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Sampo Oyj

Q22024

8/7/2024

speaker
Sami Taipulus
Head of Investor Relations, Sampo Group

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

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

Thanks, Sami, and good afternoon, everyone. The most talked about Sampo topic from this quarter has naturally been our bid for the remaining half of Top Danmark, possibly one of the least surprising moves in the European insurance industry lately. We believe we have found a value-creative way forward in this last significant remaining issue in our group simplification process. However, in a way, this is both yesterday's and tomorrow's news as we discuss the details of the offer in June, and the offer period starting shortly will not end until September. In the meantime, then, we have another set of solid results on the same path we have followed for some time now, with strong profits, cost ratio reductions, and not least, good growth. Despite the harsh winter and some well-known large losses, our operating EPS increased by 2 euro cents on last year. I'll comment more on the individual factor movements, but let me already here point out two key positives. The underlying combined ratio, adjusted for volatile short-term effects, is still improving at roughly the same pace as before, half a percentage point per annum. This is not really a number that should vary quickly. Only under extreme circumstances would this number be much bigger than this. And that is exactly what we have in the other key positive, Hastings and the UK market. As expected, we seem to have overshot a bit with our rate increases in the latter part of last year, together with a large part of the market, I suspect. And consequently, the results this year have improved substantially. Perhaps also on this page, a brief comment on the recent volatility in the investment markets. Obviously, this is a situation we are quite well prepared for, with much lower market risk than a few years ago, and with higher running yields in the background. Our solvency is also cushioned by the Solvency II symmetric adjustment in case of more extreme developments than we have seen in the past few days in the financial markets. Let's look at the premium growth in some more detail then. For our private business in IF, retention rates remained unchanged for yet another quarter, giving evidence of the stable Nordic market situation. Growth in personal insurance and property, but still not in motor, as the new car market continued to contract. gave 6.2% growth in the quarter. For commercial, we saw very healthy growth in SMEs, giving north of 8% growth for this quarter. The UK premium growth is still off the chart after the unique 2023, but we continue also to grow home insurance in numbers and have returned to growth for numbers of policies in our core motor business as well. As Sami mentioned, Toby van der Meer is on the call and we'll be able to give more color and details from the UK market. The next slide is a lesson in underwriting. Apologies for the school book tone on the slide. The main message is very simple. We have in the Nordics about 4% claims inflation in the quarter, a bit higher in motor, a bit lower for property. Obviously, claims frequencies during this challenging winter were high. But apart from that, they are where they were last year and where we have priced for. Then we have diversification between countries. But on this slide, that's a bit of a red herring as we have roughly the same results in private lines for all three of our big Nordic markets, as you can see from the bottom of the slide. So in total, we are priced correctly based on the frequency projections and the information we had on claims inflation in all countries. Then in the UK, We have continued to benefit from the early reaction to the claims to inflation compared to much of the market. The increase in the underwriting result is quite extreme, as you see. We are, as always in any market, but particularly so in the UK, trying to be agile and balanced. Growth and rate increases wisely to optimize value creation. I'm pleased to see us return to policy growth in the motor book at the same time as the operating ratio has reached below 88% in Q2. The underlying claims severity inflation in the UK is slowly and gradually improving from the levels we saw last year, and weather and frequencies have been rather benign. As always, we spend a lot of time on projections of these factors and to try to make sure that we adjust rates in a timely fashion. Together with the improved returns, the profits have increased strongly to 71 million euros for Hastings' first six months. Finally, and this is only repetition and a summary from our June transaction call, on this slide, in addition to this slide, we have since then obtained all the necessary regulatory approvals as well as the support from Sampo's EGM to issue the corresponding new shares. This transaction would be the final significant step in our simplification journey, and one which creates values in a way we're used to, have practiced for 20 years, Nordic, national and cross-border synergies. And with that, Sami, we open up for questions.

speaker
Sami Taipulus
Head of Investor Relations, Sampo Group

That's right. Operator, we're now ready to take the Q&A.

speaker
Operator
Conference Operator

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. We will pause for just a moment while waiting for them to queue for questions. Thank you. We will now take our first question from Tristan Spiro of Barenburg. Your line is open. Please go ahead.

