Sampo Oyj — Annual Report 2011

Mar 8, 2012

Contents

3	Sampo Group
19	Corporate Governance
33	Board of Directors' Report
59	Risk Management
118	Financial Statements
235	For Investors

Sampo Group

• Group CEO's Review
• 2011 in Figures
• Strategy
• Group Structure
• 10 Organization

11 Businesses

• P&C Insurance
• Nordea
• Life Insurance
• Personnel
• Corporate Responsibility

Group CEO's Review

2011 – A stormy year

The environment of the banking and insurance sector should be stable and any changes that might occur should be easy to foresee. However, in 2011 this was not the case: instead, economic turbulence and changing regulation seriously altered the operational environment.

The true nature and size of the sovereign debt crisis in Europe was brought to the public attention at the beginning of the year. This combined with the inability of politicians in Southern Europe to restore confidence, gave rise to general uncertainty in the investment markets. As a result, stock prices fell and the eurozone interest rate declined to a record low.

In addition to the volatility in the investment markets, the financial sector was heavily engaged with new regulation: Solvency II and Basel III advanced. EU made proposals as well concerning the directive on deposit-guarantee schemes, collective guarantee system and genderneutral pricing. Furthermore, a financial transaction tax was publicly debated. Banks were stress tested, and also country-specific capital requirement initiatives were published.

In addition to the economic turbulence and increased regulation, forces of nature put the foundations of our risk selection to the test: the winter at the beginning of the year was extremely harsh with heavy snow fall. In the summer, heavy rainfall caused flooding, particularly in Denmark. At the end of the year, Norway, Sweden and Finland suffered an unusually strong winter storm.

In spite of the difficult operational environment, our results were good; in some areas even excellent. Our P&C insurance operations withstood the turbulence well. Insurance technical result of our subsidiary If P&C was good and once again we clearly beat our combined ratio target (below 95 per cent) as the combined ratio for the whole year was at an excellent 92 per cent. In addition, the business volume improved noticeably, as the premium income rose to EUR 4.2 billion. When calculated using fixed exchange rates, the annual premium income increased more than ever during the time If P&C has been fully-owned by Sampo.

Furthermore, the overall positive mark-to-market investment result can be regarded as a good achievement given the prevailing circumstances. In May 2011, we increased our holding in Denmark's second largest P&C insurer, Topdanmark. Our share of the ownership now stands at over 20 per cent, and Topdanmark is now booked as an associated company.

Share of the net profit from Nordea increased to EUR 534 million

The management of Nordea, our associated company, responded quickly to the changes in the operational environment by initiating measures to safeguard the bank's profitability. One of the positive developments was increased revenues, as the bank's income in 2011 was greater than ever before in its history.

Nordea has shown that through a combination of its expertise and strong position, it can also successfully operate in the eye of the storm. This in spite of the fact that the operational environment for banks has, in many respects, developed negatively: low interest rates reduce the deposit margins, regulation increases capital requirements and a debate about a financial transaction tax is underway. The clearest proof of Nordea's stability is that Nordea is one of the few AArated banks in Europe.

During the past year, Sampo's share of Nordea's net profit was EUR 534 million compared to EUR 523 million a year earlier. In spring 2011, Sampo received EUR 250 million as dividends from Nordea.

The operational environment for life insurance in Finland was if possible even more complicated: while there is a growing need for supplementary pensions, unfortunately the general economic situation and taxation legislation do not provide impetus for them. The difficult investment environment was also reflected in the sales of asset management services. In spite of this, Mandatum Life's profit before taxes reached EUR 137 million compared to EUR 142 million a year earlier.

Mandatum Life's premium income decreased from the previous year to EUR 849 million. Regardless of this, it still was the second largest premium income in the company's history. The sales of life insurance products through Sampo Bank's distribution channel succeeded especially well.

Geographical diversification and strong capitalization as core strengths

If P&C and Nordea are headquartered in Stockholm, Sweden and If P&C's largest market is in Norway. Our diversification across the Nordic countries is a great benefit in the current economic situation: the economies of Sweden and Norway in particular are developing far better than the European economy in general. On the other hand, the

2011 in Figures

Key figures, Sampo Group, 2011

development of the economies of Finland and Denmark is closer to the European average.

In these circumstances, I believe that Sampo's near future rests on a solid ground. Our leading position in our main market areas and our strong capital base provide a good foundation for successful operations during 2012.

Kari Stadigh

Group CEO and President

EURm	2011	2010	Change, %
Profit before taxes	1,228	1,320	-7
P&C insurance	636	707	-10
Associate (Nordea)	534	523	2
Life insurance	137	142	-3
Holding (excl. Nordea)	-77	-48	60
Profit for the period	1,038	1,104	-6
			Change
Earnings per share, EUR	1.85	1.97	-0.12
EPS (incl. change in FVR), EUR	1.22	3.22	-2.00
NAV per share, EUR	14.05	17.79	-3.74
Average number of staff (FTE)	6,874	6,914	-40
Group solvency ratio, %	138.6	167.1	-28.5
Return on Equity, %	7.7	21.8	-14.1

Share Main Facts

All the B shares are held by Kaleva Mutual Insurance Company. B shares can be converted into A shares at the request of the holder.

A Shares		B Shares
Market	Nasdaq OMX Helsinki	ISIN Code	FI0009006613
List	OMXH Large Caps	Number of Shares (unlisted)	1,200,000
Business Sector	Financials	Votes/share	5/share
Listed	01/14/1988
Trading Code	SAMAS (OMX)
Bloomberg	SAMAS FH
Reuters	SAMAS.HE
ISIN Code	FI0009003305
Number of Shares	558,800,000
Votes/share	1/share

Strategy

Sampo Group aims to create value for its shareholders. Value is created through efficient and highly profitable operating units and by investments in situations offering significant upside potential with manageable downside risk. Shareholders benefit from the value creation through a high and stable dividend yield.

Sampo Group's business areas are P&C insurance and life insurance under If and Mandatum Life brands, respectively. The Group is also the largest shareholder in Nordea Bank, the leading Nordic banking

franchise. On a Group level Sampo has no stated strategy but the business areas have well-defined strategies based on return on equity targets.

Target	Performance
RoE	RoE
17.5%	12.4%
Combined ratio	Combined ratio
< 95%	92.0%
Target	Performance
Pay-out ratio*	Pay-out ratio*
$> 50\%$	$65\%$ **

Target	Performance
RoF.	RoF
17.5%	$-11.7%$

If P&C Insurance - Security and Stability

If's mission is to offer attractively priced insurance solutions that provide customers security and stability in their business operations, housing and daily life. The company's vision is to be the leading property and casualty insurance company in the Nordic and Baltic regions with the most satisfied customers, leading edge insurance expertise and superior profitability.

If's strategic goal is to establish better profitability and customer satisfaction in the long run than competitors, coupled with high creditworthiness. The financial targets are to achieve a combined ratio of less than 95 per cent and a return on equity (RoE) of at least 17.5 per cent.

If's long-term priorities to ensure a strong and stable profitability development are based on a sound operating platform, leading cost position, most satisfied customers, leading edge insurance expertise and an investment strategy based on balanced risk. The following four areas constitute the key elements in If's strategic direction:

• Customer value If will exceed customer expectations through superior insurance solutions, fast and accurate claims management and sympathetic behavior.
• Focused Insurance Expertise If will purposefully strengthen the organisation's skills in developing, pricing and distributing insurance products, as well as in the areas of liability loss prevention and claims management.
• Nordic Business Platform If will create competitive advantage through economies of scale and know-how transfer through an integrated Nordic and Baltic platform
• Investment Strategy with Balanced Risk If has adopted a low risk strategy in investments by maintaining a balance between insurance commitments and investment assets in terms of currency and duration. Surplus capital is invested to enhance total returns.

Mandatum Life – the leading expert in money and life in Finland and the Baltics

Mandatum Life aims to be the leading provider of personal risk insurances and the most respected manager of customer assets in Finland and the Baltic countries. Mandatum Life's core product areas in the coming years will consist of unit-linked policies, risk products and voluntary corporate pension schemes. In 2011, operations were expanded to cover the management of personnel fund services and corporate pension funds. Thanks to this expansion, Mandatum Life has a more comprehensive range of services for ensuring personnel commitment and motivation and for corporate pension solutions. Also during the past year, the company has continued to make investments in the development of sales and customer service.

In Finland, Mandatum Life relies on three sales channels: in-house corporate sales teams, wealth management focusing on HNWIs and Sampo Bank's network.

The company believes in the increased role of voluntary corporate pension schemes in complementing the statutory pension scheme. In addition, it is seen that companies create significant value by covering their employees' personal risks through voluntary insurance cover.

Mandatum Life started its own wealth management and investment solutions activities in 2008. The focus is on wealthy private individuals and institutions.

Sampo Bank's network is Mandatum Life's main channel in the private segment. Sampo Bank's clientele has got a lot of potential also in the corporate customer segment, which is expected to lead to an increase in the sales of life insurance products to corporations. Due to changes in legislation related to pension insurance, Mandatum Life decided a year ago not to continue sales of its pension insurances for private individuals.

The result of Mandatum Life consists of three components – investment result, risk result and expense result. The strategy in investment management is to maintain adequate solvency in relation to market risks in the balance sheet. This enables the company to strive for a return that is higher than the risk free return. In expense and risk result Mandatum Life seeks growth, even if in the short-term the expense result will suffer from the substantial investments in sales channels. Mandatum Life's financial target is to produce a RoE of at least 17.5 per cent.

Dividend Policy

Sampo plc, the listed parent company of Sampo Group, is a good dividend payer. Sampo aims to pay at least 50 per cent of its net profit as dividend. Share buy-backs can be used to complement the dividend. The Board proposes to the AGM a dividend of EUR 1.20 per share for the year 2011. The proposed dividend corresponds to a pay-out ratio of 65 per cent.

Group Structure

Organization

Businesses

Sampo Group is engaged in P&C insurance and life insurance through its fully owned subsidiaries If P&C Insurance Holding Ltd and Mandatum Life Insurance Company, respectively. In addition the parent company Sampo plc owned on 31 December 2011 approximately 21.3 per cent of Nordea Bank AB, the largest bank in the Nordic region. As of 31 December 2009 Nordea has been accounted for as an associated company.

The parent company, Sampo plc, is listed in the NASDAQ OMX Helsinki since 1988. It has no business activities of its own but administers the subsidiaries and is responsible for certain centralized functions in Sampo Group.

If P&C Insurance

If P&C Insurance is the leading property and casualty insurer in the Nordic region, with operations in Finland, Sweden, Norway, Denmark, the Baltic countries and Russia.

Nordea

Nordea, the largest bank in the Nordic region, has around 11 million customers and is among the ten largest universal banks in Europe in terms of total market capitalization. The Nordea share is listed in the NASDAQ OMX Nordic Exchanges in Stockholm, Helsinki and Copenhagen. In Sampo Group's reporting Nordea is included in the segment Holding.

Mandatum Life

Mandatum Life, with operations in Finland and the Baltic countries, is responsible for Sampo Group's life insurance operations and in addition offers asset management services under an insurance wrapper.

If P&C Insurance

In 2011 If P&C's operations developed favorably and the group delivered another year with a stable and solid result. Like last year, 2011 was marked by several events related to severe weather conditions. In the Nordics, winter was hard in January and February, a cloudburst struck Denmark in July and the year ended with winter storms sweeping over especially Norway and Finland.

Globally, industry claims cost spun out of natural catastrophes are estimated to have more than doubled compared to 2010 with major catastrophes like the earthquake in Japan and flooding in Thailand. However, extreme weather conditions are a natural element of the insurance business. Thus in moments like this If works hard to always live up to our customer promise - Claims handling the way it should be. These events affect If like the rest of the industry. But again If's size, focus and benefit of being well diversified across regions and segments show the strength and capability to manage these events both from customer and financial perspectives.

The European financial crisis deepened at the end of the year, and after a positive beginning of the year the economic growth pace started to slow down also in the Nordics. Interest rates remained in low levels throughout 2011 and financial markets showed high

volatility. From insurance industry perspective, this has increased the focus on underwriting result even further in all markets.

If reported for 2011 a combined ratio of 92.0 per cent which was an improvement of 0.8 percentage points compared to last year at the same time as the premium income grew with 5 per cent. Profit before taxes came to EUR 636 million (EUR 707 million). This is altogether a satisfactory and stable result. In the second quarter If's holding in the Danish insurance company Topdanmark exceeded 20 per cent. With this Topdanmark became an associated company of If, and its share of If's 2011 result is EUR 7 million.

Continuous improvements in underwriting and cost efficiency and further development of partnerships and customer relations continued to be If's focus areas. Improvements in customer and claims service are also constantly made in all business areas and markets. Ifs goal is to increase organizational involvement in identifying business initiatives and continued in 2011 to work systematically to involve all employees in improving Ifs operations, services and customer experience.

In both distribution and service If has focused on digitalization and development of better electronic interfaces both externally and within the company. In the private market internet sales increased

30 per cent during 2011. Also other e-business solutions like e-policy and use of on-line services grew significantly. The amount of claims reported online grew 10 per cent in 2011, and almost one third of private claims are now reported in the internet. A new business system, part of the largest IT system investment made in Business Area Commercial, was successfully launched in Norway during the year. Synergies are effectively utilized, and the system is also in use in Sweden and under implementation in Denmark.

The preparation to comply with new regulatory demands (i.e. Solvency II) is well underway. If's strong commitment to this effort and overall Risk Management approach was also acknowledged in the way that If was graded as 'Strong' by Standard & Poor's on If's Entreprise Risk Framework. If has systematically worked for the environment and reduced its carbon dioxide emissions significantly. In 2011 If became carbon neutral. Efforts towards creating a cleaner environment will be high on If's agenda also in 2012.

Nordea

Despite one of Europe's most dramatic and problematic times in the history of the euro, Nordea's development during 2011 was once again robust and the solid business momentum was maintained. A continued increase in the number of household and corporate customers, and more business with each customer, led to increased business volumes.

Nordea will continue with a more focused relationship strategy and strive for great customer experiences, to deepen its relationship with each customer. In each phase of the financial crisis, Nordea has proactively adjusted the direction to ensure our ability to reach increasing customer satisfaction, continuous income increase and stable profitability despite the crisis.

The response to the global financial and sovereign debt crises from regulators, the business community and most banks has been to take action to prevent it from happening again. The banks must take on an important role in the future economic structure, with an emphasised role as buffer for future disturbances and bubbles in the economy. New regulatory requirements on capital, liquidity and funding are the key elements in ensuring that role. But they also imply a cost. The impact on the cost of operating banks will grow further, which will be reflected in business models and other changes in the global banking market for years to come.

Nordea's adaptation to this "new normal" environment progresses according to plan. The capitalisation has been increased, funding been prolonged and liquidity been increased to sustainable levels. The capital efficiency is increased and a largely flat cost development will be ensured. The processes to reduce the number of employees progresses according to plan. In parallel, Nordea continues to develop the relationship and advice concept for both household and corporate customers.

All measures taken in this phase of Nordea's relationship strategy have only one purpose: to ensure long-term great customer

experiences also under the new requirements. By taking swift action to increase efficiency, Nordea aims at ensuring its capacity to continue increase business volumes and income. Nordea has also decided to replace its previous financial targets with one, reflecting our ambition to stay in the top league of European banks: to reach a return on equity of 15% in a normalised macroeconomic environment.

In November, Standard & Poor's affirmed Nordea's AA-rating with a stable outlook, stating that the bank has a strong business position with adequate capital and earnings. Few banks in Europe have as high a rating as Nordea, and it reflects that Nordea's repayment ability is perceived to be very good. Standard & Poor's also states that the funding and liquidity profile is seen as adequate and that Nordea is less vulnerable to market turbulence than other banks due to its welldiversified business model.

Another proof of the financial markets' strong confidence in Nordea was the announcement stating that Nordea, as the only Nordic bank, is one of the 29 most important banks for the global economy. The definition was conceived by The Financial Stability Board, a regulatory unit within the G20 group. Hence Nordea became a so-called Global SIB (Systemically Important Bank). This is a further sign of Nordea now being perceived as a truly global player.

Nordea will safeguard a continued high rating and thus strong liquidity and funding position, since it is vital to ensure the right products and services at the right price to each customer.

Nordea's vision is to be a Great European bank, acknowledged for its people, creating superior value for customers and shareholders. Nordea has around 11 million customers, approx. 1,400 branch offices and is among the largest universal banks in Europe in terms of total market capitalisation. The Nordea share is listed on the NASDAQ OMX Nordic Exchange in Stockholm, Helsinki and Copenhagen.

Mandatum Life

After a record year in 2010, the year 2011 proved to be challenging in more ways than one. The low levels of confidence in the investment market resulting from the debt crisis in the eurozone made the year difficult both in terms of investment activities and reaching the premiums written targets.

Premiums written lagged behind targets and the 2010 figures. Despite the below target level, premiums written were the second highest ever in the company's history, which, taking market conditions into account, proves that the chosen sales strategy is working. Positive signs included the increase in risk insurance volumes and the premiums written of policies sold through Sampo Bank's network, which remained at last year's good level.

Return on investments dropped after two excellent years and was negative. The company's investment result was weakened especially by the weak trend in share prices, but was partly compensated by the good return on the company's bonds. During the year, the company did not have investments in debt instruments of countries in crisis. The reserves set up in 2010 to lower the discount rate, made it easier to achieve results in 2011. As low-risk interest rates remain at low levels, the reserves to lower the discount rate were supplemented for 2012.

One of the essential cornerstones for Mandatum Life's sales strategy is the successful cooperation between the in-house distribution channels that focus on different customer segments and products. Progress has been made in the cooperation between the distribution channels and the cooperation is expected to intensify in the coming year.

In wealth management building on philosophy of absolute return, portfolios were actively protected particularly in the latter part of the year. This significantly helped reduce losses in portfolio value. Investment products offered to customers performed well in the difficult market situation compared to those of competitors. The strong increase in uncertainty and market volatility slightly dampened the willingness of the potential clientele to make decisions. Existing wealth management customers, on the other hand, were not shaken by the market situation, which was evident especially in the increase of net subscriptions also in the second half of 2011.

During the year, Mandatum Life acquired business operations that focus on personnel fund and pension services, including the personnel, into its newly established subsidiary (Innova Personnel Fund and Pension Services Ltd). The new services offered by Innova will further diversify Mandatum Life's corporate product offering.

An agreement was concluded with Sampo Bank to continue cooperation in distribution at least for the next five years. This enables investments in new product solutions, the first of which were launched already during the autumn of the year under review.

Close cooperation continued between Finland and the Baltic countries. Best practices were propagated into common Mandatum Life practices, and several products were launched simultaneously in the two markets. Uncertainty in the investment market also affected the Baltic markets: premiums written decreased from last year.

Mandatum Life continued to invest strongly in the development of the personnel's wellbeing, competence, customer orientation and supervisory work. For example, investments in occupational health services reduced the number of absences due to sickness and, as a whole, employee satisfaction in Mandatum Life as an employer rose further.

Personnel

P&C insurance is Sampo Group's largest business area and in 2011 it employed approximately 92 per cent of the personnel, while life insurance had 8 per cent of the work force. Less than one per cent worked for the parent company, Sampo plc.

The average number of Sampo Group's employees in 2011 amounted to 6,874 (6,914). 32 per cent of the personnel worked in Finland, Sweden

27 per cent and Norway 22 per cent. The share of Baltic countries, Russia, Denmark and other countries was 20 per cent.

As HR activities and needs vary significantly between the two business areas, the developments in 2011 are described separately for both of them.

HR in If P&C Insurance

During 2011, If P&C's personnel strategy continued to be influenced by the theme of the corporate strategy 'Skills and Initiatives' launched in 2010.

The aim of this initiative is to bolster If P&C's value creation by increasing the company's focus on intangible assets such as customer orientation, competence creation and the ability to innovate. These intangible assets are closely linked to our employees and how they perceive their working environment. Maximizing our intangible assets will require a company culture and work environment that creates maximum employee engagement and commitment.

Business Initiatives Process

In 2011, several 'Skills and Initiatives' sub themes, launched in 2010, gained momentum. One important such theme is the launch of a structured and recurring process for idea creation and idea implementation across the whole company. This process – called the 'Business Initiative Process' (BI) – took off during 2011.

Currently 2,400 If employees are enrolled in the process and are thus actively involved in innovation. The aim is to have 4,000–5,000 employees participating in the process by the end of 2012.

The BI Process has benefited If by helping individual employee see how their improvement ideas concretely contribute to If P&C's customer promise 'Relax we'll help you'.

Top Management Training Program

To ensure understanding of and broad support for the 'Skills and Initiatives' theme, a top management training program has been launched in cooperation with London Business School. It is aimed at If P&C's top 100 executives and key specialists from all Business Areas and countries.

In 2011, most of If P&C's top executives have attended the program, and a common language for discussing initiatives has been established.

Other competence development initiatives

Investment in competence creation continued to be high with If Academy delivering over 76,000 training activities in total. This equals approximately to 10 training activities per employee during 2011.

Development of the management has been redesigned to support the 'Skills and Initiatives' theme better. In all of If P&C's management development programs an increased focus has been placed on BI Process, team development and coaching.

Management development activities were also abundant in 2011. During the year, approximately 200 management development activities were delivered, which means that on average each If manager attended approximately 1.5 development activities.

High Employee satisfaction

If P&C performs a semi-annual employee satisfaction survey called Temper. In 2011, Temper revealed a very high employee satisfaction level – as many as 91 per cent of the employees stated that they enjoy working at If P&C. Leadership abilities at If P&C remain on a high level, which is supported by high and continuously rising scores, 87 per cent positive regarding 'My Leader' in the employee survey.

Sick leave percentages remain low and stable at between 1.2 per cent to 3.5 per cent in various countries, excluding Norway. In Norway, the sick leave figure was 4.8 per cent in 2011, a significant improvement compared to 2010 when Norwegian sick leave percentage was 0.6 per cent higher.

Personnel turnover ended at a level of 8.5 per cent on annual basis excluding Russia. This is slightly lower compared to 2010 (9.1) and is the result of focused efforts to create a positive and stimulating work climate in If P&C. Number of employees has been relatively stable, with the only exception being the reduction of employees in Russia as result of the exit from the Russian private market.

Reorganization of the Human Resources Function

The human resources (HR) function of If P&C was reorganized during 2011 to improve the ability to support the front line organization. HR departments for Employment Relations, HR Administration and HR Partners, which were operating on a Nordic level, were replaced by country based HR Operation Units.

If Academy continues as a Nordic function for competence development and a new Nordic department for Compensation and Benefits was formed.

HR in Mandatum Life

In 2011, Mandatum Life's HR policies focused on the development of customer focused culture, internal cooperation and high standard personnel management processes. Understanding of the business logic was improved in Mandatum Life by organising the Sales School training program for the entire personnel.

The management development was also continued. Managerial training programs introduced in 2010 continued and, by the end of 2011, 90 per cent of company's managers had attended the training.

The business development unit was reorganised to ensure innovations and efficient project management. The idea for the new organisation came from the training program aimed at key personnel. Customer service organisations and related career path possibilities were developed to improve customer service skills and customer satisfaction.

Personnel management also invested in the integration of the new subsidiary, Innova, and its personnel into company's operations.

The 'Great Place to Work' survey saw Mandatum Life's staff job satisfaction rise again in 2011 to 77 per cent (73). According to the study, 85 per cent of the respondents thought Mandatum Life was a very good company to work at.

Corporate Responsibility

Sampo Group's companies follow the common values of ethicality, loyalty, transparency and enterprise in their business operations and contacts with all stakeholders. Insurance is a business where responsibility and trust are inherent in daily customer contacts. Social responsibility is high on the agenda both in If P&C, the largest P&C insurer in the Nordic countries, and Mandatum Life, the leading life insurance company in Finland and in the Baltic region.

Corporate responsibility in If P&C

The guiding principle of If's operations is to contribute to a society in which everyone is able to live safely and securely. P&C insurance companies, together with public authorities such as the police, rescue services and judiciary, form some of society's most important contributors in creating everyday security. In 2011 alone, If dealt with 1.5 million insurance claims, which covered everything from private customers' motor claims to corporate claims caused by an interruption in production processes of the company or a supplier. This was the case for example in Japan and Thailand during the year. In total, If paid out close to EUR 2.8 billion in claims over the past year.

As the leading P&C insurance company in the Nordic region, If assumes a broader social responsibility than that brought on by business alone. If uses its unique knowledge of risk management to help build a safe environment. The goal is to always act in ways that meet, or preferably exceed, the ethical, legal, and commercial requirements placed upon the company.

As an example, If has taken an active interest in environmental issues over the past few years, and all the company's actions are guided by a

strict environmental policy. The fundamental thought behind the policy is that If should always seek out the most environmentally viable solution for the company itself, its customers, suppliers and partners. A series of concrete actions have been taken in 2011:

• If, which handles more than 300,000 damaged cars every year and places orders for repairs to homes and commercial premises for millions of euros, continues to specify environmental requirements for suppliers in their choice of transport, work materials, working methods etc. The results can be discerned in the statistics: For example, in 2011 If was responsible for almost half of all repairs carried out on damaged plastic car components in Sweden. In addition, If sends more than a thousand cars for dismantling every year. The work releases close to 70,000 spare parts, which are then used for repairs in car repair shops. Apart from saving on raw materials, recycling leads to reduced CO2 emissions.
• An ambitious in-house environmental program has been ongoing for a number of years in If. During the year 2011, If has e.g. carried out a major project aimed at reducing energy use at the larger If offices.
• If has become climate neutral during 2011, in compliance with the UN's Clean Development Mechanisms (CDM) program, to which If has affiliated itself. That has been accomplished by If investing in an electricity power station in India to reduce emissions there, as compensation for If's own emissions.
• If's climate-change work obtained an excellent score when it was assessed in compliance with the so called ClimateWise Principles. ClimateWise is an international climate-change initiative introduced by the insurance industry.
• If has initiated a collaborative venture with the WWF in Finland, which has included If's office in Turku becoming a green WWF office.

If has an extensive program for supporting safety initiatives in a broad sense. In Sweden, for example, If supported Rädda Barnen's (Save the Children) work to combat internet bullying in 2011. If's 'Säkerhetsnål 'and 'Eldsjälspriset' scholarships are awarded once a year to a young person working to support other young people in vulnerable positions, or an organization or a private individual whose activities contribute to a better society. In Norway, If has a collaborative relationship nationally with Direktoratet for samfunnssikkerhet og beredskap (The Norwegian Directorate for Civil Protection and Emergency Planning) and Norsk Brannvernforening (The Norwegian Fire Protection Association). In Finland If helps keep primary school children safe with high visibility yellow caps which make the children visible to traffic while on their way to school. If also supports SUL's (The Finnish National Athletics Federation) Athletic Schools initiative for children and teenagers aged from 7 to 14.

Additionally, If puts great effort into helping customers prevent accidents on their own. This is done on a smaller scale by offering safety-increasing products to consumers, and on a larger scale by supporting commercial customers through systematic risk analyses.

Naturally, If also tries to convince politicians and other decision makers to come to sensible and far-sighted decisions. One example of this is Sweden, where If works to get zoning officials take into consideration the risks of raised water levels when taking a stand on waterfront housing wishes. Along with the other three major Nordic insurance companies, If is supporting a research project on climate adaption in the Nordic region that is being managed by the Nordforsk research funding organization, an organ of the Nordic Council of Ministers. If's researchers also analyze the company's comprehensive vehicle damage statistics on a regular basis, with the aim of ensuring that the information can be used to increase safety on the roads. At present, the focus is on improving the safety of unprotected road-users such as cyclists and pedestrians.

The number of reported claims on the web increases, which both improves the customer service, and is good for the environment due to decreased paper consumption.

Corporate responsibility in Mandatum Life

Mandatum Life's corporate responsibility is based on the cornerstones of its operations: increasing and securing its customers' economic welfare and its safeguarding against risks.

Mandatum Life provides protection for its corporate customers and their families as well as for the future of the company in the event that the entrepreneur falls ill, becomes disabled or is deceased. Enabling voluntary complementing of pensions is also important for entrepreneurs, because the small size of statutory pension could mean that the entrepreneur's level of income during retirement would fall even below the subsistence-level. Mandatum Life offers entrepreneurs better possibilities to concentrate on running their business and cope in the event of personal risks. The offered solutions also have

favorable effects both on the entrepreneur's sphere of influence as on the development of entrepreneurship in general.

In close collaboration with its large corporate customers, Mandatum Life is developing strategies and processes regarding well-being at work – and is thus participating in the improvement of responsible personnel practices. Corporate customers look after their personnel, and indirectly their families, by offering, among other things, supplemental coverage against disability or death and by rewarding their personnel in a longsighted and motivating manner.

The most important factors affecting our happiness are family, health, love and good financial security. Falling critically ill, becoming disabled, an accident or death may pose a significant financial risk. Voluntary supplemental coverage is usually necessary, and Mandatum Life's indemnities help the insured and their loved ones to better cope in difficult situations.

Corporate Governance

Corporate Governance Statement

Board of Directors

• Board of Directors' Duties
• Election and Terms of Office of Board Members

Board-Appointed Committees

• Audit Committee
• Nomination and Compensation Committee

Group Executive Committee

• Group Executive Committee's Duties
• Group CEO and President
• Compensation
• Internal Audit
• Insider Administration
• External Auditor

Corporate Governance Statement

Sampo complies in full with the Finnish Corporate Governance Code issued by the Securities Market Association, effective from 1 October 2010.

Acting in compliance with Recommendation 54 of the Corporate Governance Code, Sampo has published a separate Corporate

Governance Statement on its website in fulfillment of the requirement referred to in the Finnish Securities Markets Act, chapter 2, section 6, subsection 3.

Sampo's Corporate Governance Statement (www.sampo.com/cg)

Board of Directors

Sampo plc's Board of Directors, elected annually by the AGM of Sampo plc, uses the highest decision making power in Sampo Group between the AGMs. Sampo's Board of Directors is responsible for the management of the company in compliance with the law, the

regulations of the authorities, Sampo's Articles of Association and the decisions of Shareholders Meetings.

The following persons served on Sampo plc's Board of Directors in 2011:

Björn Wahlroos

Chairman

Born 1952

Positions of Trust:

Nordea Bank AB (publ), Chairman; UPM-Kymmene Corporation, Chairman of the Board; Hanken School of Economics, Chairman of the Board; Finnish Business and Policy Forum EVA, Board Member; The Research Institute of the Finnish Economy ETLA, Board Member; The Mannerheim Foundation, Board Member

• Wahlroos was appointed to the Board of Directors of Sampo plc on 5 April 2001.
• Wahlroos holds 11,858,555 Sampo plc shares directly or through a controlled company.

Matti Vuoria

Vice Chairman CEO, President of Varma Mutual Pension Insurance Company

Born 1951

Positions of Trust:

Wärtsilä Corporation, Vice Chairman of the Board; Stora Enso Oyj, Board Member; The Finnish Pension Alliance TELA, Vice Chairman of the Board; Securities Market Association, Chairman of the Association's Board; Federation of Finnish Financial Services, Board Member

• Member of the Board of Directors of Sampo plc since 7 April 2004.
• Vuoria holds 33,794 Sampo plc shares directly or through a controlled company.

Anne Brunila

Executive Vice President of Fortum Corporation

Born 1957

Positions of Trust:

Kone Corporation, Board Member; The Research Institute of the Finnish Economy ETLA, Board Member; Finnish Business and Policy Forum EVA, Board Member; Aalto University Foundation, Board Member; International Chamber of Commerce (ICC), Finland, Board Member; Finnish Energy Industries, Board Member

• Member of the Board of Directors of Sampo plc since 9 April 2003.
• Brunila holds 7,287 Sampo plc shares directly or through a controlled company

Adine Grate Axén

Born 1961

Positions of Trust:

3 Scandinavia, Sweden, Advisor and Executive Board Member; NASDAQ OMX, Sweden, Chairman of the Swedish Listing Committee; Sobi (Swedish Orphan Biovitrum), Sweden, Board Member and Member of the Audit Committee; Swedavia, Sweden, Board Member;

AP 7, Sweden, Vice Chairman of the Board

• Member of the Board of Directors of Sampo plc since 14 April 2011.
• Grate Axén holds 957 Sampo plc shares directly or through a controlled company.

Veli-Matti Mattila

President and CEO of Elisa Corporation

Born 1961

Positions of Trust:

The Finnish Fair Association, Member of the Supervisory Board; Confederation of Finnish Industries EK, Member of Representative Assembly

• Member of the Board of Directors of Sampo plc since 7 April 2009.
• Mattila holds 3,123 Sampo plc shares directly or through a controlled company.

Eira Palin-Lehtinen

Born 1950

Positions of Trust:

Elisa Corporation, Board Member; Sigrid Juselius Foundation, Deputy Board Member and Member of Finance Committee; Nordea Funds (Nordea Alternative Investment, Nordea Funds of Funds, Nordea I Sicav), Luxembourg, Board Member; Svenska konstsamfundet, Member of Investment Committee; Sibelius Academy Foundation, Board Member; The Finnish Foundation for Share Promotion (Pörssisäätiö), Board Member

• Member of the Board of Directors of Sampo plc since 15 April 2008.
• Palin-Lehtinen holds 5,308 Sampo plc shares directly or through a controlled company.

Jukka Pekkarinen

Director General, Ministry of Finance

Born 1947

Positions of Trust:

Incomes Policy Information Committee, Chairman; Advisory Board to the Government Institute for Economic Research, Chairman of the Board

• Member of the Board of Directors of Sampo plc since 5 April 2006.
• Pekkarinen holds 7,322 Sampo plc shares directly or through a controlled company.

Christoffer Taxell

Born 1948

Positions of Trust:

Stiftelsen för Åbo Akademi, Chairman of the Board; Stockmann plc, Chairman of the Board; Föreningen Konstsamfundet, Chairman of the Board; Society of Swedish Literature in Finland, Member of Investment Committee; Nordkalk Oy Ab, Board Member; Luvata Oy, Board Member

• Taxell was transferred to the Board of Directors of Sampo plc from the Supervisory Board on 1 January 1998.
• Taxell holds 7,879 Sampo plc shares directly or through a controlled company

Following current Board members are independent of the company and its major shareholders: Adine Grate Axén, Veli-Matti Mattila, Eira Palin-Lehtinen, Jukka Pekkarinen and Christoffer Taxell. In addition, Anne Brunila became independent of the company as of 1 November 2011.

Tom Berglund

Professor, Svenska handelshögskolan

Born 1951

Member of the Board of Directors of Sampo plc from 25 May 2000 to 14 April 2011.

Board Of Directors' Duties

The operating procedures and main duties of the Board of Directors have been defined in the Board's Charter.

The Board of Directors decides on Sampo Group's business strategy, approves the budget and the principles governing the Group's risk management and internal control, takes responsibility for the proper organisation of the Group's operations, and decides, within the framework of the company's business area, on other exceptional and far-reaching matters with respect to the scope and nature of Sampo Group.

In addition, the Board regularly evaluates its own activities and cooperation with the management.

Information as of 31 December 2011. The entire CVs of members of the Board of Directors can be viewed at www.sampo.com/board.

The Board elects the Group CEO and President, the members of the Group Executive Committee and the Group Chief Audit Executive, and releases them from their duties. The Board also decides on the terms and conditions of their employment and on other compensation. In addition, the Board confirms the Group's staff planning targets and monitors their fulfillment, determines the grounds for the Group's compensation system and decides on other far-reaching matters concerning the staff.

In order to secure the proper running of operations, Sampo's Board of Directors has approved internal rules concerning corporate governance, risk management, internal control and reporting in Sampo Group.

Election and Terms of Office of Board Members

According to Sampo's Articles of Association, the company's Board of Directors comprises no fewer than three and no more than ten members elected by shareholders at the Annual General Meeting.

The Annual General Meeting of 2011 decided that the Board would consist of eight members until the close of the Annual General Meeting to be held in 2012. The term of office of the Board members ends at the close of the Annual General Meeting that first follows their election. The members of the Board elect a Chairman and Vice Chairman from among their members at their first meeting following the Annual General Meeting.

The Board convened 10 times in 2011. The average attendance of Board members at meetings was 93.8 per cent.

Board-Appointed Committees

The Board may appoint committees, executive committees and other permanent or fixed-term bodies for duties assigned by the Board. The Board confirms the Charter of Sampo's committees and Group Executive Committee, and also the guidelines and authorizations given to other bodies appointed by the Board.

The Board has an Audit Committee and a Nomination and Compensation Committee, whose members it appoints from its midst in accordance with the charters of the respective committees.

Audit Committee

The Audit Committee is responsible for monitoring the statutory auditing and reporting process of the financial statements and consolidated financial statements, and for overseeing the veracity of Sampo Group's financial statements and the financial reporting process.

Furthermore, the Audit Committee is responsible for evaluating the auditors' and auditing firm's professional competence and independence and particularly their provision of related services to Sampo Group, and for preparing proposals to the Annual General Meeting concerning the auditors' election and their fees. The Committee also oversees the actions of the auditors under the laws of Finland, monitors the auditors' invoicing for audit and non-audit services as deemed appropriate, monitors the efficiency of the Group's internal control, internal audit and risk management systems, and monitors the Group's risks and the quality and scope of risk management. In addition, the Committee approves the internal audit action plan, monitors the internal audit's reporting, monitors the fulfillment of risk policies, the use of limits and the development of profit in various business areas, oversees the preparation of and compliance with risk management policies and other related guidelines, and reviews the description of the main features of the internal control and risk management systems pertaining to the

financial reporting process, which is included in the company's Corporate Governance Statement. The Committee also evaluates the compliance with laws and regulations in Sampo Group and executes any other duties that may be bestowed upon it by the Board.

The Committee comprises at least three members elected from among those Board members who do not hold executive positions in Sampo and are independent of the company. Also participating in the meetings of the Committee are the Responsible Auditor, Group CEO, Group CFO, Group Chief Audit Executive, the member of the Group Executive Committee responsible for risk control and Group Chief Risk Officer.

In 2011, the Chairman of the Audit Committee was Christoffer Taxell, and the other members were Adine Grate Axén (as of 14 April 2011) Tom Berglund (until 14 April 2011) and Jukka Pekkarinen. Also participating in the meetings were the Auditor's representative, Group CEO, Group CFO, Group Chief Risk Officer, Group Chief Audit Executive and Group Chief Counsel (until 31 October 2011).

The Audit Committee convened five times in 2011, with one member absenting from one meeting.

Nomination and Compensation Committee

The Nomination and Compensation Committee is entrusted to prepare proposals for Sampo's Annual General Meeting on the composition of the Board, the compensation of Board members and the principles on which this compensation is determined. The Committee consults the largest shareholders in these matters.

The Committee is also responsible for preparing proposals for Sampo's Board on the composition and chairmen of the Board's committees, on the appointment of Sampo Group CEO and President and the composition of Sampo Group's Executive Committee, the composition of the Group MD Committee, and on the principles by which the members of the Group Executive Committee are to be compensated and their compensation. As authorized by the Board of Directors, the Committee also decides on the salaries of the members of the Group Executive Committee, excluding the Group CEO and Deputy CEO.

Furthermore, the Committee prepares a proposal for the Board on the appointment, employment conditions and other compensation of

Sampo Group's Chief Audit Executive, and on the principles by which Sampo Group's staff are to be compensated. In addition, the Committee is responsible for preparing proposals for the Board on issues relating to the development of good corporate governance and confirming the criteria and processes used for the Board's selfevaluation.

In 2011, the Nomination and Compensation Committee comprised the Chairman of the Board (who acted as the Committee's Chairman), the Vice Chairman of the Board and three members elected from among the members of the Board.

The Chairman of the Nomination and Compensation Committee is Björn Wahlroos, and the other members are Veli-Matti Mattila, Eira Palin-Lehtinen, Matti Vuoria and Christoffer Taxell.

The Committee convened seven times in 2011. The average attendance of members at meetings was 91.4 per cent.

Group Executive Committee

The Board of Directors has appointed the Sampo Group Executive Committee and a Group MD Committee to the Group Executive Committee, which supports the Group CEO in preparing matters to be handled by the Group Executive Committee.

The following persons served on the Group Executive Committee in 2011:

Kari Stadigh

Group CEO and President, MD of Sampo plc

Born 1955

Positions of Trust:

Nordea Bank AB (publ), Board Member;

Confederation of Finnish Industries EK, Vice Chairman of the Board; The Federation of Finnish Financial Services, Chairman of the Board; Varma Mutual Pension Insurance Company, Board Member; If P&C Insurance Holding Ltd (publ), Sweden, Chairman of the Board; Mandatum Life Insurance Company Limited, Chairman of the Board; Kaleva Mutual Insurance Company, Chairman of the Board; Nokia Corporation, Board Member;

Work Group for National Capital Market Strategy, Chairman of the Board

• Member of Sampo Group Executive Committee since 2001.
• Stadigh holds 249,346 Sampo plc shares directly or through controlled companies.

Line Hestvik

Head of Business Area Private, If P&C Insurance

Born 1969

Positions of Trust:

The organisation for the Financial Sector in Norway (FNO), Board Member

• Member of Sampo Group Executive Committee since 2005.
• Hestvik holds 21,406 Sampo plc shares directly or through controlled companies.

Peter Johansson

Group CFO

Born 1957

Positions of Trust:

If P&C Insurance Holding AB (publ), Sweden, Board Member; Mandatum Life Insurance Company Limited, Vice Chairman of the Board

• Member of Sampo Group Executive Committee since 2001.
• Johansson holds 52,112 Sampo plc shares directly or through controlled companies.

Patrick Lapveteläinen

Group CIO

Born 1966

Positions of Trust:

If P&C Insurance Holding Ltd, Sweden, Board Member; Mandatum Life Insurance Company Limited, Board Member

• Member of Sampo Group Executive Committee since 2001.
• Lapveteläinen holds 227,226 Sampo plc shares directly or through controlled companies or persons closely associated with the Insider.

Torbjörn Magnusson

Managing Director of If P&C Insurance Holding Ltd

Born 1963

Positions of trust:

If P&C Insurance Ltd, Sweden, Chairman of the Board; If P&C Insurance Company Ltd, Finland, Chairman of the Board; Swedish Insurance Federation, Chairman of the Board; Swedish Insurance Employer Association (FAO), Board Member; AcadeMedia Aktiebolag, Board Member; Urzus A/S, Chairman of the Board

• Member of Sampo Group Executive Committee since 2004.
• Magnusson holds 26,329 Sampo plc shares directly or through controlled companies.

Ivar Martinsen

Head of Business Area Commercial, If P&C Insurance

Born 1961

Positions of Trust:

The Norwegian Financial Services Association (FNO), Executive Committee of P&C Insurance, Chairman

• Member of Sampo Group Executive Committee since 2005.
• Martinsen holds 19,965 Sampo plc shares directly or through controlled companies.

Petri Niemisvirta

Managing Director of Mandatum Life Insurance Company Limited

Born 1970

Positions of Trust:

Alma Media Corporation, Board Member;

Federation of Finnish Financial Services, Life Insurance Executive Committee, Board Member;

BenCo Insurance Holding B.V., the Netherlands, Board Member; Silta Oy, Board Member

• Member of Sampo Group Executive Committee since 2001.
• Niemisvirta holds 45,215 Sampo plc shares directly or through controlled companies.

Morten Thorsrud

Head of Business Area Industrial, If P&C Insurance

Born 1971

Positions of Trust:

CJSC If Insurance, Russia, Chairman of the Board; Forsikring & Pension, Denmark, Board Member

• Member of Sampo Group Executive Committee since 2006.
• Thorsrud holds 17,182 Sampo plc shares directly or through controlled companies.

Information as of 31 December 2011. The entire CVs of the members of Sampo Group Executive Committee can be viewed at www.sampo.com/management.

Ilona Ervasti-Vaintola Born 1951

Group Chief Counsel, Principal Attorney, Member of Sampo Group Executive Committee and Secretary of the Board of Directors of Sampo plc from 2001 to October 2011. Retired on 31 October 2011.

Timo Vuorinen

Head of Business Area Baltic and Russia, If P&C Insurance; Managing Director of If P&C Insurance Company Ltd, Finland

Born 1964

Positions of Trust:

If P&C Insurance AS, Baltic, Chairman of the Board; CJSC If Insurance, Russia, Board Member; Mandatum Life Insurance Baltic SE, Board Member

• Member of Sampo Group Executive Committee since 2009.
• Vuorinen holds 8,953 Sampo plc shares directly or through controlled companies or persons closely associated with the Insider.

Ricard Wennerklint

Deputy MD, If P&C Insurance Holding Ltd

Born 1969

Positions of Trust:

If P&C Insurance Company Ltd, Finland, Board Member; If P&C Insurance AS, Estonia, Board Member; CJSC If Insurance, Russia, Board Member; IPSC Region, Russia, Board Member

• Member of Sampo Group Executive Committee since 2005.
• Wennerklint holds 20,061 Sampo plc shares directly or through controlled companies.

Group Executive Committee's Duties

Sampo Group Executive Committee supports the Group CEO in the preparation of strategic issues relating to Sampo Group, in the handling of operative matters that are significant or involve questions of principle, and in ensuring a good internal flow of information.

The Group Executive Committee addresses especially the following: Sampo Group's strategy, profit development, large purchases and projects, the Group's structure and organisation, as well as key strategic issues pertaining to administration and personnel.

The Group MD Committee comprised Kari Stadigh (Chairman), Ilona Ervasti-Vaintola (until 31 October 2011), Peter Johansson, Patrick Lapveteläinen, Torbjörn Magnusson, Petri Niemisvirta and Ricard Wennerklint.

In 2011, the Group Executive Committee convened four times at the request of Group CEO. The Group MD Committee, which assists the Group Executive Committee, met nine times.

Group CEO and President

The company has a Managing Director who is simultaneously Group CEO and President of Sampo Group.

The Board of Directors elects and releases the Group CEO, and decides on the terms of employment and other compensation. The Managing Director of the company and the Group CEO and President of Sampo Group is Mr. Kari Stadigh, M.Sc. (Eng.), BBA (Econ.).

The Group CEO is in charge of the daily management of Sampo, subject to the instructions and control of the Board of Directors. The Group CEO is empowered to take extraordinary and broad-ranging actions,

Compensation

Fair and incentivizing compensation to all employees is an important factor in Sampo Group's ability to enhance shareholder value in a competitive business environment. Compensation is an equally important determinant of success in the competition for talent. Sampo's compensation strategy is responsible both towards the employees and the shareholders and, consequently, long-term financial stability and value creation of the Group guides the design of compensation schemes.

Sampo plc's Board of Directors has approved common Compensation Principles applicable to all companies within Sampo Group.

Compensation Principles (www.sampo.com/compensation)

Salary and Remuneration Report

Sampo has published a Salary and Remuneration Report on its website in accordance with section 7 (Remuneration) of the Corporate Governance Code.

Sampo's Salary and Remuneration Report (www.sampo.com/ compensation)

taking into account the scope and nature of Sampo's operations, only upon authorization by the Board of Directors. The Group CEO ensures the legal compliance of Sampo's accounting and the trustworthy organization of asset management.

