable to profit or loss
Actuarial gains and losses from defined pension plans 32 73
Taxes -7 -15
Total items not re-classifiable to profit or loss, net of tax 26 58
TOTAL COMPREHENSIVE INCOME FOR
THE FINANCIAL YEAR -26 3,448
Profit attributable to
Owners of the parent 1,427 2,567
Non-controlling interests 114 181
Total comprehensive income attributable to
Owners of the parent -139 3,272
Non-controlling interests 114 176
Earnings per share (EUR) 8 2.69 4.63
Statement of profit and other comprehensive income
EURm Note 1–12/2022 1–12/2021
Insurance premiums written 1 9,732 9,411
Net income from investments 2 -1,511 3,549
Other operating income 3 763 491
Claims incurred 4 -6,115 -6,239
Change in liabilities for insurance and investment contracts 5 1,443 -3,123
Staff costs 6 -1,226 -1,179
Other operating expenses 7 -1,097 -976
Finance costs -119 -146
Share of associates’ profit/loss 13 -6 401
Valuation difference on disposal of associate shares 13 — 84
Reversal of impairment losses on Nordea shares 13 — 899
Profit for the financial year before taxes 1,863 3,171
Taxes 18, 19 -322 -423
Profit for the financial year 1,541 2,748
Group’s IFRS Financial Statements
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FINANCIAL STATEMENTS 2022
44
Consolidated balance sheet
EURm Note 2022 2021
Assets
Property, plant and equipment 10 355 375
Investment property 11 166 568
Intangible assets 12 3,494 3,794
Investments in associates 13 16 777
Financial assets 14, 15, 16, 17 19,469 23,321
Investments related to unit-linked insurance
contracts 15, 16, 17 9,930 19,711
Deferred tax assets 18 17 39
Reinsurers’ share of insurance liabilities 21 2,272 2,295
Other assets 20 3,242 2,977
Cash and cash equivalents 3,073 4,819
Non-current assets held for sale — 2,385
Total assets 42,033 61,061
Liabilities
Liabilities for insurance and investment contracts 21 16,567 20,369
Liabilities for unit-linked insurance and investment
contracts 22 9,908 19,550
Subordinated debt 16, 23 1,983 2,016
Other financial liabilities 16, 23 1,457 2,330
Deferred tax liabilities 18 514 855
Provisions 24 6 9
Employee benefits 25 25 26
Other liabilities 26 2,031 2,246
Liabilities related to non-current assets held for sale — 196
Total liabilities 32,490 47,597
EURm Note 2022 2021
Equity 28
Share capital 98 98
Reserves 1,530 1,530
Retained earnings 7,784 9,952
Other components of equity -443 1,208
Equity attributable to owners of the parent 8,969 12,788
Non-controlling interests 574 676
Total equity 9,543 13,464
Total equity and liabilities 42,033 61,061
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FINANCIAL STATEMENTS 2022
45
Statement of changes in equity
EURm
Share
capital
Legal
reserve
Invested
unrestricted
equity
Retained
earnings
1
Translation
of foreign
operations
2
Available-
for-sale
financial
assets
3
Total
Non-
controlling
interest Total
Equity at 1 January 2021 98 4 1,527 9,282 -749 1,257 11,418 840 12,258
Changes in equity
Acquired non-controlling interests — — — -700 — — -700 -212 -912
Dividends
4
— — — -944 — — -944 -137 -1,081
Acquisition of own shares — — — -380 — — -380 — -380
Changes in associate share holdings — — — 113 — — 113 — 113
Other changes in equity — — — 9 — — 9 9 18
Profit for the reporting period — — — 2,567 — — 2,567 181 2,748
Other comprehensive income for the reporting period — — — 6 335 365 705 -5 700
Total comprehensive income — — — 2,572 335 365 3,272 176 3,448
Equity at 31 December 2021 98 4 1,527 9,952 -415 1,622 12,788 676 13,464
Changes in equity
Acquired non-controlling interests — — — 8 — — 8 -8 —
Dividends
4
— — — -2,186 — — -2,186 -207 -2,393
Acquisition of own shares — — — -1,444 — — -1,444 — -1,444
Changes in associate share holdings — — — -10 — — -10 — -10
Other changes in equity — — — 10 -58 — -48 -1 -48
Profit for the reporting period — — — 1,427 — — 1,427 114 1,541
Other comprehensive income for the reporting period — — — 26 -253 -1,340 -1,567 — -1,567
Total comprehensive income — — — 1,454 -253 -1,340 -139 114 -26
Equity at 31 December 2022 98 4 1,527 7,784 -726 282 8,969 574 9,543
1
IAS 19 Pension benefits had a net effect of EUR 26 million (58) on retained earnings.
2
In the comparison year, the total comprehensive income includes also the share of associate Nordea’s other comprehensive income, in accordance with the Group’s holding. The retained earnings included EUR
-52 million of items not re-classifiable to profit or loss. The change in translation of foreign operations included exchange differences EUR 252 million. Respectively, the change in available-for-sale financial assets
included Nordea’s share of EUR -17 million.
3
The amount recognised in equity from available-for-sale financial assets for the period totalled EUR -1,300 million (709). The amount transferred to p/l amounted to EUR -96 million (-333). EUR 57 million (5) was
transferred to the Segregated Suomi portfolio. In the comparison year, EUR 6 million from business acquisitions was recognised directly in the opening balance of the fair value reserve.
4
Dividend per share 4.10 euro (1.70).
In the financial year 2022, Other changes in equity include a reclassification of exchange differences of EUR 58 million.
The amounts included in the translation and available-for-sale reserves represent other comprehensive income for each component, net of tax.
On 31 March 2022, Sampo plc cancelled own shares acquired in 2021, total of 17,128,505 shares. Of the own shares acquired in 2022, Sampo plc cancelled a total of 4,961,994 shares on 20 May 2022. and a total of
16,681,839 shares on 8 December 2022.
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FINANCIAL STATEMENTS 2022
46
Statement of cash flows
EURm 1–12/2022 1–12/2021
Operating activities
Profit before taxes 1,863 3,171
Adjustments:
Depreciation and amortisation 181 187
Unrealised gains and losses arising from valuation 1,212 -1,257
Realised gains and losses on investments 57 -450
Change in liabilities for insurance and investment contracts -12,851 3,520
Other adjustments* -1,978 -1,397
Adjustments total -13,380 602
Change (+/-) in assets of operating activities
Investments** 10,232 -1,788
Other assets 1,776 -269
Total 12,008 -2,057
Change (+/-) in liabilities of operating activities
Financial liabilities -4 -53
Other liabilities 26 30
Paid taxes -290 -350
Paid interest -190 -158
Total -458 -532
Net cash from operating activities 33 1,185
Investing activities
Investments in subsidiary shares -16 -936
Divestments in subsidiary shares 519 —
Investments in associate shares -1 —
Divestments in associate shares 2,291 3,843
Dividends received from associates 160 339
Net investment in equipment and intangible assets 8 31
Net cash from investing activities 2,961 3,277
EURm 1–12/2022 1–12/2021
Financing activities
Dividends paid -2,186 -944
Dividends paid to non-controlling interests -207 -137
Acquisition of own shares -1,444 -380
Issue of debt securities 62 147
Repayments of debt securities in issue -920 -853
Net cash used in financing activities -4,695 -2,166
Total cash flows -1,701 2,296
Cash and cash equivalents at the beginning of reporting period 4,819 2,520
Effects of exchange rate changes -45 3
Cash and cash equivalents at the end of reporting period 3,073 4,819
Net change in cash and cash equivalents -1,701 2,296
Additional information to the cash flow statement: 1–12/2022 1–12/2021
Interest income received 375 523
Dividend income received (excl. profit sharing from funds) 273 226
Total out-going cashflows from leases -21 -34
* Other adjustments relate mainly to the sales of shares in Nordea and Topdanmark Liv Holding.
** Investments include investment property, financial assets and investments related to unit-linked
insurance contracts.
The items of the statement of cash flows cannot be directly concluded from the balance sheets due to,
e.g. exchange rate differences, and acquisitions and disposals of subsidiaries during the period.
Cash and cash equivalents include cash at bank and in hand EUR 2,907 million (4,736) and short-term
deposits (max 3 months) EUR 166 million (83).
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Note to the cash flow statement
In December 2022, Topdanmark sold its life insurance business Topdanmark Life to Nordea.
In the table below is shown the cash flow effect of the sale, presented in the cash flows from
investing activities in the consolidated statement of cash flows.
EURm 1–12/2022
Assets
Financial assets 11,901
Other assets 343
Liabilities
Insurance liabilities 11,556
Other liabilities 578
Net assets other without cash and cash equivalents 110
Cash and cash equivalents 231
Net assets 340
Goodwill 194
Total consideration received in cash 534
Unwinding costs paid -15
Net cash from the sale 519
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FINANCIAL STATEMENTS 2022
48
Group’s notes to the financial statements
Summary of significant
accounting policies ................................ 50
Segment information ..............................78
Material partly-owned
subsidiaries ................................................ 84
Group’s other notes to
the financial statements 1–35 ............. 86
1 Insurance premiums written .................86
2 Net income from investments .............. 86
3 Other operating income ......................... 87
4 Claims incurred ..........................................88
5 Change in liabilities for insurance
and investment contracts ......................88
6 Staff costs .................................................... 88
7 Other operating expenses .....................89
8 Earnings per share .................................... 89
9 Components of other
comprehensive income ...........................89
10 Property, plant and equipment ...........90
11 Investment property ...............................90
12 Intangible assets ........................................ 91
13 Investments in associates and
joint ventures ............................................. 93
14 Financial assets ......................................... 95
15 Change in fair values of
financial assets .......................................... 97
16 Determination and hierarchy
of fair values ...............................................98
17 Movements in level 3
financial instruments
measured at fair value .......................... 103
18 Deferred tax assets and liabilities .... 105
19 Taxes ............................................................107
20 Other assets ..............................................107
21 Liabilities from insurance and
investment contracts ............................ 108
22 Liabilities from unit-linked
insurance and investment
contracts......................................................116
23 Subordinated debts and
other financial liabilities ......................... 116
24 Provisions ....................................................119
25 Employee benefits ................................. 120
26 Other liabilities ......................................... 123
27 Contingent liabilities, commitments
and legal proceedings ........................... 124
28 Equity and reserves ................................125
29 Related party disclosures ....................126
30 Incentive schemes ..................................127
31 Auditors’ fees ........................................... 130
32 Investments in subsidiaries ................ 130
33 The divestment of
Topdanmark Life business .................. 130
34 Events after the
balance sheet date .................................131
35 Risk Management Disclosure .............132
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FINANCIAL STATEMENTS 2022
49
Consolidation
Sampo plc (business id 0142213-3) is a Finnish public
company listed in Helsinki Nasdaq. It is domiciled in
Helsinki and the headquarters are at Fabianinkatu 27,
00100 Helsinki, Finland. The consolidated financial
statements of Sampo Group include Sampo plc together
with its subsidiaries and associates as of 31 December
2022. The group subsidiaries have insurance and financ-
ing activities in Finland, Sweden, Norway, Denmark, the
Baltic countries, and the United Kingdom. A copy of the
Group’s financial statements is available at the internet
address www.sampo.com.
Basis of preparation
Sampo Group has prepared the consolidated financial
statements for 2022 in compliance with the International
Financial Reporting Standards (IFRSs). In preparing the
financial statements, Sampo has applied all the standards
and interpretations relating to its business, adopted by the
commission of the EU and effective at 31 December, 2022.
The annual improvements or other amendments to the
standards, adopted at the beginning of 2022, had no material
impact on the Group’s financial statements reporting.
Group’s notes to the financial statements
Summary of significant accounting policies
In preparing the notes to the consolidated financial
statements, attention has also been paid to the Finnish
accounting and company legislation and applicable
regulatory requirements.
The going concern accounting assumption has been
assessed by the Board and used in the preparation of the
financial statements.
The financial statements have for the most part been
prepared under the historical cost convention. Exceptions
are, i.e. financial assets and liabilities at fair value through
p/l, financial assets available-for-sale, hedged items in
fair value hedges, investment property and share-based
payments settled in equity instruments measured at fair
value.
The consolidated financial statements are presented
in euro (EUR), rounded to the nearest million, unless
otherwise stated.
The Board of Directors of Sampo plc accepted the
financial statements for issue on 10 February 2023. In
accordance with Limited Liability Companies Act, the
Annual General Meeting has right to approve or reject
the consolidated financial statements or change the
statements after they have been issued.
Consolidation
Subsidiaries
The consolidated financial statements combine the
financial statements of Sampo plc and all its subsidiaries.
Control exists when the Group has more than half of the
voting power or it has power over the entity together with
exposure to variable returns from its involvement there
and the ability to use its power to affect the amount of
these returns. Subsidiaries are consolidated from the date
on which control is transferred to the Group, and cease to
be consolidated from the date that control ceases.
The acquisition method of accounting is used for the
purchase of subsidiaries. The cost of an acquisition
is allocated to the identifiable assets, liabilities and
contingent liabilities, which are measured at the fair value
of the date of the acquisition. Acquisition-related costs
are recognised through profit or loss. Possible non-con-
trolling interest of the acquired entity is measured either
at fair value or at proportionate interest in the acquiree’s
net assets. The acquisition-specific choice affects both
the amount of recognised goodwill and non-controlling
interest. The excess of the aggregate of consideration
transferred, non-controlling interest and possibly
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50
previously held equity interest in the acquiree, over the
Group’s share of the fair value of the identifiable net
assets acquired, is recognised as goodwill.
The accounting policies used throughout the Group for
the purposes of consolidation are consistent with respect
to similar business activities and other events taking place
in similar conditions. All intra-group transactions and
balances are eliminated upon consolidation.
Associates
Associates are entities in which the Group has significant
influence. Unless otherwise demonstrated, this is
generally presumed when the Group holds in excess of
20 per cent, but no more than 50 per cent, of the voting
rights of an entity. Correspondingly, even when the Group
holds less than 20 per cent of the voting power, it can be
treated as an associate if the significant influence can be
otherwise clearly demonstrated as described in IAS 28
Investments in Associates and Joint Ventures.
Investments in associates are treated by the equity
method of accounting, in which the investment is initially
recorded at cost and increased (or decreased) each year by
the Group’s share of the post-acquisition net income (or
loss), or other movements reflected directly in the equity
of the associate. If the Group’s share of the associate’s
loss exceeds the carrying amount of the investment, the
investment is carried at zero value, and the loss in excess
is consolidated only if the Group is committed to fulfilling
the obligations of the associate. Goodwill arising on the
acquisition is included in the cost of the investment.
Unrealised gains (losses) on transactions are eliminated to
the extent of the Group’s interest in the entity.
The share of associates’ profit or loss, equivalent to the
Group’s holding, is presented as a separate line in the
income statement. The Group’s share of associates’
changes in other comprehensive income is presented in
the Group’s other comprehensive income items.
If there is any indication that the value of the investment
may be impaired, the consolidated carrying amount
is tested by comparing it with its recoverable amount.
The recoverable amount is the higher of its value in
use or its fair value less costs to sell. If the recoverable
amount is less than its consolidated carrying amount, the
carrying amount is reduced to its recoverable amount by
recognising an impairment loss in the profit/loss. If the
recoverable amount later increases and is greater than the
carrying amount, the impairment loss is reversed through
profit and loss.
Non-controlling interests
The technical division of profit for the financial year and
the total comprehensive income to the owners of the
parent and non-controlling interests is presented after the
statement of comprehensive income. The share of profits
is attributed to non-controlling interests even if it should
be negative.
Non-controlling interests are presented in the balance
sheet separately as part of equity.
Non-controlling interests in an acquiree are measured
either at fair value or as a proportionate share of net assets
of the acquiree. The choice is made for each acquisition
separately. At the end of the financial reporting period,
Sampo’s non-controlling interests were determined as the
proportionate share of net assets of the acquirees.
Foreign currency translation
The consolidated financial statements are presented in
euro, which is the functional and reporting currency of
the Group and the parent company. Items included in
the financial statements of each of the Group entities
are measured using their functional currency, being the
currency of the primary economic environment in which
the entity operates. Foreign currency transactions are
translated into the appropriate functional currency using
the exchange rates prevailing at the dates of transactions
or the average rate for a month. The balance sheet items
denominated in foreign currencies are translated into the
functional currency at the rate prevailing at the balance
sheet date.
Exchange differences arising from the translation of trans-
actions and monetary balance sheet items denominated in
foreign currencies into functional currency are recognised
as translation gains and losses in profit or loss. Exchange
differences arising from non-monetary financial assets
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FINANCIAL STATEMENTS 2022
51
classified as available-for-sale financial assets are
recognised directly in the fair value reserve in equity.
The income statements of Group entities whose
functional currency is other than euro are translated into
euro at the average rate for the period, and the balance
sheets at the rates prevailing at the balance sheet date.
The resulting exchange differences are included in equity
and their change in other comprehensive income. When a
subsidiary is divested entirely or partially, the cumulative
exchange differences are included in the income statement
under sales gains or losses.
Goodwill and fair value adjustments arising from an
acquisition of a foreign entity are treated as if they were
assets and liabilities of the foreign entity. Exchange
differences resulting from the translation of these items at
the exchange rate of the balance sheet date are included
in equity and their change in other comprehensive
income.
1 euro (EUR) =
Balance sheet
date
Average
exchange rate
Swedish krona (SEK) 11.1218 10.6286
Danish krona (DKK) 7.4365 7.4396
Pound sterling (GBP) 0.8869 0.8527
Segment reporting
The Group’s segmentation is based on business areas
whose risks and performance bases as well as regulatory
environment differ from each other. The control and
management of business and management reporting are
organised in accordance with the business segments. The
Group’s business segments are If, Topdanmark, Hastings,
Mandatum and Holding (including Nordea). Geographical
information has been given on income from external
customers and non-current assets. The reported segments
are Finland, Sweden, Norway, Denmark, Great Britain and
the Baltic countries.
In the inter-segment and inter-company pricing, for both
domestic and cross border transactions, market-based
prices are applied. The pricing is based on the Code of
Conduct on Transfer Pricing Documentation in the EU
and OECD guidelines. Inter-segment transactions, assets
and liabilities are eliminated in the consolidated financial
statements.
Non-current assets held for sale
Non-current assets and the assets and liabilities related
to discontinued operations are classified as held for sale,
if their carrying amount will be recovered principally
through sales transactions rather than from continuing
use. For this to be the case, the sale must be highly
probable, the asset or disposal group must be available
for immediate sale in its present condition subject only
to terms that are usual and customary for sales of such
assets. In addition, the management must be committed
to a plan to sell, and the sale should be expected to qualify
for recognition as a completed sale within one year from
the date of classification.
Assets that meet the criteria to be classified as held for
sale are measured at the lower of carrying amount and
fair value less costs to sell. Immediately before the initial
classification of the asset as held for sale, the carrying
amount of the asset shall be measured in accordance
with applicable IFRSs. If the fair value less costs to sell
is the lower, an entity recognises an impairment loss at
initial reclassification. Gains for subsequent increases
in fair value are recognised through profit or loss. Once
reclassified, any depreciation or recognition of associates’
share of profit or loss on such assets ceases.
Revenue recognition principles
Insurance premiums
Insurance premiums in the income statement consist of
premiums written for P&C insurance and life insurance.
P&C insurance contracts are primarily of short duration,
so that premiums written are recognised at the inception
of risk coverage in line with the insurance contract.
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52
When the premium for the insurance period is divided
into several instalments, the entire premium amount
is still recognised at the beginning of the period. As an
exception, Hastings recognises insurance premiums
proportionally over the period of cover provided. At
the date of financial statements, the premiums written
are adjusted by a change in the provision for unearned
premiums i.e., by the proportion of the insurance premium
income that, based on the period covered by the insurance
contract, belongs to the following financial year.
In the life insurance business, liabilities arising from
insurance and investment contracts are long-term
liabilities. Therefore, the insurance premium and related
claims are usually not recognised in the same accounting
period. Depending on the type of insurance, premiums
are primarily recognised in premiums written when the
premium has been paid. In group pension insurance, a
part of the premiums is recognised already when charged.
The change in the provision for unearned premiums is
presented as an expense under ‘Change in insurance and
investment contract liabilities’.
Interest and dividends
Interest income and expenses are recognised in the
income statement using the effective interest rate
method. This method recognises income and expenses
on the instrument evenly in proportion to the amount
outstanding over the period to maturity. Dividends on
equity securities are recognised as revenue when the right
to receive payment is established.
Fees and commissions
The fees and transaction costs of financial instruments
measured at fair value through profit or loss are recog-
nised in profit or loss when the instrument is initially
recognised.
The costs of acquiring new and renewed insurance busi-
ness are treated as deferred acquisition costs in the P&C
insurance. In the life insurance business, the acquisition
costs are treated as fee and commission expense under
’Other operating expenses’.
Other fees and commissions paid for investment activities
are included in ’Net income from investments’.
Revenue from contracts with customers
The subsidiary Hastings has revenue from broker
activities in accordance with IFRS 15 Revenue from
Contracts with Customers. The revenue consists
principally of fees and commissions relating to the
arrangement of third party underwritten insurance
contracts and ancillary products.
Revenue from insurance brokerage activities is recognised
at the point of sale to the customer and revenue from
other retail services is recognised when the service has
been completed. Revenue arising from insurance broking
activities is measured on an agency basis, net of cost, at
the fair value of the income receivable after adjusting for
any allowance for expected future cancellation refunds.
Hastings may also provide contracts for the provision of
other ad hoc, point-in-time services to customers. Such
income is recognised when the performance obligation
has been satisfied at the expected value of consideration.
In the consolidated financial statements, the fees and
commissions from broker activities are included in ’Other
income’ or ’Other operating expenses’.
Financial assets and liabilities
Financial assets and liabilities are measured at the
initial recognition at fair value. In the acquisition of
financial assets and liabilities not measured at fair value,
transaction costs directly attributable to acquisition or
issue are added or deducted respectively.
Based on the measurement practice, financial assets
and liabilities are classified in the following categories
upon the initial recognition: financial assets at fair value
through profit or loss, loans and receivables, available-
for-sale financial assets, financial liabilities at fair value
through profit or loss, and other liabilities.
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According to the Group’s risk management policy, invest-
ments are managed at fair value in order to have the most
realistic and real-time picture of investments, and they
are reported to the Group key management at fair value.
Investments comprise debt and equity securities. They
are mainly classified as financial assets available-for-sale
or at fair value through p/l.
In the life insurance business, IFRS 4 Insurance Contracts
provides that insurance contracts with a discretionary
participation feature are measured in accordance with
national valuation principles rather than at fair value.
These contracts and investments made to cover
shareholders’ equity are managed in their entirety and
are classified mainly as available-for-sale financial assets.
An exception to the rule are investments related to
unit-linked insurance, valued at fair value through p/l
and shown as a separate line item in the balance sheet.
The corresponding liability is also shown as a separate
line item.
Recognition and derecognition
Purchases and sales of financial assets at fair value
through profit or loss and available-for-sale financial
assets are recognised and derecognised on the trade
date, which is the date on which the Group commits
to purchase or sell the asset. Loans and receivables are
recognised when cash is advanced.
Financial assets and liabilities are offset and the net
amount is presented in the balance sheet only when the
Group has a legally enforceable right to set off the recog-
nised amounts and it intends to settle on a net basis, or to
realise the asset and settle the liability simultaneously.
Financial assets are derecognised when the contractual
rights to receive cash flows have expired or the Group
has substantially transferred all the risks and rewards of
ownership. Financial liabilities are derecognised when
the obligation specified in the contract is discharged or
cancelled or expired.
Financial assets and financial liabilities
at fair value through profit or loss
In Sampo Group, financial assets and liabilities at fair
value through profit of loss comprise financial assets held
for trading and financial assets designated as at fair value
through profit or loss.
Financial assets held for trading
A financial asset that is held for the purpose of selling or
buying in the short term, or belongs to a portfolio that is
managed together or is repeatedly used for short-term
profit taking, is classified as an asset held for trading.
Gains and losses arising from changes in fair value, or
realised on disposal, together with related interest income
and dividend, are recognised in the income statement.
Also derivative instruments that are not designated as
hedges and do not meet the requirements for hedge
accounting are classified as financial assets for trading
purposes.
Financial derivatives held for trading are initially rec-
ognised at fair value. Derivative instruments are carried
as assets when the fair value is positive and as liabilities
when the fair value is negative. Derivative instruments are
recognised at fair value, and gains and losses arising from
changes in fair value together with realised gains and
losses, are recognised in the income statement.
Financial assets designated as at
fair value through profit or loss
Financial assets designated as at fair value through profit
or loss are assets which, at inception, are irrevocably
designated as such. They are initially recognised at their
fair value. They are recognised in the income statement
and balance sheet accordingly with the above-explained
assets held for trading.
Loans and receivables
Loans and receivables comprise non-derivative financial
assets with fixed or determinable payments that are
not quoted in an active market and that the Group does
not intend to sell immediately or in the short term. The
category also comprises cash and balances with banks.
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Loans and receivables are initially recognised at their fair
value, including transaction costs directly attributable
to the acquisition of the asset. Loans and receivables
are subsequently measured at amortised cost using the
effective interest rate method.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative
financial investments that are designated as availa-
ble-for-sale or that are not categorised into any other
category. Available-for-sale financial assets comprise debt
and equity securities and funds.
Available-for-sale financial assets are initially recognised
at fair value, including direct and incremental transaction
costs. They are subsequently remeasured at fair value,
and the changes in fair value are recorded in other
comprehensive income and presented in the fair value
reserve, taking the tax effect into account. Interest income
and dividends are recognised in profit or loss. When the
available-for-sale assets are sold, the cumulative change
in the fair value is transferred from equity and recognised
together with realised gains or losses in profit or loss. The
cumulative change in the fair value is also transferred
to profit or loss when the assets are impaired and the
impairment loss is recognised. Exchange differences due
to available-for-sale monetary balance sheet items are
always recognised directly in profit or loss.
Other financial liabilities
Other financial liabilities comprise debt securities in issue
and other financial liabilities.
Other financial liabilities are recognised when the
consideration is received and measured to amortised cost,
using the effective interest rate method.
If debt securities issued are redeemed before maturity,
they are derecognised and the difference between the
carrying amount and the consideration paid at redemp-
tion is recognised in profit or loss.
Fair value
The fair value of financial instruments is determined
primarily by using quoted prices in active markets.
Instruments are measured either at a bid price or at
the last trade price if there is an auction policy in the
stock market of the price source. An exception are the
syndicated loans which are measured at a mid-price
because of the lower liquidity. The financial derivatives
are also measured at the last trade price. If the financial
instrument has a counter-item that will offset its market
risk, the same price source is used in assets and liabilities
to that extent. If a published price quotation does not
exist for a financial instrument in its entirety, but active
markets exist for its component parts, the fair value is
determined on the basis of the relevant market prices of
the component parts.
Fair values of financial assets are based on either
published price quotations or valuation techniques based
on market observable inputs, where available. If these
are not available, the fair value is established by using
generally accepted valuation techniques including recent
arm’s length market transactions between knowledgeable,
willing parties, reference to the current fair value of
another instrument that is substantially the same,
discounted cash flow analysis and option pricing models.
For a limited amount of assets, the value needs to be
determined using these other techniques.
The carrying amount of cash and cash equivalents as well
as settlement receivables included in other assets is used
as an approximation of fair value.
If the fair value of a financial asset cannot be determined,
historical cost is deemed to be a sufficient approximation
of fair value. The amount of such assets in the Group
balance sheet is immaterial.
The financial instruments measured at fair value have
been classified into three hierarchy levels in the notes,
depending on, e.g. if the market for the instrument is
active, or if the inputs used in the valuation technique are
observable.
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On level 1, the measurement of the instrument is based
on quoted prices in active markets for identical assets or
liabilities.
On level 2, inputs for the measurement of the instrument
include also other than quoted prices observable for the
asset or liability, either directly or indirectly by using
valuation techniques.
On level 3, the measurement is based on other inputs
rather than observable market data. The majority of
Sampo Group’s level 3 assets are private equity and
alternative funds.
For private equity funds, the valuation of the underlying
investments is conducted by the fund manager who has
all the relevant information required in the valuation
process. The valuation is usually updated quarterly based
on the value of the underlying assets and the amount of
debt in the fund. There are several valuation methods,
which can be based on, for example, the acquisition value
of the investments, the value of publicly traded peer
companies, the multiple-based valuation or the cashflows
of the underlying investments. Most private equity funds
follow the International Private Equity and Venture
Capital (IPEV) guidelines which give detailed instructions
on the valuation of private equity funds.
For alternative funds, the valuation is also conducted
by the fund managers. Alternative funds often have
complicated structures and the valuation is dependent
on the nature of the underlying investments. There are
many different valuation methods that can be used,
for example, the method based on the cashflows of the
underlying investments. The operations and valuation
of alternative funds are regulated for example by the
Alternative Investment Fund Managers Directive
(AIFMD), which determines the principles and
documentation requirements of the valuation process.
Impairment of financial assets
Sampo assesses at the end of each reporting period
whether there is any objective evidence that a financial
asset, other than those at fair value through p/l, may be
impaired. A financial asset is impaired and impairment
losses are recognised on the estimated future cash flows
of the financial asset if there is objective evidence of
impairment as a result of one or more loss events that
occurred after the initial recognition of the asset and if
that event has an impact that can be reliably estimated.
Financial assets carried at amortised cost
There is objective evidence of impairment, if an issuer or
debtor, e.g. encounters significant financial difficulties
that will lead to insolvency and to estimation that the
customer will probably not be able to meet the obligations
to the Group. Objective evidence is first assessed for
financial assets that are individually significant, and
then individually and collectively for financial assets not
individually significant.
When there is objective evidence of impairment of a
financial asset carried at amortised cost, the amount
of the loss is measured as the difference between the
receivable’s carrying amount and the present value of
estimated future cash flows discounted at the receivable’s
original effective interest rate. The difference is
recognised as an impairment loss in profit or loss. The
impairment is assessed individually.
If, in a subsequent period, the amount of the impairment
loss decreases, and the decrease can objectively be
related to an event occurring after the impairment
was recognised (e.g. the default status is removed), the
previously recognised impairment loss shall be reversed
through profit or loss.
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Available-for-sale financial assets
If there is objective evidence of an impairment of
available-for-sale financial assets, this is evaluated in a
separate assessment. This is done if, for example, there
are changes in the credit rating of the debt instrument
issuer, the issuer is placed on a watch list, or there is
a default or delinquency in payments of principal or
interests. For equity instruments, objective evidence
may exist, if there is a significant or prolonged decline in
the fair value of an equity instrument below its original
acquisition cost.
The decision on whether the impairment is significant or
prolonged requires an assessment of the management.
The assessment is done on a case-by-case basis with
consideration paid not only to qualitative criteria but also
historical changes in the value of an equity as well as time
period during which the fair value of an equity instrument
has been lower than the acquisition cost. In Sampo Group,
the impairment is normally assessed to be significant, if
the fair value of a listed equity or participation decreases
below the average acquisition cost by 20 per cent and
assessed to be prolonged when the fair value has been
lower than the acquisition cost for over 12 months.
As there are no quoted prices available in active markets
for unquoted equities and participations, the aim is to
determine their fair value with the help of generally
accepted valuation techniques available in the markets.
The most significant share of unquoted equities and
participations comprise the private equity and venture
capital investments. They are measured in accordance
with the generally accepted common practice in the
International Private Equity and Venture Capital
Guidelines (IPEV).
The significance and prolongation of the impairment in
the last-mentioned cases is assessed case by case, taking
into consideration special factors and circumstances
related to the investment. Sampo invests in private
equity and venture capital in order to keep them to the
end of their life cycle, so the typical lifetime is 10–12
years. In general, a justifiable assessment of a potential
impairment may only be done towards the end of the life
cycle. However, if additionally there is a well-founded
reason to believe that an amount equivalent to the
acquisition cost will not be recovered when selling the
investment, an impairment loss is recognised.
An impairment on equity funds is recognised in line with
the principles above when the starting year of the fund
is at least 10 years old and both the carrying amount and
fair value of the fund is maximum EUR 500,000. In these
cases both the fair value and the carrying amount are
booked to zero. An impairment is only performed to those
funds for which the benchmarks are met in all Sampo
Group companies’ portfolios.
In the case of debt securities, the amount of the
impairment loss is assessed as the difference between the
acquisition cost, adjusted with capital amortisations and
accruals, and the fair value at the review time, reduced
by possible impairment losses previously recognised
in profit or loss. At the same time, the cumulative loss
recognised in other comprehensive income is transferred
from equity and recognised in p/l as an impairment loss.
Any additional impairment losses are also recognised
through p/l.
If, in a subsequent period, the fair value of a debt security
increases and the increase can objectively be related to an
event occurring after the impairment loss was recognised
in profit or loss, the impairment loss is reversed through
p/l, but only up until the carrying amount is the same
as it would have been had no impairment losses been
recognised in the first place.
Impairment losses for available-for-sale equity instruments
are recognised through p/l by transferring the cumulative
loss recognised in other comprehensive income from
equity to p/l. If the fair value subsequently increases, the
increase is recognised in other comprehensive income.
If the value keeps decreasing below the book value, an
impairment loss is recognised through profit or loss even
if the decline is less than 20 per cent.
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Derivative financial instruments
and hedge accounting
Derivative financial instruments are classified as those
held for trading and those held for hedging, including
interest rate derivatives, credit risk derivatives, foreign
exchange derivatives, equity derivatives and commodity
derivatives. Derivative instruments are measured initially
at fair value. All derivatives are carried as assets when
fair value is positive and as liabilities when fair value is
negative.
Derivatives held for trading
Derivative instruments that are not designated as hedges
and embedded derivatives separated from a host contract
are treated as held for trading. They are measured at fair
value and the change in fair value, together with realised
gains and losses and interest income and expenses, is
recognised in profit or loss.
If derivatives are used for hedging, but they do not qualify
for hedge accounting as required by IAS 39, they are
treated as held for trading.
Hedge accounting
Sampo Group may hedge its operations against interest
rate risks, currency risks and price risks through fair value
hedging and cash flow hedging. Cash flow hedging is used
as a protection against the variability of the future cash
flows, while fair value hedging is used to protect against
changes in the fair value of recognised assets or liabilities.
During the financial year, fair value hedging has been
applied in Mandatum and cash flow hedging in Hastings.
Hedge accounting applies to hedges that are effective in
relation to the hedged risk and meet the hedge accounting
requirements of IAS 39. The hedging relationship
between the hedging instrument and the hedged item,
as well as the risk management objective and strategy for
undertaking the hedge, are documented at the inception
of the hedge. In addition, the effectiveness of a hedge is
assessed both at inception and on an ongoing basis to
ensure that it is highly effective throughout the period
for which it was designated. Hedges are regarded as
highly effective in offsetting changes in fair value or the
cash flows attributable to a hedged risk within a range of
80–125 per cent.
Cash flow hedging
Cash flow hedging is used to hedge the interest cash flows
of individual floating rate debt securities or other floating
rate assets or liabilities. The hedging instruments used
include interest rate swaps and cross currency interest
rate swaps. Derivative instruments which are designated
as hedges and are effective as such, in accordance with
IAS 39, are measured at fair value. The effective part of the
change in fair value is recognised in other comprehensive
income. The remaining ineffective part is recognised in
profit or loss.
The cumulative change in fair value is transferred from
equity and recognised in profit or loss in the same period
that the hedged cash flows affect profit or loss.
When a hedging instrument expires, is sold, terminated,
or the hedge no longer meets the criteria for hedge
accounting, the cumulative change in fair value remains
in equity until the hedged cash flows affect profit or loss.
Fair value hedging
In accordance with the Group’s risk management
principles, fair value hedging is used to hedge changes in
fair values resulting from changes in price, interest rate
or exchange rate levels. The hedging instruments used
include foreign exchange forwards, interest rate swaps,
cross-currency interest rate swaps and options, approved
by the managements of the Group companies.
Changes in the fair value of derivative instruments that
are documented as fair value hedges and are effective in
relation to the hedged risk are recognised in profit or loss.
In addition, the hedged assets and liabilities are measured
at fair value during the period for which the hedge was
designated, with changes in fair value recognised in profit
or loss.
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Leases
Group as lessee
All lease contracts are primarily recognised in the
balance sheet in accordance with IFRS 16 Leases. The only
optional exemptions include certain short-term contracts
with a duration under 12 months or low-value contracts
for which the lease payments can be recognised as an
expense on a straight-line basis over the lease term.
Right-of-use assets related to lease contracts (right to
use an underlying asset) are recognised in the asset
side as part of Property, Plant and Equipment and the
corresponding lease liabilities in the liability side as part
of Other liabilities. A right-of-use asset is recognised at
the commencement date of the lease and measured at
cost that includes the amount of the initial measurement
of the liability and potential prepaid rents to the lessor.
Right-of-use assets are amortised on a straight-line basis
over the lease period. Lease liability is also recognised at
the commencement date and measured at the present
value of the lease payments.
Depreciations on right-of-use assets and interests on the
lease liabilities are recognised in the p/l.
Group as lessor
Leases are included in ’Investment property’ in the
balance sheet. They are depreciated over their expected
useful lives on a basis consistent with similar owned
property, plant and equipment, and the impairment
losses are recognised on the same basis as these items.
Rental income is recognised on a straight-line basis over
the lease term in profit or loss.
Intangible assets
Goodwill
Goodwill represents the excess of the cost of an
acquisition (made after 1 January 2004) over the fair
value of the Group’s share of the net identifiable assets,
liabilities and contingent liabilities of the acquired entity
at the date of acquisition. Goodwill on acquisitions before
1 January 2004 is accounted for in accordance with the
previous accounting standards and the carrying amount
is used as the deemed cost in accordance with the IFRS.
Goodwill is measured at historical cost less accumulated
impairment losses. Goodwill is not amortised. Instead, it
is tested at least annually for impairment.
Other intangible assets
IT software and other intangible assets, whether procured
externally or internally generated, are recognised in
the balance sheet as intangible assets with finite useful
lives if it is probable that the expected future economic
benefits that are attributable to the assets will flow to
the Group and the cost of the assets can be measured
reliably. The cost of internally generated intangible assets
is determined as the sum of all costs directly attributable
to the assets. Research costs are recognised as expenses
in profit or loss as they are incurred. Costs arising from
the development of new IT software or from significant
improvement of existing software are recognised only to
the extent they meet the above-mentioned requirements
for being recognised as assets in the balance sheet.
Intangible assets with finite useful lives are measured
at historical cost less accumulated amortisation and
impairment losses. Intangible assets are amortised on
a straight-line basis over the estimated useful life of the
asset. The estimated useful lives by asset class are as
follows:
IT software 3–10 years
Other intangible assets 3–10 years
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Intangible assets with an indefinite useful life, such
as brands and trademarks acquired in business
combinations, are not amortised. Instead they are tested
at least annually for impairment.
Property, plant and equipment
Property, plant and equipment comprise properties
occupied for Sampo’s own activities, office equipment,
fixtures and fittings, and furniture. Classification of
properties as those occupied for own activities and those
for investment activities is based on the square metres
in use. If the proportion of a property in Sampo’s use is
no more than 10 per cent, the property is classified as an
investment property.
Property, plant and equipment are measured at historical
cost less accumulated depreciation and impairment
losses.
Improvement costs are added to the carrying amount of
a property when it is probable that the future economic
benefits that are attributable to the asset will flow to the
entity. Costs for repairs and maintenance are recognised
as expenses in the period in which they were incurred.
Items of property, plant and equipment are depreciated
on a straight-line basis over their estimated useful life. In
most cases, the residual value is estimated at zero. Land
is not depreciated. Estimates of useful life are reviewed
at financial year-ends and the useful life is adjusted if the
estimates change significantly. The estimated useful lives
by asset class are as follows:
Buildings 20–50 years
Components of buildings 15–20 years
Property and leasehold improvements 4–10 years
IT equipment and motor vehicles 2–5 years
Other equipment 3–15 years
Depreciation of property, plant or equipment will be
discontinued, if the asset in question is classified as held
for sale in accordance with IFRS 5 Non-current Assets Held
for Sale and Discontinued Operations.
Impairment of intangible assets and
property, plant and equipment
At each reporting date, the Group assesses whether
there is any indication that an intangible asset or an
item of property, plant or equipment may be impaired.
If any such indication exists, the Group will estimate the
recoverable amount of the asset. In addition, goodwill,
intangible assets not yet available for use and intangible
assets with an indefinite useful life will be tested for
impairment annually, independent of any indication
of impairment. For impairment testing the goodwill is
allocated to the cash-generating units of the Group from
the date of acquisition. In the test the carrying amount
of the cash-generating unit, including the goodwill, is
compared with its recoverable amount.
The recoverable amount is the higher of an asset’s fair
value less costs to sell and its value in use. The value
in use is calculated by estimating future net cash flows
expected to be derived from an asset or a cash-generating
unit, and by discounting them to their present value using
a pre-tax discount rate. If the carrying amount of an asset
is higher than its recoverable amount, an impairment loss
is recognised in profit or loss. In conjunction with this, the
impaired asset’s useful life will be re-determined.
The impairment loss is reversed if there has been a change
in circumstances and the recoverable amount has changed
after the recognition of the impairment loss, but no more
than to the carrying amount which it would have been
without recognition of the impairment loss. Impairment
losses recognised for goodwill are not reversed.
Investment property
Investment property is held to earn rentals and for capital
appreciation. The investment property is measured at
fair value. The accounting principle was changed from an
acquisition model to a fair value model in the financial
year 2021 in order to align the Group accounting principles.
The Group assessed that the change had an immaterial
effect on the consolidated financial statements.
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The fair value of investment property is estimated using
methods based on estimates of future cash flows and
market-based return expectations (cash flow models used
for present value calculation) and comparison methods
based on information from actual sales in the market.
The valuation considers the characteristics of the prop-
erty with respect to location, condition, lease situation
and comparable market information regarding rents,
yield requirements and unit prices. During the financial
year, the valuations were conducted by using both the
Group’s internal resources and external independent
surveyors.
Provisions
A provision is recognised when the Group has a present
legal or constructive obligation as a result of a past event,
and it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and the Group can reliably estimate the amount of the
obligation. If it is expected that some or all of the expend-
iture required to settle the provision will be reimbursed
by another party, the reimbursement will be treated as
a separate asset only when it is virtually certain that the
Group will receive it.
Insurance and investment contracts
Insurance contracts are treated, in accordance with IFRS
4, either as insurance or investment contracts. Under the
standard, insurance contracts are classified as insurance
contracts if significant insurance risk is transferred
between the policyholder and the insurer. If the risk trans-
ferred on the basis of the contract is essentially financial
risk rather than significant insurance risk, the contract is
classified as an investment contract. The classification of
a contract as an insurance contract or investment contract
determines the measurement principle applied to it.
