SAMPO ANNUAL REPORT 1998 2 SAMPO ANNUAL REPORT 1998 Posal

ARNNUAL EPORT 1998

4Auditors BoardofDirectors 74 SupervisoryBoard 72 StatementbytheSupervisoryBoard 71 Auditors’Report 70 70 WorkingCapitalFlowStatement ParentCompanyBalanceSheet 26 ParentCompanyProfitandLossAccount 24 ConsolidatedBalanceSheet 22 ConsolidatedProfitandLossAccount 20 BoardofDirectors’Report 17 6 Financial StatementsandNotes ChiefExecutiveOfficer’sReview SampoGroupKeyInformation 4 SampoHighlights1998 3 2 Contents – Puolalankatu5,Turku(FinancialAdministration) – Aleksanterinkatu11,Helsinki(Sampo Group’sLegalAffairs) Sampo offices: Finnish markka.Theofficialfinancialstatements canbeinspectedatthefollowing Pages 17–69containthefinancialstatements presentedinfullthousandsof InvestmentAnalyses 108 Sampo-VarmaGroupOffices 106 ShareholderInformation 105 SampoGroupManagementBoard 104 Varma-Sampo 102 TheSampo-VarmaGroup’sPrincipalShareholdings 101 The Sampo-VarmaGroup Year2000andEuro SampoandtheEnvironment 100 SampoPersonnel 98 Investments 96 SampoLifeInsurance 92 ForeignReinsuranceRun-Off 86 MajorAccountsServices 84 CorporateClientServices 80 PrivateClientServices 78 76 The SampoGroup 6Analyses 36 SampoGroupKeyFigures 34 CalculationMethodsfortheKeyFigures 32 AccountingPrinciples 27 Notes totheAccounts Cover originatefromreport thisbook. collection. Theillustrationsinthisannual exhibiting thecompany’s extensiveart the GoldenAgetoPresentDay” entitled “ArsAssicurata-SampoArt from jubilees, Sampohaspublishedanart book 90th anniversary. To celebratethese Company, thisyearwillbethecompany’s insurance ingeneral.ForSampoInsurance Company and,withit,Finnishlife ofKalevaMutualInsurance anniversary The year1999marksthe125th looking andprotecting journey. ourearthly colour scaleandthedivineeyeover- of iconpainting:theexpressively effective stimuli behindthisworkonefindsfeatures as theartist himselfputsit.Amongthe face offierceinternationalcompetition”, will webeabletokeepourplaceinthe as Finns,notbyimitatingothers.Onlythus lore. “We havetoachieveself-fulfilment matter regularlyspringsfromFinnishfolk- a circle,squareandanoval.Thesubject the basicform ofhisworksbycombining oftencreates Finnish glasssculpture, very Timo Sarpaneva,agreatmasterofthe 1926– Sarpaneva, Timo Fiercy glance, 1998 glance, Fiercy 1 SAMPO ANNUAL REPORT 1998 2 SAMPO ANNUAL REPORT 1998 posal. Aproposal tomakeSampo Ltda share, inaccordance withtheBoard pro- on adividendofFIM3tobepaid oneach the Board ofDirectors. decided The AGM Sampo Group by asproposed andKaleva, to beoffered topermanentpersonnelat Sampo’s AnnualGeneralMeeting approved thebondwithwarrantsthatwas • result. but thatdiscussionshadendedwithout Sampo announcedithadinvestigated co-operation possibilitieswithPVGroup, • toUnsarights pertaining shares. pany’s administrationandpre-emptive ment on,amongotherthings,thecom- Kaleva -concludedashareholderagree- Unsa Ltdshareholders -Pension- Varma, Sampo,Industrial Insurance,and • shares (Sampo “A”) exceeded 15percent. Unsa Ltdannounceditsholdingof Sampo Insurance Companyplcvoting • of intoxicants. Safety Award peopleandtheuse wasyoung cellent results. The themeofthe1998 trol over life,andachieved theirown ex- focused onimproving young people’s con- southern Finland, whichhasforyears Yöjalka ry, anassociationfrom Vihti in TheFIM100,000Sampo Safety Award wasconferred onNuorisopalvelu • (Outokumpu Oyj)itsnew Chairman. ThemeetingofSampo Supervisory Board appointedMr. Jyrki Juusela • April from 10.26to0.07percent. plc voting (Sampo shares “A”) hadfallen Merita Plc announcedMerita Group holdings ofSampo Insurance Company • per sharedoubledtoFIM8.32. creased toFIM921millionandearnings Sampo publisheditsaccountsfor 1997. Sampo operatingprofitin- Group • March car seatstotheLeague. Management Ltd,donated4,500Caresam for Child Welfare. Sampo subsidiary, Risk operation withtheMannerheim League dren itsthemefortheyear andinitiatedco- Sampo madethepromotion ofsafety for young peopleandfamilieswithchil- • February SAMPO HIGHLIGHTS1998 network of medium-sized companies network ofmedium-sized annual award willgotoasuccessfulexport Finnish Foreign Trade Association. The of FIM50,000inco-operation withthe Sampo Sampo Enterprise, Life and Varma-Sampo Award establishedaSampo • and Sampo clients fortheeuro Y2K. focusingonthepreparednessareas of making suggestionsbothingeneraland “Tuuma of 98”emphasised theimportance staffsug- Acompetitiontopromote gestions kickedoffonSeptember 1st. • September medium-sized companies. Sampo Momentwasintroduced asa concept aimedatsmalland new service • 668 million). -Juneary rose toFIM850million(FIM Sampo publisheditsInterim Report Operatingfor thefirsthalf. forJanu- profit • August became Varma-Sampo. transferred toSampo Pension, which Pension-Varma’s was insuranceportfolio tural reorganisation,some70percentof a result ofthepensioncompanies’ struc- Varma-Sampo Mutual Pension Insur- ance Companycommencedoperations.As • July Ltd. ofFinnish LossSurveyusing theservices losses itselffrom thestartof1999,andstop Sampo announceditwouldhandle onmotorvehicleandboat loss surveys • June Sampo arrangedaphysicalexercise theme dayforitsentire personnel. • oneinfour.quently reduced around by oversubscribed. Subscriptions wereconse- to Thebondwithwarrantsoffered Sampo Group andKalevapersonnelwas • May AAS subsidiary Sampo Enterprise Sampo Latvijacommencedoperations. • Company plc. pany’s namewillbeSampo new Insurance 1st, 1998wasalsoaccepted. The com- public limitedinsurancecompanyonJuly Ltd, is a Sampo subsidiary.Ltd, isaSampo company, SampoLifeInsurance Company Company LtdonDecember31st. The new LifeInsurance CompanyLtd Sampo was mergedintoNova LifeInsurance • management companyinPoland. tookthedecisiontoestablish Sampo a non-lifeinsurancecompanyandrisk • December companies atthebeginningof1999. these through fund offeringstothemarket itsfirstmutual nounced itwillintroduce Fund an- Ltd.Sampo Management Sampo AssetManagement LtdandSampo ment Oy. The companieswere renamed Baltic BeltRahastoyhtiö Fund Manage- Finance Sampo LtdboughtPCA AssetManagementOyand Hansa • Fund ForWide Nature. WWF-Worldish divisionoftheglobal Sampo’s Lauttasaarioperationswere asaGreenrecognised Office bytheFinn- • November shares. voting has a22percentholdingofSampo“A” Unsa’s shareVarma-Sampo capital. Group 100percentof so thatitwouldthenown Sampoowned Insurance, by andIndustrial Varma-Sampo announceditsredemp- tion of44.8percenttheUnsa shares • Supervisory Board re-elected Sampo JuuselaJyrki asChairman. • marine andcargoinsurances. Major Services Sampo Accounts opened anofficeinHamburg, focusingon • operations. (State GuaranteeBoard), commenced SampoGrouprung, andtheFinnish State Finnish CreditInsurance Company Ltd, foundedbyHermes Kreditversiche- • October Sampo’s representative officeinMos- cow openedforbusiness. • bonus. starting introduced motor avoluntary Sampo insurance forusedcarsanda50percent • network activities. Association export inFinnish Foreigntaking part Trade SAMPO GROUPKEYINFORMATION Conversion coefficient:EUR1=FIM 5.94573 3.7 72.7 34.1 1.40 3,176 8.32 36.1 49.2 24.48 145.54 25.1 2.42 155 1,682 63.3 3,292 14.37 32.83 10,004 921 195.22 12.6 1,320 7,848 3,525 2,509 20,961 14,921 973 211 Average numberofpersonnel 1,651 5,784 5,758 1,254 9,815 34,235 Net assetvalue pershare Earnings pershare 1,096 6,516 Solvency capital,mill. Total onbalancesheet,mill. Operating profit, mill. Gross premiums written,mill. Turnover, mill. written, FIMm Turnover andgrosspremiums 49 69 98 97 96 95 94 Gross premiumswritten Turnover 0 2000 4000 6000 8000 10000 9819 971997 1997 1998 1998 I U I U Change% EUR FIM EUR FIM 49 69 98 97 96 95 94 FIM Net assetvalue/share, period Closing priceatendof Net assetvalue/share 0 40 80 200 120 160 3 SAMPO ANNUAL REPORT 1998 4 SAMPO ANNUAL REPORT 1998 FIM 34 billion in two years. Indeed,FIM 34billionintwoyears. thelastphaseof the Group hasmeantthebalancesheettotaldoublingto Lifewerenies andSampo abletoincrease share. market tition, boththeSampoGroup non-lifeinsurancecompa- non-life insuranceand,despite increasingly tightcompe- remainedenvironment almostconstantinbothlifeand overall Sampoperformance for1998. The operating market,butthesedidnotreally impact the investment somesignificantdisturbances,particularlyin also brought forthefourthtimerunning. on theprevious year The year was alsovisibleinSampo’s performance,whichimproved T CHIEF EXECUTIVEOFFICER’SREVIEW The introduction oflifeinsurance businessintoSampo The introduction developmentThis favourable inthenational economy in somesectorsattheendofyear. in 1998,thoughtheeconomicoutlookweakened he Finnish economycontinueditsstrong growth strengthened FIM 462million.Accelerated by depreci- million andnon-lifeinsurance technical provisions were future. improved even asa solidbasewasbeingcreatedforthe be regarded financial year. asanexceptional The result per centtoFIM14.37. hadwhatcaninfact The Group FIM 1,254million,whileearningspershare improved 73 Sampo Group by36percentto operating profit increased Operating profitexceedsonebillion solvency andsteadyperformancedevelopment. impacts ofthereorganisation are reflectedinstrong well operations attheendofreview year. Thepositive mented whenthenew Sampo Lifeofficiallycommenced structural reorganisation, initiatedin1992,wasimple- Non-recurring entriesweakened theresult byFIM320 Helsinki, whichisvisibleonthehorizon. created bythelivelywavesandshipsheadingfor of realityasseeninthispainting,suchisthefascination not easilybecometiredoftheminutelyreproducedimage the MediterraneantoGulfofFinland.Theeyedoes fjords totheboulevardsofParisandfromwaters Norwegian and townscapes.Hismotifsrangedfrom favour ofarealisticapproach,specialisedinseascapes Oscar Kleineh,whogaveuphisinitialromanticstylein Kleineh,1846–1919 Oscar Harmaja Lighthouse, 1881 Lighthouse, Harmaja shares anattractive alternative.shares This wouldalsobeinthe Stateconcrete deedsby in authoritiestomakeinvesting inshares. life insurancecompaniestoinvest thatwillweaken e.g.thepotentialforFinnishmeasures institutions are preparing addition, someadministrative scared offbyariseindividendtaxorcapitalgainstax.In ments inshares.Under nocircumstances shouldtheybe fer theirsavingsfromlow-yieldbankaccountstoinvest- ment’s plans. govern- tators andpoliticiansdeeplycontradictthenew households. private Yet concernedspeeches bycommen- forownership:capital available insurancecompaniesand here,inadditiontotheState,basically twogroups with financialcorporationmanagedlocally.strong There are ownership.foreign Ibelieve Finland needsatleastone thattheentire financialsectorbedriventhe country into of influence.Itisclearthatitnotinthebestinterest issue inFinland,duetoreal concerns aboutpotentialloss isinfactlivelyThere debateinprogress ontheownership A contradictorydebate share sufficientliquidity.which guaranteestheSampo Finnish owners andabroad internationalownership, foracompanysuchasSampotive advantage tohave solid Finnishequally between and overseas owners. It’s aposi- to beoneofourcoregoals. andmaintainingsolidliquiditycontinues out. Achieving even factoredpicked up, whentheseoccasionalpeaksare oftradingclearly largerthanusualandthevolume were was Sampo’s up9percent. strengthened duringtheyear,Exchange andoneofthese onethird ofthesharesOnly listedontheHelsinki Stock thoughthegeneralindexroseby1998, even 70percent. Exchange demonstratedhighlyincoherent development in Sharesciably attheyear-end. quotedontheHelsinki Stock butrecoveringthat hitinternationalstockmarkets appre- during theyear, turningdown sharplyintheturbulence shareThe Sampo priceexperiencedexceptional fluctuation Optimal ownershipbase combined ratiowillreach103percentby 2002. ceed inaccordancewiththestrategicgoalandIbelieve our losses duringthereview year. We shallcontinueto pro- ratio. was,afterall,anexceptionalThere numberoflarge improve considerablyin1999,mainlythrough abetterloss life insurancetemporarily, butIexpectthisratioto intheyearspotential forstrongperformance tocome. technicalprovisionsations andreinforced advanceGroup Finns donotneedfinewords aboutownership, but shouldbemadeattractiveIt forhouseholdstotrans- sharesHoldings are inSampo nowdistributedalmost one-timetransactionsinSampoIndividual shares alsoraisedthecombinedratioofnon- These measures March 1999 interests ofclientsandshareholders alike. their contributiontoitby inthebest genuinelyworking appreciate Sampo successandwanttocontinue Group entire year. personnelduring thereview Ifeelsure staff listed companiestoissueabondwithwarrantsits ingly competitivemarket. few wasoneofthevery Sampo ity andwillingnesstofightforourcompanyinanincreas- oped solelyforInternet distribution. - Sampo releasedourfirstproduct Lifehasalready devel- We are inourdistributionnetwork alsoraisingversatility invest Sampo inthesefundsbothdirectly andthrough Life. funds are beinglaunched,andourclientswillbeableto market. AssetManagement Sampo and mutual Services Financial offeringstothe Services new willintroduce in 1999. work more closelywiththeentire claimssettlementchain vitalised motorvehicle inspectionoperationstartingto and operationsmore Agoodexampleisthere- effective. Sampo non-life sector, tomakeGroup structure more solid Sampo LifeandNova. structure thatunites ance operationsfunctionintheirnew started stronglyin1999. lifeinsur- This isthefirstyear the operatingenvironment andthe Group has aswell, reorganisations havestructural usforchangesin prepared is expectedtocontinueshow moderategrowth. Sampo now somewhatweakerthaninprevious butGDP years, The economicoutlookforthenearfutureinFinland is Solid foundationsonwhichtobuild Jouko K.Leskinen in domesticcapitalalone. could nothave dreamed value ofaFIM800billionmarket ful withoutthatcapital,andtheHelsinki Exchange Stock Recovery from beenfarmore recessionwouldhave pain- been fundamentallysignificanttoFinland inthe1990’s. sector, doesnotignore thefactthatforeign capitalhas areas ofthedomesticeconomy, suchasinthefinancial tax income. clearly demonstratedthatreasonable capitaltaxationgrows interest ofthenationaleconomy-lastfew years have I have completeconfidenceinourpersonnel’s capac- In Sampo additiontolifeinsuranceproducts, reorganisationsThere willalsobestructural insidethe An emphasisonFinnish ownership insomecrucial 5 SAMPO ANNUAL REPORT 1998 6 SAMPO ANNUAL REPORT 1998 Sampo Group companies,37.7percentby Company Limited,owned 57.5 percentby company isSampoof thenew LifeInsurance ited mergedonDecember 31st,1998. The name undertaking Nova LifeInsurance Company Lim- year. seven real estate companiesduringthefinancial Limited. Sampo Group acquired oneandsold ownership withNova LifeInsurance Company 1998 year-end, 37ofwhichcameunderGroup cluded atotalof92real estatecompaniesatthe ings are listedinNotes totheAccounts. These in- Insurance CompanyplconJuly 1st,1998. Meeting, the companynamechangedtoSampo According tothedecisionofAnnualGeneral CHANGES INGROUPSTRUCTURE million, includedintoSampo’s netassetvalue. based onownership is57.5 percent,orFIM346 Sampo Group’s share ofvaluationdifferences dition tocapitalandreserves ofFIM864million. at 25percentorFIM602million. This isinad- differences ofFIM2,408millionwascalculated year, Sampo Life’s ownership share ofvaluation tus intheDecember 31st financial statementslast in Sampo lifeinsurance.Based onitssolvency sta- on theinterpretation ofthePrinciple ofFairness Sampo LifeBoard ofDirectors madeadecision or EUR32.83(FIM145.5424.48). The million). and lifeinsuranceFIM3,180million(FIM636 buting FIM11,740million(FIM9,368million) (FIM 10,004million),non-lifeinsurancecontri- Solvency capitalincreasedtoFIM14,921million ation differences strengthened Group solvency. formance potentialintheyearstocome. nical provision adjustmentsimprove positive per- 462 million. The non-recurring entriesandtech- life technicalprovisions werestrengthened byFIM fore taxby atotalofFIM320millionandnon- Major non-recurringentriesweakenedprofit be- 14.37 orEUR2.42(FIM8.321.4). 126 million).Earningspershare improved toFIM lion) andlifeinsuranceforFIM203million(FIM accounting forFIM1,050million(FIM795mil- (FIM 921millionin1997),non-lifeinsurance Operating profit increased toFIM1,254million profit development duringthefinancialyear. Sampo Group continueditssolid andfavourable BOARD OFDIRECTORS’REPORT 1998 SAMPO INSURANCECOMPANY PLC Sampo subsidiary Sampo Lifeandassociated Sampo subsidiary Group subsidiariesandassociatedundertak- Net asset valuepersharerose toFIM195.22 The improved profitandtheincreased valu- ae 26–6 4 –28 –1 –46 –1 –169 28 –5 –276 –32 0 –4 –39 166 111 –191 0 166 –234 662 988 Minority interest Taxes Profit before untaxed reserves andtax charges Extraordinary income Extraordinary LIFE INSURANCE NON-LIFE INSURANCE 1 GroupAnalysisofResult ru rftfrtefnnilya 0 8 1 82 Conversion coefficient: EUR1=FIM5.94573 119 487 708 ON NON-LIFEINSURANCEBUSINESS IMPACT OFCURRENCY EXCHANGERATES Group profit forthefinancialyear oa mat–22 74 –7 25 –42 Total impact prtn rft23163 21 –14 0 –23 34 6 0 0 –85 21 126 12 0 –135 203 34 0 –16 38 –29 54 –3 126 –17 3 –45 69 71 1 201 –96 reservesordinary andtax items,untaxed –174 –177 Life insuranceprofitbeforeextra- 321 –267 –103 –200 Bonuses andrebates 189 Change intheequalisationprovision 422 Operating profit –1,051 226 –1,192 Other incomeandcharges the equalisationprovision 1,127 and rebates andthechangein Technical 1,341 result before bonuses 134 Net operatingexpenses in theequalisationprovision 177 bonuses andrebatesthechange 0 before Change intechnicalprovisions 109 –10 795 Claims paid –24 0 on investments 194 –13 1,050 and unrealisedgainslosses 20 17 Investment incomeandcharges, 215 650 676 Premiums written –59 –635 –132 –1 –8 –145 305 –714 1,153 –152 759 –77 –91 102 0 reservesordinary andtax items,untaxed 121 –3,776 –783 Non-life beforeextra- insuranceprofit 1,275 4,017 –108 –4,248 Unrealised gainsandlossesoninvestments –49 –906 1,816 4,514 Change intheequalisationprovision –542 Operating profit Share ofassociated undertakings’profit –639 Other incomeandcharges Investment incomeandcharges the changeinequalisationprovision Balance ontechnicalaccountbefore Net operatingexpenses Claims incurred Premiums earned oa mato eut3 3 –5 5 10 33 –12 –39 –32 –8 13 57 31 –73 198 –229 80 –49 Change invaluationdifferences Total impactonresult Investment incomeandcharges Balance ontechnicalaccount FMmlin EURmillions FIMmillions 9819 981997 1998 1997 1998 through associatedundertakings’ profitshare. but Nova affectstheconsolidatedprofit only solidated balancesheetofDecember 31st,1998, transfer. unexpired riskswascalculatedonthedayof prise-Fennia. Aprovision ofFIM1.2billionfor Insurance CompanyLtd,establishedbyEnter- toFenniaas apartoftheinsuranceportfolio Life in Nova were conveyedonDecember 31st,1998 Fennia Mutual Insurance Companywhichwere Sampo Life. FIM 87millionwaswrittentothenewlymerged was placedinthepremium fund.Goodwill of tal ofNova, andtheexcess ofFIM278million 20 millionofwhichwasentered intheshare capi- merger considerationwasFIM298million, equal tothethenvalue ofthoseshares. The ing shares inSampo Life,Nova share capitalrose rights issue.Since themergermeantNova acquir- ing itsshare capitalthrough aFIM20million consideration toSampo Lifeshareholders byrais- tween Nova andSampo Life,Nova paidamerger of 1999. cent. This changewilltakeplaceatthebeginning and thatof Varma-Sampo decrease to35.2per Sampo Group holdingincrease to60percent ance Company. It hasbeenagreed thatthe pany and4.8percentby KalevaMutual Insur- Varma-Sampo Mutual Pension Insurance Com- Solvency capital Minority interest Equalisation provision Solvency margin Other items Deferred tax Intangible assets Valuation differencesoninvestments profit distribution Capital andreservesafterproposed 2 GroupSolvency Nova figuresare includedinSampo’s con- The policiesoftheclientsEnterprise- According tothetermsofmergerbe- I ilosFMmlin I ilosFMmlin U ilosEURmillions EURmillions FIMmillions FIMmillions FIMmillions FIM millions o-ieLf ru ru ru Group Group Group Group Life Non-Life 1703101,2 0042591,682 2,509 1,431 10,004 2,212 14,921 8,507 3,180 13,154 11,740 3,104 10,050 ,3 313914129242 229 643 1,441 890 1,359 709 1,585 23 5,289 3,821 9,423 1,336 4,217 2,408 814 7,015 3,402 35–1–6 60–8–109 –78 –650 –465 –81 –385 9819 9819 981997 1998 1997 1998 1998 1998 5 3485 99 0 69 55 –13 0 408 53 –79 355 –54 –25 2001. 1999,fortheterm running totheendof ary a newmemberoftheBoard ofDirectors inJanu- Sampo Mutual Pension Insurance Company, as Paavo Pitkänen, Managing Director of Varma- ended onDecember 31st,1998. Board Member Thor BjörnLundqvist’s term Björn LundqvistandMr. Christoffer Taxell. Mr. AriHeiniö, Mr. Jouko K.Leskinen,Mr. Thor Chairman), andmembersMr. Georg Ehrnrooth, Härmälä (Chairman),Mr. KariO.Sohlberg (Vice der review wascomposedas follows: Mr. Jukka The Sampo Board ofDirectors fortheyear un- SAMPO BOARDOFDIRECTORS 21 84 08 10 48 58 16 42 establishing asubsidiary, AASSampo Latvija. ited hasexpandeditsoperationsinLatviaby ness inthecompany. trated theirFinnish clientcredit insurancebusi- October 1st,1998. have concen- The partners and reserves. Operationsbeganinearneston company, holdingFIM10millionof itscapital 1998. Sampo Group owns onethird ofthenew Sampo Group associatedcompanyonJuly 2nd, State, officiallycommencedoperationsasa Insurance CompanyofFinland, andtheFinnish Kreditversicherungs-AG (AllianzGroup), the a jointventure betweencreditinsurers Hermes Sampo Board Supervisory appointedMr. Sampo Enterprise Insurance CompanyLim- The Finnish Credit Insurance CompanyLtd, Group solvencycapital,FIMm 96 Intangible assets+otheritems minority interest Capital andreserves+ Valuation differences Equalisation provision Solvency capital 798 97 -1000 0 2000 4000 6000 8000 10000 12000 14000 16000 -1000 0 2000 4000 6000 8000 10000 12000 14000 16000 -1000 0 2000 4000 6000 8000 10000 12000 14000 16000 7 SAMPO ANNUAL REPORT 1998 8 SAMPO ANNUAL REPORT 1998 Total Reinsurance Direct insuranceintotal (FIM –36million). adjustments oftechnicalprovisionsonmotorthirdpartyliabilityinsurancewasFIM–90million compensation insurancewasFIM–138millionin1998(FIM–84million).Theimpactof *) Thenetimpactofnon-recurringadjustmentspremiumsandtechnicalprovisionsonworkers 5 4 3 2 1 Direct insurance FIM millions 1=Grosspremiumswrittenbeforecreditlossandreinsurers’share Columns: 3 Non-LifeInsuranceBalanceonTechnicalAccountbyGroupofClass Other direct insurance Fire andotherdamagetoproperty Motor, otherclasses Motor thirdpartyliability Statutory workers compensation 97468407–,7 73–4 113.5 38.4 114.2 254.1 –542 104 –639 –279 –783 –906 –68 –78 –3,776 –4,248 4,017 95.9 106.9 3 –382 4,514 117.1 4,648 32 –263 181 5,177 –744 169 –704 –152 274 –838 1997 –3,394 256 1998 –591 –4,250 3,835 4,344 775 4,373 1997 4,921 1998 999 1997 1998 1997 9810982–3 13–5107.7 100.3 –65 99.4 –3 119.2 –183 100.2 3 –193 –734 –242 –1 141.3 –305 852 –756 –124 145.6 –136 –238 –894 106.1 996 –417 –302 1,099 –443 –119 –57 1,006 544 –133 1,248 114.6 577 –697 1,270 –67 1998 –834 561 –182 577 591 1997 664 –933 –82 1998 618 943 710 1997 –1,346 1998 1,246 948 1997 1,251 1998 1997 1998 6 =Combinedratio,% 5 =Balanceontechnicalaccountbeforethechangeinequalisationprovision 4 =Operatingexpenses 3 =Claimsincurred(incl.thechangeincollectiveguaranteeitem) 2 =Premiumsearned 96 fixed currencyexchangerates Calculated atchangingand Combined ratio,% 69 898* 98 97 96 Loss ratio Expense ratio 798 97 0 20 40 60 80 100 120 fixed rates. changing rates,therightat The left-handcolumnat changesinexchangerates. * Excl.non-recurringitemsand *) 6 compensation eachinexcess ofFIM10million high. SampoGroup received nineteenclaimsfor 229 million. whereas currencyfluctuationsin1997addedFIM million duetotheFinnmark’s increased strength, in previous years. Claimsincurredfellby FIM80 pacted lessonthetechnicalaccountbalancethan next 30years. estimated tocover compensationspayableforthe bestos provisions nowstandatFIM379million, decreased by acorresponding amount. Total as- asbestos exposure. The equalisationprovision was million foroccupationalillnessesresultingfrom tion insurancewere strengthenedby FIM205 by decreasing theequalisation provision. This changewasfinancedwithtariffincreases and outstanding claimsincreased byFIM257million. As aconsequence,Sampo Group provision for were lowered lines. tofourpercentinstatutory nical provisions, asusedintheinsurancebusiness, a lower level, thediscountingpercentagesontech- accounted forbySampo Industrial Insurance. to FIM387million(FIM369million),mainly eign directinsurancepremiums writtenamounted increased slightlyto35.1percent(34.9%).For- information,Grouppreliminary marketshare workers compensationinsurance.According to a 6.1percentriseexcluding aseparatechargefor increased by13.2percenttoFIM4,534million, million (FIM274million). ance premiums writtenamountedtoFIM256 tariff adjustmentof10percent.Non-life reinsur- thanks tothebrisktradeincarsandanaverage liabilityinsurancegrewthird party significantly Affairs andHealth. Premiums writteninmotor ofSocialbusiness andconfirmedbytheMinistry complied withthetermsappliedtoinsurance ing oftheprovision foroutstandingclaims,and lion. The tariffincrease allowed forastrengthen- of anon-recurring tariffincreaseofFIM287mil- nificant increase inpremiums written, asaresult ers compensationinsuranceshowed themostsig- FIM 4,921million(FIM4,373million). Work- lion), ofwhichdirect insuranceaccountedfor increased toFIM5,177million(FIM4,648mil- Gross premiums writtenby non-lifeinsurance NON-LIFE INSURANCE The numberoflargelosseswasexceptionally Currency exchange ratefluctuationsim- Technical provisions inworkerscompensa- As generalFinnish interestratesstabilisedat Domestic direct insurancepremiums written at thebeginningof1999. muted duringtheyear andthistrend continued lion calculatedatfixed rates. provision wasFIM50million, orFIM-11mil- nical accountbefore thechangeinequalisation crued byFIM85million. The balanceontech- The companies’ totalequalisationprovision ac- to standatFIM1,227milliontheyear-end. equalisation provision fellbyFIM331million cial year. Gross technicalprovisions withoutthe wood madesignificantprogress during thefinan- subsidiaries Patria, STInternational andLake- and currency exchange ratefluctuations. cent (104.8%)excluding non-recurring items ratio was114.2percent(113.5%),and110.9 percentage points. million andweakened theexpenseratioby0.5 systems increased operatingexpensesby FIM23 Non-recurring depreciations onoldinformation preparations fortheintroduction oftheeuro. programme, ITwork to Y2K, and pertaining largely duetoinvestments intheSampo 2000 (19.5%). The increase inoperatingexpenseswas and theexpenseratioweakened to20.1percent creased toFIM 906million(FIM783million) insurance lossratioimproved significantly. due toanumberoflargelosses. The activere- fire andotherproperty insurance,inparticular mained practicallyunchanged,butweakened for surance. Landvehicle insuranceprofitability re- cent (114.5%)formotorthird liabilityin- party sation was96.1percent(90.1%),and112.1 adjustments, thelossratioforworkers compen- of bothgroupsinsuranceclass.Excluding these sions hadanegative impactontheprofitability non-recurring adjustmentstotechnicalprovi- cent (120.7%).For thesecondyear inarow, motor third liabilityinsuranceto125.6per party ratio weakened to108.0percent(99.0%)and itability offoreign directinsuranceweakened. place inFinland andnineoverseas, andtheprof- Group’s own account. Ten ofthelargelossestook million oftheselargelossesremained onthe as opposedtoninesuchcasesin1997.FIM195 Several significantagreements were com- ofoldreinsuranceThe run-off portfoliosfor The non-lifeinsuranceaggregate combined Non-life insuranceoperatingexpensesin- The workerscompensationinsuranceloss January 1st,1999is3.5percent. Guaranteed interest fornewpoliciessoldafter ings, anaverage 1.9percentbonuswaspaidout. interest paidonlifeandpensioninsurancesav- ratio was175.9percent(195.1%). FIM 103million(FIM96million). The expense Life insuranceoperatingexpensesrose slightlyto surrenders ofFIM94million(FIM34million). FIM 340million(FIM234million),including Company. cluding businessfromKaleva Mutual Insurance market share stoodat23.4percent(24.9%),in- was 18.0percent(17.8%).Sampo’s lifeinsurance post-merger marketshare ofthenewSampoLife share increasedto10.3per cent(10.0%). The to preliminary information,SampoLife’s market cent andlifereinsurance 4percent.According counting for41percent,lifeinsurance55 lion (FIM1,136million),pensioninsuranceac- Gross premiums writtenrosetoFIM1,339mil- out byprivate personsremainedunchanged. ance. Total premiums writtenforinsurancetaken tal redemption policiesandgroup pensioninsur- thanks inparticulartoincreased demandforcapi- rate sectorpremiumswrittenrose by50percent, growth stoodat15percentbytheend.Corpo- est developmentatthestartofyear, annual an unprecedented FIM13billion.Despite mod- raised totalpremiums writtenduringtheyearto insurances decreased.Brisk salesinDecember crease, whereasthosewrittenintraditionallife insurance inparticularshowed apronounced individual pensioninsuranceandunit-linkedlife incoherent; premiumswritteninthefieldsofin- Development inthelifeinsurancemarketwas LIFE INSURANCE In additiontothe4.5per centguaranteed Sampo Lifeclaimsincurredamountedto This trend couldalsobeseeninSampo Life. 2 (Total FIM1,339m) premiums written,% Distribution ofSampoLife’s 5 4 3 1 4 (Total FIM4,921m) insurance premiumswritten,% Distribution ofdirectnon-life 3 2 1 2 opnain25 26 compensation Statutory workers to property te ietnnlf 22 12 Other directnon-life Motor, otherclasses 15 Motor thirdpartyliability Fire andotherdamage enuac 4 55 41 Reinsurance Pension insurance Life insurance 3 5 3 1 2 1 9 SAMPO ANNUAL REPORT 1998 10 SAMPO ANNUAL REPORT 1998 netetcags–3 21–,9 –504 2 –1,096 –261 14 –836 14 0 Unrealised gainsandlossesoninvestments 2,097 Investment charges 3,320 669 2,652 Investment income E NETETICM ,1 2 ,3 1,595 2,238 422 1,816 NET INVESTMENTINCOME 1997 1998 1998 1998 FIM millions 4 GroupInvestmentIncomeandCharges te hre 4 6 14–29 –104 –55 –94 –63 –153 –32 –156 –109 –41 –500 –38 –14 –40 –4 –26 –128 34 –118 –95 –5 –372 –33 –54 31 –35 0 84 230 0 –111 0 101 Other charges –101 20 –32 –54 Exchange ratelosses 316 –12 Value adjustments 489 31 31 Losses onrealisationofinvestments 13 419 on buildings –89 502 Depreciation accordingtoplan 70 262 7 on investments 53 147 Operating expensesanddepreciation 681 270 Charges forlandandbuildings 366 Interest expenses 355 1,979 60 366 Other income 210 Exchange rategains 1,614 Value readjustments Gains onrealisationofinvestments Income fromlandandbuildings Dividend income Interest income o-ieLf ru Group Group Life Non-life (at currentvaluesFIM39.6billion) The Group’sinvestmentportfolio,% Share offoreigninvestments21% 6 5 4 3 2 1 3 2 on 4 1 30 44 Unit-linked +other 13 Loans 7 Money-market instruments Land andbuildings Bonds Shares 4 5 6 1 Helsinki, and reorganisations ofDividum Oy investments intheSinebrychoff buildingsin most significantofwhichincludedcontinued continuedinseveralestate portfolio projects,the the year-end. The developmentofSampo’s real vestments decreasedto13.0percent(20.7%)at 42.7 percent. The proportion ofrealestatein- lion. Interest-bearing accountedfor instruments investment atamarket valueofFIM4,643mil- Holdings inNokia constitutedthelargestsingle FIM 8.2billionoftheinvestment portfolio. Foreign holdingsaccountedfor21percentor market value ofinvestments byFIM12.2billion. billion. Nova’s intotheGroup entry raisedthe FIM 21.3billion,andthelifegroup18.3 ber 31st,1998,non-lifeinsuranceaccountingfor FIM 39.6billion(FIM22.9billion)onDecem- ment result. in exchange ratelosseswasentered intheinvest- impact thaninprevious years.FIM55millionnet land andbuildingscontributingFIM86million. sales stoodatFIM205million. trading inNokia shares. Gainsfrom real estate amounted toFIM1,979million,largelyfrom 316 million)includingtheavoir fiscaltaxcredit. mance andamountedtoFIM419million(FIM thanks tolistedcompanies’ improved perfor- cent takingnormalturnover intoaccount. rate ofrented residential premises was100per per cent(5.2%)attheyear-end. The occupancy cant premises continuedtofall,aslow as3.7 in Sampo Group asawhole. The numberofva- (8.4%) inthelifegroup, and6.8percent(6.3%) per cent(6.0%)inthenon-lifegroup, 8.1percent stoodat6.7 portfolio of thecompletedproperty stood atFIM162million. The potentialnetyield million andnetincomefrom landandbuildings 321 million).Net interest incomewasFIM469 Sampo Lifesub-group forFIM422million(FIM 1,816 million(FIM1,274million)andthe non-life insurancegrouping accountingforFIM to FIM2,238million(FIM1,595million),the Sampo Group netinvestmentincomeincreased INVESTMENTS Shares madeup44.3%ofinvestments. The current value ofinvestments stoodat Exchange ratefluctuationshadasmaller Value adjustmentstotalledFIM500million, Net gainsoninvestment realisations Dividend incomecontinuedtoincrease ucts. go viaSampo Life’s unit-linkedinsuranceprod- will beabletoinvest directly inSampo fundsor these companiesduringSpring, 1999.Clients mutual fundofferingstothemarket through Management Ltd.Sampo isintroducing itsfirst Sampo AssetManagement LtdandSampo Fund Management Oy. The companieswererenamed ment OyandRahastoyhtiö Baltic BeltFund nance LtdboughtPCAHansa AssetManage- belong toSampo Group. group valuationdifferences are considered to principle offairness,FIM346millionlife million) inthelifegroup. In accordance withthe insurances, andtoFIM2,408million(FIM443 7,015 million(FIM4,846million)innon-life and bookvalues ofinvestmentsincreased toFIM the managementofsuch. quence ofthereorganisation andnow focuseson its officepremises forhotelpremisesasaconse- (Kansalliset LiikekiinteistötOy).Dividum traded million. Group’s share ofNova Group profits wasFIM15 to FIM1,127million(FIM999million).Sampo written. Nova’s netinvestmentincomeincreased million (FIM1,081million)ofgross premiums million) onthefinancialyear, fromFIM1,155 showed aprofitof FIM43million(FIM132 from officeholdingstohotelpremises. an assettransferresulting fromDividum’s change ing theDividum reorganisation. This wasdueto lion from KansallisetLiikekiinteistötOyfollow- tire share capitalasaresult. 11th, 1999. Varma-Sampo now holdsUnsa’s en- to Varma-Sampo inatransactiononJanuary Unsa’s shareswere transferred from Sampo Group agreement signedwithUnsa onApril 16th,1998. its calloption,inaccordance withtheshareholder On October 28th,1998, Varma-Sampo deployed UNDERTAKINGS PERFORMANCE OFASSOCIATED Associated Group Sampo undertaking Fi- The valuationdifference between current Nova LifeInsurance CompanyLimited Sampo Group entered alossofFIM54mil- OKVLEI OA 5883,996 15,888 443 2,408 4,439 BOOK VALUEINTOTAL 18,296 VALUATION DIFFERENCESINTOTAL 13,630 Valuation differences CURRENT VALUEINTOTAL 14,247 4,846 7,015 LIFE INSURANCE 18,475 BOOK VALUEINTOTAL 21,262 VALUATION DIFFERENCESINTOTAL Dec.31,1997 Dec.31,1998 Valuation differences CURRENT VALUEINTOTAL NON-LIFE INSURANCE FIM millions 5 GroupInvestments od 6 109 290 0 760 44 1,590 2 19 56 1,360 952 444 1,669 202 8,327 5,515 1,110 697 794 48 171 Other debtsecurities 1,501 4,091 10 Bonds Shares 97 200 Land andbuildings 6,375 573 668 0 Investments pertainingtounit-linkedpolicies Other investments 790 3,073 440 Loans 529 Other debtsecurities 9,373 Bonds 532 3,656 Shares 885 Land andbuildings 12,012 4,039 548 3,632 Other debtsecurities Bonds Shares Land andbuildings Other investments Loans Other debtsecurities Bonds Shares Land andbuildings 11 SAMPO ANNUAL REPORT 1998 12 SAMPO ANNUAL REPORT 1998 obndrto 3. – 122 3,252 18 5 – 412 16,610 –340 15,450 36 –105 174 15 77 – 3 56 30 –2 Life*) –2 –1 209 14 1,031 1,282 – – 630 43 32 –4 291 16 620 – 73 8 429 19 33 134.5 –3 288 –4 22 602 – – 215 43 –99 28 234 2 1,271 67 –39 21 –8 International 124.6 11 – – Industrial – 5,523 965 385 2 *) Thefiguresofthetechnicalprovisions,BalanceSheet,andsolvencycapitalarenewSampoLife. – 118.9 630 196 126 Average numberofpersonnel 1,452 –45 4,700 –98 592 345 109.1 106 3,286 739 Solvency capital 11,273 ofFinland 31 489 Combined ratio,% 3,410 –172 Total onBalanceSheet –1,263 1,972 117.9 Technical provisions,net 2,610 302 373 Profit/loss forthefinancialyear 8,002 143 –1,303 –188 Net investmentincome 136 Net operatingexpenses 3,935 Claims incurred 31 –1,543 1,016 Reinsurance premiumswritten Insurance –473 337 Direct insurancepremiumswritten 1,208 Enterprise FIM millions 5 1,425 (parentcompany) Average numberofpersonnel 1,757 Solvency capital Combined ratio,% Total onBalanceSheet Technical provisions,net Profit/loss forthefinancialyear Net investmentincome Net operatingexpenses Claims incurred Reinsurance premiumswritten Direct insurancepremiumswritten FIM millions 6 SampoGroupCompanies:KeyFigures1998 extraordinary itemsintheprofitandlossaccount. item hasbeenentered asataxadjustmentunder tax receivable of FIM62millionrelatingtothis the nextsixyears. Anexceptionallylargedeferred during thereview year, butwillbeallocatedover extraordinary chargesisnotfullytaxdeductible ring depreciations entered underparent company eral shares, isthuswellfounded. The non-recur- which arose from theacquisitionofKansaGen- ing consolidationdifference ofFIM281million, vances. The completeeliminationoftheremain- decreases significantlyastheprogramme ad- ucts andsystemstransferred fromKansaGeneral Sampo 2000programme. The utilisationofprod- dures andsystemsisimplementedaspartofthe An overhaul ofPrivate Sampo operatingproce- EXTRAORDINARY CHARGES ap TPti aeodSampo Lakewood Patria ST Sampo InsuranceCo. Otso Industrial Sampo Sampo age numberof1,972personsin 1998(1,925). nel. Sampo parent companyemployed anaver- ofITperson- was duetotherisingrecruitment 3,292 personsover 1998(3,176).Half thegrowth Sampo Group employed anaverage numberof PERSONNEL off initsentiretyduringthenextsixyears. merger onDecember 31st,1995,willbewritten 184 million,arisingfromtheKansaGeneral penditure by theSampo parentcompany ofFIM tax systemduringthisfinancialyear. Anetex- The Group transfertoadeferred willotherwise 8 7 6 5 4 3 2 1 Shareholder groupsDecember31st,1998,% owned by KalevaMutual Insurance Company. 240,000 Bshares withfive votes eachare still their holdingsintheadministrative register. All the year. Almostallforeign owners have listed increased from 40.5percentto50.5over did afew Finnish industrials.Foreign ownership Unsa.sidiary Merita signedawayitsholdingas folio directly plus15.5per centthrough itssub- est singleowner, holding6.9percentoftheport- nificant change. Varma-Sampo becamethelarg- FIM 11,765millionattheyear-end. The totalmarket value oftheshareportfoliowas 193.5, anincrease of9.3percentover theyear. ered towards theendofyear, closingatFIM a low ofFIM115inOctober. The pricerecov- price thenbegantofallinAugust, droppingto reach apeakofFIM311inJuly. The quoted ing stronglyduringthefirsthalfofyear to to FIM10,454million. were exchanged astheirturnover fortheyearrose throughout theyear. Almost48millionshares Lively tradinginSampo shares continued SAMPO SHARES 7 tjitacut3.9 4.0 9.7 0.8 20.9 3.4 At jointaccount 50.5 Foreign ownership,incl.administrative register Households Non-profit corporations Public corporations 6.8 Financial institutionsandinsurancecompanies Private companies Public companies Holdings ofSampo sig- Ashares underwent The share pricefluctuatedconsiderably, ris- 8 1 6 5 4 2 3 tvc y191001 0.18 0.19 0.18 0.16 0.16 0.19 109,160 0.16 0.17 49.55 117,796 50.33 100,000 0.25 100,600 0.16 30,600,679 0.20 0.26 0.17 0.43 0.19 0.20 156,188 0.44 0.19 In theadministrative register intotal 101,308 0.44 0.19 0.45 122,052 0.62 0.45 0.20 Enso OyEläkesäätiö B-osasto 266,508 116,000 1.14 0.45 Research andDevelopment 0.63 2.67 The Finnish 270,900 National Fund for 118,816 1.16 276,308 Sijoitusrahasto Alfred Berg Optimal 0.24 380,200 2.71 Steveco Oy 703,132 Aurum LifeInsurance CompanyLtd 0.25 1,649,324 Vapo Oy Alfred BergFinland Sijoitusrahasto 0.72 150,000 Teollisuuden VoimaOy Mutual Insurance CompanyPension-Fennia 0.74 Oy Rettig Ab Imatran VoimaOy 447,472 Valmet Corporation Nesteen Eläkesäätiö Metra Corporation Local Government Pension Institution Outokumpu Oyj Stora Enso Oyj nwiigls ,9 0.0 6,592 85.4 51,948,333 21 On jointaccount,notyettransferred to On waitinglist – 100,001 oa 08000100 100.00 100.00 60,800,000 13.89 14.11 8,579,811 *) 2,558,426registeredASharesand240,000 registeredBShares. Total Others intotal 15.29 6.79 15.53 6.90 ofvotes 9,442,492 capital 4,192,828 shares 31,056 Kaleva Mutual Insurance Company Insurance Company Varma-Sampo Mutual Pension 3.9 Unsa Ltd A andBshares 2,359,595 % Shareholders, December31st,1998 No.of *) Eachadministrativeregisterisincludedinthisfigureasonesingleowner. shares Total Noof. shareholders securitiessystem the book-entry A andBshares Shareholdings Shareholders bynumberofsharesowned,December31st,1998 001–10007 ,2,4 4.5 2,722,944 76 100,000 – 10,001 ,0 00048120582.0 1,240,528 438 10,000 – 1,001 0 ,0 ,5 ,3,4 2.5 1,537,745 6,150 1,000 – 101 0 43193931.6 983,903 24,371 100 – 1 *) ,9,2 .06.09 4.60 2,798,426 o f o hr % ofshare No. of *) 08000100.0 60,800,000 % 13 SAMPO ANNUAL REPORT 1998 14 SAMPO ANNUAL REPORT 1998 FIM 100 200 250 300 350 150 50 0 Monthly tradingvolume,‘000 Monthly sharepricedevelopment(shareprice,highandlow) 94 94 59 798 97 96 95 59 798 97 96 95 paid onthebond,whichwillbe repaid onMay company’s incentivescheme.No interest willbe Directors. ofthe The bondwithwarrantsisapart wholly-owned chosenbytheBoard of subsidiary Sampo Group andKaleva personnel,andtoa with warrantsvalued atFIM6.6millionto on April 21st,1998,anddecidedtoofferabond cent ofthetotalnumbervotes. amounted toatotalof3,658shares or0.0059per Director andDeputy Managing Directors Members, theBoard ofDirectors, theManaging securities systemby theturnofyear. shares hadnotbeenentered intothebook-entry December 31st,1998.3.88percentofSampo Sampo’s AnnualGeneralMeeting convened BoardThe shareholdingsofSupervisory There were 31,056registered shareholdersat thorised toincrease companysharecapital. company’s share capital. or FIM16.5millionequalto5.3percentofthe new sharesatmostasaresult ofthesubscriptions, pany plcshare capitalcanincrease by3.3million prior tothesubscription.Sampo Insurance Com- price willbeFIM271lessdividendsdistributed warrants onMay 31st,2005. The subscription 2002. The share subscription periodendsforall staggered, onMay starting 1st,2000,2001and Sampo Ashares. The share subscription periodis sonnel tosubscribeatotalof3.3million with 72percentofpersonneltakingitup. 22nd, 2001. The bondwasclearlyoversubscribed 0 200 400 600 800 1000 1200 14000 0 8.41 16.82 25.23 33.64 42.05 50.46 58.87 The company’s Board ofDirectors isnotau- The warrantsrelating tothebondallow per- EUR I EUR FIM 10 12 14 16 * Board’sdividendproposal per share Earnings anddividend 0 2 4 6 8 49 69 98* 97 96 95 94 Dividend/share Earnings/share 1.0 1.7 2.0 2.4 2.7 0 0.3 0.7 1.3 tems criticaltobusinessoperations hasalready after theyear 2000.Modification work onsys- tems andEDPequipmentbefore, duringand the smoothfunctioningofitsinformation sys- covers boughtonthereinsurance market. number oflosses,andby limitedlossfrequency foryears withanexceptionallyreserved large be covered by equalisationprovisions especially quencies. These claimsincurred will,if necessary, reinsurance contractsdonotcover majorlossfre- considerably largerthannormal,sinceordinary cal dates. tracts madewithreinsurers thuscover allthecriti- to twoyears inthemajorinsuranceclasses.Con- tions, andthecontractperiodhasbeenextended line withtheGroup approved year 2000instruc- yearand by charting 2000preparedness. rangement ofclientawareness promoting events, 310million supported throughinformationprovision, thear- practices. 1,500,000 overseas subsidiarieswilladhere tolocal Y2K capital Share possible andsubstantialmillenniumrisks.Other 186million ginning of1999,ininsuranceclassescarrying Insurance Company and Baltic subsidiarieswere amendedatthebe- 400 126million and conditionsofthedomesticGroup companies 280 380 280million potential cumulative 3,000,000 effects. The insuranceterms No.of specify insurancecover for Y2K risks,duetothe 3,000,000 Sampo Group tolimitand hasfounditnecessary Kansallis-Osake-Pankki 4,700,000 YEAR 2000 325 Price/ 250 June*) PricespershareandnumbersofsharesatanominalvalueFIM20.Thewaschangedto5inOctober1997. 30,1994 2:1plus subscriptionright 1:1plussubscriptionright A shares Termofsubscription OwnersofIndustrial Mutual Directed issue October17to November 18,1988 A shares December31,1993 Merger compensation April11to May20,1988 Subscription A andBshares New issue A andBshares New issue Mode Increases insharecapital1988–1998 Sampo continuestowork actively toensure Y2K lossesmaymakeGroup claimsincurred Sampo Group reinsurance conditionsare in Clients’ Y2K lossprevention work isactively eido usrbrsae(I)nwsae aftertheissue newshares share(FIM) subscriber or period *) man-years. estimate oftotalworkload isapproximately 170 ning intheGroup orbeinginitiated. The current ferent and market areas. instruments “Euroland” willmaterialise inallocationstodif- of plans willbespecifiedsothatthebirth ing ofinvestments intheeuroarea. Investment come athingofthepastwillfacilitatespread- 2002. ments willbedrawnupineuro asofJanuary 1st, eral ledgeraccountingandthefinancialstate- from thebeginningof2002.Gen-euro service 1999, andprivate clientswillbeoffered afull onrequest fromthebeginningof nated services porate clientshave beenofferedeuro-denomi- depending ontheneedsoftheirclientele.Cor- Introduction between willvary thebusinessunits, proved atransitionplanfortheuseofeuro. In December1998,theBoard ofDirectors ap- EURO REVIEW ing upacontinuityplanforcriticalsub-areas. pliance willcontinueduring1999e.g.by draw- by theendof1998. which 95percenthadalready beencompleted workload isapproximately 80manyears,of half of1999. The current estimateofthetotal cant systemswillbecompletedduringthefirst been completed. The testingofsomelesssignifi- There arenow dozens ofeuroprojectsrun- The factthatcurrency riskinEurope willbe- Work toensure ISenvironment Y2K com- 15 SAMPO ANNUAL REPORT 1998 16 SAMPO ANNUAL REPORT 1998 aetcmayspoi I 336,733,644.84 FIM 1,500,000.00 FIM 393,644.84 291,840,000.00 FIM FIM 43,000,000.00 FIM effective dividend yieldof2.5percent. The proposed dividendis33.4 percentofearningsshare. The closingpriceoftheSampo Ashare forthefinancialyear1998 wasFIM193.50,providing an Parent company’s profit To beretained onthe closingaccount for worthypubliccauses To beplacedatthedisposalofBoard To betransferredtothecontingencyfund To bepaidasdividend The Board ofDirectors recommends thatthecompany’s profitfor the year beappliedasfollows: in thedomesticbusiness,Kaleva. The role oflife withtheoldestcompany their 125thanniversary market areas. innew and growth oftheinsuranceindustry inthedevelopment as thecompanyparticipates Sampo’s strongcome intoplay fieldsofexpertise of operationsintotheBaltic RimandPoland. insurance market shareare enablingtheexpansion lent Group solvencyandahighdomesticnon-life Sampo’s 90thyearhasbegunfavourably. Excel- SAMPO GROUPOUTLOOK commence operationsduring1999. pany tobeestablished,thataccording toplanwill for thepracticaloperationsofaninsurancecom- Polish corporatemarket andmakepreparations in February 1999,topromoteSampo atthe ited liabilitycompany)wasestablishedin Warsaw Spolka zograniczona odpowiedzialnoscia (alim- tions intoPoland. SampoRiskManagement Industrial Insurance andSampo Enterprise. land willbetransferred toSampo subsidiaries ness handledby theInsurance CompanyofFin- dled byOtso andnewguaranteeinsurancebusi- evant authorities. the permissionshave beenobtainedfrom therel- effect onDecember 31st,1999,providing that The plannedschedulestatesthemergerswilltake holders’ General Meetings involved. oftheparties plify Sampo Group structure. their parent companySampo, toevolve andsim- and theInsurance CompanyofFinland Ltdinto aries Otso LossofProfits Insurance CompanyLtd A decisionwasmadetomergetheSampo subsidi- OF THEFINANCIALYEAR SIGNIFICANT EVENTSAFTERTHECLOSE Finnish lifeinsuranceoperationscelebrate Industrial Insurance hasexpandeditsopera- New lossofprofits insurancebusinesshan- The mergerswillbedecidedonby theShare- 60,800,000 Sampo AandBshares. dividend ofFIM4.80pershare bepaidonthe able. The Board ofDirectors thata willpropose of whichFIM1,643,200,541.14wasdistribut- werecapital andreserves FIM1,792,092,002.23, of FIM336,733,644.84.Group non-restricted 814,248,001.67, includingaprofit fortheperiod Non-restricted capitalstoodatFIM arereserves distributableintheirfullamount. The parent company’s non-restrictedcapitaland BOARD’S DIVIDENDPROPOSAL sation forSampo tobuybackitsown shares. apply totheAnnualGeneral Meeting forauthori- tribution. The company’s Board ofDirectors will prospects constituteasolidbasisfordividenddis- attainable given thecurrentoutlook. combined ratioof103,setfortheyear2002,is come. The strategictargetofanon-lifeinsurance Sampo’s favourabledevelopmentforyearsto during thefinancialyear willcontributeto the consolidationoftechnicalprovisions made increases. and finalpreparations fortheyear2000expense development work, theeuro transitionprojects penses, following theSampo 2000programme Special attentionwillbepaidtooperatingex- the euroarea tooptimisetherisk/return ratio. ment ofSampo’s own funds. strengthenedbe further through e.g.theestablish- insurance operations.Unit-linked insurancewill porate clientsstillconstitutethebackboneoflife Voluntary pensioninsurancesforprivateandcor- Group followingreorganisations. itsstructural insurance isfirmlyontheupswinginSampo Sampo’s strong solvencyandperformance Significant non-recurring depreciations and Investments willbeincreasingly diversifiedin Claims incurred hnei olciegaateie 662––,1 – –1,114 – –6,622 Change incollectiveguaranteeitem lispi 39529–,5,5 6689–614,602 –656,809 –3,654,258 –3,905,209 Claims paid aac ntcnclacut–3,6 6689–034–115,520 –90,344 –686,849 –537,160 Balance ontechnicalaccount Change intheequalisationprovision Net operatingexpenses Premiums earned Technical Account–Non-LifeInsurance CONSOLIDATED PROFITANDLOSSACCOUNT h hnei qaiainpoiin–3,6 5215–0,5 –91,175 –107,550 –542,105 –639,462 the changeinequalisationprovision Balance ontechnicalaccountbefore Reinsurers’ share Reinsurers’ share enues hr 6,5 6,0 17862,112 61,718 369,304 366,958 –104,063 –97,920 outstanding claims Change intheprovisionfor –618,729 Reinsurers’ share –582,206 unearned premiums Change inthegrossprovisionfor Reinsurers’ share Premiums written otoi rnfr–918–1,547 – –6,199 –4,857 – 9,198 18,921 –28,881 – –36,857 112,500 3,719 – – 4,540 –43,944 –1,619 – 22,114 26,994 – Portfolio transfer –261,277 –9,625 Total change – Portfolio transfer Portfolio transfer Total change Portfolio transfer oa hne–1,6 4454–3,3 –73,090 –137,135 –434,574 –815,367 36,752 –9,570 218,516 –56,903 Total change Total change 2, 7 oe 9819 981997 1998 1997 1998 Notes 2, 4,7 I 00EUR‘000 FIM‘000 2, 7 7 1 42117–,7,6 7335–635,089 –713,305 –3,776,069 –4,241,117 ,1,6 ,1,1 5,7 675,545 759,177 4,016,610 4,513,864 7287–9,1 1824–82,600 –118,214 –491,115 –702,867 6,2 ,4 1,8 1,068 –11,189 6,347 –66,528 35820–,8,5 5501–552,490 –595,091 –3,284,954 –3,538,250 ,8,9 ,1,6 7,6 674,478 770,367 4,010,263 4,580,392 ,6,9 ,2,9 6,8 778,540 868,287 4,628,992 5,162,597 8537–7,3 1715–79,289 –137,135 –471,431 –815,367 9556–8,4 1239–131,632 –152,309 –782,646 –905,586 1,0 1,8 891–3,310 18,921 –19,683 112,500 –7,192 –9,570 –42,761 –56,903 0,0 14751,0 –24,344 17,206 –144,745 102,302 9654,0 1698,259 –1,619 49,108 –9,625 17 SAMPO ANNUAL REPORT 1998 18 SAMPO ANNUAL REPORT 1998 Change intheprovisionforunearnedpremiums Change intheprovisionforunearnedpremiums Claims incurred Share ofnetinvestmentincome Premiums written Technical Account–LifeInsurance CONSOLIDATED PROFITANDLOSSACCOUNTcont. aac ntcnclacut6,5 7891,1 6,367 11,211 37,859 66,658 Balance ontechnicalaccount Net operatingexpenses oa hne–,4,0 35250–0,4 –592,450 –209,545 –3,522,550 –1,245,901 Total change Reinsurers’ share Reinsurers’ share Claims paid enues hr ,2 ,0 ,6 521 1,367 3,100 –1,645 320 8,125 –9,781 1,903 Change intheprovisionforoutstandingclaims Reinsurers’ share Reinsurers’ share Premiums written oa hne–,9 009–,4 3,365 –1,143 20,009 –6,798 1,491 –761 8,868 –4,525 Total change Total change otoi rnfr––214––3,719 – 411,261 – –22,114 – –1,547 2,445,244 – – 84,347 – –9,198 – 501,505 Portfolio transfer – Portfolio transfer Portfolio transfer Portfolio transfer oa hne–843–6,0 1,1 –94,338 –11,518 –560,909 –68,483 Total change oe 9819 981997 1998 1997 1998 Notes I 00EUR‘000 FIM‘000 1, 3 3 5 4 12268–,7,1 2069–181,544 –210,689 –1,079,412 –1,252,698 3031–3,8 5,4 –39,353 –57,245 –233,983 –340,361 7,0 5,3 1,7 –10,046 –12,279 –59,734 –73,008 12591–,7,0 2955–181,190 –209,545 –1,077,306 –1,245,901 ,4,6 ,2,0 2,0 189,482 225,501 1,126,606 1,340,766 ,3,6 ,3,8 2,8 191,127 225,181 1,136,388 1,338,864 2548–7,5 4,3 –29,828 –46,332 –177,350 –275,478 2733–7,5 4,6 –29,307 –44,966 –174,250 –267,353 1266–605–720–16,162 –17,270 –96,095 –102,686 6,8 5,0 1,1 –9,991 –11,518 –59,404 –68,483 2,3 2,4 09453,945 70,914 320,743 421,637 678–,0 113–354 –1,143 –2,105 –6,798 –56 –761 –330 –4,525 Tax onprofitordinaryactivities Other charges Other income rftfrtefnnilya 0,2 8,1 1,3 81,960 119,030 82,862 487,312 –902 707,720 119,771 492,675 –741 712,127 –5,363 –4,406 Profit forthefinancial year Minority interestintheprofitfor thefinancialyear Profit afterextraordinaryitems 85,986 147,653 20,397 511,252 877,905 –8,268 121,277 –49,161 Extraordinary incomeandcharges Profit onordinaryactivitiesaftertax Share ofassociatedundertakings’profit/lossaftertax 6,367 11,211 –115,520 37,859 –90,344 Transfer ofpartnetinvestmentincome 66,658 –686,849 Unrealised lossesoninvestments –537,160 Investment charges Unrealised gainsoninvestments Investment income Technical underwritingresult,lifeinsurance Balance ontechnicalaccount,non-lifeinsurance Non-technical Account Tax onextraordinaryincomeandcharges Extraordinary charges eerdtx2331,9 8 1,917 389 –1,229 –179 11,396 1,122 –7,306 2,313 1,104 –1,280 –1,066 6,672 –2,464 6,565 –7,610 –9,002 –14,648 –11,447 –53,525 Deferred tax –68,060 Other Depreciation ongoodwill Depreciation onconsolidationdifference Other a rmpeiu eid 8 623–3–1,050 –13 –30,542 –6,243 –58,254 –80 –181,595 –346,365 Tax frompreviousperiods Tax forthefinancialyear eraei eaiecnoiaindfeec ,7 ,7 6 467 467 2,777 2,777 Decrease innegativeconsolidationdifference Extraordinary income a o h iaca er6167241071,215 1,037 7,224 6,166 Tax forthefinancialyear eerdtx6,0 049– 10,429 – –4,339 – – 62,006 –27,843 –39,348 – –25,801 11,598 – – – –165,550 –233,951 – 68,956 Deferred tax – Other extraordinarycharges Change incollectiveguaranteeitem consolidation difference Extraordinary depreciationon Change intheequalisationprovision lispi 062–8,526 7,720 – – 50,692 45,902 – – Claims paid Premiums written oe 9819 981997 1998 1997 1998 Notes I 00EUR‘000 FIM‘000 6, 7 6, 7 5, 7 7 5 5 5 5 10628–0,7 1432–84,762 –184,382 –503,971 –1,096,288 ,1,3 ,7,9 0,3 214,162 305,433 1,274,399 1,816,132 ,3,6 ,9,4 7,6 268,284 376,366 352,726 1,595,142 558,461 2,237,769 2,097,216 3,320,458 2391–9,5 3,4 –32,183 –39,348 –191,351 –233,951 1579–857–782–3,124 –27,882 –18,577 –165,779 3412–7,4 5,7 –29,675 –57,879 –176,442 –344,132 4167–2,4 7,1 –53,945 –70,914 –320,743 –421,637 8,7 6,4 1,9 –11,511 –14,090 –68,441 –83,774 8127241,6 1,215 11,466 7,224 68,172 376298235496 2,305 2,948 13,706 ,4 ,4 ,7 1,589 1,571 9,449 9,342 17–,5 1 –177 –18 –1,050 –107 6,5 27,843 – 165,550 – 19 SAMPO ANNUAL REPORT 1998 20 SAMPO ANNUAL REPORT 1998 Prepayments andaccruedincome 8,082 16,288 Other assets 48,053 96,841 Debtors 16 Investments coveringunit-linkedinsurances 9 Investments SES17 8 Intangible assets ASSETS CONSOLIDATED BALANCESHEET Other financialinvestments aha akadi ad68385910173492,364 107,364 549,170 638,358 Cash atbankandinhand neetadrns470910097,2 30,284 71,828 180,059 – 427,069 10,429 – 62,006 65,532 Interest andrents 78,108 389,633 464,412 Tangible assets Deferred tax Arising outofreinsuranceoperations Arising outofdirectinsuranceoperations Investments inlandandbuildings te 3,0 5,4 37159,412 283 73,701 353,246 1,397 438,208 1,684 8,307 40,908 60,275 243,230 358,377 Other Other assets 69,601 66,239 413,829 Other debtors 393,837 42,445 Deposits withcedingundertakings 44,838 252,366 266,593 Other long-termexpenses Investments inassociatedundertakings odil4,3 8316923,093 6,952 9,162 54,662 18,391 10,939 15,547 41,332 54,472 325,005 65,042 92,440 Consolidation difference Goodwill Intangible rights Debt securities on urnedb otae ,6,7 8,0 7,5 64,753 179,653 385,003 1,068,170 Other loans Loans guaranteedbymortgages Shares soitdudraig 000–8,409 137,988 – 269,408 820,438 50,000 1,601,827 – Deposits withcreditinstitutions associated undertakings te agbeast 1082,2 ,4 3,384 3,540 20,120 21,048 Other tangibleassets nemdais11959,1 88315,543 109,404 18,823 147,037 92,415 650,488 111,915 874,243 Equipment Intermediaries Policyholders adadbidns46655418417984692,670 779,814 4,118,431 4,636,565 Land andbuildings Debt securitiesissuedby,andloansto, Shares andparticipations oe 9819 981997 1998 1997 1998 Notes I 00EUR‘000 FIM‘000 14 15 11 10 11 13 8 424952,6,7 ,5,9 3,525,417 5,757,899 20,961,176 34,234,915 232404869920925811,831 2,079,215 4,826,929 12,362,450 427821,2,5 ,7,2 2,039,860 4,074,827 12,128,456 24,227,822 007491,7,7 ,5,3 2,956,403 5,051,931 17,577,972 30,037,419 ,8,1 ,9,3 ,7,1 974,470 1,477,213 5,793,938 8,783,111 ,7,5 ,7,6 1,7 231,387 314,672 1,375,766 1,870,953 1,6 0,4 93850,818 69,338 302,149 412,264 7,9 1,5 3,5 154,271 131,051 917,256 779,196 5,5 2,9 24337,841 42,443 224,991 252,352 6,7 3,0 4,2 89,695 145,529 130,488 533,305 151,204 865,277 775,846 899,017 109,362 78,276 650,234 465,407 3,0 0,7 89334,457 38,903 204,871 231,304 7,9 6,5 3,5 145,862 131,051 867,256 779,196 ioiyitrs 0,9 5486,7 9,327 68,570 55,458 407,698 20 Technical provisions Untaxed reserves Minority interest eaiecnoiaindfeec ,3 1181411,868 1,401 11,108 8,331 Non-life insurance Negative consolidationdifference biaoypoiin 19051,5 ,2 1,808 11,681 1,528 9,448 10,750 22 7,546 69,452 9,085 56,174 15,656 21 44,865 93,089 Creditors Deposits receivedfromreinsurers Obligatory provisions Technical provisionsofunit-linkedinsurances crasaddfre noe94045873187987,240 158,779 518,703 944,054 Accruals anddeferred income 17 18 Capital andreserves LIABILITIES rvso o nandpeim ,6,9 ,1,9 2,6 220,426 229,862 1,310,594 1,366,697 Provision forunearnedpremiums Non-life insurance qaiainpoiin o-ieisrne13583148152464241,880 224,674 1,438,155 1,335,853 Equalisation provision,non-lifeinsurance Life insurance Life insurance Non-restricted eerdtx5,5 7889758,047 15,628 44,960 20,364 9,765 33,284 92,919 47,848 267,321 121,078 58,058 6,407 1 197,900 15,242 112,125 2,623 95,066 38,096 8 666,666 90,626 565,237 27,843 15,593 Other creditors 28,957 Deferred tax Pension loans Amounts owedtocreditinstitutions 165,550 Bond withwarrants Arising outofreinsuranceoperations Arising outofdirectinsuranceoperations 172,172 Collective guaranteeitem,non-lifeinsurance Restricted enues hr 737–,6 122–1,491 –1,232 –8,868 –124,065 –3,365 –7,327 –142,267 1,525,728 –3,255 –737,654 1,661,783 –845,881 –20,711 9,071,565 –20,009 9,880,514 –18,937 –19,355 –123,142 –112,595 Reinsurers’ share 81,960 Reinsurers’ share Claims outstanding 119,030 10,251 Reinsurers’ share 487,312 7,120 707,720 Reinsurers’ share 60,948 42,333 Profit forthefinancialyear Currency conversiondifferences lisottnig508475099874294,338 857,492 560,909 5,098,417 584,905 1,729,790 3,477,686 Claims outstanding 10,284,865 11,480 116,326 56,695 125,683 Provision forunearnedpremiums 691,646 68,256 747,279 337,093 Profit/loss broughtforward Non-restricted reserves te etitdrsre 1 19 – 31,874 369,241 113 28,345 369,241 2,195,408 189,515 – 2,195,408 168,533 Other restrictedreserves Revaluation reserve Legal reserve Subscribed capital oe 9819 981997 1998 1997 1998 Notes