Gjensidige Forsikring Asa · OSL:GJF
Gjensidige Forsikring Asa — Q3 2024 Earnings Presentation
52 slides from Gjensidige Forsikring Asa's earnings presentation, Oct 22, 2024
Slide 1: Q3 2024 Interim presentation
Q3 2024 Interim presentation October 2024
Slide 2: Strong revenue growth, higher claims cost in Norway and a solid financial result
Quarterly update Strong revenue growth, higher claims cost in Norway and a solid financial result in the third quarter • Pre-tax profit NOK 2,215m Combined ratio % • Insurance service result NOK 1,590m 87.4 83.9 • 11.7% insurance revenue growth 16.6 11.8 • Lower underlying profitability 70.8 72.1 •
Slide 3: Property, Private Norway: Continued implementation of significant pricing measures
Quarterly update Property, Private Norway: Continued implementation of significant pricing measures. Property, Private Norway Claims for property insurance volatile in nature Claims frequency • High exposure to weather - expect more frequent weather-related incidents over time Q3’24/Q3’23: - 20% (Q3
Slide 4: Motor, Private Norway: Continued high price increases to meet higher claims cost
Quarterly update Motor, Private Norway: Continued high price increases to meet higher claims cost. Motor, Private Norway Claims mix impacts severity Claims frequency • Shift in claims mix during the past quarters Q3’24/Q3’23: + 7.0% • More expensive losses • Increase in more severe claims such as co
Slide 5: Sustained growth momentum and high customer retention
Quarterly update Sustained growth momentum and high customer retention Maintaining high retention in Norway Private: • Continued strong revenue growth and competitiveness in Norway • Strong organic growth in Denmark supported by Private Commercial bolt-on Norway Norway 90/93%1 92% Commercial: • Stro
Slide 6: Moving forward with sustainability initiatives
Quarterly update Moving forward with sustainability initiatives • Agreement with Mitigrate to provide measures to prevent climate-related damages to properties. • Launched digital tool for residential buildings in Norway with partners to identifiy energy efficiency measures • Initiated improvement i
Slide 7: Financial performance
Financial performance
Slide 8: Higher insurance service result driven by revenue growth
Financial Performance Higher insurance service result driven by revenue growth. Good contribution from finance and pension. YTD YTD • Continued high revenue growth. NOKm Q3 2024 Q3 2023 2024 2023 • Profitability for Private negatively impacted by Private property, motor and A&H insurance in Norway a
Slide 9: 11.7 per cent revenue growth – 10.6 per cent in local currency
Financial Performance 11.7 per cent revenue growth – 10.6 per cent in local currency Insurance revenue development NOK m Revenue growth Segment Local Driver(s) NOK currency Private 11.3 % 10.7 % Mainly price - Norway 8.9 % 8.9 % Mainly price - Denmark 24.3 % 20.6 % Volume and price Commercial 12.8 %
Slide 10: Increased loss ratio. Deterioration in underlying profitability gradually decreasing
Financial Performance Increased loss ratio. Deterioration in underlying profitability gradually decreasing. Loss ratio development Key drivers % • Lower large losses (Q3’23 significantly impacted by severe weather) • Higher underlying frequency loss ratio in Private and Commercial. • Implementing ta
Slide 11: Continued good cost control - cost ratio 11.8 per cent
Financial Performance Continued good cost control - cost ratio 11.8 per cent Operating expenses Competitive cost ratio NOK m 600 • Efficient operations • High revenue growth 300 • Strong cost discipline across the Group 0 Private Commercial Sweden Corporate Centre Q3 2023 Q3 2024 Cost ratios % 15.1
Slide 12: Good performance in Pension
Financial Performance Good performance in Pension Pre-tax profit Assets under management NOK m NOK bn 76 79 84 69 64 386 208 186 182 164 152 137 124 114 4 Q3 Q4 Q1 Q2 Q3 2023 2023 2024 2024 2024 Q3 Q4 Q1 Q2 Q3 2023 2023 2024 2024 2024 Pre-tax profit Pre-tax profit adjusted for change in CSM Gjensidi
Slide 13: Investment return of 2.1 per cent, driven by market conditions