Under the terms of the Group CEO contract, the notice period for the Group CEO is six months. In addition to receiving salary for the period of notice, the Group CEO is entitled to severance compensation of 18 months' full salary, provided that the service contract has been terminated by Sampo.

Compensation of the Members of the Board of Directors

According to Sampo's Articles of Association, the Annual General Meeting decides on the compensation of the members of the Board of Directors.

In accordance with the decision of the Annual General Meeting in 2011, the following annual fees will be paid to the members of the Board of Directors for their Board and committee work up to the close of the Annual General Meeting in 2012: EUR 160,000 to the Chairman, EUR 100,000 to the Vice Chairman, and EUR 80,000 to the other members of the Board, with 50 per cent of each Board member's fee being paid, after taxes and corresponding charges, in Sampo A shares and the rest in cash. Board members employed by the company will not receive separate compensation for Board work during the validity of the employment or service relationship.

Members of the Board of Directors have not received any other benefits, nor do they participate in Sampo's incentive systems.

Compensation of the Managing Director and Other Executives

The Board of Directors decides on the terms of employment and compensation of the Group CEO and other executives on the Sampo Group Executive Committee, on the basis of a proposal by the Nomination and Compensation Committee. However, the Nomination and Compensation Committee can decide, upon authorization by the Board of Directors, on the salaries of the members of the Group Executive Committee, excluding the Group CEO and Deputy CEO.

Principles of the Compensation System

In addition to receiving monthly salaries, executives who are members of the Group Executive Committee are participants in the Group's short-term variable compensation system, which is decided upon separately each year. The short-term variable compensation is determined on the basis of the Group result, the business area result and individual performance. The maximum amount that can be paid for 2011 to members of the Executive Committee is an amount corresponding to nine months' fixed salary.

The members of the Group Executive Committee are also participants in the long-term incentive systems 2009 I and 2011 I for Sampo's

Internal Audit

Sampo's Internal Audit is a function independent of business operations, which evaluates the sufficiency and effectiveness of the internal control system and the quality with which tasks are performed in Sampo Group. The Internal Audit reports to the Group CEO. The Internal Audit has been organized to correspond with the business organisation.

The Audit Committee of Sampo's Board of Directors annually approves the Internal Audit's operating plan. The Internal Audit reports on the

management. The terms of the incentive systems are available on Sampo's website.

Terms of the incentive systems (www.sampo.com/compensation)

Based on his employment contract, the Group CEO will be paid a fixed monthly salary and a yearly short-term variable compensation, which may be no more than an amount corresponding to nine months' fixed salary. The Group CEO is also a participant in the long term incentive systems 2009 I and 2011 I for Sampo's management.

Mr. Kari Stadigh is the CEO of Sampo Group. For year 2011 the Group CEO was paid EUR 782,942 in fixed salary and EUR 216,233 in short term variable compensation and EUR 566,400 in long-term variable compensation, together totalling EUR 1,565,575.

The members of the Group Executive Committee are each covered by the employment pension system of their country of residence. Under the terms of their employment contracts, the majority of them are also covered by supplementary pension schemes. The retirement age for the Committee's members as set out in their contracts is 60, 65 or the age laid down in the employment pension system of their country of residence.

More detailed information on compensation in Sampo Group during 2011 is available at the Salary and Remuneration Report published by Sampo.

audits performed to the Group CEO and the Audit Committee. Company-specific audit observations are reported to the respective companies' governing bodies and management.

In its auditing work, the Internal Audit complies with, in addition to the Internal Audit Charter approved by Sampo's Board of Directors, the international professional standards approved by the IIA (the Institute of Internal Auditors).

Insider Administration

Given the nature of Sampo's business areas, especially bearing in mind their extensive investment activities, Sampo's Board of Directors has approved a separate Group Guideline for Insiders. These comply, as required by the Corporate Governance Code, with NASDAQ OMX Helsinki Ltd's Guidelines for Insiders and the Standards of the Financial Supervisory Authority.

Sampo Group's Guidelines for Insiders are stricter than the abovementioned norms on matters that concern the Group Executive Committee, other corporate executives and other specifically named persons, as these persons must obtain a separate written permission in advance for each share related securities transaction they make with the securities of Sampo plc or any of Sampo's publicly listed subsidiary or affiliate company (currently Nordea AB (publ.) and Topdanmark A/ S).

Sampo plc's insider guidelines and register may be viewed on Sampo's website.

Sampo plc's insider register (www.sampo.com/insiders)

External Auditor

Ernst & Young Oy Authorised Public Accountant

Responsible auditor Heikki Ilkka, APA

The total fees paid to the auditor for services rendered and invoiced were EUR 2,013,628. In addition, Ernst & Young Oy were paid fees for non-audit services rendered and invoiced totalling EUR 281,071.

Board of Directors' Report

Sampo Group in 2011

• Business Areas in 2011
• P&C Insurance in 2011
• Associated Company Nordea Bank Ab
• Life Insurance in 2011
• Holding in 2011

Changes in Group Structure

Administration

• Annual General Meeting
• Management Changes
• Governance in 2011
• Corporate Responsibility in 2011
• Personnel in 2011
• Management Incentive Schemes
• Risk Management in 2011

44 Shares, Share Capital and Shareholders

• Shares and Share Capital
• Authorizations Granted to the Board
• Shareholders

Financial Standing

• Internal Dividends
• Ratings
• Group Solvency
• Debt Financing
• Outlook
• Dividend Proposal
• Key Figures

Calculation of the Key Figures

• Group Key Figures
• P&C Insurance Key Figures
• Life Insurance Key Figures
• Per Share Key Figures

Sampo Group in 2011

Sampo Group's profit before taxes for 2011 amounted to EUR 1,228 million (1,320). Total comprehensive income for the period, taking changes in the market value of assets into account, decreased to EUR 686 million (1,807).

Earnings per share were EUR 1.85 (1.97). Mark-to-market earnings per share amounted to EUR 1.22 (3.22) and return on equity for the Group decreased to 7.7 per cent for 2011 (21.8).

The Board proposes to the Annual General Meeting to be held on 12 April 2012 a dividend of EUR 1.20 per share (1.15) and an authorization to repurchase a maximum of 50 million Sampo A shares.

Net asset value per share on 31 December 2011 was EUR 14.05 (17.79). Fair value reserve on the Group level amounted to EUR 355 million (736).

Profit before taxes in the P&C insurance segment amounted to EUR 636 million (707). Combined ratio improved to 92.0 per cent for the full year 2011 (92.8). Return on equity was 12.4 per cent (39.8) and fair value reserve decreased to EUR 139 million (315).

Sampo's share of Nordea's net profit in 2011 rose to EUR 534 million (523). In segment reporting the share of Nordea's profit is included in the segment 'Holding'.

Life insurance segment's profit before taxes remained stable at EUR 137 million (142). Fair value reserve decreased to EUR 214 million as at 31 December 2011 (436). Return on equity was -11.7 per cent (36.2).

Sampo Group's total investment assets at the end of 2011 amounted to EUR 17.6 billion (18.3), of which 80 per cent was invested in fixed income instruments (78), 15 per cent in equities (18) and 5 per cent in other assets (4). Mark-to-market investment return remained positive despite the sharp fall in the equity markets. Reported investment income decreased to EUR 260 million (1,148).

The Group's equity as at 31 December 2011 amounted to EUR 8,920 million (8,886). Equity was strengthened mainly by the comprehensive result for the year of EUR 686 million and reduced by the EUR 645 million of dividends paid.

Sampo Group's own funds exceeded the minimum solvency requirements at the end of 2011 by EUR 1,892 million (3,038) and solvency ratio stood at 138.6 per cent (167.1).

Results, Sampo Group, 2011

EURm	2011	2010	Change, %
Profit before taxes	1,228	1,320	-7
P&C insurance	636	707	-10
Associate (Nordea)	534	523	2
Life insurance	137	142	-3
Holding (excl. Nordea)	-77	-48	60
Profit for the period	1,038	1,104	-6
			Change
Earnings per share, EUR	1.85	1.97	-0.12
EPS (incl. change in FVR), EUR	1.22	3.22	-2.00
NAV per share, EUR	14.05	17.79	-3.74
Average number of staff (FTE)	6,874	6,914	-40
Group solvency ratio, %	138.6	167.1	-28.5
RoE, %	7.7	21.8	-14.1

P&C Insurance in 2011

If P&C is the leading property and casualty insurance company in the Nordic region, with insurance operations that also encompass the Baltic countries and Russia. The P&C insurance group's parent company, If P&C Insurance Holding Ltd, is located in Sweden, and the If subsidiaries provide insurance solutions and services in Finland, Sweden, Norway, Denmark, the Baltic countries and Russia. If's operations are divided into four business areas: Private, Commercial, Industrial and Baltic & Russia.

Results, P&C Insurance, 2011

EURm	2011	2010	Change, %
Premiums, net	4,201	3,985	5
Net income from investments	298	487	-39
Other operating income	31	25	25
Claims incurred	-2,801	-2,689	4
Change in insurance liabilities	-107	-91	17
Staff costs	-494	-479	3
Other expenses expenses	-497	-501	-1
Finance costs	-2	-29	-95
Share of associates' profit/loss	7	0	-
Profit before taxes	636	707	-10
	2011	2010	Change
Combined ratio, %	92.0	92.8	-0.8
Risk ratio, %	68.4	69.1	-0.7
Cost ratio, %	23.5	23.7	-0.2
Expense ratio, %	17.3	17.2	0.1
Return on equity, %	12.4	39.8	-27.4
Average number of staff (FTE)	6,299	6,392	-93

Profit before taxes for P&C insurance decreased to EUR 636 million (707) in 2011. The decrease was mainly explained by financial markets' uncertainty during the year, which led to lower investment returns. Year 2011 was also characterized by demanding weather conditions throughout the year. However, despite the higher than normalized weather-related claims, both risk ratio and combined ratio improved to 68.4 per cent (69.1) and 92.0 per cent (92.8), respectively. EUR 135 million (113) was released from technical reserves relating to prior year gains, out of which EUR 85 in business area Industrial.

If P&C's holding in the Danish insurance company Topdanmark exceeded 20 per cent on 16 May 2011. With the holding exceeding 20 per cent Topdanmark became an associated company to If. Topdanmark's profit contribution for 2011 was EUR 7 million. The book value for Topdanmark in the Group balance sheet was EUR 329 million on 31 December 2011. At the end of 2011 If held altogether 3,147,692 Topdanmark shares, corresponding to 23.6 per cent of the votes.

Technical result increased to EUR 457 million (449). Technical result for Private business area increased to EUR 256 million (236). For business area Commercial technical result amounted to EUR 124 million (127), Industrial EUR 53 million (65) and Baltic & Russia EUR 22 million (15).

Return on equity (RoE) decreased to 12.4 per cent (39.8) mainly due to lower investment result mark-to-market and the change in the accounting treatment of Topdanmark holding in the second quarter of 2011. Insurance margin (technical result in relation to net premiums earned) was 11.1 per cent (11.5). Fair value reserve decreased during the year to EUR 139 million (315) at the end of December 2011.

	Combined ratio,%			Risk ratio,%
	2011	2010	Change	2011	2010	Change
Private	91.9	93.0	-1.1	68.5	68.9	-0.4
Commercial	92.8	93.5	-0.7	69.1	69.8	-0.7
Industrial	91.8	90.6	1.2	71.5	71.9	-0.4
Baltic & Russia	84.5	93.4	-8.9	48.0	56.4	-8.4
Sweden	95.6	93.3	2.3	73.1	70.2	2.9
Norway	88.0	92.1	-4.1	65.9	69.6	-3.7
Finland	94.0	90.4	3.6	70.7	67.0	3.7
Denmark	93.4	101.4	-8.0	63.9	72.8	-8.9

In business area Industrial large claims were EUR 53 million above normalized level as especially Norway and Sweden were affected by several major property claims. Despite this, risk ratio improved in Industrial mainly supported by higher prior year gains. In Finland risk ratio deteriorated compared to previous year mainly due to changed mortality model affecting the results negatively by EUR 53 million in the last quarter of the year. In Baltic & Russia risk ratio improved significantly in 2011 due to lower claims frequency and improved claims outcome.

Gross written premiums increased 5 per cent to EUR 4,414 million (4,189). Adjusted for currency, premiums increased a record 4.0 per cent. All business areas and countries had positive growth. In Private gross written premiums adjusted for currency increased by 4.5 per cent. In Commercial the growth was 3.4 per cent, in Industrial 2.6 per cent and in Baltic & Russia 1.5 per cent.

Cost ratio improved to 23.5 per cent (23.7). Adjusted for currency the nominal costs increased 2.1 per cent.

At the end of December 2011 the total investment assets of If P&C amounted to EUR 11.2 billion (11.7).

Net income from investments decreased to EUR 298 million (487).

Investment return mark-to-market for the year 2011 was 1.8 per cent (7.4).

Duration for interest bearing assets was 1.2 years (1.7) and average maturity 2.5 years. Fixed income running yield was 4.1 per cent (3.9).

If P&C's solvency ratio as at 31 December 2011 (solvency capital in relation to net written premiums) was 72 per cent (79). Solvency capital amounted to EUR 3,080 million (3,373). Reserve ratios were stable at 167 per cent (173) of net written premiums and 229 per cent (237) of claims paid.

Associated Company Nordea Bank Ab

Nordea, the largest bank in the Nordic region, has around 11 million customers and is among the ten largest universal banks in Europe in terms of total market capitalization. In Sampo Group's reporting Nordea is treated as an associated company and is included in the segment Holding. On 31 December 2011 Sampo plc held 860,440,497 Nordea shares corresponding to a holding of 21.3 per cent. The average price paid per share amounted to EUR 6.46 and the book value in the Group accounts was EUR 7.27 per share. The closing price as at 31 December 2011 was EUR 5.98.

The following text is based on Nordea's full-year 2011 result release published on 24 January 2012.

2011 showed continued high total income, up 2 per cent compared to 2010. Net interest income increased 6 per cent compared to last year. Lending volumes increased 7 per cent and deposit volumes 8 per cent. Lending spreads and deposit spreads have increased from last year.

Net fee and commission income continued to increase strongly, up 11 per cent compared to 2010. Net result from items at fair value decreased by 17 per cent compared to last year. The customer-driven capital markets operations continued to be strong, while results from Capital Markets unallocated income decreased. Income under the equity method was EUR 42 million and other income was EUR 91 million.

Total expenses increased 8 per cent compared to last year. Staff costs increased 12 per cent. In local currencies and excluding restructuring costs, total expenses increased 3 per cent and staff costs increased 5 per cent.

Net loan losses decreased 16 per to EUR 735 million, compared to last year, corresponding to a loan loss ratio of 23 basis points (31 basis points last year).

Operating profit decreased 3 per cent compared to last year. Net profit decreased 1 per cent from last year to EUR 2,634 million. Risk-adjusted profit increased 4 per cent compared to last year to EUR 2,714 million.

Total lending, including reversed repurchase agreements, was EUR 337 billion, up 1 per cent compared to the previous quarter. Overall, the credit quality in the loan portfolio remained solid in the fourth quarter, with positive migration in the loan portfolio. Improvements in credit quality resulted in a reduction of risk-weighted assets (RWA) of approx. EUR 4.7 billion or 2.5 per cent. The impaired loans ratio decreased to 139 basis points of total loans, due to higher total loan volumes. Total impaired loans gross increased by 5 per cent from the previous quarter. The provisioning ratio decreased compared to the end of the third quarter to 45 per cent.

The Group's core tier 1 capital ratio, excluding transition rules, was 11.2 per cent at the end of the fourth quarter and was strengthened by 0.2 percentage points from the previous quarter. Improved capital ratios have been achieved by strong profit generation and a modest increase in risk-weighted assets (RWA). With the adoption of the CRD III amendment, new risk types under the internal approach have been introduced. For Nordea this includes additional capital charge for stressed VaR, incremental and comprehensive risk. The total CRD III impact was an increase of EUR 4.0 billion in market risk RWA. This was partly offset by continued improvement in credit quality and RWA optimisation activities. The total impact from improved credit quality affected RWA with a reduction by 2.5 per cent.

RWA were EUR 185.2 billion excluding transition rules, up EUR 2.2 billion or 1.2 per cent compared to the previous quarter and were at the same level as at the end of 2010.

The core tier 1 ratio excluding transition rules under Basel II was 11.2 per cent. The capital base of EUR 24.8 billion exceeds the capital requirements including transition rules by EUR 6.9 billion and excluding transition rules by EUR 10.0 billion. The tier 1 capital of EUR 22.6 billion exceeds the Pillar 1 capital requirements (excluding transitions rules) by EUR 7.8 billion.

Nordea is preparing for the new regulatory standards that will increase the capital requirements. The impact of these changes will be moderate and are carefully monitored to support our customers and shareholders in the best possible way. Nordea is well prepared to meet the new Basel capital requirements.

The average funding cost for long-term funding was largely unchanged in the fourth quarter. Nordea issued approx. EUR 4.0 billion of longterm funding in the fourth quarter, of which approx. EUR 2.7 billion represented issuance of Swedish, Norwegian and Finnish covered bonds in the domestic and international markets. The portion of longterm funding of total funding was at the end of the fourth quarter approx. 64 per cent (64 per cent at the end of the previous quarter).

The Board of Directors proposes to the AGM a dividend of EUR 0.26 per share (EUR 0.29). This corresponds to a payout ratio of 40 per cent of net profit, which is in line with the dividend policy. Total proposed dividend amounts to EUR 1,048 million.

For more information on Nordea Bank Ab and its result release for 2011, see www.nordea.com.

Life Insurance in 2011

Mandatum Life Group consists of Mandatum Life, a wholly-owned subsidiary of Sampo plc, operating in Finland, and its subsidiary Mandatum Life Insurance Baltic SE, which has the form of a European company and is headquartered in Estonia. It operates in the other Baltic countries through branches.

Results, Life Insurance, 2011

EURm	2011	2010	Change, %
Premiums written	849	1,111	-24
Net income from investments	-41	645	-
Other operating income	2	0	-
Claims incurred	-922	-844	9
Change in liabilities for inv. and ins. contracts	348	-678	-
Staff costs	-38	-35	7
Other operating expenses	-53	-49	8
Finance costs	-8	-8	4
Profit before taxes	137	142	-3
	2011	2010	Change
Expense ratio, %	111.6	112.1	-0.5
Return on equity, %	-11.7	36.2	-47.9
Average number of staff (FTE)	521	470	51

Profit before taxes in Sampo Group's life insurance operations remained on previous year's level despite the challenging investment markets in 2011 and amounted to EUR 137 million (142). The record high premium income of 2010 was not achieved but premiums amounted to EUR 849 million which is the second highest level in the history of the Group.

Net investment income, excluding income on unit-linked contracts, amounted to EUR 255 million (312). Net income from unit-linked investments was EUR -296 million (333). In 2011 fair value reserve decreased EUR 222 million amounting to EUR 214 million. Return on equity (RoE) in life insurance was -11.7 per cent (36.2).

Mandatum Life Group's investment assets, excluding the assets of EUR 3.1 billion (3.1) covering unit-linked liabilities, amounted to EUR 5.4 billion (6.0) at market values as at 31 December 2011.

Return on investments in 2011 was -1.4 per cent (11.1). At the end of December 2011 duration of fixed income assets was 1.8 years (2.7) and average maturity 2.3 years. Fixed income running yield was 5.4 per cent (5.2).

Mandatum Life Group's solvency margin amounted to EUR 1,049 million (1,339) as at 31 December 2011. Mandatum Life's solvency ratio was 20.9 (25.8). Total technical reserves in the balance sheet of Mandatum Life Group were EUR 7.3 billion (7.5). Unit-linked reserves accounted for 42 per cent (41) of the total technical reserves, i.e. EUR 3.1 billion (3.1).

In the Finnish operations, the total return for policyholders on withprofit technical provisions in 2011 was 2.5 – 4.5 per cent, depending on the class of insurance. In addition to the guarantee, customer bonuses varying from 0 to 2.5 per cent depending on the guaranteed interest on policies were paid. Technical reserves of the parent company Mandatum Life contain bonuses of EUR 6.3 million (1.4) for the year 2011.

Majority of Mandatum Life's traditional policies carry a guaranteed interest of 3.5 per cent. Individual policies sold in Finland before 1999 carry a guaranteed interest of 4.5 per cent. The discount rate for these policies has been lowered to 3.5 per cent and subsequently technical reserves have been supplemented with EUR 79 million (86). In addition, EUR 29 million has been reserved to lower the interest rate of all with-profit liabilities to 2.75 per cent in 2012. This supplement

decreases the minimum requirement for investment yield to 2.75 per cent for 2012. All in all, Mandatum Life has increased its technical reserves with EUR 108 million (147) due to low level of interest rates.

Risk result was exceptionally high at EUR 25 million (23). Expense result for the Group's life insurance segment developed in 2011 favorably and rose to EUR 10 million (8) for 2011. The result of the unit linked business, EUR 6.2 million (2.0) is included in the expense result.

Mandatum Life Group's premium income on own account amounted to EUR 849 million (1,111). Premiums in the main focus area of unit-linked insurance decreased to EUR 649 million (843). The share of unit-linked premiums remained at 76 per cent (76) of total premiums. Premium income from the Baltic countries was EUR 41 million (60).

Mandatum Life's overall market share in Finland rose to 24.9 per cent (22.1). Market share in the focus area, unit-linked business, remained high and was 26.8 per cent (28.2). Market share in the Baltic countries amounted to 15 per cent (20).

In Finland Mandatum Life expanded its operations to cover personnel fund management and pension fund management services in 2011. This widens further the company's services in the area of staff remuneration and pension solution.

One of the cornerstones for Mandatum Life is the co-operation with Sampo Bank. In the summer of 2011 the two companies agreed to prolong the existing sales agreement for at least the next five years. As a consequence Mandatum Life can continue to invest into new product solutions for the bank channel. First results were launched already during the autumn 2011.

Holding in 2011

Sampo plc owns and controls its subsidiaries engaged in P&C and life insurance. In addition Sampo plc held on 31 December 2011 approximately 21.3 per cent of the share capital of Nordea, the largest bank in the Nordic countries. Nordea is an associated company to Sampo plc.

Results, Holding, 2011

EURm	2011	2010	Change, %
Net investment income	18	25	-27
Other operating income	15	16	-9
Staff costs	-11	-13	-11
Other operating expenses	-13	-11	14
Finance costs	-86	-66	31
Share of associate's profit	534	523	2
Profit (loss) before taxes	457	474	-4
			Change
Average number of staff (FTE)	54	52	2

The segment's profit before taxes amounted to EUR 457 million (474), of which EUR 534 million (523) relates to Sampo's share of Nordea's 2011 profit. Segment's profit without Nordea was EUR -77 million (-48).

To balance the risks on the Group level Sampo plc's debt is mainly tied to short term interest rates and issued in euro or Swedish krona. The debt positions are managed with interest rate swaps and cross currency interest rate swaps. These derivatives are valued at fair value in the profit and loss account although economically they match the

underlying bonds. As a result Sampo plc maintains the flexibility to adjust derivative position if needed but this comes at the cost of increased volatility in the Holding segment's finance costs.

Sampo plc's holding in Nordea Bank was booked in the consolidated balance sheet at EUR 6.3 billion. The market value of the holding was EUR 5.1 billion at 31 December 2011. In addition the assets on Sampo plc's balance sheet included holdings in subsidiaries for EUR 2.4 billion (2.4).

Changes in Group Structure

On 16 May 2011 Sampo Group's ownership in the Danish insurance company Topdanmark A/S exceeded 20 per cent of the total shares and voting rights of the company. On 31 December 2011 the total number of Topdanmark shares owned by Sampo Group was 3,147,692. Shares are held by Sampo's P&C insurance operation If P&C which has reported Topdanmark as an associate company as of 16 May 2011.

In connection with the change in accounting treatment the carrying value of the Topdanmark shares held by If and valued at fair value, was reinstated at acquisition cost of EUR 324 million. The ensuing reduction of the fair value reserve decreased Sampo Group's equity by EUR 51 million. The equity accounting of Topdanmark has, however, no effect on Sampo Group's net asset value because in the NAV calculation Topdanmark is valued at fair value.

The purchase price in excess of the carrying amount of the net assets of Topdanmark was EUR 204 million. Based on the purchase price allocation EUR 85 million was allocated to customer related intangibles. The annual amortization will be EUR 8 million during eight years.

As of 16 May 2011 Sampo's share of Topdanmark's net profit has been shown on the face of Sampo Group's profit and loss account on the line Share of associate´s profit/loss. In segment reporting Topdanmark holding is included in the P&C insurance segment. Due to the late publication of financial reports by Topdanmark, consensus estimate for the company's net result is used for this purpose and any deviations in relation to subsequently published amounts will be included in the next quarterly report.

Annual General Meeting

The Annual General Meeting of 14 April 2011 decided to distribute a dividend of EUR 1.15 per share for 2010. The record date for dividend payment was 19 April 2011 and the dividend was paid on 28 April 2011. The Annual General Meeting adopted the financial accounts for 2010 and discharged the Board of Directors and the Group CEO and President from liability for the financial year.

The AGM decided to maintain the number of Board members at eight. The following members were re-elected to the Board of Directors: Anne Brunila, Veli-Matti Mattila, Eira Palin-Lehtinen, Jukka Pekkarinen, Christoffer Taxell, Matti Vuoria and Björn Wahlroos. Adine Grate-Axén was elected as a new Board member.

At its organisational meeting, the Board elected Björn Wahlroos as Chairman and Matti Vuoria as Vice Chairman. The following members were elected to the Nomination and Compensation Committee: Veli-Matti Mattila, Eira Palin-Lehtinen, Christoffer Taxell, Matti Vuoria, and Björn Wahlroos (chairman). Adine Grate Axén, Jukka Pekkarinen and

Christoffer Taxell (chairman) were elected to the Audit Committee. The Board of Directors assessed the independence of its members and concluded that all the Board members were independent of the major shareholders and all but Anne Brunila, Björn Wahlroos and Matti Vuoria were independent of the company. The Committees fulfill the Finnish Corporate Governance Code's requirement for independence.

The Annual General Meeting decided to pay the following fees to the members of the Board of Directors until the close of the 2012 Annual General Meeting: the Chairman of the Board will be paid EUR 160,000 per year, the Vice Chairman EUR 100,000 per year and the other members EUR 80,000 per year. After deduction of taxes and similar payments, approximately 50 per cent of the Board members' annual compensation will be paid in Sampo A shares and the rest in cash.

Ernst & Young Oy was elected as Auditor. The Auditor will be paid a fee determined by a reasonable invoice. Heikki Ilkka, APA, was nominated by Ernst & Young Oy as the principally responsible auditor.

Management changes

Ilona Ervasti-Vaintola, Sampo Group's Chief Legal Counsel and member of the Group Executive Board, retired on 30 October 2011 when she reached the pension age of 60 years stipulated in her employment

Governance in 2011

Sampo Group complies in full with the Finnish Corporate Governance Code published by the Securities Market Association on 15 June 2010.

The annual Corporate Governance Statement will be published in connection to the Annual Report 2011 in March 2012 and will be available at www.sampo.com/cg. The Annual Report 2011 also contains a more detailed description of the Group's governance system.

contract. Mrs. Ervasti-Vaintola acted as secretary to the Board of Sampo plc.

Sampo Group will also publish a Salary and Remuneration Report in March 2012. The report is drawn up in accordance with section 7 ("Remuneration") of the Corporate Governance Code. The report will be available at www.sampo.com/compensation.

Corporate Responsibility in 2011

As a listed company, Sampo plc has the responsibility of acting in the best interests of its shareholders, in compliance with legislation and in accordance with sound business practices. Sampo Group's companies follow the common values of ethicality, loyalty, transparency and enterprise in their business operations and contacts with all stakeholders. Insurance is a business where responsibility and trust are inherent in daily customer contacts.

Sampo Group aims at anticipating changes in society and the capital market, and adapting its operations accordingly to these changes. Sampo Group also aims at providing a non-discriminative, pleasant and open work environment. Sampo Group is aware of its corporate responsibility and is committed to developing its operations to further economic, social and environmental sustainability.

As the leading P&C insurance company in the Nordic region, If assumes a broader social responsibility than that brought on by business alone. If uses its unique knowledge of risk management to help build a safe environment. The goal is to always act in ways that meet, or preferably exceed, the ethical, legal, and commercial requirements placed upon the company.

If has taken an active interest in environmental issues over the past few years, and all the company's actions are guided by a strict environmental policy. The fundamental thought behind the policy is that If should always seek out the most environmentally viable solution for the company itself, its customers, suppliers and partners.

Personnel in 2011

The number of full-time equivalent staff decreased to 6,810 employees (6,844) as at 31 December 2011. In P&C insurance, the number of staff mainly decreased in Sweden and the Baltic and Russian operation. In life insurance, the number of staff increased in Finland.

During 2011, approximately 92 per cent of the staff worked in P&C insurance, 8 per cent in life insurance and 1 per cent in the Group's parent company Sampo plc. Geographically, 32 per cent worked in Finland, 27 per cent in Sweden, 22 per cent in Norway and 20 per cent in the Baltic countries, Russia, Denmark and other countries. The average number of employees during 2011 was 6,874, which compares to an average of 6,914 during 2010.

Mandatum Life's corporate responsibility is based on the cornerstones of its operations: increasing and securing its customers' economic welfare and safeguarding them against risks.

During 2011, If P&C's personnel strategy continued to be influenced by the theme of the corporate strategy 'Skills and Initiatives' launched in 2010. The aim of this initiative is to bolster If's value creation by increasing the company's focus on intangible assets such as customer orientation, competence creation and the ability to innovate.

Mandatum Life's HR policies focused during 2011 on the development of customer focused culture, internal cooperation and high standard personnel management processes.

More detailed information on personnel in Sampo Group is available in the section Personnel in the Annual Report 2011.

Management Incentive Schemes

On 14 June 2011 Sampo plc's Board approved the Sampo Group Compensation Principles which describe the remuneration structure and the principles used in setting up remuneration systems within the general governance framework and according to the Sampo Group's Risk Management Principles. The Compensation Principles apply to all companies within the Sampo Group and are available at www.sampo.com/corporate-governance/compensation.

The core of the Compensation Principles is that all remuneration systems in Sampo Group shall safeguard the financial stability of the Group and comply with regulatory and ethical standards. They shall also be designed to balance the interests of different stakeholder groups such as shareholders, employees, customers and supervisory authorities. Furthermore, all compensation mechanism shall be designed in parallel with the Risk Management Principles.

The starting point of any compensation mechanism is to encourage and stimulate employees at all levels to do their best and surpass their targets. Compensation packages shall be designed to reward employees on all levels, compensating them fairly for prudent and successful performance. At the same time, however, in order to safeguard the interest of other stakeholders, compensation mechanisms shall neither entice nor encourage employees to excessive or unwanted risk taking. Thus, compensation mechanisms cannot be separated from risk management practices.

According to the principles fixed compensation shall support financial stability, represent a sufficiently high share of the total compensation and be competitive but not leading in the market. Variable compensation shall be used to ensure the competitiveness of total

compensation packages while still keeping fixed cost base reasonable. Variable compensation consists of short-term incentives, profit sharing programs and discretionary rewards.

Long-term incentive programs may be used as part of the total compensation package to commit executive management and key persons to the Group for a longer period of time. The programs are designed to also align the participants' interests with those of the shareholders' by linking the pay-out of the programs not only to certain performance criteria, but also to the development of Sampo's share price.

The design of compensation systems should always encourage longterm financial stability and value creation of the Group. Variable compensation mechanisms shall ultimately be based on the employer's unilateral decision and contain 'force majeur' clauses allowing the Board to stop payment if necessary e.g. because of the financial situation of the company.

The payment of a certain portion of the variable compensation and long-term incentives payable to senior executive management and to certain key persons shall be deferred for a defined period of time as required in the regulatory framework applicable to each Group company. After the deferral period, a retrospective risk adjustment review shall be carried out and the Board shall decide whether the deferred compensation can be paid out or not. For the year 2011, part of short-term incentives has been deferred. Payout from agreements or programs decided prior to the publishing of FSA deferral recommendations has not been deferred.

On 14 September 2011 Sampo plc's Board adopted a new long-term incentive scheme 2011:1. The scheme is targeted at Sampo Group's management and other key employees. Altogether approximately 115 people are participants in the scheme. The scheme includes at maximum 4.5 million incentive units and the potential payments shall be divided for the years 2014-2017. The allocation of incentive units shall be based on a combination of the assessment of the performance of the individual, of the business area and/or business unit concerned and of the overall results of the relevant Sampo Group company or of Sampo Group. Also qualitative criteria shall be taken into account in the assessment.

According to the new scheme, incentive rewards to be paid are based on the price of Sampo plc's A share on the NASDAQ OMX Helsinki Ltd and the payments shall be made on condition that the insurance margin and return on capital at risk, determined in the terms and conditions of the scheme, exceed specified threshold values. A deferral rule applies to incentive rewards paid to key employees defined as risk takers (Sweden, Norway and Denmark) and key employees receiving

significant variable compensation (Finland). According to the deferral rule 60 per cent of the net incentive rewards will be paid in shares and 40 per cent in cash. These shares will be subject to disposal restrictions for three years from the date when the installment was paid.

In 2011 EUR 7 million (10) was paid out based on the long-term management incentive scheme 2009:1. The outcome of the long-term management incentive scheme is determined by Sampo's share price development over a period of approximately three years starting from the issue of the respective program. The program is subject to thresholds on share price development and company profitability, as well as ceilings for maximum bonuses. Furthermore, the program is subject to rules requiring part of the paid bonus to be used to acquire Sampo shares, which must in turn be held for a specified period of time.

The terms of all incentive schemes are available on Sampo's website at www.sampo.com/compensation.

Risk Management in 2011

Sampo considers that a high quality risk management process is a prerequisite for business operations. The key objectives of risk management are:

• to ensure that risks affecting our profitability and other material risks are identified, assessed and analyzed;
• to ensure that capitalization in the form of capital and foreseeable profitability of businesses – is adequate in terms of current risks inherent in business activities and existing business environment;
• to ensure that risk bearing capacity is allocated into different business areas according to chosen strategies and that risks are properly priced;
• to limit and mitigate fluctuations in the economic values of group companies; and
• to ensure the overall efficiency, security and continuity of operations.

As a diverse financial institution, Sampo Group is exposed to a variety of different risks, both financial and non-financial. The major risks associated with Sampo Group's activities during 2011 were insurance risks arising from P&C and Life insurance business areas, as well as market, credit and liquidity risks emanating from the Group's investment portfolios and the debt financing of Sampo plc.

During 2011, Sampo Group's insurance risk profile remained relatively stable. In Mandatum Life longevity risk is still the most material biometric risk and most of it arises from the group pension portfolio. In If P&C the most material insurance risk is reserve risk, which to a large

extent is driven by long-tailed business such as workers' compensation and motor third party liability.

The main market risks of Sampo Group during 2011 were equity risk, interest rate risk and credit risk. Equity risk arises from the Group's equity portfolio amounting to EUR 2.6 billion (3.4). Interest rate risk is related to the Group's fixed income investments and insurance liabilities. In the short run, rising interest rates would decrease the valuation of fixed income assets. However, over a long period the risk that interest rates fall and remain at a low level is economically more significant, because Group´s liabilities have as an average longer duration than assets. Fixed income investments also expose the Group to credit risks. The amount of the Group's fixed income investments decreased to EUR 14.1 billion (14.2) during 2011.

Currency risk is the risk that Sampo Group will incur losses due to changes in foreign currency exchange rates. If P&C and Mandatum Life are mainly exposed to currency risk via their net currency exposures stemming from business activities. In Sampo plc transaction risk relates mainly to dividends paid by If P&C. At Group level changes in foreign currency exchange rates can change group equity mainly through 'Other comprehensive income'.

Operational risks, such as failures in internal processes and systems are inherent throughout all business areas. General business risks, related to changes in the economic environment or business cycle, have increased significantly during 2011, because of the sovereign debt crisis.

A more detailed description of Sampo Group's risk management organization and activities is available in the Risk Management section of the 2011 Annual Report.

Shares and Share Capital

As at 31 December 2011, Sampo plc had 560,000,000 shares, which were divided into 558,800,000 A shares and 1,200,000 B shares. Total number of votes attached to the shares is 564,800,000. Each A share entitles the holder to one vote and each B share entitles the holder to five votes at the General Meeting of Shareholders. According to the company's Articles of Association, A Shares must number at least 179,000,000 and no more than 711,200,000. Meanwhile, B shares must number at least zero and no more than 4,800,000. As at 31 December 2011 Sampo plc's share capital amounted to EUR 98 million (98).

Sampo A shares have been quoted on the main list of the NASDAQ OMX Helsinki since 1988 and all of the B shares are held by Kaleva Mutual Insurance Company. B shares can be converted into A shares at the request of the holder.

At the end of the financial year, Sampo plc didn't hold any of its own A shares. Neither did the other Group companies hold any shares in the parent company.

Authorizations Granted to the Board

The Annual General Meeting of 2011 authorized the Board to acquire in one or several lots a maximum of 50,000,000 Sampo A shares. Shares can be repurchased in other proportion than the shareholders' proportional shareholdings (private repurchase). The share price will be no higher than the highest price paid for Sampo shares in public trading at the time of purchase. The authorization is valid until the close of the next Annual General Meeting, nevertheless not more than 18 months after AGM's decision. The shares are to be acquired through public trading on the NASDAQ OMX Helsinki at the market price prevailing at the time of repurchase.

The Sampo Board decided on 10 August 2011 to start repurchasing Sampo A shares. The maximum amount to be repurchased was 10,000,000 shares corresponding to approximately 1.8 per cent of the total number of shares. Weighty financial reasons for repurchases

existed as they were carried out in order to follow the company's distribution policy.

During the third quarter of 2011 Sampo plc acquired 1,282,390 of its own A shares, which corresponds to 0.2 per cent of all shares and related votes. An average EUR 18.94 was paid per share and a total of EUR 24.3 million used for the repurchases.

In accordance with the authorization by the Annual General Meeting the Board of Sampo plc cancelled on 13 December 2011 the Sampo A shares repurchased in the third quarter of 2011. The cancellation reduced the number of Sampo A shares with the corresponding amount. After the cancellation the number of Sampo plc's A shares totals 558,800,000. Total number of shares of the company, including 1,200,000 B shares, is 560,000,000 shares.

Shareholders

As at 31 December 2011, Sampo plc had 84,930 shareholders, representing a decrease of close to 2 per cent from the previous year. 1.3 per cent of shares had not been transferred to the book-entry system. The holdings of nominee-registered and foreign shareholders grew to 52.4 per cent (48.5) of the shares and 52.0 per cent of the votes (48.1).

At the end of 2011, the members of Sampo plc's Board of Directors and their close family members owned either directly or indirectly 11,924,225 (11,856,737) Sampo A shares. Their combined holdings

constituted 2.1 per cent of the share capital and related votes. The members of the Group Executive Committee and their close family members owned either directly or indirectly 687,795 (960,349) Sampo A shares representing 0.1 per cent of the share capital and related votes.

During 2011, Sampo did not receive any notifications of change in holdings pursuant to Chapter 2, Section 9 of the Securities Markets Act.

Shareholders by sector, Sampo plc, 31 December 2011 (A and B shares)

Sector	Number of shares	%
Foreign ownership and nominee registered	293,447,783	52.40
Corporations	92,381,495	16.50
Public institutions	69,104,675	12.34
Households	64,716,781	11.56
Financial institutions and insurance corporations	19,226,993	3.43
Non-profit institution	13,915,613	2.48
On joint account	7,206,660	1.29
Total	560,000,000	100.00

Development of the number of shares, Sampo plc, 2007-2011

Year	A shares	B shares	Total	Change during year	Reason for change
1 Jan 2007	566,418,145	1,200,000	567,618,145	+15,740,245	Option conversion (A share)
				-4,827,500	Cancellation of shares bought back (A share)
1 Jan 2008	577,330,890	1,200,000	578,530,890	-17,158,500	Cancellation of shares bought back (A share)
1 Jan 2009	560,172,390	1,200,000	561,372,390	no change
1 Jan 2010	560,172,390	1,200,000	561,372,390	-90,000	Cancellation of shares bought back (A share)
1 Jan 2011	560,082,390	1,200,000	561,372,390	-1,282,390	Cancellation of shares bought back (A share)
1 Jan 2012	558,800,000	1,200,000	560,000,000

Shareholders by number of shares owned,

Sampo plc, 31 December 2011

Number of shares	Shareholders, number	Shareholders, %	Shares, number	Shares, %	Votes, number	Votes, %
1-100	25,381	29.89	1,560,817	0.28	1,560,817	0.26
101-500	37,476	44.13	9,883,182	1.77	9,883,182	1.75
501-1,000	10,491	12.35	8,147,547	1.46	8,147,547	1.44
1,001-5,000	9,500	11.19	20,330,952	3.63	20,330,952	3.60
5,001-10,000	1,126	1.33	8,105,542	1.45	8,105,542	1.44
10,001-50,000	765	0.90	15,728,688	2.81	15,728,688	2.79
50,001-100,000	76	0.09	5,566,735	0.99	5,566,735	0.99
100,001-500,000	77	0.09	14,725,369	2.63	14,725,369	2.61
500,001-9999999999	38	0.05	468,744,508	83.70	473,544,508	83.84
Total	84,930	100.00	552,793,340	98.71	557,593,340	98.72
Nominee registered	20		287,440,983	51.33	287,440,983	50.89
On waiting list, total	0		0	0.00	0	0.00
On joint account			7,206,660	1.29	7,206,660	1.28
Total			0	0.00	0	0.00
Total shares issued			560,000,000	100.00	564,800,000	100.00

Shareholders, Sampo plc, 31 December 2011

A and B shares	Number of shares	% of share capital	% of votes
Solidium Ltd.	79,280,080	14.16	14.04
Varma Mutual Pension Insurance Company	47,709,421	8.52	8.45
Wahlroos Björn	11,758,555	2.10	2.08
Ilmarinen Mutual Pension Insurance Company	10,203,068	1.82	1.81
Kaleva Mutual Insurance Company *)	5,668,476	1.01	1.85
State Pension Fund	4,210,000	0.75	0.75
The Local Government Pension Institution	2,341,642	0.42	0.41
Folketrygdfondet	1,874,311	0.33	0.33
Svenska Litteratursällskapet i Finland	1,609,600	0.29	0.28
Mutual Insurance Company Eläke-Fennia	1,544,115	0.28	0.27
Odin Norden C/O Odin Forvaltning AS	1,308,551	0.23	0.23
OP-Delta Mutual Fund	1,270,000	0.23	0.22
Svenska Handelsbanken AB (Publ), Filialverksamheten i Finland	883,164	0.16	0.16
Schweizerische Nationalbank	877,534	0.16	0.16
Juselius Sigrid Foundation	846,400	0.15	0.15
Mutual Fund Gyllenberg Finlandia	840,000	0.15	0.15
Nordea Life Assurance Finland	831,000	0.15	0.15
Mutual Fund Seligson & CO	790,500	0.14	0.14
Mutual Fund OP-Finland Value	775,000	0.14	0.14
Mutual Fund Nordea Fennia	775,000	0.13	0.13
Nominee registered total	287,440,983	51.33	50.89
Others total	97,182,600	17.35	17.21
Total	560,000,000	100.00	100.00

* 4,468,476 A shares and 1,200,000 B shares.

Internal dividends

In 2011 Sampo plc received a total of EUR 506 million in dividends from its subsidiaries – If P&C paid a dividend of EUR 406 million (SEK 3,700 million) in the fourth quarter and Mandatum Life paid a dividend of EUR 100 million in the second quarter of 2011.

In addition the associated company Nordea Bank AB paid on 5 April 2011 a dividend amounting to EUR 250 million to Sampo plc.

Ratings

All the main ratings for Sampo Group companies remained unchanged in 2011.

		Moody's	Standard and Poor's
Rated company	Rating	Outlook	Rating	Outlook
Sampo plc	Baa2	Stable	Not rated	-
If P&C Insurance Ltd (Sweden)	A2	Stable	A	Stable
If P&C Insurance Company Ltd (Finland)	A2	Stable	A	Stable

Group Solvency

With Nordea Bank AB (publ) as its associated company as of 31 December 2009 Sampo Group became a financial and insurance conglomerate according to the Act on the Supervision of Financial and Insurance Conglomerates (2004/699).

Group solvency has in 2011 been calculated according to Chapter 3 of the Act on the Supervision of Financial and Insurance Conglomerates (2004/699). The Act is based on Directive 2002/87/EC of the European Parliament and of the Council on the supplementary supervision of credit institutions, insurance undertakings and investment.

Sampo Group Solvency

EURm	31 Dec 2011	31 Dec 2010
Group capital	8,920	8,886
Sectoral items	1,091	1,711
Intangibles and other deductibles	-2,545	-2,388
Dividends for the current period	-672	-646
Group's own funds, total	6,794	7,564
Minimum requirements for own funds, total	4,902	4,526
Group solvency	1,892	3,038
Group solvency ratio
(Own funds % of minimum requirements)	138.6	167.1

Group solvency ratio (own funds in relation to minimum requirements for own funds) remained flat in the fourth quarter of 2011 and was 138.6 per cent (167.1) as at 31 December 2011. The decrease in the solvency ratio during 2011 was due to the change in accounting of Topdanmark holding, the reduction of the amount of Tier2 loans in Nordea and the calling of If's hybrid loan in March 2011. The minimum capital requirement rose due to the increase in Nordea's capital requirement. The part of Nordea's capital requirement corresponding to Sampo's holding in Nordea is taken into account in the Group's capital requirement.

In Sampo Group solvency is assessed internally by comparing the capital required to the capital available. Capital requirement

assessment is based on an economic capital framework, in which Group companies quantify the amount of capital required for measurable risks over a one year time horizon at 99.5 per cent´s confidence level. In addition to economic capital, companies assess their capital need related to non-measurable risks like risks in business environment. Capital available or Adjusted Solvency Capital include regulatory capital and in addition other loss absorbing items like the effect of discounting technical reserves and other reserves excluded from regulatory capital.

The economic capital tied up in Group's operations on 31 December 2011 was EUR 4,374 million (4,281) and adjusted solvency capital was EUR 7,262 million (8,521).

Debt Financing

Sampo plc´s debt financing at the end of 2011 amounted to EUR 2,329 million and interest bearing assets including bank accounts to EUR 1,121 million. During the year the net debt increased to EUR 1,208 million (1,016). Gross debt to Sampo plc's equity was 35 per cent (26).

As at 31 December 2011 financial liabilities in Sampo plc's balance sheet consisted of issued senior bonds and notes of EUR 1,677 million and

EUR 652 million of outstanding CPs issued. During 2011 Sampo plc focused on diversifying the maturity structure of its outstanding debt by three smaller issues maturing in 2013, 2014 and 2016, respectively. The average interest on Sampo plc's debt as of 31 December 2011 was 3.73 per cent.

Outlook

The major risks and uncertainties to the Group in the near term

The major risks Sampo Group is exposed to in its normal business activities are credit risk, market risks and insurance risks. Their contributions to Group's Economic Capital requirement are currently within normal boundaries at levels 38 per cent, 36 per cent and 14 per cent, respectively.

