The latest Sampo pod is out now!
Topics:
00:00 Start
01:13 Sampo analyst coverage
03:30 Topdanmark
22:14 Hastings
37:20 If
47:45 Mandatum
53:56 Sampo in its current form
57:17 View on Sampo
01:00:09 Profit distribution
01:05:39 Audience questions
01:23:09 Brand in the future
Time to listen 
Here are Sale’s comments on Sampo’s peer Gjensidige’s Q2 results. 
Sampo’s Norwegian peer Gjensidige reported excellent results this morning. The results were significantly better than market expectations, and it’s difficult to find any weaknesses in the report. The report supports our assessment that Sampo’s Q2 has proceeded well, as usual.
Here are Sale’s comments on the Q2 report of another peer, Tryg.
Q2 pre-results consensus published: https://www.sampo.com/investors/analyst-information/consensus-estimates/
Sampo’s results to be published on Wednesday, strong or even stronger? You’ll see it on Wednesday morning at 8:30 in the results live stream👌
Reminder, the live stream starts led by Sale around 8:20 or as soon as the report is published.
(Qt’s live stream just started now led by Luiro. 
)
Slightly better than expected👍 Futures are green, so will the share price gain a little more today?
DI immediately gives a buy recommendation and thanks Tobbe for a very good job. I guess we owners agree😊
Let’s put the main points from the interim report here:
- Comparable gross written premium growth was 8 percent, supported by continued strong development in personal lines businesses in the Nordics and the UK.
- The favorable claims environment and positive underlying development in the Nordics during the first half of the year supported profitability, leading to an improved combined ratio of 83.6 percent.
- Underwriting result increased by 25 percent at constant exchange rates to EUR 729 million, driven by strong growth and improved profitability.
- Operating result per share strengthened by 13 percent to EUR 0.25, with the strong underwriting result exceeding the impact of lower investment income and an increased number of shares.
- Following the strong performance in the second quarter, the outlook for the 2025 underwriting result has been raised to EUR 1,425–1,525 million from the previous EUR 1,400–1,500 million.
- Sampo intends to launch a new EUR 200 million share buyback program, to be financed by capital accumulated in 2024.
- The Solvency II ratio was 174 percent, taking into account dividend accrual and the planned share buyback program, and the gearing ratio was 26.1 percent.
“Sampo once again delivered an excellent result in the second quarter, supported by growth in attractive areas, disciplined risk assessment and pricing, and productivity improvements. Our personal lines businesses grew by 9 percent in comparable terms in the Nordics and 13 percent in the UK, leveraging their strong value propositions to customers,” says Sampo Group CEO Torbjörn Magnusson.
Q2 Half-year report:
IR blog also published, this time from the pen of @Antti_Jarvenpaa
In Torbjörn’s interview, a concise and interesting look at the development of the Nordic insurance sector from a direct crisis industry to its current status as an investor’s “rational competition” dream industry.
https://www.inderes.fi/research/sampo-q225-voitonmaksun-aika
Target price raised to 10€ and reduce recommendation. 
Oh, those were the days when IF’s 2-3% growth was a big deal! (Before corona). It’s incredible how well price increases are passed on to consumers.
Hastings was talked about as a rather small part of Sampo’s overall operations, but during these approximately 5 years, excellent growth has been achieved there too. There, too, the turnover is almost 2 billion €.
Tobbe commented as follows:
Our value creation, based on excellent operational expertise, led us to the UK in 2020 and resulted in the acquisition of Hastings. This step marked a focused expansion into the UK digital personal insurance market through a unique and competitively strong player. Our premium income has more than doubled in the UK since the completion of the Hastings acquisition: Premium income reached 2.6 billion euros in 2024, and the number of in-force insurance policies has grown by over a million, while the return on capital has been at the level of our Nordic business.
This is a 
joy to own.
Sauli predicts 10% earnings growth for the coming years and about 5% annual profit distribution. Is the required rate of return not met???
Kryptoniitti can certainly hodl!
Even to my eye, these numbers look more like a “hold and add on dips” recommendation.
My first purchase batch of Sampo was the largest I had ever bought at once in my investment history up to that point. There’s still a way to go to reach its €18, but Sampo has, however, paid dividends of €29.45 along the way so far.
My own actual performance is even better, because Sampo has been bought more every year by at least the amount of the dividend. Once in 2012, I bought something else with my Sampo dividends, when the price exceeding €24 looked bad. I corrected my mistake by buying double the amount the following year @€31.76, and since then, the streak has continued.
Can anyone tell me why this development would stop?
Development is unlikely to stop for a long time, unless the long-awaited but improbable competitive risk materializes. As Torbjörn joked in an interview yesterday, there are always more efficiencies to be gained in those costs, bit by bit and year by year.
Development progresses.
