Sprouts Farmers Market closes $600 million revolving credit facility
Sampo Group, a €28.6 billion market cap insurance giant, reported a strong first quarter in 2025, with notable improvements in revenue and underwriting results. The company raised its net insurance revenue outlook to between €8.8 billion and €9.1 billion, reflecting a positive trajectory and building on its impressive 14.7% revenue growth over the last twelve months. Digital sales surged by 20% year-over-year, contributing to the company’s robust performance. The stock price of Sampo Oyj increased by 3.83%, closing at €67.34, indicating a positive market response to the earnings call. According to InvestingPro analysis, the company is currently trading near its 52-week high, with strong returns across multiple timeframes.
Key Takeaways
- Net insurance revenue outlook increased to €8.8-9.1 billion.
- Digital sales rose by 20% year-over-year.
- Integration of TopDenmark is progressing with increased synergy targets.
- Nordic commercial segment reported 5.2% growth.
- Stock price rose by 3.83% following the earnings call.
Company Performance
Sampo Group demonstrated strong performance in Q1 2025, driven by increased digital sales and improved underwriting results. The company’s strategic focus on digital innovation and risk-correct pricing has bolstered its competitive position in both the Nordic and UK markets. Integration efforts with TopDenmark are on track, enhancing operational synergies.
Financial Highlights
- Net insurance revenue: €8.8-9.1 billion (raised outlook)
- Underwriting result: €1.4-1.5 billion (raised expectation)
- Digital sales increase: 20% year-over-year
- Nordic commercial segment growth: 5.2%
Outlook & Guidance
Sampo’s outlook remains optimistic with expectations of continued growth in the Nordic and UK markets. The company plans to focus on operational efficiencies and cost synergies, with an increased synergy target from €95 million to €140 million by 2028. Additionally, Sampo is exploring a potential new AGM mandate for share buybacks.
Executive Commentary
Group CEO Torbjorn Magnuson emphasized the company’s ability to maintain low volatility, stating, "We have been able to keep volatility also in such quarters low." Morten Tollstrud, CEO of IF, highlighted the importance of accurate risk pricing: "Our principle is to focus on risk correct pricing." CFO Knut Arna Alsaker expressed optimism about the UK market: "We very much welcome the consolidation that is happening in the UK motor market."
Risks and Challenges
- Nordic inflation, although below 4%, remains a concern.
- Competitive dynamics could shift with market changes.
- Potential macroeconomic pressures may impact future revenue.
- Integration challenges with TopDenmark could affect synergy realization.
Sampo Group’s Q1 2025 performance underscores its strategic focus on digital innovation and market expansion, driving growth and investor confidence.
Full transcript - Sampo Oyj (SAMPO) Q1 2025:
Sami Toplos, Head of IR, Sampo Group: Good morning, everyone, and welcome to the Sampo Group First Quarter twenty twenty five Conference Call. My name is Sami Toplos, and I’m Head of IR at Sampo. I’m joined on the call by Group CEO, Torbjorn Magnuson Group CFO, Knut Arna Alsaker and CEO of IF, Morten Tollstrud. The call will feature a short presentation from Torbjorn, followed by Q and A. A recording of the call will later be available on sampoj.com.
With that, I hand over to Torbjorn. Please go ahead.
Torbjorn Magnuson, Group CEO, Sampo Group: Thanks, Sami, and welcome, everyone. Our business is Non Life Insurance, which means that some quarters are exceptional with large losses or a lack thereof or harsh winters or the absence of winter conditions. With our focus on mass markets, underwriting and a strong balance sheet, we have been able to keep volatility also in such quarters low. However, most quarters have quite normal business conditions when we develop our tools, do customer work and try to exploit whatever market opportunities we find with them. This is such a quarter.
So the main items for this quarter are thus: firstly, continued strong growth both in The Nordics and The U. K, capitalizing on the digital tools that we have and the corresponding increase in the full year growth outlook by EUR 100,000,000. Secondly, Gunda underwriting performance in a slightly easier winter than average, continued improvement of the underlying risk ratio at roughly the same pace as for a long time and a corresponding increase of the outlook for the underwriting result by EUR 50,000,000. And finally, a detailed synergy evaluation from the TopDenmark integration, not surprisingly finding more synergies than the quick one from the transaction and a corresponding increasing of the cost ratio target to cut 40 basis points per year rather than the earlier 20. Turning to Private Nordic business.
