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Notes to the Group’s Financial Statements

Select note 1–41
1 Insurance premiums written
P&C insurance
EURm 2014 2013
Premiums from insurance contracts
Premiums written, direct insurance 4,550 4,674
Premiums written, assumed reinsurance 84 94
Premiums written, gross 4,634 4,768
Reinsurers' share of premiums written -170 -208
Premiums written, net 4,464 4,560
Change in unearned premium provision -3 -46
Reinsurers' share -3 -10
Change in unearned premium provision, net -6 -55
Premiums earned, total 4,457 4,505
Life insurance
EURm 2014 2013
Premiums from insurance contracts
Premiums written, direct insurance 658 624
Premiums written, assumed reinsurance 4 4
Insurance contracts total, gross 661 628
Premium revenue ceded to reinsurers on insurance contracts issued -5 -5
Insurance contracts total, net 656 623
Investment contracts 449 440
Premiums written, net 1) 1,105 1,063
Elimination items between segments -24 -6
Group, total 5,544 5,618
¹) The change in unearned premiums is presented in note 4 "The change in insurance and investment liabilities".
Specification of premiums written in Life insurance
EURm 2014 2013
Premiums from insurance contracts
Premiums from contracts with discretionary participation feature 143 153
Premiums from unit-linked contracts 513 469
Premiums from other contracts 2 1
Total 658 624
Assumed reinsurance 4 4
Premiums from investment contracts
Premiums from contracts with discretionary participation feature 1 0
Premiums from unit-linked contracts 448 440
Total 449 440
Insurance and investment contracts, total 1,110 1,068
Reinsurers' share -5 -5
Premiums written, total 1,105 1,063
Single and regular premiums from direct insurance
Regular premiums, insurance contracts 282 291
Single premiums, insurance contracts 375 333
Single premiums, investment contracts 449 440
Total 1,106 1,064
2 Net income from investments
P&C insurance
EURm 2014 2013
Financial assets
Derivative financial instruments
Gains/losses -28 -5
Financial assets designated as at fair value through p/l
Equity securities
Gains/losses 0 6
Dividend income 0 0
Total 0 7
Loans and receivables
Interest income 21 22
Financial assets available-for-sale
Debt securities
Interest income 247 317
Impairment losses -14 -0
Gains/losses 18 13
Equity securities
Gains/losses 134 57
Impairment losses -5 -4
Dividend income 44 37
Total 424 419
Total from financial assets 417 443
Other assets
Investment properties
Gains/losses -0 -0
Other -0 -1
Total from other assets -1 -1
Expense on other than financial liabilities -4 -4
Effect of discounting annuities -45 -55
Fee and commission expenses
Asset management -14 -15
P&C insurance, total 353 368
Included in gains/losses from financial assets available-for-sale is a net gain of EURm -133 (-63) transferred from the fair value reserve.
Life insurance
EURm 2014 2013
Financial assets
Derivative financial instruments
Gains/losses -97 6
Financial assets designated as at fair value through p/l
Debt securities
Interest income 1 1
Gains/losses 1 0
Equity securities
Gains/losses 0 0
Dividend income 0 0
Total 2 2
Investments related to unit-linked contracts
Debt securities
Interest income 58 46
Gains/losses -10 -27
Equity securities
Gains/losses 213 210
Dividend income 19 13
Loans and receivables
Interest income 3 -1
Other financial assets
Gains/losses -16 29
Total 267 270
Loans and receivables
Interest income 2 1
Gains/losses 42 -5
Total 44 -4
Financial assets available-for-sale
Debt securities
Interest income 98 115
Gains/losses 49 2
Equity securities
Gains/losses 107 111
Impairment losses -41 -33
Dividend income 89 87
Total 302 282
Total financial assets 518 555
Other assets
Investment properties
Gains/losses 3 1
Other 5 2
Total other assets 8 2
Net fee income
Asset management -14 -13
Fee income 27 25
Total 13 11
Life insurance, total 540 569
Included in gains/losses from financial assets available-for-sale is a net gain of EURm 10 (70) transferred from the fair value reserve.
Holding
EURm 2014 2013
Financial assets
Derivative financial instruments
Gains/losses 1 8
Loans and receivables
Interest income 0 1
Gains/losses -4 -6
Total -4 -5
Financial assets available-for-sale
Debt securities
Interest income 22 16
Gains/losses 7 -
Equity securities
Gains/losses 2 5
Impairment losses -1 -0
Dividend income 2 1
Total 32 22
Total financial assets 29 25
Other assets
Investment properties
Gains/losses - 1
Other -0 -0
Total other assets -0 1
Holding, total 29 26
Included in gains/losses from financial assets available for-sale is a net gain of EURm 2 (4) transferred from the fair value reserve.
Elimination items between segments -23 -18
EURm 2014 2013
Group, total 898 945
The changes in the fair value reserve are disclosed in the Statement of changes in equity. Other income and expenses comprise rental income, maintenance expenses and depreciation of investment property. All the income and expenses arising from investments are included in Net income from investments. Gains/losses include realised gains/losses on sales, unrealised and realised changes in fair values and exchange differences. Unrealised fair value changes for financial assets available-for-sale are recorded in other comprehensive income and presented in the fair value reserve in equity. The effect of discounting annuities in P&C insurance is disclosed separately. The provision for annuities is calculated in accordance with actuarial principles taking anticipated inflation and mortality into consideration, and discounted to take the anticipated future return on investments into account. To cover the costs for upward adjustment of annuity provisions required for the gradual reversal of such discounting, an anticipated return on investments is added to annuity results.
3 Claims incurred
P&C insurance
2014 2013
EURm Gross Ceded Net Gross Ceded Net
P&C insurance
Claims cost attributable to current-year operations
Claims paid -1,643 14 -1,629 -1,718 21 -1,697
Change in provision for claims outstanding (incurred and reported losses) -695 15 -680 -715 19 -696
Change in provision for claims outstanding (incurred but not reported losses, IBNR) -594 11 -583 -633 13 -620
Claims-adjustment costs -8 - -8 -4 0 -4
Change in claims provision for annuities -10 - -10 -7 0 -7
Total claims cost attributable to current-year operations -2,951 41 -2,910 -3,078 53 -3,025
Claims costs attributable to prior-year operations
Claims paid -1,199 181 -1,019 -1,274 165 -1,108
Annuities paid -255 0 -255 -77 0 -77
Change in provision for claims outstanding (incurred and reported losses) 798 -183 615 915 -140 775
Change in provision for claims outstanding (incurred but not reported losses, IBNR) 687 -21 666 508 -18 489
Total claims cost attributable to prior-year operations 32 -24 8 71 7 79
Insurance claims paid
Claims paid -2,843 195 -2,648 -2,991 186 -2,805
Annuities paid -127 - -127 -129 - -129
Total claims paid -2,969 195 -2,774 -3,120 186 -2,935
Change in provision for claims outstanding
Change in provision for claims outstanding (incurred and reported losses) 103 -168 -65 199 -121 79
Change in provision for claims outstanding (incurred but not reported losses, IBNR) -88 -10 -98 -126 -5 -131
Change in claims provision for annuities 43 0 43 45 0 45
Claims-adjustment costs -8 - -8 -4 - -4
Total change in provision for claims outstanding 50 -178 -128 114 -126 -11
P&C insurance, total -2,919 17 -2,902 -3,006 60 -2,946
The provision for annuities is valued in accordance with normal actuarial principles taking anticipated inflation and mortality into consideration, and discounted to take the anticipated future investment return into account. To cover costs for the costs for the upward adjustment of annuity provisions required for the gradual reversal of such discounting, an anticipated return is added to the annuity results. Provisions for incurred but not reported losses pertaining to annuities in Finland are discounted. The provisions in 2014 amounted to EURm 257 (282). The non-discounted value was EURm 388 (453). The exchange effect on the discounted provisions was an increase of EURm 16. The real decrease EURm 26 is explained by the model adjustment for Motor Third Party Liability and Workers' Compensation insurances.
Interest rate used in calculating the technical provisions of annuities (%)
2014 2013
Sweden 1,75% 1,19%
Finland 2,00% 2,50%
Denmark 1,47% 2,00%
Life insurance
Claims paid Change in provision for claims outstanding Claims incurred
EURm 2014 2013 2014 2013 2014 2013
Insurance contracts
Life insurance
Contracts with discretionary participation feature (DPF) -45 -50 1 -0 -44 -50
Other contracts -0 -0 -12 -0 -12 -0
Unit-linked contracts -177 -160 0 0 -177 -160
Total -223 -211 -11 0 -233 -210
Pension insurance
Contracts with discretionary participation feature (DPF) -350 -344 35 24 -316 -320
Unit-linked contracts -13 -12 -23 -16 -36 -29
Total -364 -357 12 8 -351 -349
Assumed reinsurance -1 -1 1 -1 0 -2
Insurance contracts total, gross -587 -568 3 7 -585 -560
Reinsurers´ share 3 3 -0 -1 3 2
Insurance contracts total, net -585 -565 3 7 -582 -559
Investment contracts
Capital redemption policies
Contracts with discretionary participation feature (DPF) -0 -1 - - -0 -1
Unit-linked contracts -294 -172 - - -294 -172
Investment contracts, total -294 -173 - - -294 -173
Life insurance, total -879 -738 3 7 -876 -731
Claims paid by type of benefit
EURm 2014 2013
Insurance contracts
Life insurance
Surrender benefits -8 -10
Death benefits -21 -21
Maturity benefits -5 -9
Loss adjustment expenses -0 -0
Other -10 -10
Total -45 -50
Life insurance, unit-linked
Surrender benefits -114 -115
Death benefits -50 -34
Maturity benefits -13 -12
Loss adjustment expenses -0 0
Total -177 -160
Pension insurance
Pension payments -319 -319
Surrender benefits -25 -20
Death benefits -6 -5
Loss adjustment expenses -0 -0
Total -350 -344
Pension insurance, unit-linked
Surrender benefits -10 -9
Death benefits -3 -4
Other -0 -0
Total -13 -12
Assumed reinsurance -1 -1
Insurance contracts total, gross -587 -569
Reinsurers´ share 3 3
Insurance contracts total, net -585 -565
Investment contracts
Capital redemption policy, with-profit
Surrender benefits -0 -0
Loss adjustment expenses - -0
Total -0 -1
Investment contracts
Capital redemption policy, unit-linked
Surrender benefits -316 -170
Loss adjustment expenses 22 -2
Total -294 -172
Investment contracts total, gross -295 -173
Claims paid total, gross -882 -741
Claims paid total, net -879 -738
Elimination items between segments 8 -
EURm 2014 2013
Group, total -3,771 -3,677
4 Change in liabilities for insurance and investment contracts
P&C insurance
EURm 2014 2013
Change in unearned premium provision -3 -46
Reinsurers' share -3 -10
Change in unearned premium provision, net -6 -55
Life insurance
EURm 2014 2013
Insurance contracts
Life-insurance
Contracts with discretionary participation feature (DPF) 17 19
Unit-linked contracts -292 -232
Total -275 -213
Pension insurance
Contracts with discretionary participation feature (DPF) 144 102
Unit-linked contracts -177 -183
Total -34 -80
Assumed reinsurance 2 -3
Insurance contracts total -306 -296
Investment contracts
Capital redemption policy
Contracts with discretionary participation feature (DPF) -4 2
Unit-linked contracts -188 -353
Investment contracts, total -192 -352
Change in liabilities for insurance and investment contracts in total, net -499 -648
Elimination items between segments 16 6
Group, total -489 -697
5 Staff costs
P&C insurance
EURm 2014 2013
Staff costs
Wages and salaries -374 -390
Cash-settled share-based payments -18 -22
Pension costs
- defined contribution plans -47 -51
- defined benefit plans (Note 31) -24 -22
Other social security costs -75 -79
P&C insurance, total -537 -564
Life insurance
EURm 2014 2013
Staff costs
Wages and salaries -33 -33
Cash-settled share-based payments -4 -5
Pension costs - defined contribution plans -5 -5
Other social security costs -4 -3
Life insurance, total -46 -46
Holding
EURm 2014 2013
Staff costs
Wages and salaries -8 -8
Cash-settled share-based payments -9 -12
Pension costs - defined contribution plans -2 -3
Other social security costs -0 -1
Holding, total -20 -23
EURm 2014 2013
Group, total -603 -634
More information on share-based payments in note 36 Incentive schemes.
