Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — Q3 2015 Earnings Presentation
24 slides from Protector Forsikring ASA's earnings presentation, Oct 29, 2015
Slide 1: Results Q3 2015 Investor presentation
RESULTS Q3 2015 Investor presentation 29th October 2015 1
Slide 2: Facts about Protector
Facts about Protector • A focused Norwegian non-life insurance company • Vision: “The challenger” • Established Jan.1, 2004. (Listed Oslo Stock Exchange May 2007) • Main targets: • Entered the Swedish market in 2011 and Denmark 1 Jan. 2012 • Cost and quality leadership • Ownership: Stenshagen Invest
Slide 3: Vision: The Challenger
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 (Troverdig) Credible (Imøtekommende) Open (Modig) Brave (Engasjert) Committed
Slide 4: Highlights Q3 2015
Highlights Q3 2015 7% growth, Combined ratio on track • GWP up 7% - 6% in local currency - Small quarter with seasonality effects • Net combined ratio 88.7% (89.0%) • -0.3 % return on the investment portfolio (0.6%) - Poor investment result, but better than peers - Yield in bond portfolio increase d
Slide 5: Gross written premium Q3 2015
Gross written premium Q3 2015 Other Liability 6% personell 7% GWP up 7%, from NOK 342 m to NOK 367 m Others COI 7% 35 % • Commercial sector Scandinavia: 13% growth – Norway: -2% growth within the commercial and public lines of business Product mix – Sweden: 39% growth Group Life Q3 15 – Denmark: 53%
Slide 6: Claims development Q3 2015
Claims development Q3 2015 • Gross claims ratio 81.3%, up from 77.4% in Q3 2014 • Net run-off-gains of 2.8%, against net run-off-gains of 4.5% in Q3 2014 − Run-off gains in motor insurance • Net claims ratio 82.1%, up from 80.9%. Higher claims ratio than peers. Gross Claims Ratio 2011-2015 Net Claim
Slide 7: Cost ratio Q3 2015
Cost ratio Q3 2015 • Gross cost ratio 6.4%, down from 8.4% Q1-Q3 2015 Norway 4,7% Sweden 12,3% Denmark 10,6% High sales commissions in Sweden. Ex. Commission ~7,4% Q1-Q3 15 • Net cost ratio 6.6%, down from 8.1% Gross Cost Ratio 2011 - 2015 Net Cost Ratio 2011 - 2015 15% 15% 10,1 % 10,3 % 9,9 % 7,4 %
Slide 8: Highlights Norwegian Commercial/Public Lines Q3 2015
Highlights Norwegian Commercial/Public Lines Q3 2015 GWP 2011-2015 • Volume down 2% (small quarter) (MNOK) – 37% growth in the public sector 1 500 1 251 1 184 – 0 large wins, 0 large non-renewals 1 030 1 000 901 – -4% growth in the commercial sector 704 – 2 large wins and 1 large non-renewal 500 142
Slide 9: Highlights Q3 2015 – Sweden
Highlights Q3 2015 – Sweden GWP 2011-2015 • 39 % growth (MNOK) – 1 very large win, one large non-renewal 600 478 – No. 2 in the municipality segment 400 303 • Net combined 79.3%, 88.2% YTD 2015 200 132 73 2 20 12 59 20 52 – Run-off gains, but good underlying profitability 0 2011 2012 2013 2014 2015
Slide 10: Highlights Q3 2015 – Denmark
Highlights Q3 2015 – Denmark GWP 2011-2015 • 53% growth in a small quarter (MNOK) – Higher level of public business out in market compared 400 370 to last two years (2016 potential) 300 218 200 117 • Net combined 108.2%, 98.4% YTD 2015 100 6 30 6 16 24 0 0 0 • Slow start in Q4 – one large non-renewa
Slide 11: Highlights Q3 2015 - Change of ownership
Highlights Q3 2015 - Change of ownership • Volume down 1% GWP 2011-2015 – Strong decline in no. of policies vs. Q3 2014 (MNOK) – Slightly reduced market share due to distribution mix 600 – Prices in real estate market are strong 389 418 400 296 327 343 • Unprofitable quarter – full year profitable 2
Slide 12: Entry in the UK going according to plan
Entry in the UK going according to plan • First 3 employees recruited • Further recruitments ongoing • Established relationship with top five brokers in public sector • Property reinsurance contract agreed • First 100 building inspections done • IT project started, plenty of time… • Manchester is st
Slide 13: Results Q3 2015
