Sampo Group's results for January - March 2007

Sampo Group's results for January-March 2007 SAMPO PLC STOCK EXCHANGE RELEASE 1 (29) 9 May 2007 Sampo Group's results for January - March 2007 GOOD OPERATIONAL DEVELOPMENT OVERSHADOWED BY THE SALES GAIN FROM SAMPO BANK Sampo Group's profit before taxes in January-March 2007 amounted to EUR 3,129 million (339). The profit contains the sales gain of EUR 2,830 million from the Sampo Bank transaction. Earnings per share rose to EUR 5.30 (0.44) and, including the change in the fair value reserve, to EUR 5.38 per share (0.52). Net asset value per share increased to EUR 14.21 (9.21). - In P&C insurance the combined ratio in the seasonally weakest first quarter improved to 93.8 per cent (94.3). Profit before taxes amounted to EUR 169 million (133) as investment income rose to EUR 119 million (92). The annualised RoE was 23.3 per cent (14.8) thus clearly exceeding the target of 17.5 per cent. - Profit before taxes in life insurance amounted to EUR 100 million (128). The annualised RoE was well above target of 17.5 per cent at 40.0 per cent (54.2). - Profit for the segment 'Holding' amounted to EUR 1 million (-19). - Sampo Group's total investment assets amounted to EUR 21.5 billion, of which 82 per cent was invested in fixed income instruments. Investment income was EUR 321 million. -------------------------------------------------------------------------------- | KEY FIGURES | 1-3 | 1-3 | Change | -------------------------------------------------------------------------------- | EURm | 2007 | 2006 | % | -------------------------------------------------------------------------------- | Profit before taxes *) | 3,129 | 339 | 823 | -------------------------------------------------------------------------------- | P&C insurance | 169 | 133 | 27 | -------------------------------------------------------------------------------- | Life insurance | 100 | 128 | -22 | -------------------------------------------------------------------------------- | Holding | 1 | -19 | - | -------------------------------------------------------------------------------- | Profit for the period | 3,054 | 258 | 1,084 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, EUR | 5.30 | 0.44 | 1,105 | -------------------------------------------------------------------------------- | EPS(incl. change in FVR) EUR | 5.38 | 0.52 | 935 | -------------------------------------------------------------------------------- | NAV, EUR ** ) | 14.21 | 8.17 | 74 | -------------------------------------------------------------------------------- | Average number of staff (FTE) | 6,774 | 11,499 | -41 | -------------------------------------------------------------------------------- | Group solvency ratio, % | 853.0 | 203.8 | 319 | -------------------------------------------------------------------------------- | RoE, % ***) | 46.2 | 26.8 | 72 | -------------------------------------------------------------------------------- *) The sales gain of EUR 2,830 million and Sampo Bank Group's January 2007 profit of EUR 29 million (pre-tax) are reported under 'Discontinued operations'. **) Less full deferred tax. Banking and investments services accounts for EUR 91 million of comparison periods profit. **) Less full deferred tax. ***) 1-3/2007 figure is not annualised. The figures in this report are unaudited. Income statement items are compared on a year-on-year basis whereas comparison figures for balance sheet items are from 31.12.2006 unless otherwise stated. Business areas P&C insurance If is the leading property and casualty insurance company in the Nordic region with operations that also encompass the Baltic countries. If P&C Insurance Holding Ltd, headquartered in Sweden, is the parent company for property and casualty insurance within the Sampo Group. If also has a subsidiary in St. Petersburg, Russia. -------------------------------------------------------------------------------- | Results | 1-3 | 1-3 | Change | -------------------------------------------------------------------------------- | EURm | 2007 | 2006 | % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Premium income | 1,384 | 1,376 | 1 | -------------------------------------------------------------------------------- | Net income from investments | 119 | 92 | 29 | -------------------------------------------------------------------------------- | Other operating income | 7 | 5 | 40 | -------------------------------------------------------------------------------- | Claims incurred | -650 | -648 | 0 | -------------------------------------------------------------------------------- | Change in liabilities for | -456 | -456 | 0 | | insurance contracts | | | | -------------------------------------------------------------------------------- | Staff costs | -114 | -103 | 10 | -------------------------------------------------------------------------------- | Other expenses | -114 | -124 | -8 | -------------------------------------------------------------------------------- | Finance costs | -7 | -9 | -22 | -------------------------------------------------------------------------------- | Profit (loss) before taxes | 169 | 133 | 27 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Key figures | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Combined ratio, % | 93.8 | 94.3 | | -------------------------------------------------------------------------------- | Risk ratio, % | 70.0 | 70.4 | | -------------------------------------------------------------------------------- | Cost ratio, % | 23.8 | 23.8 | | -------------------------------------------------------------------------------- | Expense ratio, % | 17.0 | 17.5 | | -------------------------------------------------------------------------------- | Return on equity, % | 23.3 | 14.8 | | -------------------------------------------------------------------------------- | Average number of staff (FTE) | 6,340 | 6,421 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- If's good performance continued during the first three months of 2007 and profit before taxes increased by 27 per cent to EUR 169 million (133). The technical result rose to EUR 105 million (93). Business area Private accounted for 54 per cent, Commercial for 28 per cent, Industrial for 13 per cent and Baltics and Russia for 2 per cent of the technical result. EUR 19 million was released from technical reserves relating to prior year claims (21). The insurance margin - technical result in relation to net premiums earned - was 11.3 per cent (10.1). The target RoE of 17.5 per cent was clearly achieved with RoE of 23.3 per cent (14.8). The combined ratio for the first quarter improved to 93.8 per cent (94.3). Decent winter weather conditions in the Nordic countries had a favourable impact on the risk ratio, which declined to 70.0 per cent (70.4). Profitability remained good in all business areas. In business areas Private and Commercial the combined ratio was at the same level as during the first quarter of 2006. Business area Industrial incurred more large claims than a year earlier and the combined ratio rose to 95.1 per cent (93.8). The profitability in business area Baltics and Russia improved clearly from the comparison period, and combined ratio decreased to 95.5 per cent (109.9). The comparison figure was exceptionally high due to a couple of large claims. The Russian operation was included in business area Baltics in the beginning of 2007 and had negligible impact on business area's figures in the first quarter. In geographic terms the biggest combined ratio improvement occurred in Finland, where the combined ratio declined to 88.9 per cent (97.3). The significant improvement was achieved despite intense competition in certain business lines in the Private segment. In Denmark profitability suffered from one large industrial claim, and the combined ratio increased to 118 per cent (92.6). Nominal costs amounted to EUR 228 million (227) and the cost ratio was unchanged at 23.8 per cent (23.8). Gross premiums written increased by 1.2 per cent to EUR 1,522 million (1,504). Premium growth was again most rapid in the Baltic countries. No significant changes took place in the competitive environment and overall the claims development remained fairly favourable. In business area Private intense competition continues in Finland and Norway with some competitors pricing, in particular, motor policies aggressively. Premium growth in business area Commercial was positive in Finland and in the small commercial segment in all markets, whereas the broker market in Sweden continues to be tough. Competitive situation in business area Industrial remained stable. On 31 March 2007 the total investment assets of If amounted to EUR 10.4 billion (10.1), of which 89 per cent was invested in fixed income instruments (88), 11 per cent in equity (10) and 1 per cent in other assets (1). Net investment income for the first quarter of 2007 rose to EUR 119 million (92) boosted by strong equity markets. The return on investments for the first quarter of 2007 was 1.3 per cent (1.0). At end of March the duration for interest-bearing assets equalled 2.6 years (3.0). The capital position of the company remained firm and solvency capital amounted to EUR 2,952 million on 31 March 2007 (2,841). The solvency ratio - solvency capital in relation to net premiums written - was 79 per cent (74). If's reserves strengthened further and reserves were 166 per cent (159) of net premiums written and 263 per cent of claims paid (254). In February If signed a wide co-operation agreement with Blocket.se, which is the biggest second-hand internet marketplace in Sweden. If offers a tailormade guarantee insurance for used cars sold at the website. The insurance is offered to the seller of the car and covers sudden electric and mechanical failures for six months after the car has been sold. The guarantee insurance includes also a free car insurance for three months which If will renew. The target is to get more car and other private insurance. Blocket.se has yearly about 400,000 private car advertisements. Life insurance Sampo Life Group consists of Sampo Life, a wholly-owned subsidiary of Sampo plc, operating in Finland and of its subsidiary Sampo Life Insurance Baltic SE. The latter has the form of a European company headquartered in Estonia. It operates in the other Baltic countries through branches. Sampo Life also has a subsidiary in Sweden to complement the product offering of If P&C. -------------------------------------------------------------------------------- | Results | 1-3 | 1-3 | Change | -------------------------------------------------------------------------------- | EURm | 2007 | 2006 | % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Premiums | 168 | 174 | -3 | -------------------------------------------------------------------------------- | Net income from investments | 180 | 249 | -28 | -------------------------------------------------------------------------------- | Claims incurred | -205 | -143 | 43 | -------------------------------------------------------------------------------- | Change in liabilities for | -21 | -135 | -84 | | inv. and ins. contracts | | | | -------------------------------------------------------------------------------- | Staff costs | -6 | -6 | 0 | -------------------------------------------------------------------------------- | Other operating expenses | -13 | -9 | 44 | -------------------------------------------------------------------------------- | Finance costs | -3 | -3 | 0 | -------------------------------------------------------------------------------- | Profit (loss) before taxes | 100 | 128 | -22 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Key figures | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Expense ratio, % | 113.2 | 114.5 | | -------------------------------------------------------------------------------- | Return on equity, % | 40.0 | 54.2 | | -------------------------------------------------------------------------------- | Average number of staff (FTE) | 373 | 356 | | -------------------------------------------------------------------------------- Sampo Life Group's profit before taxes for the first three months of 2007 was EUR 100 million (128). Net investment income, excluding income on unit-linked contracts, amounted to EUR 147 million (176). Net income from unit-linked investments was EUR 33 million (73). The change in the fair value reserve from the beginning of the year was EUR 24 million. RoE target for life insurance operation, 17.5 per cent, was easily exceeded as the annualised RoE reached 40.0 per cent (54.2). Excluding the assets of EUR 1.9 billion (1.8) covering unit-linked liabilities, Sampo Life Group's investment assets amounted to EUR 6.0 billion (5.9) at market values on 31 March 2007. Fixed income covered 69 per cent (66), equity 29 per cent (31) and real estate 2 per cent (2) of the total assets. Equity investments include direct equity holdings, equity funds and private equity. The return on investments for the first quarter of 2007 was 3.1 per cent (4.0). At the end of March 2007 the duration of fixed income assets was 2.1 years. Sampo Life Group solvency capital remained strong and amounted to EUR 1,138 million (1,032) on 31 March 2007. Solvency ratio was 22.3 per cent (20.1). Total technical