I 00EUR‘000 FIM‘000 19 19 424952,6,7 ,5,9 3,525,417 5,757,899 20,961,176 34,234,915 ,0,6 ,0,9 5,5 673,289 758,253 4,003,197 4,508,366 ,9,9 ,4,1 0,0 209,766 301,408 1,247,214 1,792,092 025513476717655581,540 1,726,535 3,457,677 10,265,511 713311,3,8 ,6,6 2,545,488 4,566,867 15,134,786 27,153,361 ,9,9 5,4 5,6 92,847 856,260 552,041 1,401,663 1,519,516 5,091,090 8,333,911 9,034,633 199,715 210,925 1,187,453 1,254,102 463,523 456,844 2,755,983 2,716,274 ,5,5 ,1,5 7,9 187,169 177,397 1,112,858 1,054,757 1,0 1,0 21852,138 52,138 310,000 310,000 ,6 ,5 – 1,053 – 6,264 21 SAMPO ANNUAL REPORT 1998 22 SAMPO ANNUAL REPORT 1998 Claims incurred hnei olciegaateie 292––9 – –498 – –2,962 Change incollectiveguaranteeitem h hnei qaiainpoiin–0,2 2054–165–43,817 –51,655 –260,524 –307,127 the changeinequalisationprovision Balance ontechnicalaccountbefore Premiums earned Technical Account PARENT COMPANY PROFITANDLOSSACCOUNT aac ntcnclacut–4,7 2714–045–38,206 –40,495 –227,164 –240,772 Balance ontechnicalaccount Change intheequalisationprovision Net operatingexpenses enues hr 216138–6 230 –366 –1,368 18,450 23 1,368 267 –36,544 –2,176 8 109,697 –8,134 –217,284 1,589 136 –3,745 –1,334 48 –5,827 –1,180 –22,270 –7,930 Reinsurers’ share –34,645 –7,016 for outstandingclaims Change intheprovision Reinsurers’ share Reinsurers’ share for unearnedpremiums Change inthegrossprovision Reinsurers’ share lispi 13498–,4,1 2289–259,213 –222,849 –1,541,211 –1,324,998 Claims paid Premiums written oe 9819 981997 1998 1997 1998 Notes 2, 4,7 I 00EUR‘000 FIM‘000 2, 7 2, 7 1 7 13349–,4,4 2251–260,581 –222,581 –1,549,344 –1,323,409 15280–,3,7 2942–241,901 –259,492 –1,438,279 –1,542,870 ,4,4 ,2,1 9,8 272,904 293,781 1,622,615 1,746,742 ,1,4 ,0,8 8,6 269,182 287,962 1,600,481 1,712,144 ,5,5 ,3,4 9,6 274,238 294,961 1,630,545 1,753,758 29401106–69118,680 –36,911 111,066 –219,460 4340–2,2 7,2 –71,097 –79,627 –422,726 –473,440 3,9 2,3 589–3,723 –5,819 –22,134 –34,597 6353,6 1105,611 11,160 33,360 66,355 rfto riayatvte fe a 4,4 2,7 08338,510 90,863 228,972 540,247 Extraordinary incomeandcharges Profit onordinaryactivitiesaftertax Extraordinary income Tax onprofitfromordinaryactivities rftfrtefnnilya 3,3 1,5 66535,345 56,635 210,153 –259 336,734 35,386 55,811 1,328 210,395 –1,543 331,840 7,894 Profit forthefinancialyear Increase/decrease inoptionalreserves Decrease/increase indepreciationdifference Profit afterextraordinaryitems 706 914 4,199 5,437 Other charges Other income Investment charges Investment income Non-technical Account lispi 485–2,505 248 – – 14,895 1,476 – – Claims paid Premiums written Tax onextraordinaryincomeandcharges Extraordinary charges nraedces ncei osrsre–,0 ,0 55219 –505 1,300 –3,000 Increase/decrease increditlossreserve 10 –27 – –3 59 –162 –20 – Tax frompreviousperiods Other a o h iaca er–1,6 9,7 3,3 –15,468 –35,330 –91,971 –210,060 Tax forthefinancialyear ercaino odil–065–910–,4 –4,898 –5,149 –29,120 –30,615 Depreciation ongoodwill a o h iaca er1,2 ,2 ,3 1,215 1,737 7,224 10,328 Tax forthefinancialyear eerdtx6,0 049– 10,429 – –4,339 62,006 – – –12,456 – –47,217 –25,801 9,703 – – – –74,059 – –280,741 57,688 Deferred tax – Other extraordinarycharges Change incollectiveguaranteeitem Depreciation ongoodwill Change intheequalisationprovision oe 9819 981997 1998 1997 1998 Notes I 00EUR‘000 FIM‘000 6, 7 6, 7 5, 7 7 5 2000–191–530–15,458 –35,330 –91,911 –210,060 ,1,7 7,3 7,2 96,394 133,800 170,925 239,348 573,131 795,538 1,016,276 1,423,101 2071–981–727–16,795 –47,217 –99,861 –280,741 2847–857–501–3,124 –35,051 –18,577 –208,407 4685–2,0 6,2 –37,406 –68,423 –222,408 –406,825 3,3 2,8 512–4,925 –5,152 –29,282 –30,634 2347241,6 1,215 12,166 7,224 72,334 409–12,456 – 74,059 – 23 SAMPO ANNUAL REPORT 1998 24 SAMPO ANNUAL REPORT 1998 Prepayments andaccruedincome Other assets Debtors Investments SES17 8 Intangible assets ASSETS PARENT COMPANY BALANCESHEET Other investments undertakings Investments inaffiliatedandassociated neetadrns2,2 9374134,932 4,193 29,327 – 24,928 10,429 – 582 62,006 259 Interest andrents 3,460 1,537 Tangible assets Deferred tax Arising outofreinsuranceoperations Arising outofdirectinsuranceoperations te 3,7 0842,2 8,560 23,424 50,894 139,275 11,587 12,304 9,216 68,893 57,498 73,154 54,797 341,869 319 Other 249 Cash atbankandinhand 1,898 1,478 Other debtors Deposits withcedingundertakings 30,590 35,175 181,882 209,138 Investments inlandandbuildings Other long-termexpenses odil136745033,9 83,260 3,300 30,894 3,603 495,043 19,622 183,687 21,425 Goodwill Intangible rights Debt securities on urnedb otae 3,7 7,8 27129,009 22,701 172,481 134,972 Other loans Loans guaranteedbymortgages Shares eoiswt rdtisiuin 3503,0 ,5 5,298 3,952 31,500 23,500 16,618 15,485 Deposits withcreditinstitutions 98,808 92,070 Loans toaffiliatedundertakings te agbeast 8121,3 ,5 2,612 3,053 15,532 18,152 Other tangibleassets Affiliated undertakings Associated undertakings oiyodr 6,8 1,9 84669,562 78,406 413,594 466,182 Equipment Policyholders adadbidns17428184552999316,961 289,999 1,884,565 1,724,258 Land andbuildings Shares andparticipations Shares andparticipations oe 9819 981997 1998 1997 1998 Notes I 00EUR‘000 FIM‘000 14 15 12 12 13 12 10 8 9 ,0,3 ,9,4 ,4,9 1,294,197 1,345,896 7,694,949 8,002,336 ,5,6 ,2,9 7,6 272,632 276,907 278,664 307,927 1,620,994 1,646,416 1,656,860 1,830,848 ,5,7 ,9,0 4,2 435,641 446,922 2,590,203 2,657,278 333,579 305,484 1,983,373 1,816,327 ,5,1 ,4,1 1,7 176,364 210,270 1,048,611 1,250,211 ,0,3 ,2,8 ,6,8 1,046,447 1,060,581 6,221,889 6,305,931 5,5 4,8 2,3 108,849 126,537 100,544 647,185 97,656 752,353 597,806 580,637 7,0 5,4 91126,161 29,131 155,546 173,204 6,0 0212,1 13,492 27,617 37,748 80,221 41,434 164,203 224,439 246,358 79,360 146,592 471,852 871,594 117,151 69,672 696,547 414,250 5,5 4,1 60823,549 26,078 140,013 155,052 95318021,6 19,853 15,068 118,042 89,593 Technical provisions Untaxed reserves rdtr 22 Creditors crasaddfre noe242925894,6 37,987 42,760 225,859 254,239 Accruals anddeferredincome 17 18 Capital andreserves LIABILITIES rvso o nandpeim 7,2 3,7 3,8 124,355 130,181 739,379 774,024 Provision forunearnedpremiums cuuae ercaindfeec 8227,0 14312,800 11,473 76,106 68,212 Optional reserves Accumulated depreciationdifference Non-restricted te rdtr 0935,2 0208,902 44,960 10,250 32,838 52,928 518 267,321 60,943 195,245 12,456 622 21,720 –34 12,954 –6,634 10,560 3,081 74,059 –6,268 –42 477,810 129,141 3,696 77,022 –39,444 514,355 62,786 –203 –37,267 2,840,930 Other creditors 3,058,213 –251 Pension loans Bond withwarrants Arising outofreinsuranceoperations Collective guaranteeitem Equalisation provision Reinsurers’ share Claims outstanding Reinsurers’ share Restricted rdtls eev ,0 ,0 ,7 875 1,379 5,200 8,200 35,345 56,635 29,035 210,153 28,345 336,734 172,633 Credit lossreserve 168,533 Profit forthefinancialyear Revaluation reserve ttedsoa fteBad49417 77 1,230 11,722 62,641 77 1,230 11,722 67,283 69,693 461 7,312 372,448 69,693 7,314 400,048 459 Profit/loss broughtforward At thedisposalofBoard Contingency reserve Security reserve ea eev ,7,9 ,7,9 6,9 366,295 366,295 2,177,892 2,177,892 Legal reserve Subscribed capital oe 9819 981997 1998 1997 1998 Notes I 00EUR‘000 FIM‘000 19 19 ,0,3 ,9,4 ,4,9 1,294,197 1,345,896 7,694,949 8,002,336 ,7,7 ,2,9 8,2 558,483 583,725 3,320,591 3,470,673 ,5,2 ,6,2 4,7 447,468 446,779 2,660,525 2,656,425 ,3,2 ,4,6 6,4 629,673 661,740 3,743,863 3,934,527 ,2,4 ,0,8 0,8 471,176 508,087 2,801,486 3,020,946 1,4 6,6 3,4 111,015 136,947 660,066 814,248 6,8 2,3 48054,380 44,820 323,330 266,485 7,7 3,7 3,3 124,320 130,139 739,176 773,773 1,0 1,0 21852,138 52,138 310,000 310,000 6428,0 28213,675 12,852 81,306 76,412 ,0 ,1 – 1,110 – 6,600 25 SAMPO ANNUAL REPORT 1998 26 SAMPO ANNUAL REPORT 1998 I 00Dc 1 98Dc 1 97Dc 1 98Dec.31,1997 Dec.31,1998 Dec.31,1997 Dec.31,1998 Source offunds ‘000 FIM WORKING CAPITAL FLOWSTATEMENT nraedces nwrigcptl499549353238–1,842 382,368 479,395 469,995 –1,842 357,156 382,368 Increase/decrease inworkingcapital 979,474 479,395 5,206,390 469,995 14,056,431 Change inworkingcapital Increase/decrease inworkingcapital 355,314 Application offundsintotal 1,361,842 5,685,785 14,526,426 Application offunds Source offundsintotal Capital financing Repayment ofcapitalandloans Investments rdtr 7701813–520–7,073 –15,230 – 66,195 128,113 –28,380 – 27,730 –68,321 73,476 83,981 –3,170 –425,352 13,277 100,819 331,972 Accruals anddeferredincome Creditors Deposits receivedfromreinsurers Prepayments andaccruedincome Cash-flow financing etr 3,8 19193776–8,346 337,736 15,702 4,261 –159,169 433,181 339,327 89,187 Cash atbankandinhand Debtors Profit distribution nraei ogtr iblte 408–– – – – 24,098 47,924 – 332,243 Increase inminorityinterest Increase inlong-termliabilities eraei aia n eevs1,9 ,0 – 37,685 4,100 72,075 105 – – 152 – 318,925 110,025 15,094 40,581 129 173,484 – 4,746,963 13,103,959 162 161,458 – 341,248 Decrease incapitalandreserves Decrease inlong-termloans Increase inintangibleandtangibleassets 47,309 Increase ininvestments – Other profitdistribution Increase incapitalandreserves eraei netet 19,902 – – –25,801 354,337 –280,741 778,913 – –25,801 715,934 –233,951 1,294,648 Adjustment items Extraordinary incomeandcharges Decrease ininvestments items, untaxedreservesandtax Profit beforeinterestexpenses,extraordinary a 4,7 8,1 9,3 84,687 91,200 199,732 33,454 182,400 180,613 28,606 91,200 340,278 182,400 26,026 32,709 Dividends paid Tax Interest onliabilities ercain602429244340154,016 493,490 289,224 600,284 Depreciation Paren Group hne ntcnclpoiin 20679450111064–105,920 –41,221 190,664 179,516 4,520,191 66,906 12,066,799 466,403 Unrealised lossesandgainsoninvestments Changes intechnicalprovisions 414145564413182355,314 1,361,842 5,566,454 14,194,184 34527498414249110,025 492,409 4,908,421 13,445,207 34351848–36059,122 –43,610 198,418 –384,345 5,5 9,6 1,9 209,446 410,890 – 297,968 555,550 – 119,331 332,243 5,4 8,7 2,7 –60,964 425,978 280,977 854,340 565–7,7 37,685 76,175 – 55,675 t Company Life InsuranceCompanyLimited isasubsidiary merged onDecember31,1998. SampoThe new Nova LifeInsurance CompanyLimited, were and anassociatedundertaking oftheGroup, plc, SampoLifeInsurance CompanyLimited, eliminated. However, intra-groupdirect insurance isnot losses aswellprofit distributionare eliminated. to orfromGroup companies,internalgainsand ment day. Intra-group transactions,amountsdue tion, andthesubsidiariessolduntilassign- year are consolidatedasfrom thedayofacquisi- is transferred tolifeinsurancetechnicalaccount. surance whichincludesintra-group eliminations technical account. relatingThat part tolifein- ment incomeandchargesare showninthenon- counts, andanon-technicalaccount.Allinvest- prise non-lifeandlifeinsurancetechnicalac- the subsidiaries. The consolidatedaccountscom- ance sheetsandnotesoftheparent companyand combinations oftheprofitandlossaccounts,bal- uniform accountingprinciples. cluded intheconsolidatedaccountsaccording to The finalaccountsofgroupcompaniesare in- the Board ofDirectors/Notes totheAccounts. group structure arepresented intheReport by ing rights. The groupcompaniesandchangesin dominant influenceisbasedonotherthanvot- clude subsidiariesinwhichtheparent company’s half ofthevotingrights. The groupdoesnotin- pany eitherdirectly orindirectlyholdsmore than and allthesubsidiariesinwhichparentcom- ent companySampo Insurance Companyplc, Sampo’s ConsolidatedAccounts includethepar- Consolidation Principles Affairs andHealth. issuedby ofSocial theMinistry the instructions ofFinancedecision oftheMinistry according to figures andotherinformationreferred tointhe No. 1509),fortheyears 1997-2000,toreport key publicly tradedspecialpermission(22.12.1997 granted insurancecompanieswhoseshares are The Finnish Accounting Standards Board has listed companieshavebeentakenintoaccount. provisions andrecommendations concerning theinsurancebusiness.Furthermore,supervising ofSocialAffairsandHealth,try theauthority andregulations issuedbystructions theMinis- Act andInsuranceCompaniesAct andthein- accordance withtheAccountingAct, Companies The financialstatementshavebeencompiledin Accounting PrinciplesintheSampoGroup NOTES TOTHEACCOUNTS A subsidiary ofSampo InsuranceA subsidiary Company Subsidiaries acquired duringthe financial The consolidatedaccountsare drawnupas ing intotheconsolidatedaccounts ofanother cannot beintegratedasanassociated undertak- pensioninsurance panies engagedinstatutory the equitymethod. using been integratedasassociatedundertakings, Company aswellBjörkboda LåsOyAb -have year ofcomparisonandKalevaMutual Insurance Insurance CompanySampo Pension Ltdinthe amount to20-50%withtheexception of in whichtheGroup’s holdingandvoting rights In theConsolidatedAccounts, thosecompanies Associated Undertakings Account andtheBalance Sheet. sented asseparateitemsintheProfit andLoss the financialyearandcapitalreservesare pre- duetotheirorigin. capital andreserves cross-shareholdings, are shown underrestricted rates, whichhavearisenfrom theeliminationof differences resulting from changesinexchange currencies oftheeuro area. Currency conversion coefficients betweentheeuroandnational counts for1998by usingthefixed conversion Netherlands havebeenconverted inthefinalaccounts itemsofthesubsidiariesoperatingin closing thecompanies’ accounts. The finalac- quoted bytheBank ofFinland onthedateof intoFinnishverted markka attheaveragerate omic life. difference anddepreciated over itsusefulecon- unallocated partisentered underconsolidation according totheirdepreciationplan. The subsidiaries’ landandbuildingsdepreciated time ofacquisitionisentered primarilyunder atthe subsidiaries andtheircapitalreserves ference betweentheacquisitioncostofshares in inated by usingtheacquisitionmethod. The dif- cal provisions calculatedfrom theBalanceSheet. Account deviatesfromthechangeintechni- life insuranceasshown intheProfit andLoss merger, thechangeintechnicalprovisions of dated Profit andLossAccount. Owingtothe of associatedundertakings’ profit intheConsoli- The shareofNova’s profit isincludedintheshare par value wasentered intothepremiumfund. the difference between thecurrentvalueand at theamountofcurrent value ofshares,and applied. The increase insharecapitalwasmade ing theprinciplesofacquisitionmethodwere handled asacquisition,sointermsofaccount- oftheSampoand apart Group. The mergerwas Under theInsurance CompaniesAct, com- Minority interests insubsidiaries’ resultfor The closingfigures forsubsidiariesarecon- Intra-group cross-shareholdings are elim- 27 SAMPO ANNUAL REPORT 1998 28 SAMPO ANNUAL REPORT 1998 Accounting PrinciplesintheSampoGroup and variable rates. nical accountare calculatedasadifference offixed gains andlossescomprisedinthe balanceontech- analysis ofnon-lifeinsuranceresult. Exchange rate is presented separatelyinconnectionwiththe other investments. the itemsOther incomeandChargesarisingfrom expenses, are presented underinvestments, directly toanadjustmentitemunderincomeand ments andthosethatitisnotpossibletoallocate conversion differences onreceivables andinvest- items underincomeandexpenditure. Currency insurance businessare entered asadjustment rencies oftheeuro area iftheyare lower. efficients betweentheeuro andthenationalcur- acquisition, orby usingthefixed conversionco- accounts for1998attheratevalid onthedateof countries orinecuhave beenvalued inthefinal in thenationalcurrencies oftheEMUmember closing theaccounts.However, otherinvestments the dateofacquisitionorrateon have beenvaluedatthelower oftheratevalid on currencies oftheeuro area. Other investments coefficients between theeuro andthenational accounts for1998by usingthefixedconversion been converted intoFinnish markka inthefinal of theEMUmembercountriesorinecu,have ments whichhave beeninthenationalcurrencies debt securities,andshares inthenature ofinvest- ceivables, investments inthenature ofreceivables, date ofclosingtheaccounts.However, thosere- age ratequotedby theBank ofFinland onthe been converted intoFinnish markka attheaver- in thenature ofreceivables, andliabilitieshave Currency-denominated receivables, investments Foreign CurrencyItems inated intheconsolidatedaccounts. value re-adjustments anddividendsare notelim- owned by associatedundertakings andrelated presented intheNotes totheAccounts. not beenconsolidatedintothefinalaccountsare Relevant informationoncompanies whichhave Björkboda LåsOyAb isconsidered temporary. tal andtheinterest paidonit. The holdingin antee capitalisentitledonlytotheguaranteecapi- and reserves isinessential. The owner oftheguar- tion onGroup resultandnon-restricted capital consolidated sincetheimpactofconsolida- Kaleva Mutual Insurance Companyhasnotbeen companies aswell.In thefinalaccountsfor1998, insurance company. This usedtoapplymutual The impactofexchange ratesontheresult Currency conversiondifferences relating to The shares inSampoInsurance Companyplc are entered with impactontheresult. Revalu- on investmentscovering unit-linkedinsurances investments inthenature ofinvestment assetsand rent value. of unit-linkedinsurancesare valued attheircur- gain isnotentered. entered asanexpense,andthepossiblevaluation purposes andahigherbookvalue/contract rateis derivative contractsnotconcludedforhedging entered atitsfullamount. tract rateexceeds thecurrent value,thelossis item entered asanexpense.Ifthebook value/con- sponds totheamountofhedgedbalancesheet maximum amountentered isthatwhichcorre- contract rateisentered asincome.However, the ing derivative contractandalower bookvalue/ difference between thecurrentvalue ofahedg- rent value onthedateofclosingaccounts. The or current value. receivables arepresented atthelower ofparvalue quisition cost. under interest income. The counter-itemistheac- acquisition costofdebtsecuritiesisaccrued sition cost. The difference between parvalueand generally entered intheBalanceSheet atacqui- bonds andmoney-marketinstruments. They are valued according totheaverage priceprinciple. ment isconsidered permanent. The shares are sition priceorcurrent value,ifthevalue adjust- of fixed assetsare presented atthelower ofacqui- or current value.Stocks andshares inthenature ments are entered atthelower ofacquisitioncost revaluations madeinthepreviousyears. real estateandrealshares include ciation orcurrent bookvaluesof value.Certain the lower ofacquisitioncostlessplanneddepre- value. Buildings andstructures arepresented at Sheet atthelower ofacquisitioncostorcurrent and refurbishing ofrented apartments. tems developed bytheinsurancecompanyitself other long-termliabilitiesincludecomputersys- planned depreciation. Items capitalisedunder in theBalance Sheet atacquisitioncostless and productionare includedinacquisitioncosts. The variableexpensesarisingfrom acquisition Valuation andMatching Unrealised gainsandvalueadjustmentson Investments covering thetechnicalprovisions The differencebetween thecurrent valueof Derivative contractsare valuedattheircur- Receivables andinvestmentsinthenature of Debt securitiesare considered toinclude Stocks andshares inthenature ofinvest- Real estate shares are entered intheBalance Intangible assetsandequipmentare entered property inthenatureoffixed assets. No depreciations aremadeontherevaluations of ing from buildingsinthenature ofinvestments. on theunrealised gains entered asincome,aris- average usefullifeofbuildingsis madeannually insurance business,isdepreciated infive years. connection withthereorganisation of thelife acquisition ofa25percentholdinginNova in period istenyears. preciated insixyears, sothetotaldepreciation years 10␣ parent company. The remaining goodwillisde- and acorrespondingdepreciation ismadeby the 30–40years preciated infullthefinalaccountsfor1998, 40–50years kuutusosakeyhtiö Kansa(KansaGeneral) isde- 3–5years Vahinkova- Group through theacquisitionof 10–15 years The consolidationdifference createdinthe Other equipment 5–10years Computer hardware, cars Building components 10 years 5 years warehouses Industrial premises and premises Residential andbusiness 3–10 years Other long-termliabilities negative consolidationdifference Consolidation difference and Goodwill Intangible rights planneddepreciationsextraordinary ifnecessary. buildings istakenintoaccountintheformof accordingly. Adecrease inthecurrent value of the accounts,depreciation periodisadjusted from theearlierestimateondateofclosing nents, andequipment.Iftheestimatediverges assets, buildings,structures andtheircompo- estimated usefullivesaremadeonintangible Planned straight-linedepreciations basedonthe Depreciation made byusingtheequitymethod. and associatedundertakings’ value adjustments shown intheanalysesconsistsofunrealised gains the remaining acquisitioncostofinvestments tion costifthecurrent valueincreases. earlier are re-adjusteduptotheoriginalacquisi- vestment asset,thefundedrevaluation isreversed. If afixed assetsinvestment laterbecomesanin- underrestrictedtion reserve capitalandreserves. sets andtheirreversals are entered intherevalua- ations oninvestmentsinthenature offixedas- Planned depreciation corresponding tothe The consolidationdifference created bythe The difference betweenthebookvalue and Value adjustmentswhichhave beenmade the lower ofparvalue orprobable value. deposits withcedingundertakingsare valuedat sition cost,istakenastheircurrent value. set value ortheundepreciated portionofacqui- shares anddebtsecurities,e.g.basedonnetas- buying rate. The probablesalespriceofother able closingpriceor, ifthisisnotavailable,at wise publiclytraded,are valued atthelatestavail- on officialstockexchanges orwhichare other- sition costisusedastheircurrentvalue. on theequitymethod,orremainingacqui- netassetvalue,ciated undertakings, avaluebased at netassetvalue. With respect toshares inasso- account inthecurrent values oftheirshares. life insurancecompanieshavebeentakeninto former finalaccounts,novaluation differences of interpretation ofthePrinciple ofFairness. In the taken intoaccountinaccordance withtheagreed surance companywhichisasubsidiary, have been ferences inthecurrentvalue ofshares inalifein- assessment. have assistedinthe house andoutsideexperts earned, locationandmarketsituation.Bothin- is assessedseparately, allowingforthenetincome ofSocialMinistry AffairsandHealth. Eachsite buildings are fixed annually, asrequired by the The currentvalues ofinvestmentsinlandand Current Values sessors’ remunerations andlegalexpenses, adjustment expenses,suchas external lossas- by activity. These expensesincludeexternalloss to claimspaidare alsopresentedunderexpenses services). other charges(expensesarisingfrom thesaleof vestments andotherinvestments) and under (management expensesarisingfrom real estatein- settlement expenses),andinvestmentcharges istrative expenses),underclaimspaid (claims costs, policymanagementexpenses,andadmin- under operatingexpenses(policyacquisition year toyear. Expensesby activityare presented Thus thepercentualshare ofactivitiesvaries from working hourswhichiscarried outannually. rectly toactivities,partonthebasisofastudy between activities.Part of themare allocateddi- ised ADPsystemsandequipmentare divided Operating expensesanddepreciation oncapital- Expenses byActivity Loans, depositswithcredit institutions,and Shares anddebtsecuritieswhichare quoted Shares inothergroupcompaniesare valued In thefinalaccountsfor1998,valuation dif- Claims settlementexpensesdirectly allocated 29 SAMPO ANNUAL REPORT 1998 30 SAMPO ANNUAL REPORT 1998 Accounting PrinciplesintheSampoGroup that thecredit leftunusedcanbeusedinsetting for theyear willnotbeentered, ifitisprobable credit sumsexceeding theamountofincometax tion ofprofit wasmade.However, avoir fiscaltax riod duringwhichthedecision onthedistribu- fiscal taxcredit are entered in theaccountingpe- Dividends, guaranteecapitalinterests andavoir entered individends,underInvestment Income. during thepresent accountingperiod. the Group willtransfertotheuseofdeferred tax is nottax-deductiblein1998.In otherrespects, taxation over thefollowing sixyears,insofarasit ation madeintheaccountsisperiodised extraordinary incomeand charges. The depreci- General’s goodwillhasbeenentered undertaxon tax from thenon-recurringdepreciation onKansa lated inaccordance withtaxregulations. Deferred culated onthebasisoftaxableincomecalcu- Loss Account. Taxes fortheyear have beencal- items are presented separatelyintheProfit and Taxes activitiesandonextraordinary onordinary Taxes shown underextraordinary items. non-lifeinsuranceare tostatutory pertaining the formationofcollective guaranteeitem final accountsfor1997,e.g.theitemsrelated to ful lifeisentered intheparent company. In the goodwill exceeding thereassessed economicuse- Correspondingly, thatpartofthedepreciation on useful life,isshown charges. underextraordinary preciation calculatedonthebasisofeconomic dation difference whichexceeds theoriginalde- of thedepreciation onKansaGeneral’s consoli- In theconsolidatedaccounts for1998,thatpart Extraordinary IncomeandCharges relatingof services tocaptiveoperations. activities,includingtheincomeandcharges nary have adirect connectionwiththeGroup’s ordi- handled asOther Income andChargeswhich solidation difference, thoseitemshavebeen solidation difference anddecreaseinnegative con- In additiontodepreciation ongoodwillandcon- Other IncomeandCharges services. land andbuildings,aswell asfeesforcustodian maintenance chargesforreal estatesharesandfor charges comprisemanagementexpensesand expenses whichare shown underinvestment cated directly toclaims. internal lossadjustmentexpenseswhichare allo- Avoir fiscaltaxcredit ondividendearnedis Directly allocatedinvestment management from thevaluation differencesoninvestments. Deferredcapital andreserves. taxisnotdeducted isnotdistributablenon-restrictedand reserves Companies’ Act, theshare entered undercapital ducted from these.According totheInsurance capital andreserves. The minority interest isde- and share ofprofit, anddeferred taxandshare of ence are divided intothechangeindeferred tax andtheaccumulateddepreciationserves differ- ures, excludingthesolvency margin,optionalre- is 28percent. tered asincomeare taxableincome. The taxrate deferred taxisnotrealised. Unrealised gainsen- differences are realised onlytocover expenses,the revaluations transferred andvaluation toreserves Because thereserves are entered asincome,and nor from valuationdifferences oninvestments. fromreserves, revaluations transferredtoreserves, companies, deferred taxisnotdeductedfrom the reserves intheBalance Sheet. ciation difference ispresented underuntaxed and LossAccount, andtheaccumulated depre- Act ispresented asaseparateitemintheProfit ciation madeinaccordance withtheBusiness Tax tween planneddepreciationandthetotaldepre- made inthefinalaccounts. ing animpactontheresult andtaxation,tobe taxed reserves, anddepreciation above planhav- and taxationpracticeallow certain optionalun- The regulations concerningFinnish accounting of DeferredTax Untaxed ReservesandTreatment flected inthebalanceontechnical accountby a provision foroutstandingclaimsisusually re- datareceived.tions andnew sions are annuallyrevised onthebasisofassump- lity, andyieldoninvestments. Technical provi- such mattersasthesettlementofclaims,morta- ods are appliedwhichinvolve assumptionson In calculatingtechnicalprovisions, variousmeth- Technical Provisions taxes fortheyear. Profit andLossAccountasadeductionfrom the istransferredundertakings intheConsolidated dends received fromsubsidiariesandassociated immediately following. lar regard to theexpectationsforfinancialyear off theincometaxoffuture periods,withparticu- In theConsolidatedaccountsandkeyfig- In thefinalaccountsandkeyfigures ofthe In theGroup companies,thedifference be- A changeinthebasisofnon-life insurance The avoirfiscaltaxcredit relating todivi- Fairness inlifeinsurancewith mustbe observed Chapter 13,Section3,aso-called Principle of According totheInsurance Companies’ Act, Principle ofFairnessinLifeInsurance been settled. and onanestimateofclaimswhichhave notyet based onthedisclosure oftheceding company technical provisions ofassumedreinsurance are sions thepaymentofwhichhascommenced. The connection withthetechnicalprovisions ofpen- direct insurance,discountingisappliedonlyin zillmerisation is2–6years. costs. period oftheso-called The amortisation come exceedstheamountofdeferred acquisition miums, sothatineachcontractthefuture netin- ducted from theprovision forunearnedpre- policies andforeign lifereinsurance have beende- life andpensioninsurance,capitalredemption ance. the company’s own calculationbasisinreinsur- ing tothedisclosure ofthecedingcompanyor culated bypolicyindirect insurance,andaccord- ofSocial AffairsandHealth,istry areapplied. oftheMin-based onthelawandinstructions Affairs andHealth, aswellcalculatedinterests interests ofSocial confirmedbytheMinistry In calculatingthetechnicalprovisions, calculated Life Insurance ing isbasedonGroup companystatistics. The claimssettlementperiodusedindiscount- secure aprofit exceeding theinterest rateapplied. rency. The assetsare estimatedassufficientto USD andare covered byassetsinthesamecur- discounted technicalprovisions are mainlyin standing claimsinforeign reinsurance. Patria’s Reinsurance CompanyLtd’s provision forout- ofPatriaities, discountingisappliedtoapart toannu- sion foroutstandingclaimspertaining tract. lated usingtheprorataruleorbyinsurancecon- The provision forunearnedpremiumsiscalcu- Non-Life Insurance result. bases ofcalculationalwayshasanimpactonthe changed foratleastthree years. Achangeinthe equalisation provision are normallykeptun- opposite sign. The basesofcalculationforthe change intheequalisationprovision whichisof In calculatingthetechnicalprovisions of The deferred acquisitioncostsofindividual The provision forunearnedpremiums iscal- In additiontothecalculationofprovi- basis. the Profit andLossAccount ontheaccrual tice. have beenarrangedinaccordance withlocalprac- panies. In foreign subsidiaries,pensionschemes pension arrangementshandledbyinsurancecom- TEL. Some Group companieshave additional in compliancewiththeEmployees’ Pensions Act, pensioncoverpanies, statutory hasbeenarranged For thoseemployed by theFinnish group com- Pension Schemes ers orpolicyholderstothesevaluationdifferences. differences doesnotentitleindividualsharehold- ers. distributionofvaluation This calculatory ences iscalculatedtothecompany’s sharehold- nal accounts,25percentofthevaluationdiffer- status ofDecember31,1998inSampo Life’s fi- shareholders. In accordance withthesolvency run, 80percentareconsidered tobelongthe are notneededforensuringsolvency inthelong shareholders. Ofthevaluation differences which aretal andreserves consideredtobelongthe insured. The restricted andnon-restricted capi- vency capitalisrequired forensuringthebenefits policy, ofthecompany’s aprominentpart sol- a consequenceoftheprincipleandbonus of thePrinciple ofFairness inlifeinsurance.As for itspartmadeadecisionontheinterpretation distribution ofprofittoshareholders. the givingofbonusestopolicyholdersnor vency statusatsuchalevelthatitdoesnotlimit continuity ispursued. Asforthelevelperformance. ofthetotalreturn, termined annuallyonthebasisofcompany’s sists oftheguaranteedinterest andbonusesde- of aFinnish bond. treasury The totalreturn con- profit insurance savings,whichisatleasttheyield fore chargesandtaxes onpolicyholders’ with- returned tothesepoliciesasbonuses. vent ofthesurplushastobe it,areasonable part policies. If thesolvency requirements donotpre- granted onthebasisofanysurplusyieldedby insurance contract,entitletobonusesandrebates respect tosuchpolicieswhich,according tothe Pension insurancepremiums areenteredin The Board ofDirectors ofSampo Lifehas The aimistomaintainthecompany’s sol- Sampo Lifeaimsatgivingatotalreturn be- 31 SAMPO ANNUAL REPORT 1998 32 SAMPO ANNUAL REPORT 1998 lifeinsuranceoperating profit + non-lifeinsuranceoperating profit + Group operatingprofit: ± othercharges – otherincome + technicalresult before bonusesand + Life insurance: ± othercharges – otherincome + investment charges – investment income + operatingexpenses – claimsincurred – premiums earned + Non-life insurance: Operating profit lifeinsuranceturnover + non-lifeinsuranceturnover + Group turnover: otherincome + investment incomeandrevaluations + premiums writtenbefore credit losses + Life insurance: revaluations entered asincome, + otherincome + investment income + premiums earnedbefore credit losses + Non-life insurance: r ove rn Tu GENERAL KEY FIGURES the Finnish Accounting Standards Board. 1509) grantedtoinsurancecompaniesby permission (December 22,1997,No. which complywiththeexceptional the Ministry ofSocial AffairsandHealth, accordance withtheguidelinesissuedby Key figures havebeencalculatedin CALCULATION METHODSFORTHEKEYFIGURES profit andloss share ofassociatedundertakings’ equalisation provision rebates and thechangein profit andloss share ofassociatedundertakings’ and reinsurers’ share realised inconnectionwithsales and reinsurers’ share ± balancesheettotal + ± revaluation withdrawn from revaluation – revaluation entered intorevaluation + revaluation adjustments oninvestments – revaluations oninvestments + calculatedinterestontechnical + interestandexpensesonliabilities + operatingprofit + Return onassets(atcurrent values) ± minorityinterest + capitalandreserves + tax – ± revaluation withdrawnfrom revaluation – revaluation entered intorevaluation + profit before items, extraordinary + Return onequity(atcurrent values)* extraordinary charges – extraordinary income + profit before items, extraordinary + Profit before untaxed reserves andtax bonusesandrebates, lifeinsurance + revaluation adjustmentsoninvestments, – revaluations oninvestments, + ± Group operatingprofit + untaxed reserves andtax Profit before extraordinary items, (average atJan. 1andDec. 31) valuation differences oninvestments investments change invaluationdifferences on reserve reserve (non-life insurance) (non-life insurance) provisions (average onJan. 1andDec.31) valuation differences oninvestments investments change invaluationdifferences on reserve reserve untaxed reserves andtax untaxed reserves andtax non-life insurance non-life insurance change intheequalisationprovision x 100% x 100% Loss ratio and credit losses premiums written beforereinsurers’ share Gross premiums written FIGURES INSURANCE BUSINESS KEY part-timers the endofeachmonth,adjustedfor average of the numberofpersonnelat Average numberofpersonnel ± balancesheettotal + minorityinterest + equalisationprovision + solvencymargin + Solvency capital** ± deferredtax + intangibleassets – ± afterproposed capitalandreserves + Solvency margin** claimssettlementexpenses + operatingexpensesbeforethechangein + Expense ratio loss ratio+expense Combined ratio premiums earned operating expenses Expense ratio premiums earned claims incurred investments valuation differences oninvestments load income other itemsprescribed inthedecree valuation differences oninvestments profit distribution deferred acquisitioncosts ± minorityinterest + capitalandreserves + Equity/assets ratio(atcurrent values) valuation differences on (non-lifeinsurance) (lifeinsurance) (non-lifeinsurance) (non-lifeinsurance) x 100% x 100% x 100% x 100% ± capitalandreserves + Net assetvaluepershare* at Dec. 31 adjusted numberofshares capital andreserves Capital andreserves pershare minorityinterest – tax – profitbefore items, extraordinary + Earnings pershare PER-SHARE KEYFIGURES premiums earned + solvencycapital + (non-life insurance) Solvency ratio,% 75%xtechnicalprovisions ofunit- – equalisationprovision – technicalprovisions + solvencycapital + (whole businessandlifeinsurance) % oftechnicalprovisions Solvency capital, equalisationprovision – technicalprovisions + solvencycapital + (non-life insurance) % oftechnicalprovisions Solvency capital, at Dec.31 adjusted numberofshares investments valuation differences on of shares adjusted averagenumber andtax untaxed reserves linked insurances x 100% x 100% x 100% x 100% of shares adjusted averagenumber the Helsinki Stock Exchange number ofsharestradedthrough Relative share tradingvolume share priceatDec. 31 number ofsharesatDec. 31xclosing Market capitalisation earnings pershare at Dec.31 adjusted closingshare price Price/earnings ratio at Dec.31 adjusted closingshare price dividend pershare Effective dividendyield earnings pershare dividend pershare Dividend perearnings, % at Dec.31 adjusted numberofshares period dividend fortheaccounting Dividend pershare x 100% x 100% x 100% insurance. closed asthesolvencycapitalofnon-life life insurance,andthedifference isdis- Group’s solvency capitalasbelongingto of Sampo Lifehasbeenseparatedfrom the ** The solvency capitalofthesubgroup figures. included inthecalculationofsaidkey differences oflifeinsurancewere not insurance. In previous years, thevaluation oflife tion tothecapitalandreserves 1998 iscalculatedtotheowners, inaddi- valuation differences pertainingtotheyear according towhich25percentofthe insurance hasbeentakenintoaccount, tion ofthePrinciple ofFairness inlife * Incalculatingkeyfigures, aninterpreta- 33 SAMPO ANNUAL REPORT 1998 34 SAMPO ANNUAL REPORT 1998 ovnycptlFMm6563,180.2 175.9 23.3 635.6 3,103.9 195.1 2.8 2,021.4 580.8 1,575.3 1,338.9 1,136.4 260.1 3,170 233.2 3,059 20.1 94.1 FIM m 199.3 114.2 11,740.5 3,113 19.5 % FIM m 94.0 171.8 FIM m 9,367.9 113.5 FIMm 1,335.9 3,023 10,050.0 21.9 7,696.1 199.7 91.2 Average number of personnel 7,926.3 1,438.2 113.1 FIM m 2,966 6,378.7 7,794.0 6,331.5 20.0 1,362.4 89.1 Solvency capital 109.1 % 7,083.4 6,273.0 Equalisation provision 5,266.2 5,176.7 10.1 3,292 28.7 1,110.2 Solvency margin 20.7 91.4 FIM m 112.2 Expense ratio 6,104.9 5,565.3 4,647.7 1,492.9 Gross premiumswritten 3,176 8.4 35.6 14.0 5,896.3 FIM m Turnover FIM 4,495.0 m Life InsuranceKeyFigures % % 33.7 14,920.7 % 3,113 5,881.5 Average numberofpersonnel 35.9 6.0 4,219.1 11.6 10,003.5 FIMm 3,023 Solvency ratio 23.5 4,149.6 7,696.1 33.5 4.0 9.6 Solvency capital 1,222.0 FIM m 2,966 1,253.8 6,378.7 17.3 Equalisation provision 988.1 34.0 687.7 Solvency margin 3.1 1.1 921.2 7,083.4 9,815.3 Combined ratio 661.9 -3.2 Expense ratio FIM m 366.7 618.9 Loss ratio 7,848.2 % 6,515.5 3.8 365.2 Gross premiumswritten 6.8 % 270.7 6,104.9 Turnover 318.8 5,784.1 Non-Life InsuranceKeyFigures 233.7 5,896.3 Average numberofpersonnel 182.7 4,495.0 % 175.7 % 182.7 5,881.5 4,219.1 FIM m FIM m Solvency capital FIMm Equity/assets ratio FIM m 4,149.6 Return onassetsatcurrentvalues Return onequityatcurrentvalues %ofturnover FIM m Profit beforeuntaxedreservesandtax untaxed reservesandtax Profit beforeextraordinaryitems, Operating profit Gross premiumswritten Turnover General KeyFigures SAMPO GROUPKEYFIGURES ftcnclpoiin 5820.7 15.8 112.2 96.7 % 82.8 115.9 95.9 72.0 % oftechnicalprovisions 107.8 88.3 84.2 110.3 57.7 88.4 12.5 111.7 % 73.0 91.7 8.8 12.8 82.8 11.7 6.0 % oftechnicalprovisions 72.0 % 10.1 4.6 % 84.2 excluding theeffectofexchangerates 5.4 excluding theeffectofexchangerates 3.1 % 3.0 % % % oftechnicalprovisions % ofturnover % ofturnover U . 3.9 534.9 522.0 106.9 0.5 225.2 97.7 340.0 191.1 264.9 EUR m 224.7 EUR m 1,974.6 EUR m 241.9 1,690.3 1,575.6 EUR m 1,333.1 229.1 1,294.4 EUR m 870.7 1,064.9 1,072.8 186.7 781.7 1,310.9 885.7 1,191.3 251.1 1,055.0 756.0 EUR m 936.0 1,026.8 EUR m 709.6 EUR m 991.7 2,509.5 166.2 697.9 1,682.5 205.5 989.2 111.3 EUR m 1,294.4 115.7 EUR m 210.9 61.4 1,072.8 61.7 1,095.8 154.9 39.3 1,191.3 972.8 1,650.8 104.1 EUR m 45.5 30.7 1,320.0 756.0 53.6 30.7 1,026.8 EUR m 709.6 29.6 EUR m 991.7 697.9 EUR m 989.2 EUR m EUR m 9419 9619 1998 1997 1996 1995 1994 1 122 117 ubro hrsa e.3 006 06 4 240 240 240 79.1 240 60 47,902 49.9 193.50 30,191 240 60 115.00 177.00 43.5 5 26,330 311.00 88.75 240 90.75 60 12.9 218.23 7,792 203.00 57.50 5 13.5 58.25 240 60,560 130.19 11,267 19.3 91.25 '000 41.25 60,560 53.75 60,560 60,560 21.3 70.11 20 '000 68.50 '000 11,764.8 60,560 50.75 60,560 15,140 % 56.84 60,800 FIM 10,761.6 21.5 100.00 20 60,560 Number ofsharesatDec.31 60,560 60,800 15,140 5,517.6 60,800 Adjusted averagenumberofshares FIM 60,800 70.76 B Shares 19.7 60,560 FIM 60,560 60,800 3,541.6 15,140 60,800 20 15,200 Relative sharetradingvolume the accountingperiod FIM 60,560 Share tradingvolumeduring 22.7 3,268.0 58,308 60,800 60,800 15,200 '000 Adjusted closingprice FIM m Adjusted shareprice,low FIM 60,800 '000 60,800 '000 15,200 Adjusted shareprice,high 60,800 Weighted averageshareprice 58,548 Adjusted numberofsharesatDec.31 '000 Number ofsharesatDec.31 Adjusted averagenumberofshares A Shares '000 '000 Market capitalisation Par valueatDec.31 Adjusted numberofsharesatDec.31 Number ofsharesatDec.31 Adjusted averagenumberofshares Price/earnings ratio Effective dividendyield Dividend perearnings dutdnme fsae tDc 1'0 4 4 4 4 240 240 240 240 240 *) Proposal by theBoard totheAnnualGeneral Meeting concerningthefinancial year 1998 entirely totheowners. Capital andreserves, whichincludesashare andaccumulateddepreciation ofoptionalreserves difference, isconsideredtobel were notincludedinthecalculationofsaidkeyfigures. '000 the owners, inadditiontothecapitalandreserves oflifeinsurance.In previous years,thevaluation differences oflifeins has beentakenintoaccount,according towhich25%ofthevaluationdifferences totheyear 1998iscalculatedto pertaining In calculatingthenetassetvaluepershare andthe return onequity, aninterpretation ofthePrinciple ofFairness inlifei Adjusted numberofsharesatDec.31 14.37 195.22 8.32 74.15 145.54 65.84 4.23 115.64 58.73 2.96 98.01 55.51 102.91 2.37 54.14 FIM FIM FIM Dividend pershare Net assetvaluepershare Capital andreservespershare Earnings pershare Per ShareKeyFigures *) *) *) . . . . 2.5 33.4 1.7 0.81 4.80 36.1 1.7 0.50 3.00 35.5 0.25 2.1 1.50 42.2 0.21 1.9 1.25 43.8 0.17 1.00 % % EUR FIM U .498 52 97 32.54 19.34 29.77 52.31 14.93 36.70 15.26 34.14 9.67 21.90 9.80 15.35 6.94 11.79 1,978.7 9.04 11.52 9.56 8.54 1,810.0 16.82 EUR 928.0 11.90 EUR EUR 595.7 EUR 549.6 EUR m U 73 64 94 44 32.83 12.47 2.42 24.48 11.07 1.40 19.45 9.88 0.71 16.48 9.34 0.50 17.31 9.11 0.40 EUR EUR EUR 9419 9619 1998 1997 1996 1995 1994 urance nsurance ong 35 SAMPO ANNUAL REPORT 1998 36 SAMPO ANNUAL REPORT 1998 1 GROSSPREMIUMSWRITTEN ANALYSES Life insurance rs rmuswitn6555857412171751,644,236 1,761,745 5,784,132 6,515,528 Gross premiumswritten mlye’GopLf suac 2046,1 ,5 1,583 355,499 45,580 371,317 1,457 282 6,796 679,918 45,606 4,258 67,712 704,796 308,182 4,481,195 6,728 556 35,981 3,844 62,034 4,588,431 324,401 9,060 35,788 545,661 17,030 11,005 97,162 8,847 571,975 18,282 10,462 –13,691 1,630,545 95,230 Employees’ GroupLifeAssurance 1,753,758 –7,987 Unemployment Insurance 5,765,379 Group LifeAssurancePool. Compensation Insurance,andrenderedtotheUnemploymentInsurance FundandEmployees’ –18,753 6,501,461 The followinginsurancepremiumshavebeencollectedasaccessories ofStatutoryWorkers Total –14,067 Government medicaltreatmentfees Industrial safetycharge Traffic safetycharge Fire brigadecharge 1997 Premium tax PREMIUM TAXANDOTHERTRANSFERREDCHARGESINCLUDEDINPREMIUMS 1998 reinsurance premiums Premiums writtenbeforeoutward Credit lossonpremiums 1997 1998 Non-life insurance FIM ‘000 Reinsurance Direct insurance ierisrne5,7 93,888 56,477 Life reinsurance Direct insurance o-ierisrne272626641,0 13,364 15,108 246,604 227,246 Non-life reinsurance ierisrne2,4 762–027–9,875 – –10,217 – 27,682 28,544 13,910 18,680 Life reinsurance Other countries Group iln ,8,8 1,042,500 1,282,386 Finland E onre 6,6 5,7 – – 1,640,747 1,756,854 4,004,076 355,472 4,533,826 368,368 EEA countries Finland ,7,6 ,4,4 ,6,4 1,644,236 1,761,745 4,647,744 5,176,665 ,2,7 ,7,5 ,5,5 1,640,747 1,756,854 4,373,458 4,920,874 ,3,6 1,136,388 1,338,864 5,9 7,8 ,9 3,489 4,891 274,286 255,790 ParentCompany Balance ontechnicalaccount Change intheequalisationprovision Change inthecollectiveguaranteeitem Total Reinsurance Direct insuranceintotal I 001234567 6 5 4 3 2 1 balance Reinsurance 5 = Direct insurance FIM ‘000 Grosspremiumswrittenbeforecreditlossandreinsurers’share 1 = Columns: 2 GROUP:NON-LIFEINSURANCEBALANCEONTECHNICALACCOUNTBYGROUPOFCLASS Miscellaneous Legal expenses Credit andsuretyship Third partyliability Fire andotherdamagetoproperty Marine, aviationandtransport Motor, otherclasses Motor thirdpartyliability Non-statutory accidentandhealth Statutory workerscompensation 964449744302–,5,7 9833–357–0,2 113.1 113.5 196.9 38.4 114.2 254.1 –505,427 –542,105 –281,511 –43,507 –632,840 104,447 –279,337 –93,882 87,809 –1,891 –5,274 –938,303 10,124 108.6 –908,764 –167,963 106.3 –3,956,679 106.9 –1,016,068 –93,723 –4,125,690 117.1 –83,351 4,433,062 –581,830 –4,720,576 4,586,231 –4,022 4,494,977 5,105,695 –223,916 –453,201 380,473 –262,767 –83,634 4,647,744 –737,287 5,176,665 14,016 –131,315 272,861 –88,607 446,008 261,308 –12,015 –770,340 274,286 –815,041 –32,108 255,790 –932,717 –3,374,849 –3,672,488 4,052,588 1996 –151,559 –4,636,942 4,313,369 4,048,969 4,844,387 165,630 4,373,458 1997 4,920,874 1998 163,551 1996 1997 1998 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 1996 966,9 096–933–,7 ,6 94.5 92.4 127.3 129.4 120.8 3,362 * –17,362 91.4 4,169 –13,968 –13,223 – 23.6 – 18,897 – –29,955 1,666 20,352 20,305 –31,539 –32,706 100.2 –8,271 –7,210 –6,090 –13,401 –144,920 –8,470 107.9 –4,023 –92,685 119.4 –49,323 –380 –7,746 143,594 –9,585 –74,947 159,515 –68,341 –10,451 –16,138 60,956 144,728 –52,720 63,675 8,360 106.9 –19,544 –16,501 100.3 163,595 89.7 63,588 2,459 –42,916 69.0 100.1 62,295 –49,737 38,005 119.2 –32,186 65,026 –63,042 33,139 –42,338 62,634 –2,557 99.4 100.0 32,320 –51,546 19,143 –179,692 –196 35,410 64,853 –87,215 100.2 –192,687 –187,024 33,502 –10,002 –271,341 228,000 36,541 –150 –30,070 3,368 79,222 256,140 –272,537 –38,255 132.1 –5,328 319,904 –319,195 –1,414 215,615 141.3 –38,196 –855,953 258,261 145.6 –364,134 –33,446 –939,297 –1,078 –627 321,720 –39,486 106.0 –168,403 1,152,663 –210 –158,390 102.5 99.9 –1,178,447 –238,477 1,265,937 –114,381 109.6 –299,741 1,120,038 1,270,672 –397 –122,668 –219,387 245,799 1,247,524 –625 –124,027 250,936 –12,945 1,269,809 –506 106.1 –135,422 –5,773 –388,467 264,006 856 242,902 –416,756 –23,622 –121,249 262,701 –442,503 –2,473 512,063 –119,054 267,294 –1,266 544,777 –57,064 114.6 –132,726 –572,212 –1,201 576,722 528,442 –696,877 –387 –67,521 560,734 1997 –830,982 525,455 –412 –64,895 590,532 1998 578,078 –75,687 –178,158 –162,428 664,473 546,227 1996 –173,785 –66,018 –276 617,738 1997 –193,866 219,477 –66,711 710,316 1998 234,174 –837,280 247,132 222,867 1996 –932,861 –82,088 235,134 1997 904,541 247,270 1998 942,920 –1,341,849 911,622 1996 1,246,056 948,110 1997 1998 1,251,164 1996 1997 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 rs lisicre eoerisrr’saeguaranteeitemandequalisationprovision Balanceontechnicalaccountbeforethechangeincollective 6 = 7 = Combined ratio Grossoperatingexpensesbeforereinsurancecommissions 4 = Grossclaimsincurredbeforereinsurers’share 3 = Grosspremiumsearnedbeforereinsurers’share 2 = and profitparticipation –757,561 –686,849 –537,160 –252,134 –144,745 102,302 –6,622 37 SAMPO ANNUAL REPORT 1998 38 SAMPO ANNUAL REPORT 1998 Balance ontechnicalaccount Change intheequalisationprovision Change inthecollectiveguaranteeitem Total Reinsurance Direct insuranceintotal I 001234567 6 5 4 3 2 1 balance Reinsurance 5 = Direct insurance FIM ‘000 Grosspremiumswrittenbeforecreditlossandreinsurers’share 1 = Columns: PARENT COMPANY:NON-LIFEINSURANCEBALANCEONTECHNICALACCOUNTBYGROUPOFCLASS Miscellaneous Legal expenses Credit andsuretyship Third partyliability Fire andotherdamagetoproperty Marine, aviationandtransport Motor, otherclasses Motor thirdpartyliability Non-statutory accidentandhealth Statutory workerscompensation 984811,9 289–,2 7 630* 385.0 363.1 161.0 111.9 –36,104 116.3 117.9 26,300 –35,585 –379 –178,989 –804 –260,524 372 9,088 –304,165 –8,873 –13,902 – –7,067 –1,788 –430,296 –3,138 109.6 –2,128 –423,383 –473,929 –46,376 –1,248,883 114.2 119.6 –1,431,514 1,509,062 –55,090 –801 12,859 –1,542,282 1,608,275 –142,885 12,863 1,538,891 1,719,113 –224,939 13,556 1,644,236 –330,465 –8,069 15,197 1,761,745 –200 –5,144 –22,990 –7,439 3,489 –428,508 4,891 –420,245 –471,801 622 –1,202,507 –1,376,423 1,496,199 1996 –1,555,141 1,594,719 1,544,035 1,703,916 1,640,747 653 1997 1,756,854 1998 1996 1997 1998 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 1996 977166–4 69––5 224.1 162.6 –852 –485 86.5 – – 113.0 120.7 * * 6,528 178.9 –689 –6,471 60.5 –944 –9,930 – –4,458 214.5 – 148.2 4,570 20,795 –849 – 2,779 –316 –448 –9,676 –2,405 –4,365 –1,443 –6,207 686 – –4,063 775 –5,662 –847 – –569 – –944 –35,451 94.7 100.8 –52,047 98.2 721 79.8 –52,349 825 88.0 48,186 97.0 –10,566 –1,835 19,444 49,639 4,489 48,080 –195 –2,634 24,264 –3,539 8,612 7,404 49,055 5,046 –2,422 4,325 98.3 50,513 3,071 14,480 2,468 98.4 46,409 –15,492 –4,274 –9,891 –312 –3,248 5,563 7,036 –15,412 –3,484 3,001 100.3 8,450 –737 6,237 1,947 –152,052 9,064 6,053 –4,320 –149,430 –6,723 135.5 7,712 –165,602 –277,276 146.0 –1,300 8,971 –319,974 –5,662 –733 9,205 152.9 –302,857 –999 457,865 –384 –20,337 –138,236 481,264 151.7 113.7 –320 –198,823 486,423 –16,900 177.4 109.9 470,185 27,177 –348 –99,383 114.3 –261,705 475,850 25,777 197.2 –460 –99,243 494,790 26,369 –17,433 –21,991 –364 –110,637 –255,608 28,064 –33,391 –16,233 –277,678 25,847 –96,347 –24,453 –50,347 –296,401 –5 –1,949 361,961 26,751 –96,482 –9 –1,073 383,358 –107,571 –431,046 –1,081 406,058 –10 372,147 –534,227 –57,682 395,907 1997 –653,615 389,504 –56,153 415,624 1998 432,346 –6,632 –63,693 –125,089 499,845 –6,662 408,918 1996 –124,726 –7,549 469,552 1997 –132,039 162,729 –44,511 535,753 1998 165,719 –69,875 172,360 –95,262 166,905 1996 33,715 166,242 1997 43,156 171,869 1998 52,473 34,832 1996 44,142 1997 53,681 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 1996 1997 1998 rs lisicre eoerisrr’saeguaranteeitemandequalisationprovision Balanceontechnicalaccountbeforethechangeincollective 6 = 7 = Combined ratio Grossoperatingexpensesbeforereinsurancecommissions 4 = Grossclaimsincurredbeforereinsurers’share 3 = Grosspremiumsearnedbeforereinsurers’share 2 = and profitparticipation –244,004 –227,164 –240,772 –65,015 33,360 66,355 –2,962 3 LIFEINSURANCEPREMIUMSWRITTENANDCLAIMSPAID enuac 83349,852 33,969 177,350 58,393 94,164 275,478 and pensioninsurancepoliciesterminatedduring Impact ofbonusesandrebatesattachedtolife Claims paidintotal 491,190 Reinsurance 631,108 Surrenders 1,042,500 1,282,386 Regular premiums Direct insurancepremiumswrittenintotal Pension insurance h er ntetcnclrsl 3,2 84,993 135,123 the year,ontechnicalresult 551,309 36,259 651,279 1,006,240 38,696 1,243,690 Direct insurance Claims paid 1997 Premiums fromunit-linkedinsurance Premiums fromwith-profitpolicies 1998 Single premiums Life insurance Direct insurancegrosspremiumswritten FIM ‘000 ru eso nuac 74027,505 3,279 17,420 464,624 5,709 526,479 Group pensioninsurance Individual pensioninsurance Group lifeinsurance eso nuac 0,4 91,296 109,141 Pension insurance ieisrne1,8 2,233 13,781 Life insurance 547,091 732,778 Individual lifeinsurance Group ,8,8 1,042,500 1,282,386 1,042,500 1,282,386 4,9 492,129 543,899 550,370 738,488 2,2 93,529 122,921 39 SAMPO ANNUAL REPORT 1998 40 SAMPO ANNUAL REPORT 1998 4 EXPENSESBYACTIVITY hr ffxdcss4784,117 4,718 Share offixedcosts Life insurance Change indeferredpolicyacquisition costsincludedinthechangeprovisionforunearnedpremiums I 0019 9719 1997 1998 1997 1998 Non-life insurance FIM ‘000 ieisrne–,3 –3,890 –6,237 Life insurance *) Comprisesmanagementexpenses forlandandbuildingsmaintenancecharges. Operating expenses Investment managementexpenses(investmentcharges) Directly allocated Investment managementexpenses(investmentcharges) Operating expenses te hre 7 ,4 – – 42,964 3,245 15,389 44,139 17,758 876 28,107 Otherpolicyacquisitioncosts 34,819 Claims settlementexpenses(claimspaid) Other charges Share offixedcosts Claims settlementexpenses(claimspaid) ietisrnecmisos1,4 11,309 19,572 14,245 9,375 Commissionsonreinsuranceassumed Directinsurancecommissions Policy acquisitioncosts hr ffxdcss4362,999 4,386 78,831 –657 90,396 171,288 Share offixedcosts –489 196,741 193,909 148,271 345,111 206,175 154,215 –126,118 167,643 404,669 –110,482 180,136 236,318 283,402 281,679 332,425 Commissions onreinsuranceceded Administrative expenses Policy managementexpenses Otherpolicyacquisitioncosts Share offixedcosts Group omsin nrisrnecdd–0 –2,042 –702 Commissions onreinsuranceceded Directly allocated 22,491 2,501 17,021 2,128 75,037 58,388 74,465 49,080 Commissionsonreinsuranceassumed Directinsurancecommissions Policy acquisitioncosts diitaieepne 32812,305 11,988 13,288 2 22,340 11 Administrative expenses Policy managementexpenses Directly allocated ietyalctd7,4 6722,9 24,492 25,295 66,792 70,647 Directly allocated *) *) 2,2 115,723 126,520 94816,628 12,511 19,438 14,720 50,624 47,746 97,969 92,565 ,3,1 ,6,6 4,7 667,446 744,375 1,262,161 1,436,918 0,8 8,4 7,4 422,726 473,440 173,263 782,646 186,792 905,586 369,743 178,707 405,224 205,431 350,193 403,072 0,8 96,095 102,686 2,8 2,7 55466,013 65,504 126,077 127,384 77073,845 67,760 ,9 3,000 4,397 ParentCompany osldto ifrne302,011 Consolidation difference ulig 0,1 4155,6 28,989 311,356 55,368 7,610 94,125 14,648 108,815 Goodwill Buildings eaiecnoiaindfeec 277–,7 – – –2,777 1,925 –2,777 1,972 3,176 Includes depreciationofFIM281millionongoodwill,entered anextraordinary underextraordinary charges **) IncludesanextraordinarydepreciationofFIM234millionontheconsolidationdifference,enteredundercharge *) 192 3,292 Negative consolidationdifference 42,248 1997 55,176 324 42,297 61,015 1998 822 71,905 11,963 103,840 1997 2,757 320,126 76,861 12,236 123,381 Depreciation accordingtoplanbyactivity 932 333,755 DEPRECIATION ACCORDINGTOPLAN 1998 3,283 21,039 573,346 the financialyear 11,338 21,731 Average numberofpersonnelduring 610,581 retirement ageis60andthatofothermanagers60–65. 11,237 It hasbeenagreedthattheparentcompany’sManagingDirector’s Shares ofprofitpaidtoexecutives Other socialexpenses Pension expenses Monetary valueoffringebenefits Other salariesandcommissions Executives’ salariesandcommissions STAFF EXPENSESANDPERSONNEL FIM ‘000 te hre 5205–– – 2,075 85 Other charges netetcags6353926053,673 23,152 69,082 6,085 29,854 90,828 3,902 31,285 99,479 41,262 6,385 129,854 Investment charges Operating expenses Claims paid Gop Group 0,8 8,2 9,9 154,016 493,490 289,224 600,284 7,8 3,4 2,6 95,907 126,767 136,741 177,587 4,9 8,6 5,8 432,270 452,587 781,468 843,792 *) 355–– – 53,525 **) ParentCompany 29,120 s. 41 SAMPO ANNUAL REPORT 1998 42 SAMPO ANNUAL REPORT 1998 5 NETINVESTMENTINCOME INVESTMENTINCOME au edutet 9698,9 ,6 71,286 572,616 921,001 6,962 1,331,620 84,194 1,321,664 19,689 Value readjustments Total Income fromotherinvestments Income frominvestmentsinlandandbuildings osso elsto fivsmns–418–,2 949–2,305 –9,479 –3,824 –54,188 Losses onrealisationofinvestments netetcagsi oa 10628–0,7 4685–222,408 –161,050 –406,825 –155,499 –14,715 –503,971 –253,024 –279 –1,096,288 –433,594 – –18,739 –28,327 – –26,026 Investment chargesintotal –60,099 –32,709 795,538 –61,945 1,423,101 151,637 –116,114 Value adjustmentsanddepreciations 2,097,216 –67,497 495,138 –293,362 Total 3,320,458 –64,949 to otherthanaffiliatedundertakings 681,402 Interest andotherexpensesonliabilities –110,885 to affiliatedundertakings 1,979,105 Interest andotherexpensesonliabilities –107,523 Charges arisingfromotherinvestments Charges arisingfrominvestmentsinlandandbuildings 1997 INVESTMENT CHARGES Investment incomeintotal 1998 Gains onrealisationofinvestments 1997 1998 FIM ‘000 Income frominvestmentsinassociatedundertakings Income frominvestmentsinaffiliatedundertakings iiedicm 1,3 1,3 92169,616 1,380 99,271 30,219 1,011 312,232 10,637 8,673 27,587 415,130 32,740 – 10,848 83,840 30,219 8,618 14,474 – 58,565 27,587 – 93,949 – 234,495 482,969 104,162 93,824 – Other incomefromotherthanaffiliatedundertakings 499,757 – Interest incomefromotherthanaffiliatedundertakings 262,317 Interest incomefromaffiliatedundertakings Dividend income 269,676 Other incomefromotherthanaffiliatedundertakings Other incomefromaffiliatedundertakings Interest incomefromaffiliatedundertakings Other income lne ercaino ulig 1885–415–538–28,989 –55,368 –94,125 –108,815 Planned depreciationonbuildings au dutet nivsmns–9,9 1298–8,7 –30,065 –186,478 –152,998 –499,691 Value adjustmentsoninvestments neeticm ,8 ,1 2,091 225,694 – 13,776 594,062 12,743 5,916 – 3,472 1,881 3,472 – Interest income Dividend income Dividend income ru Group ,1,4 ,2,9 7,2 187,577 173,320 1,029,696 1,019,049 6856–4,2 2186–59,054 –241,846 –247,123 –608,506 6,7 6,1 1,9 113,259 113,290 262,317 269,676 2903,0 03946,086 40,329 39,607 32,940 ParentCompany Income fromotherinvestments Income frominvestmentsinlandandbuildings GROUP NETINVESTMENTINCOME,JANUARY1–DECEMBER31,1998 oa ,3,5 290,706 12,507 1,030,958 7,182 Value readjustments Total neteticm nttl26162668,796 365,583 2,651,662 1,613,522 Insurance Life Investment incomeintotal Gains onrealisationofinvestments Insurance Non-Life 84,366 199,132 1997 – – Income frominvestmentsinassociatedundertakings 80,704 1,696 1998 INVESTMENT INCOME 103,093 FIM ‘000 – 8,883 – 1997 573,131 573,131 1,016,276 –1,050 1998 2,948 1,016,276 1,595,142 –107 1,593,245 2,237,769 charges fromotherinvestments 13,706 Items includedinotherincomeand 2,224,170 income fromdividends Avoir fiscaltaxcreditincludedin net investmentincome Share ofunit-linkedinsurance NET INVESTMENTINCOME Unrealised lossesoninvestments Unrealised gainsoninvestments and lossesoninvestments Net investmentincomebeforeunrealisedgains FIM ‘000 neeticm 5,2 146,828 52,519 59,954 352,929 362,612 209,722 Interest income Dividend income Other income xhnert oss16115,1 3871,480 13,867 54,518 156,141 Exchange ratelosses te noe7,5 31,406 72,756 Other income te noe2,8 – 27,587 Other income xhnert an 0,9 3,2 39830,944 13,958 230,328 100,995 Exchange rategains neeticm ,8 – – 1,881 3,472 Interest income Dividend income Gop Group 8,9 230,752 788,296 290– 32,940 ParentCompany 43 SAMPO ANNUAL REPORT 1998 44 SAMPO ANNUAL REPORT 1998 6 GROUPTAX,ACCRUEDTAXSURPLUSANDUNUSEDCREDIT osso elsto fivsmns–375–433 –53,755 Losses onrealisationofinvestments te ,5 31065663362,964 3,396 686 645 13,140 – 1997 5,054 41,153 1998 29,743 – 272,033 1997 – – 347,865 1998 251,312 – –70,698 2,633 522,449 36,550 –182,170 – – 1997 31 26,347 – 1998 48,615 28,424 159,159 associated undertakings’dividends 9,691 4,248 134,854 Avoir fiscaltaxcreditonsubsidiaries’and 130,404 4,461 –107 32,517 84,687 16,547 4,319 97,345 Group companiesintotal 13,706 Other 77,470 24,583 199,732 191,063 421,637 Sampo LifeInsuranceCompanyLimited 17,618 49,271 Insurance CompanyofFinlandLimited 8,883 Otso LossofProfitsInsuranceCompanyLtd 56,464 408,038 Sampo EnterpriseInsuranceCompanyLimited 10,707 Industrial InsuranceCompanyLtd –260,758 Sampo InsuranceCompanyplc –118,033 – FIM ‘000 – 1,816,132 1,816,132 92,385 –835,530 –315,561 Insurance Life –424 Items includedinotherincomeandchargesfrominvestments Avoir fiscaltaxcreditincludedinincomefromdividends –105,190 Share ofunit-linkedinsurancenetinvestmentincome Insurance Non-Life NET INVESTMENTINCOME Unrealised lossesoninvestments Unrealised gainsoninvestments –12,419 gains andlossesoninvestments –32,285 Net investmentincomebeforeunrealised –188,172 Investment chargesintotal –95,104 Value adjustmentsanddepreciations Total Interest andotherexpensesonliabilities Charges arisingfromotherinvestments Charges arisingfrominvestmentsinlandandbuildings FIM ‘000 INVESTMENT CHARGES eerdtx–439–11,396 –64,319 169,217 275,959 thechangeofownership, inaccordancewithChapter3,Section 8,Paragraph4oftheactonavoir fiscal taxcredit. *) NovaLifeInsuranceCompanyLimited hasappliedforauthorisationtotaketaxsurplusintoaccountdespite Tax intheProfitandLossAccount Deferred tax xhnert oss183737,784 118,357 –14,199 Exchange ratelosses –94,616 Planned depreciationonbuildings xhnert an 98231,183 69,812 –128,093 Exchange rategains –371,598 Value adjustmentsoninvestments

