Sampo Oyj — Fund Information / Factsheet 2019

Feb 7, 2019

2018

Financial Statement Release

JANUARY–DECEMBER 2018 7 FEBRUARY 2019

Contents

Summary	3
Fourth quarter 2018 in brief	5
Business areas	6
If	6
Topdanmark	9
Associated company Nordea	11
Mandatum Life	12
Holding	14
Other developments	15
Personnel	15
Remuneration	15
Shares and share capital	15
Internal dividends	16
Ratings	16
Solvency	17
Debt financing	18
Outlook	19
Outlook for 2019	19
The major risks and uncertainties to the Group in the near-term	19
Dividend proposal	20
Tables	22
Group financial review	22
Calculation of key figures	24
Group quarterly comprehensive income statement	26
Statement of profit and other comprehensive income, IFRS	27
Consolidated balance sheet, IFRS	28
Statement of changes in equity, IFRS	29
Statement of cash flows, IFRS	30
Notes	31
Accounting policies	31
Comprehensive income statement by segment for twelve months ended 31 December 2018	32
Comprehensive income statement by segment for twelve months ended 31 December 2017	33
Consolidated balance sheet by segment at 31 December 2018	34
Consolidated balance sheet by segment at 31 December 2017	35
Other notes	36
1 Insurance premiums	36
2 Net income from investments	37
3 Claims incurred	39
4 Staff costs	40
5 Intangible assets	40
6 Financial assets	41
7 Derivative financial instruments	41
8 Determination and hierarchy of fair values	42
9 Movements in level 3 financial instruments measured at fair value measured at fair value	47
10 Sensitivity analysis of level 3 financial instruments	49
	49
	50
1 1 Investments related to unit-linked insurance
12 Liabilities for insurance and investment contracts
13 Liabilities from unit-linked insurance and investment contracts	51
14 Financial liabilities	51
15 Contingent liabilities and commitments	52
16 Result analysis of If	53
17 Associate acquisitions	54
18 Assets and liabilities related to assets previously held for sale 19 Sampo plc's income statement and balance sheet (FAS)	54 55

7 February 2019

Sampo Group's results for 2018

Group's profit before taxes for 2018 amounted to EUR 2,094 million (2,482). The profit for the comparison year contains a positive non-recurring item of EUR 706 million because of the change in Topdanmark's accounting treatment. The total comprehensive income for the period, taking changes in the market value of assets into account, declined to EUR 1,034 million (2,146).

• Earnings per share was EUR 3.04 (3.96) and marked-to-market earnings per share was EUR 1.70 (3.79). Marked-to-market earnings were burdened by the weak capital market development. Return on equity for the Group amounted to 7.5 per cent (17.1) for 2018. Net asset value per share on 31 December 2018 decreased to EUR 20.60 (25.37).
• The Board proposes to the Annual General Meeting to be held on 9 April 2019 a dividend of EUR 2.85 per share (2.60). The proposed dividend payment amounts in total to EUR 1,583 million (1,444).
• If segment's profit before taxes rose to EUR 848 million (818). Insurance technical result amounted to EUR 643 million (640) and combined ratio for full-year 2018 was 85.2 per cent (85.3). Return on equity was burdened by the decrease in the market value of investment assets and amounted to 11.2 per cent (21.3). Premiums grew by 2.9 per cent with fixed currencies.
• Topdanmark segment's profit before taxes was EUR 199 million (848). The comparison figure contains a positive non-recurring profit item of EUR 706 million, arising from the difference between the carrying value and the fair value of Sampo's holding on 30 September 2017 when Sampo started to consolidate Topdanmark as a subsidiary. Combined ratio was strong and amounted to 82.3 per cent. Topdanmark's Board of Directors proposes to the AGM of 2019 a dividend of DKK 15 per share. If approved Sampo plc's share of the dividend payment is EUR 84 million.
• Sampo's share of Nordea's net profit for 2018 amounted to EUR 625 million (616). Nordea's RoE, excluding non-recurring items, amounted to 9.7 per cent (9.5) and core Tier 1 ratio was 15.5 per cent. In segment reporting the share of Nordea's profit is included in the segment 'Holding'. Nordea's Board of Directors is going to propose to the AGM 2019 a dividend of EUR 0.69 per share (0.68). If the AGM approves the Board's dividend proposal, Sampo plc will receive a dividend of EUR 594 million (585).
• Profit before taxes for segment Mandatum rose to EUR 450 million (236). The profit includes the contribution of EUR 197 million from the Danske Bank co-operation agreement in the second quarter of 2018. Return on equity decreased to 8.7 per cent (13.3) because of the decrease in the market value of investment assets. The discount rate for with profit policies used for 2019 and 2020 is 0.25 per cent and 2.50 per cent for 2021.

Key figures

EURm	2018	2017	Change, %	10–12/2018	10–12/2017	Change, %
Profit before taxes *)	2,094	2,482	-16	451	436	3
If	848	818	4	221	215	3
Topdanmark *)	199	848	-77	29	52	-45
Nordea	625	616	1	98	126	-23
Mandatum	450	236	91	66	56	18
Holding (excl. Nordea)	-3	-40	-92	38	-13	-
Profit for the period **)	1,778	2,239	-20	381	364	5
			Change			Change
Earnings per share, EUR	3.04	3.96	-0.92	0.66	0.61	0.05
EPS (incl. change in FVR) EUR	1.70	3.79	-2.09	-0.17	0.27	-0.44
NAV per share, EUR	20.60	25.37	-4.77	-	-	-
Average number of staff (FTE)	9,509	9,364	145	-	-	-
Group solvency ratio, %	147	154	-7	-	-	-
RoE, %	7.5	17.1	-9.6	-	-	-

*) 2017 figures contain a positive non-recurring profit item of EUR 706 million related to the start of consolidation of Topdanmark as a subsidiary, without which profit before taxes for Topdanmark segment would have been EUR 142 million.

**) of which non-controlling interests are EUR 91 million (23) for 2018 and EUR 14 million (23) for the fourth quarter of 2018

The figures in this report are not audited. Income statement items are compared on a year-on-year basis whereas comparison figures for balance sheet items are from 31 December 2017 unless otherwise stated.

Exchange rates used in reporting

	1–12/2018	1–9/2018	1–6/2018	1–3/2018	1–12/2017
EURSEK
Income statement (average)	10.2583	10.2374	10.1508	9.9712	9.6351
Balance sheet (at end of period)	10.2548	10.3090	10.4530	10.2843	9.8438
DKKSEK
Income statement (average)	1.3764	1.3741	1.3630	1.3390	1.2953
Balance sheet (at end of period)	1.3733	1.3826	1.4026	1.3799	1.3222
NOKSEK
Income statement (average)	1.0688	1.0678	1.0582	1.0350	1.0330
Balance sheet (at end of period)	1.0308	1.0890	1.0990	1.0628	1.0004
EURDKK
Income statement (average)	7.4533	7.4503	7.4477	7.4468	7.4387
Balance sheet (at end of period)	7.4673	7.4564	7.4525	7.4530	7.4449

Fourth quarter 2018 in brief

Fourth quarter 2018 in brief

Sampo Group's profit before taxes for the fourth quarter of 2018 was EUR 451 million (436) and earnings per share amounted to EUR 0.66 (0.61). Marked-to-market earnings per share was EUR -0.22 (0.27). Net asset value per share decreased EUR 3.73 during the fourth quarter and was EUR 20.60.

Combined ratio for If for the fourth quarter of 2018 was 83.5 per cent (83.6). Profit before taxes amounted to EUR 221 million (215).

Topdanmark's combined ratio for the fourth quarter amounted to 81.1 per cent (82.1) and profit before taxes to EUR 29 million (52).

Sampo's share of Nordea's fourth quarter 2018 net profit amounted to EUR 98 million (126).

Profit before taxes for Mandatum Life amounted to EUR 66 million (56). Premiums written increased to a record high EUR 394 million (330).

Business areas

If

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

Results
EURm	2018	2017	Change, %	10–12/2018	10–12/2017	Change, %
Premiums, net	4,325	4,357	-1	896	894	0
Net income from investments	229	216	6	47	42	11
Other operating income	30	27	10	8	7	13
Claims incurred	-2,716	-2,717	0	-657	-650	1
Change in insurance liabilities	-35	-64	-45	186	177	5
Staff costs	-529	-543	-3	-128	-137	-7
Other operating expenses	-445	-440	1	-129	-118	10
Finance costs	-15	-19	-21	-4	-3	24
Share of associates' profit/loss	4	1	194	1	1	39
Profit before taxes	848	818	4	221	215	3
Key figures			Change			Change
Combined ratio, %	85.2	85.3	-0.1	83.5	83.6	-0.1
Risk ratio, %	63.3	63.3	0.0	64.7	64.6	0.1
Cost ratio, %	21.9	22.0	-0.1	22.8	22.9	-0.1
Expense ratio, %	16.4	16.4	0.0	17.1	17.0	0.1
Return on equity, %	11.2	21.3	-10.1	-	-	-
Average number of staff (FTE)	6,603	6,367	236	-	-	-

Profit before taxes for 2018 for the If segment was EUR 848 million (818). Combined ratio amounted to 85.2 per cent (85.3) and risk ratio was unchanged at 63.3 per cent (63.3).

In 2018 EUR 173 million (111) was released from technical reserves relating to prior year claims. Return on equity decreased to 11.2 per cent (21.3) and the fair value reserve on 31 December 2018 amounted to EUR 234 million (519).

Technical result was EUR 643 million (640). Insurance margin (technical result in relation to net premiums earned) was stable at 15.1 per cent (15.1).

