Sampo Group's results for January-June 2010

SAMPO PLC INTERIM REPORT 11 August 2010 at 9.40 am SAMPO GROUP´S RESULTS FOR JANUARY - JUNE 2010 Good performance on all fronts Sampo Group's profit before taxes for the first six months of 2010 rose to EUR 621 million (433). The total comprehensive income for the period, taking changes in the market value of assets into account, was EUR 773 million (1,900). *     Earnings per share amounted to EUR 0.92 (0.61) and marked-to-market EPS was EUR 1.38 per share (3.33). The return on equity for the Group was 19.9 per cent for the period (69.5). *     Net asset value per share amounted to EUR 14.50 (14.63). The dividend of EUR 1 per share paid in April 2010 decreased the NAV per share correspondingly. Nordea's share price has risen significantly since the end of June and consequently Sampo Group's net asset value has increased by roughly one billion euro by early August. The fair value reserve after tax on the Group level increased to EUR 401 million (296). *     The insurance technical performance of the P&C insurance operation returned to normal after the difficult first quarter of 2010. The combined ratio for the second quarter of 2010 improved to 89.9 per cent (90.7) and was 94.1 per cent (92.5) for the first half of 2010. The profit before taxes increased to EUR 333 million (308) and marked-to-market result was EUR 414 million (438). Return on equity remained high at 35.4 per cent (47.0). *     Profit before taxes for the life insurance operations rose to EUR 69 million (52) and the marked-to-market result decreased to EUR 100 million (166). The return on equity was 25.0 per cent (95.7). *     Nordea is accounted for as an associated company. In the segment reporting share of Nordea's net profit is included in the holding segment. The profit before taxes for the segment amounted to EUR 222 million (52), of which Nordea's share was EUR 231 million. KEY FIGURES 1-6/2010 1-6/2009 Change % EURm Profit before taxes 621 433 43 P&C insurance 333 308 8 Life insurance 69 52 31 Associates (Nordea) 231 - - Holding excl. associates -9 52 - Profit for the period 518 345 50 Change Earnings per share, EUR 0.92 0.61 0.31 EPS, marked-to-market, EUR 1.38 3.33 -1.95 NAV per share, EUR *) 14.50 14.63 -0.13 Average number of staff (FTE) 6,958 7,436 -478 Group solvency ratio, % *) 159.7 158.3 1.4 RoE, % 19.9 69.5 -49.6 *) comparison figure from 31.12.2009 The figures in this report are not audited. Income statement items are compared on a year-on-year basis whereas comparison figures for balance sheet items are from 31 December 2009 unless otherwise stated. SECOND QUARTER 2010 IN BRIEF Sampo Group's second quarter 2010 profit before taxes amounted to EUR 334 million (264). Earnings per share were EUR 0.48 (0.38). Marked-to-market earnings per share were EUR 0.32 (3.45). Net asset value per share decreased in the second quarter of 2010 by EUR 1.62 largely explained by the dividend of EUR 1.00 per share paid in April 2010 and by the decrease in Nordea's share price during the second quarter. Since the end of June the recovery of Nordea's share price has increased Sampo Group's net asset value by roughly one billion euro. In P&C insurance the second quarter was benign and the profit before taxes rose to EUR 208 million (164). The combined ratio improved to 89.9 per cent (90.7). Profit before taxes for the life insurance operations amounted to EUR 33 million (26). Premiums written increased 36 per cent to EUR 256 million (188). Segment 'Holding' reported a profit before taxes of EUR 96 million (74) in the second quarter, of which EUR 106 million relates to Sampo's share of Nordea's second quarter 2010 profit. BUSINESS AREAS P&C insurance If P&C is the leading property and casualty insurance company in the Nordic region, with insurance operations that also encompass the Baltic countries and Russia. The P&C insurance group's parent company, If P&C Insurance Holding Ltd, is located in Sweden, and the If subsidiaries provide insurance solutions and services in Finland, Sweden, Norway, Denmark, the Baltic countries and Russia. If's operations are divided into four business areas: Private, Commercial, Industrial and Baltic&Russia. Results 1-6/2010 1-6/2009 Change % EURm Premiums 2,358 2,174 8 Net income from investments 237 191 24 Other operating income 11 11 4 Claims incurred -1,357 -1,234 10 Change in insurance liabilities -437 -378 15 Staff costs -235 -220 7 Other expenses -231 -220 5 Finance costs -14 -15 -8 Profit before taxes 333 308 8 Key figures Change Combined ratio, % 94.1 92.5 1.6 Risk ratio, % 70.6 68.7 1.9 Cost ratio, % 23.5 23.8 -0.3 Expense ratio, % 17.0 17.3 -0.3 Return on equity, % 35.4 47.0 -11.6 Average number of staff (FTE) 6,443 6,916 -473 Claims development in If P&C was favorable in the second quarter of 2010 after the extreme winter conditions of the first quarter. Combined ratio for the second quarter was 89.9 per cent (90.7) and consequently the combined ratio for January - June 2010 improved from the first quarter to 94.1 per cent (92.5). Marked-to-market result amounted to EUR 414 million (438). Profit before taxes for P&C insurance for the first six months of 2010 increased to EUR 333 million (308). The technical result was EUR 210 million (241). The decrease was due to lower allocated investment income and lower underwriting result. The technical result for Private business area amounted to EUR 110 million (121), Commercial EUR 54 million (65), Industrial EUR 35 million (38) and Baltic and Russia EUR 8 million (13). Large claims development was worse than normal in both Commercial and Industrial business areas. Insurance margin (technical result in relation to net premiums earned) was 10.9 per cent (13.4). Return on equity (RoE) remained high at 35.4 per cent (47.0) and the fair value reserve rose to EUR 160 million (105). The combined ratio for January - June 2010 was 94.1 per cent (92.5). EUR 68 million (44) was released from the technical reserves related to prior year claims. The risk ratio of 70.6 per cent (68.7) still reflects the difficult first quarter of the year. In the Private business area the combined ratio rose to 94.0 (92.5). Cost ratio developed favorably and decreased 0.5 percentage points to 23.6 per cent. In the Commercial business area risk ratio rose 1.5 percentage points to 71.9 per cent and the combined ratio weakened to 96.1 per cent (94.5). In the Industrial business area large claims had a negative effect on the combined ratio which rose to 90.6 per cent (90.3). In the Baltic&Russia business area the combined ratio was 92.4 per cent (89.7). Gross written premiums increased 8 per cent to EUR 2,523 million (2,337). Adjusted for currency the premiums increased 0.3 per cent. In the business area Private the premiums grew in all countries and overall increased 4.0 per cent. In the Commercial business area premiums were almost flat with a decrease of 0.1 per cent. The Industrial business area still suffered from recessionary effects and the premiums decreased 4.4 per cent. The business area Baltic&Russia was worst affected with a drop of 20 per cent in premiums written. The cost ratio improved to 23.5 per cent (23.8) and adjusted for currency the nominal costs decreased 1.6 per cent. As at 30 June 2010, total investment assets amounted to EUR 11.2 billion (10.7) of which 87 per cent (89) was invested in fixed income instruments and 12 per cent (11) in equities. Net income from investments rose to EUR 237 million (191). Investment return for the first six months of 2010 was 3.1 per cent (5.0). Duration for interest bearing assets was 2.0 years (2.5). If P&C's solvency ratio as at 30 June 2010 (solvency