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Edited Transcript of SAMAS.HE earnings conference call or presentation 6-Feb-20 2:00pm GMT

Q4 2019 Sampo plc Earnings Call

Turku Feb 14, 2020 (Thomson StreetEvents) -- Edited Transcript of Sampo plc earnings conference call or presentation Thursday, February 6, 2020 at 2:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Jarmo Salonen

Sampo Oyj - Head of IR & Group Communications

* Knut Arne Alsaker

Sampo Oyj - CFO & Member of Group Executive Committee

* Morten Thorsrud

If P&C Insurance AS - CEO

* Torbjörn Magnusson

Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee

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Conference Call Participants

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* Blair Thomson Stewart

BofA Merrill Lynch, Research Division - Head of the UK and European Insurance

* Jakob Brink

Nordea Markets, Research Division - Senior Analyst & Sector Coordinator

* Jan Erik Gjerland

ABG Sundal Collier Holding ASA, Research Division - Research Analyst

* Matti Ahokas

Danske Bank Markets Equity Research - Head of Equity Research of Finland

* Niccolo Cornelis Modesto Dalla-Palma

Exane BNP Paribas, Research Division - Research Analyst

* Sami Taipalus

Goldman Sachs Group Inc., Research Division - Research Analyst

* Teik L. Goh

Citigroup Inc, Research Division - Associate

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Presentation

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Jarmo Salonen, Sampo Oyj - Head of IR & Group Communications [1]

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Ladies and gentlemen, welcome to this call on Sampo Group's 2019 results. I'm Jarmo Salonen, Head of Investor Relations at Sampo. And with me at this call, I have our group CEO, Torbjörn Magnusson; Head of P&C Insurance, CEO of If, Morten Thorsrud; and Group's CFO, Knut Arne Alsaker. Torbjörn will start with a brief presentation of the developments in Q4 and 2019. But before handing over to him, let me remind you that you can follow this call, sampo.com/results, and a recorded version will later be available at that same address. With these words, I'll hand over to Torbjörn. Torbjörn, please.

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [2]

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Thank you, Jarmo. This is the first time I present Sampo's results as Group CEO, and I'm pleased to be able to present a strong last quarter for 2019 with successful developments in all our business areas as well as in our investment operations. First and foremost, the P&C operations continue to excel at underwriting. The stability in combined ratio is the second to none as usual. In addition to this, the combination of a very low and all the time improving cost ratio, together with large investments in digital services, has also produced record growth for If P&C, over 5% growth for the full year. And the company is in a very strong position indeed in its markets at the moment.

Topdanmark, our other P&C asset, had another strong year with a combined ratio of 84% for the full year. The company is very efficient, and it's rapidly building more digital services in the Danish market. In 2020, we will see the benefits of the distribution agreement with Nordea come into play also for Topdanmark.

All our insurance operations, not least Mandatum, were helped by the favorable equity markets last year. Mandatum's unit-linked savings reached an all-time high last year as equity values appreciated substantially. At the same time, efforts to speed up the shrinking of the with profit book bore fruit, and the book is now some EUR 300 million, smaller than a year ago.

A word or 2 on Nordea. Nordea has gone through a protracted period of difficulties and now has new management and new targets. As owners, it's gratifying to see that the new management shows a great deal of determination to work towards the new targets. And the results this morning were a first step in the right direction. One quarter is, of course, a very short time period, but still, the Q4 results included the progress on capital, progress on costs and high-quality income that looks very encouraging.

Now to our dividend proposal and the new dividend policy. As we said in October, we were expecting to propose to the Board a dividend of EUR 2.10 to EUR 2.30 per share, and the Board planned to review our dividend policy in early February. The Board has now decided to propose a dividend of EUR 2.20 and has reviewed and updated our dividend policy.