Sovereign debt crisis, crisis of political system, potential banking crisis and slow growth may escalate in ways that can affect Group's

Dividend Proposal

According to Sampo Group's dividend policy, total annual dividends paid shall be higher than 50 per cent of Group's net profit for the year (excluding extraordinary items). In addition, share buy-backs can be used to complement the cash dividend.

The parent company's distributable capital and reserves totaled EUR 6,623,776,460.88, of which profit for the financial year was EUR 682,234,763.79.

The Board proposes to the Annual General Meeting a dividend of EUR 1.20 per share to company's 560,000,000 shares. The dividends to be paid are EUR 672,000,000.00 in total. Rest of funds are left in the equity capital.

activities unfavorably although Sampo Group companies do not have direct exposures in sovereigns under pressure and have small exposure to banking sector outside the Nordic region.

Outlook for 2012

Sampo Group's business areas are expected to report good operating results for 2012. However, the mark-to-market results are, particularly in life insurance, highly dependent on capital market developments.

P&C insurance operations are expected to reach their long-term combined ratio target of below 95 per cent in 2012. Nordea's contribution to the Group's profit is expected to be significant.

The dividend will be paid to shareholders registered in the Register of Shareholders held by Euroclear Finland Ltd as at the record date of 17 April 2012. The Board proposes that the dividend be paid on 24 April 2012.

No significant changes have taken place in the company's financial position since the end of the financial year. The company's liquidity position is good and in the view of the Board, the proposed distribution does not jeopardize the company's ability to fulfill its obligations.

Sampo plc

Board of Directors

Key Figures

Group key figures 1)		2011	2010	2009	2008	2007
Profit before taxes	EURm	1,228	1,320	825	870	3,833
Return on equity (at fair values)	%	7.7	21.8	55.7	-32.4	52.6
Return on assets (at fair values)	%	3.7	10.0	18.6	-7.4	11.5
Equity/assets ratio	%	29.7	29.8	28.6	21.9	30.5
Group solvency 2)	EURm	1,892	3,038	2,315	2,656	5,969
Group solvency ratio 2)	%	138.6	167.1	158.3	433.6	774.6
Average number of staff		6,874	6,914	7,311	7,145	6,855

P&C insurance		2011	2010	2009	2008	2007
Premiums written before reinsurers' share	EURm	4,414	4,189	3,888	4,057	4,085
Premiums earned	EURm	4,094	3,894	3,643	3,807	3,797
Profit before taxes	EURm	636	707	644	549	534
Return on equity (at fair values)	%	12.4	39.8	53.2	-0.8	19.2
Risk ratio 3)	%	68.4	69.1	68.0	68.1	66.9
Cost ratio 3)	%	23.5	23.7	24.1	23.7	23.7
Loss ratio excl. unwinding of discount 3)	%	74.7	75.6	74.6	74.4	73.4
Expense ratio 3)	%	17.3	17.2	17.6	17.4	17.2
Combined ratio excl. unwinding of discount	%	92.0	92.8	92.1	91.8	90.6
Solvency capital **)	EURm	3,080	3,373	2,943	2,221	2,681
% of technical provisions *)	%	34.2	38.2	36.3	29.8	33.3
Solvency ratio *)	%	72.4	79.5	77.3	65.7	71.3
Average number of staff		6,299	6,392	6,807	6,655	6,415

*) Based on the financial statements of If Group.

Life insurance		2011	2010	2009	2008	2007
Premiums written before reinsurers' share		854	1,117	809	536	622
Profit before taxes	EURm	137	142	121	140	342
Return on equity (at fair values)	EURm	-11.7	36.2	97.6	-68.8	9.1
Expense ratio	%	111.6	112.1	111.0	113.1	101.6
Solvency capital (IFRS)	%	1,046	1,335	927	382	844
% of technical provisions (IFRS)	EURm	20.9	25.7	18.5	7.8	16.4
Average number of staff	%	521	470	450	437	384

Holding		2011	2010	2009	2008	2007
Profit before taxes	EURm	456	474	36	180	95
Average number of staff		54	52	54	53	56

Per share key figures		2011	2010	2009	2008	2007
Earnings per share	EUR	1.85	1.97	1.14	1.18	6.18
Earnings per share, continuing operations	EUR	-	-	-	-	1.25
Earnings per share, incl. change in fair value reserve	EUR	1.22	3.22	5.88	-3.52	5.89
Earnings per share, incl. change in fair value reserve, continuing operations	EUR	-	-	-	-	0.95
Capital and reserves per share	EUR	15.93	15.83	13.56	8.25	13.47
Net asset value per share	EUR	14.05	17.79	14.63	8.28	13.49
Dividend per share 4)	EUR	1.20	1.15	1.00	0.80	1.20
Dividend per earnings	%	64.9	58.4	87.7	67.8	19.4
Effective dividend yield	%	6.3	5.7	5.9	6.0	6.6
Price/earnings ratio		10.4	10.2	14.9	11.2	2.9
Adjusted number of shares at 31 Dec. 5)	1,000	560,000	561,282	561,282	561,372	574,209
Average adjusted number of shares 5)	1,000	560,863	561,321	561,370	569,442	577,802
Weighted average number of shares, incl. dilutive potential shares 6)	1,000	560,863	561,321	561,370	569,442	577,802
Market capitalisation	EURm	10,735	11,254	9,553	7,433	10,382

A shares		2011	2010	2009	2008	2007
Adjusted number of shares at 31 Dec. 5)	1,000	558,800	560,082	560,082	560,172	573,009
Average adjusted number of shares 5)	1,000	559,663	560,121	560,170	568,242	576,602
Weighted average number of shares, incl. dilutive potential shares 5)	1,000	559,663	560,121	560,170	568,242	576,602
Weighted average share price	EUR	20.63	18.46	13.84	15.96	21.43
Adjusted share price, high	EUR	23.90	20.71	17.72	19.30	24.79
Adjusted share price, low	EUR	16.85	16.13	8.63	11.42	17.95
Adjusted closing price	EUR	19.17	20.05	17.02	13.24	18.08
Share trading volume during the financial year	1,000	399,759	381,863	452,367	650,816	750,748
Relative share trading volume	%	71.4	68.2	80.8	114.5	130.2

B shares		2011	2010	2009	2008	2007
Adjusted number of shares at 31 Dec.	1,000	1,200	1,200	1,200	1,200	1,200
Average adjusted number of shares	1,000	1,200	1,200	1,200	1,200	1,200

1) Sampo plc's sales gain (EURm 2,830) arising from the disposal of the share stock of Sampo Bank plc to Danske Bank A/S is included in the Group key figures for the year 2007. The comparison average numbers of staff between the year 2006 include the average staff number of the Banking and investment services (discontinued operations).

2) On 31 Dec. 2009 Nordea was consolidated as an associate to Sampo and Sampo became a financial and insurance conglomerate, in accordance with the Act on Supervision on Financial and Insurance Conglomerates (2004/699). In 2009–2010, the group solvency was calculated according to Chapter 3. In 2007 and 2008 the group solvency was based on adjusted solvency calculations for insurance groups according to the Decree of the Ministry of Social Affairs and Health (1106/2000). The adjusted solvency wass determined on the basis of the Group financial statements as permitted by the Financial Supervisory Authority (former Insurance Supervisory Authority). In 2006, the solvency was calculated according to the consolidation method defined in Chapter 3 of the Act on the Supervision of Financial and Insurance Conglomerates.

3) Key figures for P&C Insurance are based on activity based costs and cannot, therefore, be calculated directly from the consolidated income statement.

4) The Board of Director's proposal to the Annual General Meeting for the accounting period 2011.

5) In calculating the per share key figures, the treasury shares (1,282,390 shares) held by Sampo pcl during the financial year have been taken into account. The number of shares used at the balance sheet date was 560,000,000 and the average number of shares 560,862,572.

In calculating the key figures the tax corresponding to the result for the accounting period has been taken into account. The valuation differences, adjusted with deferred tax liability, on investment property and held-to-maturity debt securities have been taken into account in return on assets, return on equity, equity/assets ratio and net asset value per share. Additionally, other comprehensive income have been taken into account in return on assets and return on equity. In net asset value per share, the Group valuation difference on associate Nordea has also been taken into account.

Calculation of the Key Figures

The key figures have been calculated in accordance with the decree issued by the Ministry of Finance and the specifying regulations and instructions of the Financial Supervisory Authority. The Group solvency has been calculated according to the consolidation method defined in Chapter 3 of the Act on the Supervision of Financial and Insurance Conglomerates.

Group Key Figures

Profit before taxes

Property & casualty insurance profit before taxes + life insurance profit before taxes + holding business profit before taxes + Group elimination items with result impact

Property & casualty and life insurance

• • insurance premiums written
• • net income from investments
• • other operating income
• claims incurred
• change in liabilities for investment and insurance contracts
• staff costs
• other operating expenses
• finance costs
• +/- share of associates' profit/loss

Holding

• • net income from investments
• • other operating income
• staff costs
• other operating expenses
• finance costs
• +/- share of associates' profit/loss

Return on equity (at fair values), %

• • total comprehensive income
• • change in valuation differences on investments less deferred tax

_____________________________________________________________x 100 %

• total equity

• • valuation differences on investments less deferred tax
• (average of values on 1 Jan. and 31 Dec.)

Return on assets (at fair values), %

• • operating profit
• • other comprehensive income before taxes
• • interest and other financial expense
• • calculated interest on technical provisions
• • change in valuation differences on investments

_____________________________________________________________x 100 %

• • total balance sheet
• technical provisions relating to unit-linked insurance
• • valuation differences on investments

(average of values on 1 Jan. and 31 Dec.)

Equity/assets ratio (at fair values), %

• • total equity
• • valuation differences on investments less deferred tax

_____________________________________________________________ x 100 %

• balance sheet total

• valuation differences on investments

Group solvency

• • total equity
• • sectoral items
• intangible assets and sectoral deductibles

_____________________________________________________________

_____________________________________________________________

own funds, total

• minimum requirements for own funds, total

group solvency

Group solvency ratio, %

own funds

_____________________________________________________________x 100 %

minimum requirements for own funds

Average number of staff

Average of month-end figures, adjusted for part-time staff.

Property & Casualty Insurance Key Figures

Profit before taxes

Formula shown in connection with the Group key figures.

Return on equity (at fair values), %

Formula shown in connection with the Group key figures.

Risk ratio, %

• claims incurred

• claims settlement expenses

_________________________________________________________________x 100 %

premiums earned

Cost ratio, %

• operating expenses + claims settlement expenses

_________________________________________________________________x 100 %

premiums earned

Loss ratio, %

claims incurred
___________ x 100 %

premiums earned

Loss ratio excl. unwinding of discount, %

claims incurred before unwinding of discount

_________________________________________________________________x 100 %

premiums earned

Expense ratio, %

operating expenses

_________________________________________________________________x 100 %

premiums earned

Combined ratio, %

Loss ratio + expense ratio

Combined ratio excl. unwinding of discount, %

Loss ratio before unwinding of discount + expense ratio

Solvency capital (IFRS)

• • equity after proposed profit distribution
• ± valuation differences on investment
• intangible assets
• • subordinated loans
• deferred tax liability probably realised in near future
• • other required items (Ministry of Finance decree)

Solvency capital, % of technical provision (IFRS)

solvency capital _________________________________________________________________ x 100 %

• liabilities for insurance and investment contracts

• reinsurers' share of insurance liabilities

Solvency ratio (IFRS), %

solvency capital

_________________________________________________________________x 100 %

premiums earned from 12 months

Life Insurance Key Figures

Profit before taxes

Formula shown in connection with the Group key figures.

Return on equity (at fair values), %

Formula shown in connection with the Group key figures.

Expense ratio

• operating expenses before change in deferred acquisition costs

• claims settlement expenses

_______________________________________________________________x 100 %

expense charges

Solvency capital (IFRS)

• • equity after proposed profit distribution
• ± valuation differences on investment
• intangible assets
• • subordinated loans

• deferred tax liability probably realised in near future

• (incl. deferred tax from fair value reserve and profit)

• • other required items (Ministry of Finance decree)

Solvency ratio, % of technical provision, IFRS

• solvency capital

_______________________________________________________________x 100 %

• • liabilities for insurance and investment contracts
• reinsurers' share of insurance liabilities
• 75 % x technical provisions relating to unit-linked insurance

Per Share Key Figures

Earnings per share

profit for the financial period attributable to the parent company's equity holders

adjusted average number of shares

Earnings per share, incl. change in fair value reserve

____________________________________________________________

____________________________________________________________

total comprehensive income for the financial period attributable to the parent company's equity holders

adjusted average number of shares

Equity per share

equity attributable to the parent company 's equity holders

________________________________________________________________________

________________________________________________________________________

adjusted number of shares at balance sheet date

Net asset value per share

• • equity attributable to the parent company's equity holders
• • valuation differences on listed associate in the Group
• • valuation differences on investments less deferred tax

adjusted number of shares at balance sheet date

Dividend per share, %

dividend for the accounting period ________________________________________________________________________x 100 %

adjusted number of shares at balance sheet date

Dividend per earnings, %

dividend per share ________________________________________________________________________x 100 %

________________________________________________________________________

earnings per share

Effective dividend yield, %

dividend per share

________________________________________________________________________x 100 %

adjusted closing share price at 31 Dec.

Price/earnings ratio

adjusted closing share price at 31 Dec.

earnings per share

Market capitalisation

number of shares at 31 Dec. x closing share price at 31 Dec.

Relative share trading volume, %

number of shares traded through the Helsinki Exchanges

________________________________________________________________________x 100 %

adjusted average number of shares

Risk Management

Earnings Logic and Risks

• 65 The Objective, Tasks and Motivation of the Risk Management Process
• Risk Governance Framework
• Risk and Capital Management
• Underwriting Risks
• P&C Insurance Underwriting Risks
• Life Insurance Underwriting Risks

Market Risks

• ALM Risks
• Investment Portfolio Risks

Credit Risks

• Credit Risks Related to Reinsurance Counterparties
• Credit Risk Management

Liquidity Risks

Operational Risks

• Operational Risk Management in Sampo Group
• Operational Risk Management in If P&C
• Operational Risk Management in Mandatum Life

Group Level Considerations

Capitalization

• 1 1 1 Internal Capitalization Assessment
• Sensitivity Analysis of the Capital Position
• Capitalization by Regulatory Criteria
• Capitalization by Rating Agency Criteria
• Risk Management Outlook

Earnings Logic and Risks

Sampo Group is involved in three business areas: P&C insurance and life insurance are conducted by subsidiaries If P&C Insurance Holding Ltd and Mandatum Life Insurance Company Ltd that are wholly owned by parent company Sampo plc. In addition to the insurance subsidiaries, Group's parent company Sampo plc also held, as at 31 December 2011, an equity stake of 21.28 per cent in Nordea Bank AB (publ), through which Sampo Group has an exposure to banking activities. Nordea is an associated company affecting Sampo Group's profits and risks substantially. However, it is an independent company whose risk management is not covered in Sampo Group's annual report.

Sampo plc as a parent company does not have any business operations of its own except the management of its capital structure and liquidity buffers. Sampo plc guides the activities of subsidiaries by setting financial and capitalization targets for the subsidiaries and defining the group level principles for instance in the areas of risk management, compensation and compliance. The subsidiaries organize their operations taking into account the special characteristics that arise from the company specific earnings logic and risks, in addition to targets and principles set by the parent company.

As a pan-Nordic insurance group If P&C underwrites policies that cover various risks of individuals and corporations on a geographically diverse area. If P&C mainly underwrites insurance risks in the Nordic and Baltic countries, as well as policies for Nordic clients with operations outside the Nordic countries. In addition to geographical diversification, the business is well-diversified over lines of business. Mandatum Life operates in Finland and Baltic countries and offers savings and pension policies with life risk features, as well as, separate policies covering mortality, morbidity and disability risks.

If P&C and Mandatum Life are exposed to various risks, which are selected carefully and priced reflecting the inherent risk levels. Reinsurance is used to reduce exposure to low frequency, but high impact events. A critical success factor is also the companies' ability to optimize the balance between the expected returns and risks in investment portfolios while taking simultaneously into account the features of insurance liabilities, solvency, regulatory asset coverage rules and rating requirements. The core competencies in subsidiary companies are the pricing of insurance risks, evaluation of investment risks, the proper management of the arising risk exposures and the ability to manage adequate balance between risks and capitalization.

The parent company Sampo plc aims to ensure that the activities of the subsidiaries will not lead to unwanted risk concentrations and hence, for extra need of capital at group level. Firstly, the concentrations are pro-actively prevented by careful division of risktaking between subsidiaries, and secondly the risk profiles of subsidiaries are adjusted if needed.

Sampo Group's main risks are illustrated in figure 'Categorization of risks in Sampo Group'. The risk categorization is mostly based on sources of risks. Under P&C insurance underwriting risk the categorization is based on the practices of the administration of risk instead. This categorization distinguishes between risks of claims, which have already happened in the past (reserve risk), and the risk of claims, which will happen in the future (premium risk). Independent of this categorization the unique risk sources like fire, motor accident, windstorms and catastrophic events are similarly causing deviations from the expected values as in any other risk category. Moreover, risks such as ALM risk, concentration risk and reputation risk are by their nature linked to various risk factors simultaneously.

P&C insurance underwriting risk:

Premium risk is the risk of loss due to inadequate pricing, risk concentration, improper reinsurance coverage or random fluctuations in frequency and/or size of claims.

Reserve risk results from fluctuations in the timing and amount of claim settlements.

Catastrophe risk is the risk of low frequency, high severity events, such as natural catastrophes, that are not captured adequately by the premium risk or reserve risk. These events lead to significant

Life insurance underwriting risk:

Biometric risks refer to the risk that the company has to pay more mortality, disability or morbidity benefits than expected or the company has to keep paying pension payments to the pension policyholder for a longer time (longevity risk) than expected when pricing the policies. The specific case in which a single event of major magnitude leads to a significant deviation in actual benefits and

deviation in actual claims from the total expected claims. Catastrophe risk is not defined as a separate risk, but it can be seen as an extreme case of premium risk.

Expense risk arises from the fact that the timing and/or the amount of expenses incurred differs from those expected. As a result expense charges originally assumed may not be enough to cover the realized expenses.

payments from the total expected payments is called catastrophe risk. In life insurance, catastrophe events include single events or series of events. These events can occur within short time period or be, by nature, long-lasting events.

Policyholder behavior risks arise from the uncertainty related to the behavior of policyholders. Policyholders have a right to cease paying premiums (lapse risk) and a possibility to interrupt their policies (surrender risk).

Expense risk arises from the fact that the timing and/or the amount of expenses incurred differs from those expected at the timing of

Market risk:

Market risks refer to fluctuations in the financial results and capital caused by changes in market values of financial assets and liabilities as well as in insurance liabilities. Market values change together with underlying tradable market risk variables of which the following ones

Credit risk:

Credit risk (default) refers to the negative impact in the financial results arising from defaults of debtors (issuer risk) or other counterparties (counterparty risk in derivatives and reinsurance contracts). Credit risk may realize when the cash flows agreed with the debtor or counterparty fail to materialize. In the case of issuer risk

Liquidity risk:

Liquidity risk is the risk that insurance undertakings are unable to conduct their regular business activities in accordance with the strategy, or in extreme cases, are unable to settle their financial obligations when they fall due. Liquidity risk deals with potential

Operational risk:

Operational risk refers to the risk of loss resulting from inadequate or failed processes or systems, from personnel and systems or from external events. This definition includes legal risk but excludes risks resulting from strategic decisions. Compliance risk is the risk of legal or regulatory sanctions, material financial loss or loss of reputation

General business risk:

General business risk is the risk of losses due to changes in the competitive environment or internal flexibility. Unexpected changes in general business environment can cause bigger than expected fluctuations in financial results. Such changes include the general

ALM risk:

The company is exposed to ALM risk when changes in different market risk variables (e.g. interest rates, inflation, foreign exchange rates, equity prices) cause a change in the value of investment assets that is of different size than the respective change in the economic

pricing. As a result expense charges originally assumed may not be enough to cover the realized expenses.

are currently the most important for Sampo Group: interest rates, inflation, credit spreads, foreign exchange rates, share prices and their volatilities.

the final loss depends on the company's holding in the security and the recovery rate. In the case of counterparty risk, final loss depends on potential positive mark-to-market value at the time of default together with recovery rate.

illiquidity of investments and non-renewal of insurance policies. Also the availability and price of refinance and financial derivatives affect the company´s ability to carry out regular business.

an undertaking may suffer as a result of not complying with laws, regulations and administrative provisions as applicable to its activities. A compliance risk is often the consequence of a legal or operational risk and hence it can be seen as a part of operational risk.

economic development, changes in the institutional environment, technological innovations and competitive factors such as new competitors and changes in margins and volumes.

value of insurance liabilities. In addition, the cash flows of technical provisions are modeled estimates and therefore uncertain in relation to both their timing and amount. ALM risk also includes this component of uncertainty.

Concentration risk:

Concentration risk arises when the company´s risk exposures are not diversified enough and as a result of this an individual claim or market event could threaten the solvency or the financial position of the company. Concentration risk may realize also when the

Reputational risk:

Reputational risk, which is not categorized as an operational or a compliance risk, is the risk of reputational damage due to an action or event.

An illustrative picture of the most significant risks in Sampo Group is presented in figure 'Key risks in Sampo Group'. The most significant risks when Nordea's figures are included are credit risk, market risk,

profitability and capital position is reacting similarly to general economic development or to structural changes in institutional environment in different areas of business.

insurance risk and operational risk. The figure is for illustrative purposes only.

The most significant risk arising from the operations of the insurance subsidiaries is market risk. On the Group level, the most significant risks are market risk and credit risk. This is due to Sampo plc's holding in Nordea whose business activities in banking result in credit risk being the key risk.

The Objectives, Tasks and Motivation of the Risk Management Process

The core competences of Sampo Group's business are skillful pricing of risks, selection of risks and proper risk and capital management. A high quality risk management process is a necessary prerequisite for successful business.

In Sampo Group, the key objectives for risk management are

• to ensure that all the risks affecting the profitability and other material risks are identified, assessed and analyzed;

• to ensure that capitalization in the form of capital and foreseeable profitability of businesses – is adequate in terms of current risks inherent in business activities and existing business environment;

• to ensure that risk bearing capacity is allocated into different business areas according to chosen strategies and that risks are properly priced;

• to limit and mitigate fluctuations in the economic values of Group companies; and
• to ensure the overall efficiency, security and continuity of operations.

To meet these objectives Sampo Group's risk management process includes following tasks depicted in the 'Risk management process' figure.

A high-quality risk management process provides shareholder value for the following reasons

• Clients get reliable service from a reputable institution with an effective risk management.
• Risk premium required by investors will be smaller when risks are transparent and the risk management process is clearly described and communicated.
• The motivation of the personnel strengthens when strategies, authorizations, limits, targeted return and reward criteria are clearly defined and communicated.
• Supervisory authorities' confidence in company's ability to control the risks associated with its activities further bolsters cooperation with the authorities.

Risk Governance Framework

This section describes Sampo Group's risk governance framework. Sampo Group's overall corporate governance and system of internal control is described in the Corporate Governance section.

If P&C and Mandatum Life organize their activities autonomously but in accordance with the Group level risk management principles. The Board of Directors of the parent company defines return and capitalization targets of the subsidiaries. The risk exposure and

capitalization reports of the subsidiaries are consolidated on Group level on a quarterly basis and reported to the Board and Audit Committee of Sampo plc.

The reporting lines of different governing bodies at Sampo Group level are described in figure 'Risk management governance framework in Sampo Group'.

The Board of Directors of Sampo plc is responsible for ensuring that the Group's risks are properly managed and controlled.

The Audit Committee (AC) is responsible, on behalf of the Board of Directors, for the preparation of Sampo Group's risk management principles and other related guidelines. The AC shall ensure that the operations are in compliance with these, control Sampo Group's risks and risk concentrations as well as control the quality and scope of risk management in each company. The committee shall also monitor the implementation of risk policies, capitalization and the development of risks and profit. At least three members of the AC must be elected from those members of the Board, who do not hold management positions in Sampo Group and are independent of the company. The AC meets on a quarterly basis.

The Group Chief Risk Officer (CRO) is responsible for the appropriateness of risk management on Sampo Group level. The CRO's responsibility is to monitor Sampo Group's aggregated risk exposure as a whole and coordinate and monitor company specific and group level risk management.

The Boards of Directors in each insurance subsidiary have the overall responsibility for the risk management process and they are the ultimate decision making bodies in If P&C and Mandatum Life respectively. The Boards ensure that the management and monitoring of the risks are satisfactory, and approves the risk management plan. The Boards of Directors of If P&C and Mandatum Life appoint the individual risk management committees within each legal entity and are also responsible for identifying needs for changing policies, guidelines and instructions related to risk management.

Risk Governance in If P&C

The Board of Directors of If P&C bears overall responsibility for the risk management process and constitutes the ultimate decision making body. The Board ensures that the management and follow-up of risks

are satisfactory, monitors risk reports and approves risk management plans.

The reporting lines of different governing bodies in If P&C are described in figure 'Risk management governance framework in If P&C'.

The If P&C Risk Control Committee (IRCC) assists the CEO of If P&C and the Board of Directors in fulfilling their oversight responsibilities pertaining to the risk management process. The IRCC monitors reports from the relevant committees, business areas, experts and specialist functions as well as the exposure in relation to limits given by the Board of Directors. The Risk Control unit is, on behalf of the Chief Risk Officer, responsible for coordinating and analyzing the information reported to the IRCC.

The responsibilities of the various risk committees in If P&C are as follows

• The Chairman of the Investment Control Committee (ICC) in If P&C is responsible for monitoring the investment activities and implementing the Investment Policy ensuring compliance with the principles and limits specified in the Investment Policy and for reporting deviations from the policy.
• The Chairman of the Underwriting Committee (UWC) is responsible for approving and giving opinion on proposed deviations from the Underwriting Policy.

• The Chairman of the Actuarial Committee (AC) is responsible for reporting on reserve risk and monitoring the technical provisions and the inherent provision risk.

• The Chairman of the Reinsurance Committee (RC) is responsible for approving and reporting deviations from the Reinsurance Policy and the Internal Reinsurance Policy.

• The Chairman of the Reinsurance Security Committee (RSC) is responsible for approving and reporting deviations from the Reinsurance Security Policy.
• The Chairman of the Operational Risk Committee (ORC) is responsible for reporting on the operational risk status of If P&C as a whole based on the risks identified in the Operational Risk Assessment (ORA) process.
• The Chairman of the Ethics Committee (EC) is responsible for maintaining the Ethics Policy and other policies dealing with values and behavior.
• The Compliance Committee is an advisory forum for the If P&C Chief Compliance Officer, who is responsible for the coordination of legal compliance issues within If P&C and the adherence of operations to Sampo Group's Compliance Policy, a group level policy applicable to all Sampo Group companies.

Risk Governance in Mandatum Life

In Mandatum Life the Board of Directors is responsible for risk management and adequacy of internal control. The Board annually approves the Risk Management Plan, Investment Policy and other risk management and internal control instructions.

The Managing Director of Mandatum Life has the overall responsibility for the risk management according to Board of Directors' instructions.

The Risk Management Committee (RMC) coordinates and monitors all risks in Mandatum Life. The Committee is chaired by the Managing Director. Risks are divided into main groups, which are insurance, market, operational, legal and compliance risks, as well as, business and reputational risks. Risks related to the Baltic subsidiary are also included. Each risk area has a responsible person in the Committee.

Mandatum Life's Asset and Liability Committee (ALCO) controls that the investment activities are conducted within the limits defined in the Investment Policy approved by the Board and monitors the adequacy of capital in relation to the market risks in the balance sheet. ALCO reports to the Board and meets at a minimum on a monthly basis.

The Insurance Risk Committee is responsible for maintaining the Underwriting Policy and monitoring the functioning of the risk selection and claims processes. The Committee also reports all deviations from the Underwriting Policy to RMC. The Insurance Risk Committee is chaired by the Chief Actuary who is responsible for ensuring that the principles for pricing policies and for the calculation of technical provisions are adequate and in line with the risk selection and claims processes. The Board approves the insurance policy pricing and the central principles for the calculation of technical provisions. In addition, the Board defines the maximum amount of risk to be retained on the company's own account and approves the reinsurance policy annually.

Legal and Compliance Unit is taking care of compliance matters and Head of the Unit is a member of Risk Management Committee. Managing director is responsible for business and reputation risk issues and he is also the Chairman of Risk Management Committee.

Operational Risk Committee (ORC) analyses and handles operational risks, e.g. in relation to new products and services, changes in processes and risks as well as realized operational risk incidents. Significant observations are reported to the Risk Management Committee and to the Board of Directors quarterly. ORC is also responsible for maintaining and updating the continuity and preparedness plans.

The Baltic subsidiary has its own risk management procedures. All major incidents are also reported to Mandatum Life's Risk Management Committee. Chairman of the Baltic Subsidiary is a member of Risk Management Committee.

Internal audit ensures with its audit recommendations that adequate internal controls are in place.

The reporting lines of different governing bodies in Mandatum Life are described in figure 'Risk management governance framework in Mandatum Life'.

Risk and Capital Management

In Sampo Group, risk and capital management is about ensuring the adequacy of the available capital in relation to risks arising from the company's activities and business environment. Risk and capital management activities are conducted continuously in various parts of the organization. Figure 'Illustrative figure of risk and capital management process in Sampo Group' depicts the risk and capital management actions in Sampo Group on a general level.

Capital Adequacy Assessment

In addition to the statutory financial statements and solvency figures, Sampo Group also uses internal performance, risk and capital measures, which are based on fair values of assets and liabilities. Also the risk and capitalization opinions published by rating agencies are followed closely by Sampo Group.

Sampo Group considers that there is a need to assess capitalization internally because regulatory and rating agency models have to fit for all and hence cannot take the specific features of different companies accurately enough into account.

Capital adequacy is assessed internally by comparing the amount of available capital (adjusted solvency capital) to the amount of capital needed. The capital adequacy assessment has three phases. First, economic capital methodology is used to define the capital needed for current activities. Second, the less quantifiable, low probability and high impact risks as well as uncertainties related to the business environment are considered and this may affect Sampo Group's understanding of the capital needed. Third, when defining the capital available, expected profitability is taken into account, in addition to other capital components, because earnings are seen as the first buffer against potential losses.

What is economic capital in Sampo Group?

Sampo Group uses economic capital as an internal measure of capital required for risks the Group is exposed to. Sampo Group defines economic capital as the amount of capital required to protect the solvency over a one year time horizon with a probability of 99.5 per cent.

Economic capital accounts for market, credit, insurance and operational risks, as well as the diversification effect between these risks. Economic capital is calculated using a set of calculation methods, which have been developed for the specific needs of each business area. When assessing the economic capital need arising

The economic capital and adjusted solvency capital as well as the regulatory capital measures are disclosed quarterly.

from Nordea, Sampo plc uses the economic capital calculated by Nordea multiplied by the proportion of Sampo plc's share in Nordea (21.28 per cent at year end).

In Sampo Group, economic capital is considered to be a good estimate of the capital required to cover risks that can be measured in a reliable way and within a normal business environment. In the assessment of the adequacy of capital the effects of potential changes in the business environment as well as the effects of low probability risks are taken into account.

What is adjusted solvency capital in Sampo Group?

Different stakeholders have different views when assessing the available capital. Regulators have defined which items can be included into the solvency capital and rating agencies have their own definitions for capital. As an internal measure of available capital, Sampo Group uses adjusted solvency capital. The basis for adjusted

Risk and Capital Planning

When assessing the future capital requirement, the views of the management and different stakeholders – regulators and supervisors, rating agencies, debt investors, policyholders and shareholders – are considered. Management's views and plans regarding the future development of the business and investment activities are used when analyzing the future capital requirement. Within the planning process it is considered how changes either in business volumes and business mix or changes in existing risk factors may affect profitability, risks and capital needs. The results of these considerations are reflected in risk management and capitalization recommendations to the business management and the Board of Directors. The recommendations are also affected by the external stakeholders' views on the capitalization of Sampo Group.

solvency capital is capital items included in regulatory solvency capital. On top of those, other risk absorbing items such as the difference between the book value and market value (including a risk margin) of technical provisions are added.

Risk and Capital Management Actions

A prudent assessment of capital adequacy and a careful risk and capital planning are important phases when creating an understanding of the actions that maintain a proper balance between capital and risks. In Sampo Group, the proactive management of risks and capitalization is seen as the most important phase in the risk and capital management process. Risk limits and decision making authorizations are set up in a way that they, together with profitability targets, facilitate business and investment units to take wellconsidered risks. The limits reflect the capital adequacy targets and risk appetite in general.

Underwriting Risks

The book value (technical provisions) and economic value of insurance liabilities is dependent (i) on the size and timing of future claims payments including expenses and (ii) the interest rates used to discount these claims payments to current date. In this section the focus is mainly on the first component and hence on the underwriting risk. Discount rate risk and its effect on technical provisions are also described in this section. The interest rate risk affecting the economic value of liabilities is covered later in ALM risk section under Market Risks.

P&C Insurance Underwriting Risks

Underwriting risk is the risk that the cost of future claims payments will be higher than anticipated. Underwriting risk is the elementary risk in If P&C and the management of it forms the foundation for insurance operations. The reasons for higher than expected costs are threefold: claims sizes are bigger than expected, claims frequency is

higher than expected and timing of claims payments differs from expected timing.

The figure 'Illustrative figure of P&C insurance risk concepts' depicts the P&C insurance underwriting risk on a general level.

In P&C insurance the insurer promises to compensate a certain loss caused by a certain incident. When incidents like motor accidents,

windstorms and fires occur the insurer establishes a preliminary estimate of loss at the moment when the claim is reported and

technical provisions are booked. Later, during the claims handling process, the estimate may be adjusted and technical provisions may be changed.

In the figure 'Illustrative figure of P&C insurance risk concepts' risk sources at left are original sources for policyholders' losses and variations in them affect claims frequency and claims sizes. Risk sources in the middle may later change original estimates of claims payments.

In P&C insurance business the management of underwriting risk is traditionally organized into premium and reserve risk management. Expense risk is not as crucial as in life insurance, but it is also taken into account when estimating the expected liability cash flows.

Premium Risk

P&C insurance undertakes the obligation to indentify the insured in case of claims, and in exchange, the insured pays a premium. A crucial factor contributing to the profitability of P&C insurance operations is the ability to accurately estimate claims and administrative costs and thereby correctly price the insurance contracts correspondingly.

Given the inherent uncertainty of P&C insurance there is a risk that the future claims are unexpectedly frequent and/or high. Examples include large fires, natural catastrophes such as severe windstorms and unforeseen increases in the frequency or the average size of small and medium-sized claims. Such deviations can be purely random, i.e. an effect of the inherent uncertainty of the claims cost. The deviations can also be the result of more systematic and permanent changes in e.g. inflation, legislation or exposures. Random deviations are significant in the Industrial insurance business, where claims could potentially be very large, e.g. a fire in a large factory. Systematic deviations to a larger degree affect the Private business area, which is characterized by a large number of small claims and consequently a lower degree of random variation.

Premium Risk Management

The Underwriting Policy (UW Policy) is the principal document for underwriting and sets general principles, restrictions and directions for the organization of underwriting activities. The Board of Directors of each company approves the UW Policy at least once a year.

The UW Policy is supplemented with guidelines outlining in greater detail how to conduct underwriting within each business area. These guidelines cover, such areas as, tariff and rating models for pricing, guidelines in respect of standard conditions and manuscript wordings, as well as authorities and limits, such as sums insured and risks that are not acceptable to undertake. The Underwriting Committee (UWC) is responsible for monitoring compliance with the established underwriting principles.

The business areas manage the premium risk on a day-to-day basis. The pricing within the Private business area and smaller risks within the Commercial business area are set through fixed tariffs. The underwriting of risks in the Industrial business area and more complex risks within Commercial business area are based to a greater extent on general principles and individual underwriting than strict tariffs. In general, pricing is based on statistical analyses of historical claims data and assessments of the future development of claims frequency and claims inflation.

Given the large number of customers in P&C insurance and the fact that business is underwritten in different geographical areas and across several classes of insurance, the portfolio and respective premiums are well-diversified. The degree of diversification is shown in the figure 'Breakdown of gross written premiums by business area, country and line of business, If P&C, 31 December 2011' and in the table 'Technical provisions per line of business and country, If P&C, 31 December 2011'.

Despite the inherently well diversified insurance portfolio, risk concentrations may still arise through, for example, exposures to natural disasters, such as windstorms and floods. The geographical areas most exposed to such disasters are Denmark, Norway and Sweden. In addition, since single large claims can potentially have a major impact on the result, the risk of severe outcomes is mitigated using reinsurance.

If P&C's Reinsurance Policy stipulates guidelines for the purchase of reinsurance. The need and optimal choice of reinsurance is evaluated through statistical methods and models. The remaining net exposure is subject to the capital requirements (economic, regulatory and rating) and the cost of reinsurance must be favorable compared to the cost of capital.

To analyze the exposure to natural disasters, the probability of major losses and the need for reinsurance, If P&C cooperates with external advisors. Two different approaches are used for these analyses

• statistical models, in which historical losses are used to estimate distributions for the frequency and size of losses; and
• catastrophe models, in which catastrophes are simulated on the basis of historical meteorological data. Subsequently, insurance

losses can be calculated, taking into account vulnerability, exposure and terms of the policy.

A Nordic-wide reinsurance program has been in place in If P&C since 2003. In 2011, retention levels were between SEK 100 million (approximately EUR 11.2 million) and SEK 200 million (approximately EUR 22.4 million) per risk and SEK 200 million (approximately EUR 22.4 million) per event.

Reserve Risk

Defining the value of insurance liabilities always includes uncertainty since the future cost of claims is based on estimates of the size, frequency and timing of future claims payments. The value of insurance liabilities changes also when interest rates used in discounting change. Whenever all insurance liabilities are discounted with market rates, the end result is called economic value of insurance liabilities.

Conversely, technical provisions is a statutory concept and it is the value of insurance liabilities in bookkeeping. Technical provisions are discounted with statutory rates. In this section we focus on technical provisions.

What are technical provisions in P&C insurance?

Technical provisions are divided into provisions for unearned premiums and provisions for claims outstanding in the company's balance sheet. Provisions for unearned premiums are recognized in the balance sheet at the time contracts are incepting. These are intended to cover anticipated claims costs and operating expenses

The uncertainty of technical provisions is normally greater for new portfolios for which complete run-off statistics are not yet available, and for portfolios including claims that take a long time to settle. Workers' Compensation (WC), Motor Third Part Liability (MTPL), Personal Accident, and Liability insurance, are lines of business with the latter characteristics.

Reserve Risk Management

If P&C's Board of Directors approves the guidelines governing the calculation of technical provisions. If P&C's Chief Actuary is responsible for developing and presenting guidelines on how the technical provisions are to be calculated and for assessing whether the level of the total provisions is sufficient. The Chief Actuary issues a quarterly report on the adequacy of technical provisions, which is submitted to the Board of Directors, IRCC, CEO and CFO.

The Actuarial Committee is a preparatory and advisory board for If P&C's Chief Actuary. The Committee makes recommendations concerning guidelines for technical calculations. The Committee also monitors technical provisions and provides advice to If P&C's Chief Actuary regarding the adequacy of these provisions.

during the remaining time of insurance contracts in force. Provisions for claims outstanding on the other hand, are intended to cover the anticipated future payments of all claims incurred, including claims not yet reported to the company.

The actuaries continuously monitor the level of provisions to ensure that they comply with established guidelines. The actuaries also develop methods and systems to support these processes.

The actuarial estimates are based on historical claims data and exposures that are available at the closing date. Factors that are monitored include loss development trends, the level of unpaid claims, legislative amendments, legal cases and economic conditions. When setting provisions, the Chain Ladder and Bornhuetter-Fergusson methods are generally used, combined with projections of the number of claims and the average claim costs.

For such insurance lines as MTPL and WC, legislation and hence the product features and risks differ significantly between countries. For instance, some of the Finnish, Swedish and Danish provisions for these lines include annuities that are sensitive to changes in mortality assumptions and discount rates. The proportion of technical provisions that are related to motor and WC is 68 per cent.

The book value of technical provisions and the duration broken down by line of business and country is shown in table 'Technical provisions per line of business and country, If P&C, 31 December 2011'.

Technical provisions per line of business and country, If P&C, 31 December 2011

		Sweden		Norway	Finland		Denmark		Total
	EURm	Duration	EURm	Duration	EURm	Duration	EURm	Duration	EURm	Duration
Motor other and MTPL	2,546	8.0	847	2.2	845	11.5	131	1.7	4,369	7.4
Workers' compensation	0	0.0	410	5.9	1,034	11.5	262	6.8	1,706	9.6
Liability	320	3.8	164	2.8	131	2.3	83	2.5	698	3.1
Accident	205	5.0	311	2.3	103	1.9	66	1.2	685	2.9
Property	418	0.9	586	0.9	185	1.1	143	0.8	1,332	0.9
Cargo	35	0.7	30	0.7	25	0.5	12	0.8	103	0.3
Total	3,525	6.5	2,348	2.5	2,322	9.7	697	3.6	8,892	6.1

Excluding If Life, Baltics and Russia.

The anticipated inflation trend is taken into account when calculating all provisions and is of the utmost importance for claims settled over a long period of time, such as MTPL and WC. This is based on external assessments of the inflation trend in various areas, such as the consumer price index and payroll index, combined with If P&C's own evaluation of cost increases for various types of claims cost.

Inflation risk in the technical provisions is an important consideration underlying the If P&C's investment strategy. The sensitivity towards inflation differs between countries due to the different national rules.

The sensitivity of If P&C's technical provisions to an increase in inflation, an increase in life expectancy and a decrease in the discount rate is presented in the table 'Sensitivities of technical provisions, If P&C, 2011'.

Sensitivities of technical provisions, If P&C, 2011

Technical provision item	Risk factor	Change in risk parameter	Country	Effect EURm
Nominal reserves	Inflation increase	Increase by 1%-point	Sweden	186.8
			Denmark	12.4
			Norway	65.2
			Finland	27.7
Annuities	Decrease in mortality	Life expectancy increase by 1 year	Sweden	12.8
			Denmark	0.4
			Finland	35.1
Discounted reserves (annuities and part of Finnish IBNR)	Decrease in discount rate	Decrease by 1%-point	Sweden	70.1
			Denmark	8.6
			Finland	215.5

If P&C's technical provisions are further analyzed by claims year before and after reinsurance in the claims cost trend tables. These are disclosed in the Note 27 to the Financial Statements.

Sensitivity of underwriting result and hence underwriting risk is presented by changes in certain key figures in the table 'Sensitivity test of underwriting result, If P&C, 31 December 2011 and 31 December 2010'.

Sensitivity test of underwriting result, If P&C, 31 December 2011 and 31 December 2010

			Effect on pretax profit, EURm
Key figure	Current level (2011)	Change in current level	2011	2010
Combined ratio, business area Private	91.9%	+/- 1 percentage point	+/- 23	+/- 21
Combined ratio, business area Commercial	92.8%	+/- 1 percentage point	+/- 13	+/- 12
Combined ratio, business area Industrial	91.8%	+/- 1 percentage point	+/- 4	+/- 4
Combined ratio, business area Baltics	84.5%	+/- 1 percentage point	+/- 1	+/- 1
Premium level	4,094	+/- 1 per cent	+/- 41	+/- 39
Claims frequency	3,059	+/- 1 per cent	+/- 31	+/- 29
Ceded reinsurance premium	214	+/- 10 per cent	+/- 21	+/- 20

Life Insurance Underwriting Risks

Life insurance risks encompass underwriting risk and discount rate risk in technical provisions. Underwriting risk includes biometric, policyholder behavior and expense risks. This chapter presents the development of these life insurance risks during 2011 and the management principles of these risks.

The figure 'Illustrative figure of life insurance risk concepts' depicts the life insurance underwriting risk on a general level.

Biometric Risks

Biometric risks in life insurance refer mainly to the risk that the company has to pay more mortality, disability or morbidity benefits than expected or the company has to keep paying pension payments to the pension policyholders for a longer time (longevity risk) than expected when pricing the policies. The specific case in which a single event of major magnitude leads to a significant deviation in actual benefits and payments from the total expected payments is called catastrophe risk. In life insurance catastrophe events include single events, or series of events, usually over a short period and longer lasting events.

Long duration of policies and restriction of Mandatum Life's right to increase tariffs increases biometric risks. If the premiums turn out to be inaccurate and pricing cannot be changed afterwards, technical provisions have to be supplemented with an amount corresponding to the expected losses.

Table 'Claim ratios after reinsurance, Mandatum Life, 2011 and 2010' shows the insurance risk result in Mandatum Life's Finnish life insurance policies. The ratio of the actual claims costs to the assumed was 77 per cent in 2011 (78 per cent in 2010). Sensitivity of the insurance risk result can also be assessed on the basis of the information in the table. For instance the increase of mortality by

100 per cent would increase the amount of benefit payments from EUR 13.5 million to EUR 27 million.

Claim ratios after reinsurance, Mandatum Life, 2011 and 2010

		2011		2010
EURm	Risk income	Claim expense	Claim ratio	Risk income	Claim expense	Claim ratio
Life insurance	42.6	23.0	54%	37.9	21.7	57%
Mortality	26.7	13.5	51%	23.4	14.2	61%
Morbidity and disability	15.9	9.5	60%	14.5	7.5	52%
Pension	58.9	55.6	94%	61.0	55.5	91%
Individual pension	9.5	10.1	106%	9.5	10.0	106%
Group pension	49.4	45.5	92%	51.5	45.5	88%
Mortality (longevity)	44.6	41.8	94%	46.2	42.3	92%
Disability	4.8	3.7	76%	5.3	3.2	60%
Mandatum Life	101.5	78.6	77%	98.9	77.2	78%

Longevity risk is the most critical biometric risk in Mandatum Life. Most of the longevity risk arises from the with-profit group pension portfolio. The main uncertainty of longevity risk is related to the mortality trend among relatively old and socio-economically selected insureds. In the unit-linked group pension and individual pension portfolio the longevity risk is less significant because most of these policies are fixed term annuities including death cover compensating the longevity risk.

The annual longevity risk result and longevity trend is analyzed regularly. The assumed life expectancy related to the technical provisions for group pensions was revised in 2002 and additional changes were made in 2007. The longevity risk result has been positive since these revisions. The longevity risk result of group pension for the year 2011 was EUR 2.7 million (EUR 3.9 million in 2010).

Mortality risk result in life insurance is positive and the mortality trend has been favorable to the company. A possible pandemic is seen as the most significant risk that could adversely affect the mortality risk result.

The insurance risk result of other biometric risks has been profitable in total, although the different risk results differ considerably. In a longer term, disability and morbidity risks are mitigated by the company's right to raise insurance premiums for existing policies in case the claims experience deteriorates.

The insurance portfolio of Mandatum Life is relatively well-diversified and does not include major concentration risks. To further mitigate the effects of possible risk concentrations, Mandatum Life has the catastrophe reinsurance in place.

In addition to the biometric risks, Mandatum Life is exposed to other risks such as policyholder behavior, expense and discount rate risks.

