Protector Forsikring Asa · OSL:PROT
Protector Forsikring Asa — Investor Day (October 2018)
115 slides from Protector Forsikring Asa's investor day presentation, Oct 26, 2018
Slide 1: Protector's Capital Markets Day
Protector’s Capital Markets Day Oslo, 26th October 2018
Slide 2: Protector's Capital Markets Day 2018
Protector’s Capital Markets Day 2018 Restaurant Louise | 26th October | From 10:00 10:00 – 10:45 Q3 2018 Investor presentation 10:45 – 11:00 Coffee and snack 11:00 – 11:45 Status Company including HTD reserves 11:45 – 12:15 Investments 12:15 – 12:45 Something to eat 12:45 – 13:15 Reinsurance – updat
Slide 3: Protector's Capital Markets Day 2018
Protector’s Capital Markets Day 2018 Restaurant Louise | 26th October | From 10:00 10:00 – 10:45 Q3 2018 Investor presentation 10:45 – 11:00 Coffee and snack 11:00 – 11:45 Status Company including HTD reserves 11:45 – 12:15 Investments 12:15 – 12:45 Something to eat 12:45 – 13:15 Reinsurance – updat
Slide 4: 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 Open Bold Committed
Slide 5: Credible or not
Credible or not Guiding vs. Actual • Danish Workers comp. 2016 • Growth steady going Volume Profitability • Reserve losses COI 2016 • Sweden doing very well Year Guiding Actual Guiding Actual • Swedish Competition Authority 2017 • Always open communication (rate pressure) 2009 5% 20 % 92,00 % 96,50
Slide 6: Cost Leader in the world
Cost Leader in the world Less than half of the cost of competitors Creating cost leadership Cost the real way* on a good trend • Well defined and consistent strategy 16,3 % 17,0 % F@lcon • Value chain development 15,0 % • Real secret: Culture and competent people to implement 13,0 % • IT cost ratio
Slide 7: Quality leader in all markets
Quality leader in all markets Humble and Proud Broker satisfaction index done annually through Protector, Broker houses and/or broker associations 12 years in a row 6 years in a row #1 Back on top 2018 Straight to the top Far ahead of number two Easy to do business with Commercially attractive Trust
Slide 8: Volume growth
Volume growth 20 % growth, 10 years in a row Sustainable growth • Profitability comes first, volume growth second 4163 3439 • Low capex entering new markets 2843 2374 • Geographical diversification increasing, < 50 % in Norway 1861 1517 • UK expected to be biggest geographical area in 2021 1011 1202
Slide 9: Profitability
Profitability Combined ratio last 10 years 91 % Key comments • Average Return on Equity last 10 years >20 % • Prudent and disciplined reserving methodology – on the positive side • Norway and Sweden have delivered very well • Denmark, UK and Finland too early to say Combined Ratio 2008 2009 2010 201
Slide 10: Strong investment result over the business cycle
Strong investment result over the business cycle Investments are core business Better than peers • Risk management through; Operational routines, mandate given by board, FSA stress test quarterly, internal stress test • Investment portfolios in Norway, incl. Protector’s, have enjoyed avg. NIBOR rate
Slide 11: HTD Reserves
PROTECTOR Hee insurance HTD Reserves
Slide 12: The People
The People Commited and experienced Torstein R. Tønnessen (36) Vibeke Krane (47) Sverre Bjerkeli (59) Jostein Sørvoll (68 - Actuary) Reserving actuary CFO CEO & Founder of Protector Chairman & Founder of Protector Owns 3,2 mill shares Owns 1 mill shares Protector CFO Protector CEO Protector First CE
Slide 13: The skill and work
The skill and work Target – Best estimate • In sourced reserving actuary Q4 2015 • Bornhuetter-Ferguson is used on longer tailed products • Chain Ladder is used in addition on shorter tailed products • Output from reserving models are guiding • Final reserves might deviate from model output • No dis
Slide 14: The Process
The Process Reserve calibration towards all business units • Quarterly meetings with claims handlers and reserving actuary - Statements from claims handlers are assessed against claims reserves • Status large claims – movements and new • Changes in claims handling practice and reserving practice • C