I'd like to provide some context to the dividend policy from my perspective. First of all, as a management team, we remain committed to an attractive dividend, and our dividend policy reflects that. We are focused on creating shareholder value and believe that it's best done over time by increasing the earnings of our operations and our holdings which, in turn, ultimately underpin the dividends to our shareholders. Consequently, it makes sense to link our dividend to earnings, and we wanted to acknowledge that by updating our dividend policy and committing to a payout that it increased from the previous at least 50% to at least 70%.

Finally, an important part of the jigsaw. We have today also announced an updated outlook for our operations, and our business profile and returns support the new dividend policy, obviously, I might say. And from here, we look forward to growing our earnings and, with that, to paying an attractive dividend.

The completed succession at Sampo is, of course, a very continuous one. All positions were filled internally. The management team has deep knowledge and skills in the financial sector with an emphasis on insurance. The world around us will offer both challenges and opportunities in the period to come. And the team looks forward to using these skills and the possibilities given by the balance sheet for the benefit of our shareholders.

And with that, I hand back to you, Jarmo.

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Jarmo Salonen, Sampo Oyj - Head of IR & Group Communications [3]

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Thank you, Torbjörn. And operator, we are now ready for the questions, please.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our question is from Matti Ahokas from Danske Bank.

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Matti Ahokas, Danske Bank Markets Equity Research - Head of Equity Research of Finland [2]

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It's Matti Ahokas from Danske Bank. Two questions, please. Firstly, Torbjörn, you mentioned last year, I believe, that you wanted to see Sampo -- and you see Sampo more as an insurance-focused group. And some people have interpreted this that you might be considering divesting the Nordea stake. What's your take on this?

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [3]

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Pretty awkward timing to ask that, I guess, today, Matti. I was very pleased the new targets in the autumn, I was very much part of that. Today is a very strong step in the right direction. And I'm certainly not thinking about divesting the stake.

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Matti Ahokas, Danske Bank Markets Equity Research - Head of Equity Research of Finland [4]

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That's very clear. The second question is on the nonlife business and especially the business in Sweden, we've seen quite turbulent new car sales, and you obviously have a fairly big exposure to the motor insurance segment. Would you say that now in Q4, the situation has normalized? Or are still -- are we still seeing the kind of ripple effect from the tax changes that we had in 2018? And how should we look at the motor insurance in Sweden in 2020?

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Morten Thorsrud, If P&C Insurance AS - CEO [5]

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Yes. Morten Thorsrud here. I think if you look at the car sales in Sweden for 2019 as a whole, it's actually quite stable compared to 2018. However, we've seen quite some movement from quarter-to-quarter. And in the fourth quarter, new car sales in Sweden was up by some 50% compared to fourth quarter 2018. So I think depending on tax changes. Of course, you can see these changes from kind of one quarter to another. But I think it's more fair to look upon this on a full year basis. And then you see quite a stable situation actually.

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Matti Ahokas, Danske Bank Markets Equity Research - Head of Equity Research of Finland [6]

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And they should continue into 2020 as well.

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Morten Thorsrud, If P&C Insurance AS - CEO [7]

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That's hard to predict. But I think 2018, 2019, fairly stable development in terms of new car sales at least.

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Operator [8]

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Our next question is from Sami Taipalus from Goldman Sachs.

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Sami Taipalus, Goldman Sachs Group Inc., Research Division - Research Analyst [9]

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Sami from Goldman Sachs here. So my first question, just coming back to the dividend policy. It also mentions buybacks. I'm interested to know what the parameters you'd look at here on the buyback side. Is this linked to capital or exit earnings? Or what are the things that might trigger a buyback? And then my second question is on the industrial P&C business. Could you comment a little bit on what you saw at the 1st of January renewals here? And second, also related to this, I think you've said before that it's a business that you're interested in longer term. But given that some of your peers appear to be -- have plans to pull back a bit, do you see a chance to potentially take a bit of market share here?

