Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — FY2017 Earnings Presentation
44 slides from Protector Forsikring ASA's earnings presentation, Feb 2, 2018
Slide 1: Preliminary year end results
Preliminary year end results Investor presentation, Q4 2017 Oslo, 02.02.2017
Slide 2: Our DNA
Our DNA Vision The Challenger Business Idea This will happen through unique relationships, best in class decision-making and cost effective solutions Main targets Cost and quality leadership Profitable growth Top 3 Values Credible Open Bold Committed
Slide 3: Voted the best Insurance company in the UK
Voted the best Insurance company in the UK Far ahead of #2 Totality Protector 85 Competitor 5 65 Competitor 2 64 Competitor 9 63 Competitor 6 62 Competitor 8 61 Competitor 1 60 Competitor 4 60 Competitor 7 58 Competitor 3 55 Competitor 10 53 Competitor 11 53 Competitor 12 38 Competitor 13 28 0 10 20
Slide 4: Protector - quality leader in all markets
Protector - quality leader in all markets Proud and humble 12 years in a row 6 years in a row Back on top 2018 Straight to the top Far ahead of number two Easy to do business with, commercially attractive and trostworthy (our USP) 4
Slide 5: Highlights 2017 results
Highlights 2017 results 21,1 % growth and 19,6 % ROE • GWP growth of 21,1% (23,1 % local currency) Guiding 2018 • Q4 37,7 % (37,4 % local currency) Net combined ratio 92-94 % • Gross cost ratio 7,4% up from 6,8 % Volume growth 20 % • Q4 7,5 % up from 6,9 % Cost ratio ≈7,5 % • Net Combined ratio 93,1
Slide 6: Profit before tax
Investment result vs technical result – 2008 to 2017 Approx. 75 % of result after tax from investments 600 500 Profit before tax 400 56 % 68 % 46 % 90 % 59 % 300 62% 200 88 % 79 % 54 % 44 % 100 162 % 38 % 41 % 32 % 0 360 % 12 % 21 % 10 % -260 % -62 % -100 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 7: Gross written premiums 2017
Gross written premiums 2017 Growth of 21,1 % • GWP total NOK 4163,2m up 21,1 % • Strong growth in Sweden • Single digit in Norway – as expected • UK ahead of schedule • Strong volume start on 2018 - 20 % guiding for the full year Business unit 17 NOK m 16 NOK m NOK % growth Norway Commercial & Publi
Slide 8: Gross written premiums
Gross written premiums 10 years in a row with 20 % growth 4996 5 000 4 500 4163 4 000 3 500 3439 3 000 2843 2 500 2374 2 000 1861 1517 1 500 1202 1011 1 000 729 871 500 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 NORGE SVERIGE DANMARK FINLAND UK PROTECTOR TOTAL 8 Country split from 2012
Slide 9: Reduced Risk Profile
Reduced Risk Profile Due to product and geographic diversification 26 % 18% 2% 6% 48 % • Short tail from 34% in 2008 to 61% in 2017 • Geographical diversification increased further in 2017 • Further risk reduction expected next 2-3 years • Positive seen from a risk point of view – negative seen from
Slide 10: Claims development 2017
Claims development 2017 *Gross claims ratio exclusive of Grenfell Tower • Gross claims ratio 84,7 %*, down from 92,8 % 100% Gross claims ratio 90,4 % 84,7 % • Q4 90,4 % down from 96,3 % 90% 80% 70% • Net claims ratio 89,7 %, down from 95,2 % • Q4 94,3 % down from 101,3 % 60% 50% 2013 2014 2015 2016
Slide 11: Cost ratio 2017
Cost ratio 2017 Cost leader in the world FY Gross cost • Gross cost ratio 7,4%, up from 6,8% 20% Long term • Q4 7,5 % up from 6,9 % 18% Average 16% competitor 14% 12% • Net cost ratio 2,6%, up from 1,8% 10% • Q4 7,3 % down from 8,1 % 8% Target gross 6% expense ratio 7,4 % 4% <7,0% 2% • Cost on a low
Slide 12: Business Unit Updates
Business Unit Updates 2017 12
Slide 13: Commercial and Public sector Norway
Commercial and Public sector Norway Yet again voted #1 in broker satisfaction survey • Volume up 8,9 % • Strong new sales during the year – after a slow January 1st • Renewal rate (89 %) • Continued rate pressure in the market • Very good hit ratio both on volume and number of wins • Good profitabil
Slide 14: Commercial and Public sector Norway
Commercial and Public sector Norway Protector quality leader 12 years in a row Company totality Claims handling Protector Protector 72 Protector Protector 71 Competitor 1 Gjensidige 67 Competitor Gjensidige1 67 CompetitorKLP 2 63 Competitor KLP2 70 Competitor DNB3 62 Competitor DNB3 67 Competitor Co
Slide 15: Change of ownership insurance (COI)
Change of ownership insurance (COI) Number of open claims historically low 2 300 • Volume growth 5,1 %, 0 % growth expected in 2018 2 100 • Real estate prices +5,7% (Y/Y growth) 1 900 1 700 • Real estate prices going down last 8 months in 2017 1 500 1 300 1133 • Strong court results in 2017, very st