capital in relation to net premiums written) amounted to 81 per cent (77). The solvency capital was EUR 3,268 million (2,943) in comparison to the regulatory minimum capital requirement of EUR 687 million. Reserving position continues to be strong with reserve ratio of 173 per cent (172) of net premiums written and 237 per cent (240) of claims paid. Life insurance Mandatum Life Group consists of Mandatum Life, a wholly-owned subsidiary of Sampo plc, operating in Finland, and its subsidiary Mandatum Life Insurance Baltic SE, which has the form of a European company and is headquartered in Estonia. It operates in the other Baltic countries through branches. Results 1-6/2010 1-6/2009 Change % EURm Premiums written 603 332 82 Net income from investments 245 251 -3 Other operating income 0 0 - Claims incurred -435 -312 39 Change in liabilities for inv. and ins. contracts -296 -177 67 Staff costs -17 -13 25 Other operating expenses -27 -24 14 Finance costs -4 -4 -8 Profit before taxes 69 52 31 Key figures Change Expense ratio, % 119.8 121.4 -1.6 Return on equity, % 25.0 95.7 -70.7 Average number of staff (FTE) 463 465 -2 Mandatum Life reported a good result and a strong premium growth for the first half of 2010. Premium income rose more than 80 per cent to EUR 603 million. Profit before taxes in life insurance for January-June 2010 was EUR 69 million (52). Net investment income, excluding income on unit-linked contracts, amounted to EUR 153 million (132). Meanwhile, net income from unit-linked investments was EUR 92 million (119). The fair value reserve increased to EUR 258 million from EUR 210 million at the end of 2009. Return on equity (RoE) in life insurance amounted to 25.0 per cent (95.7). Excluding the assets of EUR 2.7 billion (2.4) covering unit-linked liabilities, investment assets amounted to EUR 5.5 billion (5.4) at market values as at 30 June 2010. Fixed income represented 64 per cent (68), equity 25 per cent (23), private equity 4 per cent (4), real estate 3 per cent (3) and other assets 3 per cent (2) of the total assets. Return on investments for January - June 2010 was 3.8 per cent (6.2). At the end of June 2010 the duration of fixed income assets was 2.6 years (2.6). Mandatum Life maintained its strong solvency position during the second quarter of 2010. The company also exceeds clearly internal Economic Capital requirements. The solvency ratio was 20.7 (18.5). Mandatum Life Group's total technical reserves were EUR 7.1 billion (6.8), of which unit-linked reserves accounted for 2.7 billion (2.4). The share of unit-linked reserves of total technical reserves increased to 37 per cent (35). Expense ratio for the life segment improved to 119.8 per cent (121.4). This ratio does not take into account all fees intended to cover the operating expenses. Mandatum Life does not defer acquisition costs, which burdens the first year's result. Mandatum Life Group's premium income on own account grew over 80 per cent and amounted to EUR 603 million (332). Unit-linked premiums amounted to 72 per cent (71) of all premiums written. Premium income from the Baltic countries was EUR 33 million (18). Mandatum Life's overall market share in Finland measured by premium income was 23.1 per cent (23.4) and market share in unit-linked business was 30.2 per cent (28.3). After deleting a duplication recorded in Finnish life insurance statistics, Mandatum Life´s overall market share was 26.0 per cent. The duplication has no effect on unit-linked market share. Market share in the Baltic countries amounted to 23 per cent (14). Holding Sampo plc controls its subsidiaries engaged in P&C and life insurance. In addition Sampo plc held on 30 June 2010 approximately 20 per cent of the share capital of Nordea, the largest bank in the Nordic countries. Nordea is an associated company to Sampo plc. Results 1-6/2010 1-6/2009 Change % EURm Net investment income 49 86 -43 Other operating income 8 6 31 Staff costs -7 -6 17 Other operating expenses -6 -11 -42 Finance costs -52 -23 127 Share of associates' profit 231 - - Profit before taxes 222 52 323 Change Average number of staff (FTE) 52 55 -3 The segment's profit before taxes amounted to EUR 222 million (52), of which EUR 231 million relates to Sampo's share of Nordea's first half 2010 profit. Sampo plc's holding in Nordea Bank was booked in the consolidated balance sheet at EUR 5.4 billion. The market value of the holding was EUR 5.7 billion at 30 June 2010. In addition the assets on Sampo plc's balance sheet as at 30 June 2010 included holdings in subsidiaries for EUR 2.4 billion (2.4). As at 30 June 2010 Sampo plc´s debt financing amounted to EUR 1,721 million, of which senior bonds and notes accounted for EUR 1,006 million and commercial papers EUR 575 million. Gross debt to Sampo plc's equity was 27 per cent (24). Associated company Nordea Bank On 30 June 2010 Sampo plc held 830,440,497 Nordea shares corresponding to a holding of 20.5 per cent. The average price paid per share amounted to EUR 6.39. The closing price as at 30 June 2010 was EUR 6.82. As Sampo's holding exceeds 20 per cent Nordea is accounted as an associated company in Sampo Group's accounts since 31 December 2009. Sampo's share of Nordea's net profit is shown on the face of Sampo Group's profit and loss account on the line Share of associate´s profit/loss. The following text is based on Nordea's January - June 2010 interim report published on 21 July 2010. Nordea's operating profit for the first half of 2010 amounted to EUR 1,608 million (1,651). Risk-adjusted profit decreased 22 per cent compared to last year and was EUR 1,194 million (1,524). Net interest income held up well despite the low interest rate levels. Net fee and commission income increased. The net result from items at fair value decreased from the high level in the first quarter. Operating profit for the second quarter of 2010 was EUR 730 million (818). In the second quarter net interest income increased 1 per cent compared to the previous quarter to EUR 1,249 million. Lending and deposit volumes continued to increase, resulting in higher net interest income in the customer areas, which, however, was partly offset by higher average funding costs. Net fee and commission income increased 13 per cent compared to the previous quarter to EUR 538 million. Increases were seen in most areas, with higher commission income from corporate finance and higher savings commission income both from asset management and life as well as from custody business. Net result from items at fair value decreased 38 per cent from a very high level in the first quarter to EUR 339 million. The result on Group level included a non-recurring gain of approx. EUR 50 million in connection to the merger of the two payment transaction companies Nordito in Norway and PBS in Denmark. Net loan loss provisions in the second quarter of 2010 were EUR 245 million. This includes provisions of EUR 58 million related to the Danish guarantee scheme (none in the first quarter), which includes incurred claims and also provisions for potential claims under the guarantee. Net loan losses excluding the guarantee scheme provisions were 28 per cent lower in the second quarter than in the first quarter, with decreases in most countries. The loan loss ratio was 35 basis points in the second quarter, including the Danish guarantee scheme provisions, and 26 basis points excluding these. This compares to 37 basis points in the first quarter, when no guarantee scheme provisions were recorded. Net loan losses in 2010 are expected to be lower than in 2009. Credit quality continues to stabilize, in line with the macroeconomic recovery. In its outlook for 2010, Nordea