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [10]

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The buyback. We're, as a management team, committed to paying an attractive dividend. And we believe that our owners are interested in that. Buybacks in the history of Sampo has been used very infrequently. I think the last time was probably 2011 maybe, when the share price was very weak.

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Sami Taipalus, Goldman Sachs Group Inc., Research Division - Research Analyst [11]

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Okay. So are you saying that this is something that you would only -- the trigger for this would only be a weak share price? Or are there other potential triggers as well?

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [12]

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That's obviously a Board decision, but that would be my expectation.

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Morten Thorsrud, If P&C Insurance AS - CEO [13]

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On your question on industrial growth, Sami, what we saw last year was quite a good combination with increased volume stemming from increased turnover with key clients, increased shares on some of the more structured [NAV] programs that we participate at. We clearly saw some price increases in the large corporate segment, and we had a record high retention in that segment. When it comes to new sales, it was more of a normal situation. But those are the very positive factors, the very positive outcome in terms of growth for industrial in 2019. And we pretty much see in the same development when looking at the first development -- the first renewal. So quite a favorable development in the industrial market. Of course, needless to say, with these growth rates, just now we are somewhat growing market share. But of course, if you look upon this over the longer period, we've been going up and down in volume here.

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Sami Taipalus, Goldman Sachs Group Inc., Research Division - Research Analyst [14]

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Okay. But you're happy with the returns, obviously, that you're getting in the market given that you're willing to take on a bit more volume.

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Operator [15]

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Okay. Our next question is from [Michael Hoffman].

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Unidentified Analyst, [16]

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The questions -- the first one is on the stakes. You mentioned more insurance, you've got the list of stakes you built up mostly in banking and payments apart from the Viking deal which is in the [season one]. So I just wondered if there's a change there, if you're going to stop doing these more banking stakes or going to sell them or -- just to get a feel for that. And the other one is on the remittance from Mandatum. So excluding the one-off in 2018, that remittance is flat. In the past, you said that reducing back book means that you can have less allocated capital to Mandatum. So I would have -- expect is the wrong word, but I was kind of thinking, maybe you could say just Mandatum could have paid more to the parent, and I just wondered if there's a moving part I'm not seeing.

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Knut Arne Alsaker, Sampo Oyj - CFO & Member of Group Executive Committee [17]

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Michael, it's Knut Arne Alsaker here. On the first part, in terms of the investment portfolio in the holding company, it had, as you will have seen from the changes in the fair value reserve, in the comprehensive income by segment in our report, a really good year in 2019. So the return was strong. And obviously, we could, at one point in time, decide to sell and take some profit also in that portfolio as we do in other investment portfolios throughout the group.

When it comes to Mandatum, I'm not exactly sure I got your question, but the release of capital from the runoff of the with profit book is still happening, so to speak. We released more than EUR 200 million last year of the highest guaranteed products and then also some additional of lower guaranteed products. And that did release capital to the tune of 100 and -- between EUR 100 million and EUR 150 million. There is no change there. The possibility for us to pay dividends from Mandatum remains. And we said that we expect Mandatum to pay a dividend now in March of EUR 150 million, which was about in line with what we expected it to do when we started 2019. So everything according to plan in Mandatum when it comes to the capital release and the dividend for the last year.

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Operator [18]

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Next question is from Blair Stewart from Bank of America.

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Blair Thomson Stewart, BofA Merrill Lynch, Research Division - Head of the UK and European Insurance [19]

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First question on our favorite topic of underlying combined ratio, Torbjörn, the adjustments that we can make from the disclosures we get suggest that for the full year, the underlying combined ratio was broadly stable. And in Q4, it looks like it deteriorated a little. I wonder if you can just give us a little bit of color on that. I know we're not able to do all the adjustments that would be necessary, but one would have expected there was -- this pricing at or better than the claims inflation that, that might have improved. And secondly, just interested in your comments around Denmark. With the rollout of the new systems, what impact that might have on that business going forward? And then finally, just on growth outlook, the growth, I think, 5.7% and higher than that in Q4 [discrete] is impressive. I wonder if you expect that going into this year as well.