Policyholder Behavior and Expense Risks

Uncertainty related to the behavior of the policyholders is a major risk as well. The policyholders have the right to cease paying premiums (lapse risk) and the possibility to interrupt their policies (surrender risk). Being able to keep lapse and surrender rates at a low level are crucial success factors especially for the expense result of unit-linked business. From ALM point of view surrender and lapse risks are less significant because in Mandatum Life, approximately 90 per cent of with-profit policies are pension policies in which surrender is possible only in exceptional cases. For ALM risk, surrender risk is therefore only relevant in individual life and capital redemption policies. In these policies, the risk is reduced by the relatively short maturity of the contracts. Furthermore, the supplements to technical provisions are not paid out at surrender which also reduces the surrender risk related to the with-profit policies.

Surrender and lapse risks are taken into account when the company is analyzing its ALM risk. This is described in more detail in the Market risks chapter.

The company is also exposed to expense risk, which is a risk that the future operating expenses exceed the level that was anticipated when pricing the insurances. Policy terms and tariffs cannot usually be changed materially during the lifetime of the insurance, which increases the expense risk. The main challenge is to keep the expenses related to insurance administrative processes and complex ITinfrastructure at an efficient level. In year 2011 expense result was EUR 9.8 million (EUR 7.8 million). Mandatum Life does not defer insurance acquisition costs.

Discount Rate Risk in Technical Provisions

Discount rate risk in technical provisions is the main risk affecting the adequacy of technical provisions. The guaranteed interest rate in policies is fixed for the whole policy period. Thus, if market interest rates and expected investment returns fall, technical provisions may have to be supplemented.

In most with-profit policies, the guaranteed interest rate is 3.5 per cent. In individual policies sold in Finland before 1999, the guaranteed interest rate is 4.5 per cent, which is also the statutory maximum discount rate of these policies. With respect to these policies, the maximum discount rate used when discounting technical provisions has been decreased to 3.5 per cent. As a result, technical provisions have been supplemented with EUR 79 million (EUR 86 million in 2010). In addition, EUR 29 million has been reserved to lower the interest rate of with-profit liabilities to 2.75 per cent in 2012. So due to low market interest rates, Mandatum Life has increased liabilities in total by EUR 108 million.

The provisions related to each product type and guaranteed interest rates are shown in table 'Analysis of the change in provisions before reinsurance, Mandatum Life, 2011'. The table also shows the change in each category during 2011.

Analysis of the change in provisions before reinsurance, Mandatum Life, 2011

EURm	Liability 2010	Premiums	Claims paid	Expense charges	Guaran teed interest	Bonuses	Other	Liability 2011	Share %
Mandatum Life parent company
Unit-linked total	2,977	611	-308	-41	0	0	-302	2,937	40%
Individual pension insurance	829	88	-6	-12	0	0	-145	753	10%
Individual life	1,178	183	-159	-11	0	0	-96	1,095	15%
Capital redemption operations	729	292	-140	-12	0	0	-46	823	11%
Group pension	241	48	-3	-5	0	0	-15	266	4%
With-profit and others total	4,391	202	-453	-37	153	6	-34	4,229	58%
Group pension	2,500	108	-190	-8	85	5	-6	2,494	34%
Guaranteed rate 3.5%	2,458	57	-185	-7	84	5	-8	2,404	33%
Guaranteed rate 2.5% or 0.0%	42	51	-5	-1	1	0	2	90	1%
Individual pension insurance	1,322	24	-148	-7	56	1	27	1,275	17%
Guaranteed rate 4.5%	1,134	16	-124	-6	49	0	5	1,075	15%
Guaranteed rate 3.5%	154	5	-17	-1	6	0	11	157	2%
Guaranteed rate 2.5% or 0.0%	34	4	-7	0	1	1	11	43	1%
Individual life insurance	335	33	-70	-11	11	0	-1	298	4%
Guaranteed rate 4.5%	83	5	-19	-2	4	0	7	77	1%
Guaranteed rate 3.5%	195	11	-44	-4	6	0	-6	158	2%
Guaranteed rate 2.5% or 0.0%	57	16	-6	-5	2	0	-1	63	1%
Capital redemption operations	21	1	-17	0	0	0	0	6	0%
Guaranteed rate 3.5%	15	0	-16	0	0	0	0	0	0%
Guaranteed rate 2.5% or 0.0%	6	1	-1	0	0	0	0	6	0%
Future bonus reserves	0	0	0	0	0	0	0	0	0%
Reserve for decreased discount rate	147	0	0	0	0	0	-40	108	1%
Assumed reinsurance	3	2	-1	0	0	0	-2	2	0%
Other liabilities	64	34	-28	-12	1	0	-13	46	1%
Mandatum Life parent company total	7,369	813	-761	-77	153	6	-336	7,166	98%
Subsidiary Mandatum Life Insurance Baltic SE	165	41	-47	-3	1	0	-20	137	2%
Unit-linked	147	37	-45	-3	0	0	-19	117	2%
Others	18	4	-2	-1	1	0	-1	19	0%
Mandatum Life group total	7,534	854	-808	-81	153	6	-356	7,303	100%

With-profit pension and saving policies have not been Mandatum Life's new sales focus area for years even though almost 60 per cent of technical provisions still constitute with-profit liabilities. Trend of with-profit technical provisions is downward because premium income is decreasing and claims, especially pensions paid, trend is upward. Average guaranteed rate for policyholders' savings, excluding the effect of discount rate reserve, is 3.7 per cent, which is gradually decreasing because policies with 4.5 per cent guarantees mature

sooner than policies with lower guarantees. The trend of unit-linked technical provisions is upward, except in years like 2008 and 2011 when investment losses of unit-linked savings have exceeded the net subscriptions.

The development of the structure and amount of Mandatum Life's technical provisions is shown in the figure 'Development of with-profit and unit-linked technical provisions, Mandatum Life, 2003-2011'.

Table 'Expected maturity of insurance and investment contracts before reinsurance, Mandatum Life, 31 December 2011' shows the expected maturity and duration of insurance and investment contracts of

Mandatum Life. The sensitivity of technical provisions to changes in discount rates can be assessed on the basis of the durations shown in the table.

Expected maturity of insurance and investment contracts before reinsurance, Mandatum Life, 31 December 2011

EURm	Duration	2012-2013	2014-2015	2016-2020	2021-2025	2026-2030	2031-2035	2036-
Mandatum Life parent company
Unit-linked total	8.5	472	406	753	480	342	220	296
Individual pension insurance	11.4	38	68	173	153	122	84	96
Individual life	6.1	272	195	281	133	85	46	47
Capital redemption operations	8.0	148	121	236	132	86	53	84
Group pension	13.2	14	22	63	62	49	36	69
With-profit and others total	9.3	1,018	855	1,621	1,138	815	569	905
Group pension	10.8	499	467	1,029	821	628	469	783
Guaranteed rate 3.5%	10.9	475	449	995	797	611	457	761
Guaranteed rate 2.5% or 0.0%	9.5	24	19	33	24	17	12	22
Individual pension insurance	6.7	328	320	481	259	147	72	74
Guaranteed rate 4.5%	6.6	276	273	417	224	122	58	59
Guaranteed rate 3.5%	7.0	41	38	52	29	21	12	11
Guaranteed rate 2.5% or 0.0%	6.7	12	9	11	6	4	2	4
Individual life insurance	7.4	101	50	84	43	33	24	44
Guaranteed rate 4,5 %	8.0	23	17	25	13	10	7	14
Guaranteed rate 3.5%	7.2	62	22	38	22	17	13	24
Guaranteed rate 2.5% or 0.0%	7.1	16	10	21	9	6	4	6
Capital redemption operations	8.6	1	1	2	1	1	1	0
Guaranteed rate 3.5%	0.5	0	0	0	0	0	0	0
Guaranteed rate 2.5% or 0.0%	8.8	1	1	2	1	1	1	0
Future bonus reserves	1.0	0	0	0	0	0	0	0
Reserve for decreased discount rate	4.7	45	15	23	12	6	3	3
Assumed reinsurance	0.5	2	0	0	0	0	0	0
Other liabilities	0.9	41	3	2	0	0	0	0
Mandatum Life parent company total	9.1	1,490	1,261	2,374	1,618	1,158	789	1,201
Subsidiary Mandatum Life Insurance Baltic SE		17	12	30	21	18	11	27
Unit-linked		13	10	24	17	17	11	26
Others		5	2	6	4	1	1	0
Mandatum Life group total		1,507	1,273	2,404	1,638	1,176	800	1,227

Life Insurance Risk Management

Biometric risks are managed by careful risk selection, by pricing to reflect the risks and costs, by setting upper limits for the protection granted and by use of reinsurance.

Reinsurance is used to limit the amount of individual mortality and disability risks. The Board of Directors annually determines the maximum amount of risk to be retained on the company's own

account, which for Mandatum Life is EUR 1.5 million per insured. To mitigate the effects of possible catastrophes, Mandatum Life participates in the catastrophe reinsurance bought jointly by Finnish life insurance companies.

Risk selection is part of the day-to-day business routines in Mandatum Life. Mandatum Life's Underwriting Policy sets principles for risk selection and limits for sums insured. Compliance with the principles and limits set in the Underwriting Policy are monitored continuously.

The risk result is followed actively and analyzed thoroughly annually. Mandatum Life measures the efficiency of risk selection and adequacy of tariffs by collecting information about the actual claims expenditure for each product line and each type of risk and comparing it to the claims expenditure assumed in insurance premiums of every risk cover.

Technical provisions are analyzed and the possible supplement needs are assessed regularly. Assumptions related to technical provisions are reviewed annually. Adequacy of technical provisions is tested quarterly. Tariffs for new policies are set, the Underwriting Policy and assumption used in calculating technical provisions are updated based on adequacy tests and risk result analysis. Tariffs and prices, as well as the reinsurance principles and reserving principles are reviewed and approved annually by the Board of Directors of Mandatum Life.

Market Risks

Market risks refer to fluctuations in the financial results and capital caused by changes in market values of financial assets and liabilities as well as value of insurance liabilities. In Sampo Group, market risks are examined both from an ALM and an investment portfolio risks' perspective and both angles are taken into account when risks are managed within the investment portfolio management framework.

ALM Risks

The company is exposed to ALM risk when changes in different market risk variables (e.g. interest rates, inflation, foreign exchange rates and equity prices) cause a change in the value of investment assets that is of different size than the respective change in the economic value of insurance liabilities. ALM risk also includes the uncertainty stemming from the fact that the future cash flows of insurance policies are modeled estimates and therefore uncertain in relation to both their timing and amount.

In Sampo Group, ALM risks are managed as a part of managing the investment portfolios. ALM risks are analyzed regularly and these analyses together with actual capitalization, regulatory requirements and rating targets are taken into account when defining the Group companies' investment policies.

The asset and liability management process applied in Sampo Group companies is illustrated in the figure 'Asset and liability management principles in Sampo Group'.

If P&C and Mandatum Life may apply slightly different approaches in their asset and liability management which are based on the specific characteristics of their businesses.

Asset and Liability Management in If P&C

If P&C's approach in asset and liability management is defined in accordance with the above described group wide principles. In addition, the composition of If P&C's investment assets must at all times comply with supervisory authorities' regulations and ensure an adequate solvency ratio.

The Board of Directors annually approves If P&C's Investment Policy. The structure of the companies' technical provisions, risk-bearing capacities, regulatory requirements, rating targets and risk tolerance are taken into account when defining asset allocations and limits and when setting return and liquidity targets. The Investment Policy also defines mandates and authorizations and sets guidelines on the use of derivatives.

Most of the technical provisions in If P&C are stated in the balance sheet in nominal terms. The provisions for annuities are discounted, and potential changes in the discount rates will affect the level of technical provisions in the company's balance sheet. The discount rates vary between countries mainly due to differences in legislation but they are at least indirectly impacted by the prevailing market interest rate environment. Hence, from an accounting perspective, the company is mainly exposed to changes in expected future claims inflation and in the regulatory discount rate. However, from an economic perspective the value of all technical provisions are exposed to changes in market interest rates.

The basis for risk taking within If P&C is the overall risk appetite. For Investment Policy purposes the risk appetite is expressed in terms of 1 year 99.5% Value at Risk (VaR). Allocation and risk limits shall be derived such that the overall risk appetite is fulfilled both from an accounting and economic perspective and also when taking insurance risk and other risks into consideration. The chosen approach shall enable follow-up on both total market risk as well as for the separate risk types.

The asset and liability management is taken into account through the risk appetite framework and in order to comply with the overall risk appetite the liability cash flows may be matched through investments in fixed income instruments denominated in the same currency as the corresponding liability. FX swaps or other currency risk mitigating derivatives are used to eliminate currency risk if investments are made in instruments not denominated in the same currency as the liability.

Within the limits set in the Investment Policy, investments are managed actively by utilizing market views and in order to enhance returns the portfolio may also contain equities in addition to fixed income investments.

Asset and Liability Management in Mandatum Life

In Mandatum Life, the approach to ALM risk management is also based on an analysis of technical provisions and current solvency position. A common feature for all with-profit technical provisions is the guaranteed rate and bonuses based on principle of fairness. The cash flows of Mandatum Life's technical provisions are relatively wellpredictable because in most of the company's with-profit products, surrenders or extra investments are restricted. The company's estimates for claims costs do not contain any significant element of inflation risk and thus the inflation risk in Mandatum Life is mainly related to administrative expenses.

In the long run the most significant risk is that fixed income investments will not generate a return at least equal to the guaranteed interest rate of technical provisions.

Mandatum Life is prepared for low interest rates on the liability side by e.g. reducing the minimum guaranteed interest rate in new contracts and by supplementing the technical provisions by applying a lower discount rate. In addition, existing contracts have been changed to accommodate improved management of reinvestment risk.

The long-term target for investments is to provide sufficient return to cover the guaranteed interest rate plus bonuses based on principle of fairness as well as the shareholder's return requirement with acceptable level of risk. The company manages its investment portfolio actively and also interest rate derivatives are used.

The Board of Mandatum Life approves the Investment Policy annually, which sets principles and limits for investment activities. The Investment Policy also includes measures and limits for maximum acceptable market risk. These measures and limits are based on both Solvency I and Solvency II type of approaches. When it comes to the Solvency I type of approach, limits are set above Solvency I requirement using a VaR analysis of the investment assets. In the Solvency II type of approach, limits are set based on different confidence levels in addition to the 99.5 per cent level used in Sampo Group. ALCO reports limit breaches to the Board which makes the decisions related to the capitalization and the market risks in the balance sheet. The general objective is to maintain the required solvency and to ensure that investments are sufficient and eligible for covering technical provisions.

Sampo plc's investment organization makes the day-to-day investment decisions based on principles set in Mandatum Life's Investment Policy. However, the most significant investment decisions are made by the Board. The ALCO regularly controls that limits and principles defined in the Investment Policy are followed.

Investment Portfolio Risks

Investments are managed according to the subsidiaries' investment policies. The most significant risks are equity, interest rate, credit spread and currency risks. Market risks also arise from private equity and hedge fund investments as well as real estate and commodity investments.

Sampo Group's Chief Investment Officer is responsible for managing investments within the limitations of Investment Policies prepared by the company and approved by the company's board. The insurance subsidiaries and the parent company have a common Group-wide infrastructure for investment management as well as performance and risk reporting. Sampo Group considers that it has a thorough understanding of Nordic markets and issuers and consequently Sampo Group's direct investments are mainly made into Nordic securities. When investing in non-Nordic securities, funds or other third party managed investments are mainly used. These investments are primarily used as a tool in tactical asset allocation when seeking return and secondarily in order to increase diversification.

Market risk control is separated from portfolio management activities. Middle Office functions measure risks and performance and control

limits set in investment policies on a daily basis. Market risks and limits are controlled by the ICC in If P&C and ALCO in Mandatum Life at least on a monthly basis. These committees are responsible for the control of investment activities within the respective legal entity. The aggregated market risks and concentrations on Sampo Group level are controlled by the Group's Audit Committee at least quarterly.

Asset Allocations and Investment Returns

The total amount of Sampo Group's investment assets as at 31 December 2011 was EUR 17,590 million (EUR 18,301 million in 2010). The composition of the investment portfolios in If P&C, Mandatum Life and Sampo plc at year end and in comparison to year end 2010 is shown in figure 'Development of investment portfolios, If P&C, Mandatum Life and Sampo plc, 31 December 2011 and 31 December 2010'.

The composition of the investment portfolios is reported on the basis of fair values of investments. These fair values are determined either on the basis of direct market quotes or by using various valuation models. More information on the valuation methods of the investment assets is presented in note 17 in the Sampo Group financial statements.

Sampo plc's own market risks are limited. Interest rate risk arising from the company's gross debt and the liquidity reserve invested into short-term money market securities is the company's most significant market risk together with the refinancing risk related to gross debt. Most of Sampo plc's debt is tied to short-term reference rates. This

mitigates the Group level interest rate risk because, while lower interest rates would reduce subsidiaries' investment returns in the long-term, the interest expense in Sampo plc would be lower.

Mandatum Life and If P&C have somewhat differing investment policies, because Mandatum Life is able to aim for higher returns than If P&C due to the different structures of technical provisions.

The more detailed investment allocations of If P&C, Mandatum Life, Sampo plc and Sampo Group are presented in the figure 'Investment allocation, If P&C, Mandatum Life, Sampo plc and Sampo Group, 31 December 2011'.

Investment allocation, If P&C, Mandatum Life, Sampo plc and Sampo Group, 31 December 2011

		If P&C			Mandatum Life			Sampo plc			Sampo Group
Asset Class	Market value, EURm	Weight	Average maturity (years)	Market value, EURm	Weight	Average maturity (years)	Market value, EURm	Weight	Average maturity (years)	Market value, EURm	Weight	Average maturity (years)
Fixed income total	9,914	89%	2.5	3,228	60%	2.3	952	96%	0.7	14,095	80%	2.4
Money market securities and cash	1,022	9%	0.3	430	8%	0.3	902	91%	0.7	2,354	13%	0.4
Government bonds	935	8%	3.1	22	0%	5.0	0	0%	0.0	956	5%	3.1
Credit bonds, funds and loans	7,954	71%	2.8	2,732	51%	2.6	0	0%	0.0	10,686	61%	2.7
Covered bonds	3,600	32%	2.7	132	2%	4.0	0	0%	0.0	3,732	21%	2.7
Investment grade bonds and loans	2,751	25%	2.7	1,205	22%	2.3	0	0%	0.0	3,956	22%	2.6
High-yield bonds and loans	1,218	11%	3.1	969	18%	2.7	0	0%	0.0	2,187	12%	2.9
Asset backed securities	0	0%	0.0	0	0%	0.0	0	0%	0.0	0	0%	0.0
Subordinated / Tier 2	295	3%	2.0	220	4%	0.9	0	0%	0.0	515	3%	1.5
Subordinated / Tier 1	91	1%	4.6	206	4%	4.3	0	0%	0.0	297	2%	4.4
Interest rate derivatives	3	0%	-	23	0%	-	50	5%	-	76	0%	-
Policy loans	0	0%	0.0	22	0%	2.8	0	0%	0.0	22	0%	2.8
Other asset classes total	1,280	11%	-	2,175	40%	-	40	4%	-	3,495	20%	-
Equity	1,149	10%	-	1,453	27%	-	19	2%	-	2,620	15%	-
Real estate	99	1%	-	172	3%	-	7	1%	-	278	2%	-
Private equity	33	0%	-	273	5%	-	15	1%	-	321	2%	-
Commodities	0	0%	-	11	0%	-	0	0%	-	11	0%	-
Hedge funds	0	0%	-	266	5%	-	0	0%	-	266	2%	-
Assets classes total	11,194	100%	-	5,403	100%	-	993	100%	-	17,590	100%	-
FX Exposure, gross position	120	-	-	433	-	-	19	-	-	572	-	-

Figures 'Annual investment returns at fair values, If P&C and Mandatum Life, 2002-2011' present the historical development of investment returns. Mandatum Life has had on average higher return with higher volatility.

The weighted average investment return of the Group's investment portfolios (including Sampo plc) in 2011 was 1.0 per cent (8.7 per cent in 2010).

Fixed Income Investments

Table 'Investment allocation, If P&C, Mandatum Life, Sampo plc and Sampo Group, 31 December 2011' presents the amount and average maturity of fixed income investments of Sampo Group by type of instrument. Sampo Group has a considerable amount of credit risk investments and is exposed to credit spread risk that is measured and managed as a part of the investment portfolio management. The limit setting is described in detail in the Credit risk chapter.

The average maturity of fixed income investments that affects the size of credit risk and reinvestment risk was 2.5 years in If P&C and 2.3 years in Mandatum Life. When it comes to interest rate sensitivity, the average duration of fixed income investments including derivatives in If P&C was 1.2 years and in Mandatum Life 1.8 years. The duration figure for Mandatum Life does not give a full picture of interest rate sensitivity at the end of the year 2011. This is due to the interest rate

derivatives that are currently mitigating the effect of decreasing interest rates.

During 2011, the proportion of money market securities and cash was 13 per cent of the total investment portfolio. The proportion of high yield bonds was respectively 12 per cent. The proportion of public sector bonds was 5 per cent of the total investment portfolio.

Equity Investments

The equity investments of Sampo Group totaled EUR 2,620 million at the end of year 2011 (EUR 3,353 million in 2010). During 2011, the decrease in the weight of equity investments in the investment portfolio was mainly due to the decline in equity prices.

At the end of year 2011 the equity exposure of If P&C was EUR 1,149 million (EUR 1,648 million in 2010). The proportion of equities in If P&C's investment portfolio was 10.3 per cent. During 2011 If P&C's ownership in Topdanmark has increased and since May 2011 it has been treated as an associated company, and hence, it is no longer included in the equity portfolio. At the end of 2010 the investment amounted to EUR 198 million. In Mandatum Life the equity exposure was EUR 1,453 million at the end of year 2011 (EUR 1,686 million in

2010) and the proportion of equities was 26.9 per cent of the investment portfolio. The equity portfolio consists of shares of Nordic companies as well as portfolios in funds and ETFs investing outside Nordic countries.

The breakdown of the equity exposures of Sampo Group by geographical regions are shown in figures 'Breakdown of equity investments by geographical regions, Sampo Group, If P&C and Mandatum Life, 31 December 2011'.

The geographical emphasis in Sampo Group's equity investments is in Nordic companies. The proportion of Nordic companies' equities corresponds to 55 per cent of the total equity portfolio. This is in line with Sampo Group's Nordic focus and the fact that insurance liabilities are in Nordic currencies.

The sector allocation of direct equity investments in Sampo Group is shown in tables 'Credit exposures by sectors, asset classes and rating, If P&C, Mandatum Life and Sampo Group, 31 December 2011'. The largest sectors are capital goods, consumer products, and basic industry. Equity investments made through investment funds accounted for 45 per cent of the entire equity portfolio.

Sampo Group's largest equity holdings are disclosed in the Notes to the Financial Statements (note 40).

Currency Risks

Currency risk in general can be divided into transaction risk and translation risk. Transaction risk refers to the currency risk arising from contractual cash flows related to the insurance or investment operations or from hedges related to these cash flows. Translation risk refers to the currency risk that arises when consolidating the financial statements of subsidiaries that have a different base currency than the parent company.

In Sampo Group, the open transaction risk positions are considered and measured separately. The net position in each currency is the net of assets, liabilities and foreign exchange transactions denominated in the particular currency.

If P&C writes insurance policies that are mostly denominated in Scandinavian currencies and in euro. The currency risk is reduced by matching technical provisions with investment assets in the corresponding currencies or by using currency derivatives.

In Mandatum Life, currency transaction risk mainly arises from investments in other currencies than euro because the company's technical provisions are almost completely denominated in euro. Mandatum Life's currency strategy is based on active management of the currency position. The objective is to achieve positive return relative to a situation where the currency risk exposure is fully hedged.

The currency transaction risk positions of If P&C and Mandatum Life against their home currency are shown in table 'Transaction risk position, If P&C and Mandatum Life, 31 December 2011'. The table shows the net transaction risk exposures and the changes in the value of positions given a 10 per cent decrease in the value of the home currency.

Transaction risk position, If P&C and Mandatum Life, 31 Dec 2011

	Base currency	EUR	USD	JPY	GBP	SEK	NOK	CHF	DKK	LTL	LVL	Other	Total, net
If P&C	SEKm
Insurance operations		-355	-126	0	-16	-120	-3,010	-1	-785	-1	-1	-14	-4,428
Investments		20	748	28	0	225	1,959	0	286	0	0	0	3,268
Derivatives		292	-610	-28	18	-91	1,057	0	475	0	0	-4	1,109
Total transaction risk, net position, If P&C		-43	12	0	2	14	7	-1	-24	-1	-1	-17	-52
Sensitivity: SEK -10%		-4	1	0	0	0	1	0	-2	0	0	-2	-7
Mandatum Life	EURm
Technical provisions		0	0	0	0	-2	0	0	0	0	0	0	-2
Investments		0	972	10	203	18	34	31	9	4	1	140	1 423
Derivatives		0	-761	-10	-201	-15	12	-38	0	0	0	-9	-1,022
Total transaction risk, net position, Mandatum Life		0	211	0	2	1	45	-6	9	4	1	131	400
Sensitivity: EUR -10%		0	21	0	0	0	5	-1	1	0	0	13	40

Options are included according to their delta-values.

Sampo plc's transaction risk position is related to SEK-denominated dividends paid by If P&C and to debt instruments issued in other currencies than euro.

In addition to transaction risk, Sampo Group and its insurance subsidiaries are also exposed to translation risk. Sampo Group's consolidated financial statements are denominated in euro. Translation risk arises when entities with another base currency are consolidated into the Group financial statements. The effect of changes in foreign exchange rates result in translation differences which are recognized in the consolidated comprehensive income statement. Translation risks arise also within If P&C and to a lesser extent within Mandatum Life from their subsidiaries whose base currency is different from that of the respective parent company.

Other Investments

If P&C and especially Mandatum Life have real estate, private equity funds, hedge funds and commodity investments. The Investment

Policies set limits for maximum allocations into these markets and products. On 31 December 2011, the combined share of the above mentioned investments was 5.0 per cent of the total investment portfolio. In If P&C the proportion was 1.2 per cent and in Mandatum Life it was 13.4 per cent.

Private equity and hedge funds are managed by external asset managers. The private equity fund portfolio is diversified both according to fund type and geographical areas. Hedge fund investments are diversified between underlying asset classes, fund types and investment styles. The Group's real estate portfolio is managed by Sampo Group's real estate management unit. The portfolio includes direct investments in properties as well as indirect investments in real estate funds and shares and debt instruments in real estate companies. The main risks related to property investments are limited by diversifying holdings both geographically and by type of property.

Credit Risks

Credit risks in Sampo Group mainly consist of the issuer risk related to investment assets, and counterparty risk related to derivatives and reinsurance transactions. The essential difference in terms of risk is that in the case of issuer risk, the entire market value of the instrument is at risk, whereas in the case of counterparty risk, it is only the possible positive market value of the contract that is at risk. Credit risk related to reinsurers arises through reinsurance receivables and through the reinsurers' portion of outstanding claims. Credit risk related to reinsurance mainly concerns If P&C, as the use of reinsurance in Mandatum Life is relatively limited.

In addition, credit risk arises from receivables from policyholders and other receivables related to commercial transactions. Credit risk exposure towards policyholders is very limited, because non-payment of premiums generally results in cancellation of the insurance policies. Also the credit risk exposures arising from other receivables related to commercial transactions are minor in Sampo Group.

Figure 'Illustrative figure of the components of credit risk' illustrates the components of credit risk on a general level.

Credit exposures including issuer and counterparty risks are shown in the tables ´Credit exposures by sectors, asset classes and rating, If P&C, Mandatum Life and Sampo Group, 31 December 2011`. Due to

differences in the treatment of derivatives, the figures in these tables are not fully comparable with other tables in this annual report.

Credit exposures by sectors, asset classes and rating, If P&C, 31 December 2011

								Fixed			Counter		Change
		AA+ -		BBB+ -			Non	income	Equi		party		31 Dec
EURm	AAA	AA-	A+ - A	BBB-	BB+ - C	D	rated	total	ties	Other	risk	Total	2010
Asset-backed
Securities	0	0	0	0	0	0	0	0	0	0	0	0	0
Basic Industry	0	0	0	0	96	0	147	243	39	0	0	282	-87
Capital Goods	0	0	18	17	0	0	27	62	276	0	0	338	-230
Consumer Products	0	5	8	260	3	0	78	355	245	0	0	600	-61
Covered Bonds	3,243	78	279	1	0	0	0	3,600	0	0	0	3,600	33
Energy	0	7	0	30	0	0	374	410	36	0	0	447	-99
Financial Institutions	28	924	1,778	186	110	0	39	3,064	55	0	0	3,119	302
Governments	296	71	0	17	0	0	65	449	0	0	0	449	-374
Index-linked Bonds	39	10	151	67	26	0	0	293	0	0	0	293	-6
Insurance	0	0	0	0	0	0	0	0	1	0	401	1	-573
Media	0	0	0	0	0	0	23	23	0	0	0	23	-14
Public Sector, Other	473	0	0	0	0	0	0	473	0	0	0	473	160
Real Estate	0	0	0	0	0	0	23	23	0	99	0	122	31
Services	0	0	0	7	0	0	5	12	6	0	0	18	-33
Technology and	0	0	0	3	0	0	0	3	2	0	0	5	2
Electronics
Telecommunications	0	0	43	40	0	0	0	83	69	0	0	152	1
Transportation	0	1	0	0	0	0	210	211	7	0	0	218	17
Utilities	0	0	252	34	0	0	15	301	1	0	0	302	14
Others	0	27	0	0	0	0	31	58	26	0	0	83	0
Funds	0	0	0	0	97	0	11	108	386	32	0	527	-98
Total	4,078	1,121	2,530	663	332	0	1,047	9,771	1,149	132	401	11,052	-1,013
Change 31 Dec 2010	-529	283	337	-57	-75	0	-121	-163	-499	26	24	-1,013

Credit exposures by sectors, asset classes and rating, Mandatum Life, 31 December 2011

								Fixed			Counter		Change
		AA+ -		BBB+ -			Non	income	Equi		party		31 Dec
EURm	AAA	AA-	A+ - A	BBB-	BB+ - C	D	rated	total	ties	Other	risk	Total	2010
Asset-backed
Securities	0	0	0	0	0	0	0	0	0	0	0	0	-18
Basic Industry	0	0	4	8	294	0	103	410	185	5	0	600	-30
Capital Goods	0	3	99	46	11	0	36	195	128	0	0	323	-24
Consumer Products	0	0	22	34	29	0	69	154	59	0	0	213	-8
Covered Bonds	90	42	0	0	0	0	0	132	0	0	0	132	-1
Energy	0	0	14	0	0	0	48	62	8	0	0	70	-12
Financial Institutions	0	552	606	173	54	0	20	1,405	15	24	13	1,457	-302
Governments	11	0	0	0	0	0	0	11	0	0	0	11	-96
Index-linked Bonds	0	0	0	0	0	0	0	0	0	0	0	0	0
Insurance	0	0	27	19	0	0	22	69	17	0	0	86	-4
Media	0	0	0	0	0	0	0	0	40	0	0	40	-19
Public Sector, Other	0	0	0	0	0	0	0	0	0	0	0	0	0
Real Estate	0	0	0	0	0	0	0	0	0	144	0	144	1
Services	0	0	0	7	42	0	9	58	38	12	0	107	25
Technology and	0	0	0	18	0	0	17	35	51	0	0	86	-29
Electronics
Telecommunications	0	0	53	79	26	0	0	157	35	0	0	193	26
Transportation	0	0	0	0	0	0	32	32	6	0	0	38	0
Utilities	0	9	158	48	0	0	0	216	84	0	0	299	-3
Other	0	0	7	0	15	0	21	43	5	0	0	48	14
Funds	0	0	0	0	166	0	66	233	782	538	0	1,553	-85
Total	101	606	992	432	637	0	444	3,212	1,453	722	13	5,400	-564
Change 31 Dec 2010	-97	-147	-248	-41	57	0	60	-415	-234	98	-13	-564

Credit exposures by sectors, asset classes and rating, Sampo Group, 31 December 2011

								Fixed			Counter		Change
		AA+ -		BBB+ -			Non	income	Equi		party		31 Dec
EURm	AAA	AA-	A+ - A	BBB-	BB+ - C	D	rated	total	ties	Other	risk	Total	2010
Asset-backed
Securities	0	0	0	0	0	0	0	0	0	0	0	0	-18
Basic Industry	0	0	4	8	390	0	250	653	225	5	0	883	-118
Capital Goods	0	3	117	63	11	0	63	257	404	0	0	661	-254
Consumer Products	0	5	30	294	32	0	148	509	304	0	0	813	-69
Covered Bonds	3,332	120	279	1	0	0	0	3,732	0	0	0	3,732	32
Energy	0	7	14	30	0	0	422	473	44	0	0	517	-110
Financial Institutions	28	2,225	2,537	359	164	0	59	5,371	70	24	25	5,490	309
Governments	308	71	0	17	0	0	65	460	0	0	0	460	-470
Index-linked Bonds	39	10	151	67	26	0	0	293	0	0	0	293	-6
Insurance	0	0	27	19	0	0	22	69	35	0	401	104	-576
Media	0	0	0	0	0	0	23	23	40	0	0	63	-32
Public Sector, Other	473	0	0	0	0	0	0	473	0	0	0	473	160
Real Estate	0	0	0	0	0	0	23	23	0	250	0	272	32
Services	0	0	0	14	42	0	14	70	44	12	0	125	-9
Technology and	0	0	0	21	0	0	17	38	53	0	0	91	-27
Electronics
Telecommunications	0	0	96	119	26	0	0	241	105	0	0	345	28
Transportation	0	1	0	0	0	0	242	243	13	0	0	256	17
Utilities	0	9	411	82	0	0	15	517	84	0	0	601	11
Other	0	27	7	0	15	0	52	100	32	0	0	133	14
Funds	0	0	0	0	264	0	77	341	1,169	585	0	2,095	-184
Total	4,179	2,476	3,674	1,095	970	0	1,491	13,885	2,620	876	426	17,406	-1,270
Change 31 Dec 2010	-626	377	170	-98	-18	0	-67	-262	-733	123	3	-1,270

The figure for counterparty risk for reinsurance activities has been included in the counterparty risk in 2011. The comparative figure for the year 2010 has been changed accordingly.

Credit Risks Related to Reinsurance Counterparties

The distribution of reinsurance receivables and reinsurers' portion of outstanding claims in If P&C on 31 December 2011 per rating category is presented in table 'Reinsurance receivables and reinsurers' portion of outstanding claims per rating category, If P&C, 31 December 2011 and

31 December 2010'. In the table, EUR 139 million (EUR 120 million in 2010) are excluded, which mainly relates to captives and statutory pool solutions.

Reinsurance receivables and reinsurers' portion of outstanding claims per rating category, If P&C, 31 December 2011 and 31 December 2010

	31 Dec 2011			31 Dec 2010
Rating	Total EURm	%	Total EURm	%
AAA	0	0%	0	0%
AA+ - A-	380	95%	354	96%
BBB+ - BBB-	1	0%	1	0%
BB+ - C	1	0%	0	0%
D	0	0%	0	0%
Non-rated	19	5%	13	3%
Total	401	100%	368	100%

The proportion of reinsurance recoverables related to the ten largest individual reinsurance counterparties amounts to EUR 355 million, which is 66.2 per cent of total recoverables. The largest individual reinsurance counterparty is Munich Re (AA-), which accounts for 27.0 per cent of total recoverables.

The amount of ceded treaty and facultative premiums was EUR 60.7 million. Of this amount 100 per cent was related to reinsurance counterparties with a credit rating of A- or higher. In Mandatum Life, the importance of reinsurance agreements is limited and thus credit risk related to reinsurance counterparties in Mandatum Life is immaterial. At the inception of the reinsurance, the accepted credit risk of the reinsurer is considered and the credit risks of reinsurance assets are monitored.

Credit Risk Management

Credit risk is managed by specific limits given in the Investment Policies of If P&C and Mandatum Life. Limits and restrictions are assigned to maximum exposures towards single issuers and derivative counterparties that are mainly based on rating class and an internal assessment.

Before an investment in a new security or a transaction with a new counterparty, the credit standing of the issuer or counterparty is thoroughly assessed. Credit ratings mainly from Standard & Poor's, Moody's and Fitch are used to support the assessment of the creditworthiness of issuers and counterparties. The portfolio development and the counterparties' credit standings are monitored continuously.

Credit risks are monitored at business area level and reported to the Investment Control Committee of If P&C and to the ALCO of Mandatum Life. The decision-making in each business area shall follow the limits defined in the respective Investment Policy. Credit exposures are reported by ratings, instruments and the industry sectors of issuers and counterparties.

Since credit risk is taken mainly as a part of investment operations where most of the investments are in tradable instruments, credit risk is by nature primarily spread risk and it is managed and monitored as part of market risk.

In order to mitigate derivative counterparty risks ISDA and CSA agreements are used. This is the case especially in Sampo plc and Mandatum Life. In order to limit and control credit risk associated with reinsurance, If P&C has a Reinsurance Security Policy, which sets requirements for the reinsurers' minimum credit ratings and the

maximum exposure to individual reinsurers. Similar to credit risk in investment assets, credit ratings from rating agencies are used to support the assessment of the creditworthiness of reinsurance companies.

Liquidity Risks

Liquidity risk is the risk that insurance undertakings are unable to conduct their regular business activities in accordance with the defined strategy, or in extreme cases, are unable to settle their financial obligations when they fall due. Major sources of liquidity risk in Sampo Group are market illiquidity risk of investments, non-renewal of insurance policies and refinancing risk of debt. Also the availability and price of refinance and financial derivatives affect the company´s ability to conduct regular business.

Liquidity risk is relatively immaterial in Sampo Group's businesses. The market illiquidity risk is rather limited because a major share of the investment assets are in tradable investment grade securities and in short-term money market instruments.

In P&C insurance, liquidity risk is limited, because premiums are collected in advance and large claims payments are usually known a long time before they fall due. Liquidity risks are managed by cash management functions that are responsible for liquidity planning. Liquidity risk is reduced by having investments that are readily marketable in liquid markets. The available liquidity of financial assets, i.e. the portion of the assets that can be converted into cash at a specific point in time, is analyzed and reported to IRCC on a quarterly basis. At year end, the liquidity position in each legal entity was favorable.

In life insurance, a large change in surrender rates could influence the liquidity situation. However, only a relatively small part of insurance

policies can be surrendered and it is therefore possible to forecast short-term cash flows related to claims payments with a very high accuracy.

Sampo Group has a relatively low amount of financial liabilities and thus the Group's respective refinancing risk is relatively minor. During the year Sampo plc issued several bonds and the maturities were selected carefully to have a well-diversified maturity profile.

Sampo Group companies have business relationships with several creditworthy counterparties which mitigate the risk that Sampo Group will not be able to enter into reinsurance or derivative transactions when needed.

In Sampo Group, liquidity risks are managed by the legal entities, which are responsible for liquidity planning. Liquidity risk is monitored based on the expected cash flows resulting from assets, liabilities and other business. At year end, the liquidity position in each legal entity was in accordance with internal requirements.

The maturities of technical provisions and financial assets and liabilities are presented in table 'Cash flows according to contractual maturity, If P&C, Mandatum Life and Sampo plc, 31 December 2011'. The table shows the financing requirements resulting from expected cash inflows and outflows arising from financial assets and liabilities as well as technical provisions.

Cash flows according to contractual maturity, If P&C, Mandatum Life and Sampo plc, 31 December 2011

		Carrying amount total					Cash flows
EURm	Carrying amount total	Carrying amount without contractual maturity	Carrying amount with contractual maturity	2012	2013	2014	2015	2016	2017-2026	2027-
If P&C
Financial assets	12,447	1,677	10,770	2,282	2,197	2,456	1,747	1,625	443	0
of which interest rate swaps	19	0	19	3	0	0	0	0	0	0
Financial liabilities	1,110	0	1,110	-1,590	-85	-14	-164	-7	-143	0
of which interest rate swaps	16	0	16	0	0	0	0	0	0	0
Net technical provisions	9,019	0	0	-3,235	-901	-616	-514	-429	-2,385	-1,851
Mandatum Life
Financial assets	5,266	2,227	3,039	872	650	788	240	302	451	0
of which interest rate swaps	22	0	22	7	7	7	2	1	0	0
Financial liabilities	166	0	166	-67	-105	0	0	0	0	0
of which interest rate swaps	1	0	1	0	0	0	0	0	0	0
Net technical provisions	4,141	0	0	-516	-461	-440	-403	-374	-2,546	-2,092
Sampo plc
Financial assets	1,188	34	1,154	864	118	12	25	17	143	0
of which interest rate swaps	16	0	16	31	4	4	2	10	0	0
Financial liabilities	2,346	0	2,346	-1,364	-496	-239	-38	-372	0	0
of which interest rate swaps	0	0	0	0	0	0	0	0	0	0

In the table, financial assets and liabilities are divided into contracts that have an exact contractual maturity profile, and other contracts. Only the carrying amount is shown for the other contracts. In addition, the table shows expected cash flows for net technical provisions, which by nature, are associated with a certain degree of uncertainty. In the investment assets of Mandatum Life insurance, the investments of the Baltic subsidiary are included in the carrying amount but excluded from the cash flows.

Operational Risks

Operational risk refers to the risk of loss resulting from inadequate or failed processes or systems, from personnel and systems or from external events. This definition includes legal risk but excludes risks resulting from strategic decisions. The risks may materialize as a consequence of

• internal misconduct;
• external misconduct;

• insufficient human resources management;

• insufficiencies in operating policies as far as customers, products or business activities are concerned;

• damage to physical property;
• interruption of activities and system failures; and
• defects in the operating process.

Operational risk may materialize as additional expenses, compensations for caused damages, non-compliance with rules and regulations, loss of reputation, false information on risk position and consecutive losses, and interruption of business activities.

Operational Risk Management in Sampo Group

The goals of Operational Risk Management are:

• to ensure simultaneously the efficiency and quality of operations;
• to ensure that operations are compliant with laws and regulations; and
• to ensure the continuity of business operations in exceptional circumstances.

Each company is responsible for arranging its operational risk management to align with above goals, taking also into account the specific features of its business activities.

The central tools in Operational Risk Management are (i) the identification of risks and (ii) proper preventive actions at all levels of operations. To ensure the use of these tools, responsibilities in the following areas are set clearly:

• drafting and enforcement of adequate Operational Risk policies and continuity plans;
• legal and financial compliance of operations;
• continuous development of human resources (knowledge and skills) and work processes;
• day to day management; and
• reporting and controlling.

Operational Risk Management in If P&C

The continuity of operational risk management is secured through the Operational Risk Committee (ORC), which coordinates the operational risk process. The committee's task is to give opinions, advice and recommendations to the If P&C Risk and Control Committee as well as report the current operational risk status. The status assessment is based on the assessments in the organization, reported incidents and other additional risk information.

If P&C identifies operational risks through different processes. A trend analysis is being performed annually, where the most important trends affecting the insurance industry are identified and the effects on If P&C are assessed. In this process the most severe external operational risks are being identified.

The line organization and corporate functions have the responsibility to identify, assess, monitor and manage their operational risks. Risk identification assessments are performed quarterly. Identified risks are assessed from a severity perspective, encompassing probability and impact. The control status for each risk is assessed using a traffic light system: green – good control of risk, yellow – attention required, red – attention required immediately. The most severe risks with control status yellow or red are reported to If P&C's Operational Risk Committee.

Incident reporting and analysis is managed differently depending on type of incident. Some types of incidents are reported via a separate web based incident reporting routine, and others are identified through controls and investigations.

In order to manage operational risks If P&C has issued a number of different steering documents; Operational Risk Policy, Contingency Plans, Security Policy, Outsourcing Policy, Complaints Handling Policy, Claims Handling Policy, and other steering documents related to

different parts of the organization. These documents are reviewed and updated at least annually.

In addition to this If P&C has detailed processes and guidelines in order to manage possible external and internal frauds. Internal training on ethical rules and guidelines is a prioritized area.

Operational Risk Management in Mandatum Life

The objective of operational risk management in Mandatum Life is to enhance the efficiency of internal processes and decrease negative impact on Mandatum Life. The aim is to minimize operational risks subject to cost-benefit considerations.

Business units are responsible for the identification, assessment and management of own operational risks, including organizing adequate internal control. Operational Risk Committee (ORC) monitors and coordinates risk management issues regarding operational risks within Mandatum Life, such as policies and recommendations concerning operational risk management. The committee ensures that risks are identified and business units have organized internal control and risk management in a proper way. The committee also analyses deviations from operational risk management policies and monitors operational risks identified in the self-assessments as well as the occurred incidents. The committee meets at least three times a year. Significant observations on operational risks are submitted to the Risk Management Committee and Board of Directors on a quarterly basis.

Identification and Management

Operational risks are identified through several different sources and methods

• Macro analysis is conducted prior to the annual strategy process where the key trends in Mandatum Life's business environment are identified, including a macro level business analysis of

operational risks. External events are monitored continuously and the company reacts to those as soon as possible.

• Self-assessment process is used to map and evaluate the major operational risks and their probabilities and significance, including an evaluation of internal controls and sufficiency of instructions. Self-assessment is conducted annually.
• Analysis of incidents. Realized operational risks and near misses reported by the business units are collected and analyzed by ORC. Each business unit is responsible for ensuring that the occurred incidents and near misses are reported to the ORC.
• Internal audits.

The most significant operational risks for Mandatum Life identified in the operational risk self-assessment process include the following: changes in the external operating environment, IT and especially aging IT systems, manual phases in processes, loss of key personnel, missselling and false information to customers.

In order to limit operational risks, Mandatum Life has approved a number of policies including e.g. Security Policies, Continuity and Preparedness Plans, Outsourcing Policy, Complaints Handling Policy and a number of other policies related to ongoing operative activities. Deviations against different policies are followed up independently in each business unit and reported to ORC.

Internal control system in processes prevents negative incidents. However, would there be an operational risk event or near misses, this must be reported to ORC.

Group Level Risk Considerations

As a general principle, the subsidiaries are managed independently from each other. However, it has been deemed pertinent to assess certain risk issues also on the Group level, i.e. concentration risks arising from exposures, correlations of profitability and capital positions, liquidity management and Group structure.

Concentration Risks

With respect to the underwriting businesses carried out in the subsidiary companies, it has been established that If P&C and Mandatum Life are operating mostly in different lines of business and hence their underwriting risks are different. The most material common risk factor is life expectancy in Finland that is affecting both companies' technical provisions. It is difficult to see material risk concentrations under normal conditions and, consequently, business lines as such are contributing diversification benefits rather than concentration risks. On the other hand, both subsidiaries have significant investment portfolios and, thus, are potentially threatened with investment related concentration risks (for example large combined exposures).

