Gjensidige Forsikring Asa · OSL:GJF
Gjensidige Forsikring Asa — Q1 2024 Earnings Presentation
52 slides from Gjensidige Forsikring Asa's earnings presentation, Apr 25, 2024
Slide 1: Q1 2024 Interim presentation
Q1 2024 Interim presentation 25 April 2024
Slide 2: Challenging weather conditions during the quarter
Quarterly update Challenging weather conditions during the quarter Air temperature Snow depth Precipitation January 20241 31 January 20242 February 20243 Snow, typically bare ground Extremely dry Extremely cold Bare ground, typically bare ground Very dry Very cold Bare ground, typically snow Dry Col
Slide 3: First quarter result significantly impacted by harsh weather
Quarterly update First quarter result significantly impacted by harsh weather • Pre-tax profit NOK 1,076m Combined ratio • Insurance service result NOK 704m % 86.9 92.6 • NOK 1,389m adjusted for weather and provisions 13.4 13.4 • Weather-related claims NOK 577m (NOK 331m 79.1 73.5 large losses, NOK
Slide 4: On track with mitigating increased losses
Quarterly update On track with mitigating increased losses Motor, Private Norway Property, Private Norway Claims frequency Close monitoring and continuous Q1’24/Q1’23: +5 % Q1’24/Q1’23: +45 % assessments for • Underlying (weather impacted severity, • Weather-related further price not claims frequenc
Slide 5: Expect improved profitability for Private Norway during the next 2 quarters
Quarterly update Expect improved profitability for Private Norway during the next 2 quarters Expect improved underlying frequency loss ratio Y/Y for Private Norway during the next 2 quarters Motor, Private Norway Property, Private Norway Insurance revenue R12 Insurance revenue R12 Incurred claims R1
Slide 6: Sustained growth momentum and efficient operations
Quarterly update Sustained growth momentum and efficient operations Maintaining high retention in Norway… • Private and Commercial • Norway: Continued strong revenue growth and strong competitiveness Private Commercial Norway Norway • Denmark: Good growth and focus on sharing best 90/94%1 91% practi
Slide 7: Moving forward with sustainability initiatives
Quarterly update Moving forward with sustainability initiatives • Launched several new initiatives relating to damage prevention: • Norway: Alarm services in house insurance; sensors for housing associations • Denmark: Assessments and advise on handling minor damage on new homes ; thermografic inspe
Slide 8: Financial performance
Financial performance
Slide 9: Insurance service result significantly impacted by weather
Financial Performance Insurance service result significantly impacted by weather NOKm Q1 2024 Q1 2023 • Insurance service result improved when adjusted for weather and provisions Private 577 547 • Estimated MNOK 577 in weather-related claims net of reinsurance Commercial 724 609 • MNOK 331 property
Slide 10: 11.0 per cent revenue growth
Financial Performance 11.0 per cent revenue growth – 11.0 per cent in local currency, adjusted for provisions Insurance revenue development NOK m Revenue growth Segment Driver(s) Local NOK currency Private 10.9% 10.2% Mainly price - Norway 8.7% 8.7% Mainly price - Denmark 21.9% 17.4% Price and volum
Slide 11: Increased loss ratio
Financial Performance Increased loss ratio Loss ratio development Key drivers % • Significant negative impact from weather and provisions. Adjusted for this: • loss ratio improved by 0.4pp • underlying frequency loss ratio improved by 0.2pp • Change in risk adjustment relating to elevated claims in
Slide 12: Continued good cost control - cost ratio 13.4 per cent
Financial Performance Continued good cost control - cost ratio 13.4 per cent Operating expenses Competitive cost ratio NOK m • Efficient operations 600 • High revenue growth 300 • Strong cost discipline across the Group 0 Private Commercial Sweden Baltics Corporate Q1 2023 Q1 2024 Centre Cost ratios
Slide 13: Strong underlying performance in Pension
Financial Performance Strong underlying performance in Pension Pre-tax profit Assets under management NOK m NOK bn 75 69 208 64 64 61 152 137 125 114 44 8 4 (9) (3) Q1 Q2 Q3 Q4 Q1 2023 2023 2023 2023 2024 Q1 Q2 Q3 Q4 Q1 2023 2023 2023 2023 2024 Pre-tax profit Pre-tax profit adjusted for change in CS