expects risk-adjusted profit to be lower in 2010 compared to 2009, due to lower income in Treasury and Markets. The core tier 1 ratio, excluding transition rules under Basel II, was 10.0 per cent. The tier 1 capital ratio and the total capital ratio are well above the targets in Nordea's capital policy. The capital base of EUR 24.3 billion exceeds the Pillar 1 capital requirements of EUR 14.8 billion excluding transition rules by EUR 9.5 billion. The tier 1 capital of EUR 20.5 billion exceeds the Pillar 1 capital requirements (excluding transitions rules) by EUR 5.7 billion. DEVELOPMENTS IN THE FIRST HALF OF 2010 Annual General Meeting The Annual General Meeting held on 13 April 2010 decided to distribute a dividend of EUR 1.00 per share for 2009. The record date for dividend payment was 16 April 2010 and the dividend was paid on 23 April 2010. The Annual General Meeting adopted the financial accounts for 2009 and discharged the Board of Directors and the Group CEO and President from liability for the financial year. The following members were re-elected to the Board of Directors: Tom Berglund, Anne Brunila, Veli-Matti Mattila, Eira Palin-Lehtinen, Jukka Pekkarinen, Christoffer Taxell, Matti Vuoria and Björn Wahlroos. At its organisational meeting, the Board elected Björn Wahlroos as Chairman and Matti Vuoria as Vice Chairman. The following members were elected to the Nomination and Compensation Committee: Veli-Matti Mattila, Eira Palin-Lehtinen, Christoffer Taxell, Matti Vuoria, and Björn Wahlroos. Tom Berglund, Jukka Pekkarinen and Christoffer Taxell were elected to the Audit Committee. The Annual General Meeting decided to pay the following fees to the members of the Board of Directors until the close of the 2011 Annual General Meeting: the Chairman of the Board will be paid EUR 160,000 per year, the Vice Chairman EUR 100,000 per year and the other members EUR 80,000 per year. After deduction of taxes and similar payments, approximately 50 per cent of the Board members' annual compensation will be paid in Sampo A shares and the rest in cash. Ernst & Young Oy was elected as Auditor. The Auditor will be paid a fee determined by a reasonable invoice. Ernst & Young Oy nominated Heikki Ilkka, APA, as responsible auditor. The Annual General Meeting resolved to amend section 12 of the Articles of Association as a result of the amendments to Chapter 5, section 19 of the Finnish Limited Liability Companies Act that entered into force on 3 August 2009 and 31 December 2009 Personnel The number of full-time equivalent personnel in Sampo Group decreased during the first half of 2010. On 30 June 2010 the number of staff was 6,899 compared to 7,087 on 31 December 2009. The average number of employees in January-June amounted to 6,958 (7,454). Approximately 92 per cent of the Sampo Group staff - 6,381 employees - worked in P&C insurance on 30 June 2010. The number of staff is divided into 1,706 employees in Finland, 1,858 employees in Sweden, 1,516 employees in Norway and 1,301 employees in Baltics and other countries. The number of personnel in P&C insurance decreased somewhat during the first half of the year. Nearly 7 per cent of the Sampo Group staff - 467 employees - worked in life insurance. Life insurance operations had 359 employees in Finland and 108 employees in Baltics. The number of staff increased slightly. Approximately 1 per cent of the Sampo Group staff - 51 employees - worked in the holding company Sampo plc. The number of staff remained at earlier level. Management incentive schemes The management incentive schemes of Sampo Group are of two types; long-term management incentive schemes based on share appreciation rights and one share-based incentive scheme. The outcome of the long-term management incentive schemes is determined by Sampo's share price development over a period of approximately three years starting from the issue of the respective program. The programs are subject to thresholds on share price development and company profitability, as well as ceilings for maximum bonuses. Furthermore, the programs are subject to rules requiring part of the paid bonus to be used to acquire Sampo shares, which must in turn be held for a specified period of time. In 2006, Sampo's Annual General Meeting decided on a share-based incentive scheme for the Executive Management belonging to the Group Executive Committee. Under the program, the participants are granted the right to receive up to a pre-determined number of Sampo shares, if Sampo's share price has outperformed a predefined threshold value and insurance margin targets have been exceeded. The bonus will be paid in Sampo shares, in cash or a combination thereof. Furthermore, the programs are subject to lock-up on Sampo shares received. Payments based on the long-term management incentive schemes in the first half of 2010 amounted to EUR 2 million (0). No payments were made on the basis of the share-based incentive scheme 2006 (0). The terms of all incentive schemes are available on Sampo's web pages at www.sampo.com/compensation. Shares and share capital As at 30 June 2010, Sampo plc had 561,372,390 shares, which were divided into 560,172,390 A shares and 1,200,000 B shares. Sampo plc held 90,000 of its own A shares corresponding to 0.02 per cent of the total number of shares and voting rights. The shares were purchased at an average price of EUR 16.53 per share and the total amount paid for the shares was EUR 1.5 million. The shares were purchased in late 2009 under the authorization received in the AGM of 2009. The other Group companies held no shares in the parent company. On 8 June 2010 the Sampo Board decided to cancel the 90,000 Sampo A shares referred to above according to the authorization by the Annual General Meeting. The cancellation reduces the number of Sampo A shares with the corresponding amount but has no effect on the share capital. The cancellation was entered into the trade register on 13 July 2010, after which the number of Sampo plc's A shares totals 560,082,390. Total number of shares of the company, including 1,200,000 B shares, is 561,282,390 shares. Sampo plc does not hold its own A shares on 11 August 2010. The other Group companies hold no shares in the parent company either. The Annual General Meeting of 2010 authorised the Board to acquire in one or several lots a maximum of 50,000,000 Sampo A shares. Shares can be repurchased in other proportion than the shareholders' proportional shareholdings (private repurchase). The share price will be no higher than the highest price paid for Sampo shares in public trading at the time of purchase. The authorisation will be valid until the close of the next Annual General Meeting, nevertheless not more than 18 months after AGM's decision. Internal dividends On 13 April 2010 Sampo plc received a dividend of EUR 103 million (SEK 1,000 million) from If P&C Insurance Holding Ltd. In addition the associated company Nordea Bank AB paid on 8 April 2010 Sampo plc a dividend amounting to EUR 204 million. No dividend was paid from Mandatum Life to Sampo plc in the first half of 2010. Ratings All the main ratings for Sampo Group companies remained unchanged in the second quarter of 2010. +--------------------------------------+--------------+-------------------+ |Rated company | Moody's |Standard and Poor's| +--------------------------------------+------+-------+---------+---------+ | |Rating|Outlook|Rating |Outlook | +--------------------------------------+------+-------+---------+---------+ |Sampo plc |Baa2 |Stable |Not rated|- | +--------------------------------------+------+-------+---------+---------+ |If P&C Insurance Ltd | | | | | |(Sweden) |A2 |Stable |A |Stable | +--------------------------------------+------+-------+---------+---------+ |If P&C Insurance Company Ltd (Finland)|A2 |Stable |A |Stable | +--------------------------------------+------+-------+---------+---------+ Group solvency Sampo Group, with Nordea Bank AB (publ) as its associated company, is regarded as a financial and insurance conglomerate according to the Act on the Supervision of Financial and Insurance Conglomerates (2004/699). Group solvency has been calculated according to Chapter 3 of the Act on the Supervision of Financial and Insurance Conglomerates (2004/699). The Act is based on Directive 2002/87/EC of the European Parliament and of the Council on the supplementary supervision of credit institutions, insurance undertakings and investment. SAMPO GROUP SOLVENCY 30 June 2010 31 December 2009 EURm Group capital 7,847 7,613 Sectoral items 1,734 1,545 Intangibles and other deductibles -2,403 -2,314 Dividends -281 -561 Group's own funds, total 6,898 6,283 Minimum requirements for own funds, total 4,320 3,968 Group solvency 2,577 2,315 Group solvency ratio (Own funds % of minimum requirements) 159.7 158.3 The Group's solvency ratio (own funds in relation to minimum requirements for own funds) was 159.7 per cent (158.3) as at 30 June 2010. Nordea is treated as an associated company in the solvency calculation and the part of Nordea's capital requirement corresponding to Sampo's holding in Nordea is taken into account in the Group's capital requirement. In Sampo Group solvency is assessed internally by comparing the capital required to the capital available. Capital requirement assessment is based on an economic capital framework, in which Group companies quantify the amount of capital required for measurable risks over a one year time horizon at 99.5 per cent´s confidence level. In addition to economic capital companies are assessing their capital need related to non-measurable risks like risks in business environment. Capital available or Adjusted Solvency Capital include regulatory capital and in addition other loss absorbing items like the effect of discounting technical reserves and other reserves excluded from regulatory capital. The economic capital tied up in Group's operations on 30 June 2010 was EUR 4,131 million (3,783) and adjusted solvency capital was EUR 7,168 million (7,077). OUTLOOK FOR THE REST OF 2010 Global economic recovery is well under way and is expected to continue despite European debt issues and some other factors creating uncertainty in the capital markets. Sampo Group is expected to report a good result for 2010 with a continuing good profitability of its insurance operations supported by the share of Nordea's profit. If P&C is expected to reach its long-term combined ratio target of below 95 per cent in 2010 and achieve a combined ratio between 92 and 94 per cent. Profit is expected to remain on a very good level. The macro economic situation will continue to dampen the premium growth but has a limited impact on profitability. Mandatum Life's marked-to-market profit is highly dependent on capital markets and is expected to remain good. Reported profit is foreseen to reach year 2009 level. The company seeks further growth in the unit-linked volumes. The associated company, Nordea Bank AB, is expected to contribute significantly to the Group profit in 2010. 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, tel. +358 10 516 0031 Sampo will arrange a Finnish-language press conference (Savoy, Eteläesplanadi 14, Helsinki), at 12:30 pm Finnish time. An English-language telephone conference for investors and analysts will be arranged at 4 pm Finnish time (2 pm UK time). Please call +44 207 162 0025 (Europe) or +1 334 323 6201 (North America). Please be ready to state the conference ID '869182', the conference title 'Sampo plc 2010/Q2 release' and the password 'SAMPO'. The telephone conference can also be followed from a direct transmission on the Internet at www.sampo.com/result. A recorded version will later be available at the same address. In addition, Group CEO and President Kari Stadigh's video interview and Supplementary Financial Information are available at www.sampo.com/result. Sampo will publish the third quarter 2010 interim report on 3 November 2010. Distribution: NASDAQ OMX Helsinki The principal media Financial Supervisory Authority www.sampo.com GROUP FINANCIAL REVIEW FINANCIAL HIGHLIGHTS 1-6/2010 1-6/2009 GROUP Profit before taxes EURm 621 433 Return on equity (at fair value) % 19.9 69.5 Return on assets (at fair value) % 9.5 19.9 Equity/assets ratio % 27.8 25.6 Group solvency ¹) EURm 2,577 4,707 Group solvency ratio % 159.7 675.7 Average number of staff 6,958 7,436 PROPERTY & CASUALTY INSURANCE Premiums written before reinsurers' share EURm 2,523 2,337 Premiums earned EURm 1,921 1,796 Profit before taxes EURm 333 308 Return on equity (at current value) % 35.4 47.0 Risk ratio ²) % 70.6 68.7 Cost ratio ²) % 23.5 23.8 Loss ratio ²) % 78.6 76.9 Loss ratio excl. unwinding of discount ³) % 77.1 75.2 Expense ratio ²) % 17.0 17.3 Combined ratio % 95.6 94.1 Combined ratio excl. unwinding of discount % 94.1 92.5 Average number of staff 6,443 6,916 LIFE INSURANCE Premiums written before reinsurers' share EURm 609 338 Profit before taxes EURm 69 52 Return on equity (at current value) % 25.0 95.7 Expense ratio % 119.8 121.4 Average number of staff 463 465 HOLDING Profit before taxes EURm 222 52 Average number of staff 52 55 PER SHARE KEY FIGURES Earnings per share EUR 0.92 0.61 Earnings per share, incl. other comprehensive income EUR 1.38 3.33 Capital and reserves per share EUR 13.98 10.85 Net asset value per share EUR 14.50 10.87 Adjusted share price, high EUR 20.23 15.03 Adjusted share price, low EUR 16.13 8.63 Market capitalisation EURm 9,749 7,550 ¹) 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 (2004/699). In the comparison year the solvency was calculated based on adjusted solvency calculations for insurance groups according to the Decree of the Ministry of Social Affairs and Health (1106/2000), determined on the basis of the Group financial statements. Nordea Bank has been consolidated as an associate as of 31 Dec. 2009, so the capital demand required by this investment did not burden the Group's solvency on 30 June 2009. ²) 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. In calculating the per share key figures, the number of shares used at the balance sheet date and as the average number of shares was 561,282,390. The valuation differences on investment property have been taken into account in calculating the return on assets, return on equity, equity/assets ratio and net asset value per share. The tax component includes the tax corresponding to the result for the period, and the deferred tax liability related to valuation differences on investment property. The total comprehensive income has been used in the calculation of the return on assets and return on equity. The key figures for the insurance business have been calculated in accordance with the decree issued by the Ministry of Finance and the specifying regulations and instructions of the Finance Supervisory Authority (former Insurance Supervisory Authority). +----------------------------------------------------------------------+-------+ |CALCULATION OF KEY FIGURES | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Return on equity (fair values), % | | +----------------------------------------------------------------------+-------+ |+ total comprehensive income | | +----------------------------------------------------------------------+-------+ |+ change in valuation differences on investments | | +----------------------------------------------------------------------+-------+ |- tax (incl. change in deferred tax relating to valuation differences |x 100 %| |on investments) | | +----------------------------------------------------------------------+-------+ |+ total equity | | +----------------------------------------------------------------------+-------+ |+ valuation differences on investments after deduction of deferred tax| | +----------------------------------------------------------------------+-------+ |(average of values 1 Jan. and the end of reporting period) | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Return on assets (at fair values), % | | +----------------------------------------------------------------------+-------+ |+ operating profit | | +----------------------------------------------------------------------+-------+ |+ other comprehensive income before taxes | | +----------------------------------------------------------------------+-------+ |+ interest and other financial charges | | +----------------------------------------------------------------------+-------+ |+ calculated interest on technical provisions | | +----------------------------------------------------------------------+-------+ |+ change in valuation differences on investments |x 100 %| +----------------------------------------------------------------------+-------+ |+ balance sheet total | | +----------------------------------------------------------------------+-------+ |- technical provisions relating to unit-linked insurance | | +----------------------------------------------------------------------+-------+ |+ valuation differences on investments | | +----------------------------------------------------------------------+-------+ |(average of values on 1 Jan. and the end of the reporting period) | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Equity/assets ratio (at fair values), % | | +----------------------------------------------------------------------+-------+ |+ total equity | | +----------------------------------------------------------------------+-------+ |+ valuation differences on investments after deduction of deferred tax|x 100 %| +----------------------------------------------------------------------+-------+ |+ balance sheet total | | +----------------------------------------------------------------------+-------+ |+ valuation differences on investments | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Risk ratio for P&C Insurance, % | | +----------------------------------------------------------------------+-------+ |+ claims incurred | | +----------------------------------------------------------------------+-------+ |- claims settlement expenses |x 100 %| +----------------------------------------------------------------------+-------+ |insurance premiums earned | | +----------------------------------------------------------------------+-------+ | |  | +----------------------------------------------------------------------+-------+ |Cost ratio for P&C Insurance, % | | +----------------------------------------------------------------------+-------+ |+ operating expenses | | +----------------------------------------------------------------------+-------+ |+ claims settlement expenses |x 100 %| +----------------------------------------------------------------------+-------+ |insurance premiums earned | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Loss ratio for P&C Insurance, % | | +----------------------------------------------------------------------+-------+ |claims incurred |x 100 %| +----------------------------------------------------------------------+-------+ |insurance premiums earned | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Expense ratio for P&C Insurance, % | | +----------------------------------------------------------------------+-------+ |operating expenses |x 100 %| +----------------------------------------------------------------------+-------+ |insurance premiums earned | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Combined ratio for P&C Insurance, % | | +----------------------------------------------------------------------+-------+ |Loss ratio + expense ratio | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Expense ratio for life insurance, % | | +----------------------------------------------------------------------+-------+ |+ operating expenses before change in deferred acquisition costs | | +----------------------------------------------------------------------+-------+ |+ claims settlement expenses |x 100 %| +----------------------------------------------------------------------+-------+ |expense charges | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Per share key figures | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Earnings per share | | +----------------------------------------------------------------------+-------+ |profit for the financial period attributable to the parent | | +----------------------------------------------------------------------+-------+ |company's equity holders | | +----------------------------------------------------------------------+-------+ |adjusted average number of shares | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Equity per share | | +----------------------------------------------------------------------+-------+ |equity attributable to the parent company's equity holders | | +----------------------------------------------------------------------+-------+ |adjusted number of shares at the balance sheet date | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Net asset value per share | | +----------------------------------------------------------------------+-------+ |+ equity attributable to the parent company's equity holders | | +----------------------------------------------------------------------+-------+ |+ valuation differences on listed associates in the Group | | +----------------------------------------------------------------------+-------+ |+ valuation differences after the deduction of deferred taxes | | +----------------------------------------------------------------------+-------+ |adjusted number of shares at balance sheet date | | +----------------------------------------------------------------------+-------+ +----------------------------------------------------------------------+-------+ |Market capitalisation | | +----------------------------------------------------------------------+-------+ |number of shares at the balance sheet date | | +----------------------------------------------------------------------+-------+ |x closing share price at the balance sheet date | | +----------------------------------------------------------------------+-------+ GROUP QUARTERLY INCOME STATEMENT EURm 4-6/2010 1-3/2010 10-12/2009 7-9/2009 4-6/2009 Insurance premiums written 1,198 1,764 1,077 896 1,036 Net income from investments 163 363 259 348 384 Other operating income 6 3 6 6 5 Claims incurred -874 -918 -792 -767 -729 Change in liabilities for insurance and investment 26 -759 -61 -17 -165 contracts Staff costs -124 -135 -134 -136 -125 Other operating expenses -139 -121 -130 -115 -122 Finance costs -29 -35 -25 -23 -21 Share of associates' profit/loss 106 124 0 0 0 Profit for the period before 334 287 199 192 264 taxes Taxes -62 -41 -51 -44 -46 Profit for the period 273 245 148 148 217 Other comprehensive income for the period Exchange differences on 30 83 -8 102 17 translating foreign operations Available-for-sale financial -179 328 -189 1,549 1,875 assets Cash flow hedges -4 -2 -3 1 -8 Share of other comprehensive 9 27 - - - income of associates Income tax relating to components 48 -85 -50 -175 -143 of other comprehensive income Other