		Combined ratio, %			Risk ratio, %
	2018	2017	Change	2018	2017	Change
Private	83.7	84.0	-0.4	61.8	62.0	-0.2
Commercial	86.9	88.0	-1.1	64.4	65.4	-1.0
Industrial	92.3	88.7	3.6	71.2	67.0	4.2
Baltic	88.8	88.9	-0.1	60.0	59.9	0.1
Sweden	79.7	84.5	-4.8	60.5	64.7	-4.2
Norway	85.7	80.8	4.9	63.1	57.8	5.3
Finland	88.6	88.3	0.2	66.2	66.4	-0.2
Denmark	98.1	98.8	-0.7	69.0	69.9	-0.9

		Combined ratio, %			Risk ratio, %
	10–12/2018	10–12/2017	Change	10–12/2018	10–12/2017	Change
Private	83.0	83.8	-0.8	59.9	60.2	-0.3
Commercial	83.2	85.1	-2.0	59.9	62.6	-2.7
Industrial	90.9	83.1	7.8	69.0	59.8	9.2
Baltic	90.1	87.7	2.4	59.6	56.6	3.0
Sweden	81.8	82.0	-0.1	60.9	62.0	-1.1
Norway	81.4	87.9	-6.5	58.1	62.8	-4.7
Finland	87.8	74.2	13.6	65.5	52.2	13.3
Denmark	90.2	102.7	-12.4	58.6	70.1	-11.5

Large claims for If were EUR 29 million (46) worse than expected for the full-year 2018. In BA Industrial they were EUR 2 million worse and in BA Commercial EUR 26 million worse than expected in 2018. In the fourth quarter of 2018 the large claims were EUR 10 million worse than expected. Sweden and Finland were most impacted by the large claims outcome.

Swedish discount rate used to discount the annuity reserves was at -0.41 per cent (-0.13) at the end of 2018 and had a negative effect on the full-year results of EUR 19 million. In Finland the discount rate for annuities was kept at 1.2 per cent during 2018.

Gross written premiums amounted to EUR 4,502 million (4,526) in 2018. With fixed currency rates premiums grew 2.9 per cent. All business areas and all countries, except Finland, had growth. Premiums in BA Private grew in all markets including Finland. The growth was highest in the Baltics, 6.5 per cent, and in BA Industrial, 5.0 per cent. In BA Private the premium growth amounted to 2.4 per cent and in BA Commercial 2.6 per cent.

Gross written premiums grew by 4.0 per cent in Sweden, 4.2 per cent in Norway and 2.3 per cent in Denmark. In BA Private Sweden the premium growth slowed down significantly in the second half of 2018, because of the changes in taxation of new cars introduced as of 1 July 2018. In Finland the premium development improved towards the end of the year but remained negative for the full year 2018 and was -1.3 per cent.

Cost ratio improved slightly to 21.9 per cent (22.0) and expense ratio remained at 16.4 per cent (16.4).

On 31 December 2018, the total investment assets of If amounted to EUR 10.9 billion (11.5), of which fixed income investments constituted 88 per cent (84), money market 2 per cent (3) and equity 10 per cent (13). Net income from investments amounted to EUR 229 million (216). Investment return marked-to-market for the full-year 2018 was -0.8 per cent (2.6). Duration for interest bearing assets was 1.4 years (1.4) and average maturity 2.7 years (2.7). Fixed income running yield without taking into account the FX hedging cost as at 31 December 2018 was 1.7 per cent (1.5).

If 's solvency position is described in the section Solvency.

8

Topdanmark

Topdanmark is the second largest non-life insurance company and the fifth largest life insurance company in Denmark. The company is listed on Nasdaq Copenhagen. In non-life insurance, Topdanmark has a 17 per cent market share. Topdanmark focuses on the private, agricultural and SME market where the company has around 600,000 customers and handles around 300,000 claims a year. In life insurance, Topdanmark has a 10 per cent market share in Denmark.

Results
EURm	2018	2017	Change, %	10–12/2018	10–12/2017	Change, %
Premiums, net	2,509	498	404	601	498	21
Net income from investments	-280	107	-	-492	107	-
Other operating income	3	1	226	1	1	-8
Claims incurred	-1,198	-285	320	-298	-285	4
Change in insurance liabilities	-458	-163	181	313	-163	-
Staff costs	-269	-68	295	-69	-68	1
Other operating expenses	-119	-39	206	-38	-39	-3
Finance costs	-11	-3	305	-2	-3	-7
Share of associates' profit/loss	22	94	-77	13	4	232
Gain from fair valuation of former associated company	-	706	-	-	-	-
Profit before taxes	199	848	-77	29	52	-45
Key figures			Change			Change
Combined ratio, %	82.3	-	-	81.1	80.5	0.6
Loss ratio, %	66.0	-	-	63.6	64.0	-0.4
Expense ratio, %	16.3	-		17.6	16.4	1.1
Average number of staff (FTE)	2,314	2,412	-98	-	-	-

At the end of 2018 Sampo plc held 41,997,070 Topdanmark shares, corresponding to 46.7 per cent of all shares and 48.7 per cent of related voting rights in the company. The market value of the holding was EUR 1,704 million at 31 December 2018.

Sampo started to consolidate Topdanmark as a subsidiary from 30 September 2017. In Sampo Group's segment Topdanmark Sampo plc's share of Topdanmark's purchase price allocated to customer relations is amortized over a period of 10 years leading to a quarterly amortization of around EUR 5 million, net of tax (included in Other operating expenses).

The Board of Directors recommends to the AGM of 2019 a dividend of DKK 1,350 million (EUR 181 million), i.e. DKK 15 per share. If the AGM approves the proposal, Sampo plc share of the dividend payment is EUR 84 million.

The following text is based on Topdanmark's full-year 2018 result release published on 24 January 2019.

Topdanmark's pre-tax profit amounted to EUR 199 million (848). The comparison figure contains a nonrecurring profit item of EUR 706 million, i.e. the difference between the carrying value and the fair value of Sampo's holding on 30 September 2017 when Sampo started to consolidate Topdanmark as a subsidiary.

In non-life insurance premiums earned increased 1.7 per cent to EUR 1,223 million (1,208). The level of largescale claims increased in 2018. Compared to 2017, the level was approximately EUR 15 million higher, thus deteriorating the claims trend for the Topdanmark Group by 1.2 percentage points. Weather related claims amounted to EUR 1.2 million, which was approximately EUR 22 million lower (DKK 161 million) compared to normal level.

The combined ratio amounted to 82.3 per cent in 2018. The expense ratio was 16.3 per cent.

In life insurance gross premiums increased 19 per cent to EUR 1,354 million (1,109) in 2018. Unit-linked contracts represented 94 per cent of new sales in 2018.

Topdanmark's solvency position is described in the section Solvency.

Further information on Topdanmark A/S and its January-December 2018 result is available at www.topdanmark.com.

Associated company Nordea

Nordea is the largest bank in the Nordic region and among the ten largest financial groups in Europe in terms of total market capitalization with around 11 million customers. The Nordea share is listed on the Nasdaq exchanges in Stockholm, Helsinki and Copenhagen. In Sampo Group's reporting Nordea is treated as an associated company and is included in the segment Holding.

On 31 December 2018 Sampo plc held 860,440,497 Nordea shares corresponding to holding of 21.2 per cent. The average price paid per share amounted to EUR 6.46 and the book value in the Group accounts was EUR 8.76 per share. The closing price as at 31 December 2018 was EUR 7.27.

Nordea's Board of Directors is going to propose to the AGM 2019 a dividend of EUR 0.69 per share (0.68). If the AGM approves the Board's dividend proposal, Sampo plc will receive dividend of EUR 594 million (585) from Nordea on 8 April 2019.

The following text is based on Nordea's full-year 2018 result release published on 6 February 2019.

2018 featured challenges in terms of revenues. Net interest income was down 7 per cent in 2018 compared to 2017 driven mainly by margin pressure and the deconsolidation of the Baltic operations. In recent quarters, the level has stabilised, and towards the end of the year, Nordea saw volume growth and stabilising blended margins. The FICC trading environment has been challenging throughout the year, and the worsening market conditions in the fourth quarter further weighted on net fair value as well as fees and commission.

Nordea continues to deliver on its cost efficiency plans with costs below EUR 4.8 billion for 2018, excluding the goodwill write-down in Russia of EUR 141 million. Nordea is well on track to reach our 2021 target to reduce costs by 3 per cent compared to 2018 and in 2019 the target is to have lower costs than in 2018, adjusted for non-recurring costs in 2018 and 2019. Common Equity Tier 1 capital ratio was 15.5 per cent, in line with Nordea's expectations and well above the required level of 13.9 per cent.

Mandatum Life

Mandatum Life Group comprises Mandatum Life Insurance Company Ltd., a wholly-owned subsidiary of Sampo plc, operating in Finland, Estonia, Latvia and Lithuania, and its subsidiaries. Parent company, Mandatum Life, is responsible for sales functions and all the functions required by the Insurance Companies Act. The operating subsidiaries are Mandatum Life Services Ltd, Mandatum Life Investment Services Ltd. and Mandatum Life Fund Management S.A.

