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Notes to the Group’s Financial Statements

Select note 1-41
1 Insurance premiums written
P&C insurance
EURm 2013 2012
Premiums from insurance contracts
Premiums written, direct insurance 4,674 4,590
Premiums written, assumed reinsurance 94 109
Premiums written, gross 4,768 4,698
Reinsurers' share of premiums written -208 -258
Premiums written, net 4,560 4,441
Change in unearned premium provision -46 -79
Reinsurers' share -10 1
Change in unearned premium provision, net -55 -78
Premiums earned, total 4,505 4,363
Life insurance
EURm 2013 2012
Premiums from insurance contracts
Premiums written, direct insurance 624 591
Premiums written, assumed reinsurance 4 2
Insurance contracts total, gross 628 593
Premium revenue ceded to reinsurers on insurance contracts issued -5 -5
Insurance contracts total, net 623 588
Investment contracts 440 389
Premiums written, net 1) 1,063 977
Elimination items between segments -6 -5
Group, total 5,618 5,413
1) The change in unearned premiums is presented in note 4 " The change in insurance and investment liabilities".
Specification of premiums written in Life insurance
EURm 2013 2012
Premiums from insurance contracts
Premiums from contracts with discretionary participation feature 153 168
Premiums from unit-linked contracts 469 421
Premiums from other contracts 1 1
Total 624 591
Assumed reinsurance 4 2
Premiums from investment contracts
Premiums from contracts with discretionary participation feature 0 0
Premiums from unit-linked contracts 440 389
Total 440 389
Insurance and investment contracts, total 1,068 983
Reinsurers' share -5 -5
Premiums written, total 1,063 977
Single and regular premiums from direct insurance
Regular premiums, insurance contracts 291 320
Single premiums, insurance contracts 333 271
Single premiums, investment contracts 440 389
Total 1,064 981
2 Net income from investments
P&C insurance
EURm 2013 2012
Financial assets
Derivative financial instruments
Gains/losses -5 -12
Financial assets designated as at fair value through p/l
Debt securities
Interest income 0 3
Gains/losses -0 4
Equity securities
Gains/losses 6 0
Dividend income 0 0
Total 7 7
Loans and receivables
Interest income 22 18
Financial assets available-for-sale
Debt securities
Interest income 317 379
Impairment losses -0 3
Gains/losses 13 11
Equity securities
Gains/losses 57 12
Impairment losses -4 -27
Dividend income 37 40
Total 419 418
Total from financial assets 443 430
Other assets
Investment properties
Gains/losses -0 1
Other -1 -1
Total from other assets -1 0
Expense on other than financial liabilities -4 -3
Effect of discounting annuities -55 -57
Fee and commission expenses
Asset management -15 -11
P&C insurance, total 368 359
Included in gains/losses from financial assets available-for-sale is a net gain of EURm -63 (28) transferred from the fair value reserve.
Life insurance
EURm 2013 2012
Financial assets
Derivative financial instruments
Gains/losses 6 42
Financial assets designated as at fair value through p/l
Debt securities
Interest income 1 3
Gains/losses 0 -1
Equity securities
Gains/losses 0 0
Dividend income 0 0
Total 2 3
Investments related to unit-linked contracts
Debt securities
Interest income 46 34
Gains/losses -27 37
Equity securities
Gains/losses 210 237
Dividend income 13 11
Loans and receivables
Interest income -1 1
Other financial assets
Gains/losses 29 -26
Total 270 294
Loans and receivables
Interest income 1 1
Gains/losses -5 1
Total -4 1
Financial assets available-for-sale
Debt securities
Interest income 115 144
Gains/losses 2 13
Equity securities
Gains/losses 111 37
Impairment losses -33 -37
Dividend income 87 67
Total 282 224
Total financial assets 555 563
Other assets
Investment properties
Gains/losses 1 -0
Impairment losses 0 -2
Other 2 4
Total other assets 2 2
Net fee income
Asset management -13 -13
Fee income 25 22
Total 11 9
Life insurance, total 569 574
Included in gains/losses from financial assets available-for-sale is a net gain of EURm 70 (2) transferred from the fair value reserve.
Holding
EURm 2013 2012
Financial assets
Derivative financial instruments
Gains/losses 8 23
Loans and receivables
Interest income 1 0
Gains/losses -6 -0
Total -5 -0
Financial assets available-for-sale
Debt securities
Interest income 16 21
Gains/losses - 3
Equity securities
Gains/losses 5 -0
Impairment losses -0 -1
Dividend income 1 5
Total 22 28
Total financial assets 25 51
Other assets
Investment properties
Gains/losses 1 0
Other -0 -0
Total other assets 1 0
Net fee income -0 -0
Holding, total 26 51
Included in gains/losses from financial assets available-for-sale is a net gain of EURm 4 (2) transferred from the fair value reserve.
Elimination items between segments -22 -18
EURm 2013 2012
Group, total 942 967
Other income and expenses comprise rental income, maintenance expenses and depreciation of investment property.
All the income and expenses arising from investments are included in Net income from investments. Gains/losses include realised gains/losses on sales, unrealised and realised changes in fair values and exchange differences. Unrealised fair value changes for financial assets available-for-sale are recorded in other comprehensive income and presented in the fair value reserve in equity.
The changes in the fair value reserve are disclosed in the Statement of changes in equity.
The effect of discounting annuities in P&C insurance is disclosed separately. The provision for annuities is calculated in accordance with actuarial principles taking anticipated inflation and mortality into consideration, and discounted to take the anticipated future return on investments into account. To cover the costs for upward adjustment of annuity provisions required for the gradual reversal of such discounting, an anticipated return on investments is added to annuity results.
3 Claims incurred
P&C insurance
2013 2012
EURm Gross Ceded Net Gross Ceded Net
P&C insurance
Claims cost attributable to current-year operations
Claims paid -1,718 21 -1,697 -1,694 30 -1,665
Change in provision for claims outstanding (incurred and reported losses) -715 19 -696 -894 166 -727
Change in provision for claims outstanding (incurred but not reported losses, IBNR) -633 13 -620 -622 13 -609
Claims-adjustment costs -4 0 -4 2 - 2
Change in claims provision for annuities -7 0 -7 -9 - -9
Total claims cost attributable to current-year operations -3,078 53 -3,025 -3,218 209 -3,009
Claims costs attributable to prior-year operations
Claims paid -1,274 165 -1,108 -1,426 139 -1,288
Annuities paid -77 0 -77 -20 -0 -20
Change in provision for claims outstanding (incurred and reported losses) 915 -140 775 938 -100 837
Change in provision for claims outstanding (incurred but not reported losses, IBNR) 508 -18 489 647 -44 603
Total claims cost attributable to prior-year operations 71 7 79 139 -6 133
Insurance claims paid
Claims paid -2,991 186 -2,805 -3,121 168 -2,952
Annuities paid -129 - -129 -42 - -42
Total claims paid -3,120 186 -2,935 -3,163 168 -2,995
Change in provision for claims outstanding
Change in provision for claims outstanding (incurred and reported losses) 199 -121 79 44 66 110
Change in provision for claims outstanding (incurred but not reported losses, IBNR) -126 -5 -131 25 -31 -6
Change in claims provision for annuities 45 0 45 13 -0 13
Claims-adjustment costs -4 - -4 2 - 2
Total change in provision for claims outstanding 114 -126 -12 84 35 119
P&C insurance, total -3,006 60 -2,946 -3,079 203 -2,876
The provision for annuities is valued in accordance with normal actuarial principles taking anticipated inflation and mortality into consideration, and discounted to take the anticipated future investment return into account. To cover costs for the upward adjustment of annuity provisions required for the gradual reversal of such discounting, an anticipated return is added to the annuity results. Provisions for incurred but not reported losses pertaining to annuities in Finland are discounted. The provisions in 2013 amounted to EURm 282 (289). The non-discounted value was EURm 453 (513). The exchange effect on the discounted provisions was an increase of EURm 9. The acquired businesses increased the the provision by some EURm 9. The real decrease EURm 15 is partly explained by the model adjustment for Motor Third Party Liability and Workers' Compensation insurances.
Interest rate used in calculating the technical provisions of annuities (%)
2013 2012
Sweden 1.19% 0.18%
Finland 2.50% 3.00%
Denmark 2.00% 2.00%
Life insurance
Claims paid Change in provision for claims outstanding Claims incurred
EURm 2013 2012 2013 2012 2013 2012
Insurance contracts
Life insurance
Contracts with discretionary participation feature (DPF) -50 -77 -0 -3 -50 -80
Other contracts -0 -0 -0 -1 -0 -1
Unit-linked contracts -160 -155 0 4 -160 -152
Total -211 -233 0 0 -210 -233
Pension insurance
Contracts with discretionary participation feature (DPF) -344 -346 24 51 -320 -296
Unit-linked contracts -12 -10 -16 -10 -29 -20
Total -357 -357 8 41 -349 -315
Assumed reinsurance -1 -1 -1 0 -2 -1
Insurance contracts total, gross -568 -590 7 41 -561 -548
Reinsurers´ share 3 4 -1 0 2 4
Insurance contracts total, net -565 -586 7 41 -559 -545
Investment contracts
Capital redemption policies
Contracts with discretionary participation feature (DPF) -1 -1 - - -1 -1
Unit-linked contracts -172 -123 - - -172 -123
Investment contracts, total -173 -124 - - -173 -124
Life insurance, total -738 -710 7 41 -731 -669
Claims paid by type of benefit
EURm 2013 2012
Insurance contracts
Life insurance
Surrender benefits -10 -8
Death benefits -21 -26
Maturity benefits -9 -33
Loss adjustment expenses -0 -0
Other -10 -10
Total -50 -77
Life insurance, unit-linked
Surrender benefits -115 -89
Death benefits -34 -27
Maturity benefits -12 -40
Loss adjustment expenses 0 -0
Total -160 -155
Pension insurance
Pension payments -319 -320
Surrender benefits -20 -19
Death benefits -5 -7
Loss adjustment expenses -0 -0
Total -344 -346
Pension insurance, unit-linked
Surrender benefits -9 -8
Death benefits -4 -2
Other -0 -0
Total -12 -10
Assumed reinsurance -1 -1
Insurance contracts total, gross -569 -590
Reinsurers´ share 3 4
Insurance contracts total, net -565 -586
Investment contracts
Capital redemption policy, with-profit
Surrender benefits -0 -0
Loss adjustment expenses -0 -0
Total -1 -1
Investment contracts
Capital redemption policy, unit-linked
Surrender benefits -170 -123
Loss adjustment expenses -2 -0
Total -172 -123
Investment contracts total, gross -173 -124
Claims paid total, gross -741 -714
Claims paid total, net -738 -710
Elimination items between segments - 4
EURm 2013 2012
Group, total -3,677 -3,541
4 Change in liabilities for insurance and investment contracts
P&C insurance
EURm 2013 2012
Change in unearned premium provision -46 -79
Reinsurers' share -10 1
Change in unearned premium provision, net -55 -78
Life insurance
EURm 2013 2012
Insurance contracts
Life-insurance
Contracts with discretionary participation feature (DPF) 19 47
Other contracts 0 0
Unit-linked contracts -232 -214
Total -213 -167
Pension insurance
Contracts with discretionary participation feature (DPF) 102 83
Unit-linked contracts -183 -229
Total -80 -146
Assumed reinsurance -3 0
Insurance contracts total, gross -296 -313
Reinsurers´ share 0 0
Insurance contracts total, net -296 -313
   