Slide 15: Factors influencing the reserve setting
Factors influencing the reserve setting It’s not 2+2, but we are historically proven with run-off gains History Relatively short - 10 years Clients Commercial clients Products 5 countries - 24 products Tail Some long tail BU relation Actuary and business closer Growth 20 % p.a. Process Structured an
Slide 16: Historically prudent reserves
Historically prudent reserves Here are the results Products Country Comment GWP 19 Property All Large gains 30 % 7 Products with run-off losses All Some losses 25 % 9 Products with run-off gains All Some gains 15 % Motor NOR & SWE Large gains 15 % COI NOR Very large losses 8% Long Tail products NOR
Slide 17: Reserve outlook next ten years
Reserve outlook next ten years Reserves will be prudent •COI 8 % of volume, commercial 92 % •Some volatility should however be expected •UK growing fast, but 80 % short tail and we have more reinsurance protection 17
Slide 18: 2019 => 2021
PROTECTOR 2019 => 2021
Slide 19: Senior management in Protector – fit for fight
Senior management in Protector – fit for fight Henrik Høye (35) – Country Manager UK & Dir. Commercial & Public sector Hans Didring (39) – Country Manager Sweden “I started Sweden and Denmark – finally something big.” “Retirement forecasted in 2047. I will work hard to improve the business results e
Slide 20: Challenger Strategy 2021
Challenger Strategy 2021 Starts with culture, ends with culture and management training Lets further develop our DNA – Next Level • Don't change Strategy • Investments are Core, manage Risk • Strong balance sheet important • Profitability comes before growth • Focus Claims Handling and top 8 MM Grea
Slide 21: Strategy 2018-2021 - Top priorities
Strategy 2018-2021 - Top 8 priorities “Don’t change strategy” • Claims Handling – Falcon • Profitable growth in Nordic • UK • ROI peer knock out • Protector University • IT as Innovator and Accelerator IT • World class HQ • Manage matrix organization perfectly Innovator Accelerator 21
Slide 22: World leading claims handling
World leading claims handling 2017-2020
Slide 23: The Falcon is killing its prey
The Falcon is killing its prey On our way to world leading Claims Handling Rolls Royce: Reductions and Recourse NOK 420m vs. target NOK 375m In front of schedule – important for profitability 23
Slide 24: The Falcon is killing its prey
The Falcon is killing its prey On our way to world leading Claims Handling Rolls Royce: Reductions and Recourse NOK 420m vs. target NOK 375m In front of schedule – important for profitability CleanDesk: No delays in Claims handling – without compromising on quality 96 % clean Very strong result – Cl
Slide 25: The Falcon is killing its prey
The Falcon is killing its prey On our way to world leading Claims Handling Rolls Royce: Reductions and Recourse NOK 420m vs. target NOK 375m In front of schedule – important for profitability CleanDesk: No delays in Claims handling – without compromising on quality 96 % clean Very strong result – Cl
Slide 26: The Falcon is killing its prey
The Falcon is killing its prey On our way to world leading Claims Handling Rolls Royce: Reductions and Recourse NOK 420m vs. target NOK 375m In front of schedule – important for profitability CleanDesk: No delays in Claims handling – without compromising on quality 96 % clean Very strong result – Cl
Slide 27: The Falcon is killing its prey
The Falcon is killing its prey On our way to world leading Claims Handling Rolls Royce: Reductions and Recourse NOK 420m vs. target NOK 375m In front of schedule – important for profitability CleanDesk: No delays in Claims handling – without compromising on quality 96 % clean Very strong result – Cl
Slide 28: People and management development
People and management development
Slide 29: Management Development programs
Management Development programsth New management training programs starts February 7 2019 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Vision, business Dream Team Next Level Great @ Work Fulehuk GTG Lederlinjen Lede®Stjerne idea, values Lederen Gruppe-dynamikk L1 Genipr