reserves were EUR 6.5 billion (6.2), from which unit-linked reserves accounted for 29 per cent (23). Sampo Life Group's premium income for the first three months was EUR 168 million (174). Premiums in the focus area, unit-linked insurance, amounted to EUR 116 million (132) and the share of unit-linked premiums decreased to 66 of the total premiums (71). The decline in unit-linked insurance premium income was mainly due to exceptional amount of large single premium contracts in the comparison period. Unit-linked premiums in pension insurance, however, increased by 19 per cent totalling EUR 28 million. The premiums in pure risk insurance in Finland increased by over 17 per cent totalling EUR 12 million (10). In connection with the sale of Sampo Bank, Sampo Life signed a co-operation agreement with Sampo Bank to secure the sale of life and pension insurance products through Sampo Bank's branch network. The agreement creates a stable ground for Sampo Life to continue and further develop sales and products in co-operation with Sampo Bank. The premium income from the Baltic subsidiary operations rose by 6 per cent to EUR 12 million (11). Sampo Life's Swedish subsidiary If Liv focuses on risk policies in cooperation with If P&C. The company's premium income amounted to EUR 1.2 million. Holding Sampo plc manages investment assets of approximately EUR 5 billion and, in addition, owns and controls its subsidiaries engaged in P&C and life insurance. -------------------------------------------------------------------------------- | Results | 1-3 | 1-3 | Change | -------------------------------------------------------------------------------- | EURm | 2007 | 2006 | % | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net investment income | 26 | 12 | 117 | -------------------------------------------------------------------------------- | Other operating income | 1 | 16 | -94 | -------------------------------------------------------------------------------- | Staff costs | -6 | -10 | -40 | -------------------------------------------------------------------------------- | Other operating expenses | -10 | -18 | -44 | -------------------------------------------------------------------------------- | Financing costs | -11 | -18 | -39 | -------------------------------------------------------------------------------- | Profit before taxes | 1 | -19 | - | -------------------------------------------------------------------------------- The segment's profit before taxes amounted to EUR 1 million (-19). The assets on Sampo plc's balance sheet on 31 March 2007 comprise investment assets of EUR 5.1 billion, of which fixed income instruments covered EUR 4.2 billion and equities EUR 0.9 billion. Sampo plc's largest equity holding was Nordea, the market value of which was EUR 858 million on 31 March 2007. Sampo plc held 71,911,000 Nordea shares and, in addition, Sampo Life held 9,225,000 Nordea shares. Sampo Group's average acquisition price was EUR 10.75 per share. Sampo plc's assets also include holdings in insurance subsidiaries for EUR 2.4 billion (3.2). Balance sheet liabilities include two debt instruments - a subordinated note and a senior note with face values of EUR 600 million and EUR 300 million respectively. The senior note was paid back in full in April 2007. Developments in the first quarter of 2007 Changes in Group structure Sampo Group experienced a major structural change during the first quarter of the year as Sampo Bank Group was divested from Sampo Group. The ownership of Sampo Bank, its subsidiary banks in Baltics and Russia, and a group of investment services companies was transferred from Sampo Group to Danske Bank on 1 February 2007. The sales gain of EUR 2,830 million from the Sampo Bank transaction is reported under 'Discontinued operations'. Sampo plc disclosed the sale of Sampo Bank plc to Danske Bank A/S on 9 November 2006. After the closing of the Sampo Bank transaction Sampo Group consists of P&C insurance company If, life insurance company Sampo Life, and holding company Sampo plc. If and Sampo Life are fully owned by Sampo plc. Sampo Life combined its Baltic subsidiaries under a new company SE Sampo Life Insurance Baltic on 2 January 2007. The new company is a European company and operates in all Baltic countries. It is domiciled in Estonia and has branches in Latvia and Lithuania. Administration The closing of the Sampo Bank transaction created changes in the administration of Sampo Group. Sampo Bank's deputy managing directors Ilkka Hallavo and Maarit NÃ¤kyvÃ¤ left Sampo Group's Executive Board with immediate effect after the closing of Sampo Bank transaction on 1 February 2007. Sampo Bank's managing director Mika Ihamuotila resigned from his position on 1 February 2007. He continued as a member of Sampo Group's Executive Committee until he left the service of the Sampo Group as of 15 April 2007. Ihamuotila resigned from Sampo Life's Board of Directors on 16 March 2007. Sampo Life's Annual General Meeting elected Jarmo Salonen, Sampo Group's Head of Investor Relations and Group Communications, as a new member to its Board of Directors on 16 March 2007. Sampo Group's CFO Peter Johansson was elected as Vice Chairman of the Board of Sampo Life and Kari Stadigh continues as Chairman of the Board. The Annual General Meeting for Sampo plc was held 12 April 2007. The meeting adopted the financial accounts for 2006 and discharged the Board of Directors and the Group CEO and President from liability for the financial year. Ernst & Young Oy was re-elected as Auditor. The Annual General Meeting re-elected the earlier Board of Directors. Georg Ehrnrooth continues his duties as Chairman of the Board and Matti Vuoria serves as Vice Chairman. Other members of the Board are Tom Berglund, Anne Brunila, Jussi Pesonen, Jukka Pekkarinen, Christoffer Taxell, and BjÃ¶rn Wahlroos. The fees of the Board members were left unchanged. The Chairman of the Board will be paid EUR 120,000 per year, the Vice Chairman EUR 85,000 per year and the other members EUR 70,000 per year. An amount equivalent to 30 per cent of the annual fee will be paid in Sampo A shares. The Annual General Meeting approved the proposed amendments to the Articles of Association necessitated by amendments to the Finnish Companies Act and by other technical reasons. The most significant changes were the deletion of provisions concerning the amount of share capital and the number of shares and the addition of a new provision that the company shall have one Auditor, which must be a firm of Authorised Public Accountants. The complete lists of proposals approved by the Annual General Meeting can be found on www.sampo.com. The Annual General Meeting decided to distribute a dividend of EUR 1.20 per share for year 2006. Shares and share capital The subscription period for Sampo 2000 option programme ended on 31 January 2007. Subscriptions with the warrants of the programme for 15,740,245 A shares were approved by the Board in January 2007. Subscriptions increased Sampo plc's share capital by EUR 2.6 million. The Sampo A shares subscribed for with warrants from the 2000 option programme after 31 December 2006 are entitled to dividends from 2007 onwards. To facilitate the payment of year 2006 dividends, a new share category called Sampo Uudet (Sampo New) was listed on the main list of the Helsinki Stock Exchange as of 2 January 2007. On 13 February 2007 the Board of Sampo plc decided to cancel 4,827,500 Sampo A shares repurchased in 2006. During the first quarter of 2007 Sampo plc did not acquire its own shares and did not possess any on 31 March 2007. The Annual General Meeting of 12 April 2007 authorised the Board of Directors to repurchase Sampo shares. The authorisation is valid until the close of the next Annual General Meeting. Sampo A shares can be repurchased in one or more lots to a total of up to 10 per cent of all the company's shares. Sampo shares may be repurchased in other proportion than the shareholders' proportional shareholdings. The share price will be no higher than the highest price paid for Sampo shares in public trading at the time of purchase. In implementing the repurchase of Sampo shares, normal derivatives, stock lending or other contracts may also be entered into as permitted by the laws and regulations at the price determined by the markets. On 31 March 2007 Sampo plc's share capital amounted to EUR 98 million (95), and the number of A shares was 577,330,890. The total number of shares of the company, including 1,200,000 B shares, was 578,530,890. On 8 February 2007, 26 March 2007 and 11 April 2007 Sampo received disclosures under chapter 2, section 9 of the Securities Markets Act, regarding Exista hf's and its subsidiaries' holding in Sampo shares and voting rights. According to the latest disclosure Exista holds 9.57 per cent of Sampo's shares and 9.50 per cent of the voting rights and has entered into agreements, which enable the company to acquire an additional 6 percent of shares. Complete disclosures are available at www.sampo.com. On 29 March 2007 Sampo received a disclosure under chapter 2, section 9 of the Securities Markets Act, according to which Morgan Stanley & Co International Limited's holding in Sampo plc had risen to 5.08 per cent of the total amount of Sampo's shares and to 5.04 per cent of the voting rights. On 5 April 2007 Morgan Stanley notified Sampo that the holding had decreased to 0.67 per cent of shares and to 0.66 per cent of voting rights. Staff Sampo Group's full-time equivalent staff on 31 March 2007 amounted to 6,776 (11,763) employees. The number of staff decreased substantially especially in Finland and the Baltic countries compared to previous year due to the sale of Sampo Bank. Also, as a consequence of the Sampo Bank transaction, the number of Primasoft staff will no longer be included into Sampo Group's staff. Approximately 93 per cent of the staff worked in P&C insurance, 6 per cent in life insurance and 1 per cent in the holding company. 30 per cent worked in Finland, 27 per cent in Sweden, 24 per cent in Norway and 19 per cent in the Baltic and other countries. The average number of employees during the first quarter of 2007 was 6,774 (11,657). Management long-term incentive schemes The payout on Sampo Group's long-term management incentive schemes is dependent on Sampo's financial and share price performance. The incentive schemes 2003I - 2006II extend to 2010. The incentive schemes increased staff costs in the first quarter of 2007 by EUR 3 million (18) and on 31 March 2007 the total provision for the schemes was EUR 33 million (53). The comparison figure contains EUR 18 million of provisions in the banking and investment services companies. The "Sampo 2006" share-based incentive increased staff costs by EUR 3 million in the first quarter of 2007. Ratings All the main ratings for Sampo Group companies remained unchanged in the first quarter of 2007. -------------------------------------------------------------------------------- | Rated company | Moody's | Standard and Poor's | -------------------------------------------------------------------------------- | | Rating | Outlook | Rating | Outlook | -------------------------------------------------------------------------------- | Sampo plc | Baa1 | Positive | Not rated | - | -------------------------------------------------------------------------------- | If P&C Insurance | A2 | Positive | A | Stable | | (Sweden) | | | | | -------------------------------------------------------------------------------- | If P&C Insurance Co. | A2 | Positive | A | Stable | | (Finland) | | | | | -------------------------------------------------------------------------------- Group solvency As a result of the disposal of Sampo Bank plc and other banking and investment service companies, the Group solvency for 2007 is based on adjusted solvency calculations for insurance groups according to the Decree of the Ministry of Social Affairs and Health (1106/2000), Chapter 7.1 Â§. The adjusted solvency is determined on the basis of the Group financial statements as permitted by the Insurance Supervisory Authority. In the comparative period, the Group solvency is calculated according to the consolidation method defined in Chapter 3 of the Act on the Supervision of Financial and Insurance Conglomerates, entered into force on 1 January 2005. The Group's solvency ratio (own funds in relation to minimum requirements for own funds) on 31 March 2007 was 853.0 per cent (202.7). -------------------------------------------------------------------------------- | SAMPO GROUP SOLVENCY | 31.3.2007 | 31.12.2006 | -------------------------------------------------------------------------------- | EURm | | | -------------------------------------------------------------------------------- | Group capital | 8,211 | 5,190 | -------------------------------------------------------------------------------- | Sectoral items | 1,008 | 3,134 | -------------------------------------------------------------------------------- | Intangibles and sectoral | -1,051 | -2,718 | | deductibles | | | -------------------------------------------------------------------------------- | Other sectoral non-transferable | -693 | -785 | | items | | | -------------------------------------------------------------------------------- | Group's