Investment contracts
Capital redemption policy
Contracts with discretionary participation feature (DPF) 2 1
Unit-linked contracts -353 -330
Investment contracts, total -352 -329
Change in liabilities for insurance and investment contracts in total, gross -648 -642
Change in liabilities for insurance and investment contracts in total, net -648 -642
Elimination items between segments 6 1
Group, total -697 -719
5 Staff costs
P&C insurance
EURm 2013 2012
Staff costs
Wages and salaries -390 -381
Cash-settled share-based payments -22 -16
Pension costs
- defined contribution plans -51 -44
- defined benefit plans (Note 31) -22 -7
Other social security costs -79 -73
P&C insurance, total -564 -521
Life insurance
EURm 2013 2012
Staff costs
Wages and salaries -33 -31
Cash-settled share-based payments -5 -3
Pension costs - defined contribution plans -5 -5
Other social security costs -3 -2
Life insurance, total -46 -42
Holding
EURm 2013 2012
Staff costs
Wages and salaries -8 -8
Cash-settled share-based payments -12 -7
Pension costs - defined contribution plans -3 -3
Other social security costs -1 -1
Holding, total -23 -18
EURm 2013 2012
Group, total -634 -582
More information on share-based payments in note 36 Incentive schemes.
6 Other operating expenses
P&C insurance
EURm 2013 2012
IT costs
Other staff costs -16 -17
Marketing expenses -44 -45
Depreciation and amortisation -11 -9
Rental expenses -53 -53
Change in deferred acquisition costs 3 10
Direct insurance comissions -180 -184
Commissions on reinsurance ceded 18 19
Other -108 -144
P&C insurance, total -393 -422
Life insurance
EURm 2013 2012
IT costs -12 -14
Other staff costs -2 -2
Marketing expenses -3 -4
Depreciation and amortisation -3 -4
Rental expenses -3 -3
Direct insurance comissions -10 -8
Comissions of reinsurance assumed 0 -1
Commissions on reinsurance ceded 2 1
Other -23 -24
Life insurance, total -54 -58
Item Other for P&C and Life Insurance includes e.g. expenses related to communication, external services and other administrative expenses.
Holding
EURm 2013 2012
IT costs -0 -0
Other staff costs -0 -0
Marketing expenses -2 -1
Depreciation and amortisation -0 -0
Rental expenses -1 -1
Other -8 -9
Holding, total -11 -13
Item Other includes e.g. consultancy fees and rental and other administrative expenses.
Elimination items between segments 16 16
EURm 2013 2012
Group, total -543 -576
7 Result analysis of P&C insurance
EURm 2013 2012
Insurance premiums earned 4,505 4,363
Claims incurred -3,215 -3,142
Operating expenses -755 -738
Other insurance technical income and expense 2 3
Allocated investment return transferred from the non-technical account 65 89
Technical result 601 574
Net investment income 405 397
Allocated investment return transferred to the technical account -120 -146
Other income and expense 43 39
Operating result 929 864
Specification of activity-based operating expenses included in the income statement
EURm 2013 2012
Claims-adjustment expenses (Claims paid) -269 -266
Acquisition expenses (Operating expenses) -525 -528
Joint administrative expenses for insurance business (Operating expenses) -245 -240
Administrative expenses pertaining to other technical operations (Operating expenses) -26 -30
Asset management costs (Investment expenses) -15 -11
Total -1,081 -1,075
8 Performance analysis per class of P&C insurance
EURm Accident and health Motor, third
party liability		 Motor, other classes Marine, air and transport Fire and
other damage
to property		 Third party liability Credit insurance
Premiums written, gross
2013 772 689 1,334 148 1,367 216 3
2012 738 693 1,291 150 1,366 203 3
Premiums earned, gross
2013 757 695 1,308 147 1,359 211 2
2012 720 694 1,249 148 1,352 203 2
Claims incurred, gross 1)
2013 -560 -508 -918 -93 -966 -105 -1
2012 -477 -499 -911 -66 -1,006 -96 -1
Operating expenses, gross 2)
2013 -135 -144 -195 -26 -207 -31 -0
2012 -125 -144 -191 -26 -208 -31 -0
Profit/loss from ceded reinsurance
2013 -2 -2 -2 -10 -81 -32 0
2012 -18 5 -2 -25 -70 -34 -0
Technical result before investment return
2013 60 41 193 18 105 42 1
2012 100 56 145 31 68 42 1
EURm Legal expenses Other Total direct insurance Reinsurance assumed Elimination Total
Premiums written, gross
2013 40 112 4,680 94 -6 4,768
2012 34 117 4,596 109 -6 4,698
Premiums earned, gross
2013 39 113 4,631 97 -6 4,723
2012 34 116 4,519 106 -6 4,619
Claims incurred, gross 1)
2013 -26 -48 -3,226 -56 6 -3,276
2012 -24 -170 -3,250 -100 4 -3,345
Operating expenses, gross 2)
2013 -7 -14 -760 -24 11 -773
2012 -6 -10 -742 -26 13 -755
Profit/loss from ceded reinsurance
2013 -0 -14 -144 -2 6 -140
2012 0 99 -46 7 6 -34
Technical result before investment return
2013 6 37 501 16 17 534
2012 3 35 481 -13 17 485
1) Activity-based operating costs EURm 269 (271) have been allocated to claims incurred.

2) Includes other technical income EURm 28 (33) and other technical expenses EURm 26 (30).
9 Earnings per share
EURm 2013 2012
Earnings per share
Profit or loss attributable to the equity holders of the parent company 1,452 1,408
Weighted average number of shares outstanding during the period 560 560
Earnings per share (EUR per share) 2.59 2.51
10 Financial assets and liabilities
Financial assets and liabilities have been categorised in accordance with IAS 39.9. In the table are also included interest income and expenses, realised and unrealised gains and losses recognised in P/L, impairment losses and dividend income arising from those assets and liabilities. The financial assets in the table include balance sheet items Financial assets and Cash and cash equivalents.
2013
EURm Carrying amount Interes inc./exp.t Gains / losses Impairment losses Dividend income
FINANCIAL ASSETS
Financial assets at fair value through p/l
Derivative financial instruments 78 1 37 - -
Financial assets designated as at fair value through p/l 50 1 7 - 0
Loans and receivables 1,051 23 -11 - -
Financial assets available-for-sale 16,430 427 187 -38 125
Financial assets, group total 17,609 453 220 -38 125
FINANCIAL LIABILITIES
Financial liabilities at fair value through p/l
Derivative financial instruments 53 - -
Other financial liabilities 2,140 -73 16
Financial liabilities, group total 2,193 -73 16
2012
EURm Carrying amount Interes inc./exp.t Gains / losses Impairment losses Dividend income
FINANCIAL ASSETS
Financial assets at fair value through p/l
Derivative financial instruments 168 2 32 - -
Financial assets designated as at fair value through p/l 70 6 3 - 0
Loans and receivables 1,142 19 0 - -
Financial assets available-for-sale 16,511 526 75 -62 112
Financial assets, group total 17,891 554 111 -62 112
FINANCIAL LIABILITIES
Financial liabilities at fair value through p/l
Derivative financial instruments 62 - -
Other financial liabilities 2,316 -85 10
Financial liabilities, group total 2,378 -85 10
11 Property, plant and equipment
P&C insurance
EURm 2013
Equipment		 2012
Equipment
At 1 Jan.
Cost 154 146
Accumulated depreciation -138 -131
Net carrying amount 16 16
Opening net carrying amount 16 16
Additions 9 9
Disposals -1 -2
Depreciation -8 -8
Exchange differences -1 0
Closing net carrying amount 16 16
At 31 Dec.
Cost 162 154
Accumulated depreciation -146 -138
Net carrying amount 16 16
Life insurance
2013 2012
EURm Land and buildings Equipment Total Land and buildings Equipment Total
At 1 Jan.
Cost 4 8 12 4 7 12
Accumulated depreciation -1 -6 -6 -0 -5 -6
Net carrying amount 4 2 5 4 2 6
Opening net carrying amount 4 2 5 4 2 6
Additions - - 0 - 0 0
Depreciation - - 0 -0 -0 -1
Closing net carrying amount 4 2 5 4 2 5
At 31 Dec.
Cost 4 8 12 4 8 12
Accumulated depreciation -1 -6 -6 -1 -6 -6
Net carrying amount 4 2 5 4 2 5
Holding
2013 2012
EURm Land and buildings Equipment Total Land and buildings Equipment Total
At 1 Jan.
Cost 2 5 7 2 5 7
Accumulated depreciation -1 -2 -3 -1 -2 -3
Net carrying amount 1 3 4 1 3 4
Opening net carrying amount 1 3 4 1 3 4
Additions 0 0 0 - 0 0
Depreciation -0 -0 -0 -0 -0 -0
Closing net carrying amount 1 3 4 1 3 4
At 31 Dec.
Cost 2 5 7 2 5 7
Accumulated depreciation -1 -2 -3 -1 -2 -3
Net carrying amount 1 3 4 1 3 4
EURm 2013 2012
Group, total 25 26
Equipment in different segments comprise IT equipment and furniture.
12 Investment property
P&C insurance
EURm 2013 2012
At 1 Jan.
Cost 34 34
Accumulated depreciation -7 -6
Accumulated impairment losses -0 -2
Net carrying amount 27 26
Opening net carrying amount 27 26
Additions -5 -0
Disposals -1 -1
Depreciation -1 -1
Impairment losses 1 2
Reversal of impairment losses -1 0
Exchange differences 2 1
Closing net carrying amount 22 26
At 31 Dec.
Cost 29 34
Accumulated depreciation -7 -7
Accumulated impairment losses -0 -0
Net carrying amount 22 27
Rental income from investment property 3 3
Property rented out under operating lease
Non-cancellable minimum rental
- not later than one year 1 2
- later than one year and not later than five years 1 1
- later than five years 0 0
Total 2 3
Expenses arising from investment property
- direct operating expenses arising from investment property generating rental income during the period -2 -2
- direct operating expenses arising from investment property not generating rental income during the period -1 -1
Total -2 -3
Fair value of investment property at 31 Dec. 23 23
Life insurance
EURm 2013 2012
At 1 Jan.
Cost 157 150
Accumulated depreciation -45 -42
Accumulated impairment losses -16 -16
Net carrying amount 95 92
Opening net carrying amount 95 92
Additions 17 8
Disposals -2 0
Depreciation -3 -3
Impairment losses -1 -2
Closing net carrying amount 107 95
At 31 Dec.
Cost 172 158
Accumulated depreciation -48 -45
Accumulated impairment losses -17 -17
Net carrying amount 107 95
Rental income from investment property 13 15
Property rented out under operating lease
Non-cancellable minimum rental
- not later than one year 6 6
- later than one year and not later than five years 14 11
- later than five years 2 3
Total 22 20
Expenses arising from investment property
- direct operating expenses arising from investment property generating rental income during the period -7 -8
- direct operating expenses arising from investment property not generating rental income during the period -2 -1
Total -9 -8
Fair value of investment property at 31 Dec. 125 112
Holding
EURm 2013 2012
At 1 Jan.
Cost 4 4
Accumulated depreciation 0 -0
Accumulated impairment losses 0 0
Net carrying amount 4 4
Net carrying amount 4 4
Disposals -4 -0
Closing net carrying amount 0 4
At 31 Dec.
Cost 0 4
Accumulated depreciation 0 -0
Accumulated impairment losses 0 0
Net carrying amount 0 4
Rental income from investment property 0 0
Fair value of investment property at 31 Dec. 0 4
Elimination items between segments -4 -4
EURm 2013 2012
Group, total 125 122
Fair values for the Group's investment property are entirely determined by the Group, based on the market evidence. The determination and hierarchy of financial assets and liabilities at fair value are disclosed in note 17. Based on the principles of this determination, the investment property falls under level 2.
The premises in investment property for different segments are leased on market-based, irrevocable contracts. The lengths of the contracts vary from those for the time being to those for several years.
13 Intangible assets
P&C insurance
2013
EURm Goodwill Other intangible assets Total
At 1 Jan.
Cost 585 125 710
Accumulated amortisation - -104 -104
Net carrying amount 585 21 606
Opening net carrying amount 585 21 606
Exchange differences 0 -2 -2
Additions
Acquired separately - 7 7
Disposals 0 - 0
Amortisation - -3 -3
Closing net carrying amount 585 23 608
At 31 Dec.
Cost 585 130 715
Accumulated amortisation - -107 -107
Net carrying amount 585 23 608
2012
EURm Goodwill Other intangible assets Total
At 1 Jan.
Cost 564 119 682
Accumulated amortisation - -102 -102
Net carrying amount 564 13 580
Opening net carrying amount 564 13 576
Exchange differences 22 1 22
Additions
Acquired separately - 6 6
Disposals 0 -1 -1
Amortisation - -2 -2
Closing net carrying amount 585 17 602
At 31 Dec.
Cost 585 125 710
Accumulated amortisation - -104 -104
Net carrying amount 585 21 606
Life insurance
2013 2012
EURm Goodwill Other intangible assets Total Goodwill Other intangible assets Total
At 1 Jan.
Cost 153 42 195 153 0 153
Accumulated amortisation - -31 -31 - 0 0
Net carrying amount 153 11 164 153 0 153
Opening net carrying amount 153 11 164 153 12 165
Additions - 1 1 - 2 2
Amortisation - -3 -3 - -3 -3
Closing net carrying amount 153 9 162 153 11 164
At 31 Dec.
Cost 153 43 196 153 42 195
Accumulated amortisation - -34 -34 - -31 -31
Net carrying amount 153 9 162 153 11 164
EURm 2013 2012
Group, total 770 771
Other intangible assets in all segments comprise mainly IT software.
Depreciation and impairment losses are included in the income statement item Other operating expenses.
Testing goodwill for impairment
Goodwill is tested for impairment in accordance with IAS 36 Impairment of assets. No impairment losses have been recognised based on these tests.