Sampo treats the liabilities arising from contracts in
the first phase of the standard according to the national
accounting standards.
The risks involved in insurance and investment contracts
are widely elaborated in the Group’s note 35.
Reinsurance contracts
A reinsurance contract is a contract which meets the
IFRS 4 requirements for insurance contracts and on the
basis of which Sampo Group (the cedant) may receive
compensation from another insurer (the reinsurer) if it
becomes liable for paying compensation based on other
insurance contracts it has issued. Such compensation
received on the basis of reinsurance contracts is included
in the balance sheet under ’Reinsurers’ share of insurance
liabilities’ and ’Other assets’. The former item includes the
reinsurers’ share of the provisions for unearned premiums
and claims outstanding in the Group’s reinsured
insurance contracts, while the latter includes short-term
receivables from reinsurers.
When the Group itself has to pay compensation to
another insurer on the basis of a reinsurance contract,
the liability is recognised in the item ’Other liabilities’.
Receivables and liabilities related to reinsurance are
measured uniformly with the cedant’s receivables and
liabilities. Reinsurance receivables are tested annually for
impairment. Impairment losses are recognised through
profit or loss if there is objective evidence indicating that
the Group (as the cedant) will not receive all amounts of
money it is entitled to on a contractual basis.
In addition, the Group companies have contracts where
they share the insurance risk with a co-insurance
partner. Where the Group is the secondary co-insurer,
the Group only recognises its share of the premium as an
insurance receivable and related claims liability. Where
the Group acts as the lead co-insurer, the gross premium
is recognised as an insurance receivable, with a related
co-insurance payable to the co-insurer.
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P&C insurance business
Classification of insurance contracts
In classifying insurance contracts and examining their
related risks, embedded contracts are interpreted as one
contract.
Other than insurance contracts, i.e. contracts where the
risk is not transferred, include Captive contracts in which
an insurance company underwrites a company’s direct
business and reinsures the same risk in an insurance
company in the same group as the policyholder. There are
also contracts in P&C insurance (Reverse Flow Fronting
contracts) in which the insurance company grants
insurance and then transfers the insurance risk to the
final insurer. For both the above types of contract, only
the net effect of the contract relationship is recognised
in the income statement and balance sheet (instead of
the gross treatment, as previously). The prerequisite for
net treatment is that the net retention recognised on the
contract is zero.
There are also contracts in P&C insurance in which the
insurance risk is eliminated by a retrospective insurance
premium, i.e. the difference between forecast and actual
losses is evened out by an additional premium directly or
in connection with the annual renewal of the insurance.
The net cash flow from these contracts is recognised
directly in the balance sheet, without recognising it first
in the income statement as premiums written and claims
incurred.
Insurance liabilities
Insurance liabilities are the net contractual obligations
which the insurer has on the basis of insurance contracts.
Insurance liabilities, consisting of the liability for
unearned premiums and unexpired risks and for claims
outstanding, correspond to the obligations under
insurance contracts.
The liability for unearned premiums is intended to
cover anticipated claims costs and operating expenses
during the remaining term of insurance contracts in
force. In P&C insurance and reinsurance, the liability for
unearned premiums is normally calculated on a strictly
proportional basis over time, i.e. on a pro rata temporis
basis. If premiums are judged to be insufficient to cover
anticipated claims costs and operating expenses, the
liability for unearned premiums must be augmented by a
provision for unexpired risks. Calculation of the liability
for unexpired risks must also take into account instalment
premiums not yet due.
The liability for claims outstanding is intended to cover
the anticipated future payments of all claims incurred,
including claims not yet reported to the company, i.e. the
IBNR (incurred but not reported) provision. The liability
for claims outstanding includes claims payments plus all
estimated costs of claim settlements.
The liability for claims outstanding in direct P&C insurance
and reinsurance may be calculated by statistical methods
or through individual assessments of individual claims.
Often a combination of the two methods is used, meaning
large claims are assessed individually while small claims
and claims incurred but not reported (the IBNR provision)
are calculated using statistical methods.
In If, the liability for claims outstanding is not discounted
to present value, with the exception of provisions for
vested annuities. Topdanmark discounts the whole
liability. In Hastings, the liability is not discounted,
except for claims that have to do with certain large bodily
injury. Mandatum does not discount anything.
Liability adequacy test
A liability adequacy test is performed separately for both
the provision for claims outstanding and the provision for
unearned premiums. The provision for claims out-
standing is based on estimates of future cash flows. The
estimates are made by using well-established actuarial
methods.
The provision for unearned premiums is, for the most
part, calculated on a strictly proportional basis over time
(so called pro rata temporis principle). The adequacy of
the provision for unearned premiums is tested by calcu-
lating a provision for unexpired risks for each company
per business area and line of business. If the provisions
are judged to be insufficient, the provision for unearned
premiums is augmented by recognising a provision for
unexpired risks.
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Deferred acquisition costs
In the P&C insurance business, acquisition costs clearly
relating to the writing of insurance contracts and extend-
ing beyond the financial year are recognised as assets in
the balance sheet. Acquisition costs include operating
expenses directly or indirectly attributable to writing
insurance contracts, fees and commissions, marketing
expenses and the salaries and overheads of sales staff.
Acquisition costs are amortised in the same way as
provisions for unearned premiums, usually in 12 months
at the maximum.
Life insurance business
Classification of insurance contracts
Policies issued by the life insurance business are classified
as either insurance contracts or investment contracts.
Insurance contracts are contracts that carry significant
insurance risk or contracts in which the policyholder has
the right to change the contract by increasing the risk. As
capital redemption contracts do not carry insurance risk,
these contracts are classified as investment contracts.
The discretionary participation feature (DPF) of a contract
is a contractual right held by a policyholder to receive
additional benefits, as a supplement to the guaranteed
minimum benefits. The supplements are bonuses based
on the reserves of policies credited to the policy reserve,
additional benefits in the case of death, or the lowering
of insurance premiums. In Mandatum, the principle of
fairness specifies the application of this feature. In unit-
linked contracts the policyholder carries the investment
risk by choosing the investment funds linked to the
contracts.
Measurement of insurance and
investment contracts
In Mandatum, national accounting standards in accord-
ance with IFRS 4 Insurance contracts are applied to all
insurance contracts and investment contracts with DPF.
All contracts, except unit-linked contracts and the
assumed reinsurance, include DPF. In those unit-linked
contracts which are not insurance contracts, the policy-
holder has the possibility to transfer the return on savings
from unit-linked schemes to guaranteed interest with
DPF. Thus, the same standard is applied to these contracts
as to contracts with DPF.
The surrender right, guaranteed interest and the
unbundling of the insurance component from the deposit
component and similar features are not separated and
measured separately.
In Mandatum, regarding the group pension portfolio
transferred from Suomi Mutual (=segregated portfolio),
a so-called shadow accounting is applied, as permitted
in IFRS 4.30, by adjusting the equity with the amount
of unrealised gains and losses of the agreement. The
equity is adjusted with the amount that unrealised gains
or losses would have affected the Segregated Portfolio
in accordance with the profit distribution policy of the
Segregated Portfolio if the gains or losses had been
realised at the balance sheet date.
In Topdanmark, unit-linked contracts include both
insurance and investment contracts. Insurance contracts
are measured in accordance with IFRS 4. Investment
contracts, on the other hand, are measured in accordance
with IAS 39 Financial Instruments: Recognition and
Measurement. Investment contracts do not include a
discretionary participation feature.
All unit-linked insurance contracts are payable on
demand at market value. In case of death, 101 per cent of
the amount is payable. This feature is considered an insig-
nificant insurance risk, and the contracts are categorised
and measured as investment contracts. There are no other
surrender rights and values to take into consideration.
Insurance and investment contract
liabilities and reinsurance assets
Liabilities arising from insurance and investment
contracts consist of provisions for unearned premiums
and outstanding claims. In the life insurance business,
various methods are applied in calculating liabilities
which involve assumptions on matters such as mortality,
morbidity, the yield level of investments, future operating
expenses and the settlement of claims.
Changes in the liabilities of reinsurance have been
calculated at variable rates of exchange.
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In direct insurance, the insurance liability is calculated by
policy, while in reinsurance it is calculated on the basis of
the reports of the ceding company or the company’s own
bases of calculation.
The interest rate used in discounting liabilities is, at most,
the maximum rate accepted by the authorities in each
country.
The provision for claims outstanding is intended to cover
the anticipated future payments of all claims incurred,
including claims not yet reported to the company (the
“IBNR” provision). The provision for claims outstanding
includes claim payments plus all costs of claim settle-
ments.
The amounts of short- and long-term liabilities in
technical provisions are determined annually.
Liability adequacy test
A liability adequacy test is applied to all portfolios and the
need for augmentation is checked, company by company,
on the basis of the adequacy of the whole technical
provisions. The test includes all the expected contractual
cash flows for non-unit-linked liabilities. The expected
contractual cash flows include expected premiums,
claims, bonuses and expenses. The claims have been
estimated including surrenders and other insurance
transactions based on historical data. The amounts of
claims include the guaranteed interest and an estimation
of future bonuses. The present values of the cash flows
have been discounted to the balance sheet date.
For the unit-linked business, the present values of
the insurance risk and expense results are calculated
correspondingly. If the aggregate amount of the liability
for the unit-linked and other business presumes an
augmentation, the liability is increased by the amount
shown by the test and recognised in profit or loss.
Principle of fairness
According to Chapter 13, Section 2 of the Finnish
Insurance Companies’ Act, the Principle of Fairness must
be observed in life insurance and investment contracts
with a discretionary participation feature. If the solvency
requirements do not prevent it, a reasonable part of the
surplus has to be returned to these policies as bonuses.
Mandatum aims at giving a total return before charges
and taxes on the original insurance portfolio’s policyhold-
ers’ savings in contracts with DPF that is at least the yield
of those long term bonds, which are considered to have
lowest risk. The total return consists of the guaranteed
interest rate and bonuses determined annually. Continu-
ity is pursued in the level of bonuses.
Employee benefits
Post-employment benefits
Post-employment benefits include pensions and life
insurance.
Sampo has defined benefit plans in Sweden and Norway,
and defined contribution plans in other countries.
The most significant defined contribution plan is that
arranged through the Employees’ Pensions Act (TyEL) in
Finland.
In the defined contribution plans, the Group pays fixed
contributions to a pension insurance company and has no
legal or constructive obligation to pay further contribu-
tions. The obligations arising from a defined contribution
plan are recognised as an expense in the period to which
the obligation relates.
In the defined benefit plans, the company still has
obligations after paying the contributions for the financial
period and bears their actuarial and/or investment risk.
The obligation is calculated separately for each plan
using the projected unit credit method. In calculating the
amount of the obligation, actuarial assumptions are used.
The pension costs are recognised as an expense for the
service period of employees.
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Defined benefit plans are both funded and unfunded.
The amounts reported as pension costs during a financial
year consist of the actuarially calculated earnings of
old-age pensions during the year, calculated straight-line,
based on pensionable income at the time of retirement.
The calculated effects in the form of interest expense for
crediting/appreciating the preceding years’ established
pension obligations are then added. The calculation of
pension costs during the financial year starts at the begin-
ning of the year and is based on assumptions about such
factors as salary growth and price inflation throughout
the duration of the obligation and on the current market
interest rate adjusted to take into account the duration of
the pension obligations.
The current year pension cost and the net interest of the
net liability is recognised through p/l in pension costs.
The actuarial gains and losses and the return of the plan
assets (excl. net interest) are recognised as a separate item
in other comprehensive income.
The fair value of the plan assets covered by the plan
is deducted from the present value of future pension
obligations and the remaining net liability (net asset) is
recognised separately in the balance sheet.
The Group has also certain voluntary defined benefit
plans. These are intra-Group and have no material
significance.
Termination benefits
An obligation based on termination of employment is
recognised as a liability when the Group is verifiably
committed to terminate the employment of one or more
persons before the normal retirement date or to grant
benefits payable upon termination as a result of an offer
to promote voluntary redundancy. As no economic
benefit is expected to flow to the employer from these
benefits in the future, they are recognised immediately as
an expense. Obligations maturing more than 12 months
later than the balance sheet date are discounted. The
benefits payable upon termination at Sampo are the
monetary and pension packages related to redundancy.
Share-based payments
During the financial year, Sampo had five valid share-
based incentive schemes settled in cash (the long-term
incentive schemes 2017 I, 2017 II, 2020 I, 2020 II and 2020
III for the management and key employees). Topdanmark
had one mainly share-settled incentive scheme for
the executive board and senior executives during the
financial year. Hastings had also a share-based incentive
scheme settled in cash during the financial year.
More information on the different incentive schemes of
the Group companies can be found in note 30 Incentive
schemes.
The schemes have been measured at fair value at the
grant date and at every reporting date thereafter.
In the schemes settled in cash, the valuation is recognised
as a liability and changes are recognised through profit or
loss.
In the schemes settled in shares, the strike amounts
received on the exercise of the options are recognised in
the shareholder’s equity.
The fair value of the schemes has to a large extent been
determined using the Black-Scholes-pricing model. The
fair value of the market-based part of the incentive takes
into consideration the model’s forecast concerning the
number of incentive units to be paid as a reward. The
effects of non-market based terms are not included in the
fair value of the incentive; instead, they are taken into
account in the number of those incentive units that are
expected to be exercised during the vesting period. In
this respect, the Group will update the assumption on the
estimated final number of incentive units at every interim
or annual balance sheet date.
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Income taxes
Item Tax expenses in the income statement comprise
current and deferred tax. Tax expenses are recognised
through profit or loss, except for items recognised
directly in equity or other comprehensive income, in
which case the tax effect will also be recognised for those
items. Current tax is calculated based on the valid tax
rate of each country. Tax is adjusted by any tax related to
previous periods.
Deferred tax is calculated on all temporary differences
between the carrying amount of an asset or liability in
the balance sheet and its tax base. Deferred tax is not
recognised on non-deductible goodwill impairment,
nor is it recognised on the undistributed profits of
subsidiaries to the extent that it is probable that the
temporary difference will not reverse in the foreseeable
future. Deferred tax liabilities and assets are offset in the
individual companies if, and only if, they relate to income
taxes levied by the same taxation authority and the
company has a legally enforceable right of offset them.
Deferred tax is calculated by using the enacted tax rates
prior to the balance sheet date. A deferred tax asset is
recognised to the extent that it is probable that future
taxable income will be available against which a tempo-
rary difference can be utilised.
Share capital
The incremental costs directly attributable to the issue of
new shares or options or to the acquisition of a business
are included in equity as a deduction, net of tax, from the
proceeds.
Dividends are recognised in equity in the period when
they are approved by the Annual General Meeting. When
the parent company or other Group companies purchase
the parent company’s equity shares, the consideration
paid is deducted from the equity as treasury shares until
they are cancelled. If such shares are subsequently sold or
reissued, any consideration received is included in equity.
Treasury shares
The purchase price paid for buy-back of treasury shares
(own shares) is directly deducted from equity. No gains or
losses are recognised from purchase, sale or cancellation
of own shares. If own shares are re-issued, the difference
between purchase price and consideration received is
recognised in the premium reserve.
Cash and cash equivalents
Cash and cash equivalents comprise cash and short-term
deposits (3 months).
Sampo presents cash flows from operating activities
using the indirect method in which the profit (loss) before
taxation is adjusted for the effects of transactions of a
non-cash nature, deferrals and accruals, and income and
expense associated with investing or financing cash flows.
In the cash flow statement, interest received and paid
is presented in cash flows from operating activities.
In addition, the dividends received, from other than
associated companies, are included in cash flows from
operating activities. Dividends received from associates
are presented in cash flows from investments. Dividends
paid are presented in cash flows from financing.
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Accounting policies requiring
management judgement and key
sources of estimation uncertainties
Preparation of the accounts in accordance with the
IFRS requires management estimates and assumptions
that affect the revenue, expenses, assets, liabilities
and contingent liabilities presented in the financial
statements. Judgement is needed also in the application
of accounting policies. The estimates made are based on
the best information available at the balance sheet date.
The estimation is based on historical experiences and the
most probable assumptions concerning the future at the
balance sheet date. The actual outcome may deviate from
results based on estimates and assumptions. Any changes
in the estimates will be recognised in the financial year
during which the estimate is reviewed and in all subse-
quent periods.
Sampo’s main assumptions concerning the future and
the key uncertainties related to balance sheet estimates
are related, for example, to assumptions used in actuarial
calculations, the determination of fair values of non-
quoted financial assets and liabilities and investment
property, and the determination of the impairment of
financial assets and intangible assets. From Sampo’s
perspective, accounting policies concerning these
areas require the most significant use of estimates and
assumptions.
Actuarial assumptions
Evaluation of insurance liabilities always involves uncer-
tainty, as technical provisions are based on estimates and
assumptions concerning future claims costs. The esti-
mates are based on statistics on historical claims available
to the Group on the balance sheet date. The uncertainty
related to the estimates is generally greater when esti-
mating new insurance portfolios or portfolios where the
clarification of a loss takes a long time because complete
claims statistics are not yet available. In addition to the
historical data, estimates of insurance liabilities take into
consideration other matters such as claims development,
the amount of unpaid claims, legislative changes, court
rulings and the general economic situation.
A substantial part of the Group’s P&C insurance liabilities
concerns statutory accident and traffic insurance. The
most significant uncertainties related to the evaluation of
these liabilities are assumptions about inflation, mortal-
ity, discount rates and the effects of legislative revisions
and legal practices.
The actuarial assumptions applied to life insurance
liabilities are discussed in more detail under ’Insurance
and investment contract liabilities and reinsurance
assets’.
Defined benefit plans as intended in IAS 19 are also
estimated in accordance with actuarial principles. As
the calculation of a pension plan reserve is based on
expected future pensions, assumptions must be made not
only about discount rates, but also about matters such as
mortality, employee turnover, price inflation and future
salaries.
Determination of fair value
The fair value of any non-quoted financial assets is
determined using valuation methods that are generally
accepted in the market. These methods are discussed in
more detail above under ’Fair value’.
During the financial year, fair values of investment
property have partially been determined by using internal
resources on the basis of comparative information derived
from the market. They include management assumptions
concerning market return requirements and the discount
rate applied.
Impairment tests
Goodwill, intangible assets not yet available for use,
and intangible assets with an indefinite useful life are
tested for impairment at least annually. The recoverable
amounts from cash-generating units have mainly been
determined using calculations based on the value in use.
These require management estimates on matters such as
future cash flows, the discount rate, and general economic
growth and inflation.
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Consolidating Topdanmark as a subsidiary
According to IFRS 10 Consolidated Financial Statements
an investor controls an investee when it is exposed, or
has rights, to variable returns from its involvement with
the investee and has the ability to affect those returns
through its power over the investee.
On 30 September 2017 Sampo’s ownership of Topdanmark
AS’s shares was 44.2 per cent and 49.1 per cent of votes.
Then Sampo’s management considered thoroughly all
facts and circumstances required by the standard in
assessing whether Sampo controlled Topdanmark and
concluded that it should consolidate Topdanmark as a
subsidiary in the consolidated financial statements.
Considerations included, among other things, the fact
that Sampo was the biggest individual investor and
Sampo was not aware of any agreements between the
other investors. In addition, it was considered that Sampo
had the power to direct Topdanmark’s relevant activities,
i.e. the activities that significantly affect the investee’s
returns. At the time of assessment, Sampo had three
members in Topdanmark’s Board of Directors, one of
them being the Chairman. In total, there are 9 members
on Topdanmark’s Board and a vote of 50 per cent is
required for decision making according to the Articles
of Association. However, Sampo has the right, at its
discretion, to convene an extraordinary general meeting
to change the composition of the board of directors and
therefore gain the majority of voting rights on the Board
of Directors.
The divestment of Topdanmark
Forsikring’s life and pension business
In March 2022, Sampo’s subsidiary Topdanmark
Forsikring announced an intention to sell Topdanmark
Forsikring’s life and pension business (Topdanmark Liv
Holding A/S, ’Topdanmark Life’) to Nordea. In Sampo
Group, assets and liabilities related to Topdanmark Life’s
operations were reclassified as non-current assets held for
sale in accordance with IFRS 5 Non-current assets held for
sale and discontinued operations.
The divestment of Topdanmark Life was completed on
1 December 2022 after regulatory approvals. The sale of
Topdanmark Life ended the classification of operations as
non-current assets held for sale.
Additional information on the divestment of Topdanmark
Life is included in note 33 Divestment of
Topdanmark Life.
Application of new or revised
IFRSs and interpretations
The Group will apply new or amended standards and
interpretations related to the Group’s business in the
financial years when they become effective, or if the
effective date is other than the beginning of the financial
year, during the financial year following the effective
date. The following new IFRSs coming into effect in
financial year 2023 will have an influence on the Group's
financial reporting: IFRS 17 Insurance Contracts and IFRS 9
Financial Instruments.
Transition to IFRS 17 Insurance Contracts
and IFRS 9 Financial Instruments
Summary of high level impacts in
Sampo Group
Sampo Group is applying IFRS 17 Insurance Contracts
and IFRS 9 Financial Instruments from 1 January 2023.
The application of these new accounting standards is not
expected to have any impact on the economics of Sampo’s
business or capital management, nor any substantial
quantitative effect on shareholders’ equity. Sampo
Group’s operations are focused on the P&C business
and Sampo primarily uses the premium allocation
approach (PAA) under IFRS 17. PAA requires changes in
the calculation of insurance liabilities, including setting
up an explicit risk adjustment for non-financial risk and
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discounting claims reserves with market rates. Additional
discounting may increase earnings volatility between the
periods in future.
The application of IFRS 9 does not have significant
impacts on the measurement of Sampo Group’s balance
sheet items, as the main part of financial assets is
currently reported at fair value in the balance sheet.
However, under IFRS 9, the fair value changes of financial
instruments are recognised in the statement of profit or
loss, which may increase earnings volatility.
Implementation of IFRS 17 or IFRS 9 does not have an
impact on the Solvency II calculations.
IFRS 17 Insurance Contracts
(effective for annual periods
beginning on 1 Jan 2023 or after)
The IASB published the IFRS 17 Insurance Contracts on
18 May 2017. IFRS 17 and the June 2020 amendments
were adopted by European Union on 19 November 2021.
In addition, an optional exemption from applying the
annual cohort requirement for certain types of groups of
contracts was adopted. Sampo Group is not applying the
exemption. Sampo Group is applying IFRS 17 for the first
time from 1 January 2023 and comparative information
for the year 2022 will be restated.
IFRS 17 replaces IFRS 4 Insurance Contracts and
establishes principles for the recognition, measurement,
presentation, and disclosures of insurance contracts.
IFRS 17 is applied to insurance contracts, reinsurance
contracts as well as to certain investment contracts with
discretionary participation features. The objective of the
standard is to provide relevant information for the users
of financial statements that faithfully represents the
insurance contracts and to harmonise the measurement
of insurance liabilities.
The new accounting policies and management judgement
may change until Sampo Group publishes its year-end
financial statements 2023 in accordance with IFRS 17,
which include the opening balance sheet of 1 January
2022.
Key accounting principles
Scope
In Sampo Group’s non-life operations, the Group does
not expect significant changes in the scope of contracts,
on which the new accounting requirements are applied
for compared to current requirements. In the Group’s
non-life insurance contracts, insurance risk is considered
significant. Insurance contracts issued by third-party
underwriters (’panel underwriters’), which do not transfer
any insurance risk to the Group companies, are not in the
scope of IFRS 17 and are instead accounted under IFRS 15
Revenue from Contracts with Customers.
Insurance contracts may contain one or more components
which would be within the scope of different accounting
standards and accounted for separately. Sampo evaluates
the insurance contracts in order to identify components
from the contracts. For example, an insurance contract
may include an investment component or a component
for services other than insurance contract services (or
both).
In Sampo Group’s life operations, the Group has identified
capital redemption policies and individual unit-linked
policies with distinct investment components with
insignificant insurance risk for which IFRS 17 is not
applied. These policies are measured in accordance with
IFRS 9.
Level of aggregation
Under IFRS 17, insurance contracts are aggregated into
portfolios of insurance contracts. A portfolio comprises
contracts subject to similar risks and managed together.
Insurance contracts are aggregated into portfolios of
insurance contracts, which comprises contracts with
similar risks that are managed together. Those portfolios
are divided into annual cohorts, i.e. contracts which are
not issued more than one year apart.
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In Sampo Group’s non-life operations, portfolios are
determined based on a segmentation of business, or a
combination of line of business (as defined by manage-
ment), business area, country and determined separately
for each legal entity, or based on product lines.
In Sampo Group’s life operations risk policies, with profit
and unit-linked contracts are separated into different
portfolios.
Sampo Group has identified certain onerous contracts,
but the amount of onerous contracts is modest.
Contract boundary
The initial measurement of the group of insurance
contracts includes all future cash flows arising within
the contract boundary. In determining which cash flows
fall within the contract boundary, substantive rights and
obligations arising from the terms of the contract, and
also from applicable laws and regulations, are considered.
In Sampo Group’s non-life operations the majority of
contracts have a one-year contract boundary, typically
until the next renewal date, i.e. the contract has a one-
year coverage period where there are substantive rights
and obligations during that period.
In Sampo Group’s life operations, the contract boundaries
depend on the contractual characteristics and are
generally longer term.
Measurement
IFRS 17 introduces a general measurement model (GMM)
applicable to all insurance contracts to measure insurance
contract liabilities. Under the general measurement
model, insurance contracts are measured based on future
cash flows, adjusted to reflect the time value of money,
including a risk adjustment, and a contractual service
margin (CSM). CSM represents the unearned profit that
will be recognised when insurance contract services are
provided in the future. The measurement of insurance
liabilities consists of liability for the remaining coverage
(LRC) and liability for incurred claims (LIC), including
both reported but not settled claims as well as incurred
but not reported claims. In Sampo Group’s life operations
GMM is applied to with profit policies and risk policies.
Under IFRS 17, the variable fee approach (VFA) is to be
applied to direct participating insurance contracts. The
variable fee approach represents a modification from
the general measurement model where the treatment of
contractual service margin is modified. In Sampo Group,
life operations VFA is applied to unit-linked insurance
contracts measured under IFRS 17.
When certain eligibility criteria are met, insurers may
apply a simplified approach, the premium allocation
approach (PAA), for the measurement of insurance
contracts. PAA is eligible for insurance contracts with
a coverage period of one year or less. This approach is
also available for contracts where the PAA would not
materially differ from the results of the GMM. In Sampo
Group’s non-life operations, PAA is applied to all insur-
ance contracts, as the coverage period for the main part
of insurance contracts is one year or less, and for longer
insurance contracts the qualifying eligibility criteria are
fulfilled. Both in non-life and life operations the PAA
model is applied to reinsurance contracts held.
Insurance acquisition cash flows arise from underwriting
a group of insurance contacts and are taken into account
when estimating the fulfillment cash flows.
Discounting
Transition to IFRS 17 broadens the discounting of
insurance liabilities. In all applied measurement models,
discounting adjusts the expected cash flows to reflect the
time value of money.
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Sampo Group’s non-life operations have determined
the discount rates based on a bottom-up approach. The
interest rate curve includes a risk-free rate (excluding
credit risk adjustment) and an illiquidity premium for
each currency. The illiquidity premium is mainly derived
based on a portfolio of high-rated bonds for the liquid
part of the interest rate curve. Beyond this, the curve
converges to the ultimate forward rate, consistent with
the EIOPA curves.
Sampo Group’s life operations have determined the
discount rates based on a top-down approach where a
theoretical reference portfolio of assets is used to define
the applicable discount curve, consisting of risk-free rate
and illiquidity premium. For insurance contracts without
a direct participation feature, a so called locked-in rate is
applied, meaning that the discount rate is determined at
the initial recognition and is applied in the accretion of
CSM.
The discounting effect of current year liabilities for
incurred claims and changes in the cash flows are
recognised in the insurance service result. The unwinding
of interest rates, the effect of changes in interest rates and
other financial assumptions are presented as insurance
finance income or expense in profit or loss. Sampo Group
has elected not to apply the OCI option allowed under
IFRS 17.
Risk adjustment
IFRS 17 introduces an explicit risk adjustment included
in the measurement of insurance liabilities. The risk
adjustment reflects the cost of uncertainty associated
with the amount and timing of cash flows arising from
non-financial risk and the degree of risk aversion.
In Sampo Group, the risk adjustment will be derived
through a confidence level technique whereby
management determines the appropriate quantile. The
risk adjustment is calculated at the subsidiary level and
aggregated into the consolidated Sampo Group level
risk adjustment, without any diversification effects
assumed. Under the general measurement model, the
risk adjustment is included in the calculation of both LRC
and LIC. Under the premium allocation approach, the
risk adjustment is only included in LIC, unless a group of
insurance contracts is onerous.
Premium allocation approach (PAA)
On initial recognition of non-life operations’ groups
of insurance contracts, the carrying amount of LRC is
measured as premiums initially received less insurance
acquisition cash flows. In case of onerous contracts, a loss
component is recognised.
As to acquisition cash flows, Sampo Group has identified
that they mainly include staff costs related to sales
personnel and commissions as well as certain costs
related to selling policies through price comparison
websites. Any overhead costs are expensed immediately.
Sampo Group’s non-life operations in the private business
area have elected to recognise acquisition cash flows as
an expense at the date when they are incurred. For other
business areas, the acquisition costs are deferred over a
one-year period or longer in case of expected renewals.
At subsequent reporting periods, the carrying amount of
LRC is increased by premiums received during the period
and decreased by the amount recognised as insurance
revenue representing the services provided. The carrying
amount of LRC is not discounted or adjusted with the
effect of financial risk, as the Group expects that the time
between providing services and the related premium due
date is no more than a year. Revenue is recognised based
on the expected premium receipts allocated to the period.
For the majority of non-life insurance contracts, revenue
recognition is based on the passage of time, i.e. allocated
straight line.
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Sampo Group measures the liability for incurred claims
(LIC) for the group of insurance contracts at the amount
of estimated fulfilment cash flows relating to incurred
claims. Fulfilment cash flows consist of three compo-
nents, namely expected cash flows, discounting and risk
adjustment. The risks typically considered in non-life
operations when assessing risk adjustment are reserve
risk, longevity risk, inflation risk and premium risk.
General measurement model (GMM)
On initial recognition, life operations measure a group of
insurance contracts at the total of the fulfilment cash flows,
comprising of estimates of future cash flows, discounting
and risk adjustment for non-financial risk. In addition, the
measurement includes the contractual service margin,
which is measured at initial recognition on the group of the
insurance contracts.
In insurance contracts related to life operations, estimates
of future cash flows are based on cash flow projections
and are estimated until the maturity of the contract. Only
risk policies with no death benefit or permanent disability
cover are short-term (yearly) contracts. Cash flows are
estimated for every reporting period and assumptions are
updated yearly or more often, if needed.
Insurance acquisition cash flows are determined at
inception of the group of insurance contracts. Insurance
acquisition cash flows are considered directly attributable
to a portfolio and are allocated to individual contracts.
Where actual and expected acquisition cash flows are not
equal at the end of the reporting period, an experience
variance is recognised in the statement of profit or loss.
In regards the risk adjustment, the following risks are
considered in life operations: mortality, longevity, disabil-
ity (incl. permanent disability), lapse and expense risk.
At the subsequent reporting periods, the amount of
insurance liabilities is a sum of the LRC consisting of the
present value of future cash flows for services that will be
provided during future periods, risk adjustment, remaining
CSM at that date and LIC. LIC includes reported but not
settled claims and incurred but not reported claims.
Variable fee approach (VFA)
Variable fee approach represents a modification from the
GMM. CSM is adjusted to reflect the variable nature of the
fees, which represent the amount of the entity’s share of
the fair value of underlying items.
Key management judgement
Sampo Group management applies judgement regarding
the determination of discount rates and risk adjustment.
As noted above, the interest rate curve includes a risk-free
rate and an illiquidity premium. Management determines
the principles for the illiquidity premium, which in
Sampo Group is mainly derived based on a portfolio of
high-rated bonds.
Risk adjustment is determined separately for all Sampo
Group’s non-life and life companies and aggregated at
the Group level. Management considers this to reflect
the compensation that different entities would require
for bearing non-financial risk and their degree of risk
aversion. As noted above, a confidence level approach is
applied in the Group companies. The confidence level
applied in calculating the risk adjustment varies between
group companies from 75 per cent to 85 per cent.
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Transition approaches applied
On transition to IFRS 17, a full retrospective approach
and restatement of the previous year’s comparatives
is required. However, if the application of a full
retrospective approach is impracticable, then a modified
retrospective approach or a fair value approach may be
applied. Sampo has considered that a full retrospective
approach is applied in the Group’s non-life companies,
whereas all transition methods are applied in the Group’s
life company.
In the full retrospective approach, Sampo Group identi-
fies, recognises and measures each group of insurance
contracts as if IFRS 17 had always been applied and
derecognises any existing balances that would not exist
if IFRS 17 had always been applied. The resulting net
difference is recognised in retained earnings.
Sampo Group’s life operations apply the modified
retrospective approach and fair value approach when
the application of the full retrospective approach is
impracticable. The choice of transition approach will
depend on the type of the product/portfolio, when it has
been issued, and on data availability.
When applying the fair value approach, Sampo Group’s
life operations are required to determine the contractual
service margin or loss component of the liability for the
remaining coverage at the transition date as the difference
between the fair value of a group of insurance contracts at
that date and the fulfilment cash flows measured at that
date.
Opening balance sheet 1 January 2022
Sampo Group’s opening balance sheet amounted to EUR
58.7 billion and equity to EUR 13.5 billion. Compared
to the IFRS 4 closing balance sheet of EUR 61.1 billion,
the opening IFRS 17 balance sheet decreased by EUR 2.4
billion. On transition to IFRS 17, both assets and liabilities
decreased mainly due to reclassifications of premium
receivables and deferred acquisition costs from other
assets to insurance liabilities in the balance sheet.
The discounting of reserves decreased insurance
liabilities whereas the introduction of risk adjustment
increased insurance liabilities. The introduction of the
loss component related to onerous contracts had only an
insignificant impact on transition.
The net transition impact on the IFRS 17 equity was
insignificant, amounting to EUR 14 million in the opening
balance sheet.
The following table presents the IFRS 17 opening balance
sheet as at 1 January 2022.
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EURm
IFRS 17
1 Jan 2022
Assets
Property, plant and equipment 373
Investment property 236
Intangible assets 3,660
Investments in associates 475
Financial assets 19,862
Financial assets related to unit-linked contracts 10,546
Deferred income tax 53
Insurance contract assets 41
Reinsurance contract assets 2,008
Other assets 712
Cash and cash equivalents 4,690
Non-current assets held for sale* 16,029
Total assets 58,684
Liabilities
Insurance contract liabilities 18,266
Liability for remaining coverage 8,083
Liability for incurred claims 10,183
Investment contract liabilities 7,239
Subordinated debts 2,016
Other financial liabilities 2,315
Deferred income tax 851
Provisions 9
Employee benefits 26
Other liabilities 1,497
Liabilities related to non-current assets held for sale 13,010
Total liabilities 45,228
EURm
IFRS 17
1 Jan 2022
Equity
Share capital 98
Reserves 1,530
Retained earnings 9,945
Other components of equity 1,231
Equity attributable to owners of the parent 12,804
Non-controlling interests 651
Total equity 13,456
Total equity and liabilities 58,684
The sale of Topdanmark Life was completed on 1 December 2022. Please see note 33 for further
information.
IFRS 17 Insurance Contracts is applied for Topdanmark Life figures in the opening balance 1 January 2022.
Assets and liabilities are presented as a single line item in the balance sheet 2022 until the sale date.
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IFRS 17 impacts on Sampo Group’s non-life operations
The impact on the insurance contract liabilities due to the
introduction of the new IFRS 17 components, including
risk adjustment, deferred acquisition costs and additional
discounting amounted to EUR -2.0 billion. The main
impacts decreasing the insurance contract liabilities were
due to the additional discounting effect and reclassifica-
tions. Under IFRS 17, all liabilities for incurred claims are
discounted whereas only a smaller part of reserves was
discounted under IFRS 4.
IFRS 17 impacts on Sampo Group’s life operations
In the IFRS 17 opening balance, insurance contract
liabilities amounted to EUR 6.6 billion. The introduction
of discounting as well as the new IFRS 17 components, risk
adjustment and CSM, increased the insurance contract
liabilities. At transition, the CSM amounted to EUR 433
million.
A significant part of life insurance liabilities (unit-linked
policies) is in the scope of IFRS 9, as these contracts do
not include significant insurance risk or discretionary
bonuses. In the opening balance sheet these investment
contract liabilities amounted to EUR 7.2 billion. For
contracts in the scope of IFRS 9, expected profits are not
presented as CSM.
Equity bridge calculation between IFRS 4 and IFRS 17
Sampo Group has assessed the impact that the applica-
tion of IFRS 17 has on the Group’s equity. Sampo Group’s
retained earnings decreased by EUR 7 million (of which
revaluation of investment property was EUR 2 million)
and other components of equity increased by EUR 23
million at 1 January 2022. Other components of equity
increased due to the termination of shadow accounting
related to the segregated group pension portfolio.
IFRS 17 impact on presentation
The implementation of IFRS 17 leads to significant
changes in the presentation and the extent of disclosures
in the financial statements during 2023. The introduction
of IFRS 17 changes the structure of the statement of profit
or loss to reflect the key sources of profit. The insurance
service result reflects the result relating to underwriting
and servicing insurance policies. The net financial result
reflects the insurance finance income and expenses
arising from financial components’ impacts. Changes in
discount rates are recognised in the net financial result
under IFRS 17, whereas these were included as prior year
development in claims incurred under IFRS 4. IFRS 17
requires changes in the time value of money and changes
in financial risk to be presented as insurance finance
income or expenses unless the allowed OCI option is
applied. Therefore, the effect from changes in interest rates
as well as interest expense is presented in its entirety as
insurance finance income or expenses. Potential changes
in indexation of annuities will be presented within
insurance finance income or expenses. Amounts related
to reinsurance contracts will be presented separately.
EURm
Share
capital Reserves
Retained
earnings
Other
components
of equity
Non-
controlling
interests Total
Equity 31 Dec 2021 98 1,530 9,952 1,208 676 13,464
IFRS 17 adjustments non-life companies 9 -32 -23
IFRS 17 adjustments life company -18 -18
Tax impact 0 7 7
Other 2 23 25
Equity 1 Jan 2022 98 1,530 9,945 1,231 651 13,456
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IFRS 9 Financial Instruments
(effective for annual periods
beginning on 1 January 2018 or after)
IFRS 9 Financial Instruments standard supersedes IAS
39 Financial Instruments: Recognition and Measurement.
The new standard changes the classification and
measurement of financial assets and includes a new
impairment model based on expected credit losses.
Sampo Group has applied the temporary exemption
regarding the adoption of IFRS 9 Financial Instruments
and implements IFRS 9 at the same time as IFRS 17
Insurance Contracts i.e. on 1 January 2023. The IFRS 9
comparative figures 2022 will not be restated.
Key accounting principles
Financial assets – classification
Under IFRS 9, financial assets are classified as being
subsequently measured either at amortised cost, at fair
value through other comprehensive income (FVOCI) or
at fair value through profit or loss (FVPL). Previous IAS
39 categories held-to-maturity, available-for-sale and
loans and receivables cease to exist under IFRS 9. Under
IFRS 9, the majority of Sampo Group’s financial assets are
classified at fair value through profit or loss. On transition
to IFRS 9, Sampo Group has classified only a limited
amount of financial assets measured at amortised cost
and no financial assets are classified as FVOCI.
The classification of financial assets into these new
measurement categories is based on Sampo Group’s
business model for managing the financial assets and
the contractual cash flow characteristics of the financial
assets (solely payments of principal and interest
-criteria, i.e. SPPI). SPPI criteria is met when the financial
instrument’s contractual cash flows are solely payments
of principal and interest on the principal amount
outstanding.
A financial asset is measured at amortised cost only if
the objective of the business model is to hold a financial
asset in order to collect contractual cash flows, and the
contractual cash flows of the financial asset meet the SPPI
criteria. Interest revenue is calculated using the effective
interest rate method. Under IFRS 9 financial assets sub-
sequently measured at amortised cost are subject to loss
allowance, expected credit losses (ECL), requirements.
Financial assets – impairment
IFRS 9 introduces a forward-looking ECL model, which
replaces the model applied under IAS 39 based on
incurred losses. In Sampo Group, the ECL model is mainly
applicable to financial assets measured at amortised
cost. Impairment requirements do not apply to equity
instruments or other financial instruments measured
at FVPL. Expected credit losses reflect past events,
i.e. historical loss experience, current conditions and
forecasts of future economic conditions.
IFRS 9 introduces a general approach for impairment in
which a loss allowance is calculated either for 12-month
expected credit losses or lifetime expected credit losses. A
three-stage model is used to determine the ECL at each
reporting date. In stage 1, the credit risk has not increased
significantly. Loss allowance is measured at an amount
equal to 12-month expected credit losses. In stage 2 and 3,
the credit risk has increased significantly since initial
recognition and the loss allowance is measured at an
amount equal to the lifetime expected credit losses. In
stage 3, the financial asset is assessed to be credit-im-
paired (at default) and the interest is calculated on the
credit-impaired amount instead of gross carrying amount.
In Sampo Group the general approach is based on three
components, namely probability of default (PD), loss
given default (LGD) and exposure at default (EAD).
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Financial liabilities
The transition to IFRS 9 does not change the measure-
ment of financial liabilities. Sampo Group measures
derivative financial liabilities at fair value through profit
or loss. Financial liabilities, including subordinated debt
securities, debt securities in issue and other financial
liabilities, are subsequently measured at amortised cost
using the effective interest rate method.
As described above, a significant part of life insurance
liabilities is under the scope of IFRS 9. Sampo Group
recognises these investment contract liabilities (unit-
linked policies) at fair value through profit or loss. The
fair value is based on the financial assets underlying these
policies and recognised at FVPL.
Classification and measurement under IFRS 9
The table presents the changes in classification and
measurement of the main financial assets and liabilities
at the transition to IFRS 9. The implementation of IFRS 9
does not have a material impact on the measurement of
the balance sheet, as the main part of financial assets are
reported at fair value under IAS 39 in the balance sheet,
which is also the measurement principle under IFRS 9.
Therefore, the new classification requirements do not
have a material impact on total equity.
As financial assets classified as available for sale under
IAS 39 are measured at fair value through profit or loss
under IFRS 9, the equity reserve related to available-for-
sale financial assets is transferred into retained earnings.
There were no changes in the measurement of financial
liabilities on transition to IFRS 9.
