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Sampo Oyj: Sampo Group's Interim Report for January - March 2014

SAMPO PLC INTERIM REPORT 7 May 2014 at 9.30 am


Sampo Group's profit before taxes for January - March 2014 rose to EUR 396
million (370). The total comprehensive income for the period, taking changes
in the market value of assets into account, decreased to EUR 374 million

* Earnings per share was EUR 0.63 (0.57) and mark-to-market EPS amounted to
EUR 0.66 per share (0.88). The return on equity for the Group was 13.7 per
cent for the period (19.1).
* Net asset value per share on 31 March 2014 rose to EUR 24.06 (22.15) and
the fair value reserve after tax on the Group level strengthened to EUR
1,026 million (960).
* The combined ratio of the P&C insurance operations for January - March 2014
improved to 90.3 per cent (90.9) which is the best ever first quarter
combined ratio in If's history. The profit before taxes amounted to EUR 194
million (204). Comprehensive income for the period decreased to EUR 209
million (279) and return on equity was 27.5 per cent (39.2).
* Nordea is accounted for as an associated company and Sampo's share of
Nordea's profit for January - March 2014 was EUR 170 million (162).
* Profit before taxes for the life insurance operations amounted to EUR 37
million (36). The interest rate used to discount with profit liabilities in
2014 was lowered to 2 per cent and the rate used in 2015 to 2.25 per cent.
The comprehensive income decreased to EUR 18 million (66). The return on
equity at market value was 6.1 per cent (22.4).

|KEY FIGURES 1-3/2014 1-3/2013 Change, % |
|EURm |
|Profit before taxes 396 370 7 |
|P&C insurance 194 204 -5 |
|Associate (Nordea) 170 162 5 |
|Life insurance 37 36 4 |
|Holding (excl. Nordea) -4 -30 -87 |
|Profit for the period 351 320 9 |
| Change |
|Earnings per share, EUR 0.63 0.57 0.06 |
|EPS (incl. change in FVR) EUR 0.66 0.88 -0.22 |
|NAV per share, EUR *) 24.06 22.15 1.91 |
|Average number of staff (FTE) 6,731 6,787 -56 |
|Group solvency ratio, % *) 182.9 184.4 -1.5 |
|RoE, % 13.7 19.1 -5.4 |
*) comparison figure from 31.12.2013

The figures in this report are not audited. Income statement items are
compared on a year-on-year basis whereas comparison figures for balance sheet
items are from 31 December 2013 unless otherwise stated.

The average EUR-SEK exchange rate used for income statement items for January
- March 2014 is 8.8598 and the end of period exchange rate used for balance
sheet items is 8.9483. For January - March 2013 the corresponding exchange
rates used were 8.4955 and 8.3553, respectively.

Sampo follows the disclosure procedure enabled by the Finnish Financial
Supervisory Authority and hereby publishes its Interim Report attached as a
PDF file to this stock exchange release. The Interim Report is also available


P&C insurance

Profit before taxes for P&C insurance decreased to EUR 194 million (204) for
January - March 2014. Combined ratio amounted to 90.3 per cent (90.9). Risk
ratio decreased 0.1 percentage points and cost ratio 0.5 percentage points.
EUR 6 million (14) was released from technical reserves relating to prior
year claims.

Return on equity (RoE) decreased to 27.5 per cent (39.2) and fair value
reserve on 31 March 2014 increased from the end of 2013 to EUR 548 million

Topdanmark's profit contribution for the first quarter of 2014 was EUR 11
million (16). On 31 March 2014 If P&C held 31,476,920 Topdanmark shares,
corresponding to over 25 per cent of all shares. All Topdanmark shares held
by Sampo Group are concentrated in If P&C Insurance Holding Ltd (publ).

Due to the mild winter the frequencies were generally low. Combined ratio for
business area Industrial was negatively impacted by two large property claims
in Sweden. All in all the negative effect from large claims was more than 7
percentage points in the combined ratio for business area Industrial. The
development in Denmark was benign because of fewer large claims and improved
cost efficiency. In business area Baltic the mild winter decreased claims
frequency. All in all large claims costs for the whole If Group did not
deviate from the expected in January-March 2014.

Gross written premiums decreased EUR 1,714 million (1,775) because of the
currency movements. Adjusted for currency, premiums rose 1.7 per cent. All
business areas except business area Industrial had positive growth. Cost
ratio improved to 22.8 per cent (23.3) and expense ratio improved 0.2
percentage points to 16.8 per cent.

On 31 March 2014 the total investment assets of If P&C amounted to EUR 11.9
billion (11.7). Net income from investments amounted to EUR 81 million (92).
Investment return mark-to-market for January-March 2014 was 1.7 per cent
(1.4). Duration for interest bearing assets was 1.2 years (1.3) and average
maturity 2.2 years (2.3). Fixed income running yield was 2.8 per cent (3.4).

