Slide 1: Protector Forsikring ASA Investor presentation
Protector Forsikring ASA Investor presentation April 2016
Slide 2: Agenda
1 Introduction and executive summary 2 Cost and quality leader 3 Company History & current position overview 4 Capital discipline 5 Executive summary Appendix I Company financials Appendix II Regulatory framework Page 1
Slide 3: Company introduction
Company introduction Protector Forsikring ASA • Nordic P&C insurance company • Listed on Oslo Stock Exchange – market cap 6,5 BNOK • 500 MNOK subordinated loan • 30 NC 5 bond structure • Most solid P&C Insurance company in the Nordic region Sverre Bjerkeli (56) – CEO • Head of consumer/commercial di
Slide 4: Executive summary
Executive summary 12 years of profitable growth Financial targets • Half the cost of competitors Overall long-term financial goals • Quality leader in the Nordic market • Growth rate of gross written premium: 10% • Best Combined Ratio last 8 years, HTD 88,5% • Combined ratio for own account: 90% • A
Slide 5: Vision, business idea, main targets and values
Vision The Challenger Business Idea This will happen through unique relationships, excellent decision-making and cost effective solutions Main targets Cost -and quality leadership Profitable growth Top 3 Values (Troverdig) Credible (Imøtekommende) Open (Modig) Brave (Engasjert) Committed Page 4
Slide 6: Company overview
Company overview Company Business segments – GWP MNOK • Nordic non-life insurance company, Commercial Lines of Change of Ownership Public Lines of Business established January 2004 Business Insurance • Listed on Oslo Stock Exchange, 2007 1592 731 509 521 608 451 • Experienced and stable management 1
Slide 7: Agenda
1 Introduction and executive summary 2 Cost and quality leader 3 History & current position 4 Capital discipline 5 Executive summary Appendix I Company financials Appendix II Regulatory framework Page 6
Slide 8: Cost leader – half the cost of competitors
Cost leader – half the cost of competitors Overview Gross expense ratio • Well defined and consistent strategy, understand 2008 2009 2010 2011 2012 2013 2014 2015 value chains and competent people to implement PRF 11,2 % 12,1 % 11,9 % 10,0 % 7,7 % 8,8 % 7,6 % 7,5 % • “Culture eats strategy for break
Slide 9: Distribution channels commercial and public lines of business
Distribution channels commercial and public lines of business Overview Brokerage share of business in 2015 • Protector = preferred insurer by the Nordic brokers 30,0 % 27,2 % • 60 different brokerage firms on list 25,0 % 20,0 % 17,7 % • International brokers facilitate entry to new markets 15,0 % 13
Slide 10: Quality leader in the Nordic market
Quality leader in the Nordic market Broker Satisfaction Survey Quality leader – 9 years in a row Avg. 57 • Consistently on top when brokers rank satisfaction Protector Forsikring 79 with service and offerings. True for Norway, Sweden Competitor 1 61 and Denmark Competitor 2 59 Competitor 3 59 • Easy
Slide 11: Profitability – Best margin in the Nordic market
Profitability – Best margin in the Nordic market Overview • Prudent and disciplined underwriting • Consistently CR below 100% since 2005 (second year in business) • Combined ratio 2015 is 88,7% • HTD combined ratio is 88,5% • Reinsurance used to reduce risk and reduce volatility Lowest combined rati
Slide 12: Volume growth – strong and prudent
Volume growth – strong and prudent Sustainable growth • Profitability comes first, volume growth second • Low capex and will exit new markets if unprofitable over time • Around 60% of new business in 1st quarter each year giving transparency to volume development • Significant growth potential in Sw
Slide 13: Agenda
1 Introduction and executive summary 2 Cost and quality leader 3 History & current position 4 Capital discipline 5 Executive summary Appendix I Company financials Appendix II Regulatory framework Page 12
Slide 14: Historical timeline
Historical timeline Sale of 3,57m Enters Enter Expands Expands Expands own shares commercial municipality to to to totaling 4,14% sector sector Sweden Denmark UK of capital 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Launches Listed on Insourced GWP GWP GWP Change of Oslo Stock
Slide 15: Commercial lines of business
Protector ASA Commercial Change of Lines of Public Lines of Ownership Business Business Insurance Commercial lines of business Summary Market drivers • Corporate clients sized min MNOK 0,2 • Cost and quality leadership • Standardized products; Workers Compensation, • Protector’s USP; “Easy to do bus
Slide 16: Public lines of business
Protector ASA Commercial Change of Public Lines of Lines of Ownership Business Business Insurance Public lines of business Summary Market drivers • Protector is the market leader in Scandinavia • Few players and tough market conditions • First municipality in 2005 – "Tønsberg kommune" • Tender proce
Slide 17: Change of ownership insurance
Protector ASA Commercial Change of Public Lines of Lines of Ownership Business Business Insurance Change of ownership insurance The product Key market drivers • Insurance linked to the property • Market situation; few players & with critical mass • Covers substantial hidden defects for 5 years • Hig
Slide 18: Development in Sweden
Development in Sweden Entry strategy Sweden • Copy winning formula from Norway (same vision, business idea, main targets and values) • Entry point public sector • Profitable growth through • Cost and quality leadership 2015 highlights Sweden moves faster than Norway • 60% growth • Critical mass reac
Slide 19: Development in Denmark
Development in Denmark Entry strategy Denmark • Copy winning formula from Norway and Sweden (same vision, business idea, main targets and values) • Entry point public sector • Profitable growth through • Cost and quality leadership • Less competition than Norway and Sweden 2015 highlights Denmark mo
Slide 20: Development in Finland
Development in Finland Entry strategy Finland • Natural part of Protector’s Nordic business • Copy winning formula (same vision, business idea, main targets and values) • Entry point public sector and some grouped insurance • First customer on board, Helsinki • Project lead from Sweden Market driver
Slide 21: Expanding into the UK market
Expanding into the UK market Overview Project C4 UK • 1000 pages analysis Sub-Project Status • Analyzed 7 countries, UK entry decided • Entry point – public sector, like Sweden in 2011 Market Analysis and Denmark in 2012 Business planning • Recruitment progressing well, 9 signed • First quotes deliv
Slide 22: Agenda
1 Introduction and executive summary 2 Cost and quality leader 3 History & current position 4 Capital discipline 5 Executive summary Appendix I Company financials Appendix II Regulatory framework Page 21
Slide 23: Solid and healthy development of solvency
Solid and healthy development of solvency Solvency margin1 development 370% 304% 315% 296% 236% 219% 2010 2011 2012 2013 2014 2015 1Solvency margin calculated in accordance with Solvency I regulation Key financial information In ‘000 NOK 2010 2011 2012 2013 2014 2015 Paid in equity 87 87 87 87 87 91
Slide 24: Most solid company in the Nordic insurance market?