6 Other operating expenses
P&C insurance
EURm 2014 2013
IT costs -101 -100
Other staff costs -15 -16
Marketing expenses -42 -44
Depreciation and amortisation -15 -11
Rental expenses -48 -53
Change in deferred acquisition costs -14 3
Direct insurance comissions -171 -180
Commissions on reinsurance ceded 14 18
Other -111 -108
P&C insurance, total -502 -493
Life insurance
EURm 2014 2013
IT costs -14 -12
Other staff costs -2 -2
Marketing expenses -3 -3
Depreciation and amortisation -2 -3
Rental expenses -3 -3
Direct insurance comissions -10 -10
Comissions of reinsurance assumed -2 0
Commissions on reinsurance ceded 2 2
Other -25 -23
Life insurance, total -60 -54
Item Other for P&C and Life Insurance includes e.g. expenses related to communication, external services and other administrative expenses.
Holding
EURm 2014 2013
IT costs -1 -0
Marketing expenses -1 -2
Rental expenses -1 -1
Other -9 -8
Holding, total -12 -11
Item Other includes e.g. consultancy fees and rental and other administrative expenses.
Elimination items between segments 16 16
EURm 2014 2013
Group, total -558 -543
7 Result analysis of P&C insurance
EURm 2014 2013
Insurance premiums earned 4,457 4,505
Claims incurred -3,162 -3,215
Operating expenses -745 -755
Other insurance technical income and expense 0 2
Allocated investment return transferred from the non-technical account 37 65
Technical result 588 601
Net investment income account 378 405
Allocated investment return transferred to the technical account -82 -120
Other income and expense 47 43
Operating result 931 929
Specification of activity-based operating expenses included in the income statement
EURm 2014 2013
Claims-adjustment expenses (Claims paid) -260 -269
Acquisition expenses (Operating expenses) -499 -525
Joint administrative expenses for insurance business (Operating expenses) -246 -245
Administrative expenses pertaining to other technical operations (Operating expenses) -27 -26
Asset management costs (Investment expenses) -14 -15
Total -1,046 -1,081
8 Performance analysis per class of P&C insurance
EURm Accident
and
health		 Motor, third
party
liability		 Motor,
other
classes		 Marine,
air and
transport		 Fire and
other damage
to property		 Third party
liability		 Credit
insurance
Premiums written, gross
2014 774 657 1,309 130 1,317 212 2
2013 772 689 1,334 148 1,367 216 3
Premiums earned, gross
2014 769 664 1,288 130 1,330 211 3
2013 757 695 1,308 147 1,359 211 2
Claims incurred, gross 1)
2014 -554 -523 -885 -86 -881 -84 -0
2013 -560 -508 -918 -93 -966 -105 -1
Operating expenses, gross 2)
2014 -133 -140 -192 -22 -213 -34 -0
2013 -135 -144 -195 -26 -207 -31 -0
Profit/loss from ceded reinsurance
2014 -13 2 -2 -9 -83 -31 0
2013 -2 -2 -2 -10 -81 -32 0
Technical result before investment return
2014 69 3 209 14 152 62 2
2013 60 41 193 18 105 42 1
EURm Legal
expenses		 Other Total
direct
insurance		 Reinsurance
assumed		 Elimination Total
Premiums written, gross
2014 41 112 4,555 84 -5 4,634
2013 40 112 4,680 94 -6 4,768
Premiums earned, gross
2014 41 111 4,547 89 -5 4,631
2013 39 113 4,631 97 -6 4,723
Claims incurred, gross 1)
2014 -29 -72 -3,115 -71 6 -3,180
2013 -26 -48 -3,226 -56 6 -3,276
Operating expenses, gross 2)
2014 -7 -16 -756 -15 13 -758
2013 -7 -14 -760 -24 11 -773
Profit/loss from ceded reinsurance
2014 0 -8 -144 -4 5 -143
2013 -0 -14 -144 -2 6 -140
Technical result before investment return
2014 6 15 533 -1 19 551
2013 6 37 501 16 17 534
1) Activity-based operating costs EURm 260 (269) have been allocated to claims incurred.
2) Includes other technical income EURm 27 (28) and other technical expenses EURm 27 (26).
9 Earnings per share
EURm 2014 2013
Earnings per share
Profit or loss attributable to the equity holders of the parent company 1,540 1,452
Weighted average number of shares outstanding during the period 560 560
Earnings per share (EUR per share) 2.75 2.59
10 Financial assets and liabilities
Financial assets and liabilities have been categorised in accordance with IAS 39.9. In the table are also included interest income and expenses, realised and unrealised gains and losses recognised in P/L, impairment losses and dividend income arising from those assets and liabilities. The financial assets in the table include balance sheet items Financial assets and Cash and cash equivalents.
2014
EURm Carrying
amount		 Interest
inc./exp.		 Gains /
losses		 Impairment
losses		 Dividend
income
FINANCIAL ASSETS
Financial assets at fair value through p/l
Derivative financial instruments 79 -2 - -
Financial assets designated as at fair value through p/l 48 1 1 - 0
Loans and receivables 2,340 23 38 - -
Financial assets available-for-sale 16,537 345 317 -62 135
Financial assets, group total 19,004 366 356 -62 135
FINANCIAL LIABILITIES
Financial liabilities at fair value through p/l
Derivative financial instruments 120 - -
Other financial liabilities 2,302 -53 24
Financial liabilities, group total 2,423 -53 24
2013
EURm Carrying
amount		 Interest
inc./exp.		 Gains /
losses		 Impairment
losses		 Dividend
income
FINANCIAL ASSETS
Financial assets at fair value through p/l
Derivative financial instruments 78 1 37 - -
Financial assets designated as at fair value through p/l 50 1 7 - 0
Loans and receivables 1,051 23 -11 - -
Financial assets available-for-sale 16,430 427 187 -38 125
Financial assets, group total 17,609 453 221 -38 125
FINANCIAL LIABILITIES
Financial liabilities at fair value through p/l
Derivative financial instruments 53 - -
Other financial liabilities 2,140 -73 16
Financial liabilities, group total 2,193 -73 16
11 Property, plant and equipment
P&C insurance
EURm 2014
Equipment		 2013
Equipment
At 1 Jan.
Cost 64 90
Accumulated depreciation -48 -74
Net carrying amount 16 16
At 31 Dec.
Cost 63 64
Accumulated depreciation -46 -48
Net carrying amount 16 16
Life insurance
2014 2013
EURm Land and
buildings		 Equipment Total Land and
buildings		 Equipment Total
At 1 Jan.
Cost 4 8 12 4 8 12
Accumulated depreciation -1 -6 -6 -1 -6 -6
Net carrying amount 4 2 5 4 2 5
At 31 Dec.
Cost 4 8 12 4 8 12
Accumulated depreciation -1 -6 -7 -1 -6 -6
Net carrying amount 3 1 5 4 2 5
Holding
2014 2013
EURm Land and
buildings		 Equipment Total Land and
buildings		 Equipment Total
At 1 Jan.
Cost 2 5 7 2 5 7
Accumulated depreciation -1 -2 -3 -1 -2 -3
Net carrying amount 1 3 4 1 3 4
At 31 Dec.
Cost 2 5 7 2 5 7
Accumulated depreciation -1 -3 -4 -1 -2 -3
Net carrying amount 1 2 3 1 3 4
EURm 2014 2013
Group, total 24 25
Equipment in different segments comprise IT equipment and furniture.
12 Investment property
P&C insurance
EURm 2014 2013
At 1 Jan.
Cost 29 34
Accumulated depreciation -7 -7
Accumulated impairment losses -0 -0
Net carrying amount 22 27
Opening net carrying amount 22 27
Additions 0 -5
Disposals -1 -1
Depreciation -1 -1
Impairment losses 0 1
Reversal of impairment losses -1 -1
Exchange differences 0 2
Closing net carrying amount 20 20
At 31 Dec.
Cost 29 29
Accumulated depreciation -8 -7
Accumulated impairment losses -1 -0
Net carrying amount 20 22
Rental income from investment property 2 3
Property rented out under operating lease
Non-cancellable minimum rental
- not later than one year 1 1
- later than one year and not later than five years 1 1
- later than five years - 0
Total 2 2
Expenses arising from investment property
- direct operating expenses arising from investment property generating rental income during the period -1 -2
- direct operating expenses arising from investment property not generating rental income during the period -1 -1
Total -2 -2
Fair value of investment property at 31 Dec. 22 23
Life insurance
EURm 2014 2013
At 1 Jan.
Cost 172 157
Accumulated depreciation -48 -45
Accumulated impairment losses -17 -16
Net carrying amount 107 95
Opening net carrying amount 107 95
Additions 74 17
Disposals -0 -2
Depreciation -3 -3
Impairment losses -0 -1
Closing net carrying amount 179 107
At 31 Dec.
Cost 247 172
Accumulated depreciation -51 -48
Accumulated impairment losses -17 -17
Net carrying amount 179 107
Rental income from investment property 17 13
Property rented out under operating lease
Non-cancellable minimum rental
- not later than one year 10 6
- later than one year and not later than five years 6 14
- later than five years 0 2
Total 17 22
Expenses arising from investment property
- direct operating expenses arising from investment property generating rental income during the period -8 -7
- direct operating expenses arising from investment property not generating rental income during the period -1 -2
Total -10 -9
Fair value of investment property at 31 Dec. 196 125
Elimination items between segments -4 -4
EURm 2014 2013
Group, total 195 125
Fair values for the Group's investment property are entirely determined by the Group based on the market evidence. The determination and hierarchy of financial assets and liabilities at fair value is disclosed in note 17. Based on the principles of this determination, the investment property falls under level 2.
The premises in investment property for different segments are leased on market-based, irrevocable contracts. The lengths of the contracts vary from those for the time being to those for several years.
13 Intangible assets
P&C insurance
2014
EURm Goodwill *) Other
intangible
assets		 Total
At 1 Jan.
Cost 567 31 598
Accumulated amortisation - -8 -8
Net carrying amount 567 23 590
At 31 Dec.
Cost 535 24 559
Accumulated amortisation - -5 -5
Net carrying amount 535 20 554
2013
EURm Goodwill *) Other
intangible
assets		 Total
At 1 Jan.
