Ladies and gentlemen, welcome to this conference call on Sampo's third quarter 2019 results. I'm Jarmo Salonen, Head of Investor Relations at Sampo, and with me at this call, I have Kari Stadigh, our Group CEO and President, Torbjörn Magnusson, who will be Group President CEO starting 1st of January next year, Knut Arne Alsaker, Group CFO, and Morten Thorsrud, CEO for If P&C. We'll have the same procedures as always, but before handing over to Kari, I'll just remind you that you can follow this transmission on sampo.com/results, and a recorded version will also be available later on at that same address. With these words, I'll hand over to Kari.
Thank you, Jarmo. Welcome to the conference call on my behalf as well. As you are all well aware of, I'm stepping down as Group CEO by the end of the year. Therefore, I'm going to hand over to Torbjörn for the comments on our Q3 results in a moment. Before that, I want to comment shortly on our new guidance on the dividend. We have for many years been committed to a yearly increase of our dividend. In our Q2 conference call, I was firmly behind continuing that good tradition, if necessary, even bridging it, if our group internal dividends didn't sum up to an adequate amount. Two things have changed since our August call. The main thing being, of course, Nordea's new communication, a payout ratio of 60%-70%, significant write-offs, and new group targets. The second thing was ECB's communication in early September.
Rates will stay lower for longer. My view on interest rates bottoming out was wrong. It became obvious that to continue to propose an increase in dividend for Sampo or bridging an annual increase in dividend was not in the best interest of our shareholders. It is also worth remembering the dividend of EUR 0.56 already distributed as Nordea shares, and this in itself reducing the number of shares on which our internal Nordea dividends is based. A new guidance for the Sampo dividend was needed. It is the duty of the management to react swiftly to news of this magnitude. Our dividend guidance for next spring still maintains our status as a dividend stock with a dividend yield of roughly 6%. This is my main comment on the dividend. Now I hand over to Torbjörn on the Q3 results.
Thank you, Kari. This has been a somewhat unusual quarter for Sampo. We have both had some significant one-time events, both in Nordea and in Sampo, as well as very strong developments in our insurance operations. Let me first comment on the more exceptional actions and events. As we had planned and communicated, we have this quarter distributed 55 million Nordea shares to our shareholders as a dividend, and as a consequence, our ownership in the bank came down to just below 20%. The aim of this was to terminate the regulation of Sampo as a financial conglomerate, since the capital commitment we had to make when Nordea was about to come as uneconomical as it was illogical. After the approval by the Finnish regulator in October, Sampo is now an insurance group also for regulatory purposes with a strong solvency ratio.
The process was well executed and with an outcome that aligns the regulation of Sampo with how I strategically view the group. We have been waiting for Nordea to present their updated business plan and new financial targets. The rapid appointment of a new CEO made it possible to do things in the right order and get him involved at an early stage. If you allow me to talk as Nordea's chairman for a moment, I was pleased with the presentation Nordea made two weeks ago. It was as a result of a significant amount of work done by the board of Nordea, the new CEO, and his management team altogether. Nordea's business plan is about better execution, better customer experiences, enhanced operational efficiency, and as a result, better shareholder value creation.
It's a credible and realistic plan with the right actions and targets that reduce uncertainty for Sampo and for other shareholders for the coming period. We have recently communicated how we see next year's dividend for Sampo and that the board will review the dividend policy over the months to come. Kari already covered the background to this. The dividend has been and will always be important for Sampo and for our owners. Obviously, our dividend needs to be based on the earnings in the businesses that we own and the dividends that these businesses upstream to Sampo PLC. This is nothing new.
With the change in dividend policy in Nordea, expectations of a dividend from Sampo of between EUR 2.1 and EUR 2.3 per share next year is a straightforward communication which aligns profit expectations and dividends. I see our communication from the 24th of October as a prudent one, but with the best interests of our shareholders in mind with respect to long-term value creation, which has always included securing a strong balance sheet for this group. This has also been a quarter with business as usual for Sampo. As usual, we have today released a great set of results for our insurance businesses. The combined ratios of the P&C insurance operations that we own are excellent. As you have seen, the operating environment for Nordic P&C is still very good. Competition from recent entrants without competitive advantages has faded, If P&C had growth for the first nine months of 5%.