For the purpose of testing goodwill for impairment, Sampo determines the recoverable amount of its cash-generating units, to which goodwill has been allocated, on the basis of value in use. Sampo has defined these cash-generating units as If Group and Mandatum Life.

The recoverable amounts for If have been determined by using a discounted cash flow model. The model is based on Sampo’s management’s best estimates of both historical evidence and economic conditions such as volumes,interest rates, margins, capital structure and income and cost development. The value in use model for Mandatum Life is greatly influenced by the long-term development of insurance liabilities, affecting e.g. the required solvency capital and thus the recoverable amount. That is why the forecast period is longer for Mandatum Life, 10 years. The derived cash flows were discounted at the pre-tax rates of the weighted average cost of capital which for If was 9.4 per cent and for Mandatum Life 9.7 per cent. These are somewhat higher than last year due to the increase in Nordic government bonds.

Forecasts for If, approved by the management, cover years 2014 – 2016. The cash flows beyond that have been extrapolated using a 2 per cent growth rate. A 2 per cent growth rate for years beyond 2023 has been used for the for Mandatum Life as well, as it is believed to be close to the anticipated inflation.

In Mandatum Life, the recoverable amount exceeds its carrying amount by some EURm 180. With the calculation method used, e.g. an increase of about 1.4 per cent in the weighted average cost of capital could lead to a situation where the recoverable amount of the entity would equal its carrying amount.

As for the If Group, the management believes that any reasonably possible change in any of these key assumptions would not cause the aggregate carrying amount to exceed the aggregate recoverable amount.
14 Investments in associates
Associates that have been accounted for by the equity method at 31 Dec. 2013
EURm


Name		 Carrying amount Fair value*) Interest held % Assets/ liabilities Revenue Profit/loss
Nordea Bank Abp 6,906 8,413 21.25 630 434 / 601 225 9,891 3,116
Topdanmark A/S 363 603 27.98 7 980 /
7 278		 1,187 167
Autovahinkokeskus Oy 3 35.50 9 / 1 9 0
Consulting AB Lennemark & Andersson 1 22.00 11 / 6 17 1
Urzus Group AS 2 28.60 11 / 10 8 -4
Svithun Assuranse AS (Norway) 1 33.00 1 / 1 2 0
Watercircles Skandinavia AS (Norway) 4 39.60 7 / 10 6 -4
Associates that have been accounted for by the equity method at 31 Dec. 2012
EURm


Name		 Carrying amount Fair value *) Interest held % Assets/ liabilities Revenue Profit/loss
Nordea Bank Abp 6,687 6,226 21.25 668 178 / 640 173 9,998 3,126
Topdanmark A/S 352 512 25.44 8 291 /
7 612		 1,253 178
Autovahinkokeskus Oy 3 35.54 9 / 1 8 1
Consulting AB Lennemark & Andersson 1 21.98 16 /1 16 1
Urzus Group AS 3 28.57 4 / -6 4 -6
Svithun Assuranse AS (Norway) 1 33.00 2 / 0 2 0
Watercircles Skandinavia AS (Norway) 2 27.68 3 / -4 3 -4
*) Published price quatation
Changes in investments in associates
EURm 2013 2012
At beginning of year 7,049 6,593
Share of loss/profit 686 700
Additions 3 3
Disposals -293 -224
Changes in the equity of associates -128 -21
Exchange differences -36 -1
At end of year 7,282 7,049
At 31 Dec. 2013, the carrying amount of investments in associates included goodwill EURm 1,102 (1,100), including goodwill from the Nordea acquisition EURm 978 (978).
Sampo's holding in Nordea
Nordea is an universal bank with positions within corporate merchant banking as well as retail banking and private banking. With approximately 1,400 branches, call centers in all Nordic countries and an e-bank, Nordea also has a large distribution network for customers in the Nordic and Baltic sea region, including more than 260 branches in five new European markets, Russia, Poland, Lithuania, Latvia and Estonia.
Nordea was first conslidated as an associate company from 31 Dec. 2009 with Sampo's holding of 20.05 per cent. In the financial year 2013, Sampo's holding in Nordea was 21.25 per cent with the goodwill related to the acquisitions of EURm 978.
Sampo's share of Nordea's profit at 31 Dec. 2013:
EURm
Share of loss/profit of the associate 662
Amortisation of the customer rlations -35
Change in deferred tax 8
Share of the loss/profit of an associate 635
15 Financial assets
Group's financial assets comprise investments in derivatives, financial assets designated as at fair value through p/l, loans and receivables, available-for-sale financial assets and investments in subsidiaries. The Holding segment includes also investments in subsidiaries.
The Group uses derivative instruments for trading and for hedging purposes. The derivatives used are foreign exchange, interest rate and equity derivatives. In P&C insurance business, fair value hedging has been applied during the financial year. In Life insurance, both fair value and cash flow hedging have been applied.
EURm 2013 2012
P&C insurance
Derivative financial instruments 5 49
Financial assets designated as at fair value through p/l 2 22
Loans and receivables 246 85
Financial assets available-for-sale 11,012 11,045
P&C insurance, total 11,265 11,200
Life insurance
Derivative financial instruments 33 60
Financial assets designated as at fair value through p/l 48 48
Loans and receivables 19 23
Financial assets available-for-sale 5,023 5,138
Life insurance, total 5,122 5,269
Holding
Derivative financial instruments 41 59
Loans and receivables 1 1
Financial assets available-for-sale 737 599
Investments in subsidiaries 2,370 2,370
Holding, total 3,148 3,028
Elimination items between segments -2,712 -2,641
Group, total 16,824 16,857
P&C insurance
Derivative financial instruments
2013 2012
Contract/ Fair value Contract/ Fair value
EURm notional amount Assets Liabilities notional amount Assets Liabilities
Derivatives held for trading
Interest rate derivatives
OTC derivatives
Interest rate swaps 1,165 - 4 50 0 1
Exchange traded derivatives
Interest rate futures 85 1 1 163 2 -
Total interest rate derivatives 1,250 1 5 213 2 1
Foreign exchange derivatives
OTC derivatives
Currency forwards 2,147 4 20 2,173 37 36
Currency options, bought and sold 42 0 - - - -
Total foreign exchange derivatives 2,189 4 20 2,173 37 36
Equity derivatives
OTC derivatives
Equity and equity index options 0 0 - 0 0 -
Total derivatives held for trading 3,439 5 25 2,386 40 37
Derivatives held for hedging
Fair value hedges
Currency forwards - - - 372 9 1
Total derivatives 3,439 5 25 2,759 49 38
Other financial assets
EURm 2013 2012
Financial assets designated as at fair value through p/l
Debt securities
Issued by public bodies - 3
Certificates of deposit issued by banks - 16
Other debt securities 0 1
Total debt securities 0 19
Equity securities
Other than listed 2 2
Total financial assets designated as at fair value through p/l 2 22
Loans and receivables
Deposits with ceding undertakings 1 1
Other 245 83
Total loans and receivables 246 85
Financial assets available-for-sale
Debt securities
Issued by public bodies 1,327 152
Certificates of deposit issued by banks 2,741 3,729
Other debt securities 5,462 5,794
Total debt securities 9,531 9,675
Equity securities
Listed 1,277 1,240
Unlisted 205 130
Total 1,481 1,370
Total financial assets available-for-sale 11,012 11,045
Financial assets available-for-sale for P&C insurance include impairment losses EURm 242 (323).
P&C insurance, total financial assets 11,265 11,200
Life insurance
Derivative financial instruments
2013 2012
Contract/ Fair value Contract/ Fair value
EURm notional amount Assets Liabilities notional amount Assets Liabilities
Derivatives held for trading
Interest rate derivatives
OTC derivatives
Interest rate swaps 5,978 25 7 778 19 2
Credit risk swaps 508 0 2 531 0 2
Total 6,486 25 10 1,309 19 3
Foreign exchange derivatives
OTC derivatives
Currency forwards 955 7 1 1,149 17 2
Currency options, bought and sold 0 0 0 99 1 0
Total foreign exchange derivatives 955 7 1 1,248 17 2
Equity derivatives
OTC derivatives
Equity and equity index options 1 0 0 - - -
Total derivatives held for trading 7,441 32 11 2,556 37 5
Derivatives held for hedging
Fair value hedges
Currency forwards 501 1 0 575 23 -
Interest rate swaps 0 0 0 - - -
Total 501 1 - 575 23 0
Cash flow hedges
Interest rate swaps 0 - - 9 0 -
Total derivatives held for hedging 501 1 - 584 23 0
Total derivatives 7,943 33 11 3,141 60 5
Fair value hedges
Fair value hedging is used to hedge a proportion of foreign exchange and interest risk in available-for-sale financial assets. The interest elements of forward contracts have been excluded from hedging relationships in foreign exchange hedges.
Net result from exchange derivatives designated as fair value hedges amounted to EURm 18 (12). Net result from hedged risks in fair value hedges of available for sale financial assets amounted to EURm -18 (-11).
Cash flow hedges
The interest rate derivatives hedging cash flows fell due during the financial year and no new cash flow hedges were started.
Other financial assets
EURm 2013 2012
Financial assets designated as at fair value through p/l
Debt securities
Issued by public bodies 11 12
Certificates of deposit issued by banks 35 35
Total debt securities 46 47
Listed equity securities 2 1
Total financial assets designated as at fair value through p/l 48 48
Loans and receivables
Deposits with ceding undertakings 1 1
Loans 18 22
Total loans and receivables 19 23
Financial assets available-for-sale
Debt securities
Issued by public bodies 727 12
Issued by banks 632 1,066
Other debt securities 1,548 1,708
Total debt securities 2,907 2,786
Equity securities
Listed 1,379 1,561
Unlisted 737 792
Total 2,116 2,353
Total financial assets available-for-sale 5,023 5,138
Financial assets available-for-sale for life insurance include impairment losses EURm 33 (29).
Life insurance, total financial assets 5,122 5,269
Financial assets available for sale / debt securities: Debt securities available for sale include EURm 2,553 (2,381) investments in bonds and EURm 354 (405) investments in money market instruments.
Financial assets available for sale /shares and participations: Listed equity securities include EURm 641 (589) listed equities. Unlisted equity securities include EURm 640 (752) investments in capital trusts.
Holding
Derivative financial instruments
2013 2012
Contract/ Fair value Contract/ Fair value
EURm notional amount Assets Liabilities notional amount Assets Liabilities
Derivatives held for trading
Interest derivatives
OTC-derivatives
Interest rate swaps 800 26 - 800 42 -
Credit risk swaps 20 0 - 20 1 -
Total interest derivatives 820 26 0 820 43 -
Foreign exchange derivatives
OTC-derivatives
Currency forwards 21 0 1 284 0 0
Equity derivatives
Exchange traded derivatives
Equity and euqity index options 88 14 16 90 16 19
Total derivatives 930 41 18 1,194 59 19
Other financial assets
EURm 2013 2012
Loans and receivables
Deposits 0 1
Financial assets available-for-sale
Debt securities
Certificates of deposit issued by banks 350 100
Other debt securities 360 475
Total debt securities 709 575
Equity securities
Listed 7 1
Unlisted 21 24
Total 28 24
Total financial assets available-for-sale 737 599
Financial assets available-for-sale for Holding business include impairment losses EURm 0 (0).
Investments in subsidiaries 2,370 2,370
Holding, total financial assets 3,148 3,028
Elimination items between segments -2,712 -2,641
EURm 2013 2012
Group, total 16,824 16,856
16 Fair values
2013 2012
EURm Fair value Carrying amount Fair value Carrying amount
Financial assets, group
Financial assets 16,827 16,824 16,858 16,857
Investments related to unit-linked contracts 4,616 4,616 3,834 3,834
Other assets 17 17 9 9
Cash and cash equivalents 779 785 1,029 1,034
Total 22,240 22,242 21,730 21,734
Financial liablities, group
Financial liabilities 2,273 2,193 2,485 2,378
Other liabilities 26 26 4 4
Total 2,299 2,219 2,489 2,382
In the table above are presented fair values and carrying amounts of financial assets and liabilities. The detailed measurement bases of financial assets and liabilities are disclosed in Group Accounting policies.
The fair value of investment securities is assessed using quoted prices in active markets. If published price quotations are not available, the fair value is assessed using discounting method. Values for the discount rates are taken from the market’s yield curve.
The fair value of the derivative instruments is assessed using quoted market prices in active markets, discounting method or option pricing models.
The fair value of loans and other financial instruments which have no quoted price in active markets is based on discounted cash flows, using quoted market rates. The market’s yield curve is adjusted by other components of the instrument, e.g. by credit risk.
The fair value for short-term non-interest-bearing receivables and payables is their carrying amount.
Disclosed fair values are "clean" fair values, i.e. less interest accruals.
17 Determination and hierarchy of fair values
A large majority of Sampo Group's financial assets are valued at fair value. The valuation is based on either published price quatations or valuation techniques based on market observable inputs, where available. For a limited amount of assets the value needs to be determined using other techniques.
The financial instruments measured at fair value have been classified into three hierarchy levels in the notes, depending on e.g. if the market for the instrument is active, or if the inputs used in the valuation technique are observable.
On level 1, the measurement of the instrument is based on quoted prices in active markets for identical assets or liabilities.
On level 2, inputs for the measurement of the instrument include also other than quoted prices observable for the asset or liability, either directly or indirectly by using valuation techniques.
In level 3, the measurement is based on other inputs rather than observable market data.
EURm Level 1 Level 2 Level 3 Total
FINANCIAL ASSETS 31.12.2013
Derivative financial instruments
Interest rate swaps 1 51 - 52
Other interest derivatives - 0 - 0
Foreign exchange derivatives - 12 - 12
Equity derivatives - 14 - 14
1 77 - 78
Financial assets designated at fair value through profit or loss
Equity securities 2 - - 2
Debt securities - 46 0 46
2 46 0 48
Financial assets related to unit-linked insurance
Equity securities 324 2 13 339
Debt securities 14 1,069 19 1,101
Derivative financial instruments 2,098 804 64 2,966
Mutual funds - 26 - 26
2,436 1,901 97 4,433
Financial assets available-for-sale *)
Equity securities 1,583 - 243 1,826
Debt securities 1,874 10,858 39 12,770
Mutual funds 993 124 720 1,836
4,449 10,981 1,002 16,432
Total financial assests measured at fair value 6,887 13,006 1,099 20,992
FINANCIAL LIABILITIES 31.12.2013
Derivative financial instruments
Interest rate derivatives 1 14 - 15
Foreign exchange derivatives - 22 - 22
Equity derivatives - 16 - 16
Total financial liabilities measured at fair value - 52 - 53
EURm Level 1 Level 2 Level 3 Total
FINANCIAL ASSETS 31.12.2012
Derivative financial instruments
Interest rate swaps 2 62 - 64
Other interest rate derivatives - 2 - 2
Foreign exchange derivatives - 87 - 87
Equity derivatives - 16 - 16
2 166 - 168
Financial assets designated at fair value through profit or loss
Equity securities 3 - - 3
Debt securities - 66 - 66
3 66 - 70
Financial assets related to unit-linked insurance
Equity securities 239 67 14 320
Debt securities - 808 17 826
Derivative financial instruments 1,821 520 50 2,390
Mutual funds - 16 - 16
2,060 1,412 81 3,553
Financial assets available-for-sale *)
Equity securities 1,535 - 69 1,603
Debt securities 253 12,439 73 12,764
Mutual funds 1,131 118 894 2,143
2,918 12,557 1,036 16,511
Total financial assests measured at fair value 4,984 14,201 1,117 20,301
FINANCIAL LIABILITIES 31.12.2012
Derivative financial instruments
Interest rate derivatives - 4 - 4
Foreign exchange derivatives - 39 0 39
Equity derivatives - - 19 19
Total financial liabilities measured at fair value - 43 19 62
*) During the financial year, debt securities EURm 19 (7) were transferred from level 1 to level to 2. From level 2 to level 1 were transferred EURm 151 (-). Mutual funds EURm 34 were transferred from level 2 to level 1 in the comparsion year.
Sensitivity analysis of fair values
  