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [20]

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I'll take the middle one and then give you a better shot than with me on the underlying combined ratio with Morten. But on Topdanmark's new systems, I don't think that we should see that as a revolution around the corner. But the Danish market is very -- has been very slow at picking up Internet web sales services. And Topdanmark has not invested enough to lead the market there and are investing heavily in that. And you will see this year, for instance, a number of products being made available on the web there. So it's a gradual development, but we're investing quite a lot -- or Topdanmark is.

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Blair Thomson Stewart, BofA Merrill Lynch, Research Division - Head of the UK and European Insurance [21]

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Sorry, Torbjörn, is it only in [proper]? Or is it also in your own Danish operations that the IT investment's increasing?

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Morten Thorsrud, If P&C Insurance AS - CEO [22]

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Yes, I can comment on that. We are rolling out the -- a new base system and currently doing that partially in Sweden and also starting up in Denmark. So that means that in Denmark, we have a little bit deep -- you could say that we have a little bit of double IT costs right now kind of still having to maintain the old legacy systems and then, at the same time, rolling out a new core system. Then to your other questions, I guess, the topic of underlying improvement is probably one of your favorites, perhaps not necessarily ours. I think...

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Blair Thomson Stewart, BofA Merrill Lynch, Research Division - Head of the UK and European Insurance [23]

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No, probably I loved talking about it in the past. So I'm hoping for a good answer from you.

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Morten Thorsrud, If P&C Insurance AS - CEO [24]

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No, but I think it -- there are so many moving parts. So it's kind of really hard to do a proper statement on that. I think we are really happy about the current profitability level, delivering 84.5% in combined ratio. We see a good competitive situation. We have said throughout 2019 that we are pricing somewhat above inflation, mainly due to the fact that there is a bit of repricing within the Commercial segment. So I think that's what we can say about it. We have, also as you've seen, published an outlook for 2020, which is 1% lower than the outlook that we published at the same period last year.

Then finally, to your question about growth. We report, as we mentioned, 5.7% growth in 2019 for the full year and then 8.5% for the fourth quarter stand-alone. Proportion of the growth is coming from increased retention rates, in particular, in the private segment. So we do believe that we have a little bit of a tailwind given that we've seen clear improvement in key customer metrics, and that will give us also a good competitive situation in 2020.

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Blair Thomson Stewart, BofA Merrill Lynch, Research Division - Head of the UK and European Insurance [25]

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Okay. Great. Just want to come back on the Danish situation. When would you expect to not be running with dual costs in ['19]? What might the impact of that be? Presumably fairly modest given it's a small operation but now may be worth knowing.

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Morten Thorsrud, If P&C Insurance AS - CEO [26]

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Hard to put the exact date on that, but it takes a couple of years to roll out the current base system that we roll out, and then you need to close out -- close down the existing or the legacy systems. So it is -- it takes some few years, but we are progressing according to plan.

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [27]

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I think the -- maybe the relevant answer, Morten, is that you know very well that we are committed to improving the cost ratio by a couple of small percentage points every year, and this will contribute to that, and we stick to that promise.

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Operator [28]

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Our next question is from [Pierre Kimber] from [ACB].

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Unidentified Analyst, [29]

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Three questions from my side. The first relates a bit to Blair's question. When we listen to your peers, in this context, probably Tryg being the most relevant, they have talked about weather-related [case] being very benign in 2019. Are you seeing the same picture? I know you don't report on the topic.

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Morten Thorsrud, If P&C Insurance AS - CEO [30]

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It's a bit different from country to country. So I think on the Nordic level, I wouldn't necessarily say that the weather was more benign in 2019 than '18. We've seen some key events in Sweden, for instance, in '19. So it's not a big difference, as I see it, between 2018 and '19 on the Nordic level. And then again, there is clearly variations when you go down on a country level.

