Sampo - Vakuuttava vakuuttaja

Osakkeet
4819

Sorry I am back again (could not help myself :roll_eyes:)

I have now been analysing all big insurance players reports published so far (Topdanmark, Tryg and Gjensidige).

Some reflections:

  1. Does the Nordic market get any better than this is my first thought? All companies report really good numbers, and most demonstrate around 25 %- 31 % return on equity at the moment. All have pricing power and have or will increase premiums. So inflation is not a worry and for example an interest increase with 1% will benefit Tryg with 300 Million dkk per year.

  2. The Nordic market has to be the best insurance market in the world. The retention rate among all big players are around 90%. Meaning that only 1 in 10 custumers in the Nordics are likely change policy provider. And that 10% is most likely custumers the companies are rather happy to get ridd of because these are the ones with most risks as they prone to accidents.

  3. Consolidation. The subject is of course relevant for Sampo and the case of Topdanmark. The only way to increase your market presence is to buy another company. As you cannot organically grow too much as those who are likely to change insurance company are customers that are the ones you dont want (because they cost too much).

  4. If is going to present a really good result based on the competitive landscape. I will look for in the If report the cost ratio as here If lags its competitors (Tryg and Gjensidige). This lag can also be a product of how cost is calculated in each company and I have no insights into this.

  5. All big players are innovative. Buying and integrating different companies to support their massive scale, everything from towing companies to introducing innovative IT solutions and they have the money to develop these. Small companies do not have proper IT budgets and will eventually lag their big peers (will result in that the big ones will buy the small ones, subject to regulation of course)

70 tykkäystä
4820

älä turhaa pyytele anteeksi hyviä analyysejä.
omia mielipiteitä:

1.listatut yhtiöt julkaisevat hyviä numeroja muut sekalaisia paitsi op. itse vänkään sitä, että korkojen nousulla on +/- vakuuttajille. vastuuvelka pienenee, mutta kilpailun pitäisi nostaa Comp ratiota. kilpailu ei toimi minusta kunnolla, saa nähdä tuleeko viranomaisilta sääntöjä, että se tulisi helpommaksi. tanskassa on myös kiinnitetty huomiota alan ylisuureen kannattavuuteen -(kultainen vasikka, autovakuutus)

2 kannattavuustaso on erittäin korkealla. historiallisesti jättiläismäinen.

  1. agree

  2. IF:iltä tulossa hyvä tulos. ainoastaan private ei juuri kasvane, koska tärkeä automarkkina on eri syistä alamaissa.

  3. I concur

5 tykkäystä
4821

En ole varsinaisesti ajatellut tätä, mutta kyllähän Sampo on niiiiiiiiin arvo-osake kuin vain voi olla :smiley:

Kyllähän ympäristössä missä asiat kuten tulos, osinko tai jopa oma pääoma/varallisuus (ENNEN KUULUMATONTA!) nousevat esiin, niin Sampo on varsin houkutteleva sijoituskohde. Toisaalta miten tämä sitten vaikuttaa? Minä hinnoittelen Sampoa osien summalla, osinkomallilla ja verrokkien kautta myös jatkossa ja ei tuo käypään arvoon vaikuta. Korkojen mahdollinen nousu voisi viedä pohjaa pois TINA-osakkeiden preemiovaluaatioilta, mutta meidän Sampo-casehan ei ole koskaan nojannut tähän :slight_smile:

61 tykkäystä
4822

Kiitos Sauli hyvästä vastauksesta👍

2 tykkäystä
4823

  1. It is hard to see that the market can really get any better than this. Almost all of the main players are “rolling in green” with superior profitabilities. The thesis that “everyone needs to focus on insurance profitability since investment returns are so poor” is starting lose ground as almost all players are earning strong return on the insurance business side. In normal competition environment, high profitabilities all across the board should encourage some players to grow in expense of profitability. This would lead to a price competition and hence lower margins. Obviously, the risk of this continues to climb as the combined ratios continue to go up. Obviously there is always some micro price competition going on somewhere (country, product line etc.), but large scale intense price competition (or even price WAR) is something we have not seen in a long long time. Time will tell if this becomes reality during this decade, but at least the landscape would support the thesis.From If’s perspective it is important to remember that If has pan-Nordic reach which mitigates the effect of possible price war in one market. Since most players are local, the price competition does cross borders. This is why If’s earnings volatility is so low.