Results Q3 2015 NOKm Q3 2015 Q3 2014 YTD 2015 YTD 2014 Premiums written gross 366,5 341,8 2 518,1 2 092,6 • GWP up 7% - underlying growth stronger Premiums earned gross 719,9 591,5 2 092,4 1 713,1 Claims incurred gross (585,2) (457,7) (1 666,6) (1 402,9) Premiums earned for own account 562,4 458,0 1
Slide 14: Balance Sheet Q3 2015
Balance Sheet Q3 2015 NOKm 30.09.2015 30.09.2014 31.12.2014 Financial assets 6 382,7 4 834,8 4 957,9 • 28% growth in investment portfolio Bank deposits 56,3 138,1 207,9 Other assets 1 098,2 899,4 786,9 Total assets 7 537,2 5 872,4 5 952,7 Total equity 1 364,6 903,7 991,4 Subordinated loan capital 14
Slide 15: Solvency II, UK & future growth capital discussions
Solvency II, UK & future growth capital discussions • Introduction of Solvency II makes other capital structures possible and attractive • Protector has low level of debt compared with peers • UK entry on track, up-side scenarios will be discussed • The company is considering raising new subordina
Slide 16: Development in financial markets in Q3
Development in financial markets in Q3 Volatile financial markets in Q3 due to concern about global economy growth: • Equity markets down 7%-9% • Global HY spreads out 155-177 ppt, and significant spread increases both in IG and bank • Norwegian capital markets affected by 22% fall in oil prices and
Slide 17: Protector HY update
Protector HY update Exposure through Nordea Global HY fund: • Managed by MacKay Shields • Over 40-year investment management history • Strong track record last 8 years • Total AUM USD 90 bn/ HY – USD 21bn/ Global HY fund • Interest duration 4,6; credit duration 4,4 • Yield 8,0% in local currency; he
Slide 18: Asset allocation
Asset allocation • End of Q3 2015; Bonds 86,5% of portfolio, equities 13,5% • No Norwegian HY • Exposure in equities increased medio Q3 Money-weighted allocation of Money-weighted allocation of investments 30.09.2015 investments 31.12.2014 Equities; Equities; 12,4 % 10,8 % Bonds and cash; 11,0 % Bon
Slide 19: Investment performance Q3 2015
Investment performance Q3 2015 -0.3% return on the investment portfolio • Net investment result of NOK -19.9m, -0.3% return (NOK 27.9m, 0.6%) - YTD; Net investment result of NOK 151.0m, 2.7% return (NOK 223.3m, 4.9%) • Equities, return of 12.1% (-1.7%), 24.2% YTD OBX development Q3 - OBX -8,9% in Q3
Slide 20: Investment return compared with competitors
Investment return compared with competitors Better than peers - again Avg. 2008- 2008 2009 2010 2011 2012 2013 2014 H1 ‘15 Q1-Q3 ‘15 2014 PRF -2,1 % 16,1 % 9,7 % -2,3 % 8,9 % 7,0 % 5,3 % 3,0 % 2,7% 6,0 % KLP skade 0,4 % 8,3 % 7,2 % 4,5 % 6,5 % 6,5 % 6,5 % 2,3 % na 5,8 % If -3,1 % 12,4 % 7,4 % 1,8 %
Slide 21: Shareholder matters October 2015
Shareholder matters 10 October 2015 Shareholder No. Shares Percent Related parties shareholding STENSHAGEN INVEST AS 6 550 000 7,60 % ODIN NORGE & NORDEN 5 755 035 6,68 % • Management’s direct and indirect shareholding totals 3,2m SWEDBANK ROBUR SMABOLAGSFOND 5 631 835 6,54 % shares or 3,7% of curre
Slide 22: Guiding; reduced due to financial income
Guiding June; reduced due to financial income Res Feb June Oct 2014 2015 2015 2015 Return assumptions 2015*: Equity allocation approx. <15 % (15%) Premium growth in NOK (%) 28 18 22 22 Return equities: 15% p.a. (15% p.a.) Investment Income (NOKm) 237 225 300 270 Return bonds: 3.7 % p.a. (3.7% p.a.)
Slide 23: Outlook 2015 – reduced due to lower financial income
Outlook 2015 – reduced due to lower financial income Guiding 1st July • GWP up 22%; slightly behind • Combined ratio 86; on schedule • Gross cost ratio < 7.5 %; on schedule • Operating profit NOK 600 m; behind due to lower financial return • Return on solvency 28 % (after tax); slightly behind due t
Slide 24: Highlights Q3 2015
Highlights Q3 2015 7% growth, Combined ratio on track • GWP up 7% - 6% in local currency - Small quarter with seasonality effects • Net combined ratio 88.7% (89.0%) • -0.3 % return on the investment portfolio (0.6%) - Poor investment result, but better than peers - Yield in bond portfolio increase d