Slide 16: Change of ownership insurance (COI)
Change of ownership insurance (COI) Worlds best quality survey – year after year 97 What is the probability that you will recommend COI from Protector to your next customer? 90 What value do you belive your customer receive by using COI? 89 What value does COI have for you as a broker? 89 How satisf
Slide 17: Sweden
Sweden GWP 1 bn NOK reached • Volume up 32,2 % (37,9 % LCY) • Despite two very large non-renewals • Very good hit-ratio both on number of accounts and volume • Gross combined ratio of 92,0 % up from 84,6 % • Q4 80,6 % down from 113,5 % • Net combined ratio of 87,0 % down from 88,1 % • Q4 89,6 % down
Slide 18: Sweden
Sweden The quality leader setting new standards Company totality Claims handling Protector Protector 81 Protector Protector 74 Competitor 1 Competitor 1 If… 68 If… 74 Competitor 2 Competitor 2 Dina Försäkringar 61 Dina Försäkringar 60 Competitor 3 Competitor 3 Moderna Competitor 4 60 Moderna Competi
Slide 19: Denmark
Denmark Halfway in turn around process, on top of quality again • Volume up 7,4 % (11,4 % LCY) • Portfolio «clean up» in action • Market leader in public sector – still growing • Gross combined ratio of 102,7 % down from 109,2 % • Q4 poor claims quarter (111,8 %) • Net combined ratio of 108,9 % down
Slide 20: Denmark
Denmark Back on top – Bravo Company totality Claims handling Protector Protector 65 Protector Protector 61 Competitor 1Gjensidige 61 Competitor Gjensidige 1 53 Competitor 2 Forsikring Købstædernes 57 Competitor 2Forsikring Købstædernes 53 Competitor 3 AIG 57 Competitor 3 AIG 53 Competitor 4 Codan 57
Slide 21: Finland
Finland Good growth, but on a small volume – strong team ready for 2018 • Volume up 124,3 % - according to plan • Very good hit rate public, low in commercial • Warmly welcomed by brokers • Profitability - too early to say • Very good claims service – in line with our high service standard 4 • Claim
Slide 22: Finland
Finland Straight to the top Company totality Claims handling Protector Protector 74 Protector Protector 68 CompetitorIf… 1 63 Competitor If… 1 70 Competitor 2 Fennia 55 Competitor 2 Fennia 52 CompetitorAIG 3 55 CompetitorAIG 3 58 LähiTapiola Competitor 4 51 LähiTapiola Competitor 4 52 OP Vakuutus Co
Slide 23: UK - Ahead of schedule
UK Ahead of schedule 23 PROTECTOR insurance
Slide 24: The four Grenfell Tower projects
Claims handling Reinsurance • Manage claim and client • Claims handling involvement and • Keep lawyer cost at decent support level • Challenging UK casualty renewal • Process is key completed • Allign with reinsurance • Align reinsurance with Risk companies Management, UW and renewal World leading r
Slide 25: Reinsurance dispute
Reinsurance dispute Disagreement regarding the Grenfell Tower Property loss split • Our property Reinsurer has raised questions regarding the Grenfell Tower loss split • Background Is further described in notification to the market 17.11.2017 • Three different legal opinions supports Protector’s pos
Slide 26: Broker Satisfaction UK
Broker Satisfaction UK Far ahead of #2 Company totality Claims handling Protector Protector 85 Protector Protector 77 CompetitorAmlin 1 65 Amlin Competitor 1 72 Competitor 2 Allianz 64 Competitor 2 Allianz 68 CompetitorRMP 3 63 CompetitorRMP 3 66 Competitor RSA 4 62 CompetitorRSA 4 65 Competitor 5 A
Slide 27: Broker Satisfaction Survey UK
Broker Satisfaction Survey UK Protector’s Quality evaluated by professional Brokers - Perception is Reality • Quality survey initiated by the Challenger, attacking the UK market • Documented quality leadership in the Nordics • Survey performed by Kantar TNS – a world leading insight and polling comp
Slide 28: UK Growth – Good progress in Three Segments
UK Growth – Good progress in Three Segments 125 clients onboard, brokers appreciating The Challenger • Fully operational and quoting “all” tenders in Public Sector • Warmly welcomed by brokers and local authorities, ~ 55 clients in portfolio • Slowly gaining access to more opportunities in Commercia
Slide 29: Volume estimates UK
Volume estimates UK Ahead of schedule Volume full year 2016 Volume full year 2017 Updated estimate 2018 25 MNOK 252,9 MNOK >500 MNOK 29
Slide 30: Investments
Investments Core Business We consider Insurance and Investments as twins - Remember 75 % of profit after tax from Investments 2008-2017 30