speaker
Tristan Spiro
Analyst, Berenberg

Hi there, good afternoon. I have a few questions. The first one is on slide 7, which shows the undiscounted underlying command ratio on the group level that has improved 2.0 on year Q2. I want to back up the haystacks improvement. from the East to Denmark sort of numbers we have. I get around 13.5 points improvement, which is quite significant. So I guess my question is whether my math is correct enough. And if so, is it fair to assume that you kept that in reserve and it needs to do with sort of stock management? So the second question is on the macro side, given the answers we have. This obviously there's a little bit of mismatch in your balance sheet, the duration on the asset side, this is sort of 2.5 years. The ability side, the leak is on 6.5 years. So is there a risk it's interesting to come down to see some volatility in the PNL and you prefer to expect the benefit on the asset side not to fully offset the headwind from the ability side. So any comments on that and whether that will have any impact in any way. And just finally on the Baltic, the Baltic operation came up for sale. Recently, I appreciate you looking at the Denmark deal. But have you had a look at this? And will you be willing to look at deals in the politics in the future? Thank you.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

I don't think we will comment on the Baltic thing. And that is obviously tiny as well. But the other two, Knut.

speaker
Knut Arne Ahlsaker
Group CFO, Sampo Group

Yes, good afternoon. On the first one, you are right that the underlying improvements in Hastings this particular quarter was significant. Also, really, really good for the first half year. compared to last year, which of course was a year where rate increases was the focus of intention and results in the beginning of the year in particular were more benign. And you are also right that the improvement of the reserve strength And the balance sheet in Hastings has continued into Q2, as I already also touched upon when commenting on the Q1 results for the UK. in terms of um the second question um on uh duration matching we have a slide on on um page i think sami it's 26 if remember correctly in terms of our sensei sensitivities yes 26 in the investor presentation in terms of our sensitivities where where you will see that we are fairly well matched in terms of a hundred basis point up or down on the on the interest rate curve assuming a parallel shift i should say despite the duration mismatch because we have clearly more fixed income assets than we have liabilities. We're also fairly well matched in terms of currency movements. Of course, what you can have is a situation like you have in Q2, where short and long rates move in a slightly opposite direction, which in Q2 gave us an additional positive compared to what these slightly simplified sensitivities would indicate. But overall, given the overall location we have to fixed income on the asset side, we're fairly well matched, I would say. Very clear. Thank you so much.

speaker
Operator
Conference Operator

Thank you. Thank you. And we'll now move on to our next question from Benet Milotra of Medibunker. Your line is open. Please go ahead.

speaker
Benet Milotra
Analyst, Medibunker

Yes, good afternoon. Thank you very much. Two questions, please, on the, just something I read in the press release, one in the UK, one in Norway, and one quick accounting check question, please. Thank you. So the The first one is on Norway. I mean, I noted in the press release that you said there were some changes to deductibles as well, along with pricing. And I'm just curious that is that something a bit new? Because my understanding has been in the past that you haven't mentioned deductibles much. You just mentioned pricing. So is that new or is that just something that has been mentioned now and have always been going on. Then on the UK, also from reading the commentary, it feels like you could rather maybe even cut some pricing to get or reduce pricing to get some growth. And I'm just wondering whether you think the time is right or is there a risk there? I'm just curious to hear your thoughts on whether even this understanding is correct. And just on the accounting side, the GDP growth, which we all focus on, is great, but the insurance revenue growth is a bit slower, I think also in 1Q. Is there something to note there that we should think about? Thank you very much.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

I have the luxury here of a CFO that wants to answer the question on deductibles.

speaker
Knut Arne Ahlsaker
Group CFO, Sampo Group

It's a fairly simple answer really in terms of just reference to a couple of different things which is included in underwriting decisions. One thing is of course to have the right price for the right risk and then also terms and conditions in general where deductibles is a tool to use if If there is a risk or an unprofitable part to have a lot of tiny claims because deductibles are too low, then deductibles have to be reviewed from time to time as well.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

But I don't think we have commented on deductibles any time in 20 years in the group communication. So it's not something we avoid commenting on. Toby, are you there? Yeah.

