News

Early 2012 has been highly profitable for Mandatum Life Insurance Company Ltd  thanks to favourable investment activities and an increase in premium income. Premium income on Mandatum Life's own account grew 20 per cent in January-March 2012, totalling EUR 260 million (216). The growth is attributed to both the successful marketing of Mandatum Life's wealth management solutions and sales made through Sampo Bank. Mandatum Life's market share in its priority area of unit-linked investments rose to 30.1 per cent (25.0). As a result, the company's total market share rose to 27.0 per cent (22.2). In the Baltic countries, however, premium income decreased considerably to EUR 5 million (12).

Economic data indicates that European countries have, according to the expectations, turned again one by one towards the recession. Differences between countries are widening as the Southern Europe is sinking dramatically in relation to other European countries.

After the positive run in January-February, riskier asset class markets experienced a moderate setback after mid-March. Concern over China’s economic growth, rising Spanish and Italian government bond yields as well as U.S. macro economic data barely reaching market expectations pushed equities under selling pressure.

The continued positive market sentiment as well as an increase in risk taking willingness kept equities on the rising track in February (S&P 500 +4.1%, Euro Stoxx 50 +4.0%, Emerging markets +5.9%). Based on the altered market consensus estimates for earnings, there was actually no reason for this, however, the ECB’s intervention with the second and final operation to offer banks three year loans was enough to satisfy markets. It is yet unclear as to how much of this operation will migrate into consumer credits to actually circulate and resuscitate the real economy.

Mandatum Life Group GWP was 849 mEUR in the 2011. Unit link share of total GWP was 76%. Result of the Group was 137 mEUR and solvency ratio was 20,9%.

Mandatum Life Insurance Baltic SE GWP was 41 mEUR (60 mEUR), total result was 239 tEUR (1 448 tEUR). Unit link share of the total GWP was 93% and assets under management decreased to 136 mEUR (165 mEUR) from which unit link savings were 86%.

The end of the year 2011 was relatively peaceful when volumes and trading activity fell significantly at the end of December. No new flavors were added into Euro crisis during December and government bond markets stayed stable on the Euro zone. Rapid additions in the liquidity of three year loans (1 % interest rate) for commercial banks run by ECB were accepted in a positive atmosphere.

A strong fluctuation was seen in the markets in the beginning of November and during the second half of the month sales pressure gained the upper hand.
The greatest coordinated measure since 2008 was undertaken by international central banks (FED, ECB, BoJ, BoE etc.) when the price of interbank lending (OIS) was lowered from 1% to 0.5%.

The performance of riskier asset classes was strong in October. Especially in the U.S., the stock market gains were more consistent, but in Europe a strong rally was seen at the beginning of the month and
right at the end of the month when EU leaders revealed their ”Grand Plan,” which raised the sentiment for investors.

Strong price fluctuations continued to play the main role in the stock markets in September. Stock and sector correlations hit their peak as the flow of macro news and political decisions took the leading role. The intraday movements were especially strong, and no forseeable change is expected in the future.