Sampo Oyj

Good afternoon, everyone, and welcome to the Sampo Group first quarter 2024 conference call. My name is Sami Taipulus, and I'm head of investor relations at Sampo. I'm joined on the call by Group CEO Torbjörn Magnusson, Group CFO Knut Arne Ahlsaker, and CEO of IF, Morten Torsrud. The call will feature a short presentation from Torbjörn, followed by Q&A. A recording of the call will later be available on sanpo.com. With that, I hand over to Torbjörn. Please go ahead.

Thanks, Sami, and good afternoon, everyone. The first quarter results follow our recent capital markets day, and the messages from that day are confirmed. The momentum in our organization is excellent. The underlying combined ratio development continues to improve at roughly the same pace, and the increase in digital sales is very positive. Our Q1 growth is a strong 10% for the group, supported by positive development across all divisions. At the same time, we saw the most severe Nordic winter weather since 2010 in January and February. This is non-life insurance, and now and then we have events or unusually large individual losses. This quarter, the winter effect for FPNC was 8%, clearly much more than an average winter, whilst the large loss amount was some 3% below budget, so clearly less than normal. Definitions of winter losses vary between companies and markets, but we try to be as specific as we can, not excluding any line of business. We see no reason at all to believe short-term volatility, in this case some 100 million euros, 100 million euros from the winter, will have any long-term effects for us, while we certainly do see clear and continuous improvements in our operations. Furthermore, the Nordic market has stayed rational yet another quarter, and our hit rates, for instance, indicate no change in market behavior. Hence, we narrowed our combined ratio outlook for 2024 and now expect to land in the 83-85% range. Indeed, April weather has been rather normal in the Nordics, which gives us further confidence. At our Capital Markets Day on the 6th of March, we outlined an agenda that puts organic growth at the heart of our ambition to grow operating EPS by at least 7% per annum in 2024-2026. We have made an excellent start on this in the first quarter, with private and the UK growing premiums by 7% and 25% respectively. Our private divisions saw premiums increase by 14% in personal insurance and 7% in property insurance, both numbers clearly increasing Nordic market share in prioritized areas. Digital sales are up by 9% in the number of objects this quarter, again increasing its proportion of the total. In the UK, we continue to see the effect of the significant price increases taken during the second half of 2023 and a rise in customer count both in motor and in home. Technology continues to be a competitive advantage for us. For example, we are leading the development in telematics solutions with good profitability, now counting some 240,000 policies. Turning back to the Nordics, claims inflation remained below our prudent pricing assumptions. The adjusted risk ratio in FPNC improved by around 30 basis points, with private seeing the most positive momentum. We continue to cover estimated Nordic claims inflation of 4-5% with price increases, even as this appears to be trending toward the lower part of the range. And, as usual, we are reducing the cost ratio for FPNC, despite increasing the spend on digital developments. On profitability in the UK, the substantial price increases taken over 23 are now earning their way into the P&L. Our headline UK operating ratio improved by 2 percentage points to 91.4% in Q1, which is also typically the toughest quarter seasonally. Together with strong premium growth, this enables Hastings to deliver a very high increase in underwriting profits year on year, adding five percentage points to group level growth. Claims inflation in the UK has come down quite a bit since last autumn and looks set to continue to trend lower in 2024, which gives some reason to be optimistic for the UK market results in this segment. This final slide just gives all the numbers to the results for this quarter, boiling down, for me, to the improvement in the underlying combined ratio and the increased underwriting profit in the UK, I think. Let me instead comment on another piece of the jigsaw that finally found its place last week when we got the decision by the Swedish FSA to approve our internal model application, giving a reduction of the SCR by the expected 300 million euros or so. The process was delayed by the change of regulator after the mandatum demerger, but we are happy to have successfully completed it in less than a year. The board and the management will now consider all the relevant effects and provide an update once we see the balance sheet run with a new model for our second quarter directly after the summer. And with that, I turn back to you in questions, Sami.