The sensitivity of financial assets and liabilites to changes in exchange rates is assessed on business area level due to differenct base currencies. In P&C insurance, 10 percentage point depreciation of all other currencies against SEK would result in an increase recognised in profit/loss of EURm 12 (15) and in a decrease recognised directly in equity of EURm 11 (11). In Life insurance, 10 percentage point depreciation of all other currencies against EUR would result in an increase recognised in profit/loss of EURm 14 (52) and in a decrease recognised directly in equity of EURm 68 (64). In Holding, 10 percentage point depreciation of all other currencies against EUR would have no impact in profit/loss, but a decrease recognised in equity of EURm 15 (3).
The sensitivity analysis of the Group's fair values of financial assets and liabilities in differenct market risk scenarios is presented below. The effects represent the instantaneous effects of a one-off change in the underlying market variable on the fair values on 31 Dec. 2013.
The sensitivity analysis includes the effects of derivative positions. All sensitivities are calculated before taxes.
The debt issued by Sampo plc is not included.
          Interest rate Equity Other financial investments
1% parallel shift down 1% parallel shift up 20% fall in prices 20% fall in prices
Effect recognised in profit/loss 9 -23 0 -4
Effect recognised directly in equity 192 -186 -550 -169
Total effect 202 -210 -550 -173
18 Movements in level 3 financial instruments measured at fair value
EURm At Jan. 2013 Total gains/losses in income statement Total gains/losses recorded in other comprehensive income Purchases Sales Transfers between levels 1 and 2 At 31 Dec. 2013 Gains/losses included in p/l for financial assets 31 Dec. 2013
   
FINANCIAL ASSETS 2013
Financial assets related to unit-linked insurance
Equity securities 14 -1 - 5 -4 - 14 -1
Debt securities 17 1 - 2 -1 - 19 1
Mutual funds 50 4 - 24 -13 - 64 3
81 4 - 31 -19 - 97 4
Financial assets available-for-sale
Equity securities 69 -1 3 176 -4 - 243 -3
Debt securities 73 29 -21 6 -47 - 39 -1
Mutual funds 894 -24 46 139 -335 - 720 19
1,036 4 27 320 -385 - 1,002 14
Total financial assests measured at fair value 1,117 8 27 351 -404 - 1,099 18
2013
EURm Realised gains Fair value gains and losses Total
   
