Sampo Balances Underwriting Quality With Growth and We Think the Former Takes Precedence

Sampo is an efficiently run Nordics-based personal lines insurer that tends to focus on improving its underwriting quality year on year through holding on to customers for longer and therefore paying less in acquisition costs, the digitalization of its operations and extraction of expenses, scale and negotiation power with its partners, and through an ability to select lower-cost customers in terms of claims or customers that are willing to pay that little bit more in price. Sampo has proved this ability year on year and tends to invest a little under EUR 100 million a year to achieve these outcomes. We think the savings the company has generated from these investments have more than covered the cost of capital and more than covered the existing returns the business was generating. In other words, we believe these investments have been value accretive.