Thank you, Torbjörn. Operator, we're now ready to start the Q&A.

Thank you very much. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one now on your telephone keypad. And to redraw your question, please press star two. The first question comes from the line of Alex Inlands calling from City. Please go ahead.

Hi, yeah, thanks for taking my questions. Firstly, just back to the capital markets day, you talked about reducing the midpoint of solvency by 10 points and the partial internal model approval would lead to €700 million of deployable capital. Is that still the case there? And you clearly highlighted you'd look at this at Q2. Is that just sort of a timing that it takes to work things through or are there any constraints in the short term to making that decision? Secondly, just on Hastings, I appreciate small numbers, but there's a quarter-and-quarter decline in policy count there in 1Q. Naturally, Hastings is a bit leaner cost-based, and you need to anticipate some growth. Is that just a reflection of the competitive market in 1Q, and is it possible to give any – colour on the sort of dynamics in Q2 so far. And sort of thirdly, if I may, just on the improved adjusted risk ratio, I know you don't target this on a sort of yearly basis, let alone quarterly, but if you could just help me understand sort of how you think about this through the year, should we expect sort of 1Q to be the low point? And clearly there's a bit of sort of favourable comps on frequency, particularly in 3Q and 4Q. Thanks.

Good afternoon, Alex. It's Knut Olme here. If I take at least the first one, in terms of the effect from the partial internal model and the change in the capital management framework from the CMD, there's no change to that €700 million. um and there's no sort of new restrictions obviously we want to plug in our internal model and calculate the solvency ratio uh officially for the first time uh which now will then be in q2 uh but but uh that's a formality um and the numbers will be like we talked about that to cmd and like we announced when we got the approval the other day

On the adjusted risk ratio, that is not a number that will be exactly the same every quarter, of course. And for FPNC, that has developed roughly in line with the past few years. So I don't expect any particular pattern over the year there. Declining policy count for Hastings in the first quarter is not the number that I have. We see stable development for the core motor portfolio with some good additions from bike and van products and, of course, especially so for home insurance. So good development on policy count and, yeah. And certainly on premiums, but you've seen that.

Thanks. The next question comes from the line of Freya Kong calling from Bank of America. Go ahead.

Hi, good afternoon. Thanks for taking the questions. Just following up on Hastings. So the operating ratio improvement year-on-year has mostly just been driven by the expenses and operating leverage there. And the loss ratio, I think, has actually deteriorated a bit, which is somewhat confusing given insurance revenues are up over a third, claims inflation is 12% and abating. I'm just trying to understand what I'm missing here in the deterioration both year-on-year and in the quarter ratio. And secondly, on Hastings, is there any more colour that you can share on the profitability development between motor and home? How is home claims inflation developing? Thanks.

Take this second one whilst Knut is thinking of the first one. The home is still... Average home premiums are quite low in the UK, and the motor premiums are completely dominant in the overall result. And the first quarter this year for home insurance has been benign in terms of weather, and of course we benefit from that, but as I said, these are small amounts... The driving force behind the improvements in the UK is the improvement in premiums compared to the claims inflation. And that is what will be seen over the coming quarters as well, of course.

In terms of the start of the year for Hastings, it was also a good quarter with respect to frequency developments, loss ratio. As you will have seen from our group underlying combined ratio development, Hastings also contributed to making that a 1.1%. which means in clarity that we decided, because of the very good frequency development, to put aside a bit of conservatism in terms of balance sheet reserving.

Okay, thank you. Can I just follow up on Alex's question as well? It did look like quarter on quarter your motor policies reduced a bit. less than 1%. Is there any reason why you would be not more positive on the market or cautious on growth going forward?

Well, we're always cautious on growth, I guess. And a one-quarter development in that product of 1% is a very small development. The overall bigger development is, of course, a good one. I think we had 6% growth year over year. But then we always take tactical discussions every month. I hadn't actually thought of that development as anything that will affect the longer-term development. We see good growth opportunities for Hastings going forward.

