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Local Insurance and Tapiola to merge, Erkki Moisander of Local Insurance to become President of the new Group

7.2.2012 -

Tapiola and Local Insurance are merging to form a mutual financial group. Erkki Moisander (born 1953), current Managing Director of Local Insurance, has been appointed President of the new Group. His term as President will commence on 1 January 2013 when the new finance group Local Insurance-Tapiola shall launch its operation.

President of Tapiola Group Asmo Kalpala’s term shall terminate as agreed earlier at the end of 2012, and he shall continue as Member of Local Insurance-Tapiola’s Board of Directors during 1 January 2013-30 June 2013. During this period, Kalpala will also serve as the Chairman of the Association of Mutual Insurers and Insurance Cooperatives in Europe, i.e. AMICE, and as Member of Insurance and Reinsurance Group at European Insurance and Occupational Pensions Authority, i.e. EIOPA. Asmo Kalpala retires on 30 June 2013.

The new company group, which will be owned by its customers, will be established by merging the Local Insurance Mutual Company and the Tapiola General Mutual Insurance Company to form the company group’s central company. Current Managing Director of Tapiola General Juha-Pekka Halmeenmäki (born 1964), M.Sc., Approved Actuary, continues as Managing Director of the central company. Local Insurance-Tapiola Group will become Finland’s largest and most solvent non-life insurer. The company's figures are estimated as follows:

Market share in non-life insurance is approximately 30 per cent

Premiums written in non-life insurance are approximately EUR 1 billion and the number of owner-customers is approximately 1.5 million

In addition to the central company, 19 regional mutual companies will be incorporated, offering comprehensive insurance, banking and investment services in their respective regions. The central company provides the overall services for the Helsinki capital area.

In addition to the central and regional companies, the company group composed of Tapiola and Local Insurance will include Tapiola’s banking and asset management companies, Tapiola Life and Tapiola Real Estate. The position of Turva remains intact in the new group. Tapiola Pension will act as the statutory employee pension insurance partner of Local Insurance-Tapiola. The company group will employ approximately 4,000 people.

“We are building a new Finnish financial group based on the mutual company form, which will grow closer to its customers and combine the best practices of both parties”, says Asmo Kalpala, President of Tapiola Group.

“The incorporation of regional mutual insurance companies means that we are bringing banking and insurance services as close to the owner-customers as possible. Strong resources enable us to provide financial services in the manner expected by the customer, in person or online. The owner-customers who concentrate their business with us will also benefit from the bonus programme," says Erkki Moisander, Managing Director of Local Insurance.

The merger process will take approximately two years, with no effect on customers
The merger process is planned to take approximately two years. During this period, the current customer relationships will remain unchanged and customers are not required to take any action. The merger process includes the setting up and organisation of the central company, setting up of the regional companies, and transfer of insurance portfolios to the regional companies.

The merger will progress as follows:

Approval of the Annual General Meetings of Local Insurance Mutual Company and Tapiola General in spring 2012 is a prerequisite for the merger, as is obtaining consent from the Financial Supervisory Authority and the Finnish Competition Authority.
By the end of 2012, Local Insurance-Tapiola, a mutual company engaging in non-life insurance business, will be established.
During 2012, 19 regional mutual insurance companies will be set up.
It is intended that the transfers of insurance portfolios to regional companies will be completed by the end of 2013.
During 2012, the new name and visual look of Local Insurance-Tapiola will be decided.
The regional companies will be set up by selecting one so-called spearhead association from among the local insurance associations currently operating in the planned region, into which the other local insurance associations will merge. The spearhead association will take the decision of changing its company form into a mutual insurance company. Tapiola’s current local regions will be organised to become part of the regional companies. The position of Tapiola’s franchising entrepreneurs and representatives as a significant service and sales channel will remain unchanged in the merger process. The impact of the merger on the Saving Bank cooperation will be separately clarified together with the savings banks.

Appointments to central company and life company boards

The number of Board Members is eight until 30 June 2013 and thereafter seven until the end of term. Erkki Moisander will be the Chairman of the Boards. Members of the Group Board of Directors comprise three Group Directors responsible for the business areas (private households, corporate customers and investment operations), two representatives of the regional companies, one person appointed by Local Insurance and one person appointed by Tapiola.

For the term commencing on 1 January 2013, the following persons have been appointed to the Boards:

Erkki Moisander, Chairman and President of Group

Members:

Asmo Kalpala, Board Member 1 January – 30 June 2013
Ralf Wickström, Board Member
Harri Lauslahti, Group Director, private households business
Jari Sundström, Group Director, corporate customer business
Jari Eklund, Group Director, investment operations
Marjatta Leiviskä, Board Member (regional company representative)
Pentti Kuusela, Board Member (regional company representative)

The merger will not have a direct effect on the personnel

The merger of Local Insurance and Tapiola will not in itself mean personnel reductions. The employees will transfer to the new company as old employees. As a rule, operations in both company groups will continue in the current format during 2012.

As a result of the merger, a new organisation will be constructed, which will take effect gradually during 2013 2014. During the course of this process, some overlaps may emerge. Their effect on the personnel numbers can only be assessed when the plans concerning the new organisation can be implemented.

NB. The formation of the regional companies will be communicated regionally on 8 February 2012.

Further information:

Local Insurance, Managing Director Erkki Moisander, 0400 670645
Tapiola Group, President Asmo Kalpala, 09 453 2101 or Communications Director Jyrki Antikainen 050 3574292