Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — Q4 2021 Earnings Presentation
32 slides from Protector Forsikring ASA's earnings presentation, Feb 3, 2022
Slide 1: Investor Presentation
Investor Presentation Oslo, February 3rd 2022 Henrik Høye Chief Executive Officer Stuart Winter Country Manager UK
Slide 2: Disclaimer
Disclaimer This presentation and the information contained herein have been prepared by and is the sole responsibility of Protector Forsikring ASA (the "Company”). Such information is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to a
Slide 3: 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 Innovative/Open Bold Committed
Slide 4: Q4 2021 highlights
235% 206%* 190% 161% Q2 ’20 Q4 ’20 Q2 ’21 Q4 ’21 Net combined ratio Gross written premium (MNOK) Investment return (MNOK) Solvency Capital Ratio Other highlights: • Best in UK broker satisfaction index 5th year running • Concentration of large losses towards UK for FY and Q4 • Special dividend of NO
Slide 5: Claims update
Claims update FY net claims ratio at 77.4 % | Q4 net claims ratio at 80.9 % • Aggregated positive COVID-19 effect of 0.8 %p on combined ratio for 2021, no net effect in Q4 5
Slide 6: Large losses and run-off
Large losses and run-off Gross large losses1 at 6% in 2021 | Net run-off losses at 0.3% Gross large loss ratio2 excl. WC, per quarter • Gross large losses at 6 % in 2021, whereof 4.3 %p from UK • UK large loss ratio at 17% • Gross large losses of MNOK 127, or 8.7 % in Q4 21 • UK Storm Arwen, 25-27th
Slide 7: Premium growth, renewal rate and price increases
• YTD: • GWP growth at 8 % (10 % in LCY) • Renewal rate at 90 % • Realized price increases at 8.9 % • Q4: a small volume-quarter (13 %) • GWP growth at 8 % (14 % in LCY) • Renewal rate at 84 % • Realized price increases at 5.2 % • January 1st 2022 growth in GWP at 8 % (11 % in LCY) • Supported by pr
Slide 8: Country-by-country key metrics
Country-by-country key metrics PROTECTOR . insurance UK net combined at 103.3 % (+ 18.4 %p) | Sweden net combined at 73.0 % (- 19.7 %p) YTD 2021 Norway Sweden Denmark UK land Protector NOKm FY 21 FY 20 FY 21 FY 20 FY 21 FY 20 FY 21 FY 20 FY21 FY 20 FY 21 Gross premium written 1415 1383 1820 1607 919
Slide 9: Result vs. 2021 guiding
Result vs. 2021 guiding Technical result in line with guiding, higher than expected investment return pushing ROE Guiding 2021 Results Q1-Q3 Results Q4 Results FY Net Combined Ratio: 88 %(1) 85.9 % 91.6 % 87.3 % Return on Equity (ROE): >20 % 37.7 %* 29.9 %* 35.6 % Gross Written Premium (GWP) growth:
Slide 10: UK
UK PROTECTOR
Slide 11: A disciplined Team journey
A disciplined Team journey On target – optimistic & cautious • Culture is key • Up-front investment in people for future • Quality leader 5th time running • Profitability impacted by large losses (LL) in 2021 • Underlying profitability is within the expected range for the UK • Disciplined growth • S
Slide 12: Culture is key
Culture is key One Team UK • Circa 90 employees - fully operative whilst working from home • 2 days WFH, 3 days in the office • Manchester & London – operate as ‘One Team’. • Cultural Lead 2020 & 2021 • A first in Protector’s history • Management team, growing in strength and numbers with strong suc
Slide 13: BSI Results 2021
BSI Results 2021 Number 1 Service Provider 5th year running Totality Claims Protector 79 Protector 76 Avg ex Protector 59 Avg ex Protector 64 Competitor 1 67 Competitor 11 72 Competitor 2 66 Competitor 1 71 Competitor 3 62 Competitor 4 67 Competitor 4 61 Competitor 9 65 Competitor 5 60 Competitor 7
Slide 14: Operational status 2021
Operational status 2021 Disciplined Underwriting & focussed Claims Handling Volume: • £340m GWP of opportunities, £160m GWP quoted • Very low hit rates (10 %) in public and housing (price driven) • Ok hit rates (15 %) commercial – (motor more challenging) • Very strong renewal rates in both segments
Slide 15: Back to profitable growth in 2022
Back to profitable growth in 2022 Challenging market, but positive growth outlook Net CR • 2021 was worse than history / benchmarks for LLs • It will normalise • Residual impact of 2021 rate improvement & inflation • Cost improvements = scale & efficiency CR 21 Motor Property Price Price incr. Cost