Okay, thank you.

The next question comes from the line of Trifonas Spiro calling from Berenberg. Please go ahead.

Hi there. I had two questions, but one of it was answered just now on Hastings. I guess the other one is on ONIF, specifically on industrial lines. You made a comment, probably on the thing in your comments, that some of the below-budget claims could be as a result of a tighter risk appetite situation. last year. Can you maybe elaborate on this and remind us what underwriting actions we've taken there? And I guess, how sustainable could this be for this year? Should we expect large losses to be structurally lower going forward? And finally, can you maybe say how much of that 13% increase in gross premiums in industrial lines relates to volume and price? And again, the question I had is on some weather. I think you gave a slight on the last three years, severe weather claims have been averaging around 1%. Clearly, Q1 was exceptional, and I think the worst score that we have is 2010, I guess. Thank you for bringing out the weather impact. How should we look at it broadly going forward? It appears that the 1% seems on the low side and the 87% seems very high. So is there any number you can give us in terms of expected sort of budgeted water claims that we should be expecting on a normalised basis? Thank you.

Martin here. I'll try to answer your questions. First, the de-risking on industrial, that's sort of something that we do in certain industries where we basically are taking down our line share, sort of in typically sort of exposures where you have kind of structured programs where we can take down our line share. Of course, that de-risking is included when we make a budget. So the budget, of course, is adjusted for the exposure that we have. So the large claim outcome favorable in first quarter is simply that we had fewer large claims than budgeted, but again, already factored for the de-risking. The 13% price increase or volume increase in industrial is fully driven from rate increases and value increases. So net gain of business is very marginal. So again, fully driven by either values or rate changes. Then on weather... This quarter, as you saw, we had 8% above what we assume being a normal sort of winter. then typically we've been talking about that we sort of on the yearly basis have roughly a percent or so in events of course in the first quarter there were some events some storms as well um but um but eight percent is sort of what we expect on top of a normal normal winter um Then in terms of expectations going forward, of course, we expect to price for a normal winter and we expect to price for normal events in our pricing. If you go back in time, I think 2023 was a little bit harsh winter. The two winters before that was sort of just around zero. 2021, I think, was slightly better than sort of a normal one. So these were very little, but obviously 2024 was exceptional. And again, you need to go back to 2010 in order to find a similar sort of harsh winter.

Sorry, thank you. But just to confirm, so the slide six sort of shows that to deal with claims as a percent of insurance revenue, is that more is above your sort of expectation or is that the absolute number of sort of severe weather claims?

That's above our expectation of a normal winter.

Okay, got it. Thank you. The next question comes from the line of Fezzan Lakhani calling from HSBC. Please go ahead.

Hi there. Thank you for taking my questions. The first one's coming back to Hastings. Thanks for the explanation on the loss ratio, but I just wanted to dig into it a little bit more. Could you help disaggregate how much of the deterioration is down to the conservatism, the better planes frequency, and if you could sort of split out how much you've actually benefited underlying from positive rate development there? The second question is, again, on Hastings, the severity you mentioned is near 12% year-on-year, coming down slightly. When I look at some of the key indicators in the UK, like used car prices have come down significantly, down to 9%. The suggestions are parts are more readily available. Why is the claim severity so sticky within the UK motor market, if you could clarify that? And the third question is on Finland. I can see the combined ratio is up 6% year on year. There's no indication that was weather related. If you could help break out what that's related to. Thank you.

We don't typically give so detailed information as to the split that you're asking for. I think suffice it to say that we've had a good first quarter in Hastings, which gave us an opportunity to make sure that we are fairly and prudently reserved. The severity of 12% or 10% or whatever high number for the UK is compared to a year ago, and you're right that a number of the key indices, like used cars, is looking a lot better now, and we expect claims inflation to fall as a consequence in the UK going forward.