Cost 585 27 612
Accumulated amortisation - -6 -6
Net carrying amount 585 13 606
At 31 Dec.
Cost 567 31 598
Accumulated amortisation - -8 -8
Net carrying amount 567 23 590
*) The change in the cost is due to exchange differences.
Life insurance
2014 2013
EURm Goodwill Other
intangible
assets		 Total Goodwill Other
intangible
assets		 Total
At 1 Jan.
Cost 153 43 196 153 42 195
Accumulated amortisation - -34 -34 - -31 -31
Net carrying amount 153 9 162 153 11 164
At 31 Dec.
Cost 153 43 196 153 43 196
Accumulated amortisation - -36 -36 - -34 -34
Net carrying amount 153 7 160 153 9 162
EURm 2014 2013
Group, total 714 751
Other intangible assets in all segments comprise mainly IT software.
Depreciation and impairment losses are included in the income statement item Other operating expenses.
Testing goodwill for impairment
Goodwill is tested for impairment in accordance with IAS 36 Impairment of assets. No impairment losses have been recognised based on these tests.
For the purpose of testing goodwill for impairment, Sampo determines the recoverable amount of its cash-generating units, to which goodwill has been allocated, on the basis of value in use. Sampo has defined these cash-generating units as If Group and Mandatum Life.
The recoverable amounts for If have been determined by using a discounted cash flow model. The model is based on Sampo’s management’s best estimates of both historical evidence and economic conditions such as volumes,interest rates, margins, capital structure and income and cost development. The value in use model for Mandatum Life is greatly influenced by the long-term development of insurance liabilities, affecting e.g. the required solvency capital and thus the recoverable amount. That is why the forecast period is longer for Mandatum Life, 10 years. The derived cash flows were discounted at the pre-tax rates of the weighted average cost of capital which for If was 7.7 % and for Mandatum Life 8.3 %. These are somewhat lower than last year due to the decrease in interest rates.
Forecasts for If, approved by the management, cover years 2015 – 2016. The cash flows beyond that have been extrapolated using a 2 % growth rate. A 2 % growth rate for years beyond 2024 has been used for the for Mandatum Life as well, as it is believed to be close to the anticipated inflation.
In Mandatum Life, the recoverable amount exceeds its carrying amount by some EURm 450. With the calculation method used, e.g. an increase of about 2.7 % in the weighted average cost of capital could lead to a situation where the recoverable amount of the entity would equal its carrying amount.
As for the If Group, the management believes that any reasonably possible change in any of these key assumptions would not cause the aggregate carrying amount to exceed the aggregate recoverable amount.
14 Investment in associates
Associates that have been accounted for by the equity method at 31 Dec. 2014
EURm

Name		 Domicile Carrying amount Fair
value*)		 Interest
held %
Nordea Bank Abp Sweden 7,065 8,325 21.25
Topdanmark A/S Denmark 371 846 30.41
Autovahinkokeskus Oy Finland 3 35.54
CAP Group AB Sweden 2 21.98
Urzus Group AS Norway 2 28.57
Svithun Assuranse AS (Norway) Norway 1 33.00
Watercircles Skandinavia AS (Norway) Norway 3 39.57
Contemi Holding AS Norway 0 28.57
Associates that have been accounted for by the equity method at 31 Dec. 2013
EURm

Name		 Domicile Carrying amount Fair
value*)		 Interest
held %
Nordea Bank Abp Sweden 6,906 8,413 21.25
Topdanmark A/S Denmark 363 603 27.98
Autovahinkokeskus Oy Finland 3 35.50
Consulting AB Lennemark & Andersson Sweden 1 22.00
Urzus Group AS Norway 2 28.60
Svithun Assuranse AS (Norway) Norway 1 33.00
Watercircles Skandinavia AS (Norway) Norway 4 39.60
*) Published price quatation
Changes in investments in associates
2014 2013
EURm Nordea Other associates Total Nordea Other associates Total
At beginning of year 6,906 375 7,282 6,687 362 7,049
Share of loss/profit 680 54 735 635 51 686
Additions - - 0 - 3 3
Disposals -370 -0 -370 -293 -0 -293
Changes in the equity of associates -151 -47 -198 -123 -4 -128
Exchange differences - -1 -1 - -36 -36
At end of year 7,065 382 7,447 6,906 375 7,282
At 31 Dec. 2014, the carrying amount of investments in associates included goodwill EURm 1,101 (1,102), including goodwill from the Nordea acquisition EURm 978 (978).
Sampo's holding in Nordea
Nordea is an universal bank with positions within corporate merchant banking as well as retail banking and private banking. With approximately 1.400 branches, call centers in all Nordic countries and an e-bank, Nordea also has a large distribution network for customers in the Nordic and Baltic sea region.
Financial information on Nordea
EURm 2014 2013
Assets 669,342 630,434
Liabilities 639,505 601,225
Revenue 10,224 9,891
Other comprehensive income items -1,042 -499
Comprehensive income statement 2,290 2,617
Dividend income from the associate during the financial year 370 293
Sampo's share of Nordea's loss/profit consists of the following as of 31 Dec. 2013:
EURm 2014 2013
Share of loss/profit of the associate 708 662
Amortisation of the customer relations -35 -35
Change in deferred tax 8 8
Share of the loss/profit of an associate 680 635
15 Financial assets
Group's financial assets comprise investments in derivatives, financial assets designated as at fair value through p/l, loans and receivables, available-for-sale financial assets and investments in subsidiaries. The Holding segment includes also investments in subsidiaries.
The Group uses derivative instruments for trading and for hedging purposes. The derivatives used are foreign exchange, interest rate and equity derivatives. Fair value hedging has been applied during the financial year both in P&C and Life insurance.
EURm 2014 2013
P&C insurance
Derivative financial instruments 42 5
Loans and receivables 238 246
Financial assets available-for-sale 10,741 11,014
P&C insurance, total 11,021 11,265
Life insurance
Derivative financial instruments 3 33
Financial assets designated as at fair value through p/l 48 48
Loans and receivables 27 19
Financial assets available-for-sale 5,587 5,023
Life insurance, total 5,665 5,122
Holding
Derivative financial instruments 34 41
Loans and receivables 1 1
Financial assets available-for-sale 555 737
Investments in subsidiaries 2,370 2,370
Holding, total 2,959 3,148
Elimination items between segments -2,715 -2,712
Group, total 16,930 16,824
P&C insurance
Derivative financial instruments
2014 2013
Contract/ Fair value Contract/ Fair value
EURm notional
amount		 Assets Liabilities notional
amount		 Assets Liabilities
Derivatives held for trading
Interest rate derivatives
OTC derivatives
Intrerest rate swaps 68 - -2 1,165 - 4
Exchange traded derivatives
Interest rate futures 85 - -1 85 1 1
Total interest rate derivatives 153 - -3 1,250 1 5
Foreign exchange derivatives
OTC derivatives
Currency forwards 2,714 41 20 2,147 4 20
Currency options, bought and sold 294 2 1 42 0 -
Total foreign exchange derivatives 3,008 42 21 2,189 4 20
Total derivatives held for trading 3,162 42 18 3,439 5 25
Other financial assets
EURm 2014 2013
Loans and receivables
Deposits with ceding undertakings 1 1
Other 237 245
Total loans and receivables 238 246
Financial assets available-for-sale
Debt securities
Issued by public bodies 1,606 1,327
Certificates of deposit issued by banks 3,031 2,741
Other debt securities 4,551 5,462
Total debt securities 9,188 9,531
Equity securities
Listed 1,365 1,277
Unlisted 188 207
Total 1,553 1,483
Total financial assets available-for-sale 10,741 11,014
Financial assets available-for-sale for P&C insurance include impairment losses EURm 243 (242).
P&C insurance, total financial assets 11,021 11,265
Life insurance
Derivative financial instruments
2014 2013
Contract/ Fair value Contract/ Fair value
EURm notional
amount		 Assets Liabilities notional
amount		 Assets Liabilities
Derivatives held for trading
Interest rate derivatives
OTC derivatives
Interest rate swaps 1,443 - 19 5,978 25 7
Credit risk swaps 577 - 1 508 0 2
Total 2,019 - 20 6,486 25 10
Foreign exchange derivatives
OTC derivatives
Currency forwards 1,184 1 14 955 7 1
Currency options, bought and sold 193 2 1 0 0 0
Total foreign exchange derivatives 1,377 3 15 955 7 1
Equity derivatives
OTC derivatives
Equity and equity index options 1 0 0 1 0 0
Total derivatives held for trading 3,398 3 35 7,441 32 11
Derivatives held for hedging
Fair value hedges
Currency forwards 583 0 50 501 1 0
Interest rate swaps 0 0 0
Total 583 0 50 501 1 0
Total derivatives held for hedging 583 0 50 501 1 0
Total derivatives 3,981 3 86 7,942 33 11
Fair value hedges
Fair value hedging is used to hedge a proportion of foreign exchange and interest risk in available-for-sale financial assets. The interest elements of forward contracts have been excluded from hedging relationships in foreign exchange hedges. Net result from exchange derivatives designated as fair value hedges amounted to EURm -74 (18). Net result from hedged risks in fair value hedges of available for sale financial assets amounted to EURm 74 (-18).
Cash flow hedges
The interest rate derivatives hedging cash flows fell due in 2013 and no new cash flow hedges have been started.
Other financial assets
EURm 2014 2013
Financial assets designated as at fair value
through p/l
Debt securities
Issued by public bodies 1 11
Issued by banks 4 35
Other debt securities 43 -
Total debt securities 47 46
Listed equity securities 2 2
Total financial assets designated as at fair value
through p/l		 48 48
Loans and receivables
Deposits with ceding undertakings - 1
Loans 27 18
Total loans and receivables 27 19
Financial assets available-for-sale
Debt securities
Issued by public bodies 388 727
Issued by banks 889 632
Other debt securities 1,619 1,548
Total debt securities 2,895 2,907
Equity securities
Listed 1,852 1,379
Unlisted 839 737
Total 2,691 2,116
Total financial assets available-for-sale 5,587 5,023
Financial assets available-for-sale for life insurance include impairment losses EURm 41 (33).
Life insurance, total financial assets 5,665 5,122
Financial assets available for sale / debt securities: Debt securities available for sale include EURm 1,963 (2,553) investments in bonds and EURm 932 (354) investments in money market instruments.
Financial assets available for sale /shares and participations: Listed equity securities include EURm 632 (641) listed equities. Unlisted equity securities include EURm 708 (640) investments in capital trusts.
Holding
Derivative financial instruments
2014 2013
Contract/ Fair value Contract/ Fair value
EURm notional
amount		 Assets Liabilities notional
amount		 Assets Liabilities
Derivatives held for trading
Interest derivatives
OTC-derivatives
Interest rate swaps 800 23 - 800 26 -
Credit risk swaps - - - 20 0 -
Total interest derivatives 800 23 0 820 26 -
Foreign exchange derivatives
OTC-derivatives
Currency forwards 3 1 0 21 0 1
Equity derivatives
Exchange traded derivatives
Equity and euqity index options 69 10 11 88 14 16
Total derivatives 872 34 11 930 41 18
Other financial assets
EURm 2014 2013
Loans and receivables
Deposits 1 1
Financial assets available-for-sale
Debt securities
Certificates of deposit issued by banks 110 350
Other debt securities 360 360
Total debt securities 470 709
Equity securities
Listed 41 7
Unlisted 45 21
Total 85 28
Total financial assets available-for-sale 555 737
Financial assets available-for-sale for Holding business do not include impairment losses.