own funds, total | 7,475 | 4,821 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minimum requirements for own | 876 | 2,378 | | funds, total | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group solvency | 6,584 | 2,443 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group solvency ratio | 853.0% | 202.7% | -------------------------------------------------------------------------------- | (Own funds % of minimum | | | | requirements) | | | -------------------------------------------------------------------------------- In Sampo plc, and in its insurance subsidiaries, risks are measured and aggregated internally using an economic capital framework, which quantifies the amount of capital required to protect against economic solvency over a one year time horizon at a confidence level equalling the historic bond defaults of AA-rated issuers. The economic capital tied up in the Group's operations on 31 March 2007 was EUR 2,768 million compared to pro forma EUR 2,695 million at 31 December 2006 excluding Sampo Bank Group. Outlook for the rest of 2007 Sampo Group's result for 2007 is expected to remain good, mainly because of the sound operating profitability of P&C and life insurance operations of the Group. If, Sampo Group's P&C insurance operation, is expected to reach a combined ratio of 90-93 per cent for the full year 2007. With stable investment markets, it is foreseen to achieve its RoE target of 17.5 per cent. If reports its investments at market value through the income statement, whereby changes in share prices or interest rates are directly reflected in its result. Sampo Life Group's full-year 2007 result is expected to be good. The RoE target of 17.5 per cent is foreseen to be achieved unless equity market performance significantly weakens. The focus of the operations continues to be on unit-linked insurance and risk policies both in Finland and the Baltics. The parent company, Sampo plc, has presently a large part of its investment assets of EUR 5.1 billion invested in cash or equivalents. Sampo Group remains committed to provide investors with a more detailed vision of how its assets will be invested in connection with the full-year 2007 result release. Excluding extraordinary items, Sampo plc is expected to report a profit of EUR 25-30 million per quarter in 2007. The biggest risk for the outlook is a severe weakening of equity markets. However, in life insurance and Sampo plc equity losses would in all likelihood be absorbed by the fair value reserve and would not affect reported profits. If, on the other hand, has a fairly limited equity exposure. A sudden rise in interest rates would in the short term cause losses by lowering the value of bond portfolios, but in the longer run it would enhance fixed income yields. SAMPO PLC Board of Directors For more information, please contact: Peter Johansson, Group CFO, tel. +358 10 516 0010 Jarmo Salonen, Head of Investor Relations and Group Communications, tel. +358 10 516 0030 Maria Silander, Press Officer, +358 10 516 0031 Sampo will arrange an English-language telephone conference for investors and analysts on the first quarter results at 4 p.m. Please call +44 20 7162 0025 (UK/Europe) or +1 334 323 6201 (North America). Password: SAMPO. The conference can also be followed from a direct transmission on the Internet at www.sampo.com/ir. A recorded version will later be available at the same address. Sampo Life has today published the 2006 Embedded Value Report, which is available at www.sampo.com/ir. Sampo will publish the second quarter 2007 interim report on 8 August 2007. DISTRIBUTION: The Helsinki Stock Exchange The principal media www.sampo.com Financial Supervisory Authority -------------------------------------------------------------------------------- | GROUP FINANCIAL REVIEW | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | FINANCIAL HIGHLIGHTS | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | GROUP Â¹) | | | | -------------------------------------------------------------------------------- | Profit before taxes | EURm | 3,129 | 339 | -------------------------------------------------------------------------------- | Return on equity (at fair value) | % | 46.2 | 26.8 | -------------------------------------------------------------------------------- | Return on assets (at fair value) | % | 9.2 | 4.2 | -------------------------------------------------------------------------------- | Equity/assets ratio | % | 30.8 | 10.1 | -------------------------------------------------------------------------------- | Group solvency Â²) | EURm | 6,584 | 2,360 | -------------------------------------------------------------------------------- | Group solvency ratio | % | 853 | 203.8 | -------------------------------------------------------------------------------- | Average number of staff | | 6774 | 11,499 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PROPERTY & CASUALTY INSURANCE | | | | -------------------------------------------------------------------------------- | Premiums written before reinsurers' | EURm | 1,522 | 1,504 | | share | | | | -------------------------------------------------------------------------------- | Premiums earned | EURm | 928 | 920 | -------------------------------------------------------------------------------- | Profit before taxes | EURm | 169 | 133 | -------------------------------------------------------------------------------- | Return on equity (at current value) | % | 23.3 | 14.8 | -------------------------------------------------------------------------------- | Risk ratio Â³) | % | 70.0 | 70.4 | -------------------------------------------------------------------------------- | Cost ratio Â³) | % | 23.8 | 23.8 | -------------------------------------------------------------------------------- | Loss ratio Â³) | % | 78.3 | 78.2 | -------------------------------------------------------------------------------- | Loss ratio before unwinding of | % | 76.8 | 76.8 | | discount Â³) | | | | -------------------------------------------------------------------------------- | Expense ratio Â³) | % | 17.0 | 17.5 | -------------------------------------------------------------------------------- | Combined ratio | % | 95.3 | 95.7 | -------------------------------------------------------------------------------- | Combined ratio before unwinding of | % | 93.8 | 94.3 | | discount | | | | -------------------------------------------------------------------------------- | Average number of staff | | 6,340 | 6,421 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIFE INSURANCE | | | | -------------------------------------------------------------------------------- | Premiums written before reinsurers' | EURm | 172 | 178 | | share | | | | -------------------------------------------------------------------------------- | Profit before taxes | EURm | 100 | 128 | -------------------------------------------------------------------------------- | Return on equity (at current value) | % | 40.0 | 54.2 | -------------------------------------------------------------------------------- | Expense ratio | % | 113.2 | 114.5 | -------------------------------------------------------------------------------- | Average number of staff | | 373 | 356 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | HOLDING | | | | -------------------------------------------------------------------------------- | Profit before taxes | EURm | 1 | -19 | -------------------------------------------------------------------------------- | Average number of staff 4) | | 61 | 440 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | PER SHARE KEY FIGURES | | | | -------------------------------------------------------------------------------- | Earnings per share | EUR | 5.30 | 0.44 | -------------------------------------------------------------------------------- | Earnings per share, incl. change in | EUR | 5.38 | 0.52 | | fair value reserve | | | | -------------------------------------------------------------------------------- | Diluted earnings per share | EUR | - | 0.43 | -------------------------------------------------------------------------------- | Capital and reserves per share | EUR | 14.19 | 8.15 | -------------------------------------------------------------------------------- | Net asset value per share | EUR | 14.21 | 8.17 | -------------------------------------------------------------------------------- | Adjusted share price, high | EUR | 22.8 | 17.99 | -------------------------------------------------------------------------------- | Adjusted share price, low | EUR | 22.51 | 14.73 | -------------------------------------------------------------------------------- | Market capitalisation | EURm | 13,144 | 9,645 | -------------------------------------------------------------------------------- Â¹) Sampo plc's sales gain (EURm 2,830) arising from the disposal of the share stock of Sampo Bank plc to Danske Bank A/S is included in the Group key figures. Due to the one-off nature of the sales gain, the key figures return on equity and return on assets have not been annualised. Â²) As a result of the disposal of Sampo Bank plc and other banking and investment service companies, the Group solvency for 2007 is based on adjusted solvency calculations for insurance groups according to the Decree of the Ministry of Social Affairs and Health (1106/2000), Chapter 7.1 Â§. The adjusted solvency is determined on the basis of the Group financial statements as permitted by the Insurance Supervisory Authority. In the comparative period, the Group solvency is calculated according to the consolidation method defined in Chapter 3 of the Act on the Supervision of Financial and Insurance Conglomerates, entered into force on 1 Jan. 2005. Â³) The key figures for P&C Insurance are based on activity based costs and cannot, therefore, be calculated directly from the consolidated income statement. The result analysis of P&C insurance is presented in note 13. 4) The comparative number includes the average number of staff for Primasoft Oy (352), fully consolidated in the financial statements for the year 2006. In calculating the per share key figures, the number of shares used at the balance sheet date was 578,530,890 and the average number of shares during the period 576,548,326. The 4,827,500 own shares held by Sampo plc and cancelled at 13 Feb. 2007 have been deducted from the average number of shares (2,306,472). In calculating the key figures, the tax corresponding to the result for the accounting period has been taken into account. The valuation differences of investment property and held-to-maturity debt securities have been taken into account in return on assets, return on equity, equity/assets ratio and net asset value per share. Additionally, the change in fair value reserve has been taken into account in return on assets and return on equity. A deferred tax liability has been deducted from the valuation differences. The key figures for the insurance business have been calculated according to the decree of the Ministry of Finance and the specifying instruction 11/002/2006 of the Insurance Supervisory Authority. -------------------------------------------------------------------------------- | GROUP QUARTERLY INCOME | | | | | | | STATEMENT | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EURm | 1-3/20 | 10-12/ | 7-9/200 | 4-6/200 | 1-3/200 | | | 07 | 2006 | 6 | 6 | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Continuing operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Insurance premiums written | 1,552 | 1,001 | 841 | 1,041 | 1,549 | -------------------------------------------------------------------------------- | Net income from investments | 322 | 327 | 307 | 19 | 355 | -------------------------------------------------------------------------------- | Other operating income | 5 | 8 | 43 | 7 | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Claims incurred | -855 | -752 | -742 | -746 | -791 | -------------------------------------------------------------------------------- | Change in liabilities for | -477 | -12 | 168 | 81 | -590 | | insurance and investment | | | | | | | contracts | | | | | | -------------------------------------------------------------------------------- | Staff costs | -126 | -108 | -128 | -129 | -118 | -------------------------------------------------------------------------------- | Other operating expenses | -132 | -190 | -110 | -129 | -143 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finance costs | -19 | -17 | -21 | -19 | -28 | -------------------------------------------------------------------------------- | Share of associates' | 1 | 0 | 0 | 0 | 1 | | profit/loss | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from continuing | 270 | 258 | 359 | 125 | 242 | | operations before taxes | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Taxes | -68 | -75 | -104 | -43 | -60 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from continuing | 202 | 183 | 255 | 82 | 182 | | operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Discontinued operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from discontinued | 2,853 | 57 | 82 | 73 | 76 | | operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | 3,055 | 241 | 337 | 156 | 258 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to | | | | | | -------------------------------------------------------------------------------- | Equity holders of parent | 3,054 | 239 | 335 | 154 | 248 | | company | | | | | | -------------------------------------------------------------------------------- | Minority interest | 0 | 2 | 2 | 2 | 9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED INCOME STATEMENT | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EURm | Note | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Continuing operations | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Insurance premiums written | 1 | 1,552 | 1,549 | -------------------------------------------------------------------------------- | Net income from investments | 2 | 322 | 354 | -------------------------------------------------------------------------------- | Other operating income | | 5 | 8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Claims incurred | 3 | -855 | -791 | -------------------------------------------------------------------------------- | Change in liabilities for insurance and | | -477 | -590 | | investment contracts | | | | -------------------------------------------------------------------------------- | Staff costs | 4 | -126 | -118 | -------------------------------------------------------------------------------- | Other operating expenses | | -132 | -143 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finance costs | | -19 | -28 | -------------------------------------------------------------------------------- | Share of associates' profit/loss | | 1 | 1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from continuing operations | | 270 | 242 | | before taxes | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Taxes | | -68 | -60 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from continuing operations | | 202 | 182 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Discontinued operations | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from discontinued operations | | 2,853 | 76 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | | 3,055 | 258 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to | | | | -------------------------------------------------------------------------------- | Equity holders of parent company | | 3,054 | 248 | -------------------------------------------------------------------------------- | Minority interest | | 0 | 9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earning per share (eur) | | | | -------------------------------------------------------------------------------- | Basic, continuing operations | | 0.35 | 0.33 | -------------------------------------------------------------------------------- | Basic, discontinued operations | | 4.95 | 0.11 | -------------------------------------------------------------------------------- | Total | | 5.30 | 0.44 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Diluted, continuing operations | | - | 0.32 | -------------------------------------------------------------------------------- | Diluted, discontinued operations | | - | 0.11 | -------------------------------------------------------------------------------- | Total | | - | 0.43 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EURm | Note | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | | -------------------------------------------------------------------------------- | Property, plant and equipment | | 38 | 51 | -------------------------------------------------------------------------------- | Investment property | | 182 | 170 | -------------------------------------------------------------------------------- | Intangible assets | 5 | 736 | 782 | -------------------------------------------------------------------------------- | Investments in associates | | 8 | 5 | -------------------------------------------------------------------------------- | Financial assets | 6, 7 | 20,919 | 15,921 | -------------------------------------------------------------------------------- | Investments related to unit-linked | 8 | 1,867 | 1,753 | | insurance | | | | -------------------------------------------------------------------------------- | Tax assets | | 124 | 149 | -------------------------------------------------------------------------------- | Reinsurers' share of insurance | | 611 | 525 | | liabilities | | | | -------------------------------------------------------------------------------- | Other assets | | 1,653 | 1,638 | -------------------------------------------------------------------------------- | Cash and cash equivalents | | 589 | 41 | -------------------------------------------------------------------------------- | Non-current assets classified as held | | - | 26,585 | | for sale | | | | -------------------------------------------------------------------------------- | Total assets | | 26,726 | 47,620 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | -------------------------------------------------------------------------------- | Liabilities for insurance and | 9 | 13,455 | 12,942 | | investment contracts | | | | -------------------------------------------------------------------------------- | Liabilities for unit-linked insurance | 10 | 1,864 | 1,752 | | and investment contracts | | | | -------------------------------------------------------------------------------- | Financial liabilities | 11, 12 | 1,369 | 1,396 | -------------------------------------------------------------------------------- | Tax liabilities | | 649 | 607 | -------------------------------------------------------------------------------- | Provisions | | 37 | 53 | -------------------------------------------------------------------------------- | Employee benefits | | 108 | 97 | -------------------------------------------------------------------------------- | Other liabilities | | 1,033 | 1,064 | -------------------------------------------------------------------------------- | Liabilities directly associated with | | - | 24,520 | | non-current assets classified as held | | | | | for sale | | | | -------------------------------------------------------------------------------- | Total liabilities | | 18,515 | 42,431 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | | | | -------------------------------------------------------------------------------- | Share capital | | 98 | 95 | -------------------------------------------------------------------------------- | Reserves | | 2,062 | 2,012 | -------------------------------------------------------------------------------- | Retained earnings | | 6,051 | 3,061 | -------------------------------------------------------------------------------- | Equity attributable to parent company's | | 8,211 | 5,168 | | equityholders | | | | -------------------------------------------------------------------------------- | Minority interest | | 0 | 21 | -------------------------------------------------------------------------------- | Total equity | | 8,211 | 5,189 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | | 26,726 | 47,620 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENTS | | | | | | | | | | OF CHANGES | | | | | | | | | | IN EQUITY | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EURm | Share | Share | Legal | Fair | Retai | Total | Minor | Total | | | capit | premi | reser | value | ned | | ity | | | | al | um | ve | reser | earni | | inter | | | | | accou | | ve | ngs | | est | | | | | nt | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity at 1 | 96 | 1,048 | 370 | 396 | 2,412 | 4,322 | 26 | 4,348 | | Jan. 2006 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow | | | | | | | | | | hedges: | | | | | | | | | -------------------------------------------------------------------------------- | - recognised | | | | 0 | | 0 | | 0 | | in equity | | | | | | | | | | during the | | | | | | | | | | financial | | | | | | | | | | year | | | | | | | | | -------------------------------------------------------------------------------- | - recognised | | | | -1 | | -1 | | -1 | | in p/l | | | | | | | | | -------------------------------------------------------------------------------- | Financial | | | | | | | | | | assets | | | | | | | | | | available-fo | | | | | | | | | | r-sale | | | | | | | | | -------------------------------------------------------------------------------- | - change in | | | | 117 | | 117 | | 117 | | fair value | | | | | | | | | -------------------------------------------------------------------------------- | - recognised | | | | -72 | | -72 | | -72 | | in p/l | | | | | | | | | -------------------------------------------------------------------------------- | Exchange | | | | | -12 | -12 | | -12 | | rate | | | | | | | | | | translation | | | | | | | | | | difference | | | | | | | | | -------------------------------------------------------------------------------- | Profit for | | | | | 248 | 248 | 9 | 258 | | the period | | | | | | | | | -------------------------------------------------------------------------------- | Total income | | | | 44 | 236 | 280 | 9 | 290 | | and expenses | | | | | | | | | | recognised | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Subscription | 0 | 0 | | | | 0 | | 0 | | for shares | | | | | | | | | | with options | | | | | | | | | -------------------------------------------------------------------------------- | Dividends | | | | | | | -15 | -15 | -------------------------------------------------------------------------------- | Equity at 31 | 96 | 1,048 | 370 | 440 | 2,648 | 4,603 | 21 | 4,623 | | March 2006 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity at 1 | 95 | 1,157 | 370 | 486 | 3,061 | 5,168 | 21 | 5,189 | | Jan. 2007 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Items of | | 0 | 0 | 3 | -3 | -1 | -22 | -22 | | equity of | | | | | | | | | | disposed | | | | | | | | | | operations | | | | | | | | | -------------------------------------------------------------------------------- | Financial | | | | | | | | | | assets | | | | | | | | | | available-fo | | | | | | | | | | r-sale | | | | | | | | | -------------------------------------------------------------------------------- | - change in | | | | 85 | | 85 | | 85 | | fair value | | | | | | | | | -------------------------------------------------------------------------------- | - recognised | | | | -42 | | -42 | | -42 | | in p/l | | | | | | | | | -------------------------------------------------------------------------------- | Exchange | 0 | 0 | 0 | | -60 | -60 | | -60 | | rate | | | | | | | | | | translation | | | | | | | | | | difference | | | | | | | | | -------------------------------------------------------------------------------- | Profit for | | | | | 3,054 | 3,054 | 0 | 3,055 | | period | | | | | | | | | -------------------------------------------------------------------------------- | Total income | 0 | 0 | 0 | 43 | 2,995 | 3,038 | 0 | 3,038 | | and expenses | | | | | | | | | | recognised | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Subscription | 3 | 4 | | | | 6 | | 6 | | for shares | | | | | | | | | | with options | | | | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | -1 | -1 | | -1 | | payments | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity at 31 | 98 | 1,160 | 370 | 531 | 6,051 | 8,211 | 0 | 8,211 | | Mar. 2007 | | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF CASH FLOWS | | | -------------------------------------------------------------------------------- | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash and cash equivalent at the beginning of | 2,016 | 1,787 | | the period | | | -------------------------------------------------------------------------------- | Cash flows from/used in operating activities | -3,788 | -600 | -------------------------------------------------------------------------------- | Cash flows from/used in investing activities | 2,817 | -7 | -------------------------------------------------------------------------------- | Cash flows from/used in financing activities | -449 | 764 | -------------------------------------------------------------------------------- | Paid dividends | -9 | -15 | -------------------------------------------------------------------------------- | Subscription for shares with options | 6 | - | -------------------------------------------------------------------------------- | Increase of liabilities | 733 | 788 | -------------------------------------------------------------------------------- | Decrease of liabilities | -1,180 | -9 | -------------------------------------------------------------------------------- | Cash and cash equivalent at the end of the | 595 | 1,943 | | period | | | -------------------------------------------------------------------------------- The cash flow statement reports cash flows during the period classified by operating, investing and financing activities. Cash flows are reported by using the indirect method. Cash flows from operating activities derive primarily from the principal revenue-producing activities. Cash flows from investments in subsidiaries and associated undertakings and those from investments in intangible assets and property, plant and equipment are presented in investing activities. Financing activities include cash flows resulting from changes in equity and borrowings in order to conduct the business. Cash and cash equivalents consist of cash at bank and