Protector Forsikring Asa · OSL:PROT
Protector Forsikring Asa — Q2 2019 Earnings Presentation
31 slides from Protector Forsikring Asa's earnings presentation, Jul 12, 2019
Slide 1: Q2 2019 Interim Results
Q2 2019 Interim Results Investor presentation Oslo, 12th July 2019
Slide 2: Our DNA
«Olemme erilaisia» Our DNA Vision «Vi är annorlunda» 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 «Vi er annerledes» Top 3 Values «Vi er forskellige» C
Slide 3: Loss in Reinsurance arbitration with Munich Re
Loss in Reinsurance arbitration with Munich Re P&L loss of £6,9m in Q2 19 – parties cover own legal cost and split arbitration cost 50/50 • Following the tragic Grenfell tower fire 14th June 2017, Munich Re raised issues regarding the claim split for GFT • Protector has always acted in good faith an
Slide 4: Change of Ownership 2019 & 2020
Change of Ownership 2019 & 2020 On track, 50% quota share on reserves • GWP 110 MNOK Q2 – more volume expected in 2019 than previously communicated • The Supreme Court in Norway has rejected the appeal related to Grey Silverfish • Previous appeal court decision in our favor. Basis for a limited numb
Slide 5: Highlights Q2 2019
Highlights Q2 2019 32% growth, combined ratio 107,2% - 99,8% excl. Grenfell Tower • GWP growth of 32% (33 % local currency) Guiding 2019 – old • Net Combined ratio 107,2% Net combined ratio 96 % • Run-off losses f.o.a amounted to -9,7 % Volume growth 14 % • Profit before tax -116,9 MNOK • Investment
Slide 6: Highlights Q2 2019
Highlights Q2 2019 19% growth, combined ratio 104,0% - 97,0% excl. Grenfell Tower • GWP growth of 19% (20 % local currency) • Net Combined ratio 104,0% • Run-off losses f.o.a amounted to -9,0 % • Profit before tax -127,8 MNOK • Investment return -69,3 MNOK or -0,6% • Solvency ratio of 164,0% (incl.
Slide 7: Gross written premiums Q2 2019
Gross written premiums Q2 2019 Up despite increased margin requirement Q2 GWP (NOK m) • GWP 1105,9 MNOK up 32% 1 200 1 106 • Significant clients also lost, will appear in coming quarters 1 100 1 000 • YTD growth 14,7% of annual premium, expectations H2 3,3% 900 838 800 739 700 • UK 81 MNOK - patient
Slide 8: Claims development Q2 2019
Claims development Q2 2019 Claims ratio 98,8% - 91,4 % excl. Grenfell Tower • Price increases came too late with too little Gross large loss ratio* • Very high claims inflation motor Nordic (6-8%) 22% 21% 20% 18% • Gross claims ratio 92,6%, up from 87,5% 16% • Unaffected by Grenfell Tower 14% 14% 12
Slide 9: Cost development Q1 2019
Cost development Q1 2019 Cost leader in the world – improving competitive position Cost the real way FY • Cost the real way – this is what matters 12,0 % • Gross cost incl. Claims handling ex. Broker commissions F@lcon • Broker commission neutral seen from a competitive point of view 11,5 % 11,0 % •
Slide 10: Combined Ratio development
Combined Ratio development Price increases - too late too little so far Why are we too late? • A lot of focus on Grenfell tower tragedy, arbitration with Munich Re, Gray silverfish crisis and UK set-up • Did not see size of motor claims inflation in Nordic 105,9% CR development 2019 (Q1-Q4) Net CR 2
Slide 11: Price increases H1 19
Price increases H1 19 More to come H1 price increase Price increase H2/2020 High renewal rate following acceptance of ≈ 10,6% Higher price increases. Price increasing ambition raised. Too little profitability measures in Q1. ≈ 6,9% A lot higher More individual increases in Q2. Strong start of 1/7-re
Slide 12: Our follow-up model
Our follow-up model Decide, implement, measure, learn and loop Q1 Apr May Jun Q2 YTD ProgQ3 ProgQ4 ProgFY Volume to renewal (MNOK) Volume - Lost profitable clients surveillance - Lost unprofitable clients Volume to renewal ex. lost Profitability neutral "index" General price increases Price increasi
Slide 13: Other profitability improvements
Other profitability improvements A part of our measurable follow-up structure • Risk Evaluation of entire portfolio (Started late Q4 2018)….. • Stricter UW guidelines on new clients (Started Q1 2019)….. • …..Leads too claims prevention requirements, Reduced appetite in certain areas, segment initiat
Slide 14: Controlled actions – get going
Controlled actions – get going Supporting IT systems UW Risk Management Market Price increases R R olls oyce KAM Increased deductibles AM Identify unprofitable clients Retain more of Data quality & cost advantage discipline
Slide 15: UK progress
UK progress Protector Board meeting in Manchester 13.06.19 Great Manchester office (Spinningfields) 100 people capacity Strong UW and RM team in place 20 people (gradually expanding) Claims Handling team with CleanDesk culture 18 people (rapidly expanding) MUK + admin with good structure and progres