speaker
Toby van der Meer
CEO, Hastings

Good afternoon, everybody. I hope you can hear me okay. On the UK, just briefly, one important thing to just remember about the UK market is the high price elasticity we see. In other words, we see relatively big volume changes depending on small to medium-sized changes in pricing. And what that means is that The way the process works in Hastings is we set our target margins and any leeway or room we have above those target margins, we then either keep as extra margin or reinvest in volume by passing it through to consumers in the form of lower rates to take advantage of those high elasticities. And what we've seen in the recent period is high market elasticities. lots of customers shopping around and therefore small price changes leading to big extra volume gains for Hastings and margins that are ones that we're happy with where there's some room given the claims environment in the UK over the last six months to invest some of those excess margins in the form of a volume growth. So I hope that gives you a bit of colour on the dynamics we've been seeing and how that's impacted our pricing approach in the first half of the year.

speaker
Knut Arne Ahlsaker
Group CFO, Sampo Group

And the accounting question should probably go to me, but I didn't fully catch it, actually. Did you, Sami? I wanted the deductible one instead. I wanted the deductible one instead, yeah.

speaker
Sami Taipulus
Head of Investor Relations, Sampo Group

My understanding was that it was about how the net insurance revenue is tracking the gross written premium development. Vinit, was that right?

speaker
Benet Milotra
Analyst, Medibunker

Yeah, so, you know, for example, there's about two points lower insurance revenue growth versus the DWP growth. And obviously, unless something changes, I mean, this is an earn-out pattern, or is it just, I mean, the point is that the insurance revenue goes into the IPOC, you know,

speaker
Knut Arne Ahlsaker
Group CFO, Sampo Group

These two things over time will of course track. Then there can be a difference between gross written premiums and net insurance revenue also in terms of changes in reinsurance program but with the same reinsurance program sort of not impacting gross and net these two things will will track over time then of course in the beginning of the year continuing into the second half gross is uh is higher than earned since a lot of the renewals on the corporate side happens in the beginning of the year, which then will be earned as insurance revenue over the full year. I don't know if that was an answer to your question.

speaker
Benet Milotra
Analyst, Medibunker

No, no, thank you. I just wanted to see if there's anything very, very strikingly obvious there. But thanks for the clarification. Thank you.

speaker
Operator
Conference Operator

Thank you. And we'll now take our next question from Jan-Erik Gyllen of ABG. Please go ahead.

speaker
Jan-Erik Gyllen
Analyst, ABG

Thank you for taking my questions as well. First one is on the growth in the personal insurance or personal risks. Could you elaborate a little bit on what type of products? Is it pregnancy products? Is it throughout the whole of the Nordics? Is it better in Sweden, better in Norway? Could you shed some light into that kind of risk the increases in the growth from that product alone. Secondly, the quota share in the UK, which is touched upon, what is the level today? Is it one third roughly? And what's the intention down the road? Is it to be closer to zero or is 25 to 20% something you would sort of aim to get to within some years? And finally, on the top offer, um how should we think of your potential plan b when it comes to uh take out on on on the 400 million if you do some accounting here uh if you cannot get to the 90 percent it will be a lot of those 400 million euros going to to be payment paid as a cash for top denmark so how should they read you your willingness to do all those 400 next just for cash or top Denmark shares. Thank you.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

So the growth in personal risks is throughout the Nordics, less so in Denmark. I don't have a split off the top of my head on sickness, accident, health, expat, insurance, but it's throughout the Nordics. Quota share is 30% today. The direction is downwards, but it has to be balanced with our relationship to the reinsurance market over time.

speaker
Knut Arne Ahlsaker
Group CFO, Sampo Group

Top, I mean, obviously we want to get above 90%. And let's see in a month where we are and how much above 90%. And then parts of the 800 million euros, in other words, the remaining 400 compared to the ongoing buyback will be used for a squeeze out. And if there are remaining amount, because acceptance rate were very high, we will start another slash extend the current ongoing buyback with the remaining amount up to 800 million euros.

speaker
Jan-Erik Gyllen
Analyst, ABG

Okay, thank you. Can I just have one follow up on the private side? When you look at the inflation, you say four to 5% currently, and you're sort of trying to price around that level. Is that mean that you're not trying to get some more volume in the Nordics for not pricing too aggressively or are you happy with your sort of combined ratio level so we should not expect it to sort of continue to drop forever and you sort of more look for an ROE which could give you a satisfactory level of return over time? So is volume becoming a more interesting path when it comes to growing your premiums going forward? Or is it still very disciplined when it comes to picking and choosing your growth targets?