Slide 14: Investment return of 0.7 per cent, driven by market conditions
Financial Performance Investment return of 0.7 per cent, driven by market conditions Investment return per asset class Balanced investment portfolio Fixed-income: 97% Listed equities: 2% Free Match PE funds: 2% 41% NOK 59% 66.1bn1 Other (incl. hedge funds and commodities): 0% 4.3% High credit qualit
Slide 15: Ensuring an optimal capital base
Financial Performance Ensuring an optimal capital base March 2024 • Issue amount: MNOK 800 Tier 1 • Rate: 3 months NIBOR + 2.80% p.a. issue • Maturity: perpetual tenor with first call option after 5.75 years February 2024 • Issue amount: MNOK 800 Tier 2 • Rate: 3 months NIBOR + 1.70% p.a. issue • Ma
Slide 16: Moving ahead on operational targets
Financial Performance Moving ahead on operational targets High customer retention in Norway, improvement potential in Denmark Metric Status Q1 2024 Target 2026 % Customer satisfaction 100 78 > 78 (Group) 91.5 91% > 90% 90 90.0 Customer retention (Norway/Outside Norway) 79% > 85% 80 82.0 Digital dist
Slide 17: Strong capital position
Financial Performance Strong capital position Solvency Eligible own funds ratio • Contribution from operating SII earnings and result in free portfolio offset by formulaic dividend Eligible • Issuance and redemption of loans own funds NOK bn Capital requirement • Mainly driven by growth, especially
Slide 18: Concluding remarks
Summary Concluding remarks Ambitious annual financial targets • Strong growth momentum and improved profitability Metric 2024 & 2025 2026 when adjusted for weather and provisions Combined ratio <84% <82% • Continued focus on profitable growth and enhanced operational efficiency Cost ratio <14% ~13%
Slide 19: Appendix
Appendix
Slide 20: Roadshows and conferences post Q1 2024 results
Appendix Roadshows and conferences post Q1 2024 results Date Location Participants Event Arranged by CEO Geir Holmgren 25 April Oslo CFO Jostein Amdal Roadshow Carnegie Head of IR Mitra H. Negård London, CFO Jostein Amdal Roadshow 29 April DNB Markets virtual IRO Marius M. Fjellbo CEO Geir Holmgren
Slide 21: Weather effects, Q1 2024
Appendix Weather effects, Q1 2024 Group Private Commercial Sweden Baltics Q1 2024 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Reported Insurance revenue, MNOK 9,474 8,532 3,581 3,230 5,039 4,420 494 458 428 365 Loss ratio 79.1% 73.5% 70.0% 68.7% 76.2% 77.3% 78.7%
Slide 22: Weather effects, Q1 2024 (Private and Commercial)
Appendix Weather effects, Q1 2024 Private Private Commercial Commercial Private Commercial Q1 2024 Norway Denmark Norway Denmark Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Reported Insurance revenue, MNOK 3,581 3,230 2,934 2,700 647 530 5,039 4,42
Slide 23: General insurance Norway
Appendix General insurance Norway Private Norway Commercial Norway Combined ratio Combined ratio 87.1% 85.4% 80.2% 80.3% 8.1% 8.7% 13.2% 12.0% 78.9% 76.7% 67.0% 68.2% Q1 2023 Q1 2024 Q1 2023 Q1 2024 Loss ratio Cost ratio Loss ratio Cost ratio Gjensidige Forsikring Group 23
Slide 24: General insurance Denmark – cost ratio and loss ratio per segment
Appendix General insurance Denmark – cost ratio and loss ratio per segment Private Denmark Commercial Denmark Combined ratio Combined ratio 97.5% 100.3% 84.3% 86.1% 20.1% 22.5% 10.8% 11.1% 77.4% 77.8% 73.5% 75.0% Q1 2023 Q1 2024 Q1 2023 Q1 2024 Loss ratio Cost ratio Loss ratio Cost ratio Gjensidige
Slide 25: General insurance – cost ratio and loss ratio per segment
Appendix General insurance – cost ratio and loss ratio per segment Sweden Baltics Combined ratio Combined ratio 93.1% 102.1% 101.3% 88.2% 14.4% 15.2% 28.9% 27.7% 73.0% 78.7% 73.2% 73.6% Q1 2023 Q1 2024 Q1 2023 Q1 2024 Loss ratio Cost ratio Loss ratio Cost ratio Gjensidige Forsikring Group 25
Slide 26: Large losses higher than expected
Appendix Large losses higher than expected Large losses (before discounting) Large losses per segment (before discounting) NOK m NOK m 263 476 483 388 188 176 221 24 34 0 10 0 0 9 Q1 2023 Q1 2024 Private Commercial Sweden Baltics CC Expected Reported, before discounting Q1 2023 Q1 2024 CC = Corporat
Slide 27: Large losses development
