Rapid recovery in the second quarter. The solvency position is still good.
Mandatum Life’s result before taxes for January–June 2020 was EUR 39 million (137). Comprehensive income after taxes, taking into account changes in market values, decreased to EUR –90 million (190). The return on equity (RoE) was –13.3 per cent (30.1). The fair value reserve decreased to EUR 316 million (438) in January–June 2020. The expense result in H1 was EUR 10 million (7). The risk result was EUR 11 million (10).
Premiums written on the company’s own account totalled EUR 498 million (529) in the first half of 2020. Premiums written on unit-linked insurance amounted to EUR 449 million (466).
The return on Mandatum Life’s investment assets at fair value was –2.7 per cent (6.1) in January–June 2020, and the return on the segregated portfolio’s investment assets at fair value during the same period was –2.3 per cent (4.5).
Measured at market values, Mandatum Life’s investment assets at the end of June totalled EUR 5.3 billion (5.7), excluding the EUR 7.8 billion (8.1) in assets covering unit-linked technical provisions.
Mandatum Life’s total technical reserves amounted to EUR 11.5 billion (12.0). At the end of June 2020, unit-linked technical provisions fell to EUR 7.8 billion (8.1), representing 67 per cent (68) of the total technical provisions. The with-profit technical provisions decreased according to plan at the end of Q2, and amounted to EUR 3.7 billion (3.9). The insurance portfolios with a high technical rate of interest (4.5 and 3.5 per cent) shrunk by EUR 149 million to EUR 2.0 billion in January–June 2020.
Overall, Mandatum Life has strengthened its technical provisions by EUR 184 million (230) in response to the low interest rate level. The figure does not include items related to the segregated portfolio. The discount rate for the rest of 2020 and for 2021 is 0.25 per cent. The discount rate for 2022 is 1.25 per cent. The technical rate of interest on the segregated group pension insurance portfolio is 0.0 per cent.
At the end of June 2020, Mandatum Life’s solvency ratio was 201 per cent (176%), and without the application of the transitional measures, it was 166 per cent (142%).
Statement by CEO Petri Niemisvirta:
“Mandatum Life sprung back quickly from the end-of-March slump. Although the comprehensive income on the first half of the year remained negative, the corresponding figure for April–June was already EUR 298 million positive. Customers’ unit-linked insurance savings also recovered after the end of March and unit-linked technical provisions grew by nearly EUR 600 million during April and June. The premium income on unit-linked insurance policies was approximately 88 per cent of the total premium income. The company’s solvency remained at a good level.
Our personnel worked remotely throughout the second quarter. A gradual return to the office will take place in September, but if required, we will be able to quickly return to full-time remote work.
The corona crisis is not over yet and is causing significant uncertainty on the markets. The outlook for global economic development is weak. Although the economic environment is difficult to decipher, our capability to react is good. Our ability to rebound from the end-of-March situation proves that we have what it takes to operate in challenging circumstances,” says Petri Niemisvirta, Mandatum Life’s CEO.
Mandatum Life’s key figures 1–6/2020
Premiums written, own account: EUR 498 million (529)
Result before taxes: EUR 39 million (137)
RoE: –13.3% (30.1)
Solvency ratio: 201% (176), and without transitional measures 166% (142)
Return on investments: –2.7% (6.1) and on the segregated portfolio –2.3% (4.5)
Average number of staff: 581 (554)
Mandatum Life’s result in its entirety is available at: www.sampo.com/result
Additional information:
Petri Niemisvirta, CEO: petri.niemisvirta@mandatumlife.fi, tel. +358 10 516 7200
Jukka Kurki, CFO: jukka.kurki@mandatumlife.fi, tel. +358 50 424 6630
Niina Riihelä, Vice President, Marketing and Communications: niina.riihela@mandatumlife.fi, tel. +358 40 728 1548