Protector Forsikring Asa · OSL:PROT
Protector Forsikring Asa — Q1 2017 Earnings Presentation
28 slides from Protector Forsikring Asa's earnings presentation, April 2017
Slide 1: Q1 2017 Results
Q1 2017 Results Investor presentation
Slide 2: 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 3: Highlights Q1 2017 result
Highlights Q1 2017 result Profitable growth continues, UK ahead, Denmark on track • Operating profit of NOK 107,3m (NOK 45,2m) New 2017 guiding: • Net Combined ratio 87,0% (88,3%) Net combined ratio 92% Volume growth 20% (22% local) • Strong GWP growth of +9,2% (12,6% local currency) Cost ratio <7%
Slide 4: Gross written premiums Q1 2017
Gross written premiums Q1 2017 Nordic growth leader – slightly ahead of schedule • GWP total NOK 2 087m up 9,2% GWP Q1 total (NOK m) • Strong growth in UK for April 1st renewal 2 500 • Strong Norwegian/Swedish growth in Q2 and Q3 still 2 000 expected 1 500 • Change of ownership: Turnover in real est
Slide 5: Claims development Q1 2017
Claims development Q1 2017 In the higher end • Gross claims ratio 91,4%, up from 90,4% in Q1 16 Q1 Gross claims ratio 100,0% • No accumulated net run-off gains/losses in quarter 95,0% 90,0% • Net claims ratio 92,7%, down from 96,6% 85,0% • Higher claims ratio than peers 80,0% 91,4% 75,0% • High clai
Slide 6: Cost ratio Q1 2017
Cost ratio Q1 2017 Cost leader in Europe • Gross expense ratio 7,1%, up from 6,1% Q1 Gross expense ratio 12,0% • Net expense ratio -5,7%, up from -8,2% 10,0% Target gross expense ratio <7,0% • Q1 2016 included one-off profit sharing reinsurance contracts of 5,2% 8,0% 6,0% • Cost on a normal, very lo
Slide 7: Commercial and Public lines Norway
Commercial and Public lines Norway Continued rate pressure • Volume down 2,6% Q1 GWP Commercial and Public Norway (NOKm) • No wins top 10 tenders, but good hit-ratio 1 000 800 • Renewal rate 86% 600 400 • Still significant rate pressure on personal lines 730 200 • Market share stable or slightly inc
Slide 8: Change of ownership insurance (COI)
Change of ownership insurance (COI) Strong market – technical surveys in focus • Number of Open Claims on a good level (historical low) • Court results slightly weaker than in Q4 • 41 % - 21 % - 38 % (win, draw, losses) • The Norwegian Consumer Council (Forbrukerrådet) challenging COI with report •
Slide 9: Sweden
Sweden Another very strong quarter • Volume up 18,0% (+26,4% in SEK) • Renewal rate 98% • Net claims ratio of 76,8% (69,6%) • All segments and products are very good • Q1 2016 one-off gain on reserves from motor • Ongoing investigation from the Swedish Q1 GWP Sweden (NOK m) Competition Authority 600
Slide 10: Sweden
Sweden Claims handling improvements • Best ever Rolls Royce • No. of savings 2 539 (1 256) • Amount saved SEK 37,3m (14,4) • Good development on all products • Best ever Claims balance • 96 % (132%) open claims compared to new claims • 38 % more new claims in total, 14 % per FTE • Motor claims handl
Slide 11: Finland
Finland Open for business in all segments • Low tender volume • Few municipalities on public tender • Strong growth in Q1 2017 • More than doubling of volume since last year • Still on a relatively low total volume • Very good broker relationship development • Voted Best trading partner by the Finni
Slide 12: UK: Ahead of schedule
UK Ahead of schedule • Accumulated volume incl. April 1st of GBP 13,5m • Increased traction in public & commercial • 60 clients including April 1st • Claims handling insourcing started April 1st • Another milestone on the way to quality leadership • Change in Ogden discount rate announced • Signific
Slide 13: Housing Associations – Good Progression
Housing Associations – Good Progression First 13 clients on board, learning quickly • Property business is 80% of volume – short tail business Project development – housing associations • Quotations delivered on April 1st clients • First 13 clients on board • Risk selection and pricing models inspir
Slide 14: Denmark results Q1 2017
