Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — Q4 2020 Earnings Presentation
34 slides from Protector Forsikring ASA's earnings presentation, Feb 4, 2021
Slide 1: Disclaimer
Disclaimer This presentation and the information contained herein have been prepared by and is the sole responsibility of Protector Forsikring ASA (the "Company”). Such information is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to a
Slide 2: Q4 2020 and preliminary year end results
Q4 2020 and preliminary year end results Investor presentation Oslo, February 4th 2021 Sverre Bjerkeli Chief Executive Officer
Slide 3: Our new CEO as of September 2021
Our new CEO as of September 2021 …when co-founder and CEO leaves according to retirement plan • Henrik is 38 years old • Educated from University of Colorado Boulder • Worked in Protector since 2007 • Currently in lead of UK business and Public sector Nordic • Have been deeply involved in establishi
Slide 4: 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 Innovative Bold Committed
Slide 5: Result highlights 2020
Result highlights 2020 A year for the history books – earnings per share at NOK 12 • Net combined ratio at 94.8% (103.8% in 2019) – Turnaround • GWP growth at 8% (2% in local currencies) – Profitability comes first • Average price increases Nordics at 13.7% • Investment return of MNOK 970, or 8.0% •
Slide 6: Result highlights Q4
Result highlights Q4 Investments returning MNOK 448, and growth at 33% • Net combined ratio at 95.4% (111.1% in Q4 2019) • GWP growth at 33% (30% in local currencies), in a small quarter • Average price increases Nordics at 9.5% • Gjerdrum land slide has a effect of MNOK 45 • Net investment return o
Slide 7: Volume update
Volume update High Nordic client churn turning to normal in Q4 in MNOK • GWP of MNOK 5 516 in 2020 (MNOK 5 100) Business unit FY '20 FY '19 Q4 '20 Q4 '19 • MNOK 416 (8%) GWP growth (2% in LCY) Sweden 1 607 1 550 249 191 • Driven by UK and Nordic price increases Norway 1 383 1 540 134 96 UK 1 328 853
Slide 8: Claims update
Claims update Claims ratio at 84.6% – Denmark lagging behind FY '20 FY '20 FY '19 FY '19 Business unit • Claims ratio improving significantly due to Nordic price and clean up activities Gross Net Gross Net Norway 81 % 80 % 100 % 99 % Sweden 79 % 80 % 90 % 84 % • Run-off losses at 2.2% in 2020 (-1.2%
Slide 9: Large losses and run-off
Large losses and run-off Gross large losses1 of MNOK 156 (11.1%) Gross large loss ratio excl. WC2 • Gross large losses of MNOK 156, or 11.1% in Q4 20,4% • Gross large losses at 8.8% in 2020 12,6% 12,0% • Gross large loss definition slightly changed; 11,1% • Reserve changes > MNOK 10 included, exclud
Slide 10: Protector Combined Ratio
Protector Combined Ratio Net CR at 94.8% in 2020 – underlying better FY 2020 Norway Sweden Denmark UK Finland Protector FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 Gross premium written 1 383 1 540 1 607 1 550 973 937 1 328 853 226 221 5 516 5 100
Slide 11: Gjerdrum land slide – 10 people have lost their lives
Gjerdrum land slide – 10 people have lost their lives Largest Norwegian landslide in recent times – a small municipality left wounded Source: NTB • Supporting our client Gjerdrum kommune is nr. 1 priority • Norwegian Natural Perils Pool arrangement distribute risk and claims • MNOK 900 in total esti
Slide 12: COVID-19 effects 2020 and onwards
COVID-19 effects 2020 and onwards Approx. 1% positive effect in 2020, neutral impact expected going forward • Some positive effects from frequency business (motor) • Corporate fleets still on the road since logistics are mainly intact • Some segments driving less (taxi and bus) • Idle vehicles resul
Slide 13: Cost development and Nordic cost program
Cost development and Nordic cost program Volume decrease in Nordics put pressure on cost advantage • Still cost leader in the world but advantage shrinking in the Nordics • Cost “the real way” is what you (and we) should focus on • Gross cost incl. claims handling ex. broker commissions1 • Long term
Slide 14: Volume 2021 and underlying realities
Volume 2021 and underlying realities 10% premium growth in local currencies in 2021 • 5% premium growth on January 1st (4% in LCY), despite phasing out MNOK 200 (9%) • Exiting WC Health and Welfare segments in Norway – government decision to including Covid-19 in workers’ compensations product • Exi
Slide 15: Combined ratio considerations 2021
Combined ratio considerations 2021 Improvements on it’s way 2020 net combined ratio at 94.8 % - Net run-off losses 2021 vs. 2020, prudent reserve history 2.2 %-points - Large loss ratio higher than normalised 7% 1.8 %-points + Covid-19 effects 1 %-points + Some negative surprises normally occur – “s
Slide 16: Investments
Investments Investment is core
Slide 17: Investments
