Topdanmark (No_rec, TP: DKK) - Discontinuing coverage

Given Sampo’s pending acquisition of Topdanmark and its subsequent delisting, we have discontinued coverage. Our last published recommendation, target price, and estimates should no longer be relied upon.

Consolidating forces

A benign quarter without major weather events should lead to strong YOY improvement in earnings across the Nordic non-life sector, helped by favourable financial markets and the ongoing momentum from multiple rounds of premium price rises. Industry consolidation continued with the acquisition of Topdanmark by Sampo, set to be completed by 18 October. The transaction should lead to increased consolidation, promoting rational market behaviour in Denmark. Based on a growing discount to peers, we hi...

Sampo plc - Mergers & Acquisitions (M&A), Partnerships & Alliances

Summary Marketline's Sampo plc Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments report includes business description, detailed reports on mergers and acquisitions (M&A), divestments, capital raisings, venture capital investments, ownership and partnership transactions undertaken by Sampo plc - Mergers & Acquisitions (M&A), Partnerships & Alliances since January2007. Marketline's Company Mergers & Acquisitions (M&A), Partnerships & Alliances and Investments reports offer a...

Weaker underlying outlook

Q2: Weak underlying, but results saved by financials. Adj. EPS down by 4.7%, 1.6% and 2.6%, for '24-26e. Expect share to continue tracking Sampo.

Topdanmark (Hold, TP: DKK371.00) - Continued repricing focus

PTP was 19% higher in Q2 YOY as rebounding financial markets helped offset a soft underwriting result. High YOY insurance revenue growth was offset by a sizeable number of large claims and continued high motor-claims frequencies, for which the company continues to raise prices. We have made limited 2025–2026e EPS changes, and reiterate our HOLD. We have raised our target price to DKK371(366), in line with the bid from Sampo.

Financials saves weaker underlying

Adj PTP beat of 4-5% amid better financials, while UW hurt. Underlying CR 1.6-1.8pp worse (motor, fires & drought). Cons.est.rev. down 2-6% on guidance, stock linked to Sampo

Nordic non-life: Q2e - Repricing to show effects

A more normal claims quarter should start to show the repricing. Expanding margins up avg. adj EPS '25e-'26e by ~1%. Prefer Sampo to Tryg and GJF (all BUYs); TOP (SELL)

Fully valued

Q2e: easier comps vs. last few quarters, but Oona headwind remains. Adj. EPS trimmed by 6% and 3% for '24e-'25e (claims). Valuation premium has jumped with the Sampo offer: SELL

Sampo plc - Company Profile and SWOT Analysis

Summary Sampo plc - Company Profile and SWOT Analysis, is a source of comprehensive company data and information. The report covers the company's structure, operation, SWOT analysis, product and service offerings and corporate actions, providing a 360˚ view of the company. Key Highlights Sampo plc (Sampo) is an insurance solutions provider. The company provides a range of property and casualty, and life insurance products and services to its customers. The company offers insurance products fo...

Seeing the effects of repricing

Warm weather in the quarter, albeit with periods of heavy rainfall, should support seasonally low claims, while we expect to see the results of the strong premium repricing since H2 2023. Stable interest rates in most markets and solid equity performance QOQ should further support Q2 earnings. Sampo is our Nordic non-life top pick, following its long-awaited bid for the remaining shares in Topdanmark.

Sampo with an all-share transaction for Topdanmark

Topdanmark (Hold, TP: DKK320.00) - Weathering the storm

Despite harsh winter weather, Topdanmark reported Q1 PTP up ~1% YOY due to a strong investment result and solid underwriting. The combined ratio was 84.8%, 1.2%-points higher YOY, supported by low large claims and high run-off gains. While the underlying claims ratio was up YOY, pricing measures should continue to support improved underwriting. On somewhat increased cost control, we have raised our 2025–2026e EPS by ~1%. We reiterate our HOLD and DKK320 target price.

Repricing the tonic for bad weather

We expect above-normal weather-related claims in Q1 as a result of heavy rain and snowfall (and record-low temperatures) in the Nordics at the start of the year. On the positive side, we believe the non-life insurers should see the effects of 2023’s repricing efforts, while their latest CMD presentations leave us confident the sector remains committed to maintaining underwriting discipline. Tryg is our top pick in the Nordic P&C sector, while we also reiterate our BUYs on Sampo and Gjensidige an...

Topdanmark (Hold, TP: DKK320.00) - Challenging end to 2023

Topdanmark reported Q4 pre-tax profit of DKK213m, hurt by high weather-related claims following storms and heavy rainfall, and an elevated level of large claims. Despite soft reported figures, the underlying claims ratio improved 0.2%-points YOY, which in our view reflects that the recent repricing efforts are starting to offset increased claims inflation and frequency trends. We have trimmed our EPS by 1–3% for 2024–2025e, reiterating our HOLD and have cut our target price to DKK320 (325).

Underwriting to remain disciplined

We expect heavy rainfall in Denmark and an early winter in the Nordics to lead to somewhat above-normalised claims in Q4, but strong equity markets and marked-to-market gains on bond investments to offset a rise in reported combined ratios. Despite higher interest rates in 2023, we remain confident that insurers will continue to focus on maintaining underwriting discipline. We still find the sector attractive long-term, and highlight Tryg as our top pick in the sector.

Topdanmark (Hold, TP: DKK335.00) - Profitability over growth

Despite severe weather in the quarter, PTP improved by 12% YOY, due to rebounding financial markets. The insurance service result was down by 15% YOY, as the combined ratio deteriorated by 3.2%-points YOY, due to both large and weather-related claims well above normalised levels. The underlying claims ratio increased by 1.8%-points YOY. We have raised our 2024–2025e EPS by ~2% on the back of the underlying improvement. We reiterate our HOLD and target price of DKK335.

Topdanmark (Hold, TP: DKK335.00) - Increasing Motor claims frequency

With several key items pre-announced on 10 July, there were few surprises in the Q2 report. Although the soft insurance service result (down 27% YOY) was due to lower run-offs, the (pre-announced) negative claims frequency trend resulted in the underlying claims ratio deteriorating by 2.4%-points YOY. As the claims trend is expected to continue while prices are being raised, we have reduced our 2024–2025e EPS by 1–4% and our target price to DKK335 (349). We reiterate our HOLD.

Heating up

Q2 has been warm and dry, and although this may support higher claims frequency, there have also been several large claim events in the Nordics QTD. We expect the rational repricing over the past few quarters to continue to bear fruit, supporting underwriting quality and insurance revenue growth. While Q2 investment returns could be hurt by rising rates, the long-term yield outlook has been strengthened. We continue to highlight Sampo and Tryg as our top sector picks.

Northern Lights

Topdanmark (Hold, TP: DKK380.00) - Solid underwriting performance

Q1 PTP was DKK511m, up significantly YOY, driven by higher interest rates, fewer storm-related claims, and a strong investment result. The transition to IFRS17 yielded few surprises. Although the underlying claims ratio was softer YOY, this was partly due to a less inclusive definition of weather-related claims. We have made limited EPS estimate revisions on the back of the solid underwriting performance and an unchanged premium growth outlook. We reiterate our HOLD and DKK380 target price.