Investments in subsidiaries 2,370 2,370
Holding, total financial assets 2,959 3,148
Elimination items between segments -2,715 -2,712
EURm 2014 2015
Group, total 16,930 16,824
16 Fair values
2014 2013
EURm Fair value Carrying
amount		 Fair value Carrying
amount
Financial assets, group
Financial assets 16,933 16,930 16,827 16,824
Investments related to unit-linked contracts 5,259 5,259 4,616 4,616
Other assets 79 79 17 17
Cash and cash equivalents 2,071 2,074 779 785
Total 24,343 24,342 22,240 22,242
Financial liablities, group
Financial liabilities 2,517 2,423 2,273 2,193
Other liabilities 90 90 26 26
Total 2,607 2,513 2,299 2,219
In the table above are presented fair values and carrying amounts of financial assets and liabilities. The detailed measurement bases of financial assets and liabilities are disclosed in Group Accounting policies.
The fair value of investment securities is assessed using quoted prices in active markets. If published price quotations are not available, the fair value is assessed using discounting method. Values for the discount rates are taken from the market’s yield curve.
The fair value of the derivative instruments is assessed using quoted market prices in active markets, discounting method or option pricing models.
The fair value of loans and other financial instruments which have no quoted price in active markets is based on discounted cash flows, using quoted market rates. The market’s yield curve is adjusted by other components of the instrument, e.g. by credit risk.
The fair value for short-term non-interest-bearing receivables and payables is their carrying amount.
Disclosed fair values are "clean" fair values, i.e. less interest accruals.
17 Determination and hierarchy of fair values
A large majority of Sampo Group's financial assets are valued at fair value. The valuation is based on either published price quatations or valuation techniques based on market observable inputs, where available. For a limited amount of assets the value needs to be determined using other techniques. The financial instruments measured at fair value have been classified into three hierarchy levels in the notes, depending on e.g. if the market for the instrument is active, or if the inputs used in the valuation technique are observable.
On level 1, the measurement of the instrument is based on quoted prices in active markets for identical assets or liabilities.
On level 2, inputs for the measurement of the instrument include also other than quoted prices observable for the asset or liability, either directly or indirectly by using valuation techniques.
EURm Level 1 Level 2 Level 3 Total
FINANCIAL ASSETS 31.12.2014
Derivative financial instruments
Interest rate swaps - 24 - 24
Foreign exchange derivatives - 46 - 46
Equity derivatives - 10 - 10
- 79 - 79
Financial assets designated at fair value through profit or loss
Equity securities 2 - - 2
Debt securities 19 27 - 47
21 27 - 48
Financial assets related to unit-linked insurance
Equity securities 449 8 16 472
Debt securities 543 645 24 1,212
Derivative financial instruments 2,464 896 57 3,417
Mutual funds - 9 - 9
3,456 1,558 96 5,110
Financial assets available-for-sale
Equity securities 1,658 - 228 1,887
Debt securities 8,086 4,037 77 12,200
Mutual funds 1,595 106 748 2,450
11,340 4,143 1,054 16,537
Total financial assests measured at fair value 14,817 5,808 1,150 21,775
FINANCIAL LIABILITIES 31.12.2014
Derivative financial instruments
Interest rate derivatives 2 21 - 23
Foreign exchange derivatives - 87 - 87
Equity derivatives - 11 - 11
Total financial liabilities measured at fair value 2 118 - 120
EURm Level 1 Level 2 Level 3 Total
FINANCIAL ASSETS 31.12.2013
Derivative financial instruments
Interest rate swaps 1 51 - 52
Other interest rate derivatives - 0 - 0
Foreign exchange derivatives - 12 - 12
Equity derivatives - 14 - 14
1 77 - 78
Financial assets designated at fair value through profit or loss
Equity securities 2 - - 2
Debt securities - 46 0 46
2 46 0 48
Financial assets related to unit-linked insurance
Equity securities 324 2 13 339
Debt securities 14 1,069 19 1,101
Derivative financial instruments 2,098 804 64 2,966
Mutual funds - 26 - 26
2,436 1,901 97 4,433
Financial assets available-for-sale
Equity securities 1,583 - 243 1,826
Debt securities 1,874 10,858 39 12,770
Mutual funds 993 124 720 1,836
4,449 10,981 1,002 16,432
Total financial assests measured at fair value 6,887 13,006 1,099 20,992
FINANCIAL LIABILITIES 31.12.2013
Derivative financial instruments
Interest rate derivatives 1 14 - 15
Foreign exchange derivatives - 22 - 22
Equity derivatives - 16 - 16
Total financial liabilities measured at fair value - 52 - 53
Transfers betweel levels 1 and 2
During the last quarter, the Group started to utilise the BVAL Score information for level determination. As a result, there were several classification changes from level 2 to level 1. Debt securities available-for-sale EURm 5,438 (151) were transferred during the financial year. Also debt securities at fair value through p/l EURm 19 were transferred. Equity securities EURm 68 and debt securities EURm 368, related to unit-linked insurance, were equivalently transferred to level one.
Sensitivity analysis of fair values
The sensitivity of financial assets and liabilites to changes in exchange rates is assessed on business area level due to differenct base currencies. In P&C insurance, 10 percentage point depreciation of all other currencies against SEK would result in an increase recognised in profit/loss of EURm 30 (12) and in a decrease recognised directly in equity of EURm 13 (11). In Life insurance, 10 percentage point depreciation of all other currencies against EUR would result in an increase recognised in profit/loss of EURm 35 (14) and in a decrease recognised directly in equity of EURm 94 (68). In Holding, 10 percentage point depreciation of all other currencies against EUR would have no impact in profit/loss, but a decrease recognised in equity of EURm 71 (15).
The sensitivity analysis of the Group's fair values of financial assets and liabilities in differenct market risk scenarios is presented below. The effects represent the instantaneous effects of a one-off change in the underlying market variable on the fair values on 31 Dec. 2014.
The sensitivity analysis includes the effects of derivative positions. All sensitivities are calculated before taxes.
The debt issued by Sampo plc is not included.
Interest rate Equity Other financial investments
1% parallel shift down 1% parallel shift up 20% fall in prices 20% fall in prices
Effect recognised in profit/loss -78 50 -0 -4
Effect recognised directly in equity 186 -179 -625 -196
Total effect 108 -130 -625 -200
18 Movements in level 3 financial instruments measured at fair value
EURm At Jan. 2014 Total gains/
losses in
income
statement		 Total gains/
losses
recorded in
other
comprehensive
income		 Purchases Sales Transfers
between
levels 1
and 2		 At 31 Dec. 2014 Gains/
losses
included
in p/l
for
financial
assets
31 Dec.
2014
FINANCIAL ASSETS 2014
Financial assets related to unit-linked insurance
Equity securities 14 2 - 3 -3 - 16 1
Debt securities 19 -1 - 18 -1 -10 24 0
Mutual funds 64 0 - 30 -20 -18 57 1
97 1 - 51 -24 -28 96 2
Financial assets available-for-sale
Equity securities 243 11 1 30 -23 -33 228 -1
Debt securities 39 2 2 10 -6 30 78 2
Mutual funds 720 29 46 215 -262 - 748 62
1,002 42 49 255 -291 -3 1,054 64
Total financial assests measured at fair value 1,099 43 49 306 -316 -31 1,150 66
2014
EURm Realised
gains		 Fair
value
gains
and
losses		 Total
Total gains or losses included in profit or loss for the financial year 43 56 99
Total gains or losses included in profit and loss for assets held at the end of the financial year 10 56 66
EURm At Jan. 2013 Total gains/
losses in
income
statement		 Total gains/
losses
recorded in
other
comprehensive
income		 Purchases Sales Transfers
between
levels 1
and 2		 At 31 Dec. 2013 Gains/
losses
included
in p/l
for
financial
assets
31 Dec.
2013
FINANCIAL ASSETS 2013
Financial assets related to unit-linked insurance
Equity securities 14 -1 - 5 -4 - 14 -1
Debt securities 17 1 - 2 -1 - 19 1
Mutual funds 50 4 - 24 -13 - 64 3
81 4 - 31 -19 - 97 4
Financial assets available-for-sale
Equity securities 69 -1 3 176 -4 - 243 -3
Debt securities 73 29 -21 6 -47 - 39 -1
Mutual funds 894 -24 46 139 -335 - 720 19
1,036 4 27 320 -385 - 1,002 14
Total financial assests measured at fair value 1,117 8 27 351 -404 - 1,099 18
2013
EURm Realised
gains		 Fair
value
gains
and
losses		 Total
Total gains or losses included in profit or loss for the financial year 8 32 40
Total gains or losses included in profit and loss for assets held at the end of the financial year -14 32 18
19 Sensitivity analysis of level 3 financial instruments measured at fair value
2014 2013
EURm Carrying
amount		 Effect of
reasonably
possible
alternative
assumptions
(+ / -)		 Carrying
amount		 Effect of
reasonably
possible
alternative
assumptions
(+ / -)
Financial assets
Financial assets available-for-sale
Equity securities 228 -18 243 -23
Debt securities 77 -4 39 -2
Mutual funds 748 -148 720 -138
Total 1,054 -170 1,002 -163
The value of financial assets regarding the debt security instruments has been tested by assuming a rise of 1 per cent unit in interest rate level in all maturities. For other financial assets, the prices were assumed to go down by 20 %. The Sampo Group bears no investment risks relatted to unit-linked insurance, so a change in assumptions regarding these assets does not affect profit or loss. On the basis of the these alternative assumptions, a possible change in interest levels would cause descend of EURm 4 (2) for the debt instruments, and EURm 166 (161) valuation loss for other instruments in the Group's other comprehensive income. The reasonably possible effect, proportionate to the Group's equity, would thus be 1.6 % (1.5).
20 Investments related to unit-linked insurance contracts
Life insurance
EURm 2014 2013
Financial assets designated at fair value through p/l
Debt securities
Issued by public bodies 64 47
Certificates of deposit issued by banks - 223
Other debt securities 1,171 832
Total 1,234 1,101
Equity securities
Listed 3,768 3,290
Unlisted 121 22
Total 3,890 3,312
Total financial assets designated at fair value through p/l 149 183
Other 9 26
Investment related to unit-linked contracts, total 5,282 4,623
Elimination items between segments -23 -7
Group total 5,259 4,616
The historical cost of the equity securities related to unit-linked contracts was EURm 3,248 (2,646) and that of the debt securities EURm 1,246 (1,089).
21 Deferred tax assets and liabilities
Changes in deferred tax during the financial period 2014
EURm 1.1. Recognised in comprehensive
income statement		 Recognised
in equity		 Exchange
differences		 31.12.