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Unidentified Analyst, [31]

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Of course. My second question related to your new dividend policy, basically the key question is any ambitions of showing an annual increase in dividend going forward. Or should we look more for a Topdanmark [look-alike] dividend that fluctuates with earnings? Should we expect a reset from the current EUR 2.2, which is approximately 100% payout? You're only promising to pay out above 70%. That doesn't really sound like Sampo, but still, I have to ask the question.

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [32]

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Sampo is a much bigger animal than Topdanmark. We get diversification on a number of levels, I mentioned, compared to Topdanmark. Our ambition is, you're quite right, to increase earnings and that the dividend will reflect those earnings, but I also expect that to be more stable than for Topdanmark.

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Unidentified Analyst, [33]

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But we report seeing a declining dividend. That is not as ruled out any longer as it was in the old days. Is that correctly interpreted?

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [34]

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[I didn't catch that].

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Unidentified Analyst, [35]

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Okay. Perfect. My final question, your investment returns on the bond side, can you give us any indication what the yield to maturity is on your bond portfolio in If and in Mandatum in these low interest rate markets?

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Knut Arne Alsaker, Sampo Oyj - CFO & Member of Group Executive Committee [36]

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The running yields in Mandatum is currently 2.4%, and for If it's 1.8%. And the mark-to-market yield is roughly some 50 basis points lower than that.

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Unidentified Analyst, [37]

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Okay. So 1.9%in Mandatum and slightly below 1% in If?

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Knut Arne Alsaker, Sampo Oyj - CFO & Member of Group Executive Committee [38]

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Slightly below 1% in If.

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Operator [39]

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Our next question is from [Juan Agustia] from [ACB].

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Jan Erik Gjerland, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [40]

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Jan Erik Gjerland from ABG. I have some questions about your premium growth. And it looks you are sort of lagging a little bit behind, if you can see sort of like that on the commercial side. Could you just shed some light into that kind of business line, just how you are thinking going forward and if the claim's higher than the premium growth at the moment in that business unit?

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Morten Thorsrud, If P&C Insurance AS - CEO [41]

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When it comes to growth in commercial lines, I think we pointed out throughout last year that we started with a weak-ish first quarter mainly driven by loss of some business in workers' comp in Finland. And then it's been improving sort of, of course, over the quarters in 2019. And when it comes to pricing, I think, again, we said that in the Commercial segment, we do see price increases somewhat above what we would assume to be normal inflation.

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Jan Erik Gjerland, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [42]

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Okay. On the combined ratio, could you shed some light into the underlying level if you strip out the discount rate in both Sweden and Finland? And is it sort of the normal runoff rate on top of that? Or how should we look upon these 2 countries in specific?

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Morten Thorsrud, If P&C Insurance AS - CEO [43]

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Again, I think it's repeating a bit of story as we talked about sort of during the quarters throughout 2019. Good underlying combined ratio, we obviously think it's more important to focus on the total combined ratio. When it comes to runoff gains, yes, they've been on a somewhat higher level over the last -- yes, almost 18 months, I guess now, more around 4%. And then historically, it's been more around 2%. And then we sort of are not giving any sort of guidance on how this will be progressing because it really depends on the underlying development compared to our reserve models.

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Jan Erik Gjerland, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [44]

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Why has it been more to 4-ish rather than 2-ish the last sort of 18 months? Is it sort of any trend you are seeing on the high [cost trajection source]? Anything -- is it particularly more [tax event] that has come off or if people are seeing -- what is the main reason here?

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Morten Thorsrud, If P&C Insurance AS - CEO [45]

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It's back to then the development in Swedish motor TPL where we've seen clearly a more benign development than what has been assumed in the reserving models. And this, as you know, is an extremely long-tail business. So that's what's driving it.

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Jan Erik Gjerland, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [46]

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But have you changed your reservation? Or is this a case [then that you're using your old models] when it comes to this back book and front book?

