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Sampo Group has released its financial results for the first half of 2024, showcasing significant top-line growth and robust investment returns, despite challenges in underwriting performance.
Strong Revenue Growth and Underwriting Results
In the first half of 2024, Sampo Group achieved an impressive 11% growth in revenue on a currency-adjusted basis. This growth was driven by strong performance across all business areas. However, the underwriting result saw a decrease to €580 million from €598 million, with the combined ratio rising to 85.8% compared to 83.8% in the previous year. This increase in the combined ratio is attributed to severe Nordic winter conditions and a higher volume of large claims.
Despite these challenges, the Group’s underlying combined ratio improved by 1.5 percentage points. This improvement was driven by positive developments across the Nordics and the UK, though it was partially offset by weaker performance in Topdanmark.
Sampo Group's profit before taxes rose to €909 million, up from €722 million in the previous year. This increase was bolstered by strong investment returns and robust underwriting performance in the UK. Operating earnings per share (EPS) also saw a 2% increase, rising to €1.09 from €1.07.
2024 Outlook and Market Conditions
Looking ahead, Sampo Group has maintained its 2024 outlook for a Group combined ratio of 83–85%. This forecast excludes any potential one-off integration costs related to synergies with Topdanmark. The combined ratio remains subject to volatility due to factors such as seasonal weather patterns, large claims, and prior year developments. Additionally, the Group's net financial result will be significantly impacted by developments in capital markets.
Public Exchange Offer for Topdanmark
On June 17, 2024, Sampo Group announced a strategic move to enhance its market position by entering into a combination agreement with Topdanmark. Under this agreement, Sampo will launch a recommended public exchange offer to acquire all outstanding shares of Topdanmark not already owned by Sampo. Shareholders of Topdanmark will receive 1.25 newly issued Sampo A shares for each share held in Topdanmark, representing a 27% premium over the closing share price of Topdanmark on Nasdaq Copenhagen as of June 14, 2024.
The offer involves issuing up to 57,468,782 new A shares in Sampo. If all Topdanmark shares are tendered, Topdanmark shareholders will collectively receive new A shares amounting to an approximate 10.3% ownership stake in Sampo.
The offer period is scheduled to begin on August 9, 2024, and conclude on September 9, 2024, though Sampo reserves the right to extend this period. Settlement and completion of the offer are anticipated in September, with all necessary regulatory approvals already secured.
Upon completion of the offer, Sampo intends to integrate Topdanmark into its If P&C operations. This integration aims to strengthen Sampo’s position as a leading insurer in the Danish P&C insurance market and further consolidate its leadership in the Nordic region.