Total gains or losses included in profir or loss for the financial year 8 32 40
Total gains or losses included in profit and loss for assets held at the end of the financial year -14 32 18
EURm At Jan. 2012 Total gains/losses in income statement Total gains/losses recorded in other comprehensive income Purchases Sales Transfers between levels 1 and 2 At 31 Dec. 2012 Gains/losses included in p/l for financial assets 31 Dec. 2012
RAHOITUSVARAT 2012
Financial assets designated at fair value through profit or loss
Debt securities 0 - - - - - 0 -
0 0 - - 0 0 0 0
Financial assets related to unit-linked insurance
Equity securities 0 -0 - 19 -6 - 13 -0
Debt securities 0 1 - 17 -0 - 17 1
Mutual funds 62 2 - 31 -45 -0 50 2
63 2 0 66 -50 -0 81 3
Financial assets available-for-sale
Equity securities 72 0 1 2 -6 - 69 -1
Debt securities 99 17 -16 4 -31 - 73 15
Mutual funds 904 4 13 168 -196 - 894 12
1,074 21 -2 174 -232 - 1,035 25
Total financial assests measured at fair value 1,137 23 -2 240 -282 -0 1,117 28
2012
EURm Realised gains Fair value gains and losses Total
Total gains or losses included in profir or loss for the financial year 23 5 29
Total gains or losses included in profit and loss for assets held at the end of the financial year 23 5 28
19 Sensitivity analysis of level 3 financial instruments measured at fair value
2013 2012
EURm Carrying amount Effect of reasonably possible alternative assumptions (+ / -) Carrying amount Effect of reasonably possible alternative assumptions (+ / -)
Financial assets
Financial assets available-for-sale
Equity securities 243 -23 69 -14
Debt securities 39 -2 73 -3
Mutual funds 720 -138 894 -163
Total 1,002 -163 1,036 -180
The value of financial assets regarding the debt security instruments has been tested by assuming a rise of 1 per cent unit in interest rate level in all maturities. For other financial assets, the prices were assumed to go down by 20 per cent. The Sampo Group bears no investment risks relatted to unit-linked insurance, so a change in assumptions regarding these assets does not affect profit or loss. On the basis of the these alternative assumptions, a possible change in interest levels would cause descend of EURm 2 (3) for the debt instruments, and EURm 161 (177) valuation loss for other instruments in the Group's other comprehensive income. The reasonably possible effect, proportionate to the Group's equity, would thus be 1.5 per cent (1.8).
20 Investments related to unit-linked insurance contracts
Life insurance
EURm 2013 2012
Financial assets designated at fair value through p/l
Debt securities
Issued by public bodies 47 34
Certificates of deposit issued by banks 223 207
Other debt securities 832 585
Total 1,101 826
Equity securities
Listed 3,290 2,702
Unlisted 22 9
Total 3,312 2,711
Total financial assets designated at fair value through p/l 183 281
Other 26 16
Investment related to unit-linked contracts, total 4,623 3,834
Elimination items between segments
-7 0
Group total 4,616 3,834
The historical cost of the equity securities related to unit-linked contracts was EURm 2,646 (2,460) and that of the debt securities EURm 1,089 (776).
21 Deferred tax assets and liabilities
Changes in deferred tax during the financial period 2013
EURm 1.1. Recognised in comprehensive income statement Recognised
in equity		 Exchange differences 31.12.
Deferred tax assets
Tax losses carried forward 18 -3 0 -0 15
Changes in fair values 0 0 0 0 0
Employee benefits 65 -1 7 -5 65
Other deductible temporary differences 0 -2 4 -5 -2
Total 83 -6 11 -10 78
Netting of deferred taxes -10
Deferred tax assets in the balance sheet 68
Deferred tax liabilities
Depreciation differences and untaxed reserves 337 -26 -0 -17 293
Changes in fair values 197 -23 28 -0 202
Other taxable temporary differences 13 10 -1 0 22
Total 547 -40 27 -17 518
Netting of deferred taxes -10
Total deferred tax liabilities in the balance sheet 508
Changes in deferred tax during the financial period 2012
EURm 1.1. Recognised in comprehensive income statement Recognised
in equity		 Exchange differences 31.12.
Deferred tax assets
Tax losses carried forward 19 -0 0 -0 18
Changes in fair values 0 -0 0 0 -0
Employee benefits 84 -10 -13 4 65
Other deductible temporary differences 29 -28 2 2 5
Total 132 -38 -11 6 88
Netting of deferred taxes -10
Deferred tax assets in the balance sheet 78
Deferred tax liabilities
Depreciation differences and untaxed reserves 356 -29 -0 10 337
Changes in fair values 107 -2 93 -1 197
Other taxable temporary differences 28 -10 0 1 18
Total 491 -41 93 10 552
Netting of deferred taxes -10
Total deferred tax liabilities in the balance sheet 542
In Sampo plc, EURm 25 of deferred tax asset has not been recognised on unused tax losses. The first losses will expire in 2021.
In life insurance, EURm 4 of deferred tax asset has not been recognised on unused tax losses.
22 Taxes
EURm 2013 2012
Profit before tax 1,668 1,622
Tax calculated at parent company's tax rate -409 -397
Different tax rates on overseas earnings 19 -11
Income not subject to tax 5 4
Expenses not allowable for tax purposes -3 -4
Consolidation procedures and eliminations 159 183
Tax losses for which no deferred tax asset has been recognised -9 -6
Changes in tax rates 22 15
Tax from previous years -1 1
Total -216 -214
23 Components of other comprehensive income
EURm 2013 2012
Other comprehensive income:
Items reclassifiable to profit or loss
Exchange differences -153 46
Available-for-sale financial assets
Gains/losses arising during the year 362 540
Reclassification adjustments -129 -31
Cash flow hedges
Gains/losses arising during the year -0 -1
Share of associate's other comprehensive income -70 9
Taxes -22 -114
Total items reclassifiable to profit or loss, net of tax -13 449
Items not reclassifiable to profit or loss
Actuarial gains and losses from defined pension plans -21 44
Taxes 7 -13
Total items not reclassifiable to profit or loss, net of tax -14 31
24 Tax effects relating to components of other comprehensive income
2013 2012
Before-tax amount Tax Net-of-tax amount Before-tax amount Tax Net-of-tax amount
Items reclassifiable to profit or loss
Exchange differences -153 - -153 46 - 46
Available-for-sale financial assets 233 -22 211 509 -114 395
Cash flow hedges -0 0 -0 -1 0 -1
Share of associate's other comprehensiv income -70 - -70 9 - 9
Total 79 -22 -13 554 -114 449
25 Other assets
P&C insurance
EURm 2013 2012
Interests 102 126
Assets arising from direct insurance operations 1,119 1,098
Assets arising from reinsurance operations 45 79
Settlement receivables 3 3
Deferred acquisition costs 1) 159 172
Assets related to Patient Insurance Pool 69 56
Other 62 57
P&C insurance, total 1,559 1,592
Other assets include non-current assets EURm 71 (57).
Item Other comprise rental deposits, salary and travel advancements and assets held for resale.
1) See table Change in deferred acquisition costs in the period
Change in deferred acquisition costs in the period
EURm 2013 2012
At 1 Jan. 172 157
Net change in the period -3 10
Exchange differences -10 5
At 31 Dec. 159 172
Life insurance
EURm 2013 2012
Interests 36 45
Receivables from policyholders 3 6
Assets arising from reinsurance operations 1 0
Settlement receivables 8 6
Taxes 0 19
Assets pledged for trading in derivatives 6 6
Other 27 27
Life insurance, total 81 109
Item Other comprise e.g. pensions paid in advance and receivables from co-operation companies.
Holding
EURm 2013 2012
Interests 36 36
Other 11 5
Holding, total 47 41
Item Other includes e.g. asset management fee receivables.
Elimination items between segments -10 -13
EURm 2013 2012
Group, total 1,676 1,729
26 Cash and cash equivalents
P&C insurance
EURm 2013 2012
Cash at bank and in hand 250 145
Short-term deposits (max 3 months) 33 261
P&C insurance, total 33 261
Life insurance
EURm 2013 2012
Cash at bank and in hand 179 55
Short-term deposits (max 3 months) 44 99
P&C insurance, total 222 154
Holding
EURm 2013 2012
Cash 280 200
Short-term deposits (max 3 months) - 273
Holding, total 280 473
Group, total 535 889
27 Liabilities from insurance and investment contracts
P&C insurance
Change in insurance liabilities
2013 2012
EURm Gross Ceded Net Gross Ceded Net
Provision for unearned premiums
At 1 Jan. 2,107 55 2,053 1,972 53 1,919
Acquired insurance holdings 38 - 38 - - -
Exchange differences -127 -2 -128 56 1 56
Change in provision 46 -10 36 79 1 78
At 31 Dec. 2,065 43 2,022 2,107 55 2,053
2013 2012
EURm Gross Ceded Net Gross Ceded Net
Provision for claims outstanding
At 1 Jan. 7,747 522 7,225 7,576 476 7,100
Disposed insurance holdings 61 0 61 -1 -0 -1
Exchange differences -314 -20 -294 199 12 187
Change in provision -59 -126 66 -27 35 -62
At 31 Dec. 7,435 377 7,058 7,747 522 7,225
Liabilities from insurance contracts
EURm 2013 2012
Provision for unearned premiums 2,065 2,107
Provision for claims outstanding 7,435 7,747
Incurred and reported losses 1,770 2,050
Incurred but not reported losses (IBNR) 3,538 3,573
Provisions for claims-adjustment costs 271 275
Provisions for annuities and sickness benefits 1,856 1,849
P&C insurance total 9,500 9,854
Reinsurers' share
Provision for unearned premiums 43 55
Provision for claims outstanding 376 522
Incurred and reported losses 270 401
Incurred but not reported losses (IBNR) 107 121
Total reinsurers' share 420 577
As the P&C insurance is exposed to various exchange rates, comparing the balance sheet data from year to year can be misleading.
Claims cost trend of P&C insurance
The tables below show the cost trend for the claims for different years. The upper part of the tables shows how an estimate of the total claims costs per claims year evolves annually. The lower section shows how large a share of this is presented in the balance sheet.
More information on P&C insurance's insurance liabilities in the Risk Management section of the Annual accounts.
Claims costs before reinsurance
Estimated claims cost
EURm < 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
At the close of the claims year 7,715 2,468 2,629 2,639 2,703 2,847 2,853 2,968 3,051 3,085 2,979
One year later 7,770 2,434 2,575 2,621 2,700 2,801 2,801 3,009 3,170 3,071
Two years later 7,768 2,371 2,521 2,592 2,664 2,741 2,771 2,953 3,168
Three years later 7,851 2,365 2,492 2,589 2,630 2,712 2,728 2,952
Four years later 7,871 2,349 2,458 2,548 2,583 2,688 2,709
Five years later 7,853 2,322 2,423 2,498 2,557 2,674
Six years later 7,928 2,281 2,369 2,467 2,547
Seven years later 8,037 2,247 2,345 2,456
Eight years later 8,077 2,209 2,327
Nine years later 8,061 2,194
Ten years later 8,096
Current estimate of total claims costs 8,096 2,194 2,327 2,456 2,547 2,674 2,709 2,952 3,168 3,071 2,979 35,174
Total disbursed 5,586 1,975 2,095 2,196 2,250 2,357 2,336 2,513 2,639 2,407 1,654 28,011
  
Provision reported in the balance sheet 2,510 219 232 259 297 316 373 440 529 664 1,325 7,164
of which established vested annuities 1,316 53 70 74 70 66 55 63 48 34 7 1,856
Provision for claims-adjustment costs 271
Total provision reported in the BS 7,435
Claims cost after reinsurance
  
