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Mandatum Life

Mandatum Life's premiums written and balance sheet reached a record high in 2010. The strong growth in premiums written was a result of investments set in motion in 2008, which aimed at strengthening the wealth management and in-house corporate sales organisations, combined with the recovery of Sampo Bank sales to the previous years' level.

Despite the good return on investment activities, the year was a very challenging one in the investment market. Recuperation from the financial crisis that started in 2007 left behind a legacy of concern about the future of the eurozone. The long-term interest rates of AAA-rated eurozone countries fell during the year and as a consequence Mandatum Life strengthened its balance sheet by supplementing technical provisions to adapt to the low interest rates. The profit was used to raise the company's equity, thus further strengthening its solvency. As far as investment activities are concerned, year 2011 also involves a number of uncertanties. However, the company's strong solvency position together with the increase in technical provisions made possible by the low interest rates creates a good basis for operations in 2011.

In terms of wealth management, Mandatum Life's philosophy of absolute return aroused clients' interest during 2010, proving its viability. The international economy and investment market were unsettled and unpredictable and subject to rapid changes. It was therefore challenging to analyse the situations and draw definite conclusions. In this demanding market situation the investment philosophy of absolute return and active investment operations proved their worth. Coupled with increasingly active wealth management sales this created the foundation for growth in 2010 and helps to create growth expectations for 2011.

In addition to wealth management, corporate sales is another focal area in the development of Mandatum Life's in-house distribution channels. The employer's need to win the commitment of employees and provide incentives for them, combined with the employees' need to prepare for retirement will help to sustain the conditions for growth expectations in the company. There is also an equal need for risk insurance, both for enterprises and for employees, and as a result the company developed its offer of risk insurance products during the year under review.

In corporate business, unit-linked premiums written continued to grow. For both corporate sales and wealth management sales, cooperation between the distribution channels is of primary importance. This cooperation was successfully set in motion during 2010, and it also explains a significant part of the growth in premiums written during the past year. During the year 2010 a record number of pension funds were transferred to life insurance companies. All these transfers are with profit policies with guaranteed interest. As the guaranteed interest rate is relatively high compared to the market interest rates Mandatum Life has not been active in this sector.

A new drive was found in the cooperation between Mandatum Life and Sampo Bank and as a result the premium income generated by the Bank grew strongly in 2010. Especially pleasing, in addition to private customers' business, was the strong recovery of private bank and corporate business. The growth in this sector is based on a common intent and confidence in strategic cooperation between Sampo Bank and Mandatum Life.

In 2010 the Baltic subsidiary changed its name from Sampo Life to Mandatum Life, a move which has further reinforced the principle of "one company, one strategy", while at the same time cooperation with the parent company has become considerably closer. This cooperation was most clearly evident during the year under review in the smooth cooperation between the wealth management service launched in the Baltic countries and the parent company's wealth management operations. Wealth management services played a key role in the growth of Baltic sales.

The company's growth, integration of new operations into the traditional life insurance business and improvement of the quality of customer service calls for new working methods and competencies from the personnel. For this reason a substantial investment has been made in personnel development, with the focus on internal cooperation, improving the quality of customer service and developing leadership. During the year under review, the insurance and claim services were also re-organised, motivated by the aim to improve customer service while giving attention to the needs of each customer segment.

Download Mandatum Life's Board of Directors' Report and Financial Statements 2010

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