Slide 16: 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 Innovative/Open Bold Committed
Slide 17: Investments
Investments Investment is core
Slide 18: AUM is increasing
Investments AUM is increasing 14 310 13 492 15.1% 13.5% 10 925 10.1% 9 373 9 535 9.323 9.9% 17.6% 7 545 6 637 22.1% 12.5% 84.9% 86.5% 4 958 89.9% 11.6% 4 000 90.1% 13.2% 82.4% 3 193 8.9% 87.5% 77.9% 2 355 2 022 17.8% 88.4% 1 635 24.6% 1 222 86.8% 25.1% 91.1% 16.8% 82.2% 74.9% 75.4% 83.2% 2008 2009 2
Slide 19: Investment performance
Investment performance Gain of MNOK 955 in 2021, whereof MNOK 237 in Q4 2021 investment results 50% • 2021 return on investment portfolio at 6.8 %, or MNOK 955 40% • Equity portfolio, ex. put options, returning 43.0 %, or MNOK 730 30% • Bond portfolio returning 2.3 %, or MNOK 285 20% 43.0% 6.8% • Re
Slide 20: Bond portfolio statistics
Bond portfolio statistics Yield at 2.0 % | Avg. IG-rated portfolio by YE21 | No losses in 2021 Investment portfolio data1 31.12.21 30.09.21 31.12.20 • Running yield at 2.0 % (2.3 % in YE’20), before cost of risk Bond & cash eq. (MNOK) 2 12 003 12 369 11 603 Avg. ref. rate (NIBOR, STIBOR, etc.) 0.5 %
Slide 21: Equity portfolio statistics
Equity portfolio statistics Return of 43 % in 2021 | CAGR of 19.2 % since inception Q4 2014 Investment portfolio data 31.12.21 31.12.20 30.09.21 • Strong operational performance in portfolio companies Portfolio size 2 166 1 823 2 118 Share of total 15.1% 13.5% 14.6% Equities Estimated intrinsic valu
Slide 22: 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 Innovative/Open Bold Committed
Slide 23: Profit and loss FY (& Q4)
Profit and loss FY (& Q4) PROTECTOR Profit of MNOK 1 204 (239) | EPS at NOK 15.0 (3.2) Insurance NOKm Q421 Q420 FY 21 FY 20 Gross premiums written 786 729 5951 5516 Earned premiums, net of reinsurance 1269 1189 4921 4614 Claims incurred, net of reinsurance (1.027) (996) (3.810) (3901) Sales cost (95
Slide 24: Balance Sheet
Balance Sheet SCR-ratio at 206% post dividend In millions 31.12.2021 31.12.2020 Financial assets 13 067 11 989 SCR-ratio composition Derivatives 94 48 Bank deposits 300 263 5.000 SCR-ratio: 206% Other assets 4 338 2 555 Discontinued operations 1 448 1 896 Total assets 19 246 16 750 4.000 Total equit
Slide 25: Solvency II
Solvency II SCR ratio at 206% Composition of SCR: Eligible solvency capital: • Net insurance risk 63% • Accumulated dividend subtracted from eligible capital • Net market risk 27% • Guarantee provision subtracted from own funds • Other risks 10% SCR composition Eligible solvency capital 4.000 6.000
Slide 26: Risk and capital management process
Risk and capital management process Dynamic to all company risks, in addition to historical investment stress Main objectives Three main risk categories ILLUSTRATIVE 1 2 3 As is SCR Excess Investment Insurance Other Min SCR situation capital stress, ex. risks risks and tolerance VA initiatives 26
Slide 27: Flexible shareholder distribution policy
Flexible shareholder distribution policy Quarterly assessment of capital position vs. capital need Solvency II ratio Current level • Capital over 180% in SCR-ratio distributed over time = 206% 180% • Shareholder distribution normally 20%-80% of net profit Normal Range • Quarterly decisions, all allo
Slide 28: Dividends
Dividends Special dividend per share of NOK 3 | Ordinary dividend per share of NOK 7 for 2021 • The Board has resolved to distribute a special dividend of MNOK 247.1, corresponding to NOK 3.00 per share. • To be paid February 16th (ex. date February 9th) • The Board proposes an ordinary dividend for
Slide 29: 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 Innovative/Open Bold Committed
Slide 30: Alternative performance measures
This presentation contains alternative performance measures (APMs). APMs are described here: https://protectorforsikring.no/en/investor/documents/spreadsheets/ * Post dividends 30
Slide 31: PROTECTOR insurance
PROTECTOR insurance
Slide 32: PROTECTOR insurance
PROTECTOR insurance