Estimated claims cost
EURm < 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total
At the close of the claims year 6,994 2,398 2,482 2,530 2,602 2,723 2,733 2,821 2,884 2,880 2,927
One year later 5,918 2,363 2,422 2,502 2,592 2,691 2,699 2,869 2,960 2,865
Two years later 7,030 2,300 2,366 2,473 2,565 2,634 2,668 2,826 2,948
Three years later 7,097 2,294 2,345 2,477 2,532 2,607 2,639 2,819
Four years later 7,110 2,281 2,313 2,438 2,487 2,586 2,621
Five years later 7,091 2,254 2,279 2,394 2,462 2,573
Six years later 7,116 2,212 2,238 2,364 2,454
Seven years later 7,242 2,180 2,215 2,355
Eight years later 7,283 2,143 2,199
Nine years later 7,282 2,130
Ten years later 7,318
Current estimate of total claims costs 7,318 2,130 2,199 2,355 2,454 2,573 2,621 2,819 2,948 2,865 2,911 33,194
Total disbursed 4,875 1,921 1,974 2,103 2,164 2,263 2,256 2,455 2,492 2,287 1,617 26,407
Provision reported in the balance sheet 2,442 210 225 252 291 311 365 365 455 4,915 7,388 6,787
of which established vested annuities 1,315 53 70 74 70 66 55 63 48 34 7 1,856
Provision for claims-adjustment costs 271
Total provision reported in the BS 7,058
Life insurance
Change in liabilities arising from other than unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2013 4,065 6 4,071
Premiums 159 0 159
Claims paid -396 -1 -396
Expense charge -37 -0 -37
Guaranteed interest 139 0 139
Bonuses 3 0 3
Other -11 -1 -12
At 31 Dec. 2013 3,924 4 3,927
Reinsurers' share -3 0 -3
Net liability at 31 Dec. 2013 3,921 4 3,925
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2012 4,242 7 4,249
Premiums 172 0 172
Claims paid -425 -1 -426
Expense charge -38 -0 -38
Guaranteed interest 148 0 148
Bonuses 3 0 3
Other -37 -1 -38
At 31 Dec. 2012 4,065 6 4,071
Reinsurers' share -3 0 -3
Net liability at 31 Dec. 2012 4,062 6 4,067
Change in liabilities arising from unit-linked insurance and investment contracts
EURm Insurance contracts Investment contracts Total
At 1 Jan. 2013 2,665 1,168 3,833
Premiums 469 440 909
Claims paid -173 -172 -345
Expense charge -36 -18 -54
Other 169 104 274
At 31 Dec. 2013 3,095 1,522 4,617
At 1 Jan. 2012 2,216 838 3,054
Premiums 421 389 810
Claims paid -165 -123 -289
Expense charge -32 -14 -46
Other 225 79 303
At 31 Dec. 2012 2,665 1,168 3,833
The liabilities at 1 Jan. and at 31 Dec. include the future bonus reserves and the effect of the reserve for the decreased discount rate. The calculation is based on items before reinsurers' share. A more detailed specification of changes in insurance liabilities is presented in Group's Risk Management.
EURm 2013 2012
Insurance contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 1,969 2,090
Provision for claims outstanding 1,948 1,972
Liabilities for contracts without discretionary participation feature (DPF)
Provision for unearned premiums 0 0
Provision for claims outstanding 1 1
Total 3,918 4,063
Assumed reinsurance
Provision for unearned premiums 4 1
Provision for claims outstanding 2 1
Total 5 2
Insurance contracts total
Provision for unearned premiums 1,973 2,091
Provision for claims outstanding 1,951 1,975
Total 3,924 4,065
Investment contracts
Liabilities for contracts with discretionary participation feature (DPF)
Provision for unearned premiums 4 6
Liabilities for insurance and investment contracts total
Provision for unearned premiums 1,976 2,096
Provision for claims outstanding 1,951 1,975
Life insurance total 3,927 4,071
Reinsurers' share
Provision for unearned premiums 0 0
Provision for claims outstanding -3 -3
Total -3 -3
Investment contracts do not include a provision for claims outstanding.
Liability adequacy test does not give rise to supplementary claims.
Exemption allowed in IFRS 4 Insurance contracts has been applied to investment contracts with DPF or contracts with a right to trade-off for an investment contract with DPF. These investment contracts have been valued like insurance contracts.
EURm 2013 2012
Group, total 3,927 4,071
28 Liabilities from unit-linked insurance and investment contracts
Life insurance
EURm 2013 2012
Unit-linked insurance contracts 3,095 2,665
Unit-linked investment contracts 1,522 1,168
Total 4,617 3,833
Elimination items between segments -7 -1
EURm 2013 2012
Group, total 4,610 3,832
29 Financial liabilities
The segment financial liabilities include derivatives, debt securities and other financial liabilities.
P&C insurance
EURm 2013 2012
Derivative financial instruments (note 15) 25 38
Subordinated debt securities
Subordinated loans
Euro-denominated loans Maturity Interest
Preferred capital note, 2002 (nominal value EURm 65) 20 years 8.98% - 66
Preferred capital note, 2005 (nominal value EURm 150) perpetual 4.94% 150 149
Preferred capital note, 2011 (nominal value EURm 110) 30 years 6.00% 109 109
Preferred capital note, 2013 (nominal value EURm 90) perpetual 4.70% 90 -
Total subordinated debt securities 348 215
P&C insurance, total financial liabilities 373 253
The subordinated loan issued in 2002 was repaid in April 2013.
The loans 2005 and 2011 are issued with fixed interest rates for the first ten years, after which they become subject to variable interest rates. The new subordinated loan issued in June 2013 has a fixed interest rate for the first 5.5 years afther which it becomes subject to variable interest rates. At the point of change, there is the possibility of redemption for all the loans. All loans and their terms are approved by supervisory authorities and the loans are utilised for solvency purposes.
The loans issued in 2011 and 2013 are wholly subscribed by Sampo Plc.
The loans issued in 2005 and 2011 are listed on the Luxembourg Exchange.
Life insurance
EURm 2013 2012
Derivative financial instruments (note 15) 11 5
Subordinated debt securities
Subordinated loans 100 100
Life insurance, total 111 105
Mandatum Life issued in 2002 EURm 100 Capital Notes. The loan is perpetual and pays floating rate interest. The interest is payable only from distributable capital. The loan is repayable only with the consent of the Insurance Supervisory Authority and at the earliest on 2012 or any interest payment date after that. The loans is wholly subscribed by Sampo Plc.
Holding
EURm 2013 2012
Derivative financial instruments (note 15) 18 19
Debt securities in issue
Commercial papers *) 308 451
Bonds 1,720 1,710
Total 2,027 2,162
Holding, total 2,045 2,181
*) The determination and hierarchy of financial assets and liabilities at fair value are disclosed in note 17. Based on the principles of this determination, the bonds of the Holding Company fall under level 2.
Elimination items between segments -336 -270
EURm 2013 2012
Group, total 2,193 2,269
30 Provisions
P&C insurance
EURm 2013
At 1 Jan. 2013 56
Exchange rate differences -3
Additions 13
Amounts used during the period -7
Unused amounts reversed during the period -1
At 31 Dec. 2013 58
Current (less than 1 year) 52
Non-current (more than 1 year) 7
Total 58
EURm 22 of the provision consist of assets reserved for the development of efficient administrative and claims-adjustment processes and structural changes in distribution channels result in organisational changes that affect all business areas. In addition, the item includes a provision of about EURm 33 for law suits and other uncertain liabilities.
31 Employee benefits
Employee benefits
Sampo has defined benefit plans in P&C insurance business in Sweden and Norway.
In addition to statutory retirement pension insurance, the Group has certain voluntary defined benefit plans. The voluntary defined benefit plans are intra-Group and included in the insurance liabilities of Mandatum Life. The amount is negligible and they have no material impact on the Group profit or loss or equity.
Employee benefit obligations of P&C Insurance 31 Dec.
EURm 01/2012 12/2012 12/2013
Present value of estimated pension obligation, 612 595 580
including social costs 347 392 385
Fair value of plan assets 266 203 195
Since January 1, 2008, the main Swedish pension plan has been closed to new employees born in 1972 or later and the corresponding Norwegian pension plan has been closed to new employees since January 1, 2007 regardless of age. The pension benefits referred to are old-age pension and survivors’ pension in Sweden and old-age pension, survivors’ pension and disability pension in Norway. A common feature of all of the pension plans is that the employees and survivors encompassed by the plans are entitled to a guaranteed pension that depends on the employees’ service period and pensionable salary at the time of retirement. The dominating benefit is the old-age pension, which refers in part to temporary pension before the anticipated retirement age and in part to a life-long pension after the anticipated retirement age.
The retirement age for receiving premature pension is normally 62 years in Sweden and normally 65 years in Norway. In Sweden, premature old-age pension following a complete service period is payable at a rate of approximately 65 per cent of the pensionable salary and applies to all employees born in 1955 or earlier and who were covered by the insurance sector’s collective bargaining agreement of 2006. In Norway, premature old-age pension following a complete service period is payable at a rate of approximately 70 per cent of the pensionable salary and applies to all employees born in 1957 or earlier and who were employed by If in 2013.
The anticipated retirement age in connection with life-long pension is 65 years for Sweden and 67 years for Norway. In Sweden, life-long old-age pension following a complete service period is payable at a rate of approximately 10 per cent of the pensionable salary between 0 and 7.5 income base amounts, 65 per cent of salary between 7.5 and 20 income base amounts and 32.5 per cent between 20 and 30 income base amounts. In Norway, life-long old-age pension following a complete service period is payable at a rate of approximately 70 per cent of the pensionable salary up to 12 Norwegian base amounts, together with the estimated statutory old-age pension. Paid-up policies and pension payments from the Swedish plans are normally indexed upwards in an amount corresponding to the change in the consumer price index. However, there is no agreement guaranteeing the value and future supplements in addition to the contractual pension benefit could either rise of fall. Pension payments from the Norwegian plans are indexed upwards in an amount corresponding to the change in the consumer price index.
The pensions are primarily funded through insurance whereby the insurers establish the premiums and disburse the benefits. If’s obligation is primarily fulfilled through payment of the premiums. Should the assets that are attributable to the pension benefits not be sufficient to enable the insurers to cover the guaranteed pension benefits, If could be forced to pay supplementary insurance premiums or secure the pension obligations in some other way. In addition to insured pension plans, there are also unfunded pension benefits in Norway for which If is responsible for ongoing payment.
To cover the insured pension benefits, the related capital is managed as part of the insurers’ management portfolios. In such management, the characteristics of the investment assets are analysed in relation to the characteristics of the obligations, in a process known as Asset Liability Management. New and existing asset categories are evaluated continuously in order to diversify the asset portfolios with a view to optimising the anticipated risk-adjusted return. Any surplus that arises from management of the assets normally accrues to If and/or the insured and there is no form of transfer of the asset value to other members of the insurance collective.
The insurers and If are jointly responsible for monitoring the pension plans, including investment decisions and contributions. The pension plans are essentially exposed to similar material risks regarding the final amount of the benefits, the investment risk associated with the plan assets and the fact that the choice of discount interest rate affects their valuation in the financial statements.
When applying IAS 19, the pension obligations are calculated, as is the pension cost attributable to the fiscal period, using actuarial methods. Pension rights are considered to have been vested straight line during the service period. The calculation of pension obligations is based on future anticipated pension payments and includes assumptions regarding mortality, employee turnover and salary growth. The nominally calculated debt is discounted to the present value using an interest rate based on current market interest rates adjusted to take into account the duration of the company’s pension obligations. As a basis for determining the discount interest rate for the Swedish obligation, If uses liquid covered mortgage bonds issued by a mortgage institution. Covered mortgage bonds are also used for the Norwegian obligation. After a deduction for the plan assets, a net asset or net liability is recognised in the balance sheet.
The following tables contain a number of material assumptions, specifications of pension costs, assets and liabilities and a sensitivity analysis showing the potential effect on the obligations of reasonable changes in those assumptions as at the end of the fiscal year. The carrying amounts have been stated including special payroll tax in Sweden (24.26 per cent) and a corresponding fee in Norway (14.1 per cent).
Specification of employee benefit obligations by country
2013 2012
Sweden Norway Total Sweden Norway Total
Recognised in income statement and other comprehensive income
Current service cost -6 -10 -16 -5 -16 -21
Past service cost -0 - -0 -2 24 22
Interest expense on net pension liability -2 -5 -7 -2 -6 -8
Total in income statement -7 -15 -22 -9 1 -7
Remeasurement of the net pension liability 19 -40 -21 -18 63 45
Total in comprehensive income statement 12 -55 -44 -27 64 38
Recognised in balance sheet
Present value of estimated pension liability, including social costs 154 426 580 174 420 595
Fair value of plan assets 124 261 385 119 273 392
Net liability recognised in balance sheet 30 165 195 56 147 203
2013 2012
Distribution by asset class Sweden Norway Sweden Norway
Debt instruments, level 1 34% 49% } 40% } 53%
Debt instruments, level 2 3% 12%
Equity instruments, level 1 31% 8% } 29% } 18%
Equity instruments, level 3 0% 3%
Property, level 3 10% 11% 10% 15%
Other, level 1 11% 13% } 21% } 14%
Other, level 2 0% 1%
Other, level 3 11% 3%
The following actuarial assumptions have been used for the calculation of defined benefit pension plans in Norway and Sweden:
31.12.2013 31.12.2012
Sweden Norway Sweden Norway
Discount rate 4,00% 3,50% 4,00% 4,00%
Future salary increases 3,00% 3,00% 3,75% 3,75%
Price inflation 2,00% 2,00% 2,25% 2,25%
Mortality table FFFS 2007:31
+1 year		 K2013 FFFS
2007:31		 K2005
Average duration of pension liabilities 20 years 16 years 20 years 15 years
Expected contributions to the defined benefit plans during 2014 9 15
Sensitivity analysis of effect of reasonably possible changes Sweden Norway Total
Discount rate, +0,50% -17 -34 -51
Discount rate, -0,50% 20 38 58
Future salary increases, +0,25% 6 7 13
Future salary increases, -0,25% -5 -7 -12
Expected longevity, +1 year 5 13 18
2013 2012
EURm Funded plans Unfunded plans Total Funded plans Unfunded plans Total
Analysis of the employee benefit obligation
Present value of estimated pension liability, including social costs 532 490 1,022 538 57 595
Fair value of plan assets 385 - 385 392 - 392
Analysis of the change in net liability recognised in the balance sheet
EURm 2012 2013
Pension liabilities:
At the beginning of the year 612 595
Earned during the financial year 21 16
Costs pertaining to prior-year service -21 0
Interest cost 19 21
Actuarial gains (-)/losses (+) on financial assumptions -74 -22
Actuarial gains (-)/losses (+) on demographic assumptions - 67
Actuarial gains (-)/losses (+), experience adjustments 33 -15
Exchange differences on foreign plans 31 -57
Benefits paid -26 -26
Defined benefit plans at 31 Dec. 595 580
Reconciliation of plan assets:
At the beginning of the year 347 392
Interest income 11 15
Difference between actual return and calculated interest income 2 8
Contributions paid 28 24
Exchange differences on foreign plans 18 -38
Benefits paid -15 -16
Plan assets at 31 Dec. 392 385
Other short-term employee benefits
There are other short-term staff incentive programmes in the Group, the terms of which vary according to country, business area or company. Benefits are recognised in the profit or loss for the year they arise from. An estimated amount of these short-term incentives, social security costs included, for 2013 is EURm 80.
32 Other liabilities
P&C insurance
EURm 2013 2012
Liabilities arising out of direct insurance operations 148 149
Liabilities arising out of reinsurance operations 49 103
Liabilities related to Patient Insurance Pool 68 55
Tax liabilities 113 176
Prepayments and accrued income 197 199
Other 119 125
P&C insurance, total 694 807
The non-current share of other liabilities is EURm 57 (45).

