Mandatum Life’s result for the 2015 financial year improved from the previous year’s and was, in fact, excellent in all respects. The company’s premiums written and expense and risk results reached the highest level in the company’s history.
Mandatum Life Group’s result before taxes for 2015 was EUR 181 million (163). Comprehensive income after taxes, taking into account changes in the market value of the investment assets, was EUR 168 million (149). The expense result and risk result were the best in the company’s history. Mandatum Life Group’s expense result increased to EUR 27 million (20) and the risk result was exceptionally good, at EUR 33 million (23). The return on equity (RoE) was 12.7 per cent (11.4). Excluding the EUR 109 million used to lower the discount rate in 2015, the RoE would have been 18.5 per cent.
Mandatum Life Group’s premiums written on its own account also reached a historical high for the company, amounting to EUR 1,144 million (1,105). Unit-linked premiums written remained at the level of the previous year and stood at EUR 968 million (960). Premiums written from the Baltic countries amounted to EUR 34 million (40). Mandatum Life’s market share remained stable and in Finland was 17.7 per cent (17.9). The company’s market share in the Baltic countries was roughly eight per cent (11).
The net return on investment assets, excluding the return related to unit-linked insurance, grew to EUR 365 million (273), largely as a result of the favourable development in the equity markets. Income from unit-linked insurance amounted to EUR 239 million (267). The fair value reserve increased by EUR 24 million and amounted to EUR 532 million (508). In 2015, the marked-to-market return on investment assets was 6.9 per cent (4.6) and the return on the segregated group pension insurance fund was 3.8 per cent.
Mandatum Life Group’s total technical provisions increased to EUR 10.9 billion (10.4). Unit-linked technical provisions amounted to EUR 5.9 billion (5.3) at the end of 2015, and accounted for 54 per cent (51) of the total technical reserves. The with-profit portfolio continued to decrease in 2015 and stood at EUR 5.0 billion (5.1) at year-end. The higher guarantee with-profit reserves (4.5 and 3.5 per cent) shrunk by EUR 188 million in the course of 2015 and amounted to EUR 3.1 billion. In response to the low interest rate level, the with-profit technical reserves include an increase of EUR 257 million in the discount rate reserve related to the segregated group pension fund and an increase of EUR 244 million related to other funds. The discount rate for the segregated group pension fund is 0.75 per cent, and through the increase in the reserve for decreased discount rates for other funds, the interest requirement will be lowered to 1.0 per cent for 2016, 1.25 per cent for 2017 and 2.25 per cent for 2018.
In 2015, Mandatum Life paid out a total of approximately EUR 387 million in pensions to 76,000 pensioners, as well as other indemnities for death, accidents, serious illness and disability, totalling some EUR 77 million.
New, EU-wide solvency regulations (Solvency II) affecting insurance companies entered into force on 1 January 2016. Solvency II includes transitional measures that aim to make the transition to the new solvency regulations as smooth as possible. Mandatum Life’s assets on its own account according to Solvency II amounted to EUR 1,913 million, taking into account the transitional measures, and the corresponding Solvency Capital Requirement (SCR) was EUR 1,212 million, for a combined solvency ratio of 158 per cent. Without the 16-year transition measure applied to technical provisions, Mandatum Life’s assets on its own account would have been EUR 1,347 million, and excluding the 7-year transition measure applied to equity risk, its capital requirement would have been EUR 1,307 million.
Statement by CEO Petri Niemisvirta:
“2015 was a record-breaking year for Mandatum Life in many respects. We recorded the highest premiums written and the highest expense and risk result in the company’s history. Personnel and customer satisfaction also improved further.
Our record-high premiums written can be attributed to highly successful sales in all our distribution channels. We reinforced our market-leading position in the corporate customer segment, and our Danske Bank network recorded a record-high sales result in the private customer segment.
The customer experience was positively influenced by, among other things, the harmonisation of our operating models and development of our service processes. We also focussed on developing our digital services, with an eye to improving the quality of our customer service, regardless of time and place. Our customer satisfaction is also highly influenced by the level of our employee satisfaction. In the annual Great Place to Work personnel survey, as much as 92 per cent of Mandatum Life’s personnel in Finland considered their workplace a very good place to work. That is an increase of 4 percentage points from last year’s survey. The results exceeded our expectations and reflect a workplace culture that we can all be proud of. The satisfaction shared by our customers and personnel alike create a solid foundation for the company’s financial success.
For Mandatum Life, 2015 was also a strong year of promoting corporate responsibility. By developing our services, we also helped our customers to further their own social responsibility. In addition to that, we were the first Finnish company to join the international Portfolio Decarbonization Coalition (PDC) network, the goal of which is to encourage investors to reduce their carbon footprint. Capital now briskly moves towards more responsible investments in seeking returns. This will also be reflected in our operations in 2016.”
Key figures 2015
Premiums written, own account: €1,144 million (1,105)
Profit before taxes: €181 million (163)
RoE: 12.7% (11.4)
Solvency ratio: 23.6% (Dec/2014: 22.9)
Return on investments: 6.9% (4.6)
Average number of staff: 521 (509)
Mandatum Life’s result in its entirety is available at www.sampo.com/result
For more information, please contact:
Petri Niemisvirta, CEO: petri.niemisvirta@mandatumlife.fi, tel. +358 10 516 7200
Jukka Kurki, CFO: jukka.kurki@mandatumlife.fi, tel. +358 (0) 50 424 6630
Niina Riihelä, Vice President, Marketing and Communications: niina.riihela@mandatumlife.fi, tel. +358 40 728 1548