Measurement category
under IAS 39
Measurement category
under IFRS 9
Carrying amount
31 Dec 2022
(IAS 39) EURm Transfer
Carrying amount
1 Jan 2023
(IFRS 9) EURm
Derivative financial instruments Derivative financial instruments 79 — 79
Financial assets at fair value
Financial assets at fair value
through profit or loss 3,045 — 3,045
Financial assets available for sale
Financial assets at fair value
through profit or loss 16,048 — 16,048
Loans and receivables Financial assets at amortised cost 296 — 296
The carrying amounts presented in the table above exclude the effect of expected credit losses. The effect is expected to be insignificant.
Previously recognised incurred credit losses are included in the carrying amounts presented in the table.
Investments underlying unit-linked policies amounting to EUR 10.5 billion are excluded in the table. They are classified as at fair value
through profit or loss both under IAS 39 and IFRS 9.
Expected credit losses
In Sampo Group expected credit losses are calculated on
financial assets classified at amortised cost. In Sampo
Group financial assets classified at amortised cost consist
mainly of bilateral loans. Expected credit losses on loan
commitments, short-term deposits and bank accounts are
considered immaterial.
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Consolidated comprehensive income statement by business segment for the year ended 31 December 2022
EURm If Topdanmark Hastings Mandatum Holding Elimination Group
Insurance premiums written 5,103 2,511 727 1,390 — — 9,732
Net income from investments 242 -1,119 16 -821 177 -6 -1,511
Other operating income 138 76 416 36 132 -35 763
Claims incurred -2,963 -1,778 -497 -883 — 5 -6,115
Change in liabilities for insurance and investment contracts -101 1,004 -133 680 — -7 1,443
Staff costs -672 -296 -154 -74 -29 — -1,226
Other operating expenses -529 -163 -312 -110 -19 35 -1,097
Finance costs -10 -19 10 -12 -96 8 -119
Share of associates’ profit/loss 9 4 — — -19 — -6
Profit for the financial year before taxes 1,217 220 73 207 146 0 1,863
Taxes -253 -22 -10 -44 8 — -322
Profit for the financial year 963 199 62 163 153 0 1,541
Segment information
Geographical information has been disclosed about
income from external customers and non-current assets.
The reported areas are Finland, Sweden, Norway,
Denmark, UK and the Baltic countries.
Segment information has been produced in accordance
with the accounting policies adopted for preparing and
presenting the consolidated financial statements. The
segment revenue, expense, assets and liabilities, either
directly attributable or reasonably allocable, have been
allocated to the segments. Inter-segment pricing is based
on market prices. The transactions, assets and liabilities
between the segments are eliminated in the consolidated
financial statements on a line-by-line basis. There was no
significant income between segments during the financial
periods.
Depreciation and amortisation by segment are disclosed
in notes 10–12 and investments in associates in note 13.
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EURm If Topdanmark Hastings Mandatum Holding Elimination Group
Other comprehensive income for the financial year
Items re-classifiable to profit or loss
Exchange differences -153 1 -109 — 8 — -253
Available-for-sale financial assets -823 — -58 -549 -240 — -1,670
Taxes 169 — — 121 40 — 331
Total items re-classifiable to profit or loss, net of tax -807 1 -167 -428 -192 — -1,592
Items not re-classifiable to profit or loss
Actuarial gains and losses from defined pension plans 32 — — — — — 32
Taxes -7 — — — — — -7
Total items not re-classifiable to profit or loss, net of tax 26 — — — — — 26
TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR 182 200 -105 -264 -39 — -26
Profit attributable to
Owners of the parent 1,427
Non-controlling interests 114
Total comprehensive income attributable to
Owners of the parent -139
Non-controlling interests 114
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Consolidated comprehensive income statement by business segment for the year ended 31 December 2021
EURm If Topdanmark Hastings Mandatum Holding Elimination Group
Insurance premiums written 4,855 2,694 495 1,367 — — 9,411
Net income from investments 215 1,359 10 1,831 146 -12 3,549
Other operating income 121 1 331 40 12 -14 491
Claims incurred -2,860 -1,947 -310 -1,127 — 5 -6,239
Change in liabilities for insurance and investment contracts -83 -1,398 4 -1,642 — -4 -3,123
Staff costs -635 -294 -159 -65 -25 — -1,179
Other operating expenses -511 -138 -237 -100 -5 14 -976
Finance costs -18 -11 -7 -14 -107 12 -146
Share of associates’ profit/loss -7 79 — 1 328 — 401
Valuation difference on disposal of Nordea shares — — — — 84 — 84
Reversal of impairment losses on Nordea shares — — — — 899 — 899
Profit for the financial year before taxes 1,077 346 127 291 1,331 0 3,171
Taxes -227 -76 -37 -60 -23 — -423
Profit for the financial year 850 270 89 231 1,308 0 2,748
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EURm If Topdanmark Hastings Mandatum Holding Elimination Group
Other comprehensive income for the financial year
Items re-classifiable to profit or loss
Exchange differences -11 2 101 — -12 — 80
Available-for-sale financial assets 242 — -18 132 104 — 460
Share of other comprehensive income of associates — — — — 186 — 186
Taxes -49 — — -25 -9 — -83
Total items re-classifiable to profit or loss, net of tax 182 2 83 106 269 — 643
Items not re-classifiable to profit or loss
Actuarial gains and losses from defined pension plans 73 — — — — — 73
Taxes -15 — — — — — -15
Total items not re-classifiable to profit or loss, net of tax 58 — — — — — 58
TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR 1,090 272 172 338 1,577 — 3,448
Profit attributable to
Owners of the parent 2,567
Non-controlling interests 181
Total comprehensive income attributable to
Owners of the parent 3,272
Non-controlling interests 176
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Group’sIFRSFinancialStatements
Sampoplc’snotestothefinancialstatements
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
81
Consolidated balance sheet by business segment at 31 December 2022
EURm If Topdanmark Hastings Mandatum Holding Elimination Group
Assets
Property, plant and equipment 190 112 23 26 4 — 355
Investment property 1 — — 166 — — 166
Intangible assets 588 1,232 1,501 172 1 — 3,494
Investments in associates 4 7 — 4 — — 16
Financial assets 10,451 2,562 1,074 3,776 8,250 -6,644 19,469
Investments related to unit-linked insurance contracts — — — 9,934 — -4 9,930
Deferred tax assets 9 12 — — — -4 17
Reinsurers’ share of insurance liabilities 326 71 1,874 1 — — 2,272
Other assets 1,987 176 858 196 60 -34 3,242
Cash and cash equivalents 296 8 246 761 1,762 — 3,073
Total assets 13,852 4,179 5,575 15,036 10,077 -6,686 42,033
Liabilities
Liabilities for insurance and investment contracts 8,798 1,786 3,014 2,969 — — 16,567
Liabilities for unit-linked insurance and investment contracts — — — 9,912 — -4 9,908
Subordinated debt 224 148 — 350 1,489 -228 1,983
Other financial liabilities 7 55 73 3 1,320 — 1,457
Deferred tax liabilities 200 135 111 68 — — 514
Provisions 6 — — — — — 6
Employee benefits 25 — — — — — 25
Other liabilities 1,103 185 490 224 64 -34 2,031
Total liabilities 10,363 2,308 3,688 13,525 2,873 -266 32,490
EURm Group
Equity
Share capital 98
Reserves 1,530
Retained earnings 7,784
Other components of equity -443
Equity attributable to parent company’s equity holders 8,969
Non-controlling interests 574
Total equity 9,543
Total equity and liabilities 42,033
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Sampoplc’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
82
Consolidated balance sheet by business segment at 31 December 2021
EURm If Topdanmark Hastings Mandatum Holding Elimination Group
Assets
Property, plant and equipment 196 121 26 28 4 — 375
Investment property 1 394 — 173 — — 568
Intangible assets 629 1,387 1,606 171 1 — 3,794
Investments in associates 17 313 — 1 447 — 777
Financial assets 11,088 5,493 966 4,427 7,654 -6,308 23,321
Investments related to unit- linked insurance contracts — 9,164 — 10,558 — -11 19,711
Deferred tax assets 4 12 27 — — -4 39
Reinsurers’ share of insurance liabilities 322 91 1,880 1 — — 2,295
Other assets 1,873 258 639 157 55 -4 2,977
Cash and cash equivalents 521 153 159 954 3,031 — 4,819
Non-current assets held for sale — — — 196 2,189 — 2,385
Total assets 14,651 17,385 5,305 16,668 13,380 -6,328 61,061
Liabilities
Liabilities for insurance and investment contracts 9,034 5,311 2,787 3,236 — — 20,369
Liabilities for unit-linked insurance and investment contracts — 9,036 — 10,525 — -11 19,550
Subordinated debt 243 255 — 349 1,487 -320 2,016
Other financial liabilities 8 83 329 29 1,881 — 2,330
Deferred tax liabilities 353 151 143 167 40 — 855
Provisions 9 — — — — — 9
Employee benefits 26 — — — — — 26
Other liabilities 1,018 452 447 237 96 -4 2,246
Non-current liabilities related to assets held for sale — — — 196 — — 196
Total liabilities 10,690 15,289 3,706 14,741 3,505 -335 47,5 97
EURm Group
Equity
Share capital 98
Reserves 1,530
Retained earnings 9,952
Other components of equity 1,208
Equity attributable to parent company’s equity holders 12,788
Non-controlling interests 676
Total equity 13,464
Total equity and liabilities 61,061
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Sampoplc’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
83
Geographical information
EURm Finland Sweden Norway Denmark UK Baltic Total
2022
Revenue
from external
customers 2,695 1,677 1,651 3,106 1,027 197 10,352
Non-current
assets 481 457 208 1,354 1,523 7 4,030
2021
Revenue
from external
customers 2,485 1,684 1,518 3,211 841 183 9,922
Non-current
assets 493 944 211 2,228 1,632 7 5,515
The revenue includes insurance premiums according to the underwriting country, consisting of
premiums earned for P&C insurance and premiums written for life insurance. Holding includes net
investment income and other operating income. For Hastings, income from broker activities has
been included as well.
Non-current assets comprise of intangible assets, investments in associates, property, plant and
equipment, and investment property.
Material partly-owned subsidiaries
Equity interest held by
non-controlling interests
Name Country 2022 2021
Topdanmark A/S Denmark 50.7 50.6
Accumulated balances of material
non-controlling interests
Topdanmark A/S 574 676
The summarised financial information
On 8 December 2021, Sampo plc announced that it had signed an agreement with Rand Merchant
Investment Holdings Limited (RMI) to acquire its ownership in Hastings, therefore the comparison
year includes the non-controlling interests’ share of the income statement until 8 December 2021.
Amounts before the separation of non-controlling interests can be seen in the Group’s segment
income statement and balance sheet.
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FINANCIAL STATEMENTS 2022
84
Non-controlling interests’ share of the balance sheet
2022 2021
EURm Topdanmark Topdanmark
Assets
Property, plant and equipment 57 61
Investment property — 199
Intangible assets 249 272
Investments in associates 4 158
Financial assets 1,298 2,777
Investments related to unit-linked insurance — 4,634
Tax assets 6 6
Reinsurers’ share of insurance liabilities 36 46
Other assets 89 131
Cash and cash equivalents 4 77
Total assets 1,743 8,361
Liabilities
Liabilities for insurance and investment contracts 905 2,686
Liabilities for unit-linked insurance and investment contracts — 4,569
Subordinated debt 75 129
Other financial liabilities 28 42
Tax liabilities 68 31
Other liabilities 94 228
Total liabilities 1,169 7,685
Total equity attributable to non-controlling interests 574 676
2022 2021
Topdanmark Hastings Topdanmark
Dividends paid to non-controlling interests 207 14 123
Cash flows allocated to non-controlling
interests -73 -15 20
Non-controlling interests’ share of the income statement
1–12/2022 1–12/20221
EURm Topdanmark Hastings Topdanmark
Insurance premiums written 1,272 148 1,362
Net income from investments -567 3 687
Other operating income 48 99 1
Claims incurred -901 -93 -985
Change in liabilities for insurance and
investment contracts 509 1 -707
Staff costs -150 -48 -148
Other operating expenses -77 -60 -56
Finance costs -9 -2 -6
Share of associates’ profit/loss — — 40
Profit for the financial year before taxes 124 48 189
Taxes -10 -13 -42
Profit for the financial year attributable to
non-controlling interests 114 34 147
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
85
1 Insurance premiums written
EURm 1–12/2022 1–12/2021
P&C insurance 8,136 7,644
Life insurance
Insurance contracts 1,543 1,765
Investment contracts 1,066 1,004
Insurance premiums written, gross 10,745 10,412
Reinsurers’ share
P&C insurance -1,004 -993
Life insurance, insurance contracts -9 -9
Reinsurers’ share, total -1,013 -1,002
Group insurance premiums written total, net 9,732 9,411
The change in unearned premiums is presented in note 5, Change in liabilities for insurance and
investment contracts.
Group’s other notes to the financial statements 1–35
2 Net income from investments
EURm 1–12/2022 1–12/2021
Financial asset
Derivative financial instruments
Interest income/ expense 25 10
Gains/ losses -341 -113
Other -19 -40
Derivative financial instruments, total -335 -143
EURm 1–12/2022 1–12/2021
Financial assets at fair value
Debt securities
Interest income/ expense 86 89
Gains/ losses -329 -94
Equity securities
Gains/ losses -94 120
Dividend income 14 34
Financial assets at fair value, total -323 148
Loans and receivables
Interest income/ expense 39 18
Gains/ losses 16 1
Exchange differences — 3
Other -19 -24
Loans and receivables, total 36 -2
Financial assets available for sale
Debt securities
Interest income/ expense 326 223
Gains/ losses 6 42
Impairment losses 4 8
Exchange differences 2 1
Other -2 15
Equity securities
Gains/ losses 105 334
Impairment losses -43 -13
Dividend income 126 192
Financial assets available for sale, total 523 804
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
86
EURm 1–12/2022 1–12/2021
Investments related to unit linked contracts
Debt securities -216 185
Equity securities -1,137 2,240
Derivatives -424 298
Loans and receivables 2 -6
Other financial assets 13 92
Investments related to unit linked contracts, total -1,763 2,808
Financial asset, total -1,862 3,614
Other income and expenses
Fees and commissions, net -7 -12
Expenses from other than financial liabilities -12 1
Effect of discounting in P&C operations 144 46
Net income from investment property 0 104
Pension tax return 68 -205
Dividend income 157 —
Other income and expenses, total 350 -65
Group investment income, total -1,511 3,549
Included in gains/losses from financial assets available for-sale is a net gain of EURm 96 (333)
transferred from the fair value reserve.
Other income and expenses comprise rental income, maintenance expenses and depreciation of
investment property. All the income and expenses arising from investments are included in Net
income from investments. Gains/losses include realised gains/losses on sales and unrealised and
realised changes in fair values.
Unrealised fair value changes for financial assets available-for-sale are recorded in other
comprehensive income and presented in the fair value reserve in equity. The changes in the
fair value reserve are disclosed in the Statement of changes in equity. The effect of discounting
annuities in P&C insurance is disclosed separately.
The provision for annuities is calculated in accordance with actuarial principles taking anticipated
inflation and mortality into consideration, and discounted to take the anticipated future return on
investments into account. To cover the costs for upward adjustment of annuity provisions required
for the gradual reversal of such discounting, an anticipated return on investments is added to
annuity results.
3 Other operating income
EURm 1–12/2022 1–12/2021
Other income 513 259
Other technical income 138 121
Income related to broker-activities 112 110
Group other operating income, total 763 491
If’s other operating income includes approximately EUR 138 million (121) income from insurance
operations without a transfer of insurance risk. Such income is primarily attributable, e.g. to sales
commission and services for administration and claims settlement in insurance contracts on behalf
of other parties. This operating income is accounted for under IFRS 15 Revenue from Contracts
with Customers. In addition, other operating income includes income from roadside assistance
services provided by If’s subsidiary Viking Assistance Group AS, recognised when roadside
assistance has been provided.
Hastings’ other operating income includes total of EUR 213 million (199) revenue recognised under
IFRS 15 and consisting of fees and commission on panel providers, ancillary product income and
other retail income. Income from broker activities is also recognised under IFRS 15.
Mandatum’s other operating income includes EUR 9 million (9) revenue from, e.g incentive and
pension services, and EUR 16 million (15) revenue from asset management. This income is also
accounted for under IFRS 15.
Other income includes also the gain from the sale of Topdanmark Life amounting to EUR 72
million.
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Group’sIFRSFinancialStatements
Sampoplc’snotestothefinancialstatements
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
87
4 Claims incurred
EURm 1–12/2022 1–12/2021
Claims paid
P&C insurance -4,842 -4,444
Life insurance
Insurance contracts -1,610 -1,780
Investment contracts -527 -519
Claims paid, gross -6,979 -6,742
Reinsurers’ share
P&C insurance 657 591
Life insurance, insurance contracts 1 1
Reinsurers’s share, total 658 593
Claims paid total, net -6,321 -6,149
Change in claims provision
P&C insurance -102 -346
Life insurance, insurance contracts 242 -30
Change in claims provision, gross 139 -376
Reinsurers’ share
P&C insurance 67 286
Reinsurers’s share, total 67 286
Change in claims provision, net 206 -90
Group claims incurred, total -6,115 -6,239
5 Change in liabilities for insurance
and investment contracts
EURm 1–12/2022 1–12/2021
Change in unearned premium provision
P&C insurance -188 -108
Life insurance
Insurance contracts 2,011 -1,736
Investment contracts -372 -1,303
Total change in liabilities, gross 1,451 -3,147
Reinsurers’ share
P&C insurance -9 24
Group change in liabilities for insurance and
investment contracts total, net 1,443 -3,123
Group’s change in life insurance liabilities is positive and includes the impact of Topdanmark Life
until the sale on 1 December 2022 amounting to approximately EUR 980 million.
6 Staff costs
EURm 1–12/2022 1–12/2021
Wages and salaries -879 -843
Cash-settled share-based payments -43 -44
Share-settled share-based payments -10 -10
Pension costs
defined contribution plans -98 -100
defined benefit plans (note 25) -20 -13
Other social security costs -176 -168
Group staff costs, total -1,226 -1,179
More information on share-based payments is in note 30 Incentive schemes.
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Group’sIFRSFinancialStatements
Sampoplc’snotestothefinancialstatements
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
88
7 Other operating expenses
EURm 1–12/2022 1–12/2021
IT costs -241 -217
Other staff costs -68 -56
Marketing expenses -65 -63
Depreciation and amortisation -134 -135
Depreciation on RoU assets -34 -24
Rental expenses* -43 -41
Change in deferred acquisition costs 5 0
Direct insurance commissions -180 -159
Commissions on reinsurance ceded 40 35
Other -377 -316
Group other operating expenses, total -1,097 -976
* From leases on which exemptions for not recognising lease liabilities in the balance sheet is applied in
accordance with IFRS 16.
Item Other includes e.g. expenses related to communication, external services and other
administrative expenses.
8 Earnings per share
EURm 1–12/2022 1–12/2021
Earnings per share
Profit or loss attributable to the equity holders of the parent
company 1,427 2,567
Weighted average number of shares outstanding during the
financial year* 530 554
Earnings per share (EUR per share) 2.69 4.63
* The weighted average number of treasury shares during the financial year has been taken into account
in the number of shares. There were no other share-related transactions during the financial year.
9 Components of other comprehensive income
EURm 1–12/2022 1–12/2021
Other comprehensive income:
Items reclassifiable to profit or loss
Exchange differences -253 80
Available-for-sale financial assets
Gains/losses arising during the year -330 871
Reclassification adjustments (IAS 1.93) -1,396 -417
The share segregated Suomi portfolio 57 5
Share of associates’ other comprehensive income — 186
Taxes 331 -83
Total items reclassifiable to profit or loss, net of tax -1,592 643
Items not reclassifiable to profit or loss
Actuarial gains and losses from defined pension plans 32 73
Taxes -7 -15
Total items not reclassifiable to profit or loss, net of tax 26 58
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Group’sIFRSFinancialStatements
Sampoplc’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
89
10 Property, plant and equipment
2022
EURm
Right-of-use
assets
1
Land and
buildings
Plant and
equipment
2
Total
At 1 January
Cost 276 127 162 566
Accumulated depreciation -70 -8 -113 -191
Net carrying amount at 1 January 207 119 50 375
Carrying amount at 1 January 207 119 50 375
Additions 33 — 18 50
Disposals -3 — -13 -17
Depreciation -34 -1 -8 -43
Exchange differences -6 -7 0 -12
Carrying amount at 31 December 197 111 47 355
At 31 December
Cost 294 120 163 577
Accumulated depreciation -97 -9 -116 -222
Net carrying amount at
31 December 197 111 47 355
2021
EURm
Right-of-use
assets
1)
Land and
buildings
Plant and
equipment
2)
Total
At 1 January
Cost 242 131 156 530
Accumulated depreciation -46 -6 -106 -158
Net carrying amount at 1 January 196 125 51 371
Net carrying amount at 1 January 196 125 51 371
Additions 42 0 18 60
Disposals -11 -1 -13 -25
Depreciation -24 -2 -7 -33
Exchange differences 3 -3 2 2
Net carrying amount at
31 December 207 119 50 375
At 31 December
Cost 276 127 162 566
Accumulated depreciation -70 -8 -113 -191
Net carrying amount at
31 December 207 119 50 375
1
The Group acts as a lessee in various leases of office premises, vehicles and office equipment. Right-
of-use assets relate to lease contracts for large office premises. The Group leases premises mainly for
its own use. The expected lease term varies from 2 to 12 years. Most contracts include an option to
extend the contract at the term end. Some lease contracts have an option to terminate the contract
before the term end. Variable lease payments are generally linked to consumer price indexes.
More information on leases is in note 26 Other liabilities.
2
Equipment in different segments comprise IT equipment and furniture.
11 Investment property
EURm 2022 2021
Net carrying amount at 1 January 568 666
Additions 17 47
Disposals -375 -8
Net gains and losses from fair value adjustments 5 133
Other changes -49 -270
Exchange differences 0 0
Net carrying amount at 31 December 166 568
Rental income from investment property 25 53
Property rented out under operating lease
Non-cancellable minimum rental
– not later than one year 7 45
– later than one year and not later than five years 10 46
– later than five years 1 16
Total 18 106
EURm 2022 2021
Expenses arising from investment property
- direct operating expenses arising from investment property
generating rental income during the period -10 -15
- direct operating expenses arising from investment property
not generating rental income during the period -3 -3
Total -13 -17
Fair values for the Group’s investment property are described in the accounting policies of the
Group. In the hierarchy of fair values the investment property falls under level 3.
The premises in investment property for different segments are leased on market-based, irrevocable
contracts. The lengths of the contracts vary from those for the time being to those for several years.
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Group’sIFRSFinancialStatements
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
90
12 Intangible assets
2022
EURm Goodwill
Customer
relations
Trade-
mark
Work in
progress
Other
intangible
assets Total
At 1 January
Cost 2,490 716 277 36 681 4,200
Accumulated
amortisation — -157 — — -249 -406
Net carrying amount
at 1 January 2,490 560 277 36 432 3,794
Net carrying amount
at 1 January 2,490 560 277 36 432 3,794
Business acquisitions — 5 — 1 2 7
Additions 3 1 — 102 7 114
Disposals -12 -28 -43 -6 -72 -162
Amortisation — -65 — — -60 -125
Transfers from WIP — — — -41 41 —
Other changes -4 1 — -19 16 -5
Exchange differences -92 -11 -10 -1 -15 -129
Net carrying amount
at 31 December 2,385 463 224 72 350 3,494
At 31 December
Cost 2,385 680 224 72 626 3,988
Accumulated
amortisation — -218 — — -276 -494
Net carrying amount
at 31 December 2,385 463 224 72 350 3,494
2021
EURm Goodwill
Customer
relations
Trade-
mark
Work in
progress
Other
intangible
assets Total
At 1 January
Cost 2,425 730 268 60 559 4,041
Accumulated
amortisation — -91 -2 — -187 -280
Net carrying amount
at 1 January 2,425 638 265 60 373 3,761
Net carrying amount
at 1 January 2,425 638 265 60 373 3,761
Business acquisitions 10 -2 — — — 9
Additions — 3 — 89 7 99
Disposals — -33 — -1 -18 -51
Amortisation — -65 — — -62 -126
Transfers from WIP — — — -113 113 —
Exchange differences 54 17 12 1 19 103
Net carrying amount
at 31 December 2,490 560 277 36 432 3,794
At 31 December
Cost 2,490 716 279 36 681 4,202
Accumulated
amortisation — -157 -2 — -249 -408
Net carrying amount
at 31 December 2,490 560 277 36 432 3,794
Goodwill is split between the segments as follows: 2022 2021
If 562 606
Topdanmark 802 814
Hastings 858 906
Mandatum 163 164
Total 2,385 2,490
The useful life for customer relations in the Group is 3–10 years. They are amortised using the
straight-line method. The useful life of trademark is deemed indefinite and it will not be amortised.
Other intangible assets in all segments comprise mainly IT software. Amortisations and impairment
losses are included in the income statement item Other operating expenses.
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
91
Testing goodwill for impairment
Goodwill is tested for impairment in accordance with IAS 36 Impairment of assets. No impairment
losses have been recognised based on these tests.
For the purpose of testing goodwill for impairment, Sampo determines the recoverable amount of
its cash-generating units, to which goodwill has been allocated, on the basis of value in use. Sampo
has defined these cash-generating units as If Group, Topdanmark Group, Hastings Group and
Mandatum Group.
The recoverable amounts for If, Hastings and Mandatum have been determined by using a
discounted cash flow model. The model is based on the best estimates of companies’ management
of both historical evidence and financial conditions such as premiums, claims, reinsurance, margins,
interest rates, capital structure and income and cost development. The first three years of the
forecast period are based on the budgets of the companies, which reflect management’s view
of future development. The value-in-use model for Mandatum is greatly influenced by the
long-term development of insurance liabilities, affecting e.g., the required solvency capital and
thus the recoverable amount. That is why the forecast period is longer for Mandatum, at 10 years.
The derived cash flows were discounted at the pre-tax rates of the cost of equity which for If was
10.0 per cent, for Hastings 11.2 per cent and for Mandatum Life 12.5 per cent. The cost of capital
is defined based on the CAPM model from external sources to reflect the risk of each company
relative to the market.
Forecasts for If, approved by the management, cover the years 2023–2025. The cash flows beyond
that have been extrapolated using a 2 per cent growth rate. Mandatum’s growth rate for years
beyond 2032 is also 2 per cent, as it is believed to be close to expected inflation in both cases.
Hastings’ long-term growth rate for years beyond 2027 is 0.7 per cent.
For Mandatum, the recoverable amount exceeds its carrying amount by some EUR 600 million.
With the calculation method used, e.g. an increase of about 3.5 per cent points in the cost of
equity combined with a long term 1 per cent growth rate could lead to a situation where the
recoverable amount of the entity would equal its carrying amount. For Hastings, the recoverable
amount exceeds its carrying amount by some EUR 420 million. With the calculation method used,
e.g., an increase of about 2 per centage points in the cost of equity could lead to a situation where
the recoverable amount of the entity would equal its carrying amount.
As for the If Group, the management believes that any reasonably possible change in any of
these key assumptions would not cause the aggregate carrying amount to exceed the aggregate
recoverable amount.
IAS 36 permits determining the recoverable amount by using the fair value less costs to sell. For
Topdanmark, the valuation of goodwill has been tested on the balance sheet date by using that
method. The fair value of Topdanmark of EUR 2,146 million on the balance sheet date exceeds its
carrying amount in the Group.
As a result of Topdanmark’s disposal of its Life operations on 1 December 2022, Sampo Group
has assessed the goodwill of EUR 12 million associated with the life operations. Sampo Group
has concluded that the original PPA calculation reflects the facts and circumstances related to
the goodwill most appropriately and therefore the allocation of goodwill to disposed operations
should be based on this original PPA.
Sensitivity analysis
Impact on the present value from the following changes (EUR bn): 2022
If:
Long-term Combined ratio +2.5 p.p. -1.4
Long-term Combined ratio -2.5 p.p. 1.4
Long-term growth rate -1 p.p. -1.7
Long-term growth rate +1 p.p. 2.3
Cost of equity +1 p.p. -1.8
Cost of equity -1 p.p. 2.4
Mandatum:
Long-term growth rate -1 p.p. -0.1
Long-term growth rate +1 p.p. 0.1
Cost of Equity +1 p.p. -0.2
Cost of Equity -1 p.p. 0.3
Hastings:
Long-term growth rate -1 p.p. -0.2
Long-term growth rate +1 p.p. 0.3
Cost of Equity +1 p.p. -0.2
Cost of Equity -1 p.p. 0.3
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
92
13 Investments in associates and joint ventures
Associates and joint ventures that have been accounted
for by the equity method at 31 December 2022
EURm
Name Domicile
Carrying
amount
Interest
held %
Associates
Precast Holding Oy Finland 4 24.43
CAP Group AB Sweden 3 21.98
Rogaland Forsikring AS Norway 1 33.00
Bornholms Brandforsikring A/S Denmark 7 27.00
Associates and joint ventures that have been accounted
for by the equity method at 31 December 2021
EURm
Name Domicile
Carrying
amount
Interest
held %
Associates
Nordax Holding AB Sweden 447 19.07
Precast Holding Oy Finland 3 24.43
CAP Group AB Sweden 3 22.00
SOS International A/S Denmark 10 25.80
Bornholms Brandforsikring A/S Denmark 10 27.00
P/S Ejendomsholding Banemarksvej Denmark 12 40.00
Carlsberg Byen P/S Denmark 106 22.51
Joint ventures
Margretheholm P/S Denmark 59 50.00
Havneholmen P/S Denmark 85 50.00
P/S Ottilia Kobenhavn Denmark 39 50.00
Changes in investments in associates and in joint ventures
2022 2021
EURm
Other
associates
and joint
ventures Total Nordea
Other
associates
and joint
ventures Total
At 1 January 777 777 4,822 548 5,370
Share of loss/profit 22 22 317 77 393
Reversal of impairment loss
on Nordea shares — — 899 — 899
Additions 1 1 — 133 133
Disposals -313 -313 -2,564 — -2,564
Changes in the equity of
associates -12 -12 -1,284 28 -1,256
Exchange differences -33 -33 — -9 -9
Reclassification as non-
current assets held for sale — — -2,189 — -2,189
Reclassification as an
investment at fair value
through p/l -425 -425 — — —
At 31 December 16 16 — 777 777
In the comparison year, Nordea was consolidated with the equity method until 25 October 2021, after
which the shares were reclassified in accordance with IFRS 5 to non-current assets held for sale.
The carrying amount of investments in associates included goodwill of EUR 4 million (76).
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FINANCIAL STATEMENTS 2022
93
Changes in holding of associate shares in 2022
Nordax
Sampo’s management assessed that the requirements for significant influence, as set out in IAS 28
Investments in Associates and Joint Ventures, were no longer met in associate Nordax at the end
of the financial year 2022. As a result, the associate shares were reclassified to equity securities at
fair value through p/l at the balance sheet date, in accordance with IAS 39 Financial Instruments:
Recognition and Measurement. The valuation difference between the book value and fair value was
recognised in the income statement in other operating income.
Until the reclassification date, Nordax was accounted for under IAS 28 Investments in associates
and joint ventures. Other comprehensive income of EUR -37 million, recognised in earlier periods
and remaining, was recycled to the income statement at the reclassifcation.
Nordea
In April 2022, Sampo sold its remaining Nordea holding through an accelerated bookbuild offering
of 200 million shares. Before the bookbuild offering, Sampo had already sold 19 million shares in
the open market in the first quarter and 27 million shares in the second quarter of 2022. The sale of
Nordea shares ended the classification of shares as non-current assets held for sale.
The transactions generated total gross proceeds of EUR 2.3 billion, of which EUR 2.1 billion was
raised in the second quarter. The positive accounting effect from the transactions on Sampo’s
consolidated statement of profit and loss was EUR 103 million, of which EUR 75 million was booked
for the second quarter.
Changes in holding of Nordea shares in 2021
In February 2021, Sampo’s Board of Directors announced an intention statement to materially
reduce Sampo’s holding in Nordea over the following 18 months.
In May, Sampo sold 162 million Nordea shares at a price of EUR 8.50 per share. Gross proceeds
were EUR 1,377 million. A sales gain of EUR 93 million from the transaction was recognised as a
reversal of previously made impairment losses. After the transaction, Sampo held 480,924,782
Nordea shares, corresponding to 11.87 per cent of all shares and voting rights in Nordea.
In September, Sampo sold 73 million Nordea shares at a price of EUR 10.20 per share. Gross
proceeds were EUR 745 million. A sales gain of EUR 144 million from the transaction was
recognised as a reversal of previously made impairment losses. After the transaction, Sampo held
407,924,782 Nordea shares, corresponding to 10.07 per cent of all shares and voting rights in
Nordea.
In October 2021, Sampo’s management expressed its commitment to sell the remaining shares,
and on 24 October 2021 an advanced bookbuild offer for an additional sell of shares was initiated.
On 25 October, Sampo sold 162 million Nordea shares at a price of EUR 10.65 per share. Gross
proceeds were EUR 1 725 million. A sales gain of EUR 368 million from the transaction was
recognised as a reversal of previously made impairment losses. After the transaction, Sampo holds
245,924,782 Nordea shares, corresponding immediately after the transaction to 6.07 per cent of all
shares and voting rights in Nordea.
The remaining Nordea shares were reclassified under IFRS 5 Non-current assets held for sale and
discontinued operations in the financial statements for 2021. In accordance with the standard, the
shares were reclassified in the balance sheet as its own line item ’Non-current assets held for sale’
and measured at the consolidated book value at the reclassification date. Immediately before the
reclassification, the reversal of remaining impairment losses of EUR 311 million was recognised in
the income statement, as well as a recycling of remaining other comprehensive income of EUR -90
million.
Until the reclassification date, Nordea was accounted for under IAS 28 Investments in associates
and joint ventures.
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FINANCIAL STATEMENTS 2022
94
14 Financial assets
The Group’s financial assets comprise investments in derivatives, financial assets at fair value
through p/l, loans and receivables and available-for-sale financial assets.
The Group uses derivative instruments for trading and for hedging purposes. The derivatives
used are foreign exchange, interest rate and equity derivatives. During the financial year, fair value
hedging has been applied in Mandatum and cash flow hedges in Hastings.
EURm 2022 2021
Derivative financial instruments 79 45
Financial assets at fair value through p/l
Debt securities 1,941 4,494
Equity securities 560 686
Deposits 544 352
Total 3,045 5,533
Loans and receivables 296 387
Financial assets available-for-sale
Debt securities 12,815 12,901
Equity securities 3,233 4,464
Total 16,048 17,365
Group’s financial assets, total 19,469 23,331
Assets held for sale — -10
Group’s financial assets, total 19,469 23,321
Financial assets available-for-sale include impairment losses of EUR 170 million (221).
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
95
Derivative financial instruments
2022
Fair value
2021
Fair value
EURm
Contract/
Notional Amount Assets Liabilities
Contract/
Notional Amount Assets Liabilities
Derivatives held for trading
Interest rate derivatives
OTC derivatives
Interest rate swaps 394 5 45 1,716 23 13
Inflation cover 274 — 3 382 — 36
Total interest rate derivatives 668 5 48 2,098 23 49
Foreign exchange derivatives
OTC derivatives
Currency forwards 5,092 58 6 9,301 22 58
Currency options, bought and sold 31 4 2 3 0 —
Total foreign exchange derivatives 5,123 62 7 9,303 22 58
Equity derivatives
OTC derivatives
Equity futures — — — 91 — —
Other — — — 110 0 2
Total equity derivatives — — — 201 0 2
Total derivatives held for trading 5,791 67 55 11,603 45 109
Derivatives held for hedging
Fair value hedges
Currency forwards 328 12 — 423 — 12
Total derivatives held for fair value hedging 328 12 — 423 0 12
Cash flow hedges
Currency forwards 6 0 — 9 — 0
Total cash flow hedges 6 0 — 9 — 0
Total derivatives held for hedging 334 12 — 433 0 13
Group financial derivatives, total 6,124 79 55 12,035 45 121
Fair value hedges
In Mandatum, fair value hedging is used to hedge a proportion of foreign exchange risk in available-for-sale financial assets. The interest elements of foreign exchange forward contracts have been
excluded from hedging relationships in foreign exchange hedges. The net result from exchange derivatives designated as fair value hedges amounted to EUR -32 million (32). The net result from hedged
risks in fair value hedges of available-for-sale financial assets amounted to EUR 32 million (-32).
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
96
15 Change in fair values of financial assets
EURm
Fair value
2022
Fair value
2021 Change
Financial asset
Financial assets measured at amortised cost
Loans and receivables 296 387 -91
Total 296 387 -91
Financial assets measured at fair value
Equity securities 2,141 3,123 -982
Debt securities 14,757 17,395 -2,639
Funds 1,652 2,027 -375
Derivatives 79 45 34
Loans guaranteed by mortgages and other loans — 1 -1
Deposits 544 352 192
Total 19,173 22,944 -3,771
Financial assets at fair value through p/l
related to unit-linked insurance
Equity securities 676 4,223 -3,547
Debt securities 941 6,072 -5,131
Funds 7,883 8,675 -793
Derivative financial instruments 18 11 7
Other 412 915 -503
Total 9,930 19,897 -9,967
Group financial assets, total 29,399 43,227 -13,829
Financial assets measured at amortised cost
To determine the appropriate classification of financial assets under IFRS 9, the entity assesses
the contractual cash flows’ characteristics of any financial asset. Financial assets of which the
contractual cash flows give rise to solely payments of principal and interest (SPPI criteria, solely
payments of principle and interest) on the principal amount outstanding, pass the SPPI test. IFRS 9
defines the terms "principal" as being the fair value of the financial asset at initial recognition and
the "interest" as being compensation for the time value of money and the credit risk associated
with the principal amount outstanding during a particular period of time.
All assets classified currently as available for sale, including both equity and debt instruments, are
anticipated to be classified as at fair value through profit or loss. Of the financial assets classified
currently as loans and receivables, including deposits, totalling EUR 840 million (740), EUR 294
million passed the SPPI test as of 31 December 2022 (476 EURm).
Based on an analysis, there are no significant credit risk concentrations related to financial
instruments that meet the SPPI criterion.
Financial assets measured at amortised cost, meeting the SPPI test, are presented by credit rating
in the following table:
2022
EURm
AA+
-
AA-
A+
-
A-
BBB+
-
BBB-
BB+
-
BB-
B+
-
B- Total
Loans and receivables 13 106 52 71 52 294
Total 13 106 52 71 52 294
2021
EURm
AA+
-
AA-
BB+
-
BB-
B+
-
B-
No credit
rating Total
Loans and receivables 214 86 — 176 476
Total 214 86 — 176 476
The table has been prepared based on a preliminary analysis on business models likely to be
applied under IFRS 9.
Since the amount of financial assets meeting the SPPI criterion, EUR 294 million (476) is minor
of the total financial assets EUR 22,542 million (28,140), the credit risk is considered not to be
significant. Their carrying amount is assessed to be best estimate of their fair value. In 2021 main
part of the financial assets meeting the SPPI criterion was unrated, so it was not possible to assess
whether they had low credit risk or not.
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FINANCIAL STATEMENTS 2022
97
16 Determination and hierarchy of fair values
A large majority of Sampo Group’s financial assets are valued at fair value. The valuation is based
on either published price quotations or valuation techniques based on market observable inputs,
where available. For a limited amount of assets, the value needs to be determined using other
techniques. The financial instruments measured at fair value have been classified into three
hierarchy levels in the notes, depending on, for example, whether the market for the instrument is
active or if the inputs used in the valuation technique are observable.
The fair value of the derivative instruments is assessed using quoted market prices in active
markets, the discounting method or option pricing models.
The fair value of loans and other financial instruments which have no quoted price in active
markets is based on discounted cash flows, using quoted market rates. The market’s yield curve is
adjusted by other components of the instrument, e.g. by credit risk.
Fair values are "clean" fair values, i.e. less interest accruals.
On level 1, the measurement of the instrument is based on quoted prices in active markets for
identical assets or liabilities.
On level 2, inputs for the measurement of the instrument also include other than quoted prices
observable for the asset or liability, either directly or indirectly by using valuation techniques.
In level 3, the measurement is based on other inputs rather than observable market data.
Sampo Group’s level 3 assets consist mainly of few larger equity investments and investments in
private equity and alternative funds.
In level 3, the two most prominent equity investments are valued by using the excess return model,
in which the value of a company is the sum of capital invested currently in the company and the
present value of excess returns that the company expects to make in the future.
For private equity funds, the valuation of the underlying investments is conducted by the fund
manager who has all the relevant information required in the valuation process. The valuation is
usually updated quarterly based on the value of the underlying assets and the amount of debt in
the fund. There are several valuation methods, which can be based on, for example, the acquisition
value of the investments, the value of publicly traded peer companies, the multiple based valuation
or the cash flows of the underlying investments.
Most private equity funds follow the International Private Equity and Venture Capital (IPEV)
guidelines, which give detailed instructions on the valuation of private equity funds.
For alternative funds the valuation is also conducted by the fund managers. Alternative funds
often have complicated structures and the valuation is dependent on the nature of the underlying
investments. There are many different valuation methods that can be used; for example, the
method based on the cash flows of the underlying investments. The operations and valuation of
alternative funds are regulated for example by the Alternative Investment Fund Managers Directive
(AIFMD), which determines the principles and documentation requirements of the valuation
process.
