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Investing.com -- Shares of Sampo surged by 3% following the release of its first quarter 2025 earnings, which surpassed consensus expectations. The insurance group’s underwriting profits and net financial results were the main drivers of the positive market response, with a notable performance in the Industrial segment and retail businesses.
The company’s gross written premiums, including brokerage, for the first quarter beat forecasts by 3.4%. While net insurance revenue was in line with expectations, private insurance outperformed by 1.3%. However, commercial and industrial sectors had mixed results, with commercial underperforming by 3.4% and industrial significantly beating expectations with a 47.6% increase, despite a median consensus of a 29% rise.
In the UK, including brokerage, the growth was a robust 8.0%, and other areas saw a 2.9% increase. The underwriting result as a whole surpassed expectations by 3.4%, with the private sector exceeding by 8.4% and industrial by an impressive 47.6%. Despite commercial insurance falling short by 17.0%, the combined ratio was 0.5 percentage points lower than anticipated.
Sampo’s net financial result outperformed by 18.8%, contributing to the group’s earnings per share (EPS) beating consensus by 10%. However, net investment income fell short by 23.1%, and finance expenses were notably higher than expected at €21 million compared to the -€31 million forecasted. The operating EPS missed by 8.3%, aligning with median expectations. The profit before tax was 7.7% higher than projected, with net income exceeding by 4.4%.
A critical factor contributing to investor confidence was the Solvency II ratio, which stood at 180%, 4 percentage points above consensus. This is particularly significant for Sampo, as it has one of the lowest Solvency ratios in the EMEA insurance industry.
Jefferies commented on the results, stating, "In our view, Sampo’s 1Q 2025 results read well, with underwriting profits running +3% ahead of consensus, driven by a material beat in Industrial and a pleasing beat in both retail businesses."
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