CONTENTS 2 Sampo Highlights 1997 3 Sampo Insurance Group Key Information 4-5 Chief Executive Officer's Review 6-7 rructural Reorganisation 8 Sampo and the Environment Accounts for the Year 10-72 Sampo Insurance Company Limited Accounts for rhe Year The Sampo Group 74 Sampo Group Key Information 75 The Sampo Group's Principal Shareholdings 76-77 Personnel 78-79 Private Client Services 80-81 Corporate Client Services 82-85 Major Accounts Services 86-87 Sampo Life Insurance 88-89 Foreign Reinsurance Run-OfF 90-91 Investments 92-93 Statutory Employment Pension Insurance 94 Management of the Sampo Group 95 Shareholder Information 95 Investment Analyses 96 Sampo Group Offices SAMPO HIGHLIGHTS 1997 SAMPO INSURANCE GROUP KEY INFORMATION January • Sampo's Annual eneral Meeting ap­ 1997. The nominal value of a Sampo • Sampo In surance Group's new life proved th e 1996 Accounts, the splitting share was reduced from FIM 20 to in urance company, Sampo Life, com­ of ampo hares and the related amend­ FIM 5 by forming four new shares from FIM millions 1997 1996 Change % menced operations. ment to the Articles of Association. each old one. • The Major Accounts ervices unit went live. May- J une November Turnover 7,848 6,182 27.0 • The Group Board of Directors rati ­ • Sampo arranged ph ys ical exercise ampo, ampo Life, ampo Pension, Gross premiums written 5,748 4,495 27.9 fied Sampo's Environment Programme. days for its per onnel. The events were Nova, Pen ion-Varma and Enterprise­ An internal environmental activities arranged in ten different locations in Fennia announced a significant true­ Operating profit 921 619 48.9 pilot project was laun ched at our Turku Finland and attracted over 700 employ­ rural reorganisa tion affecting life and T oral on balance sheet 20,961 16,128 30.0 and Salo offices. ees. employment pension companies. • The ampo Group was the first in­ Solvency capital 10,004 7,696 30.0 February August surer in Finland to ratify the UNEP Average number of personnel 3,176 3, 11 3 2.0 • Sampo announced there were no ne­ • Sampo Life invested FIM 145 million Statement of Environmental Commit­ gotiations in progress aiming at a merger in the purchase of Partek's headquarters ment by the Insurance Industry. The between ampo and Merita. There had in Helsinki. The Partek Group now United Nations Environment Pro­ Earnings per share, FIM * 8.32 4.23 96.7 been negotiations about various alterna­ leases the building. gramme (UNEP) had drawn up the tives for co-operation in the latter part of • Sampo participated in financing the statement together with the insurance Net asset value per share, FIM * 145.54 115 .64 25 .9 1996, but these ended without result. Jarvenpaa-Lahti motorway, the first pri­ companies, signed by 72 in 26 countries. • Sampo, Sampo Pension, Nova and vately financed road to be built in Fin­ • The figure for 1996 has been adjusted in accordance with the split ratio. Pension-Varma made a preliminary land. December agreement on buying the shops, central • Sampo published its Interim Report • Sampo's international services were warehousing and wholesale cash-and­ for the first half-year. Group operating strengthened by the completion of carry real estate attached to Tuko's per­ profit stood at FIM 688 million. Major Accounts Services' overseas co­ ishable goods business, on behalf of a operation network, covering 65 coun­ new real estate company. The new com­ September tries in all. pany, Vasa-Sijoituskiimeistot Oy, later • The registration period for transfer­ • Sampo and Cap Gemini established Direct insurance premiums written by Solvency capital, FIM m Net asset value per share, FIM• bought the real estate. Sampo Insurance ring Sampo shares to the book-entry a common IT company, Capsam Con­ the Sampo Insurance Group 1997 (Total FIM 5,416 m) Group's total investment in the new securities system closed on September sulting Ltd. The new company delivers 12000 -------200 12th, 1997. At the end of the period, development and maintenance services company was FIM 160 million. 10000 26,765 Sampo shareholders were regis­ for Sampo's information systems. ol March tered in the system. • Ratings company Standard & Poor's 8000 • Sampo published its result for 1996. • Industrial Insurance's sprinkler tech­ issued a Claims Paying Ability rating to ~ I Group operating profit almost doubled nology inspection and consultation serv­ Sampo and Sampo Insurance Group's 6000 to FIM 619 million. ices were granted the ISO 9002 certifi­ Major Accounts Services, the latter com­ :0 4000 I cate. prising Industrial Insurance Company Ltd, Otso Loss of Profits Insurance 2000 April I I · I • Sampo's FIM 100,000 Safety Award October Company Ltd and Sampo Industrial 0 was conferred for the 8th time. The • Sampo Group companies started sys­ Insurance N.V The companies had ap­ -1000 I I I award was made to Oy Ensto Busch­ tematic co-operation