Slide 30: Protector University will support deliberate practice
Protector University will support deliberate practice for key skills in different roles in Protector 30
Slide 31: Protector University – status
Protector University – status Virtual Campus launched – 12th October •29 competence pyramids established •250 learning modules quality assured and ready •We invite our broker partners to our campus •Next step - define and understand what “on job training” means for us to release full potential 31
Slide 32: 2019 => 2021
PROTECTOR 2019 => 2021
Slide 33: Protector's Capital Markets Day 2018
Protector’s Capital Markets Day 2018 Restaurant Louise | 26th October | From 10:00 10:00 – 10:45 Q3 2018 Investor presentation 10:45 – 11:00 Coffee and snack 11:00 – 11:45 Status Company including HTD reserves 11:45 – 12:15 Investments 12:15 – 12:45 Something to eat 12:45 – 13:15 Reinsurance – updat
Slide 34: Investments
Investments Net financial assets > NOK 10 bn, float increasing 10 454 10 500 “Insurers receive premiums upfront 10 217 10 195 and pay claims later. ... This collect- 9 373 14,7% 9 500 11,1% now, pay-later model leaves us 18,4% holding large sums — money we call 8 500 "float" — that will eventually g
Slide 35: Strong investment result over the business cycle
Strong investment result over the business cycle Better than peers Overview • Risk management through; Operational routines, mandate given by board, FSA stress test quarterly, internal stress test • Investment portfolios in Norway, incl. Protector’s, have enjoyed avg. NIBOR rates of roughly 1% above
Slide 36: Protector's financial underwriting process
Protector’s financial underwriting process Continuous process improvements Protector’s analysis process FUW Stress test Risk allocation • Stress test to ensure volatility experienced in financial crisis • Portfolio allocation based on risk/reward considerations/ high hurdle rate Bottom-up analysis Q
Slide 37: Capital allocation alternatives
Capital allocation alternatives Goal to maximize shareholder return Main capital allocation alternatives Insurance Investments Debt repayments Buy backs Dividends underwriting Equities & Bonds (or cash as an option) 1. Determine minimum hurdle rate 2. Calculate returns for all internal and external
Slide 38: Externally communicated ROE target of > 20 %
Externally communicated ROE target of > 20 % Return on equity target of >20% per year on average 38
Slide 39: Insurance and investments ties up Solvency Capital
Insurance and investments ties up Solvency Capital Due to T1/T2 loans RoE of 20% equals a RoSC of 15,1% 1 Insurance and investments ties up Solvency Capital 2 Conversion of ROE to Return on Solvency Capital (RoSC) Equity capital 2/3 of Solvency base 1/3 of capital base costs 5% and yields excess ret
Slide 40: Capital allocation alternatives
Capital allocation alternatives Insurance with high RoE’s even at high combined ratios Insurance Investments Debt repayments underwriting Equities & Bonds Buy backs Dividends (or cash as an option) Allocate capital to the alternatives yielding highest return on that capital (above high hurdle rates)
Slide 41: Illustrative RoSC calculation approach
Illustrative RoSC calculation approach Applies also to different insurance products • We target SCR ratio >150% in «normal» times (e.g. rating considerations) • Hence actual capital consumption is 1,5*SCR • Pre-tax return on Solvency Capital • 15% after tax implies ~18% pre-tax 41
Slide 42: Capital allocation alternatives
Capital allocation alternatives Challenging with low credit spreads and all time high stock markets Insurance Investments Buy backs Debt repayments Dividends Cash as an option underwriting Equities & Bonds Allocate capital to the alternatives yielding highest return on that capital (above high hurdl
Slide 43: Equities – Capital consumption and RoSC