Financial Performance Investment return of 2.1 per cent, driven by market conditions Investment return per asset class Balanced investment portfolio Fixed-income: 96% Free Match Listed equities: 2% 38% 62% NOK PE funds: 2% 62.1bn1 Other (incl. hedge funds and commodities): 1% 4.5% High credit qualit
Slide 14: Moving ahead on operational targets
Financial Performance Moving ahead on operational targets High customer retention in Norway, improvement potential in Denmark Metric Status Q3 2024 Target 2026 % Customer satisfaction 100 78 > 78 (Group1) 91.6% Customer retention 91% > 90% (Norway/Outside Norway1) 90 85% > 85% 89.8% Digital distribu
Slide 15: Strong capital position
Financial Performance Strong capital position Solvency Eligible own funds ratio • Contribution from operating SII earnings and result in free Eligible portfolio offset by formulaic own funds dividend NOK bn • Exercise of call option on T2 bond (MNOK 241) in October 2024 Solvency capital Capital requ
Slide 16: Concluding remarks
Summary Concluding remarks Ambitious annual financial targets • Continued strong growth momentum and high Metric 2024 & 2025 2026 customer loyalty. Combined ratio <84% <82% • Q3’24 result impacted by higher claims cost in Norway. Cost ratio <14% ~13% • Strong focus on ongoing measures and good cost
Slide 17: Appendix
Appendix
Slide 18: Roadshows and conferences post Q3 2024 results
Appendix Roadshows and conferences post Q3 2024 results Date Location Participants Event Arranged by CEO Geir Holmgren 22 October Oslo CFO Jostein Amdal Roadshow Carnegie Head of IR Mitra H. Negård CEO Geir Holmgren 29 October London Roadshow DNB Head of IR Mitra H. Negård CFO Jostein Amdal 29 Octob
Slide 19: Weather effects, Group excluding the Baltics
Appendix Weather effects, Group excluding the Baltics Group excluding the Baltics Q3 2024 Q3 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Reported Insurance revenue, MNOK 9,889 8,853 9,392 8,559 9,060 8,176 28,340 25,589 Loss ratio 72.1% 70.8% 72.5% 69.5% 79.4% 73.6% 74.6% 71.3% Underlying
Slide 20: Weather effects, Private
Appendix Weather effects, Private Private Private Norway Private Denmark Q3 Q3 Q2 Q2 Q1 Q1 YTD YTD Q3 Q3 Q2 Q2 Q1 Q1 YTD YTD Q3 Q3 Q2 Q2 Q1 Q1 YTD YTD 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Reported Insurance revenue, M
Slide 21: Weather effects, Commercial
Appendix Weather effects, Commercial Commercial Commercial Norway Commercial Denmark Q3 Q3 Q2 Q2 Q1 Q1 YTD YTD Q3 Q3 Q2 Q2 Q1 Q1 YTD YTD Q3 Q3 Q2 Q2 Q1 Q1 YTD YTD 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 Reported Insuranc
Slide 22: Weather effects, Sweden and Corporate Centre
Appendix Weather effects, Sweden and Corporate Centre Sweden Corporate Centre YTD YTD YTD YTD Q3 2024 Q3 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 Q3 2024 Q3 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 2024 2023 2024 2023 Reported Insurance revenue, MNOK 525 481 474 467 494 458 1,494 1,406 52 70 54 85 (54) 68 5
Slide 23: General insurance Norway – cost ratio and loss ratio
Appendix General insurance Norway – cost ratio and loss ratio Private Norway Commercial Norway Combined ratio Combined ratio 78.3% 84.5% 74.6% 76.1% 80.5% 78.0% 73.0% 8.2% 11.5% 70.4% 8.4% 11.2% 12.7% 8.0% 12.0% 7.9% 66.8% 72.1% 70.0% 76.2% 61.0% 63.4% 63.4% 62.5% Q3 2023 Q3 2024 YTD 2023 YTD 2024 Q
Slide 24: General insurance Denmark – cost ratio and loss ratio
Appendix General insurance Denmark – cost ratio and loss ratio Private Denmark Commercial Denmark Combined ratio Combined ratio 107.1% 108.4% 106.0% 100.2% 22.2% 23.2% 81.8% 81.6% 83.8% 32.0% 25.0% 78.7% 9.8% 10.7% 10.9% 10.0% 86.2% 82.8% 75.1% 75.2% 71.9% 68.7% 70.9% 72.9% Q3 2023 Q3 2024 YTD 2023
Slide 25: General insurance Sweden – cost ratio and loss ratio
Appendix General insurance Sweden – cost ratio and loss ratio Sweden Combined ratio 91.6% 89.8% 87.4% 83.8% 15.2% 15.8% 14.8% 14.8% 76.4% 69.0% 74.0% 72.6% Q3 2023 Q3 2024 YTD 2023 YTD 2024 Loss ratio Cost ratio Gjensidige Forsikring Group 25
Slide 26: Large losses higher than expected
Appendix Large losses higher than expected Large losses (before discounting)1 Large losses per segment (before discounting) NOK m NOK m 542 692 570 474 388 309 179 82 93 46 11 0 Q3 2023 Q3 2024 Private Commercial Sweden CC Expected Reported, before discounting Q3 2023 Q3 2024 CC = Corporate Centre.