Fair value
EURm
Carrying
amount Level 1 Level 2 Level 3 Total
FINANCIAL ASSETS AT 31
DECEMBER 2022
Financial assets at fair value
Derivative financial instruments
Interest rate swaps 5 — 5 — 5
Foreign exchange derivatives 74 0 74 — 74
Total 79 0 79 — 79
Financial assets at fair value
through profit or loss
Equity securities 560 111 24 425 560
Debt securities 1,881 1,718 159 5 1,881
Total 2,441 1,829 183 430 2,441
Financial assets designated as at
fair value through profit or loss
Deposits 544 — 544 — 544
Debt securities (unit-trusts) 60 43 16 — 60
Total 604 43 561 — 604
Financial assets related to unit-
linked insurance
Equity securities 676 643 2 31 676
Debt securities 941 90 757 94 941
Funds 7,883 4,880 676 2,327 7,883
Derivative financial
instruments 18 — 18 — 18
Other assets 412 — 412 — 412
Total 9,930 5,612 1,865 2,453 9,930
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Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
98
Fair value
EURm
Carrying
amount Level 1 Level 2 Level 3 Total
Financial assets
available-for-sale
Equity securities 1,581 1,224 2 354 1,581
Debt securities 12,815 7,941 4,832 43 12,815
Other assets 1,652 775 72 806 1,652
Total 16,048 9,940 4,906 1,203 16,048
Total financial assets at
fair value 29,103 17,425 7,593 4,086 29,103
Other financial assets
Financial assets at amortised
cost
Loans and receivables 296 — — 296 296
Total 29,399 17,425 7,593 4,381 29,399
Group’s financial assets, total 29,399
Fair value
EURm
Carrying
amount Level 1 Level 2 Level 3 Total
FINANCIAL LIABILITIES AT
31 DECEMBER 2022
Financial liabilities at fair value
Derivative financial instruments
Interest derivatives 45 — 45 — 45
Equity derivatives — — — — —
Foreign exchange derivatives 7 — 7 — 7
Other derivatives 3 — 3 — 3
Total 55 — 55 — 55
Total financial liabilities at
fair value 55 — 55 — 55
Other financial liabilities
Subordinated debt securities
Subordinated loans 1,983 1,409 478 — 1,887
Debt securities in issue
Bonds 1,306 1,126 110 — 1,236
Other
Borrowings on Revolving
Credit Facility 73 — — 73 73
Amounts owed to credit
institutions 23 23 — — 23
Total other financial liabilities 3,384 2,558 588 73 3,219
Group financial liabilities, total 3,439 2,558 643 73 3,274
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FINANCIAL STATEMENTS 2022
99
Fair value
EURm
Carrying
amount Level 1 Level 2 Level 3 Total
31 December 2021
Financial assets at fair value
Derivative financial instruments
Interest rate swaps 23 — 23 — 23
Foreign exchange derivatives 22 — 22 — 22
Total 45 — 45 — 45
Financial assets at fair value
through profit or loss
Equity securities 684 478 206 — 684
Debt securities 4,437 3,923 503 11 4,437
Investment funds 2 — 2 — 2
Total 5,123 4,401 711 11 5,123
Financial assets designated as at
fair value through profit or loss
Deposits 352 — 352 — 352
Debt securities 1 — 1 — 1
Debt securities (unit-trusts) 58 43 15 — 58
Total 411 43 368 — 411
Financial assets related to
unit-linked insurance
Equity securities 4,222 4,200 2 20 4,222
Debt securities 6,072 4,081 1,930 61 6,072
Funds 8,676 5,805 807 2,065 8,676
Derivative financial
instruments 11 — 11 — 11
Other assets 915 — 474 441 915
Total 19,897 14,086 3,225 2,587 19,897
Fair value
EURm
Carrying
amount Level 1 Level 2 Level 3 Total
Financial assets available-for-sale
Equity securities 2,439 2,043 2 394 2,439
Debt securities 12,901 7,032 5,796 73 12,901
Other assets 2,025 913 34 1,078 2,025
Total 17,365 9,987 5,832 1,545 17,365
Total financial assets at fair value 42,841 28,517 10,181 4,143 42,841
Other financial assets
Financial assets at amortised cost
Loans and receivables 387 — — 387 387
Total 43,228 28,517 10,181 4,529 43,227
Assets held for sale in Mandatum -196
Group financial assets, total 43,031
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FINANCIAL STATEMENTS 2022
100
Fair value
EURm
Carrying
amount Level 1 Level 2 Level 3 Total
FINANCIAL LIABILITIES AT
31 DECEMBER 2021
Financial liabilities at fair value
Derivative financial instruments
Interest derivatives 13 — 13 — 13
Equity derivatives 2 — 2 — 2
Foreign exchange derivatives 71 8 63 — 71
Other derivatives 36 — 36 — 36
Total 121 8 114 — 121
Financial liabilities designated as
at fair value through p/l
Deposits 1 — 1 — 1
Total financial liabilities at
fair value 123 8 115 — 123
Other financial liabilities
Subordinated debt securities
Subordinated loans 2,016 1,850 611 — 2,461
Debt securities in issue
Bonds 2,195 1,868 466 — 2,334
Other
Borrowings on Revolving
Credit Facility 12 — — 12 12
Total other financial liabilities 4,223 3,718 1,077 12 4,806
Group financial liabilities, total 4,345 3,726 1,192 12 4,929
Transfers between levels 1 and 2
1–12/2022 1–12/2021
EURm
Transfers
from level 2
to level 1
Transfers
from level 1
to level 2
Transfers
from level 2
to level 1
Transfers
from level 1
to level 2
Financial assets related to
unit-linked insurance
Debt securities 13 6 3 12
Financial assets
available-for-sale
Debt securities 632 500 595 349
Transfers are based mainly on the changes in trading volume information provided by an external
service provider.
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FINANCIAL STATEMENTS 2022
101
Sensitivity analysis of fair values
The sensitivity of financial assets and liabilities to changes in exchange rates is assessed on
business area level due to different base currencies. In If, a 10 percentage point depreciation of
all other currencies against SEK would result in an increase recognised in profit/loss of EUR 13
million (34) and in an increase recognised directly in equity of EUR 2 million (-24). In Topdanmark,
a 10 percentage point depreciation of all other currencies against DKK would result in a decrease
recognised in profit/loss of EUR -11 million (-4), but would not have an impact on equity. In
Mandatum, a 10 percentage point depreciation of all other currencies against EUR would result in
an increase recognised in profit/loss of EUR 36 million (32) and in a decrease recognised directly
in equity of EUR -41 million (-45). In Holding, a 10 percentage point depreciation of all other
currencies against EUR would have no impact on profit/loss, but a decrease recognised in equity
of EUR -109 million (-65). In Hastings, the changes in exchange rates would not have an impact
either in p/l or equity.
The sensitivity analysis of the Group’s fair values of financial assets and liabilities in different
market risk scenarios is presented below. The effects represent the instantaneous effects of a one-
off change in the underlying market variable on the fair values on 31 December 2022.
The sensitivity analysis includes the effects of derivative positions. All sensitivities are calculated
before taxes.
The debt issued by Sampo plc is not included.
Interest rate Equity
Other financial
assets
1% parallel
shift down
1% parallel
shift up
20% fall
in prices
20% fall
in prices
Effect recognised in
profit/loss 68 -60 -22 -22
Effect recognised directly
in equity 276 -265 -470 -178
Total effect 344 -325 -492 -200
Maximum exposure to credit risk
The carrying amount of financial assets in the balance sheet of EUR 19,469 million (23,321) added
by the amount of guarantees and investment commitments totalling EUR 2 078 million (1,820)
represents the maximum exposure to credit risk.
Sensitivity analysis of level 3 financial instruments
measured at fair value
1–12/2022 1–12/2021
EURm
Carrying
amount
Effect of
reasonably
possible
alternative
assumptions
(+/-)
Carrying
amount
Effect of
reasonably
possible
alternative
assumptions
(+/-)
Financial assets
Financial assets
available-for-sale
Equity securities 354 -71 394 -79
Debt securities 43 -1 73 -2
Funds 806 -161 1,078 -216
Total 1,203 -233 1,545 -296
The value of financial assets regarding the debt security instruments has been tested by assuming
a rise of 1 per cent in interest rate level in all maturities. For other financial assets, the prices were
assumed to go down by 20 per cent. Sampo Group bears no investment risks related to unit-
linked insurance, so a change in assumptions regarding these assets does not affect profit or loss.
On the basis of these alternative assumptions, a possible change in interest levels would cause a
decrease of EUR -1 million (-2) for the debt instruments and EUR -232 million (-294) valuation loss
for other instruments in the Group’s other comprehensive income. The reasonably possible effect,
proportionate to the Group’s equity, would thus be 2.6 per cent (2.3).
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FINANCIAL STATEMENTS 2022
102
17 Movements in level 3 financial instruments measured at fair value
EURm At 1 Jan
Total gains/
losses in
income
statement
Total gains/
losses recorded
in other
comprehensive
income
Purchases
and re-
classifications Sales Settlements
Transfers
from level 1
and 2
Transfers
to levels 1
and 2
31 Dec
2022
Gains/losses
included in
p/l for
financial
assets
31 Dec 2022
FINANCIAL ASSETS 2022
Financial assets at fair value through p/l
Equity securities — — — 425 — — — — 425 —
Debt securities 11 0 — — -6 — — — 5 1
Total 11 0 — 425 -6 — — — 430 1
Financial assets related to unit-linked
insurance contracts
Equity securities 20 1 — 15 -5 — — — 31 1
Debt securities 61 -8 — 108 -81 -23 40 -3 94 -8
Funds 2,065 -16 — 598 -315 — — -5 2,327 -23
Total 2,145 -22 — 721 -401 -23 40 -7 2,453 -30
Financial assets available-for-sale
Equity securities 394 6 -41 2 -7 — — — 354 -41
Debt securities 73 0 0 17 -18 — — -30 43 2
Funds 1,078 11 -226 44 -101 — — — 806 -216
Total 1,545 16 -267 64 -125 — — -30 1,203 -255
Total financial assets measured at fair value 3,702 -6 -267 1,210 -533 -23 40 -37 4,086 -284
Purchases and reclassifications include the reclassification of Nordax associate shares of EUR 425 million to equity securities at fair value through p/l.
1–12/2022
EURm Realised gains and losses Fair value gains and losses Total
Total gains or losses included in profit or loss for the financial year -6 -267 -273
Total gains or losses included in profit or loss for assets held at the end of the financial year -17 -267 -284
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FINANCIAL STATEMENTS 2022
103
EURm At 1 Jan
Total gains/
losses in income
statement
Total gains/
losses recorded
in other
comprehensive
income Purchases Sales
Transfers to
levels 1 and 2 31 Dec 2021
Gains/losses
included in p/l
for financial
assets
31 Dec 2021
FINANCIAL ASSETS 2021
Financial assets at fair value through p/l
Debt securities 193 11 — 1 -37 -157 11 1
Total 193 11 — 1 -37 -157 11 1
Financial assets related to unit-linked
insurance contracts
Equity securities 18 4 — 2 -4 — 20 3
Debt securities 804 29 — 169 -96 -846 61 1
Funds 1,297 478 — 636 -346 — 2,065 481
Total 2,119 511 — 806 -445 -846 2,145 485
Financial assets available-for-sale
Equity securities 342 0 63 4 -9 -7 394 63
Debt securities 60 3 1 68 -58 — 73 4
Funds 951 18 228 95 -215 — 1,078 243
Total 1,353 20 292 167 -282 -7 1,545 310
Total financial assets measured at fair value 3,666 543 292 974 -764 -1,010 3,702 796
In 2021, EUR 1,004 million of the transfers relate to Topdanmark’s structured credit products (CLOs) for which the market could be defined as active again, in accordance with IFRS 13, and which therefore
have been transferred back to level 2 from level 3.
1–12/2021
EURm Realised gains and losses Fair value gains and losses Total
Total gains or losses included in profit or loss for the financial year 504 329 833
Total gains or losses included in profit or loss for assets held at the end of the financial year 503 292 796
Gains and losses are included either in the consolidated income statement’s net investment income or other comprehensive income statements’s exchange differences and fair value changes of available-
for-sale financial assets.
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104
18 Deferred tax assets and liabilities
Changes in deferred tax during the financial year 2022
EURm 1 Jan
Business
acquisitions/
disposals
Recognised in
comprehensive
income statement
Recognised
in equity
Exchange
differences 31 Dec
Deferred tax assets
Tax losses carried forward 2 — -1 0 0 1
Changes in fair values 14 — -4 -6 0 3
Pension liabilities 8 — -1 1 -1 7
Other deductible temporary differences 42 1 -10 0 -1 31
Total 66 1 -17 -6 -2 42
Netting of deferred taxes -26
Deferred tax assets in the balance sheet, total 17
Deferred tax liabilities
Depreciation differences and untaxed reserves 219 0 0 0 -10 209
Changes in fair values 512 7 -63 -271 -19 166
Pension assets — — 0 7 — 7
Other taxable temporary differences 151 -18 26 0 -1 158
Total 881 -11 -36 -264 -30 540
Netting of deferred taxes -26
Deferred tax liabilities in the balance sheet, total 881 -11 -36 -264 -30 514
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105
Changes in deferred tax during the financial period 2021
EURm 1 Jan
Recognised in
comprehensive
income statement
Recognised
in equity
Exchange
differences 31 Dec
Deferred tax assets
Tax losses carried forward 18 -16 — 0 2
Changes in fair values 15 -1 -1 1 14
Pension liabilities 26 -2 -15 0 8
Other deductible temporary differences 28 15 -1 1 42
Total 86 -5 -17 1 66
Netting of deferred taxes -27
Deferred tax assets in the balance sheet, total 39
Deferred tax liabilities
Depreciation differences and untaxed reserves 219 -2 — 1 219
Changes in fair values 383 26 98 6 512
Other taxable temporary differences 152 -2 0 1 151
Total 754 22 98 8 881
Netting of deferred taxes -27
Deferred tax liabilities in the balance sheet, total 855
The line items within deferred tax assets and liabilities for the comparison year 2021 have been restated.
In Sampo plc, EUR 34 million of deferred tax assets have not been recognised on unused tax losses. The first losses will expire at the end of fiscal year 2022.
In Mandatum, EUR 1 million of deferred tax assets have not been recognised on unused tax losses.
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FINANCIAL STATEMENTS 2022
106
19 Taxes
EURm 2022 2021
Profit before tax 1,863 3,171
Tax calculated at parent company’s tax rate -373 -634
Different tax rates in foreign jurisdictions -12 -4
Income from associates not subject to tax 21 259
Income not subject to tax 81 13
Non-deductible expenses -17 -11
Tax losses for which no deferred tax asset has been recognised -28 -12
Changes in tax rates 2 -24
Tax from previous years 4 -11
Total -322 -423
20 Other assets
EURm 2022 2021
Interests 113 128
Assets arising from direct insurance operations 2,261 2,067
Assets arising from reinsurance operations 113 85
Settlement receivables 83 45
Deferred acquisition costs* 182 185
Assets related to Patient Insurance Pool 69 67
Other 422 399
Group other assets, total 3,242 2,977
Item Other comprise, e.g. assets held for resale, asset management fee receivables and prepaid
pensions.
Other assets include non-current assets EUR 99 million (139).
* Change in deferred acquisition costs in the period
EURm 2022 2021
At 1 January 185 147
Net change in the period 4 36
Exchange differences -7 3
At 31 December 182 185
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107
21 Liabilities from insurance and investment contracts
P&C liabilities from insurance contracts
2022 2021
EURm Gross Reinsurance Net Gross Reinsurance Net
Provision for unearned premiums 3,398 390 3,008 3,340 412 2,928
Provision for claims outstanding 10,200 1,881 8,319 10,781 1,881 8,900
Incurred and reported losses 4,666 1,409 3,257 4,336 1,324 3,012
Incurred but not reported losses (IBNR) 3,115 471 2,644 3,080 551 2,529
Provisions for claims adjustment costs 272 — 272 247 — 247
Provisions for annuities and sickness
benefits 2,147 0 2,146 3,118 6 3,112
P&C insurance total 13,598 2,271 11,328 14,121 2,293 11,828
As the P&C companies, especially If, are exposed to various exchange rates, comparing the balance sheet data from year to year can be misleading.
Change in P&C insurance liabilities
2022 2021
EURm Gross Reinsurance Net Gross Reinsurance Net
Provision for unearned premiums
At 1 January 3,340 412 2,928 3,169 365 2,803
Business transactions -36 — -36 — — —
Change in provision 209 -9 218 115 24 90
Exchange differences -115 -14 -101 57 23 34
At 31 December 3,398 390 3,008 3,340 412 2,928
2022 2021
EURm Gross Reinsurance Net Gross Reinsurance Net
Provision for claims outstanding
At 1 January 10,781 1,881 8,900 10,140 1,454 8,685
Business transactions -384 -5 -379 — — —
Unwinding of discounted annuities -121 -2 -118 -41 -1 -41
Change in provision 201 90 112 464 327 137
Exchange differences -278 -83 -195 219 100 119
At 31 December 10,200 1,881 8,319 10,781 1,881 8,900
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FINANCIAL STATEMENTS 2022
108
The tables below show the cost trend for the claims for different years. The upper part of the tables shows how an estimate of the total claims costs per claims year evolves annually.
The lower section shows how large a share of this is presented in the balance sheet. More information on insurance liabilities is in the risk management note 35.
If
Claims cost trend of P&C insurance
Claims costs before reinsurance
Estimated claims cost
EURm < 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total
At the close of the claims year 27,892 2,581 2,559 2,581 2,624 2,657 2,796 2,909 3,060 3,033 3,272
One year later 27,838 2,604 2,551 2,598 2,655 2,694 2,893 2,954 3,098 3,163
Two years later 27,801 2,607 2,557 2,586 2,653 2,689 2,923 2,969 3,125
Three years later 27,884 2,612 2,570 2,563 2,614 2,694 2,940 2,992
Four years later 27,737 2,618 2,575 2,538 2,604 2,669 2,930
Five years later 27,632 2,607 2,546 2,535 2,615 2,658
Six years later 27,454 2,596 2,520 2,520 2,599
Seven years later 27,314 2,581 2,510 2,507
Eight years later 27,123 2,573 2,490
Nine years later 26,969 2,553
Ten years later 26,576
Current estimate of total claims costs 26,576 2,553 2,490 2,507 2,599 2,658 2,930 2,992 3,125 3,163 3,272 54,865
Total disbursed 24,555 2,406 2,344 2,346 2,405 2,445 2,649 2,674 2,664 2,458 1,748 48,694
Provision reported in the balance sheet 2,021 148 146 161 194 213 281 318 461 705 1,523 6,171
of which established vested annuities 22,534 2,258 2,198 2,185 2,210 2,233 2,368 2,356 2,203 1,753 225 42,523
Provision for claims adjustment costs 245
Total provision reported in the BS of If 6,415
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If
Claims cost trend of P&C insurance
Claims costs after reinsurance
Estimated claims cost
EURm < 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total
At the close of the claims year 23,897 2,537 2,523 2,539 2,570 2,601 2,745 2,849 2,878 2,910 3,186
One year later 23,785 2,560 2,513 2,553 2,579 2,642 2,824 2,883 2,897 3,007
Two years later 23,738 2,564 2,505 2,539 2,576 2,633 2,854 2,895 2,924
Three years later 23,708 2,571 2,517 2,524 2,546 2,638 2,872 2,919
Four years later 23,785 2,574 2,518 2,497 2,536 2,613 2,859
Five years later 23,669 2,565 2,487 2,493 2,542 2,614
Six years later 23,598 2,552 2,461 2,479 2,527
Seven years later 23,438 2,537 2,450 2,467
Eight years later 23,302 2,530 2,430
Nine years later 23,125 2,507
Ten years later 22,979
Current estimate of total claims costs 22,979 2,507 2,430 2,467 2,527 2,614 2,859 2,919 2,924 3,007 3,186 50,419
Total disbursed 20,982 2,363 2,287 2,309 2,352 2,408 2,584 2,614 2,501 2,359 1,735 44,494
Provision reported in the balance sheet 1,997 145 143 158 175 206 275 305 423 648 1,451 5,926
of which established vested annuities 1,352 59 53 54 47 48 69 48 36 22 4 1,790
Provision for claims adjustment costs 245
Total provision reported in the BS of If 6,171
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FINANCIAL STATEMENTS 2022
110
Topdanmark
Claims cost trend of P&C insurance
Claims costs before reinsurance
Estimated claims cost
EURm < 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total
At the close of the claims year 953 829 817 795 722 780 787 819 841 867
One year later 977 838 827 793 737 799 812 792 820
Two years later 980 832 814 782 736 811 810 768
Three years later 975 825 814 776 748 814 798
Four years later 965 810 813 761 740 804
Five years later 959 796 796 763 734
Six years later 946 786 789 758
Seven years later 941 784 786
Eight years later 944 783
Nine years later 937
Current estimate of total claims costs 937 783 786 758 734 804 798 768 820 867 8,055
Total disbursed 898 741 741 714 677 724 703 641 600 449 6,889
Discounting 0 -1 0 -1 -1 -2 -2 -3 -7 -12 -29
Provision reported in the balance sheet 39 41 44 43 55 78 93 124 214 407 1,138
Discounting of previous years 288
Total provision reported in the BS of Topdanmark 1,426
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FINANCIAL STATEMENTS 2022
111
Topdanmark
Claims cost trend of P&C insurance
Claims costs after reinsurance
Estimated claims cost
EURm < 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total
At the close of the claims year 802 780 767 737 697 728 754 781 783 822
One year later 807 787 775 739 710 746 777 754 763
Two years later 810 783 763 727 709 758 774 732
Three years later 805 776 762 721 721 761 762
Four years later 795 761 756 706 713 750
Five years later 789 746 750 704 707
Six years later 775 736 744 701
Seven years later 770 738 741
Eight years later 773 737
Nine years later 766
Current estimate of total claims costs 766 737 741 701 707 750 762 732 763 822 7,481
Total disbursed 728 695 696 660 651 673 669 610 563 431 6,375
Discounting 0 -1 0 -1 -1 -1 -2 -3 -6 -11 -26
Provision reported in the balance sheet 38 41 45 40 55 76 92 119 194 380 1,080
Discounting of previous years 288
Total provision reported in the BS of Topdanmark 1,368
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112
Hastings
Claims cost trend of P&C insurance
Claims costs before reinsurance
Estimated claims cost
EURm < 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total
At the close of the claims year 1,344 368 426 540 675 754 822 898 794 997 1,221 8,840
One year later 1,339 369 431 548 697 779 854 953 814 1,036
Two years later 1,320 355 428 539 684 791 880 964 921
Three years later 1,356 362 443 557 754 802 876 1,007
Four years later 1,363 368 462 559 733 795 890
Five years later 1,334 358 436 565 759 845
Six years later 1,328 368 433 554 727
Seven years later 1,329 352 417 509
Eight years later 1,329 343 416
Nine years later 1,336 345
Ten years later 1,314
Payments to date -1,296 -339 -419 -521 -620 -684 -706 -676 -466 -485 -446 -6,658
Gross outstanding claims liabilities, net
of salvage and subrogation recoveries 48 29 7 20 55 70 116 222 328 512 776 2,182
Reconciliation to net outstanding claims liabilities
Anticipated salvage and subrogation recoveries 189
IFRS 3 fair value acquisition adjustment -27
Total provision reported in the BS of Hastings 2,344
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FINANCIAL STATEMENTS 2022
113
Hastings
Claims cost trend of P&C insurance
Claims costs after reinsurance
Estimated claims cost
EURm < 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total
At the close of the claims year 945 142 196 235 296 326 363 378 294 347 554 4,077
One year later 944 142 196 236 296 329 369 386 319 381
Two years later 946 142 196 236 297 330 373 391 386
Three years later 944 141 196 234 297 329 368 406
Four years later 942 141 196 235 290 324 378
Five years later 942 141 193 230 285 341
Six years later 944 141 191 229 289
Seven years later 948 141 187 226
Eight years later 952 147 184
Nine years later 958 154
Ten years later 967
Payments to date -941 -142 -194 -231 -291 -311 -335 -321 -219 -211 -220 -3,417
Net outstanding claims liabilities, net of
salvage and subrogation recoveries 4 1 2 4 5 15 28 56 75 136 334 660
Reconciliation to net outstanding claims liabilities
Anticipated salvage and subrogation recoveries 189
Reinsurers’ share of salvage and subrogation recoveries -80
IFRS 3 fair value acquisition adjustment -3
Net outstanding claims liability 766
Reinsurers’ share of outstanding claims liabilities 1,578
Total provision reported in the BS of Hastings 2,344
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FINANCIAL STATEMENTS 2022
114
Life insurance liabilities from insurance and investment contracts
2022 2021
EURm Gross Reinsurance Net Gross Reinsurance Net
Provision for unearned premiums
Insurance contracts 1,369 — 1,369 4,471 0 4,471
Investment contracts 25 — 25 28 — 28
Provision for claims outstanding 1,575 1 1,573 1,759 1 1,758
Group liabilities from insurance and investment contracts, total 2,969 1 2,967 6,258 2 6,257
Liabilities related to non-current assets held for sale in Mandatum -10
Group’s liabilities for insurance and investment contracts, total 2,967 6,246
Change in liabilities from insurance contracts
EURm
Gross
Contracts with
discretionary
participation features
At 1 January 2022 6,231
Premiums 130
Claims paid -420
Expense charge -34
Guaranteed interest 89
Bonuses -74
Other -2,977
Total life insurance liabilities at 31 December 2022 2,944
Line item Other includes EUR -2,812 million related to the sale of Topdanmark Life.
EURm
Gross
Contracts with
discretionary
participation features
At 1 January 2021 6,622
Premiums 187
Claims paid -611
Expense charge -41
Guaranteed interest 115
Bonuses 182
Other -224
Total life insurance liabilities at 31 December 2021 6,231
Liabilities related to non-current assets held for sale in Mandatum -10
Total life insurance liabilities at 31 December 2021 6,220
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FINANCIAL STATEMENTS 2022
115
Life insurance liabilities from investment contracts
EURm 2022 2021
Investment contracts with discretionary participation features 25 28
The change between financial years is mainly due to the claims paid.
Investment contracts do not include a provision for claims outstanding. The liability adequacy test
does not give rise to supplementary claims.
As a result of the sale of Topdanmark Life, life insurance liabilities were derecognised from the
balance sheet.
Exemption allowed in IFRS 4 Insurance contracts has been applied to investment contracts with
DPF or contracts with a right to trade-off for an investment contract with DPF. These investment
contracts have been valued like insurance contracts.
Reconciliation to the consolidated insurance and
investment contract liabilities
Milj. e 2022 2021
P&C Insurance 13,598 14,121
Life insurance 2,969 6,258
Group consolidated insurance and investment contracts, gross, total 16,567 20,379
Liabilities related to non-current assets held for sale in Mandatum — -10
Group consolidated insurance and investment contracts, gross, total 16,567 20,369
22 Liabilities from unit-linked insurance
and investment contracts
EURm 2022 2021
Unit-linked insurance contracts 4,892 5,925
Unit-linked investment contracts 5,015 4,775
Life insurance liabilities — 9,036
Group liabilities from unit-linked insurance and investment
contracts, total 9,908 19,550
As a result of the sale of Topdanmark Life, life insurance liabilities were derecognised from the
balance sheet.
23 Subordinated debts and other financial liabilities
EURm 2022 2021
Subordinated debt securities
Subordinated loans 1,983 2,016
Subordinated debt liabilities, total 1,983 2,016
Other financial liabilities
Derivative financial instruments 55 121
Debt securities in issue
Bonds 1,306 2,195
Other
Borrowings on Revolving Credit Facility 73 12
Amounts owed to credit institutions 23 —
Group other financial liabilities, total 1,457 2,330
Group financial liabilities, total 3,439 4,345
The segment financial liabilities include subordinated debts, derivatives, debt securities in issue
and other financial liabilities.
During the financial year 2022 bonds decreased by EUR 890 million. Hastings redeemed its GBP
250 million (approximately EUR 290 million) bond in full, at par. Sampo Plc announced tender
offers for its outstanding senior notes maturing in 2023, 2025, 2028 and 2030. The amount of
nominal debt purchased across all the targeted maturities amounted to EUR 500 million.
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116
If
EURm 2022 2021
Derivative financial instruments 7 8
Subordinated debt securities
Subordinated loans Maturity Interest
Subordinated loan, 2021
(nominal value 1,500 MSEK) 30 years
3 month Stibor
+ 1.30% 134 146
Subordinated loan, 2018
(nominal value 1,000 MSEK) perpetual
3 month Stibor
+ 2.75% 90 97
Total subordinated debt securities 224 243
If, total financial liabilities 231 250
The loan of SEK 1,000 million was issued in 2018 with variable interest rate terms. The loan includes
terms stating the right of redemption after five years and at any interest payment date thereafter.
The loan is listed on the Luxembourg Stock Exchange (BdL Market).
The loan of SEK 1,500 million was issued in 2021 with variable interest rate terms. The loan includes
terms stating the right of redemption after five years, at any date for a three-month period
after the first five years and thereafter at any interest payment date. The loan is listed on the
Luxembourg Stock Exchange (BdL Market).
Topdanmark
EURm 2022 2021
Derivative financial instruments 32 81
Subordinated debt securities
Subordinated loans Maturity Interest
Subordinated loan tier 1, 2022
(nominal value 400 MDKK) perpetual
3 month Cibor
+ 4.75% 54 —
Subordinated loan, 2021
(nominal value 700 MDKK) 12/2031
3 month Cibor
+ 1.25% 94 134
Subordinated loan, 2020
(nominal value 500 MDKK) 12/2030
3 month Cibor
+1.60% — 67
Subordinated loan, 2017
(nominal value 400 MDKK) bullet
3 month Cibor
+2.75% — 54
Total subordinated debt securities 148 255
Other financial liabilities 23 1
Topdanmark, total financial liabilities 203 338
Subordinated loans are wholly included in Topdanmark’s own funds. Approximately 128 (220)
million euro (DKK 950 million) of the subordinated loans are subscribed by If.
Hastings
EURm 2022 2021
Debt securities in issue
Bonds 0 317
Other financial liabilities 73 12
Hastings, total financial liabilities 73 329
During the financial period Hastings has signed a revolving credit facility with financial institution
totalling EUR 85 million of which at the end of the reporting period EUR 12 million is undrawn.
The revolving credit facility is terminating on 23 November 2023, but the contract contains an
extension option. In addition, Hastings has an undrawn credit facility with Sampo Plc totalling
EUR 89 million with a maturity date of 29 October 2026.
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FINANCIAL STATEMENTS 2022
117
Mandatum
EURm 2022 2021
Derivative financial instruments 3 29
Subordinated debt securities
Subordinated loans Maturity Interest
Subordinated loan, 2019
(nominal value EURm 250) 30 years
12 months
Euribor + 4.5% 250 249
Subordinated loan, 2002
(nominal value EURm 100) perpetual 1.88% 100 100
Total subordinated debt securities 350 349
Mandatum, total financial liabilities 352 378
Mandatum Life issued in 2002 EUR 100 million Capital Notes. The loan is perpetual and pays floating
rate interest. The interest is payable only from distributable capital. The loan is repayable only
with the consent of the Financial Supervisory Authority and at the earliest on 2012 or any interest
payment date after that. The loan is wholly subscribed by Sampo Plc.
In 2019 Mandatum Life issued a Solvency II Tier 2 loan of EUR 250 million. The loan matures on
4 October, 2049. The loan has a fixed interest rate until the first possible redemption date on
4 October, 2024, whereafter it becomes subject to variable interest rates.
Holding
EURm 2022 2021
Derivative financial instruments 14 3
Debt securities in issue Maturity Interest
Bond 2016,
(nominal value EURm 750) 7 years 1.00% 318 429
Bond 2017,
(nominal value EURm 500) 8 years 1.25% 161 273
Bond 2018,
(nominal value EURm 500) 10 years 1.625% 311 496
Bond 2018,
(nominal value EURm 500) 12 years 2.25% 400 497
Bond 2018,
(nominal value NOKm 1,000) 10 years 3.10% 95 100
Others 21 83
Total bonds 1,306 1,878
Subordinated debt securities
Subordinated loans Maturity Interest
Subordinated loan, 2020
(nominal value EURm 1,000) 32 years 2.50% 993 992
Subordinated loan, 2019
(nominal value EURm 500) 30 years 3.38% 496 495
Total subordinated debt securities 1,489 1,487
Omistusyhteisön rahoitusvelat yhteensä 2,808 3,369
The subordinated loan of 2019 has a fixed interest rate for the first ten years, the 2020 loan for
the first 12 years. After that, the loans become subject to a variable interest rate but they also
include terms stating the right of redemption at this point in time or at any interest payment date
thereafter. The loans are listed on the London Stock Exchange.
The determination and hierarchy of fair values of financial assets and liabilities measured at
acquisition cost is disclosed in note 17. According to this determination, the subordinated debt
securities and bonds are categorised either on level 1 or 2.
EURm 2022 2021
Elimination items between segments -228 -320
Group, total financial liabilities 3,439 4,345
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118
Change in liabilities from financing activities
EURm 1 Jan 2022 Incoming cash flows Outgoing cash flows Exchange differences Other 31 Dec 2022
Subordinated debt 2,016 54 -161 74 1 1,983
Bonds 2,195 — -859 -6 -24 1,306
Borrowings on RCF (only Hastings) 12 69 — -8 — 73
EURm 1 Jan 2021 Incoming cash flows Outgoing cash flows Exchange differences Other 31 Dec 2021
Subordinated debt 2,158 281 -423 -2 0 2,016
Bonds 2,747 — -571 17 2 2,195
Borrowings on RCF (only Hastings) — 12 — 0 — 12
24 Provisions
EURm 2022
At 1 January 2022 9
Additions 2
Amounts used during the period -4
Unused amounts reversed during the period -2
Exchange rate differences 0
At 31 December 2022 6
Current (less than 1 year) 2
Non-current (more than 1 year) 4
Total 6
EUR 3 million (3) of the provision consist of funds reserved for futures expenses for previously
implemented or planned development of efficient administrative and claims adjustment processes
and structural changes in distribution channels, resulting in organisational changes that affect all
business areas. In addition, the item includes a provision of about EUR 3 million (6) for lawsuits
and other uncertain liabilities.
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119
25 Employee benefits
Employee benefits
During the financial year 2022, Sampo had defined benefit plans in P&C insurance business in
Sweden and Norway.
In addition to statutory retirement pension insurance, the Group has certain voluntary defined
benefit plans. The voluntary defined benefit plans are intra-Group and included in the insurance
liabilities of Mandatum Life. The amount is negligible, and they have no material impact on the
Group profit or loss or equity.
For the defined-contribution pension plans, If pays fixed contributions and has no further
payment obligations once the contributions have been paid. The pension expense for the defined-
contribution plans is equal to the premiums paid by If for the fiscal year.
Employee benefit obligations of If
EURm 2022 2021
Defined benefit pension obligations, including social costs etc. 210 294
Fair value of plan assets 220 268
Net liability (asset) recognised in the balance sheet -9 26
of which recognised as Net pension assets 34 —
of which included in the item Other provisions 25 26
The main Swedish defined-benefit pension plan, FTP2, is a multiemployer plan and is closed to
new employees born in 1972 or later. The main Norwegian defined-benefit pension plan consists
solely of active people employed prior to 2006 and born 1957 and earlier. As only a few individuals
covered by the plan remain employed in If, the plan has been closed for accounting purposes
during the year.
The pension benefits referred to are old-age pension and survivors’ pension. A common feature
of the defined-benefit plans is that the employees and survivors encompassed by the plans are
entitled to a guaranteed pension that depends on the employees’ service period and pensionable
salary at the time of retirement. The dominating benefit is the old-age pension, referring to a life-
long pension after the anticipated retirement age.
The anticipated retirement age for Sweden in connection with life-long pension is 65 years.
Life-long old-age pension following a complete service period is payable at a rate of 10% of the
pensionable salary between 0 and 7.5 income base amounts, 65% of salary between 7.5 and 20
income base amounts and 32.5% between 20 and 30 income base amounts. Paid-up policies
and pension payments from the Swedish plans are normally indexed annually with an amount
corresponding to the change in the consumer price index. However, there is no agreement
guaranteeing the value and future supplements, in addition to the contractual pension benefit,
could either rise or fall.
In addition to the closed pension plan, there are also unfunded pension benefits in Norway for
which If is responsible for ongoing payments. All employees in Norway born in 1957 or earlier
and who were employed by If in 2013 are entitled to a temporary pension before the anticipated
retirement age. The retirement age for receiving early retirement pension is normally 65 years.
Following a complete service period the early retirement pension is payable at a rate of 70% of the
pensionable salary. A few individuals also have a top-hat arrangement on salary above 12G or an
individual pension agreement.
The pensions in Sweden are primarily funded through insurance whereby the insurers establish
the premiums and disburse the benefits. If’s obligation is primarily fulfilled through payment of
the premiums. Should the assets that are attributable to the pension benefits not be sufficient
to enable the insurers to cover the guaranteed pension benefits, If could be forced to pay
supplementary insurance premiums or secure the pension obligations in some other way.
However, given the insurers’ high consolidation ratio, the risk that If will be forced to take any
such action is low.
To cover the insured pension benefits, the related capital is managed as part of the insurers’
management portfolios. New and existing asset categories are evaluated on an ongoing basis
in order to diversify the asset portfolios with a view to optimise the anticipated risk-adjusted
return. Any surplus that arises from the management of the assets normally accrues to If and/or
the insured and there is no form of transfer of the asset value to other members of the insurance
collective.
The insurers and If are jointly responsible for monitoring the pension plans, including investment
decisions and contributions. The pension plans are essentially exposed to similar material risks
regarding the final amount of the benefits, longevity, the investment risk associated with the plan
assets and the fact that the choice of discount interest rate affects the valuation in the financial
statements.
When applying IAS 19, the pension obligation and the pension cost attributed to the fiscal period
are calculated annually using the Projected Unit Credit method. The calculation of the defined
benefit obligation is based on future expected pension payments and includes yearly updated
actuarial assumptions such as salary growth, inflation, mortality and employee turnover. The
expected pension payments are then discounted to a present value using a discount rate set with
reference to AAA and AA corporate bonds issued in local currency, including mortgage-backed
bonds, as at mid December. The discount rates chosen in Sweden and Norway take into account
the duration of the company’s pension obligations in each respective country. After a deduction
for the plan assets, a net asset or a net liability is recognised in the balance sheet.
The following tables contain a number of material assumptions, specifications of pension costs,
assets and liabilities and a sensitivity analysis showing the potential effect on the obligations of
reasonable changes in those assumptions as at the end of the fiscal year.
The carrying amounts have been stated including a special payroll tax in Sweden (24.26%) and a
corresponding fee in Norway (14.1%–19.1%).
In addition to the defined benefit plan in Norway that was closed during the year, two small plans
in Sweden have also been closed for accounting purposes. This has been reported as a settlement
under IAS 19 as of 31 December 2022.
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120
Specification of employee benefit obligations by country
2022 2021
EURm Sweden Norway Total Sweden Norway Total
Recognised in income statement and other comprehensive income
Current service cost 4 0 4 6 1 7
Past service cost and settlements 0 1 1 — — —
Interest expense on net pension liability 0 0 0 1 — 1
Total in income statement 4 1 5 7 1 8
Remeasurement of the net pension liability -31 -2 -32 -73 — -73
Total in comprehensive income statement -26 0 -27 -66 1 -65
Recognised in balance sheet
Defined benefit pension obligations, including social costs etc. 184 27 210 245 48 294
Fair value of plan assets 218 2 220 250 18 268
Net liability (net assets) recognised in balance sheet -34 25 -9 -5 30 26
Distribution by asset class
Bonds 42% — 41% 55%
Equities 20% — 27% 12%
Properties 10% — 9% 13%
Other 28% — 23% 20%
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121
The following actuarial assumptions have been used for the calculation of defined benefit pension plans in Norway and Sweden:
Sweden Sweden Norway Norway
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Discount rate 3.50% 1.75% 3.25% 2.00%
Future salary increases 2.75% 2.50% 3.00% 3.00%
Price inflation 2.00% 1.75% 2.00% 2.00%
Mortality table DUS21 DUS14 K2013 K2012
Average duration of pension liabilities 18 years 20 years 10 years 12 years
Expected contributions to the defined benefit plans during 2023 and 2022 6 7 — 1
Sensitivity analysis of effect of reasonably possible changes
2022 2021
Sweden Norway Total Sweden Norway Total
Discount rate, +0.50% -15 -1 -16 -29 -3 -32
Discount rate, -0.50% 17 1 18 33 3 36
Future salary increases, +0.25% 4 0 4 8 0 8
Future salary increases, -0.25% -3 0 -3 -7 0 -7
Expected longevity, +1 year 6 1 7 12 1 13
2022 2021
EURm Funded plans Unfunded plans Total Funded plans Unfunded plans Total
Distribution of obligations on funded and unfunded plans
Defined benefit pension obligations, including social costs etc. 186 24 210 264 30 294
Fair value of plan assets 220 — 220 268 — 268
Net pension liability (net assets) recognised in the balance sheet
-34 24 -9 -4 30 26
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122
Analysis of the change in net liability recognised in the balance sheet
EURm 2022 2021
Pension liabilities:
At the beginning of the year 288 318
Current cost 4 6
Interest cost 5 4
Actuarial gains (-)/losses (+) on financial assumptions -66 -28
Actuarial gains (-)/losses (+) on demographic assumptions -6 —
Actuarial gains (-)/losses (+), experience adjustments 25 4
Exchange differences on foreign plans -19 -3
Benefits paid -20 -13
Settlements -7 —
Defined benefit pension obligations on Dec 31,
excl. social security costs etc. 204 288
Social security costs 7 6
Defined benefit plans on Dec 31, incl. social security costs etc. 210 294
Reconciliation of plan assets:
At the beginning of the year 268 239
Interest income 5 3
Difference between actual return and calculated interest income -16 35
Contributions paid 10 7
Exchange differences on foreign plans -19 -4
Benefits paid -20 -13
Settlements -7 —
Plan assets at 31 December 220 268
Other short-term employee benefits
There are other short-term employee incentive programmes in the Group, the terms of which vary
according to country, business area or company. Benefits are recognised in the profit or loss for
the year they arise from. An estimated amount of these short-term incentives, social security costs
included, for 2022 is EUR 110 million.
26 Other liabilities
EURm 2022 2021
Liabilities arising out of direct insurance operations 252 248
Liabilities arising out of reinsurance operations 360 293
Liabilities related to Patient Insurance Pool 67 66
Pension return tax — 204
Tax liabilities 105 100
Premium taxes 176 185
Settlement liabilities 61 131
Interests 9 40
Leases* 197 205
Prepayments and accrued income 311 285
Other 495 488
Group other liabilities, total 2,031 2,246
Item Other includes, e.g. withholding taxes, social expenses related to Workers’ Compensation
insurance policies and employee benefits.
The non-current share of other liabilities is EUR 134 million (128).
* The total effect of leases on the statement of cash flows was EUR -15 million (-34). Non-cash flow
additions from IFRS 16 leases to the balance sheet items were EUR 32 million (41).
EURm 1–12/2022 1–12/2021
Items recognised in the p/l from lease liabilities
Interest expenses -3 -2
Expenses from short-term and low-value lease liabilities -7 -7
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123
27 Contingent liabilities, commitments
and legal proceedings
EURm 2022 2021
Off-balance sheet items
Guarantees 9 2
Investment commitments 2,069 1,818
IT acquisitions 11 15
Other 2 48
Total 2,091 1,883
Assets pledged as collateral for liabilities or contingent liabilities
2022 2021
EURm
Assets
pledged
Liabilities/
commitments
Assets
pledged
Liabilities/
commitments
Assets pledged as collateral
Investments 362 169 482 162
Subsidiary shares 94 28 94 30
Cash and cash equivalents 19 32 3 —
Total 476 230 579 192
EURm 2022 2021
Assets pledged as security for derivative contracts, carrying value
Investment securities 8 173
Cash and cash equivalents 60 186
Total 68 358
Assets pledged as security for insurance undertakings, carrying value
Investment securities 354 420
Assets pledged as security for loans, carrying value
Subsidiary shares 94 94
Assets pledged for other commitments, carrying value
Cash and cash equivalents 0 1
Other financial commitments
The subsidiary If P&C Insurance Ltd provides insurance with mutual undertakings within the Nordic
Nuclear Insurance Pool, Norwegian Natural Perils’ Pool and the Dutch Terror Pool.