TaxAccrued a upu credit taxsurplus *) 4624–142,291 –466,214 1,639 – – Unused 7 INCOMEANDCHARGEITEMSIMPACTINGTHECOMPARABILITYOFRESULT Change intheprovisionforoutstandingclaims Extraordinary incomeandcharges Tax onprofitfromordinaryactivities Investment charges enues hr ,9 – – –46,521 3,298 –125,302 –134,898 – –256,829 1997 Change inequalisationprovision 1998 in theequalisationprovision Balance ontechnicalaccountbeforethechange 1997 Net operatingexpenses Reinsurers’ share 1998 Premiums earned FIM ‘000 mato eut–6,9 223–2,8 – –220,980 12,263 –164,194 Impact onresult Claims incurred Change inthecalculationbases ercaino odil–––8,4 – –280,741 – – – 4,889 – – –4,769 – – –616 –1,887 –233,951 – Tax onextraordinaryincomeandcharges Depreciation ongoodwill Depreciation onconsolidationdifference –1,887 Tax forthefinancialyear Extraordinary depreciationsaccordingtoplan aclto ae feulsto rvso 6851,3 – – 17,032 26,825 Calculation basesofequalisationprovision ftcnclpoiin 3,9 3,9 0,2 46,521 109,727 134,898 234,091 – –15,575 – of technicalprovisions Counter itemsforchangesinbases –22,737 Extraordinary depreciationsaccordingtoplan Premiums written Claims paid nrae ieepcac 1524––46,521 – – –105,244 –125,457 – – –256,951 Increased lifeexpectancy Change intherateofinterest te 2543–292–062– –40,682 –32,952 –205,413 – –4,574 – Other –6,718 Extraordinary depreciationsaccordingtoplan Group eerdtx6,0 206– 62,006 – 62,006 Deferred tax a o h iaca er616–1,2 – 10,328 – 6,166 Tax forthefinancialyear eaaecag etiigt tttr okr’2667–1,6 – 11,960 – 286,657 compensation insurance Separate chargepertainingtostatutoryworkers’ osauoywres opnainisrne–166–4,2 – 49,025 – –51,666 to statutoryworkers’compensationinsurance Equalisation oftheseparatechargepertaining 4234–3,9 1618–46,521 –166,138 –138,196 –462,364 1579––0,0 – –208,407 – –165,779 5078–3,9 1167–46,521 –121,687 –134,898 –520,748 5,8 441– 44,451 – –58,384 6,1 5,3 0,2 46,521 109,727 151,930 260,917 ParentCompany 45 SAMPO ANNUAL REPORT 1998 46 SAMPO ANNUAL REPORT 1998 8 CHANGESININTANGIBLEANDTANGIBLEASSETS1998 erae–––,9 –4,391 –4,391 22,110 – 8,994 – 9,559 –107,880 – –96,977 17,573 – 173,210 569,302 13,116 –114,617 – 66,798 –103,714 155,052 16,942 – 183,687 – –10,903 –4,188, –8,014 –3,834 1,502,949 230,563 1,444,355 354,150 – –3,785 –10,903 311,356 391,065 933,646 106,412 614,759 41,116 of theplan,Dec.31. Accumulated depreciationinexcess – 607,795 614,759 199,098 77,353 2,217 Decrease 20,497 534,039 21,130 Depreciation above/belowplan 251,052 431,072 Accumulated depreciationinexcessoftheplan,Jan.1 438,531 11,051 2,096 3,171 according toplan,Dec.31 119,716 Acquisition costafterdepreciation –49 –123,079 303,477 17,389 Accumulated depreciationaccordingtoplan,Dec.31 – Decrease –112,094 237,027 17,448 647,264 Depreciation accordingtoplan – 688,380 Accumulated depreciationaccordingtoplan,Jan.1 –1 11,115 210,807 –131,363 Acquisition cost,Dec.31 231,304 Decrease 330,135 121 1,486 –120,041 Increase 31,682 122,270 Acquisition cost,Jan.1 125,441 PARENT COMPANY –6,338 96,479 –10,985 –1 21,619 9,600 4,797 *) IncludesanextraordinarydepreciationofFIM234milliononconsolidationdifference,enteredundercharges. 314,187 331,635 1,927,002 104,550 Net expendituresaftertotaldepreciation,Dec.31 8,942 513,608 3,171 313,882 1,706,612 –11,322 of theplan,Dec.31 29 1,238,623 Accumulated depreciationinexcess 129,106 difference dation 684,951 528,228 Decrease 12,000 282,304 862,952 Depreciation above/belowplan 104,325 23,714 Portfolio transfer/merger 568,402 Accumulated depreciationinexcessoftheplan,Jan.1 559,510 728,443 323,483 677 according toplan,Dec.31 609,982 Acquisition costafterdepreciation 236,029 396,808 Accumulated depreciationaccordingtoplan,Dec.31 Decrease Depreciation accordingtoplan 303,439 Portfolio transfer/merger Accumulated depreciationaccordingtoplan,Jan.1 Acquisition cost,Dec.31 Decrease Increase Portfolio transfer/merger Acquisition cost,Jan.1 GROUP FIM ‘000 e xedtrsatrttldpeito,Dc 1274613671608547,192 146,058 183,687 *) Includesanextraordinarydepreciation ofFIM281millionongoodwill,enteredunderextraordinarycharges. 217,446 Net expendituresaftertotaldepreciation, Dec.31 nagbergt n osldto if qimn Total Equipment diff. Consolidation and rights Intangible ogtr xessNegativeconsoli- long-term expenses Goodwill *) *) 949487,635 69,429 503433,732 45,023 has beenreleasedtointerest income(+)or repayable atmaturityandpurchaseprice,which comprises thatdifferencebetweentheamount The remainingacquisitioncostofdebtsecurities Valuation difference Other investments Associated undertakings hre oitrs noe() 403–12,409 413,829 (difference betweencurrentvalueandbookvalue) 14,013 413,829 413,829 Book valuecomprises 393,837 charged tointerestincome(–). value 393,837 393,837 value acquisitioncost Deposits withcedingundertakings value value acquisitioncost Investments inlandandbuildings FIM ‘000 9 GROUP:CURRENTVALUEANDVALUATIONDIFFERENCEONINVESTMENTS eautosetrdi eauto eev 0,3 234,387 52,155 50,000 302,149 201,833 50,000 302,149 302,149 – 4,381,306 734,186 820,438 4,102,705 Revaluations enteredinrevaluationreserve 412,264 4,101,926 724,224 820,438 385,003 412,264 – 724,224 820,438 385,003 11,983,471 412,264 886,004 11,022,566 10,155,722 912,591 385,003 11,022,566 5,793,938 – 1,342,043 867,256 1,601,827 5,793,938 861,940 1,339,884 1,601,827 745,948 1,068,170 1,339,884 861,940 1,601,827 16,656,577 1,068,170 8,783,111 1,068,170 8,783,111 870,158 779,068 Deposits withcreditinstitutions 779,196 703,304 Other loans 777,063 Loans guaranteedbymortgages 703,304 Other debtsecurities Bonds Shares andparticipations Bonds Shares andparticipations Real estateshares nelsdgisetrda noe3661374,262 356,651 Unrealised gainsenteredasincome 3,823,319 3,256,491 2,648,621 4,353,418 3,933,261 3,374,778 Land andbuildings 946833,3,1 940821,4,1 7579222,866,701 17,577,972 16,848,015 39,460,832 30,037,419 29,476,803 eann okCretRmiigBo Current Book Remaining Current Book Remaining 427822,2,2 304311,2,7 2184616,778,804 12,128,456 12,127,677 33,064,351 24,227,822 24,227,822 ,7,8 ,3,6 ,3,8 ,1,6 ,1,3 4,735,909 4,118,431 3,510,561 5,132,486 4,636,565 4,078,081 7,6 7,9 7,5 9,4 1,5 938,159 917,256 795,948 870,158 779,196 777,063 981997 1998 5,8 608,650 558,483 ,2,1 5,288,729 9,423,413 47 SAMPO ANNUAL REPORT 1998 48 SAMPO ANNUAL REPORT 1998 hre oitrs noe() 3,0 47,414 –33,401 Book valuecomprises charged tointerestincome(–). has beenreleasedtointerestincome(+)or repayable atmaturityandpurchaseprice,which comprises thatdifferencebetweentheamount The remainingacquisitioncostofdebtsecurities nelsdgisetrda noe364650,174 306,476 Unrealised gainsenteredasincome Other investments Valuation difference Associated undertakings eoiswt eigudraig 3,4 3,4 3,4 5,9 5,9 253,991 (difference betweencurrentvalueandbookvalue) 253,991 253,991 value 139,846 139,846 value 139,846 acquisitioncost value Deposits withcedingundertakings value acquisitioncost Investments inlandandbuildings FIM ‘000 INVESTMENTS DEC.31,1998 NON-LIFE ANDLIFEINSURANCE:CURRENT VALUE AND VALUATION DIFFERENCEON te on 9,7 9,7 9,7 1,8 1,8 116,388 116,388 116,388 8,326,998 794,409 7,566,568 792,320 7,566,568 835,177 295,876 792,320 835,177 295,876 3,656,473 835,177 3,455,998 295,876 5,439,101 547,635 3,455,998 3,852,182 547,565 3,852,182 232,993 547,565 232,993 11,217,476 4,930,929 232,993 4,930,929 Other loans Loans guaranteedbymortgages Other debtsecurities Bonds Shares andparticipations eautosetrdi eauto eev 0,3 – 201,833 856,388 856,388 Revaluations enteredinrevaluationreserve 856,388 43,698 39,063 745,439 745,439 39,063 745,439 735,369 664,241 Deposits withcreditinstitutions 664,241 Shares andparticipations Real estateshares adadbidns20933257612863213545145601,457,096 1,405,610 1,355,435 2,896,322 2,527,651 2,019,343 Land andbuildings 377451,4,7 121971,3,8 5704318,198,835 15,790,443 15,739,388 21,261,997 14,246,976 13,737,415 eann okCretRmiigBo Current Book Remaining Current Book Remaining 028801,0,0 665811,1,2 4090216,368,461 14,019,022 14,019,022 16,695,891 10,208,800 10,208,800 ,8,8 ,9,9 ,3,9 ,9,9 ,4,7 1,500,794 1,444,672 1,394,498 3,631,692 3,191,892 2,683,584 0,8 0,3 9,6 1877,5 75,589 72,757 71,877 794,569 706,439 705,185 o-ieIsrneLifeInsurance Non-LifeInsurance 0,0 50,174 508,309 ,1,2 2,408,392 7,015,021 hre oitrs noe() 870–5,289 –8,740 Book valuecomprises charged tointerest income(–). has beenreleased tointerest income(+)or repayable atmaturityandpurchase price,which comprises thatdifference between theamount The remaining acquisitioncostofdebtsecurities nelsdgisetrda noe3323326,856 303,203 Unrealised gainsenteredasincome Valuation difference Other investments Associated undertakings Affiliated undertakings eoiswt eigudraig ,7 ,7 ,7 ,9 ,9 1,898 1,898 (difference betweencurrentvalueandbookvalue) 1,898 1,478 1,478 1,478 value value Deposits withcedingundertakings acquisitioncost value value acquisitioncost Investments inlandandbuildings FIM ‘000 PARENT COMPANY: CURRENT VALUE AND VALUATION DIFFERENCEONINVESTMENTS eautosetrdi eauto eev 6,3 172,633 – 118,042 168,533 684,409 118,042 – 31,500 647,185 118,042 31,500 647,185 89,593 – Revaluations enteredinrevaluationreserve 31,500 172,481 651,431 89,593 172,481 622,766 23,500 89,593 172,481 2,229,227 622,766 129,615 1,620,994 23,500 129,586 1,620,994 134,972 98,808 23,500 129,586 134,972 2,379,526 98,808 1,656,860 134,972 1,656,860 98,808 Deposits withcreditinstitutions Other loans Loans guaranteedbymortgages 92,070 Other debtsecurities Bonds Shares andparticipations 92,070 Shares andparticipations 92,070 Shares andparticipations Loans toaffiliatedundertakings te elett hrs57895789636467206720684,550 647,220 1,169,020 1,036,616 236,608 647,220 537,127 200,729 653,604 200,729 1,058,700 597,809 948,561 215,336 597,809 476,825 177,889 177,889 Other realestateshares Shares inaffiliatedundertakings Land andbuildings eann okCretRmiigBo Current Book Remaining Current Book Remaining ,3,9 ,0,3 46954572416218911,821,793 6,221,889 5,722,401 14,699,554 6,305,931 5,834,195 ,5,7 ,5,7 ,0,3 ,9,0 ,9,0 3,235,660 2,590,203 2,590,203 3,408,637 2,657,278 2,657,278 5,736,501 1,048,611 2,188,986 1,048,611 1,983,373 1,483,884 8,615,944 1,250,211 2,019,709 1,250,211 1,816,327 1,344,592 8,3 8,3 5,8 9,0 9,0 658,749 597,806 597,806 653,785 580,637 580,637 981997 1998 7,3 499,488 471,736 ,9,2 5,599,904 8,393,623 49 SAMPO ANNUAL REPORT 1998 50 SAMPO ANNUAL REPORT 1998 10 GROUPCHANGESININVESTMENTSLANDANDBUILDINGS ftepa,Dc 19,2 106,329 94,623 260,636 1,115,380 285,125 255,636 of theplan,Dec.31 Accumulated depreciationinexcess 1,341,660 920,279 260,636 222,327 1,111,937 1,647,032 218,377 446,043 Book valueafterdepreciationaccordingtoplan/ 3,179,045 value adjustments,Dec.31 405,603 204,837 Accumulated depreciationaccordingtoplan/ 1,673,796 222,327 3,971,038 413,678 446,043 value adjustments,Jan.1 Accumulated depreciationaccordingtoplan/ Unrealised gainsoninvestments,Dec.31 Unrealised gainsoninvestments,Jan.1 Acquisition cost,Dec.31 ubro opne 259 1997 92 804,596 964,210 4,601 694,974 843,766 1998 9,783 580,893 23,411 547,304 24,123 Profit/loss forthefinancialyearin total 119,793 Number ofcompanies GROUP REALESTATECOMPANIES Management expenses(directlyallocated) Current value 2,403,379 Book value Remaining acquisitioncost 106,329 FIM ‘000 1,608,723 2,509,709 GROUP: LANDANDBUILDINGSOCCUPIEDFOROWN ACTIVITIES 2,948,432 1,593,509 Value ofbuildingsaftertotaldepreciation,Dec.31 3,043,056 of theplan,Jan.1 Accumulated depreciationinexcess value adjustments,Dec.31 1,331,500 2,709,249 1,647,032 3,165,807 Acquisition cost,Jan.1 FIM ‘000 opne’cptladrsre nttl12774844,495 1,277,744 Companies’ capital andreservesintotal erae–,8 116 –1,682 – –1,573 5,000 –23,425 –11,050 – –42,497 –1,054 – – 15,000 – 96,909 Decrease 40,440 100,818 –17,489 –11,754 20,127 – 27,787 2,067 –32,365 –3,624 103,241 166,913 –295,700 – –108,421 Decrease adjustments andvaluereadjustments Depreciation accordingtoplan/value Change ingroupstructure Portfolio transfer/merger Decrease Portfolio transfer/merger Decrease 1998 hnei ru tutr 5116 –212 –13,383 –501 1,274 –10,797 212,438 Depreciation above/belowplan Change ingroupstructure Portfolio transfer/merger 61,837 117,374 114,848 243,513 411,583 205,091 670,139 Increase Portfolio transfer/merger ulig adadwtr ulig Landandwaters Buildings Landandwaters Buildings n elett andrealestate and realestate hrsshares shares 1997 PARENTCOMPANY:CHANGESININVESTMENTSLANDANDBUILDINGS xeso h ln e.3 61259,164 – 287,400 46,102 – – 359,411 Value ofbuildingsaftertotal – excess oftheplan,Dec.31 – Accumulated depreciationin 192,733 287,400 192,733 336,300 312,762 331,841 – 336,300 – 402,264 – according toplan/value Book valueafterdepreciation 182,833 287,400 adjustments, Dec.31 192,733 according toplan/value 324,800 359,411 Accumulated depreciation 98,808 336,300 1,167,062 835,281 adjustments, Jan.1 according toplan/value 92,070 Accumulated depreciation Dec. 31 1,117,497 Unrealised gainsoninvestments, 814,154 Jan. 1 Unrealised gainsoninvestments, Acquisition cost,Dec.31 I 0019 1997 371,752 358,357 1998 215,057 210,686 753,006 Book value Remaining acquisitioncost 60,423 FIM ‘000 690,588 98,808 PARENT COMPANY:LANDANDBUILDINGSOCCUPIED FOROWNACTIVITIES 1,072,395 812,170 depreciation, Dec.31 92,070 takings 987,568 59,164 736,690 excess oftheplan,Jan.1 Accumulated depreciationin adjustments, Dec.31 takings 87,420 1,154,310 829,059 98,808 1,167,062 835,281 Acquisition cost,Jan.1 FIM ‘000 urn au 2,8 441,166 426,986 Current value erae350116 – – – 3,510 – – –1,418 – – 28,989 Decrease – –23,425 – –21,615 48,787 – 64,468 –10,613 –7,294 –9,900 Decrease –1,914 –11,500 readjustments –12,738 value adjustmentsand Depreciation accordingtoplan/ –113,879 –34,199 Decrease Decrease eo ln–652–1,375 –16,572 below plan Depreciation above/ 22,000 20,046 8,136 6,000 64,313 13,071 Increase ulig adadwtr on oBidnsLn n aesLoansto Landandwaters Buildings Loansto Landandwaters Buildings n elett fiitdadra saeaffiliated andrealestate affiliated and realestate hrsudr hrsunder- shares under- shares 981997 1998 51 SAMPO ANNUAL REPORT 1998 52 SAMPO ANNUAL REPORT 1998 11 GROUP’SSHARESANDPARTICIPATIONS Sampo FinanceLtd naO ,4,2 48 48 5,7 4,7 233865,476 22,323 348,776 254,972 205,680 3,521 44.87 61,388 44.87 45,781 2,549,722 25.00 25.00 915,625 Unsa Oy Tampereen KiinteistöinvestOy C oprt iac 7 71 71 7 5 52,054 1,152 45 8,190 –13 29,869 2,352 –131 557 539 1,638 9,956 372 173 384 5,000 27.11 46.74 20.00 33.33 27.11 46.74 20.00 33.33 372 1,729 384 50,000 Suomen OikeuspalveluOy 93,133 Suomen LuottovakuutusOy Rakennus OyLeoHeinänen 22,168 PCA CorporateFinance Kiinteistövarma Oy 101,438 45,000 100.00 100.00 9,000,000 ST InternationalInsuranceCompanyLimited yHvr b2 0.0100 2 0 129,998 –5,717 5,340 9 154,412 117 2,642 45,000 5,695 NLG –250 2 6,840 1,294 424 100.00 223,785 4,000 15,000 9,262 7,608 100.00 EEK 4,000 31 113,294 45,000 163,278 3,000 –3,300 264,604 10 100.00 –7,692 80 SEK 116,886 100.00 100.00 45,000 434,154 100.00 GBP 1,500 105,000 100.00 100.00 NLG 17,571 80 20 NLG 100.00 100.00 100.00 –503 100.00 30,000 100.00 400 100.00 100.00 17,282 100.00 10,000 Sampo LifeInsuranceCompanyLimited 45,000 11,250 1,050,000 Teva HoldingB.V. GBP Industrial InsuranceCompanyLtd 80.00 Insurance CompanyofFinlandLtd 80.00 100.00 Sampo KindlustuseAS Sampo IndustriförsäkringAB 100.00 800 Sampo IndustrialInsuranceN.V. 11,250,000 Sampo IndustrialHoldingB.V. Sampo Holdings(UK)Ltd Risk ManagementLtd Oy HaveriAb Oy FinnishCaptiveandRiskServicesLtd Lakewood InsuranceCompanyLtd er ieIsrneCmayLmtd1,9 58 58 ,1 001020,166 0 10,091 1,810 25.85 25.85 18,095 Kaleva MutualInsuranceCompany Retro LifeInsuranceCompanyLimited aeo opn o fsae % % I 00FM‘0 FIM‘000 FIM‘000 FIM‘000 % % No.ofshares Transport andtraffic Investment Insurance Banking andfinance Public companies company of Name Other shares andparticipations aikpleuO 6 00 00 4 ,2 ,2 5,109 1,523 1,022 144 20.00 20.00 51,938 5,109 360 20,042 1,523 2,450 5,723 2,450 6,398 24.50 1) 35.54 TOTAL 24.50 Vahinkopalvelu Oy 35.54 2,450 2,559 5,972 6,020 3,759 –710 800 Dividum Oy Björkboda LåsOyAb 6,963 Autovahinkokeskus Oy 160 Associated undertakings 82,740 500 TOTAL 15,836 Sampo EnterpriseInsuranceCompanyLimited LVL 83,760 FIM‘000 FIM‘000 50,000 99.99 60.00 FIM‘000 Currency 99.99 40.00 % 49,996 1,600 100.00 % 100.00 50,000 No.ofshares Otso LossofProfitsInsuranceCompanyLtd Patria ReinsuranceCompanyLimited Capsam ConsultingOy AAS SampoLatvija Affiliated undertakings company of Name Figuresatgrouplevel inie l ,4,0 .587 7469,8 381,195 89,147 42,819 97,683 67,743 55,327 42,819 17,486 14,958 46,483 10,130 34,386 8.75 3.53 14,007 9,145 6.16 8.75 8.97 3.53 5,208 228,234 74,603 5.53 125,692 1,748,600 73,530 13.72 3.78 2,991,504 11,983 70,880 132,007 3,438,641 79,576 700,346 8,373 3.78 68,089 0.85 12.11 216 7,136 260,415 0.85 12.11 6.14 0.06 7,088,024 9,947,000 8.91 0.11 Neptun MaritimeOyj 3,567,763 43,219 Finnlines Plc Finnair Oyj Norvestia plc Kiinteistösijoitus OyjCitycon Arctos CapitalOyj Pohjola GroupInsuranceCorporation Merita Oyj Mandatum PankkiOyj 1) 1) 2) 1) 3) Shareofguaranteecapital 1) 1) 1) 2) 1) 1) 1) 5,0 0.0100 5006,4 09784,264 1,008,032 532,550 10,977 249,850 69,240 50,000 15,000 100.00 100.00 100.00 234,563 100.00 112,551 500,000 150,000 120,503 90,000 100.00 100.00 900,000 0,0 00 00 0008,0 440168,989 14,410 83,303 40,000 533,865 50.00 144,612 299,900 50.00 50,000 800,000 100.00 100.00 500,000 5005.02.02,0 5695,5 199,635 55,052 25,639 25,000 25.00 864,193 50.00 48,068 25,000 404,303 60,310 57.52 57.52 47,698 ,0 00 00 4 7 2,348 0 270 340 20.00 20.00 3,400 9 47 47 9,0 2,4 1148656,043 –181,408 227,844 291,000 34.73 34.73 291 3) odn oe a au okvle erreserves year Bookvalue Parvalue Votes Holding FinancialyearJune1,1997–May31,1998 odn oe Prvle okvlevalue Bookvalue Parvalue Votes Holding rftls o Capital Profit/loss for h iaca and the financial 2,241,306 779,196 Current Chemical industry Data communicationsandelectronics Construction industry Food industry Energy FIM‘000 Conglomerates FIM‘000 FIM‘000 Forestry % % No.ofshares Metal industry Other services Trade company of Name eiaOj4795036 .74,9 7,2 172,629 170,989 119,765 83,801 172,629 101,424 119,122 47,296 19,722 59,588 10,692 9,928 3.67 5.08 1,995 5,568 16,362 2.39 297,189 154,447 3.79 158 12,428 3.67 5.08 1.42 4,642,545 8,255 3,039 31,402 30,202 585,317 24,255 4.65 1.50 4,729,550 1,972,195 992,776 0.46 18,720 13,394 30,202 5,442 0.79 259,959 199,525 1.50 3.70 298 17,085 6,864 0.46 294 158,439 240,670 155,168 0.79 25,395 15,479 79,200 4,290 215,645 1.24 2.34 130,202 1.74 3,302,100 0.15 309,300 19,788 2,629 27,770 16,193 248,464 0.53 2.34 7,487,975 1.74 105,423 976 9.18 3.69 0.49 151,202 4.08 18,785 67,979 1.67 160,299 686,400 148,825 18,785 95,941 6.58 2.71 1.49 294,000 4.08 1,787 1.02 95,598 28,019 Orion Corporation 857,950 2,763 72,389 Kemira Oyj 4,628,260 809,650 64,729 1.49 28,019 5.68 Asko Oyj 262,851 1.02 4,591 10.13 7,648 1,213 Vaisala Oyj 162,445 97,637 5.68 Tampereen PuhelinOyj 8,014,958 10.56 10.13 Sonera Groupplc 118,834 5.08 3.06 470,759 PK CablesOyj 93,783 893,415 Nokia Corporation 10.56 7,800 552,500 386,510 JOT AutomationGroupOyj 4.83 3.06 56,465 1,326,562 Helsinki TelephoneCorporation 166,328 104,469 459,050 3.59 390,221 16,829 22,369 85,363 164,956 3.09 YIT Corporation 93,420 764,783 1,212,933 77,689 47,035 156,664 126,393 3.24 24,460 15,642 4.62 85,363 3.37 Hartwall Plc 77,644 270,856 1.38 134,792 126,393 39,855 Lännen Tehtaatplc 3.13 5,394 11,536 Huhtamäki Oyj 10,654 780,028 184,830 1.61 33,691 16,600 152,016 38,417 Cultor Oyj 3.37 3,986 25,010 10,446,901 2.18 61,288 5.24 30,579 7,634 3.13 6.90 1.34 2.89 41,170 2,236,930 17,911 Länsivoima Oyj 0.46 9,341,987 7.67 Fortum Oyj 7,182 235 2.18 5.24 Espoon SähköOyj 12,172 2,446,000 6.90 613 43,518 1.34 2.89 267,963 1.19 4.83 5.65 144,578 1,432 43,518 Suunto Oyj 1,153,559 539,400 0.09 125,227 160,744 3,369,122 Lassila &TikanojaPlc 1,660,031 1.93 3,841,722 133,962 Kyro Corporation 79,720 2,563 3.25 91,754 1.19 25,700 3,064,401 Instrumentarium Corporation 65,717 0.09 Aspo Plc 1.93 16,477 3.41 1.96 1,436,315 1.19 5.35 UPM-Kymmene Corporation 46,932 – Metsä-Serla Corporation 122,600 5.00 1.98 Stora EnsoOyj 5.35 179,000 Valmet Corporation 2,569,980 1.83 128,169 Santasalo-JOT Corporation 6,571,742 Rautaruukki Corporation Rauma Corporation 1,647,730 Partek Corporation Outokumpu Oyj Metra Corporation Kone Corporation KCI KonecranesInternationalPlc Fiskars Corporation Tieto Corporation Novo GroupPlc Tamro Corporation Stockmann plc Rautakirja Oyj Kesko Corporation odn oe Prvle okvlevalue Bookvalue Parvalue Votes Holding Current 53 SAMPO ANNUAL REPORT 1998 54 SAMPO ANNUAL REPORT 1998 GROUP’S SHARESANDPARTICIPATIONScont. Capital trusts Unit trusts en aat y36–––2,0 28,200 12,000 28,200 12,000 10,920 – – 10,920 – – 30,165 – 24,670 34,863 25,000 20,722 64,081 34,000 12,959 24,600 – – 21,929 – 11,463 14,802 11,071 – 53,951 16,838 17,375 – – 102,100 19,999 8,399 – 23,582 10,000 – 100,000 9,050 – 376 – – – 56,038 21,719 – 240 – – 41,245 – 16,543 – – – 54,300 – – 22,781 – 40,000 22,448 16,543 – 13,208 – 32,626 – – – – 19,586 – 19,050 – – – – 13,208 – 32,626 17,000 – 16,002 – – 19,586 – 245,483 – 4,000 78,628 – – – 20,160 17,000 – 16,002 – 21,896 – 140 17,196 – – 416,780 52,632 – 10.00 20,160 8,500 539,353 1,896 30,602 – 7.24 39,824 – 2,274 15,135 92,473 – 20,000 Finnventure RahastoIIIKy 10,000,000 10.00 – 1.13 10,507 7.78 – MB FinnmezzanineFundIKy 90,500 43,062 Fenno RahastoKy 7.24 10.35 2.33 – 10,507 4,000 – Sijoitusrahasto ArctosJulkisyhteisö 2.55 7.78 5,430,000 Sij.rah. Seligson&CoGlobalTop25Brands 390,245 10.35 171,960 207,725 726 2.33 Sij.rah. Seligson&CoEuroObligaatioindeksirahastoA Riskisijoitusrahasto MandatumVipu 85 1,896 1,900,025 Sijoitusrahasto MandatumGlobal 227,419 364,290 Sijoitusrahasto LeoniaEuroKasvuosakeA 3.46 800,000 Gyllenberg SmallFirmB Gyllenberg MoneyManagerB Gyllenberg MomentumB 3.46 Gyllenberg InternationalB Gyllenberg EuropeanEquityB Evli SelectB Evli NordicSmallerCompaniesB 36,300 Evli EuroKorko Evli EuropeanSmallerCompaniesB Erikoissijoitusrahasto Phalanx Alfred BergMarkkaA VVO-yhtymä Oy Suomen KantaverkkoOyj Setec Oy Sato-Yhtymä Oyj Oy RealinvestAb Okmetic Oy Publishing CompanyOtavaLtd Other sharesandparticipations Holdings exceeding FIM 10millionandholdingsinpubliccompanies exceedingfivepercentspecified. oetcsae n atcptosi oa ,0,0 13,758,924 6,506,001 *) Domestic sharesandparticipationsintotal FIM‘000 FIM‘000 FIM‘000 Other companies % Public companiesintotal Other publiccompanies % Prelist No.ofshares I-list Other industries Communications andpublishing company of Name Shareofguaranteecapital ueiousut P-eeoadllgtHF871––2,1 409160,969 94,079 20,012 – – 8,701 Total Puhelinosuuskunta HPY-TelefonandelslagetHTF pno udIK 8 81255,631 28,192 – – – 281 Total Sponsor FundIKy e y490139 .84901,7 17,572 17,572 4,990 33,900 56,167 3.98 30,480 50,472 3.98 3,750 14,360 5.32 499,031 0.14 47,014 5,600 13.30 26,095 0.77 3,507 2,351 359,000 3,750 38,775 350 10,411 0.37 120,416 17,166 17,681 10,411 42,943 7.44 3.51 2,350 9,572 2,215 9,667 7.44 2.28 520 235,070 85,876 0.74 12.14 350,000 2.28 85,656 Varma-Sampo MutualPensionInsuranceCompany 1.27 10.91 Hex Oy 0.74 Oy G.W.SohlbergAb 149,399 5,132 A. AhlströmOsakeyhtiö 235,000 966,658 1.27 53,264 221,500 4.17 4,602 208,016 3.26 1.20 513,224 3.83 Suomen HelastoOyj Chips Abp 460,193 Tamfelt Corporation Nokian Tyresplc Metsä TissueOyj Werner SöderströmCorporation-WSOY Talentum Oyj Alma MediaCorporation *) 1100 1001392206,021 123,912 71,000 – 100.00 71 odn oe Prvle okvlevalue Bookvalue Parvalue Votes Holding ,6,4 12,362,766 5,364,246 ,6,4 12,471,546 5,461,346 3,1 1,160,219 931,216 1,3 127,159 113,439 Current 710108,780 97,100 Medical industry FIM‘000 FIM‘000 % Public institutions shares Country Energy Banking Public companies Name ofcompany Foreign sharesandparticipations oh odn GSizrad4600 57028,263 46,829 13,306 13,745 15,770 74,483 32,918 39,951 8,175 5,329 52,226 28,458 11,900 0.00 50,975 20,392 0.00 43,745 21,504 0.06 2,668 47,334 0.03 5,290 0.01 0.06 456 0.07 0.02 31,512 4,690 0.00 381,360 5,290 34,947 20,500 427,347 202,000 0.01 Switzerland UK 504,666 Switzerland 134,600 34,456 Denmark 10,000 0.02 UK 5,316 Japan 13,491 Sweden Germany 45,390 0.02 10,341 70,500 USA 11,454 3,143 15,000 19,206 4,770 USA 155,000 35,298 0.07 35,976 Germany 0.00 19,404 0.06 Spain 0.06 38,921 27,249 30,486 15,161 360,000 2,500 66,200 26,595 0.02 0.03 50,000 Italy 5,089 0.06 Switzerland Denmark 0.00 Sweden 25,741 16,989 116,450 5,089 270,000 325,000 Germany 15,009 Spain 16,989 510,000 Other 38,712 Italy 0.01 52,192 Yamanouchi PharmaceuticalCo. Roche HoldingAG UK 0.00 0.06 29,044 Nycomed AmershamPlc 42,915 Novo NordiskA/S 21,274 12,740 Novartis AG 0.02 55,245 57,400 510,000 0.00 Glaxo WellcomePlc USA Fresenius MedicalCareAG 41,764 12,443 53,672 Italy Bristol-Myers SquibbCo. USA 66,100 Bayer AG 690,000 7,812 34,227 0.00 Astra Ab 0.01 Amgen Inc. France UK 8,412 0.06 24,409 6,179 10,624 50,500 35,400 Other 7,932 16,925 Telefonica SA 17,476 5,209 0.01 42,591 50,900 Holland Telecom ItaliaMobile 48,956 Switzerland Tele DanmarkA/S 0.05 0.00 17,476 Swisscom AG 37,765 19,253 0.29 France 43,516 NetCom Systems 58,607 5,276 British TelecommunicationsPlc 0.01 0.05 6,415 749,000 Data communicationsservices 32,650 0.01 UK 209,957 4,132 18,290 Sweden Other USA 160,000 – Norway Veba AG 265,800 158,464 Endesa SA 17,346 0.01 UK Edison Spa Germany Holland American ElectricPower 0.01 Electricity, water,gas 50,000 150,000 Italy USA Other 171,623 Royal DutchPetroleumCo.NV Mobil Corp. Holland ENI SPA Elf Aquitaine BP AmocoPlc Other UBS AG Societe Generale Nordbanken HoldingAb Internationale NederlandeBank HSBC HoldingsPlc Fokus BankenASA Federal NationalMortgageAssociation Commerzbank AG Citigroup Inc Barclays BankPlc Banca CommercialeItaliana ABN-AMRO HoldingsNV o f odn Bo au value Bookvalue Holding No. of Current 72130,625 27,201 28,989 18,586 23,313 19,102 ,3 3,712 3,632 5,428 4,701 55 SAMPO ANNUAL REPORT 1998 56 SAMPO ANNUAL REPORT 1998 GROUP’S SHARESANDPARTICIPATIONScont. aeo opn onr sae I 00FIM‘000 FIM‘000 Other % shares Country Electronics Business services Name ofcompany ’ra rne50000 ,4 18,313 26,529 14,578 8,946 15,508 24,955 14,578 13,964 0.01 0.02 0.09 0.00 5,000 72,000 12,315 51,880 63,400 France Japan 12,315 6,194 France 23,620 USA 0.02 6,178 20,101 9,169 105,650 0.02 0.16 57,281 Sweden 10,650 9,169 83,980 20,000 24,963 8,238 5,297 0.21 Germany 6,858 Denmark 0.03 0.02 4,448 6,858 150,500 78,008 180,000 Norway 0.02 7.05 42,422 France 18,442 UK 5,082 7,649 25,885 25,000 28,118 17,303 23,253 9,037 5,082 6,872 0.00 Italy 11,757 Other 7,568 12,459 Lithuania 0.05 22,244 Sony Corp. 7,695 0.17 0.01 L’Oreal 17,743 11,069 12,283 68,498 35,560 Gillette Co. 6,467 70,214 0.23 24,035 69,000 BIC 0.24 17,743 5,257 1.86 Bang &OlufsenHoldingA/S 1,368,000 1.83 22,500 50,764 18,278 USA Other consumables 0.00 13,213 Japan Malaysia 870,000 0.04 14,830 2,295 Holland 0.06 0.02 Other 465,000 2,563,500 0.00 16,803 3,056,000 Japan Volvo Ab 70,000 Singapore Singapore Volkswagen AG Singapore 14,574 327,300 0.00 24,046 Motor industry 12,599 12,330 1,498,150 294,000 7,068 5,373 Japan 46,100 0.01 Sweden UK Other 14,154 Sweden 9,802 0.02 British AirportAuthoritiesPlc 4,000 5,374 USA 52,197 5,234 Bergesen d.y.ASA 0.08 Transport 6,650 5,302 0.01 France 15,500 52,197 0.20 0.01 Other AB LietuvosDraudimas Germany 5,302 22,233 Holland 0.12 AXA UAP 330,000 Assicurazioni Generali 10,000 60,000 Denmark Insurance 1.54 UK 735,600 USA UK Other Holland 15,000 Wong’s CircuitsHoldingsLtd. Venture ManufacturingLtd. United Engineers Holland Philips Electronics Kyocera Corp. Intel Corp. IDT Holdings Hitachi Cable General ElectricCo.(U.S.) General ElectricCo. Ericsson TelAb Canon Inc. ABB Ab Other Wolters Kluwer Vivendi Sap AG Rentokil InitialPlc Ratin A/S Microsoft Corp. Granada Group Elsevier NV Cap GeminiNV o fHlig okvlevalue Bookvalue Holding No. of Current 67619,555 16,706 52,690 44,873 16,708 15,201 ,6 10,259 8,467 9,267 8,907 9,085 4,485 Other companies Public companiesintotal aeo opn onr sae I 00FIM‘000 FIM‘000 % shares Country Name ofcompany onyHtl ru l K921239 ,3 8,429 18,855 8,336 16,000 14.98 3.93 900,000 992,172 UK UK Nordben LifeandPension County HotelsGroupPlc netrA wdn2,0 .26426,422 7,860 19,277 16,277 6,422 7,860 0.01 0.02 1.00 126,600 6,071 28,000 8,314,000 USA Malaysia 11,218 5,689 Sweden 11,175 14,026 9,699 10,013 0.27 8,587 10,909 0.21 10,013 10,717 0.03 150,000 0.02 5,303 0.03 5,433 Sweden 10,717 200,000 5,303 60,800 12,025 Sweden 0.07 5,433 60,000 Holland France 0.15 Norway 0.04 76,000 5,814 63,300 37,162 Sweden 5,814 27,500 Norway 10,309 11,655 Germany 0.12 28,701 Other 9,050 0.00 Walt DisneyCo. Metroplex 27,302 45,000 Investor Ab 27,865 0.05 Other 36,429 64,000 0.04 Germany 26,721 Stora KopparbergsBergslagsAb 27,537 38,835 Germany Forestry 55,700 35,887 1,457,000 14,145 0.02 Other 0.02 25,777 Japan 23,254 Holland 13,084 Svenskt StålAb 16,101 11,037 Metal industry 27,920 0.03 802,000 15,694 12,786 23,634 103,000 0.04 Other 7,622 0.01 15,294 9,106 UK Norsk HydroASA Japan 0.00 0.40 Akzo Nobel 15,159 207,402 Air Liquide 3,810 0.00 86,500 8,593 3,700 Chemical industry Holland 0.01 53,700 172,000 Sweden Other 0.01 2,525 0.11 France Skanska Ab Norway Holland Kvaerner A/S 409,968 20,390 Hochtief AG 25,000 Switzerland Bilfinger &BergerBauAG UK 31,000 Construction industry 19,549 Holland Denmark Other 0.03 Mitsubishi HeavyIndustryLtd Mannesmann AG Mechanical engineeringindustry 20,340 Other Hagemeyer NV France Wholesaling Other Marks &SpencerPlc Koninklijke AholdNV Ito-Yokado Co. Hennes &MauritzAb Carrefour Supermarche Retailing Other Unilever NV Orkla Asa Nestle SA LVMH Moet-HennessyLouisVuitton Heineken NV Diageo Plc Carlsberg Food industry o fHlig okvlevalue Bookvalue Holding No. of ,8,3 2,449,930 1,886,530 Current 45635,357 24,576 14,698 12,677 14,467 14,019 ,8 3,783 3,783 4,602 3,784 7,398 6,984 10,569 6,921 9,625 5,579 57 SAMPO ANNUAL REPORT 1998 58 SAMPO ANNUAL REPORT 1998 12 PARENTCOMPANY’SSHARESANDPARTICIPATIONS GROUP’S SHARESANDPARTICIPATIONScont. Sampo FinanceLtd naO ,1,0 01 01 7,1 9,4 233865,476 22,323 197,343 171,410 30.16 30.16 1,714,103 Unsa Oy inesöam y651.21.26 3 1 1,152 –13 236 69 18.52 18.52 685 93,133 22,168 101,438 45,000 Suomen OikeuspalveluOy Kiinteistövarma Oy 100.00 100.00 9,000,000 ST InternationalInsuranceCompanyLimited uoaikksu y2583.53.56356321535,109 1,523 6,332 6,345 2,642 –250 35.25 223,785 4,000 35.25 9,262 4,000 2,538 163,278 10 GBP 100.00 100.00 Kaleva MutualInsuranceCompany 100.00 400 100.00 Dividum Oy 10,000 Autovahinkokeskus Oy Associated undertakings TOTAL Sampo LifeInsuranceCompanyLimited Industrial InsuranceCompanyLtd Insurance CompanyofFinlandLtd Sampo Holdings(UK)Ltd Risk ManagementLtd Other sharesandparticipations aeo opn onr hrs I 00FIM‘000 FIM‘000 % shares Holdings exceedingFIM5millionspecified. Foreign shares andparticipationsintotal Country Capital trusts Unit trusts Name ofcompany aikpleuO 6 00 00 4 4 ,2 5,109 1,523 540 144 20.00 20.00 360 5,972 3,759 800 1) 160 TOTAL Vahinkopalvelu Oy FIM‘000 FIM‘000 FIM‘000 FIM‘000 Currency 60.00 % 40.00 1,600 % Sampo EnterpriseInsuranceCompanyLimited No.ofshares Otso LossofProfitsInsuranceCompanyLtd Capsam ConsultingLtd Subsidiaries company of Name Figures atgrouplevel crdrVnue uoenFn K33–1,5 13,958 13,958 – 313 UK Total Schroder VenturesEuropeanFund nutiKptlSee 8–1,6 16,666 16,666 7,456 – 39,656 7,456 10,109 39,668 – 10,056 18 – 43,926 – 8,953 30 5,065 43,926 Sweden 10,366 52 – 8,953 10,335 229,181 1,950 5,065 10,192 Sweden 175,562 10,335 6,999 UK – UK – – – 54,596 – 6,999 Sweden 486,688 10,000 13,823 – 520 300,000 Islands Cayman Estonia Bahamas The Islands Cayman CaymanIslands 13,289 USA Procuritas CapitalPartnersII Industri Kapital Hambro EuropeanVenturesIII Baltic InvestmentFundII.L.P Russian ProsperityFundA Russian ProsperityCupFund New ProvidenceFundLtd Nektar HedgeFund Key InternationalTrust Hansa InvestmentFund Citimarkets GlobalEmergingMarkets 1) 1) 2) Share ofguaranteecapital 1) 3) 1) 1) 1) 2) 1) 1) 1) 0,0 00 00 0007,0 440168,989 14,410 75,000 40,000 533,865 144,612 50.00 299,900 84,264 50,000 1,008,032 532,550 50.00 10,977 249,850 234,563 69,240 800,000 50,000 112,551 15,000 70,577 100.00 81,000 100.00 100.00 500,000 100.00 100.00 100.00 90.00 500,000 150,000 90.00 810,000 5003.01.01,0 5495,5 199,635 55,052 15,479 15,000 864,193 15.00 48,068 30.00 291,128 25,944 15,000 31.28 31.28 25,944 ,0 00 00 4 4 2,348 0 140 340 20.00 20.00 3,400 3) 9 47 47 9,0 8,6 1148656,043 –181,408 285,568 291,000 34.73 34.73 291 Accounting periodJune 1,1997–May 31,1998 odn oe a au vlefn erreserves fin.year value Parvalue Votes Holding o f odn Bo au value Bookvalue Holding No. of okfrteand forthe Book 1,250,211 ,7,1 2,897,653 2,277,110 rftls Capital Profit/loss 580,637 7,7 429,954 373,172 Current 74817,769 17,408 Other publiccompanies Total Public companiesintotal Chemical industry Data communicationsandelectronics Food industry Energy FIM‘000 Conglomerates FIM‘000 FIM‘000 Forestry % % Metal industry No.ofshares Trade Transport andtraffic Banking andfinance Public companies company of Name Other sharesandparticipations ro oprto 6,0 .611 ,2 50555,698 55,055 4,620 1.16 0.66 462,000 Orion Corporation eiaOj800006 .68503,2 31,025 98,347 31,025 46,408 8,500 54,630 11,343 244,776 0.66 27,315 2.92 46,675 159,499 26,910 1,518 0.66 987 46,675 2.92 26,910 40,714 0.08 50,935 5,386 850,000 11,800 2,820 28,486 1,134,332 0.02 9,520 29,113 0.08 1.87 20,900 8,321 672 0.84 9,520 0.07 32,861 15,341 200 607,000 1.28 0.21 0.08 1,400 0.47 394,800 1,000 0.64 897,600 24,894 5.14 0.21 0.26 82,575 141,000 2.30 16,218 82,575 0.64 5.14 1,643,062 134,370 34,000 2.30 1,196 164,564 18,350 11,784 100,000 34,000 12,560 280,000 19,740 97,087 24,890 100,000 0.63 0.62 11,784 Kemira Oyj 5,000 12,560 39,167 Asko Oyj 19,740 11,589 16,066 1,592 0.50 0.24 2,701 5,811 6,000 62,603 0.64 0.42 11,500 Sonera Groupplc 5,600 22,800 Nokia Corporation 0.30 77,000 Helsinki TelephoneCorporation 43,559 119,600 0.55 1,835,000 1,813 3,400 0.45 43,600 0.64 1.41 0.42 11,920 13,449 77,000 5,931 0.30 Huhtamäki Oyj 22,891 2.07 400 0.55 10,623 3,000 0.45 Cultor Oyj 500,000 0.52 35,000 1,158,900 48,300 0.87 2,000 2,000 159,237 0.82 – Fortum Oyj 2.85 270,100 0.33 600,000 31,641 Espoon SähköOyj 280,000 1.00 1.15 0.47 15,000 57,668 362,658 2.85 0.33 Suunto Oyj 0.33 Instrumentarium Corporation 1.00 593,132 0.18 0.47 36,147 Aspo Plc 3,500,000 50,000 300,000 3,117 200,000 UPM-Kymmene Corporation 0.18 400,000 Stora EnsoOyj 2.60 1,500,000 Valmet Corporation Rautaruukki Corporation 3.89 Rauma Corporation Partek Corporation Metra Corporation KCI KonecranesInternationalPlc 1,558,600 Fiskars Corporation Tamro Corporation Stockmann plc Kesko Corporation Finnlines Plc Finnair Oyj Merita Plc Mandatum PankkiOyj odn oe Prvle okvlevalue Bookvalue Parvalue Votes Holding ,1,1 1,441,495 1,018,219 ,4,7 1,481,746 1,049,877 Current 16840,251 31,658 59 SAMPO ANNUAL REPORT 1998 60 SAMPO ANNUAL REPORT 1998 PARENT COMPANY’SSHARESANDPARTICIPATIONScont. Capital trusts Unit trusts iotsaat adtmGoa 0,5 00711,887 8,956 10,007 7,964 8,956 – 7,964 10,210 – 10,000 – – – – – – – – – 100,054 – 100,000 100,000 1,000,000 Sijoitusrahasto MandatumGlobal Sij. rah.Seligson&CoGlobalTop25Brands Evli NordicSmallerCompaniesB Evli EuropeanSmallerCompaniesB Other sharesandparticipations Total Holdings exceedingFIM10millionspecified. aeo opn onr hrs I 00FIM’000 FIM’000 Medical industry % shares Country Public institutions Energy Banking Public companies Name ofcompany FIM‘000 Foreign sharesandparticipations FIM‘000 FIM‘000 % *) Domestic sharesandparticipationsintotal % No.ofshares Other companies company of Name Shareofguaranteecapital pno udIK 5 16311,673 11,673 – – – 259 Sponsor FundIKy sr bSee 86600 ,3 7,100 8,351 12,892 27,364 5,233 5,227 6,677 13,363 15,747 40,217 6,764 0.00 0.01 8,186 0.00 0.00 28,597 12,205 6,764 5,316 0.02 0.01 3,747 68,666 39,500 208 157,000 4,867 0.00 UK 3,143 7,995 Sweden Germany 3,413 82,000 59,900 17,353 8,955 0.02 Switzerland 30,000 0.00 6,775 Japan USA 12,272 0.02 7,487 3,904 16,789 17,800 Spain 0.01 13,723 0.01 2,500 100,000 10,795 0.02 3,334 Denmark 19,385 7,560 Italy 57,250 Switzerland 60,000 0.00 0.00 150,000 15,002 0.00 Germany 18,154 Spain 18,727 Italy 220,000 0.01 100 13,266 15,836 30,600 18,442 UK 33,100 0.00 13,437 USA 0.01 Japan 7,984 France 0.02 Yamanouchi PharmaceuticalCo. 240,000 17,866 12,000 Roche HoldingAG 5,242 3,398 Glaxo WellcomePlc UK 19,300 Bristol-Myers SquibbCo. 13,041 19,253 Switzerland Bayer AG 0.02 3,398 Astra Ab France 0.02 6,415 0.00 245,000 Tele DanmarkA/S – Telefonica SA 111,500 Sweden Telecom ItaliaMobile Swisscom AG Germany 11,000 Nippon Telegraph&TelephoneCorp. British TelecommunicationsPlc 50,000 Holland Data communicationsservices Veba AG USA Endesa SA Edison Spa Electricity, water,gas Mobil Corp. Elf Aquitaine British PetroleumCo. UBS AG Societe Generale 17,572 Nordbanken HoldingAb Internationale NederlandeBank 45,344 Federal NationalMortgageAssociation 17,572 25,400 Commerzbank AG 35,562 4,990 25,400 1,312 3.98 9,600 5.97 4.22 3.98 5.97 8.89 499,031 131,152 240,000 Varma-Sampo MutualPensionInsuranceCompany Oy G.W.SohlbergAb Sato-yhtymä Oyj Hex Oy *) 34.8–3,0 39295,756 13,942 33,000 – 46.48 33 odn oe Prvle okvlevalue Bookvalue Parvalue Votes Holding o fHligvlevalue value Holding No. of okCurrent Book ,0,4 1,730,018 1,200,345 4,7 234,762 141,076 Current ,9 13,510 9,392 Other sharesandparticipations Unit trusts Public companiesintotal aeo opn onr hrs I 00FIM‘000 FIM‘000 % shares Country Other Electronics Business services Name ofcompany oeg hrsadpriiain nttl4654649,508 456,514 Foreign sharesandparticipations intotal knk bSee 25000 ,7 3,173 3,173 6,999 0.02 6,999 22,500 – Sweden 13,289 USA Citimarkets GlobalEmergingMarkets Skanska Ab rt bSee 25000 9 1,051 795 0.02 1,466 5,814 20,904 22,500 1,466 934 5,814 5,724 Sweden 12,942 0.04 0.12 719 0.00 12,479 11,466 14,147 17,500 45,000 0.02 9,362 36,000 8,016 0.02 10,594 10,696 Norway Germany 11,741 Germany 14,320 6,896 4,950 657,000 0.01 0.01 7,622 5,200 4,273 Japan 9,019 5,339 0.01 0.00 5,968 11,054 330,000 3,810 Denmark 40,000 0.01 0.01 5,339 UK 10,746 Japan 5,250 50,000 725 0.01 3,602 8,521 28,300 0.03 0.01 248,400 Holland 0.00 25,000 Switzerland Sweden 3,602 UK 7,680 19,000 30,000 Holland 24,400 0.01 0.01 France Japan 2,500 33,490 USA Drott Ab Bilfinger &BergerBauAG 30,900 8,500 10,650 Construction industry 2,501 13,694 9,123 Sweden 7,751 Mitsubishi HeavyIndustryLtd France 8,238 0.01 Mannesmann AG 0.05 Kvaerner A/S 6,456 10,157 7,272 Mechanical engineeringindustry 4,337 0.02 45,608 41,000 Sophus Berendsen 9,861 0.00 0.02 Wholesaling 4,337 5,528 France 23,919 180,000 Norway 15,537 Marks &SpencerPlc 0.10 15,100 Koninklijke AholdNV UK 5,624 0.01 16,643 29,000 5,528 Ito-Yokado Co. 9,545 8,311 Hennes &MauritzAb 7,068 USA 380,000 0.00 Japan Retailing 3,277 0.00 80,000 7,481 0.00 13,127 Japan Nestle SA 5,374 LVMH Moet-HennessyLouisVuitton 0.02 Sweden 523,150 13,127 Heineken NV 2,400 0.01 29,800 Diageo Plc 0.20 UK Food industry 0.03 5,200 Germany USA 250,000 Sony Corp. 10,000 Gillette Co. Denmark UK BIC 185,000 Other consumables USA Holland Volvo Ab Motor industry British AirportAuthoritiesPlc Bergesen d.y.ASA Transport AXA UAP Insurance Kyocera Corp. Intel Corp. Hitachi Cable General ElectricCo.(U.S.) General ElectricCo. ABB Ab SAP AG Rentokil InitialPlc Ratin A/S Microsoft Corp. Elsevier NV oo. odn Bo au value Bookvalue Holding No of. 4,4 642,439 449,445 Current 070 70 61 SAMPO ANNUAL REPORT 1998 62 SAMPO ANNUAL REPORT 1998 13 INVESTMENTSINAFFILIATEDANDASSOCIATEDUNDERTAKINGS 14 OTHERLOANSBYSECURITY neet()45–.050 .050 5.00 1,403 4.50–5.00 2,426 5.00 43,669 1997 3,401 39,282 4.50–7.50 1998 5,309 88,352 1997 249,379 5,368 1998 7,142 – – Interest (%) – Loans toexecutives 30,015 LOANS TO EXECUTIVES(Insurance Companies’ Act, Chapter 12,Section 5) – 50,000 Other security – 0 80,015 Insurance policy – FIM ‘000 50,000 –8,000 11,786 –8,000 597,806 Remaining acquisitioncost,Dec.31 580,637 1997 11,598 745,948 521,641 –692 Original acquisitioncost,Jan.1 1998 777,063 1,048,611 associated undertakings 605,806 1,322,710 Debt securities issuedby, andloansto, –364,427 1,250,211 1997 1,413,038 first timeonDec.31,1998 694,605 –364,427 – in theconsolidatedfinalaccountsfor difference ofassociatedcompaniesincluded – Total goodwillandnegativeconsolidation – 734,349 1998 Remaining acquisitioncost,Dec.31 consolidation difference,Dec.31 – – on consolidationdifference/decreaseinnegative – Accumulated valueadjustments/depreciation Original acquisitioncost,Jan.1 Shares inassociatedundertakings Remaining acquisitioncost,Dec.31 Accumulated valueadjustments,Dec.31 Original acquisitioncost,Jan.1 Shares inaffiliatedundertakings FIM ‘000 vrg onpro yas 01 11 10 10 9 Average loanperiod(years) akgaate2,8 98240011,494 4,030 19,872 38,509 25,686 33,280 24,371 72,491 13,001 61,171 116,066 68,887 Shares inhousingandrealestatecompanies Bank guarantee parish securitiesandloansthereto,State Federation ofmunicipalities,municipalityand rnfr 1 –15 – –15 – Transfers erae–000–000––30,000 – –30,000 –50,000 – – 84,165 –3,314 236 90,328 –14,090 –420 –44,000 201,600 84,165 –43,262 – –3,346 90,013 Decrease – Transfers Decrease Increase Increase Gop Group Group 1,6 0,4 953118,042 89,593 302,149 412,264 ParentCompany ParentCompany – – 16 GROUP:INVESTMENTSCOVERINGUNIT-LINKEDINSURANCES 15 SUBORDINATEDLIABILITIESBYBALANCESHEETITEM etscrte 67735,364 value) (=book 61,477 26,727 cost acquisition 61,388 271,807 Debt securities Shares ininvestmentfunds FIM ‘000 201,799 Interests areentered basisinaccordance onaccrual withtheoriginalpaymentplan. KymmeneOy MeritaBankPlc MeritaBankPlc OtavaPublishingCompanyLtd Essential subordinatedliabilities Debtsecurities Other investments PARENT COMPANY Interests areentered basisinaccordance onaccrual withtheoriginalpaymentplan. Debtor Debtor Essential subordinatedliabilities Other investments GROUP FIM ‘000 netet curdi dac 434–4,755 –4,334 corresponding totechnicalprovisions Investments tounit-linked insurances, pertaining Investments acquiredinadvance neet%55 5.50 18.11.1993–18.11.2043 138,000 MeritaBankPlc 5.50 8.25 31.12.1995–31.12.2006 138,000 MeritaBankPlc 5.50 70,000 31.12.1995–31.12.2006 251,000 5.00 456,023 Loan period 18.11.1993–18.11.2043 75,000 Interest % 5.50 Amount ofloan Debtor 30.12.1998–30.12.2003 Loan period 31.12.1995–31.12.2006 Interest % 251,000 Amount ofloan Debtor 31.12.1995–31.12.2006 562,047 Loan period Interest % Amount ofloan Loan period Interest % Amount ofloan Debt securities