in hand and short-term deposits (under 3 months). NOTES ACCOUNTING POLICIES Sampo Group's consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the EU. The interim financial statements are presented in accordance with IAS 34 Interim Financial Reporting. In preparing the interim financial statements, the same accounting policies and methods of computation are applied as in the financial statements for 2006. The financial statements for 2006 are available on Sampo's website at the address www.sampo.com/ir. CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR THREE MONTHS ENDED 31 MARCH 2007 -------------------------------------------------------------------------------- | EURm | P&C | Life | Holdin | Elimina | Group | | | insuranc | insura | g | tion | | | | e | nce | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Insurance premius written | 1,384 | 168 | - | - | 1,552 | -------------------------------------------------------------------------------- | Net income from investments | 119 | 180 | 26 | -3 | 322 | -------------------------------------------------------------------------------- | Other operating income | 7 | 0 | 1 | -3 | 5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Claims incurred | -650 | -205 | - | - | -855 | -------------------------------------------------------------------------------- | Change in liabilities for | -456 | -21 | - | - | -477 | | insurance and investment | | | | | | | contracts | | | | | | -------------------------------------------------------------------------------- | Staff costs | -114 | -6 | -6 | - | -126 | -------------------------------------------------------------------------------- | Other operating expenses | -114 | -13 | -10 | 4 | -132 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finance costs | -7 | -3 | -11 | 2 | -19 | -------------------------------------------------------------------------------- | Share of associates' | 0 | 0 | 0 | - | 1 | | profit/loss | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from continuing | 169 | 100 | 1 | 0 | 270 | | operations before taxes | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Taxes | | | | | -68 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from continuing | | | | | 202 | | operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from discontinued | | | | | 2,853 | | operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | | | | | 3,055 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to | | | | | | -------------------------------------------------------------------------------- | Equity holders of parent | | | | | 3,054 | | company | | | | | | -------------------------------------------------------------------------------- | Minority interest | | | | | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED INCOME | | | | | | | STATEMENT BY SEGMENT FOR | | | | | | | THREE MONTHS ENDED 31 MARCH | | | | | | | 2006 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EURm | P&C | Life | Holdin | Elimina | Group | | | insuranc | insura | g | tion | | | | e | nce | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Insurance premius written | 1,376 | 174 | - | - | 1,549 | -------------------------------------------------------------------------------- | Net income from investments | 92 | 249 | 12 | 3 | 355 | -------------------------------------------------------------------------------- | Other operating income | 5 | 0 | 16 | -15 | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Claims incurred | -648 | -143 | - | - | -791 | -------------------------------------------------------------------------------- | Change in liabilities for | -456 | -135 | - | - | -590 | | insurance and investment | | | | | | | contracts | | | | | | -------------------------------------------------------------------------------- | Staff costs | -103 | -6 | -10 | 1 | -118 | -------------------------------------------------------------------------------- | Other operating expenses | -124 | -9 | -18 | 9 | -143 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Finance costs | -9 | -3 | -18 | 2 | -28 | -------------------------------------------------------------------------------- | Share of associates' | 0 | 1 | 0 | - | 1 | | profit/loss | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from continuing | 133 | 128 | -19 | 0 | 242 | | operations before taxes | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Taxes | | | | | -60 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from continuing | | | | | 182 | | operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit from discontinued | | | | | 70 | | operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Intra-segment elimination | | | | | 6 | | items attributable to | | | | | | | discontinued operations | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit for the period | | | | | 258 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to | | | | | | -------------------------------------------------------------------------------- | Equity holders of parent | | | | | 248 | | company | | | | | | -------------------------------------------------------------------------------- | Minority interest | | | | | 9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET | | | | | | | BY SEGMENT AT 31 MARCH 2007 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EURm | P&C | Life | Holdin | Elimin | Group | | | insuran | insuranc | g | ation | | | | ce | e | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | | | | -------------------------------------------------------------------------------- | Property, plant and | 28 | 5 | 5 | - | 38 | | equipment | | | | | | -------------------------------------------------------------------------------- | Investment property | 41 | 110 | 32 | - | 182 | -------------------------------------------------------------------------------- | Intangible assets | 576 | 159 | 0 | - | 736 | -------------------------------------------------------------------------------- | Investments in associates | 4 | 1 | 3 | - | 8 | -------------------------------------------------------------------------------- | Financial assets | 10,245 | 5,742 | 7,438 | -2,506 | 20,919 | -------------------------------------------------------------------------------- | Investments related to | - | 1,867 | - | - | 1,867 | | unit-linked insurance | | | | | | -------------------------------------------------------------------------------- | Tax assets | 101 | 1 | 20 | 1 | 124 | -------------------------------------------------------------------------------- | Reinsurers' share of | 606 | 4 | - | - | 611 | | insurance liabilities | | | | | | -------------------------------------------------------------------------------- | Other assets | 1,512 | 90 | 79 | -27 | 1,653 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 342 | 129 | 118 | - | 589 | -------------------------------------------------------------------------------- | Total assets | 13,455 | 8,108 | 7,694 | -2,532 | 26,726 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | | | -------------------------------------------------------------------------------- | Liabilities for insurance | 8,816 | 4,639 | - | - | 13,455 | | and investment contracts | | | | | | -------------------------------------------------------------------------------- | Liabilities for unit-linked | - | 1,864 | - | - | 1,864 | | insurance and investment | | | | | | | contracts | | | | | | -------------------------------------------------------------------------------- | Financial liabilities | 579 | 107 | 814 | -131 | 1,369 | -------------------------------------------------------------------------------- | Tax liabilities | 420 | 210 | 19 | - | 649 | -------------------------------------------------------------------------------- | Provisions | 37 | - | - | - | 37 | -------------------------------------------------------------------------------- | Employee benefits | 108 | - | - | - | 108 | -------------------------------------------------------------------------------- | Other liabilities | 860 | 95 | 107 | -27 | 1,033 | -------------------------------------------------------------------------------- | Total liabilities | 10,820 | 6,915 | 939 | -158 | 18,515 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | | | | | | -------------------------------------------------------------------------------- | Share capital | | | | | 98 | -------------------------------------------------------------------------------- | Reserves | | | | | 2,062 | -------------------------------------------------------------------------------- | Retained earnings | | | | | 6,051 | -------------------------------------------------------------------------------- | Equity attributable to | | | | | 8,211 | | parent company's | | | | | | | equityholders | | | | | | -------------------------------------------------------------------------------- | Minority interest | | | | | 0 | -------------------------------------------------------------------------------- | Total equity | | | | | 8,211 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | | | | | 26,726 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CONSOLIDATED BALANCE SHEET | | | | | | | BY SEGMENT AT 31 DECEMBER | | | | | | | 2006 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EURm | P&C | Life | Holdin | Elimin | Group | | | insuran | insuranc | g | ation | | | | ce | e | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets | | | | | | -------------------------------------------------------------------------------- | Property, plant and | 28 | 5 | 18 | - | 51 | | equipment | | | | | | -------------------------------------------------------------------------------- | Investment property | 41 | 110 | 19 | - | 170 | -------------------------------------------------------------------------------- | Intangible assets | 599 | 159 | 23 | - | 782 | -------------------------------------------------------------------------------- | Investments in associates | 4 | 1 | 0 | - | 5 | -------------------------------------------------------------------------------- | Financial assets | 9,821 | 5,657 | 4,043 | -3,598 | 15,921 | -------------------------------------------------------------------------------- | Investments related to | - | 1,753 | - | - | 1,753 | | unit-linked insurance | | | | | | -------------------------------------------------------------------------------- | Tax assets | 113 | 13 | 22 | 1 | 149 | -------------------------------------------------------------------------------- | Reinsurers' share of | 521 | 4 | - | - | 525 | | insurance liabilities | | | | | | -------------------------------------------------------------------------------- | Other assets | 1,475 | 121 | 78 | -36 | 1,638 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 230 | 58 | 336 | -582 | 41 | -------------------------------------------------------------------------------- | Non-current assets | - | - | - | - | 26,585 | | classified as held for sale | | | | | | -------------------------------------------------------------------------------- | Total assets | 12,831 | 7,882 | 4,538 | -4,216 | 47,620 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | | | | -------------------------------------------------------------------------------- | Liabilities for insurance | 8,247 | 4,695 | - | - | 12,942 | | and investment contracts | | | | | | -------------------------------------------------------------------------------- | Liabilities for unit-linked | - | 1,752 | - | - | 1,752 | | insurance and investment | | | | | | | contracts | | | | | | -------------------------------------------------------------------------------- | Financial liabilities | 499 | 112 | 930 | -146 | 1,395 | -------------------------------------------------------------------------------- | Tax liabilities | 407 | 189 | 11 | - | 607 | -------------------------------------------------------------------------------- | Provisions | 42 | - | - | - | 42 | -------------------------------------------------------------------------------- | Employee benefits | 109 | - | - | - | 109 | -------------------------------------------------------------------------------- | Other liabilities | 961 | 39 | 98 | -32 | 1,065 | -------------------------------------------------------------------------------- | Liabilities directly | - | - | - | - | 24,520 | | associated with non-current | | | | | | | assets classified as held | | | | | | | for sale | | | | | | -------------------------------------------------------------------------------- | Total liabilities | 10,264 | 6,787 | 1,039 | -179 | 42,431 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity | | | | | | -------------------------------------------------------------------------------- | Share capital | | | | | 95 | -------------------------------------------------------------------------------- | Reserves | | | | | 2,012 | -------------------------------------------------------------------------------- | Retained earnings | | | | | 3,061 | -------------------------------------------------------------------------------- | Equity attributable to | | | | | 5,168 | | parent company's | | | | | | | equityholders | | | | | | -------------------------------------------------------------------------------- | Minority interest | | | | | 21 | -------------------------------------------------------------------------------- | Total