Slide 27: Large losses development
Appendix Large losses development ~ NOK 1.9bn in large losses1 expected annually Large losses1 per segment (before discounting) - (before discounting) actual vs. expected NOK m NOK m 800 309 600 241 179 400 162 82 200 65 7 0 0 Q316 Q321 Q117 Q317 Q118 Q318 Q119 Q319 Q120 Q320 Q121 Q122 Q322 Q123 Q32
Slide 28: Run-off gains
Appendix Run-off gains1 NOK m 181 66 13 24 21 10 (6) (37) Private Commercial Sweden Corporate Centre Q3 2023 Q3 2024 1) Excluding the Baltics from Q3 2024 Gjensidige Forsikring Group 28
Slide 29: Run-off
Appendix Run-off Run-off % of insurance revenue1,2 10% 8% Motor TPL and Motor TPL (Norway) and WC 6% WC (Norway) (Norway, Denmark) 4% Group life and Motor BI (Norway) Liability and Accident (Denmark) 2% WC and disease (Norway) 0% (2%) Run-off (%), net Average 1) Based on earned premiums up until 202
Slide 30: Quarterly insurance service results - seasonality in Nordic general insurance
Appendix Quarterly insurance service results - seasonality in Nordic general insurance NOK m 2 000 1 000 0 Q1 Q2 Q3 Q4 2022 904 1,667 1,864 1,101 2023 1,115 1,509 1,111 734 2024 704 1,434 1,590 2022 2023 2024 1) Excluding the Baltics from Q3 2024 Gjensidige Forsikring Group 30
Slide 31: Gross written premiums
Appendix Gross written premiums +16.1% +12.2% +5.4% NOK m 3,299 3,828 2,850 3,197 320 337 Private Commercial Sweden Q3 2023 Q3 2024 Gjensidige Forsikring Group 31
Slide 32: Norwegian Natural Perils Pool in brief
Appendix Norwegian Natural Perils Pool in brief Details regarding the pool Objects covered • As per 1.1.2024 the premium rate is set to 0.065 per • Fire insurance coverage for buildings and contents in thousand of the fire insurance amount. No change Norway includes coverage for natural catastrophes
Slide 33: Handling of natural perils claims
Appendix Handling of natural perils claims Details regarding the pool Gjensidige specific • The customers report claims to own insurance • Gjensidige is a reinsurer for the pool, for its own company market share • The insurance company reports claims to Finance • Natural perils claims are booked in
Slide 34: Reinsurance – overview valid as from 2024
Appendix Reinsurance – overview valid as from 2024 • Reinsurance is purchased for protection of the Group’s capital position and is primarily a capital management tool. • General retention level per loss/loss occurrence is NOK/DKK/SEK 100m (for the first loss the retention is NOK/DKK/SEK 200m). • Fo
Slide 35: Practical example, natural perils claim in Norway
Appendix Practical example, natural perils claim in Norway • A natural perils event covered by the Norwegian Natural Perils Pool occurs and is defined by Finance Norway as a single event. The total industry claim exceeds NOK 1,500m. • Gjensidige’s share of the NOK 1,500 claim is allocated according
Slide 36: Investment strategy supporting high and stable nominal dividends
Appendix Investment strategy supporting high and stable nominal dividends Match portfolio Key characteristics • Duration and currency matching versus technical • Limited risk appetite provisions • Fixed-income: • Credit element for increased returns • Currency hedging vs NOK ~ 100% • Some inflation
Slide 37: Investment portfolio
Appendix Investment portfolio Asset class Investments, key elements1 Benchmark Match portfolio NBP Norwegian RM1-RM3 Duration 3Y Index - NORM123D3 Fixed-income NOK Corporate and government bonds (Alternatively: a Norwegian IG fund with 3 year duration) Fixed-income DKK Covered Bonds and government b
Slide 38: Asset allocation – as at 30.09.2024
Asset allocation – as at 30.09.2024 Match portfolio Free portfolio • NOK 38.4 bn • NOK 23.7 bn • Average duration: 2.8 years • Average duration fixed-income instruments: 1.4 years • Average yield: 3.7% • Average yield: 4.4% Fixed-income – short duration: 44% Fixed-income NOK: 59% Global investment g
Slide 39: Credit and counterparty risk
Appendix Credit and counterparty risk Total fixed income portfolio • The portfolio consists mainly of securities in Split – Rating Match portfolio Free portfolio NOK bn % NOK bn % rated companies with high creditworthiness AAA 16.2 42.2 5.5 26.0 (Investment grade) AA 2.6 6.7 3.6 17.0 A 8.3 21.5 4.7
Slide 40: Capital generation year-to-date