Results
EURm	2018	2017	Change, %	10-12/2018	10-12/2017	Change, %
Premiums written	1,074	960	12	394	330	19
Net income from investments	-26	782	-	-353	136	-
Other operating income	212	10	2,093	3	2	39
Claims incurred	-1,116	-1,021	9	-268	-280	-4
Change in liabilities contracts	426	-377	-	313	-104	-
Staff costs	-46	-47	-3	-10	-11	-9
Other operating expenses	-67	-63	7	-11	-17	-38
Finance costs	-7	-7	3	-2	-1	192
Profit before taxes	450	236	91	66	56	18
Key figures			Change			Change
Expense ratio, %	92.1	94.7	-2.6	-	-	-
Return on equity, %	8.7	13.3	-4.6	-	-	-
Average number of staff (FTE)	531	525	6	-	-	-

Profit before taxes for Mandatum Life in 2018 amounted to EUR 450 million (236). The profit includes the contribution of EUR 197 million from the Danske Bank co-operation agreement in the second quarter of 2018. The total comprehensive income for the period after tax reflecting the changes in market values of assets amounted to EUR 112 million (188). Return on equity amounted to 8.7 per cent (13.3).

Net investment income, excluding income on unit-linked contracts, amounted to EUR 232 million (376). Net income from unit-linked contracts was EUR -259 million (405). During 2018 fair value reserve decreased to EUR 352 million (599).

Total technical reserves of Mandatum Life Group were EUR 11.2 billion (11.6). The unit-linked reserves were EUR 7.0 billion (7.1) at the end of 2018. Unit-linked reserves corresponded to 62 per cent (61) of total technical reserves.

With profit reserves continued to decrease as planned during 2018 and amounted to EUR 4.2 billion (4.6) on 31 December 2018. With profit reserves related to the higher guarantees of 4.5 and 3.5 per cent decreased EUR 209 million to EUR 2.4 billion at the end of 2018.

Mandatum Life has overall supplemented its technical reserves with a total of EUR 232 million (325), of which EUR 193 million is allocated to years 2019 - 2021. The figure does not take into account the reserves relating to the segregated fund. The discount rate used for 2019 and 2020 is 0.25 per cent.

For 2021 a rate of 2.50 per cent is used. Discount rate of segregated liabilities is 0.50 per cent and discount rate reserve of segregated liabilities amounted to EUR 250 million (261).

At the end of 2018 Mandatum Life Group's investment assets, excluding the assets of EUR 7.0 billion (7.1) covering unit-linked liabilities, amounted to EUR 5.6 billion (6.3) at market values.

The assets covering Mandatum Life's original with profit liabilities at the end of 2018 amounted to EUR 4.6 billion (5.2) at market values. 49 per cent (42) of the assets are in fixed income instruments, 9 per cent (16) in money market, 27 per cent (28) in equities and 15 per cent (13) in alternative investments. The investment return marked-to-market for 2018 was -2.4 per cent (6.5). The duration of fixed income assets at the end of 2018 was 2.5 years (2.0) and average maturity 2.8 years (2.2). Fixed income running yield without taking into account the FX hedging cost was 2.7 per cent (2.4) on 31 December 2018.

The assets covering the segregated fund amounted to EUR 1.0 billion (1.1), of which 77 per cent (77) was in fixed income, 5 per cent (6) in money market, 11 per cent (11) in equities and 6 per cent (6) in alternative investments. Segregated fund's investment return marked-to-market was -1.9 per cent (1.8). On 31 December 2018 the duration of fixed income assets was 2.5 years (2.6) and average maturity 3.1 years (3.3). Fixed income running yield without taking into account the FX hedging cost was 2.4 per cent (2.1).

The expense result rose to a new record. The expense result for life insurance segment amounted to EUR 35 million (33) and risk result to EUR 33 million (35).

Mandatum Life Group's premium income on own account increased to EUR 1,074 million (960). Premiums through Danske Bank channel was EUR 78 million during 2018. Premiums from unit-linked policies increased to EUR 976 million (850).

Mandatum Life's solvency position is described in the section Solvency.

13

Holding

Sampo plc owns and controls its subsidiaries engaged in P&C and life insurance. In addition Sampo plc held on 31 December 2018 approximately 21.2 per cent of the share capital of Nordea, the largest bank in the Nordic countries. Nordea is an associated company to Sampo plc. As of March 2018 Sampo plc also has had another associated company, NDX Intressenter AB, of which Sampo plc owns 36.25 per cent. The company was established for the takeover of Nordax Group AB.

Results
EURm	2018	2017	Change, %	10–12/2018	10–12/2017	Change, %
Net investment income	2	10	-85	19	-2	-
Other operating income	17	18	-6	5	5	-3
Staff costs	-11	-18	-40	0	-5	-93
Other operating expenses	-14	-14	2	-4	-4	11
Finance costs	3	-36	-	19	-8	-
Share of associates' profit	621	616	1	97	126	-23
Profit before taxes	618	576	8	135	112	21
Key figures			Change			Change
Average number of staff (FTE)	61	60	1	-	-	-

Holding segment's profit before taxes amounted to EUR 618 million (576), of which EUR 621 million (616) relates to Sampo's share of Nordea's and NDX Intressenter's 2018 profit. Nordea's share was EUR 625 million (616) and NDX Intressenter's EUR -4 million. Segment's profit excluding the associated companies was EUR -3 million (-40).

Changes in market values of derivative instruments and currency exchange rates can cause volatility in the net investment income and finance cost lines.

Sampo plc's holding in Nordea Bank was booked in the consolidated balance sheet at EUR 7.5 billion. The market value of the holding was EUR 6.3 billion, i.e. EUR 7.27 per share, at 31 December 2018. In addition the assets on Sampo plc's balance sheet included holdings in subsidiaries for EUR 3.4 billion (2.4).

Sampo plc has during 2017 and 2018 made five investments (Asiakastieto, Intrum, Nets, Nordax and Saxo) amounting totally to approx. EUR 1 billion. Of these holdings Nordax (NDX Intressenter) is treated as an associated company, and other investments as financial assets.

Other developments

Personnel

The average number of Sampo Group's employees (FTE) in 2018 amounted to 9,509 (9,364).

If is Sampo Group's largest business area and employed on average 70 per cent of the personnel. Topdanmark employed 24 per cent and Mandatum Life approximately 6 per cent of the personnel. The parent company Sampo plc employed 1 per cent of the work force.

In geographical terms Denmark had 31 per cent of the personnel, Finland 24 per cent, Sweden 22 per cent and Norway 14 per cent. The share of other countries was 10 per cent.

The total number of staff in If increased 4 per cent. As of 31 December 2018 If employed 6,680 persons.

Topdanmark employed 2,309 persons at the end of the year and the total number of staff decreased 4 per cent.

The total number of staff in Mandatum Life increased 2 per cent. As of 31 December 2018 Mandatum Life employed 533 persons.

Sampo plc had 61 employees (60) at the end of 2018.

At the end of the year, the total number of staff in Sampo Group totaled 9,582 persons.

More detailed information on personnel in Sampo Group is available in Sampo Group Corporate Responsibility Report 2018 to be published in May 2019 at www.sampo.com/year2018.

Remuneration

In 2018 EUR 23 million (19), including social cost, was paid on the basis of the long-term incentive schemes. EUR 36 million (37), including social costs, was paid as short-term incentives during the same period. The result impact of the long-term incentive schemes in force in 2018 was EUR 5 million (28).

Sampo Group will publish in March 2019 the Remuneration Report 2018 at www.sampo.com/year2018. The Remuneration Report 2018 is part of the Remuneration Statement, which is available at www.sampo.com/remunerationstatement. The statement has been prepared in accordance with the Corporate Governance Code issued by the Securities Market Association and effective as of 1 January 2016.

Shares and share capital

The Annual General Meeting of 2018 authorized the Board to repurchase a maximum of 50,000,000 Sampo A shares. Shares are repurchased in other proportion than the shareholders' proportional shareholdings (directed repurchase). The maximum price to be paid is highest market price quoted during the authorization period. The authorization will be valid until the close of the next Annual General Meeting, nevertheless not more than 18 months after AGM's decision.

Sampo plc made no repurchases during 2018 and has not purchased its own shares after the end of the reporting period.

Internal dividends

Sampo plc, Sampo Group's parent company, received almost EUR 1.7 billion in dividends from its subsidiaries and associated company Nordea Bank AB during 2018. The following dividend payments were received:

• Mandatum Life; EUR 150 million in March 2018 and EUR 150 million in September 2018,
• Nordea; EUR 585 million in March 2018,
• Topdanmark; EUR 107 million in April 2018 and
• If; SEK 7.0 billion (EUR 675 million) in December 2018

On 6 February 2019 Nordea's Board of Directors announced that it is going to propose to the Annual General meeting to be held on 28 March 2019, a dividend of EUR 0.69 per share. With its current holding Sampo plc's share amounts to EUR 594 million. The dividend is proposed to be paid on 8 April 2019.

Topdanmark's Board of Directors proposed to the Annual General Meeting of 3 April 2019 a dividend of DKK 15 per share. Sampo's share of the Topdanmark's total dividend amounts to EUR 84 million.

A dividend of EUR 150 million is planned to be paid by Mandatum Life during the first quarter of 2019. If normally pays its dividend towards the end of the calendar year.

Ratings

Relevant ratings for Sampo Group companies on 31 December 2018 are presented in the table below.

Rated company	Moody's		Standard & Poor's
	Rating	Outlook	Rating	Outlook
Sampo plc – Long-term Issuer Rating	A3	Stable	A-	Stable
If P&C Insurance Ltd (Sweden) – Insurance Financial Strength Rating	A1	Stable	A+	Stable

Solvency

Sampo Group's capital requirement is dependent on the capital requirements of the business areas and the parent company. Sampo Group's capital requirement and the amount of group's own funds are calculated by both the conglomerate rules (FICO) and the Solvency II directive.