This is very much due to market-leading web offering and a successful transition into an omni-channel distribution world. In Mandatum, further, the result this year is very good due to high investment returns. The transformation of the company's balance sheet is continuing with growth in unit-linked reserves and continued reduction of old with profit reserves. We have taken various initiatives during the third quarter to strengthen the company's balance sheet, given, of course, the impact from the low interest rate environment. For Topdanmark, I think the only thing to say is that we have become so used to the company performance that a non-life combined ratio of just above 80 for the year so far and continued double-digit % growth in unit-linked life business almost passes without anybody noticing.
With the investment in IT that the company's making, combined with the exceptionally strong underwriting culture, we see possibilities for further continuous improvements. Nordea Q3 result was obviously affected by a number of one-offs, which we're already well aware of. Looking at the underlying business, I think it was a decent quarter, where we saw some small positive effects from increased business volumes and activities on both net interest and net commission income, and the market shares for the mortgage businesses is back roughly at the back book levels in all countries. Lastly, one thing is undoubtedly special with the quarter we're already well into, not only for Sampo, but for me personally, and for Kari. This is Kari's last few weeks as CEO of Sampo Group.
I want to thank Kari for the enormous support that you have given me during the last 18 years, and for the belief that you have shown that creating shareholder value can be done owning insurance businesses. This was certainly not a commonly held view 18 years ago. We have worked together for an exceptionally long time, so the CEO transition here is a very continuous one. I obviously share many of your core values, Kari, including a focus on people and equally on accessing maximum information in the markets and the importance of a strong balance sheet, but equally on not hoarding capital unnecessarily. Thank you, Kari, and I'm certain many of you others on this call wish you all the best for your retirement.
Thank you.
Thank you, Torbjörn, and thank you, Kari. Operator, we are now ready for the questions please.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press 01 on your telephone keypad. Our first question comes from the line of Jakob Brink from Nordea. Please go ahead.
Thank you. I have a few detailed questions. I hope that's okay. On page 24 in the slide packets, maybe Ståle, could you just highlight or give us a bit more details on how the sensitivity to equity prices, hence also, I guess Nordea is actually working, how much of this is Nordea, and maybe just a bit more detail on that would be helpful. Thanks.
Okay. I can start the other thing. Hello, Jakob. What we show on page 24 is our equity exposure, including Nordea, but it's also including the symmetric adjustment under Solvency II, which gives us a buffer for a reduction in the first 20% drop in share prices, which obviously is reflected here on this page, since we're showing -10% and -20%, which gives a fairly limited sensitivity. This is assuming that our equity portfolio, including Nordea, moves in line with the global indices, which the symmetric adjustment is based on. That's what we show on this particular page.
What if Nordea would move differently than the world index?
If Nordea specifically would go down, obviously that reduction in market value would impact own funds. Roughly 40% of that reduction would reduce the SCR, assuming that Nordea was the only stock that went down and global markets otherwise remained unchanged.
Okay. Thank you for that. It looks like the reduction in with profit guarantees and reserves year to date or year on year is somewhat larger than what it has been in recent quarters. Remember, I think at the Analyst Day in August, there was a presentation talking about you would try to speed up that reduction. Is that what we are seeing the results of now, and should it continue at a higher pace?
Yes, that's what you see the result of now. The reduction that we have year to date is the highest reductions we've had in any of the years where this has been in run-off, and roughly EUR 200 million of that reduction is related to the 3.5% and 4.5% guarantee. I would expect that to remain and probably end off in the year somewhere EUR 250 million-EUR 300 million in total, where the majority of that will be the high guarantee product.
250 to EUR 350. Okay.
EUR 250-EUR 300.
Okay. Thank you. As far as I can calculate, the goodwill amortization on Nordea is relatively large here in Q3. I don't know if that's anything to do with the sell down of shares, or is that a new level?
