Mandatum plc, Stock exchange release, 24 April 2026 at 11:15 a.m. EEST
Mandatum will adopt the Solvency II discount rate curve published by the European Insurance and Occupational Pensions Authority (EIOPA), including the volatility adjustment, for discounting insurance contract liabilities under IFRS 17. The new discount rate curve will replace the curve previously provided by an external service provider. The new curve will be applied starting from the interim reporting for the first quarter of 2026.
The IFRS 17 standard, which entered into force at the beginning of 2023, requires that cash flows related to insurance contract liabilities are discounted using a market-based yield curve. With the previously used curve, changes in discount rates have at times resulted in volatility in Mandatum's net finance result that has been difficult to estimate. The purpose of the change is to reduce fluctuations in the level of the discount rate curve arising from factors other than changes in the risk-free interest rate. The aim of the change is also to improve the transparency of the with-profit business net finance result and the predictability of earnings in Group IFRS reporting.
The change in the discount rate curve has no impact on Mandatum's cash flows, solvency or dividend paying capacity, rather, it represents a change in the accrual of IFRS earnings over time.
The change in the discount rate curve increases the present value of the expected cash flows included in insurance contract liabilities, as the new curve is lower than the previous one, particularly at the long end of the curve. This is estimated to result in a one-off negative impact of approximately EUR 36 million on profit before taxes in the first quarter of 2026. However, the negative earnings impact will be offset over time as the expected unwinding expense related to discounting under IFRS 17 will decrease correspondingly over the lifetime of the insurance policies.
The change of the discount rate curve improves the quality and transparency of the financial information provided to investors and predictability of the net finance result. The change will be described in more detail in Mandatum's interim report for the first quarter of 2026, which will be published on Friday, 8 May at approximately 8.30 a.m. EEST.
EIOPA Solvency II discount rate curve: https://www.eiopa.europa.eu/tools-and-data/risk-free-interest-rate-term-structures_en
Additional information:
Lotta Borgström
VP, Investor Relations
Tel. +358 50 022 1027
lotta.borgstrom[a]mandatum.fi
Mandatum in brief
Mandatum is a major financial services provider, combining expertise in asset and wealth management and life insurance. Clients include institutional investors, companies and private individuals. Mandatum offers a broad range of services encompassing asset and wealth management, compensation and rewards, supplementary pensions and personal risk insurance. Skilled personnel, strong brand and proven investment track record are at the centre of Mandatum's success. The company has been listed on Nasdaq Helsinki since 2023. mandatum.fi/en/group/
Distribution:
Nasdaq Helsinki
Financial Supervisory Authority
Key media
www.mandatum.fi