I think on Finland, I think I rather would look at the combined ratio of 85.2, which I think is a fair combined ratio for a winter quarter. There were clearly sort of winter effects also in Finland, but clearly much more than what we saw in in Sweden and Norway. So Sweden and Norway accounted for almost 90% of the winter effects, but again, there were some winter effects in Finland. But I think the combined ratio of 85.2 again is a good, fair combined ratio in the winter quarter also in Finland.

Thank you very much.

The next question comes from Vinit Mallorta calling from Mediabanca. Please go ahead.

Yes, good afternoon. I hope you can hear me. My questions are mostly regarding the train side. So there's three, hopefully very quick ones. So first one is the launch losses proved to be better than budget also this quarter, also last year, 1Q. And I'm just wondering if you could comment if there's any sort of conservatism built in or is it just good luck factors or or is there anything that you could help us understand? Because it seems to be that it's in two quarters in a row now, better than feared. So that's the large losses. Second question is just on the, you commented April weather was more normal. I'm just curious if you look at March and April, was it more normal or was it actually much better than before? the previous year or something, because that's what your peers have kind of hinted at. I'm just curious on that clarity. And last thing is just feedback to UK inflation. Commentary you have said is modest reduction in inflation. I'm just curious, is there anything that is stickier? Because, you know, when we see headlines, we think, oh, inflation is getting much better. So also a base effect of last year. So just curious why it's only moderately lower and not much lower.

Thank you. Can I just do the UK before? Yeah. Yeah. I agree. I think everyone has been surprised how sticky claims inflation has been in the UK, not only you. But now we clearly see, for instance, the used car prices at a lower inflation level than before. We have good hopes that this is now going to improve a lot. And then Morten will ask the surprising question that now that we've had two quarters of good large loss outcome, we get a question whether that is permanent.

No, and that's of course, the large loss pattern is purely random. even though we saw a good large claim outcome Q1 2023 and Q1 this year, that's, of course, purely random. So there's no kind of... quarterly sort of pattern on that. And on the April sort of March weather, I guess it doesn't make a lot of sense starting to comment sort of weather on a per month or per week or per day level, really. But of course, I mean, there's been no big storms, no big floodings, no big events, and good decent sort of insurance weather. But But I guess, yeah.

It's good to know. Good to know. Thank you very much.

The next question comes from the line of Ulrich Zucker calling from Nordea. Please go ahead.

Thank you. Three questions from me. Is it fair to assume that the 7% growth within private lines for IF will be quite sticky this year, given that inflation is high and your peers... appears to be chasing quite big margin improvements. Secondly, I wonder if you could comment on how much your motor claims frequencies have gone up since 2022, again, for IF, even if they're in line with your expectations. And thirdly, why not grow more in commercial? It's the lowest growth rate you have, and it seems like a quite good combined ratio. Thank you.

Yeah, more there again. 7% growth in private. Yes, I think we have rather good growth prospects and outlook for the private business area. It's worthwhile bearing in mind that over the last couple of years, we've had quite a bit of headwind from low motor sales, as we talked about many, many times in these conference calls. that headwind is starting to ease up as we start to compare with years with also low new car sales so in private 8.1 percent growth this quarter excluding the mobility business 5.6 was the corresponding figure excluding mobility business last year And I think we see that we benefit from maintained high retention rates and, of course, then continue high price actions. And we expect price actions also to remain at a somewhat elevated level also going forward since we see that inflation is still, even though it's kind of gradually coming down, we see that it's still on a high level compared to historic levels. In terms more to claims frequencies, the development that we have seen, and I think you have a good graph on this in the capital markets day material actually, is a very gradual increase from sort of the time after COVID until today. Of course, varying a little bit from country to country, quarter to quarter, But for us, it has been very stable and very minor increase in frequencies. And again, very much what we had expected, returning sort of to more normal traffic levels after COVID. On commercial growth, yes, we have an ambition to grow further in that market. We are making heavy investments, particularly in digital solutions and remote distribution setup. And I do expect us to be able to grow as the market will become more digital. Of course, the other alternative would be to invest in the more old-fashioned distribution capacity, which would be a fairly short-sighted sort of way of growing in the SME market.