In connection with the transfer of property and casualty insurance business from the Skandia
Group to the If Group as of March 1, 1999, If P&C Holding Ltd and If P&C Insurance Ltd issued a
guarantee for the benefit of Försäkringsaktiebolaget Skandia (publ.) whereby the aforementioned
companies in the If Group mutually guarantee that companies in the Skandia group will be
indemnified against any claims or actions due to guarantees or similar commitments made by
companies in the Skandia Group within the property and casualty insurance business transferred
to the If Group.
If P&C Insurance Holding Ltd and If P&C Insurance Ltd have separately entered into agreements
with Försäkringsaktiebolaget Skandia (publ.) and Tryg-Baltica Forsikrings AS whereby Skandia
and Tryg-Baltica will be indemnified against any claims attributable to guarantees issued by
Försäkringsaktiebolaget Skandia (publ.) and Vesta Forsikring AS, on behalf of Skandia Marine
Insurance Company (U.K.) Ltd. (changed name to Marlon Insurance Company Ltd., company
dissolved in July 2017) in favour of the Institute of London Underwriters. Marlon was sold during
2007, and the purchaser issued a guarantee in favour of the aforementioned companies in the If
Group for the full amount that they may be required to pay under these guarantees.
If P&C Insurance Company Ltd has outstanding commitments to private equity funds totalling
EUR 3 million, which is the maximum amount that the company has committed to invest in the
funds. Capital will be called to these funds over several years as the funds make investments.
With respect to certain IT systems If and Sampo use jointly, If P&C Insurance Holding Ltd has
undertaken to indemnify Sampo for any costs caused by If that Sampo may incur in relation to the
owners of the systems.
Sampo Group’s Danish companies and Topdanmark Group’s companies are jointly taxed, with
Topdanmark A/S being the management company. Pursuant to the specific rules on corporation
taxes etc. in the Danish Companies Act, the companies are liable for the jointly taxed companies
and for any obligations to withhold tax from interests, royalties and dividend for companies
concerned.
In connection with implementation of a new customer and core system, Topdanmark Forsikring
A/S has undertaken to provide support towards specific suppliers to fulfil Topdanmark EDB IV
ApS’ obligations in accordance with the contracts.
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124
Contingent liability
Entities within Hastings Group are subject to review by tax authorities in the UK and Gibraltar.
The Hastings Group commenced discussion with HMRC in December 2016 regarding aspects
of its business model and the allocation of certain elements of its profit between the Group’s
operating subsidiaries, Hastings Insurance Services Limited (’HISL’) in the UK and Advantage
Insurance Company Limited (’AICL’) in Gibraltar. During the year, management has engaged in
correspondence and meetings with HMRC. Management has reviewed current and previous tax
filings and considered the nature of the ongoing enquiries and does not consider it appropriate
to provide for any additional tax due. Hastings Group provides for potential tax liabilities that
may arise on the basis of the amount expected to be paid to the tax authorities, having taken
into consideration any ongoing enquiries or reviews and based on guidance from professional
firms. The final amounts paid may differ from the amounts provided depending on the ultimate
resolution of such matters and any changes to the estimates or amounts payable in respect of
prior periods are reported through adjustments relating to prior periods. In the event that the
tax authorities do not ultimately accept the filed tax position, it is possible that the Hastings
Group will have an additional tax liability. However the ongoing nature of the enquiry means that
it is inherently difficult to predict a range of potential outcomes with certainty. Based on the
information received from HMRC to date, management does not believe that it is probable that any
additional amounts will ultimately become payable. Further information in respect of the enquiries
has therefore not been provided in accordance with IAS 37 on the grounds it is not practicable to
do so.
Legal proceedings
There are a number of legal proceedings against the Group companies outstanding on
31 December 2022, arising in the ordinary course of business. The companies estimate it
unlikely that any significant loss will arise from these proceedings.
28 Equity and reserves
Equity (1,000 shares)
2022 2021
Equity (1,000 shares) 514,369 546,812
The shares are divided into A and B classes, with the number of A shares being 179,000,000 at
minimum and 711,200,000 at maximum, and the number of B shares being 0 at minimum and
4,800,000 at maximum. Each A share entitles its holder to one vote and each B share entitles its
holder to five votes at a General Meeting of Shareholders. The shares have no nominal value.
At the end of financial year 2022, the number of A shares amounted to 514,169,315 and B shares to
200,000 shares.
Treasury Shares (1,000 shares)
2022 2021
Own shares held by Sampo Plc (1,000 shares) 2,141 8,540
Reserves and retained earnings
Legal reserve
The legal reserve comprises the amounts to be transferred from the distributable equity accordin
to the Articles of Association or on the basis of the decision of the AGM.
Invested unrestricted equity
The reserve includes other investments of equity nature, as well as the issue price of shares to the
extent it is not recorded in the share capital by an express decision.
Other components of equity
Other components of equity include fair value changes of financial assets available for sale and
derivatives used in cash flow hedges, and exchange differences.
Changes in the reserves and retained earnings are presented in the Group’s statement of changes
in equity.
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125
29 Related party disclosures
The related parties of Sampo Group include subsidiaries, associates and joint ventures. In addition,
related parties include, as mentioned below, key management personnel and their related parties.
The Group’s subsidiaries are included in note 32 and significant associates and joint ventures in
note 13.
All intra-group transactions and balances are eliminated upon consolidation. The related party
transaction disclosed in the note include transactions with related parties that are not eliminated in
the preparation of consolidated financial statements.
Transactions with related parties are on an arm’s length basis.
Key management personnel and their related parties
The key management personnel in Sampo Group consists of the members of the Board of
Directors of Sampo plc, the Chief Executive Officer (CEO) and Sampo Group’s Executive
Committee. Their related parties include close family members and the entities over which the
members of the key management personnel or their close family members have control or
significant influence.
Key management compensation
EURm 2022 2021
Short-term employee benefits -10 -8
Post employment benefits -3 -3
Other long-term benefits -6 -4
Total -19 -15
Short-term employee benefits comprise salaries and other short-terms benefits, including profit-
sharing bonuses accounted for the year, and social security costs.
Post employment benefits include pension benefits under the Employees’ Pensions Act (TyEL) in
Finland and voluntary supplementary pension benefits.
Other long-term benefits consist of the benefits under long-term incentive schemes accounted for
the year (see note 30).
Related party transactions of the key management
The key management does not have any loans from the Group companies.
Associates
Outstanding balances with related parties/Associates Nordea and Nordax
EURm 2022 2021
Assets — 2,941
Liabilities — 54
In the comparison period, the Group’s receivables from Nordea comprised mainly long-term
investments in bonds and deposits. In addition, the Group had several on-going derivative contracts
related to the Group’s risk management of investments and liabilities. At the end of financial year
2022, these companies are no longer associates of the Group.
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126
30 Incentive schemes
Long-term incentive schemes 2017 I–2020 I
The Board of Directors of Sampo plc has decided on the long-term incentive schemes 2017:1
and 2020:1 for the key employees of Sampo Group. The Board of Directors of Sampo plc has
authorised the Group CEO to decide on the allocation of incentive units, which are used to
determine the incentive reward. The Board of Directors of Sampo plc decides on the number of
incentive units allocated to the Group CEO and the Group Executive Committee members. Some
130 persons were included in the long-term incentive schemes at the end of 2022.
The amount of the incentive reward is based on the share price development of the Sampo A
share, the If P&C insurance margin (IM) and/or Sampo Group’s return on capital at risk (RoCaR).
The value of one calculated incentive unit is the trade-weighted average price of the Sampo A
share at the time period specified in the terms of the incentive scheme, reduced by the dividend-
adjusted starting price. The starting price of the incentive schemes varies between EUR 32.94–44.74.
The maximum value of one incentive unit varies between EUR 56.94–68.74. In the 2017:1 incentive
scheme, the calculation of the incentive reward furthermore takes into account the outcome of
two performance indicators. If the IM is at least 6 per cent, 60 per cent of the incentive reward is
paid. If the IM is between 4–5.99 per cent, 30 per cent of the incentive reward is paid. If the RoCaR
is at least risk-free return + 4 per cent, 40 per cent of the incentive reward is paid. If the RoCaR is
at least risk-free return + 2 per cent but less than risk-free return + 4 per cent, 20 per cent of the
incentive reward is paid. In the 2020:1 incentive scheme, the calculation of the incentive reward
furthermore takes into account the RoCaR. If the RoCaR is at least risk-free return + 5 per cent, the
reward is paid out in full. If the RoCaR is at least risk-free return + 3 per cent but less than risk-free
return + 5 per cent, the payout is 50 per cent. If the RoCaR is below risk-free return + 3 per cent,
no incentive reward will be paid.
Each plan has three performance periods and incentive rewards are paid in cash in three
instalments. Identified staff shall buy Sampo A shares with 50 per cent of the amount of the
instalment after deducting income tax and other comparable charges. The shares are subject to
disposal restrictions for three years from the date when the instalment was paid. A premature
payment of the incentive reward may occur in the event of changes in the group structure. The fair
value of the incentive schemes is estimated by using the Black-Scholes pricing model
2017:I 2017:I/2 2020:I 2020:I/2 2020:I/3
Terms approve*
14 Sep
2017
14 Sep
2017
5 Aug
2020
5 Aug
2020
5 Aug
2020
Granted (1,000) 31 Dec 2019 3,948 85 — — —
Granted (1,000) 31 Dec 2020 2,638 85 3,877 — —
Granted (1,000) 31 Dec 2021 1,292 60 3,815 220 —
Granted (1,000) 31 Dec 2022 — 30 3,805 220 208
End of performance period I 30% Q2-2020 Q2-2021 Q2-2023 Q2-2024 Q2-2025
End of performance period II 35% Q2-2021 Q2-2022 Q2-2024 Q2-2025 Q2-2026
End of performance period III 35% Q2-2022 Q2-2023 Q2-2025 Q2-2026 Q2-2027
Payment I 30% 9-2020 9-2021 9-2023 9-2024 9-2025
Payment II 35% 9-2021 9-2022 9-2024 9-2025 9-2026
Payment III 35% 9-2022 9-2023 9-2025 9-2026 9-2027
Price of Sampo A at terms approval
date EUR* 44.02 44.02 30.30 30.30 30.30
Starting price EUR** 43.81 44.10 32.94 43.49 43.49
Dividend-adjusted starting price
EUR at 31 December 2022 30.49 33.38 27.14 39.39 44.74
Sampo A closing price EUR at
31 December 2022 48.82
Total intrinsic value, EURm 0 47 1 0
Total debt 49
Total cost for the financial period,
EURm (incl. social cost) 43
*
Grant dates vary
**
In the 2017:1 incentive scheme, the trade-weighted average price of the Sampo A share during ten
trading days from the adoption of the scheme and in the 2020:1 incentive scheme, the trade-weighted
average price of the Sampo A share during twenty-five trading days commencing the day after Sampo
plc’s publication of its Half-Year Financial Report in 2020.
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Long-term incentive scheme of Topdanmark
Topdanmark’s long-term option-based scheme is for its Executive Board and senior executives.
The strike price has been fixed at 110% of the market price on the last trading date in the prior
financial year (average of all trades). The options may be exercised 3-5 years subsequent to the
granting. The scheme is settled by shares.
The only earnings conditions to the option scheme requires employment during the whole year of
the allocation. Options are allocated at the beginning of the year and, in connection with resignations
in the year of allocation, a proportional deduction in the number of allocated options is made.
The tables below show option holder’s standing at the year end.
Strike price Executive board Senior executives Resigned Total
Total number of options (1,000)
At 1 January 2022 36 108 765 249 1,121
Granted 54 38 180 0 218
Transferred -53 -414 467 0
Exercised 28 -8 -105 -239 -352
Forfeited 37 0 0 -7 -7
At 31 December 2022 37 85 425 470 981
At 1 January 2021 35 224 598 308 1,130
Granted 39 78 228 — 306
Transferred -171 103 67 -1
Exercised 23 -23 -165 -115 -303
Forfeited 38 — — -12 -12
At 31 December 2021 36 108 765 249 1,121
Per granting
2018, exercise period January 2021–2023 27 1 25 72 99
2019, exercise period January 2022–2024 34 17 74 101 191
2020, exercise period January 2023–2025 40 17 106 103 227
2021, exercise period January 2024–2026 32 23 102 122 247
2021, exercise period January 2025–2027 50 27 118 71 216
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The fair value of the granting for the year has been calculated using the Black and Scholes model,
assuming a share price of EUR 49 (36). The interest rate corresponds to the zero-coupon rate
based on the swap curve on 31 December of the previous year. Future volatility is assumed to be
22 per cent (22) p.a and the average life of the options approximately 4 years. The volatility based
on previous years’ volatility is still management’s best estimate of the future volatility. The strike
prices are adjusted by dividend distribution for outstanding options.
At 31 December 2022, there were 290,000 options (324,000) which could be exercised.
Long-term incentive scheme of Hastings
The total charge for the share-based payments recognised in the profit or loss during 2022 was
EUR 2 million (15) with a share-based payment liability of EUR 15 million (25) held at 31 December
2022.
Long term incentive plan
Certain management personnel of Hastings Group participate in the Group’s Long Term Incentive
Plan (’LTIP’), which is a cash settled scheme. Vesting is subject to a three-year service period
and the achievement of certain performance conditions. For the 2021 tranche, the performance
conditions were in respect of adjusted operating profit and live customer policies over a three year
period. For the 2022 tranche, adjusted operating profit was changed to profit before tax, while live
customer policies remained unchanged as a condition.
Cash awards totalling EUR 12 million (12) were granted in 2022 and EUR 2 million (1) of cash
awards were forfeited. The expected life is the contractual life of the award adjusted to reflect
management’s best estimate of holder behaviour. There were cash awards with a value of EUR 38
million (39) outstanding at 31 December 2022.
Executive board Senior executives Resigned Total
Average market price on date of exercise 2022 50
Average market price on date of exercise 2021 41
Fair value of granting 2022 0 1 0 1
Fair value of granting 2021 0 1 0 1
Fair value at 31 December 2022 1 6 7 14
Fair value at 31 December 2021 1 10 4 15
Restricted stock awards
Restricted Stock Awards are whereby certain individuals are granted cash awards conditional upon
their continued employment with the Group. The expected life is the contractual life of the award
adjusted to reflect management’s best estimate of holder behaviour. During 2022, certain key
management personnel were granted cash awards with a value of EUR 0.5 million (0.3) conditional
upon continued employment with the Group. There were cash awards with a value of EUR 0.8
million (3) outstanding at 31 December 2022.
Capital appreciation plan
In the year ended 31 December 2021, certain key management personnel were invited to
participate in the Hastings Group’s Capital Appreciation Plan (’CAP’) under which they may be
awarded up to five free B Ordinary Shares in HGCL, for every B Ordinary Share they purchase,
subject to performance thresholds based upon total shareholder return (’TSR’). The total number
of B Ordinary Shares purchased and allotted under the scheme in 2022 was 0 million (1). Potential
matching awards of B Ordinary Shares have the potential to vest in two tranches, with 50% being
conditional upon a TSR measured over a four-year period, and 50% being conditional upon
TSR measured over a five-year period, with the number of awards dependent upon the level of
return between a minimum and maximum target. At the end of each performance period, one
half of shares will vest immediately, and one half will be deferred for 12 months before becoming
exercisable. The vesting is dependent on continuing service by the participant over the period of
any deferment, so ranges from three to six years.
The TSR measure for these awards is calculated using the Monte Carlo valuation model. The fair
value of the matching shares was EUR 3 million, or approximately EUR 4 per matching share.
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31 Auditors’ fees
EURm 2022 2021
Auditing fees -4 -3
Deloitte -4 -3
KPMG 0 0
Other fees 1 —
Deloitte -1 —
KPMG 0 0
Total -5 -3
32 Investments in subsidiaries
Name Group holding % Carrying amount
If P&C Insurance Holding Ltd 100 1,886
If P&C Insurance Ltd 100 1,485
If P&C Insurance AS 100 40
Vertikal Helseassistanse AS 100 31
Viking Assistance Group AS 100 83
Topdanmark Forsikring A/S* 49 1,474
Hastings Group (Consolidated) Ltd 49.3 831
Hastings Group Holdings Limited 100 2,517
Hastings Group (Finance) plc 100 1,831
Hastings Group Limited 100 946
Advantage Global Holdings Limited 100 251
Hastings (Holdings) Limited 100 174
Mandatum Holding Oy 100 23
Mandatum Holding Oy 100 539
*
The Group’s ownership of votes.
The table excludes dormant companies in Great Britain as well as property and housing companies
accounted for in the consolidated accounts, and other companies that are insignificant to the
consolidated financial statements.
Sampo Group owns 50 per cent of the guarantee capital of Kaleva Mutual Insurance Company but
the company is not consolidated in the Group’s financial statements due to limitations on controlling
interest and distribution of profits.
Changes in the subsidiary shares during reporting period 2022
Topdanmark Forsikring A/S sold Topdanmark Liv Holding to Nordea Life Holding AB on 1 December 2022.
Mandatum Life sold their Baltic life insurance business to Invalda INVL-Group. The transaction was
completed on 30 June 2022 and the control for the life business was transferred on 1 July 2022.
Sampo plc made an additional investment of approximately EUR 9 million in Topdanmark A/S.
Interests in unconsolidated structured entities
Mandatum Fund Management S.A. and Mandatum AM AIFM Ltd, which are part of Mandatum
Group, manage Mandatum’s funds and investments in limited partnership companies. Mandatum
Fund Management S.A. has outsourced the portfolio management of the investments it manages
to Mandatum Asset Management Ltd and Mandatum AM AIFM Ltd has its own portfolio
management and other operations. Mandatum Group receives management fees from the
unconsolidated investments and these fees are treated as commission income in the financial
statements. In addition, as an investor Mandatum Group receives investment profits from the
unconsolidated investments and these profits are booked as investment profits to the asset class
in which the investment is included on the balance sheet. Mandatum Group’s investments in these
funds were in total EUR 1,766 million (1,915) as of 31 December 2022. These investments are
included in the investment assets on the balance sheet.
33 The divestment of Topdanmark Life business
On 18 March 2022, Sampo’s subsidiary Topdanmark Forsikring A/S signed an agreement to divest
of Topdanmark Liv Holding A/S and all its subsidiaries to Nordea Life Holding AB. Illness and
Accident in the Liv Holding Group were included in the operations divested. The transaction was
approved by regulatory authorities and the transaction was completed on 1 December 2022.
In Sampo Group, Topdanmark Life’s operations have been reported as part of the Topdanmark
segment. As Topdanmark’s life business did not represent a major line of business or geographic
area of operations for Sampo Group, assets and liabilities related to Topdanmark Life’s operations
were classified to non-current assets held for sale, in accordance with IFRS 5 Non-current assets
held for sale and discontinued operations.
Sampo Group recognised a sales gain on the disposal of Topdanmark Life, amounting to EUR 72
million, in the other operating income.
Topdanmark recognised a net profit of EUR 146 million, including a sales gain of EUR 127 million,
from divested operations.
At the date of the sale, the balance sheet total of Topdanmark’s life business amounted
approximately to EUR 12.5 billion. The balance sheet consisted mainly of financial assets and
liabilities for insurance and investment contracts, including those related to unit-linked contracts.
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34 Events after the balance sheet date
Dividend proposal to the AGM
In the meeting of 10 Feb 2023, the Board of Directors decided to propose at the Annual General
Meeting on 17 May 2023 a divided distribution of EUR 2.60 per share (totalling approx. EUR 1,337
million based on the number of outstanding shares at the balance sheet date). The dividends to be
paid will be accounted for in the equity in 2023 as a deduction of retained earnings.
Acquisition of own shares
Sampo’s share buyback programme of EUR 1 billion announced on 9 June 2022 continued after the
end of the reporting period. The buyback programme was completed on 8 February 2023, when
at market close, the company held in total 5.4 million Sampo A shares representing 1.05 per cent
of the total number of shares in Sampo plc. Sampo bought altogether 22.1 million A shares under
the share buyback programme from 10 June 2022 to 8 February 2023, of which 16.7 million shares
were cancelled on 8 December 2022. Further information on the buyback programme is available
on www.sampo.com/sharebuyback.
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35 Risk Management Disclosure
Sampo Group and Sampo plc
Sampo Group companies operate in business areas where
specific features of value creation are the pricing of risks
and the active management of risk portfolios in addition
to sound client services. Hence common risk definitions
are needed as a basis for business activities.
Classification of risks
In Sampo Group, the risks associated with business
activities fall into three main categories as shown in
the picture Classification of Risks in Sampo Group:
business risks, reputational risk and risks inherent in the
business operations. The first two risk classes are only
briefly described in this Risk Management Disclosure as
the focus is on the third risk class.
Business risks
Business risk is the risk of losses due to changes in the
competitive environment and/or lack of internal opera-
tional flexibility. Unexpected abrupt changes or already
identified but internally neglected trends can cause larger
than expected fluctuations in profitability when volumes,
margins, costs, and capital charges change, and in the
long run, they may also endanger the existence of Sampo
Group’s business models.
External drivers behind such changes are varied,
including for instance general economic development,
changes in commonly shared values, developments in the
institutional and physical environment, and technological
innovations. Because external drivers are inter-connected,
the customer preferences and demand can change
unpredictably and there may be a need to change
regulations as well. If the company’s understanding of
changes or its willingness and ability to act accordingly is
inadequate and competitors are more able to meet clients’
and regulation’s altered expectations, the company is
highly exposed to business risk.
Due to the predominantly external nature of the drivers
and development in the competitive environment, man-
aging business risks is the responsibility of the executive
level senior management. Proactive strategic decision
making is the central tool in managing business risks
that relate to competitive advantage. The maintenance of
internal operational flexibility – i.e., the ability to adjust
the business model and cost structure when needed – is
also an efficient tool in managing business risks.
Business risks do not have a regulatory capital charge,
although they may be a material source of earnings
volatility. Because of this, business risks may influence
the amount and structure of the actual capital base, if
deemed prudent in the existing business environment.
Sustainability as a business risk driver
Issues related to sustainability are changing the
preferences and values of the Sampo Group companies’
stakeholders and, as a result, creating a shift in the
operating and competitive environment. For example,
investors and authorities are putting an increasing focus
on sustainability, but consumers and employees also pay
attention to these topics when choosing a brand or an
employer.
The Group companies operate mainly in countries that
are characterised by an inherent respect for human
rights, high transparency, and low levels of corruption
and bribery. In addition, the compliance requirements for
labour rights, health and environmental legislation, and
freedom of speech and association are high. These themes
are also inherent in the operations of all Sampo Group
companies.
The key sustainability-related business risk drivers for
Sampo Group can be divided into five main categories:
Sustainable business management and practices are
fundamental to the Sampo Group companies’ operations.
Good governance in Sampo Group means effective
policies, management practices, and training that provide
assurance that the Group companies and their personnel,
suppliers, and other business partners comply with laws,
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regulations and generally accepted principles on human
rights, labour rights, the environment and climate,
anti-money laundering, counter-terrorist financing,
and anti-corruption and bribery. Further, they include
comprehensive information security and cybersecurity
governance systems, and data protection activities.
Sustainable corporate culture includes factors relating to
the work environment, diversity, equity and inclusion,
employee health and well-being, competence develop-
ment, remuneration, and talent attraction and retention.
The Sampo Group companies want to provide customers
with the best service in all situations. Here, skilled, and
motivated employees are an essential success factor.
Losing talent or being perceived as an unattractive
employer would pose large risks for the businesses. There-
fore, the Sampo Group companies strive to ensure a sound
work environment, not only because it is stipulated by
law, but also because it lays the foundation for sustainable
business performance. Diversity, equity, and inclusion are
key focus areas for the Sampo Group companies, which
are committed to providing a non-discriminatory, open,
and agreeable working environment where everyone is
treated fairly and equally. Risks related to these themes
are managed, for example, by having strong internal
policies and governance structures, conducting organisa-
tional development programmes, and offering employees
training, interesting career opportunities and attractive
remuneration packages.
Sustainable investment management and operations are
important in managing investment risks and in mitigat-
ing potential adverse impacts on the Group’s reputation.
Therefore, the Sampo Group companies take environ-
mental (including climate change), social and governance
(“ESG”) issues into account when assessing the security,
quality, liquidity, and profitability of investments.
Investment opportunities are carefully analysed before
any investments are made and ESG issues are considered
along with other factors that might affect the risk-return
ratio of individual investments. Depending on the asset
class, the Group companies use different ESG strategies
to ensure the effective consideration and management of
investment risks arising from ESG issues. The strategies
used include, for example, ESG integration, sector-based
screening, norms-based screening, and engagement with
investee companies.
Sustainable product and service offering is important
in meeting the evolving needs of all customers and in
mitigating potential adverse impacts on the Group’s
reputation. Therefore, the Sampo Group companies aim
to take ESG issues, including climate change, into account
in product and service development, insurance under-
writing, and supply chain management. Additionally,
sustainable product and service offering requires being
attentive to the risks relating to inappropriate customer
advice and product sales, lack of clarity on conditions,
prices and fees, and errors in claims handling and
complaint processes. The focus in sales and marketing
practices is on meeting the demands and needs of the
customer and providing the customer with the informa-
tion necessary for them to make well-informed decisions
on their insurance coverage. The Sampo Group compa-
nies manage risks related to these themes, for example,
by having effective internal policies and governance
structures, and offering employees training.
Environmental issues and climate change are factors that
are expected to have a mid and long-term effect on Sampo
Group’s businesses. Climate-related risks can be cate-
gorised into physical risks and transition risks. Physical
risks can be further classified into long-term weather
changes (chronic risks) and extreme weather events such
as storms, floods, or droughts (acute risks). Transition
risks refer to risks arising from the shift to a low carbon
economy, for example changes in technology, legislation,
and consumer sentiment.
The strength of the risks depends on the trajectory of
global warming. A scenario in line with the Paris Climate
Agreement, limiting the temperature rise to 1.5°C, would
have moderate consequences, whereas 3–5°C scenarios
would have severe consequences for industry, infrastruc-
ture, and public health. Especially in geographically
vulnerable regions, abandonment of low-lying coastal
areas due to rising sea levels and food and water shortages
can lead to large-scale migration and outbreaks of
diseases.
Physical risks are risk factors affecting especially the
financial position and results of the Group’s non-life
insurers. The increasing likelihood of extreme weather
conditions and natural disasters is included in internal
risk models. Climate-related risks are also managed effec-
tively with reinsurance programs and price assessments.
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Since climate change could increase the frequency and/
or severity of physical risks, the Sampo Group companies
conduct sensitivity analyses using scenarios in which the
severity of natural catastrophes is assumed to increase.
The Sampo Group companies also help their corporate
and private customers to manage climate-related risks.
Extreme weather events can, for example, damage
properties, lead to crop failure and business interruption.
Loss prevention is an essential part of insurance services,
as it helps customers to reduce economic losses and
mitigates the impacts of climate change.
The Sampo Group companies’ investments can be
exposed to both physical risks and transition risks,
depending on the investment in question. Investments
are particularly exposed to physical risks in the form
of losses incurred from extreme weather events. The
transition to a low-carbon society with potentially
increasing environmental and climate regulation, more
stringent emission requirements, and changes in market
preferences, could in turn cause transition risks for the
Group’s investments and possible revaluation of assets
as operating models in carbon intense sectors change. To
manage physical risks and transition risks, investment
opportunities are carefully analysed before any invest-
ments are made and climate-related risks are considered
along with other factors affecting the risk-return ratio
of individual investments. The methods used by Sampo
Group companies include, for example, annual analysis of
the carbon footprint and climate impact of investments,
sector-based screening and ESG integration, monitoring
the geographical distribution of investments, and
engagement with investee companies.
In terms of scenario analysis, Sampo has analysed the
Group investment portfolio’s exposure to systemic
economic and financial climate risks in three different
climate scenarios over the period from 2022 to 2060.
The analysis is based on the investment allocation as
at 31 at December 2021. The three scenarios analysed
are the following:
• Orderly transition: This scenario describes an easy and
smooth transition where political and social organisa-
tions act quickly and predictably to achieve net-zero
carbon emissions by 2050. This scenario is most closely
corresponding to the ’very low emissions’ IPCC scenario
SSP1-RCP1.9;
• Disorderly transition: In this scenario, transition to a
greener economy happens, but in a disorderly manner.
Sudden divestments in 2025 to align portfolios to the
goals of the Paris Climate Agreement have disruptive
effects on financial markets with sudden repricing
followed by stranded assets and a sentiment shock. This
scenario is most closely corresponding to the same ’very
low emissions’ IPCC scenario SSP1-RCP1.9 as the orderly
transition scenario; and
• Failed transition: In this scenario the world fails to meet
the goals of the Paris Climate Agreement and global
warming reaches 4.3°C above pre-industrial levels by
2100. Physical climate impacts cause large reductions
in economic productivity and increasing impacts from
extreme weather events. This scenario focuses on
physical risk as transition does not happen and is most
closely corresponding to the ’high emissions’ IPCC
scenario SSP3-RCP7.0.
According to the modelled results, Sampo’s current
investment portfolio is relatively resilient to climate
risk in all three scenarios. This is due to the significant
allocation to fixed income instruments, which tends to
be less affected than equities, as well as the geographical
allocation towards mainly the Nordics and other countries
in Europe where the effects of climate change is expected
to be lower than other parts of the world. In the short run,
the main risk is related to the pricing-in shock in the Net
zero disorderly scenario. In the long run, there will always
be a negative impact on the returns in all scenarios, due
to increased physical risks. In addition, returns from
“brown” sectors are particularly affected in both Net zero
pathways.
Further information on corporate responsibility in Sampo
Group is available in the Sustainability Report 2022
published in May 2023 www.sampo.com/year2022.
Reputational risk
Managing stakeholder relationships means satisfied
customers, professional staff, good co-operation with
authorities and the trust and approval of the environ-
ment. These contribute to a key success factor of the
company, its reputation.
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Reputational risk refers to the risk that adverse publicity
regarding the company’s business practices or associa-
tions, whether accurate or not, causes a loss of confidence
in the integrity of the institution. Reputational risk is
often a consequence of a materialised operational or
compliance risk and often manifests as a deterioration of
reputation amongst customers and other stakeholders.
Reputational risk is related to all activities shown in the
graph Classification of Risks in Sampo Group. As the roots
of reputational risk are varied, the tools to prevent it must
be diverse and embedded within the corporate culture.
These are reflected in the way in which Sampo Group
deals with ESG issues and with key stakeholders (i.e.
customers, personnel, investors, co-operation partners
and authorities) and how Sampo Group has organised its
corporate governance system.
KAAVIONO
Classification of risks in Sampo Group
Earningsrisks
capitalcharge
Earningsrisks
nocapitalcharge
Consequentialrisks
capitalcharge
Consequentialrisks
nocapitalcharge
Counterparty
defaultrisks
Derivative
counterparty
Reinsurance
counterparty
Operational
risks
Processes
Personnel
Systems
Externalevents
Legalrisk
Compliancerisk
Lifeinsurance
underwritingrisks
Biometricrisks
Policyholder
behaviourrisks
Expenserisk
Investment
portfoliomarket
risks
Interestraterisk
Currencyrisk
Spreadrisk
Equityrisk
Otherrisks
Non-lifeinsurance
underwritingrisks
Premiumand
catastropherisks
Reserverisks
Externaldrivers
Negativeimpactonfinancialresultscapitalisationandlong-termprofitability
Reputationalrisk
Business
risks
Volumes
Margins
Numberofclients
Concentrationrisk
ALMrisks
Concentrationrisk
Concentrationrisk Concentrationrisk Concentrationrisk Concentrationrisk
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Risks inherent in business operations
In its underwriting and investment operations, Sampo
Group is consciously taking certain risks to generate
earnings. These earnings risks are carefully selected
and actively managed. Underwriting risks are priced
to reflect their inherent risk levels and the expected
return of investments is compared to the related risks.
Furthermore, earnings-related risk exposures are adjusted
continuously and their impact on the capital need is
assessed regularly.
The successful management of underwriting risks and
investment portfolio market risks is the main source
of earnings for Sampo Group companies. Day-to-day
management of these risks, i.e. maintaining them within
given limits and authorisations, is the responsibility of the
business areas and the investment units.
Some risks, such as counterparty default risks and
operational risks presented in the graph Classification
of Risks in Sampo Group are indirect repercussions of
Sampo’s normal business activities. They are one-sided
risks, which in principle have no related earnings
potential. Accordingly, the risk management objective
is to mitigate these risks efficiently rather than actively
manage them. Mitigation of consequential risks is the
responsibility of the business areas and the investment
units. The capital need for these risks is measured by
independent risk management functions. It must be
noted that the categorisation of risks between earnings
and consequential risks varies depending on the industry.
For Sampo Group’s clients, for instance, the events that
are subject to insurance policies are consequential risks
and for Sampo Group these same risks are earnings risks.
Some risks such as interest rate, currency and liquidity
risks are by their nature simultaneously linked to various
activities. To manage these risks efficiently, Sampo
Group companies must have a detailed understanding of
expected cash flows and their variance within each of the
company’s activities. In addition, a thorough understand-
ing of how the market values of assets and liabilities may
fluctuate at the total balance sheet level under different
scenarios is needed. These balance sheet level risks are
commonly defined as Asset and Liability Management
(“ALM”) risks. In addition to interest rate, currency and
liquidity risk, inflation risk and risks relating to GDP
growth rates are central ALM risks in Sampo Group. The
ALM risks are one of the focus areas of senior manage-
ment because of their relevance to risks and earnings in
the long run.
In general, concentration risk arises when the company’s
risk exposures are not diversified enough. When this is
the case, an individual extremely unfavourable claim or
financial market event, for instance, could threaten the
solvency of the company.
Concentrations can evolve within separate activities
– large single name or industry specific insurance or
investment exposures – or across activities when a single
name or an industry is contributing widely to the profit-
ability and risks of the company through both insurance
and investment activities.
Concentration risk may also materialise indirectly when
profitability and the capital position react similarly to
general economic developments or to structural changes
in the institutional environment in different areas of
business.
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136
Core risk management activities
To create value for all stakeholders in the long run,
Sampo Group companies must have the following forms
of capital in place:
• Financial flexibility in the form of adequate capital and
liquidity.
• Good technological infrastructure.
• Intellectual capital in the form of comprehensive
proprietary actuarial data and analytical tools to
convert this data into information.
• Human capital in the form of skilful and motivated
employees.
• Social and relationship capital in the form of good
relationships with society and clients to understand the
changing needs of different stakeholders.
These resources are being continuously developed in
Sampo Group companies. They are in use when the
following core activities related to risk pricing, risk taking,
and active management of risk portfolios are conducted.
Appropriate selection and pricing of underwriting risks
• Underwriting risks are carefully selected and are priced
to reflect their inherent risk levels.
• Insurance products are developed proactively to meet
clients’ changing needs and preferences.
Effective management of underwriting exposures
• Diversification is actively sought.
• Reinsurance is used effectively to reduce largest
exposures.
Careful selection and execution of investment transactions
• Risk return ratios and sustainability issues of separate
investments opportunities are carefully analysed.
• Transactions are executed effectively.
Effective mitigation of consequential risks
• Counterparty default risks are mitigated by carefully
selecting counterparties, applying collateral agree-
ments, and assuring adequate diversification.
• High quality and cost-efficient business processes are
maintained.
• Continuity and recovery plans are continuously
developed to secure business continuity.
Effective management of investment portfolios and
the balance sheet
• Balance between expected returns and risks in invest-
ment portfolios and the balance sheet is optimised,
considering the features of insurance liabilities,
internally assessed capital needs, regulatory solvency
rules and rating requirements.
• Liquidity risks are managed by having an adequate
portion of investments in liquid instruments. The
portion is mainly dependent on the features of the
liabilities.
At the Group level, the risk management focus is on
capitalisation, leverage, and liquidity. It is also essential
to identify potential risk concentrations and to have a
thorough understanding of how solvency and reported
profits of Group companies would develop under different
scenarios. These concentrations and correlations may
influence Group level capitalisation, leverage, and
liquidity as well as Group level management actions.
When the above-mentioned core activities are success-
fully implemented, a balance between profits, risks and
capitalisation can be achieved and shareholder value can
be created.
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Sampo Group risk profile
Sampo’s strategy is to create long-term value from its
non-life insurance operations. The Group’s focus within
non-life insurance is on the private and SME business in
the Nordic countries and the digital distribution market
in the United Kingdom. Sampo Group is first and fore-
most exposed to the general performance of the Nordic
economies. However, the Nordic economies typically are
at any given time in different stages of their economic
cycles, because of reasons such as different economic
structures and separate currencies. Also the Nordics as a
geographically large area is more a source of underwriting
diversification than concentration. Hence the Nordic
area is inherently a good basis for a diversified business.
Geographic diversification is extended also outside of the
Nordics into the United Kingdom via Hastings.
To further maintain diversification of businesses Sampo
Group proactively prevents concentrations, to the extent
possible, by segregating the duties of separate business
areas. As a result, separate companies have very few
overlapping areas in their underwriting and investment
activities. Despite proactive strategic decisions on the
segregation of duties, concentrations in underwriting and
investments may appear, and hence, liabilities and assets
are monitored at the Group level to identify potential
concentrations at a single company or risk factor level.
It is regarded that the current business model where all
companies have their own operational processes and
agreements with counterparties is preventing accumula-
tion of counterparty default risks and operational risks.
Hence, these risks are mainly managed at company level.
The number of intragroup exposures between the Group
companies is small and the parent company is the main
source of internal liquidity and capital within the Group.
This effectively prevents the contagion risk, and hence
potential problems of one company will not directly affect
the other Group companies.
Underwriting and market risk concentrations and their
management are described in the next sections as well
as the parent company’s role as a risk manager of group-
wide risks and as a source of liquidity.
Underwriting risks at Sampo Group
With respect to the underwriting businesses carried out in
the subsidiary companies, it has been established that If,
Topdanmark and Mandatum all operate within the Nordic
countries, but mostly in different geographical areas
and in different lines of business and hence their under-
writing risks are different by nature. There are, however,
some common risk factors such as the life expectancy
in Finland. Also, in Denmark If and Topdanmark have
some overlapping areas. However, there are no material
underwriting risk concentrations in the normal course of
business. Hastings operates solely in the United Kingdom,
and hence its underwriting risks are geographically
distinct from the Nordics. Consequently, business lines as
such are contributing diversification benefits rather than
a concentration of risks.
Market risks at Sampo Group level
For all subsidiaries, their insurance liabilities and the
company specific risk appetite are the starting points
for their investment activities. The insurance liabilities
including loss absorbing buffers as well as the risk
appetite of If, Topdanmark, Hastings and Mandatum
differ, and as a result the structures and risks of the
investment portfolios and the balance sheets of the four
companies differ respectively. Sampo Group’s investment
assets presented in the tables and graphs in this section
do not include investments in the shares of subsidiaries.
The total amount of Sampo Group’s investment assets as
at 31 December 2022 was EUR 22,346 million (28,672) as
presented in the following graph. Mandatum’s investment
assets presented here do not include assets which cover
unit-linked contracts.
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138
Graph 23
The content of the figures in this graph is different compared to the financial asset line presented in the balance sheet.
Sampo Plc figures do not include intragroup items nor derivatives but accrued interest is included; these amount to EUR 118 million. Operational bank accounts not used for investment operations
amounting to EUR 103 million are excluded.
If figures include cash EUR 272 million.
Topdanmark figures do not include Topdanmark Liv for the year 2022.
The total investment allocation of Mandatum Life is equal to EUR 4,327 million. When EUR 7 million of intra-group assets, EUR 24 million of accrued interest, EUR 372 million of cash, EUR 172 million of real
estates and an adjustment of EUR 1 million to the value of loans and receivables are deducted, and EUR 25 million of derivatives are added, the total is equal to EUR 3,776 million, which corresponds to the
sum of Mandatum’s financial assets on Sampo Group’s balance sheet.
* Private equity also includes direct holdings in non-listed equities.
Developmentofinvestments
SampoplcIfTopdanmarkHastingsandMandatumLife
EURm






December
TotalEURmillion
December
TotalEURmillion
If IfMandatum Life Mandatum LifeSampo plc Sampo plcHastings HastingsTopdanmark Topdanmark
10,719
4,327
1,320
3,411
2,569
6,199
4,505
1,125
5,233
11,610
● Fixedincome          
● Listedequity          
● Privateequity*          
● Realestate          
● Otheralternativeinvestments          
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FINANCIAL STATEMENTS 2022
139
Investment activities and market risk taking are arranged
pro-actively in such a way that there is no significant over-
lap between the wholly owned subsidiaries’ single name
risks except with regards to Nordic banks where the com-
panies have their extra funds in short-term money market
assets and cash. From the diversification of the assets of
the balance sheet perspective, Topdanmark is a positive
factor because the role of Danish assets is dominant in its
portfolios and especially the role of Danish covered bonds
is central. In Sampo Group’s other insurance companies’
portfolios, the weight of Danish investments has been
immaterial. Even though Hastings’ investment portfolio
is smaller than other Group companies’ portfolios, it has
had a positive impact on the diversification of Sampo
Group’s investments. Most Hastings’ assets are British
investments, denominated in pound sterling, which is
a market that other Sampo Group companies have very
limited exposure to. Moreover, Hastings’ investment
portfolio consists mainly of investment-grade fixed
income investments.
In the next paragraphs, concentrations by homogenous
risk groups and by single names are presented first and
after that balance sheet level risks are discussed.
Holdings by sector, geographical area and
asset class
Regarding fixed income and equity exposures, financial
institutions and covered bonds have a material weight
in the group-wide portfolios, whereas the role of public
sector investments is quite limited. Most of these assets
are issued by Nordic corporates and institutions, although
Hastings brings some diversification in this respect. Most
corporate issuers, although being based in the Nordic
countries, are operating at global markets and hence
their performance is not that dependent on the Nordic
markets. Exposures by sector, asset class and rating are
presented in the following table. Sampo considers that
the balance sheet values describe the maximum exposure
amount exposed to credit risk.