comprehensive income for -96 351 -250 1,477 1,741 the period, net of tax TOTAL COMPREHENSIVE INCOME FOR 177 596 -102 1,624 1,959 THE PERIOD, NET OF TAX Profit attributable to Owners of the parent 273 245 148 148 217 Non-controlling interests 0 0 0 0 0 Total comprehensive income attributable to Owners of the parent 177 596 -101 1,625 1,958 Non-controlling interests 0 0 0 0 0 CONSOLIDATED COMPREHENSIVE INCOME STATEMENT EURm Note 1-6/2010 1-6/2009 Insurance premiums written 1 2,961 2,506 Net income from investments 2 527 549 Other operating income 9 8 Claims incurred 3 -1,792 -1,546 Change in liabilities for insurance and investment -733 -555 contracts Staff costs 4 -259 -240 Other operating expenses -260 -250 Finance costs -63 -38 Share of associates' profit/loss 231 0 Profit before taxes 621 433 Taxes -103 -88 Profit for the period 518 345 Other comprehensive income for the period Exchange differences 113 28 Available-for-sale financial assets 149 1,628 Cash flow hedges -6 -1 Share of other comprehensive income of associates 36 - Income tax relating to components of other comprehensive -37 -101 income Other comprehensive income for the period, net of tax 255 1,555 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 773 1,900 Profit attributable to Owners of the parent 518 345 Non-controlling interests 0 0 Total comprehensive income attributable to Owners of the parent 773 1,900 Non-controlling interests 0 0 Basic earnings per share (eur) 0.92 0.61 CONSOLIDATED BALANCE SHEET EURm Note 06/2010 12/2009 Assets Property, plant and equipment 31 34 Investment property 124 124 Intangible assets 5 726 688 Investments in associates 5,389 5,172 Financial assets 6, 7 16,323 15,479 Investments related to unit-linked insurance contracts 8 2,679 2,366 Tax assets 76 81 Reinsurers' share of insurance liabilities 575 481 Other assets 1,751 1,439 Cash and cash equivalents 623 771 Total assets 28,295 26,635 Liabilities Liabilities for insurance and investment contracts 9 13,945 13,014 Liabilities for unit-linked insurance and investment 10 2,666 2,359 contracts Financial liabilities 11 2,250 2,098 Tax liabilities 566 500 Provisions 31 35 Employee benefits 106 104 Other liabilities 886 912 Total liabilities 20,448 19,022 Equity Share capital 98 98 Reserves 1,530 1,530 Retained earnings 5,868 5,889 Other components of equity 351 96 Equity attributable to owners of the parent 7,847 7,613 Non-controlling interests 0 0 Total equity 7,847 7,613 Total equity and liabilities 28,295 26,635 STATEMENTS OF CHANGES IN EQUITY, IFRS In- Trans- Avai- Sha- vest- Re- lation lable- Sha- re Le- ed un- tain- of for- Cash EURm re pre- gal re- ed foreign sale flow Total capital mium re- strict- earn- ope- finan- hedges ac- serve ed ings rations cial ***) count equity *) assets **) Equity at 1 98 1,161 370 0 5,614 -249 -2,375 11 4,631 Jan. 2009 Changes in equity Transfers between -1,161 -366 1,527 -1 equity Share-based -2 -2 payments Recognition of undrawn 11 11 dividends Dividends -449 -449 Total comprehensive 345 28 1,528 0 1,900 income for the period Equity at 98 0 4 1,527 5,519 -221 -847 11 6,090 30 June 2009 Equity at 1 98 0 4 1,527 5,889 -200 287 9 7,613 Jan. 2010 Changes in equity Share-based 0 0 payments Recognition of undrawn 10 10 dividends Dividends -561 -561 Share of associate's other changes in equity 12 12 Total comprehensive 518 150 110 -5 773 income for the period Equity at 98 0 4 1,527 5,868 -50 397 4 7,847 30 June 2010 *) The total comprehensive income includes also the share of the associate Nordea's other comprehensive income, in accordance with the Group's share holding. As Nordea's other comprehensive income comprise mainly the currency hedging of net investments and exchange differences, the Group's share of Nordea's other comprehensive income EURm 367 is also included in the Group's exchange differences in the statement of changes in equity. **) The amount recognised in equity from available-for-sale financial assets for the period totalled EURm 177 (1,466). The amount transferred to p/l amounted to EURm -67 (61). ***) The amount recognised in equity from cash flow hedges for the period totalled EURm -6 (-0) . The amount included in the translation, available-for-sale and cash flow hedge reserves represent other comprehensive income for each component, net of tax. STATEMENT OF CASH FLOWS 1-6/2010 1-6/2009 Cash and cash equivalent at the beginning of the period 761 499 Cash flow from/used in operating activities 244 1,168 Cash flow from/used in investing activities 61 -1,205 Cash flow from/used in financing activities -454 42 Dividends paid -554 -443 Increase of liabilities 989 487 Decrease of liabilities -888 -1 Cash and cash equivalent at the end of the period 612 504 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 2009. Sampo adopted various new or revised standards and interpretations at the beginning of the year 2010. These standards and interpretations are explained in Sampos accounting policies for the financial year 2009. The financial statements are available on Sampo's website at www.sampo.com/result . The most significant of the adopted standards is the revised IFRS 3 Business combinations. The standard includes various significant changes regarding the accounting treatment of business combinations by allowing the company to measure the non-controlling interest at fair value instead of the proportionate interest in the acquiree's net assets. The choice affects the amounts of recognised goodwill and non-controlling interest. CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR SIX MONTHS ENDED 30 JUNE 2010 EURm P&C insurance Life insurance Holding Elimination Group Insurance premius 2,358 603 - - 2,961 written Net income from 237 245 49 -3 527 investments Other operating income 11 0 8 -10 9 Claims incurred -1,357 -435 - - -1,792 Change in liabilities for insurance and -437 -296 - - -733 investment contracts Staff costs -235 -17 -7 - -259 Other operating -231 -27 -6 4 -260 expenses Finance costs -14 -4 -52 6 -63 Share of associates' 0 0 231 - 231 profit/loss Profit before taxes 333 69 222 -2 621 Taxes -87 -17 0 0 -103 Profit for the period 246 52 222 -2 518 Other comprehensive income for the period Exchange differences 113 0 - - 113 Available-for-sale 75 71 2 1 149 financial assets Cash flow hedges - -6 - - -6 Share of other comprehensive income of - - 36 - 36 associates Income tax relating to components of other -20 -17 0 0 -37 comprehensive income Other comprehensive income for the period, 169 48 38 0 255 net of tax TOTAL COMPREHENSIVE 414 100 260 -2 773 INCOME FOR THE PERIOD Profit attributable to Owners of the parent 518 Non-controlling 0 interests Total comprehensive income attributable to Owners of the parent 773 Non-controlling 0 interests CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR SIX MONTHS ENDED 30 JUNE 2009 EURm P&C insurance Life insurance Holding Elimina-tion Group Insurance premius 2,174 332 - - 2,506 written Net income from 191 251 86 20 549 investments Other operating income 11 0 6 -9 8 Claims incurred -1,234 -312 - - -1,546 Change in liabilities for insurance and -378 -177 - - -555 investment contracts Staff costs -220 -13 -6 - -240 Other operating -220 -24 -11 5 -250 expenses Finance costs -15 -4 -23 4 -38 Share of associates' 0 0 - - 0 profit/loss Profit before taxes 308 52 52 20 433 Taxes -77 -10 4 -5 -88 Profit for the period 231 42 57 15 345 Other comprehensive income for the period Exchange differences 28 0 - - 28 Available-for-sale 243 169 1,236 -19 1,628 financial assets Cash flow hedges - -1 - - -1 Income tax relating to components of other -64 -44 2 5 -101 comprehensive income Other comprehensive income for the period, 206 