On the Group level, eventual large exposures are monitored and managed in several ways. Firstly, concentration risk is mitigated through effective differentiation in asset allocation. Mandatum Life's direct investments are mainly denominated in euro and in companies geographically located in Finland, whereas If P&C has the majority of its direct investments in Scandinavian currencies and in the respective countries. Investments managed by external asset managers, on their behalf, are selected for both companies by the same investment team. Consequently, the risk of unidentified or unwanted concentrations is

relatively easy to negotiate by appropriate limit setting and by applying sufficient level of control over the activity itself. Secondly, concentrations are actively monitored and, if deemed necessary, further managed by deploying Group level exposure restrictions for instance by industries or individual issuers.

On the subsidiary level, investment risk concentrations are monitored and controlled by the ICC in If P&C and ALCO in Mandatum Life, which have been established as independent parties from investment operations. Total group exposures are monitored and controlled by Sampo Group's Chief Investment Officer, Sampo Group's Chief Risk Officer and Sampo Group's Audit Committee.

Concentrations are illustrated in tables 'Credit exposures by sectors, asset classes and rating, If P&C, Mandatum Life and Sampo Group, 31 December 2011' which are shown in Credit Risk section. Nordic financial sector is the largest concentration at Sampo Group level. Conversely, the significance of public sector bonds is minor and Sampo Group does not have investments in government bonds of the PIIGS countries (Portugal, Ireland, Italy, Greece, Spain).

Fixed income investments in financial and public sector are shown, respectively, in tables 'Fixed income investments in financial sector, Sampo Group, 31 December 2011' and 'Fixed income investments in public sector, Sampo Group, 31 December 2011'. When it comes to the financial sector most of the investments are in Nordic countries, and product wise covered bonds and short-term money market investments have a major emphasis. The public sector figures include government bonds, government guaranteed bonds and other public sector investments.

Fixed income investments in financial sector, Sampo Group, 31 December 2011

	Covered bonds	Money market securities	Long-term senior debt	Long-term subordinated debt	Total, EURm	%
Sweden	3,028	614	1,143	316	5,101	56%
Finland	118	1,471	169	50	1,807	20%
Norway	339		479	203	1,021	11%
Denmark	76		170	131	377	4%
France	68		153	12	232	3%
United States			132	8	140	2%
Germany	60		71		131	1%
Switzerland			95		95	1%
United Kingdom			40	16	56	1%
Estonia		46		0	46	1%
Netherlands			43		43	0%
Austria	33		1		33	0%
Luxembourg	11				11	0%
Belgium			5	3	8	0%
Latvia	1				1	0%
Total	3,732	2,130	2,502	739	9,103	100%

Fixed income investments in public sector, Sampo Group, 31 December 2011

	Governments	Government guaranteed	Public sector, other	Total market value, EURm
Sweden	142	61	239	442
Finland	22	53	112	186
Norway			90	90
Germany		74		74
United States		71		71
Denmark		13	26	39
Netherlands	26			26
France	9			9
Austria	6			6
Total	205	271	466	943

The largest exposures by individual counterparties are presented in table 'Largest individual exposures by asset class, Sampo Group, 31 December 2011'.

Largest individual exposures by asset class, Sampo Group, 31 December 2011

EURm Counterparty	Total fair value EURm	% of total investment assets	Cash & short term fixed income	Long-term fixed income, total	Long-term fixed income: Government guaranteed	Long-term fixed income: Covered bonds	Long-term fixed income: Senior bonds	Long-term fixed income: Tier 1 and Tier 2	Equities	Uncolla teralized deri vatives
Nordea Bank	1,670	10%	697	972	0	715	231	27	0	0
Svenska Handelsbanken	1,258	7%	355	903	0	669	117	118	0	0
Skandinaviska Enskilda Banken	1,058	6%	284	772	0	393	275	104	0	2
Swedbank	952	5%	30	922	44	682	159	37	0	0
Pohjola Bank	633	4%	511	114	0	0	81	33	0	8
Danske Bank	630	4%	167	458	0	105	218	136	0	4
SBAB	525	3%	0	525	0	316	166	43	0	0
DnB NOR Bank	483	3%	0	483	0	130	264	89	0	0
Landshypotek	285	2%	0	285	0	251	34	0	0	0
Kommuninvest Sverige	266	2%	56	210	22	0	188	0	0	0
Total top 10 exposures	7,759	45%	2,100	5,645	66	3,261	1,732	587	0	13
Other	9,647	55%
Total investment assets	17,406	100%

Furthermore, largest exposures of direct equity as well as high-yield and non-rated fixed income investments are broken down in tables 'Ten largest direct equity investments, Sampo Group,

31 December 2011' and 'Ten largest direct high-yield and non-rated fixed income investments, Sampo Group, 31 December 2011'.

Ten largest direct equity investments, Sampo Group, 31 December 2011

Top 10 equity investments	Total fair value, EURm	% of total direct equity investments
Fortum	82	6%
UPM-Kymmene	77	5%
YIT	76	5%
TeliaSonera	69	5%
Veidekke	60	4%
Nobia	58	4%
Investor	55	4%
Hennes & Mauritz	54	4%
Volvo	47	3%
Atlas Copco	42	3%
Total top 10 exposures	620	43%
Other direct equity investments	832	57%
Total direct equity investments	1,452	100%

Ten largest direct high-yield and non-rated fixed income investments,

Sampo Group, 31 December 2011

Largest direct high-yield and non-rated fixed income investments	Rating	Total fair value, EURm	% of total direct fixed income investments
UPM-Kymmene	BB	185	1%
Stora Enso	BB	135	1%
A P Moller - Maersk	NR	67	0%
Wilh. Wilhelmsen	NR	64	0%
Boliden	NR	61	0%
Metsäliitto	NR	60	0%
Finnvera	NR	53	0%
Seadrill	NR	50	0%
Neste Oil	NR	48	0%
Color Group	NR	44	0%
Total top 10 exposures		768	6%
Other direct fixed income investments		12,776	94%
Total direct fixed income investments		13,544	100%

Fixed income investments in UPM-Kymmene decreased by EUR 78 million in January 2012 when a bond matured.

Correlations of Profitability and Capital Positions

As discussed above, direct concentration risks may arise in Sampo Group due to large exposures in investment assets. A more general Group level concentration risk arises when the Group companies' profitability and/or capital positions react similarly to general economic development, i.e. the correlation between general economic development and the profitability of different subsidiaries is more or less analogous. This type of concentration risk can be analyzed

indirectly based on reported profits. From that perspective, especially Nordea's, which is Sampo plc's associate company, result is creating clear diversification benefits, in particular when analyzed vis à vis with If P&C and Mandatum Life. The historical correlation between If P&C´s and Nordea's, as well as Mandatum Life's and Nordea's, quarterly reported profits since 2005 is very low.

The historical correlations of quarterly reported profits between If P&C, Mandatum Life and Nordea are depicted in the figure 'Correlations of quarterly reported profits, If P&C, Mandatum Life and Nordea, 1 January 2005 - 31 December 2011'.

Correlations of quarterly reported profits, If P&C, Mandatum Life and Nordea, 1 January 2005 - 31 December 2011

	If P&C	Mandatum Life	Nordea
If P&C	1
Mandatum Life	0.87	1
Nordea	0.17	0.16	1

Liquidity

Liquidity risk is managed at company level, and in normal course of business, subsidiary companies do not invest in Sampo plc's debt instruments. However, a general prohibition to intra-group asset transactions has not been deemed necessary and, thus, subsidiaries are allowed to invest in the parent company's debt instruments and sell assets to each other at market prices, especially when this is justified by business opportunities. Thus, during possible market stresses these options are available to certain extent as well.

Corporate Structure Related Risks

The structure of Sampo Group, both legal and reporting structure – parent company, two subsidiaries and two associated companies – is simple, straightforward and transparent. The structure as such effectively mitigates any risks related to complex structures. Structural simplicity and transparency together with a limited amount of exposures within Sampo Group (i.e. direct and/or indirect claims between different companies excluding normal course of business transactions with Nordea) and diligently managed capitalization of subsidiaries also effectively protects Group companies from contagion risks.

Capitalization

This chapter presents the capitalization of Sampo Group in 2011 and the changes that took place during the year. Risks and the respective capital requirements in Sampo Group are assessed internally, as well as according to the methods defined by the regulators and rating agencies. The amount of adjusted solvency capital is compared to economic capital and regulatory solvency capital is compared to the regulatory capital requirement. Furthermore, rating agency capital targets for different ratings are compared to the respective rating agency measures of available capital.

The adjusted solvency capital of Sampo Group's insurance subsidiaries decreased during the year due to lower interest rates and respective changes in liability side adjustment and in addition paid dividends and a decrease in fair value reserves. The changes in Economic Capital were modest. The development of capitalization in Sampo Group within the internal and regulatory perspectives during the year 2011 is shown in the figures 'Development of capitalization, If P&C, Mandatum Life and Sampo Group, 31 December 2010 – 31 December 2011'.

Updates and refinements are frequently done to the models and assumptions used for calculating the economic capital. Thus, the economic capital figures may not be fully comparable between years. In early 2011, If P&C entered into a so-called pre-application process with the aim of having a partial internal model approved for calculating the capital requirements under the new Solvency II regulation. As a

result of the continuous work with risk management issues If P&C was graded 'strong' in ERM (Enterprise Risk Management) rating by Standard & Poor's in February 2011.

Internal Capitalization Assessment

Figure 'Breakdown of economic capital by business areas and adjusted solvency capital, Sampo Group, 31 December 2011' shows the contributions of the different business areas to Sampo Group's total

economic capital as well as the diversification effect included in the calculation of Group´s economic capital. The figure also shows the amount of adjusted solvency capital on Group level.

Sampo Group's economic capital increased during the year and amounted to EUR 4,374 million at the end of 2011 (EUR 4,281 million in 2010).

Nordea is included in the calculation of Sampo Group's economic capital by adding Sampo Group's share of the economic capital reported by Nordea, converted into the 99.5 % confidence level. At year end, the risks arising from Nordea constitute the largest single component in Sampo Group's economic capital. The correlations between risk types and business areas, and thereby indirectly the amount of diversification, are defined by Sampo plc on a Sampo Group level.

The amount of adjusted solvency capital on the Group level decreased during the year to EUR 7,262 million (EUR 8,521 million in 2010) due to a decrease in the liability side adjustment and fair value reserve before taxes. Thus, the adjusted solvency capital exceeded the economic capital by EUR 2,888 million (EUR 4,240 million in 2010).

Figure 'Breakdown of economic capital by risk type, Sampo Group, 31 December 2011' presents the split of economic capital by the different risks.

The most significant risk areas for Sampo Group in terms of economic capital in 2011 were credit risk and market risk. Only minor changes occurred during the year. Insurance risk increased by EUR 115 million and market risk decreased by EUR 162 million.

The split of economic capital by risk type and the adjusted solvency capital in If P&C and Mandatum Life is depicted in the figures 'Breakdown of economic capital by risk type and adjusted solvency capital, If P&C and Mandatum Life, 31 December 2011'.

In If P&C, economic capital increased to EUR 1,460 million (EUR 1,381 million at the end of 2010) meanwhile in Mandatum Life, economic capital decreased to EUR 1,046 million (EUR 1,119 million at the end of 2010).

During 2011 If P&C's holding in Topdanmark has increased and the Danish insurance company is now an associated company. Therefore it is no longer treated as an equity exposure. Instead If P&C's share of Topdanmark's regulatory solvency requirement of EUR 98 million as at the end of year 2011 is included in the economic capital.

Market risk is still the most significant risk for both If P&C and Mandatum Life although it has decreased in both companies compared to the year 2010. Insurance risk increased in If P&C during the year to EUR 677 million (EUR 583 million at the end of 2010) and in Mandatum Life to EUR 345 million (EUR 305 million at the end of 2010).

Adjusted solvency capital is an internal measure of available capital. Adjusted solvency capital is calculated by making an adjustment to the regulatory solvency capital. The adjustment is the difference between carrying amount and market value of technical provisions, where the market value of technical provisions is the discounted value of future cash flows plus a risk margin.

At Sampo Group level the amount of adjusted solvency capital exceeded the economic capital. The amount of adjusted solvency capital exceeded the economic capital in If P&C whereas in Mandatum Life the adjusted solvency capital was below the economic capital. During the year, the amount of adjusted solvency capital in If P&C decreased to EUR 2,854 million (EUR 3,670 million in the end of 2010), and in Mandatum Life, adjusted solvency capital decreased to EUR 925 million (EUR 1,589 million in the end of 2010). In both companies paid dividends were affecting capitalization together with decreases in fair value reserves and interest rate levels.

Sensitivity Analysis of the Capital Position

The total sensitivity of equity is shown in table 'Sensitivity analysis of capitalization to market risks, If P&C, Mandatum Life and Sampo plc, 31 December 2011' separately for the insurance subsidiaries together with the corresponding effect on the discounted value of liabilities and adjusted solvency capital. For example, a rise in interest rates would

reduce the values of financial instruments causing a fall in the Sampo Group's equity. On the other hand, the effect on adjusted solvency capital would be positive due to the fact that value of technical provisions would fall as a result of applying a higher discount rate.

Sensitivity analysis of capitalization to market risks, If P&C, Mandatum Life and Sampo plc, 31 December 2011

	Interest rate		Other financial investments
EURm	1% parallel shift down	1% parallel shift up	20% fall in prices	20% fall in prices
If P&C	114	-111	-236	-20
Mandatum Life	114	-107	-291	-144
Sampo plc	7	-6	-4	-4
Total effect on equity	235	-224	-530	-169
Change in liability side adjustment	-1,087	892	11	6
Effect on adjusted solvency capital	-853	667	-519	-163

The effects represent the instantaneous effects of a one-off change in the underlying market variable on the fair values as of 31 December, 2011. The sensitivity analysis includes the effects of derivative positions. All sensitivities are calculated before taxes. The debt issued by Sampo Group companies is not included.

Capitalization by Regulatory Criteria

Sampo Group reports its Group solvency quarterly to the Finnish supervisory authorities monitoring Sampo Group. Subsidiaries' solvency is reported to the local supervisory authorities.

The regulatory capital requirements and the regulatory solvency capital of If P&C and Mandatum Life are presented in figures 'Regulatory capital measures, If P&C and Mandatum Life, 31 December 2011 and 31 December 2010'. In If P&C regulatory solvency capital was 3.25 times regulatory capital requirement and the respective figure for Mandatum Life was 4.61 at the end of year 2011. Regulatory solvency capital,

which is used to assess the solvency of an insurance company, is not calculated for the parent company Sampo plc.

Regulatory solvency capital of If P&C decreased to EUR 2,698 million (EUR 2,956 million in 2010) while the regulatory capital requirement was EUR 841 million (EUR 735 million in 2010). Regulatory solvency capital of Mandatum Life Group decreased to EUR 1,041 million (EUR 1,324 million in 2010) while the regulatory capital requirement was EUR 226 million (EUR 231 million in 2010). Also Sampo Group's consolidated capital position was strong. The Group solvency ratio was 139 per cent (167 per cent in 2010).

The calculation of Group solvency according to the Act on the Supervision of Financial and Insurance Conglomerates (1193/2004) is broken down in table 'Group solvency, 31 December 2011 and 31 December 2010'.

Group solvency, 31 December 2011 and 31 December 2010

EURm	31 Dec 2011	31 Dec 2010
Group capital	8,920	8,886
Sectoral items	1,091	1,711
Valuation differences and deferred taxes	380	508
Topdanmark	-141
Subordinated loans	200	289
Share of Nordea's capital not included in Group capital	653	915
Intangibles and other deductables	-3,217	-3,033
Intangibles (insurance companies)	-745	-742
Intangibles (Nordea)	-1,314	-1,218
Equalisation provision (Finland)	-317	-361
Contingency reserve (Finland)	0	0
Other	-169	-67
Planned dividends for the current period	-672	-645
Solvency capital, total	6,794	7,564
Minimum requirements for solvency capital, total	4,902	4,526
Group solvency	1,892	3,038
Group solvency ratio (solvency capital % of minimum requirement)	139%	167%

Capitalization by Rating Agency Criteria

If P&C Insurance Ltd. (publ) (Sweden) and If P&C Insurance Company Ltd. (Finland) are rated by Moody's and Standard & Poor's and Sampo plc by Moody's. The Group's main rating objective is to retain at least a single A rating for If P&C. The S&P rating model in If P&C is updated

regularly. Sampo Group has a continuous dialogue with the rating agencies and hence good understanding of the opinions of the agencies.

Risk Management Outlook

Sampo Group continuously develops its risk management framework and systems. This work is based on internal needs and future Solvency II requirements. The new Solvency II regulation is expected to be implemented by 2014.

In If P&C a separate program was introduced in 2007 to prepare If P&C for the anticipated changes. The program has encompassed involvement in the Solvency II debate and a thorough review of If P&C's corporate governance and internal control structure, the risk management framework as well as the internal capital model.

In the beginning of 2011 If P&C entered a so-called pre-application process with the Swedish and Finnish Financial Supervisory Authorities. The process will continue during 2012 with the goal of having a partial internal model approved when the Solvency II legal framework enters into force. Also Mandatum Life further develops its corresponding models.

Based on a judgment by Court of Justice of the European Union, gender of the insured person cannot be used in the future as a basis in the pricing of insurance contracts. Gender neutral pricing has to be followed in the contracts coming into force at 21 December 2012 or after. This is a crucial change especially in the life insurance business because in pension insurances and life insurances the gender has been one of the key pricing factors. According to the actuarial statistics, males and females have different risk levels in different insurance products. Thus gender-neutral pricing is not in line with the risk-based principles of Solvency II and best actuarial practices.

Financial Statements

Group's IFRS Financial Statements

• Consolidated Comprehensive Income Statement, IFRS
• Consolidated Balance Sheet, IFRS
• Statement of Changes in Equity, IFRS
• Statement of Cash Flows, IFRS
• Notes to the Accounts
• Summary of Significant Accounting Policies
• Segment Information
• Notes to the Group's Financial Statements

Sampo plc Financial Statements

• Parent Company Income Statement
• Parent Company Balance Sheet
• Parent Company Statement of Cash Flows
• Summary of Significant Accounting Policies
• Notes to the Parent Company Financial Statements
• Approval
• Auditor's Report

Consolidated Comprehensive Income Statement, IFRS

EURm	Note			Jan–Dec 2011	Jan–Dec 2010
Insurance premiums written		1,	8	5,050	5,096
Net income from investments	2,	10,	18	260	1,148
Other operating income				32	26
Claims incurred		3,	8	-3,723	-3,533
Change in liabilities for insurance and investment contracts			4	241	-769
Staff costs			5	-543	-527
Other operating expenses		6,	8	-548	-547
Finance costs			10	-82	-96
Share of associates' profit/loss			14	541	523
Profit before taxes				1,228	1,320
Taxes	21,	22,	23	-189	-217
Profit for the period				1,038	1,104
Other comprehensive income for the period		23,	24
Exchange differences				6	214
Available-for-sale financial assets				-520	605
Cash flow hedges				-2	-9
Share of associate's other comprehensive income				23	48
Income tax relating to components of other comprehensive income				141	-156
Other comprehensive income for the period, net of tax				-352	703
TOTAL COMPREHENSIVE INCOME FOR THE YEAR				686	1,807
Profit attributable to
Owners of the parent				1,038	1,104
Non-controlling interests				0	0
Total comprehensive income attributable to
Owners of the parent				686	1,807
Non-controlling interests				0	0
Earnings per share (eur)			9	1.85	1.97

Consolidated Balance Sheet, IFRS

EURm			Note				Dec 2011	Dec 2010
Assets
Property, plant and equipment						11	26	29
Investment property						12	118	122
Intangible assets						13	745	742
Investments in associates						14	6,593	5,699
Financial assets	10,	15,	16,	17,	18,	19	16,745	17,508
Investments related to unit-linked insurance contracts					10,	20	3,053	3,127
Tax assets						21	64	68
Reinsurers' share of insurance liabilities						28	532	514
Other assets						25	1,659	1,515
Cash and cash equivalents					10,	26	572	527
Total assets							30,107	29,851
Liabilities
Liabilities for insurance and investment contracts						28	13,796	13,749
Liabilities for unit-linked insurance and investment contracts						29	3,054	3,124
Financial liabilities			10,	16,	17,	29	2,768	2,187
Tax liabilities						21	474	640
Provisions						30	37	36
Employee benefits						31	98	105
Other liabilities						32	960	1,124
Total liabilities							21,187	20,965
Equity						34
Share capital							98	98
Reserves							1,531	1,530
Retained earnings							6,844	6,459
Other components of equity							447	799
Equity attributable to owners of the parent							8,920	8,886
Non-controlling interests							0	0
Total equity							8,920	8,886
Total equity and liabilities							30,107	29,851

Statement of Changes in Equity, IFRS

EURm	Share capital	Share premium account	Legal reserve	Invested unrestricted equity	Retained earnings	Translation of foreign operations *)	Available for-sale financial assets**)	Cash flow hedges***)	Total
Equity at 1 Jan 2010	98	0	4	1,527	5,889	-200	287	9	7,613
Changes in equity
Share-based payments					-1				-1
Recognition of undrawn dividends					10				10
Dividends					-561				-561
Share of associate's other changes in equity					19				19
Total comprehensive income for the year					1,104	262	447	-6	1,807
Equity at 31 Dec 2010	98	0	4	1,527	6,459	62	734	3	8,886
Changes in equity
Recognition of undrawn dividends					13				13
Dividends					-645				-645
Acquisition of treasury shares					-24				-24
Share of associate's other changes in equity					4				4
Total comprehensive income for the year					1,038	29	-379	-2	686
Equity at 31 Dec 2011	98	0	4	1,527	6,844	91	354	1	8,920

*) The total comprehensive income includes also the share of the associate Nordea's other comprehensive income, in accordance with the Group's share holding. As Nordea's other comprehensive income comprise mainly the currency hedging of net investments and exchange differences, the Group's share of Nordea's other comprehensive income EURm 23 (48) is also included in the Group's exchange differences in the statement of changes in equity.

**) The amount recognised in equity from available-for-sale financial assets for the period totalled EURm -409 (615). The amount transferred to p/l amounted to EURm 30 (-168).

***) The amount recognised in equity from cash flow hedges for the period totalled EURm -2 (-6).

The amount included in the translation, available-for-sale and cash flow hedge reserves represent other comprehensive income for each component, net of tax.

Statement of Cash Flows, IFRS

	2011	2010
Operating activities
Profit before taxes	1,228	1,320
Adjustments:
Depreciation and amortisation	18	29
Unrealised gains and losses arising from valuation	530	-458
Realised gains and losses on investments	-130	-279
Change in liabilities for insurance and investment contracts	-95	331
Other adjustments	-885	-515
Adjustments total	-562	-892
Change (+/-) in assets of operating activities
Investments *)	17	74
Other assets	-130	73
Total	-113	148
Change (+/-) in liabilities of operating activities
Financial liabilities	101	-9
Other liabilities	-307	-132
Paid taxes	-241	-288
Total	-447	-429
Net cash from operating activities	106	147
Investing activities
Investments in group and associated undertakings	-119	62
Net investment in equipment and intangible assets	-17	5
Net cash used in investing activities	-136	67
Financing activities
Acquisition of own shares	-24	-
Dividends paid	-637	-554
Issue of debt securities	2,440	1,954
Repayments of debt securities in issue	-1,703	-1,848
Net cash used in financing activities	75	-448
Total cash flows	46	-234
Cash and cash equivalents at 1 January	524	793
Effects of exchange rate changes	2	-32
Cash and cash equivalents at 31 December	572	527
Net increase in cash and cash equivalents	46	-234

Additional information to the statement of cash flows:	2011	2010
Interest income received	697	655
Interest expense paid	-194	-187
Dividend income received	102	64

*) Investments include investment property, financial assets and investments related to unit-linked insurance contracts.

The items of the statement of cash flows cannot be directly concluded from the balance sheets due to e.g. exchange rate differences, and acquisitions and disposals of subsidiaries during the period.

Cash and cash equivalents include cash at bank and in hand and short-term deposits (max. 3 months).

Notes to the Accounts

125	Summary of Significant Accounting Policies
138	Segment Information
144	Notes to the Group's Financial Statements
144	1 Insurance premiums written
146	2 Net income from investments
150	3 Claims incurred
153	4 Change in liabilities for insurance and
	investment contracts
154	5 Staff costs
155	6 Other operating expenses
157	7 Result analysis of P&C insurance
158	8 Performance analysis per class of P&C insurance
159	9 Earnings per share
160	10 Financial assets and liabilities
162	11 Property, plant and equipment
164	12 Investment property
167	13 Intangible assets
169	14 Investments in associates
171	15 Financial assets
178	16 Fair values
179	17 Determination and hierarchy of fair values
182	18 Movements in level 3 financial instruments
	measured at fair value
184	19 Sensitivity analysis of level 3 financial
	instruments measured at fair value

• 20 Investments related to unit-linked insurance contracts
• 21 Deferred tax assets and liabilities
• 22 Taxes
• 23 Components of other comprehensive income
• 24 Tax effects relating to components of other comprehensive income
• 25 Other assets
• 26 Cash and cash equivalents
• 27 Liabilities from insurance and investment contracts
• 28 Liabilities from unit-linked insurance and investment contracts
• 29 Financial liabilities
• 30 Provisions
• 31 Employee benefits
• 32 Other liabilities
• 33 Contingent liabilities and commitments
• 34 Equity and reserves
• 35 Related party disclosures
• 36 Incentive schemes
• 37 Auditors' fees
• 38 Legal proceedings
• 39 Investments in subsidiaries
• 40 Investments in shares and participations other than subsidiaries and associates
• 41 Events after the balance sheet date

Summary of Significant Accounting Policies

Sampo Group has prepared the consolidated financial statements for 2011 in compliance with the International Financial Reporting Standards (IFRSs). In preparing the financial statements, Sampo has applied all the standards and interpretations relating to its business, adopted by the commission of the EU and effective at 31 December, 2011.

During the financial year, Sampo adopted the following new or amended standards or interpretations relating to its business. The changes had no effect on the financial statements reporting.

The amendment to IAS 32 Financial Instruments: Presentation – Classification of Rights Issues addressed the accounting for rights, options or warrants that are denominated in a currency other than the functional currency of the issuer.

The revised IAS 24 Related Party Disclosure clarified the concept of related parties.

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments clarified the accounting by the entity that, after renegotiations, issues equity instruments to its creditor in order to settle all or part of its financial liability.

Amended IFRIC 14 Prepayments of a Minimum Funding Requirement permitted an entity to treat the benefit of certain early payments as assets.

Improvements to IFRSs 2010 – various minor changes made to different standards at the same time. The changes were not material to Sampo's financial statements reporting.

In preparing the notes to the consolidated financial statements, attention has also been paid to the Finnish accounting and company legislation and applicable regulatory requirements. Some of the risk management disclosures are presented in the Group's financial statements' Risk Management section.

The financial statements have been prepared under the historical cost convention, with the exception of financial assets and liabilities at fair value through p/l, financial assets available-for-sale, hedged items in fair value hedges and share-based payments settled in equity instruments measured at fair value.

The consolidated financial statements are presented in euro (EUR), rounded to the nearest million, unless otherwise stated.

The Board of Directors of Sampo plc accepted the financial statements for issue on 9 February 2012.

Consolidation

Subsidiaries

The consolidated financial statements combine the financial statements of Sampo plc and all its subsidiaries. Entities qualify as subsidiaries if the Group has the controlling power. The Group exercises control if its shareholding is more than 50 per cent of the voting rights or it otherwise has the power to exercise control over the financial and operating policies of the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group, and cease to be consolidated from the date that control ceases.

The acquisition method of accounting is used for the purchase of subsidiaries. The cost of an acquisition is allocated to the identifiable assets, liabilities and contingent liabilities, which are measured at the fair value of the date of the acquisition. Possible non-controlling interest of the acquired entity is measured either at fair value or at proportionate interest in the acquiree's net assets. The acquisitionspecific choice affects both the amount of recognised goodwill and non-controlling interest. The excess of the aggregate of consideration transferred, non-controlling interest and possibly previously held equity interest in the acquiree, over the Group's share of the fair value of the identifiable net assets acquired, is recognised as goodwill.

The accounting policies used throughout the Group for the purposes of consolidation are consistent with respect to similar business activities and other events taking place in similar conditions. All intra-group transactions and balances are eliminated upon consolidation.

Associates

Associates are entities in which the Group has significant influence, but no control over the financial management and operating policy decisions. Unless otherwise demonstrated, this is generally presumed when the Group holds in excess of 20 per cent, but no more than 50 per cent, of the voting rights of an entity. Investments in associates are treated by the equity method of accounting, in which the investment is initially recorded at cost and increased (or decreased) each year by the Group's share of the post-acquisition net income (or loss), or other movements reflected directly in the equity of the associate. If the Group's share of the associate's loss exceeds the carrying amount of the investment, the investment is carried at zero value, and the loss in excess is consolidated only if the Group is committed to fulfilling the obligations of the associate. Goodwill arising on the acquisition is included in the cost of the investment. Unrealised gains (losses) on transactions are eliminated to the extent of the Group's interest in the entity.

The share of associates' profit or loss, equivalent to the Group's holding, is presented as a separate line in the income statement.

If there is any indication that the value of the investment may be impaired, the carrying amount is tested by comparing it with its recoverable amount. The recoverable amount is the higher of its value in use or its fair value less costs to sell. If the recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount by recognising an impairment loss in the profit/ loss. If the recoverable amount later increases and is greater than the carrying amount, the impairment loss is reversed through profit and loss.

Foreign currency translation

The consolidated financial statements are presented in euro, which is the functional and reporting currency of the Group and the parent company. Items included in the financial statements of each of the Group entities are measured using their functional currency, being the currency of the primary economic environment in which the entity operates. Foreign currency transactions are translated into the appropriate functional currency using the exchange rates prevailing at the dates of transactions or the average rate for a month. The balance sheet items denominated in foreign currencies are translated into the functional currency at the rate prevailing at the balance sheet date.

Exchange differences arising from translation of transactions and monetary balance sheet items denominated in foreign currencies into functional currency are recognised as translation gains and losses in profit or loss. Exchange differences arising from equities classified as available-for-sale financial assets are included directly in the fair value reserve in equity.

The income statements of Group entities whose functional currency is other than euro are translated into euro at the average rate for the period, and the balance sheets at the rates prevailing at the balance sheet date. The resulting exchange differences are included in equity and their change in other comprehensive income. When a subsidiary is divested entirely or partially, the cumulative exchange differences are included in the income statement under sales gains or losses.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as if they were assets and liabilities of the foreign entity. Exchange differences resulting from the translation of these items at the exchange rate of the balance sheet date are included in equity, and their change in other comprehensive income

Exchange differences that existed at the Group's IFRS transition date, 1 January 2004, are deemed to be zero, in accordance with the exemption permitted by IFRS 1.

The following exchange rate was applied in the consolidated financial statements:

	Balance sheet date	Average exchange rate
1 euro (EUR) =
Swedish krona (SEK)	8.9126	9.0294

Segment reporting

The Group's segmentation is based on business areas whose risks and performance bases as well as regulatory environment differ from each other. The control and management of business and management reporting is organised in accordance with the business segments. The Group's business segments are P&C insurance, life insurance and holding business.

Geographical information has been given on income from external customers and non-current assets.. The reported segments are Finland, Sweden, Norway, Denmark, the Baltic countries and other countries.

In the inter-segment and inter-company pricing, for both domestic and cross border transactions, market-based prices are applied. The pricing is based on the Code of conduct on Transfer Pricing Documentation in the EU and OECD guidelines.

Inter-segment transactions, assets and liabilities are eliminated in the consolidated financial statements on a line-by-line basis.

Interest and dividends

Interest income and expenses are recognised in the income statement using the effective interest rate method. This method recognises income and expenses on the instrument evenly in proportion to the amount outstanding over the period to maturity.

Dividends on equity securities are recognised as revenue when the right to receive payment is established.

Fees and commissions

The fees and transaction costs of financial instruments measured at fair value through profit or loss are recognised in profit or loss when the instrument is initially recognised.

The costs of acquiring new and renewed insurance business are treated as deferred acquisition costs in the P&C insurance. In the life insurance business the acquisition costs are treated as fee and commission expense under 'Other operating expenses'.

Other fees and commissions paid for investment activities are included in 'Net income from investments'.

Insurance premiums

Insurance premiums in the income statement consist of premiums written for P&C insurance and life insurance.

P&C insurance contracts are primarily of short duration (1 year), so that premiums written are recognised as earned on a pro rata basis, adjusting them by a change in the provision for unearned premiums i.e. by the proportion of the insurance premium income that, based on the period covered by the insurance contract, belongs to the following financial year.

In the life insurance business, liabilities arising from insurance and investment contracts count as long-term liabilities. Therefore the insurance premium and related claims are usually not recognised in the same accounting period. Depending on the type of insurance, premiums are primarily recognised in premiums written when the premium has been paid. In group pension insurance, a part of the premiums is recognised already when charged.

The change in the provisions for unearned premiums is presented as an expense under 'Change in insurance and investment contract liabilities'.

Financial assets and liabilities

Based on the measurement practice, financial assets and liabilities are classified in the following categories upon the initial recognition: financial assets at fair value through profit or loss, loans and receivables, available-for-sale financial assets, financial liabilities at fair value through profit or loss, and other liabilities.

According to the Group's risk management policy, investments are managed at fair value in order to have the most realistic and real-time picture of investments, and they are reported to the Group key management at fair value. Investments comprise debt and equity securities. They are mainly classified as financial assets available-forsale.

In the P&C insurance, the fair value option permitted by IAS 39 has been applied in the earlier years. The remaining assets acquired before the year 2008 are still measured at fair value through p/l. Furthermore, the fair value option is applied in some minor P&C companies.

In the life insurance business, IFRS 4 Insurance Contracts provides that insurance contracts with a discretionary participation feature are measured in accordance with national valuation principles (except for the equalisation reserve) rather than at fair value. These contracts and investments made to cover shareholders' equity are managed in their entirety and are classified mainly as available-for-sale financial assets.

Financial assets designated as at fair value through profit or loss in the life insurance business are investments related to unit-linked insurance, presented separately in the balance sheet. The corresponding liabilities are also presented separately. In addition, in the life insurance business, investments classified as the financial assets of foreign subsidiaries, and financial instruments in which embedded derivatives have not been separated from the host contract have been designated as at fair value through profit or loss.

In the Holding business, investments are primarily classified as financial assets available-for-sale.

Recognition and derecognition

Purchases and sales of financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets are recognised and derecognised on the trade date, which is the date on which the Group commits to purchase or sell the asset. Loans and receivables are recognised when cash is advanced.

Financial assets and liabilities are offset and the net amount is presented in the balance sheet only when the Group has a legally enforceable right to set off the recognised amounts and it intends to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Financial assets are derecognised when the contractual rights to receive cash flows have expired or the Group has transferred substantially all the risks and rewards of ownership. Financial liabilities are derecognised when the obligation specified in the contract is discharged or cancelled or expire.

In some limited circumstances, the amendments permit reclassifications of certain financial assets measured at fair value, after the initial recognition.

Financial assets and Financial liabilities at fair value through profit or loss

In Sampo Group, financial assets and liabilities at fair value through profit of loss comprise derivatives held for trading, and financial assets designated as at fair value through profit or loss.

Financial derivative instruments held for trading

Derivative instruments that are not designated as hedges and do not meet the requirements for hedge accounting are classified as derivatives for trading purposes.

Financial derivatives held for trading are initially recognised at fair value. Derivative instruments are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Derivative instruments are recognised at fair value, and gains and losses arising from changes in fair value together with realised gains and losses are recognised in the income statement.

Financial assets designated as at fair value through profit or loss

Financial assets designated as at fair value through profit or loss are assets which, at inception, are irrevocably designated as such. They are initially recognised at their fair value. Gains and losses arising from changes in fair value, or realised on disposal, together with the related interest income and dividends, are recognised in the income statement.

Loans and receivables

Loans and receivables comprise non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and that the Group does not intend to sell immediately or in the short term. The category also comprises cash and balances with central banks.

Loans and receivables are initially recognised at their fair value, added by transaction costs directly attributable to the acquisition of the asset. Loans and receivables are subsequently measured at amortised cost using the effective interest rate method.

Available-for-sale Financial assets

Available-for-sale financial assets are non-derivative financial investments that are designated as available for sale and or are not categorised into any other category. Available-for-sale financial assets comprise debt and equity securities.

Available-for-sale financial assets are initially recognised fair value, including direct and incremental transaction costs. They are subsequently remeasured at fair value, and the changes in fair value are recorded in other comprehensive income and presented in the fair value reserve, taking the tax effect into account. Interest income and dividends are recognised in profit or loss. When the available-for-sale assets are sold, the cumulative change in the fair value is transferred from equity and recognised together with realised gains or losses in profit or loss. The cumulative change in the fair value is also transferred to profit or loss when the assets are impaired and the impairment loss is recognised. Exchange differences due to availablefor-sale monetary balance sheet items are always recognised directly in profit or loss.

Other Financial liabilities

Other financial liabilities comprise debt securities in issue and other financial liabilities.

Other financial liabilities are recognised when the consideration is received and measured to amortised cost, using the effective interest rate method.

If debt securities issued are redeemed before maturity, they are derecognised and the difference between the carrying amount and the consideration paid at redemption is recognised in profit or loss.

Fair value

The fair value of financial instruments is determined primarily by using quoted prices in active markets. Instruments are measured either at the bid price or at the last trade price, if the instrument is a share listed at NASDAQ OMX. The financial derivatives are also measured at the last trade price. If the financial instrument has a counter-item that will offset its market risk, the mid-price may be used to that extent. If a published price quotation does not exist for a financial instrument in its entirety, but active markets exist for its component parts, the fair value is determined on the basis of the relevant market prices of the component parts.

If a market for a financial instrument is not active, or the instrument is not quoted, the fair value is established by using generally accepted valuation techniques including recent arm's length market transactions between knowledgeable, willing parties, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models.

If the fair value of a financial asset cannot be determined, historical cost is deemed to be a sufficient approximation of fair value. The amount of such assets in the Group balance sheet is immaterial.

Impairment of Financial assets

Sampo assesses at the end of each reporting period whether there is any objective evidence that a financial asset, other than those at fair value through p/l, may be impaired. A financial asset is impaired and impairment losses are incurred, if there is objective evidence of impairment as a result of one or more loss events that occurred after the initial recognition of the asset, and if that event has an impact, that can be reliably estimated, on the estimated future cash flows of the financial asset.

Financial assets carried at amortised cost

There is objective evidence of impairment, if an issuer or debtor e.g. encounters significant financial difficulties that will lead to insolvency and to estimation that the customer will probably not be able to meet the obligations to the Group. Objective evidence is first assessed for financial assets that are individually significant, and individually and collectively for financial assets not individually significant.

When there is objective evidence of impairment of a financial asset carried at amortised cost, the amount of the loss is measured as the difference between the receivable's carrying amount and the present value of estimated future cash flows discounted at the receivable's original effective interest rate. The difference is recognised as an impairment loss in profit or loss. The impairment is assessed individually.

If, in a subsequent period, the amount of the impairment loss decreases, and the decease can objectively be related to an event occurring after the impairment was recognised (e.g. the default status is removed), the previously recognised impairment loss shall be reversed through profit or loss.

Available-for-sale Financial assets

Whether there is objective evidence of an impairment of available-forsale financial assets, is evaluated in a separate assessment, which is done if the credit rating of an issuer has declined or the entity is placed on watchlist, or there is a significant or prolonged decline in the fair value of an equity instrument below its original acquisition cost.

The decision on whether the impairment is significant or prolonged requires an assessment of the management. The assessment is done case by case and with consideration paid not only to qualitative criteria but also historical changes in the value of an equity as well as time period during which the fair value of an equity security has been lower than the acquisition cost. In Sampo Group, the impairment is normally assessed to be significant, if the fair value of a listed equity or participation decreases below the average acquisition cost by 20 per cent and prolonged, when the fair value has been lower than the acquisition cost for over 12 months.

As there are no quoted prices available in active markets for unquoted equities and participations, the aim is to determine their fair value with the help of generally accepted valuation techniques available in the markets. The most significant share of unquoted equities and

participations comprise the private equity and venture capital investments. They are measured in accordance with the generally accepted common practice, International Private Equity and Venture Capital Guidelines (IPEV).

The significance and prolongation of the impairment in the lastmentioned cases is assessed case by case, taking into consideration special factors and circumstances related to the investment. Sampo invests in private equity and venture capital in order to keep them to the end of their life cycle, so the typical lifetime is 10 – 12 years. In general, a justifiable assessment of a potential impairment may only be done towards the end of the life cycle. However, if additionally there is a well-founded reason to believe that an amount equivalent to the acquisition cost will not be recovered when selling the investment, an impairment loss is recognised.

In the case of debt securities, the amount of the impairment loss is assessed as the difference between the acquisition cost, adjusted with capital amortisations and accruals, and the fair value at the review time, reduced by previously in profit or loss recognised impairment losses.

When assessed that there is objective evidence of impairment in debt or equity securities classified as financial assets available-for-sale, the cumulative loss recognised in other comprehensive income is transferred from equity and recognised in profit or loss as an impairment loss.

If, in a subsequent period, the fair value of a debt security increases and the increase can objectively be related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss shall be reversed by recognising the amount in profit or loss.

If the fair value of an equity security increases after the impairment loss was recognised in profit or loss, the increase shall be recognised in other comprehensive income. If the value keeps decreasing below the acquisition cost, an impairment loss is recognised through profit or loss.

Derivative Financial instruments and hedge accounting

Derivative financial instruments are classified as those held for trading and those held for hedging, including interest rate derivatives, foreign exchange derivatives, equity derivatives and commodity derivatives. Derivative instruments are measured initially at fair value. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.

Derivatives held for trading

Derivative instruments that are not designated as hedges and embedded derivatives separated from a host contract are treated as held for trading. They are measured at fair value and the change in fair value, together with realised gains and losses and interest income and expenses, is recognised in profit or loss. If derivatives are used for

hedging, but they do not qualify for hedge accounting as required by IAS 39, they are treated as held for trading.

Hedge accounting

The Sampo Group may hedge its operations against interest rate risks, currency risks and price risks through fair value hedging and cash flow hedging. Cash flow hedging is used as a protection against the variability of the future cash flows, while fair value hedging is used to protect against changes in the fair value of recognised assets or liabilities.

Hedge accounting applies to hedges that are effective in relation to the hedged risk and meet the hedge accounting requirements of IAS 39. The hedging relationship between the hedging instrument and the hedged item, as well as the risk management objective and strategy for undertaking the hedge, are documented at the inception of the hedge. In addition, the effectiveness of a hedge is assessed both at inception and on an ongoing basis, to ensure that it is highly effective throughout the period for which it was designated. Hedges are regarded as highly effective in offsetting changes in fair value or the cash flows attributable to a hedged risk within a range of 80-125 per cent.

During the financial year, fair value hedges have been used in P&C insurance. Both fair value and cash flow hedging have been applied in life insurance.

Cash flow hedging

Cash flow hedging is used to hedge the interest cash flows of individual floating rate debt securities or other floating rate assets or liabilities. The hedging instruments used include interest rate swaps, interest rate and cross currency swaps. Derivative instruments which are designated as hedges and are effective as such are measured at fair value. The effective part of the change in fair value is recognised in other comprehensive income. The remaining ineffective part is recognised in profit or loss.

The cumulative change in fair value is transferred from equity and recognised in profit or loss in the same period that the hedged cash flows affect profit or loss.

When a hedging instrument expires, is sold, terminated, or the hedge no longer meets the criteria for hedge accounting, the cumulative change in fair value remains in equity until the hedged cash flows affect profit or loss.

Fair value hedging

In accordance with the Group's risk management principles, fair value hedging is used to hedge changes in fair values resulting from changes in price, interest rate or exchange rate levels. The hedging instruments used include foreign exchange forwards, interest rate swaps, interest rate and cross currency swaps and options, approved by the managements of the Group companies.

Changes in the fair value of derivative instruments that are documented as fair value hedges and are effective in relation to the hedged risk are recognised in profit or loss. In addition, the hedged assets and liabilities are measured at fair value during the period for which the hedge was designated, with changes in fair value recognised in profit or loss.

Securities lending

Securities lent to counterparties are retained in the balance sheet. Conversely, securities borrowed are not recognised in the balance sheet, unless these are sold to third parties, in which case the purchase is recorded as a trading asset and the obligation to return the securities as a trading liability at fair value through profit or loss.

Leases

Group as lessee

Finance leases

Leases of assets in which substantially all the risks and rewards of ownership are transferred to the Group are classified as finance leases. Finance leases are recognised at the lease's inception at the lower of the fair value of the leased asset and the present value of the minimum lease payments. The corresponding obligation is included in 'Other liabilities' in the balance sheet. The assets acquired under finance leases are amortised or depreciated over the shorter of the asset's useful life and the lease term. Each lease payment is allocated between the liability and the interest expense. The interest expense is amortised over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Operating leases

Assets in which the lessor retains substantially all the risks and rewards of ownership are classified as operating leases and they are included in the lessor's balance sheet. Payments made on operating leases are recognised on a straight-line basis over the lease term as rental expenses in profit or loss.

Group as lessor

Operating leases

Leases in which assets are leased out and the Group retains substantially all the risks and rewards of ownership are classified as operating leases. They are included in 'Investment property' in the balance sheet. They are depreciated over their expected useful lives on a basis consistent with similar owned property, plant and equipment, and the impairment losses are recognised on the same basis as for these items. Rental income on assets held as operating leases is recognised on a straight-line basis over the lease term in profit or loss.

Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition (made after 1 January 2004) over the fair value of the Group's share of the net identifiable assets, liabilities and contingent liabilities of the acquired entity at the date of acquisition. Goodwill on acquisitions before 1 January 2004 is accounted for in accordance with the previous accounting standards and the carrying amount is used as the deemed cost in accordance with the IFRS.

Goodwill is measured at historical cost less accumulated impairment losses. Goodwill is not amortised.

Other intangible assets

IT software and other intangible assets, whether procured externally or internally generated, are recognised in the balance sheet as intangible assets with finite useful lives, if it is probable that the expected future economic benefits that are attributable to the assets will flow to the Group and the cost of the assets can be measured reliably. The cost of internally generated intangible assets is determined as the sum of all costs directly attributable to the assets. Research costs are recognised as expenses in profit or loss as they are incurred. Costs arising from development of new IT software or from significant improvement of existing software are recognised only to the extent they meet the above-mentioned requirements for being recognised as assets in the balance sheet.

Customer relationships based on insurance contracts and identifiable in conjunction with the merger of the P&C insurance business are also recognised as other intangible assets. Customer relationships were measured at fair value at the acquisition. Measurement of the present value of all future cash flows from an asset takes into consideration insurance premium revisions, cross-sales and general economic forecasts. The average validity period of insurance contracts, 6 years, is deemed as the asset's useful life, during which time it is amortised on a straight-line basis. When necessary, customer relationships are tested for impairment.

Intangible assets with finite useful lives are measured at historical cost less accumulated amortisation and impairment losses. Intangible assets are amortised on a straight-line basis over the estimated useful life of the asset. The estimated useful lives by asset class are as follows:

• IT software 4-10 years
• Other intangible assets 3-10 "

Property, plant and equipment

Property, plant and equipment comprise properties occupied for Sampo's own activities, office equipment, fixtures and fittings, and furniture. Classification of properties as those occupied for own activities and those for investment activities is based on the square metres in use. If the proportion of a property in Sampo's use is no more than 10 per cent, the property is classified as an investment property.