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Exposures by sector, asset class and rating
Sampo Group, 31 December 2022
EURm AAA
AA+
-
AA-
A+
-
A-
BBB+
-
BBB-
BB+
-
C D Non-rated
Fixed
income
total
Listed
equities Other
Counter-
party risk Total
Change
from 31
Dec 2021
Basic industry 0 0 22 245 50 0 70 388 134 0 0 522 97
Capital goods 0 0 141 138 88 0 151 519 585 0 0 1,103 -223
Consumer products 1 29 270 413 105 0 118 935 227 0 0 1,162 -298
Energy 0 12 75 0 0 0 99 186 12 0 0 199 -33
Financial institutions 32 2,059 3,021 1,055 162 0 88 6,417 741 26 506 7,690 -1,235
Governments 422 71 0 0 0 0 0 493 0 0 0 493 -20
Government guaranteed 52 34 0 0 0 0 0 87 0 0 0 87 6
Health care 0 0 18 92 139 0 56 305 35 0 0 340 -157
Insurance 14 9 65 186 8 0 178 459 0 15 0 473 -144
Media 0 0 0 0 0 3 30 33 0 0 0 33 -54
Packaging 0 0 0 0 47 0 0 47 5 0 0 52 -20
Public sector, other 651 37 0 0 0 0 0 687 0 0 0 687 -250
Real estate 0 39 146 318 32 0 287 822 0 170 0 992 -1,487
Services 0 0 17 85 291 0 62 455 103 5 0 563 -152
Technology and electronics 0 12 29 29 5 0 80 155 110 1 0 266 -140
Telecommunications 0 0 18 177 27 0 19 242 39 0 0 280 -135
Transportation 0 70 57 20 18 0 118 283 7 0 0 290 -126
Utilities 0 1 99 201 172 0 78 550 0 0 0 550 -168
Others 0 6 0 6 13 0 121 145 0 12 0 158 44
Asset-backed securities 0 0 0 0 0 0 0 0 0 0 0 0 0
Covered bonds 4,082 0 118 0 0 0 118 4,318 0 0 0 4,318 -1,618
Funds 0 0 0 0 0 0 214 214 885 1,005 0 2,104 -28
Clearing house 0 0 0 0 0 0 0 0 0 38 11 49 -40
Total 5,253 2,378 4,097 2,966 1,158 3 1,887 17,741 2,884 1,272 517 22,413 -6,181
Change from 31 Dec 2021 -1,532 10 -1,319 -401 -129 3 -1,251 -4,619 -928 -1,001 368 -6,181
In the table, both fixed income instruments and listed equities include direct and indirect investments.
Total assets differ from the graph Development of investments due to derivatives.
Topdanmark Liv is not included in the year 2022 figures.
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Most of the financial institutions and covered bonds are
in the Nordic countries, which can be seen in the table
Fixed income investments in the financial sector,
Sampo Group, 31 December 2022 and 31 December 2021.
Fixed income investments in the financial sector
Sampo Group, 31 December 2022
EURm Covered bonds
Cash and money
market securities
Long-term
senior debt
Long-term
subordinated debt Total %
Denmark 1,813 869 156 2,839 24.3%
Finland 1,729 157 552 165 2,603 22.3%
Sweden 44 2,028 291 127 2,490 21.3%
France 520 515 283 1,318 11.3%
Norway 179 328 264 771 6.6%
United States 2 346 2 350 3.0%
United Kingdom 62 176 2 240 2.1%
Canada 32 197 230 2.0%
Netherlands 161 50 211 1.8%
Ireland 138 27 24 188 1.6%
Iceland 56 33 89 0.8%
Germany 1 81 82 0.7%
Spain 40 40 0.3%
Gibraltar 40 40 0.3%
Switzerland 26 13 40 0.3%
Luxembourg 6 34 39 0.3%
New Zealand 25 25 0.2%
Australia 25 25 0.2%
Austria 18 18 0.2%
Bermuda 16 16 0.1%
Belgium 14 14 0.1%
Estonia 8 8 0.1%
Cayman Islands 5 5 0.0%
Jersey 0 0 0.0%
Total 4,318 3,302 3,087 971 11,679 100.0%
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Fixed income investments in the financial sector
Sampo Group, 31 December 2021
EURm Covered bonds
Cash and money
market securities
Long-term
senior debt
Long-term
subordinated debt Total %
Denmark 4,380 145 322 259 5,105 34.7%
Finland 71 2,697 436 116 3,320 22.5%
Sweden 822 34 600 151 1,607 10.9%
France 1,197 221 14 1,432 9.7%
Norway 630 427 273 1,330 9.0%
United States 2 336 10 348 2.4%
Ireland 72 64 168 304 2.1%
United Kingdom 41 224 33 297 2.0%
Canada 33 193 226 1.5%
Netherlands 178 42 220 1.5%
Other 76 21 97 0.7%
Iceland 49 43 91 0.6%
Germany — 54 16 70 0.5%
Spain 57 57 0.4%
Gibraltar 44 44 0.3%
Australia 44 44 0.3%
Switzerland 40 40 0.3%
Bermuda 15 10 25 0.2%
New Zealand 23 23 0.2%
Austria 12 12 0.1%
Belgium 10 10 0.1%
Estonia 8 8 0.1%
Guernsey 8 8 0.1%
Luxembourg 2 1 3 0.0%
Italy 3 3 0.0%
Cayman Islands 1 1 0.0%
Total 5,937 4,309 3,346 1,134 14,726 100.0%
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Fixed income investments in the public sector
Sampo Group, 31 December 2022
EURm Governments
Governments
guaranteed
Public sector,
other Total
Sweden 404 184 588
Norway 369 369
Finland 19 24 42
Supranationals 135 135
United Kingdom 71 71
Germany 52 52
France 10 10
Total 493 87 687 1,267
Sampo Group, 31 December 2021
EURm Governments
Governments
guaranteed
Public sector,
other Total
Sweden 496 256 752
Norway 353 353
Finland 20 27 234 281
Supranationals 101 101
Germany 45 45
France 12 12
Greece 0 0
Total 517 84 944 1,544
The public-sector exposure includes government bonds,
government guaranteed bonds and other public-sector
investments as shown in the tables Fixed income invest-
ments in the public sector, Sampo Group, 31 December
2022 and 31 December 2021. The public sector has had
a relatively minor role in Sampo Group’s portfolios and
these exposures have been mainly in the Nordic countries.
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The listed equity investments of Sampo Group totalled
EUR 2,884 million at the end of year 2022 (3,812). The
geographical core of Sampo Group’s equity investments
is in the Nordic companies. The proportion of Nordic
companies’ equities corresponds to 57 per cent of the
total equity portfolio. This is in line with Sampo Group’s
investment strategy of focusing on Nordic companies.
However, these Nordic companies are mainly competing
in global markets, and only a few are operationally purely
domestic companies. Hence, the ultimate risk is not
highly dependent on the Nordic economies. A breakdown
of the listed equity exposures of Sampo Group is shown
in the graph Breakdown of listed equity investments by
geographical regions, Sampo Group, 31 December 2022
and 31 December 2021.
Graph 24
Breakdown of listed equity investments by geographical regions
SampoGroup
●
Denmark
●
Norway
●
Sweden
●
Finland
●
WesternEurope
● EasternEurope
● NorthAmerica
● LatinAmerica
● Asia
● Denmark
● Norway
● Sweden
● Finland
● WesternEurope
● EasternEurope
● NorthAmerica
● LatinAmerica
● Asia
31 December 2022
Total EUR 2,884 million
31 December 2021
Total EUR 3,812 million
24%
1%
1%
12%
10%
11%
3%
21%
17%
12%11%
4%
1%
33%
9%
14%
1%
16%
Topdanmark Liv is not included in the year 2022 figures.
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Largest holdings by single name
The largest exposures by individual issuers and counter-
parties are presented in the table Largest exposures by
issuer and asset class, Sampo Group, 31 December 2022
and 31 December 2021.
Largest exposures by issuer and asset class
Sampo Group, 31 December 2022
Issuer Total, EURm
% of total
investment
assets
Cash & short-
term fixed
income
Long-term
fixed income,
total
Long-term
fixed income:
Government
guaranteed
Long-term
fixed income:
Covered bonds
Long-term
fixed income:
Senior bonds
Long-term
fixed income:
Tier 1 and
Tier 2 Equities
Un-
collateralised
part of
derivatives
Nordea Bank 1,416 6% 715 699 0 496 130 73 0 2
Skandinaviska Enskilda Banken 818 4% 639 178 0 65 93 20 0 1
Danske Bank 801 4% 516 286 0 119 137 29 0 0
Nykredit Realkredit A/S 645 3% 0 645 0 645 0 0 0 0
BNP Paribas 601 3% 541 60 0 0 60 0 0 0
Sweden 588 3% 0 588 0 0 588 0 0 0
Realkredit Danmark 514 2% 0 514 0 514 0 0 0 0
Nordax 425 2% 0 0 0 0 0 0 425 0
Norway 369 2% 0 369 0 0 369 0 0 0
Saxo Bank 345 2% 0 31 0 0 13 17 314 0
Total top 10 exposures 6,522 29% 2,411 3,368 0 1,840 1,389 140 739 3
Other 15,824 71%
Total investment assets 22,346 100%
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Largest exposures by issuer and asset class
Sampo Group, 31 December 2021
Issuer Total, EURm
% of total
investment
assets
Cash & short-
term fixed
income
Long-term
fixed income,
total
Long-term
fixed income:
Government
guaranteed
Long-term
fixed income:
Covered bonds
Long-term
fixed income:
Senior bonds
Long-term
fixed income:
Tier 1 and
Tier 2 Equities
Un-
collateralised
part of
derivatives
Nykredit Realkredit 1,601 6% 966 632 0 379 191 63 0 3
Nordea Bank 1,359 5% 0 1,359 0 1,354 5 0 0 0
Realkredit Danmark 1,270 4% 1,197 74 0 0 71 3 0 0
Jyske Realkredit 1,088 4% 813 263 0 135 104 24 6 6
Danske Bank 999 3% 924 74 0 50 7 17 0 1
DLR Kredit 939 3% 0 939 0 939 0 0 0 0
BNP Paribas 801 3% 0 801 0 801 0 0 0 0
Skandinaviska Enskilda Banken 737 3% 0 737 0 0 737 0 0 0
Nordea Kredit 509 2% 0 509 0 509 0 0 0 0
Sweden 387 1% 0 387 0 177 142 68 0 0
Total top 10 exposures 9,689 34% 3,899 5,774 0 4,342 1,257 175 6 9
Other 18,974 66%
Total investment assets 28,663 100%
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FINANCIAL STATEMENTS 2022
147
Ten largest direct high-yield and non-rated fixed income investments and
direct listed equity investments
Sampo Group, 31 December 2022
Ten largest direct high-yield and non-rated
fixed income investments Rating Total, EURm
% of total direct fixed
income investments
Ellevio Holding 1 AB NR 60 0.4%
Teollisuuden Voima BB+ 54 0.3%
Saab NR 53 0.3%
Granite Debtco 9 Limited NR 49 0.3%
Granite Debtco 10 Limited NR 45 0.3%
Huhtamaki BB+ 44 0.3%
ALM Equity NR 43 0.3%
Pohjolan Voima NR 41 0.3%
Visma Group Holding NR 36 0.2%
Schibsted NR 35 0.2%
Total top 10 exposures 459 2.8%
Other direct fixed income investments 15,790 97.2%
Total direct fixed income investments 16,249 100.0%
Ten largest direct listed equity investments Total, EURm
% of total direct
equity investments
Nordax* 425 21.3%
Saxo Bank* 314 15.7%
Volvo 131 6.6%
ABB 114 5.7%
Enento Group 62 3.1%
Volvo Car 55 2.8%
Nederman Holding 54 2.7%
Husqvarna 52 2.6%
Vaisala 50 2.5%
Yara International 48 2.4%
Total top 10 exposures 1,306 65.5%
Other direct equity investments 689 34.5%
Total direct equity investments 1,995 100.0%
*
Although Nordax and Saxo Bank are not listed companies, they are major equity investments in Sampo plc’s portfolio and are therefore included in
the table.
Topdanmark Liv is not included in the year 2022 figures.
The largest high-yield and non-rated fixed income
investment single-name exposures are presented in the
table Ten largest direct high-yield and non-rated fixed
income investments, Sampo Group, 31 December 2022.
Furthermore, the largest direct listed equity exposures
are presented in the table Ten largest direct listed equity
investments, Sampo Group, 31 December 2022 and 31
December 2021.
The exposures in fixed income instruments issued by
non-investment grade issuers are significant because a
relatively small number of Nordic companies are rated.
Furthermore, many of the Nordic rated companies have a
high-yield rating.
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148
Balance sheet concentrations
In general, Sampo Group is structurally dependent on
the performance of the Nordic economies as already
described earlier. Sampo Group is also economically
exposed to a fall in interest rates. This follows from the
duration of insurance liabilities being longer than fixed
income asset duration in If and Mandatum Life. This is
being partially mitigated by Mandatum receiving fixed
interest rate swaps to hedge some of the long-dated
interest rate risk inherent in its technical provisions.
In Topdanmark and Hastings the interest rate risk of
the balance sheet is being actively hedged and hence
Topdanmark or Hastings are not increasing interest rate
risk materially at the Group level.
Sampo Group benefits when interest rates rise, as the
economic value of insurance liabilities decreases more
than the value of assets backing them.
Ten largest direct high-yield and non-rated fixed income investments and
direct listed equity investments
Sampo Group, 31 December 2021
Ten largest direct high-yield and non-rated
fixed income investments Rating Total, EURm
% of total direct fixed
income investments
High Street Shopping NR 151 0.7%
Nykredit Realkredit NR 116 0.6%
TDC B 91 0.4%
Trevian Finland Properties I NR 82 0.4%
Danmarks Skibskredit NR 73 0.4%
Realkredit Danmark NR 64 0.3%
Sponda NR 63 0.3%
GN Store Nord NR 62 0.3%
Saab NR 59 0.3%
Ellevio Holding NR 57 0.3%
Total top 10 exposures 818 4.0%
Other direct fixed income investments 19,847 96.0%
Total direct fixed income investments 20,664 100.0%
Ten largest direct listed equity investments Total, EURm
% of total direct
equity investments
Saxo Bank* 343 11.8%
Volvo 158 5.4%
Volvo Car 142 4.9%
ABB 135 4.7%
Husqvarna 112 3.9%
Nobia 97 3.3%
Enento Group 96 3.3%
Vaisala 78 2.7%
Nederman Holding 74 2.6%
Veidekke 67 2.3%
Total top 10 exposures 1,301 44.8%
Other direct equity investments 1,601 55.2%
Total direct equity investments 2,902 100.0%
*
Although Saxo Bank is not a listed company, it is a major equity investment in Sampo plc’s portfolio and is therefore included in the table.
The role of Sampo plc
Sampo plc is as the Group’s holding company responsible
for the group’s capital management activities. These
actions are guided by targets set for group level solvency
and financial leverage and include decisions on group
level investment exposures, business growth and
performance targets, reinsurance strategies, capital
distributions and capital instrument issuances. In
addition, group level risk accumulations and concentra-
tions are monitored regularly and managed by adjusting
aggregated risks where necessary.
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The leverage of Sampo plc was moderate at year end
according to, for example, these measures:
• The financial leverage measured as the portion of debt
within all liabilities was 29 per cent (28).
• Sampo’s net debt is EUR 201 million (-505) and can be
considered as low.
Regarding liquidity, Sampo plc held EUR 2,467 million
(3,732) in bank account balances and short-term money
market investments. Liquidity is mainly affected by
received and paid dividends as well as changes in
issued debt instruments and changes in investments.
Sampo’s dividend payment takes place in May and it will
significantly lower the liquidity position of the holding
The parent company Sampo plc is also a source of
liquidity within the Group. Hence, the healthy funding
structure and the capacity to generate funds if needed
are under continuous focus. Sampo plc needs liquidity
to manage the group’s financing needs, enable dividend
security and to finance potential transactions. Sampo
plc funding is mainly limited to internal dividends and
investment returns but can periodically be complemented
with new debt and capital or asset sales. Hence, holding
company liquidity needs to be managed holistically
together with the dividend policy, strategic ambitions,
and balance sheet targets.
As at 31 December 2022 Sampo had long-term strategic
holdings of EUR 6,066 million in the subsidiary and
associated companies and they were funded mainly by
capital of EUR 6,814 million, senior debt of EUR 1,306
million and subordinated debt of EUR 1,489 million.
Average remaining maturity of senior debt was 4.5 years
and EUR 806 million of it had a maturity longer than 5
years. Senior debt is used to fund other financial assets
as well. The average maturity of subordinated loans and
fixed income instruments of EUR 127 million was 1.7 years.
The funding structure of strategic holdings and other
holdings can be considered strong.
The capacity to generate funds is dependent on leverage
and liquidity buffers, which can be inferred from the table
Balance sheet structure, Sampo plc, 31 December 2022
and 31 December 2021.
Balance sheet structure
Sampo plc, 31 December 2022 and 31 December 2021
EURm 31 Dec 2022 31 Dec 2021
Assets total 9,685 12,327
Liquidity 2,467 3,732
Investment assets 990 836
Other investments 2 2
Fixed income 27 39
Equity & private equity 961 795
Subordinated loans 100 100
Equity holdings 6,066 7,596
Subsidiaries 6,066 5,639
Associated 0 1,956
Other assets 62 63
EURm 31 Dec 2022 31 Dec 2021
Liabilities total 9,685 12,327
CPs issued — —
Long-term senior debt 1,306 1,878
Private placements 21 47
Bonds issued 1,285 1,831
Subordinated debt 1,489 1,487
Capital 6,814 8,823
Undistributable capital 98 98
Distributable capital 6,716 8,725
Other liabilities 77 138
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FINANCIAL STATEMENTS 2022
150
company. A part of the investment assets (990) can be
sold in case liquidity is needed. Short-term liquidity can
be considered adequate.
All in all, Sampo plc is in a good position to refinance its
current debt and even issue more debt. This capacity,
together with the tradable financial assets, means that
Sampo plc can generate liquid funds.
Currently, Sampo Group has a capital buffer in excess
of the Solvency Capital Requirement. The subordinated
loans presented in the table Balance sheet structure,
Sampo plc, 31 December 2022 and 31 December 2021 are
currently all issued by Mandatum and eliminated from
the Group’s own funds. In case these assets would be sold,
in addition to liquidity in Sampo plc, also own funds and
Sampo Group solvency ratio would increase.
Sampo plc is able to balance risks within Sampo Group.
When Sampo plc is managing its funding, capital
structure and liquidity, it takes into account that some of
its operative companies have other base currencies (the
Swedish krona, the Danish krone, pound sterling) than
the euro, and are exposed to lower interest rates. These
risks may affect Sampo’s decisions on the issuance of
debt instruments and the composition of the liquidity
portfolio.
The maturities of financial assets and liabilities and lease
liabilities are presented in the table Cash flows according
to contractual maturity, Sampo plc, 31 December 2022 and
31 December 2021.
Cash flows according to contractual maturity
Sampo plc, 31 December 2022
Carrying amount total Cash flows
EURm
Carrying
amount total
Carrying
amount without
contractual
maturity
Carrying
amount with
contractual
maturity 2023 2024 2025 2026 2027
2028–
2037 2038–
Financial assets 3,596 2,799 797 688 24 8 8 8 77 183
Financial assets (non-derivatives) 3,596 2,799 797 688 24 8 8 8 77 183
Interest rate swaps 0 0 0 0 0 0 0 0 0 0
FX forwards 0 0 0 0 0 0 0 0 0 0
Financial liabilities 2,816 0 2,816 -416 -65 -224 -60 -60 -2,513 0
Financial liabilities (non-derivatives) 2,802 0 2,802 -416 -63 -223 -59 -59 -2,504 0
Interest rate swaps 14 0 14 0 -2 -1 -1 -1 -9 0
FX derivatives 0 0 0 0 0 0 0 0 0 0
Lease liabilities 2 0 2 -1 -1 0 0 0 0 0
Net technical provisions 0 0 0 0 0 0 0 0 0 0
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Cash flows according to contractual maturity
Sampo plc, 31 December 2021
Carrying amount total Cash flows
EURm
Carrying
amount total
Carrying
amount without
contractual
maturity
Carrying
amount with
contractual
maturity 2022 2023 2024 2025 2026
2027–
2036 2037–
Financial assets 4,697 3,885 812 687 8 28 7 5 52 172
Financial assets (non-derivatives) 4,690 3,885 804 684 7 27 5 5 52 172
Interest rate swaps 7 0 7 3 2 1 2 0 0 0
FX forwards 0 0 0 0 0 0 0 0 0 0
Financial liabilities 3,406 0 3,406 -132 -518 -68 -340 -62 -2,868 0
Financial liabilities (non-derivatives) 3,404 0 3,404 -135 -520 -70 -342 -64 -2,868 0
Interest rate swaps 2 0 2 3 3 2 2 2 0 0
FX derivatives 0 0 0 0 0 0 0 0 0 0
Lease liabilities 2 0 2 -1 -1 0 0 0 0 0
Net technical provisions 0 0 0 0 0 0 0 0 0 0
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FINANCIAL STATEMENTS 2022
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Sampo Group capitalisation
Capitalisation at the Group level
Sampo’s core business competences are skilful pricing of
risks inherent in business operations and high-quality
management of arising risk-exposures and capital needed
to cover these risks. A balance between earnings, risks
and capital contributes positively to return on equity and
to stakeholder confidence, facilitating the creation of
shareholder value.
Sampo plc is responsible for the group’s capital manage-
ment activities. These actions are guided by targets set
for group level solvency and financial leverage and they
include decisions on group level investment exposures,
business growth and performance targets, reinsurance
strategies, capital distributions and capital instrument
issuances.
Group level capitalisation is managed within Sampo’s
capital management framework, which sets targets for
solvency and informs potential risk management actions.
Group level capitalisation and the factors affecting it are
illustrated in the graph Sampo Group’s capitalisation
framework.
KAAVIO N.O 18
SampoGroup’scapitalisationframework
Capitalrequirements
Group’sownfunds
Sampo plc
If
Topdanmark
Hastings
Other related undertakings
Otheritems
Consolidated
GroupequityExcessof
assetsoverliabilities
Mandatum
Grouplevelbuffers
• minimum level buffer
• risk buffer
• operating buffer
Factors affecting the size of group
level buffers:
• risk appetite
• profitability and its volatility
• risk exposures
• diversification benefits
• growth prospects
• shareholders’ dividend
expectations
• business risks & arrangements
• liquidity and issuance capacity
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The Group’s capital requirement is dependent mainly
on the capital requirements of the sub-groups and
investments in the Nordic financial service companies
on Sampo plc’s balance sheet. Otherwise, the parent
company’s contribution to the Group capital need is
relatively small because Sampo plc does not have any
business activities of its own other than the management
of its capital structure and liquidity portfolio.
Diversification benefit exists at two levels, within the
companies and between the companies. The former is
included in the companies’ solvency capital requirement
(SCR).
Conceptually, the Group’s own funds is the difference
between the market value of assets and liabilities plus
the subordinated liabilities. This difference has accrued
during the lifetime of the Group and it includes the
following main components:
• Accrued profits that have not been paid as dividends
over the years.
• Market value adjustment to the book values of assets
and liabilities.
• Issued capital and subordinated liabilities meeting
Solvency II requirements.
At the Group level, the capital requirement and own funds
are both exposed to foreign currency translation risk. The
actual capital and the capital needs of If, Topdanmark
and Hastings are converted from their reporting cur-
rencies to the euro. When the reporting currencies of If,
Topdanmark and Hastings depreciate, the actual amount
of the Group’s capital in euros decreases and the capital
requirements of If, Topdanmark and Hastings will be
lower in euro terms. Translation currency risk is moni-
tored internally and its effect on Sampo Group’s solvency
on a going concern basis is analysed regularly. However,
no capital need is set internally for translation risk
because it is realised only when a sub-group is divested.
The Group level buffers equal in total to the difference
between the amount of the Group’s own funds and the
Group capital requirement. In addition to sub-group level
factors – expected profits and their volatility, business
growth prospects, the volatility of the balance sheet due
to fluctuations in the market value of investments and
insurance liabilities, and the ability to issue Solvency II
compliant capital instruments – there are factors that are
additionally relevant when considering the size of the
Group level buffers. The most material of them are the
correlation of sub-groups’ profits, the parent company’s
capacity to generate liquidity, the probability of business
arrangements and shareholders’ dividend expectations.
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If Group
Underwriting risks
As shown in the graph Breakdown of gross written
premiums by business area, country, and line of business,
If, 31 December 2022, the If insurance portfolio is well
diversified across business areas, countries, and lines
of business. The six lines of business are segmented in
accordance with the insurance class segmentation used
in IFRS.
There are minor differences between the figures reported
by Sampo Group and If due to differences in foreign
exchange rates used in the consolidation.
Premium and catastrophe risk and
their management and control
Given the inherent uncertainty of P&C insurance
business, there is a risk of losses due to unexpectedly high
claims costs. Examples of what could lead to high claims
costs include large fires and natural catastrophes or an
unforeseen increase in the frequency of claims or the
average size of small and medium-sized claims.
The principal methods for mitigating premium risks are
reinsurance, diversification, prudent underwriting and
regular follow-ups linked to the strategy and financial
planning process.
Graph 1, 2, 3
Breakdown of gross written premiums
IfDecembertotalEUR()million
● Private()
● Commercial()
● Industrial()
● Baltic()
ThefollowingadjustmentsfromIFRSLinesofBusinesstoSolvencyIILinesofBusinessaremade
•
IFRSLineofBusinessMotorotherandMotorthirdpartyliability()includeSolvencyIILineofBusinessMotorvehicleliabilityinsurance()andOthermotorinsurance()
•
IFRSlineofbusinessaccident()includesSolvencyIIlineofbusinessesincomeprotectioninsurance()otherlifeinsurance()medicalexpenseinsurance()andassistance()
By business area By country By line of business
● Norway()
● Sweden()
● Finland()
● Denmark()
● Baltic()
● UnitedKingdom()
● Motorotherandmotor
thirdpartyliability
()
● Workers’
compensation
()
● Liability()
● Accident()
● Property()
● Marineaviation
transport()
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The sensitivity of the underwriting result and hence the
underwriting risk is presented by changes in certain key
figures in the table Sensitivity test of underwriting result,
If, 31 December 2022 and 31 December 2021.
The Underwriting Committee is an advisory and pre-
paratory body to the CEOs in the respective companies.
In accordance with the instructions for the Underwriting
Committee, the Committee monitors compliance with
the established underwriting principles. The Chairman
of the Underwriting Committee is, among other things,
responsible for the approval of underwriting deviations
defined in the Underwriting Policy.
The Underwriting Policy, approved by the Boards of Direc-
tors, sets general principles, restrictions, and directions
for the underwriting activities. The Underwriting Policy
is supplemented by guidelines outlining how to conduct
underwriting within each business area in greater detail.
The business areas manage the underwriting risk
on a day-to-day basis. A crucial factor affecting the
profitability and risk of non-life insurance operations
is the ability to accurately estimate future claims and
expenses and thereby price insurance contracts correctly.
The premiums are set through tariffs within the business
area Private and for smaller risks within the business area
Commercial. The underwriting of risks in the business
area Industrial and of more complex risks within the
business area Commercial is to a greater extent based on
principles and individual underwriting than on tariffs.
The risk related to pricing is mitigated by continuous
monitoring of the risk ratio and claims cost as well as the
development of systems to support tariff analysis. Pricing
is in general based on statistical analyses of historical
claims data and assessments of future claims frequency
and claims inflation.
If’s reinsurance policy stipulates guidelines for the pur-
chase of reinsurance. The optimal choice of reinsurance
is evaluated by considering the expected cost versus the
benefit of the reinsurance, the impact on result volatility
and capital requirements. The main evaluation tool is If’s
internal model in which frequency claims, large claims
and natural catastrophes are modelled.
A group-wide reinsurance program is in place in If since
2003. In 2022, retention levels were between SEK 100
million (approximately EUR 9.0 million) and SEK 250
million (approximately EUR 22.5 million) per risk and SEK
250 million (approximately EUR 22.5 million) per event.
Sensitivity test of underwriting result
If, 31 December 2022 and 31 December 2021
Key Figures
Current level
(2022)
Change in
current level
Effect on pre-tax profit,
(EURm)
2022 2021
Combined ratio, business area Private 82% +/- 1 percentage point +/- 29 +/- 29
Combined ratio, business area Commercial 75% +/- 1 percentage point +/- 13 +/- 13
Combined ratio, business area Industrial 86% +/- 1 percentage point +/- 6 +/- 5
Combined ratio, business area Baltics 90% +/- 1 percentage point +/- 2 +/- 2
Net premiums earned (EURm) 5,002 +/- 1 per cent +/- 50 +/- 48
Net claims incurred (EURm) 3,245 +/- 1 per cent +/- 32 +/- 31
Ceded written premiums (EURm) 329 +/- 10 per cent +/- 33 +/- 28
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Reserve risk and its management and control
The main reserve risks for If are stemming from uncer-
tainty in the claim amounts caused by higher-than-ex-
pected claims inflation, increased retirement age and
increased life expectancy.
Reserves, especially in long tailed business, are sensitive
to assumptions of future claims inflation since they affect
the future claim amount. An increased retirement age,
through for instance a political decision, will increase the
duration and present value of annuities as these decrease,
or expire at retirement. An increase in life expectancy
will likewise increase the duration and present value of
annuities. The present value of discounted reserves is
sensitive to decreasing interest rates, especially in Sweden
and Finland, due to the longer duration of the technical
provisions.
The duration of the provisions, and thus the sensitivity
to changes in discount rates, varies with each product
portfolio. The weighted average duration for 2022 across
the product portfolios was 5.3 years.
For lines of businesses such as Motor third-party liability
and Workers’ compensation, legislation differs signif-
icantly between countries. Some of the provisions for
these lines include annuities that are sensitive to changes
in inflation, retirement age, mortality assumptions and
discount rates. The proportion of technical provisions
related to Motor third-party liability and Workers’
compensation was 44 (48) per cent.
In the tables Net technical provisions by line of business
and major geographical area, If, 31 December 2022 and
31 December 2021, the size and duration of If’s technical
provisions are presented by line of business and major
geographical area.
Technical provisions by line of business and major geographical area
If, 31 December 2022 and 31 December 2021
Sweden Norway Finland Denmark Baltics Total
EURm Duration EURm Duration EURm Duration EURm Duration EURm Duration EURm Duration
Motor other and MTPL 1,597 6.8 565 1.3 866 10.3 171 2.4 146 3.4 3,345 6.4
Workers’ compensation 0 0.0 170 3.6 897 11.3 309 8.1 0 0.0 1,375 9.7
Liability 339 3.6 149 1.5 125 2.9 93 3.0 25 2.3 731 2.9
Accident 422 6.7 473 4.9 236 5.7 111 1.9 10 0.5 1,253 5.4
Property 500 0.9 614 1.0 301 1.0 203 0.7 49 0.7 1,667 0.9
Marine, aviation, transport 27 0.9 27 0.8 13 1.2 33 0.6 3 1.0 102 0.8
Total 2,885 5.3 1,997 2.3 2,439 8.7 920 3.8 233 2.6 8,473 5.3
Sweden Norway Finland Denmark Baltics Total
EURm Duration EURm Duration EURm Duration EURm Duration EURm Duration EURm Duration
Motor other and MTPL 1,771 8.0 538 1.5 1,046 13.6 146 1.6 124 5.7 3,626 8.3
Workers’ compensation 0 0.0 171 7.7 1,139 12.9 282 10.5 0 0.0 1,592 12.0
Liability 311 3.8 123 1.1 109 3.6 79 3.1 27 2.4 649 3.1
Accident 438 7.2 448 7.1 198 6.6 105 1.8 8 0.5 1,196 6.6
Property 533 1.0 569 0.9 265 1.1 153 0.7 43 1.7 1,563 1.0
Marine, aviation, transport 21 1.0 22 0.8 11 1.2 28 0.6 3 0.9 85 0.8
Total 3,074 6.2 1,871 3.1 2,769 11.2 793 4.7 205 4.1 8,712 7.0
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157
The sensitivity of If’s technical provisions to an increase
in inflation, an increase in life expectancy and a decrease
in the discount rate is presented in the table Sensitivities
of technical provisions, If, 31 December 2022.
The technical provisions are further analysed by claims
years. The output from this analysis is illustrated both
before and after reinsurance in the claims cost trend
tables. These are disclosed in the note 21.
The If Boards of Directors approve the policies governing
the calculation of technical provisions. The Chief Actuary
is responsible for the Actuarial function and reports to
the Boards of Directors and the CEOs and advises on
actuarial matters. The Actuarial function is responsible
for ensuring compliance with the steering documents and
that local rules and regulations are reflected in guidelines
and working routines. The Chief Actuary issues a quar-
terly report on the adequacy of If’s technical provisions.
The Actuarial Committee is a preparatory and advisory
board for If’s Chief Actuary. The committee secures a
comprehensive view over reserve risk, discusses, and
gives recommendations on policies and guidelines for
calculating technical provisions.
The calculation of technical provisions according to IFRS
is carried out by actuaries within each business area. The
premium and claims provisions according to the Solvency
II regulations are based on parameters from each business
area and the Chief Actuary unit. The actuaries also
develop methods and systems to support these processes.
Sensitivities of technical provisions
If, 31 December 2022 and 31 December 2021
Technical provision item Risk factor
Change in
risk parameter Country
Effect
EURm 2021
Effect
EURm 2021
Nominal provisions (IFRS 4) Inflation increase
Increase by
1 percentage point
Sweden 110.4 134.7
Denmark 21.3 19.3
Norway 35.5 63.3
Finland 49.4 41.1
Annuities and estimated share
of claims provisions to future
annuities
Decrease in
mortality
Life expectancy
increase by 1 year
Sweden 15.3 15.4
Denmark 0.8 1.0
Finland 50.5 76.9
Discounted provisions
(annuities and part of Finnish
IBNR, IFRS 4)
Decrease in
discount rate
Decrease by
1 percentage point
Sweden 75.4 97.8
Denmark 17.6 21.2
190.1 313.1
The actuarial estimates consider factors such as loss
development trends, the level of unpaid claims, changes
in legislation, case law and economic conditions.
Market risks
The total market value of If’s investment portfolio at 31
December 2022 was EUR 10,719 million (11,610). A large part
of the fixed income portfolio was concentrated to Financials.
Corporate bonds issued by financial institutions and bank
account balances amounted to 28.7 per cent of the fixed
income portfolio. When including covered bonds, the
concentration to financial institutions was 55.3 per cent.
The remainder consists of real estate and private equity.
The composition of the If investment portfolios by asset
class at year end 2022 and at year end 2021, as well as
average maturities of fixed income investments, are
shown in the table Investment allocation, If, 31 December
2022 and 31 December 2021.
If’s investment management strategy is conservative,
with a low equity share and low fixed-income duration.
The Investment Policy is the principal document for
managing market risk. Starting from January 2023, If has
a separate Responsible Investment Policy, expanding
the scope of the responsible investment processes and
increasing alignment across the Sampo Group. Both
investment performance and market risk are actively
monitored and controlled by the Investment Control
Committee monthly and reported to the Own Risk and
Solvency Assessment Committee (“ORSA Committee”) on
a regular basis. Other limits, such as the allocation limits,
issuer and counterparty limits, sensitivity limits for
interest rates and credit spreads as well as the regulatory
capital requirements are regularly monitored.
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Investment allocation
If, 31 December 2022 and 31 December 2021
2022 2021
Asset class
Market value,
EURm Weight, %
Average maturity,
years
Market value,
EURm Weight, %
Average maturity,
years
Fixed income total 9,541 89% 2.9 9,949 86% 2.3
Money market securities and cash 272 3% 0.0 1,166 10% 0.1
Government bonds 1,030 10% 3.5 1,190 10% 4.3
Credit bonds, funds and loans 8,239 77% 2.9 7,593 65% 2.4
Covered bonds 2,505 23% 3.0 1,803 16% 2.0
Investment grade bonds and loans 3,649 34% 2.8 3,130 27% 2.1
High-yield bonds and loans 1,088 10% 2.7 1,499 13% 2.7
Subordinated / Tier 2 555 5% 2.9 629 5% 3.6
Subordinated / Tier 1 442 4% 3.0 532 5% 2.9
Hedging swaps 0 0% - 0 0% -
Listed equity total 1,169 11% - 1,646 14% -
Finland 0 0% - 0 0% -
Scandinavia 630 6% - 1,171 10% -
Global 539 5% - 475 4% -
Alternative investments total 5 0% - 15 0% -
Real estate 1 0% - 1 0% -
Private equity 4 0% - 14 0% -
Biometric 0 0% - 0 0% -
Commodities 0 0% - 0 0% -
Other alternative 0 0% - 0 0% -
Trading derivatives 4 0% - 0 0% -
Asset classes total 10,719 100% - 11,610 100% -
FX Exposure, gross position 73 - - 124 - -
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Market risks of balance sheet
Asset and liability management risk
The ALM risk is considered through the risk appetite
framework and its management and governance are based
on If’s investment policies. To maintain the ALM risk
within the overall risk appetite, the technical provisions
may be matched by investing in fixed income instruments
and by using currency and interest rate derivatives.
Interest rate risk
If is negatively affected when interest rates are decreasing
or remaining at low levels, as the duration of liabilities in
If is longer than the duration of assets. During 2022, inter-
est rates increased considerably compared to the previous
year and If invested in instruments with somewhat longer
maturities. Interest rate sensitivity in terms of the average
duration of fixed income investments was 1.9 years on 31
December 2022 (1.1). The respective duration of insurance
liabilities was 5.3 years (7.0). The overall interest rate risk
is managed by sensitivity limits for instruments sensitive
to interest rate changes.
The technical provisions are under IFRS 4 predominantly
stated in nominal terms on the balance sheet. However,
the economic value of these provisions, meaning the
present value of future claims payments, is exposed to
changes in interest rates. Furthermore, If is exposed to
changes in future inflation. For more information see
the table Sensitivities of technical provisions, If, 31
December 2022 and 31 December 2021 in the section
Underwriting risks.
Currency risk
If writes insurance policies that are mostly denominated
in the Scandinavian currencies and in the euro. The
currency risk is reduced by matching technical provisions
with investment assets in the corresponding currencies
or by using currency derivatives. The currency exposure
in insurance operations is hedged to the base currency
on a regular basis. The currency exposure in investment
assets is controlled weekly and hedged when the exposure
has reached a specific level, set with respect to cost
efficiency and minimum transaction size. An active
currency management can be performed within set limits.
The transaction risk positions against the Swedish krona
are shown in the tables Transaction risk position, If, 31
December 2022 and 31 December 2021. The table shows
the net transaction risk exposures and the changes in the
value of positions given a 10 per cent decrease in the value
of the base currency.
In addition to transaction risk, If is also exposed to
translation risk which at a Group level stems from foreign
operations with other base currencies than SEK.
Transaction risk position
If, 31 December 2022 and 31 December 2021
Base currency, SEKm EUR USD JPY GBP SEK NOK CHF DKK Other Total, net
Insurance operations -3,742 -218 0 -34 -11 -2,318 -5 -1,029 -25 -7,381
Investments 2,304 297 1 11 108 2,071 4 263 1 5,058
Derivatives 1,370 -113 13 16 -78 229 2 760 13 2,211
Transaction risk, net position -68 -34 13 -8 19 -18 1 -6 -11 -112
Sensitivity: SEK -10% -7 -3 1 -1 2 -2 0 -1 -1 -11
Base currency, SEKm EUR USD JPY GBP SEK NOK CHF DKK Other Total, net
Insurance operations -3,555 -151 0 -17 -37 -2,197 -2 -932 -19 -6,911
Investments 1,925 387 0 4 71 2,289 0 423 1 5,100
Derivatives 1,562 -246 0 9 -45 -94 2 489 13 1,692
Transaction risk, net position -67 -9 0 -4 -11 -1 1 -21 -5 -119
Sensitivity: SEK -10% -7 -1 0 0 -1 0 0 -2 0 -12
The transaction risk position in SEK represents exposure in foreign subsidiaries/branches within If with a base currency other than SEK.
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Liquidity risk
If’s liquidity risk is limited since premiums are collected
in advance and large claim payments are usually known a
long time before they fall due. Liquidity risks are managed
by cash management functions which are responsible
for liquidity planning. Liquidity risk is also reduced by
investing in assets that are readily marketable in liquid
markets.
The maturities of technical provisions, financial assets
and liabilities as well as lease liabilities are presented in
the tables Cash flows according to contractual maturity,
If, 31 December 2022 and 31 December 2021. The average
maturity of fixed income investments was 2.9 years (2.3).
The table shows the financing requirements resulting
from expected cash inflows and outflows arising from
financial assets and liabilities as well as technical
provisions.
Cash flows according to contractual maturity
If, 31 December 2022
EURm
Carrying
amount total
Carrying
amount without
contractual
maturity
Carrying
amount with
contractual
maturity
Cash flows
2024 2025 2026 2027
2028–
2037 2038–
Financial assets 12,569 1,464 11,105 3,257 2,178 1,811 2,023 2,266 862 0
Financial assets (non-derivatives) 12,515 1,464 11,050 3,206 2,177 1,811 2,023 2,266 862 0
Interest rate swaps 4 0 4 3 1 0 0 0 0 0
FX derivatives 50 0 50 48 0 0 0 0 0 0
Financial liabilities 1,065 48 1,017 -874 -8 -35 -138 0 0 0
Financial liabilities (non-derivatives) 1,058 48 1,010 -868 -8 -35 -138 0 0 0
Interest rate swaps 0 0 0 0 0 0 0 0 0 0
FX derivatives 7 0 7 -6 0 0 0 0 0 0
Lease liabilities 160 0 160 -26 -23 -23 -22 -18 -59 0
Net technical provisions 8,473 8,473 0 -3,492 -1,047 -585 -423 -341 -1,790 -1,777
In the table, financial assets and liabilities are divided into contracts that have an exact contractual maturity profile, and other contracts. The carrying amount is shown for the other contracts. In addition, the table
shows expected cash flows for net technical provisions, which by nature, are associated with some uncertainty.
If has a relatively low amount of financial liabilities and
thus the refinancing risk is small.
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Cash flows according to contractual maturity
If, 31 December 2021
EURm
Carrying
amount
total
Carrying
amount without
contractual
maturity
Carrying amount
with contractual
maturity
Cash flows
2022 2023 2024 2025 2026
2027–
2036 2037–
Financial assets 13,359 2,182 11,177 4,225 1,846 2,128 1,440 1,334 526 0
Financial assets (non-derivatives) 13,342 2,182 11,160 4,209 1,845 2,127 1,440 1,334 526 0
Interest rate swaps 1 0 1 1 0 1 0 0 0 0
FX derivatives 17 0 17 15 0 0 0 0 0 0
Financial liabilities 997 44 953 -686 -102 -4 -33 -148 0 0
Financial liabilities (non-derivatives) 990 44 946 -678 -102 -4 -33 -148 0 0
Interest rate swaps 0 0 0 0 0 0 0 0 0 0
FX derivatives 8 0 8 -8 0 0 0 0 0 0
Lease liabilities 167 0 167 -24 -22 -21 -20 -19 -71 0
Net technical provisions 8,712 8,712 0 -3,326 -989 -524 -361 -289 -1,712 -1,950
Counterparty default risks
In If, the major sources of counterparty risk are reinsur-
ance, bank balances, financial derivatives, and other
receivables.