Appendix Capital generation year-to-date Solvency Ratio Eligible Own Funds NOK bn Solvency Capital Requirement NOK bn 31.12.2023 Operating Free Dividend2 Capital Regulatory/ 30.09.2024 SII earnings1 portfolio mgmt./ model mgmt. changes actions 1) Operating SII earnings comprise SII underwriting resu
Slide 41: Capital position per operational areas
Appendix Capital position per operational areas NOK bn Approved partial internal Approved partial internal Own partial internal Own partial internal Gjensidige model (Group) model (general model (Group)1 model Pensjonsforsikring insurance) (general insurance)1 Eligible own 21.5 19.0 21.3 18.2 2.8 fu
Slide 42: Solvency II eligible own funds
Appendix Solvency II eligible own funds Bridging the gap between IFRS1 equity and Solvency II capital NOK bn Figures as at 30.09.2024. Assumed dividend of 80% of profit. GPF = Gjensidige Pensjonsforsikring AS. Miscellaneous: Main effects are related to the guarantee scheme provision.. Gjensidige For
Slide 43: Gjensidige continues to work for full approval of own partial internal model
Appendix Gjensidige continues to work for full approval of own partial internal model (PIM) Main differences between approved and own PIM NOK bn Approved PIM Own PIM • Windstorm model: Approved PIM based on standard (Group) 1 (Group) 2 formula. More validation required for approval. Eligible own fun
Slide 44: Solvency II sensitivities for the approved partial internal model
Appendix Solvency II sensitivities for the approved partial internal model 167% 174% 171% 164% 162% 160% 166% 155% 159% 100% Solvency II ratio Equity Interest rate Spread Inflation (-20%/20%) (-100 bps/+100 bps) (-100 bps/+100 bps) (-100 bps/+100 bps) Figures as at 30.09.2024. The legal perspective
Slide 45: Subordinated debt capacity – Gjensidige Forsikring Group
Appendix Subordinated debt capacity – Gjensidige Forsikring Group Principles for capacity Capacity and utilisation T1 T2 Constraint • Tier 1 remaining capacity is NOK 1.2 - 1.5bn • Utilised Tier 1 debt capacity: NOK 2.0bn Max 20% of Max 50% of SCR less Must be satisfied at SII Tier 1 capital other T
Slide 46: Annualised return on equity 23.5 per cent
Appendix Annualised return on equity 23.5 per cent Equity (NOK m) Annualised return on equity (%) 23.5 18.2 2023 YTD 2024 Bridge shows main elements in equity development. Gjensidige Forsikring Group 46
Slide 47: Market leader in Norway
Appendix Market leader in Norway Market share – Total market Market share – Commercial Market share – Private 23.4% 31.1% 20.4% 25.0% 18.5% 14.4% 10.6% 5.7% 4.3% 4.9% Gjensidige: 26.4% If: 21% Fremtind: 14.7% Tryg: 13% Eika: 4.0% Frende : 3.4% Gjensidige If Tryg Fremtind Protector Gjensidige Fremtin
Slide 48: Growth opportunities outside Norway
Appendix Growth opportunities outside Norway Market shares Denmark Market shares Sweden Gjensidige: 7.2% Tryg: 24.4% Alm.Brand: 16.4% Gjensidige: 1.8% Lansforsäkringar: 30.1% If: 17.9% Topdanmark: 14.4% If: 5.5% Other: 32.1% Trygg Hansa: 16.6% Folksam: 16% Other: 17.6% Sources: Insurance Sweden, 2st
Slide 49: Gjensidige Pensjonsforsikring
Appendix Gjensidige Pensjonsforsikring - Number four position in the growing Norwegian defined contribution pension market Market shares – total AUM NOK 512 bn • Well positioned for continued profitable organic 40% growth 30% • Core focus on SME customers • Strong profitability 20% • Multi-channel d
Slide 50: Gjensidige Pensjonsforsikring
Appendix Gjensidige Pensjonsforsikring Group policy 1 and company portfolio Number of occupational pension members In thousand 324 Currenct bonds: 80.9% 304 Fixed income - short 243 duration: 15.6% Property exsposure: 2.9% 156 165 NOK 9.7 bn Equity funds: 0.5% 2020 2021 2022 2023 Q3 2024 Figures as
Slide 51: Disclaimer
Disclaimer This presentation and the information contained herein have been prepared by and is the sole responsibility of Gjensidige Forsikring ASA (the "Company”). Such information is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to
Slide 52: Investor Relations
Investor Relations Mitra Hagen Negård Address Head of Investor Relations Schweigaards gate 21, Mobile: (+47) 957 93 631 P.O. Box 700 Sentrum, NO-0106 OSLO mitra-hagen.negard@gjensidige.no gjensidige.com/ir Apineya Maheswaran Investor Relations Officer Mobile: (+47) 991 11 950 apineya.maheswaran@gjen
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