Property, plant and equipment are measured at historical cost less accumulated depreciation and impairment losses. Improvement costs are added to the carrying amount of a property when it is probable that the future economic benefits that are attributable to the asset will flow to the entity. Costs for repairs and maintenance are recognised as expenses in the period in which they were incurred.

Items of property, plant and equipment are depreciated on a straightline basis over their estimated useful life. In most cases, the residual value is estimated at zero. Land is not depreciated. Estimates of useful life are reviewed at financial year-ends and the useful life is adjusted if the estimates change significantly. The estimated useful lives by asset class are as follows:

•	Residential, business premises and offices	20 - 60 years
•	Industrial buildings and warehouses	30 - 60 years
•	Components of buildings	10 - 15 years
•	IT equipment and motor vehicles	3 - 5 years
•	Other equipment	3 - 10 years

Depreciation of property, plant or equipment will be discontinued, if the asset in question is classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Impairment of intangible assets and property, plant and equipment

At each reporting date the Group assesses whether there is any indication that an intangible asset or an item of property, plant or equipment may be impaired. If any such indication exists, the Group will estimate the recoverable amount of the asset. In addition, goodwill, intangible assets not yet available for use and intangible assets with an indefinite useful life will be tested for impairment annually, independent of any indication of impairment. For impairment testing the goodwill is allocated to the cash-generating units of the Group from the date of acquisition. In the test the carrying amount of the cash-generating unit, including the goodwill, is compared with its recoverable amount.

The recoverable amount is the higher of an asset's fair value less costs to sell and its value in use. The value in use is calculated by estimating future net cash flows expected to be derived from an asset or a cashgenerating unit, and by discounting them to their present value using a pre-tax discount rate. If the carrying amount of an asset is higher than its recoverable amount, an impairment loss is recognised in profit or loss. In conjunction with this, the impaired asset's useful life will be re-determined.

If there is any indication that an impairment loss recognised for an asset in prior periods may no longer exist or may have decreased, the recoverable amount of the asset will be estimated. If the recoverable amount of the asset exceeds the carrying amount, the impairment loss is reversed, but no more than to the carrying amount which it would have been without recognition of the impairment loss. Impairment losses recognised for goodwill are not reversed.

Investment property

Investment property is held to earn rentals and for capital appreciation. The Group applies the cost model to investment property in the same way as it applies to property, plant and equipment. The depreciation periods and methods and the impairment principles are also the same as those applied to corresponding property occupied for own activities. In the Holding segment, the investment property of the associate Nordea is measured at fair value in item Investments in associates.

The fair value of investment property is estimated using a method based on estimates of future cash flows and a comparison method based on information from actual sales in the market. The fair value of investment property is presented in the Notes.

The valuation takes into account the characteristics of the property with respect to location, condition, lease situation and comparable market information regarding rents, yield requirements and unit prices. During the financial year, the valuations were conducted by the Group's internal resources.

Provisions

A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and the Group can reliably estimate the amount of the obligation. If it is expected that some or all of the expenditure required to settle the provision will be reimbursed by another party, the reimbursement will be treated as a separate asset only when it is virtually certain that the Group will receive it.

Insurance and investment contracts

Insurance contracts are treated, in accordance with IFRS 4, either as insurance or investment contracts. Under the standard, insurance contracts are classified as insurance contracts if significant insurance risk is transferred between the policyholder and the insurer. If the risk transferred on the basis of the contract is essentially financial risk rather than significant insurance risk, the contract is classified as an investment contract. Classification of a contract as an insurance contract or investment contract determines the measurement principle applied to it.

Sampo treats the liabilities arising from contracts in the first phase of the standard according to national accounting standards, except for the equalisation reserve and the provision for collective guarantee item and their changes which are reported in equity and profit or loss, in accordance with the IFRS.

The risks involved in insurance and investment contracts are widely elaborated in the Group's financial statements' Risk Management section.

Reinsurance contracts

A reinsurance contract is a contract which meets the IFRS 4 requirements for insurance contracts and on the basis of which the Sampo Group (the cedant) may receive compensation from another insurer (the reinsurer), if it becomes liable for paying compensation based on other insurance contracts it has issued. Such compensation received on the basis of reinsurance contracts is included in the balance sheet under 'Reinsurers' share of insurance liabilities' and 'Other assets'. The former item includes the reinsurers' share of the provisions for unearned premiums and claims outstanding in the Group's reinsured insurance contracts, while the latter includes shortterm receivables from reinsurers.

When the Group itself has to pay compensation to another insurer on the basis of a reinsurance contract, the liability is recognised in the item 'Other liabilities'.

Receivables and liabilities related to reinsurance are measured uniformly with the cedant's receivables and liabilities. Reinsurance receivables are tested annually for impairment. Impairment losses are recognised through profit or loss, if there is objective evidence indicating that the Group (as the cedant) will not receive all amounts of money it is entitled to on a contractual basis.

P&C insurance business

Classification of insurance contracts

In classifying insurance contracts and examining their related risks, embedded contracts are interpreted as one contract.

Other than insurance contracts, i.e. contracts where the risk is not transferred, include Captive contracts in which an insurance company underwrites a company's direct business and reinsures the same risk in an insurance company in the same group as the policyholder. There are also contracts in P&C insurance (Reverse Flow Fronting contracts) in which the insurance company grants insurance and then transfers the insurance risk to the final insurer. For both the above types of contract, only the net effect of the contract relationship is recognised in the income statement and balance sheet (instead of the gross treatment, as previously). The prerequisite for net treatment is that the net retention recognised on the contract is zero.

There are also contracts in P&C insurance in which the insurance risk is eliminated by a retrospective insurance premium, i.e. the difference between forecast and actual losses is evened out by an additional premium directly or in connection with the annual renewal of the insurance. The net cash flow from these contracts is recognised directly in the balance sheet, without recognising it first in the income statement as premiums written and claims incurred.

Insurance liabilities

Insurance liabilities are the net contractual obligations which the insurer has on the basis of insurance contracts. Insurance liabilities, consisting of the provisions for unearned premiums and unexpired risks and for claims outstanding, correspond to the obligations under insurance contracts.

The provision for unearned premiums is intended to cover anticipated claims costs and operating expenses during the remaining term of insurance contracts in force. In P&C insurance and reinsurance, the provision for unearned premiums is normally calculated on a strictly proportional basis over time, i.e. on a pro rata temporis basis. In the event that premiums are judged to be insufficient to cover anticipated claims costs and operating expenses, the provision for unearned premiums must be augmented by a provision for unexpired risks. Calculation of the provision for unexpired risks must also take into account instalment premiums not yet due.

The provision for claims outstanding is intended to cover the anticipated future payments of all claims incurred, including claims not yet reported to the company; i.e. the IBNR (incurred but not reported) provision. The provision for claims outstanding includes claims payments plus all estimated costs of claim settlements.

The provision for claims outstanding in direct P&C insurance and reinsurance may be calculated by statistical methods or through individual assessments of individual claims. Often a combination of the two methods is used, meaning large claims are assessed individually while small claims and claims incurred but not reported (the IBNR provision) are calculated using statistical methods. The provision for claims outstanding is not discounted, with the exception of provisions for vested annuities, which are discounted to present value using standard actuarial methods, taking anticipated inflation and mortality into account.

Premiums written for P&C insurance and reinsurance are recognised in the income statement when the annual insurance premium is due for payment.

Liability adequacy test

A liability adequacy test is performed separately for both the provision for claims outstanding and the provision for unearned premiums. The provision for claims outstanding is based on estimates of future cash flows. The estimates are made by using well-established actuarial methods.

The provision for unearned premiums is, for the most part, calculated on a strictly proportional basis over time (so called pro rata temporis principle). The adequacy of the provision for unearned premiums is tested by calculating a provision for unexpired risks for each company per business area and line of business. If the provisions are judged to be insufficient, the provision for unearned premiums is augmented by recognising a provision for unexpired risks.

Pay-as-you-go system for P&C insurance

Pensions and compensation for healthcare or medical rehabilitation paid on the basis of Finland's statutory P&C insurance (accident, motor third party liability and patient insurance) are raised annually by the TEL (Employee Pensions Act) index in order to maintain the real value of the pensions. The index raises are not the responsibility of the insurance companies, but are funded by the so-called pay-as-you-go principle, i.e. each year premiums written include index raises to the same amount that is paid out in that year. In practice, the P&C insurance companies collect a so-called expense loading along with their premiums written, which is then forwarded to the central organisation for the particular insurance line. The central organisation distributes the pay-as-you-go contributions collected so that the company undertaking the type of insurance in question receives an amount equal to the compensation falling under the pay-as-you-go system it has paid that year. The insurer's participation in the payment is proportional to the insurer's market share in the insurance line in question.

The pay-as-you-go system related to pension index raises is not treated as an insurance activity under IFRS 4 and does not generate any risk for the insurance company. Thus, the pay-as-you-go contribution collected together with the insurance premium is not deemed to be premium income, and the pension index raise paid out is not deemed to be claims incurred. Because the collected index raise corresponds in amount to the paid out pension index raise, the said items are set-off in the Income Statement item 'Other expenses from operations'. The share of a balancing figure not yet received from, or not paid by, a central organisation is presented as current receivables or liabilities in the balance sheet items 'Other assets' or 'Other liabilities'.

Deferred acquisition costs

In the P&C insurance business, acquisition costs clearly relating to the writing of insurance contracts and extending beyond the financial year are recognised as assets in the balance sheet. Acquisition costs include operating expenses directly or indirectly attributable to writing insurance contracts, fees and commissions, marketing expenses and the salaries and overheads of sales staff. Acquisition costs are amortised in the same way as provisions for unearned premiums, usually in 12 months at the maximum.

Life insurance business

Classification of insurance contracts

Policies issued by the life insurance business are classified as either insurance contracts or investment contracts. Insurance contracts are contracts that carry significant insurance risk or contracts in which the policyholder has the right to change the contract by increasing the risk. As capital redemption contracts do not carry insurance risk, these contracts are classified as investment contracts.

The discretionary participation feature (DPF) of a contract is a contractual right held by a policyholder to receive additional benefits, as a supplement to the guaranteed minimum benefits. The supplements are bonuses based on the reserves of policies credited to the policy reserve, additional benefits in the case of death, or lowering of insurance premiums. In Mandatum Life, the principle of fairness specifies the application of this feature. In unit-linked contracts the policyholder carries the investment risk by choosing the investment funds linked to the contracts.

Measurement of insurance and investment contracts

National accounting standards are applied to all insurance contracts and to investment contracts with DPF, with the exception of the equalisation provision and changes in it.

All contracts, except unit-linked contracts and the assumed reinsurance, include DPF. In those unit-linked contracts which are not insurance contracts, the policyholder has the possibility to transfer the return on savings from unit-linked schemes to guaranteed interest with DPF. Thus, these contracts are also measured as contracts with DPF.

The surrender right, guaranteed interest and the unbundling of the insurance component from the deposit component and similar features are not separated and measured separately.

Insurance and investment contract liabilities and reinsurance assets

Liabilities arising from insurance and investment contracts consist of provisions for unearned premiums and outstanding claims. In the life insurance business, various methods are applied in calculating liabilities which involve assumptions on matters such as mortality, morbidity, the yield level of investments, future operating expenses and the settlement of claims.

Changes in the liabilities of reinsurance have been calculated at variable rates of exchange. In direct insurance, the insurance liability is calculated by policy, while in reinsurance it is calculated on the basis of the reports of the ceding company or the company's own bases of calculation.

The interest rate used in discounting liabilities is, at most, the maximum rate accepted by the authorities in each country. The guaranteed interest used in the direct insurance premium basis varies on the basis of the starting date of the insurance from zero to 4.5 per cent. The interest rate used in discounting liabilities is the same or lower than that used in premium calculation. Most of the liabilities of the accrued benefits of pension business with DPF are discounted by an interest rate of 3.5 per cent, also being the highest discount rate used. In addition, Mandatum Life has for the year 2012 lowered the maximum rate to 2.75 %.

Due to the difference in the discount rate of liabilities and the guaranteed interest of 4.5 %, supplementary provisions for

guaranteed interest have been added to technical provisions. In the subsidiary, Mandatum Life Insurance Baltic, the discount rate varies by country between 2.5 - 4.0 per cent and the average guaranteed interest rate between 2.5 – 4.0 per cent.

Mortality assumptions have an essential effect on the amount of liability, particularly in group pension insurance, the liability of which accounts for about 39 per cent of the technical provisions of the Finnish life company. A so-called cohort mortality model is used in calculating the group pension insurance liability since 2002, incorporating the insured person's birth year in addition to his or her age and sex. The cohort mortality model assumes that life expectancy increases by one year over a ten-year period.

For unit-linked contracts, all the liabilities and the assets covering the unit-linked insurance are matched. Both the liabilities and the assets have been presented in the Notes to the financial statements. In calculating the provision for claims outstanding of direct insurance, discounting is applied only in connection with the liabilities of pensions whose payment has commenced. The liabilities of assumed reinsurance are based on the reports of the ceding company and on an estimate of claims which have not yet been settled. The assets covering the unit-linked liabilities include debt securities issued by the Group companies. These have not been eliminated. Elimination would lead to misleading information, as the policy holders carry the investment risk related to these investments, and to a mismatch between the unit-linked liabilities and assets covering them.

The provision for claims outstanding is intended to cover the anticipated future payments of all claims incurred, including claims not yet reported to the company (the "IBNR" provision). The provision for claims outstanding includes claim payments plus all costs of claim settlements.

The amounts of short- and long-term liabilities in technical provisions are determined annually. The Group's financial statements' Risk Management section elaborates on the change of technical provisions and their forecast annual maturities.

Liability adequacy test

A liability adequacy test is applied to all portfolios, company by company, and the need for augmentation is checked, company by company, on the basis of the adequacy of the whole technical provisions. The test includes all the expected contractual cash flows for non-unit-linked liabilities. The expected contractual cash flows include expected premiums, claims, bonuses and expenses. The claims have been estimated including surrenders and other insurance transactions based on historical data. The amounts of claims include the guaranteed interest and an estimation of future bonuses. The present values of the cash flows have been discounted to the balance sheet date by using a swap rate curve.

For the unit-linked business, the present values of the insurance risk and expense results are calculated correspondingly. If the aggregate amount of the liability for the unit-linked and other business presumes an augmentation, the liability is increased by the amount shown by the test and recognised in profit or loss.

Principle of fairness

According to Chapter 13, Section 2 of the Finnish Insurance Companies' Act, the Principle of Fairness must be observed in life insurance and investment contracts with a discretionary participation feature. If the solvency requirements do not prevent it, a reasonable part of the surplus has to be returned to these policies as bonuses.

Mandatum Life aims at giving a total return before charges and taxes on policyholders' savings in contracts with DPF that is at least the yield of those long term bonds, which are considered to have lowest risk. At the moment we consider German government bonds to be the most risk free long term bonds available. Nevertheless, Finnish government bonds are used as target levels at the moment. The total return consists of the guaranteed interest rate and bonuses determined annually. Continuity is pursued in the level of bonuses. The aim is to maintain the company's solvency status on such a level that it neither limits the giving of bonuses to policyholders nor the distribution of profit to shareholders. The principle is explained in detail on the company's website.

The legislation of Estonia, Latvia and Lithuania respectively does not contain provisions corresponding to the Principle of Fairness.

Employee benefits

Post-employment benefits

Post-employment benefits include pensions and life insurance.

Sampo has defined benefit plans in Sweden and Norway, and defined contribution plans in other countries. The most significant defined contribution plan is that arranged through the Employees' Pensions Act (TEL) in Finland.

In defined contribution plans, the Group pays fixed contributions to a pension insurance company and has no legal or constructive obligation to pay further contributions. The obligations arising from a defined contribution plan are recognised as an expense in the period that the obligation relates to.

In defined benefit plans, the company still has obligations after paying the contributions for the financial period and bears their actuarial and/ or investment risk. The obligation is calculated separately for each plan using the projected unit credit method. In calculating the amount of the obligation, actuarial assumptions are used. The pension costs are recognised as an expense for the service period of employees.

Defined benefit plans are both funded and unfunded. The amounts reported as pension costs during a financial year consist of 1) the actuarially calculated earnings of old-age pensions during the year, calculated straight-line, based on pensionable income at the time of retirement, and 2) calculated effects in the form of interest expense for crediting/appreciating the preceding years' established pension obligations less 3) revenues from the assets covered by the plan. The calculation of pension costs during the financial year starts at the beginning of the year and is based on assumptions about such factors as salary growth and price inflation throughout the duration of the

obligation and on the anticipated/expected return on the plan's assets and the market interest rate on the obligation during the financial year.

When reporting defined benefit plans in the balance sheet, the socalled corridor method is used. According to this model, accrued actuarial gains and losses resulting from differences between calculated assumptions and the actual outcome are not reported in the income statement unless the accumulated difference exceeds 10 per cent of the present value of the future obligations or the fair value of the plan's assets, whichever is higher. Accumulated differences that exceed the 10 per cent limit are accrued in the income statement as pension costs throughout the duration of the obligation. The accumulated accrued actuarial gains and losses calculated in this way that are not reported in the income statement are reported in the balance sheet as a net asset/net liability.

The Group also has certain voluntary defined benefit plans. These are intra-Group, included in the insurance liabilities of Mandatum Life and have no material significance.

Termination benefits

An obligation based on termination of employment is recognised as a liability when the Group is verifiably committed to terminate the employment of one or more persons before the normal retirement date or to grant benefits payable upon termination as a result of an offer to promote voluntary redundancy. As no economic benefit is expected to flow to the employer from these benefits in the future, they are recognised immediately as an expense. Obligations maturing more than 12 months later than the balance sheet date are discounted. The benefits payable upon termination at Sampo are the monetary and pension packages related to redundancy.

Share-based payments

During the financial year, Sampo had three valid share-based incentive schemes settled in cash (the long-term incentive schemes 2008 II, 2009 I and 2011 I for executives and specialists) . Schemes have been measured at fair value at the grant date and at every reporting date thereafter.

In the schemes settled in cash, the valuation is recognised as a liability and changes recognised through profit or loss.

The fair value of schemes has been determined using the Black-Scholes-pricing model. The fair value of the market-based part of the incentive takes into consideration the model's forecast concerning the number of bonus units to be paid as an incentive. The effects of nonmarket based terms are not included in the fair value of the incentive; instead, they are taken into account in the number of those share options that are expected to be exercised during the vesting period. In this respect, the Group will update the assumption on the estimated final number of bonus units at every interim or annual balance sheet date.

Income taxes

Item Tax expenses in the income statement comprise current and deferred tax. Tax expenses are recognised through profit or loss, except for items recognised directly in equity or other comprehensive income, in which case the tax effect will also be recognised those items. Current tax is calculated based on the valid tax rate of each country. Tax is adjusted by any tax related to previous periods.

Deferred tax is calculated on all temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Deferred tax is not recognised on non-deductible goodwill impairment, and nor is it recognised on the undistributed profits of subsidiaries to the extent that it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax is calculated by using the enacted tax rates prior to the balance sheet date. The new tax rate 24.5 % from 2012 on, ratified by the Finnish parliament, has been used in the calculation of deferred taxes. The taxable income for the financial year is based on the current tax rate 26 %.

A deferred tax asset is recognised to the extent that it is probable that future taxable income will be available against which a temporary difference can be utilised.

Share capital

The incremental costs directly attributable to the issue of new shares or options or to the acquisition of a business are included in equity as a deduction, net of tax, from the proceeds.

Dividends are recognised in equity in the period when they are approved by the Annual General Meeting.

When the parent company or other Group companies purchase the parent company's equity shares, the consideration paid is deducted from the share capital as treasury shares until they are cancelled. If such shares are subsequently sold or reissued, any consideration received is included in equity.

Cash and cash equivalents

Cash and cash equivalents comprise cash and short-term deposits (3 months).

Sampo presents cash flows from operating activities using the indirect method in which the profit (loss) before taxation is adjusted for the effects of transactions of a non-cash nature, deferrals and accruals, and income and expense associated with investing or financing cash flows.

In the cash flow statement, interest received and paid is presented in cash flows from operating activities. In addition, the dividends received are included in cash flows from operating activities. Dividends paid are presented in cash flows from financing.

Accounting policies requiring management judgement and key sources of estimation uncertainties

Preparation of the accounts in accordance with the IFRS requires management estimates and assumptions that affect the revenue, expenses, assets, liabilities and contingent liabilities presented in the financial statements. Judgement is needed also in the application of accounting policies. The estimates made are based on the best information available at the balance sheet date. The estimation is based on historical experiences and most probable assumptions concerning the future at the balance sheet date. The actual outcome may deviate from results based on estimates and assumptions. Any changes in the estimates will be recognised in the financial year during which the estimate is reviewed and in all subsequent periods.

Sampo's main assumptions concerning the future and the key uncertainties related to balance sheet estimates are related, for example, to assumptions used in actuarial calculations, determination of fair values of non-quoted financial assets and liabilities and investment property and determination of the impairment of financial assets and intangible assets. From Sampo's perspective, accounting policies concerning these areas require most significant use of estimates and assumptions.

Actuarial assumptions

Evaluation of insurance liabilities always involves uncertainty, as technical provisions are based on estimates and assumptions concerning future claims costs. The estimates are based on statistics on historical claims available to the Group on the balance sheet date. The uncertainty related to the estimates is generally greater when estimating new insurance portfolios or portfolios where clarification of a loss takes a long time because complete claims statistics are not yet available. In addition to the historical data, estimates of insurance liabilities take into consideration other matters such as claims development, the amount of unpaid claims, legislative changes, court rulings and the general economic situation.

A substantial part of the Group's P&C insurance liabilities concerns statutory accident and traffic insurance. The most significant uncertainties related to the evaluation of these liabilities are assumptions about inflation, mortality, discount rates and the effects of legislative revisions and legal practices.

The actuarial assumptions applied to life insurance liabilities are discussed in more detail under 'Insurance and investment contract liabilities and reinsurance assets'.

Defined benefit plans as intended in IAS 19 are also estimated in accordance with actuarial principles. As the calculation of a pension plan reserve is based on expected future pensions, assumptions must be made not only of discount rates, but also of matters such as mortality, employee turnover, price inflation and future salaries.

Determination of fair value

The fair value of any non-quoted financial assets is determined using valuation methods that are generally accepted in the market. These methods are discussed in more detail above under 'Fair value'.

Fair values of investment property have been determined internally during the financial year on the basis of comparative information derived from the market. They include management assumptions concerning market return requirements and the discount rate applied.

Impairment test

Goodwill, intangible assets not yet available for use, and intangible assets with an indefinite useful life are tested for impairment at least annually. The recoverable amounts from cash-generating units have mainly been determined using calculations based on value in use. These require management estimates on matters such as future cash flows, the discount rate, and general economic growth and inflation.

Application of new or revised IFRSs and interpretations

The Group will apply the following new or amended standards and interpretations related to the Group's business, if approved by the EU. If not stated otherwise, the following standards or interpretations or their amendments have already been approved by the EU at the balance sheet date.

Applications in 2012

The amendment to IFRS 7 Financial instruments: Disclosures (effective for annual periods beginning on 1 July 2011 or after) enhances the transparency of the transfer transactions of financial assets and helps users to understand the possible effects of risks remaining with the company and the effect on the financial statements. The Group estimates that the amendment will have no influence on the Group-s financial statements reporting.

Applications in 2013 (the changes were not approved by the EU at the balance sheet date)

Amendment to IAS 1 (effective for annual periods beginning on 7 July 2012 or after) requires the grouping of items presented in other comprehensive income based on whether they are potentially reclassifiable to profit or loss subsequently. The amendment will have an impact on the Group's disclosures.

The amendment to IAS 19 Employee Benefits (effective for annual periods beginning on 1 Jan 2013 or after) mandates all actuarial gains and losses be recognised in other comprehensive income, thus the socalled corridor approach is eliminated and the benefit cost will be

determined based on the net funding. The change will have an impact on the employee benefits recognised in the If subgroup where the accumulated unrecognised losses at the balance sheet date were EURm 150. These losses will reduce the opening equity for the comparison year 2012, while the subsequent changes will be recognised in other comprehensive income.

The amendment to IFRS 7 Financial Instruments: Disclosures (effective for annual periods beginning on 1 Jan 2013 or after) specifies the situations when financial assets and financial liabilities need to be offset.

IFRS 10 Consolidated Financial Statements (effective for annual periods beginning on 1 Jan 2013 or after) defines closer the concept of control as the crucial factor for consolidation.

IFRS 12 Disclosure of Interests in Other Entities (effective for annual periods beginning on 1 Jan 2013 or after) includes requirements for

disclosures regarding different involvements in other entities, such as associates and unconsolidated entities.

IFRS 13 Fair Value Measurement (effective for annual periods beginning on 1 Jan 2013 or after) combines in one standard the determination of fair value and defines the concept of fair value more precisely.

Revised IAS 27 Consolidated and Separate Financial Statements (effective for annual periods beginning on 1 Jan 2013 or after) includes the requirements for separate financial statements to the extent they have not been included in the new IFRS 10.

Revised IAS 28 Investments in Associates (effective for annual periods beginning on 1 Jan 2013 or after) includes the requirements for using the equity method accounting for investments in associates and joint ventures.

Segment information

The Group's business segments comprise P&C insurance, Life insurance and Holding company.

Geographical information has been disclosed about income from external customers and non-current assets. The reported areas are Finland, Sweden, Norway, Denmark, the Baltic countries and other countries.

Segment information has been produced in accordance with the accounting policies adopted for preparing and presenting the consolidated financial statements.The segment revenue, expense, assets and liabilities, either directly attributable or reasonably allocable, have been allocated to the segments. Inter-segment pricing is based on market prices. The transactions, assets and liabilities between the segments are eliminated in the consolidated financial statements on a line-by-line basis.

Depreciation and amortisation by segment are disclosed in notes 11 - 13 and investments in associates in Note 14.

CONSOLIDATED INCOME STATEMENT BY BUSINESS SEGMENT FOR YEAR ENDED 31 DECEMBER 2011

EURm	P&C insurance	Life insurance	Holding	Elimination	Group
Insurance premius written	4,201	849	-	-	5,050
Net income from investments	298	-41	18	-16	260
Other operating income	31	2	15	-15	32
Claims incurred	-2,801	-922	-	-	-3,723
Change in liabilities for insurance and investment contracts	-107	348	-	-	241
Staff costs	-494	-38	-11	-	-543
Other operating expenses	-497	-53	-13	15	-548
Finance costs	-2	-8	-86	14	-82
Share of associates' profit/loss	7	0	534	-	541
Profit before taxes	636	137	457	-3	1,228
Taxes	-159	-30	-1	0	-189
Profit for the year	478	107	456	-3	1,038
Other comprehensive income for the year
Exchange differences	6	0	-	-	6
Available-for-sale financial assets	-239	-304	3	20	-520
Cash flow hedges	-	-2	-	-	-2
Share of associate's other comprehensive income	-	-	23	-	23
Income tax relating to components of other comprehensive income	63	84	-1	-5	141
Other comprehensive income for the year, net of tax	-170	-222	25	15	-352
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	308	-115	481	12	686
Profit attributable to
Owners of the parent					1,038
Non-controlling interests					0
Total comprehensive income attributable to
Owners of the parent					686
Non-controlling interests					0

CONSOLIDATED INCOME STATEMENT BY BUSINESS SEGMENT FOR YEAR ENDED 31 DECEMBER 2010

	P&C	Life
EURm	insurance	insurance	Holding	Elimination	Group
Insurance premius written	3,985	1,111	-	-	5,096
Net income from investments	487	645	25	-9	1,148
Other operating income	25	0	16	-15	26
Claims incurred	-2,689	-844	-	-	-3,533
Change in liabilities for insurance and investment contracts	-91	-678	-	-	-769
Staff costs	-479	-35	-13	-	-527
Other operating expenses	-501	-49	-11	15	-547
Finance costs	-29	-8	-66	6	-96
Share of associates' profit/loss	0	0	523	-	523
Profit before taxes	707	142	474	-3	1,320
Taxes	-189	-37	9	0	-217
Profit for the year	518	105	483	-3	1,104
Other comprehensive income for the year
Exchange differences	214	0	-	-	214
Available-for-sale financial assets	286	315	4	1	605
Cash flow hedges	-	-9	-	-	-9
Share of associate's other comprehensive income	-	-	48	-	48
Income tax relating to components of other comprehensive income	-75	-80	-1	0	-156
Other comprehensive income for the year, net of tax	425	226	51	1	703
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	943	332	534	-2	1,807
Profit attributable to
Owners of the parent					1,104
Non-controlling interests					0
Total comprehensive income attributable to
Owners of the parent					1,807
Non-controlling interests					0

CONSOLIDATED BALANCE SHEET BY BUSINESS SEGMENT AT 31 DECEMBER 2011

EURm	P&C insurance	Life insurance	Holding	Elimination	Group
Assets
Property, plant and equipment	16	6	4	-	26
Investment property	26	92	4	-4	118
Intangible assets	580	165	0	-	745
Investments in associates	340	0	6,253	-	6,593
Financial assets	10,754	5,168	3,465	-2,642	16,745
Investments related to unit-linked insurance contracts	-	3,053	-	-	3,053
Tax assets	52	-	17	-5	64
Reinsurers' share of insurance liabilities	528	3	-	-	532
Other assets	1,479	133	59	-12	1,659
Cash and cash equivalents	390	93	89	-	572
Total assets	14,165	8,713	9,891	-2,662	30,107
Liabilities
Liabilities for insurance and investment contracts	9,547	4,249	-	-	13,796
Liabilities for unit-linked insurance and investment contracts	-	3,054	-	-	3,054
Financial liabilities	528	164	2,346	-269	2,768
Tax liabilities	388	85	-	-	474
Provisions	37	-	-	-	37
Employee benefits	98	-	-	-	98
Other liabilities	695	151	126	-12	960
Total liabilities	11,294	7,703	2,472	-281	21,187
Equity
Share capital					98
Reserves					1,531
Retained earnings					6,844
Other components of equity					447
Equity attributable to parent company's equityholders					8,920
Non-controlling interests					0
Total equity					8,920
Total equity and liabilities					30,107

CONSOLIDATED BALANCE SHEET BY BUSINESS SEGMENT AT 31 DECEMBER 2010

EURm insurance insurance Holding Elimination Group Assets Property, plant and equipment 19 5 5 - 29 Investment property 26 96 4 -4 122 Intangible assets 577 165 0 - 742 Investments in associates 11 0 5,688 - 5,699 Financial assets 11,226 5,745 3,101 -2,563 17,508 Investments related to unit-linked insurance contracts - 3,127 - - 3,127 Tax assets 50 - 18 0 68 Reinsurers' share of insurance liabilities 510 4 - - 514 Other assets 1,363 106 66 -20 1,515 Cash and cash equivalents 319 152 56 - 527 Total assets 14,101 9,400 8,938 -2,587 29,851 Liabilities Liabilities for insurance and investment contracts 9,340 4,410 - - 13,749 Liabilities for unit-linked insurance and investment contracts - 3,124 - - 3,124 Financial liabilities 512 126 1,741 -191 2,187 Tax liabilities 464 176 - - 640 Provisions 36 - - - 36 Employee benefits 105 - - - 105 Other liabilities 690 339 117 -22 1,124 Total liabilities 11,146 8,174 1,857 -213 20,965 Equity Share capital 98
Reserves 1,530
Retained earnings 6,459
Other components of equity 799
Equity attributable to parent company's equityholders 8,886
Non-controlling interests 0
Total equity 8,886
Total equity and liabilities 29,851

Geographical information

EURm	Finland	Sweden	Norway	Denmark	Baltic	Other	Total
At 31 Dec 2011
Revenue from external customers
P&C insurance	862	1,245	1,497	371	111	8	4,094
Life insurance	808	-	-	-	41	-	849
Holding	33	-	-	-	-	-	33
Total	1,703	1,245	1,497	371	152	8	4,976
Non-current assets
P&C insurance	105	828	13	5	10	2	962
Life insurance	261	-	-	-	1	-	262
Holding	9	6,253	-	-	-	-	6,262
Total	375	7,081	13	5	11	2	7,486
At 31 Dec 2010
Revenue from external customers
P&C insurance	827	1,167	1,451	323	125	0	3,894
Life insurance	1,051	-	-	-	60	-	1,111
Holding	42	-	-	-	-	-	42
Total	1,919	1,167	1,451	323	185	0	5,046
Non-current assets
P&C insurance	108	494	13	3	14	0	632
Life insurance	266	-	-	-	1	-	267
Holding	9	5,688	-	-	-	-	5,697
Total	383	6,183	13	3	15	0	6,596

The revenue includes insurance premiums according to the underwriting country, consisting of premiums earned for P&C insurance and premiums written for Life insurance, and net investment income and other operating income in the Holding segment.

Non-current assets comprise of intangible assets, investments in associates, property, plant and equipment, and investment property.

1 INSURANCE PREMIUMS WRITTEN

P&C insurance

EURm	2011	2010
Premiums from insurance contracts
Premiums written, direct insurance	4,324	4,105
Premiums written, assumed reinsurance	90	84
Premiums written, gross	4,414	4,189
Reinsurers' share of premiums written	-213	-204
Premiums written, net	4,201	3,985
Change in unearned premium provision	-106	-94
Reinsurers' share	-1	2
Change in unearned premium provision, net	-107	-91
Premiums earned, total	4,094	3,894

Life insurance

EURm	2011	2010
Premiums from insurance contracts
Premiums written, direct insurance	541	648
Premiums written, assumed reinsurance	2	2
Insurance contracts total, gross	544	649
Premium revenue ceded to reinsurers on insurance contracts issued	-5	-6
Insurance contracts total, net	538	643
Investment contracts	311	468
Premiums written, net ¹)	849	1,111
Group, total	5,050	5,096

¹) The change in unearned premiums is presented in Note 4 " The change in insurance and investment liabilities".

Specification of premiums written in Life insurance

EURm	2011	2010
Premiums from insurance contracts
Premiums from contracts with discretionary participation feature	201	271
Premiums from unit-linked contracts	339	376
Premiums from other contracts	1	1
Total	541	648
Assumed reinsurance	2	2
Premiums from investment contracts
Premiums from contracts with discretionary participation feature	1	1
Premiums from unit-linked contracts	310	467
Total	311	468
Insurance and investment contracts, total	854	1,117
Reinsurers' share	-5	-6
Premiums written, total	849	1,111
Single and regular premiums from direct insurance
Regular premiums, insurance contracts	360	392
Single premiums, insurance contracts	186	256
Single premiums, investment contracts	307	468
Total	852	1,115

2 NET INCOME FROM INVESTMENTS

P&C insurance

EURm	2011	2010
Financial assets
Derivative financial instruments
Gains/losses	-18	28
Financial assets designated as at fair value through p/l
Debt securities
Interest income	3	4
Gains/losses	0	2
Equity securities
Gains/losses	1	2
Dividend income	1	1
Total	4	9
Loans and receivables
Interest income	21	13
Financial assets available-for-sale
Debt securities
Interest income	381	358
Impairment losses	3	-3
Gains/losses	32	91
Equity securities
Gains/losses	87	66
Impairment losses	-169	-19
Dividend income	30	27
Total	363	519
Total from financial assets	370	569
Other assets
Investment properties
Gains/losses	1	-1
Other	-1	-1
Total from other assets	0	-2
Expense on other than financial liabilities	-7	-16
Effect of discounting annuities	-56	-58

Fee and commission expenses

Asset management	-9	-8
P&C insurance, total	298	487
Net income from investments includes exchange differences
Arising from insurance business	4	-4
Arising from investments	-3	29

Included in gains/losses from financial assets available-for-sale is a net gain of EURm 47 (-143) transferred from the fair value reserve.

Life insurance

EURm	2011	2010
Financial assets
Derivative financial instruments
Gains/losses	-14	-7
Financial assets designated as at fair value through p/l
Debt securities
Interest income	8	3
Gains/losses	0	2
Equity securities
Gains/losses	0	0
Dividend income	0	0
Total	8	6
Investments related to unit-linked contracts
Debt securities
Interest income	23	27
Gains/losses	-14	21
Equity securities
Gains/losses	-296	281
Dividend income	7	2
Loans and receivables
Interest income	1	-1
Other financial assets
Gains/losses	-19	2
Total	-296	333

Loans and receivables
Interest income	4	4
Gains/losses	0	0
Total	4	4
Financial assets available-for-sale
Debt securities
Interest income	154	151
Gains/losses	5	38
Equity securities
Gains/losses	91	72
Impairment losses	-69	-7
Dividend income	61	42
Total	242	297
Total financial assets	-56	631
Other assets
Investment properties
Gains/losses	0	0
Impairment losses	-1	0
Other	6	5
Total other assets	6	5
Net fee income
Asset management	-14	-15
Fee income	24	23
Total	10	8
Life insurance, total	-41	645
Net income from investments includes exchange differences
Arising from investments	-17	9

Included in gains/losses from financial assets available-for-sale is a net gain of EURm 25 (86) transferred from the fair value reserve.

Holding

EURm	2011	2010
Financial assets
Derivative financial instruments
Gains/losses	2	-9

Loans and receivables
Interest income	1	1
Gains/losses	-3	20
Total	-2	21
Financial assets available-for-sale
Debt securities
Interest income	13	9
Gains/losses	-	1
Equity securities
Gains/losses	3	0
Impairment losses	0	-1
Dividend income	2	2
Total	18	11
Total financial assets	18	23
Other assets
Investment properties
Gains/losses	0	2
Other	0	0
Total other assets	0	2
Net fee income	0	1
Holding, total	18	25
Included in gains/losses from financial assets available-for-sale is a net gain of EURm -0 (1) transferred from the fair value reserve.
Elimination items between segments	-16	-9
Group, total	260	1,148

Other income and expenses comprise rental income, maintenance expenses and depreciation of investment property.

All the income and expenses arising from investments are included in Net income from investments. Gains/losses include realised gains/losses on sales, unrealised and realised changes in fair values and exchange differences. Unrealised fair value changes for financial assets available-for-sale are recorded in other comprehensive income and presented in the fair value reserve in equity.

The changes in the fair value reserve are disclosed in the Statement of changes in equity.

The effect of discounting annuities in P&C insurance is disclosed separately. The provision for annuities is calculated in accordance with actuarial principles taking anticipated inflation and mortality into consideration, and discounted to take the anticipated future return on investments into account. To cover the costs for upward adjustment of annuity provisions required for the gradual reversal of such discounting, an anticipated return on investments is added to annuity results.

3 CLAIMS INCURRED

P&C insurance

		2011			2010
EURm	Gross	Ceded	Net	Gross	Ceded	Net
P&C insurance
Claims cost attributable to current-year operations
Claims paid	-1,680	27	-1,653	-1,555	20	-1,534
Claims portfolio	-	-	0	14	-	14
Change in provision for claims outstanding (incurred and reported losses)	-841	126	-715	-782	110	-672
Change in provision for claims outstanding (incurred but not reported losses, IBNR)	-589	17	-572	-605	17	-588
Claims-adjustment costs	3	-	3	-13	-	-13
Change in claims provision for annuities	-	-	-	-9	-	-9
Total claims cost attributable to current-year operations	-3,107	171	-2,936	-2,950	147	-2,803
Claims costs attributable to prior-year operations
Claims paid	-1,227	96	-1,130	-1,149	96	-1,053
Annuities paid	-115	0	-115	-28	-	-28
Claims portfolio	-	-	-	-5	-	-5
Change in provision for claims outstanding (incurred and reported losses)	833	-104	729	743	-103	640
Change in provision for claims outstanding (incurred but not reported losses, IBNR)	677	-25	652	592	-33	559
Total claims cost attributable to prior-year operations	169	-33	135	154	-40	113
Insurance claims paid
Claims paid	-2,907	124	-2,783	-2,704	116	-2,588
Annuities paid	-40	-	-40	-39	-	-39
Claims portfolio	-	-	-	9	-	9
Total claims paid	-2,947	124	-2,823	-2,734	116	-2,618
Change in provision for claims outstanding
Change in provision for claims outstanding (incurred and reported losses)	0	22	22	-39	7	-32
Change in provision for claims outstanding (incurred but not reported losses, IBNR)	88	-8	80	-13	-16	-29
Change in claims provision for annuities	-82	-	-82	3	-	3
Claims-adjustment costs	3	-	3	-13	-	-13
Total change in provision for claims outstanding	9	14	23	-62	-9	-71
P&C insurance, total	-2,938	138	-2,801	-2,796	107	-2,689

The provision for annuities is valued in accordance with normal actuarial principles taking anticipated inflation and mortality into consideration, and discounted to take the anticipated future investment return into account. To cover costs for the costs for the upward adjustment of annuity provisions required for the gradual reversal of such discounting, an anticipated return is added to the annuity results. Provisions for incurred but not reported losses pertaining to annuities in Finland are discounted. The provisions in 2011 amounted to EURm 274 (281). The non-discounted value was EURm 492 (472). The changes are due to foreign exchange effects, real decrease and prolonged estimated payment pattern.

Interest rate used in calculating the technical provisions of annuities (%)	2011	2010
Sweden	0.24%	1.33%
Finland	3.15%	3.15%
Denmark	2.00%	2.00%

Life insurance

	Claims paid		Change in provision for claims outstanding		Claims incurred
EURm	2011	2010	2011	2010	2011	2010
Insurance contracts
Life insurance
Contracts with discretionary participation feature (DPF)	-84	-68	1	1	-83	-67
Other contracts	0	0	0	0	0	0
Unit-linked contracts	-187	-153	-3	-2	-190	-155
Total	-271	-222	-2	-1	-273	-223
Pension insurance
Contracts with discretionary participation feature (DPF)	-353	-331	-114	-64	-467	-395
Unit-linked contracts	-9	-10	-1	-1	-10	-11
Total	-362	-342	-115	-65	-478	-407
Assumed reinsurance	-1	-1	0	0	-1	-1
Insurance contracts total, gross	-634	-564	-117	-66	-750	-629
Reinsurers´ share	3	4	0	0	3	4
Insurance contracts total, net	-631	-560	-117	-66	-748	-626
Investment contracts
Capital redemption policies
Contracts with discretionary participation feature (DPF)	-17	-37	-	-	-17	-37
Unit-linked contracts	-157	-181	-	-	-157	-181
Investment contracts, total	-174	-218	-	-	-174	-218
Life insurance, total	-805	-778	-117	-66	-922	-844

Claims paid by type of benefit

EURm	2011	2010
Insurance contracts
Life insurance
Surrender benefits	-16	-9
Death benefits	-25	-26
Maturity benefits	-35	-26
Loss adjustment expenses	0	0
Other	-9	-8
Total	-84	-69
Life insurance, unit-linked
Surrender benefits	-121	-90
Death benefits	-27	-23
Maturity benefits	-40	-40
Loss adjustment expenses	0	-
Total	-187	-153
Pension insurance
Pension payments	-310	-303
Surrender benefits	-38	-24
Death benefits	-5	-4
Loss adjustment expenses	0	0
Total	-353	-331
Pension insurance, unit-linked
Pension payments	-	-2
Surrender benefits	-8	-7
Death benefits	-2	-2
Other	0	0
Total	-9	-10
Assumed reinsurance	-1	-1
Insurance contracts total, gross	-634	-564
Reinsurers´ share	3	4
Insurance contracts total, net	-631	-560

Investment contracts
Capital redemption policy, with-profit
Surrender benefits	-1	-23
Loss adjustment expenses	-16	-14
Total	-17	-37
Investment contracts
Capital redemption policy, unit-linked
Surrender benefits	-157	-178
Loss adjustment expenses	-1	-2
Total	-157	-181
Investment contracts total, gross	-174	-218
Claims paid total, gross	-808	-782
Claims paid total, net	-805	-778
Group, total	-3,723	-3,533

4 CHANGE IN LIABILITIES FOR INSURANCE AND INVESTMENT CONTRACTS

P&C insurance

EURm	2011	2010
Change in unearned premium provision	-106	-94
Reinsurers' share	-1	2
Change in unearned premium provision, net	-107	-91

Life insurance

EURm	2011	2010
Insurance contracts
Life-insurance
Contracts with discretionary participation feature (DPF)	38	16
Other contracts	0	0
Unit-linked contracts	117	-177
Total	155	-161

Pension insurance
Contracts with discretionary participation feature (DPF)	221	32
Unit-linked contracts	52	-240
Total	273	-208
Assumed reinsurance	0	0
Insurance contracts total, gross	428	-369
Reinsurers´ share	0	0
Insurance contracts total, net	428	-369
Investment contracts Capital redemption policy
Contracts with discretionary participation feature (DPF)	15	35
Unit-linked contracts	-95	-345
Investment contracts, total	-80	-309
Change in liabilities for insurance and investment contracts in total, gross	348	-678
Change in liabilities for insurance and investment contracts in total, net	348	-678
Group, total	241	-769

5 STAFF COSTS

P&C insurance

EURm	2011	2010
Staff costs
Wages and salaries	-356	-340
Cash-settled share-based payments	-5	-9
Pension costs
- defined contribution plans	-46	-41
- defined benefit plans (Note 31)	-19	-22
Other social security costs	-68	-68
P&C insurance, total	-494	-479

Life insurance

EURm	2011	2010
Staff costs
Wages and salaries	-30	-27
Cash-settled share-based payments	-1	-2
Pension costs - defined contribution plans	-5	-4
Other social security costs	-2	-3
Life insurance, total	-38	-35

Holding

EURm	2011	2010
Staff costs
Wages and salaries	-8	-7
Cash-settled share-based payments	-2	-4
Pension costs - defined contribution plans	-1	-1
Other social security costs	-1	-1
Holding, total	-11	-13
Group, total	-543	-527

More information on share-based payments in Note 36 Incentive schemes.

6 OTHER OPERATING EXPENSES

P&C insurance

EURm	2011	2010
IT costs	-100	-97
Other staff costs	-17	-16
Marketing expenses	-44	-44
Depreciation and amortisation	-11	-19
Rental expenses	-50	-50
Change in deferred acquisition costs	17	8
Direct insurance comissions	-174	-151
Commissions on reinsurance ceded	16	16
Other	-133	-149
P&C insurance, total	-497	-501

Life insurance

EURm 2011		2010
IT costs	-14	-11
Other staff costs	-2	-1
Marketing expenses	-3	-4
Depreciation and amortisation	-4	-5
Rental expenses	-3	-3
Change in deferred acquisition costs	-7	-5
Direct insurance comissions	-1	-1
Commissions on reinsurance ceded	1	2
Other	-20	-20
Life insurance, total	-53	-49

Item Other for P&C and Life Insurance includes e.g. expenses related to communication, external services and other administrative expenses. In 2010, item Other for P&C Insurance includes also the effect of dissolvement of the collective guarantee item EURm 25.

Holding

EURm	2011	2010
IT costs	-1	-1
Other staff costs	0	0
Marketing expenses	-1	-1
Depreciation and amortisation	0	0
Rental expenses	-1	-1
Other	-9	-8
Holding, total	-13	-11

Item Other includes e.g. consultancy fees and rental and other administrative expenses.