124 1,238 -14 1,555 net of tax TOTAL COMPREHENSIVE 438 166 1,295 0 1,900 INCOME FOR THE PERIOD Profit attributable to Owners of the parent 345 Non-controlling 0 interests Total comprehensive income attributable to Owners of the parent 1,900 Non-controlling 0 interests CONSOLIDATED BALANCE SHEET BY SEGMENT AT 30 JUNE 2010 EURm P&C insurance Life insurance Holding Elimina-tion Group Assets Property, plant and 21 5 5 - 31 equipment Investment property 27 96 4 -4 124 Intangible assets 560 166 0 - 726 Investments in 10 0 5,379 - 5,389 associates Financial assets 10,945 5,338 2,578 -2,539 16,323 Investments related to unit-linked insurance - 2,679 - - 2,679 contracts Tax assets 66 0 10 0 76 Reinsurers' share of 571 4 - - 575 insurance liabilities Other assets 1,547 139 77 -12 1,751 Cash and cash 395 120 108 - 623 equivalents Total assets 14,142 8,548 8,160 -2,555 28,295 Liabilities Liabilities for insurance and 9,475 4,469 - - 13,945 investment contracts Liabilities for unit-linked insurance - 2,666 - - 2,666 and investment contracts Financial liabilities 586 110 1,721 -167 2,250 Tax liabilities 435 130 - - 566 Provisions 31 - - - 31 Employee benefits 106 - - - 106 Other liabilities 637 178 84 -14 886 Total liabilities 11,270 7,554 1,805 -181 20,448 Equity Share capital 98 Reserves 1,530 Retained earnings 5,868 Other components of 351 equity Equity attributable to 7,847 owners of the parent Non-controlling 0 interests Total equity 7,847 Total equity and 28,295 liabilities CONSOLIDATED BALANCE SHEET BY SEGMENT AT 31 DECEMBER 2009 EURm P&C insurance Life insurance Holding Elimina-tion Group Assets Property, plant and 23 5 5 - 34 equipment Investment property 28 87 10 - 124 Intangible assets 521 167 0 - 688 Investments in 3 0 5,168 - 5,172 associates Financial assets 10,248 5,216 2,554 -2,538 15,479 Investments related to unit-linked insurance - 2,366 - - 2,366 contracts Tax assets 71 - 11 0 81 Reinsurers' share of 477 4 - - 481 insurance liabilities Other assets 1,265 133 76 -36 1,439 Cash and cash 292 68 412 - 771 equivalents Total assets 12,927 8,047 8,235 -2,574 26,635 Liabilities Liabilities for insurance and 8,583 4,431 - - 13,014 investment contracts Liabilities for unit-linked insurance - 2,359 - - 2,359 and investment contracts Financial liabilities 524 132 1,609 -166 2,098 Tax liabilities 403 97 - - 500 Provisions 35 - - - 35 Employee benefits 104 - - - 104 Other liabilities 719 134 95 -36 912 Total liabilities 10,367 7,153 1,703 -202 19,022 Equity Share capital 98 Reserves 1,530 Retained earnings 5,889 Other components of 96 equity Equity attributable to 7,613 owners of the parent Non-controlling   0 interests Total equity 7,613 Total equity and 26,635 liabilities OTHER NOTES 1 INSURANCE PREMIUMS P&C insurance 1-6/2010 1-6/2009 Premiums from insurance contracts Premiums written, direct insurance 2,464 2,270 Premiums written, assumed reinsurance 59 68 Premiums written, gross 2,523 2,337 Ceded reinsurance premiums written -165 -163 P&C Insurance, total 2,358 2,174 Change in unearned premium provision -503 -438 Reinsurers' share 66 60 Premiums earned for P&C Insurance, total 1,921 1,796 Life insurance 1-6/2010 1-6/2009 Premiums from insurance contracts Premiums from contracts with discretionary participation 170 94 feature Premiums from unit-linked contracts 189 113 Premiums from other contracts 2 2 Insurance contracts, total 362 210 Assumed reinsurance 2 0 Premiums from investment contracts Premiums from contracts with discretionary participation 0 0 feature Premiums from unit-linked contracts 245 128 Investment contracts, total 245 128 Reinsurers' shares -5 -6 Life insurance, total 603 332 Single and regular premiums from direct insurance Regular premiums, insurance contracts 200 163 Single premiums, insurance contracts 162 46 Single premiums, investment contracts 245 128 Total 607 337 Group, total 2,961 2,506 2 NET INCOME FROM INVESTMENTS P&C Insurance 1-6/2010 1-6/2009 Financial assets Derivative financial instruments 12 43 Financial assets designated as at fair value through p/l Debt securities 4 15 Equity securities 2 6 Total 7 21 Loans and receivables 6 8 Financial asset available-for-sale Debt securities 230 164 Equity securities 17 -10 Total 246 154 Total financial assets 271 226 Income from other assets 0 0 Fee and commission expense -4 -4 Expense on other than financial liabilities -1 -1 Effect of discounting annuities -29 -30 P&C insurance, total 237 191 Life insurance 1-6/2010 1-6/2009 Financial assets Derivative financial instruments -39 36 Financial assets designated as at fair value through p/l Debt securities 3 3 Equity securities 0 0 Total 3 3 Investments related to unit-linked contracts Debt securities 33 6 Equity securities 67 113 Loans and receivables 0 - Other financial assets -7 - Total 92 119 Loans and receivables 3 2 Financial asset available-for-sale Debt securities 123 92 Equity securities 55 -19 Total 178 72 Total income from financial assets 238 232 Other assets 3 18 Fee and commission income, net 4 0 Life insurance, total 245 251 Holding 1-6/2010 1-6/2009 Financial assets Derivative financial instruments 21 1 Loans and other receivables 19 1 Financial assets available-for-sale Debt securities 5 14 Equity securities 1 62 Total 6 76 Other assets 2 8 Fee income, net 1 0 Holding, total 49 86 Elimination items between segments -3 20 Group, total 527 549 3 CLAIMS INCURRED P&C insurance 1-6/2010 1-6/2009 Claims paid -1,391 -1,217 Reinsurers' share 74 54 Claims paid, net -1,317 -1,163 Change in provision for claims outstanding -34 -36 Reinsurers' share -6 -35 P&C Insurance total -1,357 -1,234 Life insurance 1-6/2010 1-6/2009 Claims paid -390 -277 Reinsurers' share 4 4 Claims paid, net -386 -274 Change in provision for claims outstanding -49 -38 Reinsurers' share 0 0 Life insurance, total -435 -312 Group, total -1,792 -1,546 4 STAFF COSTS P&C insurance 1-6/2010 1-6/2009 Wages and salaries -168 -160 Granted cash-settled share options 0 0 Pension costs -34 -31 Other social security costs -32 -29 P&C insurance, total -235 -220 Life insurance 1-6/2010 1-6/2009 Wages and salaries -13 -11 Granted cash-settled share options -1 0 Pension costs -2 -2 Other social security costs -1 -1 Life insurance, total -17 -13 Holding 1-6/2010 1-6/2009 Wages and salaries -4 -4 Granted cash-settled share options -1 -1 Pension costs -1 -1 Other social security costs -1 0 Holding, total -7 -6 Group, total -259 -240 5 INTANGIBLE ASSETS P&C insurance 06/2010 12/2009 Goodwill 546 506 Customer relations 3 6 Other intangible assets 11 8 P&C Insurance, total 560 521 Life insurance 06/2010 12/2009 Goodwill 153 153 Other intangible assets 13 14 Life insurance, total 166 167 Holding 06/2010 12/2009 Other intangible assets 0 0 Group, total 726 688 6 FINANCIAL ASSETS P&C insurance 06/2010 12/2009 Derivative financial instruments (Note 7) 77 84 Financial assets designated as at fair value through p/l Debt securities 129 136 Equity securities 3 27 Total 133 163 Loans and receivables Loans 50 2 Deposits with ceding undertakings 1 1 Total 52 3 Financial assets available-for-sale Debt securities 9,248 8,797 Equity securities 1,436 1,201 Total 10,684 9,998 P&C insurance, total 10,945 10,248 Life insurance 06/2010 12/2009 Derivative financial instruments (Note 7) 72 66 Financial assets designated as at fair value through p/l Debt securities 49 46 Equity securities 14 4 Total 63 50 Loans and receivables Loans 26 24 Deposits with ceding undertakings 2 2 Total 28 26 Financial assets available-for-sale Debt securities 3,196 3,289 Equity securities *) 1,980 1,785 Total 5,175 5,074 Life insurance, total 5,338 5,216 *) of which investments in interest funds 68 157 Holding 06/2010 12/2009 Derivative