As we have talked quite a lot about our digital capabilities in the past year, it’s, of course, encouraging to see growth of 8.5% in Private Nordic. Any concerns about market or customer behaviors changing for the negative with more remote distribution are completely allayed by our now increasing retention, yes, increasing from 89%. And yes, digital sales increased by some 20% since last year. So we also increased this operational ambition for 2026 to EUR 175,000,000 per year rather than the previous EUR 160,000,000. We clearly benefit from this shift in the market and continue to continue the strong growth momentum we’ve now had for some three years.
Our strongest growth comes from Norway, where the unusual situation with our peers seemingly needing higher rate increases than us persists. The results for our Norwegian business still indicate to us that no such need exists for our business. In the private business in The U. K, at this point in time, I almost indicated in the late autumn that our U. K.
Growth was likely to moderate. Rates have indeed continued to decline slowly, but still in a quite rational way, with claims inflation also moderating now to mid single digit percent number, now close to The Nordics actually or to numbers from before the cost of living crisis. However, we are still able to write home insurance as well as bike and van profitably. We were helped by the GIP reform to get the growth push in home, but we are careful not to grow into subsegments before we know how to price them properly. We now have some 777,000 home policies after Q1.
Hastings has a long tradition as a company that exploits new technology skillfully, and telematics is a more recent proof of this. You will see from the graph on the right hand side on this page that an important part of our growth in the past twelve months has come from this product. Our way of doing Telematics is a bit different than many others in the market. We benefit from low cost technology, but we all have also designed a product so that loss prone drivers are weeded out quickly, normally in less than ninety days from inception. Turning then to the synergies with Topdanmark, Topdanmark.
Let me just first say that the integration work with Topdanmark has progressed very rapidly and smoothly. And during the summer the coming summer, the company will cease to exist as a legal entity. The new integrated organization has already now been in place for some time, and the management reports are no longer separate. Turning to synergies. It was pointed out by many that they seem to be on the low side when they were presented last summer.
I said then that we present what we know, and when we know more, we present that. This, I think you will recognize, is what we have always done in the past. Now as promised, we have gone through a much more detailed exercise with the people that are to deliver these synergies, and we have laid out integration plans for IT for the next few years. We have also found more fast and simple synergies like reducing broker costs for reinsurance or office integration as illustrated by the left hand and middle graphs here. Notable is that all the improvements are cost synergies or the new synergies are cost synergies, not revenue ones.
To get the full picture of our cost targets, I need to mention that we moved TopDenmark to if standards with full costing of IT expenses from now on rather than capitalizing developments on the balance sheet and with inclusion of all Holdco costs in the cost ratio. We prefer to have the full downward pressure on costs by including all of them in our various ratios as we have always done. Synergies, as you will know, sometimes have a tendency to live a life of their own outside the P and L. And to avoid that, we also raised our annual cost ratio target corresponding to this increase. Thus, for the next few years, our ambition will be to reduce the Nordic cost ratio not by 20 basis points per year, but rather than 40 basis points per year.
Then my final slide is a reminder of the first, but with numbers as it were. We have produced Top Downmark synergies faster than originally planned. Digital sales have increased rapidly. And the competitive situations both in The Nordics and The U. K.
Have played out in our favor. Furthermore, we had an okay winter, and we have had a good large cadence outcome in the first quarter. The impact on the outlook for 2025 is detailed on the slide. We now expect the net insurance revenue to increase to EUR 8,800,000,000.0 to 9,100,000,000.0, at the same time as the underwriting result expectation is now EUR 1,400,000,000.0 to 1,500,000,000.0, with both lower and upper end increased by EUR 50,000,000. Reflecting this, we now have a new AGM mandate for buybacks, and we’ll return to this question in our Q2 report, hopefully also with some clarity on the future of Nova.
It’s been a really strong beginning of the year, and I’m certainly excited about what we will be able to achieve for the rest of the year. And with that, Sami, we open up for questions.
Sami Toplos, Head of IR, Sampo Group: Yes, operator, we’re now ready for the Q
Giaco Tervainen, Analyst, SEB: and
Speaker 3: The next question comes from David Baumer from Bank of America. Please go ahead.