Until the end of 2018 the total minimum capital requirement under FICO rules was calculated based on the subsidiaries' standard formula capital requirements. At the year-end 2018 Sampo started using Partial Internal Model (PIM) Solvency Capital Requirements (SCR) for most of non-life insurance business of If and Topdanmark in FICO calculations. This decreased the total minimum capital requirement by approximately EUR 470 million in the fourth quarter of 2018.

In Solvency II Sampo Group has not, however, an approved Group PIM, although the PIMs of If and Topdanmark are approved by their respective local regulators, and therefore the Standard Formula SCRs are applied in Solvency II on a group-level. The treatment of Nordea's capital requirement in Sampo is similar under FICO and Solvency II and the effects of any changes are similar as well.

In the fourth quarter of 2018 Nordea's Risk Exposure Amount (REA) increased EUR 35 billion to EUR 156 billion stemming mainly from migration of existing items from Pillar 2 to Pillar 1 due to the re-domiciliation of the bank from Sweden to Finland. At the same time, the systemic risk buffer (SRB) decreased temporarily to zero per cent. As a consequence of these two effects, the nominal capital requirement for Sampo was EUR 3,779 million on 31 December 2018. However, the SRB has to be applied in Finland starting 1 January 2019 (2 per cent in the first half of 2019 and 3 per cent from 1 July 2019) which will increase Nordea's capital requirement for Sampo accordingly in 2019 and decrease the Group solvency ratio. As the situation develops Sampo will be looking into different measures to counter the impact.

Group's conglomerate solvency ratio (own funds in relation to minimum requirements for own funds) amounted to 147 per cent (154) as at 31 December 2018. The components of the calculation are described in the table below.

EURm	31 Dec 2018	31 Dec 2017
Group capital	13,014	13,508
Goodwill, other intangibles, foreseeable dividends and distributions and deductibles	-5,269	-5,004
Sectoral items	2,586	2,517
Group's own funds, total	10,330	11,021
Minimum requirements for own funds, total	7,017	7,164
Group solvency	3,313	3,858
Group solvency ratio (Own funds % of minimum requirements)	147	154

Sampo Group solvency

The Group solvency calculated according to the Solvency II directive amounted to 140 per cent (156) on 31 December 2018.

The insurance subsidiaries have since 1 January 2016 applied Solvency II rules in their regulatory solvency calculations. If Group companies use either partial internal models or standard model for calculation of their solo solvency position. Mandatum Life reports in accordance with standard formula for Solvency II. Topdanmark uses a partial internal model to report its stand-alone solvency position.

If Group has an A+ rating from S&P which will continue to require significantly more capital than the standard formula and therefore the use of standard formula has no practical implications on If Group's capital position. On 31 December 2018 If Group's pro forma Solvency II capital requirement under standard formula amounted to EUR 1,833 million (1,938) and own funds to EUR 3,599 million (3,818). Solvency ratio amounted to 196 per cent (197).

S&P A+ rating requirement for If Group amounted to EUR 2,949 million (3,098) at the end of 2018 and the capital base was EUR 3,149 million (3,408). On 31 December 2018 If Group's Solvency II capital requirement under partial internal model was EUR 1,305 million (1,510) and own funds EUR 3,599 million (3,875). Solvency ratio amounted to 276 per cent (257).

Topdanmark calculates most of its non-life and health risks and their respective solvency capital requirement by a partial internal model approved by the DFSA. Other risks are calculated by Solvency II SCR standard formula. Topdanmark's solvency ratio under the partial internal model was 196 per cent (204) at the end of 2018.

On 31 December 2018 Topdanmark's Solvency II capital requirement under standard formula amounted to EUR 534 million and own funds to EUR 872 million. Solvency ratio amounted to 163 per cent (166).

Mandatum Life's solvency ratio after transitional measures remained strong despite the dividend payment and the negative capital market development and was 176 per cent (182) on 31 December 2018. Own funds of EUR 1,740 million (1,977) exceed Solvency Capital Requirement (SCR) of EUR 990 million (1,087) by EUR 750 million. Without transitional measures, own funds would have amounted to EUR 1,348 million (1,555) and the solvency capital requirement to EUR 1,030 million (1,220) leading to a solvency ratio of 131 per cent (127).

More information on Sampo Group's capital policy is available in the Risk Management Report 2018 published in March 2019 at www.sampo.com/year2018.

Debt financing

Sampo plc's debt financing on 31 December 2018 amounted to EUR 4,067 million (3,177) and interest bearing assets to EUR 1,959 million (1,754). Interest bearing assets include bank accounts, fixed income instruments and EUR 489 million (496) of hybrid capital and subordinated debt instruments issued by the subsidiaries and associated companies. Altogether, excluding cash and equivalents, the fixed income instruments' yield was over 5 per cent.

On 31 December 2018 financial liabilities in Sampo plc's balance sheet consisted of issued senior bonds and notes of EUR 3,943 million (2,884) and EUR 124 million (293) of CPs issued. The average interest, net of interest rate swaps, on Sampo plc's debt as of 31 December 2018 was 0.81 per cent (0.93).

More information on Sampo Group's outstanding debt issues is available at www.sampo.com/debtfinancing.

Outlook

Outlook

Outlook for 2019

Sampo Group's business areas are expected to report good operating results for 2019.

However, the marked-to-market results are, particularly in life insurance, highly dependent on capital market developments. The continuing low interest rate level also creates a challenging environment for reinvestment in fixed income instruments.

If P&C is expected to reach a combined ratio of 86 – 90 per cent in 2019.

With regard to Topdanmark reference is made to the profit forecast model that the company publishes quarterly.

Nordea's contribution to the Group's profit is expected to be significant.

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

In its current day-to-day business activities Sampo Group is exposed to various risks and uncertainties mainly through its separately managed business areas including the parent company Sampo plc.

Major risks affecting the Group companies' profitability and its variation are market, credit, insurance and operational risks that are quantified independently by the business areas. At the group level sources of risks are same, but they are not directly additive because of diversification effects.

Uncertainties in the form of major unforeseen events may have an immediate impact on the Group's profitability. Identification of unforeseen events is easier than estimation of their probabilities, timing and potential outcomes. Currently there are a number of widely identified macro-economic, political and other sources of uncertainty which can in various ways affect financial services industry negatively. Especially the political risks are at an elevated level at the moment.

Other sources of uncertainty are unforeseen structural changes in the business environment and already identified trends and potential wide-impact events. These external drivers may also have a long-term impact on how business shall be conducted. Examples of already identified trends are technological development in areas such as artificial intelligence and digitalization, demographic changes and sustainability issues that may have profound effects on financial sector companies as well.

Outlook

Dividend proposal

According to Sampo plc's dividend policy, total annual dividends paid shall be at least 50 per cent of the 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 totalled EUR 7,792,358,111.04 of which profit for the financial year was EUR 1,668,757,866.27.

The Board proposes to the Annual General Meeting a dividend of EUR 2.85 per share to company's 555,351,850 shares. The dividends to be paid are EUR 1,582,752,772.50 in total. Rest of funds are left in the equity capital.

The dividend will be paid to shareholders registered in the Register of Shareholders held by Euroclear Finland Ltd as at the record date of 11 April 2019. The Board proposes that the dividend be paid on 18 April 2019.

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

Information

For more information, please contact

Knut Arne Alsaker, Group CFO, tel. +358 10 516 0010

Jarmo Salonen, Head of Investor Relations and Group Communications, tel. +358 10 516 0030

Mirko Hurmerinta, IR and Communications Specialist, Media Relations, tel. +358 10 516 0032

Press Conference and Conference call

Sampo will today arrange a press conference at Restaurant Palace (10th floor), Eteläranta 10, Helsinki, at 1 pm Finnish time (11 am UK time). Languages used at the press conference are English and Finnish.

To attend the press conference and for interview requests please contact Mirko Hurmerinta via e-mail, mirko.hurmerinta@sampo.fi

An English-language conference call for investors and analysts will be arranged at 5 pm Finnish time (3 pm UK time). Please call +44 (0)333 300 0804, +1 631 913 1422, +46 (0)8 5664 2651 or +358 (0)9 8171 0310. The conference code is 69958632#.

The press conference and conference call can also be followed live at www.sampo.com/result.

Recorded versions will later be available at the same address.

In addition, a Supplementary Financial Information Package is available at www.sampo.com/result.

Sampo will publish the Interim Statement for January-March 2019 on 8 May 2019.