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Morten Thorsrud, If P&C Insurance AS - CEO [47]

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Of course, you update your reserving model sort of constantly, sort of taking into account the new data.

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Jan Erik Gjerland, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [48]

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Okay. On Denmark, you have a very high cost ratio, is that linked to the IT system development stuff you have in the Q4? Or is it something structural?

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Morten Thorsrud, If P&C Insurance AS - CEO [49]

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It is a situation that's been there for a while in Denmark. Obviously, replacing the IT system is one contributor in taking that down. And then it's back to the overall kind of focus on the cost improvement in If. So clearly, there is a target of reducing the cost ratio in Denmark.

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Jan Erik Gjerland, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [50]

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Okay. Finally, on Mandatum then. You have lowered your sort of buffer -- what is it called, again? You lowered your discount rate for down to 1.25% for '22, probably you're seeing very strong financial in the Q4 numbers. How should we look upon the 1.25 % versus the 75 basis points -- 25 basis points for the outer years. Is it so that you want to be down to the 25 basis points as well for Mandatum by '22? And how should we be running there? Is it just by financial strong results that will get you there?

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Knut Arne Alsaker, Sampo Oyj - CFO & Member of Group Executive Committee [51]

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We make provisions on discount rates sort of after every quarter, depending on how the rate environment looks. There's, of course, no change in the guarantees in Mandatum. Rates on average currently is just around 3%. And for us to prepare for a lower -- for longer interest rate environment also going forward, we have no plan to change that. But we don't have a guidance for how we will deal exactly with the discount rates reserve going forward.

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Jan Erik Gjerland, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [52]

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Okay. So well, the running yield is around 2.4%, as you said, to [Pierre]. And then we should think about If being -- coming down towards 1.5% to 2% somewhere, and that you should be happy with 1.25% over there.

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Knut Arne Alsaker, Sampo Oyj - CFO & Member of Group Executive Committee [53]

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We're happy with 1.25% right now, but that doesn't mean that we will not take it further down at 1 point in time going forward.

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Operator [54]

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Our next question is from Jakob Brink from Nordea.

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Jakob Brink, Nordea Markets, Research Division - Senior Analyst & Sector Coordinator [55]

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Jakob Brink, I think that was me, from Nordea. Sorry, just coming back to the payout policy once again, sorry, but how do you look at -- so this is a payout ratio on net profit, but these days, of course, it's a difference, at least right now, between payout ratio of -- in Nordea. It's not 100%. So there's a difference between the cash flow and the actual profit that you consolidate. How do you look at that in connection with the dividend policy? And then also in addition to that, what if, at some point, you'll be able to start to do a buyback. Then I guess, that could be a meaningful change to the cash flow that you would be starting to incur. So how would you then do that, the potential for start -- to start doing buybacks? Or would you accumulate the capital over time? Or how would that work?

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [56]

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The dividend policy that we have published today is a balanced one. So clearly, we have taken into account the Nordea dividend policy. Not much more to say about that. On buybacks, that's a potential in the future. As the rules and regulations look today, we cannot allow our holding in Nordea to increase about 20%, but we don't know what that situation will look like if and when Nordea decides to start with buybacks.

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Operator [57]

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Our next question is from Derald Goh from Citigroup.

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Teik L. Goh, Citigroup Inc, Research Division - Associate [58]

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Just going back to the January renewals, please. Could you give a sense of the rate improvements that you're seeing, possibly by region? And how does it compare to 2019? I think in 2019, there's a bit more rate in industrial Norway. Has that picked up outside Norway as well?

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Morten Thorsrud, If P&C Insurance AS - CEO [59]

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I think I'll avoid going through much in detail. So I think it's been a positive renewal for us. I commented that we do see rate increases in industrial book, and we continue to see rate increases, price increases within commercial. I think apart from that, I think we commented that this -- it's more clear that although the price increases are strongly in Norwegian market, but we see it a little bit across the board.

