Sampo Capital Market Day UPDATE ON IF P&C AND THE NORDIC MARKET Torbjörn Magnusson, CEO of If P&C
THE NORDIC P&C MARKET The market In brief Premium income of EUR 25 billion Average market growth of 3% since 2005 High retention levels Highly efficient market High internet penetration Premium by country Sweden 31% Norway 26% Denmark 27% Finland 16% Consolidation top 4 insurers Market structure 80% 70% 90% 56% Small/local 26% Large mutual 18% Large listed 56% Sweden Norway Finland Denmark 2
IF P&C AT A GLANCE If P&C In brief Business areas, % GWP Largest P&C insurer in the Nordic region GWP 2016: EUR 4,5 billion Commercial 26% Owned by Sampo Group since 2004 Return on equity >17,5% Industrial 12% Private 59% Baltic 3% Market share by country Premium by country, % GWP 2% Finland 22% 8% Sweden 36% 18% 21% 23% 6% 16% Denmark 9% Sweden Norway Finland Denmark Nordic average Including Topdanmark market share (49,3% ownership) Norway 30% Baltic 3% 3
PERFORMANCE UPDATE EUR m 6M-17 6M-16 Change Premiums written, gross 2 706 2 683 +0,9% Technical result 294 352-16,5% Investment result 127 80 +58,8% Operating result 453 436 +3,9% Result for the period 364 346 +5,2% Risk ratio 64,5% 61,6% +2,9%-p Cost ratio 22,0% 22,2% -0,2%-p Combined ratio 86,5% 83,7% +2,8%-p Return on equity 30,5% 16,2% +14,3%-p 4
COMBINED RATIO AND PREMIUM GROWTH BY BUSINESS AREA Private Commercial 83,9% 81,2% 22,0% 22,2% 93,8% 87,8% 22,6% 22,7% 61,9% 59,1% 71,2% 65,2% 6M-17 6M-16 6M-17 6M-16 Risk ratio Cost ratio Risk ratio Cost ratio Premium growth: 1,9% Premium growth: 0,3% Industrial Baltic 85,1% 89,5% 21,7% 22,3% 89,7% 90,5% 28,1% 28,6% 63,5% 67,2% 61,6% 61,9% 6M-17 6M-16 6M-17 6M-16 Risk ratio Cost ratio Risk ratio Cost ratio Premium growth: -1,5% Premium growth: 3,2% 5
NORDIC P&C MARKET OVERVIEW Total Nordic P&C market, EUR bn +4,2% +3,5% +4,5% +1,7% +1,4% 24,7 25,2 25,5 22,9 23,7 4,4 4,3 4,3 3,9 4,1 5,4 5,7 5,9 6,0 6,0 6,8 6,8 7,0 7,0 7,1 Finland Norway Denmark 6,8 7,0 7,4 7,8 8,1 Sweden 2012 2013 2014 2015 2016 6
NORDIC P&C COMPETITOR LANDSCAPE P&C insurers with a Nordic market share above 5% If P&C Other 34% 18% 10% Länsförsäkringar 6% 6% OP Group Folksam 8% 9% Gjensidige 9% Tryg RSA Scandinavia 7
0,3% 1,1% 0,8% 1,5% 1,8% 1,6% 1,7% 2,2% 2,0% 1,8% 2,5% 2,9% 2,8% 3,0% 3,8% INTEREST RATE AND NORDIC MACRO DEVELOPMENT Nordic government bond yield 5y Nordic GDP 2015-2017E 2,5% 2,0% 1,5% 1,0% 0,5% 0,0% -0,5% -1,0% 2012 2013 2014 2015 2016 2017 Aug Sweden Norway Finland Denmark Sweden Norway Finland Denmark Weighted average 2015 2016 2017E 8
92,8 96,1 92,0 96,1 88,9 91,5 88,1 91,3 87,7 88,5 85,4 88,9 84,4 87,6 PROFITABILITY DEVELOPMENT IN NORDIC P&C Combined ratios If and Nordic weighted average 2010 2011 2012 2013 2014 2015 2016 If P&C Nordic market (excl. If) 9
Standard deviation UNDERWRITING EXCELLENCE AND SCALE BENEFITS Nordic peers Quarterly data 2005-2016 8% 7% 6% 5% 4% 3% 2% 1% 0% 85% 86% 87% 88% 89% 90% 91% 92% 93% 94% Combined ratio 10