Distribution:

Nasdaq Helsinki London Stock Exchange The principal media Financial Supervisory Authority www.sampo.com

Group financial review >

Financial highlights

GROUP		1–12/2018	1–12/2017
Profit before taxes	EURm	2,094	2,482
Return on equity (at fair value)	%	7.5	17.1
Return on assets (at fair value)	%	3.2	7.6
Equity/assets ratio	%	25.1	26.1
Group solvency ¹)	EURm	3,313	3,858
Group solvency ratio ¹)	%	147	154
Average number of staff		9,509	9,364

IF		1–12/2018	1–12/2017
Premiums written before reinsurers' share	EURm	4,502	4,525
Premiums earned	EURm	4,290	4,293
Profit before taxes	EURm	848	818
Return on equity (at current value)	%	11.2	21.3
Risk ratio ²)	%	63.3	63.3
Cost ratio ²)	%	21.9	22.0
Loss ratio ²)	%	68.8	68.9
Expense ratio ²)	%	16.4	16.4
Combined ratio ²)	%	85.2	85.3
Average number of staff		6,603	6,367

TOPDANMARK		1–12/2018	10–12/2017
Premiums written before reinsurers' share, life insurance	EURm	1,357	294
Premiums written before reinsurers' share, P&C insurance	EURm	1,235	210
Premiums earned, P&C insurance	EURm	1,144	281
Profit before taxes	EURm	199	848
Loss ratio ²)	%	66.0	64.0
Expense ratio ²)	%	16.3	16.4
Combined ratio	%	82.3	80.5
Average number of staff		2,314	2,412

MANDATUM		1–12/2018	1–12/2017
Premiums written before reinsurers' share	EURm	1,082	967
Profit before taxes	EURm	450	236
Return on equity (at current value)	%	8.7	13.3
Expense ratio	%	92.1	94.7
Average number of staff		531	525

> Group financial review

HOLDING		1–12/2018	1–12/2017
Profit before taxes	EURm	618	576
Average number of staff		61	60
PER SHARE KEY FIGURES		1–12/2018	1–12/2017
Earnings per share	EUR	3.04	3.96
Earnings per share, incl. other comprehensive income	EUR	1.70	3.79
Capital and reserves per share	EUR	22.30	23.14
Net asset value per share	EUR	20.60	25.37
Adjusted share price, high	EUR	48.92	47.46
Adjusted share price, low	EUR	37.61	41.53
Market capitalisation	EURm	21,331	24,858

¹) The Group solvency is calculated according to the consolidation method defined in Chapter 3 of the Act on the Supervision of Financial and Insurance Conglomerates (2004/699).

²) The key figures for P&C Insurance are based on activity based costs and cannot, therefore, be calculated directly from the consolidated income statement. The result analysis of If is presented in note 16.

The number of shares used at the balance sheet date and as the average number during the financial period was 555,351,850.

The valuation differences on investment property have been taken into account in calculating the return on assets, return on equity, equity/assets ratio and net asset value per share. The tax component includes the tax corresponding to the result for the period, and the deferred tax liability related to valuation differences on investment property.

The total comprehensive income has been used in the calculation of the return on assets and return on equity.

The key figures for the insurance business have been calculated in accordance with the decree issued by the Ministry of Finance and the specifying regulations and instructions of the Finance Supervisory Authority.

Calculation of key figures

Return on equity (fair values), %

+ total comprehensive income
valuation differences on investments less deferred tax	x 100 %
+ total equity
valuation differences on investments less deferred tax
(average of values 1 Jan. and the end of reporting period)
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
+ balance sheet, total	x 100 %
– technical provisions relating to unit-linked insurance
valuation differences on investments
(average of values on 1 Jan. and the end of the reporting period)
Equity/assets ratio (at fair values), %
+ total equity
valuation differences on investments after deduction of deferred tax	x 100 %
+ balance sheet total
valuation differences on investments
Risk ratio for P&C insurance, %
+ claims incurred
– claims settlement expenses
insurance premiums earned	x 100 %
Cost ratio for P&C insurance, %
+ operating expenses
+ claims settlement expenses
insurance premiums earned	x 100 %
Loss ratio for P&C insurance, %
claims incurred
insurance premiums earned	x 100 %
Expense ratio for P&C insurance, %
operating expenses	x 100 %
insurance premiums earned
Combined ratio for P&C insurance, %
Loss ratio + expense ratio
Expense ratio for life insurance, %
+ operating expenses before change in deferred acquisition costs
+ claims settlement expenses	x 100 %
expense charges

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

Equity per share

• equity attributable to the parent company's equity holders
• adjusted number of shares at the balance sheet date

Net asset value per share

• • equity attributable to the parent company's equity holders
• valuation differences on listed associates in the Group
• valuation differences after the deduction of deferred taxes adjusted number of shares at balance sheet date

Market capitalisation

number of shares at the balance sheet date x closing share price at the balance sheet date

Group quarterly comprehensive income statement

EURm	10–12/2018	7–9/2018	4–6/2018	1–3/2018	10–12/2017
Insurance premiums written	1,891	1,561	1,858	2,598	1,722
Net income from investments	-779	439	330	-95	280
Other operating income	12	13	211	8	7
Claims incurred	-1,223	-1,213	-1,264	-1,316	-1,215
Change in liabilities for insurance	808	-62	-271	-560	-88
and investment contracts
Staff costs	-207	-213	-212	-222	-221
Other operating expenses	-177	-154	-166	-130	-170
Finance costs	14	-21	-4	-7	-11
Share of associates' profit/loss	112	140	226	169	131
Profit for the period before taxes	451	490	708	445	436
Taxes	-70	-76	-101	-70	-72
Profit for the period	381	414	607	375	364
Other comprehensive income for the period
Items reclassifiable to profit or loss
Exchange differences on translating foreign operations	-15	30	-31	-81	-71
Available-for-sale financial assets	-552	23	4	-214	-108
Share of other comprehensive income of associates	-35	-5	-2	-20	-33
Taxes	118	-5	0	46	22
Total items reclassifiable to profit or loss, net of tax	-484	43	-29	-269	-190
Items not reclassifiable to profit or loss
Actuarial gains and losses from defined pension plans	-7	7	-8	2	-1
Taxes	2	-2	2	0	0
Total items not reclassifiable to profit or loss, net of tax	-6	5	-6	1	-1
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	-108	463	571	108	174
Profit attributable to
Owners of the parent	367	386	586	348	341
Non-controlling interests	14	28	21	27	23
Total comprehensive income attributable to
Owners of the parent	-122	434	550	81	150
Non-controlling interests	14	28	21	27	23

Statement of profit and other comprehensive income, IFRS

EURm	Note	1–12/2018	1–12/2017
Insurance premiums written	1	7,907	5,815
Net income from investments	2	-104	1,104
Other operating income		244	36
Claims incurred	3	-5,015	-4,023
Change in liabilities for insurance and investment contracts		-85	-603
Staff costs	4	-855	-676
Other operating expenses		-627	-536
Finance costs		-18	-52
Share of associates' profit/loss		647	712
- Gain from fair valuation of former associated company		-	706
Profit before taxes		2,094	2,482
Taxes		-317	-243
Profit for the period		1,778	2,239
Other comprehensive income for the period
Items reclassifiable to profit or loss
Exchange differences		-97	-96
Available-for-sale financial assets		-739	73
Share of other comprehensive income of associates		-61	-57
Taxes		159	-18
Total items reclassifiable to profit or loss, net of tax		-739	-97
Items not reclassifiable to profit or loss
Actuarial gains and losses from defined pension plans		-6	5
Taxes		1	-1
Total items not reclassifiable to profit or loss, net of tax		-5	4
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD		1,034	2,146
Profit attributable to
Owners of the parent		1,687	2,216
Non-controlling interests		91	23
Total comprehensive income attributable to
Owners of the parent		943	2,122
Non-controlling interests		91	23
Basic earnings per share (EUR)		3.04	3.96

Consolidated balance sheet, IFRS

EURm	12/2018	12/2017
Assets Property, plant and equipment		162	158
Investment property		665	653
Intangible assets	5	2,143	2,121
Investments in associates		8,065	7,765
Financial assets	6, 7, 8,	22,693	22,832
Investments related to unit-linked insurance contracts	9, 10 11	10,671	7,409
Tax assets		24	18
Reinsurers' share of insurance liabilities		294	297
Other assets		2,263	1,940
Cash and cash equivalents		2,361	2,734
Assets held for sale	18	-	3,374
Total assets		49,340	49,300
Liabilities
Liabilities for insurance and investment contracts	12	18,415	18,900
Liabilities for unit-linked insurance and investment contracts	13	11,390	7,959
Financial liabilities	14	4,711	3,649
Tax liabilities		487	638
Provisions		18	33
Employee benefits		51	57
Other liabilities		1,254	1,258
Liabilities related to assets held for sale	18	-	3,299
Total liabilities		36,326	35,792
Equity Share capital		98	98
Reserves		1,530	1,530
Retained earnings		10,944	10,692
Other components of equity		-186	528
Equity attributable to parent company's equity holders		12,386	12,848
Non-controlling interests		628	660
Total equity		13,014	13,508
Total equity and liabilities		49,340	49,300

Statement of changes in equity, IFRS

EURm	Share capital	Legal reserve	Invested unrestricted equity	Retained earnings 1)	Translation of foreign operations 2)	Available for-sale financial assets 3)	Total	Non controlling interest	Total
Equity at 1 Jan. 2017	98	4	1,527	9,700	-518	1,124	11,934	-	11,934
Changes in equity
Recognition of undrawn dividends				10			10		10
Cancellation of shares				30			30		30
Dividends				-1,288			-1,288		-1,288
Business acquisitions				17			17	636	654
Share of associate's other changes in equity				23			23		23
Profit for the period				2,216			2,216	23	2,239
Other comprehensive income for the period				-15	-138	60	-93		-93
Equity at 31 December 2017	98	4	1,527	10,692	-656	1,184	12,848	660	13,508
Changes in equity
Dividends				-1,444			-1,444	-112	-1,556
Share-based payments				8			8	9	17
Share of associate's other changes in equity				31			31		31
Other changes in equity								-20	-20
Profit for the period				1,687			1,687	91	1,778
Other comprehensive income for the period				-31	-124	-590	-744		-744
Equity at 31 December 2018	98	4	1,527	10,944	-780	594	12,386	628	13,014

1) IAS 19 Pension benefits had a net effect of EURm -34 (-15) on retained earnings.

