Pohjola Insurance Ltd and Pohjantähti Mutual Insurance Company Are Planning to Merge

Pohjola Bank plc
COMPANY RELEASE, Release Category: Stock Exchange Release
29 September 2010, 8.30 am

Pohjola Insurance Ltd and Pohjantähti Mutual Insurance Company Are Planning to Merge

Pohjola Insurance Ltd and Pohjantähti Mutual Insurance Company are planning to merge. At the meeting of 28 September 2010, the Board of Directors of both companies has approved a merger plan whereby Pohjantähti Mutual Insurance Company will merge into Pohjola Insurance. If both companies' extraordinary general meetings adopt the merger plan, the companies will merge according to the proposal to be submitted to the general meetings.

The merger plan specifies the amount of the merger consideration offered to Pohjantähti's shareholders, its distribution and other terms and conditions governing the merger. The aggregate amount of the merger consideration comes to 80 million euros, comprising the amount payable to the policyholder-shareholders and the holder of the guarantee capital. The consideration will be paid in cash in its entirety.

In the merger, Pohjantähti's insurance portfolio and agreements as such would transfer to Pohjola and Pohjantähti's customers would become those of Pohjola Insurance.

Pohjola was the initiator of the merger. According to Pohjantähti's Board of Directors, the merger bid has financially justified reasons and its terms and conditions are in the interests of both customers and personnel.

The extraordinary general meetings of both companies will decide whether the merger plan will be rejected or approved. In addition to approval by the general meetings, the merger will require regulatory approval from relevant authorities. Policyholder-shareholders and Ilmarinen Mutual Pension Insurance Company, the holder of the guarantee capital, exercise voting rights at the general meeting of Pohjantähti. The tentative date for the extraordinary general meeting is 8 December 2010.

The purpose of the merger is to strengthen the competitiveness in the Finnish non-life insurance market of the new entity formed by the insurance business of Pohjola Insurance and Pohjantähti. The merger is aimed at enhancing growth potential and profitability of the combined insurance businesses. The new entity will be able to more efficiently manage product and service development, ICT development, staff recruitment and training, and capital, given the increasingly demanding operating and regulatory environment.

Pohjantähti is currently headquartered in Hämeenlinna. Pohjola aims to increase the number of insurance experts in Hämeenlinna and will establish a Pohjola Insurance service centre in the town. According to the merger plan, the merger should be executed in the spring of 2011. Post-merger business development measures are now only under preparation. However, based on a decision already made, further plans will not involve any redundancies, changing full-time employment contracts to part-time contracts or layoffs.

- If the planned merger comes true, we will provide work for all of Pohjantähti's existing employees and insurance intermediaries. Moreover, we will recruit at least 50 new employees at the Hämeenlinna service centre, says Mikael Silvennoinen, President and CEO of Pohjola.

- The strong growth in the number of Pohjola Insurance customers has created a need to hire more staff especially in customer service, continues Silvennoinen.

Pohjola Bank plc

Carina Geber-Teir
Chief Communications Officer

For more information, please contact:
Mikael Silvennoinen, President and CEO, Pohjola Bank plc, tel. +358 (0)10 252 2549 (call request)
Jouko Pölönen, CFO, Pohjola Banc plc, tel. +358 (0)10 252 3405
Jaakko Tuomikoski, Chairman of the Board of Directors, Pohjantähti, tel. +358 (0)10 284 3447 (call request)
Petri Suni, Managing Director, Pohjantähti, tel. +358 (0)20 763 4069 (call request)


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Established in 1895, Pohjantähti is a Finnish insurance company owned by its customers. It has 45 offices throughout Finland. Headquartered in Hämeenlinna, Pohjatähti serves households and the business and agricultural sectors. Pohjantähti has partnered with Ilmarinen Mutual Pension Insurance Company within statutory pension insurance and with OP Life Assurance Company Ltd within life, savings and unit-linked policies. The company's highest decision-making body is the general meeting of shareholders in which policyholders and holders of guarantee capital exercise their voting rights. Pohjantähti's market share of premiums written stands at 2.4 per cent.

Pohjola is a Finnish financial services group which provides its corporate and institutional customers with a diverse range of banking, non-life insurance and asset management services and private individuals with an extensive range of non-life insurance and private banking services.
Pohjola is Finland's leading non-life insurer. The Group's non-life insurance service providers comprise Pohjola Insurance Ltd as a non-life insurer, A-Insurance Ltd focusing on insurance for commercial transport, Eurooppalainen Insurance Company Ltd specialising in travel insurance and the Seesam companies in the Baltic States. Pohjola Bank plc (Pohjola) is part of OP-Pohjola Group, the leading financial services group in Finland. OP-Pohjola Group consists of over 200 member cooperative banks and the Group's central institution, OP-Pohjola Group Central Cooperative, with its subsidiaries and closely-related companies, the largest of which is Pohjola.