Sampo Oyj

Good afternoon, everyone, and welcome to this Sampo Group conference call on our third quarter 2024 results. My name is Sami Taipulus, and I am Head of Investor Relations at Sampo. On the call with me today, I have Group CEO Torbjörn Magnusson, Group CFO Knut-Anne Ahlsaker, CEO of IF, Morten Torsrud, and CEO of Hastings, Tobbe van der Meer. The call will feature a short presentation from Torbjörn, followed by Q&A. The call will be recorded, and a recording will later be available on Sampo.com. With that, I hand over to Torbjörn.

Thanks, Sami, and good afternoon, everyone. Much of Sampo's success and stability over the past decade has been built on continuous and constant deliveries of Nordic synergies. Our organization is used to always working with finding the next process and system to optimize cross-border, and then the next, and then the next. And there's considerable optimism and energy in the organization now that we get the new opportunities to employ our pan-Nordic structure with Top Danmark. It certainly also gives us new business opportunities locally in Denmark, where our presence has been too small in history. And diversification improves with all of this, of course. The integration process has started at high speed. A joint Nordic management team is in place. And both the regular customer service and the synergies work is run by the people who will be measured by the results. We will report first on integration costs in Q4 and then from the first quarter next year on synergy realization. There are no new numbers on this slide, only a few weeks after the integration started, of course. From a more legalistic perspective, the squeezing out of the last remaining shares has been completed and top 10 mark is delisted. Today, we also take the next formal step in the process by selling Top Denmark from Sampo to FPNC, and we expect the legal integration work to be complete sometime mid-next year. Since the acquisition has been so much discussed over the years, it's tempting for me to mainly talk about it, but however, it's still a limited change to Sampo's structure, so let's turn to the very solid performance of our regular business. Overall, nine-month underwriting profits increased by 8%, driven both by good developments in the number of customers and rates. The development is better than our target, despite the challenging winter this year in the Nordics, as well as more losses than normal, large losses than normal. We will always have a little volatility in our quarterly numbers, less so in the annual ones, and Q3 2023 contained rather bad weather. so I'll abstain from commenting on the face value quarterly improvements. Both our Nordic and our UK businesses are running at very good speed since some time. In the UK first, even though this year we are a little helped by a supportive market in general, our timing has been excellent and we have been able to exploit the fact that our profit level is much better than average and the total live policies count is up by 11% year on year. The extraordinary premium growth numbers for the UK in general will of course fade for the market as a whole in the coming period, but we are still very well placed to reap profits as well as customer growth from the good work in the past year. The UK market behavior so far this year is quite rational. gradually reflecting lower frequencies and moderating severities, rather than a few aggressive optimists changing market behavior or anything like that. I finally think that the doubled profits before taxes for Hastings with cautious reserve bookings speak for themselves. Second, turning to the Nordics, we have solid growth in our prioritized segments. For instance, 11% in personal risks, 6 in property and 10 in private online sales. These segments make up some 40% of FPNC. The total is moderated again by some of the lowest car sales in a decade and the fact that workers' comp premiums in Finland come down a bit when the economy is slow. At the moment, I see no trend towards lower growth numbers, especially since our 89% retention for private lines holds up really well. The only more important change in the Nordic market, I think, is the continuous change to digital direct sales and services over the years. Price comparison websites have not been able to gain any important foothold at all. Claims inflation is very gradually moderating, now 4% on average, more in motor, less in property. But our expectation is not that it will reach lower in the very near future. And our pricing reflects this. There are variations between geographies and sub-segments, of course, as usual, but we're able to price for at least claims inflation. Since this is the first time Top Danmark is not reporting separately, let me also just very briefly comment that it's pleasing to see Top Danmark contributing better to growth now than in the early 2020s. Organic growth of 7.5% plus the owner health acquisition. That's quite good numbers. And a bit of weather in Denmark this quarter. Some rate increases in motor is all business as usual for top Denmark. There's always a lot going on in our group in terms of underwriting services, and I seldom comment on specific actions. Let me this time make an exception and mention two key topics. The first one has to do with our dislike for volatility. As you are aware, the large corporate market has been improving rates-wise for a few years, driven by us and by others, and we have been able to get much better attritional loss ratios from this. Large losses are, of course, more random to their nature, but in the present market, we're now able to be selective in our choices of the largest risks or in the line sizes we take there. reducing volatility without sacrificing our leadership in this segment. This exercise has been going on since the beginning of the year and has worked out as planned. This does not mean that we will never, ever have any negative large loss deviations, but the volatility will definitely be reduced. On the right-hand side of this slide, another key action, We have made a special study, again, of profitability and working with electric vehicles. This type of car is now making up some 11% of our motor book in the Nordics, so no longer small. And the work underlines the importance of pricing with all information for these vehicles, just as for all other types of engines. This information that you need to use, of course, includes the age of the car, where the car is driven, the individual brands and model, and much, much more. Since several years, we have the same profitability targets for EVs as for combustion engines and hybrids. And the very firm conclusion, as you can actually see from the graph here, is that we have the same profitability for EVs as for other cars since several years. So, in summary, the third quarter of 2024 was a financially stable quarter with continued very positive momentum in the Nordics and accelerated growth in the UK. Finally, it was also a quarter when we completed Sampo's transformation that we initiated in 2020. And with that, Sami, we open up for questions.

Yes, that concludes the introduction and let's move over to the Q&A section of the call.