Yeah, just on the claim frequency for motors, I think this is increasing slowly or marginally, but you still have to reprice for that top of the claims inflation, right?

There are three factors that you need to sort of price for in motor. One is the underlying inflation. Second one is a slight increase in frequencies. And the third one is that the repair cost of repairing a new car is significantly higher than the repair cost of repairing an old car. That latter one we are not sort of in our calculations kind of calling inflation because that's something that we price for when selling new insurances for new cars. But again, you need to get all of those three rights in order to kind of have good pricing or... correct pricing within motor. And I think sometimes people confuse and sort of mix inflation and frequencies and also this more underlying increased repair cost from repairing new cars and mix all of that into claims inflation.

So you're talking about claims inflation plus a couple of percent maybe growth and then a potential market share. Is that the top-line growth plan?

That's fair to say. I mean, it's underlying inflation, some extra for frequencies, and also for sort of increased repair cost of newer cars on motor, and then on top of that would be sort of market share growth.

Yeah, excellent. Thank you.

The next question comes from the line of Yudish Shikori, calling from Autonomous Research. Please go ahead.

Good afternoon, everyone. I've got two questions. The first one is on the cost ratio at HIF. I think the ambition there is to actually improve it by 20% annually, but given the development in 2023 and in Q1 this year, is it possible that you'll probably be achieving closer to 40 basis points improvement this year? That's my first question. And then secondly, on the fixed income running yield up to if, which was stable quarter on quarter, I think at the capital market, you showed a slide showing a flat development declining going forward. But I think that today you mentioned in your slide deck you were reinvesting above 5%. So So as things stand, should the fixed income running yield be trending upwards going forward? Thank you.

I can start on the cost ratio. I think, as we often comment, looking at cost ratio on a quarterly basis is not necessarily meaningful. We're not... I mean, some cost items come in different quarters, so it's... And of course, we do nothing to try to smoothen this out. But of course, we have a target of around 20 basis points improvements. Last year, we delivered a bit more than that. So that's what you should expect also going forward, sort of at least around 20 basis points.

On the fixed income side, you're absolutely right, referring to the sort of trying to forecast the running yield at the CMD. There's nothing in terms of rate developments over the last month, if you like that, that makes us less confident that we can maintain the running yield that day. high level for some time, which means that we have been able to add some investments to support that 4.2% level also going forward.

All right. All right. Thank you.

The next question comes from the line of Johan Strom calling from Carnegie. Please go ahead.

Thank you. So two questions from me. If we look at the 2024 group combined ratio guidance of 83% to 85%, I assume you're not going to give us the if P&C combined ratio for 2024, but do you think it's fair for us to assume it to be lower, maybe a percentage point lower than the group range, given that the UK would most likely be wrong with a slightly higher combined ratio than you do in the Nordics? And then on the solvency position, what would the dividend adjusted solvency margin of 180% been if you would have used the PIM model? Am I right in calculating something slightly more than 15 percentage point higher solvency margin with the PIM model? Thank you.

Those are almost entirely numerical questions, weren't they, Knut Arne? Even the first one, almost by definition, is sort of in the right range.

Given that the focus on underwriting profit or operating ambition in the UK is underwriting profit and not an exact combined ratio, although we will, of course, grow at attractive margins, but it's not the same as the Nordic margins will not be. But growth will be higher. It means that if our Nordic business, including from top, needs to support a solvency ratio of 83 to 85 to make that average work. So it depends on where you want to put your estimates in that range in terms of what you think about the... target for this year. So as you say, we're not setting a specific target for IF as such. But it needs to be a bit below the group average, exactly as you say. And the internal model has a positive impact on the solvency ratios of 300 million euros on the SCR, but on the solvency ratio of around 17 percentage points.

