Gjensidige Forsikring Asa · OSL:GJF
Gjensidige Forsikring Asa — Q2 2024 Earnings Presentation
56 slides from Gjensidige Forsikring Asa's earnings presentation, Jul 15, 2024
Slide 1: Q2 2024 Interim presentation
Q2 2024 Interim presentation July 2024
Slide 2: Second quarter result impacted by higher claims in Norway
Quarterly update Second quarter result impacted by higher claims in Norway Combined ratio • Pre-tax profit NOK 1,830m % 83.2 85.4 • Insurance service result NOK 1,434m 13.6 13.2 • 9.7% insurance revenue growth • NOK 402m positive impact from change in risk 69.5 72.2 adjustment • Underlying profitabi
Slide 3: Higher claims for Property in Private Norway driven by fires
Quarterly update Higher claims for Property in Private Norway driven by fires. Implementing 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 Q
Slide 4: Higher claims for Motor in Private Norway met by extraordinary pricing measures
Quarterly update Higher claims for Motor in Private Norway met by extraordinary pricing measures Motor, Private Norway Effects of ongoing long-term trends increasingly visible Claims frequency Q2’24/Q2’23: +5.8 %, underlying Claims inflation (repair cost) Q2’24/Q2’23: + 6.5% Expectation for next 12-
Slide 5: Sustained growth momentum and efficient operations
Quarterly update Sustained growth momentum and efficient operations Maintaining high retention in Norway Private: • Continued strong revenue growth and competitiveness in Norway Private Commercial • Strong organic growth in Denmark supported by Norway Norway bolt-on 90/93%1 91% Commercial: • Strong
Slide 6: A strong, highly motivated and competent management team in place
Quarterly update A strong, highly motivated and competent management team in place Geir Holmgren CEO Siri Langangen Jostein Amdal EVP CFO People & Communication Catharina Hellerud CRO Berit Nilsen Johan Rostoft René Fløystøl Lars G. Bjerklund Vivi Kofoed EVP EVP EVP EVP EVP Analysis, Product and Tec
Slide 7: Customer dividend model supports customer loyalty
Quarterly update Customer dividend model supports customer loyalty Attractive customer dividends • More than NOK 31 bn paid out since 2008 • Highly valued customer proposition Customer dividends paid NOK bn 3 2 1 0 2012 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 8: Delivering on our ambition to be a problem solver
Quarterly update Delivering on our ambition to be a problem solver New products and services Cyber insurance Legal insurance Young insurance Violence damage insurance More comprehensive assistance for New product for SME customers in New concept in Denmark, bundling New product in Denmark for losses
Slide 9: Moving forward with sustainability initiatives
Quarterly update Moving forward with sustainability initiatives • Cooperation with partner to develop solutions that Norwegian Business School’s sustainability simplify the process for BREEAM certification survey1 • Good results from project involved in developing damage prevention measures in the N
Slide 10: Financial performance
Financial performance
Slide 11: Lower insurance service result offset by higher results from pension and investments
Financial Performance Lower insurance service result offset by higher results from pension and investments YTD YTD • Continued high revenue growth NOKm Q2 2024 Q2 2023 2024 2023 • Positive impact from change in risk adjustment Private 539 724 1,116 1,271 (NOK 394m in CC, NOK 8m in the Baltics) Comme
Slide 12: 9.7 per cent revenue growth – 10.0 per cent in local currency
Financial Performance 9.7 per cent revenue growth – 10.0 per cent in local currency Insurance revenue development NOK m Revenue growth Segment Local Driver(s) NOK currency Private 9.1% 9.2% Price and volume - Norway 7.3% 7.3% Mainly price - Denmark 18.1% 19.1% Price and volume Commercial 11.9% 12.2%
Slide 13: Increased loss ratio
Financial Performance Increased loss ratio Loss ratio development Key drivers % • Positive contribution from the change in risk adjustment due to change in percentile on LIC • Higher underlying frequency loss ratio in Private and Commercial. Adverse development in Q1’24 claims in Norway. • Implement
Slide 14: Continued good cost control - cost ratio 13.2 per cent
Financial Performance Continued good cost control - cost ratio 13.2 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 Baltics Corporate Centre Q2 2023 Q2 2024 Cost ratios
Slide 15: Good underlying performance in Pension
Financial Performance Good underlying performance in Pension Pre-tax profit Assets under management NOK m NOK bn 79 76 69 386 64 64 208 186 164 152 137 114 19 4 (3) Q2 Q3 Q4 Q1 Q2 Q2 Q3 Q4 Q1 Q2 2023 2023 2023 2024 2024 2023 2023 2023 2024 2024 Pre-tax profit Pre-tax profit adjusted for change in CS