Item Other includes e.g. witholding taxes, social expenses related to Workers Compensation insurance policies and employee benefits, unpaid premium taxes and other accruals.
Life insurance
EURm 2013 2012
Interests 7 9
Tax liabilities 18 0
Liabilities arising out of direct insurance operations 6 6
Liabilities arising out of reinsurance operations 5 5
Settlement liabilities 26 4
Guarantees received 31 122
Other liabilities 37 32
Life insurance, total 129 177
Item Guarantees received comprise assets accepted as guarantees required in derivative trading and securities lending. Item Other includes e.g. liabilities arising from withholding taxes and social security costs, liabilities to creditors and insurance premium advances.
Holding
EURm 2013 2012
Interests 34 34
Guarantees for trading in derivatives 47 78
Liability for dividend distribution 26 24
Other 21 16
Holding, total 129 152
Item Other includes e.g. reservations for share-based incentive programmes and other incentive salaries.
Elimination items between segments -11 -13
EURm 2013 2012
Group, total 941 1,123
33 Contingent liabilities and commitments
P&C insurance
EURm 2013 2012
Off-balance sheet items
Guarantees 28 37
Other irrevocable commitments 14 6
Total 42 43
Assets pledged as collateral for liabilities or contingent liabilities
2013 2012
EURm Assets pledged Liabilities/ commitments Assets pledged Liabilities/ commitments
Assets pledged as collateral
Cash at balances at central banks 1 1 6 4
Investments
- Investment securities 270 131 285 153
Total 271 132 290 157
EURm 12/2013 12/2012
Assets pledged as security for derivative contracts, carrying value
Investment securities 39 40
The pledged assets are included in the balance sheet item Other assets.
EURm 2013 2012
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year 32 37
later than one year and not later than five years 99 110
later than five years 78 101
Total 209 248
Lease and sublease payments recognised as an expense in the period
- minimum lease payments 25 -45
- sublease payments 11 -
Total 36 -45
The subsidiaries If P&C Insurance Ltd and If P&C Insurance Company Ltd provide insurance with mutual undertakings within the Nordic Nuclear Insurance Pool and If P&C Insurance Ltd within the Norwegian Natural Perils’ Pool and the Dutch Terror Pool.
In connection with the transfer of property and casualty insurance business from the Skandia Group to the If Group as of March 1, 1999, If P&C Holding Ltd and If P&C Insurance Ltd issued a guarantee for the benefit of Försäkringsaktiebolaget Skandia (publ.) whereby the aforementioned companies in the If Group mutually guarantee that companies in the Skandia Group will be indemnified against any claims or actions due to guarantees or similar commitments made by companies in the Skandia Group within the property and casualty insurance business transferred to the If Group.
If P&C Insurance Holding Ltd and If P&C Insurance Ltd have separately entered into contracts with Försäkringsaktiebolaget Skandia (publ.) and Tryg-Baltica Forsikrings AS whereby Skandia and Tryg-Baltica will be indemnified against any claims attributable to guarantees issued by Försäkringsaktiebolaget Skandia (publ.) and Vesta Forsikring AS, on behalf of Skandia Marine Insurance Company (U.K.) Ltd. (now Marlon Insurance Company Ltd.) in favor of the Institute of London Underwriters. Marlon Insurance Company Ltd. was disposed during 2007, and the purchaser issued a guarantee in favour of If for the full amount that If may be required to pay under these guarantees.
Normal seller's guarantees have been given in connection the disposal of the subsidiary IPSC Region.
If P&C Insurance Company Ltd has outstanding commitments to private equity funds totalling EURm 6, which is the maximum amount that the company has committed to invest in the funds. Capital will be called to these funds over several years as the funds make investments.
With respect to certain IT systems If and Sampo use jointly, If P&C Insurance Holding Ltd has undertaken to indemnify Sampo for any costs caused by It that Sampo may incur in relation to the owners of the systems.
Life insurance
EURm 2013 2012
Off-balance sheet items
Investment commitments 391 367
Acquisition of IT-software 3 1
Total 394 368
EURm 12/2013 12/2012
Assets pledged as security for derivative contracts, carrying value
Cash and cash equivalents 6 6
The pledged assets are included in the balance sheet item Other assets.
Lended securities
Domestic shares
Remaining acquisition cost 14 67
Fair value 4 53
Security lendings can be interrupted at any time and they are secured.
EURm 2013 2012
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year 2 2
later than one year and not later than five years 8 3
later than five years 9 -
Total 19 5
Total of sublease payments expected to be received under non-cancellable operating sub-leases at 31 Dec. 1 1
Lease and sublease payments recognised as an expense in the period
- minimum lease payments -3 -3
- sublease payments 0 0
Total -3 -3
Holding
EURm 2013 2012
Off-balance sheet items
Investment commitments 1 1
EURm 2013 2012
Commitments for non-cancellable operating leases
Minimum lease payments
not later than one year 1 1
later than one year and not later than five years 2 3
Total 3 4
The Group had at the end of 2013 premises a total of 178,877 m2 (178,971) taken as a lessee. The contracts have been made mainly for 3 to 10 years.
34 Equity and reserves
Equity
The number of Sampo plc’s shares at 31 Dec. 2013 was 560,000,000, of which 558,000,000 were A-shares and 1,200,000 B-shares. There was no change in the company's share capital of EURm 98 during the financial year.

At the end of the financial year 2013, the mother company or other Group companies held no shares in the parent company.
Reserves and retained earnings
Legal reserve
The legal reserve comprises the amounts to be transferred from the distributable equity according to the articles of association or on the basis of the decision of the AGM.
Invested unrestricted equity
The reserve includes other investments of equity nature, as well as issue price of shares to an extent it is not recorded in share capital by an express decision.
Other components of equity
Other components of equity include fair value changes of financial assets available for sale and derivatives used in cash flow hedges, and exchange differences.

Changes in the reserves and retained earnings are presented in the Group's statement of changes in equity.
35 Related party disclosures
Key management personnel
The key management personnel in Sampo Group consists of the members of the Board of Directors of Sampo plc and Sampo Group’s Executive Committee, and the entities over which the members of the key management personnel have a control.
Key management compensation
EURm 2013 2012
Short-term employee benefits 7 6
Post employment benefits 3 3
Other long-term benefits 10 6
Total 19 16
Short-term employee benefits comprise salaries and other short-terms benefits, including profit-sharing bonuses accounted for for the year, and social security costs.
Post employment benefits include pension benefits under the Employees’ Pensions Act (TEL) in Finland and voluntary supplementary pension benefits.
Other long-term benefits consist of the benefits under long-term incentive schemes accounted for for the year (see Note 36).
Related party transactions of the key management
The related party transactions of the key management are not material nor does the key management have any loans from the Group companies.
Associates
Outstanding balances with related parties/Associate Nordea
EURm 2013 2012
Assets 1,152 1,074
Liabilities 111 122
The Group's receivables from Nordea coprise mainly long-term investments in bonds and deposits. In addition, the Group has several on-going derivative contracts related to the Group's risk management of investments and liabilities.
36 Incentive schemes
Long-term incentive schemes 2009 I - 2011 I
The Board of Directors of Sampo plc has decided on the long-term incentive schemes 2009 I - 2011 I for the management and key employees of Sampo Group. The Board has authorised the CEO to decide who will be included in the scheme, as well as the number of calculated incentive units granted for each individual used in determining the amount of the incentive reward. In the schemes, the number of calculated incentive units granted for the members of the Group Executive Committee is decided by the Board of Directors. Over 110 persons were included in the schemes at the end of year 2013.
The amount of the performance-related bonus is based on the value performance of Sampo's A share and on the insurance margin (IM) and, regarding the 2011 I scheme, also on Sampo's return on the risk adjusted capital (RORAC). The value of one calculated incentive unit is the trade-weighted average price of Sampo's A-share at the time period specified in the terms of the scheme, and reduced by the starting price adjusted with the dividends per share distributed up to the payment date. The pre-dividend starting prices vary between eur 16.49 - 24.07. The maximum value of one incentive unit varies between eur 28.49 - 39.07, reduced by the dividend-adjusted starting price. In the 2011 I scheme, the incentive reward depends on two benchmarks. The payout is 70 per cent, if the IM is 6 per cent or more, and 35 per cent, if the IM is between 4 - 5.99 per cent. No IM-related reward will be paid out, if the IM stays below these. In addition, the return on the risk adjusted capital is taken into account so that an incentive reward of 30 per cent is paid out, if the return is at least risk free return + 4 per cent. If the return is risk free return + 2 per cent, but less than risk free return + 4 per cent, the payout is 15 per cent. If the return stays below these benchmarks, no RORAC-based reward will be paid out.
Each plan has three performance periods and incentive rewards are settled in cash in three installments. In the scheme 2009 I when the reward is paid, the employee shall buy Sampo's A-shares at the first possible opportunity, taking into account the provisions on insiders, with 30 per cent of the amount of the reward after taxes and other comparable charges, and to keep the shares in his/her possession for 2 years. In the 2011 I scheme, the employee shall buy Sampo A shares with 60 per cent of the net amount of reward received. The shares are subject to transfer restrictions for three years from the day of payout. A premature payment of the reward may occur in the event of changes in the group structure or in the case of employment termination on specifically determined bases. The fair value of the incentive schemes is estimated by using the Black-Scholes princing model.
The longe-term incentive scheme 2009 I ended in September 2013, when the last reward was paid out.
2009 I 2011 I 2011 I/2
Terms approved *) 08/27/09 09/14/11 09/14/11
Granted (1,000) 31 Dec. 2010 4,369 - -
Granted (1,000) 31 Dec. 2011 3,002 4,359 -
Granted (1,000) 31 Dec. 2012 1,444 4,199 130
Granted (1,000) 31 Dec. 2013 - 4,134 100
End of performance period I 30% Q2-2011 Q2-2014 Q2-2015
End of performance period II 35% Q2-2012 Q2-2015 Q2-2016
End of performance period III 35% Q2-2013 Q2-2016 Q2-2017
Payment I 30% 9-2011 9-2014 9-2015
Payment II 35% 9-2012 9-2015 9-2016
Payment III 35% 9-2013 9-2016 9-2017
Price of Sampo A at terms approval date *) 16.74 18.10 18.10
Starting price **) 16.49 18.37 24.07
Dividend-adjusted starting price at 31 Dec. 2013 13.14 15.82 22.72
Sampo A - closing price 31 Dec. 2012 35.72
Total intrinsic value, EURm - 37 0
Total debt 38
Total cost for the financial period, meur (incl. social costs) 42
*) Grant dates vary
**) Trade-weighted average for ten trading days from the approval of terms
37 Auditors' fees
EURm 2013 2012
Auditing fees -2 -2
Other fees -0 -1
Total -3 -3
38 Legal proceedings
There are a number of legal proceedings against the Group companies outstanding on 31 Dec. 2013, arising in the ordinary course of business. The companies estimate it unlikely that any significant loss will arise from these proceedings.
39 Investments in subsidiaries
Name Group holding % Carrying amount
  