David Baumer, Analyst, Bank of America: Good morning. Thanks for taking my questions. Firstly, I wanted to ask about the portfolio measures you’ve been taking in Nordic Commercial and Industrial Alliance. How much progress have you achieved on this? And do you expect top line growth to remain a bit more muted for the rest of this year?
And then staying in The Nordics, expense ratio was a bit higher in Q1 and up about 80 bps compared to Q1 twenty twenty four. Could you explain what drives this? And then lastly, on The UK, so impressive results this quarter. Could you give some color on the sort of accident year combined ratio you’re achieving at this point? Or at least how it’s developed compared to 2024?
Thank you.
Morten Tollstrud, CEO of IF, Sampo Group: Good. Morten here. I’ll answer the two first ones. When it comes to the portfolio measures or derisking in our large corporate business, the actions are close to being fully implemented now as of May 1 actually. So some effect also into the second quarter, but more or less fully implemented.
We started this mid last year. It will still have an impact on volumes in Industrial throughout this year and also a little bit into next year as, of course, the premiums are earned in sort of the twelve months period ahead. But the actions as such, more or less implemented as of now. When it comes to the expense ratio in The Nordics, we reported a pro form a of 22.7% last year. And then as Torbjorn mentioned in the introduction, we have firstly included a number of costs that TopDenmark had outside of the ISR, typically holding company cost that is now being included in the total cost ratio of If, bringing that sort of figure more to a 23%.
So that’s sort of more EUR 23,000,000. So that’s more the starting point. And then we report EUR 22,900,000.0 as of first quarter, which means that the underlying development is according to the trajectory of delivering the 40 basis points improvements. But we have some volatility from quarter to quarter. Of course, the synergies are not being realized sort of in an equal manner over the quarters and then also some more cost in the first quarter due to high sales activity.
So that’s on the expense ratio on The Nordics.
Torbjorn Magnuson, Group CEO, Sampo Group: And then finally, in The U. K, prices have followed the moderation of claims inflation down in a rather rational way. We have it’s easier for us to compete on home insurance where we have a lower market share to start with or telematics where we have a unique product rather than grow very quickly in our, let’s say, big motor book. But we are meeting the targets on the combined ratio as we’ve had from before.
Knut Arna Alsaker, Group CFO, Sampo Group: And if I should just add to Orbjorn on that. It’s Knut Onne here. The margins that we are creating in the first quarter of this year is not driven by prior year gains. The reserve strength in Hastings is broadly unchanged this quarter compared to year end.
David Baumer, Analyst, Bank of America: Very helpful. Thank you.
Speaker 3: The next question comes from Nadia Claresa from JPMorgan. Please go ahead.
Nadia Claresa, Analyst, JPMorgan: Hi. Yes. Good morning. I have two questions, please. The first
Speaker 3: is just
Nadia Claresa, Analyst, JPMorgan: on pricing in The Nordics. So you gave us some qualitative comments that rate increases are covering claims inflation. But could you just help us quantify this, please? So how does this compare to the 4%? I think I’m just trying to understand the implications on the underlying margin development from here.
And secondly, a quick one, hopefully. Are there any updates on the work you’re doing around the expansion of the internal model? More specifically relating to TOP, is this something we can still expect at the fourth quarter of this year earliest? Thank you.
Morten Tollstrud, CEO of IF, Sampo Group: So price increases and inflation in The Nordics, perhaps start with inflation. Inflation is continuing to tick slowly down. So inflation now is slightly below 4% on total Nordic level. And we continue to price somewhat above that, so a 5% to 6% price increase on average. So that’s pricing and inflation in The Nordics.
Knut Arna Alsaker, Group CFO, Sampo Group: And when it comes to the internal model, the timetable is unchanged. Technically, we can’t make an application before the merger between TopDanmark and our Swedish operating entity has happened July 1. And then the time line is six months. At the very end of the fourth quarter is still our expectations.
Speaker 3: The next question comes from Yudish Chikuri from Autonomous Research. Please go ahead.
Yudish Chikuri, Analyst, Autonomous Research: Good morning, everyone. Thank you for taking my question. My first question is, if I could go back on your industrial segment. Could you I mean, if we separate the underwriting or derisking actions you’re taking, can you give us a sense of what the underlying pricing and volume dynamics look like? That’s my first question.