rgnlCurrentvalue Original 81596,841 88,115 37292,086 83,782 981997 1998 1998 Kymmene Oy 70,000 8.25 63 SAMPO ANNUAL REPORT 1998 64 SAMPO ANNUAL REPORT 1998 17 DEBTORSANDCREDITORS,AFFILIATEDASSOCIATEDUNDERTAKINGS Creditors Creditors Debtors DEBTORS ANDCREDITORS,ASSOCIATEDUNDERTAKINGS I 0019 9719 1997 1998 1997 1998 Debtors DEBTORS ANDCREDITORS,AFFILIATEDUNDERTAKINGS FIM ‘000 Creditors Technical provisions eso on 6,2 267,321 4,838 – 2,844 6,537 – 267,321 8,825 – 2,845 10,988 1,392 201 830 Other creditors Pension loans Other debtors Accruals anddeferredincome rsn u frisrneoeain 84 849 48 49 48 Arising outofreinsuranceoperations Prepayments andaccruedincome Debtors Investments te rdtr ,9 5,842 – 8,191 337 –5,000 – –5,000 642 26,635 760 22,145 775 Other creditors Bond withwarrants Arising outofreinsuranceoperations Reinsurers’ share Provision foroutstandingclaims Provision forunearnedpremiums te rpyet n cre noe5– 5 Other prepaymentsandaccruedincome ru Group neetadrns1 – 18,926 11 249,144 42 98,808 4,309 92,070 Interest andrents Other debtors Arising outofreinsuranceoperations Loans toaffiliatedundertakings Investments inlandandbuildings/ 0982616657272,159 6,537 276,146 10,988 4 ,9 82,894 48 2,895 249 4,3 117,776 345,539 80829,511 28,038 ParentCompany 18 CONSOLIDATEDSTATEMENTOFCHANGESINCAPITALANDRESERVES PARENT COMPANYSTATEMENTOFCHANGESINCAPITAL ANDRESERVES ioiyitrs notoa eevsaddpeito ifrne–0 2,581 –47,778 –401 Optional reservesanddepreciationdifference –58,058 Minority interestinoptionalreserves anddepreciation difference Deferred taxonoptionalreserves anddepreciation difference itiual rft e.3 ,4,0 1,121,775 1,643,201 Optional reservesanddepreciationdifference,Dec.31 Distributable profit,Dec.31 Non-restricted Non-restricted I 00Jn ,19 nraeDces Dec.31,1998 Decrease Increase Jan.1,1998 125,438 148,891 Restricted FIM ‘000 in non-restrictedcapitalandreserves,Dec.31 Dec.31,1998 Decrease Distributable profit Increase Jan.1,1998 Restricted FIM ‘000 euiyrsre6,9 69,693 336,734 459 400,048 7,314 – – – –152 –210,150 – 336,734 – 150 27,600 – 69,693 372,448 461 217,464 172,633 Profit forthefinancialyear Profit/loss broughtforward At thedisposalofBoard Contingency reserve Security reserve Revaluation reserve osn eev 51210,454 22,089 35,102 36,510 138,093 707,720 135,739 –125,438 – –148,891 Housing reserve Credit lossreserve 42,333 707,720 Accumulated depreciationdifference in non-restrictedcapitalandreserves –19,377 – 762 Profit forthefinancialyear 60,948 Currency conversiondifferences o-etitdrsre 9,4 0,1 5,7 747,279 337,093 –50,277 –626,103 105,910 407,628 691,646 555,568 Profit/loss broughtforward Non-restricted reserves ea eev ,7,9 2,177,892 310,000 – – – – 2,177,892 310,000 Legal reserve Subscribed capital o-etitdcptladrsre ,9,9 1,247,214 – 2,195,408 1,792,092 310,000 – 168,533 –113 – –26,863 – – Optional reservesanddepreciationdifference Non-restricted capitalandreserves – 5,881 113 2,195,408 189,515 310,000 Other restrictedreserves Revaluation reserve Legal reserve Subscribed capital ,0,9 ,2,0 72734,508,366 1,792,092 –722,733 –676,380 1,227,901 1,221,258 4,003,197 1,247,214 ,2,9 6,8 24423,470,673 –214,402 364,484 3,320,591 6,6 6,8 2032814,248 –210,302 364,484 660,066 ,5,8 ,4 4,5 2,716,274 –46,353 6,643 2,755,983 ,6,2 4102,656,425 –4,100 – 2,660,525 0,5 170,635 207,351 981997 1998 – 410168,533 –4,100 65 SAMPO ANNUAL REPORT 1998 66 SAMPO ANNUAL REPORT 1998 20 TECHNICALPROVISIONS 19 DISTRIBUTIONOFSHARES enues hr –22 – maturity ofthediscounted provision foroutstandingclaims issixyears. 19,269 of thisprovision wasdiscountedatfourper centinterest rate. The estimatedaverage Company Ltd’s foreign reinsuranceprovision foroutstandingclaims.In 1998apart on otherthanannuity-formcompensations, inconnectionwithPatria Reinsurance Discounting hasbeeneffectedincalculatingtheprovision foroutstandingclaims 26,193 Discounting oftheprovisionforoutstandingclaimsnon-lifeinsurance PROVISION FOROUTSTANDINGCLAIMS Maximumnumberofshares 1,320,000 990,000 990,000 Reinsurers’ share the lifeinsuranceprovisionforunearnedpremiums Deferred insurancepolicyacquisitioncostsdeductedfrom PROVISION FORUNEARNEDPREMIUMS C warrant B warrant A warrant FIM ‘000 5 of dividendsdistributedbeforethesubscriptionforshares. The sharesubscriptionpriceappliedtoallwarrantsisFIM271deductedbytheamount 60,800,000 May 1,2002–31,2005 May 1,2001–31,2005 1997 60,800,000 5 May 1,2000–31,2005 240,000 period Subscription 60,560,000 1998 240,000 Ashares,of 3,300,000new eachofaparvalue ofFIM5,i.e.by amaximumofFIM16,500,000. As aresult ofthesubscriptions,share capitalofSampo Insurance Companyplccanincrease by amaximum 60,560,000 Sampo Group andKaleva Mutual Insurance Companywere entitledtosubscribefortheloan. No interest ispaidontheloanwhichwillberepaidMay 22,2001.Staff permanentlyemployed bythewhole Sampo Insurance CompanyplcissuedabondloanwithwarrantsofFIM6,600,000 onMay 22,1998. BOND LOANWITHWARRANTS bond. or tosubscribeaconvertible The Board hasnoauthorisationforarightsissue,togive rightsofoption, options heldbyGroupcompanies Number ofparentcompanysharesand Par value/share(FIM) Total B shares,5votes/share A shares,1vote/share Number ofshares acltn h ehia rvsoso nute % .04.50 – 5.00 4.00 calculating thetechnicalprovisions ofannuities(%) Interest rateusedintheGroupand ParentCompanyin – – – 168,250 Options Shares

