Sampo Joins Skandia, Storebrand in If

Finland’s Sampo will join two other Nordic Insurers, Sweden’s Skandia and Norway’s Storebrand as a shareholder in If Property and Casualty Insurance Ltd. following the transfer of its non-life operations to the group.

When completed, Sampo will own a 38 percent stake in If and its pension arm Varma-Sampo 10.1 percent, Skandia 19.4 percent, Storebrand 22.5 percent and Skandia Liv 10 percent. Sampo will also receive a cash payment of around $188 million for merging its two general insurance units into If.

Becoming If’s largest shareholder at least partially compensates Sampo for the failure of its efforts to acquire Storebrand, largely as a result of opposition from some members of the Norwegian government and from Den Norske Bank (See IJ Website Oct.2) If will become the regions largest p/c insurer with around around a 24 percent market share.

Standard & Poor’s reacted to the news by placing If on CreditWatch with negative implications, largely on the possibility that “the ratings could be lowered if the transaction fails to complete.” It said it would reaffirm the company’s ‘A’ ratings once the deal is finalized, and saw the addition of the Sampo units as strengthening If both in terms of geographical distribution and financially.