Appendix Large losses development ~ NOK 1.9bn in large losses expected annually Large losses per segment (before discounting) - (before discounting) actual vs. expected NOK m NOK m 800 263 241 600 176 162 400 200 65 34 7 10 2 0 0 Q116 Q121 Q316 Q117 Q317 Q118 Q318 Q119 Q319 Q120 Q320 Q321 Q122 Q322
Slide 28: Run-off gains 0.7 percentage points
Appendix Run-off gains 0.7 percentage points NOK m 163 119 37 17 30 17 17 (9) (33) (226) Private Commercial Sweden Baltics Corporate Centre Q1 2023 Q1 2024 Gjensidige Forsikring Group 28
Slide 29: Run-off
Appendix Run-off Run-off % of Insurance revenue1 Run-off gains beyond 10% expected level Q418 8% Motor TPL and Motor TPL (Norway) and WC 6% WC (Norway) (Norway, Denmark) 4% Group life and Motor BI (Norway) Liability and Accident (Denmark) 2% WC and disease (Norway) 0% (2%) Run-off (%), net Average 1
Slide 30: Quarterly insurance service results - seasonality in Nordic general insurance
Appendix Quarterly insurance service results - seasonality in Nordic general insurance NOK m 2 000 1 000 0 Q1 Q2 Q3 Q4 2022 904 1,667 1,864 1,101 2023 1,115 1,509 1,111 734 2024 704 2022 2023 2024 Gjensidige Forsikring Group 30
Slide 31: Gross written premiums
Appendix Gross written premiums +8.7% +13.8% +1.0% +18.4% NOK m 10,925 9,596 4,146 4,506 673 679 433 513 128 170 Private Commercial Sweden Baltics Corporate Centre Q1 2023 Q1 2024 Gjensidige Forsikring Group 31
Slide 32: Norwegian Natural Perils Pool in brief
Appendix Norwegian Natural Perils Pool in brief Details regarding the pool Objects covered • As per 1.1.2024 the premium rate is set to 0.065 per • Fire insurance coverage for buildings and contents in thousand of the fire insurance amount. No change Norway includes coverage for natural catastrophes
Slide 33: Handling of natural perils claims
Appendix Handling of natural perils claims Details regarding the pool Gjensidige specific • The customers report claims to own insurance • Gjensidige is a reinsurer for the pool, for its own company market share • The insurance company reports claims to Finance • Natural perils claims are booked in
Slide 34: Reinsurance – overview valid as from 2024
Appendix Reinsurance – overview valid as from 2024 • Reinsurance is purchased for protection of the Group’s capital position and is primarily a capital management tool. • General retention level per loss/loss occurrence is NOK/DKK/SEK 100m (for the first loss the retention is NOK/DKK/SEK 200m). • Fo
Slide 35: Practical example, natural perils claim in Norway
Appendix Practical example, natural perils claim in Norway • A natural perils event covered by the Norwegian Natural Perils Pool occurs and is defined by Finance Norway as a single event. The total industry claim exceeds NOK 1,500m. • Gjensidige’s share of the NOK 1,500 claim is allocated according
Slide 36: Investment strategy supporting high and stable nominal dividends
Appendix Investment strategy supporting high and stable nominal dividends Match portfolio Key characteristics • Duration and currency matching versus technical • Limited risk appetite provisions • Fixed-income: • Credit element for increased returns • Currency hedging vs NOK ~ 100% • Some inflation
Slide 37: Investment portfolio
Appendix Investment portfolio Asset class Investments, key elements1 Benchmark Match portfolio NBP Norwegian RM1-RM3 Duration 3Y Index - NORM123D3 Fixed-income NOK Corporate and government bonds (Alternatively: a Norwegian IG fund with 3 year duration) Fixed-income DKK Covered Bonds and government b
Slide 38: Asset allocation – as at 31.03.2024
Asset allocation – as at 31.03.2024 Match portfolio Free portfolio • NOK 38.7 bn • NOK 27.4 bn • Average duration: 2.9 years • Average duration fixed-income instruments: 2.1 years • Average yield: 4.3% • Average yield: 4.5% Fixed-income – short duration: 46% Fixed-income NOK: 57% Global investment g
Slide 39: Credit and counterparty risk
Appendix Credit and counterparty risk Total fixed income portfolio • The portfolio consists mainly of securities in Split – Rating Match portfolio Free portfolio NOK bn % NOK bn % rated companies with high creditworthiness AAA 15.8 40.8 4.7 18.4 (Investment grade) AA 2.3 5.9 9.6 38.0 A 9.3 24.1 4.9
Slide 40: Capital position per operational areas
Appendix Capital position per operational areas NOK bn Approved partial internal Approved partial internal Own partial internal Own partial internal Gjensidige model (Group) model (general model (Group)1 model Pensjonsforsikring insurance) (general insurance)1 Eligible own 21.9 19.3 22.1 19.5 2.5 fu