61319,247 26,193 981997 1998 Group to besubscribed 23 CONTINGENTLIABILITIES,PLEDGEDASSETSANDDERIVATIVES 22 LONG-TERMLIABILITIES(5yearsorlonger) 21 OBLIGATORYPROVISIONS The conditionsofthebondloanwithwarrantsare presented underDistribution ofShares intheAnalyses. Reinsurers’ share te w iblte 6 – – – 7,759 – 8,395 961 33,486 – 1997 22,886 – – 32,111 51,796 1998 65,029 167,476 – – 274,618 567,434 59,968 422,952 1997 – 195,245 540,465 86 67 1998 274,618 – Other ownliabilities 422,952 195,245 Leasing liabilities 7,555 780,935 185,972 21,982 1997 322,396 135,830 VAT deductions 283,484 Investment liabilities 185,972 1998 Countersecurities Collateral againstown foreignreinsurance liabilities 135,830 Amount oftheaboveliabilities 1997 Pledges againstownliabilities Amount oftheaboveloans 10,750 Mortgages forownloans 1998 FIM ‘000 9,085 Pension loans Provision forrents FIM ‘000 Group Provision foroutstandingclaims(discountedpart) FIM ‘000 mut wdt rdtisiuin 76738,096 47,657 Amounts owedtocreditinstitutions muto icut1,7 9,007 –48,748 57,756 10,575 –39,426 70,424 50,001 –208,739 63,248 –199,883 Amount ofdiscount After discounting Before discounting Amount ofdiscount After discounting ob addrn olwn er 8061,5 – – – – 19,552 18,046 4,343 5,317 To bepaidduringfollowingyears To bepaidduringthestartingfinancial year during 1994–1998/1997 From newconstructionandrealestaterefurbishments 279,163 263,131 Before discounting ru Group 8,8 2,6 3,3 185,972 135,830 224,068 183,486 981997 1998 Group ParentCompany ParentCompany – – 67 SAMPO ANNUAL REPORT 1998 – – 68 SAMPO ANNUAL REPORT 1998 24 PARENTCOMPANYKEYFIGURES cont. CONTINGENT LIABILITIES,PLEDGEDASSETSANDDERIVATIVES I 0019 9519 971998 1997 1996 1995 1994 Solvency margin KEY FIGURESPERTAININGTOSOLVENCY FIM ‘000 1997 The Group hasnootherliabilitiesasspecifiedintheInsurance CompaniesAct, Chapter10,Section 8,Sub-section 3. 1998 1997 1998 Derivative contracts FIM ‘000 The significantincreaseinderivativecontractsoriginatesmainlyfromNovaLifeInsuranceCompanyLimited. The currentvaluesoftheoptioncontractsincludereceivedandpaidpremium. te tm 4,8 4,8 2 –24,691 – –28 –48,485 –45,380 Other items nagbeast 1352–0,5 7026–9,4 –414,250 8,393,623 76,412 –696,547 5,599,904 –700,236 81,306 4,251,080 –703,754 2,982,893 81,064 –123,522 2,659,161 3,178,833 3,138,191 82,643 3,110,544 3,022,745 80,508 3,089,063 Intangible assets value ofassets value andBalanceSheetbook Valuation differencebetweencurrent depreciation difference Optional provisionsandaccumulated profit distribution Capital andreservesafterproposed Interest rate-linkedderivatives Share derivatives Currency-linked derivatives Gop Group uue n owrs neligisrmn ,4,8 – – – – – – 9,740,689 508,423 instrument underlying instrument underlying Futures andforwards, Interest rateswaps, cretvle–635––– – – – – 917 – –36,345 2,198 522,237 Option contracts –2,176 104,845 instrument underlying currentvalue Futures andforwards, 61,822 –294 1,031,064 Option contracts 1,328,209 instrument underlying currentvalue Futures andforwards, od neligisrmn 2,7 4,7 – – 244,776 – – 244,776 – – – 529,272 underlyinginstrument – 578,969 – underlyinginstrument – Sold, 613,485 Bought, underlyinginstrument 1,459,526 underlyinginstrument Sold, Bought, urn au 451––– – – – – – 24,541 5,213 current value current value urn au 2,2 1,4 – – –17,444 – –7,247 – – – – – –23,221 –16,143 – – current value current value 1,987 331 current value current value ,5,3 ,3,4 ,4,2 ,2,5 11209,927 8,122,855 6,742,424 5,336,042 5,659,831 ParentCompany eseulsto rvso % 5. 4. 9. 2. 291.2 228.3 191.8 1998 3.4 147.9 62,786 1997 158.3 129,141 7.7 Combined ratio 1996 Expense ratio 220,189 325,106 Loss ratio 14.0 155,175 292,147 1995 OTHER KEYFIGURES 455,397 253,093 less equalisationprovision(%) 10.7 Solvency capitaltotechnicalprovisions 1994 288,535 354,738 Solvency ratio 18.8 Solvency capital Equalisation provisiontoitsfullvalue(%) technical provisions large numbersoflossesincludedin Equalisation provisionforyearswith Chapter 11,Section2 Finnish InsuranceCompaniesAct, Solvency marginrequiredunderthe FIM ‘000 osrtoadepnerto()167144119163117.9 116.3 27.7 90.3 111.9 26.4 89.9 114.4 28.6 83.3 126.7 658.4 28.8 85.6 515.6 27.6 99.1 Loss ratioandexpense(%) 464.5 Operating expensestopremiumsearned(%) Claims incurredtopremiumsearned(%) 525.2 11,272,713 582.3 8,251,996 6,962,613 Solvency capitaltopremiumsearned(%) 5,491,217 6,115,228 Solvency marginandequalisationprovision uk äml aiO olegGeorgEhrnrooth KariO.Sohlberg Härmälä Jukka Ari Heiniö Paavo Pitkänen Christoffer Taxell Christoffer Pitkänen Paavo Ari Heiniö Chairman SAMPO INSURANCECOMPANYPLC Helsinki, March4th,1999 Jouko K.Leskinen Board ofDirectors Managing Director 69 SAMPO ANNUAL REPORT 1998 AUDITORS’ REPORT