Equities – Capital consumption and RoSC Today we need a return of above 11% + safety margin to reach RoE target Allowed decline without being forced Float 70%-80% 20%-30% 20%-30% ~25% sellers 20%-30% T1/T2 capital ~50%-60% 100,0% High level capital consumption view Equity capital ~50% Stress levels
Slide 44: Bonds – Capital consumption and RoSC
Bonds – Capital consumption and RoSC Can reach RoE target with materially lower capital consumption ~20%-25% ~20%-25% Capital consumption (Short BB bond example) Stress - "Tax loss carry forward" Share of T1/T2 eligible SCR req. post stress SCR diversification effect SCR Capital Duration (2,25)* Spr
Slide 45: Opportunistic buy back
Opportunistic buy back Clearly an attractive capital allocation alternative if meeting hurdle Capital allocation alternatives Insurance Investments Debt Cash as an Buy backs Dividends underwriting Equities & Bonds repayments option 45
Slide 46: Buy back of 4.4 million shares @ 57,50
Buy back of 4.4 million shares @ 57,50 Opportunistic – below intrinsic value • Excess capital due to: Buy back process: • lower growth • Safe harbour and auction considered. • lack of equity ideas meeting hurdle rates • Safe harbour would have taken 6-18 mnths • lack of fixed income ideas meeting hu
Slide 47: Capital allocation alternatives
Capital allocation alternatives Other alternatives better Capital allocation alternatives Insurance Investments Cash as an Debt Buy backs Dividends underwriting Equities & Bonds option repayments 47
Slide 48: Available capital allocation frame
Available capital allocation frame Excess capital a headwind for returns Risk tolerance / Stress levels Excess capital Excess (and poorly performing) capital provides available capital allocation frame Current SCR ratio Minimum Minimum SCR ratio post "worst internal regulatory case financial SCR rat
Slide 49: Portfolio statistics
Portfolio statistics Strong outperformance since inception Performance – In-house managed portfolio vs. benchmarks Top 10 holdings per 26.10.2018 (08.10.2014 – 30.09.2018) 1. Majestic Wine 170 TWR Equities 2. Lehto 156 150 3. eWork 130 4. Multiconsult 5. Schibsted 110 6. Vostok New Ventures 90 7. B3
Slide 50: Equity investments – status overview
Equity investments – status overview Portfolio KPIs Risk capacity utilization H1 intrinsic value adj. (>±10%) Portfolio 5Y expected return 16,4% p.a. >15% p.a. Clearly below full ~Full utilization 1 6 capacity utilization 31% discount >27% discount • Disappointing performance vs. expectations YTD As
Slide 51: Investment process HY bonds
Investment process HY bonds Probabilistic approach based on bottom-up company analysis incl. bond terms focus 1 2 3 Company analysis Bond terms evaluation Cost of risk & stress rating assessment • Financial risk • Covenants • P(default) • Gearing & debt level • Individual assessments based on financ
Slide 52: Fixed income portfolio data
Fixed income portfolio data Reduced risk, A+ vs. A- last CMD – not reaching for yield Factor 30.09.2018 Total bond portfolio comments Market value 9 060 • Significant spread tightening Yield (%) 1,8 Spread (bp) 113 • Reduced risk in bond portfolio Average rating A+ Duration (yrs) 0,3 • Bargain oppor
Slide 53: Fully internally managed fixed income portfolio
Fully internally managed fixed income portfolio Sector distribution migration 60% Corporate HY market 52% 50% 40% 30% 20% 9% 10% 5% 5% 5% 4% 3% 3% 3% 2% 2% 2% 2% 1% 1% 1% 1% 0% 0% 0% 0% 0% 31.12.2016 31.12.2017 30.09.2018 *Source: Stamdata and Arctic Securities (Updated Sept 28th 2018). Sector distr
Slide 54: Portfolio statistics
Portfolio statistics Internally managed portfolio vs. benchmarks, end of September 2018 Performance – Internally managed portfolio1 vs. benchmark2 ,3 (31.03.2015 – 30.09.2018) Total weighted return in-house bond portfolio 14% 12% 12,0 % • Navigating in a very hot market 10% 11,1 % 8,9 % 8% • Signifi
Slide 55: Investment summary
Investment summary Investments are core • Financial Underwriting Model continuously developed • 6 people on board o 2 Portfolio Managers o 4 Analysts • HTD ROI better than peers o Also risk adjusted • Only willing to invest if investment is above a high hurdle rate. 55