And then secondly, on Hastings, actually on personal motor pricing specifically, there’s been suggestion that the pricing has stabilized towards the end of Q1 and into April. Is that something that you’re seeing as well? So
Morten Tollstrud, CEO of IF, Sampo Group: I’ll start with the Industrial segment in The Nordics. Price actions are still being implemented in the large corporate book of business. So we have still quite a fair amount of rate increases that would push premiums up. And then obviously, the reason why we report zero on gross written premium and even negative on the earned is due to the de risking. But rates continue to increase with still a fair amount in the large corporate business in The Nordics.
Torbjorn Magnuson, Group CEO, Sampo Group: Sorry, could you repeat the second question? Because we heard motor pricing in Q1 and then the line broke down.
Yudish Chikuri, Analyst, Autonomous Research: Sorry. Yes. So I was wondering whether there has been a stabilization in pricing towards the end of Q1 and into April, please.
Torbjorn Magnuson, Group CEO, Sampo Group: Pricing has come down during the first quarter. That’s public knowledge and public data. And the rate erosion since then, let’s comment on that after Q2 because it’s it’s too short periods otherwise. But remember, this is after a very volatile period with extremely high prices. So I think the market seems to be searching for the right level with the claims inflation that we’re seeing now.
Speaker 3: The next question comes from Hans Rechtel Kristianzen from Danske Bank Markets. Please go ahead.
Hans Rechtel Kristianzen, Analyst, Danske Bank Markets: Yes. Hello, and thanks for taking my questions. My first question was on the updated synergy realization in in Tofdomak, and thank you for giving sort of the more detailed numbers for year over year. I was just wondering, to the €95,000,000 that you’d previously guided, how should we think about the updated number? Is that sort of purely driven by the cost side of those synergies?
Or is there also an updated expectation on the revenue side of the synergies? And and the second question related to that is, do you think there’s more room as you kind of get to know the the portfolio better to to take out even more synergies, or is this a final estimate? My second question is on the written premium growth in in Norway of 17%. Can you maybe just decouple that into sort of volume and price effect and what you’re seeing in the retention side in perhaps Norway specifically and on The Nordics overall?
Torbjorn Magnuson, Group CEO, Sampo Group: To you, Morten.
Morten Tollstrud, CEO of IF, Sampo Group: Yes. Synergies. Yes, the increase is coming from costs. And it’s fair to say that we have focused on understanding the cost and the cost base at this point in time. Of course, as we learn more about the company, we find more areas where we can improve, where we can sort of learn from TopDenmark and where TopDenmark can learn from IFS.
So I think this is a good estimate of the synergies. But of course, it will never be a final figure. We will always learn more. Then when it comes to sort of revenue synergies, those are less tangible. And that’s also the reason why we have chosen to focus on the cost.
So I think speculating in revenue synergies is yes, it comes with less certainty sort of for sure. So let’s see in the future sort of how, for instance, when we introduce digitalization into the more clearly into the operations of TopDenmark, how that will play out in the market. When it comes to volume and price in Norway, a larger part of the volume increase in Norway is, of course, price driven. Price actions in Norway are clearly higher than in the other Nordic markets. Then we are, at the same time, growing in terms of number of objects, number of customers in Norway and in particularly Norway, actually.
So there is also an underlying sort of pure volume sort of component to this. Retention in Norway has been ticking up over the last few months. During Q1, it was more stable. And also for the other countries, retention have typically been ticking up over the last few months. And over a quarter in total, a slight increase in retention in the Nordic region as such.
Knut Arna Alsaker, Group CFO, Sampo Group: Hans, Klutane here. Just to add to Morten’s comment on the synergies and manage expectations. We have just released a very healthy increase of the synergies of EUR 45,000,000 from EUR 95,000,000 to EUR 140,000,000. That is what you should expect us to realize up until 2028. Then as Morten says, to continuously work on cost efficiency also after EUR 28,000,000 is a part of the DNA.
But it is 140 we have announced today and no other number.
Hans Rechtel Kristianzen, Analyst, Danske Bank Markets: Okay. Thank you very much. That’s super helpful.
