Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — Q2 2018 Earnings Presentation
23 slides from Protector Forsikring ASA's earnings presentation, Jun 13, 2018
Slide 1: Q2 2018 Interim Results
Q2 2018 Interim Results Investor presentation Oslo, 13.06.2018 1
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 Q2 2018
Highlights Q2 2018 14,3% growth, Combined Ratio 99,5% • Growth of 14,3% (16,4 % local currency) Guiding 2018 – old • Gross cost ratio 7,4% down from 7,5% Net combined ratio >94 % Volume growth 20 % • Net Combined ratio 99,5% up from 90,7% Cost ratio ≈7,5 % • Profit before tax of NOK 97,4m down from
Slide 4: Guiding changed
Guiding changed Changed due to a poor profitability start on H1 2018 Result per Guiding per Guiding per Guiding per H1 18 Q4 17 for 18 Q1 for 18 Q2 for 18 Growth Rate 16,80 % 20 % 20 % 16 % Significantly higher Net Combined Ratio 97,50 % 92-94% >94% than 94% Gross Cost Ratio 7,80 % ≈7,5 % ≈7,5 % ≈7,
Slide 5: Gross written premiums Q2 2018
Gross written premiums Q2 2018 Growth of 14,3% (16,4% LCY) - as signalized in Q1 • GWP total NOK 1017,5m up 14,3% 1 100 Q2 GWP (NOK m) 1 017 1 000 • Strong growth in Sweden and UK 900 890 800 722 • Volume slightly down Com. & Publ. Norway and Denmark 700 636 • One large non-renewal (NOK 40m) in Norw
Slide 6: Claims development Q2 2018
Claims development Q2 2018 Poor claims quarter – further actions necessary • Gross claims ratio 89,1%, down from 136,1 % Q2 Gross claims 140% 136,1% 120% • Net claims ratio 96,2%, up from 89,2 % 100% 89,5% 89,1% 80,1% 80% 73,5% 60% • Run-off losses f.o.a amounted to NOK 30,1m or 3,5% • Change of Own
Slide 7: Further actions necessary
Further actions necessary Stronger price increases going forward • One very large distribution deal not renewed (with GWP > NOK 120m and Communicated after Q1 CR>100%) in COI • Rolls Royce • Additional non-renewal of one small distribution deal (GWP ~ NOK 15m, CR • Culture of thoroughly searching fo
Slide 8: Cost ratio Q2 2018
Cost ratio Q2 2018 World Cost leadership maintained • Gross cost ratio 7,4%, down from 7,5% Gross Cost incl. Claims handling ex. Broker commission (real way) on a good trend • Net cost ratio 3,3%, up from 1,5% 18,0 % 17,0 % 16,0 % 15,0 % • Gross cost the real way 10,5% down from 11,5% 14,0 % • Inclu
Slide 9: Business unit update Q2 2018
Business unit update Q2 2018 Price increases initiated for Q4 18 and Q1 19 – stronger price increases going forward Public & Commercial sector Change of Ownership Insurance • Volume down -20,7 %, one large non-renewal • Volume up 18,3 % - seasonality influencing • Poor claims quarter • Very large di
Slide 10: UK business unit update Q2 2018
UK business unit update Q2 2018 Profitable, but slow Growth (1st April), good activity level 14th June 2018 marked one year since the tragic Grenfell Tower fire in London. • Gross Written premium up 63,5 % • Gross claims ratio 61,4 % down from 1426,6% • Grenfell Tower tragedy • Net claims ratio 73,2
Slide 11: Investments
Investments Net financial assets > NOK 10 bn, float increasing 10 454 10 500 10 217 9 373 14,7% 9 500 18,4% 8 500 17,6% 7 546 7 500 6 637 22,1% 6 589 6 500 12,5% 5 500 4 958 4 500 11,6% 85,3% 4 000 81,6% 13,2% 82,4% 3 500 3 193 8,9% 87,5% 77,9% 2 500 2 355 2 022 17,8% 88,4% 1 635 24,6% 86,8% 1 500 1