But revenue approaching 10 billion cannot endlessly grow faster than the market and by eating into others’ market share. A safe assumption is that eventually Sampo will grow at the rate of the nominal economic growth of its target markets. Perhaps the result will be marginally more, if efficiency can be further extracted. What could this growth be? If Finland’s real economic growth were, for example, 0.5% and inflation 2%, the pace here would be 2.5%. The UK economy is also struggling, but inflation seems to be over 4%. Other Nordic countries, in the long run, might grow perhaps 1-2% per year plus a couple of points of inflation. So, growth will calm down towards 4% and below in the long run, unless acquisitions are made (which will certainly happen again at some point somewhere).
This does not make Sampo a bad investment (it is one of the best companies on the Helsinki Stock Exchange). I’m just trying to temper the chain’s mood regarding what can be expected from such a large company in the long run.
Yep.
I’m not worried about this, because Hastings operates in a much bloodier and more volatile market. My username’s car was first registered in London, and even then the British car insurance market was dominated by brokers who moved large volumes from one insurance company to another based on the competitive situation. Now, instead of brokers, the competition is even faster online. In light of the numbers, Hastings clearly knows this game well, so in my opinion, Sampo has the prerequisites to utilize Hastings’ experience also in the Nordic countries if the competitive situation intensifies.
In a price war, everyone’s profits decrease, but my guess is that the combined industry best practices of Hastings’ risk management and dynamic market expertise, and IF’s and TD’s knowledge of the Nordic countries, are the best in the Nordics?
This is a real threat.
I also fully understand that an analyst must take into account the price paid for the result in their recommendation, which a perpetual holder retiree does not need to give quite as much weight to. Of course, the value increase so far could be released to yield better returns, if only I could figure out where to find better continuous returns for the portfolio, taking into account tax debt?
That’s why the analyst’s justified “reduce fully priced” is a sure “hold” for a pension portfolio (and more on dips).
One of the beauties of this hobby is that there is more than one right answer 
Sampo’s future, in my mind, broadly consists of the following components:
-In past years, insurance was rather a poorly performing ‘problem sector’, which has since developed into a highly respected sector in the Nordics, as well as elsewhere in Europe and the Americas. This is increasingly reflected in stock prices too.
-CEO Torbjörn stated in an interview regarding this earnings report that the insurance business has been able to utilize technology to its maximum potential. AI will bring even more efficiencies, with no end in sight.
-In recent years, Sampo has transformed from a financial bazaar into a pure-play insurer. It’s easier to understand, and investors know what they’ve put their money into.
-After a shaky start in Britain, things are now picking up speed there, and among Finland’s largest listed companies, Sampo has the strongest growth prospects, and not just from inflation-driven price increases (Source: early year Verner’s Quarter).
-Of course, there are potential threats, e.g., from competition to the damages caused by climate change, and the ongoing investigation by the Danish competition authorities, as well as those unexpected black swans that no one can predict. But compared to most companies or almost any other investment form, the list of threats is shorter 
-And by the way, does the new CEO Morten intend to shake things up?
Autonomous driving is also a risk. Insuring vehicles is a big part of insurance companies’ business. When autonomous driving will arrive is then a more challenging question. Probably not in the coming years, at least not here in the Nordics.
I have no worries regarding Sampo’s outlook, but I’m starting to have concerns about its valuation level 
The current valuation is already very high (P/E +18x) and in my opinion, this valuation already largely bakes in the future Topdanmark synergies. Furthermore, the current share price assumes everything will continue to go smoothly and gives little weight to the risks outlined by @Verneri_Pulkkinen. 
As @740_GLE pointed out, this would be a ‘hold’ recommendation if we had one, and yesterday I thought long and hard about whether this is ‘add’ or ‘reduce’. Ultimately, however, I came to the conclusion that I can no longer recommend buying the stock at its current valuation, as the expected return is simply too thin. At the same time, I don’t really see any downward drivers for the stock.
Regarding If’s growth, I must put a bit of a damper on this discussion by saying that the very strong growth in recent years has been quite exceptional and due to the inflation spike. Fundamentally, the Nordic insurance market grows at roughly the nominal GDP rate or perhaps slightly above, as societal safety nets thin out and are compensated, for example, by health insurance. Gaining market share is, in the big picture, very difficult and expensive. Although If is undeniably the best insurance company in the Nordics, I don’t believe it has competitive advantages that would allow it to systematically gain significantly more market share without affecting its profitability.
I have to insert an advertisement here for my and Antti’s podcast; it turned out great, if I do say so myself: Suuri Sampo-podi vol. 2 | inderesPodi 235 - Inderes
Here are OP’s Antti Saari’s quick comments on the Q2 results.
Sampo’s reported Q2 operating profit was higher than both our own forecast and consensus. This is mainly explained by strong financial income. The underwriting result, which is more relevant for the investment story, was also slightly better than anticipated. In the video, Chief Analyst Antti Saari reviews the company’s exceptionally strong quarter.