Deferred tax assets
Tax losses carried forward 15 0 - -0 15
Employee benefits 66 -2 26 -5 85
Other deductible temporary differences -5 15 1 -2 8
Total 75 13 26 -7 107
Netting of deferred taxes -22
Deferred tax assets in the balance sheet 86
Deferred tax liabilities
Depreciation differences and untaxed reserves 294 -7 - -13 275
Changes in fair values 202 7 25 -3 231
Other taxable temporary differences 18 3 -0 -1 19
Total 514 3 25 -17 526
Netting of deferred taxes -22
Total deferred tax liabilities in the balance sheet 504
Changes in deferred tax during the financial period 2013
EURm 1.1. Recognised in comprehensive
income statement		 Recognised
in equity		 Exchange
differences		 31.12.
Deferred tax assets
Tax losses carried forward 18 -3 - -0 15
Changes in fair values 65 -1 7 -5 65
Other deductible temporary differences 0 -2 4 -5 -2
Total 83 -6 11 -10 78
Netting of deferred taxes -10
Deferred tax assets in the balance sheet 68
Deferred tax liabilities
Depreciation differences and untaxed reserves 337 -26 -0 -17 293
Changes in fair values 197 -23 28 -0 202
Other taxable temporary differences 13 10 -1 0 22
Total 547 -40 27 -17 518
Netting of deferred taxes -10
Total deferred tax liabilities in the balance sheet 508
In Sampo plc, EURm 27 of deferred tax asset has not been recognised on unused tax losses. The first losses will expire in 2021.

In life insurance, EURm 3 of deferred tax asset has not been recognised on unused tax losses.
22 Taxes
EURm 2014 2013
Profit before tax 1,759 1,668
Tax calculated at parent company's tax rate -352 -409
Different tax rates on overseas earnings -16 19
Income not subject to tax 3 5
Expenses not allowable for tax purposes -3 -3
Consolidation procedures and eliminations 149 159
Tax losses for which no deferred tax asset has been recognised -1 -9
Changes in tax rates 1 22
Tax from previous years -1 -1
Total -220 -216
23 Components of other comprehensive income
EURm 2014 2013
Other comprehensive income:
Items reclassifiable to profit or loss
Exchange differences -174 -153
Available-for-sale financial assets
Gains/losses arising during the year 212 362
Reclassification adjustments -140 -129
Cash flow hedges
Gains/losses arising during the year - -0
Share of associate's other comprehensive income -168 -70
Taxes -15 -22
Total items reclassifiable to profit or loss, net of tax -285 -13
Items not reclassifiable to profit or loss
Actuarial gains and losses from defined pension plans -101 -21
Taxes 26 7
Total items not reclassifiable to profit or loss, net of tax -76 -14
24 Tax effects relating to components of other comprehensive income
2014 2013
Before-
tax
amount		 Tax Net-of-tax
amount		 Before-
tax
amount		 Tax Net-of-tax
amount
Items reclassifiable to profit or loss
Exchange differences -174 - -174 -153 - -153
Available-for-sale financial assets 72 -15 57 233 -22 211
Cash flow hedges - - - -0 0 -0
Share of associate's other comprehensive income -168 - -168 -70 - -70
Total -270 -15 -285 79 -22 -13
25 Other assets
P&C insurance
EURm 2014 2013
Interests 66 102
Assets arising from direct insurance operations 1,103 1,119
Assets arising from reinsurance operations 34 45
Settlement receivables 2 3
Deferred acquisition costs 1) 138 159
Assets related to Patient Insurance Pool 117 69
Other 73 62
P&C insurance, total 1,533 1,559
Other assets include non-current assets EURm 122 (71).
Item Other comprise rental deposits, salary and travel advancements and assets held for resale.
1) Change in deferred acquisition costs in the period
EURm 2014 2013
At 1 Jan. 159 172
Net change in the period -14 -3
Exchange differences -7 -10
At 31 Dec. 138 159
Life insurance
EURm 2014 2013
Interests 30 36
Receivables from policyholders 3 3
Assets arising from reinsurance operations 1 1
Settlement receivables 68 8
Assets pledged for trading in derivatives 72 6
Other 33 27
Life insurance, total 208 81
Item Other comprise e.g. pensions paid in advance and receivables from co-operation companies.
Holding
EURm 2014 2013
Interests 37 36
Settlement receivables 9 -
Other 4 11
Holding, total 50 47
Item Other includes e.g. asset management fee receivables.
Elimination items between segments -11 -10
EURm 2014 2013
Group, total 1,781 1,676
26 Cash and cash equivalents
P&C insurance
EURm 2014 2013
Cash at bank and in hand 281 250
Short-term deposits (max 3 months) 167 33
P&C insurance, total 448 282
Life insurance
EURm 2014 2013
Cash at bank and in hand 389 179
Short-term deposits (max 3 months) 469 44
P&C insurance, total 858 222
Holding
EURm 2014 2013
Cash 501 280
Short-term deposits (max 3 months) 266 -
Holding, total 768 280
Group, total 2,074 785
27 Liabilities from insurance and investment contracts
P&C insurance
Change in insurance liabilities
2014 2013
EURm Gross Ceded Net Gross Ceded Net
Provision for unearned premiums
At 1 Jan. 2,065 43 2,022 2,107 55 2,053
Acquired insurance holdings - - 0 38 - -
Exchange differences -69 1 -68 -127 -2 -125
Change in provision 3 -3 -0 46 -10 55
At 31 Dec. 1,999 41 1,958 2,065 43 2,022
2014 2013
EURm Gross Ceded Net Gross Ceded Net
Provision for claims outstanding
At 1 Jan. 7,435 377 7,058 7,747 522 7,225
Disposed insurance holdings 45 - 45 61 0 61
Exchange differences -245 -2 -243 -314 -20 -294
Change in provision -50 -178 128 -59 -126 66
At 31 Dec. 7,185 197 6,988 7,435 377 7,058
Liabilities from insurance contracts
EURm 2014 2013
Provision for unearned premiums 1,999 2,065
Provision for claims outstanding 7,185 7,435
Incurred and reported losses 1,609 1,770
Incurred but not reported losses (IBNR) 3,298 3,538
Provisions for claims-adjustment costs 269 271
Provisions for annuities and sickness benefits 2,009 1,856
P&C insurance total 9,183 9,500
Reinsurers' share
Provision for unearned premiums 41 43
Provision for claims outstanding 197 376
Incurred and reported losses 98 270
Incurred but not reported losses (IBNR) 98 107
Total reinsurers' share 237 420
As the P&C insurance is exposed to various exchange rates, comparing the balance sheet data from year to year can be misleading.
Claims cost trend of P&C insurance
The tables below show the cost trend for the claims for different years. The upper part of the tables shows how an estimate of the total claims costs per claims year evolves annually. The lower section shows how large a share of this is presented in the balance sheet.
Claims costs before reinsurance
Estimated claims cost
EURm < 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total
At the close of the claims year 9,825 2,517 2,522 2,588 2,715 2,718 2,829 2,914 2,953 2,851 2,835
One year later 9,792 2,465 2,504 2,584 2,672 2,669 2,869 3,028 2,940 2,879
Two years later 9,809 2,412 2,476 2,549 2,615 2,641 2,815 3,024 2,956
Three years later 9,823 2,385 2,475 2,518 2,588 2,601 2,814 3,012
Four years later 9,789 2,352 2,435 2,472 2,565 2,582 2,807
Five years later 9,833 2,319 2,388 2,448 2,551 2,559
Six years later 9,896 2,267 2,358 2,438 2,531
Seven years later 9,902 2,244 2,348 2,425
Eight years later 9,852 2,227 2,337
Nine years later 9,874 2,210
Ten years later 9,912
Current estimate of total claims costs 9,912 2,210 2,337 2,425 2,531 2,559 2,807 3,012 2,956 2,879 2,835 36,463
Total disbursed 7,349 2,013 2,110 2,169 2,271 2,261 2,470 2,590 2,475 2,268 1,572 29,548
Provision reported in the balance sheet 2,563 197 227 256 261 298 337 422 482 611 1,263 6,916
of which established vested annuities 1,390 73 80 77 70 59 75 65 62 47 10 2,009
Provision for claims-adjustment costs 269
Total provision reported in the BS 7,185
Claims costs after reinsurance
Estimated claims cost
EURm < 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Total
At the close of the claims year 9,070 2,375 2,418 2,490 2,598 2,604 2,691 2,756 2,756 2,801 2,795
One year later 9,022 2,318 2,390 2,480 2,567 2,572 2,738 2,829 2,741 2,829
Two years later 9,025 2,264 2,363 2,453 2,513 2,542 2,696 2,816 2,758
Three years later 9,032 2,244 2,367 2,422 2,487 2,515 2,689 2,810
Four years later 8,999 2,213 2,330 2,379 2,468 2,498 2,686
Five years later 8,998 2,181 2,289 2,355 2,455 2,474
Six years later 9,076 2,141 2,261 2,348 2,437
Seven years later 9,086 2,120 2,252 2,335
Eight years later 9,049 2,104 2,243
Nine years later 9,074 2,087
Ten years later 9,121
Current estimate of total claims costs 9,121 2,087 2,243 2,335 2,437 2,474 2,686 2,810 2,758 2,829 2,795 34,575
Total disbursed 6,617 1,897 2,022 2,083 2,180 2,184 2,361 2,409 2,304 2,241 1,559 27,856
Provision reported in the balance sheet 2,504 191 221 252 257 290 325 402 454 588 1,236 6,719
of which established vested annuities 1,390 73 80 77 70 59 75 65 62 47 10 2,009
Provision for claims-adjustment costs 269
Total provision reported in the BS 6,988
Life insurance
Change in liabilities arising from other than unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2014 3,924 4 3,928
Premiums 148 1 149
Claims paid -397 -0 -397
Expense charge -36 - -36
Guaranteed interest 131 - 131
Bonuses 0 - 0
Portfolio transfers 1,337 - 1,337
Other -48 -0 -48
At 31 Dec. 2014 5,061 4 5,065
Reinsurers' share -3 - -3
Net liability at 31 Dec. 2014 5,058 4 5,062
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2013 4,065 6 4,071
Premiums 159 0 159
Claims paid -396 -1 -396
Expense charge -37 -0 -37
Guaranteed interest 139 0 139
Bonuses 3 0 3
Other -11 -1 -12
At 31 Dec. 2013 3,924 4 3,927
Reinsurers' share -3 - -3
Net liability at 31 Dec. 2013 3,921 4 3,925
Change in liabilities arising from unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2014 3,095 1,522 4,617
Premiums 513 448 961
Claims paid -191 -294 -485
Expense charge -39 -21 -60
Other 220 59 279
At 31 Dec. 2014 3,599 1,714 5,312
At 1 Jan. 2013 2,665 1,168 3,833
Premiums 469 440 909
Claims paid -173 -172 -345
Expense charge -36 -18 -54
Other 169 104 274
At 31 Dec. 2013 3,095 1,522 4,617
The liabilities at 1 Jan. and at 31 Dec. include the future bonus reserves and the effect of the reserve for the decreased discount rate. The calculation is based on items before reinsurers' share. A more detailed specification of changes in insurance liabilities is presented in Group's Risk Management.
EURm 2014 2013
Insurance contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 2,625 1,969
Provision for claims outstanding 2,434 1,948
Liabilities for contracts without discretionary participation feature (DPF)
Provision for unearned premiums - 0
Provision for claims outstanding - 1
Total 5,059 3,918
Assumed reinsurance
Provision for unearned premiums 1 4
Provision for claims outstanding 0 2
Total 2 5
Insurance contracts total
Provision for unearned premiums 2,626 1,973
Provision for claims outstanding 2,434 1,951
Total 5,061 3,924
Investment contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 4 4
Liabilities for insurance and investment contracts total
Provision for unearned premiums 2,631 1,976
Provision for claims outstanding 2,434 1,951
Life insurance total 5,065 3,927
Reinsurers' share
Provision for claims outstanding -3 -3
Investment contracts do not include a provision for claims outstanding.
