Protector Forsikring Asa · OSL:PROT
Protector Forsikring Asa — SEB conference March 2022
35 slides from Protector Forsikring Asa's conference presentation, Mar 23, 2022
Slide 1: Protector Forsikring ASA Mid-quarter update
Protector Forsikring ASA Mid-quarter update | March 23rd 2022
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: Agenda
Protector Forsikring ASA Mid-quarter update | Agenda
Slide 4: Mid-quarter update | Agenda
Protector Forsikring ASA Mid-quarter update | Agenda
Slide 5: Historical to date success story
Historical to date success story The Challenger in the Nordics and UK HTD combined ratio at 93.5% - 90-92% long-term target Return on Equity Cost leadership within our core markets Geographic diversification, reaching critical mass in 4 out of 5 countries UK running on target – optimistic and cautio
Slide 6: Our DNA
Culture eats strategy for breakfast Cost and quality leadership should lead to profitable growth and a top 3 position Strategy • Broker distribution only Our DNA Vision • USP: easy to do business with, commercially attractive and The Challenger trustworthy Business Idea • Competitive prices (support
Slide 7: Organic growth from 0 to 6bnNOK
Organic growth from 0 to 6bnNOK Balancing risk-taking and discipline Protector Future growth The company The company Insurance was Expansion to coming from gets listed on reaches 1 Expansion to Expansion to established as the UK and markets Oslo Stock bnNOK in Sweden Denmark an insurance Finland out
Slide 8: Profitability back on track
Profitability back on track Premium increases and de-risking Development in net combined ratio Significant Nordic price increase, stronger underwriting discipline in some markets and segments, margin management, capital allocation and exit from COI market in Norway driving increased profitability 10
Slide 9: Introducing F@CT
Introducing F@CT Developing Core systems for data quality Risk • F@ct structure deliver: • Cover in structured, reportable format enabling Location • Control of risks on cover • Profitability analysis • Claims handling process • Easier policy admin > better quality service @ Claims • Quality in Rein
Slide 10: F@CT Deliveries 2021
F@CT Deliveries 2021 Data quality is Risk Management Policy and Contract Address Data Quality Objective: 100% data quality on insured interests, covers, limits and deductibles Objective: Control on Risk in existing portfolio • Public goes first • Data cleaned by machine learning and manual review. •
Slide 11: Product mix development – shifted towards short tail
Product mix development(1) – shifted towards short tail Reduced risk profile and reduced capital consumption Comments Increased exposure towards short tail over the years • Short tail from 34% in 2008 to 79% in 2021 2008 2014 2020 2021 • Long tail attractiveness decreasing with declining Motor Motor
Slide 12: Mid-quarter update | Agenda
Protector Forsikring ASA Mid-quarter update | Agenda
Slide 13: 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 14: 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 15: 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 16: 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 17: Mid-quarter update | Agenda
Protector Forsikring ASA Mid-quarter update | Agenda
Slide 18: Investment portfolio heavily weighted towards bonds
Investment portfolio heavily weighted towards bonds Priority #1 is to never allow risk for solvency issues Development in assets under management +6% NOK 14.3bn NOK 13.5bn NOK 10.9bn NOK 9.4bn NOK 9.5bn NOK 7.5bn NOK 6.6bn NOK 5.0bn NOK 4.0bn NOK 3.2bn NOK 2.0bn NOK 2.4bn 2010 2011 2012 2013 2014 20
Slide 19: Investment strategy - bonds
Investment strategy - bonds Higher risk requires higher margin of safety, hurdle rate = companies with ROE target > 20% • Bottom-up analysis (underwriting) and quarterly follow up Analysis / underwriting strategy • Bond market often slow to react to deteriorating fundamentals • Continuous developmen
Slide 20: Bond portfolio returns
Bond portfolio returns Stable returns with low risk and low capital consumed Comments Protector bond portfolio return (excl. bond funds) • Historically performed well 30% during periods of high 24,9 % 25% volatility, e.g.: • Q1 2020 (COVID outbreak) 20% • Q1 2016 (oil price plunge) 15% 10% • Annuali
Slide 21: Investment strategy - equities
Investment strategy - equities Focus on level of difficulty and risk/reward Horizon Long term ownership returns Type of investments Good long-term ownership returns through investment in easy and predictable businesses Hurdle rate and margin of safety High margin of safety in our investments Keeping
Slide 22: Equity portfolio returns
Equity portfolio returns Strong results historically, volatility outside of benchmarks to be expected Comments Historical performance far above benchmarks • Equity portfolio currently Protector OSEBX Nordic index 300 comprises 15.1% of the total investment portfolio • Historically returned 19.2% 258
Slide 23: Capital Allocation is about more than Investments
Capital Allocation is about more than Investments
Slide 24: Risk and capital management process
Risk and capital management process Controlling all company risks and 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 24
Slide 25: Distribution policy
Distribution policy Flexible distribution policy – profitable growth in insurance and sufficient SCR buffer always priority nr 1 Current level of • Capital over 180% in SCR ratio distributed over time 206% 180% • Shareholder distribution normally 20% - 80% of net profit Normal range • Quarterly deci
Slide 26: Mid-quarter update | Agenda
Protector Forsikring ASA Mid-quarter update | Agenda
Slide 27: ESG Strategy
ESG Strategy Improved structure and follow-up At the end of 2021, the following directive are leading The importance of environmental, social and governmental factors increases. The necessity of proper ESG for Protector’s ESG strategy: management is substantial to keep market position and to be cons
Slide 28: Protector aims to be a responsible, trusted and credible ESG actor
Protector aims to be a responsible, trusted and credible ESG actor Accelerating our business through leveraging sustainability We commit to people We encourage and We focus on climate We have responsible value and employee motivate our insured to resilience to business behaviour at engagement in our
Slide 29: ESG Roadmap
ESG Roadmap A set of required activities to gradually take us to our ambition MILESTONES 2022 MILESTONES 2023 MILESTONES 2024 We have further improved systems and trained our employees to evaluate climate risk and impact, and to Protector aims to be a We have improved systems to understand and respo
Slide 30: Mid-quarter update | Agenda
Protector Forsikring ASA Mid-quarter update | Agenda
Slide 31: PROTECTOR insurance
PROTECTOR insurance
Slide 32: Appendix
Appendix PROTECTOR
Slide 33: Prudent reserving practice
Prudent reserving practice Significant de-risking through sale of COI and WC tail in Denmark and Norway Comments Net run-off gains / losses (mNOK)(1) • Reserves are volatile in some products, however Protector had total run off gains of 310 8.8% mNOK (excl. COI) in the 8.1% period 2010 – 2021 67 5.9
Slide 34: Reinsurance Program – 2022
Reinsurance Program(1) – 2022 Solid panel of reinsurers, (+99%) placed with a rating of A- or better Comments Reinsurance program illustrations(3) • All lines of business have reinsurance protection Protector Property Programs Nordic XL Programs UK Motor and Liability XL Property Risk XL EML facilit
Slide 35: Shareholder list
Shareholder list As of 31 December 2021 Shareholder # of shares % AWC AS 8.370.828 10.15% STENSHAGEN INVEST AS 7.526.353 9.12% VERDIPAPIRFOND ODIN NORDEN 6.367.205 7.72% CITIBANK EUROPE PLC 5.025.410 6.09% VERDIPAPIRFONDET ALFRED BERG GAMBA 3.850.053 4.67% HVALER INVEST AS 2.811.809 3.41% CLEARSTREA