SOLNA, Sweden, Feb. 12, 2002 (PRIMEZONE) --
Torbjorn Magnusson new CEO and President of If, February 8
Merger between If and Sampo P&C agreed, completed
January 2, 2002
Significant premium increases implemented
Large claims much above normal
Weak investment return for the full year, 2.5%
Strong positive cash flow from operations, SEK 2.1 bn
(SEK 0.5 bn)
Group result highlights 2001 2000
If Stand alone
Gross written premiums 25,520 20,474
Operating result incl.
normalized investments(a)
-1 415 77
Operating result -2 752 -989
Combined ratio 115.3% 111.2%
Combined ratio(b) 112.7% 110.2%
(a) In addition to the statutory results, If shows an operating result based on a normalized investment result as well as the statutory investment result. This approach is taken because as equity investments are fully marked to market in the profit and loss account, short-term fluctuations in equity market returns affect the statutory operating result. The normalized investment result for 2001 was calculated based on If's applicable investment mix, as adjusted during 2001, and assuming a bond yield of 5.2% and an equity risk premium of 3.5%.
(b)Excluding one-time launching cost of MSEK 170 in Q2 2000 and increase of the technical provisions by MSEK 485 and restructuring charges of MSEK 88 in Q4 2001.
Comments from Torbjorn Magnusson, CEO of If: "The result in 2001 was unsatisfactory, due to adverse claims development, including high large claims, and a weak investment return. This calls for decisive action.
In November, the merger with Sampo P&C was announced, and completion took place on January 2, 2002. The integration with Sampo has started and we have significant value potentials in several areas. A fully pan-Nordic business area structure has been defined.
In Q4, the technical provisions were increased by MSEK 485, as agreed between the owner parties in the merger with Sampo P&C. If also posted restructuring charges and related transactions cost of MSEK 148, of which MSEK 88 affected the combined ratio.
We now look forward to 2002 as a year to develop If. Our aim is to combine customer value with long-term profitability. The differentiated premium increases we are implementing together with even more efficient claims handling are both key to this.
Actions to restore profitability have already been taken and will be reflected in the results in 2002 and 2003. The focal points are risk selection, portfolio pruning in appropriate market segments and retention of existing customers. We have a single-minded focus on improving profitability in the core business areas, and the speed to deliver change will be stepped up."
A teleconference will be held on February 12, at 15.30 Stockholm time. The invitation is published under Press Service on If's IR website. www.if-insurance.com
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The full text report with financial tables can be found at the following URLs: www.waymaker.net/bitonline/2002/02/12/20020212BIT00730/bit0002.doc
www.waymaker.net/bitonline/2002/02/12/20020212BIT00730/bit0002.pdf
www.waymaker.net/bitonline/2002/02/12/20020212BIT00730/bit0002.xls