To the Shareholders of Sampo Insurance Company plc

We have audited the accounting records and the financial statements, as well as the administration by the Supervisory Board, the Board of Directors and the Managing Director of Sampo Insurance Com- pany plc for the financial year 1998. The financial statements, which include the report of the Board of Directors, consolidated and parent company income statements, balance sheets and notes to the financial statements, have been prepared by the Board of Directors and the Managing Director. Based on our audit we express an opinion on these financial statements and on the company’s administration. The undersigned Jaakko Nyman has scrutinised the accounts for the financial year and submitted a separate report thereon. We have conducted the audit in accordance with Finnish Generally Accepted Auditing Standards. Those standards require that we plan and perform the audit in order to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. The purpose of our audit of administration has been to exam- ine that the Supervisory Board, the Board of Directors and the Managing Director have legally complied with the rules of the Insurance Companies Act and Finnish Companies Act. In our opinion, the final accounts have been prepared in accordance with the Finnish Accounting 70 Act and other rules and regulations governing the preparation of financial statements in Finland. The financial statements give a true and fair view, as defined in the Accounting Act, of both the consolidated and parent company result of operations, as well as of the financial position. The financial statements can be adopted and the members of the Supervisory Board, the Board of Directors and the Managing Director of the parent company can be discharged from liability for the period audited by us. The proposal made by the Board of Directors on the distribution of profit is in compliance with the Finnish Companies Act. We have reviewed the interim report made public by the company during the year. It is our under- standing that the interim report statements have been prepared in accordance with the rules and regula-

SAMPO ANNUAL REPORT 1998 SAMPO ANNUAL REPORT tions governing the preparation of such reports in Finland.

Turku, March 18th, 1999

Thor Nyroos Jaakko Nyman Authorised Public Accountant Authorised Public Accountant KPMG (Translation of a Finnish Original)

STATEMENT BY THE SUPERVISORY BOARD

The Supervisory Board has received the Accounts for Sampo Insurance Company plc for the financial year 1998, together with the consolidated accounts of the Sampo Group and the Auditors’ Report concerning these. The Supervisory Board has found no cause for criticism on account of the above, and therefore submits the Accounts and the Auditors’ Report to the Annual General Meeting and recommends that the Profit and Loss Account and Balance Sheet together with the Consolidated Profit and Loss Account and Balance Sheet be approved and that the proposals for the disposal of the profit for the financial year moved by the Board of Directors be accepted.

Helsinki, March 22nd, 1999

For the Supervisory Board Jyrki Juusela SUPERVISORY BOARD

The Supervisory Board • supervises the administration of the Company by the Board of Directors and Heikki J. Perälä, born 1958 (1999) Managing Director; Managing Director, • submits to the Annual General Meeting a statement concerning the Company’s Helsinki Chamber of Commerce Accounts for the Year, the Consolidated Accounts for the Year, The Auditors’ Report for the Company and the Consolidated Auditors’ Report; Jarmo Rytilahti, born 1944 (2001) • determines the commissions and the basis upon which travelling expenses will be CEO, Asko Oyj calculated for the Chairman, the Vice Chairman and the other members of the Board of Directors; Martin Saarikangas, born 1937 (1999) • determines the number of, and elects, the members of the Board of Directors; Chairman, CEO, • elects the Chairman and Vice Chairman of the Board of Directors; Kvaerner Masa-Yards Inc. • resolves matters concerning the significant contraction or expansion of the operations of the Company or substantive changes in the organisation of the Company. Seppo Sipola, born 1943 (2000) President, CEO, Asset Management Jyrki Juusela, born 1943 (2000) Heimo Karinen, born 1939 (2000) Company Arsenal Ltd Chairman CEO, Kemira Oyj CEO, Outokumpu Oyj Stig Stendahl, born 1939 (1999) Eino Keinänen, born 1939 (2000) President and CEO, Fiskars Corporation Krister Ahlström, born 1940 (2000) Chairman of the Board, Leonia plc Vice Chairman Matti Sundberg, born 1942 (2001) Chairman of the Board, Ahlström Group Keijo Ketonen, born 1942 (2000) President and CEO, 71 Managing Director, TS Group Valmet Corporation Kalevi Aro, born 1947 (2001) Vice Chairman Henri Kuitunen, born 1958 (2001) Jukka Suominen, born 1947 (2001) President, Aro-Yhtymä Oy Director General, VR Group CEO, Neptun Maritime Oyj

Esa Swanljung, born 1949 (2000) Antti Lagerroos, born 1945 (1999) Seppo Säynäjäkangas, born 1942 (1999) Vice Chairman President, CEO, Finnlines Plc Chairman of the Board, Polar Electro Oy President, Finnish Confederation of

Salaried Employees (STTK) Heikki Lehtonen, born 1959 (2001) Pekka Vennamo, born 1944 (2000) 1998 SAMPO ANNUAL REPORT President, Santasalo-JOT Corporation President, CEO Antti Aarnio-Wihuri, born 1940 (2000) PT Finland Ltd (Jan. 1st – June 30th, Chairman of the Board, Wihuri Ltd Curt Lindbom, born 1942 (1999) 1998) Member of the Board, Sonera Group plc (as of July 1st, 1998 Fredrik Björnberg, born 1938 (1999) CapMan Capital Management until Jan. 4th, 1999) Chairman of the Board, Myllykoski Corporation Esko Muhonen, born 1941 (2001) Jukka Viinanen, born 1948 (2001) Managing Director, Vapo Group President and CEO, Neste Corporation Matti Elovaara, born 1939 (1999) CEO, Tamro Corporation Carl G. Nordman, born 1939 (2000) Markku Äärimaa, born 1942 (2001) Managing Director, Oy AGA Ab Secretary General, Finnish Medical Martin Granholm, born 1946 (1999) Association Executive Vice President, Jorma Ollila, born 1950 (2000) UPM-Kymmene Corporation President and CEO, Nokia Corporation Year of expiry of office given in brackets.