No, there's no special in the goodwill amortization in Q3. Our goodwill related to Nordea doesn't change. Obviously, we have a lower stock on Nordea shares. Of course, that is reducing our holding and book value of Nordea. The 55 million Nordea shares is proportion reducing the total nominal book value of Nordea since it's no longer on our balance sheet. There's no other special things going on in terms of our goodwill and intangibles related to Nordea.
Great. Just finally on non-life. The very strong Swedish combined ratio now for three quarters in a row, or even better than it used to be for three quarters, is I think you said last quarter, that that was due to relatively high run-off gains on motor TPL. Is that still the same going on?
Yes, I'll confirm, Morten here. That's correct. It's still very much reserve releases from motor TPL affecting that in Sweden.
Okay. Thank you very much for the answers.
The next question comes from the line of Matti Ahokas, Nordea . Please go ahead.
Yes, good afternoon. Two questions on the non-life business as well. A topic you've talked about quite frequently is the impact of lower interest rates. When you look at the running yield of If in particular, it has actually been extremely stable. I was wondering, could you shed us some light on what's behind it? Is this purely technical, or does it reflect different investment mix to, for example, Norway, where rates are higher? How do you see this going forward? The other question is regarding also Sweden and the non-life business. The profitability has been very strong, but has also the premium growth. I was wondering, Morten, if you could talk a bit and elaborate on the dynamics on the market, how come premiums are growing so much as they are? Thank you.
I start with the running yield question, Matti. The maturity profile of our fixed income book lately have been fairly stable, meaning that we haven't had a lot of fixed income maturities over the last couple of quarters, and will not have in Q4 either. That has helped to keep up the running yield in If and also in Mandatum, actually. Obviously, with the interest rate environment we have, the reinvestment yield is lower. On many of the investments we do, obviously the yield is more between zero and half a percentage points. Slightly higher if we take a bit of all credit risk, but it's lower than the running yield. Again, that has been kept up and will probably be kept up for a couple of more quarters due to the maturity profile of the fixed income portfolio.
It will still come down in 2020 if rates stay at current levels.
It will definitely still come down in 2020.
To your question, Matti, on Sweden and growth. We report 4.3% growth for the Swedish business year to date, and 7% in the third quarter standalone. We do see quite a good growth in net number of customers in Sweden, in particular in the business area private. On top of that, in Q3, we also see increased car sales. If you recall, we had a special situation last year where a lot of the car sales took place in the first half of the year due to tax changes. Now we are comparing toward a third quarter last year, that was also a bit weaker as a result of that. Still, we do see good growth in number of customers, again, in particular in the private segment in Sweden.
This is not a reflection of significant price adjustments, it's more a question of volume?
It's more a question of volume. Price increases are more natural, I would say, more normal in Sweden. A bit higher in commercial than in private, but nothing special.
Got it. Thanks. All the best to your many future endeavors, Kari. Thank you.
The next question comes from the line of Pierre Gundahl from SEB. Please go ahead.
Yes, thank you. two questions from my side. First of all, industrial, you're growing 14% year-over-year. Can you put some light on what you're seeing out on the marketplace? We know that a number of other Nordic competitors are leaving this market. What are you seeing going forward from here?
We do see good profitability in our industrial business, and we've been doing things so for many years. The industrial business is a key part of our business, a natural part of our business. We do experience quite strong growth this year. It's driven by several factors. One being increased turnover with a number of our clients. Another one being price increases in the portfolio as such. We also have some one-off effects with some larger construction projects that could typically inflate the GWP figure and typically earn more over time. We see a very high retention rate in the large corporate segment, which I guess is reflecting a little bit that some other players have a bit more negative view on this segment. Again, we see good underlying profitability in this segment and are happy about the growth that we see.
Okay. My second question relates to Mandatum. You show in the report that you have provided EUR 227 for low rates. Take into account the size of your book and where interest rates are currently. It doesn't look like you have provided a lot, take into account that, yes, this is not a very long tail business, but it's still businesses you will have on your book for, I guess, on average six to eight years still to come.
If I got your question right, this EUR 227 million, if I should describe what it includes, then it's including the discounting all the 4.5% guaranteed liabilities that we have down to 3.5%. In addition to that, it includes discounting all liabilities down to 0.25% for this year, next year, and 2021. All liabilities down to 2.5% discount rate in 2022. After that, there's no discount rate reserved, and the average guarantee on Mandatum's liability is slightly above 3%.
