Sampo Group

Annual Report 2011
Nordea
Personnel

Mandatum Life

After a record year in 2010, the year 2011 proved to be challenging in more ways than one. The low levels of confidence in the investment market resulting from the debt crisis in the eurozone made the year difficult both in terms of investment activities and reaching the premiums written targets.

Premiums written lagged behind targets and the 2010 figures. Despite the below target level, premiums written were the second highest ever in the company's history, which, taking market conditions into account, proves that the chosen sales strategy is working. Positive signs included the increase in risk insurance volumes and the premiums written of policies sold through Sampo Bank’s network, which remained at last year’s good level.

Return on investments dropped after two excellent years and was negative. The company’s investment result was weakened especially by the weak trend in share prices, but was partly compensated by the good return on the company’s bonds. During the year, the company did not have investments in debt instruments of countries in crisis. The reserves set up in 2010 to lower the discount rate, made it easier to achieve results in 2011. As low-risk interest rates remain at low levels, the reserves to lower the discount rate were supplemented for 2012.

One of the essential cornerstones for Mandatum Life’s sales strategy is the successful cooperation between the in-house distribution channels that focus on different customer segments and products. Progress has been made in the cooperation between the distribution channels and the cooperation is expected to intensify in the coming year.

In wealth management building on philosophy of absolute return, portfolios were actively protected particularly in the latter part of the year. This significantly helped reduce losses in portfolio value. Investment products offered to customers performed well in the difficult market situation compared to those of competitors. The strong increase in uncertainty and market volatility slightly dampened the willingness of the potential clientele to make decisions. Existing wealth management customers, on the other hand, were not shaken by the market situation, which was evident especially in the increase of net subscriptions also in the second half of 2011.

During the year, Mandatum Life acquired business operations that focus on personnel fund and pension services, including the personnel, into its newly established subsidiary (Innova Personnel Fund and Pension Services Ltd). The new services offered by Innova will further diversify Mandatum Life’s corporate product offering.

An agreement was concluded with Sampo Bank to continue cooperation in distribution at least for the next five years. This enables investments in new product solutions, the first of which were launched already during the autumn of the year under review.

Close cooperation continued between Finland and the Baltic countries. Best practices were propagated into common Mandatum Life practices, and several products were launched simultaneously in the two markets. Uncertainty in the investment market also affected the Baltic markets: premiums written decreased from last year.

Mandatum Life continued to invest strongly in the development of the personnel’s wellbeing, competence, customer orientation and supervisory work. For example, investments in occupational health services reduced the number of absences due to sickness and, as a whole, employee satisfaction in Mandatum Life as an employer rose further.

Mandatum Life's Board of Directors' Report and Financial Statements 2011

Nordea
Personnel