Sampo Group’s results for January–September 2024
Sampo plc, Interim statement, 6 November 2024 at 9:45 am EET
Sampo Group’s results for January–September 2024
• Top line growth amounted to 10 per cent in January-September 2024 on a currency adjusted basis, supported by solid development in all business areas, but particularly in the UK.
• The underwriting result increased to EUR 955 million (882) and the combined ratio amounted to 84.6 per cent (84.2), driven by strong growth and positive underlying margin development.
• The Group underlying combined ratio improved by 1.6 percentage points on the back of positive trends in the Nordics and in the UK.
• Profit before taxes increased to EUR 1,340 million (1,113), supported by higher underwriting profit and strong investment results, while operating EPS was up 2 per cent to EUR 1.68 (1.65).
• Solvency II coverage stood at 177 per cent, net of dividend accrual, and financial leverage amounted to 26.8 per cent.
• The public exchange offer for Topdanmark was successfully completed in September 2024.
Key figures
| EURm | 1–9/ 2024 | 1–9/ 2023 | Change, % | 7–9/ 2024 | 7–9/ 2023 | Change, % |
| Profit before taxes | 1,340 | 1,113 | 20 | 432 | 391 | 11 |
| If | 1,068 | 989 | 8 | 333 | 332 | — |
| Topdanmark | 159 | 143 | 11 | 47 | 38 | 22 |
| Hastings | 140 | 70 | 99 | 69 | 43 | 59 |
| Holding | -28 | -81 | — | -19 | -21 | — |
| Net profit for the equity holders | 973 | 941 | 3 | 320 | 366 | -12 |
| Operating result | 846 | 837 | 1 | 297 | 291 | 2 |
| Underwriting result | 955 | 882 | 8 | 374 | 284 | 32 |
| Change, % | Change, % | |||||
| Earnings per share (EUR) | 1.94 | 1.86 | 4 | 0.64 | 0.73 | -12 |
| Operational result per share (EUR) | 1.68 | 1.65 | 2 | 0.59 | 0.58 | 2 |
Net profit for the equity holders and earnings per share for January–September 2023 include result from life operations.
The figures in this report have not been audited.
Sampo Group key financial targets for 2024–2026
| Target | 1–9/2024 |
| Operating EPS growth: over 7% (period average) | 2% |
| Group combined ratio: below 85% | 84.6% |
| Solvency ratio: 150-190% | 177% (including dividend accrual) |
| Financial leverage: below 30% | 26.8% |
Financial targets for 2024–2026 announced at the Capital Markets Day on 6 March 2024.
GROUP CEO’S COMMENT
The third quarter of 2024 marked another solid performance for Sampo. We continued to see robust top line growth with our nine-month underwriting result growing by 8 per cent, despite the severe winter in the first quarter, and profit before taxes increasing by 20 per cent. We also finalised the strategic transformation that began when I assumed the role of Group CEO in 2020 by completing the acquisition of Topdanmark.
As part of our P&C insurance focused strategy, we successfully completed the exchange offer for Topdanmark during the quarter. This milestone allows us to move forward with the integration, a process that is well underway and poised to bring notable synergies. In particular, we anticipate benefits in key areas such as IT portfolio optimisation, increased operational digitalisation, and unified procurement. These synergies will not only enhance efficiency but also improve our ability to serve our customers. Through the deal, we have gained skilled Topdanmark personnel and have already established an integrated Nordic management team. I am confident that we will achieve our integration objectives and further solidify our leadership positions in the Nordic and Danish markets.
Looking back, another important step in our strategic transformation was the acquisition of Hastings in 2020. The transaction is proving successful, both in terms of financial performance and strategic alignment. During the third quarter of 2024, gross written premiums in the UK grew by 28 per cent on a constant currency basis, fuelled by pricing actions taken in the latter half of 2023 and an 11 per cent increase in customer policies year-on-year, bringing the total to 3.8 million. During the third quarter alone, we added 159,000 motor policies. The strong performance illustrates the significant growth potential in the UK. However, as is always the case at Sampo, we only grow when we see the opportunity to earn attractive returns, and our nine-month operating ratio of 88.5 per cent shows that we are delivering on this commitment.
Operational momentum is strong also in the Nordics. Retention in Private remains high at 89 per cent as we continue to price for claims inflation, while the growth rates in online sales, property and personal insurance are all above target level, at 10 per cent, 6 per cent and 11 per cent year-to-date, respectively. We are also on track to achieve our cost ratio ambition for the year, despite continued investments in our capabilities.