Slide 31: Investments
Investments Investment portfolio passed 10 bn. January 2018 Investment portfolio and float (NOK m) 10 000 9 373 8 000 5 539 6 000 4 000 2 000 - 2012 2013 2014 2015 2016 2017 Investment portfolio Float Equity share (%) Bond portfolio split (%) 25% 100% 82,4 % 17,6 % 80% 20% 60% 15% 40% 10% 20% 0% 5%
Slide 32: Portfolio statistics equities
Portfolio statistics equities Behind benchmark in 2017 – satisfied with underlying company development Performance – In-house managed equity portfolio vs. benchmarks (08.10.2014 – 31.12.2017) Key Figures Protector portfolio OSEBX 150 Performance 148,2 % 42,7 % 148,2% Dividend yield 2,2 % 3,2 % 130 P
Slide 33: Portfolio statistics bonds
Portfolio statistics bonds «Risk off» continued – average rating A Performance – In-house managed bond portfolio vs. benchmark Portfolio data 31.12.2017 (31.03.2015 – 31.12.2017)1,2,3 Size NOK m 7 725 Yield 1,9% 12% Start point 10,3 % new benchmark Duration 0,3 10% Credit duration 3,0 8,6 % Average
Slide 34: Investment performance 2017
Investment performance 2017 ROI 4,8% - better than most peers again • 4,8% return on investment portfolio, net investment result of NOK Return 2017 420m 14% 12,1% 12% • Q4 1,7% Q4 return, net investment result of NOK 163m 10% 8% 6% 4,8% • Equity return of 12,1% (OSEBX of 19,1%) 4% 3,3% 1,7% • Q4 ret
Slide 35: Profit & loss 2017 – ROE 19,6 %
Profit & loss 2017 – ROE 19,6 % Profit for the full year up 17,2 % [1.000.000 NOK] Q4 2017 Q4 2016 FY 2017 FY 2016 Gross premiums written 540,2 392,3 4 163,2 3 439,0 21,1 % growth FY, 37,7 % Q4 Gross premiums earned 1 000,0 768,6 3 808,1 3 250,4 Gross claims incurred (903,8) (740,3) (4 056,8) (3 005
Slide 36: Balance sheet 2017
Balance sheet 2017 SCR 199,4 % pr. 31.12.17 based on standard formula [1.000.000 NOK] 31.12.2017 31.12.2016 SCR ratio composition Owner-occupied property 13,5 13,7 Financial assets 9.379,4 7.547,0 4000 Derivatives 2,5 1,3 Bank deposits 327,5 204,3 Other assets 2.629,5 1.091,7 3500 Total assets 12.35
Slide 37: Solvency II
Solvency II Composition of SCR: Eligible SII capital: • Net insurance risk 58% • Assumed no dividend • Net market risk 34% • Guarantee provision subtracted from own • Other risks 8% funds SCR composition Eligible SII capital 3 500 193 55 4 500 438 1 085 4 000 1 243 3 000 402 3 500 21 86 44 2 500 3 0
Slide 38: Shareholder's matters
Shareholder’s matters Per 31.12.2017 Shareholder # shares Percent Related parties shareholding STENSHAGEN INVEST AS 6 550 000 7,6 % • Management’s direct and indirect shareholding totals 3,5m shares ODIN NORDEN 4 485 857 5,2 % or 4,0% of current outstanding shares SWEDBANK ROBUR SMABOLAGSFOND 3 963
Slide 39: CEO summary of risk outlook 2017
CEO summary of risk outlook 2017 Minor deviations Risk Result 1. Volume (GWP up 16% (18 local) • Upside and downside in UK Medium ✓ • Downside in Denmark Low ✓ 2. Cost (gross cost ratio <7.0%) • Cost outside guiding No ✓ 3. Profitability (Net Combined Ratio 92%) • Behind guiding in Norway, Sweden an
Slide 40: CEO summary of risk outlook 2018
CEO summary of risk outlook 2018 Slightly increased risk since UK and Finland portfolio is growing Risk Volume (GWP up 20%) • Upside and downside in UK Medium • Downside in the Nordics Low Cost (gross cost ratio ≈7,5%) • Cost outside guiding No Profitability (Net Combined Ratio 92-94%) • Behind guid
Slide 41: Long term financial objectives
Long term financial objectives Steady going • Net Combined Ratio 92 % • Solvency II Capital ratio >150 % • Return on Equity >20 % • GWP growth rate 2017-2019 15 % Net Combined Ratio Return on Equity* GWP Growth Target < 92% Target > 20% Target >15% 97,8 % 94,2 % 97,0 % 93,1 % 38,4 % 37,8 % 28% 85,3
Slide 42: Summary
Summary #1 on quality in all countries ✓ ✓ • Growth 21,1%, ROE 19,6 % ✓ Guiding 2018 • Gross cost ratio 7,4% ✓ Net combined ratio 92-94 % Volume growth 20 % • Net Combined ratio 93,1% X Cost ratio ≈7,5 % • Profit after tax of NOK 516,5m ✓ • Investment return 4,8 % - better than peers again ✓ • Solve
Slide 43: Q&A Preliminary 2017 Results
Q&A Preliminary2017 Results
Slide 44: Key ratio description
Key ratio description Ratio (1) Claims ratio, net of ceded business (2) Expense ratio, net of ceded business (3) Combined ratio, net of ceded business (4) Gross claims ratio (5) Gross expense ratio (6) Gross combined ratio (7) Retention rate (8) Earnings per share Ratio calculation (1) Claims incurr