Moody's Affirms Sampo Group's Ratings with Stable Outlook

Strategic Insights -

Sampo Group, the parent company of If P&C Insurance Ltd, has seen its ratings affirmed by Moody's Investors Service. The stable outlook reflects Sampo's strong position in the Nordic property and casualty insurance market, as well as its consistent profitability and solid capital adequacy. Despite its narrow geographic focus and modest scale compared to peers, Sampo's dominant market positions in the Nordic region and growing UK presence contribute to its robust credit profile.

Key Takeaways:

  • Moody's has affirmed If P&C Insurance Ltd's Insurance Financial Strength Rating (IFSR) at Aa3, reflecting its core status within the Sampo Group and strong credit profile.
  • Sampo's senior unsecured debt ratings have been affirmed at A2, anchored on the Group's Aa3 notional IFSR, due to its strong credit profile and dominant market positions in the Nordic region.
  • Sampo's senior unsecured MTN rating has been affirmed at (P)A2, with its subordinated notes rated at A3(hyb).
  • The Group's stable outlook reflects Moody's expectation that Sampo will maintain its leading position in the Nordic non-life insurance market, strong profitability, and solid capitalization.
  • Partially offsetting these strengths are Sampo's narrow geographic focus, modest scale, and moderately high exposure to equities, which could add volatility to investment earnings.
  • Sampo's profitability is strong, benefiting from excellent underwriting results and a steadily increasing contribution from Hastings Group Holdings plc.
  • The Group's capital adequacy is solid, with a Solvency II ratio of 177% as at YE2024 and a strong capital generation track record.
  • Sampo maintains strong financial flexibility, with moderate leverage and good earnings coverage ratios, and access to debt markets.
  • The stable outlook is supported by Moody's view that Sampo will maintain a disciplined capital management approach and operate with a Group Solvency II ratio close to or above the midpoint of its target range of 150-190%.

Statistics:

  • If P&C Insurance Ltd's IFSR is affirmed at Aa3, with an outlook that remains stable.
  • Sampo's senior unsecured debt ratings are affirmed at A2, with a stable outlook.
  • Sampo's senior unsecured MTN rating is affirmed at (P)A2, with its subordinated notes rated at A3(hyb).
  • The Group's financial flexibility is supported by moderate leverage and good earnings coverage ratios.
  • Sampo's capital generation track record is strong, with a Solvency II ratio of 177% as at YE2024.
  • The Group's return on capital and underwriting results are very strong, with a 13% growth in underwriting profits in 2024 and a combined ratio of 84.3%.
  • Sampo's Solvency II ratio is expected to remain close to or above the midpoint of its target range of 150-190%.

Sources:

  • Moody's Investors Service - "Moody's Ratings" (2024)
  • Sampo Plc - "Annual Report 2024"
  • Hastings Group Holdings plc - "Annual Report 2024"