Denmark results Q1 2017 On track • Net combined ratio 76,4% (65,7%) • Net CR for Workers Comp. above 100% • Gross combined ratio 93,2% (83,5%) • +8% GWP growth (+12% in DKK) • Mainly due to price increases • Renewal rate 92% • ComeBack ‘17 – dialogue with all brokers completed regarding qualitative
Slide 15: Protector's key success factors
Protector’s key success factors Cost, quality, profitability and growth Gross expense Quality leadership 2012 2013 2014 2015 2016 Q1 2017 ratio PRF 7,7 % 8,8 % 7,6 % 7,5 % 6,8 % 7,1 % Quality leader – 10 years in a row Quality leader – 5 years in a row Gjensidige 15,5 % 15,3 % 15,0 % 15,1 % 14,2 % C
Slide 16: Profit & loss Q1 2017
Profit & loss Q1 2017 Strong growth and improved technical result [1.000.000 NOK] Q1 2017 Q1 2016 FY 2016 Gross premiums written 2 087,4 1 912,2 3 439,0 GWP growth 9% Gross premiums earned 858,6 782,9 3 250,4 Gross claims incurred (784,4) (707,7) (3 005,0) Earned premiums, net of reinsurance 710,2 6
Slide 17: Investments: Core business
Investments Core business 17
Slide 18: Investments
Investments Beautiful “Float” growing rapidly Net financial assets (NOK m) 10 000 9 000 8 000 7 000 6 000 9 306 5 000 4 000 3 000 2 000 2012 2013 2014 2015 2016 Q1 2017 % Equity share % Bond portfolio split1 25,0 % 100,0 % 20,0 % 80,0 % 69,6 % 15,0 % 60,0 % 40,0 % 10,0 % 17,9 % 20,0 % 12,5 % 5,0 % 0
Slide 19: Portfolio statistics
Portfolio statistics In-house managed equity portfolio vs. OSEBX end of March 2017 In-house Managed Performance – In-house managed portfolio vs. OSEBX Key Figures Portfolio OSEBX (08.10.2014 – 31.03.2017) Performance 112,4 % 22,4 % Dividend yield 1,8 % 4,1% P/E NTM* 21,1 14,5 112,4% 3 yr sales CAGR
Slide 20: Portfolio statistics
Portfolio statistics In-house managed portfolio vs. benchmark end of March 20171 Portfolio data 31.03.2017 Performance – In house managed portfolio vs. benchmark* (31.03.2015 – 31.03.2017) Size NOK m 6 6792 Yield 2,43% 10,0 % Duration 0,29 7,5 % 8,0 % Credit duration 2,54 Average rating BBB+3 6,0 %
Slide 21: Investment performance Q1 2017
Investment performance Q1 2017 Behind benchmark • 0,3% return on investment portfolio, Return Q1 2017 net investment result of NOK 26,6m 5,0 % 4,0 % • Equities -3,1% 3,0 % • Portfolio consist of 16 companies • Good underlying development 2,0 % • Minor adjustments done to portfolio 1,0 % 1,3 % 0,3 %
Slide 22: Shareholder matters 12.04.2017
Shareholder matters 12.04.2017 CEO Sverre Bjerkeli purchased 375 000 shares on April 4th 2017 Shareholder No. Shares Percent Related parties shareholding STENSHAGEN INVEST AS 6 550 000 7,60% SWEDBANK ROBUR NORDEN AND SMABOLAGSFOND 5 639 053 6,55% Management’s direct and indirect shareholding total
Slide 23: Balance sheet Q1 2017
Balance sheet Q1 2017 Strong & growing fast [1.000.000 NOK] 31.03.2017 31.03.2016 31.12.2016 Owner-occupied property 13,9 13,8 13,7 SCR ratio composition Financial assets 9 294,2 7 183,3 7 547,0 (Standard formula calculation) Financial derivatives* 1 046,9 376,4 990,7 Bank deposits 150,4 52,0 204,3
Slide 24: Solvency II
Solvency II Composition of SCR: Available SII capital: • Net insurance risk 54 % • Assumed dividend of 40 % on YTD17 result • Net market risk 38 % • Guarantee provision subtracted from own funds • Other risks 8 % • Ex recallable NOK 150m Tier 2 SCR composition Available SII capital 3 500 4 500 358 1
Slide 25: Profitable growth + investment return = success
Profitable growth + investment return = success 25
Slide 26: Summary Q1 2017
Summary Q1 2017 Profitable growth continues, UK ahead, Denmark on track • Operating profit of NOK 107,3m (NOK 45,2m) New 2017 guiding: • Net Combined ratio 87,0% (88,3%) Net combined ratio 92% Volume growth 20% (22% local) • GWP growth of 9,2% and better than expected Cost ratio <7% • Solvency ratio
Slide 27: Q&A
Q&A Q1 2017 Results
Slide 28: Key ratio description
Key ratio description Ratio (1) Claims ratio, net of ceded business (2) Expense ratio, net of ceded business (3) Combined ratio, net of ceded business (4) Gross claims ratio (5) Gross expense ratio (6) Gross combined ratio (7) Retention rate (8) Earnings per share (9) Return on Equity (ROE) (10) Ret