Shares and shareholders The Annual General Meeting held on 2 June 2020 authorized the Board to repurchase a maximum of 50,000,000 Sampo A shares. The price paid for the shares repurchased under the authorization shall be based on the current market price of Sampo A shares on the securities market. The authorization will be valid until the close of the next Annual General Meeting, nevertheless not more than 18 months after AGM's decision. During January -- September 2020 Sampo plc made no repurchases of its own shares and it has not purchased any shares after the end of the reporting period. Furthermore, Sampo plc and its subsidiaries did not hold any Sampo shares as at 30 September 2020. Internal dividends If has decided to pay a dividend of SEK 6.30 billion (approx. EUR 600 million) to Sampo plc in December 2020. Nordea's AGM on 28 May 2020 mandated the Board of Directors to decide on a dividend payment for the financial year 2019. According to Nordea's interim report for the third quarter of 2020, the bank intends to pay out a dividend for the financial year 2019. Nordea's Board of Directors will refrain from deciding on the 2019 dividend payment before 1 January 2021 and review the situation in the fourth quarter of 2020 in the light of any further European Central Bank communication. Following the Danish FSA's recommendation, Topdanmark's Board of Directors decided to postpone paying out the remainder of the dividend for 2019 until the AGM on 25 March 2021. It is still the intention to distribute in part or in full the remaining DKK 8.5 of the previously announced dividend of DKK 17 per share. Mandatum Life decided not to pay the dividend of EUR 150 million planned for March 2020. Ratings The relevant ratings for Sampo Group companies did not change in the third quarter of 2020. The ratings at the end of September 2020 are presented in the table below. Both S&P and Moody's confirmed all Sampo Group's ratings after the announcement of the bid on Hastings and maintained the Stable outlook for the ratings. Rated company Moody's Standard & Poor's -------------------------------- --------------- ------------------- Rating Outlook Rating Outlook -------------------------------- ------ ------- --------- -------- Sampo plc -- Issuer Credit A3 Stable A Stable Rating -------------------------------- ------ ------- --------- -------- If P&C Insurance Ltd A1 Stable A+ Stable -- Insurance Financial Strength Rating -------------------------------- ------ ------- --------- -------- If P&C Insurance Holding - - A Stable Ltd (publ) - Issuer Credit Rating -------------------------------- ------ ------- --------- -------- Mandatum Life Insurance - - A+ Stable Company Ltd -- Issuer Credit Rating -------------------------------- ------ ------- --------- -------- Group solvency Sampo Group calculates its group solvency under the Solvency II rules. In this calculation Nordea is treated as an equity investment. According to the Solvency II directive, Sampo Group's solvency ratio amounted to 214 per cent (167) at the end of September 2020. The ratio includes the subordinated Tier 2 notes of EUR 1 billion issued on 3 September 2020 to partly finance the offer on Hastings Group Holdings Plc. Solvency position in the subsidiaries The insurance subsidiaries apply Solvency II rules in their regulatory solvency calculations. The If Group companies use either partial internal models or the standard model for the calculation of their solo solvency position. Mandatum Life reports in accordance with the standard formula for Solvency II. Meanwhile, Topdanmark uses a partial internal model to report its stand-alone solvency position. If Group has an A+ rating from S&P which will continue to require significantly more capital than the standard formula and therefore the use of the standard formula has no practical implications on If Group's capital position. On 30 September 2020, If Group's Solvency II capital requirement under the standard formula amounted to EUR 1,804 million (1,890) and own funds amounted to EUR 3,167 million (3,592). The solvency ratio amounted to 176 per cent (190). The S&P single-A capital requirement for If Group amounted to EUR 2,959 million (3,083) on 30 September 2020 and the capital base was EUR 3,387 million (3,151). Topdanmark calculates most of its non-life and health risks and their respective solvency capital requirement by applying a partial internal model approved by the DFSA. Other risks are calculated by the Solvency II SCR standard formula. Topdanmark's solvency ratio under the partial internal model was 200 per cent (177) at the end of September 2020. Mandatum Life's solvency ratio after transitional measures amounted to 206 per cent (176) on 30 September 2020. Own funds were EUR 2,245 million (2,117) and the Solvency Capital