Slide 41: Solvency II eligible own funds
Appendix Solvency II eligible own funds Bridging the gap between IFRS1 equity and Solvency II capital NOK bn Figures as at 31.03.2024. Assumed dividend of 80% of profit. GPF = Gjensidige Pensjonsforsikring AS. Miscellaneous: Main effects are related to the guarantee scheme provision. 1) IFRS® Accoun
Slide 42: Gjensidige continues to work for full approval of own partial internal model
Appendix Gjensidige continues to work for full approval of own partial internal model (PIM) Main differences between approved and own PIM NOK bn Approved Own PIM • Windstorm model: Approved PIM based on standard PIM (Group) 1) (Group) 2) formula. More validation required for approval. Eligible own f
Slide 43: Solvency II sensitivities for the approved partial internal model
Appendix Solvency II sensitivities for the approved partial internal model 187% 184% 177% 174% 180% 173% 178% 167% 171% 100% Solvency II ratio Equity Interest rate Spread Inflation (-20%/20%) (-100 bps/+100 bps) (-100 bps/+100 bps) (-100 bps/+100 bps) Figures as at 31.03.2024. The legal perspective
Slide 44: Subordinated debt capacity – Gjensidige Forsikring Group
Appendix Subordinated debt capacity – Gjensidige Forsikring Group Principles for capacity Capacity and utilisation T1 T2 Constraint • Tier 1 remaining capacity is NOK 1.2 - 1.5bn • Utilised Tier 1 debt capacity: NOK 2.0bn Max 20% of Max 50% of SCR less Must be satisfied at SII Tier 1 capital other T
Slide 45: Annualised return on equity 14.4 per cent
Appendix Annualised return on equity 14.4 per cent Equity (NOK m) Annualised return on equity (%) 18.2 14.4 2023 YTD 2024 Bridge shows main elements in equity development. Gjensidige Forsikring Group 45
Slide 46: Market leader in Norway
Appendix Market leader in Norway Market share – Total market Market share – Commercial Market share – Private 23.6% 30.7% 20.4% 25.3% 18.8% 14.5% 11.7% 5.7% 4.3% 4.4% Gjensidige: 26.3% If: 21.3% Tryg: 13.4% Fremtind: 14.7% Eika: 4.0% Frende : 3.3% Gjensidige If Tryg Fremtind Protector Gjensidige Fre
Slide 47: Growth opportunities outside Norway
Appendix Growth opportunities outside Norway Market shares Denmark Market shares Sweden Market shares Baltics Gjensidige: 7.1% Tryg: 24.2% Gjensidige: 1.8% Lansforsäkringar: 30.2% Gjensidige: 6.7% Vienna: 26.3% Topdanmark: 14.3% Alm.Brand: 8.3% If: 17.8% Trygg Hansa: 17.3% PZU: 25.6% Ergo: 13.6% Cod
Slide 48: Gjensidige Pensjonsforsikring - Number four position in Norwegian defined contribution pension market
Appendix Gjensidige Pensjonsforsikring - Number four position in the growing Norwegian defined contribution pension market Market shares – total AUM NOK 466 bn • Well positioned for continued profitable organic 40% growth 30% • Core focus on SME customers 20% • Strong profitability 10% • Multi-chann
Slide 49: Gjensidige Pensjonsforsikring
Appendix Gjensidige Pensjonsforsikring Group policy 1 and company portfolio Number of occupational pension members In thousand Currenct bonds: 80% 304 308 Fixed income - short 243 duration: 17% Property exsposure: 3% 156 165 NOK 9.7 bn Equity funds: 0.3% 2020 2021 2022 2023 Q1 2024 Figures as at 31.
Slide 50: Ownership
Appendix Ownership 10 largest shareholders1 Geographical distribution of shares2 No Shareholder Stake (%) Norway: 40.5% North America: 21.4% 1 Gjensidigestiftelsen 62.2 UK: 9.5% 2 Folketrygdfondet 4.4 Asia: 2.4% 3 Deutsche Bank 2.9 Europe excl. UK and Norway: 25.5% 4 BlackRock Inc 2.7 RoW: 0.9% 5 Sc
Slide 51: Disclaimer
Disclaimer This presentation and the information contained herein have been prepared by and is the sole responsibility of Gjensidige Forsikring ASA (the "Company”). Such information is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to
Slide 52: Investor Relations
Investor Relations Mitra Hagen Negård Marius Michelsen Fjellbo Address Head of Investor Relations Investor Relations Officer Schweigaards gate 21, Mobile: (+47) 95 79 36 31 Mobile: (+47) 99 56 75 93 P.O. Box 700 Sentrum, NO-0106 OSLO mitra-hagen.negard@gjensidige.no marius-michelsen.fjellbo@gjensidi
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