I think in the light of your also stating that your reinvestment yield is now down to the level of between zero and half a %. There seems to be a potential significant need for putting the reserves aside for these guarantees if we don't see a sharp rise in interest rates within a couple of years.
Sure. After 2022, the guaranteed rate is just above 3%. That can be met in different ways, obviously, with an investment return, with the portfolio Mandatum doesn't have. You're right. Some of that will need to be meet the guarantees. Alternatively, Mandatum is making roughly EUR 30 million risk result and EUR 30 million expense result per year, roughly today. In 2022, one year cost of Mandatum's guarantee with the run-off profile it now will have, will be EUR 60 million. In 2022, with 0% investment return and the current risk and expense result, Mandatum's profit will be zero. The risk and expense result in 2022 will still be enough in itself to meet one year's guarantee.
Okay. Thank you.
My apology. I should say 2023. In 2022, we actually need a little bit less than EUR 60 million. We need EUR 45 million.
Of course. Got you. Got the point. Thank you.
All right.
The next question comes from the line of Jonny Urwin from UBS. Please go ahead.
Hello, good afternoon. Thanks for taking my question. Just one focus area really around the attritional loss ratio. Mainly the expectations going forward. I think you guys are making the point again today that pricing is on average in line with claims inflation and in some markets ahead, mainly Norway. All else being equal, should we expect that attritional loss ratio to improve from here? I was also just hoping for you to make a comment around retentions. The growth is pretty good at the moment. You're getting rate as well. What's happening to retentions? Is there anything you're doing there to perhaps lift retentions even higher and anything you'd like to showcase? Thank you.
No. Of course, as you know, we prefer to look at the total combined, and we report a total combined of 84.3, which of course is a highly attractive combined ratio as such. When we look at the current year result, it's of course, somewhat higher as this is partially supported by run-off gains, and to a magnitude that is somewhat higher than what we've seen earlier. We do see a certain underlying improvement if you look at the first nine months, since we are having, in part of the business, price increases that are somewhat above what is expected inflation, and that continues into Q4 as well. On a current year basis, we do expect to see some improvement going forward. When it comes to growth and retention, a larger part of the growth that we see comes from improved retention, in particularly in the private segment.
We do see retention rate increasing in all markets and being actually at record high levels now. That trend kind of continues.
Thank you very much, and all the best, guys.
Thanks.
The next question comes from the line of Kevin Ryan from Bloomberg Intelligence. Please go ahead.
Thank you very much. I just wanted to try and understand a little better the dividend guidance going forward. Around that, I wonder if you could tell us what level of earnings distribution for the dividend you're happy with, and also how that ties in with the solvency level you're happy with. Thank you.
The guidance, if you read it carefully, it's actually only for next spring. We have said in the announcement that we will come back to that early next year on a proper dividend policy.
Okay, thanks.
The solvency ratios that we would be happy with.
The next question comes from the line of Sami Taipalus from Goldman Sachs. Please go ahead.
Hi. Good afternoon, everyone. My first question is strategic. I think, Torbjörn, you talked about sort of a will to return more towards an insurance focus in the past, and you mentioned in your speech about more of an insurance focus as well, and you've announced the appointment of Mr. Ricard Wennerklint as Chief of Strategy today, who also comes from a very insurance-focused background. I'm just wondering what we should read into this regarding Sampo's strategy going forward and potential implications for the stakes in Nordea and maybe also the investment portfolio held at holding company level. It'd be great to hear any thoughts on that to start off with, please.
I don't think there's any dramatic sign to read into it. Three-quarters or so of Sampo is now insurance operations. It's by and large, thus an insurance-dominated operation, and we have an unusual amount of knowledge about the insurance business. We need to keep it that way and continue to develop that business. Any further thoughts on the future, of course, I will return to next year.