• 2) The total comprehensive income includes also the share of the associate Nordea's other comprehensive income, in accordance with the Group's share holding. The retained earnings thus include EURm -26 (-19) of Nordea's items not reclassifiable to profir or loss. The exchange differences include the share of Nordea's exchange differences EURm -26 (-43). Respectively, available-for-sale financial assets include EURm -10 (15) of Nordea's valuation differences on assets at fair value through p/l. Nordea adopted the new IFRS 9 Financial instruments standard from 1 January 2018 on.
• 3) The amount recognised in equity from available-for-sale financial assets for the period totalled EURm -409 (266). The amount transferred to p/l amounted to EURm -192 (-204). EURm 20 (-7) was transferred to the Segregated Suomi portfolio.

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

Statement of cash flows, IFRS

EURm	1–12/2018	1–12/2017
Cash and cash equivalent at the beginning of the period	2,734	2,585
Cash flow from/used in operating activities	-208	1,254
Cash flow from/used in investing activities	406	534
Cash flow from/used in financing activities	-571	-1,639
Dividends paid	-1,444	-1,286
Increase of liabilities	1,482	1,042
Decrease of liabilities	-609	-1,395
Cash and cash equivalent at the end of the period	2,361	2,734

The cash flow statement reports cash flows during the period classified by operating, investing and financing activities. Cash flows from operating activities derive primarily from the principal revenue-producing activities. Cash flows from investments in subsidiaries and associated undertakings and those from investments in intangible assets and property, plant and equipment are presented in investing activities. Financing activities include cash flows resulting from changes in equity and borrowings in order to conduct the business. Cash and cash equivalents consist of cash at bank and in hand and short-term deposits (under 3 months).

30

Notes

Accounting policies

Sampo Group's consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the EU. The interim financial statements are presented in accordance with IAS 34 Interim Financial Reporting. In preparing the interim financial statements, the same accounting policies and methods of computation are applied as in the financial statements for 2017.

Sampo adopted new or revised standards and interpretations at the beginning of the year 2018. The changes did not have a material impact on the reported numbers. These standards and interpretations are explained in Sampos accounting policies for the financial year 2017. The financial statements are available on Sampo's website at www.sampo.com/annualreport.

Comprehensive income statement by segment for twelve months ended 31 December 2018

EURm	If	Top danmark	Mandatum	Holding	Elimination	Group
Insurance premius written	4,325	2,509	1,074	-	-1	7,907
Net income from investments	229	-280	-26	2	-28	-104
Other operating income	30	3	212	17	-18	244
Claims incurred	-2,716	-1,198	-1,116	-	15	-5,015
Change in liabilities for insurance and investment contracts	-35	-458	426	-	-18	-85
Staff costs	-529	-269	-46	-11	-	-855
Other operating expenses	-445	-119	-67	-14	18	-627
Finance costs	-15	-11	-7	3	12	-18
Share of associates' profit/loss	4	22	0	621	-	647
Profit before taxes	848	199	450	618	-20	2,094
Taxes	-187	-43	-91	0	4	-317
Profit for the period	661	156	360	618	-16	1,778
Other comprehensive income for the period
Items reclassifiable to profit or loss Exchange differences	-87	-9	-	-2	-	-97
Available-for-sale financial assets	-364	-	-314	-61	-	-739
Share of other comprehensive	-	-	-	-61	-	-61
income of associates
Taxes Total items reclassifiable to profit	80	-	67	12	-	159
or loss, net of tax	-372	-9	-247	-111	-	-739
Items not reclassifiable to profit or loss
Actuarial gains and losses from defined pension plans	-6	-	-	-	-	-6
Taxes	1	-	-	-	-	1
Total items not reclassifiable to profit or loss, net of tax	-5	-	-	-	-	-5
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	284	147	112	506	-16	1,034
Profit attributable to Owners of the parent						1,687
Non-controlling interests						91
Total comprehensive income attributable to
Owners of the parent						943
Non-controlling interests						91

Comprehensive income statement by segment for twelve months ended 31 December 2017

		Top
EURm	If	danmark	Mandatum	Holding	Elimination	Group
Insurance premius written	4,357	498	960	-	0	5,815
Net income from investments	216	107	782	10	-10	1,104
Other operating income	27	1	10	18	-20	36
Claims incurred	-2,717	-285	-1,021	-	-	-4,023
Change in liabilities for insurance
and investment contracts	-64	-163	-377	-	1	-603
Staff costs	-543	-68	-47	-18	-	-676
Other operating expenses	-440	-39	-63	-14	20	-536
Finance costs	-19	-3	-7	-36	14	-52
Share of associates' profit/loss	1	94	0	616	-	712
- Gain from fair valuation of former associated company	-	706	-	-	-	706
Profit before taxes	818	848	236	576	4	2,482
Taxes	-180	-12	-51	0	0	-243
Profit for the period	637	848	185	576	4	2,239
Other comprehensive income for the period
Items reclassifiable to profit or loss
Exchange differences	-95	-1	0	-	-	-96
Available-for-sale financial assets	46	-	5	22	-	73
Share of other comprehensive income of associates	-	-	-	-57	-	-57
Taxes	-11	-	-2	-4	-	-18
Total items reclassifiable to profit
or loss, net of tax	-61	-	3	-39	-	-97
Items not reclassifiable to profit or loss
Actuarial gains and losses from	5	-	-	-	-	5
defined pension plans
Taxes	-1	-	-	-	-	-1
Total items not reclassifiable to profit or loss, net of tax	4	-	-	-	-	4
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	581	848	188	537	4	2,146
Profit attributable to
Owners of the parent						2,216
Non-controlling interests						23
Total comprehensive income
attributable to
Owners of the parent						2,122
Non-controlling interests						23

Consolidated balance sheet by segment at 31 December 2018

EURm	If	Topdanmark	Mandatum	Holding	Elimination	Group
Assets Property, plant and equipment	24	130	5	3	-	162
Investment property	4	513	148	-	-	665
Intangible assets	512	1,472	158	0	-	2,143
Investments in associates	14	225	3	7,823	-	8,065
Financial assets	10,753	6,028	4,902	5,069	-4,058	22,693
Investments related to unit-linked insurance contracts	-	3,735	6,960	-	-24	10,671
Tax assets	11	2	-	15	-4	24
Reinsurers' share of insurance liabilities	208	85	1	-	-	294
Other assets	1,704	279	182	107	-8	2,263
Cash and cash equivalents	294	34	586	1,448	-	2,361
Total assets	13,525	12,502	12,944	14,465	-4,095	49,340
Liabilities
Liabilities for insurance and investment contracts	8,934	5,259	4,221	-	-	18,415
Liabilities for unit-linked insurance and investment contracts	-	4,460	6,955	-	-24	11,390
Financial liabilities	405	339	133	4,104	-271	4,711
Tax liabilities	207	188	96	-	-4	487
Provisions	18	-	-	-	-	18
Employee benefits	51	-	-	-	-	51
Other liabilities	785	227	173	78	-9	1,254
Total liabilities	10,401	10,473	11,578	4,182	-308	36,326
Equity
Share capital						98
Reserves						1,530
Retained earnings						10,944
Other components of equity						-186
Equity attributable to parent company's equity holders						12,386
Non-controlling interests						628
Total equity						13,014
Total equity and liabilities						49,340

Consolidated balance sheet by segment at 31 December 2017

EURm	If	Topdanmark	Mandatum	Holding	Elimination	Group
Assets
Property, plant and equipment	22	130	3	3	-	158
Investment property	12	489	151	-	-	653
Intangible assets	528	1,509	83	-	-	2,121
Investments in associates	14	173	0	7,578	-	7,765
Financial assets	11,217	6,166	4,977	4,510	-4,038	22,832
Investments related to unit-linked insurance contracts	-	3,464	3,986	-	-42	7,409
Tax assets	17	2	-	3	-4	18
Reinsurers' share of insurance liabilities	220	77	0	-	-	297
Other assets	1,601	211	103	33	-8	1,940
Cash and cash equivalents	437	72	1,025	1,200	-	2,734
Assets held for sale	-	-	3,374	-	-	3,374
Total assets	14,069	12,293	13,703	13,326	-4,092	49,300
Liabilities
Liabilities for insurance and investment contracts	9,120	5,405	4,375	-	-	18,900
Liabilities for unit-linked insurance and investment contracts	-	4,036	3,965	-	-42	7,959
Financial liabilities	322	303	106	3,187	-269	3,649
Tax liabilities	278	196	164	-	-	638
Provisions	33	-	-	-	-	33
Employee benefits	57	-	-	-	-	57
Other liabilities	739	249	241	38	-9	1,258
Liabilities related to assets held for sale	-	-	3,299	-	-	3,299
Total liabilities	10,549	10,189	12,150	3,224	-321	35,792
Equity
Share capital						98
Reserves						1,530
Retained earnings						10,692
Other components of equity						528
Equity attributable to parent company's equity holders						12,848
Non-controlling interests						660
Total equity						13,508
Total equity and liabilities						49,300

Other notes, EURm

1 Insurance premiums

	1–12/2018	1–12/2017
P&C insurance	5,737	4,737
Life insurance
Insurance contracts	1,751	802
Investment contracts	687	457
Insurance premiums, gross	8,174	5,996
Reinsurers' share
P&C insurance	-259	-174
Life insurance, insurance contracts	-7	-7
Reinsurers's share, total	-267	-181
Group insurance premiums total, net	7,907	5,815

2 Net income from investments >

If	1–12/2018	1–12/2017
Financial assets
Derivative financial instruments	-34	-35
Loans and receivables	10	9
Financial asset available-for-sale
Debt securities	190	166
Equity securities	120	137
Total	310	303
Total financial assets	286	277
Fee and commission expense	-21	-23
Expense on other than financial liabilities	-5	-6
Effect of discounting annuities	-31	-33
If, total	229	216

