Sampo profit down 23% in 2023 despite fourth-quarter surge

Nordic insurer Sampo reported a 23% drop in pre-tax profit for full year 2023 to €1.48bn on a reported basis, although the fourth quarter closed with a 449% gain at €368m. Adjusted for IFRS 9, profit before taxes increased 84%.

Profit from Sampo’s largest subsidiary If was down 12% for the year to €1.36bn while UK unit Hastings and Nordic insurer Topdanmark reported profit increases.

The group reported a 13% increase in underwriting profit to €1.16bn after a gain of 159% in Q4 to €281m. Sampo achieved its combined ratio target of below 86% across the group, closing the year at 84.6%, with only Hastings higher.

Gross premiums recorded 8% growth in 2022 to €8.87bn. The fourth quarter saw a 12% rise in gross premiums driven by strong pricing trends in the UK, where premiums surged 34%, and growth in the Nordics, where commercial lines were up 7% and industrial 4%.

Sampo said underlying Nordic margin trends remained positive in 2023, with adjusted top line growth 11% across the group.

“Growth was driven mainly by continued high retention, despite rate increases” in the Nordics, CEO Torbjörn Magnusson said.

He added that the UK market was a “stand-out performer”, increasing gross written premiums by 32% in 2023 on the back of substantial rate increases in motor and property. The 1 January 2024 renewals saw significant further rate increases, while underwriters reduced exposure to single large property risks, the company said.

Magnusson said 2023 saw some of the largest single claims on record in the Nordics coupled with elevated claims inflation in the UK, but said underwriting result held up.

“We have made cautious assumptions around claims inflation, even though this appears to be moderating, and avoided the temptation to call a ‘new normal’ on claims frequency after Covid-19,” he said.