Slide 56: Protector's Capital Markets Day 2018
Protector’s Capital Markets Day 2018 Restaurant Louise | 26th October | From 10:00 10:00 – 10:45 Q3 2018 Investor presentation 10:45 – 11:00 Coffee and snack 11:00 – 11:45 Status Company including HTD reserves 11:45 – 12:15 Investments 12:15 – 12:45 Something to eat 12:45 – 13:15 Reinsurance – updat
Slide 57: Protector's Capital Markets Day 2018
Protector’s Capital Markets Day 2018 Restaurant Louise | 26th October | From 10:00 10:00 – 10:45 Q3 2018 Investor presentation 10:45 – 11:00 Coffee and snack 11:00 – 11:45 Status Company including HTD reserves 11:45 – 12:15 Investments 12:15 – 12:45 Something to eat 12:45 – 13:15 Reinsurance – updat
Slide 58: 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 Open Bold Committed
Slide 59: Purpose of reinsurance in Protector
Purpose of reinsurance in Protector Why and how we buy reinsurance
Slide 60: Purpose of reinsurance in Protector
Purpose of reinsurance in Protector Why and how we buy reinsurance • Why we buy reinsurance • Ensuring appropriate protection and reducing volatility • Reinsurance functions as an alternative to capital • The type of reinsurances we buy • Proportional (Surplus), non-proportional (XL) and other risk
Slide 61: Reinsurance programme overview
Reinsurance programme overview HTD development and walk-through of Property
Slide 62: Historical reinsurance development
Historical reinsurance development Walk-through 2004 – 2007 2010 – 2018 2007 – 2010 ART programme Surplus Property Treaty Surplus Property Treaty Quota Share Treaty XL Treaties for EB and across all classes XL Treaties for EB and Casualty (incl. UK Casualty Casualty from 2016) XL Treaties for EB and
Slide 63: Reinsurance going forward
Reinsurance going forward 2019 and Future 2019 – Future – Individual XL Treaties for Property Risk and CAT Considering increases in retention supported by XL Treaties for EB and cross-programme Casualty (Nordic and Aggregate Solutions UK) “Moving forward in the UK” “European insurer” • Expanding on
Slide 64: Reinsurance programme overview
Reinsurance programme overview Illustration of current reinsurance structures
Slide 65: Current property reinsurance structure
Current property reinsurance structure Sufficient capacity, new programme from 1.1.2019 Property • Limited fluctuations in reinsurance panel; strategic partnership in focus, Fac. facility GBP Development of carriers 2004-2019 100m xs 104m Fac. facility NOK 1200m xs 800m • Increased retention to NOK
Slide 66: Property renewal 1.1.2019
Property renewal 1.1.2019 New structure Fdfd • Increasing capacity in the Nordics to NOK 1mrd (GBP 100m in the UK) • The programme is finalized and placed • Facultative facility of NOK 1mrd xs 1mrd in excess of the Treaty limit • Property CAT will be covered in a separate Treaty structure Df
Slide 67: Current Nordic Casualty and EB structure
Current Nordic Casualty and EB structure Sufficient capacity, stability in structure going forward Nordic Employee Benefits Casualty • Both Nordic Casualty and EB are stable programmes in terms of MTPL XL Unl xs 200m structure and “lead” reinsurers • EB programme has historically had a lower retenti
Slide 68: Current UK Casualty structure
Current UK Casualty structure UK Casualty XL • Programme initially placed 1.3.2016 for 18 months 50m Unl • First renewal shortly after the GFT tragedy and Ogden rate increase – challenging negotiation, acceptable outcome Facultative Facility Liability XL 22m xs 3m Motor XL Unl xs 25m • Increasing po
Slide 69: Reinsurers' ratings
Reinsurers’ ratings Consistent panel: A- to AA-
Slide 70: Reinsurer rating overview
Reinsurer rating overview Consistent panel over time with rating from A- to AA- All Programmes 2018 Property XL (2019)
Slide 71: Renewal 2019
PROTECTOR Hee insurance Renewal 2019 Bakara)
Slide 72: Property Submission – backdrop to the renewal 1.1.2019