Nordic market dynamics remain stable, with some peers indicating large price increases, and claims inflation has trended down to 4 per cent. However, underwriting is more than just raising prices – we continuously leverage our expertise to actively manage our business. On electric vehicles, for example, we have been able to achieve the same profitability as on vehicles with Internal Combustion Engines (ICEs) by ensuring that we price accurately, even if this has meant sacrificing market share in some areas. Meanwhile, in the Nordic Industrial market, we are a leading provider with a strong track record of profitability and a business that consumes very limited incremental capital. Over recent years, we have implemented rate increases that have driven material profitability improvements. We are now taking the opportunity to significantly cut our shares on large property risks to ensure that we continue to deliver stable underwriting results. The reductions will be targeted, and we will continue to act as a lead underwriter. Underwriting actions are part of our everyday business and a key driver of our strong financial track record.
In summary, the third quarter of 2024 was a financially stable quarter, with continued positive momentum in the Nordics and accelerated growth in the UK. However, more importantly it was strategically critical as we completed Sampo’s transformation initiated in 2020. Looking ahead, we are well-positioned to leverage our operational capabilities and apply learnings from our impressive track record in the Nordic insurance business to our growing UK business. With this structure in place, I am confident in our ability to drive sustained value creation for our shareholders.
Torbjörn Magnusson
Group CEO
OUTLOOK FOR 2024
Following the nine-month result, Sampo has maintained its 2024 outlook for a Group combined ratio of 83–85 per cent. The outlook excludes potential one-off integration costs related to the realisation of synergies with Topdanmark.
Sampo Group’s combined ratio is subject to volatility driven by, among other factors, seasonal weather patterns, large claims, and prior year development. The net financial result will be significantly influenced by capital markets’ developments.
PUBLIC EXCHANGE OFFER FOR TOPDANMARK
On 17 June 2024, Sampo announced that it would make a recommended best and final public exchange offer to acquire all of the outstanding shares in Topdanmark not already owned by Sampo. Under the terms of the offer, Topdanmark shareholders would receive 1.25 newly issued Sampo A shares in exchange for each share held in Topdanmark. On 8 July 2024, Sampo announced that all necessary regulatory approvals had been obtained for the exchange offer.
The offer period began on 9 August 2024 and expired on 9 September 2024. Based on the final result announced on 16 September 2024, Sampo received acceptances representing approximately 92.6 per cent of the entire share capital and total number of voting rights in Topdanmark, excluding Topdanmark’s treasury shares. Based on the final result, the Board resolved to issue 48.2 million new Sampo A shares to Topdanmark shareholders. The new Sampo shares were listed on Nasdaq Copenhagen on 18 September 2024.
On 20 September 2024, Sampo commenced a compulsory acquisition of the Topdanmark shares held by the remaining minority shareholders of Topdanmark. The total acquisition cost of the minority shares amounted to EUR 325 million. The compulsory acquisition was completed and Topdanmark shares were removed from trading on Nasdaq Copenhagen after the end of the reporting period in October 2024. Sampo will begin reporting on the delivery of synergies from the first quarter of 2025.
SAMPO PLC
Board of Directors
The Interim Statement for January-September 2024, Investor Presentation and a video review with Group CEO Torbjörn Magnusson are available at www.sampo.com/result.
A conference call for investors and analysts will be arranged at 2:30 pm Finnish time (12:30 pm UK time).
To ask questions, please join the teleconference by registering using the following link: https://palvelu.flik.fi/teleconference/?id=50048816.
After the registration you will be provided with phone numbers and a conference ID to access the conference. To ask a question, please press #5 on your telephone keypad to enter the queue.
The conference call can also be followed live at www.sampo.com/result. A recorded version and a transcript will later be available at the same address.
Sampo will publish the Financial Statement Release for 2024 on 6 February 2025.
For further information, please contact:
Knut Arne Alsaker, Group CFO, tel. +358 10 516 0010
Sami Taipalus, Head of Investor Relations, tel. +358 10 516 0030
Maria Silander, Communications Manager, Media Relations, tel. +358 10 516 0031
Distribution:
Nasdaq Helsinki
Nasdaq Stockholm
Nasdaq Copenhagen
London Stock Exchange
FIN-FSA
DEN-FSA
The principal media
www.sampo.com
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