Investments AUM up 23% - CAGR last 5 years at 15.2% 13 498 13.5% 10 925 10.1% 9 373 9 535 8 975 9.9% 17.6% 7 545 6 637 22.1% 12.5% 86.5% 4 958 89.9% 11.6% 4 000 90.1% 13.2% 82.4% 3 193 8.9% 87.5% 77.9% 2 355 2 022 17.8% 88.4% 1 635 24.6% 1 222 86.8% 25.1% 91.1% 16.8% 82.2% 74.9% 75.4% 83.2% 2008 200
Slide 18: Investment performance
Investment performance Gain of MNOK 970 in 2020 and MNOK 448 in Q4 • 2020 return on investment portfolio at 8.0%, or MNOK 970 YTD investment results • Equity portfolio returning 36.1%, ex. put options • Bond portfolio has gained 5.0% 40% 30% 20% 36.1% 10% 8.0% 5.0% • Q4 return on investment portfoli
Slide 19: Bond portfolio statistics
Bond portfolio statistics 5% return in 2020 Portfolio data 31.12.20 30.09.20 31.12.19 Size bond & cash eq. (MNOK)1 11 603 11 788 9 757 • Bond portfolio returning 5.0%, or MNOK 536 in 2020 Avg. ref. rate (NIBOR, STIBOR, etc.) 0.2% 0.1% 1.2% • Returning 0.5%, or MNOK 58 in quarter Avg. spread/risk pre
Slide 20: Equity portfolio statistics
Equity portfolio statistics Portfolio returning 36.1% in 2020 • Equities gaining 36.1% in 2020, or 447 MNOK Cumulative TWR in % – Equity portfolio vs. benchmarks (08.10.2014 – 31.12.2020) NOK m • Equities gaining 29.5% in Q4, following a strong Q3. 2 000 180% 1 800 160% • Equity share at 13.5%, up f
Slide 21: 2020 – an investment year for the history books
2020 – an investment year for the history books “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble” - Warren Buffett 1 2 3 2020 investments – an outstanding year. Exceeding our long-term earnings power Disciplined investment approach and watchlist-preparations
Slide 22: Capital allocation alternatives – more to be said at CMD
Capital allocation alternatives – more to be said at CMD Goal to maximize shareholder return Main capital allocation alternatives 1 2 3 4 5 Insurance Investments Debt repayments Buy backs Dividends underwriting Equities & Bonds (or cash as an option) • Determine minimum hurdle rate Capital • Calcula
Slide 23: 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 Innovative Bold Committed
Slide 24: Profit and loss
Profit and loss 2020 profit of MNOK 982 – EPS at NOK 12 NOKm Q4 2020 Q4 2019 FY 2020 FY 2019 Gross premiums written 728.9 548.8 5 516.3 5 100.5 8% GWP growth Gross premiums earned 1 404.5 1 315.6 5 379.6 4 995.8 Gross claims incurred (1 155.3) (1 363.2) (4 424.6) (4 723.9) Earned premiums. net of re
Slide 25: Balance sheet
Balance sheet SCR-ratio at 188% In millions 31.12.2020 31.12.2019 Owner-occupied property 0.0 12.8 SCR-ratio composition Financial assets 11 988.6 9 219.8 4 500 SCR-ratio: Derivatives 47.9 32.6 Bank deposits 263.2 343.3 188% Other assets 2 554.9 2 705.2 4 000 Discontinued operations 1 895.7 2 428.5
Slide 26: Solvency II
Solvency II Composition of SCR: Eligible SII capital: • Net insurance risk 69% • No dividend subtracted from eligible capital • Net market risk 22% • Guarantee provision subtracted from own funds • Other risks 9% SCR composition Eligible SII capital 4 500 6 000 4 000 276 102 5 000 430 843 1 473 3 50
Slide 27: Distribution to shareholders
Distribution to shareholders NOK 3 per share for 2020 • Dividend of MNOK 246.9 (NOK 3 per share) to be considered by the Board in connection with the approval of annual accounts • Subject to approval by the Norwegian Financial Supervisory Authority • SCR ratio adjusted for such a dividend would be 1
Slide 28: Summary 2020 and 2021 outlook
Summary 2020 and 2021 outlook 10% growth and CR 90-92% expected in 2021 • Profit after tax of MNOK 982 (MNOK -5) – EPS at NOK 12 • 2020 dividend of NOK 3 per share, and quarterly assessment going forward • We expect 10% growth in 2021 and a combined ratio within the range of 90-92%. • Welcome to our
Slide 29: 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 Innovative Bold Committed
Slide 30: PROTECTOR insurance
PROTECTOR insurance
Slide 31: Appendix
Appendix PROTECTOR
Slide 32: Discontinued business
Discontinued business CR Protector incl. COI at 94.5% for 2020 – GWP take-down slower than expected FY 2020 COI Protector incl. COI FY 2020 FY 2019 FY 2020 FY 2019 Gross premium written 240 356 5 757 5 457 Gross premium earned 240 356 5 620 5 352 Net premium earned 169 224 4 782 4 372 Gross claims r
Slide 33: Profit & loss – incl. discontinued business
Profit & loss – incl. discontinued business 2020 profit of MNOK 982 – EPS at NOK 12 NOKm Q4 2020 Q4 2019 FY 2020 FY 2019 Gross premiums written 778.2 617.8 5 756.7 5 456.6 Gross premiums earned 1 453.8 1 384.6 5 619.9 5 351.9 Gross claims incurred (1 210.9) (1 460.4) (4 650.8) (4 993.7) Earned premi
Slide 34: Key ratio description
Key ratio description Ratio (1)Claims ratio, net of reinsurance (2)Expense ratio, net of reinsurance (3)Combined ratio, net of reinsurance (4)Gross claims ratio (5)Gross expense ratio (6)Gross combined ratio (7)Retention rate (8)Earning per share Ratio calculation (1)Claims incurred in % of earned p