Counterparty default risk arising from receivables from
policyholders and other receivables related to commercial
transactions is limited, as non-payment of premiums
generally results in cancellation of insurance policies.
Reinsurance counterparty risk
Reinsurance is used regularly to utilise If’s own funds
efficiently, reduce the cost of capital, limit large
fluctuations of underwriting results and to have access
to reinsurers’ competence base. The Reinsurance
Committee is a collaboration forum with the role to
secure appropriate reinsurance cover for insurance risk in
accordance with If’s risk appetite and provides an opinion
as well as proposes actions in respect of such issues.
The distribution of reinsurance receivables and
reinsurers’ portion of outstanding claims per rating on
31 December 2022 is presented in the table Reinsurance
recoverables, If, 31 December 2022 and 31 December 2021.
Reinsurance recoverables of EUR 185 million (180) are
excluded from the table, which mainly relate to captives
and statutory pooled solutions.
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The amount of the recoverables reported above is exposed
to counterparty risk, as recoverables are typically not
covered by collaterals.
If’s Reinsurance Policy sets requirements for the
reinsurers’ minimum credit ratings and the maximum
exposure to individual reinsurers. In addition, the own
credit-analysis plays a central role when counterparties
are selected.
The Reinsurance Security Committee in If shall give input
and suggestions in respect to various issues regarding
Reinsurance recoverables
If, 31 December 2022 and 31 December 2021
31 Dec 2022 31 Dec 2021
Rating Total EURm % of total Total EURm % of total
AAA 0 0% 0 0%
AA+ - A- 163 100% 169 100%
BBB+ - BBB- 0 0% 0 0%
BB+ - C 0 0% 0 0%
D 0 0% 0 0%
Non-rated 0 0% 1 0%
Total 163 100% 170 100%
reinsurance default risk and risk exposure, as well as
proposed deviations from the Reinsurance Policy.
Most of the reinsurers have ratings between AA+ and
A-. The ten largest individual reinsurance recoverables
amounted to EUR 199 million, representing 57 per cent of
the total reinsurance recoverables including captives and
statutory pooled solutions.
The total ceded premium related to treaty and facultative
reinsurance amounted to EUR 86 million.
Counterparty risk related to
financial derivatives
In If, the default risk of derivative counterparties is
a by-product of managing market risks. The role of
long-term interest rate derivatives has been immaterial
and counterparty risk mainly stems from short-term FX
derivatives. The counterparty risk of bilaterally settled
derivatives is mitigated by a careful selection and diversi-
fication of counterparties to prevent risk concentrations
and by using collateral techniques, e.g., ISDA Master
Agreements backed by Credit Support Annexes. If settles
interest rate swaps in central clearing houses, which
mitigates bilateral counterparty risk but also results in
a systemic risk exposure related to centralised clearing
parties.
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Topdanmark Group
Underwriting risks
Non-life underwriting risks
As shown in the graph Breakdown of gross written
premiums by business area, country and line of business,
Topdanmark Non-Life, 2022, Topdanmark’s insurance
portfolio is diversified across Business areas and lines of
business.
Premium and catastrophe risk and
their management and control
The main underwriting risk that influences the
performance is the risk of catastrophe events. However,
Topdanmark Forsikring has a very comprehensive
reinsurance programme in place contributing to the low
level of underwriting risk. The largest retention level of
DKK 100 million plus reinstatement for each event is on
storm events. The maximum retention on fire events is
DKK 30 million and in workers’ compensation risks are
covered up to DKK 1 billion with a retention of DKK 50
million.
With certain restrictions, acts of terrorism are covered by
the reinsurance contracts. The NBCR (nuclear, biological,
chemical, radiological) acts of terrorism are covered by
a public organisation. This is based on an Act on NBCR
acts of terrorism. Under this scheme, the costs from a
NBCR attack in Denmark will initially be borne by the
State, but those costs will subsequently be recovered from
policyholders.
Breakdown of gross written premiums
TopdanmarkNon-LifetotalEUR()million
● Norway()
● Sweden()
● Finland()
● Denmark()
● Baltic()
● UnitedKingdom()
By business area By country By line of business
● Motorotherandmotor
thirdpartyliability
()
●
Workers’compensation
()
● Liability()
● Accident()
● Property()
● Marineaviation
transport()
● Private()
● Commercial()
● Industrial()
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Premium risk reduction measures taken at different levels
of operations are as follows:
• Collection of data on risk and claims history
• Use of collected and processed data in profitability
reporting, risk analyses and in the internal model
• Ongoing follow-up on risk developments as well as
quarterly forecasts for future risk development
• Pricing using a statistical model tool including cus-
tomer scoring tools
• Reinsurance cover that reduces the risk especially for
catastrophe events
• Ongoing follow-up on the risk picture and reinsurance
coverage in Topdanmark’s Risk Committee
To maintain product and customer profitability,
Topdanmark monitors changes in its customer portfolios.
Provisions are recalculated, and the profitability reports
are updated in the same context on a monthly basis.
Based on this reporting, trends in claim levels are
carefully assessed and price levels may be adjusted if
considered necessary.
In the private market segment, customer scoring is used,
and customers are divided into groups according to their
expected profitability levels. The customer scoring has
two roles. First it helps to maintain the balance between
the individual customer’s price and risk. Secondly it
facilitates the fairness between individual customers by
ensuring that no customers are paying premiums too
large to cover losses from customers who pay premiums
that are too small.
The historical profitability of major SME customers
with individual insurance schemes is monitored using
customer assessment systems. These assessment systems
enable Topdanmark to achieve accurate information
about income, claims expenses, combined ratio etc. for
each customer.
In addition to the analysis described above, Topdanmark
continuously improves its administration systems to
achieve more detailed data, which in turn enables the
company to continuously improve the pricing and gain
even better insight into how the different types of claims
are composed.
The non-life risk scenarios are presented in the table Non-
life insurance risk scenarios, Topdanmark, 31 December
2022 and 31 December 2021.
Reserve risk and its management and control
The insurance lines of business are divided into short-tail,
i.e. those lines where the period from notification until
settlement is short and long-tail, i.e. those lines where
the period from notification until settlement is long. The
main short-tail lines in Topdanmark are buildings and
other property and comprehensive motor insurance. For
Non-life insurance risk scenarios
Topdanmark, 31 December 2022 and 31 December 2021
Key figures
Current level
(2022)
Change in
current level
EURm after tax
2021
Combined ratio, business area Private 80.9% +/- 1 percentage point +/- 4.8 +/- 5.5
Combined ratio, business area Commercial 82.7% +/- 1 percentage point +/- 5.2 +/- 5.1
Net premiums earned (EURm) 1,242 +/- 1 per cent +/- 9.3 +/- 10.1
Net claims incurred (EURm) 791 +/- 1 per cent +/- 5.9 +/- 6.7
Ceded written premiums (EURm) 89 +/- 10 per cent +/- 6.7 +/- 6.3
the short-tail lines the claims are mainly settled within
the first year. Long-tail lines relate to personal injury and
liability and consist of the lines Workers’ compensation,
Accident, Motor third party insurance and Commercial
liability. The composition of non-life provisions for
outstanding claims is presented in the following table.
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Due to the longer period of claims settlement, the risk
profile of the long-tail lines of business is generally more
uncertain than that of the short-tail lines. It is not unusual
that claims in long-tail lines are settled three to five years
after notification and, in rare cases, up to ten to fifteen
years.
The reserve risk is calculated using Topdanmark’s partial
internal model for insurance risk. Workers’ compensation
claims provision has by far the biggest risk, followed by
the other long-tail lines’ claims provisions.
Composition of non-life provisions for outstanding claims
Topdanmark, 31 December 2022 and 31 December 2021
Provisions for outstanding claims
2022 2021
% Duration % Duration
Short-tail 17.3 1.1 13.7 1.1
Annuity provisions in workers’ compensation 25.4 10.5 24.2 10.6
Other claims provisions in workers’ compensation 29.9 2.0 21.6 1.7
Accident 12.3 3.1 30.0 9.3
Motor personal liability 8.3 2.1 6.0 2.1
Commercial liability 6.8 1.8 4.5 1.9
During such a long period of settlement, the levels of
compensation could be significantly affected by changes
in legislation, case law or practice in the compensation
of claim incidents adopted by the Danish Labour Market
Insurance which decides on compensation for injury
and loss of earnings potential in all cases of serious
industrial injuries. The practice adopted by the Danish
Labour Market Insurance also has some impact on the
levels of compensation for accident and personal injury
within motor liability and commercial liability insurance.
Supreme court decisions can also influence the provisions
for former years especially for Workers’ compensation.
The reserve risk represents mostly the ordinary uncer-
tainty of calculation and claims inflation, i.e. an increase
in the level of compensation due to the annual increase
in compensation per policy being higher than the general
development in prices or due to a change in judicial
practice or legislation. The sufficiency of the provisions
is tested in key lines by calculating the provisions using
alternative models as well, and then comparing the
compensation with information from external sources,
primarily statistical material from the Danish Labour
Market Insurance and the Danish Road Sector/Road
Directorate.
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166
Life underwriting performance and risks
This section presents the premium development for
Topdanmark Life until the divestment was completed on 1
December 2022. The split of premiums between products
during the last two years is presented in the table Sources
of gross premiums, Topdanmark Life Insurance, 2022 and
2021.
Sources of gross premiums
Topdanmark Life Insurance, 31 December 2022 and 31 December 2021
EURm 2022 2021
With profit schemes 35 48
Unit-linked schemes 366 381
Group life 33 35
Regular premiums 434 464
With profit schemes 1 7
Unit-linked schemes 775 922
Single premiums 776 929
Gross premiums 1,210 1,393
Until the divestment of Topdanmark Life was completed on 1 December 2022.
Market risks
In general, the long-term value creation shall be based
mainly on the acceptance of insurance risks. To supple-
ment the Group’s profit from its insurance activities,
Topdanmark accepts a certain level of financial market
risks as well, given its strong liquidity position and stable,
high earnings from insurance operations. Hence, in
addition to fixed income instruments, Topdanmark has
invested, among other things, in equities and properties
to improve the average investment return.
Market risks are limited to the extent that is considered
appropriate, so that the negative P/L effect is limited
in very unfavourable financial market scenarios. Large
risk exposures or highly correlated risks are covered to
prevent unnecessary losses and market risks originating
from insurance operations. The investment portfolio shall
be managed in a way that market risk taking shall not
endanger the normal operations or implementation of
planned actions in unfavourable market conditions.
To reach the general goals, the investment policy sets
the company’s objectives, strategies, organisation, and
reporting practices on investments. The investment
strategy is more precisely determined in terms of market
risk limits and specific requirements for certain types of
positions and sub-portfolios (risk appetite). The invest-
ment strategy is determined by the Board and revised at
least once a year. Appropriate financial risk mitigation
techniques are used.
When selecting the investment assets, a portfolio compo-
sition that matches the risk features of the corresponding
liabilities is sought. The purpose of the investment
policy is also to ensure that the company has effectively
implemented the organisation, systems, and processes
necessary to identify, measure, monitor, manage and
report on investment risks to which it is exposed.
When market risks are measured and managed, all
exposures are included, regardless of whether they arise
from active portfolio management of investments or from
annuities considered to be a market risk.
As of 1 December 2022, when the closing deal between
Topdanmark Forsikring and Nordea was finalised, the
new investment department took over all front office
capabilities of Topdanmark Forsikring. The investment
policy and thereby the overall risk profile and strategic
asset allocation is mainly unchanged. However, the
investment strategy has been altered. As part of the
closing deal, the co-investing (“saminvestering”) between
Topdanmark Forsikring and Topdanmark Livsforsikring
has been terminated. The exposures have been shifted to
ETFs (Exchange Traded Funds). The original asset classes
and geographical exposures are unchanged. The one
exception is CLOs which have in part been replaced with a
High-Yield ETF (EUR).
The main idea of these changes is to keep the risk profile
unchanged and use index trackers to get the right
exposures that comply with risk limits, ESG policy, etc.
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167
Investment allocations
Topdanmark, 31 December 2022 and 31 December 2021
Topdanmark Non-life Topdanmark Life
31 Dec 2022 31 Dec 2021 31 Dec 2022 31 Dec 2021
Asset class
Market value,
EURm Weight, %
Market value,
EURm Weight, %
Market value,
EURm Weight, %
Market value,
EURm Weight, %
Fixed income total 2,422 94% 1,863 89% 2,916 71%
Money market securities and cash 544 21% 83 4% 220 5%
Government and mortgage bonds 1,722 67% 1,582 76% 2,376 58%
Credit bonds 39 2% 5 —% 110 3%
Index-linked bonds 91 4% 100 5% 125 3%
CLOs 26 1% 93 4% 84 2%
Listed equity total 111 4% 120 6% 358 9%
Denmark 25 1% 28 1% 85 2%
Scandinavia 2 —% 2 —% 5 —%
Global 85 3% 91 4% 268 7%
Alternative investments total 35 1% 110 5% 816 20%
Real estate 0 —% 59 3% 334 8%
Unlisted equities and hedge funds 35 1% 50 2% 482 12%
Trading derivatives 1 —% 3 —% 14 —%
Asset classes total 2,569 100% 2,095 100% 4,104 100%
The exposure in equities outside Denmark and credit bonds has been adjusted by the use of derivatives. Unlisted equities and hedge funds include also private equity and direct holdings in non-listed equities.
Asset allocations and investment
performance: Topdanmark Forsikring
The equity portfolios are well diversified and without
major single positions when associated companies are
disregarded.
The main investment assets are government and
mortgage bonds, which comprise primarily Danish
mortgage bonds. The assets in this asset class are interest
rate-sensitive and to a significant extent equivalent to
the total interest rate sensitivity of the non-life insurance
provisions. Consequently, the return on government and
mortgage bonds should be assessed in connection with
return and revaluation of non-life insurance provisions.
Credit bonds are composed of a minor share of a well-
diversified portfolio, primarily exposed to businesses in
Europe.
Index-linked bonds comprise bonds – primarily Danish
mortgage bonds – for which the coupon and principal are
index-linked.
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Market risks of balance sheet
Interest rate risk
Interest rate risk is calculated for assets, liabilities, and
derivative instruments, for which the carrying amount is
dependent on the interest rate level. Regarding insurance
liabilities, Topdanmark is exposed to interest rate risk due
to provisions for outstanding claims.
Shifting the market yield curve upwards and downwards
or changing its shape leads to changed market values of
assets and derivatives and thus to unrealised gains or
losses.
When assessing the value and sensitivity of insurance
provisions Topdanmark has used the Solvency II discount
curve that has its basis on a market yield curve with a
volatility adjustment (“VA”). The VA component of DKK
yield curve comprises a corrective element based on the
spreads of Danish mortgage bonds and European credit
bonds.
Generally, the interest rate risk is limited and controlled
by investing in interest-bearing assets in order to reduce
the overall interest rate exposure of the assets and
liabilities to the desired level. Therefore, the Danish
mortgage bonds and government bonds have a central
role in the asset portfolios. To further reduce the interest
rate sensitivity of the balance sheet, interest rate swaps
have been used for hedging purposes.
Equity risk
The Danish part of the equity portfolio is composed
based on the OMXCCAP index and is approximated by
the ETF Xact OMXC25. The rest of the equity holdings
are in the foreign equity portfolio that seeks to track the
MSCI World DC index by the relevant geographical ETF in
USA, Europe and Japan. As a result, Topdanmark’s equity
holdings are well-diversified.
Real estate risk
Real estate risk is limited to properties in own use and
located in Ballerup and Viby. The properties are valued in
accordance with the rules of the Danish FSA i.e., at market
value taking the level of rent and the terms of the tenancy
agreements into consideration.
Spread risk
Most of Topdanmark’s interest-bearing assets comprise
of AAA rated Danish mortgage bonds. The risk of losses
is minor due to the high credit quality of the issuers and
because investments have been made at spreads that are
in balance with Topdanmark’s desired risk ratio levels.
The portfolio is well diversified both geographically and
by issuer type and, therefore, the exposure to concentra-
tion risk is insignificant.
The investment policy stipulates that the portfolio must
be well diversified by the number of counterparties and
by the amount of exposure to individual counterparties.
The main source of spread risk is the mortgage bonds.
Due to high allocation of these investments in the
portfolios, spread risk is the most material source of
market risk SCR.
Currency risk
In practice, the investment assets are the only source of
currency risk while the insurance liabilities are in Danish
krones. The currency risk is mitigated by derivatives, and
net exposures in different currencies are minor except in
the euro.
The currency risk is assessed based on SCR. The value of
the base currency is shocked by 25 per cent against most
of the currencies except against the euro where the largest
exposure exists, and the shock is 0.39 per cent, because
the Danish krone is pegged to the euro.
Inflation risk
Future inflation is implicitly included in the models Top-
danmark uses to calculate its provisions. The provisions
are calculated based on the expected future indexation of
wages and salaries.
An expected higher future inflation rate would generally
be included in the provisions with a certain time delay,
while at the same time the result would be impacted by
higher future indexation of premiums. To reduce the risk
of inflation within Workers’ compensation, Topdanmark
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FINANCIAL STATEMENTS 2022
169
uses index-linked bonds and derivatives to hedge a
significant proportion of the expected cash flows sensitive
to future inflation.
Liquidity risk
Topdanmark Group has a strong liquidity position. Firstly,
as premiums are paid in the beginning of the coverage
period the liquidity risk related to customers’ payments
is very limited. Secondly, the combination of insurance
businesses is of a character in which it is highly unlikely
that a liquidity shock could occur, as insurance liabilities
are by their nature stable liabilities and money market
investments in asset portfolios are complemented by a
large portfolio of liquid listed Danish government and
mortgage bonds.
Experience from quite significant and sudden movements
in long-term interest rates have confirmed that the
liquidity of these assets is not significantly affected by
market shocks.
The maturity structure of technical provisions and the
bond portfolio is presented in the following table.
Expected cash flows for provisions and the bond portfolio
Topdanmark, 31 December 2022 and 31 December 2021
Cash flow years
EURm
Carrying
amount 1 2–6 7–16 17–26 27–36 >36
Provisions for claims
2021 1,882 -601 -735 -400 -155 -60 -14
2022 1,426 -563 -648 -250 -102 -53 -12
Life insurance provisions guarantees
and profit sharing
2021 3,001 -285 -988 -1,268 -500 -140 -38
2022 0 0 0 0 0 0 0
Bond portfolio including interest rate
derivatives
2021 4,176 1,550 1,483 1,894 501 0 0
2022* 1,818 1,092 1,046 342 76 5 0
* Excludes Topdanmark Life’s bond portfolio.
The expected cash flows of the bond portfolio are calculated based on option-adjusted durations that are used to measure the duration
of the bond portfolio. The option adjustment relates primarily to Danish mortgage bonds and reflects the expected duration capturing the
shortening effect of the borrower’s option to have the bond be redeemed through the mortgage institution at any point in time.
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Counterparty default risks
Topdanmark is exposed to counterparty risk in both its
insurance and investment activities. The default risk
related to fixed income and equity investments is covered
by spread-risk and equity-risk models in SCR calculations
and hence they are not discussed in this context.
The main sources of counterparty risk are deposits made
to individual banks, derivative contracts with banks and
current receivables from reinsurance companies with the
addition of potential receivables that will arise in case of a
1-in-200-year catastrophe event. Topdanmark’s counter-
party risk is assessed by the SCR standard formula.
Reinsurance
Within insurance activities the reinsurance companies’
ability to pay is the most important counterparty risk
factor. Topdanmark minimises this risk by primarily
buying reinsurance cover from reinsurance companies
with a minimum rating of A- and by spreading reinsur-
ance cover over many reinsurers.
For reinsurance counterparties, the Board approves
security guidelines which determine the maximum size of
reinsurance contract cover per a separate reinsurer. This
portion is dependent on the reinsurer’s rating as well as
on Topdanmark’s own assessment of the reinsurer. The
largest risk concentrations may occur in case of major
catastrophe events, including storms and cloudbursts.
Investments
Topdanmark may suffer losses due to their counterpar-
ties’ inability to meet their obligations on bonds, loans
and other contracts including derivatives. The majority
of Topdanmark’s interest-bearing assets comprise Danish
mortgage bonds. In order to minimise the risk to a single
debtor, Topdanmark strives to always have a well-diver-
sified portfolio of bonds not only regarding a debtor but
also geographically.
To limit the counterparty risk of financial contracts,
including derivative contracts, the choice of counterparties
is restrictive, and collateral is required when the value of
the financial contracts exceeds the predetermined limits.
The size of the limits depends on the counterparty’s credit
rating and the terms of the contract.
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FINANCIAL STATEMENTS 2022
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Hastings Group
Underwriting risks
Hastings provides motor and home insurance products to
the United Kingdom (UK) market via its Gibraltar-based
general insurance underwriting company Advantage.
For Solvency II reporting purposes the lines of business are:
• Motor vehicle liability insurance (Motor liability)
• Other motor insurance (Motor other)
• Fire and other damage to property insurance
Pricing risk
Advantage’s risk appetite requires management to
maintain rates that are projected to achieve loss ratios
within the target loss ratio range. As a response to market
conditions, rates were regularly adjusted, after review by
management, to remain competitive and provide custom-
er-focused benefits to policyholders. The rate changes
were regularly reviewed and amended in keeping with
Gross technical provisions by line of business
Hastings, 31 December 2022 and 31 December 2021
31 Dec 2022 31 Dec 2021
EURm Duration EURm Duration
Motor vehicle liability insurance 2,145 2.2 2,075 4.6
Other motor insurance 834 -0.2 692 0
Fire and other damage to property insurance 35 1.2 20 1
Total 3,014 1.5 2,787 3.4
an agile approach to pricing and appropriately factoring
in ongoing claims inflation risk. The Department for
Travel data shows that traffic levels have returned back
to pre-pandemic levels but with different peak trends.
The FCA’s General Insurance Pricing Practices (“GIPP”)
changes went live at the start of 2022; all motor and
household insurance products were GIPP-compliant
ahead of implementation with continuous assurance
processes in place. Despite market-wide new business
demand decreasing as a result of GIPP, net written
premiums saw an increase in H1 of 2022 because of timely
pricing rate actions.
Weekly governance arrangements approve changes to the
rate plan and review account performance. The Rating
Analysis Committee (“RAC”) approves decisions for
segment-level rate changes and book-level rate changes.
The goal is to ensure that the business being written will
be profitable.
Audits are conducted on a regular basis to ensure that all
underwriting and rating rules are being applied correctly.
Advantage maintains a control log to identify, report, and
act on errors made by the outsourced service provider.
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FINANCIAL STATEMENTS 2022
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Reserve risk
Advantage does not take significant reserve risk and
holds an internal risk margin to a 75 per cent confidence
level versus the internal best estimate. Since reserving is
subject to expert judgment, the Chief Actuary calculates
the best estimate, the Hastings Group Senior Actuary
verifies the data, the appropriateness of the techniques
utilised, and the assumptions used to create the best
estimate and an additional best estimate is created by a
fully independent third party. Advantage has a series of
monthly, quarterly, and semi-annual controls to ensure
reserve adequacy.
Hastings’ Gross Written Premiums (GWP) for 2022
amounted to EUR 1,313 million.
Advantage maintained a disciplined approach to pricing
despite continued market competition. Live customer
policies grew year on year. This disciplined but agile
underwriting and pricing approach led to many selective
rate adjustments during 2022.
Claims cost inflation had a large influence on the risk
profile for 2022. A combination of repairer delays, parts
shortages, residual COVID-19 impacts to the economy,
alongside the Russia/Ukraine conflict and the cost of
living crisis, all needed to be considered during the year.
Effective pricing claims management and frequency
experience has resulted in profits and capital solvency
with the solvency ratio within or above Advantage’s target
range during the year.
Sensitivities of technical provisions
Hastings, 31 December 2022 and 31 December 2021
Technical provision item Risk factor Change in risk parameter
Effect EURm
2022
Effect EURm
2021
Nominal provisions (IFRS 4) Inflation increase Increase by 1 percentage point 16.9 22.8
Periodic Payment Orders (PPOs) Decrease in mortality
Life expectancy increase by 1
year 0.2 0.1
Discounted provisions (IFRS 4) Decrease in discount rate Decrease by 1 percentage point 3.2 3.9
Graph 26, 2, 3
Breakdown of gross written premiums
HastingsDecembertotalEUR()million
● Private()
● Commercial()
● Industrial()
By business area By country By line of business
● Norway()
● Sweden()
● Finland()
● Denmark()
● Baltic()
● UnitedKingdom
()
● Motorotherandmotor
thirdpartyliability
()
●
Workers’compensation
()
● Liability()
● Accident()
● Property()
● Marineaviation
transport()
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Market risks
Rising yields have reduced market value in line with
expectation – losses recognised through reserves in the
balance sheet and Solvency II impact offset by reduction
in claims. The fixed income portfolio is held to maturity
and had no realised losses incurred. The book yield
has increased significantly during the year, supporting
profitability.
2022 also saw an increased focus on ESG initiatives within
Hastings Group; Advantage became a signatory to the UN
Principles of Investment, and in Q3 2022 Hastings Group
committed to the Science based Target initiative (SBTi).
The Advantage investment portfolio maintains an ESG
rating of AA, exceeding the ESG rating requirement of A
defined in the Responsible Investment Framework. The
ESG overall score for the investment portfolio increased
to 7.6, above the benchmark by 0.6. The Hastings Board
are committed to decarbonisation of the core investment
portfolio, reducing carbon intensity by 50 per cent by
2030 with the aim to be net zero by 2050.
Hastings’ investment portfolio has been designed to
generate a targeted return whilst operating within the
conservative risk appetite parameters set by the Board.
Management aims to prudently operate within its risk
appetite. The risk appetite includes a low appetite for
losses arising from the volatility of market prices affecting
values of assets and liabilities and for assets not matching
the profile of liabilities. As a result, the investment
strategy includes a limited amount of equity exposure.
Investment allocation
Hastings, 31 December 2022 and 31 December 2021
2022 2021
Asset class
Market
value,
EURm Weight, %
Average
maturity,
years
Market
value,
EURm Weight, %
Average
maturity,
years
Fixed income total 1,287 98% 3.3 1,095 97% 3.6
Money market securities and cash 246 19% 159 14% 0.0
Government bonds 71 5% 0.1 0 0% 0.0
Credit bonds, funds and loans 970 74% 4.3 936 83% 4.2
Covered bonds 0 0% 0.0 0 0% 0.0
Investment grade bonds and loans 954 72% 4.4 921 82% 4.1
High-yield bonds and loans 16 1% 4.0 15 1% 4.5
Subordinated / Tier 2 0 0% — 0 0% —
Subordinated / Tier 1 0 0% — 0 0% —
Hedging swaps 0 0% — 0 0% —
Listed equity total 0 0% — 0 0% —
UK 0 0% — 0 0% —
Global 0 0% — 0 0% —
Alternative investments total 32 2% — 30 3% —
Real estate 0 0% — 0 0% —
Private equity 0 0% — 0 0% —
Biometric 0 0% — 0 0% —
Commodities 0 0% — 0 0% —
Other alternative 32 2% — 30 3% —
Trading derivatives 0 0% — 0 0% —
Asset classes total 1,320 100% — 1,125 100% —
FX Exposure, gross position 0 0% — 0 0% —
The core investment portfolio of debt securities,
supplemented by a diversified portfolio of holdings in
collective investment schemes, is held by Advantage. The
Advantage Board works with the investment managers
and investment consultants to maximise return whilst
minimising risk and preserving capital. The criteria for
the portfolio structure, classes of holdings and individual
limits are consistent with a very low risk appetite. These
investment rules are monitored on a quarterly basis inter-
nally and using an external consultancy. The monitoring
outputs are provided to the Investment Committee and
Risk & Compliance Committee quarterly.
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Advantage made no direct use of derivatives during
the period. Derivatives are, however, utilised within
Investment Funds in which Advantage has a share, both
for hedging purposes and to generate additional return.
Interest rate risk
Advantage manages balance sheet interest rate risk prin-
cipally through matched duration of assets and liabilities,
meaning that interest rates are aligned as far as possible,
and interest rate risk is reduced. This is monitored in the
quarterly Investment Committee meeting and includes
adherence to tight duration mismatch tolerances, which
form part of the relevant risk appetite statement.
Liquidity risks
Advantage maintains a short duration and highly
liquid portfolio. Cash and cash equivalent balances are
held in current accounts or short-term money market
instruments. These are generally less than 60 days in
duration, with low sensitivity to movements in interest
rates compared to longer duration assets.
The liquidity profile and cashflow of investments is
monitored at the quarterly Investment Committee to
ensure Advantage can meet its liabilities into the future.
Advantage’s investment managers actively manage
liquidity risk in the portfolio to ensure that bonds can be
sold efficiently to meet cash needs. Informed by market
data, they look to purchase bonds with less than 5 years
since the issue date, larger issue sizes and which trade
regularly. Liquidity scoring is conducted by Advantage’s
investment managers, based on time since issue, issue
size, traded volumes and observed bid-ask spreads.
Cash flows according to contractual maturity
Hastings, 31 December 2022
EURm
Carrying
amount total
Carrying
amount without
contractual
maturity
Carrying
amount with
contractual
maturity
Cash flows
2024 2025 2026 2027
2028–
2037 2038–
Financial assets 1,320 306 1,014 249 138 301 247 79 0 0
Financial assets (non-derivatives) 1,320 306 1,014 249 138 301 247 79 0 0
Interest rate swaps 0 0 0 0 0 0 0 0 0 0
FX derivatives 0 0 0 0 0 0 0 0 0 0
Financial liabilities 73 0 73 -29 -46 0 0 0 0 0
Financial liabilities (non-derivatives) 73 0 73 -29 -46 0 0 0 0 0
Interest rate swaps 0 0 0 0 0 0 0 0 0 0
FX derivatives 0 0 0 0 0 0 0 0 0 0
Lease liabilities 14 0 14 -5 -5 -2 -1 0 0 0
Net technical provisions 1,060 1,060 0 -451 -225 -149 -81 -53 -58 -44
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Cash flows according to contractual maturity
Hastings, 31 December 2021
EURm
Carrying
amount total
Carrying
amount without
contractual
maturity
Carrying
amount with
contractual
maturity
Cash flows
2022 2023 2024 2025 2026
2027–
2036 2037–
Financial assets 1,125 217 908 253 187 121 201 143 3 0
Financial assets (non-derivatives) 1,125 217 908 253 187 121 201 143 3 0
Interest rate swaps 0 0 0 0 0 0 0 0 0 0
FX derivatives 0 0 0 0 0 0 0 0 0 0
Financial liabilities 329 0 329 -10 -21 -9 -302 0 0 0
Financial liabilities (non-derivatives) 329 0 329 -10 -21 -9 -302 0 0 0
Interest rate swaps 0 0 0 0 0 0 0 0 0 0
FX derivatives 0 0 0 0 0 0 0 0 0 0
Lease liabilities 15 0 15 -4 -4 -4 -2 -1 -1 0
Net technical provisions 840 840 0 -345 -191 -121 -57 -39 -47 -40
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Counterparty default risks
Counterparty risk is the risk that a counterparty will be
unable to pay amounts in full as they fall due. Hastings is
exposed to counterparty risk through reinsurance assets,
financial assets and cash and cash equivalents. A number
of controls exist within the Hastings Group to mitigate
against counterparty default, such as annual reviews of
reinsurance panels, credit rating tolerances in line with a
low-risk appetite, and a low-risk, diversified investment
portfolio.
Reinsurance counterparty risk
A key component of risk mitigation is reinsurance.
Advantage’s reinsurance programme includes both
Excess of Loss (“XoL”) and Quota Share (“QS”) protection.
Under the 2022 arrangements, the Motor exposure risk to
Advantage is capped at GBP 1 million per loss, net of XoL
reinsurance, and Household exposure is capped at GBP
5.0 million (approximately EUR 5.6 million) per event loss.
In 2022, the AICL Board reduced the motor QS participa-
tion from 50 per cent to 35 per cent, driven principally by
a change in risk appetite. AICL’s reinsurance strategy will
continue to be reviewed in line with risk appetite.
To mitigate the inherent counterparty and credit risk
posed by the reinsurance programme to Advantage’s
balance sheet, Advantage has set criteria for the minimum
credit quality of the reinsurance counterparties and for
concentration limits.
To better protect itself, and where possible, Advantage
aims to:
• place with parent entities within reinsurance groups
to mitigate counterparty risk in accepting reinsurance
from small regional branches;
• introduce collateralisation or cut through terms and/or
parental guarantees to mitigate counterparty risk;
• ensure special termination clauses are in place in
the event of a rating downgrade or reorganisation of
reinsurance groups to which Advantage is exposed.
Reinsurance recoverables
Hastings, 31 December 2022 and 31 December 2021
2022 2021
Rating Total, EURm % of total Total, EURm % of total
AAA 0 0% 0 0%
AA 1,221 65% 1,224 65%
A 649 35% 653 35%
BBB 3 0% 3 0%
Less than BBB 0 0% 0 0%
Unrated 0 0% 0 0%
Total 1,874 100% 1,880 100%
Mandatum Group
Underwriting risks
The development of insurance liabilities during 2022 is
shown in the table Analysis of the change in provisions
before reinsurance, Mandatum Life, 31 December 2022.
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Analysis of the change in provisions before reinsurance
Mandatum Life, 31 December 2022
EURm Liability 2021 Premiums Claims paid
Expense
charges
Guaranteed
interest Bonus Other Liability 2022 Share %
Unit-linked, excl. Baltic 10,526 1,285 -734 -104 0 0 -1,061 9,912 77
Individual pension insurance 1,778 52 -24 -20 0 0 -308 1,478 11
Individual life 2,495 73 -146 -19 0 0 -342 2,062 16
Capital redemption operations 4,721 1,065 -510 -41 0 0 -220 5,015 39
Group pension 1,532 95 -54 -24 0 0 -192 1,357 11
With profit and others, excl. Baltic 3,236 104 -364 -31 80 4 -61 2,969 23
Group pension insurance, segregated portfolio 751 2 -45 -1 16 4 -12 715 6
Basic liabilities. guaranteed rate 3.5% 485 2 -45 -1 16 4 -10 451 4
Reserve for decreased discount rate (3.5% -> 0.0%) 183 0 0 0 0 0 -15 169 1
Future bonus reserves 82 0 0 0 0 0 13 96 1
Group pension 1,397 32 -168 -4 41 0 12 1,309 10
Guaranteed rate 3.5% 1,129 0 -133 -2 37 0 13 1,044 8
Guaranteed rate 2.5%, 1.5% or 0.0% 268 32 -35 -2 4 0 -2 265 2
Individual pension insurance 550 4 -123 -3 19 0 43 490 4
Guaranteed rate 4.5% 377 2 -56 -2 15 0 -5 331 3
Guaranteed rate 3.5% 112 1 -35 -1 4 0 23 104 1
Guaranteed rate 2.5% or 0.0% 61 0 -32 0 1 0 26 56 —
Individual life insurance 130 30 -19 -9 5 0 -14 122 1
Guaranteed rate 4.5% 49 4 -2 -1 2 0 -1 51 —
Guaranteed rate 3.5% 63 8 -9 -3 2 0 -5 57 —
Guaranteed rate 2.5% or 0.0% 18 18 -8 -5 0 0 -8 15 —
Capital redemption operations 28 0 0 0 0 0 -3 25 —
Guaranteed rate 3.5% 0 0 0 0 0 0 0 0 —
Guaranteed rate 2.5% or 0.0% 28 0 0 0 0 0 -3 25 —
Future bonus reserves 0 0 0 0 0 0 0 0 —
Reserve for decreased discount rate 274 0 0 0 0 0 -63 211 2
Longevity reserve 71 0 0 0 0 0 -8 63 —
Assumed reinsurance 1 0 -1 0 0 0 0 0 —
Other liabilities 35 37 -8 -15 0 0 -17 32 —
Total, excl. Baltic 13,762 1,390 -1,098 -135 80 4 -1,123 12,881 100
Baltic 196 10 -27 -3 0 0 -176 0 —
Unit-linked liabilities 186 9 -26 -3 0 0 -166 0 —
Other liabilities 10 1 -1 0 0 0 -10 0 —
Mandatum Life Group total 13,958 1,399 -1,125 -138 81 4 -1,299 12,881 100
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Biometric risks
Mandatum Life’s main biometric risks are longevity,
mortality, and disability. In general, the long duration
of policies and Mandatum Life’s restricted right to
change policy terms and conditions and tariffs increase
biometric risks. If the premiums turn out to be inadequate
and cannot be increased, technical provisions must
be supplemented by an amount corresponding to the
increase in expected losses.
Longevity risk is the most critical biometric risk in
Mandatum Life. The Solvency Capital Requirement of
longevity risk is also highly dependent on the interest
rate level, which in practice means that the lower the
applied discount rate is, the higher the longevity SCR
would be and vice versa. Most of the longevity risk arises
from the with-profit group pension portfolio. With profit
group pension policies have mostly been closed for new
members for years and due to this the average age of
members is relatively high, at almost 70 years. In the unit-
linked group pension and individual pension portfolio,
the longevity risk is less significant because most of these
policies are fixed-term annuities including death cover
compensating the longevity risk.
The annual longevity risk result and longevity trend are
analysed regularly. For the segregated group pension
portfolio, the assumed life expectancy related to the
technical provisions was revised in 2014 and for the other
group pension portfolios in 2002 and 2007. In total, these
changes increased the 2022 technical provision by
EUR 63 million (71), including a EUR 52 million longevity
reserve for the segregated group pension portfolio. The
cumulative longevity risk result has been positive since
these revisions. The longevity risk result of group pension
for the year 2022 was EUR 7.8 million (11.3) after a EUR 7.6
million release from the longevity reserve.
The mortality risk result in life insurance was positive. A
possible pandemic is seen as the most significant risk that
could adversely affect the mortality risk result. However,
during the years 2020 to 2022, COVID-19 did not have any
significant effect on the mortality risk result. The reason
for this is that COVID-19 has had the most significant
incremental effect on the mortality of elder people and
the insured are generally younger.
The insurance risk result of other biometric risks has been
profitable overall, although the different risk results vary
considerably. In the longer term, disability and morbidity
risks are mitigated by the company’s right to raise
insurance premiums for existing policies in case there is
an unfavourable change in the claims development.
The table Claims ratios after reinsurance, Mandatum
Life, 31 December 2022, and 31 December 2021 shows
the insurance risk result in Mandatum Life’s insurance
policies, excluding Baltic operations. The ratio of the
Claims ratios after reinsurance
Mandatum Life, 31 December 2022 and 31 December 2021
2022 2021
EURm Risk income Claims expense Claims ratio Risk income Claims expense Claims ratio
Life insurance 46.5 22.2 48% 47.3 17.3 37%
Mortality 27.4 17.2 63% 28.2 12.1 43%
Morbidity and disability 19.1 5.0 26% 19.1 5.3 28%
Pension 80.1 72.9 91% 83.5 72.1 86%
Individual pension 13.9 14.6 105% 14.0 14.6 104%
Group pension 66.2 58.3 88% 69.4 57.4 83%
Mortality (longevity) 64.9 57.2 88% 67.9 56.6 83%
Disability 1.2 1.1 94% 1.6 0.9 54%
Total 126.6 95.1 75% 130.8 89.4 68%
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actual-to-expected claims costs was 75 per cent in 2022
(68). The sensitivity of the insurance risk result can also
be assessed based on the information in the table. For
instance, an increase of mortality by 100 per cent would
increase the amount of benefit payments from EUR 17
million to EUR 34 million.
The underwriting portfolio of Mandatum Life is
relatively well diversified and does not include any major
concentration of biometric risks. To further mitigate the
effects of possible risk concentrations, Mandatum Life has
catastrophe reinsurance in place.
In general, biometric risks are managed by careful risk
selection, by setting prices to reflect the risks and costs,
by setting upper limits for the protection granted and by
the use of reinsurance. Mandatum Life’s Underwriting
Policy sets principles for risk selection and limits for
sums insured. The Reinsurance Policy governs the use
of Reinsurance. The Board approves the Underwriting
policy, Reinsurance Policy, pricing guidelines and the
central principles for the calculation of the insurance
liabilities and the technical provisions.
The Insurance Risk Committee is responsible for
maintaining the Underwriting Policy and monitoring the
functioning of the risk selection and claims processes.
The Committee also reports all deviations from the
Underwriting Policy to the Risk Management Committee.
The Insurance Risk Committee is chaired by the Chief
Actuary who is responsible for ensuring that the
principles for pricing policies and for the calculation of
technical provisions are adequate and in line with the
underwriting and claims management processes.
Reinsurance is used to limit the amount of individual
mortality and disability risks. The Board of Directors
annually approves the Reinsurance Policy and determines
the maximum amount of risk to be retained on the com-
pany’s own account. The highest retention of Mandatum
Life is EUR 1.5 million per insured.
The risk result is actively followed and thoroughly
analysed on an annual basis. Mandatum Life measures
the efficiency of risk selection and the adequacy of
tariffs by collecting information about the actual claims’
expenditure for each product line and each type of risk
and comparing it to the claims expenditure assumed in
the insurance premiums of every risk cover.
Technical provisions are analysed, and the possible
supplemental needs are assessed regularly. Assumptions
related to technical provisions are reviewed annually. The
adequacy of the technical provisions is tested quarterly.
Tariffs for new policies are set and the Underwriting
Policy and assumptions used in calculating technical
provisions are updated based on adequacy tests and risk
result analysis.
Policyholder behaviour and expense risks
From an Asset and Liability Management point of view,
surrender risk is not material because in Mandatum Life
around 85 per cent of with profit technical provisions
consists of pension policies in which surrender is possible
only in exceptional cases. Surrender risk is therefore
only relevant in individual life and capital redemption
policies, of which the related technical provisions amount
to around 5 per cent (around EUR 150 million) of the
total with profit technical provisions. Furthermore, the
supplements to technical provisions are not paid out at
surrender which also reduces the surrender risk related
to the with-profit policies. Due to the limited surrender
risk, the future cash flows of Mandatum Life’s insurance
liabilities are quite predictable.
Policy terms and tariffs cannot usually be changed
materially during the lifetime of the insurance, which
increases the expense risk. The behaviour of financial
markets has also an influence on expense risk since
normally the company’s fee income is linked to policy
reserves in unit-linked policies. The main challenge is
to keep the expenses related to insurance administrative
processes and complex IT infrastructure at an effective
and competitive level.
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Market risks
This section covers market risk related to Mandatum
Life’s with-profit business, i.e. that part of the business
where Mandatum Life carries the investment risk. As
mentioned earlier, the behaviour of financial markets has
also an influence on unit-linked business since normally
the company’s fee income is linked to policy reserves
in unit-linked policies. This risk is considered as part of
expense risk.