Associated company Nordea Bank AB

On 31 March 2014 Sampo plc held 860,440,497 Nordea shares corresponding to a
holding of 21.2 per cent. The average price paid per share amounted to EUR
6.46 and the book value in the Group accounts was EUR 7.78 per share. The
closing price as at end of March 2014 was EUR 10.26. Nordea is accounted as
an associated company in Sampo Group's accounts.

The following text is based on Nordea's January - March 2014 interim report on
29 April 2014.

Net interest income was down 2 per cent compared to the previous quarter to
EUR 1,362 million, mainly due to two less banking days in the first quarter
compared to the previous one. In local currencies, net interest income was
down 1 per cent.

Net fee and commission income was unchanged compared to the previous quarter
at EUR 704 million, with a maintained stable and strong contribution from
savings and investments and with an increase in lending-related commissions.

The net result from items at fair value increased 23 per cent from the
previous quarter to EUR 411 million.

Total expenses amounted to EUR 1,237 million, down 3 per cent from the
previous quarter in local currencies, mainly due to seasonality.
Cost-efficiency measures have proceeded according to plan in the first
quarter. An annualised gross reduction in total expenses of EUR 45 million
has been conducted in the first quarter and EUR 255 million from the
beginning of 2013.

Net loan loss provisions were EUR 158 million in the continuing operations and
the loan loss ratio was 18 basis points (EUR 180 million or 21 basis points
in the previous quarter).

Operating profit was up 10 per cent for the continuing operations to EUR 1,106
million. Net profit from the total operations was largely unchanged at EUR
831 million.

The Group's fully loaded Basel III Common equity tier 1 (CET1) capital ratio
increased to 14.6 per cent at the end of the first quarter from 13.9 per cent
at the end of the fourth quarter, following strong profit generation and the
advanced IRB approval for the Nordic corporate portfolio.

Further information on Nordea Bank AB and its January - March 2014 result is

Life insurance

Profit before taxes in life insurance for January-March 2014 amounted to EUR
37 million (36). The interest rate used to discount all with profit
liabilities in 2014 was lowered to 2 per cent and the discount rate for 2015
to 2.25 per cent. The amount used to lower the discount rate was increased by
EUR 12 million in the first quarter of 2014. All in all, Mandatum Life has
increased its technical reserves with a total of EUR 158 million due to low
level of interest rates.

Return on equity (RoE) amounted to 6.1 per cent (22.4). The total
comprehensive income for the period, taking changes in the market value of
assets into account, was EUR 18 million (66).

Premium income decreased 7 per cent to EUR 244 million (262) and the overall
market share in Finland dropped to 15.8 per cent (18.2).

Investment return mark-to-market for the first quarter of 2014 was 1.1 per
cent (2.3). The fair value reserve decreased to EUR 480 million (492). At the
end of March 2014 the duration of fixed income assets was 1.8 years (1.8) and
average maturity 2.1 years (2.2). Fixed income running yield was 3.7 per cent
(4.4) as a result of lower reinvestment yields.

The expense result continued to develop favorably in the first quarter of 2014
and rose to EUR 4 million (1). The risk result decreased to EUR 4 million (7)
in the same period.

On 19 March 2014 Mandatum Life Insurance Company and Suomi Mutual Life
Assurance Company announced that they have agreed on the transfer of Suomi
Mutual's with-profit group pension portfolio to Mandatum Life. The portfolio
transfer is scheduled to take place on 30 December 2014. The final amount of
transferred assets will be established in connection with the transfer, but
it is estimated to have been around EUR 1.3 billion on 31 December 2013. The
transfer requires the approval of both companies' Annual General Meetings and
the consent of the Financial Supervisory Authority. The Annual General
Meetings of Mandatum Life and Suomi Mutual will be held on 7 May 2014.


The segment's profit before taxes amounted to EUR 166 million (132), of which
EUR 170 million (162) comes from Sampo's share of Nordea's January - March
2014 profit. The segment, excluding share of Nordea's profit, reported a loss
of EUR 4 million (-30). The decrease in finance costs was due to the
depreciation of Swedish krona and lower swap rates.

Sampo plc's debt financing on 31 March 2014 amounted to EUR 2,009 million
(2,027) and interest bearing assets to EUR 1,176 million (980). Interest
bearing assets include bank accounts and EUR 352 million of hybrid capital
issued by the subsidiaries and associates. During the first quarter of 2014
the net debt decreased EUR 216 million to EUR 833 million (1,048). The net
debt was further reduced when Nordea dividend was received on 1 April 2014.
Gross debt to Sampo plc's equity was 27 per cent (29).

As at 31 March 2014 financial liabilities in Sampo plc's balance sheet
consisted of issued senior bonds and notes of EUR 1,711 million (1,720) and
EUR 298 million (308) of outstanding CPs issued. The aver...

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