Strong insurance technical results for Sampo Group but investment result dropped due to COVID-19
Sampo Group continued to report strong insurance technical results for January–March 2020, although the sharp decrease in the market values of investment assets lowered the profit. Sampo Group’s profit before taxes for January – March 2020 amounted to EUR 162 million compared to a EUR 475 million a year ago. Impairments of investment assets totaling almost EUR 200 million are included in the profit.
- Capital market reactions on COVID-19 have been very negative, of course. The market value of Sampo Group’s investment portfolio dropped more than a billion euros, says Torbjörn Magnusson, Group CEO and President.
- This crisis has, however, proved the robustness of our business model. More than 60 per cent of our business is P&C insurance. The larger of our P&C insurance operations, If, produced the best combined ratio ever in the first quarter. A benign winter in the Nordic countries and the decrease in the miles driven balanced the COVID-19 claims costs, Magnusson adds.
If reported a combined ratio of 83.7 per cent for January – March 2020 compared to 86.5 per cent a year ago. The combined ratio of Topdanmark amounted to 88.7 per cent (78.2).
Sampo Group and its subsidiaries continue to report solid solvency ratios.
- This is also the background to our Board’s decision to propose a dividend of EUR 1.50 per share. It is important for us to pay dividends in accordance with our dividend policy as we have the capital and the liquidity to do so, says Magnusson.
Sampo’s Board of Directors decided earlier today to cancel its previous dividend proposal of EUR 2.20 per share. The decision was affected by the high level of uncertainty in the financial markets and changes in Sampo’s internal dividends.
Outlook for the rest of 2020
Sampo Group’s insurance businesses are expected to report good insurance technical results for 2020. The investment results are at this point in time more uncertain than usual. The mark-to-market results for 2020 are highly dependent on capital market developments, particularly in life insurance.
If P&C is expected to reach a combined ratio of 84 - 87 per cent in 2020. Nordea’s contribution to the Group’s profit is expected to be significant.
Sampo Group’s Interim Statement for January – March 2020 and Supplementary Financial Information Package are available at www.sampo.com/result.
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