  2. Yes, the market is fantastic, don’t really see how it can get any better than this. Also I don’t see any sudden change for worse.

  3. In the big picture the market is split between handful of big players. There is not really too much room for consolidation. It is worth to notice that you can also grow through price hikes (one of the key drivers during the past years in the Nordics). Obviously insurance prices increase together with GDP (more expensive cars, houses etc.). But obviously without taking market share the growth is limited to close to GDP figures.

  4. I’ll comment this later with pre-comment :blush:

  5. Obviously big players have the scale with IT-investments. However I want to highlight that usually when some industry is disrupted the disruption comes outside the industry or from some new kid on the block (think of FAANGS, Tesla etc.). As you pointed our earlier, the Nordic market has super attractive fundamentals which at least in theory should attract new competition. Obviously, the entry barrier is super super high and it is hard for me to imagine where the disruption would come from (maybe you buy car insurance from the car companies in the future? Or something like that). Anyway this is something Sampo owner should follow, even though there is not any major threat in the foreseeable future :blush:

Ps, don’t be sorry, your content is really good and you are great contributor for this forum! :blush:

74 tykkäystä
4824

Some replies to the comments above:

  1. My point of being apologetic refers to that I do not want to ‘dominate’ the discussions (with many inputs), as the forum should be about many various viewpoints and thereby improving the Sampo discussions. (voitte hyvin vastata suomeksi, vaikkakin kirjoitan itse englanniksi, työkieli on englanti)

  2. With regard to the Nordic pricing landscape, it is of interest to note that all big players underline that they are ‘indirectly’ not going to start a price war. As why would they? All thrive in this environment.

An example of a company who started a price war in order to gain market share was Protector. And look how they ended up. :poop: Undercut anyone with prise and ending up with bad quality customers.

  1. I personally think that there would not be an innovation disrupter in this market.

Why?

One: regulation.

Two: All big players can rather ‘easly’ copy the interrupters. Or at least have the money to do so.

An example of this would be the Nordic banking landscape. Some years ago there where predictions of that the banks would be eaten for lunch by Fintech. Well this in my view has not happened and will not happen. Because of regulation and because of the Nordic banks are quite innovative in comparision to other banks in the world. And if there is a big successful Fintech they will attempt to buy them or copy them.

Three: many of the insurance companies’ custumers a rather satisfied based on different surveys. For example here is one: Danske forsikringskunder er de mest tilfredse i Norden

Lets say Meta, or Google or Tesla would or whoever of the big tech would like to innovative this market. How many of us would trust giving our personal info to these companies? I bet you there would be a lot of trust issues here.

27 tykkäystä
4825

Omien ostoa jatkettu eilen; yhteensä 192 216 kappaletta keskihinnalla 42,58.

20 tykkäystä
4826

Kevään Nordea osinkojen osalta Sampo on uuden edessä, kun omistus on alle 10% ja niistä pitäisi maksaa verot. Lokakuussa - 21 Sammolla oli juuri sopiva 10,1% Nordeasta.

Omien ajatusten ilotulituksena tuli mieleen että jos Cevian ja Sampo laittaisivat Nordea omistukset yhteisyritykseen ennen Nordean osingon täsmäytystä saisivat molemmat (Cevian ja Sampo) osingot verovapaasti yhteisyritykseen.

4827

Tuo tällä palstalla usein viitattu 10% alitus ja sen merkittävyys liittyy myyntivoiton verotukseen, ei osinkoon suoraan. Usko pois, kyllä siellä konttorilla on nämä osattu laskea. :slight_smile:

Edit: Mielenkiintoista on tosin miettiä, milloin loputkin Nordeat lähtee myyntiin? Voipi olla, että Nordean osinkoja ei välttämättä enää tarvitse ottaa huomioon ollenkaan. Myyntirajoitushan taisi mennä umpeen maanantaina (24.1.)?

7 tykkäystä
4828

Oyj:n jakama osinko toiselle Oyj:lle on verovapaata tuloa. Tuo 10% koskee ainoastaan jos Oyj maksaa osinkoa Oy:lle.

Tosiaan Nordean osakkeet olleet Sammon käyttöomaisuutta ja luovutuksen verovapaus perustuu EVL 6b§.

9 tykkäystä
4829

Kappas niin olikin, että listayhtiöiden välillä tämä oli verovapaata - hyvä näin.