17,6% 18,8% 17,2% 18,3% 17,3% 18,0% 16,9% 18,1% 16,8% 17,3% 16,7% 17,2% 16,6% 17,5% 16,6% 17,2% CONTINUOUS EFFICIENCY IMPROVEMENT Expense ratio, if vs nordic weighted average If Cost ratio, including all operating expenses 24,1 23,7 23,5 23,0 22,8 22,5 22,3* 22,1 22,0 * 2009 2010 2011 2012 2013 2014 2015 2016 If P&C Nordic market (excl. If) *) excluding one-offs If 11
MARKET DEVELOPMENT SWEDEN Combined ratio, % Market share, % 130% 120% 110% 100% 90% 100% 80% 60% 21% 20% 20% 15% 15% 15% 16% 17% 16% Other RSA Scandinavia Folksam 80% 70% 60% 2006 2008 2010 2012 2014 2016 If LF Folksam RSA Scandinavia 40% 20% 0% 30% 30% 30% 18% 18% 18% 2015 2016 Q2 2017 LF If 12
MARKET DEVELOPMENT NORWAY Combined ratio, % Market share, % 130% 100% 120% 110% 100% 90% 80% 70% 60% 2006 2008 2010 2012 2014 2016 If Gjensidige Tryg SpareBank 1 80% 60% 40% 20% 0% 29% 30% 30% 10% 10% 10% 13% 13% 13% 25% 26% 26% 22% 21% 21% 2015 2016 Q2 2017 Other SpareBank 1 Tryg Gjensidige If 13
GROWTH DEVELOPMENT NORWAY If Norway Growth, % 1,2-1,1-2,2 2015 2016 2017 6M Change in number of customers 6M, % 0,5 0,6-0,7 2017 vs 2015 2017 vs 2016 Last quarter 14
MARKET DEVELOPMENT FINLAND Combined ratio, % Market share, % 130% 120% 110% 100% 100% 80% 60% 9% 9% 10% 10% 25% 26% Other Fennia 90% LähiTapiola 80% 70% 60% 2006 2008 2010 2012 2014 2016 If OP Group LähiTapiola Fennia 40% 20% 0% 32% 32% 24% 23% 2015 2016 OP Group If 15
MARKET DEVELOPMENT DENMARK Combined ratio, % Market share, % 130% 100% 120% 110% 80% 38% 38% Other Alm. Brand 100% 90% 80% 70% 60% 2006 2008 2010 2012 2014 2016 If Tryg Topdanmark RSA Scandinavia 60% 40% 20% 0% 10% 10% 11% 11% 17% 17% 18% 18% 6% 6% 2015 2016 RSA Scandinavia Topdanmark Tryg If Alm. Brand 16
EFFICIENT AND CUSTOMER CENTRIC DISTRIBUTION Customer centre structure in if Number of branch offices 220 90 2002 2017 Trondheim leading insurer online esales: 20% Eservice: 40% ecustomers grimstad Gothenburg Turku Eclaims: 40% Stamholmen Flagship customer centres 17
CONTINUED EXTREME FOCUS ON DIGITALISATION total IT development cost, EUR m 53 40 2012 2016 Early adopter First webshop launched 1999 18
UNDERWRITING EXCELLENCE AND MODERN IT Efficiency one integrated price and production system serving all markets Initiated in 2005 Business value delivering underwriting excellence in practice Quality world class competence and technology platform Status one nordic IT platform Private Commercial Industrial 19
CUSTOMER SATISFACTION IN A DIGITAL ERA NPS If Nordic contact center 31 39 43 2014 2015 2016 NPS If Nordic claims 61 64 64 2014 2015 2016 20
SHAREHOLDER PERSPECTIVE Return on equity, % Dividend paid, EUR m 53,2% 39,8% 36,9% 519 488 540 406 544 490 597 587 586 494 19,2% 12,4% 24,4% 25,3% 25,0% 21,5% 18,1% 181-0,8% 21
CONTINUED VALUE CREATION THROUGH UNDERWRITING EXCELLENCE Stable returns through underwriting excellence and scale advantages Financial discipline and best-in-risk Management commitment to continuous improvement Financial incentives focused on underwriting result 22
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