Liability adequacy test does not give rise to supplementary claims.
Exemption allowed in IFRS 4 Insurance contracts has been applied to investment contracts with DPF or contracts with a right to trade-off for an investment contract with DPF. These investment contracts have been valued like insurance contracts.
EURm 2014 2013
Group, total 14,248 13,427
28 Liabilities from unit-linked insurance and investment contracts
Life insurance
EURm 2014 2013
Unit-linked insurance contracts 3,599 3,095
Unit-linked investment contracts 1,714 1,522
Total 5,312 4,617
Elimination items between segments -23 -7
EURm 2014 2013
Group, total 5,289 4,610
29 Financial liabilities
The segment financial liabilities include derivatives, debt securities and other financial liabilities.
P&C insurance
EURm 2014 2013
Derivative financial instruments (note 15) 24 25
Subordinated debt securities
Subordinated loans
Euro-denominated loans Maturity Interest
Preferred capital note, 2005 (nominal value EURm 150) perpetual 4.94% 150 150
Preferred capital note, 2011 (nominal value EURm 110) 30 vuotta 6.00% 109 109
Preferred capital note, 2013 (nominal value EURm 90) perpetual 4.70% 90 90
Total subordinated debt securities 349 150
P&C insurance, total financial liabilities 373 174
The loans 2005 and 2011 are issued with fixed interest rates for the first ten years, after which they become subject to variable interest rates. The subordinated loan issued in 2013 has a fixed interest rate for the first 5.5 years afther which it becomes subject to variable interest rates. At the point of change, there is the possibility of redemption for all the loans. All loans and their terms are approved by supervisory authorities and the loans are utilised for solvency purposes.
The loans issued in 2005 and 2011 are listed on the Luxembourg Exchange.
Life insurance
EURm 2014 2013
Derivative financial instruments (note 15) 86 11
Subordinated debt securities
Subordinated loans 100 100
Life insurance, total 186 111
Mandatum Life issued in 2002 EURm 100 Capital Notes. The loan is perpetual and pays floating rate interest. The interest is payable only from distributable capital. The loan is repayable only with the consent of the Insurance Supervisory Authority and at the earliest on 2012 or any interest payment date after that. The loans is wholly subscribed by Sampo Plc.
Holding
EURm 2014 2013
Derivative financial instruments (note 15) 11 18
Debt securities in issue
Commercial papers 305 308
Bonds *) 1,888 1,720
Total 2,192 2,027
Holding, total 2,203 2,045
*) The determination and hierarchy of financial assets and liabilities at fair value is disclosed in note 17. Based on the principles of this determination, the boned of the Holding Company fall under level 2.
Elimination items between segments -339 -336
EURm 2014 2013
Group, total 2,423 1,994
30 Provisions
P&C insurance
EURm 2014
At 1 Jan. 2014 58
Exchange rate differences -3
Additions 21
Amounts used during the period -11
Unused amounts reversed during the period -2
At 31 Dec. 2014 63
Current (less than 1 year) 27
Non-current (more than 1 year) 36
Total 63
EURm 22 of the provision consist of assets reserved for the development of efficient administrative and claims-adjustment processes and structural changes in distribution channels result in organisational changes that affect all business areas. In addition, the item includes a provision of about EURm 37 for law suits and other uncertain liabilities.
31 Employee benefits
Employee benefits
Sampo has defined benefit plans in P&C insurance business in Sweden and Norway.
In addition to statutory retirement pension insurance, the Group has certain voluntary defined benefit plans. The voluntary defined benefit plans are intra-Group and included in the insurance liabilities of Mandatum Life. The amount is negligible and they have no material impact on the Group profit or loss or equity.
Employee benefit obligations of P&C Insurance 31 Dec.
EURm 2014 2013
Present value of estimated pension obligation, including social costs 664 580
Fair value of plan assets 399 385
Net pension obligation recognised in the balance sheet 265 195
Since January 1, 2008, the main Swedish pension plan has been closed to new employees born in 1972 or later and the corresponding Norwegian pension plan has been closed to new employees since January 1, 2007 regardless of age. The pension benefits referred to are old-age pension and survivors’ pension in Sweden and old-age pension, survivors’ pension and disability pension in Norway. A common feature of all of the pension plans is that the employees and survivors encompassed by the plans are entitled to a guaranteed pension that depends on the employees’ service period and pensionable salary at the time of retirement. The dominating benefit is the old-age pension, which refers in part to temporary pension before the anticipated retirement age and in part to a life-long pension after the anticipated retirement age.
The retirement age for receiving premature pension is normally 62 years in Sweden and normally 65 years in Norway. In Sweden, premature old-age pension following a complete service period is payable at a rate of approximately 65% percent of the pensionable salary and applies to all employees born in 1955 or earlier and who were covered by the insurance sector’s collective bargaining agreement of 2006. In Norway, premature old-age pension following a complete service period is payable at a rate of approximately 70% percent of the pensionable salary and applies to all employees born in 1957 or earlier and who were employed by If in 2013.
The anticipated retirement age in connection with life-long pension is 65 years for Sweden and 67 years for Norway. In Sweden, life-long old-age pension following a complete service period is payable at a rate of approximately 10 percent of the pensionable salary between 0 and 7.5 income base amounts, 65 percent of salary between 7.5 and 20 income base amounts and 32.5 percent between 20 and 30 income base amounts. In Norway, life-long old-age pension following a complete service period is payable at a rate of approximately 70 percent of the pensionable salary up to 12 Norwegian base amounts, together with the estimated statutory old-age pension. Paid-up policies and pension payments from the Swedish plans are normally indexed upwards in an amount corresponding to the change in the consumer price index. However, there is no agreement guaranteeing the value and future supplements in addition to the contractual pension benefit could either rise of fall. Pension payments from the Norwegian plans are indexed upwards in an amount corresponding to the change in the consumer price index to the extent of 80 - 100 %.
The pensions are primarily funded through insurance whereby the insurers establish the premiums and disburse the benefits. If’s obligation is primarily fulfilled through payment of the premiums. Should the assets that are attributable to the pension benefits not be sufficient to enable the insurers to cover the guaranteed pension benefits, If could be forced to pay supplementary insurance premiums or secure the pension obligations in some other way. In addition to insured pension plans, there are also unfunded pension benefits in Norway for which If is responsible for ongoing payment.
To cover the insured pension benefits, the related capital is managed as part of the insurers’ management portfolios. In such management, the characteristics of the investment assets are analyzed in relation to the characteristics of the obligations, in a process known as Asset Liability Management. New and existing asset categories are evaluated continuously in order to diversify the asset portfolios with a view to optimizing the anticipated risk-adjusted return. Any surplus that arises from management of the assets normally accrues to If and/or the insured and there is no form of transfer of the asset value to other members of the insurance collective.
The insurers and If are jointly responsible for monitoring the pension plans, including investment decisions and contributions. The pension plans are essentially exposed to similar material risks regarding the final amount of the benefits, the investment risk associated with the plan assets and the fact that the choice of discount interest rate affects their valuation in the financial statements.
When applying IAS 19, the pension obligations are calculated, as is the pension cost attributable to the fiscal period, using actuarial methods. Pension rights are considered to have been vested straight line during the service period. The calculation of pension obligations is based on future anticipated pension payments and includes assumptions regarding mortality, employee turnover and salary growth. The nominally calculated debt is discounted to the present value using an interest rate based on current market interest rates adjusted to take into account the duration of the company’s pension obligations. As a basis for determining the discount interest rate for the Swedish obligation, If uses liquid covered mortgage bonds issued by a mortgage institution. Covered mortgage bonds are also used for the Norwegian obligation. After a deduction for the plan assets, a net asset or net liability is recognised in the balance sheet.
The following tables contain a number of material assumptions, specifications of pension costs, assets and liabilities and a sensitivity analysis showing the potential effect on the obligations of reasonable changes in those assumptions as at the end of the fiscal year. The carrying amounts have been stated including special payroll tax in Sweden (24.26%) and a corresponding fee in Norway (14.1%).
Specification of employee benefit obligations by country
2014 2013
Sweden Norway Total Sweden Norway Total
Recognised in income statement and other comprehensive income
Current service cost -5 -11 -16 -6 -10 -16
Past service cost -1 - -1 -0 - -0
Interest expense on net pension liability -1 -6 -7 -2 -5 -7
Total in income statement -7 -17 -24 -7 -15 -22
Remeasurement of the net pension liability -34 -71 -105 19 -40 -21
Total in comprehensive income statement -40 -88 -129 12 -55 -43
Recognised in balance sheet
Present value of estimated pension liability, including social costs 194 470 664 154 426 580
Fair value of plan assets 140 259 399 124 261 385
Net liability recognised in balance sheet 55 211 265 30 165 195
2014 2013
Distribution by asset class Sweden Norway Sweden Norway
Debt instruments, level 1 40% 52% 34% 49%
Debt instruments, level 2 1% 13% 3% 12%
Equity instruments, level 1 28% 9% 31% 8%
Equity instruments, level 3 8% 3% 0% 3%
Property, level 3 10% 9% 10% 11%
Other, level 1 3% 10% 11% 13%
Other, level 2 6% 4% 0% 1%
Other, level 3 4% 0% 11% 3%
The following actuarial assumptions have been used for the calculation of defined benefit pension plans in Norway and Sweden:
Sweden Sweden Norway Norway
31.12.2014 31.12.2013 31.12.2014 31.12.2013
Discount rate 2,75% 4,00% 2,75% 4,00%
Future salary increases 2,75% 3,00% 3,50% 3,75%
Price inflation 1,75% 2,00% 2,00% 2,25%
Mortality table FFFS 2007:31 +1 year FFFS 2007:31 +1 year FFFS 2007:31 FFFS
2007:31
Average duration of pension liabilities 22 years 20 years 17 years 16 years
Expected contributions to the defined benefit plans during 2014 and 2015 8 9 15 15
2014 2013
Sensitivity analysis of effect of reasonably possible changes Sweden Norway Total Sweden Norway Total
Discount rate, +0,50% -23 -40 -63 -17 -34 -51
Discount rate, -0,50% 27 45 71 20 38 58
Future salary increases, +0,25% 8 8 16 6 7 13
Future salary increases, -0,25% -7 -8 -15 -5 -7 -12
Expected longevity, +1 year 7 15 22 5 13 18
2014 2013
EURm Funded plans Unfunded plans Total Funded plans Unfunded plans Total
Analysis of the employee benefit obligation
Present value of estimated pension liability, including social costs 620 44 664 532 490 1,022
Fair value of plan assets 399 - 399 385 - 385
Analysis of the change in net liability recognised in the balance sheet
EURm 2014 2013
Pension liabilities:
At the beginning of the year 580 595
Earned during the financial year 16 16
Costs pertaining to prior-year service 1 0
Interest cost 23 21
Actuarial gains (-)/losses (+) on financial assumptions 123 -22
Actuarial gains (-)/losses (+) on demographic assumptions - 67
Actuarial gains (-)/losses (+), experience adjustments -3 -15
Exchange differences on foreign plans -48 -57
Benefits paid -27 -26
Defined benefit plans at 31 Dec. 664 580
Reconciliation of plan assets:
At the beginning of the year 385 392
Interest income 15 15
Difference between actual return and calculated interest income 15 8
Contributions paid 29 24
Exchange differences on foreign plans -29 -38
Benefits paid -17 -16
Plan assets at 31 Dec. 399 385
Other short-term employee benefits
There are other short-term staff incentive programmes in the Group, the terms of which vary according to country, business area or company. Benefits are recognised in the profit or loss for the year they arise from. An estimated amount of these short-term incentives, social security costs included, for 2014 is EURm 66.