In Mandatum Life, the approach to market risk
management is based on an analysis of technical
provisions’ expected cash flows, the interest rate level
and the current solvency position, i.e. active Asset
and Liability Management. A common feature for all
with-profit technical provisions is the guaranteed rate
and bonuses. The cash flows of life insurance technical
provisions are generally predictable because in most
of the company’s with-profit policies, surrenders and
additional investments are not possible.
Mandatum Life’s market risks arise mainly from equity
investments, the credit risk of fixed income investments
and interest rate risk related to assets and insurance
liabilities with a guaranteed interest rate. The most
significant interest rate risk in the life insurance business
is that fixed income investments and hedging derivatives
will not, over a long period of time, generate a return at
least equal to the guaranteed interest rate of technical
provisions.
The probability of this risk increases when market
interest rates fall and stay at a low level. The duration
gap between the balance sheet’s technical provisions and
fixed income investments is constantly monitored and
managed. Control levels based on an internal risk capacity
model are used to manage and ensure adequate capital in
different market situations.
The majority of the investment portfolio is invested in
fixed income and listed equity investments, but the role
of alternative investments – real estate, private equity and
private credit funds – is also material, being 16 per cent
of total investments. During the year 2022, Mandatum
Life has also established an asset portfolio within the
investment portfolio, a so-called ALM hedging portfolio.
This portfolio includes hedging instruments, currently
interest rate swaps, which are meant to hedge the interest
rate risk of technical provisions.
Investment allocations and average maturities of fixed
income investments as at year end 2022 and 2021 are
presented in the table Investment allocation, Mandatum
Life, 31 December 2022 and 31 December 2021.
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Investment allocation
Mandatum Life, 31 December 2022 and 31 December 2021
31 Dec 2022 31 Dec 2021
Asset class
Market value,
EURm Weight, %
Average maturity,
years
Market value,
EURm Weight, %
Average maturity,
years
Fixed income total 2,869 66 2.6 3,231 62 2.7
Money market securities and cash 372 9 0.0 585 11 0.0
Government bonds 0 — 0.0 0 — 0.0
Credit bonds, funds and loans 2,497 58 2.9 2,645 51 3.2
Covered bonds 0 — 0.0 0 — 0.0
Investment grade bonds and loans 1,091 25 3.1 1,056 20 3.0
High-yield bonds and loans 1,079 25 2.8 1,240 24 3.3
Subordinated / Tier 2 173 4 2.4 148 3 3.0
Subordinated / Tier 1 156 4 3.5 200 4 4.1
Hedging swaps -2 — — 0 — 0.0
Listed equity total 784 18 — 1,233 24 0
Finland 329 8 — 543 10 0
Scandinavia 0 — — 0 — 0
Global 455 11 — 690 13 0
Alternative investments total 673 16 — 770 15 0.0
Real estate 172 4 — 191 4 0.0
Private equity* 249 6 — 293 6 0.0
Private Credit Funds 252 6 — 286 5 0.0
Asset classes total 4,327 100 — 5,233 100 0.0
FX Exposure, gross position 110 — — 139 — 0.0
The total investment allocation of Mandatum Life is equal to EUR 4,327 million. When EUR 7 million of intra-group assets, EUR 24 million of accrued interest, EUR 372 million of cash, EUR 172 million of real estate
and an adjustment of EUR 1 million to the value of loans and receivables are deducted and EUR 25 million of derivatives are added, the total is equal to EUR 3,776 million, which corresponds to the sum of Mandatum’s
financial assets on Sampo Group’s balance sheet. By further deducting EUR 0.8 million of financial assets belonging to Mandatum Asset Management Group, the total is equal to EUR 3,775 million, which is equal to
Mandatum Life’s financial assets.
* Private equity also includes direct holdings in non-listed equities.
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Balance sheet market risk
The Board of Directors of Mandatum Life approves
annually the Investment Policy, which covers both the
segregated assets and the company’s other assets that
carry investment risk. This policy sets principles and
limits for investment portfolio activities and they are
based on the features of insurance liabilities, risk taking
capacity and shareholders’ return requirements.
The Risk Management Policy defines the risk-bearing
capacity and the corresponding control levels for the
respective portfolio for segregated assets. Since the future
bonus reserves of the segregated group pension portfolio
is the first buffer against possible investment losses, the
risk-bearing capacity is also based on the amount of the
future bonus reserve. Different control levels are based on
the fixed stress scenarios of assets.
The Risk Management Policy also defines the company-
level risk-bearing capacity, the control levels for the
maximum acceptable risk and the respective measures to
manage the risk positions. The control levels are set above
the Solvency II SCR and are based on Sampo Group’s risk
management principles. The general objective of these
control levels and respective guidelines is to maintain the
required solvency. If the above-mentioned control levels
are breached, the CRO reports to the Board, which then
takes the responsibility for decisions regarding capitalisa-
tion and market risks on the balance sheet.
The cash flows of Mandatum Life’s with-profit technical
provisions are relatively predictable, because in most
of the company’s with profit products, surrenders and
premiums are restricted. In addition, the company’s
claims costs do not contain a significant inflation risk
element.
The long-term target for investments is to provide
enough return to cover the guaranteed interest rate
plus discretionary bonuses based on the principle of
fairness, as well as the shareholder’s return requirement,
with an acceptable level of risk. In the long run, the
most significant risk is that assets will not generate an
adequate return compared to the applied discount rate.
As mentioned earlier, one way to mitigate this risk is by
hedging the interest rate risk of technical provisions with
interest rate swaps.
In addition to investment and capitalisation decisions,
Mandatum Life has implemented active measures on the
liability side to manage the balance sheet-level interest
rate risk. The company has reduced the minimum
guaranteed interest rate in new contracts, supplemented
the technical provisions with discount rate reserves and
adjusted policy terms and conditions as well as policy
administration processes to enable more efficient interest
rate risk management.
Interest rate risk
Mandatum Life is negatively affected when rates are
decreasing or staying at low levels, because the duration
of insurance liabilities is longer than the duration of
assets. A growing part of Mandatum Life’s business, i.e.
unit-linked and risk insurance business, is not interest
rate sensitive, which mitigates the whole company’s
interest rate risk.
The average duration of fixed income investments exclud-
ing the hedging portfolio was 1.9 years. The respective
duration of the insurance liabilities was around 8 years.
Interest rate risk is managed at the balance sheet level by
changing the duration of assets and by using interest rate
derivatives.
Currency risk
Currency risk can be divided into transaction and
translation risk. Mandatum Life is exposed to transaction
risk, which refers to currency risk arising from contractual
cash flows in foreign currencies.
In Mandatum Life, transaction risk arises mainly from
investments in other currencies than the euro as the
company’s technical provisions are denominated in the
euro. Open FX exposures are managed within limits given
in the Investment Policy.
Mandatum Group’s transaction risk is mainly composed
of Mandatum Life’s transaction risk as Mandatum Asset
Management only has a very limited SEK exposure. The
transaction risk positions of Mandatum Life against the
euro as at year ends 2022 and 2021 are shown in the tables
Transaction risk position, Mandatum Life, 31 December
2022 and 31 December 2021. The tables show the net
transaction risk exposures and the changes in the value of
positions given a 10 per cent decrease in the value of the
base currency.
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Liquidity risks
Liquidity risk is relatively immaterial for Mandatum
Life’s with-profit business because liability cash flows
in most lines of business are stable and predictable and
an adequate share of the investment assets is in cash or
short-term money market instruments. However, the
use of derivatives requires that collateral management is
aligned with the liquidity management and appropriate
escalation processes are in place.
In life insurance companies in general, a large change
in surrender rates could influence the liquidity position.
Transaction risk position
Mandatum Group, 31 December 2022
Base currency, EURm EUR USD JPY GBP SEK NOK CHF DKK Muut Total, net
Technical provisions 0 0 0 0 0 0 0 0 0 0
Investments 0 514 1 119 45 10 22 9 147 867
Derivatives 0 -518 0 -125 -49 -9 -29 -14 -68 -812
Transaction risk, net position 0 -4 1 -6 -4 1 -7 -5 79 55
Sensitivity: EUR -10% 0 0 0 -1 0 0 -1 -1 8 6
Base currency, EURm EUR USD JPY GBP SEK NOK CHF DKK Muut Total, net
Technical provisions 0 0 0 0 -1 0 0 0 0 -1
Investments 0 538 0 145 60 11 55 26 214 1,050
Derivatives 0 -518 0 -142 -58 -9 -48 -25 -122 -922
Transaction risk, net position 0 21 0 4 2 2 7 1 92 127
Sensitivity: EUR -10% 0 2 0 0 0 0 1 0 9 13
However, in Mandatum Life, only a relatively small
part of the insurance policies can be surrendered, and
it is therefore possible to forecast short-term cash flows
related to claims payments with very high accuracy.
The maturities of technical provisions and financial assets
and liabilities as well as lease liabilities are presented in
the tables Cash flows according to contractual maturity,
Mandatum Group, 31 December 2022 and 31 December
2021. The average maturity of fixed income investments
was 2.6 years in Mandatum Life. The tables show the
financing requirements resulting from expected cash
inflows and outflows arising from financial assets and
liabilities as well as technical provisions and lease
liabilities.
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Cash flows according to contractual maturity
Mandatum Group, 31 December 2022 and 31 December 2021
EURm
Carrying
amount total
Carrying
amount without
contractual
maturity
Carrying
amount with
contractual
maturity
Cash flows
2024 2025 2026 2027
2028–
2037 2038–
Financial assets 4,610 2,214 2,396 330 640 571 515 427 435 —
Financial assets (non-derivatives) 4,587 2,214 2,373 307 640 571 515 427 435 —
Interest rate swaps — — — — — — — — — —
FX forwards 23 — 23 23 0 0 0 0 0 —
Financial liabilities 405 — 405 -362 -263 -8 -8 -8 -78 -183
Financial liabilities (non-derivatives) 402 — 402 -362 -263 -8 -8 -8 -77 -183
Interest rate swaps 2 — 2 — -1 — — — -1 —
FX derivatives 0 — 0 0 — — — — — —
Lease liabilities 21 — 21 -2 -2 -2 -2 -2 -13 —
Net technical provisions 2,493 — 2,493 -242 -229 -225 -205 -177 -114 -683
EURm
Carrying
amount total
Carrying
amount without
contractual
maturity
Carrying
amount with
contractual
maturity
Cash flows
2023 2024 2025 2026
2027–
2036 2037–
Financial assets 5,431 2,908 2,523 223 301 704 606 419 451 —
Financial assets (non-derivatives) 5,427 2,908 2,519 219 301 704 606 419 451 —
Interest rate swaps — — — — — — — — — —
FX forwards 4 — 4 4 0 0 0 0 0 —
Financial liabilities 459 — 459 -38 -9 -259 -5 -5 -52 -172
Financial liabilities (non-derivatives) 428 — 428 -9 -9 -259 -5 -5 -52 -172
Interest rate swaps — — — — — — — — — —
FX derivatives 31 — 31 -29 — — — — — —
Lease liabilities 23 — 23 -2 -2 -2 -2 -2 -14 —
Net technical provisions 2,707 — 2,707 -215 -232 -239 -222 -205 -1,300 -820
Cashflows related to assets without contractual maturity are not included in the table, although they are covering the 2023 cashflows, which in the table are negative.
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Counterparty default risks
In Mandatum Life, the three main sources of counterparty
risk are financial derivatives, reinsurance, and other
receivables. Counterparty default risk arising from
reinsurance or receivables from policyholders and
other receivables related to commercial transactions is,
however, very limited.
Counterparty risk related to
financial derivatives
In Mandatum Life, the default risk of derivative
counterparties is a by-product of managing market risks.
Mandatum Life uses interest rate derivatives and FX
forwards and options to manage market risks.
The counterparty risk of bilaterally settled derivatives
is mitigated by careful selection of counterparties, by
diversification of counterparties to prevent risk concen-
trations and by using collateral arrangements, e.g. ISDA
Master Agreements backed by Credit Support Annexes.
Mandatum Life settles interest rate swaps in central coun-
terparty clearing houses, which, while further mitigating
bilateral counterparty risk, also expose to the systemic
risk related to central counterparty clearing houses.
Risks related to asset management activities
Mandatum Asset Management Ltd (MAM) is the asset
management arm of Sampo Group and an investment
firm which forms, together with its subsidiaries
Mandatum AM AIFM and Mandatum Fund Management,
an investment firm group. MAM offers discretionary
and consultative asset management for institutional
and other professional investors and manages a variety
of investment products within its core areas of credit,
alternatives, and equity selection. MAM currently has
approximately EUR 27 billion in client and balance sheet
assets and employs more than 130 professionals.
MAM’s approach to managing clients’ assets is character-
ised by jointly investing in products with its own balance
sheet, bringing economics of scale and an alignment
of interests with its clients. Its investment philosophy
focused on investment selection, opportunism, and
patience points to its heritage as part of Sampo Group to
generate strong returns for its clients.
MAM’s risk management follows Sampo Group’s risk
management principles and Mandatum Holding’s risk
management policy. MAM’s risk management framework
is in line with Mandatum Group’s risk management
framework. MAM’s Board of Directors is responsible for
the adequacy of risk management and internal control
within the Company and the CEO has the overall respon-
sibility for the implementation of risk management in
accordance with the instructions set by the Board.
MAM’s most significant risk areas are operational risks,
which is why operational risk management is an impor-
tant part of the Company’s risk management. In addition
to operational risks, MAM is exposed to liquidity risk.
MAM’s business is financed by income financing, which
consists of commission income from clients and partners.
MAM has not financed its activities through external
financing, so the Company does not have any related risks
such as interest rate risk, exchange rate or refinancing
risk. Going forward, MAM’s liquidity strategy remains
to seek to finance the business without external loan
financing. MAM limits liquidity risk by monitoring its
liquidity position on a regular basis and by maintaining a
liquidity buffer. MAM also monitors its liquidity position
with respect to regulatory liquidity requirements.
MAM is also exposed to concentration risk with respect to
its clients as most of its business is linked to clients within
Sampo Group. Mandatum Life is MAM’s largest client by
commission income. This is not, however, considered a
significant risk since Mandatum Life and MAM are both
Sampo Group companies.
MAM does not trade on its own account, and it is not
exposed to market risk arising from its own trading book.
MAM commission income is, however, strongly tied to the
value of the assets it manages and, through its commis-
sion income, MAM is exposed to market risk. Nonetheless,
the asset portfolios MAM manages are well diversified
both by asset class and sector as well as geographically.
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Sampoplc’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Group’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
186
Sampo plc’s Financial Statements
Sampo plc’s income statement ..................................................188
Sampo plc’s balance sheet
............................................................189
Sampo plc’s statement of cash flows
................................... 190
FINANCIAL STATEMENTS 2022
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements Sampoplc’snotestothefinancialstatements
Sampoplc’sFinancialStatements
187
Sampo plc’s Financial Statements
Sampo plc’s income statement
EURm Note 1–12/2022 1–12/2021
Sales 1 0 48
Staff expenses
Salaries and remunerations -21 -21
Social security costs
Pension costs -2 -2
Other -6 -2
Other operating expenses 2 -19 -16
Operating profit -48 7
Financial income and expense 4
Income from shares in Group companies 1,008 1,003
Income from other shares 182 375
Other interest and financial income
Group companies 4 11
Other 6 6
Other investment income and expense 704 1,365
Other interest income 11 9
Interest and other financial expense -111 -117
Exchange result -12 -11
Profit before appropriations and taxes 1,744 2,647
Group contribution 29 15
Income taxes 8 -23
Profit for the financial year 1,780 2,639
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements Sampoplc’snotestothefinancialstatements
Sampoplc’sFinancialStatements
FINANCIAL STATEMENTS 2022
188
Sampo plc’s balance sheet
EURm Note 2022
2021
restated 2021
ASSETS
Intangible asset 1 1 1
Tangible assets 3 3 3
Investments
Shares in Group company 22 6,066 5,639 5,639
Receivables from Group companies 5 100 100 100
Investments in associates — 1,956 1,956
Other shares and participations 6 961 595 287
Financial instruments — — 508
Other investment receivables 7 696 704 703
Short-term receivables
Other receivables 8 44 20 20
Prepayments and accrued income 9 16 42 42
Cash and cash equivalents 1,798 3,067 3,067
TOTAL ASSETS 9,685 12,127 12,327
EURm Note 2022
2021
restated 2021
LIABILITIES
Equity 10
Share capital 98 98 98
Fair value reserve — — 160
Invested unrestricted equity 1,527 1,527 1,527
Other reserves 273 273 273
Retained earnings 3,136 4,127 4,127
Profit for the financial year 1,780 2,639 2,639
6,814 8,663 8,823
Liabilities
Long-term liabilities 14
Bonds 1,306 1,878 1,878
Subordinated debt securities 1,489 1,487 1,487
Short-term liabilities
Deferred tax liability 15 — — 40
Other liabilities 12 12 49 49
Accruals and deferred income 13 65 49 49
TOTAL LIABILITIES 9,685 12,127 12,327
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements Sampoplc’snotestothefinancialstatements
Sampoplc’sFinancialStatements
FINANCIAL STATEMENTS 2022
189
Sampo plc’s statement of cash flows
EURm 1–12/2022 1–12/2021
Operating activities
Profit before tax 1,773 2,662
Adjustments:
Realised gains and losses on investments 0 -83
Other adjustments -830 -1,514
Adjustments total -830 -1,597
Change (+/-) in assets of operating activities
Investments 48 -417
Other assets 13 21
Total 60 -396
Change (+/-) in liabilities of operating activities
Financial liabilities -35 33
Other liabilities 9 -6
Paid interests -90 -106
Paid taxes 8 -9
Total -107 -88
Net cash from operating activities 896 580
EURm 1–12/2022 1–12/2021
Investing activities
Investment in subsidiaries -427 -927
Divestments in associates 2,291 3,843
Dividend received from associates 157 339
Other investments 0 3
Net cash from investing activities 2,022 3,258
Financing activities
Dividends paid -2,186 -944
Purchase of own shares -1,444 -380
Repayments of debt securities in issue -571 -571
Received group contribution 15 3
Net cash used in financing activities -4,186 -1,891
Total cash flows -1,269 1,947
Cash and cash equivalents at 1 January 3,067 1,120
Cash and cash equivalents at 31 December 1,798 3,067
Net change in cash and cash equivalents -1,269 1,947
Additional information to the statement of cash flows:
EURm 1–12/2022 1–12/2021
Interest income received 23 28
Interest expense paid -90 -106
Dividend income received 1,190 1,377
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements Sampoplc’snotestothefinancialstatements
Sampoplc’sFinancialStatements
FINANCIAL STATEMENTS 2022
190
Sampo plc’s notes to the financial statements
Summary of significant
accounting policies
.......................................192
Notes to the income statement 1–4
...193
1 Sales ................................................................. 193
2 Other operating expenses ...................... 193
3 Auditors’ fees ............................................... 193
4 Financial income and expense .............. 193
Notes to the assets 5–9 .............................194
5 Receivables from Group companies ....194
6 Other shares and participations ...........194
7 Other investment receivables ................194
8 Other receivables .......................................194
9 Prepayments and accrued income ......194
Notes to the staff and
management 19–21
........................................ 197
19 Staff numbers ............................................. 197
20 Board fees and management
remuneration ............................................ 197
21 Pension contributions to
the CEO, deputy CEO and
the members of the Board ...................198
22 Shares held as of 31 Dec 2022 ............ 198
Notes to the liabilities 10–14 ...................195
10 Movements in the parent
company’s equity ..................................... 195
11 Share capital ................................................ 196
12 Other liabilities ........................................... 196
13 Accruals and deferred income ............196
14 Long-term liabilities ................................. 196
Note to the income taxes 15 ..................196
15 Deferred tax assets and liabilities ......196
Notes to the off-balance sheet
liabilities and commitments 16–18
....... 197
16 Pension liabilities ...................................... 197
17 Future rental commitments .................. 197
18 Other liabilities and commitments ..... 197
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
191
FINANCIAL STATEMENTS 2022
Summary of significant accounting policies
The presentation of Sampo plc’s financial statements have been prepared in accordance with the
Finnish Accounting Act and Ordinance.
Foreign currency translation
Foreign currency transactions are translated using the exchange rate prevailing at the date of
transactions or the average rate for the month. The Balance sheet items denominated in foreign
currencies are translated at the rate prevailing at the balance sheet date. The exchange differences
are recognised in the income statement.
Derivatives
Financial derivatives held for trading are initially recognised at fair value, and gains and losses
arising from changes in fair value together with realised gains and losses are recognised in the
income statement. Derivative instruments are carried as assets when the fair value is positive and
as liabilities when the fair value is negative.
Derivative financial instruments have been used only for operative hedging purposes. For more
information see the Group note Summary of Significant Accounting Policies.
Non-current assets
Intangible and tangible assets are stated at acquisition cost less depreciation or amortisation.
Investments are measured at acquisition cost and, in case there is objective evidence of
an impairment, the impairment is recognised through profit or loss. Previously the financial
instruments were measured at fair value through Fair Value reserve applying Chapter 5 section
2a § of the Finnish Accounting Act. The change in the accounting policy is recognised through
retained earnings on 1 January 2022. The effect of the change is presented in note 10 Movements
in the parent company’s equity.
Sampo plc’s notes to the financial statements
Risk management
The risk management disclosure includes detailed information on the risk management.
Revenue recognition
Revenue is recognised when it occurs.
Leases
Lease payments are treated as rentals.
Income taxes
The income statement includes the company's income taxes based on taxable profit for the period.
Income tax includes tax expense based on taxable profit for the period as well as deferred tax.
Tax expense is recognised in profit or loss except for the items recognised directly in equity, in
which case tax is recognised accordingly. Tax is adjusted for possible items related to previous
reporting periods.
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
192
1 Sales
EURm 1–12/2022 1–12/2021
Income from investment operations — 12
Other — 36
Total — 48
2 Other operating expenses
EURm 1–12/2022 1–12/2021
Rental expenses -1 -1
IT expenses -1 -2
External services -10 -8
Other staff costs -1 -1
Other -6 -4
Total -19 -16
Item Other includes e.g. administration fees.
Notes to the income statement 1–4
3 Auditors’ fees
EURm 1–12/2022 1–12/2021
Auditing fees -1.0 -0.4
Tax consultancy — —
Other fees — —
Total -1.0 -0.4
4 Financial income and expense
EURm 1–12/2022 1–12/2021
Dividend income 1,190 1,378
Interest income 20 26
Interest expense -86 -93
Gains on disposal 704 1,365
Exchange result -12 -11
Other -25 -24
Total 1,792 2,641
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
193
Notes to the assets 5–9
5 Receivables from Group companies
EURm 2022 2021
Carrying amount at the beginning of the year 100 242
Additions — 10
Disposals — -152
Carrying amount at the end of the year 100 100
Receivables are subordinated loans issued by subsidiaries. More information in the consolidated
note 23 Subordinated debts and other financial liabilities.
6 Other shares and participations
EURm 2022
2021
restated 2021
Fair value at 1 January 795 786
Change of acc. Policy -200
Acquisition cost 1 January 595 640
Transfer from associates 368 —
Increase 3 2 56
Decrease -5 -47 -47
Acquisition cost 31 December 961 595
Fair value at 31 December 795
7 Other investment receivables
EURm 2022
2021
restated 2021
Fair value at 1 January 703 86
Change of acc. Policy 0
Acquisition cost 1 January 704 76
Increase 3,766 1,083 1,073
Decrease -3,773 -455 -455
Acquisition cost 31 December 696 704
Fair value at 31 December 703
8 Other receivables
EURm 2022 2021
Trading receivables 1 1
Other 43 19
Total 44 20
Item Other includes Group receivables of 29 (15) million euros.
9 Prepayments and accrued income
EURm 2022 2021
Accrued interest 5 8
Derivatives — 7
Other 11 26
Total 16 42
2022 Fair value 2021 Fair value
Derivates, EURm
Contract/
not ional
value Assets Liabilities
Contract/
not ional
value Assets Liabilities
Derivates held for trading
Interest rate derivatives 95 — 14 386 7 3
Foreign exchange derivatives — — — 67 — 0
Total 95 — 14 453 7 3
EURm 2022
2021
restated 2021
Bonds 26 152 152
Market money 670 552 552
Total 696 704 703
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
194
Notes to the liabilities 10–14
10 Movements in the parent company’s equity
Restricted equity Unrestricted equity
EURm Share capital Fair value reserve
Invested
unrestricted capital Other reserves Retained earnings Total
Carrying amount at 1 January 2021 98 124 1,527 273 5,451 7,472
Dividends -944 -944
Treasury shares -380 -380
Financial assets available-for-sale
recognised in equity 103 103
recognised in p/l -67 -67
Profit for the year 2,639 2,639
Carrying amount at 31 December 2021 98 160 1,527 273 6,766 8,823
Change in accounting policy -160 160 —
Change in accounting policy, investment assets -200 -200
Change in accounting policy, Def.tax liability 40 40
Carrying amount at 31 December 2021, restated 98 — 1,527 273 6,766 8,663
Restricted equity Unrestricted equity
EURm Share capital Fair value reserve
Invested
unrestricted capital Other reserves Retained earnings Total
Carrying amount at 1 January 2022 98 — 1,527 273 6,766 8,663
Dividends -2,186 -2,186
Treasury shares -1,444 -1,444
Profit for the year 1,780 1,780
Carrying amount at 31 December 2022 98 — 1,527 273 4,916 6,814
Distributable assets
EURm 2022 2021
Parent company
Profit for the year 1,780 2,639
Retained earnings 3,136 4,127
Invested unrestricted capital 1,527 1,527
Other reserves 273 273
Total 6,716 8,565
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
195
11 Share capital
Information on share capital is disclosed in note 28 in the consolidated financial statements.
12 Other liabilities
EURm 2022 2021
Derivatives — 1
Guarantees for derivate contracts — 7
Other 12 41
Total 12 49
13 Accruals and deferred income
EURm 2022 2021
Deferred interest 29 33
Derivatives 14 2
Other 22 14
Total 65 49
14 Long-term liabilities
EURm 2022 2021
Bonds 1,306 1,878
Subordinated debt securities 1,489 1,487
Total 2,794 3,365
More information in the consolidated note 23 Subordinated debts and other financial liabilities.
15 Deferred tax assets and liabilities
In the comparison year 2021, the deferred tax liability of EUR 40 million related to the fair value
reserve was recognised in the balance sheet as a deferred tax liability. As a result of the change in
the accounting policy, the deferred tax liability has been restated in 2021 to retained earnings, and
therefore there is no deferred tax liability at the end of 2022.
Note to the income taxes 15
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
196
Notes to the off-balance sheet liabilities and
commitments 16–18
16 Pension liabilities
The basic and supplementary pension insurance of Sampo plc’s staff is handled through insurance
policies in pension insurance companies in Finland and Sweden.
17 Future rental commitments
EURm 2022 2021
Not more than one year 1 1
Over one year but not more than five years 1 1
Total 2 2
18 Other liabilities and commitments
Sampo plc has granted a credit facility to Hastings Group Holdings Ltd of GBP 75 million which will
terminate in October 2026. More information in the Group note 23 Subordinated debts and other
financial liabilities.
The fund commitments given total EUR 7.4 million (7.9) and the amount of joint liability related to
the Finnish VAT group commitment totals EUR 3.1 million (2.3).
Notes to the staff and management 19–21
19 Staff numbers
2022
Average
during the
year
2021
Average
during the
year
Full-time staff 50 64
Part-time staff — —
Temporary staff — —
Total 50 64
20 Board fees and management remuneration
EUR thousand 2022 2021
Group Executive Director Torbjörn Magnusson 3,328 2,511
Members of the Board of Directors
Björn Wahlroos 190 184
Christian Clausen 98 95
Fiona Clutterbuck 104 101
Georg Ehrnrooth 104 101
Jannica Fagerholm 152 147
Johanna Lamminen 104 101
Steve Langan 104 —
Risto Murto 98 95
Markus Rauramo 98 101
In accordance with the decision of the Annual General Meeting in 2022, the company has
compensated the transfer tax related to the acquisition of the company shares, in total
EUR 7,536.19 (EUR 1,516.43 pertaining to the Chairman, EUR 1,212.39 EUR to the Vice Chairman
and EUR 4,807.37 to the other Finnish members of the Board).
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
197
21 Pension contributions to the CEO,
deputy CEO and the members of the Board
EUR thousand
Supplementary
pension costs
Statutory
pension costs Total
Pension contributions paid during the year
President/CEO
1
640 485 1,125
Former Chairmen of the Board
Kalevi Keinänen
2
31 31
Former Presidents/CEO:s
Harri Hollme
3
76 76
747 485 1,232
1
The Group CEO is entitled to a supplementary defined contribution pension in accordance with the
present pension contract. The pension expense includes also related taxes and social security cost.
2
Group pension agreement with a retirement age of 60 years and pension benefit of 66 per cent of
the pensionable TyEL-salary (TYEl: Employees’s Pension Act). The payment for 2022 is based on a Tyel
index adjustment.
3
Group pension agreement with a retirement age of 60 years and a pension benefit of 60 per cent of
the pensionable TyEL-salary. The payment for 2022 is based on a TyEL index adjustment.
22 Shares held as of 31 Dec 2022
Company name
Percentage of
share capital held
Carrying
amount EURm
P&C insurance
If P&C Insurance Holding Ltd, Stockholm, Sweden 100.00 1,886
P&C and life insurance
Topdanmark A/S, Copenhague, Denmark 48.53 1,107
P&C insurance
Hastings Group (Consolidated) Plc, London, United Kingdom 100.00 2,534
Life insurance
Mandatum Holding Ltd, Helsinki, Finland 100.00 539
Sampo Plc has a branch located in Sweden.
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
198
Helsinki, 10 February 2023
Sampo plc
Board of Directors
Christian Clausen Fiona Clutterbuck Georg Ehrnrooth
Jannica Fagerholm Johanna Lamminen Steve Langan
Risto Murto Markus Rauramo
Björn Wahlroos Torbjörn Magnusson
Chairman Group CEO
Approval of the Financial Statements
and the Board of Directors’ Report
BoardofDirectors’
Report
Auditor’sReport
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
FINANCIAL STATEMENTS 2022
199
Auditor’s Report (Translation of the Finnish Original)
To the Annual General Meeting of Sampo plc
Report on the Audit of
the Financial Statements
Opinion
We have audited the financial statements of Sampo Oyj
(business identity code 0142213-3) for the year ended 31
December, 2022. The financial statements comprise the
consolidated balance sheet, income statement, statement
of comprehensive income, statement of changes in equity,
statement of cash flows and notes, including a summary
of significant accounting policies, as well as the parent
company’s balance sheet, income statement, statement of
cash flows and notes.
In our opinion
• the consolidated financial statements give a true and
fair view of the group’s financial position, financial
performance and cash flows in accordance with
International Financial Reporting Standards (IFRS) as
adopted by the EU.
• the financial statements give a true and fair view of the
parent company’s financial performance and financial
position in accordance with the laws and regulations
governing the preparation of financial statements in
Finland and comply with statutory requirements.
Our opinion is consistent with the additional report
submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing
practice in Finland. Our responsibilities under good
auditing practice are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements
section of our report.
We are independent of the parent company and of
the group companies in accordance with the ethical
requirements that are applicable in Finland and are
relevant to our audit, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements.
In our best knowledge and understanding, the non-audit
services that we have provided to the parent company and
group companies are in compliance with laws and regula-
tions applicable in Finland regarding these services, and
we have not provided any prohibited non-audit services
referred to in Article 5(1) of regulation (EU) 537/2014.
The non-audit services that we have provided have been
disclosed in note 31 to the consolidated financial state-
ments and in note 3 to the parent company notes.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the financial statements of the current period.
These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion
on these matters.
We have also addressed the risk of management override
of internal controls. This includes consideration of
whether there was evidence of management bias that
represented a risk of material misstatement due to fraud.
BoardofDirectors’
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Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
Auditor’sReport
FINANCIAL STATEMENTS 2022
200
Key audit matter How our audit addressed the key audit matter
Valuation of insurance contract liabilities
We refer to Summary of Significant Accounting policies in the financial statements
as well as notes 21 and 22.
As at 31.12.2022 Sampo Group has insurance contract liabilities totalling EUR 26,475
million (2021: EUR 39,919 million), consisting of both life and non-life insurance contract
liabilities.
The methods and models applied may have a significant influence on the measurement
of provisions for insurance contracts.
Key assumptions which affect the carrying amount include inflation, interest rates as
well as estimated future payments for claims.
Valuation of insurance contract liabilities requires significant management judgment
and accounting assumptions about uncertain future events, which may materially affect
the carrying amount, and thus this is a key audit matter.
We have assessed the measurement of the provisions for insurance contracts as calculated
by Management. Our audit procedures included testing of the key controls relating to
valuation of insurance liabilities and key assumptions.
We have utilized Deloitte’s actuarial experts in audit and assessed methods, models and
data used based on historical development and market trends.
We have compared the information used in the calculation with the historical data.
Further, we have analysed the developments in risk, interest and cost trends.
We have evaluated and challenged changes in the key assumptions and models applied
and recalculated the claims outstanding provisions for insurance contracts for selected
sectors.
We have evaluated and examined a selection of general IT controls linked to relevant
systems and applications assessed as critical to the data that forms the basis for the
valuation of provision for claims outstanding. On a sample basis we have also examined
input data used in the calculations of the provision for claims outstanding.
We have assessed the disclosures linked to the provisions for claims outstanding in the
financial statements.
BoardofDirectors’
Report
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
Auditor’sReport
FINANCIAL STATEMENTS 2022
201
Key audit matter How our audit addressed the key audit matter
Valuation of financial assets
We refer to Summary of Significant Accounting policies in the financial statements
as well as notes 14–17.
The Group's investments amount to EUR 19,469 million (2021: EUR 23,321 million).
Financial assets represent a significant part of the group's balance sheet.
Major part of the Group's financial assets are measured at fair value. At level 1, the
valuation of the financial asset is based on the quoted price in an active market.
Level 2 valuation also uses other verifiable prices as inputs, either directly or derived
from them, using valuation techniques. At level 3, valuation is based on non-observable
market data.
Audit focus areas relate to valuations on level 2 and 3 in line with IFRS in which the
valuation techniques include inputs which are not directly observable from the markets.
The use of different valuation techniques and assumptions may result in different
estimates of fair value and hence this is a key audit matter.
Our audit procedures have included the evaluation of the internal controls,
appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management.
We have evaluated the appropriateness of the valuation models and accounting policies
used by the company to assess whether the fair value measurement is in accordance
with generally accepted standards and industry practices. We have requested external
confirmations to verify the existence of the investment.
Together with our valuation specialists, we have assessed the assumptions used by
management in the valuation calculation. We have utilized Deloitte’s valuation analytics
and performed the recalculation of fair values based on the information available on the
market.
For financial assets that are valued on the basis of non-market information, we have also
evaluated the practices and assumptions used by management in determining fair values.
We have assessed the disclosures of the investments in the financial statements.
BoardofDirectors’
Report
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
Auditor’sReport
FINANCIAL STATEMENTS 2022
202
Responsibilities of the Board of
Directors and the Group CEO
for the Financial Statements
The Board of Directors and the Group CEO are responsible
for the preparation of consolidated financial statements
that give a true and fair view in accordance with
International Financial Reporting Standards (IFRS) as
adopted by the EU, and of financial statements that
give a true and fair view in accordance with the laws
and regulations governing the preparation of financial
statements in Finland and comply with statutory
requirements. The Board of Directors and the Group
CEO are also responsible for such internal control as
they determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of
Directors and the Group CEO are responsible for
assessing the parent company’s and the group’s ability
to continue as going concern, disclosing, as applicable,
matters relating to going concern and using the going
concern basis of accounting. The financial statements
are prepared using the going concern basis of accounting
unless there is an intention to liquidate the parent
company or the group or cease operations, or there is no
realistic alternative but to do so.
purpose of expressing an opinion on the effectiveness
of the parent company’s or the group’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of the Board of
Directors’ and the Group CEO’s use of the going concern
basis of accounting and based on the audit evidence
obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt
on the parent company’s or the group’s ability to con-
tinue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the
financial statements or, if
• such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future
events or conditions may cause the parent company or
the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures,
and whether the financial statements represent the
underlying transactions and events so that the financial
statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business
activities within the group to express an opinion on the
consolidated financial statements. We are responsible
for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit
opinion.
Auditor’s Responsibilities for the
Audit of Financial Statements
Our objectives are to obtain reasonable assurance on
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with good auditing practice will always detect a material
misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users
taken on the basis of the financial statements.
As part of an audit in accordance with good auditing
practice, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the
BoardofDirectors’
Report
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
Auditor’sReport
FINANCIAL STATEMENTS 2022
203
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the financial statements
of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in
our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Reporting Requirements
Information on our
audit engagement
We were first appointed as auditors by the Annual General
Meeting on 19 May, 2021, and our appointment represents
a total period of uninterrupted engagement of 2 years.
Other information
The Board of Directors and the Group CEO are responsible
for the other information. The other information
comprises the report of the Board of Directors.
Our opinion on the financial statements does not cover
the other information. In connection with our audit of
the financial statements, our responsibility is to read the
other information and, in doing so, consider whether
the other information is materially inconsistent with the
financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated.
Our responsibility also includes considering whether
the report of the Board of Directors has been prepared in
accordance with the applicable laws and regulations.
In our opinion, the information in the report of the
Board of Directors is consistent with the information
in the financial statements and the report of the Board
of Directors has been prepared in accordance with the
applicable laws and regulations.
If, based on the work we have performed, we conclude
that there is a material misstatement of the report of the
Board of Directors, we are required to report that fact.
We have nothing to report in this regard.
Other opinions
We support that the financial statements should be
adopted. The proposal by the Board of Directors regarding
the use of the profit shown in the balance sheet is in
compliance with the Limited Liability Companies Act. We
support that the Board of Directors of the parent company
and the Group CEO should be discharged from liability for
the financial period audited by us.
Helsinki, 10 March 2023
Deloitte Oy
Audit Firm
Jukka Vattulainen
Authorised Public Accountant (KHT)
BoardofDirectors’
Report
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
Auditor’sReport
FINANCIAL STATEMENTS 2022
204
To the Board of Directors of Sampo Oyj
We have performed a reasonable assurance engagement on
whether the iXBRL tagging of the consolidated financial
statements in the ESEF consolidated financial statements
(743700UF3RL386WIDA22-2022-12-31-en.zip) of Sampo Oyj
(0142213-3) for the financial year 1.1.-31.12.2022 has been
prepared in accordance with the requirements of Article
4 of Commission Delegated Regulation (EU) 2018/815
(ESEF RTS).
Responsibilities of the board of
directors and the Group CEO
The Board of Directors and the Group CEO are responsible
for the preparation of the report of the Board of Directors
and financial statements (ESEF financial statements)
that comply with the requirements of ESEF RTS. This
responsibility includes:
• preparation of ESEF financial statements in XHTML
format in accordance with Article 3 of ESEF RTS
• tagging the consolidated financial statements’ primary
statements, disclosures and identifying information
in the ESEF financial statements with iXBRL tags in
accordance with Article 4 of ESEF RTS, and
• ensuring consistency between ESEF financial state-
ments and audited financial statements.
The Board of Directors and the Group CEO are also
responsible for such internal control as they determine
is necessary to enable the preparation of ESEF financial
statements in accordance with the requirements of
ESEF RTS.
Auditor’s independence and
quality control
We are independent of the company in accordance with
the ethical requirements that are applicable in Finland
and are relevant to the engagement we have performed,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
The auditor applies International Standard on Quality
Management 1 and, accordingly, an audit firm shall
design, implement, and maintain a system of quality
control including policies and procedures regarding com-
pliance with ethical requirements, professional standards,
and applicable legal and regulatory requirements.
Independent auditor’s report on the ESEF consolidated financial
statements of Sampo Oyj (Translation of the Finnish Original)
BoardofDirectors’
Report
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
Auditor’sReport
FINANCIAL STATEMENTS 2022
205
Sampo plc (business id 0142213-3) is a Finnish public company listed in Helsinki Nasdaq. It is domiciled in Helsinki and the headquarters are at Fabianinkatu 27, 00100 Helsinki, Finland. The consolidated
financial statements of Sampo Group include Sampo plc together with its subsidiaries and associates as of 31 December 2022. The group subsidiaries have insurance and financing activities in Finland,
Sweden, Norway, Denmark, the Baltic countries, and the United Kingdom. A copy of Group’s financial statements is available at internet address www.sampo.com. Copyright Sampo plc, Finland.
Auditor’s responsibilities
In accordance with the engagement letter, we express
an opinion on whether the tagging of the consolidated
financial statements in the ESEF financial statements has
been prepared in all material respects in accordance with
the requirements of Article 4 of ESEF RTS. We conducted
a reasonable assurance engagement in accordance with
International Standard on Assurance Engagements
ISAE 3000.
The engagement includes procedures to obtain evidence
on:
• whether the tagging of the consolidated financial state-
ments’ primary statements in ESEF financial statements
has been prepared in all material respects in accordance
with the requirements of Article 4 of ESEF RTS
• whether the tagging of the consolidated financial
statements’ disclosures and identifying information in
the ESEF financial statements has been prepared in all
material respects in accordance with the requirements
of Article 4 of ESEF RTS, and
• whether the ESEF financial statements are consistent
with the audited financial statements.
The nature, timing and extent of the procedures selected
depend on the auditor’s judgment. This includes the
assessment of risk of material departures from the
requirements set out in ESEF RTS, whether due to fraud
or error.
We believe that the evidence we have obtained is suffi-
cient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the tagging of the consolidated
financial statements in the ESEF financial statements
(743700UF3RL386WIDA22-2022-12-31-en.zip) of Sampo
Oyj for the financial year 1.1.-31.12.2022 has been prepared
in all material respects in accordance with the require-
ments of Article 4 of ESEF RTS.
Our audit opinion on the consolidated financial state-
ments of Sampo Oyj for the financial year 1.1.-31.12.2022
has been expressed in our auditor’s report dated 10.3.2023.
In this report, we do not express an audit opinion or any
other assurance conclusion on the consolidated financial
statements.
Helsinki 30 March 2023
Deloitte Oy
Audit Firm
Jukka Vattulainen
APA
BoardofDirectors’
Report
Group’sIFRSFinancialStatements
Group’snotestothefinancialstatements
Sampoplc’sFinancialStatements
Sampoplc’snotestothefinancialstatements
Auditor’sReport
FINANCIAL STATEMENTS 2022
206
Sampo plc, Fabianinkatu 27, 00100 Helsinki, Finland
Phone: 010 516 0100 | Business ID: 0142213-3
www.sampo.com
Sampo_plc sampo_oyj sampo-plc
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