Speaker 3: The next question comes from Vasco Solya from Goldman Sachs. Please go ahead.
Torbjorn Magnuson, Group CEO, Sampo Group0: Hi. Thank you for taking my questions. I have two of them, please. So the first one on Nordic commercial. So there, you have highlighted some premium adjustments within the workers’ comp line.
So I just wanted to get a sense if you could just unpack that a bit further and explain are you what is the outlook in that particular segment? And also if any comments that you could provide on Una Health at this point? And the second one, a bit more strategic on U. K. Motor.
So just given the consolidation that we are seeing in The U. K. Motor market, are you expecting any change in competitive dynamics? And if so, also, I mean, do you increase your appetite for M and A in the region?
Morten Tollstrud, CEO of IF, Sampo Group: Good. So I’ll take the two first ones. When it comes to Nordic commercial, we are reporting a growth of 5.2%. And then we comment that we have a little bit of headwind from workers’ comp adjustment premiums in Finland. And that’s kind of a one off related to final invoicing of premiums for last year.
So one of the few areas where you kind of have runoff effects on premiums even. That’s adjustment premiums on workers’ comp Finland. When it comes to Una Health, good progress, excellent cooperation. We are starting now cross selling Una Health products not only on the TopDenmark portfolio but also on the If portfolio. And Una is also looking into strengthening their expansion in Sweden.
So good development and also continued good growth on the premium side of Una.
Knut Arna Alsaker, Group CFO, Sampo Group: It’s Knutane here. I’ll take The U. K. Motor question. We very much welcome the consolidation that is happening in The U.
K. Motor market and believe that, that will extend the period of rational market behavior and our ability to compete in that market in a healthy way also going forward. Given the size of Hastings, which we have grown organically to be one of the top insurers and will remain one of the top insurers also going forward after the consolidation, we have the size to make the investments for the future in terms of technology that we need to have and still create good margins. There’s no strategic need for us from that perspective to participate in consolidation. Then of course, we always, in all markets, look at the opportunities that exist.
But our focus this period, as you know, is on organic growth and creating value of organic growth, which we are doing quite successfully without being disturbed by participating in consolidations other than the clearly value creating acquisitions we made in Denmark.
Torbjorn Magnuson, Group CEO, Sampo Group0: Got it. Thank you.
Speaker 3: The next question comes from Vineet Mohhotra from Mediobanca. Please go ahead.
Torbjorn Magnuson, Group CEO, Sampo Group1: Good morning. So just three quick questions for me, please. One is on the retention, node retention. I mean, do you think Sample is doing something differently in the market because some of your peers are reporting that retentions have been falling because of the big price move. Do you think it’s because samples being more stable sort of in pricing?
Just keen to hear your comments on that and as a difference to the market. Second question is just on the top 10 mark synergies. You mentioned the cost, but also the claims, the EUR 25,000,000 number. Can you just add a bit of color on is there a big jump in that? I presume there is.
And and and why or how would you think the claim side would be also benefiting from the analysis you have done now? And lastly, a quick comment a quick quick question on new car sales. Well, we see seeing some pretty big numbers around there. Norway, Finland. Norway up 40% plus.
Finland down about 10%. Just is there anything to note here? I know your main market remains sweeter on that, but is there anything you’re seeing in the car buying behavior also important because when we have more new cars, it affects the claims patterns as well?
Morten Tollstrud, CEO of IF, Sampo Group: Some quick comments on these three items. When it comes to retention, retention is driven by, of course, providing good service and accurate pricing. And I think if you are better better at that, then you’ll have than the others, then you’ll have a good development. So I think we’ve been good at both providing good service and having accurate pricing over time. Top 10 mark synergies on the claims side, that’s mainly procurement of sort of claims handling services.
So using the typically, in Denmark, sort of top Denmark have a better purchasing power than if had as a small player. So that gives us benefits on the claims side. Then when it comes to new car sales, it’s somewhat up, slightly up on the Nordic level in Q1 but from very low levels. And then yes, you do see some quarterly volatility in car sales in the various countries. That’s typically driven more by changes in car taxation sort of from one year to another, which is, for instance, why you see the effect in Norway.
So I think over a longer term, sort of car sales remain on a fairly low level in The Nordics even though it’s now increased with 8%.