Okay, great. Just moving on to the solvency ratio. If I just try to strip out the Nordea stake out of the Group Solvency II ratio, it looks like the insurance-only solvency ratio would be quite low, actually. Is that something that you would see in your own calculations? Second, how optimized is the group solvency ratio? If I remember correctly, and correct me if I'm wrong, it includes If and Topdanmark and Mandatum at standard formula. Is that right? Are there some other potential actions you could take there to optimize the ratio further?
The answer to your first question in terms of the insurance business standalone, the way I view the group now, it is an insurance group with a large holding in Nordea, which adds, from a solvency perspective, market risk to our solvency calculation. It's an integrated part of the Solvency II group SCR and own funds. There's nothing really to strip out. If I took the extreme case that Nordea should go bankrupt and the value of Nordea should be zero, we would have a Solvency II ratio as of Q3 of slightly above 120%. We would still be okay.
Such an extreme scenario, which means that we are very comfortable with the solvency position and the capital position that we have today. We have a little bit more capital than we actually need for regulatory purposes. Clearly, without Nordea going bankrupt, we have a very comfortable strong capital buffer. In terms of optimizing, there's no activity going on with the strong capital buffer. We have to try to further optimize it. Right now, we have a possibility to issue some more hybrid capital, which we had talked about before. We most likely will do in the years to come, particularly out of If has room for a little bit more hybrid. Mandatum is pretty much fully optimized. On a group basis, we could, over time, consider to apply also for a group internal model.
That wouldn't significantly, on a group basis, change the solvency ratio from today's level, but it would make it a little bit higher with the assumptions we currently have in our own consideration around an internal model. With a solvency ratio 178%, that's not an active ongoing project for the time being.
Okay, great. Just finally finishing off on If and I guess the growth there. If the profitability and the returns are quite considerably above your market cost of capital, you've already accelerated the growth a little bit. At the same time, I get the sense that you've made quite a lot of progress on the IT side and particularly on the digital distribution. Is there room there to accelerate the growth further from the current level, or are you pretty much hitting up against what you can do or what you're comfortable on doing?
Well, let's see what the future brings. Of course, 5% growth year to date and 6.9% in Q3 is a very high growth rate in P&C. I think just being at that level should be highly satisfactory.
Okay. Great. Thanks very much for your answers.
The next question comes from the line of Blair Stewart from Bank of America. Please go ahead.
Thank you. Good afternoon, everyone. I've got two questions. Firstly, just on dividends expected from subsidiaries. Are we done for this year, or should we expect a late extra dividend coming in from Mandatum? On that point, just a second part to that question. You mentioned about potentially raising hybrids at the P&C level. Why would you do that? Would that allow you to perhaps free up some equity within that business in the form of higher dividends back to group? That's the first question. Secondly, just on the dividend or the dividend statement that you have made for 2019. Correct me if I'm wrong here, but I'm assuming that that would be a level which would be consistent with your new dividend policy, and you wouldn't be making further changes from here. In other words, it's a dividend of EUR 2.1-EUR 2.3.
I'm assuming that's going to fit within your new dividend strategy. Thank you.
Should I start with the first two? You should not expect us to take off any extra dividend from Mandatum. Mandatum solvency ratio today is good and solid. I expect everything else equal. Let's see where the year ends up to be room for an ordinary dividend, but not for an extraordinary dividend. Let's say that we're done for this year, I think.
Clear. Thank you.
Hybrid, we're not talking big amounts from If. We have this capitalization strategy to have the balance sheets of our subsidiaries to be capitalized on their own merits. We utilize now in Q3 the possibility to raise some hybrid in Mandatum, which improved their solvency. We have done and plan to continue to do small amounts also in If. That will, with the total solvency strength over time, contribute to If continuing to pay a very good dividend to Sampo plc. Mainly because of the profit generation that If is having.
I think you have commented that If is overcapitalized, so just wondering why you would add more capital?
We don't need more capital in it from that perspective. It is to make the balance sheet of If more efficient. I haven't changed my view on the strong capital position of If.
On the dividend going forward, you now have clear guidance for this year, I said the profit expectation and the dividend now go hand in hand. Let's see what the board makes of that when they look at the policy early next year.