Property Submission – backdrop to the renewal 1.1.2019 Analytical approach – Data and results • A comprehensive Property Submission was produced in Q2 2018 with the aim of achieving a favourable renewal per 1.1.2019 • Key take-outs were the following: • Low exposure and low risk to the reinsurance p
Slide 73: UK Casualty Submission – backdrop to the renewal 1.9.2018
UK Casualty Submission – backdrop to the renewal 1.9.2018 Analytical approach – Data and results • A comprehensive Casualty Submission was produced in Q2 2018 • Key take-outs were the following: • Reduced risk and a return to “normal” as the book has developed positively from a portfolio balance vie
Slide 74: EB and Casualty renewals 1.1.2019
EB and Casualty renewals 1.1.2019 Expecting unchanged structures • EB and Casualty Treaties in the Nordics have historically been stable – both in terms of structure and carriers. • Renewal 1.1.2019 • Casualty • The expectation is for the programme to continue unaltered • No change to «lead» of the
Slide 75: Linking specialists to reinsurance
Linking specialists to reinsurance Underwriting and Risk engineering
Slide 76: How we link our specialists to reinsurance
How we link our specialists to reinsurance Underwriting and Risk engineering Risk Engineering Underwriting Reinsurance Submissions Reinsurance Negotiations Close collaboration iro exposure assessment Presenting to reinsurers and high degree of visibility Joined-up and coordinated approach to r
Slide 77: Solvency based QS
Solvency based QS Shock-absorber and capital relief
Slide 78: Solvency based reinsurance solution
Solvency based reinsurance solution Cushion against negative solvency changes – effective from July 1st 2017 Solvency Margin Net Solvency Margin Gross • Covers all lines of businesses – across all jurisdictions 240% 10% 50% 10% Cession Cession Cession 190% • Intention of minimum 3 year duration, wit
Slide 79: Change in Property reinsurance structure
Change in Property reinsurance structure P&L effects
Slide 80: Change in reinsurance structure property
Change in reinsurance structure property From Surplus to XL in 2019 P&L effects due to the change Key figures Net earned premium Significantly increasing Net claimsratio Unchanged Claims for own account Significantly increasing Net cost ratio Significantly increasing Commissions from reinsurers Sign
Slide 81: Summary – Reinsurance in Protector
Summary – Reinsurance in Protector Approach to reinsurance – Entering 2019 • Background • Reinsurance is a cruicial part of Protector’s history • Territorial expansion and new classes (UK) adds complexity , but… • … gradual retention increases and alignment of programmes gives clarity • Entering 201
Slide 82: Protector's Capital Markets Day 2018
Protector’s Capital Markets Day 2018 Restaurant Louise | 26th October | From 10:00 10:00 – 10:45 Q3 2018 Investor presentation 10:45 – 11:00 Coffee and snack 11:00 – 11:45 Status Company including HTD reserves 11:45 – 12:15 Investments 12:15 – 12:45 Something to eat 12:45 – 13:15 Reinsurance – updat
Slide 83: UK Including Grenfell Tower
UK Including Grenfell Tower Oslo | 26th Oct 2018
Slide 84: Our DNA
Our DNA Vision Heading Towards Vision 2020 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 Open Bold Committed
Slide 85: On Schedule, but meeting some «speed-bumps»
On Schedule, but meeting some «speed-bumps» Very large potential, great start on quality Broker Survey 2017 Totality Gross expense 2011 2012 2013 2014 2015 2016 2017 Protector 85 ratio Cost leadership Competitor 5 Quality leadership 65 Protector Status:10,0 % 7,7 Too%early 8,8 % 7,6 % 7,5 % 6,8 % 7,
Slide 86: Grenfell Tower and Risk Management
Grenfell Tower and Risk Management 86
Slide 87: UW and Risk Management
UW and Risk Management Market leader Nordics, Consistent approach transferred to UK • Analytical and data driven underwriting • Competent and experienced Underwriters • Focused Risk Management approach • Inspected more than 12 500 buildings in public sector • UW discussions between risk engineers an
Slide 88: RBKC Underwriting and Assessment
