Half-Year Financial Report 2022

HALF-YEAR FINANCIAL REPORT FOR JANUARY-JUNE 2022

Contents
Summary..........................................................................................................................................................................................	3
Second quarter 2022 in brief ..................................................................................................................................................	6
Group CEO's comment...............................................................................................................................................................	7
Outlook.............................................................................................................................................................................................	8
Outlook for 2022...........................................................................................................................................................................	8
The major risks and uncertainties for the Group in thenear-term..............................................................................	8
Business areas ...............................................................................................................................................................................	9
If ..........................................................................................................................................................................................................	9
Topdanmark....................................................................................................................................................................................	12
Hastings............................................................................................................................................................................................	13
Mandatum........................................................................................................................................................................................	14
Holding..............................................................................................................................................................................................	15
Other developments ...................................................................................................................................................................	16
Exit from Nordea...........................................................................................................................................................................	16
Retuof excess capital .............................................................................................................................................................	16
Group solvency..............................................................................................................................................................................	16
Financial leverage position........................................................................................................................................................	16
Ratings..............................................................................................................................................................................................	17
Shares and shareholders ............................................................................................................................................................	17
Annual General Meeting .............................................................................................................................................................	18
Effects of external events on Sampo Group .......................................................................................................................	18
Remuneration.................................................................................................................................................................................	19
Personnel .........................................................................................................................................................................................	19
Events after the end of the reporting period......................................................................................................................	20
Tables................................................................................................................................................................................................	21
Group financial review.................................................................................................................................................................	21
Calculation of key figures...........................................................................................................................................................	23
Group quarterly comprehensive income statement.........................................................................................................	25
Statement of profit and other comprehensive income ...................................................................................................	26
Consolidated balance sheet ......................................................................................................................................................	27
Statement of changes in equity...............................................................................................................................................	28
Statement of cash flows .............................................................................................................................................................	29
Notes .................................................................................................................................................................................................	30
Accounting policies......................................................................................................................................................................	30
Comprehensive income statement by segment for six months ended 30 June 2022.........................................	33
Comprehensive income statement by segment for six months ended 30 June 2021..........................................	34
Consolidated balance sheet by segment at 30 June 2022............................................................................................	35
Consolidated balance sheet by segment at 31 December 2021 ...................................................................................	36
Other notes.....................................................................................................................................................................................	37
1 Insurance premiums written...................................................................................................................................................	37
2 Net income from investments...............................................................................................................................................	38
3 Other operating income..........................................................................................................................................................	39
4 Claims incurred ..........................................................................................................................................................................	39
5 Staff costs ....................................................................................................................................................................................	40
6 Intangible assets........................................................................................................................................................................	40
7 Financial assets ..........................................................................................................................................................................	41
8 Derivative financial instruments..........................................................................................................................................	41
9 Determination and hierarchy of fair values......................................................................................................................	42
10 Movements in level 3 financial instruments measured at fair value ......................................................................	48
11 Liabilities for insurance and investment contracts .......................................................................................................	50
12 Liabilities fromunit-linkedinsurance and investment contracts ............................................................................	50
13 Financial liabilities....................................................................................................................................................................	50
14 Contingent liabilities and commitments..........................................................................................................................	52
15Non-currentassets held for sale .......................................................................................................................................	53
16 Subsequent events after the balance sheet date.........................................................................................................	53

HALF-YEAR FINANCIAL REPORT FOR JANUARY-JUNE 2022

3 August 2022

Sampo Group's results for

January-June 2022

Group P&C gross written premiums grew by 7 per cent year-on-year, supported by strong renewals, high retention and rate actions.
The Group combined ratio stood strong at 81.1 per cent (80.7).
Underwriting profit increased by 3 per cent to EUR 679 million (658). Excluding COVID-19 effects reported in the first half of 2021, underwriting profit grew 17 per cent.
Profit before taxes amounted to EUR 1,066 million (1,343) and earnings per share to EUR 1.61 (1.80). Excluding all Nordea-related items, profit before taxes was EUR 806 million (983).
Group Solvency II coverage including dividend accrual increased to 233 per cent (185), driven by strong underwriting profits, the Nordea-exit and higher interest rates.
A new share buyback programme of EUR 1 billion was launched in June 2022, following the completion of the previous programmes of EUR 750 million and EUR 228 million.

Key figures

EURm	1-6/2022	1-6/2021	Change, %	4-6/2022	4-6/2021	Change, %

Profit before taxes	1,066	1,343	-21	499	710	-30
If	662	566	17	379	309	23
Topdanmark	60	208	-71	23	71	-68
Hastings	25	85	-70	23	38	-41
Mandatum	116	141	-18	35	65	-46
Holding	203	343	-41	40	227	-83
Profit for the period	897	1,112	-19	414	586	-29
Underwriting profit	679	658	3	389	341	14
			Change			Change
Earnings per share, EUR	1.61	1.80	-0.19	0.75	0.99	-0.24
EPS (without eo. items), EUR *)	1.42	1.64	-0.22	0.61	0.82	-0.21
EPS (including OCI), EUR **)	-0.69	2.66	-3.35	-0.57	1.27	-1.63
RoE (including OCI), %	-6.7	25.2	-31.9	-	-	-

*) Nordea-related accounting effects of EUR 103 million in January-June 2022 have been defined as extraordinary items in accordance with Sampo Group's dividend policy. The comparison figures included extraordinary items of EUR 93 million.