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Teik L. Goh, Citigroup Inc, Research Division - Associate [60]

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Okay. And my next question is just on the large losses in the commercial segment, I think it's the second or third year in a row where it's exceeded expectations. Could you maybe talk a bit about what are the issues by specific line or maybe also by countries? And also, are you taking any actions to address that?

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Morten Thorsrud, If P&C Insurance AS - CEO [61]

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No, I think it's kind of a certain volatility that you would expect. I mean it's -- we've seen over the last year somewhat more losses in the commerce segment. In the fourth quarter stand-alone, it was clearly less than expected. So this is moving in kind of -- varying a bit from country to country so -- and from industry to industry.

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [62]

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Let me add to the rate increase question that Sampo -- the main target for If P&C is to exceed 17.5% ROE post-tax, which If has been able to do with the margin for a long period. The rate increases are designed so that we would meet that, and the rate increases carried out in 2019 and the one now have been able to meet that.

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Operator [63]

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Next question is from Niccolo from BNP Paribas.

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Niccolo Cornelis Modesto Dalla-Palma, Exane BNP Paribas, Research Division - Research Analyst [64]

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Three questions for me. Firstly, at Q3, you talked of -- told us that it was reasonable to answer questions about strategy next year. So you're in the next year, I want to double-check if you already have something to share or whether we should expect an update on this later in the year? And maybe if you can't tell us what changes, if you can already give us a strong view about what will not change. Secondly, on Nordea, I mean, you mentioned earlier that it is a good time to ask whether you'd be selling it. Maybe you can give us a bit of a longer-term perspective in terms of whether you look at this as a strategic or financial stake by which, I mean, do you think there are reasons you're better owner than the market of it? And/or are there -- or will you try and create value for the shareholders by, of course, selling it if you think it's at the right price to do so? So that's the second question. And lastly, on the new money yield, if you could tell us what yields you have been investing at most recently in your P&C portfolio?

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [65]

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I'll take the first 2 then. Strategy for next year, I think I actually covered what I could cover in my introduction. The strategy is on an operational level, Nordea starting to move towards the target and supporting that. For If P&C and Topdanmark, keep the combined ratios where they are. And obviously, P&C, at the strong position they are, should also be able to pursue a higher growth figure than in the past. That will increase the profits of the group. So that's a very operational strategy. Apart from that, we'll use all the skills and knowledge that there is in the management team to see what opportunities the world brings. Then on the longer-term perspective on Nordea, well, Sampo has always been agile and used phrases like everything is always for sale at an extremely high price, of course. And at this point in time, we believe that we can develop Nordea -- Nordea's management team can develop Nordea to much higher values. And that's the focus. So I see no reason to speculate in what happens after that.

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Niccolo Cornelis Modesto Dalla-Palma, Exane BNP Paribas, Research Division - Research Analyst [66]

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That's very clear.

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Knut Arne Alsaker, Sampo Oyj - CFO & Member of Group Executive Committee [67]

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And Niccolo, it's Knut Arne answering your last question about the yield. We had been invested. You mentioned Q3, referenced Q3 where I was signaling a possible clear drop in the running yield during 2020. The fixed income investments we have done in the fourth quarter helped to stabilize the running yield. The level I indicated earlier are more positive to being able to maintain the current running yield, 2.4% to 1.8% for Mandatum [and If] during 2020 than I was a quarter ago, meaning that we've been able to invest in yield slightly higher during the last 3 months than during the first part of the year -- last year.

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Operator [68]

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We have a follow-up question from [Juan Agustia] from [ACB].

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Unidentified Analyst, [69]

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Yes. My question's really answered.

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Operator [70]

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(Operator Instructions) There are no further questions at this time. Please go ahead, speakers.

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Torbjörn Magnusson, Sampo Oyj - Group CEO, President & Chairman of Group Executive Committee [71]

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Thank you, operator. Thank you all for your attention, and have a great evening.