equity | | | | | 5,189 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | | | | | 47,620 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OTHER NOTES | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 1 INSURANCE PREMIUMS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | | | -------------------------------------------------------------------------------- | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- | Premiums from insurance contracts | | | -------------------------------------------------------------------------------- | Premiums written, direct insurance | 1,478 | 1,466 | -------------------------------------------------------------------------------- | Premiums written, assumed reinsurance | 44 | 38 | -------------------------------------------------------------------------------- | Premiums written, gross | 1,522 | 1,504 | -------------------------------------------------------------------------------- | Ceded reinsurance premiums written | -138 | -128 | -------------------------------------------------------------------------------- | Premiums written, net | 1,384 | 1,376 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Change in unearned premium provision | -530 | -528 | -------------------------------------------------------------------------------- | Reinsurers' share | 75 | 73 | -------------------------------------------------------------------------------- | Insurance premiums earned, net | 928 | 920 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Premiums from insurance contracts | | | -------------------------------------------------------------------------------- | Premiums from contracts with discretionary | 54 | 48 | | participation feature | | | -------------------------------------------------------------------------------- | Premiums from unit-linked contracts | 109 | 102 | -------------------------------------------------------------------------------- | Premiums from other contracts | 2 | 1 | -------------------------------------------------------------------------------- | Insurance contracts, total | 165 | 151 | -------------------------------------------------------------------------------- | Assumed reinsurance | 0 | 0 | -------------------------------------------------------------------------------- | Premiums from investment contracts | | | -------------------------------------------------------------------------------- | Premiums from contracts with discretionary | 0 | 2 | | participation feature | | | -------------------------------------------------------------------------------- | Premiums from unit-linked contracts | 7 | 25 | -------------------------------------------------------------------------------- | Investment contracts, total | 8 | 27 | -------------------------------------------------------------------------------- | Reinsurers' shares | -4 | -4 | -------------------------------------------------------------------------------- | Premiums written, total | 168 | 174 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Single and regular premiums from direct | | | | insurance | | | -------------------------------------------------------------------------------- | Regular premiums, insurance contracts | 98 | 69 | -------------------------------------------------------------------------------- | Single premiums, insurance contracts | 67 | 82 | -------------------------------------------------------------------------------- | Single premiums, investment contracts | 8 | 27 | -------------------------------------------------------------------------------- | Total | 172 | 178 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group, total | 1,552 | 1,549 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 2 NET INCOME FROM INVESTMENTS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C Insurance | | | -------------------------------------------------------------------------------- | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- | Financial assets | | | -------------------------------------------------------------------------------- | Derivative financial instruments | 0 | 4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial assets designated as at fair value | | | | through p/l | | | -------------------------------------------------------------------------------- | Debt securities | 67 | -18 | -------------------------------------------------------------------------------- | Equity securities | 63 | 115 | -------------------------------------------------------------------------------- | Total | 130 | 97 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Loans and receivables | 6 | 4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total financial assets | 137 | 106 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Income from other assets | -1 | 1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fee and commission expense | -2 | -3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Expense on other than financial liabilities | 0 | -1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Effect of discounting annuities | -14 | -13 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance, total | 119 | 92 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | | | -------------------------------------------------------------------------------- | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- | Financial assets | | | -------------------------------------------------------------------------------- | Derivative financial instruments | 2 | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial assets designated as at fair value | | | | through p/l | | | -------------------------------------------------------------------------------- | Debt securities | 1 | 1 | -------------------------------------------------------------------------------- | Equity securities | 0 | 0 | -------------------------------------------------------------------------------- | Total | 1 | 1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investments related to unit-linked contracts | | | -------------------------------------------------------------------------------- | Debt securities | -2 | - | -------------------------------------------------------------------------------- | Equity securities | 34 | 73 | -------------------------------------------------------------------------------- | Total | 33 | 73 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Investment securities held-to-maturity | | | -------------------------------------------------------------------------------- | Debt securities | 0 | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Loans and receivables | 2 | 0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial asset available-for-sale | | | -------------------------------------------------------------------------------- | Debt securities | 30 | 24 | -------------------------------------------------------------------------------- | Equity securities | 109 | 140 | -------------------------------------------------------------------------------- | Total | 139 | 164 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total income from financial assets | 174 | 241 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other assets | 1 | 2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Fee and commission income, net | 3 | 2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance, total | 180 | 249 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Holding | | | -------------------------------------------------------------------------------- | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- | Financial assets | | | -------------------------------------------------------------------------------- | Derivative financial instruments | 1 | 2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Loans and other receivables | -3 | 3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Financial assets available-for-sale | | | -------------------------------------------------------------------------------- | Debt securities | 25 | 2 | -------------------------------------------------------------------------------- | Equity securities | 4 | 1 | -------------------------------------------------------------------------------- | Total | 28 | 3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other assets | 0 | 4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Holding, total | 26 | 12 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Elimination items between segments | -2 | 3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group, total | 322 | 355 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 3 CLAIMS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Claims paid | -590 | -597 | -------------------------------------------------------------------------------- | Reinsurers' share | 27 | 38 | -------------------------------------------------------------------------------- | Claims paid, net | -564 | -559 | -------------------------------------------------------------------------------- | Change in provision for claims outstanding | -99 | -77 | -------------------------------------------------------------------------------- | Reinsurers' share | 12 | -13 | -------------------------------------------------------------------------------- | Claims incurred, net | -650 | -648 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Claims paid | -175 | -112 | -------------------------------------------------------------------------------- | Reinsurers' share | 4 | 3 | -------------------------------------------------------------------------------- | Claims paid, net | -171 | -109 | -------------------------------------------------------------------------------- | Change in provision for claims outstanding | -35 | -34 | -------------------------------------------------------------------------------- | Reinsurers' share | 0 | 0 | -------------------------------------------------------------------------------- | Claims incurred, net | -205 | -143 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group, total | -855 | -791 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 4 STAFF COSTS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Wages and salaries | -79 | -68 | -------------------------------------------------------------------------------- | Granted equity-settled share options | 0 | - | -------------------------------------------------------------------------------- | Granted cash-settled share options | -2 | -9 | -------------------------------------------------------------------------------- | Pension costs | -17 | -13 | -------------------------------------------------------------------------------- | Other social security costs | -16 | -13 | -------------------------------------------------------------------------------- | P&C insurance, total | -114 | -103 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Wages and salaries | -4 | -4 | -------------------------------------------------------------------------------- | Granted equity-settled share options | 0 | - | -------------------------------------------------------------------------------- | Granted cash-settled share options | 0 | -1 | -------------------------------------------------------------------------------- | Pension costs | -1 | -1 | -------------------------------------------------------------------------------- | Other social security costs | -1 | -1 | -------------------------------------------------------------------------------- | Life insurance, total | -6 | -6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Holding | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Wages and salaries | -2 | -6 | -------------------------------------------------------------------------------- | Granted equity-settled share options | 0 | - | -------------------------------------------------------------------------------- | Granted cash-settled share options | -3 | -2 | -------------------------------------------------------------------------------- | Pension costs | 0 | -1 | -------------------------------------------------------------------------------- | Other social security costs | 0 | -1 | -------------------------------------------------------------------------------- | Other business, total | -6 | -10 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Elimination items between segments | - | 1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group, total | -126 | -118 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 5 INTANGIBLE ASSETS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Goodwill | 536 | 557 | -------------------------------------------------------------------------------- | Customer relations | 27 | 29 | -------------------------------------------------------------------------------- | Other intangible assets | 13 | 13 | -------------------------------------------------------------------------------- | Total | 576 | 599 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Goodwill | 153 | 153 | -------------------------------------------------------------------------------- | Other intangible assets | 6 | 6 | -------------------------------------------------------------------------------- | Total | 159 | 159 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Holding | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other intangible assets | 0 | 23 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group, total | 736 | 782 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 6 FINANCIAL ASSETS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | | | -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Derivative financial instruments (Note 7) | 228 | 87 | -------------------------------------------------------------------------------- | Financial assets designated as at fair value | | | | through p/l | | | -------------------------------------------------------------------------------- | Debt securities | 8,919 | 8,690 | -------------------------------------------------------------------------------- | Equity securities | 1,097 | 1,041 | -------------------------------------------------------------------------------- | Total | 10,015 | 9,732 | -------------------------------------------------------------------------------- | Loans and receivables | | | -------------------------------------------------------------------------------- | Deposits with ceding undertakings | 2 | 2 | -------------------------------------------------------------------------------- | P&C insurance, total | 10,245 | 9,821 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | | | -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Derivative financial instruments (Note 7) | 13 | 16 | -------------------------------------------------------------------------------- | Financial assets designated as at fair value | | | | through p/l | | | -------------------------------------------------------------------------------- | Debt securities | 70 | 70 | -------------------------------------------------------------------------------- | Equity securities | 4 | 5 | -------------------------------------------------------------------------------- | Total | 74 | 75 | -------------------------------------------------------------------------------- | Investments held-to-maturity | | | -------------------------------------------------------------------------------- | Debt securities | 10 | 10 | -------------------------------------------------------------------------------- | Loans and receivables | | | -------------------------------------------------------------------------------- | Deposits | 2 | 4 | -------------------------------------------------------------------------------- | Deposits with ceding undertakings | 2 | 2 | -------------------------------------------------------------------------------- | Total | 4 | 6 | -------------------------------------------------------------------------------- | Financial assets available-for-sale | | | -------------------------------------------------------------------------------- | Debt securities | 3,663 | 3,440 | -------------------------------------------------------------------------------- | Equity securities | 1,979 | 2,110 | -------------------------------------------------------------------------------- | Total | 5,642 | 5,550 | -------------------------------------------------------------------------------- | Life insurance, total | 5,742 | 5,657 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Holding | | | -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- | Loans and receivables | | | -------------------------------------------------------------------------------- | Deposits | 0 | 291 | -------------------------------------------------------------------------------- | Financial assets available-for-sale | | | -------------------------------------------------------------------------------- | Debt securities | 4,166 | 140 | -------------------------------------------------------------------------------- | Equity securities | 902 | 454 | -------------------------------------------------------------------------------- | Total | 5,068 | 595 | -------------------------------------------------------------------------------- | Investments in subsidiaries | 2,370 | 3,157 | -------------------------------------------------------------------------------- | Holding, total | 7,438 | 4,043 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Elimination items between segments | -2,506 | -3,598 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group, total | 20,919 | 15,921 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 7 DERIVATIVE | | | | | | | | FINANCIAL | | | | | | | | INSTRUMENTS | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | | 3/200 | | | 12/200 | | | | | 7 | | | 6 | | -------------------------------------------------------------------------------- | | | Fair | Fair | | Fair | Fair | | | | value | value | | value | value | -------------------------------------------------------------------------------- | | Contrac | Asset | Liabilit | Contract | Assets | Liabiliti | | | t/ | s | ies | / | | es | | | notiona | | | notional | | | | | l | | | amount | | | | | amount | | | | | | -------------------------------------------------------------------------------- | Derivatives | | | | | | | | held for | | | | | | | | trading | | | | | | | -------------------------------------------------------------------------------- | Interest rate | 8,143 | 4 | 3 | 1,668 | 4 | 2 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Foreign | 6,314 | 213 | 134 | 4,548 | 73 | 55 | | exchange | | | | | | | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Equity | 67 | 11 | 0 | 15 | 10 | 0 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Total | 14,524 | 228 | 138 | 6,232 | 87 | 57 | | derivative | | | | | | | | assets/(liabili | | | | | | | | ties) held for | | | | | | | | trading | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | | 3/200 | | | 12/200 | | | | | 7 | | | 6 | | -------------------------------------------------------------------------------- | | | Fair | Fair | | Fair | Fair | | | | value | value | | value | value | -------------------------------------------------------------------------------- | | Contrac | Asset | Liabilit | Contract | Assets | Liabiliti | | | t/ | s | ies | / | | es | | | notiona | | | notional | | | | | l | | | amount | | | | | amount | | | | | | -------------------------------------------------------------------------------- | Derivatives | | | | | | | | held for | | | | | | | | trading | | | | | | | -------------------------------------------------------------------------------- | Interest rate | 916 | 3 | 2 | 754 | 8 | 9 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Foreign | 913 | 8 | 3 | 676 | 7 | 3 | | exchange | | | | | | | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Equity | 0 | 0 | 0 | 0 | 0 | 0 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Commodity | 67 | 2 | 2 | 76 | 1 | 1 | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Total | 1,896 | 13 | 7 | 1,506 | 16 | 12 | | derivative | | | | | | | | assets/(liabili | | | | | | | | ties) | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Holding | | 3/200 | | | 12/200 | | | | | 7 | | | 6 | | -------------------------------------------------------------------------------- | | | Fair | Fair | | Fair | Fair | | | | value | value | | value | value | -------------------------------------------------------------------------------- | | Contrac | Asset | Liabilit | Contract | Assets | Liabiliti | | | t/ | s | ies | / | | es | | | notiona | | | notional | | | | | l | | | amount | | | | | amount | | | | | | -------------------------------------------------------------------------------- | Derivatives | | | | | | | | held for | | | | | | | | hedging | | | | | | | -------------------------------------------------------------------------------- | Derivatives | 600 | - | 11 | 628 | - | 12 | | designated as | | | | | | | | fair value | | | | | | | | hedges | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total | 600 | - | 11 | 628 | - | 12 | | derivative | | | | | | | | assets/(liabili | | | | | | | | ties) | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 8 INVESTMENTS RELATED TO UNIT-LINKED INSURANCE | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | | | -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- | Financial assets as at fair value through p/l | | | -------------------------------------------------------------------------------- | Debt securities | 59 | 58 | -------------------------------------------------------------------------------- | Equity securities | 1,808 | 1,695 | -------------------------------------------------------------------------------- | Financial assets as at fair value through p/l | 1,867 | 1,753 | | total | | | -------------------------------------------------------------------------------- | Other | 0 | 0 | -------------------------------------------------------------------------------- | Life insurance, total | 1,867 | 1,753 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 9 LIABILITIES FOR INSURANCE AND INVESTMENT | | | | CONTRACTS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | | | -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- | Insurance contracts | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 2,167 | 1,640 | -------------------------------------------------------------------------------- | Provision for claims outstanding | 6,648 | 6,606 | -------------------------------------------------------------------------------- | Total insurance liabilities for P&C insurance | 8,816 | 8,247 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Reinsurers' share | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 130 | 56 | -------------------------------------------------------------------------------- | Provision for claims outstanding | 476 | 465 | -------------------------------------------------------------------------------- | Total reinsurers' share | 606 | 521 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | | | -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- | Insurance contracts | | | -------------------------------------------------------------------------------- | Liabilities for contracts with DPF | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 2,912 | 2,979 | -------------------------------------------------------------------------------- | Provision for claims outstanding | 1,600 | 1,565 | -------------------------------------------------------------------------------- | Total | 4,512 | 4,544 | -------------------------------------------------------------------------------- | Liabilities for contracts without DPF | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 5 | 6 | -------------------------------------------------------------------------------- | Provision for claims outstanding | 0 | 0 | -------------------------------------------------------------------------------- | Total | 6 | 6 | -------------------------------------------------------------------------------- | Total | 4,518 | 4,550 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assumed reinsurance | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 4 | 4 | -------------------------------------------------------------------------------- | Provision for claims outstanding | 2 | 3 | -------------------------------------------------------------------------------- | Total | 6 | 7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Insurance contracts, total | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 2,922 | 2,989 | -------------------------------------------------------------------------------- | Provision for claims outstanding | 1,602 | 1,568 | -------------------------------------------------------------------------------- | | 4,524 | 4,557 | -------------------------------------------------------------------------------- | Investment contracts | | | -------------------------------------------------------------------------------- | Liabilities for contracts with DPF | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 115 | 138 | -------------------------------------------------------------------------------- | Investment contracts, total | 115 | 138 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities for insurance and investment | | | | contracts, total | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 3,036 | 3,127 | -------------------------------------------------------------------------------- | Provision for claims outstanding | 1,602 | 1,568 | -------------------------------------------------------------------------------- | Life insurance, total | 4,639 | 4,695 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Recoverable from reinsurers | | | -------------------------------------------------------------------------------- | Provision for unearned premiums | 1 | 0 | -------------------------------------------------------------------------------- | Provision for claims outstanding | 4 | 4 | -------------------------------------------------------------------------------- | Total | 4 | 4 | -------------------------------------------------------------------------------- Investment contracts do not include a provision for claims outstanding. Liability adequacy test does not give rise to supplementary claims. 