Sampo Earnings: Strong Top-Line Growth and Continued Quality in Underwriting

In the first quarter of 2024, Sampo Group continued to price ahead of inflation, with rate rises of 5%-6%, versus claims inflation of 4% to 5%, sticking with a premium of 1%. While in this quarter the company has placed more importance on the top line than is typical of Sampo, with 10% currency-adjusted growth, that hasn’t come at the expense of underwriting, with an improvement in its undiscounted combined ratio from 88.4% to 87.3% quarter on quarter. That is despite the absorption of 6% of severe weather claims over the quarter, an increase of 4 percentage points versus the same period in the prior year. Retention in property and casualty has slipped over the year to 89%, a deterioration of 1%. Nonetheless, we think the strength of the business is a bit better than it was last year.