Topdanmark	1–12/2018	10–12/2017
Financial assets
Derivative financial instruments	-32	18
Financial assets for trading
Debt securities	35	15
Equity securities	-20	13
Total	15	28
Investments related to unit-linked contracts
Debt securities	19	10
Equity securities	-123	43
Derivatives	-143	24
Other financial assets	-26	12
Total	-273	90
Loans and receivables	2	0
Total financial assets	-287	136
Net income from investment property	18	3
Pension tax return	4	-20
Effect of discounting, insurance liabilities	-12	-11
Other expenses related to investments	-2	0
Topdanmark, total	-280	107

> 2 Net income from investments

Mandatum	1–12/2018	1–12/2017
Financial assets
Derivative financial instruments	-125	170
Investments related to unit-linked contracts
Debt securities	4	21
Equity securities	-254	348
Loans and receivables	6	-9
Other financial assets	-15	45
Total	-259	405
Loans and receivables	2	-13
Financial assets available-for-sale
Debt securities	132	-107
Equity securities	208	290
Total	334	183
Total income from financial assets	-43	746
Other assets	3	19
Fee and commission income, net	13	16
Mandatum, total	-26	782

Holding	1–12/2018	1–12/2017
Financial assets
Derivative financial instruments	-27	0
Loans and receivables	-24	1
Financial assets available-for-sale
Debt securities	40	1
Equity securities	13	7
Total	53	8
Total income from financial assets	2	9
Other assets	0	1
Holding, total	2	10
Elimination items between segments	-28	-10
Group investment income, total	-104	1,104

3 Claims incurred

-3,036 -845 -311 -4,193
100
5
105
-4,088
75
0
76
-8
-3
-11
65

4 Staff costs

	1–12/2018	1–12/2017
Wages and salaries	-625	-471
Granted cash-settled share options	-1	-31
Grnated share-settled share options	-9	-2
Pension costs	-96	-76
Other social security costs	-123	-97
Group staff costs, total	-855	-676

5 Intangible assets

	12/2018	12/2017
Goodwill	1,454	1,476
Other intangible assets	689	719
Total	2,143	2,196
Mandatum's assets held for sale	-	-75
Group intangible assets, total	2,143	2,121

6 Financial assets

	12/2018	12/2017
Derivative financial instruments (Note 7)	72	85
Financial assets designated as at fair value through p/l
Debt securities	4,432	4,628
Equity securities	726	793
Total	5,158	5,421
Loans and receivables	685	542
Financial assets available-for-sale
Debt securities	12,888	13,081
Equity securities	3,889	3,902
Total	16,777	16,983
Financial assets, total	22,693	23,031
Mandatum's assets held for sale	-	-198
Group financial assets, total	22,693	22,832

7 Derivative financial instruments

		12/2018			12/2017
		Fair value	Fair value		Fair value	Fair value
	Contract/ notional amount	Assets	Liabilities	Contract/ notional amount	Assets	Liabilities
Derivatives held for trading
Interest rate derivatives	2,750	48	100	2,836	6	77
Foreign exchange derivatives	11,304	24	65	11,319	76	18
Equity derivatives	41	0	-	44	0	-
Derivatives held for trading, total	14,096	72	166	14,199	82	96
Derivatives held for hedging
Fair value hedges	364	-	4	364	3	-
Group derivative financial instruments, total	14,460	72	169	14,563	85	96

8 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.

The majority of Sampo Group's level 3 assets are private equity and alternative funds.

For private equity funds the valuation of the underlying investments is conducted by the fund manager who has all the relevant information required in the valuation process. The valuation is usually updated quarterly based on the value of the underlying assets and the amount of debt in the fund.

There are several valuation methods, which can be based on, for example, the acquisition value of the investments, the value of publicly traded peer companies, the multiple based valuation or the cashflows of the underlying investments. Most private equity funds follow the International Private Equity and Venture Capital (IPEV) guidelines which give detailed instructions on the valuation of private equity funds.

For alternative funds the valuation is also conducted by the fund managers. Alternative funds often have complicated structures and the valuation is dependent on the nature of the underlying investments. There are many different valuation methods that can be used, for example, the method based on the cashflows of the underlying investments. The operations and valuation of alternative funds are regulated for example by the Alternative Investment Fund Managers Directive (AIFMD), which determines the principles and documentation requirements of the valuation process.

The assets held for sale are included in the comparison figures for 2017.

Financial assets at 31 December 2018	Level 1	Level 2	Level 3	Total
Financial assets at fair value
Derivative financial instruments
Interest rate swaps	-	48	-	48
Foreign exchange derivatives	-	24	-	24
Total	-	72	-	72
Trading assets
Equity securities	533	191	-	725
Debt securities	3,957	695	51	4,703
Total	4,490	886	51	5,428
Financial assets designated as at fair value through p/l
Deposits	-	587	-	587
Financial assets related to unit-linked insurance
Equity securities	2,433	4	7	2,444
Debt securities	1,209	1,894	27	3,130
Funds	3,119	918	678	4,716
Derivative financial instruments	-	5	-	5
Other assets	-	-	41	41
Total	6,761	2,822	754	10,337
Financial assets available-for-sale
Equity securities	1,683	-	322	2,005
Debt securities	9,289	3,315	13	12,617
Other assets	907	44	909	1,860
Total	11,878	3,359	1,245	16,482
Total financial assests at fair value	23,130	7,727	2,050	32,907

> 8 Determination and hierarchy of fair values >

Financial assets at 31 December 2018	Level 1	Level 2	Level 3	Total
Other financial assets
Financial assets at amortised cost
Loans and receivables	-	358	98	456
Group financial assets, total	23,130	8,086	2,148	33,363
Financial liabilities at 31 December 2018	Level 1	Level 2	Level 3	Total
Financial liabilities at fair value
Derivative financial instruments
Interest derivatives	-	100	-	100
Foreign exchange derivatives	-	69	-	69
Total	-	169	-	169
Financial liabilities designated as at fair value through p/l
Deposits	-	-	11	11
Total financial liabilities at fair value	-	169	11	180
Other financial liabilities
Subordinated debt securities
Subordinated loans	147	321	-	468
Debt securities in issue
Commercial papers	3,547	419	-	3,966
Bonds	-	124	-	124
Total	3,547	543	-	4,090
Total other liabilities	3,695	864	-	4,558
Group financial liabilities, total	3,695	1,033	11	4,738

> 8 Determination and hierarchy of fair values >

Financial assets at 31 December 2017	Level 1	Level 2	Level 3	Total
Financial assets at fair value
Derivative financial instruments
Interest rate swaps	-	6	-	6
Foreign exchange derivatives	-	79	-	79
Equity derivatives	-	1	-	1
Total	-	86	-	86
Assets held for trading
Equity securities	608	185	-	793
Debt securities	3,953	868	77	4,899
Total	4,561	1,053	77	5,692
Financial assets designated at fair value through profit or loss
Deposits	-	457	-	457
Financial assets related to unit-linked insurance
Equity securities	2,223	4	6	2,233
Debt securities	1,163	1,583	38	2,785
Funds	3,786	940	359	5,085
Derivative financial instruments	-	15	-	15
Other assets	-	-	19	19
Total	7,173	2,542	422	10,137
Financial assets available-for-sale
Equity securities	1,939	-	42	1,981
Debt securities	9,922	2,854	34	12,810
Other assets	1,183	62	675	1,921
Total	13,045	2,916	751	16,712
Total financial assets at fair value	24,779	7,054	1,250	33,083
Other financial assets
Financial assets at amortised cost
Loans and receivables	-	374	83	457
Group financial assets, total	24,779	7,428	1,333	33,540

> 8 Determination and hierarchy of fair values >

Financial liabilities at 31 December 2017	Level 1	Level 2	Level 3	Total
Financial liabilities at fair value
Derivative financial instruments
Interest derivatives	-	77	-	77
Foreign exchange derivatives	-	19	-	19
Total financial liabilities at fair value	-	96	-	96
Other financial liabilities
Subordinated debt securities
Subordinated loans	170	207	-	377
Debt securities in issue
Commercial papers	2,816	138	-	2,954
Bonds	-	293	-	293
Total	2,816	431	-	3,247
Total other liabilities	2,986	638	-	3,624
Group financial liabilities, total	2,986	734	-	3,720

		12/2018	12/2017
Transfers between levels 1 and 2	Transfers from level 2 to level 1	Transfers from level 1 to level 2	Transfers from level 2 to level 1	Transfers from level 1 to level 2
Assets held for trading
Debt securities	1	58	59	-
Financial assets related to unit-linked insurance
Debt securities	17	64	49	48
Funds	-	44	18	-
Total	17	108	67	4
Financial assets available-for-sale
Debt securities	461	477	811	649

Transfers are based mainly on the changes of trading volume information provided by an external service provided.

45

> 8 Determination and hierarchy of fair values

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 different base currencies. In If, 10 percentage point depreciation of all other currencies against SEK would result in an increase recognised in profit/loss of EURm 1 (13) and in a decrease recognised directly in equity of EURm -1 (-12). In Topdanmark, 10 percentage depreciation of all other currencies against DKK would result in an increase recognised in profit/loss of EURm 0 (-1), but would not have an impact on equity. In Mandatum, 10 percentage point depreciation of all other currencies against EUR would result in an increase recognised in profit/loss of EURm 29 (12) and in a decrease recognised directly in equity of EURm -67 (-79). In Holding, 10 percentage point depreciation of all other currencies against EUR would have no impact in profit/loss, but a decrease recognised in equity of EURm -249 (-216).

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 December 2018.