for the creation of plied for the rating which assesses capi­ 95 96 97 95 96 97 Jaeger Ab for developing a water leakage a leading Sampo brand. The ampo tal adequacy and solvency. All four com­ 1 Private Client Services 30% • Solvency capitol • Net asset value/shore Equalisation provision • Closing price at end of period , value, and reli­ panies received an A- rating, represent­ 2 Corporate Client Services 22% guard to detect water damage in build­ brand stands for quality • Valuation differences ings at an early stage. ability. ing good security on the & P scale. ~ 3 Major Accounts Services 29% • Capital and reserves + minority interest * The figures for 1995-1996 hove hare split was entered in 4 life Insurance Services 19% Intangible assets been adjusted in accordance • The Sampo - the trade register on October 24th, with the split ratio. 2 SAMP ANNUAL HFPORT 1997 AMPO A UAL HEPORT 1997 3 CHIEF EXECUTIVE OFFICER'S REVIEW he past year was notably success­ should be created within insurance com­ Mea ured by technical provisions or in­ where Sampo Industrial Insurance voluntary insurance is expected to con­ the past. I wish to thank all our people ful for Sampo, repre enting an­ panie or even within in urance groups. surance saving , ampo life in urance performed very well in 1997. Foreign tinue. And high solvency is viral for a life for a prosperous year. As a more concrete other significant increase in Uniform and competent T supervision is will also be the undi pured marker direct insurance was profitable in other company in Finland. expression of gratitude, the Board of earnings. The Group ended 1997 having the be t guarantee of a working sys tem. leader. The total amount of premiums respects, too. Ir is clear that mastery and the uti­ Directors will propose to the Annual doubled the quoted price of ampo written by ampo Life, Kaleva and Nova The starting point of Sampo's over­ lisation of information technology, one General Meeting in Spring 1998, that a share and thus its market capitalisation. was already the largest in the field in seas operations is to serve our clients our­ of rhe prerequisites of success for an bond loan with warrants be offered to Sampo Group life insurance companies New Sampo Life and Varma-Sampo 1997. selves in the most important markets. insurance company, will be even more the whole personnel. performed especially well. A resolution The previou major structural reorgani­ Furthermore, a network of international crucial in the next millennium. In my review a year ago, I promised was passed that will make our life and sation affecting the Sampo Group wa co-operation partners serves corporate To prepare for future information our clients that we will stay at the fore­ employment pension insurance compa­ accomplished just over four years ago. A Operating Profit Increased Again clients in 65 countries so that Sampo's technology challenges, Sampo establ­ front of our industry in future, further nies market leaders in Finland, a position little later, Kansa General became a The operating profit of the ampo Insur­ service network covers almost the entire ished a new IT organisation with Cap developing our operations. We pursued already attained by the non-life compa­ Group company following an acquisi­ ance Group rose by approximately 50 industrialised world. Gemini, one of the largest IT consultan­ this target on a broad front in 1997 and mes. tion. per cent to FIM 921 million and earn­ cies in Europe. The new company is the work continues. I wish to thank all Economic growth has continued at These arrangements made Sampo ings per share doubled to FIM 8.32. called Capsam Consulting. our clients for their co-operation. a surprisingly steady pace, providing a the leading non-life insurance group in Sampo's good result was attributable Share Price and Turnover Up Capsam's most important initial We will also continue to develop favourable operating environment for Finland. As for life and employment in particular to record-breaking invest­ The rise in the quotation price of Sampo task is to continue to develop Private Sampo as an investment object. Our aim the insurance business. Investment yield pension insurance, the plans did not ment results and a decrease in operating shares was the fourth largest on the Hel­ Sampo's information systems as part of is to be worthy of the confidence our prospects were further improved by the materialise, which left the reorganisation expenses. However, the balance on tech­ sinki Stock Exchange in 1997. Sampo the Sampo 2000 programme. shareholders place in us. ~ positive trend in quoted share prices. incomplete. In addition to supplying life nical account fell , mainly owing to ad­ was the sixth largest company by market In order to succeed, all development A pick-up in the economy and the and employment pension insurance justments in technical provisions.