Matti Honkala, born 1945 (2001) Niilo Pellonmaa, born 1941 (1999) For additional information on the CEO, Kesko Corporation Member of the Board, Members of the Supervisory Board, Jaakko Pöyry Group Oyj please contact: Henrik Höglund, born 1949 (2000) Sampo Insurance Company plc Chairman of the Board, Heikki Pentti, born 1946 (2001) Legal Affairs KWH Group Ltd Chairman of the Board, Aleksanterinkatu 11, Helsinki, Finland Lemminkäinen Corporation Postal address: Matti Ilmari, born 1942 (1999) FIN-00025 SAMPO, Finland President, ABB Oy Group Telephone +358 10 515 311 72 SAMPO ANNUAL REPORT 1998 • determines the principles and order in accordance withwhichtheDeputy determinestheprinciplesandorder inaccordance ManagingDirectors mayexercise • confirmsthegeneralregulationsconcerningretirement ageofandpensionsduetoemployees ofthe • theemolumentsandotherbenefitsofCompanyemployees; determinesthegeneralprinciplesgoverning • Director, appointstheManaging ManagingDirectors, Deputy andAssistantManagers, Managers acceptstheir • thesurrenderofreal belongingtotheCompanyandgrantspermissionfor resolves estateproperty • theraisingofloansforCompanyandsuretyobligationsentered resolves intoby theCompany; • whichtheCompanymaywithoutrecourse on toreinsurance confirmsthemaximumsumsinsured, retain • Moreover theBoard ofDirectors: arrangement ofaccountingandfinancialadministration. management ofitsoperations. The Board isfurthermore ofDirectors responsiblefortheproper The Board isresponsible ofDirectors fortheadministrationofCompanyandproper BOARD OFDIRECTORS the authorityandpowers oftheManagingDirector. Company; anddeterminestheiremoluments; resignations ofsuchproperty; mortgaging account; its own Period ofofficecommencedonAugust 1st,1992. appointed Member oftheBoard ofSampoInsurance CompanyLimitedonJune 26th,1992. Sandvik AB. Chairman oftheBoard, Varma-Sampo Mutual Pension Company. Insurance He was Chairman oftheBoard, AssaAbloy AB.MemberoftheBoard, KarlFazer OyAb, ABB Oy, and Georg Ehrnrooth 20th,1993. on October Fair Corporation.He wasappointedMember ofSampo oftheBoard CompanyLimited Insurance Company. Member Board, oftheSupervisory MeritaBank Plc. ChairmanoftheBoard,Finnish PerlosChairman oftheBoard, Oy. Member oftheBoard, Varma-Sampo Mutual Pension Insurance O.Sohlberg Kari Vice Chairman He onOctober 20th,1993. wasappointedChairmanoftheBoard CompanyLimitedonJuneInsurance 26th,1992.Period ofofficestartedonAugust 1st,1992. Board, MeritaBankof theSupervisory Plc. He wasappointedMember ofSampo oftheBoard Board,Varma-SampoChairman oftheSupervisory Mutual Pension Insurance Company. Member the Board, Plc Finnlines andPVO Group. Member Neptun oftheBoard, Maritime Oyj. Vice ConfederationofFinnishChairman oftheBoard, andEmployers. Industry Vice Chairmanof Jukka Härmälä Chairman , born1946(2000),Managing Director, Stora Oyj. Enso , born1940(2000),Managing Director, OyG.W. Sohlberg Ab. , born1940(1999),President, Corporation. Metra Member of Sampo CompanyplcsinceJanuary oftheBoard 22nd,1999. Insurance ofAlmaMediaMember Board CorporationandInstrumentarium oftheSupervisory Corporation. Company. Metra Member ofthe Board, Corporation,Partek Corporation,Stora Oyj. Enso Paavo Pitkänen Board ofSampoInsuranceonJanuary CompanyLimitedfrom Board theSupervisory 1st,1998. ABB Oy. ChairmanoftheBoard KalmarIndustries ofDirectors, AB.He transferredtothe Member KCI oftheBoard, Konecranes International Plc, Metra Corporation,Stockmann plc, Christoffer Taxell October 20th,1993.HisperiodofofficeontheBoard endedonDec. ofDirectors 31st,1998. He transferredtotheBoardofSampoInsurance CompanyLimitedfrom Board theSupervisory on Lundqvist Thor Björn 20th,1992). (appointed onOctober Cultor Oyj.MemberoftheBoard ofSampoInsurance CompanyLimitedsinceJanuary 1st,1993 Varma-Sampo Mutual Pension Company, Insurance Corporation.ChairmanoftheBoard, Nokia Vice ChairmanoftheBoard,UPM-Kymmene Corporation.Member Finnlines oftheBoard, Plc, K.Leskinen Jouko Insurance CompanyLimitedfrom Board theSupervisory Sampo onOctober 20th,1993. Mutual Pension Insurance Company, Finnish Fair Corporation.Hetransferred totheBoard of AlmaMediaMember Board, Corporation,Merita oftheSupervisory BankVarma-Sampo Plc, Metsä Tissue Oyj,Palace Hotel OyAb andEmployers’ Industries. ConfederationofService CommercialChairman oftheBoard, Employers’ Association.Member Finnair oftheBoard, Oyj, Heiniö Ari , born 1945 (2001), Managing Director,, born1945(2001),Managing Stockmann plc. , born1942(2001),Managing Director, Varma-Sampo Mutual Pension Insurance , born1948(1999),President, CEO,Partek Corporation. , born1943(2001),President Insurance andCEO,Sampo Companyplc. , born1941(1998),Member oftheBoard, OyRettig Ab, Finnlines Plc. 73 SAMPO ANNUAL REPORT 1998 74 SAMPO ANNUAL REPORT 1998 Deputy Auditors Auditors AUDITORS Authorised Public AccountantsWideri KPMG OyAb Authorised Public Accountant, M.Sc.(Econ) Pertti Keskinen Authorised Public Accountant, B.Sc.(Econ) Thor Nyroos Authorised Public Accountant, M.Sc.(Econ) NymanJaakko 1916 thisoilpainting,whichnowbelongstoSampo’s collection. Kallela. Oneofthemwascalled“IlmarinenPloughingtheFieldVipers”.Onbasisthatworkhecreatedin thegemsofpavilionwere depictingtheKalevalabyAkseliGallen- thefrescoes Paris in1900.Asforpictorialart, fortheFinland’s andarchitecture wascreated industry A synthesisofFinnishart, pavilionattheWorld Fairheldin 1865-1931 Gallen–Kallela, Akseli Ilmarinen Ploughing the Field of Vipers, 1916 Vipers, of Field the Ploughing Ilmarinen 75 SAMPO ANNUAL REPORT 1998 76 SAMPO ANNUAL REPORT 1998 rvt letSrie 36% 3 2 PrivateClientServices 1 FIM 4,921m Sampo Groupintotal premiums written Direct non-lifeinsurance 3 ao consSrie 35% Major AccountsServices 29% Corporate ClientServices 2 FIM 1,757m 1 immediately so repair workimmediately sorepair Thanks to canbegin. replaced,property orthedamagedcar isinspected is paidintotheirbankaccount, lostordamaged client’s claimishandledatonego;compensation feedbackfrom positive bothclientsand staff. The have receivedtem forclaimssettlementservices 2000. are expectedintheyear andhasalready begun. services The firstresults targets overall and reform ofinsuranceproducts in1998. claims settlementservices The nextphase insystemsandoperationsfor similar reforms modelandsupportsystemsin1997, service ments were theestablishmentofanewcustomer overand spread several years.First phaseachieve- launched in1995, the Sampo 2000programme ucts andinformationsystemshasbeenfocusedin Private Sampo’s upgradingofitsoperations,prod- Service Reforms areas withthehighest risk. increases were directedatinsured objectsand holds wasalsodeveloped further, sothatpremium Property insurancetariffingforprivate house- inAutumn.stock wasintroduced tothemarket forFinland’scially developed ageingpassengercar motorvehicleinsuranceespe- avoluntary more, driver.phasis ontheageofvehicle Further- vehicle insurancetariffsnow placeahigherem- level ofriskwaswellreceived lastyear. Motor came inclearlyunderbudget. expensesdeveloped favourablyOperating and atalmostthesamelevel as1997. remained rosereceived by 5.9percentwhileclaimspaid eted targetwasexceeded. The totalofpremiums than12percentovermore 1997andthebudg- Private Sampo’s operatingmarginimproved by Positive DevelopmentinUnderwriting how ofitspersonnel. andwell-being oriented andcost-efficient,ensure theknow- processes thatareincreasinglyservice customer- satisfaction, tosafeguardprofitability, develop Private Sampo’s are core objectives highcustomer commands almostathird oftheFinnish householdmarket. by Private Sampo, ofSampo aunitthatispart plc.Sampostrength Private households,farms are andtheself-employed allwell served PRIVATE CLIENTSERVICES The new operationsmodelandsupport sys- The new tothe A tariffsystemthatbettercorresponds surveys. Co-operationwasexpandedatthe surveys. Finlandthroughout atSampo’s disposalforloss 45inspectioncentresstations, there around are availability. InadditiontoSampo’s sevensurvey service to beasignificantfactorinincreasing Finnish Motor Vehicle Ltdhasproved Inspection The conclusionofaco-operationagreementwith thewholeGroup. organisationserves The new andboats. activitiesonmotorvehicles loss survey organisationforhandling and establisheditsown Finnish Ltd,endedthatco-operation LossSurvey flexibleclaimssettlementservices.even more are ourclientswithfasterand we abletoprovide andmachinesequipmentacquisition, services specialisinginrepair our co-operationpartners vrg o fpronl1921,925 1,972 515.6 658.4 8,252.0 129.1 89.9 11,272.7 26.4 8,122.9 116.3 62.8 11,209.9 Average no. ofpersonnel 90.3 27.7 117.9 –91.9 –210.1 7,694.9 Solvency ratio,% Solvency capital 8,002.3 Equalisation provision Solvency margin 3,743.9 Combined ratio,% 229.0 3,934.5 Expense ratio,% 13,294.8 Loss ratio,% –25.1 540.2 573.1 16,396.0 Sheet totalatcurrentvalues Balance 2,426.8 –25.2 Sheet total Balance 1997 1,016.3 –1,438.3 –422.7 Technical 3,179.3 –227.2 provisions, net 1,600.5 –1,542.9 1998 –473.4 –240.8 33.4 1,712.1 activities Profit onordinary Tax incomeandcharges Other 66.4 Net investment income ontechnicalaccount Balance Change intheequalisationprovision Net operatingexpenses Claims incurred Premiums earned Turnover FIM millions Sampo InsuranceCompanyplc Sampo relinquished ownership itspart Sampo of strong andhouseholds’strong ownexpectations about isexpectedtoremainhousehold buyingpower trend theweakening Despite ineconomicgrowth, Household Insurances Favourable Outlookfor Spring. forthefirsttimethis bought throughtheInternet motorvehicle. insurancescanbe insured Sampo ing andfornotifyingaperiodofnon-usean premiums, andwithactiveforms forlossreport- the additionofafunctiontocalculateinsurance Internetgrowing. Our servicewasexpandedby phone callsandtheirsteadyupward trend. SampoSo CallCentre of handlesarisingvolume notablyforseveral yearsphone hasincreased now. tele- choose tohandletheirinsurancemattersby telephone service. The numberofclientswho 86officesandtheSampothrough CallCentre thatcatertoclients four geographicalregions theseoutlets. ance salesfrom beginning of1999tooffermotorvehicleinsur- The demand for self-service access isalso The demandforself-service network service isdividedinto The Sampo growing competitionthatresults. Finnish market withmore operatorsandthe new dic andEuropean financialmarkets impactthe theyneedthem. and whenever quickly,access insuranceservices andwherever mobile phones.Clientswillinfuturebeableto becoming available new through mediasuchas options areconstantlyexpandingandgradually Internet continuesitsbriskdevelopment. services is significantgrowth potentialforPrivate Sampo. sicknessandhealthservice insurances,there new Combined withtheincreasingneedtodevelop ing volume ofassetsavailableforinvestment. pensionschemesandhavearis- with voluntary ested insupplementingstatutorysocialsecurity also expectedtocontinuegrowing. salesarethus highlyfavourable andmotorvehicle The outlookfortheprivate householdsectoris their economicsituationcontinuetobepositive. At thesametime, structuralAt changesinNor- Technology ofsupplyingthose in support Private alsovery householdsare muchinter- throughout hiscareer. central forLehto’s painting humility. Thisthemeremained message oftenderness,loveand and soft-edgedforms conceala of worldart.Thedimcolours eternal motherandchildtheme ism. “InthePark”depicts master ofNaïvismandSurreal- Nikolai Lehto,thegreatFinnish vided afirm foundationfor Cézanne toPicassohavepro- The mastersofpaintingfrom 1905–1994 Lehto, Nikolai Commerce andTrade Federation ofFinnish Guy Wires Kaleva Matti Rantanen STTK-J ry Mikko Mäenpää Auto-Jalonen Oy Martti Jalonen Private Sampo Managing Director, Vice Chairman Hannu Kokkonen CEO, SampoGroup Chairman oftheBoard Jouko K.Leskinen of Directors Private SampoBoard In the Park, 1948 Park, the In 77 SAMPO ANNUAL REPORT 1998 78 SAMPO ANNUAL REPORT 1998 3 2 1 FIM 4,921m Sampo Groupintotal premiums written Direct non-lifeinsurance 3 ao consSrie 35% Major AccountsServices 29% 36% Corporate ClientServices Private ClientServices FIM 1,444m 2 1 ovnyrto 0. 100.1 1,117.4 106.1 951.1 1,451.8 93.0 166.4 14.6 107.6 1,238.9 212.9 95.4 13.7 109.1 –17.6 –56.5 2,778.1 Solvency ratio,% Solvency capital 3,410.3 Equalisation provision Solvency margin 2,232.5 Combined ratio,% 43.8 0.2 2,610.1 3,380.9 Expense ratio,% Loss ratio,% 199.3 4,172.8 145.9 0.4 totalatcurrentvalues Balance Sheet 373.4 1,435.3 total Balance Sheet –1,037.3 –163.2 Technical provisions, –138.2 1997 1,989.4 net 1,115.8 –1,303.3 –187.7 –171.4 1,367.7 Profit onordinary activities 1998 –53.5 Tax Other incomeandcharges Net investment income –46.5 Balance ontechnicalaccount Change intheequalisationprovision Net operatingexpenses Claims incurred Premiums earned Turnover FIM millions Sampo EnterpriseInsuranceCompanyLimited forthewholecompany.vide operationssupport pro-Corporate Development andAdministration Sampo Operations, EnterpriseInvestment while centresprofit aretheBalticProfit Group and sharper focusonnon-lifebusiness. The other and theNon-Life InsuranceUnit ensures a forclientrelationshipresponsible management Latvian domesticmarket was0.1percent. year.in thereview Sampo Latvija’s shareofthe increasedits market 4.0to4.6percent share from Kindlustus hasapproximately 7,000clientsand hasincreasedto11.0percent.Sampoket share informationindicatesdomesticmar- preliminary EnterpriseSampo hasover 90,000clientsand ofinsuranceon-going provision anddevelopment intheBalticRim. services established in 1998-helpsecureSampo Latvija-anewsubsidiary the afield. further Sampo KindlustusinEstonia,Wholly-owned subsidiary and Sampofrom EnterpriseInsurance inFinland CompanyLimited and and housingrealestatecompanies,allreceive theyvalue theservices Small andmedium-sized enterprises,theirkeypersonnel,thepublicsector, CORPORATE CLIENTSERVICES vrg o fpronl52560 592 Average no. ofpersonnel The Service Network operatesthroughits Network Enterprise Service The Sampo is vrg o fpronl1 11 5.2 16 162.4 5.2 92.8 5.2 – 77.1 94.4 17.3 5.2 – Average no. ofpersonnel 57.4 97.5 40.1 –0.1 11.1 –0.2 4.6 Solvency ratio,% 14.9 Solvency capital Equalisation provision 11.1 0.1 Solvency margin 6.7 0.1 Combined ratio,% Expense ratio,% 14.8 0.1 – Loss ratio,% 13.0 –2.5 – 3.2 0.2 0.1 Sheet totalatcurrentvalues Balance –0.6 17.3 Sheet total Balance –3.2 Technical 1997 provisions, net 5.6 0.1 –2.3 activities Profit onordinary – 1998 Tax – incomeandcharges Other Net investment income ontechnicalaccount Balance Change intheequalisationprovision Net operatingexpenses Claims incurred Premiums earned Turnover FIM millions Sampo KindlustuseAS nancial year. The non-lifeinsurancebalanceon recorded aprofit ofFIM143millionforthefi- Enterprise InsuranceCompanyLimited Sampo Improved Performance relationships. andimplementsbroker co-operation develops oftheentireNon-Life services broker Group and ofinsuranceagents. ganisation, andanetwork Regionalalso supports Channels,itsregionalor- a daythroughouttheyear. CentralisedChannels 24hours bles clientstoreachSampoEnterprise Internetices andsampo.fi technology, whichena- ised Channelsisresponsible fortelephoneserv- Central- regional andcentralisedchannelservices. Sampo EnterpriseSampo managestheupgraded creased by 29.7percentandthecompany re-creased infinancing. sation ofequityinstruments Finland continued. wasalsogreaterThere utili- ofequityinvestments tomarkets outside spread bonds andFinnish andforeign whilethe shares, operating expensestotalledFIM188million. Net number ofoccupationalaccidentsreported. lion. There wasalsoanupward trendinthe FIM9mil- est individuallosscominginaround from lastyear,in numberandvalue withthelarg- Single lossesover FIM0.5millionincreased both ums totalledFIM6million. lossesonunpaidpremi-ing thischarge.Credit premiums writtengrew by 8.2percentexclud- ers compensationinsurance.Non-life insurance separatechargeonstatutory work- non-recurring islargelyattributabletothenational, This growth asubstantial22.4percent. expected, infactby written increasedDirect insurancepremiums as premiums writtenFIM1,456million. and gross SampoEnterprise totalledFIM1,425million by improve. andsolvency continuedto million fortheyear Enterprise groupprofit totalled FIM145 Sampo incomestood atFIM373million. investment tion provision wasFIM-125million,andnet thechangeinequalisa- technical accountbefore woman hiddeninthepainting. isayoung there figurative art, who feelscepticalaboutnon- moss. Asaconsolationtothose of beautiful mural-likesurface most dominantoneofthemisthe cally composedpainting.The pointsinthemathemati- starting A carefulexaminerwillfindthese intoanewentirety.reconstructs small fragmentswhichhethen landscapesto forest Northern deconstructs Finnish Concretism, Birger Carlstedt,thepioneerof 1907–1975 Carlstedt, Birger Composition, 1950 Composition, Sampo KindlustuspremiumsSampo written in- investmentsNew were mainlyinFinnish Claims incurred stoodatFIM1,303million. Direct non-lifeinsurancepremiums written years tocome. for clientcorporationswillbeagrowing focusfor management ofequity-ratedfinancing solutions investmentsdirect inclientcorporations. The cant Finnish venture capitalfundsandhasmade Enterprise isinvolvedtinue. Sampo inallsignifi- andthistrendrelated projects, isexpectedtocon- increased considerably, asdidthenumberof for thefuture thatdemandsnewknow-how. emphasise theBaltic countriesandare achallenge know-how. ’s customerserviceon increasing andsalesstaff content,and models,service lar focusonservice how. Operations upgradeswillestablishaparticu- andstrongclaims expenditure, reinsurance know- prevention, efficientandskilledmanagementof achieved appropriate through riskselection,loss Reaching thisgoalrequires profitable growth, best non-lifeinsurance. profitability ofvoluntary sational insurer, andsubstantiallyimprove the strengthen itspositionasacorporateandorgani- Sampo Enterprise’s goalforthefutureisto Emphasising CorporateClientFinancing throughout theyear. initialoperationalexpenseswerewhereas incurred not granteduntilmidwaythrough theperiod, loss; localauthorisationstosupplyinsurancewere Sampocorded aprofit. afirstyear Latvijashowed The useofequity-ratedinstruments Sampo Enterpriseinternational operations ST International&PatriaRe Matti Ruohonen (as ofMay29th,1998) Hankintatukku Oy Arno Latvus Lammela Oy Vesa Lammela Planmeca Oy Heikki Kyöstilä Steel-Invest Oy Seppo Hauta-aho Private Sampo Managing Director, Vice Chairman Hannu Kokkonen CEO, SampoGroup Chairman oftheBoard Jouko K.Leskinen Board ofDirectors Sampo Enterprise 79 SAMPO ANNUAL REPORT 1998 80 SAMPO ANNUAL REPORT 1998 3 2 1 FIM 1,720m FIM 4,921m Sampo Groupintotal premiums written Direct non-lifeinsurance ao consSrie 35% Major AccountsServices 36% 29% Corporate ClientServices Private ClientServices 3 2 1 of Sampo’s Accounts Major Services. thestructurestrengthens and operationsmodel and Sampo Enterprise. This bothsimplifiesand toSampoferred subsidiariesIndustrial Insurance CompanyofFinland,Insurance willbetrans- the guarantee insurancebusinesshandledby ofbyof profitsinsurancetakencare Otso and 1999.ForSampo atyear-end policies,loss new will mergeaccording company toplanintoparent AG.Kreditversicherungs andGermantee Board, companyHermes Insurance,Industrial theFinnish State Guaran- Insurance CompanyLtd,ajointventure between transferredoperations were totheFinnishCredit CompanyofFinlandInsurance credit insurance A SimplifiedServiceStructure officewasalsoopenedinMoscow.resentative riskmanagementexperts. Arep-ment ofseveral ity inSweden wasstrengthenedbytherecruit- applied forinSpring, capac- 1999.MASservice a licencetoopenaninsurancecompanywillbe was establishedinPoland inFebruary, 1999,and on cargoinsurance.Ariskmanagementcompany tive officeinHamburgwillinitiallyconcentrate officeinBelgium.resentative Anew representa- lands, Great Britain andGermany, openedarep- whichhasofficesintheNether-trial Insurance, MAS overseas operationslastyear. Sampo Indus- and cardboard productioncapacityinEurope. 17percentofallthepaper stance, MASinsures istraditionally strong.Forment expertise in- focuses onindustriesinwhichitsriskmanage- itsoverseascompanies. In operations,MAS large-scale Finnish industry andmajorservice 500groupscomprises approximately representing leader initssegmentFinland. MASclientele MajorSampo isthemarket AccountsServices St. Petersburg andMoscow, aswell network. theMASglobalservice asby Sweden, Sampo Industrial Insurance inEurope, representative offices in and theInsurance CompanyofFinland, Sampo Industriförsäkring by in tional companies.Major Industrial clientsare by Insurance, served Otso tomajorcorporations interna- andmedium-sized management services Major Services(MAS)specialisesinofferinginsurance Accounts andrisk MAJOR ACCOUNTSSERVICES Otso andtheInsurance CompanyofFinland weresignificantlyupgradedin Client services launch platformanditsmothership were finished management projectinhullinsurance. Asatellite and improvement. selves andrevealsareas thatrequire development provides agoodoverall pictureoftherisksthem- risks.It andbusinessinterruption of property inthemanagement auditing wasusedextensively threat of further damage. threat offurther the machines, andtheirtimelydetectionaverted defectsinsomepower generation and structural generation machinery. Testing bearing uncovered boilers andpower marily aimedatsodarecovery inseveralsignificant role fires. brigadesplayedavoided. In-housefactoryfire a have been able damagethatcouldotherwise causedconsider- been completed,where thefire caseswhere hadnot installationwork unfortunate brigade. assisted bythelocalfire wereThere two often installation wasabletoextinguishthefire, Finnish clientele,andineachcasethesprinkler with sprinklersamongstIndustrial Insurance’s were around50firesThere inpremises equipped ofsprinklersystems. the successfuldeployment participated. tives andmoreactively than2,500clientrepresenta- customertrainingalsocontinued panies. Related inco-operationwithclientcom- loss prevention forthefurther development of recommendations 1,100reports weredrawnupcontaining Around bywidely employed clientcompaniesin1998. dation forMASriskmanagementsolutions. laythefoun- with clientcompaniesandbrokers Risk analysesandlossprevention inco-operation Good Performance Loss PreventionGuarantees Sea Launch was a particularly interesting risk Sea interesting Launchwasaparticularly The Askelma Non-destructive testingactivitieswere pri- largelosseswereSeveral avoided thanksto lossprevention were MAS expert services ® methoddeveloped forrisk ing inreinsuranceandtherelated periodisations restructur-compensation insurance.Intra-group separatechargeonstatutory workers recurring isattributabletothenationalnon- the growth increased 18percentin1998.MostInsurance of Direct Industrial insurancepremiums writtenby A YearofExceptionalLosses ofoccupationalsafetypractices. portance emphasisontheim- tions, willplaceincreasing the implementationofMAStailor-madesolu- toworkersrelated compensationinsurance,and work dictable risks,andintraining.Development ment, accidentstatistics,theassessmentofpre- Insurance’sIndustrial services insafetymanage- needs. TUTOR isacompletepackageoffering which canbeappliedforeachclient’s individual in the TUTOR occupational safetyprogramme, wasputtogooduse and developmentknow-how results. supervision periodthatyieldedpositive year-long loss ordamageneedingcompensationduringa Insurance,carried outby wasno Industrial there Largelythankstoinspections tinational project. of lossprevention forthisUSD250millionmul- InsuranceIndustrial wasclaimsleaderincharge stances inStPetersburg andVyborg inRussia. challengingcircum- and fittedoutundervery Industrial Insurance’sIndustrial extensive experience capital andthesolvency ratiostrengthened vestment incomerose considerably. Solvency on listedshares thanintheprevious year, netin- erably over 1997.Despiteadjustments value more increasedgains oninvestment realisations consid- related tomeritpaymentsandsocialexpenses. 2000, andanumberofperiodisationrevisions cruitment, preparationsfortheeuro andtheyear operating expenseswere raisedby increased re- related periodisations.Industrial Insurance’s own to intra-groupreinsurance commissionsand ties intheyears tocome. This adjustmentwillimprove opportuni- profit sation provision atotalofFIM221million. by technical accountbeforethechangeinequali- provisions thebalanceon adjustmentsweakened compensationinsurance. workers tory Technical foroccupationaldiseasesinstatu- of thereserve in thecalculatedinterest, andthestrengthening adecrease writing businesswasalsoaffectedby The profitability ofIndustrial Insurance’s under- FIM10millionlastyear.large lossesexceeding tially. impacted reinsurance writtensubstan- premiums Both generalincomefrom investmentsand Increased operatingexpenseswere largelydue highnumberof There wasanexceptionally three-dimensionality. trompe l’oeil,anillusionof a art generallytriestocreate of adrawinginitwhilepictorial has triedtocapturethenature dox oftheworkisthatartist asthematerial.Thepara- serves phy, whileFinnishbirch wood springs fromChinesecalligra- the delicatelywindingimagery mannerin“BlueEgo”: an artistic Finnish woodarecombinedin Ancient orientalcultureand 1952– Aiha, Martti Blue Ego, 1990 Ego, Blue 81 SAMPO ANNUAL REPORT 1998 82 SAMPO ANNUAL REPORT 1998 Metsäteollisuus ry Forest Industries– Timo Poranen Corporation Helsinki Telephone Kurt Nordman Cultor Corporation Björn Mattsson Kemira Corporation Heimo Karinen Rautaruukki Oy President, CEO Deputy Chairman Mikko Kivimäki CEO, SampoGroup Chairman oftheBoard Jouko K.Leskinen Board ofDirectors Industrial Insurance ovnyrto 5. 370.2 3,870.7 457.0 5,523.2 531.2 11.7 98.2 3,339.5 109.9 5,169.9 353.2 14.2 104.7 118.9 –97.3 –191.1 3,991.5 Solvency ratio,% Solvency capital 4,699.6 Equalisation provision Solvency margin 2,969.6 Combined ratio,% 244.7 3,286.4 6,723.4 Expense ratio,% –8.9 Loss ratio,% 469.7 9,296.9 489.6 –7.8 totalatcurrentvalues Balance Sheet 738.7 1,890.5 total Balance Sheet –118.8 –1,026.7 –122.5 Technical provisions, 2,413.9 net 1997 1,045.5 –1,263.0 –50.2 –171.8 1,208.6 Profit onordinary activities 1998 –15.1 Tax Other incomeandcharges Net investment income 178.0 Balance ontechnicalaccount Change intheequalisationprovision Net operatingexpenses Claims incurred Premiums earned Turnover FIM millions Industrial InsuranceCompanyLtd differences. and thiswasmainlyduetoincreasedvaluation Solvencyinvestments. capitalwasconsolidated siderably, thankstohighergainsonrealisation of ceived. and thegrowth commissionsre- inreinsurance slightly asaresult oflower reinsurance volumes expensesdecreased of largeclaims.Operating anexceptionalness wasalsostrainedby number previous year. premiumsso gross writtenfellcompared tothe decreasedby 18percent reinsurance nevertheless firstvisiblein1997.Assumed signs ofwhichwere industry,able development intheforest early tenpercentlastyear,by mainlyduetofavour- Direct insurancepremiums writtenbyOtso rose by OtsoIncrease Direct InsurancePremiumsWritten tion differences. in profitfortheaccountingperiodandtovalua- duringthereviewfurther year, duetotheincrease MAJOR ACCOUNTSSERVICES vrg o fpronl35373 385 Average no. ofpersonnel Otso’s netinvestmentincomeincreasedcon- The profitability ofOtso’s busi- underwriting high asthecompany’s own operatingexpenses. wereReinsurance almostas commissionsreceived through recoverysations received proceedings. itability wasimprovedanumberofcompen- by of Finland prof- remained constant.Underwriting oftheInsurance Company The businessvolume Insurance CompanyofFinlandPerformsWell andOtso.Insurance reinsures amajorpartofitsbusinessinIndustrial under review. Sampo Industrial Insurance come, thecompanyshowed a lossfortheyear vious year. Despite growth innetinvestmentin- businesscompared tothepre- ity ofunderwriting tral Europe, too,whichweakenedtheprofitabil- ceptionally highnumberoflargelossesinCen- slightly.ums writtenincreased There wasanex- insurance businessinCentralEurope, andpremi- IndustrialSampo Insurance underwritesdirect Large LossesinCentralEurope vrg o fpronl4 51 43 839.0 1,187.0 724.2 1,100.9 1,270.8 83.3 462.9 36.7 120.0 805.3 465.5 Average no. ofpersonnel 85.2 39.3 124.6 –24.6 933.4 –49.3 Solvency ratio,% 964.6 Solvency capital 646.2 Equalisation provision Solvency margin 630.4 Combined ratio,% 36.0 – 1,479.7 Expense ratio,% Loss ratio,% 105.6 1,651.1 115.1 258.6 –0.3 Sheet –117.9 totalatcurrentvalues Balance 195.7 Sheet total Balance 141.5 –51.9 –45.0 469.4 –98.4 Technical provisions, net 1997 115.4 –45.4 –31.0 activities Profit onordinary –16.7 1998 Tax incomeandcharges Other –2.6 Net investment income ontechnicalaccount Balance Change intheequalisationprovision Net operatingexpenses Claims incurred Premiums earned Turnover FIM millions Otso LossofProfitsInsuranceCo.Ltd asentrepreneurship risks sation andclientservice, aboutspeciali- Competition willbeincreasingly Service CreatesAddedValue vrg o fpronl7 70 73 281.9 285.6 284.0 290.7 285.6 – 59.8 33.2 93.0 – 290.7 Average no. ofpersonnel 96.4 –8.8 38.1 134.5 – 544.4 Solvency ratio,% 601.9 Solvency capital 181.7 Equalisation provision Solvency margin 557.0 214.8 Combined ratio,% Expense ratio,% 15.2 16.9 – 627.7 Loss ratio,% – 376.4 –60.6 –7.7 27.6 Sheet totalatcurrentvalues Balance 7.1 Sheet total Balance 101.3 –33.6 390.4 –98.7 Technical 1997 provisions, net 102.3 –39.0 –35.3 activities Profit/loss onordinary – 1998 Tax incomeandcharges – Other Net investment income ontechnicalaccount Balance Change intheequalisationprovision Net operatingexpenses Claims incurred Premiums earned Turnover FIM millions Sampo IndustrialInsuranceN.V. intheyear 2002. tronically of allMAStransactionswillbeconductedelec- in1999. developed The goalisthat30percent Forest Clusterproject. associationknown asthe member oftheindustry this year, Industrial Insurance wasadmittedasa ice capabilitieswillcontinuein1999.InJanuary operational modelsandthestrengthening ofserv- on theforestindustry. The development of aretations ofimprovement high. themefor1999,andexpec- been madethecore more thanbefore.even In fact,lossprevention has oflossprevention emphasised theimportance tions toclientcompanies. affordable riskmanagementsolu- which delivers andclaimssettlement, prevention, underwriting in theseamlesscombinationofriskanalyses,loss undergo fundamentalchange.MASstrengthslie Interactive electronic services willbestrongly Interactive electronic MAS internationalstrategyislargelyfocused The exceptionallossexperienceoflastyear vrg o fpronl819 8 257.9 6,032.5 – 287.8 201.7 – 56.2 185.5 9,778.3 223.5 – – 64.4 Average no. ofpersonnel 16.0 –4.2 236.4 –4.3 Solvency ratio,% 234.1 59.4 Solvency capital Equalisation provision Solvency margin 66.9 356.2 0.1 11.6 Combined ratio,% Expense ratio,% 18.5 384.1 Loss ratio,% –7.9 54.5 11.0 – 4.3 1.4 20.8 Balance Sheet totalatcurrentvalues –2.8 0.2 59.4 Balance Sheet total Technical 1997 provisions, net 2.9 –0.5 –5.5 Profit –0.5 activities onordinary 1998 Tax Other incomeandcharges –8.1 Net investment income Balance ontechnicalaccount Change intheequalisationprovision Net operatingexpenses Claims incurred Premiums earned Turnover FIM millions Insurance CompanyofFinlandLtd the vieweriseffective. than theother-junglecontainsendlesspossibilities.Thedialoguebetweenpictureand of humidity. sometimeslikerain.Nooneimage isstronger Sometimestheyseemlikewaterfalls, womb oftheforestbeforeoureyes.Thedownflowingtricklescolourintensifyimpression Itseemsasifwehadthemoist landscapes outoftheheartgloomyFinnishwilderness. Marika Mäkelädoesnotcopyreality imaginary does.Theresults butcreates it,asnature are 1947– Mäkelä, Marika Nameless, 1988 Nameless, 83 SAMPO ANNUAL REPORT 1998 84 SAMPO ANNUAL REPORT 1998 FIM m and capitalreserves, Patria Re’stechnicalprovisions paid byPatriaRe,FIMm Foreign reinsuranceclaims company itself contracts managedbythe Number ofPatriaRe’sactive 49 69 98 97 96 95 94 49 69 98 97 96 95 94 49 69 98 97 96 95 94 Capital andreserves Technical provisions,net Technical provisions,gross (Contracts asatDec.31st,1998) Claims paidonactivecontracts Claims paidonpassivecontracts 0 1000 2000 3000 4000 0 100 200 300 400 500 0 200 400 600 800 1000 I ilos19 9719 9719 1997 1998 1997 1998 1997 1998 FIM millions rates, i.e.aftereliminatingexchange ratefluctua- for theperiod. therefore, itseffectisnotincludedintheaccounts appeal hasbeenmadeagainstthedecisionand, award grantingabinitioavoidance ofatreaty. An liabilitiescommuted. 1998, andallrelated once whollyowned byPatria were completedin laboriousway.operations, albeitinasomewhat havecontrol toexpediterun-off alsoserved Patria’s own greater control. toassert These efforts 387newtreaties broughtAs aresult, under were tuted onlyafractionofthosepriortotherun-off. toFinlandand theliabilitiestransferred consti- fromLondoninfull, insurance poolwasreturned 1998, especiallyby Patria; forinstance,alarge matterslongin-handwereMany concludedin Under Control results. betterthanexpected the companiesrecorded operating expensesremained undercontrol,and muted, theinsuranceportfolio wasrationalised, fully in1998.Outstanding claimswere com- Foreign continuedsuccess- run-offs reinsurance foreign reinsurance portfolio. Insurance CompanyLtd,are inchargeofrunning Group’s offSampo Limited, Patria Reinsurance andLakewood CompanyLimited, companies,STInternational run-off InsuranceThe Sampo Company vrg o fpronl1 61 855 5 1.4 1.2 18 98.7 – –0.4 14 77.4 35.2 –0.1 – 29.9 –0.5 4.8 98.7 –0.5 –1.6 2.8 –2.8 77.4 767.0 16 –1.8 –0.6 –1.6 – 619.8 514.1 –2.2 –0.1 15 –6.3 428.6 3.9 – – –0.2 –4.4 71.5 794.8 2.1 1,175.7 19.1 –1.6 639.7 33.1 1,031.2 – –4.3 742.1 18.7 2.2 –4.0 629.5 –67.6 – –14.0 1,211.5 –5.8 1,040.0 112.0 0.1 –63.9 15.7 32.4 –88.2 Average no. ofpersonnel 4.1 –31.0 –5.2 43.2 –117.8 –2.5 –3.5 –16.6 totalatcurrent values Balance Sheet total Balance Sheet Technical provisions, net –28.5 –53.8 Profit/loss onordinary activities Tax Other incomeandcharges Net investment income Balance ontechnicalaccount Change intheequalisationprovision Net operatingexpenses Claims incurred Premiums earned FOREIGN REINSURANCERUN-OFF Patria’s gross technicalprovisions atfixed A singlemajordisputeleadtoanarbitration The finalphasesofthesaleasubsidiary Pti TItrainlLakewood PatriaSTInternational transfer. Patria hasfurtheracceleratedthepersonnel decreasing workload. The portfolio transferto inSampobeen reassigned asaresult Group ofthe Turku’s STInternational personnelhasalready forthehand-overPlanning underway. isalready toPatria willbetransferred portfolio Helsinki. offby 2000,whenremaining treaty Autumn run inFinland.centre operationsinjustone 1998 toconcentraterun-off Patria’s Boards decidedinDecember, ofDirectors suchthatSTInternationalcreased toalevel, and andthenumberoftreatieshaveprovisions de- standing claims.Boththecompany’s technical containingsignificantprovisions forout- treaties commutedsomeproblematic ST International Centralised Operations instruments. denominatedbondsandmoney-marketrency treaties. oncommutedreinsurance lion ofwhichwent million were paidduringtheyear, FIM88mil- rates.ClaimsofFIM147 181 millionatvariable FIM135million,andbytions, decreased by FIM ST International operationsin ST International Turku willbe Patria’s stillmainlyincur- investments are Sampo Industrial Insurance.Sampo to transferredfromLondon have Lakewood million attheyear-end. Two membersofstaffin FIM14milliontostandat140 dropped by sonably successfulandtechnicalprovisions Lakewood’s insuranceportfolio wasrea- run-off covering thecompany’s pensionliabilitydeficit. gains. FIM 13millionofrealised show and thefinalaccountsforfinancialyear rates. FIM 126millionatvariableexchange bydecreased FIM104millionatfixed ratesand expected. The provision foroutstandingclaims thus countered by exchangethus countered ratelossesin1998. incomein1997were entered intonetinvestment exchangethat cover them.Significant rategains fortechnicalprovisions andtheassets currencies rates. exchange These arethetwomostsignificant fluctuations inPound Sterling andUSDollar netinvestmentlower incomesfor1997,due to experiencedconsiderably companies nevertheless BoththeseFinnishsation provisions. run-off ontheyear, aprofit show despiteincreasedequali- Patria wellto andSTInternational performed A ProfitableYear Lakewood performance weakeneddueto Lakewood Real continued estateinvestment realisations claimspaiddeveloped as ST International that pervades thepainting. that pervades lyrical atmosphereofshimmeringemptinessandsilence and thiswouldpreventtheviewerfromexperiencing builtupofvertical, horizontalanddiagonalsurfaces, tures ofthebuildings,whicharethe eyefrom therhythm struc- needs nomovementorpeople.Theywouldonlydistract the chimneys.Thepaintingoflovelylittletownactually nosmokeisseenrisingfrom neither panesnorcurtains, inthelanes.Thefewwindowshave norubbish gardens, cats ordogs,nowashingonthelines,toolsin are onlystreets,houses,roofs,windowsandwalls.No scapes, thetownislackinginmovementandlife.There of thelittleFrenchtownChevreuse.Unliketypicaltown- Cézanne himself,asonecaneasilyseefromhispainting Ragnar Ekelund’s style.Hisstrongest influencescamefrom A rhythmreminiscentofCubismisthecentralelement 1892–1960 Ekelund, Ragnar Chevreuse, 1955 Chevreuse, 20 percentinSTInternational. environmental damages,andslightlylessthan forasbestosand outstanding claimsisreserved insurance companiestendtoslowtheprocess. although continuingstructural reorganisationsof companies, tates andexpeditesthetaskofrun-off liabilities. This gradualchangeofattitudefacili- insurance companiestoeliminatetheirmarket an increasingly commonandapproved wayfor Some 25percentofPatria’s for provision Run-offs andcommutationsare becoming the companyitself active contractsmanagedby Number ofSTInternational’s reserves, FIMm provisions andcapital ST International’stechnical paid bySTInternational,FIMm Foreign reinsuranceclaims 49 69 98 97 96 95 94 49 69 98 97 96 95 94 49 697 96 95 94 Capital andreserves Technical provisions,net Technical provisions,gross (Contracts asatDec.31st,1998) Claims paidonactivecontracts Claims paidonpassivecontracts 98 0 1000 2000 3000 4000 0 100 200 300 400 500 0 200 400 600 800 1000 85 SAMPO ANNUAL REPORT 1998 86 SAMPO ANNUAL REPORT 1998 4 3 2 7 8 7 6 5 4 3 2 1 6 5 1 (Total FIM13,017m) of insurance insurance industry,bytype Premiums writtenbylife (Domestic companies) Life insurancemarketshares 6 nuac 1.6% 11.8% 17.1% insurance 17.6% Unit-linked pension pension insurance Traditional individual insurance Group pension policies ojl 27.0% 7.2% 28.0% 6.7% 3.2% Pohjola Tapiola 1.2% 23.4% Merita Aurum 3.4% Leonia Verdandi, Liv-Alandia Fennia Life Sampo 38.1% Other lifeinsurance 13.7% Unit-linked lifeinsurance Capital redemption 8 6 5 4 1 1 3 5 4 2 3 2 almost FIM1.4billion.Unit-linked pension per centover theprevious year, amountingto unit-linked lifecover by morethan150 increased Finland). operatingin 2 billion(includesforeigninsurers writtenexceededproducts; totalpremiums FIM developmentthe mostfavourable inhousehold Unit-linked lifeandpensioninsurancesshowed unchangedatFIM7.7billion. mained virtually 20 percenttoFIM1.7billion. writteningrouppremiums pension insurances by number oflargepensionfundliabilitiesincreased 1997 toFIM2.2billion. The dissolutionofa product; premiumsby four-foldover writtenrose growth demption policiesexperiencedthegreatest 50percenttoFIM5.3billion.Capitalre- by thebusinesssector.out by Premiums writtenrose record-breaking sales. 4 billionofwhichwasattributabletoDecember’s FIM 13billionfortheindustry, nearlyFIM formation, premiums writtentotalledslightlyover in- almost 15percent.According topreliminary premiums writtenby Finnish lifecompaniesup the beginningofyear, helpedpush December particular. growthcies showed exceptional inDecember in and numberofpremiumswrittenfornewpoli- year.end ofthereview Boththe volume ofsales flected inaconsiderablesalespickuptowards the from ingrouppensioninsurance. This wasre- 1999willremain atthehigherlevel,before apart ofthisyear,point atthestart to3.5percent. interest paidonnewpoliciesby onepercentage cut therateforhighestpossibleguaranteed AffairsandHealthMinistry ofSocial inFinland inmostlifeinsurancelines. than 40years The terest. This hasremained unchangedformore ofwhichisrelatedtoguaranteedin- important of significantchangesinthepastyear, themost Finnish lifeinsurancebusinesshasseenanumber Life IndustryDevelopment SAMPO LIFEINSURANCE Premiums Finnish writtenby companiesfor Premiums writtenforprivateindividualsre- The largestgrowth wasininsurancestaken wereAlthough salesfigures modestat more Guaranteed grantedonpoliciessold interest ovnymri ai,% 389.5 – 643.7 – 465.9 4,331.1 – – 4,054.6 – Solvency marginratio,% 200.7 117 180.3 Solvency margin 122 Valuation differences 38.1 Balance Sheettotal –85.0 126.0 54.4 account) (on own 0 –135.1 Technical 186.5 provisions Average no.ofpersonnel Expense ratio,% 0 –2.8 andtax untaxed reserves –98.4 1.1 beforeProfit extraordinary items, –105.1 Bonuses andrebates 126.0 –174.3 Change intheequalisationprovision –1,051.3 –267.5 Operating profit 186.5 –1,191.7 323.4 Other incomeandcharges 1,576.8 585.1 change intheequalisationprovision 551.3 411.9 Technical result bonusesand before 2,014.8 1997 687.6 Net operatingexpenses 651.3 the equalisationprovision 1998 before bonusesandchangein 1,136.4 Change intechnicalprovisions 1,338.9 Claims paid(net) Net investmentincome Regularpremiums Singlepremiums premiumsGross written Turnover FIM millions Sampo Life type ofstaffbenefitscheme. pension insurancepoliciestakenoutisforthis companies. Moreover, ofgroup alargeproportion paidforbyvidual pensioninsurancesthatwere in the30percentofpremiums writtenforindi- and payschemes,andthisisreflected incentive asapart ofcompany cies are commonlyemployed year.up ontheprevious Voluntary pensionpoli- to individualpensioninsuranceswere 14percent premiumscies. Gross ofFIM2.4billionwritten traditionalguaranteed-interest poli- from accrued miums writtenforindividualpensioninsurances thenextfewpension insurancessoldover years. take aconsiderablylargershare oftotalvoluntary 220 million.Unit-linked expectedto policiesare insurance premiums writtennearlytripledtoFIM A major part - FIM 2.2 billion - of gross pre- -FIM2.2billionofgross A majorpart ovnymri 3,229.1 16,609.8 Solvency margin Balance Sheettotal auto ifrne 2,553.9 Valuation differences FIM 400billion. of Finnish households’ totalfinancialassetsof able toprivate individuals,orlessthan10percent FIM35billionwasattribut- end of1998.Only FIM60billionatthe companies totalledjustover ovnymri ai,%514.5 LifeandNova** afterthemergerofSampo transferred toFennia Life * includestheportfolio Solvency marginratio,% 89.8 15,449.7 107 93.5 101 145.3 688.0 –542.9 65.7 account) (on own Technical provisions –659.0 723.6 Average no.ofpersonnel –2.4 0.2 Expense ratio,% –59.1 andtax untaxed reserves –19.8 beforeProfit extraordinary items, 1.1 Bonuses andrebates –626.9 –52.2 –696.6 690.4 Change intheequalisationprovision Operating profit –832.4 –646.1 743.4 Other incomeandcharges 998.8 2,370.8 change intheequalisationprovision Technical result bonusesand before 1997 2,955.0 1,126.9 Net operatingexpenses the equalisationprovision bonusesandchangein before 1,080.6 1998 Change intechnicalprovisions Claims paid(net) 1,154.4 Net investmentincome premiumsGross written Turnover FIM millions Nova* Fennia. Insurance Sampo Companyplcbought Varma-Sampo1st, 1998,named andPension- two newpensioninsurancecompaniesfrom July pensioninsurancebusiness,established related Varma, twocompaniesbothinvolved inearnings- turing betweenSampoPension andPension- ofthe’90swascompletedlastyear.start Restruc- pension andlifeinsurancebusinessesbegunatthe reorganisation ofearnings-related The structural Structural ReorganisationsCompleted eua rmus431450.1 630.1 473.1 681.3 Regular premiums Single premiums Aggregate insurance savingsinFinnishAggregate life ** ** ** ** ** 10,686.9 1,897.9 1,401.1 9,984.7 465.5 ovnymri ai,%499355.0 469.9 878.4 1,226.5 733.5 4,076.9 Solvency marginratio,% 1,040.1 4,501.0 3,863.0 4,223.9 102.1 33 66.8 33 Solvency margin Valuation differences 32.7 Balance Sheettotal 75.8 178.7 –142.2 (on own account) –210.0 Technical 290.6 provisions 0.2 Average no.ofpersonnel Expense ratio,% 0 –3.1 andtax untaxed reserves –85.3 Profit extraordinary –4.8 before items, –52.4 Bonuses andrebates 178.5 –428.4 Change intheequalisationprovision –360.9 –539.7 Operating profit –145.1 290.6 Other incomeandcharges 270.5 change intheequalisationprovision 1,206.6 354.5 Technical before result bonusesand 1,234.0 1997 Net operatingexpenses the equalisationprovision 1998 before bonusesandchangein Change intechnicalprovisions Claims paid(net) Net investmentincome Gross premiums written Turnover FIM millions Kaleva form ofanewissue.Afterthepayment tal wasoffered Lifeshareholders toSampo inthe 150 millionin1998. premiums writtentotalledapproximately FIM wereportfolio slightlyover FIM1billion,and 1998. Technical provisions forthetransferred Insurance CompanyLimitedonDecember31st, of part oftheinsuranceportfoliotoFennia Life formerly inNova were conveyedinthetransfer pany Limited.Enterprise-Fennia clientpolicies Nova was renamed Sampo LifeInsurance Com- merged intoNova 31st,1998,and onDecember same time. Nova Company Limitedatthe LifeInsurance up Enterprise-Fennia’s 25percentholdingin eua rmus245283.8 530.9 294.5 411.5 Regular premiums Single premiums A FIM 20.4 million increase inshareA FIM20.4millionincrease capi- Sampo Life InsuranceCompanyLimitedwas 6 5 4 3 2 insurers, FIMm Premiums writtenbySampolife 1 (Total FIM2,282m) written bynewSampoLife Direct insurancepremiums and FIM154millionin1998. estimated atFIM195millionin1997 the portfoliotransferredtoFenniaLife, Nova’s figuresfor1998comprise 495 94 6 croae 38.3% 3.5% (corporate) Capital redemptionpolicies 13.2% (corporate) Other lifeinsurance 16.1% 10.5% (private persons) Life insurance 18.4% (private persons) Individual pensioninsurance (corporate) Individual pensioninsurance (corporate) Group pensioninsurance 5 Nova Sampo Life Kaleva 96 4 798 97 0 500 1000 1500 2000 2500 3000 3500 4000 1 3 2 87 SAMPO ANNUAL REPORT 1998 88 SAMPO ANNUAL REPORT 1998 4 4 2 2 6 5 4 3 1 (at currentvaluesFIM5,332m) Dec. 31st,1998 Kaleva’s investmentportfolio, 6 5 4 3 1 (at currentvaluesFIM18,199m) portfolio, Dec.31st,1998 The newSampoLife’sinvestment ntuet 9.7% 34.8% instruments Foreign money-market instruments 12.2% 42.6% instruments Foreign money-market instruments te netet 1.6% 10.8% 32.6% 10.4% Other investments Land andbuildings Domestic shares Foreign shares Domestic money-market 6.6% 8.2% 20.0% 10.3% Other investments Land andbuildings Domestic shares Foreign shares Domestic money-market 5 3 5 6 3 6 2 2 1 1 pushed the proportion ofsinglepremiumpushed theproportion policies single premiumendowmentmore policies. This til theendof1998drew clientstosubscribe policies. successofcapitalredemptionto theincreased sion solutionsforbusiness,andontheother Nova’s particularspecialisationin additional pen- porate clients. This isdueontheonehandto Sampo fromcor- new Lifeisestimatedtoaccrue points. sharemarket by approximately 1.1percentage transferred Nova from toFennia Lifedecreased and thatofKaleva5.4percent. The portfolio Sampo Lifewas18.0percent share ofthenew before.down ontheyear The calculatedmarket topreliminaryaccording information,slightly stoodat23.4percent life insurancemarket premiums writtenin1998. thanFIM700millionin Kaleva bookedmore thiscontractioninitsbusinessoperations, Despite reorganisationcies sincethestructural of1997. whichhasnotsoldnewendowmentKaleva, poli- complementedbyinsurance operationsare of whichwasattributabletoNova. Sampo’s life totalled FIM2,339million,1,000million theportfoliotransferred toFenniaexcluding Life, Gross Life, premiumsthenew writtenby Sampo A SteadyFootingintheMarket fornewdeparture SampoLife. this hascreated anextremely sound pointof was considered excellentattheendof1998,and intheirown clientsegments- quite competitive ofthetwomergedcompanies-both solvency individualsandSMEs. insurance forprivate The inprovidingland. SampoLifehassolidexpertise Nova theleadinggroup inFin- pensioninsurer earnings-related pensioncompanieshasmade ment eachotherwell. Closeco-operationwith between Varma-Sampo andSampo plc. transactions increase to60percentthrough Group’sSampo Lifewill holdinginSampo per cent. The reorganisationalsomeantthat tal, Varma-Sampo 4.8 37.7percentandKaleva subsidiaries own57.5percentofthesharecapi- Sampo andits LifeisdistributedsothatSampo merger consideration,ownership ofthenew SAMPO LIFEINSURANCE The higherguaranteedinterestinforceun- writtenbySome two-thirdsofpremiums the Sampo-Varma Group’s oftheFinnish share The mergedcompanies’ operationscomple- cent. figure forKaleva was21per The corresponding Life’scent ofSampo attheendof1998. portfolio FIM1billion. approximately year, differences andrelated cameto valuation ofFIM5.3billionattheendreview value lion. Kaleva’s investment hadamarket portfolio totalledmore thanFIM2.5bil- on investments client creditsValuation anddeposits. differences 5percenteachin estate andapproximately 8percentinrealin bonds,30percentshares, atFIM18.2billion;50percent tfolio wasvalued pany’s owners. level ofprofit isdistributedtothecom- factory status,andensuretain itssolidsolvency asatis- pay competitivebonusestopolicyholders,main- Successful investmentswillenableSampo Lifeto toimprovedirected therisk/return abroad ratio. are investments addition, more andmore being In ments inshares andothercapitalprojects. ofinvest- theproportion gradually increasing improvement inthatyieldisbeingsoughtby Furtheron investedassetsinthelongrun. LifeinvestmentsSampo targetagoodreal yield Investments DirectedAbroad good. willcontinuetobe guarantees thatprofitability mately FIM310millionandthecurrentstrategy Life’s amountedtoapproxi- portfolio reinsurance ness assumed. Technical provisions onSampo renewalrestricted ofcontractsandnew busi- a policypursued,characterisedby underwriting written. cent ofpremiums This wasduetothe than FIM56millionaccountedforamere 2per operations thisyear. emphasis ondevelopingitsunit-linked particular modest.Samporemained Lifewilltherefore place ten inunit-linkedlifeandpensioninsurances Life’sinsurance business,Sampo premiums writ- slightly over FIM1billionfortheyear. writtenbyLifetotalled Sampo premiums thenew 60 percentatthesametime.Pension insurance premiums toapproximately writtenrose of gross written. total premiums The lifeinsuranceshare Sampowritten by LifeandNova toover halfthe Foreign investments accountedfor22per Life’sSampo post-mergerinvestment por- Assumed reinsurancetotallingalittlemore tothegeneraltrend inthelife Contrary year underreview.year wasminor inthe portfolio value oftheinvestment changes oninvestmentincomeandthemarket holdingsinlistedshares.ments, mainlyfrom adjust- FIM250millioninvalue approximately gains;investment chargesincluded lion inrealised income includedslightlymorethanFIM1bil- asuccess.Investmentlion andmustbeconsidered total netinvestmentincomeofover FIM1.5bil- interest paymentsof4.25–4.5 per cent.Sampo est intheindustry, inaddition toguaranteed amongthehigh- grant clientbonusesthatwere LifeandaboutFIM75millioninKaleva. Sampo FIM 64millioninNova, FIM54millionin well in1998.Profitnies performed taxwas before All Sampo-Varma Group lifeinsurancecompa- Good ReturnforInsuredsandOwners The impact of currency exchange rate The impactofcurrency LifeandNovaSampo investments accrued These good results enabledthecompaniesto These goodresults overheads typicaltoanew company, Sampo Life operating expensesforthereview year. Given the ing itemswere clearlysufficienttocover Nova charged topoliciescover theseexpenses.Load- operating expensescorrespondtoloadingitems ratio to100percentinthenextfew years,sothat of its125thanniversary celebrationsin1999. various typesofadditionalbenefitgranted aspart bonusesin FIM 170millionreserve forfuture supplement canbespread 15years. over the decrease inguaranteedinterest. The provisions final accounts. This requirement stemmedfrom pension policieswaslargelycovered inthe1998 the needtosupplementprovision forgroup future bonusesin1998. because This waspartly cent bonus. Kaleva endowment policiesweregranteda2per Life paidanaveragebonusof1.8percentandall Sampo Life aims to decrease itsexpense Sampo Lifeaimstodecrease aconsiderablepartKaleva ofits willdeploy Nova for setasideexceptionally largereserves co-operation. created thishymntohuman has means bywhichtheartist give himthedelightoffinding They knife keepthevieweralert. The strokesandslashesofthe favour oftheoverallimpression. sised bytheomissionofdetailin the work.Thisisfurther empha- ful, concentratedmovementof effectively projectsthepurpose- surfaces,the broad plaster-like “Fishermen”, achievedthrough The expressivepresentationof 1901–1983 Mikola, Armas Fishermen, 1969 Fishermen, 89 SAMPO ANNUAL REPORT 1998 90 SAMPO ANNUAL REPORT 1998 Jan. 1st,1997. after thetransferofoperationson in 1996accordingtothesituation The figuresforSampoLifeandKaleva the portfoliotransferredtoFenniaLife. Nova’s figuresfor1998excluding Balance sheet,FIMm 4 3 2 1 Dec. 31st,1998 Solvency margin,FIMm 94 1 4 3 12 New SampoLife Nova Old SampoLife Kaleva 596 95 Capital andreserves Valuation diff.andotheritems Minimum amount Nova Sampo Life Kaleva 798 97 0 4000 8000 12000 16000 20000 24000 0 1000 2000 3000 4000 on unit-linkedbusinessrapidlyattractinga is expectedtocontinue,majorexpectationsfocus trend inindividualandgroup pensioninsurances written. insurance premiums While theupward show growth oflife onlyaverage in thevolume company. and synergiesofhumanotherresourcesinthe assist inthefull-scaleutilisationofstrengths ing springandearlyautumnthisyear. This will buildingsinHelsinki Sinebrychoff dur- portant tothefullyrenovatedmove andhistoricallyim- year. ofthe1999financial FIM 3.2billionatthestart under FIM17billionwithasolvency marginover ured by itsbalancesheet,whichtotalledslightly inFinlandis infactthelargestlifeinsurer meas- Finnish lifeinsurancemarket. New SampoLife Sampo’s competitive positioninthegrowing Sampoand stronger Lifesignificantlyimproves The mergerofSampo LifeandNova intoanew Looking totheFuture clearly exceed theminimumEUlevel. lined fordomesticlifeinsurancecompaniesthat solvency criteriaout- and Kalevabothmetnew of own-account Sampo technicalprovisions. Life capitalwasapproximatelySolvency 32percent timestherequiredlion, almostfive minimum. in 1998toamarginofslightlyover FIM1.2bil- stipulatedbynical provisions EUregulations. minimumoffourpercenttech- the required this hasmeantatargetofanaveragefourtimes Inlong-term operationalrequirements. practice, thatensurescompanysolvencylevel meets 1998. accountattheendof nical provisions onown provision -wasslightlyover 21percentoftech- marginplustheequalisation tal -thesolvency timestherequired minimum.Solvencyfive capi- Life’sSampo post-mergersolvency marginwas Solid SolvencyStatus tion inonlyitssecondyearofoperations. intherightdirec-operating expensesalsomoved SAMPO LIFEINSURANCE The current financialyearThe current isexpectedto Life’sSampo headofficeorganisationwill Kaleva’s considerably solvency strengthened Investment operationsare conductedatarisk ments permit. require- cies intheformofbonuses,ifsolvency tothesepoli- surplus musttherefore bereturned portion ofthe policies.Areasonable to with-profit a so-calledPrincipleofFairness mustbeapplied The Finnish Insurance CompaniesActstatesthat A FormulaforthePrincipleofFairness sary inDecember 1999. sary insurance businesscelebratesits125thanniver- Life. Sampo plcanditssubsidiary company Sampo percenteachinlisted ings ofapproximately five isfurther significanthold- Kaleva strengthenedby highly effectiveinsuranceportfolio management. company’s statusalready strong enables solvency for membersofemployee organisations. The ofgroupemphasis ontheprovision lifeinsurance sectors. try todifferent indus- allocating equityinvestments informationsocietychanges,by structural by utilisetheredistribution ofassetstriggered actively Lifeintendsto in linewiththismodel.Sampo offoreignproportion investmentsinourportfolio increasethe euroareaenablesustofurther the years. pursued duringthepastfew The birthof will beinvested according totheoperatingmodel policies. withpensioninsuranceandunit-linked offered byexpandingtherangeofproducts veloped further. Internet-based insurancesaleswillbede- willalsobedeveloped Other unit-linkedproducts clientneeds. andevolving duced tomeetnew group pensioninsurancewillbeintro-Sesam fer, market andtoincrease share. trans- theyear-end portfolio mium basecausedby tocompensatethelossinpre- nevertheless that indicatesnosignificantgrowth. The aimis trend theinsuranceindustry expected tofollow of1999. the start traditional insurances,whichcameintoplayat thedecreaseby grantedon inguaranteedinterest clientele. broader This trend hasbeenaccelerated Kaleva andtherefore thewholeFinnishKaleva life operationswillplaceincreasingKaleva savingsentrustedtoSampo Life Insurance toSampoA unit-linkedalternative Life’s Total premiums writtenby SampoLifeare cant part ofthecompany’scant part solvencycapitalis Life’sand Sampo bonuspolicyisthatasignifi- 1998. ers hasbeendefinedinthefinalaccountsfor tion ofthecompany’s assetsbelonging toitsown- distribution ofprofitstoshareholders. The por- annual grantingofbonusestopolicyholdersand statusatalevelvency thatdoesnotlimitthe Sampo Lifewishestomaintainitssol- returns. oftotal pursuecontinuityinthelevel actively also we Lifeperformance; on thebasisofSampo plusbonusesdeterminedannually anteed interest bond yields. The totalreturn comprisestheguar- savings, thatatleastmatchesFinnish treasury charges andtaxesonpolicyholders’ with-profit south-eastern coastofFinland. south-eastern onthe ofFinnishseascape.ItwaspaintedatPellinki,nearthetownPorvoo its beautifulcompositionthepicturesqueness topaintcommissionedworks.“BoysontheCroft from demonstrateswith hewasforced Shore” tuberculosis, and suffering ofcash inParis,butreturned triumph.Beingshort toFinlandafterhisshort Aukusti Uotilaalmostmadeabreakthrough 1858–1886 Uotila, Aukusti Boys on the Croft Shore, the 1880’s the Shore, Croft the on Boys One consequenceofthePrinciple ofFairness Lifeaimsforatotalreturnbefore Sampo Principle ofFairness describedabove. company’s shareholders, inaccordance withthe differences werecalculatedtobelongthenew ny’s finalaccounts-25percentofthevaluation December 31st,1998-asstatedinthecompa- As aresult ofSampo Life’s statuson solvency ences ofFIM2,408millionis346million. Sampo Life’s 1998group-level valuationdiffer- policyholders tothesevaluationdifferences. not directly entitleindividual shareholdersor differenceslated distributionofvaluation does solvency.needed toensurelong-run This calcu- differencesis eightypercentofvaluation not are considered tobelongtheshareholders, as Restricted andnon-restricted capitalandreserves tosafeguardrequired thebenefitsinsured. The calculatedSampoGroup holdingin 5 4 3 2 1 1998 (FIMbillion) Households’ financialassetsin 4 od 35 15 229 100 Bonds 35 Bank deposits Cash Insurance savings Shares 5 1 3 2 91 SAMPO ANNUAL REPORT 1998 92 SAMPO ANNUAL REPORT 1998 7 6 5 4 3 2 1 (at currentvaluesFIM18.2b) Life Group’sinvestmentportfolio 6 5 4 3 2 1 (at currentvaluesFIM21.3b) portfolio Non-life insuranceinvestment 3 3 netkns1.4% undertakings 9.1% and deposits 0.7% 1.9% undertakings Deposits withceding 6.1% companies and deposits rdt 5.2% 30.3% Deposits withceding 8.2% 45.8% Credits Land andbuildings Money-market instruments Shares Bonds 2.5% 17.2% Holdings inrealestate Credits 54.6% 17.0% Money-market instruments Land andbuildings Bonds Shares 2 2 4 4 5 5 67 6 1 1 sidered thedomesticmarket forequityinvest- However,domestic market. Finland isstillcon- area,noweign investments totheeuro seenasour cent. We arealsoattemptingtodirect halfoffor- thisfiguregoal istoincrease toatleast30per per centofthetotalsecuritiesportfolio,and to27percent. review bringsthetotalyieldforyear under ferences was 5.2percent. The inclusionofvaluation dif- wasenteredasincome. est-bearing instruments gainsoninter- ments. FIM43millionofrealised investmentSampo ininterest-bearing instru- tic market andaccounted for77percentof million. The euro thedomes- areaisconsidered 4,949 millionandtheLifeGroup FIM9,978 which non-lifeinsuranceaccountedforFIM FIM 14,927millionattheturnofyear, of and valueadjustmentstotalledFIM411million. realised asincome, gainsonequitieswasentered fiscaltaxcredit.avoir FIM1,731millionof amounted toFIM415million,includingthe were madeoutsideFinland.equity investments FIM 482million.Some24percentofnew decreased bythe netvalue ofequityinvestments portfolioincreased, even though total investment market valueofequityinvestments relative tothe folio and30percentofthelifeinvestments. The ment portfolio,56percentofthenon-lifeport- accounting for44percentoftheGroup invest- Securities investments concentratedonequities, Securities amounted toFIM9.4billion. thecurrent andbookvalues ences between vestments was21percent. Total valuationdiffer- ments 13percent. The proportion offoreign in- estateinvest- cent, equities44percentandreal accountedfor43per est-bearing instruments Of thetotalGroup investment portfolio, inter- Life Insurance Company. onDecembervalue 31st,1998. includestheassetsofNovaThe portfolio Sampo Group investmentsstoodatalmostFIM40billioncurrent INVESTMENTS International investmentsInternational accountedfor21 thesecuritiesportfolio The directyieldfrom wereInterest-bearing at instruments valued Dividend incomefrom investment equities closing oftheaccounts. ments infundstotalledFIM1,292millionatthe Group’sSampo loansandprivateequityinvest- forclientfinancing. sised ascoreinstruments equityinvestmentsvate were increasingly empha- for loansin1998.Guarantee insuranceandpri- There were nosignificantchangesinthedemand Client Financing istoimproveinvestments therisk/return ratio. fication. The goalininternationalising Sampo criteriafordiversi- are nolongerseenasprimary andcurrency distributions sectors, sincecountry ments. Foreign are investments madeinselected 205 million in realised gains. 205 millioninrealised The largestsingle FIM ofFIM350millionandaccruing total value premises,ments, businessandproduction fora financed residential buildings,individualapart- in1998bysellingprivatelyestate portfolio location. by 53 percentoftheportfolio Helsinkirapidly developing area accounts for for 79percentoftherealestateportfolio. The per centin1996).Businesspremises accounted standing at13percent(21in1997;24 continued tofall, the totalinvestmentportfolio net yield6.8percent(6.3cent). was 6.6percent(5.9cent)andthepotential values portfolioatcurrent completed property 100percent. estate wasvirtually in 1997).Theoccupancyrateofresidential real (5.2percent as low as3.7percentatyear-end tenance. estatemain- manding, andtomoreefficientreal pricethatrents com- are able tothehighermarket portfolio. The increaseinnetincomeisattribut- inthereal estate of 1997,despiteareduction incomefromNet rents exceeded therealisedvalue Real EstateIncomeontheIncrease Sampo developed thestructureSampo ofitsreal ofreal estateinvestmentsThe proportion to netyieldofSampoThe effective Group’s ratecontinuedtofall,standing The vacancy Data communicationsandelectronics Communications andpublishing Metal andengineering Banks andfinance The figures of Nova LifeInsuranceThe figures ofNova includedintheirfullamountboththereal estateportfolio CompanyLtdare andtheinco Chemical industry Forest industry Other services Other industry Multi-business Food industry Construction Investment Insurance Transport The potential net yield ratio comprises the estimated rental incomeforvacant ofFIM37.50perm premises,The potentialnetyieldratiocomprisestheestimatedrental atanaverage Energy Trade te ulig . 781162620.0 6.4 6.2 0.2 10.4 3.0 7.3 100.0 3.7 6.2 7.1 25.5 9.6 5,132.5 6.8 6.8 0.7 696.5 6.8 1.1 7.1 1.8 8.3 6.6 1.7 8.8 38.0 6.5 57.8 10.4 6.5 6.8 of FIM68perm 90.5 87.0 hasvalued estatesurveyor An independentauthorisedreal therents ata fortheretailpremises andofficesoccupiedbySampo, Net yieldcomprisesFIM5.2millionofinterest subsidiespaidonstate-subsidisedresidentialproperties. 9.8 449.9 3.5 536.1 78.9 6.4 Total 349.3 4,644.6 19.2 Acquisitions duringtheyear 16.2 118.5 4,050.7 Sites anddevelopmentprojects 670.6 108.4 70.4 Completed propertyportfolio 548.6 Other buildings Residential buildings 3,614.4 Business premisesintotal Hotels warehouses 421.0 Industrialbuildingsand Officesandretailpremises Business premises Group’s RealEstatePortfolio,Dec.31st,1998 Stock Exchange Sampo Group 2 (at currentvaluesFIM12,455m) by industry,% Investments inlisteddomesticshares permonth(gross). 0102030405060 ‘000 m raCretDsrbto e il/Ntyed aac Owner Vacancy Netyield/ Netyield/ Distribution Current Area 2 I % % % % % FIM m au fprfloefcieptnilrt occupied rate potential effective ofportfolio value Business services Health care Electronics Utilities Energy Banks Other 100 203040 (at currentvaluesFIM2,450m) by industry,% Investments inlistedforeignshares FT/S&P worldindex Sampo Group 2 permonth(gross). me from realme from estate. n average 93 SAMPO ANNUAL REPORT 1998 94 SAMPO ANNUAL REPORT 1998 7 6 5 4 3 2 1 (at currentvalues) Real estateportfolio,regionaldistribution relatedFIM 86million;thesewere toreal estate entered intotheProfit andLossAccount totalled Helsinki. LifeonBulevardi ofSampo headquarters new in estate, themostsignificantsingleitembeing ment andfocusesonhotelpremises. companyspecialisesin realestateinvest- the new andwasrenamedrearrangement DividumOy; astructural salliset LiikekiinteistötOyunderwent Espoo andKauniainen,againintheHelsinki area. in transaction wasthesaleof242apartments INVESTMENTS 5 6 vres3% 5% 13% 26% Overseas Other partsofFinland Tampere 24% Turku 14% 15% Helsinki metropolitanarea Other partsofHelsinki Central Helsinki Value estateinvestments adjustmentsonreal realFIM 155millionwasinvested innew Sampo Group associatedundertaking Kan- 4 7 3 1 2 Real estateportfolio,distributionbyuse Group.Sampo totheseprojectsfrommillion willbetransferred estateassetsofmoreaction. Real thanFIM500 estatetrans- for thesecond,concerningareal Oyj letter ofintenthasbeensignedwithCastrum ownershipshopping centre isunderway, anda companyfocusedon estateinvestment a real toestablish main during1999.Inthefirst,work year, bothofwhichwillbeimplementedinthe investment securitisationduringthefinancial to theinvestmentsmade. realSampo estaterose by FIM89millionthanks securitisation projects. The current value of 6 5 4 3 2 1 (at currentvalues) 2 eeomn rjcs7% development projects te 1% 2% Other 10% Hotels 71% Undeveloped sitesand 9% Industrial buildingsandwarehouses Residential buildings Offices andretailpremises 3 Two projects estate helpedprepare forreal 4 5 6 1 capital markets. In theseintegratingmarkets,capital markets.In the Funds istoutilisetheintegrationofinternational securities increased. ties isdecreasedandthatofinterest-bearing theshareAs thetargetyearapproaches, ofequi- ofequitiesinthefund. the largerproportion approaches. is, awaythetargetyear The further fundsasthetargetyear turn intofixed-income linked insurancesolutions. compatiblewithSampothat theyare Lifeunit- April, 1999. These fundshave beenplannedso mutual fundproductstothemarket inMarch- FundSampo Management isintroducing itsfirst Sampo FundManagementLtd and SampoFund ManagementLtdrespectively. nies were SampoAssetManagement renamed Ltd OyinAutumn 1998. Management The compa- Beltment OyandRahastoyhtiöBaltic Fund capitalofPCAHansa share entire AssetManage- Sampo by boughtthe andKaleva, in equalparts companySampoInvestment Finance Ltd,owned MANAGEMENT SERVICES NEW FUNDSANDASSET The investmentprinciplebehindSector Target fundsareinitiallybalancedthat Sampo’s fundproducts. lar investment philosophytothatwhichguides These managementcontractsarebasedonasimi- private persons, companiesandorganisations. to offerindividualassetmanagementcontracts The missionofSampo AssetManagementLtdis Sampo AssetManagementLtd alternative withahigherexpectedreturn. whoseekaninvestment experienced riskinvestors market.developing Baltic The fundissuitablefor mainly inlong-termbondstheeuroarea. tion lessthanayear. The BondFundinvests intheeuro area,instruments dura- withaverage Fund. The LiquidityFund invests inshort-term BondFundEuro Euro andSampo Liquidity worldwide. entity. inFinland, Sectorfundsinvest Europe and good prospects, whichtogetherformabalanced Management hasselectedsixkeysectorswith the companyoperatesissignificant.Sampo Fund is notrelevant, whilethebusinesssectorinwhich country inwhichthecompany’s shares are quoted A special investment fundfocusesonthe A specialinvestment Sampo Funds Euro comprisebothSampo regarded asclassicistinspirit. motionless background,canbe which, togetherwiththedark, outlines andunmixedcolours fruit arepaintedusingclosed Expressionism. Thejugandthe the informal, spritof carefree intoxicating coloursrepresent cloth andtheirluminous, execution ofthetableand glowing colours,whereasthe and edgesisillustratedwith of them:theCubistideacubes from 1930exemplifiesseveral “Still-life” new “isms”toheart. Finnswhotookthe noteworthy Ilmari Aaltowasoneofthefirst as ExpressionismandCubism. brought withitsuchnewstyles revolution inpaintingwhich World War Iwasanage of The lastdecadebeforethe 1891–1934 Aalto, Ilmari Still-life, 1930 Still-life, 95 SAMPO ANNUAL REPORT 1998 96 SAMPO ANNUAL REPORT 1998 4 * Year1998SampoGroup,years 5 4 3 2 1 Personnel byeducation Employee turnover Personnel* 06.96 01.96- 95 Kaleva andSampoPension 1995–1997 SampoGroupplus 12.96 06.96- nvriy17.4% 38.2% 11.0% University Secondary school 11.7% College Vocational school 21.7% Comprehensive school 5 Male Female Resigned New employees 96 06.97 01.97- 3 12.97 07.97- 798 97 06.98 01.98- 12.98 07.98- 1 0 1000 2000 3000 4000 0 20 40 60 80 100 120 140 2 on in1998(2171997). The totalnumberof -asmany261new peoplewere taken the year recruitment continuedtogrowemployee during thanonethirdmore (34.7percent)ismale.New staff asatDecember 31st,1998,ofwhichslightly tion. to datafrom theperiodpriortoreorganisa- comparisons harderandsowe occasionallyrefer pension companyVarma-Sampo. This makes Group figures thatdonotincludeKalevaandnew Pension -have beenreplaced now by Sampo included figures andtheformerSampo forKaleva data onourpersonnelnumbers-thatpreviously The 1998structuralreorganisationsmeanthat Personnel Structure inSampoemployed communities. working other active have preventionalsobeen measures ’s continuedwell-being, workedand have forstaff mains afocusarea. Well-being support groups might exist;securingpersonnelwell-beingthusre- anyindividualproblemsthat donotreflect that presented arenosmaller. ticularly encouraging,giventhatthechallenges surveys. compared toprevious This trendispar- previous year. Feelings ofstresshave decreased capacity tohaveimproved slightlyasitdidinthe perceived working as 1997,andstaffthemselves nel satisfactionremainedatalmostthesamelevel were surveyed forthethirdtimein1998.Person- climateandpersonnelwell-being Our working under pressure andduringextensivedevelopment work. Sampo personnelsatisfactionandworking capacityremain solideven SAMPO PERSONNEL Sampo Group 3,296permanent employed statisticsareaverage values Climate survey end of1998. byness administrationandentrepreneurship the hadcommencedtheirtrainingin busi- employees raise theirlevelofeducation.Around 100Sampo to continues toofferSampostaffanopportunity gun in1997expandedthereview year and andcontinuethisyear.level, bothinthebusinessunitsandatGroup started skills grammes formanagementandsupervision them.Long-termdevelopmentpro- that support customerservice modelsandthedatasystems new andimplementation of cused ontheintroduction their skillsatleastsufficientforthetaskshand. demonstrated that86.9percentofpersonnelfind nevertheless business units,theclimatesurvey and operatingmethodscontinuingapaceinall Even withtheintroductionofnew datasystems challenges. despite theconstantneedtomeetfresh andabilitytodevelopknow-how high, remains base.Staffsolid knowledge faithintheirown personnelare highlyprofessionalSampo witha Professional SkillsandDevelopment gree. havingatleastacollegede- first halfoftheyear a high74.2percentofthoseemployed duringthe albeitslowly,sonnel continuestoimprove with measures. essary personnelplanningintakingthenec- sist Sampo amine interestinthistypeofretirement, toas- tocome.Astudyhasbeenlaunchedex- years pensionretirement inthe right toapart-time numberofSampoA growing staffwillattainthe of1999. pensionatthestart ple onapart-time year,the review peo- makingatotalof58Sampo staff. There pensionretirees were in 22part-time 1997or163extrapart-time 16.6 percentover 5.8 percentoftotalpersonnel. This isariseof labour market. thegeneraltrend intheFinnish1997, reflecting cent. This is2.1percentage pointshigherthanin 208 ontheyear, 6.3per anetturnover ofaround Group increasedstaff leavingSampo from 145to The apprenticeshiptrainingprogrammebe- personneldevelopment fo- Core projects The standard ofeducationamongstourper- The standard 190part-time were There staffin1998or 982018 1998 5 4 3 2 1 climate analysis,% Main resultsofthecorporate reaching retirementage/year Number ofemployees 12345 Stress experienced Flow ofinformation Satisfaction withwork Satisfaction withsupervisor Satisfaction withSampo On part-timepension Retirement age Part-time retirementage 1998 1997 1996 0 10 20 30 40 50 60 70 80 90 25 75 125 0 50 100 150 left thescene,doesthat‘something’emerge.” tobereborn inalaterage.Onlyafterthemakerhas “It iseithertoocrushingoritcrushed, ofJaakola’s followingly: perhaps part tragedyasanartist.Hehimselfcharacterisedhisart and messagetendtoarousestrongemotions.TheNaïvistiseasilymisunderstood, andthiswas Alpo Jaakola’s worksdivideopinionsintothoseforandagainst:allintheircontent 1929–1997 Jaakola, Alpo Three in Nature, 1973 Nature, in Three 97 SAMPO ANNUAL REPORT 1998 98 SAMPO ANNUAL REPORT 1998 osmto/esndy72A4s/person/day terms andconditions,otherprintedmaterials. 3,296 54,336,240 pages(A4)or272t paperconsumptionissentouttoclientsaspolicydocuments,insurance Sampo paper, boughtby theGroup’s in1998.Amajorpart of services purchasing The figurescomprisewhiteandcoloured copyingpaper, pluslaserandprintout Consumption/person/day Personnel atDec.31st,1998 Office paperconsumption 47,729 m for 69.6percentofallthoseoccupiedby Sampo. 13,333MWh 2,482 505,544m offices. Four ofthebuildingsalsohousetenants. The premises listedaccount Sampofor five premises in Turku, sixinHelsinki, andthe Tampere andOulu 20,024MWh consumption,thebuildings’resource andpersonnelnumbers,totalled volume, The figures,basedondataprovided by Suomen Talokeskus Oy, describe Personnel atDec.31st,1998 Total volumeinbuildings Water consumption Heat consumption Electricity consumption Environmental BalanceSheetfor1998 become art. process ofgrowth,andthusthebanal has wood hasbeenintegratedintotheartistic naturally.material nolongergrows There-used made outofcastawaypiecesplank, the the restofusdidnotsee.In“Growing Desire”, early asinthe1980’s KariCavénsawwhat times.As Recycling isakeywordofmodern 1954– Cavén, Kari guidedbyoperations. Our high operationsare andensurethecontinuityofits and well-being Sampo’s missionistoproduceeconomic security Sampo EnvironmentalStrategy estate. company owned real environmentalalso developing operationsfor damageinsurance.Sampois environmental tory 1998. The EICfocusesonthehandlingofstatu- foundedinMarch,mental Insurance Centre, the largestofficesandSampo joinedtheEnviron- An environmentalbalancesheetwasdrawnupfor further upgradedintheyearwere underreview. The environmentaloffices operationsofSampo SAMPO ANDTHEENVIRONMENT Growing Desire, 1984 Desire, Growing 3 3 unit representatives. Sampo’sunit representatives. environmental Policyronmental Steering Group, comprising units. their own by theEnvi- This issupervised implementationin sponsibility forprogramme foundinSampo’sand opportunities worktodate. totheneeds in Spring,1999,tobettercorrespond agement Board inJanuary, 1997willbeupdated Programme approved theSampoGroup by Man- dustry CommitmentbytheInsuranceIn-vironmental development. able environmental sustain- ethical valuesandthegoalofsafeguarding Sampo business and service units carry re- unitscarry businessandservice Sampo 1 inNovember, 1997. The Environmental Sampo ratifiedtheUNEPStatementSampo ofEn- cial consequences.Sampo’s “Environment and andpreparationdamage evaluation, foranyfinan- be utilisedinenvironmental riskprevention, tal risksofalargeindustrialplant. The resultswill carried outadetailedanalysisoftheenvironmen- orunknown. insolvent liableforenvironmental damageiseither party on January covers 1st,1999.It caseswherethe mental liabilityinsurancethatbecameobligatory focused oninformingclientsoftheenviron- we theunderwriting business, asset management.In claims,lossprevention and lated tounderwriting, works. halfofSampopersonnel end, inwhichroughly Turku, Salo andLauttasaariofficesby theyear- systemswereEnvironmental inplaceatthe was builtforourLauttasaariofficesinHelsinki. Officetions, theGreen environmental system ofSampo’sAs part internalenvironmental opera- Environmental AspectsinSampoOperations est Group non-lifeinsurancecompanies. todateconcentratedinthelarg- operations are In co-operationwithoneofourclients,we In environmental operationsareExternal re- 2 able EnergySources. Efficiencymation CenterforEnergy andRenew- material published by Motivamaterial publishedby Conservation Week inOctober, 1998,around Sampo officesduringFinland’s National Energy website. ronmental issueswereforourintranet developed training courses,andpagesdesignatedforenvi- presented to new staffmembersduringrecruit issues. Sampo’s environmentaloperationswere to engenderstaffcommitmentenvironmental Information wasprovided andtrainingorganised Environmental WorkConcernsEveryone Sampo’s intranet website. revised ourinformationpolicytobetterutilise tion oforganicandtoxic waste.Moreover, we andintensifiedthecollec- security requirements, allowingfordata upgraded wastepapersorting, nal environmentaloperations.Asaresult, we carriedoutinLauttasaari,itsinter- tal survey sheet data,andthatprovided anenvironmen- by nies. ating modelsinbankingandinsurancecompa- established inGermanyforenvironmental oper- balance sheetwillbeattunedtotheguidelines ing measures andmonitoringdevelopment. The tion willbeutilisedindefiningobjectives, target- in thetableonoppositepage. This informa- the largestpremises Sampo, occupiedby asshown An environmentalbalancesheetwasdrawnupfor Environmental Working Information Promotes activities. maintenance andrepair andtheresultsowned were premises, utilisedin five energyinspectionswere carriedoutinSampo industries.Fourstruction and conditionsurveys gramme beingcreated forthereal estateandcon- to itsownoperationsofanenvironmental pro- alsomappedouttheapplicability ment. Sampo for environmentalissuesunderassetmanage- portfolio,cent oftheinvestment andwasassessed large losses. 30casesin1998. approximately There were no damagein in compensationforenvironmental year.sold 84copiesduringthereview vironmental operationsofbusinessenterprises, Safety” publication,drawnuptosupport theen- Exhibitions arrangedinthelargest were Sampo utilisedtheenvironmentalbalance realSampo owned estateconstitutes13per Sampo paidoutatotalofFIM1.3million 4 , theEnergy Infor- 3 please visitwww.motiva.fi. For further information, 4 (VfU) atwww.vfu.de Sparkassen undVersicherungen Umweltmanagement inBanken, please visitderVerein für For further information, 3 www.wwf.fi please visitWWFFinlandat For further information, 2 please visitwww.unep.ch For further information, 1 99 SAMPO ANNUAL REPORT 1998 100 SAMPO ANNUAL REPORT 1998 euro-denominated on request services extent theirclienteleneeds. independently, whenandto whatever Business unitswilladoptthenew currency Directors approved transitionplan. aeuro In December 1998, Sampo’s Board of Transition Plan proximately 170man-years. current estimatedtotalworkload isap- projects orbeinginitiatedandthe running 1997. Sampo nowhasdozens ofeuro Steering Group wasestablished inSpring, sition totheeuro eversinceourEMU Sampo Group hasbeenpreparing fortran- EURO mands onthefunctionalityofreinsurance preparedness. Y2K charting arranging awareness raisingevents, and loss prevention by providing information, Y2K practices. Sampo subsidiarieswilladheretolocal likely tobesubstantial.Otheroverseas classes where Y2K risksare feasibleand beginning of1999,inthoseinsurance Baltic subsidiarieswere amendedatthe tions ofdomesticGroup companiesand effects. The insurancetermsandcondi- risks, becauseofthepotentialcumulative limit andspecifyinsurancecover for Y2K Sampo Group to hasfounditnecessary Insurance andtheYear2000 business operationshasbeencompleted. Modification work IScriticalto onSampo adjustment ofreinsurance agreements. insurance termsandconditions,the claims have resulted intheamendmentof Preparations in forapossiblegrowth ance operationsandinformationsystems. significant impactonSampo Group insur- The turnofthemillenniumishavinga YEAR 2000 Corporate clientshavebeenoffered Y2K risksmakehigherthanusualde- Sampo client Y2K actively supports the total workload arethe totalworkload around 80man- the firsthalfof1999.Current estimatesof cant systemsisbeingcompletedduring conform andtestingofsomelesssignifi- year 2000.Critical Y2K systemsalready equipment before, duringandafterthe sure smoothlyfunctioningISandEDP Sampo continuestowork toen- actively Information Systems on thecurrency, offertrainingto project in 1998were tocollectbasic information divisions. and market in theallocationofdifferent instruments area oftheeuro that thebirth isreflected area. Investment planswillbespecifiedso facilitate thespread ofinvestments inthat in“Euroland”will becomehistory will 2002. be drawnupineuro 1st, asofJanuary counting andthefinancialstatementswill of2002.Generalfrom thestart ledgerac- clients willbeofferedafulleuro service since thebeginningof1999,andprivate the reinsurancemarket. limited lossfrequency covers boughton ceptionally largenumbersoflosses,andby withex- sions especiallyreservedforyears essary, becovered by equalisationprovi- frequencies. Claimsincurred will,ifnec- insurance contractsdonotcover heavyloss re-due to Y2K losses,sinceordinary less beconsiderablylargerthannormal cal dates. Reinsurer contractsthuscover allthecriti- two years inthemajorinsuranceclasses. the contractperiodhasbeenextendedto with Group approved Y2K guidelines,and terms andconditionsfalluniformlyinline programmes. Group Sampo reinsurance The core tasksofSampo europrojects conversionThe factthatcurrency risk Group claimsincurred mayneverthe- vision ofinformationtoSampo clientele. will continueasnecessary, aswillthe pro- personneltraining specifications. Related on therelevant tothese systemsaccording changes theeurowillentail,andstartwork work, drawupspecificationsonnecessary We withinvestigation aimtoproceed Euro Activitiesin1999 into playinearly1999. with sufficienttrainingonissuescoming plans, andprovide personnel theentire drawuptransition organisation staff, August 1999. InterimSampo publishedin Report atwww.sampo.fiwebsite andinthe about GroupY2K preparedness via its areas. drawing upcontinuityplansforcritical environment continuesin1999e.g. Work toensure Y2K conformityintheIS partners duringthefirsthalfofthisyear. Sampo groups andco-operation interest formity isbeingexaminedtogetherwith byOctobersecured 1999atthelatest. Their year2000compatibilitywillbe and therequired measures agreedon. apparatus etc.haslargelybeencompiled, estatemanagement,office related toreal completion by August 1999. and otherequipmentisscheduledfor workstations, printers system software, 1999,andtestingof til theendofApril computercentretinues attheSampo un- pleted bytheendof1998. years, ofwhich95percenthadbeencom- Sampo willkeepthepublicinformed Common systems’ year 2000con- ofembeddedsystems An inventory Year 2000compatibilitytestingcon- Incl.Unsa15.5% * 22.4* PRINCIPAL SHAREHOLDINGSDEC.31,1998 THE SAMPO-VARMA GROUP: 4.6 46.5 19.7 30 37.7 ▼ ▼ 22.5 ▼ ▼ ▼ ▼