Slide 12: Equity portfolio statistics
Equity portfolio statistics 15 % of total investment portfolio Performance – In-house managed equity portfolio vs. benchmarks (08.10.2014 – 30.06.2018) Key Figures In-house Managed OSEBX 170 Portfolio 150 153 Performance 153,4% 54,0% Dividend yield 2,1% 3,5% 130 P/E NTM* 17,7 15,8 3 yr sales CAGR 19
Slide 13: Bond portfolio statistics
Bond portfolio statistics 85% of total investment portfolio Performance – In-house managed bond portfolio vs. benchmarks (31.03.2015 – 30.06.2018)1,2,3 Portfolio data 30.06.2018 Starting point 12% Size bond & cash eq. (NOK m) 8 922 new benchmark 11,5 % Avg. ref. rate (NIBOR, STIBOR etc.) 0,6% 10% 10
Slide 14: Investment performance Q2 2018
Investment performance Q2 2018 Good absolute return for equities - stable spreads for bond portfolio • 1,1% return on investment portfolio, Returns Q2 2018 5,0% net investment result of NOK 112,3m 4,5% 4,4% 4,0% • Equity portfolio return of 4,4% 3,5% • Benchmark: OSBX (9,2%), OMXSGI (4,6%), OMXCGI (
Slide 15: Profit & loss Q2 2018
Profit & loss Q2 2018 14,3 % growth, Combined Ratio 99,5% [1.000.000 NOK] Q2 2018 Q2 2017 H1 2018 H1 2017 FY 2017 Gross premiums written 1 017,5 890,5 3 478,5 2 977,9 4 163,2 Growth of 14,3% (16,4% LCY) Gross premiums earned 1 195,0 927,3 2 265,8 1 785,9 3 805,5 Gross claims incurred (1 064,7) (1 26
Slide 16: Balance sheet Q2 2018
Balance sheet Q2 2018 SCR 196,5 % based on standard formula [1.000.000 NOK] 30.06.2018 30.06.2017 31.12.2017 Owner-occupied property 13,7 13,7 13,5 SCR ratio composition Financial assets 10 457,9 9 209,5 9 379,4 4000 Derivatives 13,7 2,4 2,5 Bank deposits 213,6 285,5 327,5 Other assets 3 358,5 2 173
Slide 17: Solvency II
Solvency II Composition of SCR: Eligible SII capital: • Net insurance risk 62% • No dividend • Net market risk 29% • Guarantee provision subtracted from own • Other risks 9% funds SCR composition Eligible SII capital 4 000 4 500 3 500 237 49 1 243 4 000 3 704 993 398 3 000 3 500 24 446 58 31 2 500 3
Slide 18: Capital situation very strong – significantly above target
Capital situation very strong – significantly above target Capital allocation alternatives to meet ROE target A B C D E Insurance Debt repayments Investments Buy backs Dividends underwriting (or cash as an option) • Protector’s • Few attractive equity • Opportunistic share buy • Fully utilized Tier
Slide 19: Shareholder's matters
Shareholder’s matters Per 30.06.2018 SHAREHOLDER NAME # SHARES % Related parties shareholding STENSHAGEN INVEST AS 6 550 000 7,60 % • Management’s direct and indirect shareholding totals 3,5m shares or 4,0% of GLOBAL PORTFOLIO INVESTMENTS, S.L. 4 478 076 5,20 % current outstanding shares ODIN NORDEN
Slide 20: Summary Q2 2018
Summary Q2 2018 Guiding changed - stronger price increases going forward • Growth of 14,3% (16,4 % local currency) • Net Combined ratio 99,5% up from 90,7% • Multiple unprofitable clients sized NOK 250m not renewed • Distribution deals COI and Publ. & Comm. Norway and Denmark • Stronger price increa
Slide 21: 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 22: Q&A Q2 2018 interim results
Q&A Q2 2018 interim results
Slide 23: 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 Ratio calculation (1) Claims incurr