Mandatum Life Group's profit for January-March 2011 totalled EUR 44 million (36) before taxes. Profit at fair value, recognising changes in the market values of investment assets, decreased to EUR 13 million (133) after taxes. Both results were impacted by the company's need to prepare for future increases in customer bonuses by adding a further EUR 35 million to its technical provisions. The parent company's profit from unit-linked policies improved from the results seen this time last year, finishing at a positive EUR 1 million (-1).
Premiums written on Mandatum Life Group's own account decreased from those of one year ago to EUR 216 million (348). The difference between the figures of this and last year are mostly due to the transferred responsibilities for group pensions, which are included in last year's figures. However, the company has also seen a decrease in unit-linked premiums written this past year. Mandatum Life's overall market share in Finland decreased to 22.2% (25.3) in direct business and 25.0% (32.8) in unit-linked life insurance.
The return on investment assets was 1.4% (3.9), which ensured the continued strength of Mandatum Life's solvency ratio in January-March 2011. At the end of Q1, the company's solvency ratio was 23.9% (25.8). The EUR 100 million in dividends paid to Sampo Oyj on April 28th, 2011 has already been deducted from the solvency capital.
Sampo Group's expense ratio in life insurance improved to 121.8% (127.8). This expense ratio does not account for all the fees collected to cover expenses. When these fees are taken into account, the expense ratio is 96.8% (102.9). The result of the acquisition year is impacted by the fact that Mandatum Life does not activate its acquisition costs.
Mandatum Life Group's unit-linked technical provisions grew to EUR 3,192 million (3,124), while technical provisions related to with-profit products decreased slightly to EUR 4,383 million (4,410).
Technical provisions related to with-profit products include the additional reserve for future bonuses (35), added in January-March, and the various reserves for decreased discount rates, which were added at the beginning of the year. These additions form EUR 136 million of the total provisions.
Together with the reserves allotted earlier for decreased discount rates and the company's strong solvency, the improved technical provisions increase the likelihood of good results for the end of 2011 and for 2012.
Key figures Q1/2011
Total premiums written, on own account: EUR 216 million (348)
Profit before taxes: EUR 44 million (36)
Return on equity: 5.0% (65.4)
Expense ratio: 121.8 % (127.8)
Solvency ratio: 23.9 % (25.8)
Return on investments: 1.4 % (3.9)
Average number of employees: 503 (461)