32 Other liabilities
P&C insurance
EURm 2014 2013
Liabilities arising out of direct insurance operations 155 148
Liabilities arising out of reinsurance operations 37 49
Liabilities related to Patient Insurance Pool 115 68
Tax liabilities 85 113
Prepayments and accrued income 27 197
Other 284 119
P&C insurance, total 702 694
The non-current share of other liabilities is EURm 102 (57).
Item Other includes e.g. witholding taxes, social expenses related to Workers Compensation insurance policies and employee benefits, unpaid premium taxes and other accruals.
Life insurance
EURm 2014 2013
Interests 8 7
Tax liabilities 23 18
Liabilities arising out of direct insurance operations 7 6
Liabilities arising out of reinsurance operations 4 5
Settlement liabilities 90 26
Guarantees received 35 31
Other liabilities 43 37
Life insurance, total 209 129
Item Guarantees received comprise assets accepted as guarantees required in derivative trading and securities lending.
Item Other includes e.g. liabilities arising from withholding taxes and social security costs, liabilities to creditors and insurance premium advances.
Holding
EURm 2014 2013
Interests 34 34
Guarantees for trading in derivatives 47 47
Liability for dividend distribution 30 26
Other 24 21
Holding, total 134 129
Item Other includes e.g. reservations for share-based incentive programmes and other incentive salaries.
Elimination items between segments -11 -11
EURm 2014 2013
Group, total 1,035 941
33 Contingent liabilities and commitments
P&C insurance
EURm 2014 2013
Off-balance sheet items
Guarantees 7 28
Other irrevocable commitments 10 14
Total 17 42
Assets pledged as collateral for liabilities or contingent liabilities
2014 2013
EURm Assets
pledged		 Liabilities/
commitments		 Assets
pledged		 Liabilities/
commitments
Assets pledged as collateral
Cash at balances at central banks 0 1 1 1
Investments
- Investment securities 238 136 270 131
Yhteensä 239 137 271 132
EURm 12/2014 12/2013
Assets pledged as security for derivative contracts, carrying value
Investment securities 25 39
The pledged assets are included in the balance sheet item Other assets.
EURm 2014 2013
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year 31 32
later than one year and not later than five years 93 99
later than five years 59 78
Total 183 209
Lease and sublease payments recognised as an expense in the period
- minimum lease payments -22 -25
- sublease payments - -11
Total -22 -36
The subsidiaries If P&C Insurance Ltd and If P&C Insurance Company Ltd provide insurance with mutual undertakings within the Nordic Nuclear Insurance Pool and If P&C Insurance Ltd within the Norwegian Natural Perils’ Pool and the Dutch Terror Pool.
In connection with the transfer of property and casualty insurance business from the Skandia group to the If Group as of March 1, 1999, If P&C Holding Ltd and If P&C Insurance Ltd issued a guarantee for the benefit of Försäkringsaktiebolaget Skandia (publ.) whereby the aforementioned companies in the If Group mutually guarantee that companies in the Skandia group will be indemnified against any claims or actions due to guarantees or similar commitments made by companies in the Skandia group within the property and casualty insurance business transferred to the If Group.
If P&C Insurance Holding Ltd and If P&C Insurance Ltd have separately entered into contracts with Försäkringsaktiebolaget Skandia (publ.) and Tryg-Baltica Forsikrings AS whereby Skandia and Tryg-Baltica will be indemnified against any claims attributable to guarantees issued by Försäkringsaktiebolaget Skandia (publ.) and Vesta Forsikring AS, on behalf of Skandia Marine Insurance Company (U.K.) Ltd. (now Marlon Insurance Company Ltd.) in favor of the Institute of London Underwriters. Marlon Insurance Company Ltd. was disposed during 2007, and the purchaser issued a guarantee in favour of If for the full amount that If may be required to pay under these guarantees.
Normal seller's guarantees have been given in connection the disposal of the subsidiary IPSC Region.
If P&C Insurance Company Ltd has outstanding commitments to private equity funds totalling EURm 10, which is the maximum amount that the company has committed to invest in the funds. Capital will be called to these funds over several years as the funds make investments.
With respect to certain IT systems If and Sampo use jointly, If P&C Insurance Holding Ltd has undertaken to indemnify Sampo for any costs caused by It that Sampo may incur in relation to the owners of the systems.
Life insurance
EURm 2014 2013
Off-balance sheet items
Investment commitments 384 391
Acquisition of IT-software 2 3
Total 386 394
EURm 12/2014 12/2013
Assets pledged as security for derivative contracts, carrying value
Cash and cash equivalents 72 6
The pledged assets are included in the balance sheet item Other assets.
Lended securities
Domestic shares
Remaining acquisition cost 23 14
Fair value 19 4
Security lendings can be interrupted at any time and they are secured.
EURm 2014 2013
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year 2 2
later than one year and not later than five years 9 8
later than five years 8 9
Total 19 19
Total of sublease payments expected to be received under non-cancellable operating sub-leases at 31 Dec. 0 1
Lease and sublease payments recognised as an expense in the period
- minimum lease payments -2 -3
- sublease payments 0 0
Total -2 -3
Holding
EURm 2014 2013
Off-balance sheet items
Investment commitments 0 1
EURm 2014 2013
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year 1 1
later than one year and not later than five years 1 2
Total 2 3
The Group had at the end of 2014 premises a total of 171,598 m2 (178,877) taken as a lessee. The contracts have been made mainly for 3 to 10 years.
34 Equity and reserves
Equity
The number of Sampo plc’s shares at 31 Dec. 2013 was 560,000,000, of which 558,000,000 were A-shares and 1,200,000 B-shares. There was no change in the company's share capital of EURm 98 during the financial year.

At the end of the financial year, the mother company or other Group companies held no shares in the parent company.
Reserves and retained earnings
Legal reserve
The legal reserve comprises the amounts to be transferred from the distributable equity according to the articles of association or on the basis of the decision of the AGM.
Invested unrestricted equity
Other components of equity include fair value changes of financial assets available for sale and derivatives used in cash flow hedges, and exchange differences.
Other components of equity
Other components of equity include fair value changes of financial assets available for sale and derivatives used in cash flow hedges, and exchange differences. Changes in the reserves and retained earnings are presented in the Group's statement of changes in equity.
35 Related party disclosures
Key management personnel
The key management personnel in Sampo Group consists of the members of the Board of Directors of Sampo plc and Sampo Group’s Executive Committee, and the entities over which the members of the key management personnel have a control.
Key management compensation
EURm 2014 2013
Short-term employee benefits 8 7
Post employment benefits 3 3
Other long-term benefits 10 10
Total 21 19
In addition, deferred compensation EUR 134,779 was paid to former members of the Group Executive Committee during the financial year. The equivalent sum paid in 2013 was EUR 584,500.
Short-term employee benefits comprise salaries and other short-terms benefits, including profit-sharing bonuses accounted for for the year, and social security costs.
Post employment benefits include pension benefits under the Employees’ Pensions Act (TEL) in Finland and voluntary supplementary pension benefits.
Other long-term benefits consist of the benefits under long-term incentive schemes accounted for for the year (see Note 36).
Related party transactions of the key management
The related party transactions of the key management are not material nor does the key management have any loans from the Group companies.
Associates
Outstanding balances with related parties/Associate Nordea
EURm 2014 2013
Assets 1,483 1,152
Liabilities 114 111
The Group's receivables from Nordea coprise mainly long-term investments in bonds and deposits. In addition, the Group has several on-going derivative contracts related to the Group's risk management of investments and liabilities.
36 Incentive schemes
Long-term incentive schemes 2011 I - 2014 I
The Board of Directors of Sampo plc has decided on the long-term incentive schemes 2011 I - 2014 I for the management and key employees of Sampo Group. The Board has authorised the CEO to decide who will be included in the scheme, as well as the number of calculated incentive units granted for each individual used in determining the amount of the incentive reward. In the schemes, the number of calculated incentive units granted for the members of the Group Executive Committee is decided by the Board of Directors. Over 130 persons were included in the schemes at the end of year 2014.
The amount of the performance-related bonus is based on the value performance of Sampo's A share and on the insurance margin (IM) and on Sampo's return on the risk adjusted capital (RORAC). The value of one calculated incentive unit is the trade-weighted average price of Sampo's A-share at the time period specified in the terms of the scheme, and reduced by the starting price adjusted with the dividends per share distributed up to the payment date. The pre-dividend starting prices vary between eur 18.37 - 38.26. The maximum value of one incentive unit varies between eur 33.37 - 57.26, reduced by the dividend-adjusted starting price. In all the schemes, the incentive reward depends on two benchmarks. If the IM is 6 per cent or more, the IM-based reward is paid in full. If the IM is between 4 - 5.99 per cent, half of the incentive reward is paid. No IM-related reward will be paid out, if the IM stays below these. In addition, the return on the risk adjusted capital is taken into account. If the return is at least risk free return + 4 per cent, the RORAC-based incentive reward is paid out in full. If the return is risk free return + 2 percent, but less than risk free return + 4 percent, the payout is 50 per cent. If the return stays below these benchmarks, no RORAC-based reward will be paid out.
Each plan has three performance periods and incentive rewards are settled in cash in three installments. The employee shall authorise Sampo plc to buy Sampo's A-shares with 60 per cent of the amount of the reward after taxes and other comparable charges. The shares are subject to transfer restrictions for three years from the day of payout. A premature payment of the reward may occur in the event of changes in the group structure or in the case of employment termination on specifically determined bases. The fair value of the incentive schemes is estimated by using the Black-Scholes pricing model.
2011 I 2011 I/2 2014 I
Terms approved *) 09/14/11 09/14/11 09/17/14
Granted (1,000) 31 Dec. 2011 4,359 - -
Granted (1,000) 31 Dec. 2012 4,199 130 -
Granted (1,000) 31 Dec. 2013 4,134 100 -
Granted (1,000) 31 Dec. 2014 2,855 100 4,434
End of performance period I 30% Q2-2014 Q2-2015 Q2-2017
End of performance period II 35% Q2-2015 Q2-2016 Q2-2018
End of performance period III 35% Q2-2016 Q2-2017 Q2-2019
Payment I 30% 9-2014 9-2015 9-2017
Payment II 35% 9-2015 9-2016 9-2018
Payment III 35% 9-2016 9-2017 9-2019
Price of Sampo A at terms approval date *) 18.10 18.10 37.22
Starting price **) 18.37 24.07 38.26
Dividend-adjusted starting price at 31 Dec. 2014 14.17 21.07 38.26
Sampo A - closing price 31 Dec. 2014 38.82
Total intrinsic value, meur 43 1 1
Total debt 45
Total cost for the financial period, meur (incl. social costs) 34
*) Grant dates vary
**) Trade-weighted average for ten trading days from the approval of terms
37 Auditors' fees
EURm 2014 2013
Auditing fees -2 -2
Other fees -0 -0
Total -3 -3
38 Legal proceedings
There are a number of legal proceedings against the Group companies outstanding on 31 Dec. 2014, arising in the ordinary course of business. The companies estimate it unlikely that any significant loss will arise from these proceedings.