**) OCI refers to Other comprehensive income. The figures in this report have not been audited.

Sampo Group financial targets for 2021-2023

	Target	1-6/2022

	Mid-single digit UW profit growth annually on	3% (17% excluding reported COVID-19 effects in
	average (excluding COVID-19 effects)	H1/2021)

Group	Group combined ratio: below 86%	81.1%

	Solvency ratio: 170-190%	245% (233% including dividend accrual)

	Financial leverage: below 30%	29.2%

If	Combined ratio: below 85%	78.9%
Hastings	Operating ratio: below 88%	88.6%

Loss ratio: below 76%	75.4%

Financial targets for 2021-2023 announced at the Capital Markets Day on 24 February 2021.

January-June 2022 effects related to the COVID-19 pandemic have been very limited; hence, these will not be reported separately. For further information, please see section Other developments.

HALF-YEAR FINANCIAL REPORT FOR JANUARY-JUNE 2022

SUMMARY

Financial highlights for January-June 2022

Sampo Group's core business, P&C insurance continued its strong performance and achieved an underwriting profit of EUR 679 million (658) in January-June 2022. Underwriting profit growth was 3 per cent year-on-year or 17 per cent adjusted for COVID-19 effects reported in the first half of 2021. The Group combined ratio was strong at 81.1 per cent (80.7), supported by solid underlying development and higher discount rates. The increase on prior year was driven by the unwind of COVID-19 effects, excluding which the combined ratio would have improved by 1.7 percentage points year-on-year. Gross written premiums increased by 7 per cent to EUR 4,769 million, supported by strong renewals, high retention and rate actions across the business, but particularly in Industrial lines. Sampo targets mid-single digit per cent underwriting profit growth on average and a combined ratio below 86 per cent for 2021-2023.

If P&C had a robust first half as its underwriting profit increased by 18 per cent year-on-year to EUR 522 million (442). The growth was driven by 2.2 percentage points improvement in the combined ratio to 78.9 per cent (81.1) and currency adjusted premium growth of 7.5 per cent. Premium development was supported by broad based growth, with Industrial and the Baltics seeing particularly notable positive development. If's adjusted risk ratio improved by 0.6 percentage points year-on-year and profit before taxes increased to EUR 662 million (566).

Topdanmark's profit before taxes decreased to EUR 60 million (208) in Sampo Group's profit and loss account, mainly driven by investment returns being affected by the challenging market environment. The combined ratio was 84.2 per cent (82.2).

Hastings has remained disciplined in a challenging UK motor insurance market in which pricing is not keeping up with elevated market wide claims inflation. As a result, overall policy count remained broadly stable over the first half at 3.2 million, despite 22 per cent growth in the home insurance book where the company is strongly positioned. Gross written premiums grew by 6 per cent on a currency adjusted basis as Hastings increased prices to cover claims inflation. The operating ratio increased to 88.6 per cent (76.5), driven by the unwind of COVID-19 effects and high claims inflation. Hastings' profit before taxes excluding non-operational amortisation amounted to EUR 55 million (105) and reported profit before taxes was EUR 25 million (85).

Mandatum segment's profit before taxes for the first half of 2022 decreased to EUR 116 million (141), as the investment result was adversely affected by a reduction in realised gains. Despite positive net flows of

EUR 254 million, lower market values led to a decline in Mandatum's unit-linked and other client assets under management to EUR 10.3 billion from EUR 11.1 billion at the year-end 2021 and EUR 10.9 billion at the end of the first quarter. Mandatum Life's Solvency II ratio grew to 255 per cent (190), driven by a sharply decreased solvency capital requirement.

Holding segment's profit before taxes amounted to EUR 203 million (343), including a dividend of EUR 157 million from Nordea and a gain of EUR 103 million from selling all the remaining Nordea shares during the first half of 2022.

On 9 June 2022, Sampo launched a third buyback programme of EUR 1 billion, starting on 10 June and ending no later than 8 February 2023. In addition Sampo announced that management intends to propose to the Board of Directors a second distribution of capital in the form of a share buyback programme or extra dividend, or a combination thereof, in connection with the publication of the 2022 financial result. Prior to the launch of the latest buyback programme, Sampo had already completed its first two buyback programmes. In total, Sampo repurchased 15.7 million shares for a total of EUR 687 million in the first half.

Sampo Group's Solvency II ratio increased to 233 per cent from 185 per cent at the end of 2021 and 200 per cent at the end of March 2022, net of dividend accrual based on the 2021 insurance dividend of EUR 1.70 per share and the new buyback programme of EUR 1 billion. The increase of 33 percentage points from the end of the first quarter was driven by robust underwriting profit, the Nordea-exit and higher interest rates. Sampo targets a solvency ratio of 170-190 per cent.

HALF-YEAR FINANCIAL REPORT FOR JANUARY-JUNE 2022

SUMMARY

Sampo Group's financial leverage increased to 29.2 per cent from 23.8 per cent at the end of 2021 and 24.8 per cent at the end of March 2022. The increase was driven by the payment of the annual dividend, executed share buybacks and adverse asset value development taken through other comprehensive income. Sampo targets a financial leverage below 30 per cent.

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Sampo Oyj published this content on 03 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2022 06:42:53 UTC.

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