1 tykkäys
4830

Tilanne päivitys:
Tähän mennessä on siis ollut ostopäiviä: 79 kpl
Yhteensä ostettu: 11268905 kpl
Ostettujen määrä kaikista osakkeista: ~2,029 %
josta saadaan keskiarvona: 142644 kpl / päivä
ja prosentteina per päivä (per 750milj.) : 0,843 %
ja prosentteina nyt hankittu (per 750milj.) : 66,60 %
Yhteensä käytetty : ~499,5 Milj. €
Keskihinnan ollessa nyt noin: 44,324€

Muutamana viime päivinä on hankittu enemmän kuin 1,1% hankittavasta määrästä versus normaalin 0,8xx% sijaan on selvää että perälauta lähenee nopeammin ja jos vielä se osinkokiima pääsisi iskemään, niin silloin nopeutuu entisestään. Nyt siis näyttää vahvasti siltä, että omien ostot saatetaan saada päätökseen @Aatu mainitsemassa ajassa 21.3. (Juuri nyt laskennallinen 23. tai 24.3.) Mukavasti on viime päivinä keskihinta pudonnut, eikä haittaisi vaikka alehinnat pitäisivät ostojen loppuun :slight_smile:

35 tykkäystä
4831

A new speculative exercise with regard to Sampo buying the rest of Topdanmark.

The idea is to challange the view that buying Topdanmark is expensive at these levels.

I will use the same principle Sampo used when it bought Hastings.

My math is a bit off (and input from others are welcomed). My aim is to provide general numbers not exact to showcase my point.

–

Sampo started buying Topdanmark in 2008. The share was trading around 60 - 70 dkk. Sampo acquired ca 10 - 15% ownership.

In 2011 Sampo increased its ownership to 20 - 25% of Top. The share was around 70 - 90 dkk.

First conclusion:

Sampo first 25% of Topdanmark was acquired at levels below 90 dkk.

–

In 2013 Sampo increased again to 25 - 33 % ownership of Top. The share was trading at levels around 13 - 150.

In 2016 Sampo increased its ownership to the final 46.6 %. Share between that time 160 - 180 plus.

Assumption:

Sampo has on a general basis acquired its share based on the basic and general logic of first 25% at 90 dkk and the rest ca 20 % at 180 (yes these are not correct numbers, but that is not the point here, my point is to show some rough estimates).

So 90 plus 180 is 270 and that would give an average of ca 135 dkk is what Sampo has bought its current 46.6 %. (again rough numbers).

So lets assume that the rest of Topdanmark what Sampo does not own is acquired for 30% premium of today’s numbers. It trades around 370 now which would make a premium of ca 480 dkk per share.

So then a basic and rough calculation: 135 (avr so far price paid) + 480 (price for rest) is 616 dkk divided by 2 (again general numbers): give an average of ca 308 dkk.

To sum up

So Sampo could get complete ownership of Topdanmark for little over 300 dkk. I would argue that this not exactly expensive assuming that Top is able to generate ca 20 dkk eps per year (that is what marketscreener had as an estimate).

These numbers could be translated to that Sampo buys Topdanmark at levels of 15 price to earning. Currently all are Nordic peers trade around p/e 20.

Again this is all speculative, but I am using the same logic Sampo applied to buy Hastings.

My point is that to show that buying the rest of Topdanmark at a premium is not necessarily that expensive from this ‘speculative’ exersice (which has some flaws and is not exactly precise).

Source: https://www.topdanmark.com/binaries/content/assets/corporate/investor/aktionaerer/storaktionaerer-uk.pdf

25 tykkäystä
4832

Ehkä tuohon laskelmaan voisi lisätä saadut osingot? Voiko niiden ajatella maksaneen osittain takaisin jo tehtyjä hankintoja ja siten alentaa tehtyä investointia? Voisiko tuosta tulla liki 10v ajalta jonkinlaista merkittävää suuruusluokkaa oleva summa?

3 tykkäystä
4833

Hmm, I would not calculate it that way. What valuation Sampo pays for rest of Topdanmark needs to be considered based on the individual valuation of that part only, not considering what they paid for the first part.

Looking from opportunity cost perspective:

  • Sampo can use xx € to buy rest of Topdanmark, which gives some level of return yy% on the investment (including Topdanmark business + potential synergies)
  • Sampo can use same xx € to do something else (purchase shares, pay dividends, make other M&A moves, etc), which in turn gives some return for that investment above or below yy%

So the investment of xx€ is the same in both cases, difference is the return that shareholders get for spending that money on Topdanmark or something else.

