Protector Forsikring Asa · OSL:PROT
Protector Forsikring Asa — FY2008 Earnings Presentation
29 slides from Protector Forsikring Asa's earnings presentation, Feb 26, 2009
Slide 1: Investor presentation: Preliminary annual results 2008
Investor presentation Preliminary annual results 2008 February 26th 2009
Slide 2: Agenda
Agenda Highlights Commercial and public lines Change of ownership insurance Financial information CEO Summary Outlook 2009 Summary 2
Slide 3: Highlights 2008
Highlights 2008 Continued growth, acceptable combined ratio and weak investment income • 10% growth i GWP – Commercial and public lines of business, up 26% – Change of ownership insurance, down 11%, due to a weak real estate market • Combined ratio 94,9%, up 9 percentage points – Avarage combined ra
Slide 4: NEMI - process
NEMI - process • Process started, May 2008 • Tentatively bid communicated October 2008 • W.R. Berkley Corp; bid on NEMI, negotiations terminated ultimo December 2008 after due diligence, • Protector signs share purchase agreement subject to due diligence, January 19th 2009 • Due diligence • Internal
Slide 5: Agenda
Agenda Highlights Commercial and public lines Change of ownership insurance Financial information CEO Summary Outlook 2009 Summary 5
Slide 6: Commercial and public lines of business
Commercial and public lines of business • Fast growing • Top class in-house underwriting • Cost leadership • Preferred by the broker • Scalable business model 6
Slide 7: Commercial and public lines of business
Commercial and public lines of business Highlights 2008 Gross written premium (NOKm) • Renewal rate 93%, in line with target 466 368 • 26 % volume growth -Difficult in the top end, less than 10% hit-ratio - Acceptable hit-ratio medium sized businesses 48 - High hit-ratio in the lower end 44 Q4 2008
Slide 8: Commercial and public lines of business
Commercial and public lines of business Highlights 2008 • Normal claims level - 3 large claims ( > NOK 5m) • Cost ratio down • 2009 reinsurance renewed to equal terms as of 2008 • Claims handling in sourced - Full effect from 2009 - Increased quality and improved CR by 0.8 percentage points in 2008
Slide 9: Overall satisfaction with the insurance companies
Overall satisfaction with the insurance companies 9
Slide 10: Agenda
Agenda Highlights Commercial and public lines Change of ownership insurance Financial information CEO Summary Outlook 2009 Summary 10
Slide 11: Change of ownership insurance
Change of ownership insurance • Market leader • Quality leader - Sale & service - Claims handling • Cost leader • Best database 11
Slide 12: Change of ownership insurance
Change of ownership insurance Highlights 2008 Gross written premium (NOKm) • Market share 50%, strengthened position in the beginning of 2009 297 263 • Volume down 11%, due to low turnover rate in the estate market. Product change 82 45 gives NOK 14m in extra volume in 2008 • Real estate brokers rat
Slide 13: Agenda
Agenda Highlights Commercial and public lines Change of ownership insurance Financial information CEO Summary Outlook 2008 Summary 13
Slide 14: Results 2008
Results 2008 MNOK Q4 2008 Q4 2007 2008 2007 Premiums written gross 93,0 125,8 729,0 664,9 Premiums earned gross 166,7 173,5 720,5 649,6 Claims incurred gross (157,5) (147,2) (549,1) (533,6) Premiums earned for own account 113,6 107,5 592,4 375,8 Claims incurred for own account (95,6) (76,7) (477,1)
Slide 15: Balance sheet 2008
Balance sheet 2008 MNOK 31.12.2008 31.12.2007 Financial assets 1 221,3 1 152,9 Bank deposits 37,2 91,2 Other assets 362,4 464,7 Total assets 1 620,9 1 708,7 Total equity 386,0 544,4 Total reserves 1 025,5 832,4 Other liabilities 209,3 331,8 Total equity and liabilities 1 620,9 1 708,7 Solvency capit
Slide 16: Development in earnings and key ratios