Okay. All right, fine. I'd be disappointed if there was a second downwards revision to the dividend. I'll leave that for later. Maybe just finish with a word on Kari. Kari, all the best. I've always enjoyed our encounters. You've got a great sense of humor, even if that doesn't always come out on these calls. You're a very entertaining guy. All the best. All the best to you as well, Torbjörn. You served a very long apprenticeship. I wish you every success. Thank you.
Likewise, Blair, you are a very entertaining guy as well, so let's both keep it up.
Yeah.
The next question comes from the line of Johan Ström from Carnegie. Please go ahead.
Thank you. Apologies, but I'd like to come back to the hybrid capital questions. My question is on the holding company's senior bond portfolio, where you have around EUR 300 million of maturities, I think in May next year. It's maybe a little bit early to comment, but would it make sense to refinance some of these maturities with cheap hybrid capital now?
I think you said it yourself. It's a little bit early to comment. We have that date to look at, and we'll make our plans and see how the market looks when we're approaching that date. I don't have any plans to outline on that point now.
Okay. Thank you, Knut. Then a quick one to Morten on If P&C another quarter with good run-off gains. Just wanted to double-check if there are any trends or other dynamics that suggest that near-term run-off gains should go down from the current levels. Thank you very much.
Well, we typically don't want to speculate about future run-off gains. It's still something we assess from quarter to quarter. So far, the trend that we've seen on reduced bodily injuries in motor TP in Sweden has continued. Of course, it's no guarantee that it will continue in the future, try to avoid to speculate on that.
The next question comes from the line of Jan Erik Gjerland from ABG. Please go ahead.
Good afternoon. It's Jan-Erik Gjerland from ABG. I just want to check your strategy here going forward. When you're now being an insurance group, would you like to start to consolidate more into the life insurance industry in the Nordics? Maybe move into Sweden, Denmark, or Norway with potentially unit-linked products rather than these old guarantees. How should we look at your insurance interest going forward if you think about you're already consolidated in non-life insurance side?
Well, I think it's reasonable that I get to answer questions about the strategy of the group next year rather than this year. On life insurance, synergies between even Nordic countries are non-existent. That's not a brilliant starting point.
Okay.
You must always read into Torbjörn's answers the fact that Nordea already is a big life insurer in the Nordics.
That's a good feeling. Secondly, on the Mandatum side, if you say that you have a guaranteed interest rate from the back book there around 3% by 2023, should we expect no dividends going forward if we would look for a sort of the zero rate interest rate you have today? That you will cover your guarantee by the admin result and risk result as such? Is that a fair look on it?
No, that's not what I meant. It was in a scenario where investment results were zero in a year. We obviously do believe that we will make a positive investment result over time in Mandatum like we've done for many years, and the expense and admin results come on top of that. In our thinking around Mandatum, it is not a zero dividend. I would more call it in line with what you have seen of ordinary dividends recently, which last year was EUR 150. Obviously 2023, it is a little bit away in time. Mandatum's unit link book is growing gradually, not big steps, but gradually good. Premium income in this quarter and this year has been good. That should everything else equal over time also increase the expense result element in this profit mix I was relating to.
It was absolutely no link to having expected dividend from Mandatum of zero for the years to come.
How is the takeout of the balance sheet, as you said, it's growing faster, so how helpful will that be? It starts to translate into your 3%, or is it a separate issue?
It's quite helpful because with the run rate we've had in recent years, in addition to the profit which we have been talking about a couple of times on the call, we free up capital. There will be a freed-up capital requirement when this book is running down and around 250 million of lower with-profit reserves release is around EUR 50 million of capital with very little additional capital requirements from new unit-linked business. They're basically none. That will help in maintaining a good dividend when the investment return from the with-profit book is being reduced.
That's right. Just finally, on the If side, you had a very strong cost ratio this time around. Is it seasonally stronger because of the summer quietness, or is it driven higher by the premiums in this quarter? As you said, it was extremely short and high.
Yeah, I wouldn't read too much into sort of quarterly changes. The cost ratio year to date is 21.5, down from 21.6. There could be some variation on when different costs are booked. I wouldn't read too much into the 0.3 reduction that you have in the third quarter standalone. More than nine months is more in line with expectations.
