Help

BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

Finland's Sampo upgrades insurance outlook

Reprints

(Reuters) — Finnish financial holding group Sampo P.L.C. upgraded the full-year profitability outlook for its property/casualty insurance business If P&C Insurance after policyholders made no big claims in the Nordic region in the first six months.

If Chief Executive Torbjorn Magnusson said conditions for insurers were exceptional in all Nordic countries, resulting in the company's best first-half profitability.

"There were no large claims. There were few fires and a low amount of car accidents," he said in a statement on Wednesday.

The upbeat results from If, the biggest property/casualty insurer in the Nordics with a market share of 18%, followed similar improvements from rivals Tryg and Pohjola.

Sampo cut its target for If's combined ratio, or claims and costs in relation to earned premiums, to 88%-91% for this year from the 89%-92% it forecast in May. A lower figure indicates higher profitability.

Analysts had expected the upgrade. In a Reuters poll carried out before the second-quarter results they estimated the full-year figure at 88.6%.

If's strong position in all Nordic and Baltic countries balances out any hits from a single market, giving it an advantage over rivals.

"They have also been effective in optimizing costs, with customers submitting more and more claims online," Evli analyst Jaakko Tyrvainen said.

Sampo's overall pretax profit in the second quarter rose 2% from a year ago to €465 million ($623.6 million) as investment income increased.

In addition to its own insurance businesses, Sampo owns 21% of shares in Nordea, the region's largest lender, and through If, more than 28% of Topdanmark , its Danish rival.

If's stake in Topdanmark has gradually risen due to the Danish company's share buybacks, while If CEO Mr. Magnusson recently joined Topdanmark's board of directors.

"I believe If is interested in lifting its market share in Denmark through Topdanmark, but the valuation is too high right now," Evli's Mr. Tyrvainen said.

Sampo, whose biggest owners include the Finnish state and its chairman Bjorn Wahlroos, has a strong track record on deals. It sold its banking business to Danske Bank for €4 billion ($5.36 billion) just before the financial crisis, then bought Nordea shares at low prices during the crisis in 2008 and 2009.

"At current valuation levels in the sector, I don't believe we will see any big moves (by Sampo), but rather some kind of add-on acquisitions," Mr. Tyrvainen said.

Read Next

  • Allianz's profit beats forecasts despite problems at Pimco

    (Reuters) — Problems at Allianz S.E.'s U.S. investment firm, Pacific Investment Management Co. L.L.C. persisted in the second quarter as clients defected and margins slipped, posing a challenge for the chief executive of Europe's biggest insurer, who aims to make a record group profit this year.