Requirement (SCR) was EUR 1,091 million (1,204). Without transitional measures, own funds would have amounted to EUR 1,906 million (1,756) and the solvency capital requirement would have amounted to EUR 1,102 million (1,234), leading to a solvency ratio of 175 per cent (142). Debt financing On 30 September 2020, Sampo plc's debt financing amounted to EUR 4,714 million (3,908) and interest bearing assets amounted to EUR 548 million (1,725). Interest bearing assets include bank accounts, fixed income instruments and EUR 345 million (359) of hybrid capital and subordinated debt instruments issued by the subsidiaries and associated companies. Sampo plc's net debt amounted to EUR 4,166 million (2,183). The net debt calculation takes into account interest bearing assets and liabilities. Gross debt to Sampo plc's equity was 70 per cent (52) and financial leverage was 41 per cent (34). On 3 September 2020 Sampo plc issued 32-nc-12 Tier 2 notes of EUR 1,000 million maturing on 3 September 2032. On 30 September 2020, financial liabilities in Sampo plc's balance sheet consisted of issued senior bonds and notes of EUR 3,089 million (3,414). In addition, Sampo plc has issued subordinated notes of EUR 1,486 million (494). Outstanding commercial papers amounted to EUR 140 million (0). The average interest, net of interest rate swaps, on Sampo plc's debt as of 30 September 2020 was 1.6 per cent (1.2). More information on Sampo Group's outstanding debt issues is available at: https://www.globenewswire.com/Tracker?data=VtcZaM5XomdKrs_UGU9xP5oDS2SgyfRYkjOAt_2pB9r_h2S8aHN5j6L_Nc0np4cTwUtK-i2scPKq4cJHieyxBCHbMXT7yqMDynkE770izmMl5UJr2wM2n06QotFijDHI www.sampo.com/debtfinancing. OUTLOOK Outlook for 2020 Sampo Group's insurance businesses are expected to report good insurance technical results for 2020. However, the investment results are at this point in time more uncertain than usual. The mark-to-market results for 2020 are highly dependent on capital market developments, particularly in life insurance. If P&C is expected to reach a combined ratio of 82 -- 84 per cent in 2020. With regard to Topdanmark, reference is made to the profit forecast model that the company publishes on a quarterly basis. Nordea's contribution to the Group's profit is expected to be significant. The major risks and uncertainties for the Group in the near-term In its current day-to-day business activities Sampo Group is exposed to various risks and uncertainties, mainly through its separately managed major business units. Major risks affecting the Group companies' profitability and its variation are market, credit, insurance and operational risks that are quantified independently by the major business units. At the group level, sources of risks are the same, although they are not directly additive due to the effects of diversification. Uncertainties in the form of major unforeseen events may have an immediate impact on the Group's profitability. The identification of unforeseen events is easier than the estimation of their probabilities, timing, and potential outcomes. Currently, the COVID-19 pandemic and the measures taken to contain the virus are causing significant negative effects on economies and uncertainties on capital market development. There are also a number of widely identified macroeconomic, political and other sources of uncertainty which can, in various ways, affect the financial services industry in a negative manner. Other sources of uncertainty are unforeseen structural changes in the business environment and already identified trends and potential wide-impact events. These external drivers may have a long-term impact on how Sampo Group's business will be conducted. Examples of already identified trends are technological developments in areas such as artificial intelligence and digitalization, demographic changes, and sustainability issues that may also have profound effects on companies within the financial sector. SAMPO PLC Board of Directors For more information, please contact: Knut Arne Alsaker, Group CFO, tel. +358 10 516 0010 Jarmo Salonen, Head of Investor Relations and Group Communications, tel. +358 10 516 0030 Maria Silander, Communications Manager, Media Relations, tel. +358 10 516 0031 Conference call An English language conference call for investors and analysts will be arranged today at 2 pm Finnish time (12 pm UK time). To participate, please call one of the following telephone numbers: +1 631 913 1422, +44 33 3300 0804, +46 8 5664 2651, or +358 9 8171 0310. The conference code is 50800225#. The conference call can also be followed live at: https://www.globenewswire.com/Tracker?data=VtcZaM5XomdKrs_UGU9xP8y8ZGhiaK8OwGKsKrrHgfbEhu3lcLC1qJWFO1q04r2T29-h3DNmNIaT4LiEPgRJDz3cqwrfgaFhQGjnefTPn_A=
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