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

The general answer is the boring one that we are always trying to balance for each segment, volumes and rate increases. Claims to inflation now is 4%, roughly, and we're able to price for that and a little bit more. You will have seen from our communications in the past 18 months that we have an ambition and an ability to improve the underlying combined ratio and we are very careful publishing that every quarter. However, it's not, you know, some years back we could improve the combined ratio by 2-3% a year. We're not there anymore and volumes have been more important for that reason. and also for the reason that we can because of the digital proficiency that we have and the uk situation that we with the technology leadership that we have there perfect thank you thank you and then i'll take our next question from amelie of deutsche bank your line is open please go ahead

speaker
Amelia
Analyst, Deutsche Bank

Hello, good afternoon. This is Amelia from Deutsche Bank. Thank you so much for taking my questions. I have two, if I may. And they're actually both on Hastings. So for Hastings, you've grown motor and home policy count. And GWP is actually also up quarter and quarter. Are you able to split the GWP growth between motor and home and maybe also talk a little bit more about the pricing and claims environment in the UK? So that was my first question. I know it's a bit long. And then second, please, can you add sort of any additional color on the Hastings operating ratio, both the moving parts quarter and quarter, so where the improvements come from, but also how we should think about it going forward for the rest of the year? Thank you.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

Toby, go for it.

speaker
Toby van der Meer
CEO, Hastings

Thank you. Firstly, on the GWP growth, assume that given the scale of our motor insurance business and the much higher premiums that we have in it relative to the smaller home business with lower average premiums that the vast majority of the 29% GWP growth has come from motor insurance. We're seeing very significant premium growth in home insurance too, but it's still relatively modest numbers in the context of the Hastings results overall. On the pricing environment, as Torbjorn said earlier in the call, in the introduction, rates went up a lot during the second half of 2023. um probably overshot in the expectation of very significant ongoing claims inflation um and couple this with my answer on claims in a second um but the pricing environment has moderated a bit i think not surprisingly after a rapid period of increases at the scale that we saw in h2 in uh moderated in the first half of the year. The ABI data suggests the premiums fell by about 2% in the second quarter after a period of stability in the first quarter. Just to make that come to life for you directionally, that's consistent with the data we've seen internally. On claims, on the average cost of an accident, I claim severities, we've seen ongoing high inflation. broadly in line with our expectations. You might recall we talked about 12% claims inflation in 2023, and it's moderated a bit from those highs, but continues to be very high. Competitors talking directionally about around 10%, which again would be directionally consistent with the data we've got internally. On frequencies, however, we have seen benign weather. coupled with the benefits of some of our claims, fraud and pricing initiatives come together into a reduction in claims volumes that has partly offset the severity increases. And when you take those together, that meant that rates have been higher than needed to cover the claims costs in the first six months of the year, and frankly, now to cover the claims costs that we expect over the next six to 12 months as we look ahead. And the operating ratio improvement is mainly driven by those dynamics. I continued very strong top line growth, both average premiums and policy count, and those extra premiums being more than sufficient to cover the extra claims costs. On top of that, our retail income. We've also seen an increase in expenses, but the sorts of expenses that we like. by the strain of writing higher new business volumes and some of the investments we continue to make in technology initiatives because we're seeing very good returns on those and are therefore happy to continue to invest as the team bring us new ideas and new business cases.

speaker
Amelia
Analyst, Deutsche Bank

Thank you so much. Very clear.

speaker
Operator
Conference Operator

Thank you. Once again, as a reminder, if you would like to ask a question, please press star one on your telephone keypad Thank you. We will now move on to our next question from Freya Kong of Bank of America. Please go ahead.

