P&C Insurance in 2010

If P&C is the leading property and casualty insurance company in the Nordic region, with insurance operations that also encompass the Baltic countries and Russia. The P&C insurance group's parent company, If P&C Insurance Holding Ltd, is domiciled in Sweden, and the If subsidiaries provide insurance solutions and services in Finland, Sweden, Norway, Denmark, the Baltic countries and Russia. If's operations are divided into four business areas: Private, Commercial, Industrial and Baltic & Russia.

Results, P&C Insurance, 2010

EURm 2010 2009 Change %
Premiums, net



Net income from investments




Other operating income 25 23
Claims incurred



Change in insurance liabilities



Staff costs



Other expenses



Finance costs



Profit (loss) before taxes



  2010 2009 Change

Combined ratio, %




Risk ratio, %




Cost ratio, %




Expense ratio, %




Return on equity, %




Average number of staff (FTE)




Year 2010 was characterized by exceptional weather conditions in most of the countries where If operates: extreme winter, scorching summer riddled with storms and heavy downpours, and in the fourth quarter weeks of premature but abundant snowfall.

Another exceptional development in 2010 reflected in consolidated P&C insurance result is the significant strengthening of Swedish krona.

Despite the challenging weather conditions, profit before taxes for P&C insurance for the year 2010 rose 10 per cent to EUR 707 million (644) and combined ratio was again on a stable level in 2010 at 92.8 per cent (92.1) being clearly better than the long-term target of below 95 per cent.

Technical result was EUR 449 million (488), of which the Private business area accounted for 53 per cent, Commercial 28 per cent, Industrial 15 per cent and Baltic and Russia 3 per cent.

Insurance margin (technical result in relation to net premiums earned) decreased from the previous year to 11.5 per cent (13.4). Return on equity (RoE) remained good and was 39.8 per cent (53.2) while the fair value reserve increased to EUR 315 million (105).

In business area Private risk ratio increased to 68.9 per cent (68.0) affected by the exceptional weather conditions. Helped by the improved cost ratio, combined ratio increased slightly to 93.0 (92.5). Also in Commercial cost ratio improved compared to last year but the weakened risk ratio of 69.8 per cent (68.3) drove the combined ratio slightly up to 93.5 per cent (92.6).

In business area Industrial combined ratio improved to 90.6 per cent (90.7) helped by the favorable development in nominal costs. Risk ratio was at previous year's level at 71.9 percent (71.6). In Baltic and Russia both risk ratio and combined ratio increased compared to previous year, and were 56.4 per cent (55.7) and 93.4 per cent (91.7), respectively.

Risk ratio weakened due to extraordinary weather conditions during year 2010 in all countries excluding Sweden, where despite the severe winter both risk ratio and combined ratio improved to 70.2 per cent (72.4) and 93.3 per cent (95.2), respectively. In Norway risk ratio increased to 69.6 per cent (68.8) but due to improved cost ratio in all business areas, combined ratio was at previous year's level at 92.1 per cent (92.0). Also in Finland cost ratio improved in all business areas, but the increase in risk ratio to 67.0 per cent (64.0) lead to a higher combined ratio of 90.4 per cent (88.5). In Denmark risk ratio increased to 72.8 per cent (66.1) and combined ratio to 101.4 per cent (93.7).

Gross written premiums increased 8 per cent to EUR 4,189 million (3,888). Adjusted for currency, premiums increased 1.3 per cent.

Cost ratio improved by 0.4 percentage points to 23.7 per cent compared to a year earlier as a result of continuous efforts put on streamlining the operations. The amount of total costs increased to EUR 1,009 million (939), mainly due to the strengthening of the Swedish krona.

Other operating expenses increased EUR 25 million due to dissolving the collective guarantee provision in the Finnish workers' compensation insurance.

Claims incurred increased to EUR 2,689 million (2,477) and risk ratio deteriorated to 69.1 per cent (68.0), affected by the weather. EUR 113 million (87) was released from technical reserves, which related to prior year claims. Reserve ratio was 173 per cent (172) of net premiums written and 236 per cent (240) of claims paid.

Investment market remained positive during the year and net income from investments increased to EUR 487 million (394). As at 31 December 2010, total investment assets amounted to EUR 11.7 billion (10.7) of which 85 per cent (89) was invested in fixed income instruments and 14 per cent (11) in equities. Investment return for 2010 mark-to-market was 7.4 per cent (12.4). Duration for interest bearing assets was 1.7 years (2.5).

As at 31 December 2010 If P&C had a solvency ratio (solvency capital in relation to net premiums written) of 79 per cent (77). Despite the EUR 540 million paid to Sampo plc in dividends during 2010, solvency capital amounted to EUR 3,373 million (2,943) in comparison to the regulatory minimum capital requirement of EUR 735 million.

On 1 January 2011 a new five-year cooperation agreement was announced between If P&C and Volvo Cars regarding Volvia brand insurance. The agreement offers Volvo owners a brand profiled insurance and a 3-year car warranty period. If has more than 443,000 Volvia-insurances in its portfolio, of which 400,000 in Sweden, which means that 40 percent of all Volvo cars in Sweden are insured by Volvia. The deal with Volvo is worth approximately 2 billion Swedish krona in premiums earned for If annually.

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