Most solid company in the Nordic insurance market?1 Full year 2015 PRF Rank Gjensidige Rank Tryg Rank Topdanmark Rank Cost ratio 7,5 % #1 15,1 % #2 15,3 % #3 15,9 % #4 Combined ratio (2008-2015) 88,5 % #1 89,4 % #3 89,9 % #4 88,7 % #2 Geographic diversification - share of business outside country of
Slide 25: Protector's investment portfolio - allocation
Protector’s investment portfolio - allocation Overview • End of Q4 2015; Bonds 86,3% of portfolio, equities 13,7% • Reduced exposure to HY funds in 2015 and in Q1 2016 • Zero exposure to Norwegian oil and oil services sector both in equities and bonds • Investment grade average for both bond funds a
Slide 26: Strong investment result compared to peers
Strong investment result compared to peers Overview • Good investment return compared to peers in the period 2010-2015 • Investment portfolios in Norway, including Protector’s, have experienced NIBOR on average 0,9% above STIBOR and 1,4% above CIBOR for the period 2010-2015 • Better investment retur
Slide 27: Limiting risk exposure through reinsurance policies
Limiting risk exposure through reinsurance policies Overview reinsurance at Protector Key market drivers • Own account normally limited to 20 MNOK per event • Current view of the reinsurance market; • Property Surplus contracts signed for 2016 and 2017 soft market going forward (it’s a buyer’s marke
Slide 28: Agenda
1 Introduction and executive summary 2 Cost and quality leader 3 History & current position 4 Capital discipline 5 Executive summary Appendix I Company financials Appendix II Regulatory framework Page 27
Slide 29: Executive summary
Executive summary Most solid company in the Nordic P&C Insurance Market • Diversified Nordic company with strong market positions • No CapEx booked when entering UK • Consistent strategy and prudent risk management all 12 years • Half the cost of competitors, quality leader in all markets • Best Com
Slide 30: Agenda
1 Introduction and executive summary 2 Cost and quality leader 3 History & current position 4 Capital discipline 5 Executive summary Appendix I Company financials Appendix II Regulatory framework Page 29
Slide 31: Protector financials
Protector financials 2014-2015 financial highlights and key ratios Profit and loss Balance Sheet NOKm Q4 2015 Q4 2014 2015 2014 NOKm 31.12.2015 31.12.2014 Premiums written gross 325,3 281,8 2 843,4 2 374,5 Financial assets 6 636,6 4 957,9 Premiums earned gross 698,7 593,7 2 791,1 2 306,8 Bank deposi
Slide 32: Agenda
1 Introduction and executive summary 2 Cost and quality leader 3 History & current position 4 Capital discipline 5 Executive summary Appendix I Company financials Appendix II Regulatory framework Page 31
Slide 33: Ownership & company structure
Ownership & company structure Organizational structure Ownership as of 29.01.2016 Shareholder No. of shares Percent CEO STENSHAGEN INVEST AS 6 550 000 7,60% SWEDBANK ROBUR SMABOLAGSFOND 5 631 835 6,54% ODIN NORDEN 4 473 484 5,19% Head of reinsurance OJADA AS 3 563 116 4,14% CFO VERDIPAPIRFONDET HAND
Slide 34: Management
Management Sverre Bjerkeli – Chief Executive Officer Flemming Holm – CFO Bjerkeli has worked for Protector since 2004 Employee since 2016. Holm has significant and as CEO since 2006. Bjerkeli has more experience from both the banking -and than 20 years of experience from the finance insurance indust
Slide 35: Board
Board Jostein Sørvoll – Chairman of the Board Erik G. Braathen – Board Member, Deputy Chairman of the Board Mr. Sørvoll has been the Chairman of the Mr. Braathen has been a member of the Board at Board since 2006. He is also Chairman of the Protector since 2009. He is the Chairman of the Board at Ga