It wasn't a... exercise for mathematical purposes when we at the Capital Markets Day said that the target for Hastings or the ambition for Hastings is underwriting profit or increase of that. We need to have a very agile decision process to increase the underwriting profits for Hastings and that will necessarily mean that we balance the combined ratios and the growth prospects all the time. So I encourage you to try to look at the underwriting profit for Hastings even before you look at the combined ratio separately.

Thank you very much, Torbjörn. That's all for me.

The next question comes from the line of Jan-Erik Gerland calling from ABG. Please go ahead.

Thank you for taking my questions as well. I have three or four. The first one is, according to your peers, it seems like you have a very strong Norwegian combined ratio. Could you give us some insight if you have sort of dressed it up with some prior gains or something else, or is it equally distributed throughout the different kind of countries? That's my first question. The second one is on the profitability in private sector. It seems that it has taken most of the winter effects, the negative ones, versus the commercially industrials. And if so, why? The third one is the facing of this potential share buyback. You talked about 1100, the 700 plus 500 on the Captain Marcus Day. We still have some 10 quarters to go to 2026, if we start with this in August. Would 100 plus per quarter be sort of a good proxy for phasing in on this, or will it be more front-end loaded? Thank you.

start with your kind of combined ratio questions and profitability questions on Norway and the Nordics. I think to your question on profitability in Norway, yes, I think we have a good underlying profitability in Norway. I think we've been disciplined in pricing for the inflation that we have seen and expected to see in the Norwegian market. So, and then in terms of runoff, that we only disclose at the IF group level, there is not anything special sort of sticking out in terms of sort of country or line of business or anything like that. It's It's a little bit higher than sort of a normal runoff this quarter, but nothing spectacular. So I think Norwegian combined ratio, good underlying performance, good underlying business there. Private profitability and winter effect. Yes, the winter clearly affects private the most. These were typically sort of motor damages to normal sort of passenger cars. There were sort of damages to houses, pipes bursting from frost and so forth. And we didn't have any... sort of larger winter related claims in commercial or industrial. So there were typically sort of frequency claims and then typically affecting business area privates.

Question, Jan-Erik. Not sure I fully understood the question. It wouldn't make sense for us to start a 100 million buyback each quarter, to spread it out over a number of years. of years. Like we said also at the CMD, we would sort of consider deployable capital about once every 12 to 18 months, which means that we would come back in Q2, in August, with consideration around the deployable capital we have generated then. And then a buyback takes the time it takes, so to speak. That, of course, depends on volume, on the exchanges we buy back. So our trading volume at Nasdaq Helsinki and sort of what we can buy back to not influence the share price just in terms of how large of a share of the daily trading volume that we can take. Not that that is a question on the buyback, but if I just looked at some of the latest buyback we have done, that would be what summed to the tune of 5-6 million euros per day.

It means that when you come back in August, you will then start a larger mandate, and then you start until your AGM, and then you will ask for a new mandate, and then you will restart again in, let's say, May 2025, and then continue until you have done whatever you want to plan, depending on deployable capital and your overcapitalization, if I understand you correctly now. So we should not take it like an evenly distributed throughout the years.

If we're talking about the buyback, it becomes a bit evenly distributed given that it sort of takes the time it takes. If volume is constant, it takes some months. But let's come back to the exact size. But given the fact that we talked about making such consideration once a year, and we have sort of done what we have done, generating the 700 million euros of deployable capital, it would make sense for us to consider a buyback that takes more than a quarter.

Agreed. Agreed. To spread it out for a longer protracted period for some reason. No, no, no. Just spread it out. No, no.

So it's not like we split those 1.2 into exact sort of even buckets. And we already have sort of the 700 million of the 1.2 billion in capital management actions in the books.