RBKC Underwriting and Assessment Well documented Process, Conclusion from reassessment remains the same • Portfolio of housing properties, approx. 7000 buildings • RBKC underwent extended UW process • Protector inspected ~2/3 of the RBKC portfolio • RBKC Claims Experience was good • Benchmarked agai
Slide 89: The four Grenfell Tower projects
Claims handling Reinsurance • Manage claim and client • Claims handling involvement and • Keep lawyer cost at low level support • Process is key • Align reinsurance with Risk • Align with reinsurance Management, UW and renewal companies season • Proactive and professional • UK Casualty Reinsurance c
Slide 90: Role of Insurance in such a Tragedy
Role of Insurance in such a Tragedy In the Periphery of the Event, How do we focus our efforts? 1. Ensure correct settlements to injured parties 2. Minimize the share of payments to legal advisors 3. Learn and prevent similar events from happening again 90
Slide 91: Grenfell Tower Property claim settled
Grenfell Tower Property claim settled Arbitration with Munich Re postponed to may 2019 • Property released to client 1st August 2018 • Tower not likely to be reinstated, memorial park in the future • Settlement agreed with client 17th Aug. – money transferred 14 days later • Good feedback from clien
Slide 92: Claims Handling update
Claims Handling update Total insurance claim still unchanged at £75m Property – Settled Liability Recovery • Property released to client 1st August 2018 • Unprecedented claim, call for unprecedented • Potential liable entities (“PDs”) mapped • Tower not likely to be reinstated, memorial park actions
Slide 93: Feedback from RBKC & JLT
Feedback from RBKC & JLT Protector proud to receive such statements “From the very beginning of needing to formulate an insurance response to this terrible tragedy, Protector have stood side by side with RBKC and have worked in supportive partnership facing the unique and complex challenges together
Slide 94: Post GFT Risk Management report
Post GFT Risk Management report 40 pages, will be released autumn 2018 Based on a Review of Public buildings in Public sector in total not Grenfell Tower as such 94
Slide 95: Risk Management and underwriting Post Grenfell
Risk Management and underwriting Post Grenfell Focused and achievable approach, we are more competent than… Immediately after Grenfell Tower • Street view entire TB exposure • All TB’s allocated into risk bands low - high • First hand inspection and verification of assumed high risk locations • Star
Slide 96: Risk Management
Risk Management A crucial part of sales and Margin Management • Risk engineering team with experience from insurers, brokers and large corporations • Risk engineers form part of the underwriting- and sales process • Bespoke RM solutions to meet client needs in partnership with their brokers Current
Slide 97: The UK market
PROTECTOR Hee insurance The UK market
Slide 98: UK Market Overview
UK Market Overview £10bn of the UK market relates to domestic risks written outside of Lloyd’s In-scope UK Commercial estimated by stripping out Personal lines, Lloyd's and risks with large global exposures 1. Personal Lines: Commercial risks align with Protector’s existing model and capabilities, t
Slide 99: UK Market Distribution Landscape
UK Market Distribution Landscape Distribution of UK Commercial lines continues to consolidate through M&A activity Distribution primarily controlled by the largest four brokers, which have seen strong organic growth and invested in acquisitions • Marsh and Aon’s respective acquisitions of Bluefin (N
Slide 100: In-scope market by region
In-scope market by region The London Company Market accounts for £2.9bn (28%) of in-scope premium Regional market | In-scope market premium by UK region1 The North and South East represent the largest markets outside London and both returned to overall GWP growth in the last 12 Scotland £10bn GWP mo
Slide 101: UK Commercial insurer operating models
UK Commercial insurer operating models UK Commercial business is dominated by large insurers with multiple offices London is utilised for larger & more complex risks whereas a local presence is often required for more conventional risks Scotland South UK insurer operating models Model Insurer Office