Elimination items between segments	15	15
Group, total	-548	-547

7 RESULT ANALYSIS OF P&C INSURANCE

EURm	2011	2010
Insurance premiums earned	4,094	3,894
Claims incurred	-3,058	-2,943
Operating expenses	-707	-671
Other insurance technical income and expense	4	0
Allocated investment return transferred from the non-technical account	124	168
Technical result	457	449
Net investment income	353	516
Allocated investment return transferred to the technical account	-181	-226
Other income and expense	7	-32
Operating result	636	707

Specification of activity-based operating expenses included in the income statement

EURm	2011	2010
Claims-adjustment expenses (Claims paid)	-257	-253
Acquisition expenses (Operating expenses)	-491	-452
Joint administrative expenses for insurance business (Operating expenses)	-248	-243
Administrative expenses pertaining to other technical operations (Operating expenses)	-27	-24
Asset management costs (Investment expenses)	-9	-8
Total	-1,032	-980

8 PERFORMANCE ANALYSIS PER CLASS OF P&C INSURANCE

					Fire and other
EURm	Accident and health	Motor, third party liability	Motor, other classes	Marine, air and transport	damage to property	Third party liability	Credit insurance
Premiums written, gross
2011	669	681	1,207	139	1,287	198	3
2010	621	662	1,106	131	1,261	180	6
Premiums earned, gross
2011	655	679	1,142	138	1,267	188	3
2010	597	666	1,075	129	1,226	179	5
Claims incurred, gross 1)
2011	-449	-521	-852	-65	-998	-100	-1
2010	-401	-541	-799	-98	-918	-105	0
Operating expenses, gross 2)
2011	-121	-135	-183	-25	-190	-30	0
2010	-106	-128	-169	-25	-186	-29	0
Profit/loss from ceded reinsurance
2011	-11	-1	-1	-15	-40	-19	-
2010	-11	0	-2	-2	-31	-30	-
Technical result before investment return
2011	75	22	107	33	40	39	2
2010	79	-4	106	4	90	15	4

EURm	Legal expenses	Other	Total direct insurance	Reinsurance assumed	Elimination	Total
Premiums written, gross
2011	32	115	4,329	90	-5	4,414
2010	29	113	4,109	84	-4	4,189
Premiums earned, gross
2011	31	116	4,219	94	-5	4,308
2010	27	108	4,012	88	-4	4,095
Claims incurred, gross 1)
2011	-19	-165	-3,169	-26	-1	-3,196
2010	-16	-99	-2,977	-70	-2	-3,049
Operating expenses, gross 2)
2011	-6	-12	-702	-22	6	-718
2010	-5	-27	-676	-10	0	-686
Profit/loss from ceded reinsurance
2011	-	27	-60	-7	6	-61
2010	0	-19	-95	13	3	-80
Technical result before investment return
2011	6	-35	288	39	6	333
2010	5	-37	264	20	-3	281

1) Activity-based operating costs EURm 257 (253) have been allocated to claims incurred.

2) Includes other technical income EURm 31 (25) and other technical expenses EURm 27 (24).

9 EARNINGS PER SHARE

EURm	2011	2010
Earnings per share
Profit or loss attributable to the equity holders of the parent company	1,038	1,104
Weighted average number of shares outstanding during the period	561	561
Earnings per share (EUR per share)	1.85	1.97

10 FINANCIAL ASSETS AND LIABILITIES

Financial assets and liabilities have been categorised in accordance with IAS 39.9. In the table are also included interest income and expenses, realised and unrealised gains and losses recognised in P/L, impairment losses and dividend income arising from those assets and liabilities. The financial assets in the table include balance sheet items Financial assets, Investments related to unit-linked contracts and Cash and cash equivalents.

			2011
	Carrying	Interest		Impairment	Dividend
EURm	amount	inc./exp.	Gains/ losses	losses	income
FINANCIAL ASSETS
	Financial assets at fair value through p/l
Derivative financial instruments	179	24	-54	-	-
Financial assets designated as at fair value through p/l	3,261	35	-328	-	9
Loans and receivables	679	25	-3	-	-
Financial assets available-for sale	16,252	548	219	-236	93
Financial assets, group total	20,371	632	-166	-236	102
FINANCIAL LIABILITIES
	Financial liabilities at fair value through p/l
Derivative financial instruments	283	-	-

Other financial liabilities	2,486	-83	1
Financial liabilities, group total	2,768	-83	1

			2010
EURm	Carrying amount	Interest inc./exp.	Gains/ losses	Impairment losses	Dividend income
FINANCIAL ASSETS
Financial assets at fair value through p/l
Derivative financial instruments	157	39	-27	-	-
Financial assets designated as at fair value through p/l	3,280	34	311	-	3
Loans and receivables	626	17	20	-	-
Financial assets available-for sale	17,097	509	267	-29	72
Financial assets, group total	21,161	599	571	-29	75
FINANCIAL LIABILITIES
Financial liabilities at fair value through p/l
Derivative financial instruments	111	-	-
Other financial liabilities	2,077	-106	-25
Financial liabilities, group total	2,187	-106	-25

11 PROPERTY, PLANT AND EQUIPMENT

P&C insurance

	2011	2010
EURm	Equipment	Equipment
At 1 Jan
Cost	140	134
Accumulated depreciation	-122	-111
Net carrying amount	19	23
Opening net carrying amount	19	23
Additions	7	6
Disposals	-1	-1
Depreciation	-9	-11
Exchange differences	0	1
Closing net carrying amount	16	19
At 31 Dec
Cost	146	140
Accumulated depreciation	-131	-122
Net carrying amount	16	19

Life insurance

		2011			2010
	Land and			Land and
EURm	buildings	Equipment	Total	buildings	Equipment	Total
At 1 Jan
Cost	4	7	11	4	6	10
Accumulated depreciation	0	-5	-5	0	-5	-5
Net carrying amount	4	2	5	4	1	5
Opening net carrying amount	4	2	5	4	1	5
Additions		1	1	-	1	1
Depreciation	0	0	0	0	0	0
Closing net carrying amount	4	2	6	4	2	5
At 31 Dec
Cost	4	7	12	4	7	11
Accumulated depreciation	0	-5	-6	0	-5	-5
Net carrying amount	4	2	6	4	2	5

Holding

		2011			2010
EURm	Land and buildings	Equipment	Total	Land and buildings	Equipment	Total
At 1 Jan
Cost	2	5	7	2	5	7
Accumulated depreciation	-1	-1	-2	-1	-1	-2
Net carrying amount	1	4	5	1	4	5
Opening net carrying amount	1	4	5	1	4	5
Additions	-	0	0	0	0	0
Depreciation	0	0	0	0	-1	-1
Closing net carrying amount	1	3	4	1	4	5
At 31 Dec
Cost	2	5	7	2	5	7
Accumulated depreciation	-1	-2	-3	-1	-1	-2
Net carrying amount	1	3	4	1	4	5
					2011	2010
Group, total					26	29

Equipment in different segments comprise IT equipment and furniture.

12 INVESTMENT PROPERTY

P&C insurance

EURm	2011	2010
At 1 Jan
Cost	34	34
Accumulated depreciation	-6	-5
Accumulated impairment losses	-2	-1
Net carrying amount	26	28
Opening net carrying amount	26	28
Additions	-	0
Disposals	0	0
Depreciation	-1	-1
Impairment losses	0	-2
Reversal of impairment losses	1	0
Exchange differences	1	0
Closing net carrying amount	26	26
At 31 Dec
Cost	34	34
Accumulated depreciation	-6	-6
Accumulated impairment losses	-2	-2
Net carrying amount	26	26
Rental income from investment property	3	3
Property rented out under operating lease
Non-cancellable minimum rental
- not later than one year	1	1
- later than one year and not later than five years	1	1
Total	1	2
Expenses arising from investment property
- direct operating expenses arising from investment property generating rental income during the period	-2	-2
- direct operating expenses arising from investment property not generating rental income during the period	-1	-1
Total	-3	-3
Fair value of investment property at 31 Dec	23	24

Life insurance

EURm	2011	2010
At 1 Jan
Cost	152	139
Accumulated depreciation	-39	-37
Accumulated impairment losses	-16	-16
Net carrying amount	96	87
Opening net carrying amount	96	87
Additions	2	13
Disposals	-4	-1
Depreciation	-3	-3
Impairment losses	0	0
Closing net carrying amount	92	96
At 31 Dec
Cost	150	152
Accumulated depreciation	-42	-39
Accumulated impairment losses	-16	-16
Net carrying amount	92	96
Rental income from investment property Property rented out under operating lease	15	15
Non-cancellable minimum rental
- not later than one year	7	8
- later than one year and not later than five years	10	9
- later than five years	5	7
Total	22	24
Total rental recognised as income during the financial period	0	0
Expenses arising from investment property
- direct operating expenses arising from investment property generating rental income during the period	-8	-7
- direct operating expenses arising from investment property not generating rental income during the period	-1	-1
Total	-9	-8
Fair value of investment property at 31 Dec	105	111

Holding

EURm	2011	2010
At 1 Jan
Cost	4	27
Accumulated depreciation	0	0
Accumulated impairment losses	0	-17
Net carrying amount	4	10
Opening net carrying amount	4	10
Disposals	-	-6
Depreciation	-	0
Closing net carrying amount	4	4
At 31 Dec
Cost	4	4
Accumulated depreciation	0	0
Accumulated impairment losses	0	0
Net carrying amount	4	4
Rental income from investment property	0	0
Fair value of investment property at 31 Dec	4	4
Elimination items	-4 2011	-4 2010
Group, total	118	122

Fair values for the Group's investment property are entirely determined by the Group based on the market evidence.

The premises in investment property for different segments are leased on market-based, irrevocable contracts. The lengths of the contracts vary from those for the time being to those for several years.

13 INTANGIBLE ASSETS

P&C insurance

		2011
		Other
EURm	Goodwill	intangible assets	Total
At 1 Jan
Cost	564	113	677
Accumulated amortisation	-	-100	-100
Net carrying amount	564	13	577
Opening net carrying amount	564	13	577
Exchange differences	3	0	4
Additions
Acquired separately	-	5	5
Disposals	-4	-	-4
Amortisation	-	-2	-2
Closing net carrying amount	564	17	580
At 31 Dec
Cost	564	119	682
Accumulated amortisation	-	-102	-102
Net carrying amount	564	17	580

			2010
EURm	Goodwill	Customer relations	Other intangible assets	Total
At 1 Jan
Cost	506	47	107	660
Accumulated amortisation	-	-41	-99	-140
Net carrying amount	506	6	8	521
Opening net carrying amount	506	6	8	521
Exchange differences	71	0	0	72
Additions
Acquired separately	-	-	6	6
Disposals	-13	-	-	-13
Amortisation	-	-7	-1	-8
Closing net carrying amount	564	0	13	577

At 31 Dec
Cost	564	47	113	725
Accumulated amortisation	-	-47	-100	-148
Net carrying amount	564	0	13	577

The intangible asset allocated to customer relations arose from the acquisition of If in 2004, as a part of the acquisition cost allocated to the insurance contracts of the If Group. The item was amortised on a straight-line basis in 6 years.

Life insurance

		2011			2010
		Other intangible			Other intangible
EURm	Goodwill	assets	Total	Goodwill	assets	Total
At 1 Jan
Cost	153	36	190	153	34	188
Accumulated amortisation	-	-25	-25	-	-20	-20
Net carrying amount	153	12	165	153	14	167
Opening net carrying amount	153	12	165	153	14	167
Additions	-	3	3	-	2	2
Amortisation	-	-3	-3	-	-4	-4
Closing net carrying amount	153	12	165	153	12	165
At 31 Dec
Cost	153	40	193	153	36	190
Accumulated amortisation	-	-28	-28	-	-25	-25
Net carrying amount	153	12	165	153	12	165

	2011	2010
Group, total	745	742

Other intangible assets in all segments comprise mainly IT software.

Depreciation and impairment losses are included in the income statement item Other operating expenses.

Testing goodwill for impairment

Goodwill is tested for impairment in accordance with IAS 36 Impairment of assets. No impairment losses have been recognised based on these tests.

For the purpose of testing goodwill for impairment, Sampo determines the recoverable amount of its cash-generating units, to which goodwill has been allocated, on the basis of value in use. Sampo has defined these cash-generating units as If Group and Mandatum Life.

The recoverable amounts for If have been determined by using a discounted cash flow model. The model is based on Sampo's management's best estimates of both historical evidence and economic conditions such as volumes, margins, income and cost development. The value in use model for Mandatum Life has been fundamentally based on the embedded value model where the cash flow estimates for existing policies are based on budgets approved by the management and on historical evidence in terms of policy surrendering, death and accident frequencies etc. The derived cash flows were discounted at the pre-tax rates of the weighted average cost of capital which for If was 9.8 % and for Mandatum Life 10.5 %.

Forecasts for If, approved by the management, cover years 2012–2014. The cash flows beyond that have been extrapolated using a 2 % growth rate. A 2 % growth rate for years beyond 2011 has been used for the markets where Mandatum Life operates.

Management believes that any reasonably possible change in any of these key assumptions would not cause the aggregate carrying amount to exceed the aggregate recoverable amount.

14 INVESTMENTS IN ASSOCIATES

Associates that have been accounted for by the equity method at 31 Dec 2011

EURm Name	Carrying amount	Fair value*)	Interest held %	Assets/ liabilities	Revenue	Profit/ loss
Nordea Bank Abp	6,253	5,141	21.26	716,204/ 690,084	9,501	2,634
Topdanmark A/S	329	379	23.59	8,033 / 7,397	1,145	93
Autovahinkokeskus Oy	3		35.54	9 / 1	7	1

Associates not accounted for by the equity method at 31 Dec 2011 **)

EURm Name	Assets/ liabilities	Revenue	Profit/ loss
Consulting AB Lennemark & Andersson	11 / 7	15	1
Urzus Group AS	10 / 3	5	-1
Besure Forsikring Skandinavia AS	3 / 0	0	-1

Associates that have been accounted for by the equity method at 31 Dec 2010

EURm Name	Carrying amount	Fair value*)	Interest held %	Assets/ liabilities	Revenue	Profit/ loss
Nordea Bank Abp	5,688	6,776	20.54	580,689 / 556,151	9,334	2,663
Autovahinkokeskus Oy	3		35.54	8 / 1	7	1

Associates not accounted for by the equity method at 31 Dec 2010 **)

EURm Name	Assets/ liabilities	Revenue	Profit/ loss
Consulting AB Lennemark & Andersson	10 / 6	13	1
Urzus Group AS	1 / 1	3	0
Besure Forsikring Skandinavia AS	-	-	-

*) Published price quatation

**) Excluded from accounting for by the equity method because of their immaterial effect on consolidated figures.

Changes in investments in associates

EURm	2011	2010
At beginning of year	5,699	5,172
Share of loss/profit	540	522
Additions	583	238
Disposals	-250	-205
Changes in the equity of associates	18	-29
Exchange differences	2	1
At end of year	6,593	5,699

At 31 Dec 2011, the carrying amount of investments in associates included goodwill EURm 1,094 (909), including goodwill from the Nordea acquisition EURm 976 (905).

Sampo's holding in Nordea

Nordea is an universal bank with positions within corporate merchant banking as well as retail banking and private banking. With approximately 1.400 branches, call centers in all Nordic countries and an e-bank, Nordea also has a large distribution network for customers in the Nordic and Baltic sea region, including more than 260 branches in five new European markets, Russia, Poland, Lithuania, Latvia and Estonia.

Nordea was first conslidated as an associate company from 31 Dec. 2009 with Sampo's holding of 20,05 %. In the financial year 2011, Sampo's holding in Nordea was 21.26 % with the goodwill related to the acquisitions of EURm 976.

Sampo´s share of Nordea's loss/profit consists of the following as of 31 Dec 2011:

EURm	2011
Share of loss/profit of the associate	560
Amortisation of the customer relations	-35
Change in deferred tax	9
Share of the loss/profit of an associate	534

Due to the decrease in the Nordea's market value during the financial year 2011, Sampo performed an impairment test in accordance with IAS 36 Impairment of Assets where the recoverable amount for Nordea was compared with its carrying amount in the Group.The recoverable amount was defined using a discounted cash flow model, where the cash flows were based on the public information on Nordea and Sampo's estimates of Nordea's future based on this information. No impairment losses were recognised based on the test, as the recovarable amount exceeded Nordea's carrying amount.

15 FINANCIAL ASSETS

Group's financial assets comprise investments in derivatives, financial assets designated as at fair value through p/l, loans and receivables, available-for-sale financial assets and investments in subsidiaries. The Holding segment includes also investments in subsidiari

The Group uses derivative instruments for trading and for hedging purposes. The derivatives used are foreign exchange, interest rate and equity derivatives. In P&C insurance business, fair value hedging has been applied during the financial year. In Life insurance, both fair value and cash flow hedging have been applied.

EURm	2011	2010
P&C insurance
Derivative financial instruments	114	63
Financial assets designated as at fair value through p/l	155	90
Loans and receivables	83	73
Financial assets available-for-sale	10,402	10,999
P&C insurance, total	10,754	11,226
Life insurance
Derivative financial instruments	36	58
Financial assets designated as at fair value through p/l	51	61
Loans and receivables	23	26
Financial assets available-for-sale	5,058	5,598
Life insurance, total	5,168	5,745
Holding
Derivative financial instruments	29	36
Loans and receivables	1	1
Financial assets available-for-sale	1,066	695
Investments in subsidiaries	2,370	2,370
Holding, total	3,465	3,101
Elimination items between segments	-2,642	-2,563
Group, total	16,745	17,508

P&C insurance

DERIVATIVE FINANCIAL INSTRUMENTS

		2011			2010
	Contract/		Fair value	Contract/		Fair value
	notional			notional
EURm	amount	Assets	Liabilities	amount	Assets	Liabilities
Derivatives held for trading
Interest rate derivatives
OTC derivatives
Intrerest rate swaps	162	19	16	162	5	-
Exchange traded derivatives
Interest rate futures	393	0	-	809	3	0
Total interest rate derivatives	555	19	16	970	8	0
Foreign exchange derivatives
OTC derivatives
Currency forwards	11,749	94	185	3,963	54	75
Currency options, bought and sold	211	2	2	-	-	-
Total foreign exchange derivatives	11,961	95	186	3,963	54	75
Equity derivatives
OTC derivatives
Equity and equity index options	0	0	-	2	1	-
Total derivatives held for trading	12,516	114	202	4,935	63	75
Derivatives held for hedging
Fair value hedges
Currency forwards	277	-	0	189	0	0
Total derivatives	12,793	114	202	5,124	63	75

OTHER FINANCIAL ASSETS

EURm	2011	2010
Financial assets designated as at fair value through p/l
Debt securities
Issued by public bodies	33	70
Certificates of deposit issued by banks	89	3
Other debt securities	33	17
Total debt securities	155	90
Listed debt securities EURm 126 (90).
Equity securities
Listed	0	0
Unlisted	-	-
Total	0	0
Total financial assets designated as at fair value through p/l	155	90
Loans and receivables
Deposits with ceding undertakings	1	0
Other	82	73
Total loans and receivables	83	73
Financial assets available-for-sale
Debt securities
Issued by public bodies	258	427
Certificates of deposit issued by banks	2,967	1,859
Other debt securities	5,888	6,939
Total debt securities	9,113	9,226
Listed debt securities EURm 7,505 (8,247).
Equity securities
Listed	1,145	1,637
Unlisted	144	137
Total	1,289	1,774
Total financial assets available-for-sale	10,402	10,999

Financial assets available-for-sale for P&C insurance include impairment losses EURm 166 (179).

P&C insurance, total financial assets	10,754	11,226

Life insurance

DERIVATIVE FINANCIAL INSTRUMENTS

	2011		2010
	Contract/		Fair value	Contract/		Fair value
	notional			notional
EURm	amount	Assets	Liabilities	amount	Assets	Liabilities
Derivatives held for trading
Interest rate derivatives
OTC derivatives
Interest rate swaps	1,750	21	-	760	28	-
Credit risk swaps	558	10	0	117	0	0
Total	2,308	31	0	877	28	0
Exchange traded derivatives
Interest futures	-	-	-	100	-	1
Interest options, bought and sold	-	-	-	300	1	1
Total	-	-	-	400	1	3
Total interest rate derivatives	2,308	31	0	1,277	30	3
Foreign exchange derivatives
OTC derivatives
Currency forwards	708	2	24	1,754	24	8
Currency options, bought and sold	203	1	1	120	1	1
Total foreign exchange derivatives	912	3	25	1,874	25	9
Equity derivatives
OTC derivatives
Equity and equity index options	29	0	0	-	-	-
Total derivatives held for trading	3,248	35	25	3,151	54	12
Derivatives held for hedging
Fair value hedges
Currency forwards	430	-	38	461	-	14
Interest rate swaps	33	-	1	33	1	-
Total	463	0	38	494	1	14
Cash flow hedges
Interest rate swaps	47	2	-	88	3	-
Total derivatives held for hedging	510	2	38	582	4	14
Total derivatives	3,758	36	64	3,733	58	26

Fair value hedges

Fair value hedging is used to hedge a proportion of foreign exchange and interest risk in available-for-sale financial assets. The interest elements of forward contracts have been excluded from hedging relationships in foreign exchange hedges, as well as the share of credit risk in interest risk hedges.

Net gains from exchange derivatives designated as fair value hedges amounted to EURm -11 (4). Net losses from hedged risks in fair value hedges of available for sale financial assets amounted to EURm 11 (3).

Net gains from interest rate swaps designated as fair value hedges amounted to EURm -2 (1) milj. euroa. Net losses from hedged risks in fair value hedges of available for sale financial assets amounted to EURm 2 (-1).

Cash flow hedges

Cash flow hedges have been used to hedge future interest payments resulting from floating rate interest-bearing assets. The hedged items designated are interest payments from EUR denominated bonds.The effectiveness of the hedging relationships is assessed prospectively using the critical terms match method. An effectiveness test is carried out retrospectively using the hypothetical swap method.

At 31 Dec. 2011 he total amount of gains recognised in equity from the changes in the fair values of hedging instruments was EURm 2 (4). These gains are recognised in the income statement at the time when the hedged items affect profit or loss. The table below represents the periods when the cash flows are expected to occur and when they are expected to affect profit or loss. Any ineffectiveness is recognised in the income statement.

EURm	Total	Up to 1 year	1 - 2 years
From hedging instruments
Receivable cash flows (forecast)	3	2	0
Payable cash flows (forecast)	-1	-1	0
Net	2	2	0

Most of the cash flows are forecast to occur during 2012.

OTHER FINANCIAL ASSETS

EURm	2011	2010
Financial assets designated as at fair value through p/l
Debt securities
Issued by public bodies	11	19
Certificates of deposit issued by banks	39	24
Other debt securities	-	18
Total debt securities	50	61
Listed debt securities EURm 26 (20).
Equity securities
Listed	1	0
Unlisted	-	-
Total	1	0
Total financial assets designated as at fair value through p/l	51	61

Loans and receivables
Deposits with ceding undertakings	1	1
Loans	22	25
Total loans and receivables	23	26
Financial assets available-for-sale
Debt securities
Issued by public bodies	11	107
Issued by banks	1,150	1,480
Other debt securities	1,671	1,655
Total debt securities	2,832	3,242
Listed debt securities EURm 2,739 (3,155).
Equity securities
Listed	1,451	1,738
Unlisted	775	619
Total	2,226	2,357
Total financial assets available-for-sale	5,058	5,598

Life insurance, total financial assets	5,168	5,745

Financial assets available for sale / debt securities:

Debt securities available for sale include EURm 2,494 (2,709) investments in bonds and EURm 338 (533) investments in money market instruments.

Financial assets available for sale /shares and participations:

Listed equity securities include EURm 635 (674) quoted shares. Unlisted equity securities include EURm 692 (551) investments in capital trusts.

Holding

DERIVATIVE FINANCIAL INSTRUMENTS

		2011			2010
	Contract/		Fair value	Contract/		Fair value
	notional			notional
EURm	amount	Assets	Liabilities	amount	Assets	Liabilities
Derivatives held for trading
Interest derivatives
OTC-derivatives
Interest rate swaps	1,050	16	-	1,075	29	-
Credit risk swaps	20	0	-	-	-	-
Total interest derivatives	1,070	16	0	1,075	29	0

Equity derivatives
Exchange traded derivatives
Equity and euqity index options	80	13	17	95	7	10
Total derivatives	1,150	29	17	1,170	36	10

OTHER FINANCIAL ASSETS

EURm	2011	2010
Loans and receivables
Deposits	1	1
Financial assets available-for-sale
Debt securities
Certificates of deposit issued by banks	809	509
Other debt securities	223	151
Total debt securities	1,032	659
Listed debt securities EURm 932 (553).
Equity securities
Listed	-	-
Unlisted	34	36
Total	34	36
Total financial assets available-for-sale	1,066	695
Financial assets available-for-sale for Holding business include impairment losses EURm 0 (2).
Investments in subsidiaries	2,370	2,370
Holding, total financial assets	3,465	3,101
Elimination items between segments	-2,642	-2,563
Group, total	16,745	17,508

16 FAIR VALUES

	2011		2010
EURm	Fair value	Carrying amount	Fair value	Carrying amount
Financial assets, group
Financial assets	16,747	16,745	17,508	17,508
Investments related to unit-linked contracts	3,053	3,053	3,127	3,127
Other assets	10	10	23	23
Cash and cash equivalents	572	572	515	527
Total	20,383	20,381	21,173	21,184
Financial liablities, group
Financial liabilities	2,775	2,768	2,214	2,187
Other liabilities	2	2	67	67
Total	2,777	2,771	2,281	2,254

In the table above are presented fair values and carrying amounts of financial assets and liabilities. The detailed measurement bases of financial assets and liabilities are disclosed in Group Accounting policies.

The fair value of investment securities is assessed using quoted prices in active markets. If published price quotations are not available, the fair value is assessed using discounting method. Values for the discount rates are taken from the market's yield curve

The fair value of the derivative instruments is assessed using quoted market prices in active markets, discounting method or option pricing models.

The fair value of loans and other financial instruments which have no quoted price in active markets is based on discounted cash flows, using quoted market rates. The market's yield curve is adjusted by other components of the instrument, e.g. by credit risk.

The fair value for short-term non-interest-bearing receivables and payables is their carrying amount.

Disclosed fair values are "clean" fair values, i.e. less interest accruals.

17 DETERMINATION AND HIERARCHY OF FAIR VALUES

A large majority of Sampo Group's financial assets are valued at fair value. The valuation is based on either published price quatations or valuation techniques based on market observable inputs, where available. For a limited amount of assets the value needs to be determined using other techniques.

The financial instruments measured at fair value have been classified into three hierarchy levels in the notes, depending on e.g. if the market for the instrument is active, or if the inputs used in the valuation technique are observable.

On level 1, the measurement of the instrument is based on quoted prices in active markets for identical assets or liabilities.

On level 2, inputs for the measurement of the instrument include also other than quoted prices observable for the asset or liability, either directly or indirectly by using valuation techniques.

In level 3, the measurement is based on other inputs rather than observable market data.

EURm	Level 1	Level 2	Level 3	Total
FINANCIAL ASSETS 31 Dec 2011
Derivative financial instruments
Interest rate swaps	-	67	-	67
Foreign exchange derivatives	-	98	-	98
Equity derivatives	0	13	-	13
	0	13	-	179
Financial assets designated at fair value through profit or loss
Equity securities	1	-	-	1
Debt securities	31	174	-	205
	32	174	0	206
Financial assets related to unit-linked insurance
Equity securities	150	1	0	151
Debt securities	4	566	0	570
Derivative financial instruments	0	2	-	2
Mutual funds	1,458	519	62	2,039
	1,612	1,087	63	2,762
Financial assets available-for-sale
Equity securities	1,394	-	71	1,465
Debt securities	317	12,290	99	12,706
Mutual funds	1,053	127	905	2,084
	2,764	12,417	1,074	16,254
Total financial assests measured at fair value	4,409	13,690	1,137	19,401

FINANCIAL LIABILITIES 31 Dec 2011
Derivative financial instruments
Interest rate derivatives	-	1	-	1
Foreign exchange derivatives	-	265	-	265
Equity derivatives	0	17	-	17
Total financial liabilities measured at fair value	0	282	-	283

EURm	Level 1	Level 2	Level 3	Total
FINANCIAL ASSETS 31 Dec 2010
Derivative financial instruments
Interest rate swaps	-	66	-	66
Other interest rate derivatives	4	1	-	5
Foreign exchange derivatives	-	79	-	79
Equity derivatives	-	8	-	8
	4	153	-	158
Financial assets designated at fair value through profit or loss
Equity securities	0	-	-	0
Debt securities	78	56	18	151
	78	56	18	151
Financial assets related to unit-linked insurance
Equity securities	152	6	0	159
Debt securities	31	519	0	551
Derivative financial instruments	0	14	-	14
Mutual funds	1,602	612	57	2,271
	1,785	1,151	58	2,994
Financial assets available-for-sale
Equity securities	1,837	-	77	1,914
Debt securities	602	12,220	86	12,908
Mutual funds	1,252	259	767	2,278
	3,691	12,479	930	17,099
Total financial assests measured at fair value	5,557	13,839	1,005	20,402

FINANCIAL LIABILITIES 31 Dec 2010

Derivative financial instruments
Interest rate derivatives	3	0	-	2
Foreign exchange derivatives	-	23	-	23
Equity derivatives	-	75	-	75
Other derivatives	-	10	-	10
Total financial liabilities measured at fair value	3	108	-	110

SENSITIVITY ANALYSIS OF FAIR VALUES

The sensitivity of financial assets and liabilites to changes in exchange rates is assessed on business area level due to differenct base currencies. In P&C insurance, 10 percentage point depreciation of all other currencies against SEK would result in an effect recognised in profit/loss of EURm 9 and in an effect recognised directly in equity of EURm -1. In Life insurance, 10 percentage point depreciation of all other currencies against EUR would result in an effect recognised in profit/loss of EURm 20 and in an effect recognised directly in equity of EURm -60. In Holding, 10 percentage point depreciation of all other currencies against EUR would have no impact in profit/loss, but an effect recognised in equity of EURm 2.

The sensitivity analysis of the Group's fair values of financial assets and liabilities in differenct market risk scenarios is presented below. The effects represent the instantaneous effects of a one-off change in the underlying market variable on the fair values on 31 Dec 2011.

The sensitivity analysis includes the effects of derivative positions. All sensitivities are calculated before taxes.

The debt issued by Sampo plc is not included.

		Interest rate	Equity	Other financial investments
	1 % parallel shift down	1 % parallel shift up	20 % fall in prices	20 % fall in prices
Effect recognised in profit/loss	21	-20	0	-4
Effect recognised directly in equity	213	-204	-524	-171
Total effect	235	-224	-524	-175

18 MOVEMENTS IN LEVEL 3 FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

EURm	At Jan 2011	Total gains/losses in income statement	Total gains/losses recorded in other comprehensive income	Purchases	Sales	Transfers between levels 1 and 2	At 31 Dec 2011	Gains/losses included in p/l for financial assets 31 Dec 2011
FINANCIAL ASSETS 2011
Financial assets designated at fair value through profit or loss
Debt securities	18	8	-	-	-26	-	0	-
Financial assets related to unit-linked insurance
Equity securities	0	-	-	0	-	-	0	-
Debt securities	0	-1	-	-	0	1	0	-1
Mutual funds	57	2	-	22	-19	-	62	2
	58	1	0	22	-19	1	63	1
Financial assets available-for sale
Equity securities	77	3	12	1	-22	0	72	-5
Debt securities	111	24	12	50	-96	-3	99	24
Mutual funds	742	14	33	250	-134	0	904	12
	930	41	57	302	-252	-3	1,074	31
Total financial assests measured at fair value	1,005	50	57	324	-297	-2	1,137	32
FINANCIAL LIABILITIES 2011	-	-	-	-	-	-	-	-

		2011
EURm	Realised gains	Fair value gains and losses	Total
Total gains or losses included in profir or loss for the financial year	35	15	50
Total gains or losses included in profit and loss for assets held at the end of the financial year	25	8	32

EURm	At Jan 2011	Total gains/losses in income statement	Total gains/losses recorded in other comprehensive income	Purchases	Sales	Transfers between levels 1 and 2	At 31 Dec 2011	Gains/losses included in p/l for financial assets 31 Dec 2011
FINANCIAL ASSETS 2010
Financial assets designated at fair value through profit or loss
Debt securities	16	3	-	0	-2	-	18	2
Mutual funds	1	-	-	-	-1	-	0	-
	17	3	-	-	-3	0	18	2
Financial assets related to unit linked insurance
Equity securities	-	0	-	0	0	-		-
Debt securities	1	-1	-	-	-	-	0	2
Mutual funds	54	2	-	26	-24	-	57	-
	54	2	0	26	-25	0	57	2
Financial assets available-for sale
Equity securities	75	0	0	5	-3	-	77	-1
Debt securities	93	-20	39	51	-81	3	86	-2
Mutual funds	501	6	45	293	-78	-	767	8
	669	-14	84	350	-161	3	930	5
Total financial assests measured at fair value	740	-9	84	376	-189	3	1,005	9
FINANCIAL LIABILITIES 2010	-	-	-	-	-	-	-	-
							2010

	Realised gains	Fair value gains and losses	Total
Total gains or losses included in profir or loss for the financial year	-24	14	-9
Total gains or losses included in profit and loss for assets held at the end of the financial year	-4	13	9

19 SENSITIVITY ANALYSIS OF LEVEL 3 FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

		2011		2010
		Effect of reasonably possible alternative		Effect of reasonably possible alternative
	Carrying	assumptions	Carrying	assumptions
EURm	amount	(+ / -)	amount	(+ / -)
Financial assets
Financial assets designated at fair value through profit or loss
Debt securities	0	0	-	-
Mutual funds	0	0	18	0
Total	0	0	18	0
Financial assets available-for-sale
Equity securities	71	-14	77	-15
Debt securities	99	-4	86	0
Mutual funds	905	-166	767	-128
Total	1,074	-185	930	-144
Total financial assests measured at fair value	1,074	-185	948	-144

The value of financial assets regarding the debt security instruments has been tested by assuming a rise of 1 per cent unit in interest rate level in all maturities. For other financial assets, the prices were assumed to go down by 20 %. The Sampo Group bears no investment risks relatted to unit-linked insurance, so a change in assumptions regarding these assets does not affect profit or loss. On the basis of the these alternative assumptions, a possible change in interest levels would cause descent of EURm 0 (0) for the debt instruments, and EURm 185 (144) valuation loss for other instruments in the Group's other comprehensive income. The reasonably possible effect, proportionate to the Group's equity, would thus be 2.1 % (1.6).

20 INVESTMENTS RELATED TO UNIT-LINKED INSURANCE CONTRACTS

Life insurance

EURm	2011	2010
Financial assets designated at fair value through p/l
Debt securities
Issued by public bodies	32	44
Certificates of deposit issued by banks	137	137
Other debt securities	401	370
Total	570	551
Listed debt securities EURm 473 (412).
Equity securities
Listed	2,181	2,426
Unlisted	8	4
Total	2,190	2,430
Total financial assets designated at fair value through p/l	291	131
Other	2	15
Investment related to unit-linked contracts, total	3,053	3,127

The historical cost of the equity securities related to unit-linked contracts was EURm 2,157 (2,096) and that of the debt securities EURm 556 (530).

21 DEFERRED TAX ASSETS AND LIABILITIES

Changes in deferred tax during the financial period 2011

		Recognised in comprehensive
		income	Recognised	Exchange
EURm	1 Jan	statement	in equity	differences	31 Dec
Deferred tax assets
Tax losses carried forward	20	1	-2	0	20
Changes in fair values	0	0	0	0	0
Employee benefits	38	-2	0	0	37
Other deductible temporary differences	16	-1	0	0	15
Total	75	-1	-2	0	72
Netting of deferred taxes					-8
Deferred tax assets in the balance sheet					64
Deferred tax liabilities
Depreciation differences and untaxed reserves	377	-22	0	1	356
Changes in fair values	249	-2	-140	0	108
Other taxable temporary differences	20	-2	0	0	18
Total	647	-26	-140	2	482
Netting of deferred taxes					-8
Total deferred tax liabilities in the balance sheet					474

In Sampo plc, EURm 16 of deferred tax asset has not been recognised on unsed tax losses.

In P&C insurance, EURm 3 of deferred tax asset has not been recognised on unused tax losses and temporary differences.

Changes in deferred tax during the financial period 2010

		Recognised in comprehensive
		income	Recognised	Exchange
EURm	1 Jan	statement	in equity	differences	31 Dec
Deferred tax assets
Tax losses carried forward	5	15	0	0	20
Changes in fair values	1	0	-1	0	0
Employee benefits	34	1	0	4	38
Other deductible temporary differences	51	-18	6	-1	37
Total	91	-3	5	2	95
Netting of deferred taxes					-28
Deferred tax assets in the balance sheet					68
Deferred tax liabilities
Depreciation differences and untaxed reserves	360	-5	0	22	377
Changes in fair values	121	4	125	0	249
Other taxable temporary differences	29	11	0	1	41
Total	510	10	125	23	667
Netting of deferred taxes					-28
Total deferred tax liabilities in the balance sheet					640

22 TAXES

EURm	2011	2010
Profit before tax	1,228	1,320
Tax calculated at parent company's tax rate	-319	-343
Different tax rates on overseas earnings	0	0
Income not subject to tax	69	55
Expenses not allowable for tax purposes	-4	-7
Consolidation procedures and eliminations	73	83
Tax losses for which no deferred tax asset has been recognised	-17	-1
Changes in tax rates	7	-
Tax from previous years	2	-3
Total	-189	-217

23 COMPONENTS OF OTHER COMPREHENSIVE INCOME

EURm	2011	2010
Other comprehensive income:
Exchange differences	6	214
Available-for-sale financial assets
Gains/losses arising during the year	-559	832
Reclassification adjustments	40	-227
Cash flow hedges
Gains/losses arising during the year	-2	-9
Share of associate's other comprehensive income	23	48
Income tax relating to components of other comprehensive income	141	-156
Total	-352	703

24 TAX EFFECTS RELATING TO COMPONENTS OF OTHER COMPREHENSIVE INCOME

		2011			2010
EURm	Before tax amount	Tax	Net-of tax amount	Before tax amount	Tax	Net-of tax amount
Exchange differences	6	-	6	214	-	214
Available-for-sale financial assets	-520	140	-379	605	-158	447
Cash flow hedges	-2	1	-2	-9	2	-6
Share of associate's other comprehensive income	23	-	23	48	-	48
Total	-516	141	-352	811	-156	703

25 OTHER ASSETS

P&C insurance

EURm	2011	2010
Interests	131	140
Assets arising from direct insurance operations	1,014	939
Assets arising from reinsurance operations	67	42
Settlement receivables	2	2
Deferred acquisition costs 1)	157	139
Assets related to Patient Insurance Pool	55	55
Other	54	46
P&C insurance, total	1,479	1,363

Other assets include non-current assets EURm 57 (47).

Item Other comprise rental deposits, salary and travel advancements and assets held for resale.

1) Change in deferred acquisition costs in the period

EURm	2011	2010
At 1 Jan	139	122
Net change in the period	17	9
Exchange differences	1	8
At 31 Dec	157	139

Life insurance

EURm	2011	2010
Interests	54	60
Receivables from policyholders	5	6
Assets arising from reinsurance operations	0	0
Settlement receivables	5	6
Other	69	34
Life insurance, total	133	106

Item Other comprise e.g. receivables from the employees' group life insurance pool, pensions paid in advance and receivables from co-operations companies.

Holding

EURm	2011	2010
Interests	51	43
Other	8	22
Holding, total	59	66
Item Other includes e.g. asset management fee receivables.
Elimination items between segments	-12	-20
Group, total	1,659	1,515

26 CASH AND CASH EQUIVALENTS

P&C insurance

EURm	2011	2010
Cash at bank and in hand	225	200
Short-term deposits (max 3 months)	166	119
P&C insurance, total	390	319

Life insurance

EURm	2011	2010
Cash at bank and in hand	93	86
Short-term deposits (max 3 months)	-	66
Life insurance, total	93	152

Holding

EURm	2011	2010
Cash at bank and in hand	89	56
Short-term deposits (max 3 months)	-	0
Holding, total	89	56
Group, total	572	527

27 LIABILITIES FROM INSURANCE AND INVESTMENT CONTRACTS

P&C insurance

Change in insurance liabilities

		2011			2010
EURm	Gross	Ceded	Net	Gross	Ceded	Net
Provision for unearned premiums
At 1 Jan	1,845	53	1,792	1,668	49	1,619
Exchange differences	20	1	21	83	2	81
Change in provision	106	-1	105	94	2	91
At 31 Dec	1,972	53	1,919	1,845	53	1,792
		2011			2010
EURm	Gross	Ceded	Net	Gross	Ceded	Net
Provision for claims outstanding
At 1 Jan	7,494	457	7,037	6,915	428	6,486
Unwinding of discount	-	-	-	61	-	61
Exchange differences	34	5	29	457	38	418
Change in provision	48	14	34	62	-9	71

Liabilities from insurance contracts

EURm	2011	2010
Provision for unearned premiums	1,972	1,845
Provision for claims outstanding	7,576	7,494
Incurred and reported losses	2,037	2,026
Incurred but not reported losses (IBNR)	3,485	3,555
Provisions for claims-adjustment costs	269	271
Provisions for annuities and sickness benefits	1,785	1,535
P&C insurance total	9,547	9,340
Reinsurers' share

Provision for unearned premiums	53	53
Provision for claims outstanding	476	457
Incurred and reported losses	328	303
Incurred but not reported losses (IBNR)	148	154
Total reinsurers' share	528	510

As the P&C insurance is exposed to various exchange rates, comparing the balance sheet data from year to year can be misleading. During the financial year, however, the exchange rate effects were minor on the insurance liabilities.

Claims cost trend of P&C insurance

The tables below show the cost trend for the claims for different years. The upper part of the tables shows how an estimate of the total claims costs per claims year evolves annually. The lower section shows how large a share of this is presented in the balance sheet.

More information on P&C insurance's insurance liabilities in the Risk Management section of the Annual accounts.

Claims costs before reinsurance

Estimated claims cost

EURm	< 2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	Total
At the close of the claims year	5,046	2,583	2,526	2,689	2,703	2,768	2,920	2,929	3,049	3,131
One year later	5,273	2,542	2,490	2,632	2,687	2,765	2,873	2,877	3,090
Two years later	5,369	2,461	2,425	2,578	2,658	2,729	2,812	2,847
Three years later	5,450	2,452	2,420	2,549	2,654	2,695	2,784
Four years later	5,545	2,432	2,403	2,515	2,612	2,648
Five years later	5,584	2,414	2,375	2,479	2,562
Six years later	5,585	2,400	2,334	2,424
Seven years later	5,672	2,413	2,299
Eight years later	5,746	2,389
Nine years later	5,798
Current estimate of total claims costs	5,798	2,389	2,299	2,424	2,562	2,648	2,784	2,847	3,090	3,131	29,970
Total disbursed	3,377	2,123	1,997	2,113	2,210	2,243	2,292	2,267	2,361	1,684	22,668
Provision reported in the balance sheet	2,421	266	302	311	351	405	491	580	729	1,446	7,302
of which established vested annuities	1,313	64	51	66	69	67	64	50	33	7	1,785
Other provision											5
Provision for claims-adjustment costs											269
Total provision reported in the BS											7,576

Claims costs after reinsurance

Estimated claims cost

EURm	< 2002	2003	2004	2005	2006	2007	2008	2009	2010	2011	Total
At the close of the claims year	4,435	2,462	2,453	2,542	2,592	2,667	2,796	2,808	2,897	2,958
One year later	4,650	2,412	2,416	2,478	2,566	2,658	2,763	2,774	2,945
Two years later	4,753	2,336	2,354	2,423	2,536	2,631	2,705	2,741
Three years later	4,813	2,326	2,347	2,402	2,539	2,597	2,678
Four years later	4,892	2,305	2,333	2,370	2,500	2,552
Five years later	4,923	2,288	2,306	2,334	2,459
Six years later	4,922	2,276	2,264	2,300
Seven years later	4,958	2,289	2,230
Eight years later	5,050	2,269
Nine years later	5,110
Current estimate of total claims costs	5,050	2,289	2,264	2,334	2,500	2,597	2,705	2,774	2,897	2,958	28,368
Total disbursed	2,721	2,042	1,978	2,037	2,163	2,211	2,228	2,244	2,260	1,658	21,542
Provision reported in the balance sheet	2,329	246	286	298	337	386	477	530	636	5,526	6,826
of which established vested annuities	1,313	64	51	66	69	67	64	50	33	7	1,785
Other provision											5
Provision for claims-adjustment costs											269
Total provision reported in the BS											7,100

Life insurance

Change in liabilities arising from other than unit-linked insurance and investment contracts

EURm	Insurance contracts	Investment contracts	Total
At 1 Jan 2011	4,388	22	4,410
Premiums	204	1	206
Claims paid	-438	-17	-455
Expense charge	-37	0	-37
Guaranteed interest	153	0	153
Bonuses	6	0	6
Other	-34	0	-34
At 31 Dec 2011	4,242	7	4,249
Reinsurers' share	-3	0	-3
Net liability at 31 Dec 2010	4,239	7	4,245

EURm	Insurance contracts	Investment contracts	Total
At 1 Jan 2010	4,374	57	4,431
Premiums	273	1	274
Claims paid	-401	-37	-438
Expense charge	-37	0	-37
Guaranteed interest	158	1	159
Bonuses	1	0	1
Other	20	0	20
At 31 Dec 2010	4,388	22	4,410
Reinsurers' share	-4	0	-4
Net liability at 31 Dec 2010	4,385	22	4,406

Change in liabilities arising from unit-linked insurance and investment contracts

EURm	Insurance contracts	Investment contracts	Total
At 1 Jan 2011	2,381	743	3,124
Premiums	339	310	649
Claims paid	-196	-157	-354
Expense charge	-31	-12	-43
Other	-277	-44	-321
At 31 Dec 2011	2,216	838	3,054
At 1 Jan 2010	1,961	398	2,359
Premiums	376	467	843
Claims paid	-163	-181	-344
Expense charge	-30	-9	-38
Other	236	68	304
At 31 Dec 2010	2,381	743	3,124

The liabilities at 1 Jan and at 31 Dec include the future bonus reserves and the effect of the reserve for the decreased discount rate. The calculation is based on items before reinsurers' share. A more detailed specification of changes in insurance liabilities is presented in Group's Risk Management.

EURm	2011	2010
Insurance contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums	2,219	2,465
Provision for claims outstanding	2,020	1,907
Liabilities for contracts without discretionary participation feature (DPF)
Provision for unearned premiums	0	14
Provision for claims outstanding	0	0
Total	4,240	4,386
Assumed reinsurance
Provision for unearned premiums	1	1
Provision for claims outstanding	1	2
Total	2	3
Insurance contracts total
Provision for unearned premiums	2,220	2,479
Provision for claims outstanding	2,022	1,909
Total	4,242	4,388

Investment contracts

Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums	7	22

Liabilities for insurance and investment contracts total

Provision for unearned premiums	2,227	2,501
Provision for claims outstanding	2,022	1,909
Life insurance total	4,249	4,410

Reinsurers' share

Total	-3	-4
Provision for claims outstanding	-3	-4
Provision for unearned premiums	0	0

Investment contracts do not include a provision for claims outstanding.