Slide 16: Investment return of 0.8 per cent, driven by market conditions
Financial Performance Investment return of 0.8 per cent, driven by market conditions Investment return per asset class Balanced investment portfolio Fixed-income: 95% Listed equities: 2% Free Match 37% 63% PE funds: 2% NOK Other (incl. hedge funds and commodities): 1% 61.6bn1 2.6% High credit qualit
Slide 17: Moving ahead on operational targets
Financial Performance Moving ahead on operational targets High customer retention in Norway, improvement potential in Denmark Metric Status Q2 2024 Target 2026 % Customer satisfaction 100 78 > 78 (Group) Customer retention 91% > 90% 91.5% (Norway/Outside Norway) 80% > 85% 90 89.7% Digital distributi
Slide 18: 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 • Change in IFRS 17 risk adjustment has no solvency effect Solvency capital Capital requireme
Slide 19: Concluding remarks
Summary Concluding remarks Ambitious annual financial targets • Continued strong growth momentum and a solid Metric 2024 & 2025 2026 capital position Combined ratio <84% <82% • Q2 result impacted by higher claims in Norway • Delivery on the combined ratio target for 2024 will be Cost ratio <14% ~13%
Slide 20: Appendix
Appendix
Slide 21: Roadshows and conferences post Q2 2024 results
Appendix Roadshows and conferences post Q2 2024 results Date Location Participants Event Arranged by CFO Jostein Amdal Roadshow ABGSC 13 August Stockholm Head of IR Mitra H. Negård CEO Geir Holmgren 19 August Oslo CFO Jostein Amdal Roadshow DNB Markets Head of IR Mitra H. Negård CEO Geir Holmgren 28
Slide 22: Weather effects, Group
Appendix Weather effects, Group Group Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Reported Insurance revenue, MNOK 9,832 8,960 9,474 8,532 19,306 17,491 Loss ratio 72.2% 69.5% 79.1% 73.5% 75.6% 71.5% Underlying frequency loss ratio 72.2% 66.6% 74.5% 72.2% 73.3% 69.4% Weather-related claims Lar
Slide 23: Weather effects, Private
Appendix Weather effects, Private Private Private Norway Private Denmark Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Reported Insurance revenue. MNOK 3,723 3,413 3,581 3,230 7,304 6,644 3,057 2,
Slide 24: Weather effects, Commercial
Appendix Weather effects, Commercial Commercial Commercial Norway Commercial Denmark Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Reported Insurance revenue, MNOK 5,140 4,594 5,039 4,420 10,180 9
Slide 25: Weather effects, Sweden, Baltics and CC
Appendix Weather effects, Sweden, Baltics and CC Sweden Baltics Corporate Centre Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Q2 2024 Q2 2023 Q1 2024 Q1 2023 YTD 2024 YTD 2023 Reported Insurance revenue, MNOK 474 467 494 458 969 925 454 417 428
Slide 26: General insurance Norway – cost ratio and loss ratio per segment
Appendix General insurance Norway – cost ratio and loss ratio per segment Private Norway Commercial Norway Combined ratio Combined ratio 87.6% 86.5% 80.4% 77.8% 80.3% 82.0% 75.4% 77.0% 7.6% 8.1% 11.4% 11.7% 8.1% 13.0% 13.1% 8.1% 80.0% 73.9% 78.4% 62.4% 69.0% 64.7% 68.6% 68.9% Q2 2023 Q2 2024 YTD 202
Slide 27: General insurance Denmark – cost ratio and loss ratio per segment
Appendix General insurance Denmark – cost ratio and loss ratio per segment Private Denmark Commercial Denmark Combined ratio Combined ratio 109.0% 104.7% 95.8% 96.6% 24.8% 87.1% 86.6% 23.7% 78.8% 81.4% 22.7% 21.4% 11.7% 11.4% 11.4% 11.1% 84.2% 75.2% 81.0% 75.3% 75.2% 73.2% 67.4% 70.3% Q2 2023 Q2 202
Slide 28: General insurance – cost ratio and loss ratio per segment
Appendix General insurance – cost ratio and loss ratio per segment Sweden Baltics Combined ratio Combined ratio 96.5% 95.1% 99.1% 98.1% 89.4% 85.4% 88.8% 89.3% 16.8% 15.2% 16.0% 14.8% 27.5% 26.8% 28.2% 27.2% 72.6% 70.3% 72.8% 74.6% 69.0% 70.9% 70.9% 68.3% Q2 2023 Q2 2024 YTD 2023 YTD 2024 Q2 2023 Q2
Slide 29: Large losses higher than expected
Appendix Large losses higher than expected Large losses (before discounting) Large losses per segment (before discounting) NOK m NOK m 332 506 512 476 257 388 227 114 56 10 10 10 3 0 Q2 2023 Q2 2024 Private Commercial Sweden Baltics CC Expected Reported, before discounting Q2 2023 Q2 2024 CC = Corpo
Slide 30: Large losses development
Appendix Large losses development ~ NOK 1.9bn in large losses expected annually Large losses per segment (before discounting) - (before discounting) actual vs. expected NOK m NOK m 800 332 600 241 400 162 114 200 65 56 7 10 2 0 0 Q216 Q221 Q416 Q217 Q417 Q218 Q418 Q219 Q419 Q220 Q420 Q421 Q222 Q422
Slide 31: Run-off gains 1.0 percentage point
Appendix Run-off gains 1.0 percentage point NOK m 116 85 41 36 22 30 9 7 (5) (32) Private Commercial Sweden Baltics Corporate Centre Q2 2023 Q2 2024 Gjensidige Forsikring Group 31
