In line with the P&C-focused strategy, Sampo plc announced a strategic review of Mandatum’s role within the group on December 7, 2022. After evaluating the options, the Board decided to propose a demerger of Sampo to separate the Mandatum.
At the Annual General Meeting, held on May 17, 2023, it was decided to approve the partial demerger of Sampo as outlined in the plan approved and signed by the Board of Directors in March earlier this year.
Sampo will therefore be a pure-play property and casualty (P&C) insurer with an attractive footprint and the potential to deliver high and stable returns on capital. The demerger advances Sampo’s strategy, which promotes a primary focus on P&C insurance operations.
In the demerger, all shares of Mandatum Holding Ltd and related assets and liabilities will be transferred without liquidation to Mandatum plc, a company to be included in the demerger. Meanwhile an independent Mandatum will be able to build a strong Finnish core business to promote growth.
Mandatum will have greater strategic and financial flexibility on a standalone basis, which will allow it to continue to execute its current growth strategy focusing on products that generate payments and run its book with income.
As part of the demerger resolution of Sampo and conditional on the registration of the completion of the demerger, the AGM decided to establish a new entity, Mandatum plc, to approve its articles of association.
In addition, the company will elect Markus Aho, Jannica Fagerholm, Kimmo Laaksonen, Johanna Lamminen, Patrick Lapveteläinen and Jukka Ruuska to the Board of Directors of Mandatum plc. It is proposed that the said Board of Directors choose from among themselves Patrick Lapveteläinen as Chair and Jannica Fagerholm as Vice Chair of the Board of Directors.
The AGM also decided that, until the end of the first AGM of the Mandatum will pay a term fee of €27,000 to each member of the Board of Directors, €42,000 to the Chair of the Board of Directors and €36,000 to the Vice Chair of the Board of Directors. The company will also pay meeting fees for each meeting of the Board of Directors of € 600 for each member of the Board of Directors and € 1,500 for the Chair of the Board of Directors and Vice Chairman of the Board if he takes the lead of the meeting while paying meeting fees for each meeting of the Audit Committee of €600 for each member of the Audit Committee and €1,000 for the Chair of the Audit Committee.
After the demerger, Sampo will be the largest P&C company in the Nordic market with a 20% market share. Gross written premiums for Sampo for the financial year 2022 amounted to €8.1 billion, with a combined ratio of 82.1%. While its underwriting profit stands at € 1.3 billion for 2022 and the growth of underwriting income is 13%.