Sensitivity Analysis of the Capital Position
The total sensitivity of equity is shown in the table Sensitivity analysis of capitalization to market risks, If P&C, Mandatum Life and Sampo plc, 31 December 2012 separately for the insurance subsidiaries together with the corresponding effect on the discounted value of liabilities and adjusted solvency capital.
Sensitivity Analysis of Capitalization to Market Risks
If P&C, Mandatum Life and Sampo plc, 31 December 2012
|
31 Dec 2012 |
Interest rate | Equity |
Other financial investments |
|
|
EURm |
1% parallel shift down |
1% parallel shift up |
20% fall in prices |
20% fall in prices |
|---|---|---|---|---|
|
If P&C |
107 | -105 | -250 | -26 |
|
Mandatum Life |
1 | -21 | -316 | -152 |
|
Sampo plc |
2 | -2 | -4 | -3 |
|
Total effect on equity |
109 | -127 | -569 | -180 |
|
Change in liability side adjustment |
-1,143 | 944 | 9 | 4 |
|
Effect on adjusted solvency capital |
-1,033 | 817 | -560 | -176 |
For example, a rise in interest rates would reduce the values of financial instruments causing a fall in the Sampo Group's equity. On the other hand, the effect on adjusted solvency capital would be positive due to the fact that the market value of technical provisions would decrease as a result of applying a higher discount rate.
