Sampo (SAMPO) Q3 2024 earnings summary

Executive summary

• Nine-month top line grew 10% year-over-year, with strong contributions from all business areas, especially the UK, and underlying margin improvements despite challenging weather and large claims in the Nordics.

• Underwriting profits rose 8% to EUR 955 million, with a combined ratio of 84.6%, and profit before taxes increased 20% to EUR 1,340 million, supported by higher underwriting profit and investment returns.

• Strategic transformation completed with the acquisition and integration of Topdanmark, with legal steps finalized and full integration expected by mid-next year.

• Strong UK results driven by LCP expansion, benign claims frequency, and robust policy growth; Nordic performance resilient despite harsh winter and elevated large claims.

• Public exchange offer for Topdanmark finalized in September 2024, with full ownership achieved in October and new shares listed on Nasdaq Copenhagen.

Financial highlights

• Group gross written premiums and brokerage income up 10% to EUR 8,870 million for 1-9/2024; UK GWP up 27% in local currency.

• Net profit for equity holders was EUR 973 million for 1-9/2024, compared to EUR 941 million for 1-9/2023.

• Operating EPS for 1-9/2024 was EUR 1.68, up 2% year-over-year; Q3 operating EPS at EUR 0.59.

• Net investment income increased 67% to EUR 818 million, with total investment return at 4.9%.

• Group combined ratio improved to 84.6% for 1-9/2024 (84.2% prior year); Q3 combined ratio at 82.5%.

Outlook and guidance

• 2024 outlook for group combined ratio maintained at 83–85%, excluding potential one-off Topdanmark integration costs.

• Claims inflation and rate increases are expected to remain stable over the next six months, with significant price hikes anticipated in Denmark in 2025 and a 4.3% indexation for next year.

• Sampo expects continued volatility in combined ratio due to weather, large claims, and prior year development; financial results remain sensitive to capital markets.

• Financial targets for 2024–2026: operating EPS growth >7%, combined ratio <85%, solvency II ratio 150–190%, financial leverage <30%.

• No major changes in growth strategy if new car sales remain low; growth in other lines offsets motor weakness.