What has already been paid for Topdanmark earlier has been spent, and the return on that investment is already included as part of Sampo’s value, so in a sense it would be “double counting” from ROI perspective to use that old value to justify new investment.

17 tykkäystä
4834

Yes, you have a logical point. And a fair one also.

But, the logic I applied is the one Sampo used to defend is rationale when they bought the rest of Hastings. Some market actors also criticized Sampos logic.

I would defend the logic I used and which Sampo used is to ‘contextualize’ the optimal way of using the proceedings from the sell of Nordea shares.

My logic builds on the idea of buying rest of Topdanmark will never get cheap and Sampo will not have this opportunity again (excess of extra money). Buying at a later stage with debt financing is not optimal. Compare this with Tryg and all the associted costs of buying RSA operations with diluation of own shares and other financing costs.

And given how the Nordic insurence market works (see my earlier post) Sampo will need to buy Topdanmark to stay competitive in Denmark. And to realize synergy potentials.

Yes you are right in the sense that you could probably get better ROI elsewhere.

But for example any M&A moves in the Nordics (except Top) is out of question (regulation). And any M&A in UK involves in my view a higher risk than buying Topdanmark at a premium.

But again this is just my 2 cents :thinking:

9 tykkäystä
4835

To be clear, I actually agree that buying Topdanmark has a clear logic and may in any case be very good use of capital on hand. So don’t want to judge the logic of that as such, as there are people who are much better equipped than me to estimate the value of such a deal.

Only wanted to point out that this would need to be considered as a separate capital allocation decision that needs to make sense in itself and in comparison to other uses today.

8 tykkäystä
4836

When I saw the Hastings deal and argumentation behind it I also thought that you could use the same logic to justify the high price without “eating your words” (Sampo has stated many times that the current price is too high).

However I completely agree with @jangsteri_vain that from shareholders’ perspective this is pure sleight of hand and you obviously should not include sunken costs for future ROI calculations.

I also agree with @916 that Sampo is between the rock and the hard place and the possibility to buy it cheap is close to zero. There are major synergies on the table and the risk of If losing competitivness in Denmark is real.

When you think of this, the whole situation is somewhat weird. Most of the market players would actually like Sampo to acquire Top regarding the price due to the operational synergies and Sampo’s excess capital. Sampo also would like to buy, but they are chasing the valuation which not achievable and have put themselves in very difficult situation communicationwise :man_shrugging:

28 tykkäystä
4837

To conclude on my part on this topic:

Sampo has really ‘shot themselves in the foot here’ (bad analogy, but you get my point).

A personal example:

Even this week I have added to my wife’s stock account Topdanmark shares several times (around 365-366). Note: she has owned Topdanmark shares since 2016 and has an average ca 300 now. So basically I am averaging up.

Why?

Well I view owning Topdanmark is a rather low risk investment for her long-term and her rather low cost average. Its not too volatile and the risk downside is limited (due to Sampos interest in the company). And there is a potential bonus waiting :money_mouth_face:

So why have money in the account when she can own Topdanmark and collect annual dividends from the share? Even after this year the expectations is that Topdanmark will almost pay out 100% of their EPS. Estimates are round 20 dkk per share going forward. That is around 6.7% dividend on 300 based average. Much better than having money in the account which is subject to inflation. So if Sampo does not buy, she will collect rather high dividend every year for sitting on the shares.

My point: I/we am not the only one acting like this. Which implies why the Topdanmark share wont ever get cheap again. This will eventually force Sampos hand to act.

8 tykkäystä
4838

pari lisähuomiota:

-Magnunsoni aina sanoo ostoargumentteihin, että liian kallis ja myös johto on osakkenomistajia, mutta tämä nyt on vaan puhetta, että saisi hintaa alas. lisäksi sampohan on myös kallis ja silti ostetaan omia osakkeita. ristiriita on ilmeinen, koska synenergiat olisivat topissa.

-sampo haluaa vain vahinkopuolen topissa. onko sampolaiset tosiaan niin munkkeja topin hallituksessa, että katsovat vain topin etuja. itse uskon, että life saa mennä, mutta topin hintahan saattaa silloin vielä suhteessa nousta. ehkä toppi kannattaisi ostaa ja myydä top-life itse pois?

9 tykkäystä