Slide 16: UK – Manchester is growing, London is trading
UK – Manchester is growing, London is trading On schedule • Manchester HQ Team growing, working closely with London • London office Started trading, £1m in June Grenfell Tower • Commercial Protector is selective 100 clients • Public, 12 % hit ratio Protector is patient 114 clients • Housing, 38 % hi
Slide 17: Investment performance Q2 2019
Investment performance Q2 2019 -0,6%, net investment result of NOK -69,3m • Equity return of -10,1% Q2 2019 investment performance • Portfolio consist of 14 companies 2% 0,5% 0% -0,6% -2% • Bond portfolio; return of 0,5% -4% • In-line with the market -10,1% -6% • No default events -8% -10% -12% Equi
Slide 18: Equity portfolio statistics
Equity portfolio statistics Volatility outside benchmark must be expected Performance return in % – Equity portfolio vs. benchmarks (08.10.2014 – 30.06.2019) Key figures In-house Man. Port. OSEBX 170 TWR Equities Performance 100% 51% 150 Dividend yield 4,4% 4,4% 130 P/E NTM 10,5 14,2 3 yr sales CAGR
Slide 19: Portfolio statistics bonds
Portfolio statistics bonds 3 years with reduced risk Portfolio data 30.03.19 30.06.19 Size bond & cash eq. (NOK m) 9 302 9 694 • Bond portfolio 89,7% Avg. ref. rate (NIBOR, STIBOR etc.) 0,9% 1,0% Avg. spread/risk premium (bp) 99 97 • Avg. yield up to 1,95% at end of quarter (1,90% in Q1) Yield 1,90%
Slide 20: Profit & loss Q2 2019
Profit & loss Q2 2019 32% growth, Combined Ratio 107,2% - 99,8 % excl. Grenfell Tower in millions Q2 2019 Q2 2018 H1 2019 H1 2018 FY 2018 Gross premiums written 1 105,9 838,3 3 819,2 3 186,7 4 286,1 33 % LCY, Sweden, UK & price increases Gross premiums earned 1 241,9 1 015,7 2 388,8 1 974,0 4 139,6
Slide 21: Profit & loss Q2 2019
Profit & loss Q2 2019 19% growth, Combined Ratio 104,0% - 97,0 % excl. Grenfell Tower in millions Q2 2019 Q2 2018 H1 2019 H1 2018 FY 2018 Gross premiums written 1 215,7 1 017,5 4 017,8 3 478,5 4 799,7 20 % LCY, Sweden, UK & price increases Gross premiums earned 1 351,8 1 195,0 2 587,5 2 265,8 4 653,
Slide 22: Balance sheet Q2 2019
Balance sheet Q2 2019 SCR-ratio 164,0% based on standard formula In millions 30.06.2019 30.06.2019 31.12.2018 SCR-ratio composition Owner-occupied property 13,1 13,7 13,4 Financial assets 8.899,5 8.341,7 7.591,8 3300 SCR-ratio: Derivatives 16,7 10,9 25,7 164,0% Bank deposits 151,4 190,7 278,6 Other
Slide 23: Solvency II
Solvency II Composition of SCR: Eligible SII capital: • Net insurance risk 68% • No dividend • Net market risk 21% • Guarantee provision subtracted from own funds • Other risks 11% SCR composition Eligible SII capital 3 500 102 4 000 271 321 3 000 677 3 500 1 243 2 856 2 500 3 000 30 1 179 467 89 11
Slide 24: Shareholder's matters
Shareholder’s matters Per 30.06.2019 SHAREHOLDER NAME # SHARES % Related parties shareholding STENSHAGEN INVEST AS 7 126 353 8,27 % AWILHELMSEN CAPITAL HOLDINGS AS 6 535 816 7,59 % • Management’s direct and indirect shareholding totals 3,7m shares or 4% of current outstanding shares CITIBANK EUROPE
Slide 25: Summary Q2 2019 & Q&A
Summary Q2 2019 & Q&A 32% growth, more price increases necessary Protector excl. COI Protector incl. COI • Growth 32% 19 % • Net Combined ratio -107,2% (99,8% excl. GFT) -104,0% (97,0 excl. GFT) • Profit before tax -116,9 MNOK -127,8 MNOK • Investment return -31,7 MNOK or -0,4% -69,3 MNOK or -0,6% •
Slide 26: Enjoy your summer
Enjoy your summer Protector Forsikring Interim presentation 12.07.2019 26
Slide 27: Appendix
Appendix Oslo, 12th July 2019 This appendix contains numbers inclusive of COI
Slide 28: Gross written premiums Q2 2019
Gross written premiums Q2 2019 Up despite increased margin requirement Q2 GWP (NOK m) 1 300 • GWP 1105,9 MNOK up 32% 1 200 1 216 • Significant clients also lost, will appear in coming quarters 1 100 1 017 1 000 • YTD growth 14,7% of annual premium, expectations H2 3,3% 900 800 722 700 636 • UK 81 MN
Slide 29: Claims development Q2 2019
Claims development Q2 2019 Claims ratio 96,3% - 89,3 % excl. Grenfell tower • Price increases came too late with too little • Gross claims ratio 90,8%, up from 89,1% • Unaffected by Grenfell Tower • Net claims ratio 96,3%, up from 96,2% • 89,3% excl. Grenfell Tower • Run-off losses f.o.a amounted to
Slide 30: Cost development Q1 2019
Cost development Q1 2019 Cost leader in the world – improving competitive position • Cost the real way – this is what matters Cost the real way FY • Gross cost incl. Claims handling ex. Broker commissions 14,0 % F@lcon • Broker commission neutral seen from a competitive point of view 13,0 % • Cost t
Slide 31: 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