Torbjorn Magnuson, Group CEO, Sampo Group1: The
Speaker 3: next question comes from Giaco Tervainen from SEB.
Giaco Tervainen, Analyst, SEB: Good morning. It’s Yakko from SEB. Most of the questions have already been asked and answered, but I could touch on the prior year claim development, which was very muted during the quarter. What was
Sami Toplos, Head of IR, Sampo Group: Can we Jacque, can you
Speaker 3: hear is now unmuted. Please go ahead.
Giaco Tervainen, Analyst, SEB: Can you hear me now? It’s up quite a bit. Alright. I’m, asking on prior claims, impact, which was very muted. Could you elaborate a bit what was driving this?
Did you have some, changes in assumptions, for example, and and, what should we expect going forward?
Hans Rechtel Kristianzen, Analyst, Danske Bank Markets: I’ll take
Knut Arna Alsaker, Group CFO, Sampo Group: that, Hakul. The prior year gain this quarter is broadly in line with what you should expect in terms of just the technical release of our risk adjustment reserving. Above that, there weren’t much prior year gains, which again means that we have, during the quarter, strengthened the reserve base in the group since we have at all not at all changed our way of reserving or assumptions in terms of the overall picture for the group balance sheet.
Giaco Tervainen, Analyst, SEB: Alright. Thanks. And then another one on this recent Danish antitrust authority to report. What is your interpretation on on that that one? Do you see, for example, risks of the Danish authorities to introduce female rules that we saw in The UK market a few years back?
Morten Tollstrud, CEO of IF, Sampo Group: I think, first of all, competition is good in the Danish market. I mean, if you look at the number of players and how the market is operating, there is a good and sound competition in the Danish market but also quite a variation in profitability in the Danish market. When it comes to some of the items that is touched upon in that report, our principle is to focus on risk correct pricing. I think that’s the sound fundament for any insurance company. And if you do something else than that, you run the risk sort of in the future.
We always, I believe, strongly in risk correct pricing. And then there is also a little bit focus on this special Danish way of having an index, and that is a special Danish solution. One could argue that is good for consumers. One could argue that is good for insurance companies. We don’t have this practice in any other Nordic countries.
So for us, we are happy operating in sort of any environment with or without this type of construction.
Torbjorn Magnuson, Group CEO, Sampo Group: And let me also remind you that when the GIP reform was introduced in The U. K, we gained from that rather than lost as we had the same principle of technical pricing, risk correct pricing in The U. K. Since before in contrast to some of the market.
Speaker 3: The next question comes from Jan Erik Gieland from ABG. Please go ahead.
Torbjorn Magnuson, Group CEO, Sampo Group2: Thank you. Jan Erik Gieland from ABG. Thank you for taking my questions. The first one is to your brand names in Denmark. Have you decided what to do with the top Denmark versus the If brand names?
If you could shed some light into that?
Morten Tollstrud, CEO of IF, Sampo Group: Yes. Longer term, we are focusing on this brand, but we’re using the top Denmark brand still for a while. Branding is a little bit more difficult these days with digital processes. You need not only to change the brand, but you also need to change a lot of the digital processes before you can change a brand. So currently, we are operating with both If and TOPDENmark as brands in the Danish markets.
And then over time, we will move towards diff branding.
Torbjorn Magnuson, Group CEO, Sampo Group2: Thank you. When it comes to competition in The Nordics, you shed some light into the Norwegian operation. Could you shed some more light into Sweden as well as Denmark and Finland, both of private as well corporate or commercial? I
Morten Tollstrud, CEO of IF, Sampo Group: think the overall comment to that is that we see quite benign competitive situation right now. I think clear proof of that, obviously, is the growth that we see in Business Area Private with 8.5% and basically strong growth across the board in all geographies. I think that also goes for the SME part of commercial, also strong competitive situation in all four markets. And then on upper commercial and industrial, it’s always a little bit more difficult because then it’s sort of more volatile and more sort of single clients and single events. But I think overall, good competitive situation for us, which also sort of result in extremely high new sales figures, both off line and, in particular, online, where you see sort of 20% increase, for instance, on private.
Sami Toplos, Head of IR, Sampo Group: So that concludes the call for today. Thank you, everyone, for dialing in and participating.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.