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 assets
	1% parallel shift down	1% parallel shift up	20% fall in prices	20% fall in prices
Effect recognised in profit/loss	327	-295	-107	-38
Effect recognised directly in equity	391	-361	-588	-201
Total effect	718	-656	-694	-239

9 Movements in level 3 financial instruments measured at fair value >

			Total gains/				Gains/ losses
		Total gains/	losses recorded in other				included in p/l for financial
		losses in	compre			At	assets
Financial assets	At Jan. 1 2018	income statement	hensive income	Purchases	Sales	31 Dec 2018	31 Dec 2018
Financial assets for trading
Debt securities	77	1	-	14	-40	51	1
Investments related to unit-linked insurance
contracts
Equity securities	6	30	-	7	-35	7	-
Debt securities	38	0	-	4	-16	27	-
Funds	359	21	-	355	-56	678	21
Total	403	51	-	366	-107	713	21
Financial assets available-for-sale
Equity securities	43	1	4	519	-245	323	4
Debt securities	34	0	-1	95	-115	13	0
Other assets	674	5	-4	350	-116	909	1
Total	751	6	-1	964	-476	1,245	4
Total financial assests measured at fair value	1,231	58	-1	1,344	-623	2,009	27

		12/2018
	Realised gains	Fair value gains and losses	Total
Total gains or losses included in profit or loss for the financial period	57	0	57
Total gains or losses included in profit and loss for assets held at the end of the financial period	27	0	27

> 9 Movements in level 3 financial instruments measured at fair value

			Total				Gains/
			gains/ losses				losses included
		Total	recorded				in p/l for
		gains/ losses in	in other compre			At	financial assets
	At Jan. 1	income	hensive			31 Dec	31 Dec
Financial assets at	2017	statement	income	Purchases*)	Sales	2017	2017
Financial assets for trading
Debt securities	-	-4	-	89	-9	77	-4
Investments related
to unit-linked insurance
contracts
Equity securities	14	-8	-	7	-6	6	-8
Debt securities	27	0	-	21	-9	38	0
Funds	154	10	-	242	-47	359	11
Total	194	2	-	269	-62	403	3
Financial assets
available-for-sale
Equity securities	48	10	-1	6	-21	43	-2
Debt securities	58	0	0	334	-358	34	0
Other assets	757	-49	11	180	-226	674	-36
Total	864	-38	10	520	-604	751	-38
Total financial assests
measured at fair value	1,058	-40	10	878	-675	1,231	-39

*) Purchases of debt securities include business acquistion related financial assets for trading EURm 57 and investments related to unit-linked insurance contracts EURm 21.

		12/2017
	Realised gains	Fair value gains and losses	Total
Total gains or losses included in profit or loss for the financial period	-37	8	-29
Total gains or losses included in profit and loss for assets held at the end of the financial period	-46	8	-39

10 Sensitivity analysis of level 3 financial instruments measured at fair value

	12/2018		12/2017
	Carrying amount	Effect of reasonably possible alternative assumptions (+ / -)	Carrying amount	Effect of reasonably possible alternative assumptions (+ / -)
Financial assets
Financial assets available-for-sale

Total	1,245	-248	751	-145
Other assets	909	-182	675	-135
Debt securities	13	-1	34	-1
Equity securities	322	-64	42	-8

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 per cent. Sampo Group bears no investment risks related 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 at 31 December 2018 would cause a descend of EURm -1 (-1) for the debt instruments, and EURm -246 (-143) 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 2.0 per cent (1.1).

11 Investments related to unit-linked insurance

	12/2018	12/2017
Financial assets as at fair value through p/l
Debt securities	3,130	2,826
Equity securities	6,901	7,276
Loans and receivables	358	373
Derivatives	5	15
Other	277	19
Total	10,671	10,509
Mandatum's assets held for sale	-	-3,100
Group investments related ot unit-linked insurance, total	10,671	7,409

12 Liabilities for insurance and investment contracts

	12/2018	12/2017
Insurance contracts
Provision for unearned premiums
P&C insurance, total	2,422	2,399
Life insurance
Insurance contracts	1,934	2,223
Investment contracts	24	26
Provision for claims outstanding
P&C insurance, total	8,663	8,882
Life insurance	2,264	2,324
Life insurance liabilities	3,109	3,244
Total	18,415	19,098
Mandatum's liabilities related to assets held for sale	-	-198
Group liabilities for insurance and investment contracts, total	18,415	18,900

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.

13 Liabilities from unit-linked insurance and investment contracts

	12/2018	12/2017
Unit-linked insurance contracts	4,399	4,794
Unit-linked investment contracts	2,531	2,230
Life insurance liabilities	4,460	4,036
Total	11,390	11,060
Mandatum's liabilities related to assets held for sale	-	-3,100
Group liabilities from unit-linked insurance and investment contracts, total	11,390	7,959

14 Financial liabilities

	12/2018	12/2017
Derivative financial instruments (Note 7)	169	96
Subordinated debt securities
Subordinated loans	464	376
Debt securities in issue
Commercial papers	124	293
Bonds	3,943	2,884
Total	4,067	3,177
Deposits received from reinsurers	11	-
Group financial liabilities, total	4,711	3,649

15 Contingent liabilities and commitments

		12/2018		12/2017
Off-balance sheet items
Other irrevocable commitments		1,144		992
Guarantees		10		3
Investment commitments		5		2
Acquisition of IT-software		98		106
Total		1,257		1,103
Assets pledged as collateral for liabilities or contingent liabilities
	12/2018	12/2018	12/2017	12/2017
Assets pledged as collateral	Assets pledged	Liabilities/ commit ments	Assets pledged	Liabilities/ commit ments
Investments
- Investment securities	209	152	218	129
Assets pledged as security for derivative contracts, carrying value		12/2018		12/2017
Investment securities		13		15
Cash and cash equivalents		182		85
The pledged assets are included in the balance sheet item Other assets or Cash and cash equivalents.
Non-cancellable operating leases		12/2018		12/2017
Minimum lease payments not later than one year		31		32
later than one year and not later than five years		92		105
later than five years		40		54

16 Result analysis of If

	1–12/2018	1–12/2017
Premiums earned	4,290	4,293
Claims incurred	-2,954	-2,959
Operating expenses	-702	-705
Other technical income and expenses	-4	-8
Allocated investment return transferred from the non-technical account	13	19
Technical result	643	640
Investment result	245	229
Allocated investment return transferred to the technical account	-44	-52
Other income and expenses	3	0
Operating result	848	818

17 Associate acquisitions

The Swedish NDX Intressenter AB became an associate of the Group in March 2018 with an ownership of 36.25%. The p/l and balance sheet of the company are presented in the Holding segment.

The preliminary purchase price allocation on the acquisition is presented below:

Cost of the business acquisition	241
Net assets acquired without the pre-acquisition goodwill	84
Purchase consideration to be allocated	157
Allocated to other intangible assets
Customer relations	54
Other intangible assets	1
Deferred tax liability related to allocations	-12
Goodwill	114
Total	157

The allocations to the customer relations and other intangible assets are amortised over 8 years. Their total net effect sums to about EUR 43 million. The net effect of annual amortisation is about EUR 5 million.

18 Assets and liabilities related to assets held for sale

In October 2016, Mandatum Life Insurance Company announced that it will not continue the distribution agreement of insurance policies with Danske Bank Plc after 31 December 2016 and that it will use its right to sell the insurance portfolio acquired via Danske Bank to Danske Bank A/S. The portfolio has been classified according to IFRS 5.

Mandatum Life and Danske Bank agreed on 24 April 2018 to continue their co-operation and that the transfer of the insurance portfolio agreed earlier will not take place. Commission structures in the new co-operation agreement differ from the ones used earlier and Mandatum Life will pay higher commissions for both the new sales and the existing portfolio. The agreed transaction was subject to confirmation of the tax treatment. Despite the negative pre-ruling on the tax treatment the parties have agreed to continue their co-operation as agreed and appeal against the pre-ruling. Danske Bank has paid EUR 197 million in June 2018 . If the tax treatment remains negative, Mandatum life's financial risk is EUR 13 million.

The classification of the insurance portfolio as assets held for sale and liabilities related to assets held for sale has ended as a result of the agreement.

19 Sampo plc's income statement and balance sheet (FAS)

INCOME STATEMENT	1–12/2018	1–12/2017
Other operating income	17	18
Staff expenses	-11	-18
Depreciation and impairment	0	0
Other operating expenses	-14	-14
Operating profit	-8	-14
Finance income and expenses	1,677	1,410
Profit before appropriations and income taxes	1,669	1,396
Income taxes	0	-
Profit for the financial period	1,669	1,396
BALANCE SHEET	12/2018	12/2017
ASSETS
Property, plant and equipment	3	3
Investments
Shares in Group companies	3,401	3,401
Receivables from Group companies	261	266
Shares in participating undertakings	5,799	5,557
Receivables from participating undertakings	227	230
Other shares and participations	745	175
Other receivables	23	58
Receivables	166	49
Cash and cash equivalents	1,447	1,199
TOTAL ASSETS	12,073	10,939
LIABILITIES
Equity
Share capital	98	98
Fair value reserve	-3	45
Invested unrestricted equity	1,527	1,527
Other reserves	273	273
Retained earnings	4,328	4,376
Profit for the year	1,669	1,396
Total equity	7,890	7,714
Liabilities
Long-term	3,943	2,884
Short-term	240	340
Total liabilities	4,182	3,224
TOTAL LIABILITIES	12,073	10,939

Sampo plc Fabianinkatu 27 00100 Helsinki, Finland

Phone: +358 10 516 0100 Business ID: 0142213-3

www.sampo.com @Sampo_plc sampo-plc