▼ ▼ ▼ VARMA-SAMPO SAMPO LIFE Interest inguaranteecapital(%) Interest insharecapital(%) Interest insharecapital,SampoGroup companies(%) ▼ 30 AEAOTSO KALEVA SAMPO ▼ ▲ ▼ 11.3 20 4.8 ▼ 31.3

▼

▼ ▼ 26.2 ▼ 10 10 50 50 100 100 100 100 90 100 ▼ ▼ ▼ ▼ ▼ ▼ ▼ ▼ INDUSTRIAL INSURANCE SAMPO HOLDINGS(UK) SAMPO ENTERPRISE ST INTERNATIONAL INSURANCE CO. SAMPO FINANCE OF FINLAND ▲ 10 100 100 100** 99.99 100 100 100 35.7* *Shareholdingsofthesub-group ** Partoftheownershipischannelled * 64.3*

Sampo Holdings(UK) situated intheNetherlands through theholdingcompanies ▼ ▼ ▼ ▼ ▼ ▼ ▼ ▼ ▼ SAMPO KINDLUSTUS SAMPO INDUSTRIAL SAMPO INDUSTRI- SAMPO LATVIJA MANAGEMENT MANAGEMENT SAMPO ASSET SAMPO FUND FÖRSÄKRING LAKEWOOD PATRIA 101 SAMPO ANNUAL REPORT 1998 102 SAMPO ANNUAL REPORT 1998 Pensions paid,FIMm Premiums written,FIMm Paavo Pitkänen Managing Director 49 69 98 97 96 95 94 49 69 98 97 96 95 94 Pro forma Actual premiumswritten Pro forma Pensions 0 2000 4000 6000 8000 10000 12000 0 2000 4000 6000 8000 10000 12000 3 percent. Group,owner oftheguaranteecapital,i.e. Sampo theinsuredcent ofthevotes, 21percent,andthe Varma-Sampo AGM, 76per policyholdershave Act TEL. In practice,thismeansthatatthe surance undertheFinnish Employees Pensions pensionin- paid themselves forearnings-related ing thatcorresponds tothe premium theyhave have avoting Meet- rightattheAnnualGeneral decision-making oftheinsurancecompanies;they inthe toparticipate withtheopportunity parties ity intheiroperations.Italsoprovided theinsured ofmutual- related pensions,andtheimportance ence ofinsurancecompanieshandlingearnings- Ltd attheendof1998. LifeInsurancepany LtdandSampo Company involved themergerofNova LifeInsuranceCom- Pension-Fennia. The structural reorganisation also company, renamed Mutual InsuranceCompany Varma’s remainedintheold insuranceportfolio was renamed Varma-Sampo. The rest ofPension- to Sampo Pension, whichbecameamutualand Mutual Insurance Company’s insuranceportfolio ofPension-Varmaring approximately two-thirds transfer- The reorganisation wasimplementedby month. in pensionstosome260,000pensioners every working Finns. Nearly FIM1billionispaidout earnings-related pensioncover ofover 400,000 which meansthatthecompanyisinchargeof Act and35,000policiesfortheself-employed, 25,500 policiesundertheEmployees’ Pensions pensionsinFinland.related It handles some Varma-Sampo isthelargestinsurer ofearnings- FIM 1BillionofPensionsEveryMonth VARMA-SAMPO Sampo Group Mutual andKaleva Insurance Company. comprising Varma-Sampo Mutual Pension Insurance Company, the largestco-operation insurance groupingintheFinnish industry, insurance companies. The outcomewastheSampo-Varma Group, tion, thathelpedclarifythecompetitive situationbetweenFinnish lengthy preparatory inastructural stage,whichresulted reorganisa- operations onJuly 1st,1998. That dayalsomarked theendofa Varma-Sampo Mutual Pension Insurance Companycommenced The reorganisation promotedThe reorganisation theindepend- and SampoInsurance Companyplc (22.3%). Sampo LifeInsuranceCompanyLimited(37.7%) Oy(47%)offeringISoperatingservices, Octel estatemanagement, inreal (49.6%) involved Kiinteistövarma Oy analysisservices, investment clude Unsa Equity Oy(50%)providing Research töt Oy(100%). company estate investment Vasa-Sijoituskiinteis- andreal specialising inpersonnelfundservices, tions andfunds,Rahastopalvelu RPOy(40%) servicesforpensionfounda- (84.6%) providing AbEläkesysteemi (65%),Pensionservice Ltd (holding 100%),ISplanningcompanyOy year-end. andemployed some580personsatthe market earnings-relatedthe Finnish pensioninsurance bonds. Varma-Sampoury heldaround athird of mately FIM76billion,halfofwhichisintreas- company’s investment totalledapproxi- portfolio sheet totalwasslightlyover FIM77billion. The amounted toFIM8.5billionandthebalance a whole. Close and direct co-operation with a whole.Closeanddirect mission istoassesstheclient’s insurancecover as range ofFinnish economiclife. Varma-Sampo’s Group. identicaltothatofSampotele isthusalready was attheSampo Group. Varma-Sampo’s clien- compensationinsurance clients whoseworkers mainlyconsistedofthepoliciesthose Sampo transferredThe insuranceportfolio to Varma- through Co-Operation Comprehensive Service Varma-Sampo inassociatedundertakings Varma-Sampo subsidiariesincludeUnsa Ltd Premiums writtenby Varma-Sampo Varma-Sampo clienteleembracesawide Varma-Sampo inpoleposition. of86Sampo network officesplaces wide service Varma-Sampo’s own operations.Here thenation- viaSampo’sserved points,inadditionto service tions. Small clientsare andmedium-sized also orthemanagementofpensionfounda- abroad, e.g. tomaintainingworkingcapacity, working purpose. offered related are The specialservices staff exclusively trained anddesignatedforthis of majoraccountsitself,sinceithasprofessional several decadesontheother.over Varma’s modelbuiltup majoraccountsservice entrepreneurs ontheonehand,andPension- Pension’s solidexpertise in insuringSMEsand thefactthatcompanycombinesSampoby ent’s needs. andtailor-made tocli- ices arereadily available GroupSampo guaranteesthatallinsuranceserv- over forthisfunction. much laterthatinsurancetook these sentiments.Itwasnotuntil assigned thetaskofalleviating sphinx ofancientmythsis danger. Theself-sacrificinghare- of fear, asenseofmenaceand The deepblueofthepaintingtells the whiteovalfloatinginsky. the unreachable,representedby forthehigherand yearning “Like anAngel”expressesa 1951– Suomi, Risto Like an Angel, 1991 Angel, an Like Varma-Sampo handlesthepensioninsurance Varma-Sampo’s skillsare service accentuated 3 4 3 2 1 (Total FIM76,620m) values, Dec.31st,1998 Investment portfolioatcurrent hrs12.5% 14.6% 15.1% Land andbuildings Shares 57.8% Interest-bearing instruments Loans 4 2 1 103 SAMPO ANNUAL REPORT 1998 104 SAMPO ANNUAL REPORT 1998 and Patria. Born 1947,ManagingDirector of STInternational Matti Ruohonen International Operations. Industrial Insurance, Manager General of Born 1951,ManagingDirector of Sampo Eero Holma development ofthegroup’s businessactivity. Areas ofresponsibility:group strategyandstrategic Born 1944,GeneralManager, Planning. Juhani Kangas services, IR-operations,internalauditing. Areas ofresponsibility:group finance,logistics Manager,Born 1939,General Group Finance. OlaKari Born 1951,GeneralManager, Investments. Martti Porkka Deputy Managing Director ofSampo Life. Born 1949,ManagingDirector ofKaleva, Matti Rantanen Born 1955,ManagingDirector ofSampo Life. StadighKari Born 1953,ManagingDirector ofSampo Enterprise. Juhani Vesterinen finance, internalriskmanagement. of Sampo. Areas ofresponsibility:majorclients, Insurance Managing andOtso, Deputy Director Born 1947,ManagingDirector ofIndustrial Juha Toivola run-off, informationtechnology, personnel. Areas ofresponsibility:private households, Deputy Managing Director ofSampo. Born 1947,ManagingDirector ofPrivate Sampo, Hannu Kokkonen Born 1943,CEO,Managing Director ofSampo. Jouko K.Leskinen SAMPO GROUPMANAGEMENTBOARD eoHlaMattiRuohonen Eero Holma JuhaniKangas KariOla Martti Porkka MattiRantanen KariStadigh Juhani Vesterinen JuhaToivola HannuKokkonen Jouko K.Leskinen For financial informationandbulletins,pleasevisitwww.sampo.fi Information ontheInternet the InformationDepartment: andInterim ReportsAnnual Reports canbeordered from willbepublishedonAugustThe report 24th,1999. 1st–JuneJanuary 30th,1999. willpublishaninterimreport fortheperiod Sampo MutualKaleva Insurance Company Company Limited LifeInsurance CompanyLimited+NovaSampo LifeInsurance LifeInsuranceSampo Patria ReinsuranceCompanyLimited InsuranceST International CompanyLimited Industrial InsuranceSampo N.V. Insurance CompanyLtd Industrial InsuranceSampo Companyplc AnnualReports:Sampo SampoThe officialfinalaccountscanbeinspectedatthefollowing offices: Financial Information SHAREHOLDER INFORMATION Internet www.sampo.fiInternet Fax +358 105141811 availableinFinnish andSwedish • availableinFinnish, Swedish andEnglish • availableinEnglish • availableinEnglish • availableinEnglish • availableinFinnish, Swedish andEnglish • availableinFinnish, Swedish andEnglish • Puolalankatu 5, Turku (Financial Administration) • Aleksanterinkatu11,Helsinki(Sampo Group’s LegalAffairs) • tem. securitiessys- tothebook-entry been transferred ment, dividendwillbepaidaftertheirshares have system by thematchingdayofdividendpay- tothebook-entryferred securities theirshares 7th,1999. dividend ispayableonMay dividend paymentisApril 30th,1999,andthe of theBoard ofDirectors, thematchingdayof Ltd.In withtheproposalDepository accordance ister heldby theFinnishCentralSecurities payment, are intheShareholders’ registered Reg- holders, whoonthematchingdayofdividend financial year. Dividend willbepaidtoshare- bepaidforthe a dividendofFIM4.80pershare The SampoBoard ofDirectors hasproposed that Payment ofDividend 1999 at3p.m. tieläisenkatu 3,Helsinki,on Tuesday April 27th, Fair Centre,Congress Wing, Hall C1,atRauta- ance CompanyplcwillbeheldattheHelsinki The AnnualGeneral MeetingofSampo Insur- Annual GeneralMeeting To whohave nottrans- thoseshareholders 105 SAMPO ANNUAL REPORT 1998 106 SAMPO ANNUAL REPORT 1998 a +358105146288 Fax +3581051517 Tel. Vattuniemenkuja 8A,Helsinki Visiting address: FIN-00211 Helsinki, Finland P.O. Box 101 Postal address: Otso +358105145232 Fax 124832assurfi Telex +3581051512 Tel. Vattuniemenkuja 8A,Helsinki Visiting address: FIN-00035 Helsinki, Finland Postal address: Industrial Insurance +358105144028 Fax 62242sampofi Telex +35810515311 Tel. Aleksanterinkatu 11,Helsinki Visiting address: FIN-00025 SAMPO,Finland Postal address: +358105141811 Fax 62242sampofi Telex +35810515300 Tel. Yliopistonkatu 27, Turku Visiting address: FIN-20025 SAMPO,Finland Postal address: Sampo Enterprise Sampo SAMPO-VARMA GROUPOFFICES a +35810 514 4752 Fax +3581051513 Tel. Annankatu 18,Helsinki address: Visiting Finland FIN-00098 VARMA-SAMPO, Postal address: Varma-Sampo +358105147449 Fax 62242 sampofi Telex +358 10515225 Tel. 56,HelsinkiBulevardi address: Visiting FIN-00025 SAMPO,Finland Postal address: Kaleva Sampo Life +358105141940 Fax 62242sampofi Telex +35810515300 Tel. Puutarhakatu 1, Turku address: Visiting FIN-20100 Turku,Finland Puolalankatu 5 Postal address: ST International +358105145195 Fax 124832assurfi Telex +3581051512 Tel. 22A,Helsinki Melkonkatu address: Visiting FIN-00211 Helsinki, Finland P.O. Box 12 Postal address: Patria +358105145833 Fax +3581051512 Tel. Itälahdenkatu 21A,Helsinki address: Visiting FIN-00211 Helsinki, Finland P.O. Box 12 Postal address: of Finland Insurance Company Mänttä Mikkeli Loviisa Loimaa Lohja Lieksa Lapua Lappeenranta Laitila Lahti Kuusamo Kuopio Kouvola Kotka Kokkola Kokemäki Keuruu Kerava Kemijärvi Kemi Kauhajoki Kankaanpää Kangasala Kajaani Järvenpää Jämsä Jyväskylä Jurva Joensuu Imatra Ikaalinen Iisalmi Hämeenlinna Hyvinkää Huittinen Helsinki Heinola Harjavalta Hamina Forssa Espoo Alajärvi Other officesinFinland - Sörnäinen - Mannerheimintie - Malmi - Kannelmäki - Itäkeskus - Hakaniemi - Aleksi - Tapiola Service points Äänekoski Ähtäri Ylivieska Virrat Varkaus Vantaa Vammala Valkeakoski Vaasa Uusikaupunki Turku Tornio Toijala Tampere Tammisaari Suonenjoki Somero Seinäjoki Savonlinna Salo Saarijärvi Rovaniemi Riihimäki Rauma Raisio Raahe Porvoo Pori Pietarsaari Pieksämäki Parainen Paimio Oulu Närpiö Nummela Nokia - Sodankylä - Siilinjärvi - Orivesi - Orimattila - Mäntyharju - Leppävaara - Kitee - Ivalo - Eura - Myyrmäki - Tikkurila - Hämeenkatu - Yliopistonkatu a +44171 208 8402 Fax +441712088400 Tel. United Kingdom London EC3N4SA Lane 2 Seething OfficeBranch inEngland +494036130125 Fax +49 403613010 Tel. Germany D-20459 Hamburg 16 Rödingsmarkt +49696701441 Fax +49699678050 Tel. Germany D-60528 Frankfurt a.M. 72 Rennbahnstrasse OfficesBranch inGermany +31102120850 Fax +31102121000 Tel. The Netherlands 3062 MBRotterdam K.P. 90 van derMandelelaan address: Visiting The Netherlands NL-3009 AMRotterdam P.O. Box 8524 Postal address: OfficeBranch inHolland +31104524403 Fax +31104527299 Tel. The Netherlands 3062 MBRotterdam K.P. 90 van derMandelelaan address: Visiting The Netherlands NL-3009 AMRotterdam P.O. Box 8524 Postal address: Office Head DirectorManaging Eero Holma, InsuranceIndustrial N.V. Sampo Subsidiaries FINLAND SUBSIDIARIES ANDOFFICESOUTSIDE Managing Director Janis +3717503555 Teteris, Fax +3717503333 Tel. Latvia Riga, LV-1050 Merkela Street 1(5thfloor) AAS SampoLatvija Managing Director Olavi +3726130131 Laido, Fax +3726130 Tel. Estonia EE-0001 Tallinn Rävala 2 Sampo AS Kindlustuse Managing Director Matti +46856610540 Rattik, Fax +46856610500 Tel. Sweden SE-103 23Stockholm Box 16136 Jacobs Torg3 Sampo Industriförsäkring AB a +78123292541 Pirjo Myyryläinen, Manager Fax +78123292540 Tel. Russia RU-191186 StPetersburg office A11 Malaja 1/3, Konjushennaja Visiting address: Finland FIN-53501 Lappeenranta, P.O. Box 16 Postal address: Office St Petersburg Representative Sampo Group Offices a +70959374376 Janis Manager Abasins, Fax +70959374375 Tel. Russia MoscowRU-119034 Building 3,1stfloor Molochnyj 9/14 pereulok Visiting address: Finland FIN-53501 Lappeenranta, P.O. Box 310 c/o LeoniaBank, Office,Representative Sampo Group, Moscow Postal address: Moscow Representative Office Sampo Group 107 SAMPO ANNUAL REPORT 1998 108 SAMPO ANNUAL REPORT 1998 crdr ihr rik+41716583033 94044494 +44 +358 1713756355 1715136612 +44 +44 Urwick Richard Lampinen Ari 171 772 2385 +44 1713259174 +44 912340320 87014149 +358 +46 Cathcart Mark Nordhus Espen AndrewJMitchell Runciman Angus 947669202 +358 Timonen Elina 171 774 2526 32880335 Anderson Mats +44 +45 961628727 +358 Schroders Opstock Kock Christian Yates Bob +441715451054 Securities NatWest 3333 1509 1719055634 Gottlob GiovanniGovi Martin +45 +44 Stanley Morgan Koskinen Mika 954993315 +358 Lynch Merrill Ltd Securities Merita JesperSkriverFrandsen Morgan JP 1717860811 Lainz Miguel +44 Handelsbanken Goldman SachsInternational Dahlström Bengt Brege Anders Fox –Pitt,Kelton Ruohomaa Ronny Securities Evli Securities Enskilda Grenfell Morgan Deutsche Carnegie Securities Aros Ltd Securities Arctos Alfred BergFinlandOyAb Securities ABG Sampo fortheassessmentspresented doesnotanswer intheanalyses. These stockbrokersandinvestment analystsassessedSampo in1998. asanexcitinginvestment opportunity INVESTMENT ANALYSES oet evs 4 1716583137 +44 Cervesi Roberto ila akn 4 1713778929 +44 Hawkins William Telephone nos.

www .sampo.fi

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Sampo Insurance Company plc, registered domicile and address Turku, Yliopistonkatu 27, FIN-20025 SAMPO, FINLAND. Trade reg. no. 46.425