Development in earnings and key ratios Gross written premium (in NOKm) Net combined ratio 94,9 % 800 100 % 729,0 85,9 % 664,9 90 % 700 74,7 % 80 % 600 516,0 70 % 500 60 % 400 50 % 2006 2007 2008 2006 2007 2008 Return on solvency capital Gross cost ratio 25 % 20 % 20 % 20 % 24 % 21,7 % 15 % 10 % 20 %
Slide 17: Revised long term financial objectives
Revised long term financial objectives Net combined ratio • Medium term GWP growth rate: 10% (35%) 131,4 % 140 % • Net combined ratio: 92% (88%) 120 % 94,9 % 100 % 85,9 % • Solvency margin: 80% (80%) 74,7 % Target < 92% 80 % 59,6 % 60 % • Return on solvency capital: 20% (20%) 40 % 2004 2005 2006 200
Slide 18: Investment performance
Investment performance Highlights 2008 • Net financial income – 28.2 MNOK (-2,1%) due to turbulent equity and credit markets. • Equities; negative return of 44.7%, OSEBX down 54.1% • Bonds; negative return of 1.4%, due to widening credit spreads in Q4 Return 2008 per Asset Class Return Q4 2008 per A
Slide 19: Asset allocation
Asset allocation Asset allocation December 31, 2008 Asset allocation December 31, 2007 Equities 13,3 % Equities Money 16,8 % Bonds market HTM 38,4 % Bonds 12,7 % HTM Money 21,7 % market Bonds 62,4 % 11,7 % Bonds 23,1 % Total financial assets 31.12.2008 NOK 1.221m Total financial assets 31.12.2007 NO
Slide 20: Combined ratio 2006 - 2008
0% 10 % 20 % 30 % 40 % 50 % 60 % 70 % 80 % 90 % 100 % 110 % 120 % 130 % 140 % 150 % 57,1 % 17,7 % 74,7 % 71,5 % 14,4 % 85,9 % Protector 80,5 % 14,4 % 94,9 % 63,9 % 23,1 % 87,0 % If 67,0 % 22,8 % 89,8 % 70,7 % 22,6 % 93,3 % ¹ Q3 2008 figures, Q4 2008 not reported 69,1 % 16,5 % 85,6 % 67,8 % 20,8 % 88
Slide 21: Shareholder matters February 19th 2009
Shareholder matters February 19th 2009 Shareholder No. shares Percent Verdipapirfond Odin Norden 7 633 355 8,86 % MSF-Mutual Financial Services FD 4 479 410 5,20 % DNB Nor Luxembourg SA 4 027 456 4,67 % Option program Ojada AS 3 527 116 4,09 % • Outstanding options: 3.244.334 Morgan Stanley and co.
Slide 22: Agenda
Agenda Highlights Commercial and public lines Change of ownership insurance Financial information CEO Summary Outlook 2009 Summary 22
Slide 23: CEO summary 2008
CEO summary 2008 • Financial market meltdown • Real estate market collapsed • Reserve losses within Change of Ownership • Quality improvement within Change of Ownership claims handling should have been better • Improved hit-ratio and strengthened market position beginning of 2009 in Change of Owners
Slide 24: Agenda
Agenda Highlights Commercial and public lines Change of ownership insurance Financial information CEO Summary Outlook 2009 Summary 24
Slide 25: GWP - Outlook 2009
GWP - Outlook 2009 • GWP up 5% in 2009 Q1 strong, Q2 weak, Q3 normal and Q4 strong • Commercial and public lines up 15% Q1 up 20%, Q2 – Q4 up 8% - Still competitive in the top market with too low rates + Consolidation in the market + Renewal rate Q1 estimated to 95% supported by index and price incr
Slide 26: Costs - Outlook 2009
Costs - Outlook 2009 • 2008 status, stable cost ratio ~ 18% – Weaker cost ratio change of ownership insurance – Improved cost ratio commercial and public lines of business • 2009 target, gross cost ratio down 1 percentage points – Stable cost ratio within change of ownership insurance, despite lower
Slide 27: Outlook 2009
Outlook 2009 NOKm Realised Outlook Favorable Negative 2008 2009 scenario scenario Premium growth 10% 5% 10% 0% Operating profit 9.4 120 150 90 Investment income -36.6 70 Gross cost ratio(%) 18 17 Combined ratio (%) 94.9 92 88 96 Return assumptions p.a. Cost cut programme: Equity 8% Cost reductions o
Slide 28: Agenda
Agenda Highlights Commercial and public lines Change of ownership insurance Financial information CEO Summary Outlook 2009 Summary 28
Slide 29: Summary
Summary • 2008 – a challenging year with a difficult market • Continued growth, acceptable Combined Ratio and weak investment income • Starting 2009 with improved quality and market position • New long term objectives (through a 5 year cycle); – Growth rate 10% – Combined ratio 92% – Solvency margin