financial instruments (Note 7) 32 12 Loans and receivables Deposits 1 1 Financial assets available-for-sale Debt securities 137 135 Equity securities 39 36 Total 176 172 Investments in subsidiaries 2,370 2,370 Holding, total 2,578 2,554 Elimination items between segments -2,539 -2,538 Group, total 16,323 15,479 7 DERIVATIVE FINANCIAL INSTRUMENTS P&C insurance 06/2010 12/2009 Fair Fair value Fair Fair value value value Contract/ Contract/ notional Assets Liabilities notional Assets Liabilities amount amount Derivatives held for trading Interest rate 1,344 13 1 849 22 0 derivatives Foreign exchange 3,728 64 149 3,365 62 88 derivatives Equity - - - 1 - 0 derivatives Total 5,072 77 150 4,215 84 88 Derivatives held for hedging Fair value 181 0 0 217 0 0 hedges P&C Insurance, 5,253 77 150 4,432 84 89 total Life 06/2010 12/2009 insurance Fair Fair value Fair Fair value value value Contract/ Contract/ notional Assets Liabilities notional Assets Liabilities amount amount Derivatives held for trading Interest rate 5,619 46 3 1,406 51 3 derivatives Foreign exchange 1,010 16 8 852 4 29 derivatives Equity 1 0 0 - - - derivatives Commodity - - - 14 - 0 derivatives Total 6,630 62 10 2,272 54 32 Derivatives held for hedging Cash flow 889 3 - 365 12 - hedges Fair value 478 7 0 227 - - hedges Total 1,367 10 0 591 12 - Life insurance, 7,997 72 10 2,863 66 32 total Holding 06/2010 12/2009 Fair Fair value Fair Fair value value value Contract/ Contract/ notional Assets Liabilities notional Assets Liabilities amount amount Derivatives held for trading Interest rate 975 26 - 975 7 - derivatives Exchange 11 - 1 48 1 0 derivatives Equity 54 6 9 42 4 7 derivatives Total 1,040 32 9 1,065 12 7 8 INVESTMENTS RELATED TO UNIT-LINKED INSURANCE Life insurance 06/2010 12/2009 Financial assets as at fair value through p/l Debt securities 494 365 Equity securities 2,075 1,923 Loans and receivables 107 70 Derivatives 3 8 Life insurance, total 2,679 2,366 9 LIABILITIES FOR INSURANCE AND INVESTMENT CONTRACTS P&C insurance 06/2010 12/2009 Insurance contracts Provision for unearned premiums 2,229 1,668 Provision for claims outstanding 7,247 6,915 P&C Insurance, total 9,475 8,583 Reinsurers' share Provision for unearned premiums 119 49 Provision for claims outstanding 451 428 P&C Insurance, total 571 477 Life insurance 06/2010 12/2009 Insurance contracts Liabilities for contracts with DPF Provision for unearned premiums 2,520 2,513 Provision for claims outstanding 1,889 1,844 Total 4,408 4,358 Liabilities for contracts without DPF Provision for unearned premiums 13 13 Provision for claims outstanding 0 0 Total 14 13 Total 4,422 4,371 Assumed reinsurance Provision for unearned premiums 1 1 Provision for claims outstanding 2 2 Total 3 3 Insurance contracts, total Provision for unearned premiums 2,534 2,528 Provision for claims outstanding 1,891 1,846 Total 4,425 4,374 Investment contracts Liabilities for contracts with DPF Provision for unearned premiums 44 57 Liabilities for insurance and investment contracts, total Provision for unearned premiums 2,578 2,585 Provision for claims outstanding 1,891 1,846 Life insurance, total 4,469 4,431 Recoverable from reinsurers Provision for unearned premiums 0 0 Provision for claims outstanding 4 4 Life insurance, 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 13,945 13,014 10 LIABILITIES FROM UNIT-LINKED INSURANCE AND INVESTMENT CONTRACTS Life insurance 06/2010 12/2009 Unit-linked 2,091 1,961 insurance contracts Unit-linked 575 398 investment contracts Life insurance, 2,666 2,359 total 11 FINANCIAL LIABILITIES P&C insurance 06/2010 12/2009 Derivative financial 150 89 instruments (Note 7) Subordinated debt securities Subordinated loans 436 435 P&C insurance, total 586 524 Life insurance 06/2010 12/2009 Derivative financial 10 32 instruments (Note 7) Subordinated debt securities Subordinated loans 100 100 Life insurance, 110 132 total Holding 06/2010 12/2009 Derivative financial 9 7 instruments (Note 7) Debt securities in issue Commercial papers 575 466 Bonds 1,006 962 Total 1,582 1,429 Subordinated debt securities Debentures - 37 Other Pension loan 130 130 Other - 6 Total 130 136 Holding, total 1,721 1,609 Elimination items -167 -166 between segments Group, total 2,250 2,098 12 CONTINGENT LIABILITIES AND COMMITMENTS P&C insurance 06/2010 12/2009 Off-balance sheet items Guarantees 17 19 Other irrevocable 58 69 commitments Total 74 88 Assets pledged as collateral for liabilities or contingent liabilities 06/2010 06/2010 12/2009 12/2009 Assets pledged as Assets Liabilities/ Assets Liabilities/ collateral pledged commit- ments pledged commit- ments Cash at balances at 10 8 9 7 central banks Investments - Investment 147 121 124 101 securities Total 157 129 133 108 Non-cancellable 06/2010 12/2009 operating leases Minimum lease payments not later than one 32 32 year later than one year and not later than 77 82 five years later than five 103 106 years Total 212 220 Life insurance 06/2010 12/2009 Off-balance sheet items Fund commitments 392 357 06/2010 12/2009 Other commitments Acquisition of 0 0 IT-software Non-cancellable 06/2010 12/2009 operating leases Minimum lease payments not later than one 2 2 year later than one year and not later than 7 7 five years later than five - 1 years Total 8 10 Holding 06/2010 12/2009 Off-balance sheet items Fund commitments 3 3 Assets pledged as collateral for liabilities or contingent liabilities 06/2010 06/2010 12/2009 12/2009 Assets pledged as Assets Liabilities/ Assets Liabilities/ collateral pledged commit- ments pledged commit- ments Investments - Mortgaged - - 15 6 collateral notes Non-cancellable 06/2010 12/2009 operating leases Minimum lease payments not later than one 1 1 year later than one year and not later than 3 3 five years later than five 2 2 years Total 6 7 13 RESULT ANALYSIS OF P&C INSURANCE BUSINESS 1-6/2010 1-6/2009 Premiums earned 1,921 1,796 Claims incurred -1,480 -1,350 Operating expenses -327 -311 Other technical 0 1 income and expenses Allocated investment return transferred from the 97 105 non-technical account Technical result 210 241 Investment result 252 206 Allocated investment return transferred -126 -135 to the technical account Other income and -4 -3 expenses Operating result 333 308 14 SAMPO PLC'S INCOME STATEMENT AND BALANCE SHEET (FAS) INCOME STATEMENT   1-6/2010 1-6/2009 Other operating 8 7 income Staff expenses -7 -6 Depreciation and 0 0 impairment Other operating -6 -11 expenses Operating profit -5 -11 Finance income and 302 167 expenses Profit before appropriations and 297 157 income taxes Income taxes 0 4 Profit for the 297 161 financial period BALANCE SHEET 06/2010 12/2009 ASSETS Non-current assets Intangible assets 1 1 Property, plant and 4 4 equipment Investments Shares in Group 2,370 2,370 companies Receivables from 120 122 Group companies Shares in participating 5,304 5,168 undertakings Receivables from participating - undertakings Other shares and 39 14 participations Other receivables 21 41 Receivables 118 98 Cash and cash 108 412 equivalents TOTAL ASSETS 8,084 8,229 LIABILITIES Equity Share capital 98 98 Fair value reserve -2 -3 Invested 1,527 1,527 unrestricted equity Other reserves 273 273 Retained earnings 4,088 4,108 Profit for the year 297 531 Total equity 6,281 6,534 Liabilities Long-term 1,136 1,129 Short-term 668 567 Total liabilities 1,803 1,696 TOTAL LIABILITIES 8,084 8,229 [HUG#1437017] Interim report January-June 2010: http://hugin.info/3096/R/1437017/381913.pdf This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. All reproduction for further distribution is prohibited. Source: Sampo Oyj via Thomson Reuters ONE

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