speaker
Freya Kong
Analyst, Bank of America

Hi, thanks for taking my questions. Just some follow-ups. You talk about pricing for claims inflation, which is around 4%, but I think some of the price increases your peers are putting through are in the high single digits and even low double digits. For you, does this mean scope for further potentially significant margin improvement, or would you look to trade that for volumes? And then just secondly, on the UK, thanks for the color on that just then, but how much do you think UK motor pricing actually overshot at the end of last year? You said pricing was down 2% in Q2. Is there scope for this to fall further in Q3 and beyond? Thanks.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

yes if competitors actually uh go through with price increases to the tune that you mentioned that will give us some opportunities to create value and for each segment we will decide on whether that's margins or volumes if that happens and then toby

speaker
Toby van der Meer
CEO, Hastings

I can't speak for our competitors and what they will do in the second half of the year. What I can say is that we're very comfortable with our current pricing approach and the margins projected from those. And we believe there's still caution in our assumptions, both on pricing and reserving. And so we're very comfortable with where we are in going into the second half of the year. Typically, what we found over the years is that because of our pricing and fraud capabilities, that our margins are much healthier than others at any one given point in time. And therefore, what I can say is we have room to invest in the second half of the year, should we be in an environment where lots of customers are shopping around and we continue to see high price elasticities. I can't say whether our competitors are in a similar position.

speaker
Operator
Conference Operator

and therefore hard to call what the market will look like in the second half of the year but can reiterate that we're in a comfortable position going into it thank you thank you and we'll take our next question from jacko provainen of feb please go ahead good afternoon it's jacko from fb

speaker
Jacko Provainen
Analyst, FEB

A couple of questions from my side. I'll take them one by one, if I may, and start with a question on the overall CPI print in the Nordics have been well below the 4% to 5% for some time now. Are you seeing the claims inflation also moderating further, and what kind of a time lag we should expect there? And then perhaps a follow-up on this. Are you seeing rivals starting to price in already the likely moderating inflation?

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

The claims inflation, we changed the language ever so slightly this time, didn't we? We've said four to five some time ago, we said mid sort of in the middle of four to five, then it became lower part of the range four to five. And then I'm now at least orally I'm saying around four. And that is... on the basis of very very much lower pricing claims inflation for building materials and the like but like a higher for for spare parts for cars so these are very specific inflation numbers and they're always very difficult to compare to consumer price inflation the the very claims inflation is specific to insurance companies and remains will remain so will this moderate further well we have the benefit of long-term agreements, which means that it is unlikely that they will suddenly fall before the end of the year when we renew some of the biggest long-term agreements.

speaker
Jacko Provainen
Analyst, FEB

Okay, thank you. That's clear. Then Finland specifically saw fairly modest premium growth during the quarter. Have there been any changes in the market dynamics meaning perhaps more aggressive pricing of some rivals or customers becoming more active in their tendering.

speaker
Knut Arne Ahlsaker
Group CFO, Sampo Group

No, that's really not the case. The premium growth is impacting by a loss of a few larger commercial industrial clients. So it's a couple of specific cases which plays a role in a single quarter, but doesn't indicate the direction of the market.

speaker
Jacko Provainen
Analyst, FEB

Okay, thanks. Perhaps then finally on prior year gains, which you have for some time reported pretty large. Should we expect the runoff gain to moderate going forward, or are we on the levels that can be expected also in the coming quarters?

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

Not sure that I would call this pretty large, but... These are not unusual levels for us, and we keep a strong balance sheet, but we don't aim to have high prior year gains.

speaker
Knut Arne Ahlsaker
Group CFO, Sampo Group

Knut, you seem... I agree. We don't guide for prior games. I don't think there is one specific figure that is exact normal. Sometimes it's a little bit higher, sometimes it's a little bit lower. But there's nothing exceptional as such with this quarter. The levels we had in the second quarter last year was, of course, more elevated levels.

speaker
Jacko Provainen
Analyst, FEB

Okay, I understand. Thank you. That's all from my side.

speaker
Operator
Conference Operator

Thank you. And we'll now move on to our next question from Fezzan Wakani of HSBC. Please go ahead.

speaker
Fezzan Wakani
Analyst, HSBC

Thank you for taking my questions. The first one is on the financial leverage. It's rare to be close to your 30% but still below. Is there more you can do in terms of bringing that down and giving yourself greater capacity there? That's my first question. The second one is on UK claims inflation, I appreciate your comments around claim inflation are similar to your peers, but I just want to understand the drive, why do you expect inflation to still be at the sort of double digit level? What is the incremental drive against, you know, large BI sort of being okay, we're seeing used car prices come down in the UK as well, so if you could provide some sort of indication there. And the third one is just sort of more for my understanding. You know, you've been very good at managing the claims frequency in the Nordics, but you can see it's quite volatile quarter to quarter. Could you just sort of elaborate on how do you normalize for that, you know, for the underlying calculation and what are your expectations for frequency by country the rest of the year in 2025?

