Mandatum Life continues to see gains in premium income and market share
Mandatum Life Group's profit for January-September 2012 totalled EUR 98 million (107) before taxes. The profit is burdened by the decreased discount rates used for technical provisions. Comprehensive profit after tax, which includes the changes in the market value of investments, increased to EUR 218 million (-204). Return on investments at fair value was 7.5 per cent (-3.8).
Premium income on Mandatum Life's own account grew 11 per cent, totalling EUR 678 million (612). Unit-linked policies accounted for EUR 545 million (490) of the premium income. Sampo Bank has been a particularly successful distribution channel this year, and is expected to attain the highest premium income in history this year. Premium income from the Baltic countries was EUR 21 million (34). Mandatum Life's overall share of the Finnish market in direct business grew to 25.4 per cent (23.7). The market share in unit-linked insurance was 27.3 per cent (26.3).
Mandatum Life Group's solvency ratio, according to Solvency I regulations, continued to improve as a result of the good fair value return. At the end of the quarter, the company's solvency ratio was 26.0 per cent (20.9), with the parent company's solvency margin almost 6 times the set minimum. Extremely low interest rates together with insurance policies with long-term guaranteed interest present a challenge in terms of meeting the solvency requirements of the upcoming Solvency II regulations. Mandatum Life's adjusted solvency capital is slightly below the capital requirements estimated using the company's internal calculation model.
Mandatum Life Group's expense result for January-September 2012 totalled EUR 3.6 million (6.7). The expense result is expected to continue to rise, but not as high as in the previous year thanks to an increase in sales volume. Sales commissions burden the acquisition year's result due to the fact that Mandatum Life does not activate its acquisition costs. The expense result was also impacted by the increase in staff and by payments related to bonus programs.
The company's unit-linked technical provisions continued to increase to EUR 3,585 million (3,054), making this the third consecutive quarter with record results. Technical provisions related to with-profit products have dropped from the start of the year by almost 90 million, now totalling EUR 4,159 million. Technical provisions related to with-profit products include reserves for decreased discount rates totalling EUR 126 million (108).
Key figures for 1-9/2012
Total premiums written, on own account: EUR 678 million (612)
Profit before taxes: EUR 98 million (107)
Return on equity: 29.9% (–29.3)
Expense ratio: 115.5% (112.1)
Solvency ratio: 26.0% (20.9)
Return on investments: 7.5% (-3.8)
Average number of staff: 541 (517)
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