Slide 32: Run-off
Appendix Run-off Run-off % of Insurance revenue1 Run-off gains beyond 10% expected level Q418 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
Slide 33: 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 2022 2023 2024 Gjensidige Forsikring Group 33
Slide 34: Gross written premiums
Appendix Gross written premiums +10.7% +15.8% +8.2% +4.7% NOK m 3,458 3,827 2,838 3,287 454 492 410 430 0 0 Private Commercial Sweden Baltics Corporate Centre Q2 2023 Q2 2024 Gjensidige Forsikring Group 34
Slide 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: Asset allocation – as at 30.06.2024
Asset allocation – as at 30.06.2024 Match portfolio Free portfolio • NOK 39.0 bn • NOK 22.6 bn • Average duration: 2.9 years • Average duration fixed-income instruments: 2.5 years • Average yield: 4.3% • Average yield: 4.6% Fixed-income – short duration: 36% Fixed-income NOK: 58% Global investment g
Slide 42: 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 15.5 39.7 4.8 24.5 (Investment grade) AA 2.3 5.9 3.9 20.2 A 9.6 24.5 3.9
Slide 43: 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/ 30.06.2024 SII earnings1 portfolio mgmt./ model mgmt. changes actions 1) Operating SII earnings comprise SII underwriting resu
Slide 44: 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 21.4 18.8 21.7 19.0 2.7 fu
Slide 45: 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 30.06.2024. Assumed dividend of 80% of profit. GPF = Gjensidige Pensjonsforsikring AS. Miscellaneous: Main effects are related to the guarantee scheme provision. Gjensidige Fors
Slide 46: Gjensidige continues to work for full approval of own partial internal model (PIM)
Appendix Gjensidige continues to work for full approval of own partial internal model (PIM) Main differences between approved and own PIM NOK bn Approved Own PIM • Windstorm model: Approved PIM based on standard PIM (Group) 1) (Group) 2) formula. More validation required for approval. Eligible own f
Slide 47: Solvency II sensitivities for the approved partial internal model
Appendix Solvency II sensitivities for the approved partial internal model 180% 176% 170% 167% 172% 167% 170% 160% 164% 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 30.06.2024. The legal perspective
Slide 48: 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 1.1 - 1.4bn • 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 49: Annualised return on equity 20.2 per cent
Appendix Annualised return on equity 20.2 per cent Equity (NOK m) Annualised return on equity (%) 20.2 18.2 2023 YTD 2024 Bridge shows main elements in equity development. Gjensidige Forsikring Group 49
Slide 50: Market leader in Norway
Appendix Market leader in Norway Market share – Total market Market share – Commercial Market share – Private 23.5% 31.1% 20.5% 24.6% 18.6% 14.4% 11.2% 5.8% 4.3% 4.7% Gjensidige: 26.4% If: 21% Fremtind: 14.8% Tryg: 13.2% Eika: 4.0% Frende : 3.3% Gjensidige If Tryg Fremtind Protector Gjensidige Fremt
Slide 51: Growth opportunities outside Norway
Appendix Growth opportunities outside Norway Market shares Denmark Market shares Sweden Market shares Baltics Gjensidige: 7.2% Tryg: 24.7% Gjensidige: 1.7% Lansforsäkringar: 30.1% Gjensidige: 6.9% Vienna: 26.5% Alm.Brand: 15.6% Topdanmark: 14.5% If: 17.7% Trygg Hansa: 17.0% PZU: 24.8% Ergo: 13.2% Fo
Slide 52: Gjensidige Pensjonsforsikring - Number four position in Norwegian defined contribution pension market
Appendix Gjensidige Pensjonsforsikring - Number four position in the growing Norwegian defined contribution pension market Market shares – total AUM NOK 483 bn • Well positioned for continued profitable organic 40% growth 30% • Core focus on SME customers 20% • Strong profitability 10% • Multi-chann
Slide 53: Gjensidige Pensjonsforsikring
Appendix Gjensidige Pensjonsforsikring Group policy 1 and company portfolio Number of occupational pension members In thousand Currenct bonds: 80.6% 318 304 Fixed income - short 243 duration: 15.9% Property exsposure: 3.0% 156 165 NOK 9.7 bn Equity funds: 0.4% 2020 2021 2022 2023 Q2 2024 Figures as
Slide 54: Ownership
Appendix Ownership 10 largest shareholders1 Geographical distribution of shares2 No Shareholder Stake (%) Norway: 41,1% 1 Gjensidigestiftelsen 62.2 North America: 21,4% UK: 8,6% 2 Folketrygdfondet 4.6 Asia: 2,7% 3 Deutsche Bank 2.8 Europe excl. UK and Norway: 23,1% 4 BlackRock Inc 2.8 RoW: 2,2% 5 Sc
Slide 55: 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 56: Investor Relations
Investor Relations Mitra Hagen Negård Address Head of Investor Relations Schweigaards gate 21, Mobile: (+47) 95 79 36 31 P.O. Box 700 Sentrum, NO-0106 OSLO mitra-hagen.negard@gjensidige.no gjensidige.com/ir
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