SAMPO OYJ If P&C is expected to reach a combined ratio of 82 - 84 per cent in 2021. With regard to Topdanmark, reference is made to the profit forecast model that the company publishes on a quarterly basis. Hastings is on track to deliver against its financial targets but uncertainties relating to COVID-19 development, regulatory reform and Brexit remain. Nordea continues to focus on creating great customer experiences, growing income and improving operational efficiency. The results are progressing well towards 2022 targets. The major risks and uncertainties for the Group in the near-term In its current day-to-day business activities Sampo Group is exposed to various risks and uncertainties, mainly through its separately managed major business units. Major risks affecting the Group companies' profitability and its variation are market, credit, insurance and operational risks that are quantified independently by the major business units. At the group level, sources of risks are the same, although they are not directly additive due to the effects of diversification. Uncertainties in the form of major unforeseen events may have an immediate impact on the Group's profitability. The identification of unforeseen events is easier than the estimation of their probabilities, timing, and potential outcomes. Currently, the COVID-19 pandemic and the measures taken to contain the virus are causing significant uncertainties on economic and capital market development. There are also a number of widely identified macroeconomic, political and other sources of uncertainty which can, in various ways, affect the financial services industry in a negative manner. Other sources of uncertainty are unforeseen structural changes in the business environment and already identified trends and potential wide-impact events. These external drivers may have a long-term impact on how Sampo Group's business will be conducted. Examples of identified trends are demographic changes, sustainability issues, and technological developments in areas such as artificial intelligence and digitalization including threats posed by cybercrime. THE BOARD'S DIVIDEND PROPOSAL The Board proposes to the Annual General Meeting a dividend of EUR 1.70 per share to the company's 555,351,850 shares. The dividends to be paid are EUR 944,098,145.00 in total. The remainder of the funds are left in the equity. The dividend will be paid to the shareholders registered in the Register of Shareholders held by Euroclear Finland Ltd as the record date of 21 May 2021. The Board proposes that the dividend be paid on 28 May 2021. EFFECTS OF COVID-19 ON SAMPO GROUP The COVID-19 pandemic continued to affect societies, businesses and individual people during the first quarter of 2021. However, as a technologically advanced insurance group, Sampo has been able to meet the challenges created by COVID-19 and to accelerate support and services, both for its customers and for its employees. There have been no COVID-19 related lay-offs among Sampo Group personnel and none of the Group companies has required any government funding support during the COVID-19 pandemic. If's claims cost for the first quarter was positively impacted by low claims frequency, especially in motor and travel insurance, following from continued lockdown measures implemented by governments to contain the spread of the pandemic and a low level of activity in society. The effect of COVID-19 on If's risk ratio is approximately 3 percentage points positive in the first quarter. Claims frequency levels are expected to increase towards more normal levels following the improved situation and as a consequence of lockdown measures. Hastings' motor claims frequencies have reduced, reflecting reduced motor vehicle usage as a result of the national and local restrictions resulting from COVID-19 which continued throughout most of 2020 and the first quarter of 2021. Claim severities increased due to interruptions in the repair networks and supply of parts caused by COVID-19 and increased car rental costs, with repairs typically taking longer than anticipated. Topdanmark has reported on the impacts of the COVID-19 pandemic in its interim report for January--March 2021 published on 26 April 2021. The report is available at www.topdanmark.com. BUSINESS AREAS If The underwriting result for the If segment of EUR 213 million was the best-ever recorded in a first quarter, as was the combined ratio of 81.5 per cent. Weather losses were slightly above the normal and large losses were broadly at normal levels while COVID-19 loss frequency effects benefitted the combined ratio by approximately 3 percentage points. Prior year development had a 4 percentage points positive impact on the combined ratio, which is within the range of outcomes observed over recent years. Following the strong performance in the quarter, If's 2021 combined ratio outlook has been improved to 82 -- 84 per