Okay. Finally, on the price increases. You said that Norway was maybe running a little bit higher than claims at the moment. What should be our expectations there into Q4 and maybe also next year? Is this also something you see continuing at this hard pace?
Let's see. As we have commented earlier, there are quite some differences between business segments, where we do see higher price increases on commercial than in other business areas. Of course, we monitor claims inflation on a daily basis. We do see a little pickup in claims inflation, probably driven a little bit by weak currencies in Sweden and Norway. That's something we look out for, but it's kind of marginal development.
In Finland, you have sort of turned around a little bit on the book, but you're still sort of flat if you look year-on-year. It's sort of increasing on the Gross Written Premium a little bit. Is that the Gross Premium Written you should look into when you look at the future growth there? You see that it's actually coming up on speed.
We report 1.4% growth year to date in Finland and 3.9% in Q3 isolated. You should bear in mind that in the first quarter, we had quite a weak development in Finland due to the fact that we lost a bit of workers' comp business.
Okay.
Yeah.
Yeah. I was just looking at the earned versus the other one, but as I see, your written premium is EUR 3.9, as you say.
Yeah.
In Denmark, just to touch base, you have on the earned side, a blip in the curve last quarter. Was this anything particular that you lost something and you're back on track again now? Is that the sort of things we could expect going forward? Is the commercial versus private in Denmark?
I think what you see now should represent a fair picture of how well we performed year to date. We have a couple of agreements that are booked early in the year that could adjust GWP a little bit more in one quarter than another. We report 4.5% in Q3 and 4.4% year to date. That's a representation of the growth in Denmark.
Okay. Thanks a lot for your time, Kari, and good luck for your pension career, and hope we can see each other on the annual crayfish party as our special guest.
Thanks.
The next question comes from the line of John Dinan from Morgan Stanley. Please go ahead.
Brilliant. Thank you for taking my question. Knut, you said that Nordea going bankrupt would have left your Solvency II ratio slightly above 120% at 3Q. Presumably, this is the same level as if you paid out all remaining Nordea shares to Sampo shareholders. Would you be comfortable with your solvency ratio going down to this level? If not, can you rule out an exit from Nordea in this fashion, were you to later choose to exit?
I think in terms of just relating to your question on the solvency and then the future, we'll see what we do with Nordea. 122 would be below what I would feel comfortable with. To speculate in dividending out Nordea shares for, I haven't checked the Nordea share price right now, but EUR 5.2 billion, EUR 5.3 billion obviously is not in line with the dividend communication we just recently made. To steer the group to a solvency level of 120 is not what we're planning to do.
Brilliant. Thank you.
Just as a reminder, if you do wish to ask a question, please press 01 on your telephone keypad now. We have a follow-up question from the line of Sami Taipalus from Goldman Sachs. Please go ahead.
Yeah. Hi. Sorry to drag out the call, just a quick follow-up. Coming back to Mandatum Life. You seem to have done quite a lot of work on improving the solvency in that business, I guess, to a level where you're comfortably above targets levels also on the basis without transitionals, including the best issuance you did in the quarter. Does it make sense to still keep such a large duration gap in that business? Potentially you would have done all this work, but you're still sitting on the possibility of undoing that through movement in interest rates. I guess, particularly given that this duration gap doesn't generate spread that you need to pay the dividend. It'd be great to just have a comment on that.
I think sort of trading with the back of your mirror, it would probably in the past have been good to have a slightly different duration gap. We have the duration gap we have now. We manage with that duration gap now. We are happy with the equity exposure that we have in the Mandatum now. We have taken some action on the asset side, but that hasn't been the main driver for the fix in the Mandatum solvency. We've been able to increase the solvency ratio of Mandatum with other measures in Q3. Let's see in the future what kind of asset mix Mandatum will have going forward also as the with profit book is of course becoming smaller.
Okay, great. Because I forgot to say it earlier, obviously also all the best of luck to Kari in his retirement. Thank you very much.
As there are no further questions, I'll hand it back to the speakers.
Thank you, operator, and thank you all for your attention. Have a very nice evening.