Liability adequacy test does not give rise to supplementary claims.

Exemption allowed in IFRS 4 Insurance contracts has been applied to investment contracts with DPF or contracts with a right to trade-off for an investment contract with DPF. These investment contracts have been valued like insurance contracts.

EURm	2011	2010
Group, total	4,558	5,058

28 LIABILITIES FROM UNIT-LINKED INSURANCE AND INVESTMENT CONTRACTS

Life insurance

EURm	2011	2010
Unit-linked insurance contracts	2,216	2,381
Unit-linked investment contracts	838	743
Total	3,054	3,124

29 FINANCIAL LIABILITIES

Financial liabilities in the segments include liabilities from derivates, dept securities in issue and other financial liabilities.

P&C insurance

EURm	2011	2010
Derivative financial instruments (Note 15)	202	75
Subordinated debt securities
Subordinated loans
Euro-denominated loans Maturity
Preferred capital note, 2001(nominal value EURm 200) 20 years	-	217
Preferred capital note, 2002 (nominal value EURm 65) 20 years	68	71
Preferred capital note, 2005 (nominal value EURm 150) perpetual	149	149
Preferred capital note, 2011 (nominal value EURm 110) 30 years	109	-
Total subordinated debt securities	326	437
P&C insurance, total financial liabilities	528	512

The loans are issued with fixed interest rates for the first ten years, after which they become subject to variable interest rates. At that point, there is the possibility of redemption. All loans and their terms are approved by supervisory authorities. The loans are utilised for solvency purposes.

The loan issued in 2001 was redeemed during the financial year. The loan issued in 2002 was issued to If's previous owners in relation to their holding in If. In December 2011, an new loan was issued amounting to EURm 110. The loans was wholly subscribed by Sampo Plc.

The loans issued in 2005 and 2011 are listed on the Luxembourg Exchange.

Life insurance

EURm	2011	2010
Derivative financial instruments (Note 15)	64	26
Subordinated debt securities
Subordinated loans	100	100
Life insurance, total	164	126

Mandatum Life issued in 2002 EURm 100 Capital Notes. The loan is perpetual and pays floating rate interest. The interest is payable only from distributable capital. The loan is repayable only with the consent of the Insurance Supervisory Authority and at the earliest on 2012 or any interest payment date after that. The loans is wholly subscribed by Sampo Plc.

Holding

EURm	2011	2010
Derivative financial instruments (Note 15)	17	10
Debt securities in issue
Commercial papers	652	575
Bonds	1,677	1,026
Total	2,329	1,601
Other financial liabilities
Pension loans	-	130
Holding, total	2,346	1,741
Elimination items between segments	-269	-191
Group, total	2,768	2,187

30 PROVISIONS

P&C insurance

EURm	2011
At 1 Jan 2011	36
Exchange rate differences	0
Additions	15
Amounts used during the period	-13
Unused amounts reversed during the period	-1
At 31 Dec 2011	37
Current (less than 1 year)	29
Non-current (more than 1 year)	8
Total	37

The development of efficient administrative and claims-adjustment processes and structural changes in distribution channels result in organisational changes that affect all business areas. The provision consists mainly of assets reserved for future expenses attributable to previously implemented or planned future organisational changes.

31 EMPLOYEE BENEFITS

Employee benefits

Sampo has defined benefit plans in P&C insurance business in Sweden and Norway.

In addition to statutory retirement pension insurance, the Group has certain voluntary defined benefit plans. The voluntary defined benefit plans are intra-Group and included in the insurance liabilities of Mandatum Life. The amount is negligible and they have no material impact on the Group profit or loss or equity.

Employee benefit obligations of P&C Insurance 31 Dec

EURm	2011	2010
Present value of estimated pension obligation	577	458
Fair value of plan assets	347	326
Net obligation/liability	230	132
Net cumulative unrecognised actuarial gains/losses	-151	-46
Net pension obligation recognised in the balance sheet	79	85
Provision for social security	19	20
Provision for pensions 31 Dec	98	105

IAS 19 Employee benefits is applied in the accounting for the defined benefit plans from the beginning of the financial year 2005.

Pension obligations, and the pension cost accrued during the fiscal period, are calculated using actuarial methods. Earned pension rights are calculated on a straight-line basis during the employment period. The calculation of pension obligations is based on anticipated future pension payments and includes assumptions regarding mortality, employee turnover and salary growth. The nominally calculated liability is discounted to present value using an interest rate based on the current market rate and adjusted to take into account the duration of the company's pension obligations. After deducting plan assets, a net asset or liability is entered in the balance sheet. The net obligation reported in the closing balance pertained to defined-benefit pension plans for employees in Sweden and Norway. The pension benefits arising in the other countries covered by the Group's operations have been classified as defined contribution plans.

The following actuarial assumptions have been used for the calculation of defined benefit pension plans in Sweden and Norway:

	Sweden	Sweden	Norway	Norway
	31 Dec 2011	31 Dec 2010	31 Dec 2011	31 Dec 2010
Discount interest rate	3.75%	5.00%	2.75%	4.00%
Anticipated return	3.00%	4.50%	3.75%	4.75%
Future pay increases	3.00%	3.25%	3.75%	3.75%
Price inflation	2.00%	2.00%	2.25%	2.25%

The expected rate of return on the plan assets has been calculated based on the following division of investment assets:

Debt instruments	43%	42%	64%	65%
Equity instruments	34%	39%	15%	16%
Property	11%	10%	17%	16%
Other	12%	9%	4%	3%

Analysis of the employee benefit obligation

		2011			2010
EURm	Funded plans	Unfunded plans	Total	Funded plans	Unfunded plans	Total
Present value of estimated pension obligation	506	71	577	395	63	458
Fair value of plan assets	347	-	347	326	-	326
Net obligation/liability	159	71	230	69	63	132
Net cumulative unrecognised actuarial gains/losses	-138	-13	-151	-41	-5	-46
Net pension obligation recognised in the balance sheet	21	58	79	27	58	85

Recognised in Income Statement

EURm	2011	2010
Current service cost	14	14
Interest cost	19	19
Expected rate of return on plan assets at the begninning of the year	-16	-14
Actuarial gains (-) or losses (+) recognised during the financial year	1	2
Losses (+) or gains (-) on curtailments and settlements	1	0
Pension costs	19	22

Analysis of the change in net liability recognised in the balance sheet

EURm	2011	2010
Pension obligations:
At the beginning of the year	458	424
Earned during the financial year	14	14
Interest cost	19	19
Actuarial gains or losses	100	-19
Losses or gains on curtailments and settlements	1	0
Exchange differences on foreign plans	3	35
Benefits paid	-18	-16
Defined benefit plans at 31 Dec	577	458
Reconciliation of plan assets:
At the beginning of the year	326	272
Expected return on assets	16	15
Actuarial gains or losses	-6	2
Contributions	21	24
Exchange differences on foreign plans	2	23
Benefits paid	-13	-11
Plan assets at 31 Dec	347	326

Other short-term employee benefits

There are other short-term staff incentive schemes in the Group, the terms of which vary according to country, business area or company. Benefits are recognised in the profit or loss for the year they arise from. An estimated amount of these profit-sharing bonuses, social security costs included, for 2011 is EURm 46.

32 OTHER LIABILITIES

P&C insurance

EURm	2011	2010
Liabilities arising out of direct insurance operations	163	136
Liabilities arising out of reinsurance operations	69	45
Liabilities related to Patient Insurance Pool	54	54
Tax liabilities	105	140
Prepayments and accrued income	177	178
Other	127	137
P&C insurance, total	695	690

The non-current share of other liabilities is EURm 57 (61).

Item Other includes e.g. witholding taxes, social expenses related to Workers Compensation insurance policies and employee benefits, unpaid premium taxes and other accruals.

Life insurance

EURm	2011	2010
Interests	9	8
Tax liabilities	7	36
Liabilities arising out of direct insurance operations	6	4
Liabilities arising out of reinsurance operations	5	5
Settlement liabilities	2	67
Guarantees received	88	176
Other liabilities	35	42
Life insurance, total	151	339

Item Guarantees received comprise assets accepted as guarantees required in derivative trading and securities lending. Item Other includes e.g. liabilities arising from withholding taxes and social security costs, liabilities to creditors and insurance premium advances.

Holding

EURm	2011	2010
Interests	52	47
Guarantees for trading in derivatives	43	36
Liability for dividend distribution	21	26
Other	10	8
Holding, total	126	117
Item Other includes e.g. liabilities arising from intra-group management fees and unredeemed dividends.
Elimination items between segments	-12	-22
Group, total	960	1,124

33 CONTINGENT LIABILITIES AND COMMITMENTS

P&C insurance

EURm	2011	2010
Off-balance sheet items
Guarantees	43	57
Other irrevocable commitments	11	27
Total	54	84

Assets pledged as collateral for liabilities or contingent liabilities

	2011 Assets	Liabilities/ commit	2010 Assets	Liabilities/ commit
EURm	pledged	ments	pledged	ments
Assets pledged as collateral
Cash at balances at central banks	10	8	10	8
Investments
- Investment securities	142	114	133	111

EURm	2011	2010
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year	41	32
later than one year and not later than five years	105	78
later than five years	120	101
Total	266	212
Lease and sublease payments recognised as an expense in the period
- minimum lease payments	-36	-34
- sublease payments	0	0
Total	-36	-34

The subsidiaries If P&C Insurance Ltd and If P&C Insurance Company Ltd provide insurance with mutual undertakings within the Nordic Nuclear Insurance Pool and within the Norwegian Natural Perils' Pool.

In connection with the transfer of property and casualty insurance business from the Skandia group to the If Group as of March 1, 1999, If P&C Holding Ltd and If P&C Insurance Ltd issued a guarantee for the benefit of Försäkringsaktiebolaget Skandia (publ.) whereby the aforementioned companies in the If Group mutually guarantee that companies in the Skandia group will be indemnified against any claims or actions due to guarantees or similar commitments made by companies in the Skandia group within the property and casualty insurance business transferred to the If Group.

With respect to certain IT systems that If and Sampo use jointly, If has undertaken to indemnify Sampo for any costs that Sampo may incur in relation to the owner of the systems.

If P&C Holding Ltd and If P&C Insurance Ltd have separately entered into contracts with Försäkringsaktiebolaget Skandia (publ.) and Tryg-Baltica Forsikrings AS whereby Skandia and Tryg-Baltica will be indemnified against any claims attributable to guarantees issued by Försäkringsaktiebolaget Skandia (publ.) and Vesta Forsikring AS, on behalf of Skandia Marine Insurance Company (U.K.) Ltd. (now Marlon Insurance Company Ltd.) in favor of the Institute of London Underwriters. Marlon Insurance Company Ltd. was disposed during 2007, and the purchaser issued a guarantee in favour of If for the full amount that If may be required to pay under these guarantees.

If P&C Holding Ltd has issued a guarantee to the benefit of TietoEnator Corporation whereby If Holdings guarantees the commitments incurred by the If Group company If It Services A/S with TietoEnator based on an agreement covering IT-services. The guarantee will indemnify TietoEnator if If IT Services A/S is declared bankrupt, suspends payments in general, seeks a composition of creditors or in any other way is deemed to be insolvent.

If P&C Holding Ltd has issued a guarantee to the benefit of Svenska Handelsbanken Ab (publ) whereby If Holdings guarantees the commitments incurred by the If P&C Insurance Ltd deriving from short term credits up to an amount of EURm 56 and for commitments deriving from derivates transaction and - on behalf of - If P&C Insurance Ltd, If P&C Insurance Company Ltd and Capital Assurance Company for those companies commitments relating to Letters of Credits issued on behalf of their insurance operations. Capital Assurance Company Inc was sold during 2008, and the purchaser issued a guarantee in favor of If for the amount that If may be required to pay under the standby letters of credit pertaining to Capital Assurance Company Inc.

If P&C Insurance Company Ltd has outstanding commitments to private equity funds totalling EURm 11, which is the maximum amount that the company has committed to invest in the funds. Capital will be called to these funds over several years as the funds make investments.

If P&C Insurance Ltd has according to a shareholders' agreement between the shareholders in Hemfosa Fastigheter AB committed to up until 30 June 2014 supply the company with a subordinated loan (shareholders' loan) up to a maximum amount of EURm 56. The whole amount was used as of December 2011.

Life insurance

EURm	2011	2010
Off-balance sheet items
Fund commitments	338	348
Other commitments
Acquisition of IT-software	1	2
Lended securities
Domestic shares
Number of shares	7,867,000	9,990,868
Remaining acquisition cost	86	112
Fair value	73	145

Security lendings can be interrupted at any time and they are secured.

EURm	2011	2010
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year	2	2
later than one year and not later than five years	5	6
Total	7	8
Total of sublease payments expected to be received under non-cancellable operating sub-leases at 31 Dec	1	0
Lease and sublease payments recognised as an expense in the period
- minimum lease payments	-3	-3
- sublease payments	0	0
Total	-3	-3

Holding

EURm	2011	2010
Off-balance sheet items
Subscription liabilities	1	1

EURm	2011	2010
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year	1	1
later than one year and not later than five years	3	3
later than five years	0	1
Total	5	5

The Group had at the end of 2011 premises a total of 180 598 m2 (188,589) taken as a lessee. The contracts have been made mainly for 3 to 10 years.

34 EQUITY AND RESERVES

Equity

The number of Sampo plc's shares at 31 Dec. 2011 was 561,282,390, of which 560,082,390 were A-shares and 1,200,000 B-shares. Sampo plc acquired and annulled 1,282,390 treasury shares during the financial year. There was no change in the company's share capital of EURm 98 during the financial year.

At the end of the financial year 2011, the mother company or other Group companies held no shares in the parent company.

Reserves and retained earnings

Share premium reserve

The reserve included investments of equity nature and the issue price of shares to an extent it is not recorded in share capital by an express decision.

Legal reserve

The legal reserve comprises the amounts to be transferred from the distributable equity according to the articles of association or on the basis of the decision of the AGM.

Invested unrestricted equity

The reserve includes other investments of equity nature, as well as issue price of shares to an extent it is not recorded in share capital by an express decision.

Other components of equity

Other components of equity include fair value changes of financial assets available for sale and derivatives used in cash flow hedges, and exchange differences.

Changes in the reserves and retained earnings are presented in the Group's statement of changes in equity.

35 RELATED PARTY DISCLOSURES

KEY MANAGEMENT PERSONNEL

The key management personnel in Sampo Group consists of the members of the Board of Directors of Sampo plc and Sampo Group's Executive Committee.

Key management compensation

EURm	2011	2010
Short-term employee benefits	6	7
Post employment benefits	2	1
Other long-term benefits	3	8
Total	10	16

Short-term employee benefits comprise salaries and other short-terms benefits, including profit-sharing bonuses accounted for for the year, and social security costs.

Post employment benefits include pension benefits under the Employees' Pensions Act (TEL) in Finland and voluntary supplementary pension benefits.

Other long-term benefits consist of the benefits under long-term incentive schemes accounted for for the year (see Note 36).

Related party transactions of the key management

The related party transactions of the key management are not material nor does the key management have any loans from the Group companies.

ASSOCIATES

Outstanding balances with related parties/Associate Nordea

EURm	2011	2010
Assets	1,913	1,673
Liabilities	165	56

The Group's receivables from Nordea coprise mainly long-term investments in bonds and deposits. In addition, the Group has several on-going derivative contracts related to the Group's risk management of investments and liabilities.

36 INCENTIVE SCHEMES

LONG-TERM INCENTIVE SCHEMES 2008 II - 2011 I

The Board of Directors for Sampo plc has decided on the long-term incentive schemes 2008 II - 2011 I for the management and experts of the Sampo Group. The Board has authorised the CEO to decide who will be included in the scheme, as well as the number of calculated bonus units granted for each individual used in determining the amount of the performance-related bonus. In the schemes, the number of calculated bonus units granted for the members of the Group's Executive Committee is decided by the Board of Directors. Over 100 persons were included in the schemes at the end of year 2011.

The amount of the performance-related bonus is based on the value performance of Sampo's A share and on the insurance margin (IM) and, regarding the 2011 I scheme, also on Sampo's return on the risk adjusted capital (RORAC). The value of one calculated bonus unit is the tradeweighted average price of Sampo's A-share at the time period specified in the terms of the scheme, and reduced by the starting price adjusted with the dividends per share distributed up to the payment date. The pre-dividend starting prices vary between eur 16.69 - 18.44. The maximum value of one bonus unit varies between eur 28.49 - 33.37, reduced by the dividend-adjusted starting price. The IM criteria in the schemes 2008 II and 2009 I has three levels. If the IM reaches 4 per cent or more, the bonus is paid in its entirety. If the IM is between 2 - 3.99 per cent, the payout is 50 per cent. In the case of IM staying below these benchmarks, no bonus will be paid out. In the 2011 I scheme, the bonus depends on two benchmarks. The payout is 70 per cent, if the IM is 6 per cent or more, and 35 per cent, if the IM is between 4 - 5.99 per cent. No IM-related bonus will be paid out, if the IM stays below these. In addition, the return on the risk adjusted capital is taken into account so that a bonus of 30 per cent is paid out, if the return is, in the minimum, a riskless return + 4 per cent. If the return is a riskless return + 2 percent, but less than a riskless return + 4 percent, the payout is 15 per cent. If the return stays below these benchmarks, no RORAC-based bonus will be paid out.

Each plan has three performance periods and bonuses are settled in cash in three installments. In the schemes 2008 II and 2009 I when the bonus is paid, the employee shall buy Sampo's A-shares at the first possible opportunity, taking into account the provisions on insiders, with 30 per cent of the amount of the bonus after taxes and other comparable charges, and in the scheme 2008 II to keep the shares in his/her possession for one year and in the scheme 2009 I for 2 years. In the 2011 I scheme, the employee shall authorise Sampo plc to acquire the Sampo A shares for him/ her, with 60 per cent of the amount of bonus received. The shares are subject to transfer restrictions for three years from the day of payout. A premature payment of the bonuses may occur in the event of changes in the group structure or in the case of employment termination on specifically determined bases. The fair value of the incentive schemes is estimated by using the Black-Scholes princing model.

		2008 II	2009 I	2011 I
		7 May 2008	27 Aug 2009	14 Sep 2011
Terms approved *)
Granted (1,000) 31 Dec 2008		95	-	-
Granted (1,000) 31 Dec 2009		63	4,392	-
Granted (1,000) 31 Dec 2010		32	4,369	-
Granted (1,000) 31 Dec 2011		-	3,002	4,359
		Q3-2009	Q2-2011	Q2-2014
End of performance period I 30 %		Q1-2010	Q2-2012	Q2-2015
End of performance period II 35 %		Q4-2010	Q2-2013	Q2-2016
End of performance period III 35 %		12-2009	9-2011	9-2014
Payment I 30 %		6-2010	9-2012	9-2015
Payment II 35 %		3-2011	9-2013	9-2016
Payment III 35 %
Price of Sampo A at terms approval date *)		18.02	16.74	18,10
Starting price **)		18.44	16.49	18.37
Dividend-adjusted starting price at 31 Dec 2011		16.64	14.34	18.37
Sampo A - closing price 31 Dec 2011	19.17
Total intrinsic value, meur		0	10	1
Total debt	11
Total cost for the financial period, meur (incl. social costs)	8

*) Grant dates vary

**) Trade-weighted average for ten trading days from the approval of terms

37 AUDITORS' FEES

EURm	2011	2010
Auditing fees	-2	-2
Other fees	0	0
Total	-2	-2

38 LEGAL PROCEEDINGS

There are a number of legal proceedings against the Group companies outstanding on 31 Dec 2011, arising in the ordinary course of business. The companies estimate it unlikely that any significant loss will arise from these proceedings.

39 INVESTMENTS IN SUBSIDIARIES

Name	Group	Carrying
EURm	holding %	amount
P&C insurance
If P&C Insurance Holding Ltd	100%	1,886
If P&C Insurance Ltd	100%	1,356
If P&C Insurance Company Ltd	100%	498
If P&C Insurance AS	100%	50
AS If Kinnisvarahaldus	100%	0
CJSC If Insurance	100%	10
SOAO Region	100%	10
If Livförsäkring Ab	100%	8
Life insurance
Mandatum Life Insurance Company Ltd	100%	484
Mandatum Life Insurance Baltic SE	100%	11
Other business
Oy Finnish Captive & Risk Services Ltd	100%	0
If IT Services A/S	100%	0
Riskienhallinta Oy	100%	0
Barn i Bil	100%	0
Sampo Capital Oy	100%	1

The table excludes property and housing companies accounted for in the consolidated accounts.

40 INVESTMENTS IN SHARES AND PARTICIPATIONS OTHER THAN SUBSIDIARIES AND ASSOCIATES

P&C insurance

EURm	Country	No. of shares	Holding %	Carrying amount/ Fair value
Listed companies
A P Moller - Maersk	Denmark	4,396,114	0.03%	7
Eitzen Maritime	Norway	111,896,400	23.13%	3
Equinox Offshore	Singapore	210,500,002	1.24%	0
Reservoir Exploration Tech	Norway	88,990,170	8.16%	1
Statoil	Norway	3,188,647,103	0.06%	35
Veidekke	Norway	133,704,942	9.06%	60
Yara	Norway	287,656,159	0.21%	18
ABB	Switzerland	2,314,743,264	0.12%	40
Astrazeneca	Great Britain	1,330,000,000	0.04%	19
Atlas Copco A+B	Sweden	1,229,613,104	0.02%	42
BB Tools	Sweden	28,436,416	0.93%	2
Be Group	Sweden	50,000,000	7.55%	8
Clas Ohlson B	Sweden	65,600,000	4.75%	28
CTT Systems	Sweden	11,391,438	4.49%	2
G&L Beijer B	Sweden	21,195,515	0.45%	2
Gunnebo	Sweden	75,855,597	11.67%	24
Hennes Mauritz B	Sweden	1,655,072,000	0.13%	54
Husqvarna A+B	Sweden	576,343,778	1.01%	29
Investor B	Sweden	767,175,030	0.49%	55
Lindab	Sweden	78,707,820	4.94%	16
Nederman	Sweden	11,715,340	9.90%	13
Nobia	Sweden	175,293,458	11.95%	58
Nolato B	Sweden	26,307,408	1.23%	2
Sandvik	Sweden	1,186,287,175	0.34%	38
Scani B	Sweden	800,000,000	0.38%	35
Sectra B	Sweden	36,842,089	11.73%	26
SSAB A+B	Sweden	323,934,800	0.28%	13
Svedbergs B	Sweden	21,200,000	11.45%	8
Teliasonera SE	Sweden	4,330,084,781	0.30%	69
VBG	Sweden	13,694,000	3.92%	5
Volvo A+B	Sweden	2,128,420,220	0.06%	47

Total listed companies 758

Other 14

Unit trusts
Sampo Japan osake K JPY	Finland	315,965,078	28
Aberdeen GL Asia Pacific	Luxemburg	940,169	42
Mand north AM enhanced inc USD	Finland	22,375,015	29
Mand US samll cap value K USD	Finland	23,330,247	34
Ishares SP500 index fund	United States	595,000	58
SPDR SP500 ETF	United States	155,000	15
Gartmore Latin America A	Luxemburg	1,845,097	31
Mand emerging Asia K	Finland	1,460,726	42
Mand europe enhanced index	Finland	34,833,513	50
db x-trackers DAX	Luxemburg	160,000	9
IShares DJ Euro Stoxx 50 ETF	Ireland	752,200	17
Lyxor ETF DJ Euro Stoxx 50	France	220,000	5
Lyxor ETF DJ Stoxx 600 Telecommunications	France	1,000,000	25
EQT IV (No. 1) Limited Partnership	Guernsey	802,893	10
EQT Northern Europe	Guernsey	940,024	7
Mandatum I	Finland	731,694	7
Mandatum II eur	Finland	152,520	1
Private Energy Market fund	Finland	306,349	3
Mandatum II USD	Finland	506,987	5
WD Power inv USD	Finland	862	0
GS Loan Partners I Debt eur	United States	2,279,780	22
GS Loan Partners I Debt eur	United States	827,872	9
GS Loan Partners I Debt eur	United States	9,000,000	66

Total unit trusts 516

Total shares and participations 1,289

Life insurance

EURm	Country	No. of shares	Holding %	Carrying amount/ Fair value
Listed companies
Alma Media Oyj	Finland	6,537,512	8.66%	40
Amer Sports Oyj	Finland	2,354,268	1.94%	21
Comptel Oyj	Finland	20,532,625	19.18%	10
Elisa Oyj	Finland	2,191,217	1.32%	35
Finnlines Oyj	Finland	773,500	1.65%	6
Fortum Oyj	Finland	4,954,834	0.56%	82
F-Secure Oyj	Finland	4,286,981	2.70%	9
Kemira Oyj	Finland	2,741,613	1.76%	25
Konecranes Oyj	Finland	580,240	0.92%	8
Lassila & Tikanoja Oyj	Finland	2,231,238	5.75%	26
Metso Oyj	Finland	1,411,056	0.94%	40
Neste Oil Oyj	Finland	1,008,905	0.39%	8
Nokia Oyj	Finland	1,500,000	0.04%	6
Nokian Renkaat Oyj	Finland	832,344	0.64%	21
Norvestia Oyj	Finland	1,789,538	11.68%	12
Oriola KD Oyj	Finland	4,286,778	2.83%	7
Outokumpu Oyj	Finland	1,452,122	0.79%	7
Outotec Oyj	Finland	459,971	1.00%	17
Pöyry Oyj	Finland	2,075,287	3.47%	11
Stora Enso Oyj	Finland	4,250,000	0.54%	20
Suominen Yhtymä Oyj	Finland	22,222,222	9.04%	9
Teleste Oyj	Finland	1,679,200	9.23%	5
Tikkurila Oyj	Finland	2,056,195	4.66%	27
UPM-Kymmene Oyj	Finland	8,993,219	1.71%	77
Vaisala Oyj	Finland	766,650	4.21%	13
YIT Oyj	Finland	6,172,949	4.85%	76
Total				617
Other listed companies				21
Listed companies in total				637
Unit trusts
Danske Invest Emerging Asia Kasvu	Finland	1,094,339		32
Danske Invest Japani Osake Kasvu	Finland	100,000,000		9
Fourton Odysseus Kasvu	Finland	161,358		28
KJK Fund SICAV-SIF Baltic States	Finland	7,378		10
Total				78

Capital trusts
Amanda III Eastern Private Equity Ky	Finland	15
Amanda IV West Ky	Finland	10
CapMan Real Estate I Ky	Finland	11
CapMan Real Estate II Ky	Finland	7
Mandatum Pääomarahasto I Ky	Finland	11
Mandatum Pääomarahasto II Ky USD	Finland	5
MB Equity Fund III Ky	Finland	8
Total		67
Other shares and participations		26

Other companies

BenCo Insurance Holding B.V.	Netherlands	389,329	6.49%	7
Ekahau Inc.	United States	20,465,356	11.10%	2
EQT IV ISS Co-investment Limited Partnership	Guernsey	872,610	12.52%	12
Total				21

Domestic shares and participations in total 809

Foreign unit trusts

Aberdeen Global Asia Pacific Equity Fund	Great Britain	1,382,572	62
Allianz RCM Europe Equity Growth W	Luxemburg	29,319	38
Comgest Panda	Luxemburg	19,776	33
Danske Invest Europe High Dividend I	Luxemburg	4,193,065	35
db x-trackers DAX ETF	Luxemburg	931,200	54
GAM Global Rates Hedge Fund	Great Britain	50,285	7
Goldman Sachs Asset Management Liquidity Partners 2007	United States	108,973	6
Henderson Gartmore Latin America R	Great Britain	3,798,776	63
Highbridge Liquid Loan Opportunities Fund, L.P	Cayman islands	5,072,870	39
IShares S&P 500 Index Fund ETF	United States	1,463,990	143
MFS European Value Fund Z	Luxemburg	284,433	28
Nektar Bermuda Hedge Fund Class B	Bermuda	8,392	16
Powershares DB Commodity Ind ETF	United States	520,000	11
Prosperity Cub Fund	Guernsey	161,961	46
Prosperity Russia Domestic Fund	Guernsey	74,036,000	35
Source Markets DJ Stoxx 600 Optimised Healthcare ETF	Ireland	300,000	36
Source Markets DJ Stoxx 600 Optimised Telecommunications ETF	Ireland	1,120,402	85
SPDR Technology Select Sector ETF	United States	1,954,000	38
Total			777

Foreign unit trusts

Access Capital L.P.	Guernsey	6
Avenue Special Situations Fund VI (C Feeder), L.P.	Cayman islands	16
Behrman Capital III L.P.	United States	8
BOF III CV Investors LP (Gilde Buyout Fund III)	Guernsey	9
Capital Structured Solutions No. 1 LP	Guernsey	16
CapMan Buyout IX Fund L.P.	Guernsey	7
CapMan Buyout VIII (Guernsey) L.P.	Guernsey	6
EQT Credit (General Partner) L.P.	Guernsey	37
EQT IV (No. 1) Limited Partnership	Guernsey	10
EQT V (General Partner) LP	Guernsey	14
Financial Credit Investment I L.P.	Cayman islands	9
Fortress Credit Opportunities Fund II L.P.	Cayman islands	70
Fortress Credit Opportunities Fund III L.P.	Cayman islands	6
Fortress Life Settlement Fund (C) L.P.	Cayman islands	15
Goldman Sachs Loan Partners I, L.P.	Cayman islands	13
Goldman Sachs Loan Partners I, L.P. Debt EUR	Cayman islands	29
Goldman Sachs Loan Partners I, L.P. Debt USD	Cayman islands	88
Goldman Sachs Petershill Fund Offshore, L.P.	Cayman islands	21
Goldman Sachs Real Estate Mezzanine Partners (Treaty) L.P.	United States	7
Gresham IV Fund L.P.	Great Britain	5
Highbridge Senior Loan Fund II	Cayman islands	27
Montagu Fund III L.P.	Great Britain	7
Mount Kellet Capital Partners (Cayman) II, L.P.	Cayman islands	18
Mount Kellet Capital Partners (Cayman), L.P.	Cayman islands	38
Oaktree PPIP Private Fund GP Ltd	Cayman islands	7
Permira Europe IV	Guernsey	7
Russia Partners II L.P.	Cayman islands	12
VenCap 9 LLC (Preferential Equity Investors II LLC	Jersey	6
Victory Park Capital Fund II L.P	Cayman islands	9
Total		521
Other share and participations		100
Foreign shares and participations in total		1,419
Shares and participations in total		2,227

Holding

				Carrying amount/
	Country	No. of shares	Holding %	Fair value
Domestic other than listed companies
Keskinäinen työeläkevakuutusyhtiö Varma	Finland	57	0.80%	14
Other	Finland			5
Total domestic shares and participations				19
Foreign unit trusts
Behrman Capital III L.P.				5
Other				9
Total foreign shares and participations				14
Total shares and participations				34

Holdings exceeding EURm 5 and holdings in listed companies exceeding five per cent specified. The table does not include investments related to unit-linked insurance contracts.

41 EVENTS AFTER THE BALANCE SHEET DATE

In the meeting of 9 Feb. 2012, the Board of Directors decided to propose at the Annual General Meeting on 12 April 2012 a dividend distribution of EUR 1.20 per share, or total EUR 672.000.000, for 2011. The dividends to be paid will be accounted for in the equity in 2012 as a deduction of retained earnings.

Parent Company Income Statement

EURm	Note	2011	2010
Other operating income	1	15	17
Staff expenses
Salaries and remunerations		-10	-11
Social security costs
Pension costs		-1	-1
Other		0	-1
Depreciation and impairment	2
Depreciation according to plan		0	0
Other operating expenses	3	-13	-12
Operating profit		-10	-8
Financial income and expense	5
Income from shares in Group companies Income from other shares		510 252	540 207
Other interest and financial income Group companies		7	7
Other		6	2
Other investment income and expense		-14	25
Other interest income		67	60
Interest and other financial expense
Group companies		-2	-1
Other		-139	-116
Exchange result		5	-13
Proft before taxes		683	702
Income taxes
Tax for the financial year		-	-
Tax from previous years		0	0
Deferred taxes		-1	9
Profit for the financial year		682	710

Parent Company Balance Sheet

EURm	Note	2011	2010
ASSETS
Non-current assets
Intangible assets	6	1	1
Property, plant and equipment	7
Buildings		1	1
Equipment		1	1
Other		2	2
Investments
Shares in Group companies	8	2,370	2,370
Receivables from Group companies	8	223	145
Shares in participating undertakings	9	5,557	5,304
Receivables from participating undertakings		325	150
Other shares and participations	10	38	40
Other receivables	11	484	365
Short-term receivables
Deferred tax assets	19	17	18
Other receivables	12	37	56
Prepayments and accrued income	13	51	45
Cash at bank and in hand		89	56
TOTAL ASSETS		9,195	8,553

LIABILITIES

Equity	14
Share capital		98	98
Fair value reserve		2	0
Invested unrestricted equity		1,527	1,527
Other reserves		273	273
Retained earnings		4,142	4,088
Profit for the financial year		682	710
		6,724	6,696
Liabilities
Long-term liabilities
Bonds		1,677	1,026
Pension loans		-	130
Short-term liabilities
Debt securities		652	575
Other liabilities	15	81	73
Accruals and deferred income	16	61	53
TOTAL LIABILITIES		9,195	8,553

Parent Company Statement of Cash Flows

EURm	2011	2010
Operating activities
Profit before taxes	683	702
Adjustments:
Depreciation and amortisation	0	0
Unrealised gains and losses arising from valuation	0	1
Realised gains and losses on investments	-3	0
Other adjustments	-296	79
Adjustments total	-298	80
Change (+/-) in assets of operating activities
Investments *)	-347	-543
Other assets	-5	10
Total	-352	-533
Change (+/-) in liabilities of operating activities
Financial liabilities	7	3
Other liabilities	4	52
Paid interests	-83	-143
Paid taxes	0	0
Total	-71	-88
Net cash used in operating activities	-38	161
Investing activities
Investments in group and associated undertakings	-4	-69
Net investment in equipment and intangible assets	0	0
Net cash used in investing activities	-4	-69

Acquisition of own shares -24 Dividends paid -637 Issue of debt securities 2,440 Repayments of debt securities in issue -1,703 Net cash from financing activities 75 Total cash flows 33 Cash and cash equivalents at 1 January 56 Cash and cash equivalents at 31 December 89 Net change in cash and cash equivalents 33	Financing activities
		-
		-554
		1,954
		-1,848
		-448
		-356
		412
		56
		-356

*) Investments include both investment property and financial assets.

Additional information to the statement of cash flows:

EURm	2011	2010
Interest income received	72	78
Interest expense paid	-137	-143
Dividend income received	762	747

Summary of Significant Account Policies

The presentation of Sampo Plc's financial statements together with the notes has been prepared in accordance with the Finnish Accounting Act and Ordinance. The accounting principles applied to the separate financial statements of Sampo plc do not materially differ from those of the Group, prepared in accordance with the International Financial Reporting Standards (IFRSs). The financial assets are measured at fair value derived from the markets. See The accounting principles for the Group.

Notes to the Income Statement

1 OTHER OPERATING INCOME

EURm	2011	2010
Income from property occupied for own activities	0	1
Other	15	16
Total	15	17

2 DEPRECIATION AND IMPAIRMENT

EURm	2011	2010
Depreciation according to plan
Property, plant and equipment	0	0
Intangible assets	0	0
Total	0	0

3 OTHER OPERATING EXPENSES

EURm	2011	2010
Rental expenses	-1	-1
Expense on property occupied for own activities	0	0
Other	-12	-10
Total	-13	-12

Item Other includes e.g. administration and IT expenses and fees for external services.

4 AUDITORS' FEES

EURm	2011	2010
Authorised Public Accountants Ernst & Young Oy
Auditing fees	-0.1	-0.2
Tax consulting	-	0,0
Other fees	0,0	0,0
Total	-0.2	-0,3

5 FINANCIAL INCOME AND EXPENSE

EURm	2011	2010
Received dividends in total	762	747
Interest income in total	80	69
Interest expense in total	-141	-118
Gains on disposal in total	3	0
Losses on disposal in total	0	0
Exchange result	5	-13
Other	-17	25
Total	693	710

Notes to the assets

6 INTANGIBLE ASSETS

		2011		2010
EURm	IT	Other	IT	Other
Cost at beginning of year	3	2	3	2
Accumulated amortisation at beginning of year	-3	-2	-3	-1
Amortisation according to plan during the financial year	-	0	0	0
Carrying amount at end of year	0	1	0	1

7 PROPERTY, PLANT AND EQUIPMENT

		2011		2010
EURm	Land and buildings	Other	Land and buildings	Other
Cost at beginning of year	1	4	2	4
Additions			0	0
Disposals	-	0	-	-
Transfers	-	-	-	0
Accumulated depreciation at beginning of year	-	-1	-1	-1
of which related to disposals	-	0	-	0
Depreciation according to plan during the financial year	0	0	0	0
Carrying amount at end of year	1	3	1	3

8 RECEIVABLES FROM GROUP COMPANIES

EURm	2011	2010
Cost at beginning of year	145	122
Additions	109	23
Disposals	-32	-
Carrying amount at end of year	223	145

Receivables are subordinated loans issued by subsidiaries. More information in the consolidated note 29 Financial liabilities.

9 SHARES IN PARTICIPATING UNDERTAKINGS

EURm	2011	2010
Cost at beginning of year	5,304	5,168
Additions	254	136
Carrying amount at end of year	5,557	5,304

10 OTHER SHARES AND PARTICIPATIONS

2011		Fair value changes 2010				Fair value changes
EURm	Fair value	Recognised in p/l	Recognised in fair value reserve	Fair value	Recognised in p/l	Recognised in fair value reserve
Avalaible-for-sale equity securities	34	3	5	36	1	2
Changes in property shares
EURm					2011	2010
Cost at beginning of year					4	5
Disposals					-	-1
Carrying amount at end of year					4	4

Difference between current cost and carrying amount 0 0

11 OTHER INVESTMENT RECEIVABLES

	2011	Fair value changes		2010		Fair value changes
EURm	Fair value	Recognised in p/l	Recognised in fair value reserve	Fair value	Recognised in p/l	Recognised in fair value reserve
Market money	484	0	1	359	-	0
Bonds	0	-	0	6	-	1
Total	484	0	1	365	-	-

12 OTHER RECEIVABLES

EURm	2011	2010
Trading receivables	4	16
Derivatives	29	36
Other	4	5
Total	37	56

13 PREPAYMENTS AND ACCRUED INCOME

EURm	2011	2010
Accrued interest	51	43
Other	0	2
Total	51	45

Notes to the liabilities

14 MOVEMENTS IN THE PARENT COMPANY'S EQUITY

		Restricted equity					Unrestricted equity
EURm	Share capital	Share premium account	Legal reserve	Fair value reserve	Invested unrestricted capital	Other reserves	Retained earnings	Total
Carrying amount at 1 Jan 2010	98	0	0	-3	1,527	273	4,640	6,534
Dividends							-561	-561
Recognition of undrawn dividends							10	10
Financial assets available-for-sale
- recognised in equity				2				2
- recognised in p/l				1				1
Profit for the year							710	710
Carrying amount at 31 Dec 2010	98	0	0	0	1,527	273	4,799	6,696

	Restricted equity				Unrestricted equity
EURm	Share capital	Share premium account	Legal reserve	Fair value reserve	Invested unrestricted capital	Other reserves	Retained earnings	Total
Carrying amount at 1 Jan 2011	98	0	0	0	1,527	273	4,799	6,696
Dividends							-645	-645
Recognition of undrawn dividends							13	13
Financial assets available-for-sale
- recognised in equity				4				4
- recognised in p/l				-2				-2
Acquisition of own shares							-24	-24
Profit for the year							682	682
Carrying amount at 31 Dec 2011	98	0	0	2	1,527	273	4,824	6,724

DISTRIBUTABLE ASSETS

EURm 2011	2010
Parent company
Profit for the year 682	710
Retained earnings 4,142	4,088
Invested unrestricted capital 1,527	1,527
Other reserves 273	273
Undistributable items	- 0
Total 6,624	6,598

15 SHARE CAPITAL

Information on share capital is disclosed in Note 29 in the consolidated financial statements.

16 OTHER LIABILITIES

EURm	2011	2010
Unredeemed dividends	21	26
Derivatives	17	10
Guarantees for derivate contracts	43	36
Other	0	1
Total	81	73

17 ACCRUALS AND DEFERRED INCOME

EURm	2011	2010
Deferred interest	52	47
Other	10	7
Total	61	53

Notes to the income taxes

18 DEFERRED TAX ASSETS AND LIABILITIES

EURm	2011	2010
Deferred tax assets
Losses	18	19
Timing differences	0	0
Fair value reserve	-	0
Total	18	19
Deferred tax liabilities
Timing differences	-1	-1
Fair value reserve	-1	-
Total	-2	-1
Total, net	17	18

Notes to the liabilities and commitments

19 PENSION LIABILITIES

The basic and suplementary pension insurance of Sampo plc's staff is handled through insurances in Varma Mutual Insurance Company and in Mandatum Life Insurance Company Limited.

20 FUTURE RENTAL COMMITMENTS

EURm	2011	2010
Not more than one year	1	1
Over one year but not more than five years	3	3
Over five years	0	1
Total	5	5

21 OFF-BALANCE SHEET ITEMS

EURm	2011	2010
Underwriting commitments	1	1
Off-balance sheet items total	1	1
To or on behalf of Group companies	-	-
To or on behalf of associates	-	-

Notes to the staff and management

22 STAFF NUMBERS

	2011	2010
EURm	Average during the year	Average during the year
Full-time staff	52	49
Part-time staff	2	2
Temporary staff	2	1
Total	56	52

23 MANAGEMENT'S REMUNERATION AND POST-EMPLOYMENT BENEFITS

	2011	2010
EURm		(EUR thousand)
Managing Director Kari Stadigh	1,566	2,363
Members of the Board of Directors
Björn Wahlroos	160	160
Anne Brunila	80	80
Adine Grate Axén	80	-
Mattila Veli-Mati	80	80
Eira Palin-Lehtonen	80	80
Jukka Pekkarinen	80	80
Christoffer Taxell	80	80
Matti Vuoria	100	100

PENSION LIABILITY

The retirement age of the Managing Director is 60 years, when the pension benefit is 60% of the pensionable salary.

Notes to the shares held

24 SHARES HELD AS OF 31 DEC, 2011

	Percentage	Carrying
Company name	of share capital held*)	amount EURm
Group undertakings
P&C insurance
If Skadeförsäkring Holding AB, Stockholm Sweden	100,00 %	1,886
Life insurance
Mandatum Life Ltd, Helsinki Finland	100,00 %	484
Other
Sampo Capital Oy, Helsinki Finland	100,00 %	1

Approval of the Financial Statements and the Board of Directors' Report

Helsinki, 9 February 2012

Sampo plc

Board of Directors

Anne Brunila	Adine Grate Axén	Veli-Matti Mattila
Eira Palin-Lehtinen	Jukka Pekkarinen	Christoffer Taxell
	Matti Vuoria
Björn Wahlroos		Kari Stadigh

Chairman

Group CEO

Auditor's report To the Annual General Meeting of Sampo plc

We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of Sampo plc for the financial period 1.1. - 31.12.2010. The financial statements comprise the consolidated statement of financial position, statement of comprehensive income, statement of changes in equity and statement of cash flows, and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements.

Responsibility of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.

Auditor's Responsibility

Our responsibility is to express an opinion on the financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. The Auditing Act requires that we comply with the requirements of professional ethics. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of the parent company and the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or violated the Limited Liability Companies Act or the articles of association of the company.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement, whether due to fraud or error. In making those

risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and report of the Board of Directors that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion on the consolidated financial statements

In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

Opinion on the company's financial statements and the report of the Board of Directors

In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company's financial performance and financial position in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.

Opinions based on the assignment of the Audit Committee

We support that the financial statements should be adopted. The proposal by the Board of Directors regarding the use of the profit shown in the balance sheet is in compliance with the Limited Liability Companies Act. We support that the members of the Board of Directors of the parent company and the Managing Director should be discharged from liability for the financial period audited by us.

Helsinki, March 3, 2011 Ernst & Young Oy Authorized Public Accountant Firm Heikki Ilkka Authorized Public Accountant

For Investors

• Financial Information and Annual General Meeting 2012
• Contacts

Financial Information and Annual General Meeting in 2012

Sampo will publish three Interim Reports in 2012. The Interim Reports and related Supplementary Materials are published on Sampo's website at www.sampo.com. Press and stock exchange releases, the monthly updated list of shareholders and other investor information published by Sampo are available on the site as well.

Sampo plc's Annual General Meeting will be held in April.

03/29/12

The record date for the Annual General Meeting

Shareholder who is registered on the record date for the Annual General Meeting in the company's Shareholder Register kept by Euroclear Finland Ltd has the right to participate in the General Meeting. Shareholders whose shares are registered on their personal Finnish bookentry accounts are registered in the company's Shareholder Register.

04/03/12

The registration for the Annual General Meeting will finish at 4 pm

Shareholder may register for the General Meeting

• On the internet at www.sampo.com/ agm;
• By telephone to +358 (0)10 516 0028 from Monday to Friday, 8 am–4 pm (Finnish time);
• By fax to +358 (0)10 516 0719; or
• By mail to the address Sampo plc, Shareholder Services, Fabianinkatu 27, 00100 Helsinki, Finland.

Sampo plc's Annual General Meeting will be held on 12 April, 2012 at 2 pm (Finnish time), at the Helsinki Exhibition and Convention Centre, address Messuaukio 1, Helsinki. The listing of persons who have registered for the meeting will commence at 12.30 pm.

Read more about the AGM at www.sampo.com/agm.

04/12/12

Annual General Meeting

04/13/12

Ex-dividend date

After the ex-dividend date, the dividend from any shares traded is paid to the seller of the shares.

04/17/12

Dividend record date

The right to the dividend is held by the shareholder who is marked in the Shareholders Register on the dividend record date.

04/24/12

Dividend payment date

05/08/12

Interim Report for the period January - March 2012

You can subscribe to Sampo's Stock Exchange Releases and Press Releases at www.sampo.com/subscription.

09/08/12

Interim Report for the period January - June 2012

You can subscribe to Sampo's Stock Exchange Releases and Press Releases at www.sampo.com/subscription.

11/06/12

Interim Report for the period January - September 2012

You can subscribe to Sampo's Stock Exchange Releases and Press Releases at www.sampo.com/subscription.

Contacts

Address

Sampo plc Fabianinkatu 27 00100 Helsinki Finland

Telephone

+358 (0)10 516 0100

Fax

+358 (0)9 228 90 434 or +358 (0)10 516 0016

Internet

www.sampo.com

E-mail

firstname.lastname@sampo.fi

Business ID

0142213-3

Registered domicile

Helsinki