That points me to the write-up of an exit. There was a transaction in Q1, if I understood correctly. So that is alluded to, the 41 million you had unfolding is alluded to that transaction, which then gave an indication of valuation of an exit. Is that fair to say?

That's the sheer price. The way that NEXI is accounted for in our books, given that it actually is a private equity holding for us, is with one quarter's lag in valuation. So the 42 million profit we had from Nexi in Q1 reflected Nexi's shared price development in Q4. And it is, of course, also well known that Nexi's share price did not perform as good in Q1, which will be reflected in our holding profit in Q2.

Okay. Just one question left for Morten. The Bursen in Denmark fire, is that sort of any news you can tell us about that? Is it a large enough for loss or is it a 25 euro loss or what should we think about it?

of course a sad claim for Denmark but from an insurance perspective it's a large claim but it's sort of nothing out of the extraordinary from an insurance perspective so we have we have sort of our normal sort of reinsurance sort of cover which gives us sort of net 30 million euro and then plus reinstatement premium of course on that but yeah will be part of the large claims budget and outcome in Q2 then.

Thanks a lot. That's all from my side.

As a reminder, a final reminder, if you'd like to ask a question, press star one now on your telephone keypad. The next question comes from the line of Jakob Tiravainen calling from SEB. Please go ahead.

Yes, good afternoon. Jakob here from SEB. Could you give a bit more flavor on the current market dynamics in the Nordics? Have you seen, for example, any rival being a bit more aggressive in terms of market shares lately? Or is that kind of a risk that you are seeing, given the inflation is slowing down clearly and the bond portfolios have been rolled into the higher rate levels?

I would say that the market dynamics in the Nordics is still very disciplined. I think generally there are still a need for price increases if you look at the different companies' performance, varying a little bit from country to country. most clear in Norway, where I think sort of quite many sort of players seems to need to have quite hefty price increases. But again, it's a very disciplined market.

Okay, good. Then second one on ESPNC private customer volumes, which seems to be which seems to remain kind of flat or actually marginal down in Q1. Still, you are reporting growth in certain areas like personal insurance and property. Is the right conclusion that you are kind of gaining those volumes in those growth pockets by just cross-selling to your existing portfolio or how aggressively you are chasing totally new customers?

So much sort of low development in terms of number of customers in private is more or less exclusively driven from the development in Sweden and on single car customers within sort of the car brand type of setup. So this is almost pure mechanics that you get when the new car sales is high. lower year-on-year sort of as we see now for the last few years. If you would have adjusted for those sort of single car customers, we would see a growth in number of customers in business-era private. So typically the customer segment that have multiple products, that segment sort of within private is growing.

Okay, good. That's all from my side.

And the last question comes from the line of Michele Balatore calling from KBW. Please go ahead.

Yes, thank you for taking my question. So the first question is just, sorry if I missed this, but in terms of the more prudence in Hastings, can you also reserve prudence? Can you tell me the reason behind this? Probably, sorry if I missed this. And the other question is about in 4Q, you released some reserve related to inflation. Can you tell me if there is positive development related to inflation also in the first quarter of 2024? Thank you.

which could have been other parts of the group as well. Sampo, we like to have prudency in our reserves. And from time to time, when we see a really good frequency development, we use the opportunity to create a little bit of prudency in case the next quarter is not developing in the same excellent way as it did for Hastings in Q1. Again, going back to the contribution to the underlying claims development. No specific worries other than our wish to have a prudent reserving position.

And to the prior gain on if, we reported 4.2% prior gains. That's a little bit higher than what we normally would assume being kind of more longer-term prior gain percentage, but it's purely driven by kind of normal quarterly volatility, so nothing sort of in particular that stands out on that one.

There are no further questions, so I will hand you back to your host to conclude today's conference. Thank you.

Okay, perfect. Thank you very much, everyone, for attending. And that concludes the call today.