39 Investments in subsidiaries
Name Group holding % Carrying amount
P&C insurance
If P&C Insurance Holding Ltd 100 1,886
If P&C Insurance Ltd 100 1,286
If P&C Insurance Company Ltd 100 472
If P&C Insurance AS 100 47
AS If Kinnisvarahaldus 100 0
CJSC If Insurance 100 10
If Livförsäkring Ltd 100 8
Life insurance
Mandatum Life Insurance Company Ltd 100 484
Innova Services Ltd 100 3
Mandatum Life Services Ltd 100 2
Mandatum Life Investment Services Ltd 100 1
Mandatum Life Fund Management S.A. 100 1
Mandatum Life Insurance Baltic SE 100 11
Other business
If IT Services A/S 100 0
Sampo Capital Oy 100 1
The table excludes property and housing companies accounted for in the consolidated accounts.
40 Investments in shares and participations other than subsidiaries and associates
P&C insurance
Country Holding % Carrying
amount /
Fair value
Listed companies
A P Moller - Maersk Denmark 0,03% 9
ABB Switzerland 0,18% 74
Atlas Copco A+B Sweden 0,16% 41
BB Tools Sweden 0,64% 3
Be Group Sweden 6,34% 3
Clas Ohlson Sweden 4,75% 45
CTT Systems Sweden 4,08% 2
Beijer Ab Gl Norway 0,44% 3
Gunnebo AB Sweden 11,67% 36
Hennes Mauritz B Sweden 0,16% 94
Husqvarna AB Sweden 1,01% 36
Husqvarna Sweden 0,39% 14
Investor Sweden 0,13% 29
Lindab Intl Sweden 4,94% 27
Nederman Holding AB Sweden 9,90% 21
Nobia AB Sweden 12,02% 156
Nolato AB Sweden 0,92% 5
Sandvik AB Sweden 0,31% 32
Sectra AB Sweden 11,38% 45
SSAB Sweden 0,05% 2
SSAB Sweden 0,17% 7
Svedbergs i Dalstrop Sweden 11,45% 8
Teliasonera AB Sweden 0,34% 79
Teliasonera AB Sweden 3,94% 6
Veidekke ASA Norway 9,06% 99
Volvo AB Sweden 0,06% 12
Volvo AB Sweden 0,36% 66
Yara Intl ASA Norway 0,21% 22
Marine Harvest ASA Norway 0,23% 11
Total listed companies 985
Other 168
Unit trusts
Aberdeen AM Luxemburg 29
Danske Invest Finland 71
Danske Invest Finland 51
DB Platinum Advisors Luxemburg 56
PEQ Eqt III Guernsey 1
PEQ Eqt IV Guernsey 3
Investec Asset Mgmt Great Britain 49
Barclays Global Investment Ireland 24
Blackrock Inc United States 61
Lyxor Int AM France 0
PEQ Mandatum I Finland 2
PEQ Mandatum II Finland 2
PEQ Mandatum II Finland 5
PEQ Private Egy mkt Finland 3
PEQ Eqt Mid Market Great Britain 5
Handelsbanken Fonder Sweden 24
Hermes Investment Ireland 16
Total unit trusts 400
P&C insurance, total shares and participations 1,553
Life insurance
Country Holding % Carrying
amount /
Fair value
Listed companies
Amer Sports OYJ Finland 4,30% 82
Comptel OYJ Finland 19,11% 20
eQ OYJ Finland 5,59% 8
F-Secure OYJ Finland 4,20% 15
Kemira OYJ Finland 0,82% 13
Lassila & Tikanoja OYJ Finland 5,62% 33
Metso OYJ Finland 0,99% 37
Nokia OYJ Finland 0,05% 12
Nokian Renkaat OYJ Finland 0,96% 26
Norvestia OYJ B Finland 12,41% 13
Oriola-KD OYJ B Finland 2,88% 10
Outotec OYJ Finland 0,81% 7
Pöyry OYJ Finland 3,47% 6
Suominen OYJ Finland 5,47% 11
Teleste OYJ Finland 8,84% 9
Tikkurila OYJ Finland 3,58% 23
UPM-Kymmene OYJ Finland 1,79% 130
Vaisala OYJ A Finland 4,24% 14
Valmet Corp Finland 1,00% 15
Wärtsila OYJ Finland 0,61% 44
Yit OYJ Finland 3,37% 18
Total 546
Other listed companies Finland 28
Listed companies in total 574
Unit trusts
Danske Invest Emerging Asia Fund G Finland 25
Erikoissijoitusrahasto Taaleritehdas Parkki A Finland 6
EVLI EUROPE-B Finland 7
FIM EMERGING YIELD - ACC Finland 8
FONDITA NORDIC MICRO CAP-B Finland 6
FONDITA NORDIC SMALL CAP-B Finland 6
Fourton Odysseus Finland 43
FOURTON STAMINA NON-UCITS Finland 20
KJK Fund SICAV-SIF Baltic States B1 C Finland 12
OP-EMD Local CurrencyA Kasvu Finland 24
OP-Euro A Finland 14
OP-Eurooppa Pienyhtiöt A Finland 5
OP-KEHITTYVA AASIA Finland 5
OP-KORKOTUOTTO II A Finland 19
OP-OBLIGAATIO TUOTTO-A Finland 51
OP-Reaalikorko A Kasvu Finland 7
OP-Yrityslaina A Finland 11
TAALERITEHDAS ARVO MARK OS-A Finland 9
Total 278
Capital trusts
Amanda III Eastern Private Equity L.P. Finland 16
Amanda IV West L.P. Finland 24
CapMan Hotels RE Ky Finland 10
CapMan RE II Ky Finland 6
Capman Real Estate I Ky Finland 9
Capman Real Estate II Ky Finland 8
Mandatum Private Equity Fund I L.P. Finland 6
Sponsor Fund III Ky Finland 6
Total 84
Other shares and participations 62
Domestic shares and participations in total 999
Other companies
BenCo Insurance Holding B.V. Netherlands 6,49% 6
Cummins Inc United States 0,02% 5
EI du Pont de Nemours & Co United States 0,01% 5
Gap Inc/The United States 0,04% 6
Pension Corporation Group Limited Guernsey 1,39% 9
Total 31
Foreign unit trusts
Prosperity Cub Fund Guernsey 34
Comgest Growth Asia Ex Japan USD I Acc Class Guernsey 52
DJ STOXX 600 OPT Healthcare Ireland 28
HERMES ASIA EX-JP E-F-A EURO Ireland 31
IRIDIAN-US EQUITY FUND-I Ireland 43
NOMURA FDS IR-JP STR V-I JPY Ireland 11
PIMCO GIS-Emerging Markets Bond Fund Ireland 21
PIMCO-Global Investment Grade Credit Ireland 23
Aberdeen Global Asia Pacific Equity Fund Luxemburg 52
Allianz RCM Europe Equity Growth W Luxemburg 63
Danske Invest Europe High Dividend I Luxemburg 53
DB X-Trackers DAX UCITS ETF Luxemburg 53
FIDELITY FDS-JPN AGGRE-IJPY Luxemburg 6
FIDELITY-ASIAN HI YLD-A USD Luxemburg 14
LUX Mandatum Life Nordic High Yield Total Return Fund SICAV-SIF G EUR Share Class Luxemburg 14
MFS MER-EUROPE SM COS-I1EUR Luxemburg 14
UBS LUX-CHINA OPPORTUNITY BA Luxemburg 6
UNIDEUTSCHLAND XS Germany 21
ASHMORE-EMKT COR DB-I -ACC Great Britain 10
Investec Emerging Markets Currency I Acc USD Great Britain 10
INVESTEC GSF-ASIA PACIFIC-I Great Britain 67
ISHARES CORE S&P 500 INDEX FUND United States 287
MFS European Value Fund Z Luxemburg 47
Prosperity Russia Domestic Fund Guernsey 14
The Forest Company Limited Guernsey 10
SPDR S&P INSURANCE ETF United States 16
Total 1,001
Foreign unit trusts
Avenue Special Situations Fund VI (C-Feeder), L.P. Cayman islands 20
Financial Credit Investment I, L.P. Cayman islands 11
Fortress Credit Opportunities Fund II (C) L.P. Cayman islands 52
Fortress Credit Opportunities Fund III (C) L.P. Cayman islands 32
Fortress Life Settlement Fund (C) L.P. Cayman islands 6
Goldman Sachs Loan Partners I Offshore B, L.P. Cayman islands 9
Highbridge Liquid Loan Opportunities Fund, L.P Cayman islands 48
Highbridge Specialty Fund III Cayman islands 34
Lunar Capital Partners III L.P. Cayman islands 9
Mount Kellet Capital Partners (Cayman), L.P. Cayman islands 25
Mount Kellett Capital Partners (Cayman) II, L.P. Cayman islands 22
Petershill II Offshore LP Cayman islands 12
Petershill Offshore LP Cayman islands 22
Russia Partners II, L.P. Cayman islands 8
Victory Park Capital Fund II (Cayman), L.P. Cayman islands 19
Capman Buyout IX Fund A L.P. Guernsey 8
EQT Credit (No.1) L.P. Guernsey 17
EQT Credit (No.2) L.P. Guernsey 20
EQT IV ISS Co-investment L.P. Guernsey 10
EQT V (No.1) L.P. Guernsey 7
EQT VI (No.1) L.P. Guernsey 23
Gilde Buy-Out Fund III Guernsey 6
Permira IV L.P. 2 Guernsey 6
M&G Debt Opportunities Fund II Ire 13
Activa Capital Fund II FCPR France 8
Verdane Capital VII K/S Denmark 14
Broad Street Loan Partners 2013 Europe L.P. Great Britain 15
M&G Debt Opportunities Fund Great Britain 22
HRJ Global Buy-out III (Asia) L.P. United States 6
Total 506
Other share and participations 155
Total foreign shares and participations 1,694
Life insurance, total shares and participations 2,693
Holding
Country Holding % Carrying
amount /
Fair value
Listed companies
Aktia Plc Finland 5,73% 37
Other Finland 3
Domestic other than listed companies
Varma Mutual Pension Insurance Company Finland 80,28% 14
Other Finland 28
Total domestic shares and participations 82
Foreign unit trusts 3
Holding, total shares and participations 85
Holdings exceeding EURm 5 and holdings in listed companies exceeding five per cent specified.
The table does not include investments related to unit-linked insurance contracts.
41 Events after the balance sheet date
In the meeting of 11 Feb. 2015, the Board of Directors decided to propose at the Annual General Meeting on 16 April 2015 a dividend distribution of EUR 1.95 per share, or total EUR 1.092.000.000, for 2014. The dividends to be paid will be accounted for in the equity in 2015 as a deduction of retained earnings.
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