Exceptionally good comprehensive income and strong solvency.
Mandatum Life’s result before taxes for January–December 2020 was EUR 154 million (280). Comprehensive income after taxes, taking into account changes in market values, amounted to EUR 213 million (308). The return on equity was 14.4 per cent (23.5), and the fair value reserve stood at EUR 534 million (438) at the end of December. The expense result increased to EUR 27 million (24) in January–December, and the risk result was EUR 38 million (35).
Premiums written on the company’s own account decreased to EUR 1,051 million (1,596). Premiums written on unit-linked insurance amounted to EUR 960 million (1,476). In 2019, a non-recurring item of EUR 400 million resulting from a change in the tax treatment of life insurance products was included in both premium income and claims paid.
The return on Mandatum Life’s investment assets at fair value was 6.5 per cent (9.2) in 2020, and the return on the segregated portfolio’s investment assets at fair value during the same period was 1.5 per cent (6.4).
The investment assets covering Mandatum Life’s original with-profit liabilities on 31 December 2020 totalled EUR 4.8 billion (4.7) at market values. The value of the investments covering the segregated portfolio was EUR 1.0 billion (1.0).
Mandatum Life’s technical provisions stood at EUR 12.3 billion (12.0) at the end of 2020. Unit-linked technical provisions amounted to EUR 8.8 billion (8.1), representing 72 per cent (67) of the total technical provisions. The with-profit technical provisions decreased according to plan in 2020, and amounted to EUR 3.5 billion (3.9) at the end of the year. The insurance portfolios with a high technical rate of interest (4.5 and 3.5 per cent) shrunk by EUR 268 million in the course of 2020 to EUR 1.9 billion.
Overall, Mandatum Life has strengthened its technical provisions by EUR 218 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 2020–2023 is 0.25 per cent. The new discount rate for the years 2022 and 2023 impacted the result negatively by EUR 77 million. The technical rate of interest on the segregated group pension insurance portfolio is 0.0 per cent.
At the end of December 2020, Mandatum Life’s solvency ratio was 188 per cent (194% in 12/2019), and without the application of the transitional provisions, it was 159 per cent (159% in 12/2019).
In 2020, Mandatum Life paid out a total of EUR 395 million (427) in pensions to approximately 59,000 pensioners. A total of approximately 63,000 other claims were also paid out.
Statement by CEO Petri Niemisvirta
“The year 2020 will go down in history for the Covid-19-pandemic and its extensive impacts on society, the economy and people’s daily lives. Despite the altered state of the world, Mandatum Life’s year turned out to be excellent. I am happy with the company’s good result for the whole year, and particularly with the fact that the comprehensive income, which takes into account the fair values in investment operations, rose to an exceptionally high level. The company’s solvency remained strong throughout the year.
We are used to preparing for the future. Our excellent readiness for change allowed the entire personnel to transfer to remote work with one day’s notice on the 13th of March. Well-functioning technology and processes have enabled smooth remote work right through the pandemic.
We were able to serve our customers and respond to their needs in every way possible in an uncertain situation. Record-high customer satisfaction throughout the year is an indication of our success.
Personnel satisfaction has also remained excellent, regardless of the unusual working conditions. The company was selected as the best place to work in Finland and the 10th best place to work in Europe in the large organisations category of the Great Place to Work Institute’s survey. Of our personnel, 95 per cent considered Mandatum Life an excellent place to work.”
Mandatum Life’s key figures 2020
Premiums written, own account: EUR 1,051 million (1,596)
Result before taxes: EUR 154 million (280)
RoE: 14.4% (23.5)
Solvency ratio: 188% (194), and without transitional provisions 159% (159)
Return on investments: 6.5% (9.2) and on the segregated portfolio 1.5% (6.4)
Average number of staff: 576 (563)
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