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

Will you start with the leverage?

speaker
Knut Arne Ahlsaker
Group CFO, Sampo Group

Start with leverage. Just to be clear on the pro forma leverage that we have in the quarterly presentation, that's, of course, including 800 million in capital deployment to take place for the next two months. It's not including the profit that we will generate in the same period. So it's just based on the... Consolidated equity as of end of June. That was more a technicality. In terms of what we can do going forward, we have some smaller maturities coming up over the next couple of years, some older senior debt. And as I mentioned, I think, sometimes before we... we would still work a little on reducing the senior debt and actually letting that mature. Then, of course, we are still not above 30%. So we don't actively try to manage down leverage from the current levels as we speak. But the possibility to let some of the senior debt that we still have mature, we obviously could take.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

Why is there claims inflation in the UK, Toby?

speaker
Toby van der Meer
CEO, Hastings

As you rightly say, there's a large number of factors that go into it and you can use car prices. The one that you picked up on is one that is looking more favourable at the moment compared to where it was last year. I guess the things that sit on the other side of the equilibrium are minimum wages and the feed through into bodily injury costs in particular. And on bodily injury, also the updates that have been made to the judicial college guidelines and further changes expected as we look ahead under under Labour government in particular. And also we've seen continued high inflation in repair costs, particularly for more complex technology and cars. And so. We do think it's an uncertain environment when you bring all of those together. And I did, I guess, comment earlier that there's some caution in our pricing, but nonetheless, we're pricing for continued inflation levels at the high single digit sort of rate.

speaker
Fezzan Wakani
Analyst, HSBC

Sorry, just quickly, are you worried about the total lost cost investigation by the FCA and any implication of inflation from that as well?

speaker
Toby van der Meer
CEO, Hastings

Yeah, good question. So the FCA are, of course, always working on a range of different industry-wide themes. Premium finance, as you'll know, ancillaries, claims service and total losses are some of the current industry-wide reviews that they're undertaking. We are awaiting the details of some of those and we've built assumptions and caution into both pricing and reserving, recognising the uncertainty in some of those regulatory dynamics. But not much more to say at this point.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

And finally, on how do you normalise claims frequencies going forward? Or in other words, how do you build a tariff? You project with statistics, the frequencies, claims for each customer segment, each brand of car, each location of a house, et cetera, et cetera. So that's a big exercise using as much data as you can and all the analysts in the house.

speaker
Fezzan Wakani
Analyst, HSBC

Sorry, just the second part of that was what are your expectations of frequency going forward?

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

Yeah, but we can't give that the frequencies are. We have been able to to predict the frequencies very well this year, and they have been no there have been no important changes since last year, as long as you adjust for the changes in the portfolio and Of course, the winter has to be taken out this year.

speaker
Fezzan Wakani
Analyst, HSBC

Thank you very much. Much appreciated.

speaker
Operator
Conference Operator

Thank you. And we'll now move on to our next question. A follow-up from Trifonis Spiro of Berenberg. Please go ahead. Trifonis, would you want to check on your mute button, please?

speaker
Tristan Spiro
Analyst, Berenberg

Oh yes, hi, hi, sorry there. My question may have been answered, but I couldn't take myself off the queue, but so I'll go ahead and ask a quick one. Can you maybe say what your previous claims inflation assumption was in the UK? Clearly that you say now it has come down from sort of 12%, but were you expecting that to be 12% or even higher in the second half of this year? And that's why you're sort of a little bit more relaxed in the pipeline. Thank you.

speaker
Torbjörn Magnusson
Group CEO, Sampo Group

That is for you, Toby.

speaker
Toby van der Meer
CEO, Hastings

Yeah, we did see 12% claims inflation last year. We then moderated and adjusted our assumptions going forward. And what I can just repeat is that the claims inflation we've seen in the first half of the year has been more benign than we had expected and priced for.

speaker
Tristan Spiro
Analyst, Berenberg

Thank you.

speaker
Operator
Conference Operator

Thank you. We have no further questions in queue currently. As a final reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. There are no further questions coming through. I will now hand it back to your host for closing remarks. Thank you.

speaker
Sami Taipulus
Head of Investor Relations, Sampo Group

Great. Thank you everyone for listening in today.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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