Slide 102: Competitor landscape
Competitor landscape Over half of UK Commercial market premium is consolidated among the top five insurers Motor is the most concentrated line, with many insurers only quoting where they already have a P&C relationship (e.g. AIG, Aviva) Insurer GWP share | Total in-scope UK Commercial market1 Insure
Slide 103: The Team
PROTECTOR Hee insurance The Team
Slide 104: > 35 Individuals, Key Roles Defined and Covered
> 35 Individuals, Key Roles Defined and Covered Good level of expertise, committed to our culture, still high recruitment activity
Slide 105: Broker Satisfaction UK 2017
Broker Satisfaction UK 2017 Far ahead of #2 Company totality Claims handling Protector Protector 85 Protector Protector 77 CompetitorAmlin 1 65 Amlin Competitor 1 72 Competitor 2 Allianz 64 Competitor Allianz 2 68 CompetitorRMP 3 63 CompetitorRMP 3 66 Competitor RSA 4 62 CompetitorRSA 4 65 Competito
Slide 106: Broker Satisfaction UK 2018
Broker Satisfaction UK 2018 Aim to be far ahead of #2 • 2018 Survey distributed same time as in 2017 • Same questions, which have been calibrated for relevance with brokers over 10 years • Our purpose: • Receive feedback for focus on where to improve • An opportunity for a structured dialogue with o
Slide 107: The Segments
PROTECTOR Hee insurance The Segments
Slide 108: Poor new sales in Public Sector, due to price…
Poor new sales in Public Sector, due to price… …but rapidly building large datasets and learning quickly • Very low hit-ratio on quoted volume 1st April (largest renewal date) • Mainly due to price • Quality scores improving significantly during the year • 3 clients lost due to quality in tender res
Slide 109: Gaining traction in Commercial Sector
Gaining traction in Commercial Sector Selection of segments and brokers is key • Close to 500 tenders seen, 60 % quoted • Risk appetite to be clarified with brokers • Careful on liability • ~60 % of quoted volume is motor • Cost advantage is key • Increasing inbox for property and liability • 10 bro
Slide 110: The Housing Sector is Protector's «home turf»
The Housing Sector is Protector’s «home turf» Speed bumps lead to a slow start, good traction from 2019 • Market size of ~ £300m, only £12m quoted in 2018 • Expect quote volume to increase significantly in 2019 • Low deductibles, low value exposures • Datadriven underwriting • Relative importance of
Slide 111: Profitable Growth – according to plan
Profitable Growth – according to plan «Scratching» the market surface, insignificant, but ok status on profitability • Too high pricing, but learning quickly in Public Sector • Good renewals (processes and results) • All clients renewed, rate increases achieved • Very high activity, but poor new sal
Slide 112: Volume
Volume Volume full year 2016 MNOK Volume full year 2017 MNOK Estimate 2018 MNOK PROTECTOR Ht Seinsurance Estimate 2019 MNOK
Slide 113: On Schedule - Close to critical mass in 2019
On Schedule - Close to critical mass in 2019 Cost ratio will rapidly decrease • Critical mass not reached, building for scalability • Claims Handling insourced in 2018 • Several manual processes before efficient systems are implemented • The biggest potential (Commercial sector) gaining traction in
Slide 114: On Schedule, but meeting some «speed-bumps»
On Schedule, but meeting some «speed-bumps» Very large potential, great start on quality Broker Survey 2017 Totality Gross expense 2011 2012 2013 2014 2015 2016 2017 Protector 85 ratio Cost leadership Competitor 5 Quality leadership 65 Protector Status:10,0 % 7,7 Too%early 8,8 % 7,6 % 7,5 % 6,8 % 7,
Slide 115: Protector's Capital Markets Day 2018
Protector’s Capital Markets Day 2018 Restaurant Louise | 26th October | From 10:00 10:00 – 10:45 Q3 2018 Investor presentation 10:45 – 11:00 Coffee and snack 11:00 – 11:45 Status Company including HTD reserves 11:45 – 12:15 Investments 12:15 – 12:45 Something to eat 12:45 – 13:15 Reinsurance – updat