P&C insurance
If P&C Insurance Holding Ltd 100 1,886
If P&C Insurance Ltd 100 1,364
If P&C Insurance Company Ltd 100 501
If P&C Insurance AS 100 50
AS If Kinnisvarahaldus 100 0
CJSC If Insurance 100 10
If Livförsäkring Ab 100 8
Life insurance
Mandatum Life Insurance Company Ltd 100 484
Mandatum Life Insurance Baltic SE 100 11
Other business
If IT Services A/S 100 0
Sampo Capital Oy 100 1
The table excludes property and housing companies accounted for in the consolidated accounts.
40 Investments in shares and participations other than subsidiaries and associates
P&C insurance
Country No. of shares Holding % Carrying amount / Fair value
   
Listed companies
A P Moller - Maersk Denmark 1,125 0.03% 9
ABB Switzerland 3,162,541 0.14% 61
Atlas Copco A+B Sweden 1,918,293 0.16% 35
BB Tools Sweden 254,500 0.89% 3
Be Group Sweden 3,740,083 7.48% 5
Clas Ohlson Sweden 3,114,337 4.75% 42
CTT Systems Sweden 511,200 4.49% 2
Eitzen Maritime Norway 8,231,616 30.16% 3
Beijer Ab Gl Sweden 188,774 0.44% 3
Gunnebo AB Sweden 8,849,114 11.67% 40
Hennes Mauritz B Sweden 2,180,192 0.13% 73
Husqvarna AB Sweden 5,833,987 1.01% 25
Husqvarna Sweden 2,249,321 0.39% 10
Investor Sweden 970,000 0.13% 24
Lindab Intl Sweden 3,890,055 4.94% 28
Nederman Holding AB Sweden 1,160,400 9.90% 25
Nobia AB Sweden 21,075,000 12.02% 130
Nolato AB Sweden 243,131 0.92% 4
Reservoir Exploration Tech Norway 5,438,761 6.11% 0
Sandvik AB Sweden 3,945,780 0.31% 40
Scania AB Sweden 3,044,397 0.38% 43
Sectra AB Sweden 4,322,927 11.65% 37
SSAB Sweden 663,760 0.20% 4
SSAB Sweden 1,360,353 0.42% 6
Statoil ASA Norway 1,783,700 0.06% 31
Svedbergs i Dalstrop Sweden 2,427,790 11.45% 6
Teliasonera AB Sweden 14,400,000 0.33% 87
VBG Group AB Sweden 540,211 3.94% 8
Veidekke ASA Norway 12,111,648 9.06% 71
Volvo AB Sweden 1,287,600 0.06% 12
Volvo AB Sweden 4,409,972 0.21% 42
Yara Intl ASA Norway 596,861 0.21% 19
Noreco Norway 5,277,700 0.09% 4
Marine Harvest ASA Norway 9,495,173 2.31% 8
Total listed companies 942
Other 185
Unit trusts
Aberdeen AM Luxemburg 940,169 48
Danske Invest Finland 32,303,302 66
Danske Invest Finland 22,375,015 40
DB Platinum Advisors Luxemburg 160,000 15
PEQ Eqt III Guernsey 4,720,364 2
PEQ Eqt IV Guernsey 6,257,655 5
Henderson Global Great Britain 883,774 13
Investec Asset Mgmt Great Britain 2,036,689 32
Barclays Global Investment Ireland 752,200 23
Blackrock Inc United States 595,000 80
Lyxor Int AM France 220,000 7
PEQ Mandatum I Finland 4,874,032 5
PEQ Mandatum II Finland 1,436,768 2
PEQ Mandatum II Finland 3,383,184 4
PEQ Private Egy mkt Finland 2,851,007 3
Handelsbanken Fonder Sweden 406,261 11
PEQ Eqt Mid Market Great Britain 2,164,951 2
Total unit trusts 356
Total shares and participations 1,483
Life insurance
Country No. of shares Holding % Carrying amount / Fair value
Listed companies
Amer Sports OYJ Finland 4,000,000 3.38% 60
Comptel OYJ Finland 20,532,625 19.18% 10
Elecster OYJ A Finland 117,000 6.43% 1
eQ Oyj Finland 2,053,296 5.63% 5
Fortum OYJ Finland 4,954,834 0.56% 82
F-Secure OYJ Finland 6,674,081 4.20% 12
Kemira OYJ Finland 1,279,880 0.82% 16
Lassila & Tikanoja OYJ Finland 2,181,238 5.62% 33
Metso OYJ Finland 1,487,381 0.99% 35
Nokia OYJ Finland 1,500,000 0.04% 9
Nokian Renkaat OYJ Finland 1,099,757 0.83% 38
Norvestia OYJ B Finland 1,789,538 12.41% 13
Oriola-KD OYJ B Finland 3,000,000 2.88% 8
Poyry OYJ Finland 2,075,287 3.47% 8
Suominen OYJ Finland 20,759,500 8.37% 10
Teleste OYJ Finland 1,679,200 8.92% 7
Tikkurila Oyj Finland 1,577,079 3.58% 31
UPM-Kymmene OYJ Finland 9,531,219 1.80% 117
Vaisala Oyj A Finland 629,250 4.24% 15
Valmet Corp Finland 1,487,381 0.99% 11
Wartsila OYJ Finland 1,018,119 0.52% 36
YIT OYJ Finland 4,370,951 3.44% 44
Total 602
Other listed companies Finland 20,312,267 12
Listed companies in total 614
Unit trusts
Danske Invest Emerging Asia Fund G Finland 765,617 22
Fourton Odysseus Finland 161,675 39
KJK Fund SICAV-SIF Baltic States B1 C Finland 4,990 9
Total 70
Capital trusts
Amanda III Eastern Private Equity L.P. Finland 13,455,462 16
Amanda IV West L.P. Finland 19,305,862 19
Capman Real Estate I Ky Finland 10,257,479 12
Capman Real Estate II Ky Finland 6,612,696 8
Mandatum Private Equity Fund I L.P. Finland 8,042,153 8
Sponsor Fund III Ky Finland 4,778,688 5
Total 68
Other shares and participations 34
Domestic shares and participations in total 786
Other companies
BenCo Insurance Holding B.V. Netherlands 389,329 6.49% 6
EQT IV ISS Co-investment L.P. Guernsey 872,610 12.52% 12
Pension Corporation Group Limited Guernsey 8,706,965 1.39% 8
Apple Inc United States 21,120 0.00% 9
Foreign unit trusts
Prosperity Russia Domestic Fund Guernsey 54
Prosperity Cub Fund Guernsey 53
DJ STOXX 600 OPT Healthcare Ireland 23
Aberdeen Global Asia Pacific Equity Fund Luxemburg 70
Danske Invest Europe High Dividend I Luxemburg 48
DB X-Trackers DAX Luxemburg 31
MFS MER-Europe SM COS-I1EUR Luxemburg 13
MFS European Value Fund Z Luxemburg 41
Allianz RCM Europe Equity Growth W Luxemburg 57
Comgest Panda Luxemburg 37
Brummer & Partners Nektar Fund Sweden 16
Unideutschland XS Germany 19
Henderson Gartmore Latin America R Great Britain 48
Investec GSF-Asia Pacific-I Great Britain 58
Ishares Core S&P 500 Index Fund United States 127
Technology Select Sect SPDR United States 25
Foreign unit trusts
Fortress Credit Opportunities Fund II (C) L.P. Cayman islands 55
Fortress Credit Opportunities Fund III (C) L.P. Cayman islands 20
Victory Park Capital Fund II (Cayman), L.P. Cayman islands 15
Avenue Special Situations Fund VI (C-Feeder), L.P. Cayman islands 25
Financial Credit Investment I, L.P. Cayman islands 10
Fortress Life Settlement Fund (C) L.P. Cayman islands 20
Goldman Sachs Loan Partners I Offshore B, L.P. Cayman islands 14
Goldman Sachs Loan Partners I Offshore Investment Fund L.P. Cayman islands 32
Highbridge Liquid Loan Opportunities Fund, L.P Cayman islands 42
Highbridge Principal Strategies - Senior Loan Fund II L.P. Cayman islands 6
Highbridge Specialty Fund III Cayman islands 18
Lunar Capital Partners III L.P. Cayman islands 6
Mount Kellet Capital Partners (Cayman), L.P. Cayman islands 30
Mount Kellett Capital Partners (Cayman) II, L.P. Cayman islands 23
Petershill Offshore LP Cayman islands 17
Russia Partners II, L.P. Cayman islands 9
Capman Buyout IX Fund A L.P. Guernsey 10
Capman Buyout VIII Fund A L.P. Guernsey 6
EQT Credit (No.1) L.P. Guernsey 47
EQT Credit (No.2) L.P. Guernsey 17
EQT V (No.1) L.P. Guernsey 6
EQT VI (No.1) L.P. Guernsey 10
Gilde Buy-Out Fund III Guernsey 9
Permira IV L.P. 2 Guernsey 7
Activa Capital Fund II FCPR France 9
Verdane Capital VII K/S Denmark 10
Gresham IV Fund L.P. Great Britain 7
M&G Debt Opportunities Fund Great Britain 16
Other share and participations 82
Foreign shares and participations in total 1,332
Shares and participations in total 2,117
Holding
Country No. of shares Holding % Carrying amount / Fair value
Domestic other than listed companies
Varma Mutual Pension Insurance Company Finland 57 80,28% 14
Other Finland 10
Total domestic shares and participations 24
Foreign unit trusts 4
Total shares and participations 28
Holdings exceeding EURm 5 and holdings in listed companies exceeding five per cent specified.
The table does not include investments related to unit-linked insurance contracts.
41 Events after the balance sheet date
In the meeting of 12 Feb. 2014, the Board of Directors decided to propose at the Annual General Meeting on 24 April 2014 a dividend distribution of EUR 1.65 per share, or total EUR 924,000,000, for 2013. The dividends to be paid will be accounted for in the equity in 2014 as a deduction of retained earnings.
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