UPDATE 2-Finnish insurer Sampo books $1.1 bln impairment on Nordea stake

(Adds analyst, details, shares)

Feb 11 (Reuters) - Finnish financial group Sampo on Thursday reported a fourth-quarter loss as the company booked a 899 million euro ($1.09 billion) impairment charge due to a revaluation of its shares in banking group Nordea.

The unexpected earnings hit was offset by a strong performance of Sampo’s insurance businesses, with fourth-quarter pretax profits at its main property and casualty (P&C) insurance division If up 25% from a year earlier.

Sampo shares were down about 1%.

The pan-Nordic insurer, which is the largest shareholder in Nordea with 15.9% stake, said it had reduced the book value of its Nordea shares to 7.50 euros from 8.90 euros. Shares in Nordea were at 7.03 euros in midday trade on Thursday.

“The action effectively reduces the potential for earnings surprises regardless of what the insurer decides to do with its stake,” Moody’s analyst Christian Badorff said in a note.

Last week, activist investor Elliott said Sampo should sell its holding in Nordea this year and focus on its insurance operations, saying the move would unlock 8 billion euros of shareholder value for Sampo owners.

“Furthermore Sampo’s main operating insurance operations, and If P&C in particular, contributed strong underlying earnings, despite negative Covid19-related effects on investment returns,” Moody’s Badorff said.

Sampo reported an October-December pretax loss of 675 million euros, compared with analysts’ average forecast for a 242.2 million profit, Refinitiv Eikon data showed.

Sampo was upbeat on prospects for property and casualty insurance business If.

“We expect P&C underwriting results to remain robust and continue to work toward a more focused group structure,” Chief Executive Torbjorn Magnusson said in a statement.

Sampo is holding a capital markets day on Feb. 24.

$1 = 0.8246 euros Reporting by Tarmo Virki in Tallinn. Editing by Jason Neely, Mark Potter and Jane Merriman