cent, well in line with the target of below 85 per cent. The underwriting result of EUR 213 million (180) represented 18 per cent growth over the previous year. Adjusting for COVID-19 effects and harsher winter weather, underwriting profit growth clearly supported the mid-single digit target for 2021-2023. The first quarter combined ratio of 81.5 per cent was 2.2 percentage points better than the year before (83.7) mainly as a result of an improvement in the risk ratio to 61.0 per cent (63.4). The combined ratio benefitted from rating actions, particularly in BA Industrial and BA Commercial, as well as ongoing operational work on risk selection and cost efficiency. Large claims declined year-on-year, supporting risk ratio development by approximately 1.8 percentage points. Weather conditions were roughly 2 percentage points harsher than in the previous year with cold temperatures and snowfall leading to freeze claims. COVID-effects supported year-on-year development in the risk ratio by approximately 3 percentage points. In the first quarter of 2021 EUR 47 million (62) was released from the technical reserves relating to prior year claims. The reserve releases had a positive impact of 4 percentage points on the combined ratio, which was 1.6 percentage points less than a year ago. The cost ratio was stable relative to the previous year at 20.5 per cent (20.4). Gross written premiums amounted to EUR 1,801 million (1,733) in January -- March 2021. Excluding the currency effects, premiums grew 2.6 per cent (7.0), driven by stable and high retention levels and strong business momentum. The renewals of corporate lines on 1 January 2021 were characterised by stable retention and selective rate actions. If's most profitable business, BA Private, was the main driver of growth but premiums grew in all business areas. Geographically, Sweden and Norway saw growth; in Sweden, new car sales had a notable positive impact on premium growth. COVID-19 has a negative impact on premium volumes in the Finnish workers compensation and the travel insurance portfolio across all markets. The growth in the Baltics was significantly stronger than the market average. If reported a strong investment result of EUR 52 million driven by highly supportive equity and credit markets. Mark-to-market return on investments increased to 1.5 per cent (-5.6). Asset allocation remained stable. Fixed income comprises 88 per cent (88) and equity 12 per cent (12) of the total assets of EUR 11.6 billion (11.0). As a result of the strong underwriting result and investment income achieved in the first quarter, profit before taxes almost doubled to EUR 257 (129) million relative to the difficult first quarter of 2020. Total comprehensive income for the period after tax was EUR 292 million (-518). If's solvency position is described in the section Solvency. Topdanmark At the end of March 2021 Sampo plc held 41,997,070 Topdanmark shares, corresponding to 46.7 per cent of all shares and 47,9 per cent of related voting rights in the company. The market value of the holding was EUR 1,639 million on 31 March 2021. Topdanmark's profit before taxes for January-March 2021 amounted in Sampo Group's profit and loss account to EUR 137 million (-13). The combined ratio improved to 84.7 per cent (88.7). The expense ratio was 16.8 per cent (17.2). Further information on Topdanmark A/S and its January-March 2021 result is available at www.topdanmark.com. Hastings Hastings achieved strong underwriting margins in the first quarter of 2021, supported by lower claims frequencies as a result of COVID-19 restrictions and the ongoing progress on strategic and operational initiatives. Gross written premiums amounted to EUR 238 million, with lower average premiums than previously recorded, primarily reflecting lower claims frequencies, a competitive pricing environment and a change in mix of customers to lower risk segments, as well as the ongoing support given to Hastings' customers. Rate reduction has been observed across the UK motor market during the first quarter of 2021. Hastings has remained disciplined in its pricing approach, resulting in live customer policies being broadly stable compared to the year end at 3.1 million, and up 7 per cent year-on-year. Customer retention rates continue to be high and above market averages. Motor claims frequencies have remained low, reflecting reduced motor vehicle usage as a result of COVID-19 restrictions that continued throughout most of the first quarter of 2021. Uncertainty over ultimate costs has been recognized in a continued cautious approach to reserving. Hastings operating ratio for the first quarter was 75.1 per cent. The ratio includes a 3.4 percentage points benefit from acquisition accounting across revenue and operating expenses for deferred acquisition costs and other fair value adjustments that will continue
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