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. -------------------------------------------------------------------------------- | Group, total | 13,455 | 12,942 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 10 LIABILITIES FROM UNIT-LINKED INSURANCE AND | | | | INVESTMENT CONTRACTS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Unit-linked insurance contracts | 1,801 | 1,690 | -------------------------------------------------------------------------------- | Unit-linked investment contracts | 62 | 62 | -------------------------------------------------------------------------------- | Total | 1,864 | 1,752 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 11 FINANCIAL LIABILITIES | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Derivative financial instruments (Note 7) | 138 | 57 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Subordinated debt securities | | | -------------------------------------------------------------------------------- | Subordinated loans | 441 | 441 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance, total | 579 | 499 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Derivative financial instruments (Note 7) | 7 | 12 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Subordinated debt securities | | | -------------------------------------------------------------------------------- | Subordinated loans | 100 | 100 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance, total | 107 | 112 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Holding | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Derivative financial instruments (Note 7) | 11 | 12 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Debt securities in issue | | | -------------------------------------------------------------------------------- | Certificates of deposit | 18 | 50 | -------------------------------------------------------------------------------- | Bonds and notes | 191 | 191 | -------------------------------------------------------------------------------- | Total | 209 | 241 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Subordinated debt securities | | | -------------------------------------------------------------------------------- | Debentures | 587 | 586 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other | | | -------------------------------------------------------------------------------- | Pension loan | - | 85 | -------------------------------------------------------------------------------- | Other | 6 | 6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Holding, total | 814 | 930 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Elimination items between segments | -131 | -146 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Group, total | 1,369 | 1,395 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 12 CONTINGENT LIABILITIES AND COMMITMENTS | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | P&C insurance | | | -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- | Off-balance sheet items | | | -------------------------------------------------------------------------------- | Guarantees | 44 | 48 | -------------------------------------------------------------------------------- | Other irrevocable commitments | 18 | 19 | -------------------------------------------------------------------------------- | Total | 62 | 67 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other | | | -------------------------------------------------------------------------------- | Assets covered by policyholders' beneficiary | 324 | 326 | | rights | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets pledged as collateral for | | | | | | liabilities or contingent | | | | | | liabilities | | | | | -------------------------------------------------------------------------------- | | 3/2007 | 3/2007 | 12/2006 | 12/2006 | -------------------------------------------------------------------------------- | Assets pledged as collateral | Assets | Liabili | Assets | Liabilit | | | pledged | ties/ | pledged | ies/ | | | | commit- | | commit- | | | | ments | | ments | -------------------------------------------------------------------------------- | Cash at balances at central banks | 20 | 9 | 18 | 9 | -------------------------------------------------------------------------------- | Investments | | | | | -------------------------------------------------------------------------------- | - Investment securities | 281 | 113 | 250 | 114 | -------------------------------------------------------------------------------- | Total | 301 | 122 | 268 | 123 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-cancellable operating leases | 3/2007 | 12/2006 | | | -------------------------------------------------------------------------------- | Minimum lease payments under | | | | | | non-cancellable operating leases | | | | | -------------------------------------------------------------------------------- | not later than one year | 34 | 33 | | | -------------------------------------------------------------------------------- | later than one year and not later | 97 | 92 | | | | than five years | | | | | -------------------------------------------------------------------------------- | later than five years | 87 | 75 | | | -------------------------------------------------------------------------------- | Total | 218 | 201 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Life insurance | | | | | -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | | | -------------------------------------------------------------------------------- | Off-balance sheet items | | | | | -------------------------------------------------------------------------------- | Fund commitments | 215 | 216 | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Assets pledged as collateral for | | | | | | liabilities or contingent | | | | | | liabilities | | | | | -------------------------------------------------------------------------------- | | 3/2007 | 3/2007 | 12/2006 | 12/2006 | -------------------------------------------------------------------------------- | Assets pledged as collateral | Assets | Liabili | Assets | Liabilit | | | pledged | ties/ | pledged | ies/ | | | | commit- | | commit- | | | | ments | | ments | -------------------------------------------------------------------------------- | Investments | | | | | -------------------------------------------------------------------------------- | - Investment securities | 2 | 1 | 2 | 1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- | Other commitments | | | -------------------------------------------------------------------------------- | Acquisition of IT-software | 1 | 1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-cancellable operating leases | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- | Minimum lease payments under non-cancellable | | | | operating leases | | | -------------------------------------------------------------------------------- | not later than one year | 2 | 2 | -------------------------------------------------------------------------------- | later than one year and not later than five years | 6 | 6 | -------------------------------------------------------------------------------- | later than five years | 5 | 5 | -------------------------------------------------------------------------------- | Total | 13 | 13 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 13 RESULT ANALYSIS OF P&C INSURANCE BUSINESS | | | -------------------------------------------------------------------------------- | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Premiums earned | 928 | 920 | -------------------------------------------------------------------------------- | Claims incurred | -713 | -706 | -------------------------------------------------------------------------------- | Operating expenses | -158 | -161 | -------------------------------------------------------------------------------- | Other technical income and expenses | | | -------------------------------------------------------------------------------- | (+collective guarantee item) | 2 | -1 | -------------------------------------------------------------------------------- | Allocated investment return transferred from the | 45 | 41 | | non-technical account | | | -------------------------------------------------------------------------------- | Technical result | 105 | 93 | -------------------------------------------------------------------------------- | Investment result | 126 | 96 | -------------------------------------------------------------------------------- | Allocated investment return transferred to the | -59 | -55 | | technical account | | | -------------------------------------------------------------------------------- | Other income and expenses | -2 | -2 | -------------------------------------------------------------------------------- | Operating result | 169 | 133 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | 14 SAMPO PLC'S INCOME STATEMENT AND BALANCE SHEET | | | | (FAS) | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | INCOME STATEMENT | | | -------------------------------------------------------------------------------- | | 1-3/2007 | 1-3/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Other operating income | 2 | 5 | -------------------------------------------------------------------------------- | Staff expenses | -6 | -5 | -------------------------------------------------------------------------------- | Depreciation and impairment | -1 | -2 | -------------------------------------------------------------------------------- | Other operating expenses | -10 | -10 | -------------------------------------------------------------------------------- | Operating profit | -15 | -12 | -------------------------------------------------------------------------------- | Finance income and expenses | 3,456 | 622 | -------------------------------------------------------------------------------- | Profit before appropriations and income taxes | 3,441 | 610 | -------------------------------------------------------------------------------- | Appropriations | - | - | -------------------------------------------------------------------------------- | Income taxes | -1 | 7 | -------------------------------------------------------------------------------- | Profit for the financial period | 3,440 | 617 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | BALANCE SHEET | 3/2007 | 12/2006 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | ASSETS | | | -------------------------------------------------------------------------------- | Non-current assets | | | -------------------------------------------------------------------------------- | Intangible assets | 0 | 23 | -------------------------------------------------------------------------------- | Property, plant and equipment | 5 | 5 | -------------------------------------------------------------------------------- | Investments | | | -------------------------------------------------------------------------------- | Shares and participations in Group companies | 2,370 | 3,157 | -------------------------------------------------------------------------------- | Other shares and participations | 903 | 456 | -------------------------------------------------------------------------------- | Other receivables and investments | 4,193 | 158 | -------------------------------------------------------------------------------- | Receivables | 298 | 94 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 118 | 623 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL ASSETS | 7,888 | 4,516 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | LIABILITIES | | | -------------------------------------------------------------------------------- | Equity | | | -------------------------------------------------------------------------------- | Share capital | 98 | 95 | -------------------------------------------------------------------------------- | Share premium account | 1,160 | 1,157 | -------------------------------------------------------------------------------- | Legal reserve | 366 | 366 | -------------------------------------------------------------------------------- | Fair value reserve | 41 | 20 | -------------------------------------------------------------------------------- | Other reserves | 273 | 273 | -------------------------------------------------------------------------------- | Retained earnings | 1,579 | 261 | -------------------------------------------------------------------------------- | Treasury shares | - | -73 | -------------------------------------------------------------------------------- | Profit for the year | 3,440 | 1,391 | -------------------------------------------------------------------------------- | Total equity | 6,957 | 3,490 | -------------------------------------------------------------------------------- | Accumulated appropriations | - | - | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Liabilities | | | -------------------------------------------------------------------------------- | Long-term | 587 | 671 | -------------------------------------------------------------------------------- | Short-term | 344 | 355 | -------------------------------------------------------------------------------- | Total liabilities | 931 | 1,026 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | TOTAL LIABILITIES | 7,888 | 4,516 | --------------------------------------------------------------------------------

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