Gjensidige Forsikring Asa · OSL:GJF
Gjensidige Forsikring Asa — Investor Presentation (November 2022)
28 slides from Gjensidige Forsikring Asa's investor presentation, Nov 22, 2022
Slide 1: An introduction to the main impacts on Gjensidige Group's accounts
• An introduction to the main impacts on Gjensidige Group’s accounts Webinar, 22 November 2022
Slide 2: 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 3: Speakers panel
Karen-Elise Berg Simen Gaarder Christoffersen Chief Actuary Chief Accountant Speakers panel This presentation contains alternative performance measures (APMs). APMs are described on www.gjensidige.no/reporting in document named APMs Gjensidige Forsikring Group Q3 2022.
Slide 4: Jostein Amdal, Chief Financial Officer
Jostein Amdal, Chief Financial Officer
Slide 5: Key messages on IFRS 17 impact
● No major impact on earnings ● No change to solvency position ● No change to dividend policy ● Lower 2022 opening balance of equity ● Minor changes in General Insurance results ● Some changes in KPIs for General Insurance ● More volatile Pension results ● Potential tax effect, pending regulatory de
Slide 6: Annual financial targets from 2023
Annual financial targets from 2023 Unchanged Unchanged Combined ratio < 84% Return on Equity > 20% Solvency ratio Cost ratio < 14% (from < 85%) (from > 19%) 150–200% Primarily due to discounting Minor impact from IFRS 17 Primarily due to higher No change in solvency of all claims reserves interest r
Slide 7: Contract, segment and measurement model
Accounting Contract Segment Measurement model standard Insurance General Premium Allocation IFRS 17 contracts Insurance (GI) Approach (PAA) Insurance Building Block Pension IFRS 17 Revenue1) contracts Approach (BBA) Investment Investment Fair value through IFRS 9 contracts portfolio Pension profit o
Slide 8: Measurements, presentation and terminology
Measurements Presentation and terminology ● Introduction of Insurance service result, similar to Underwriting result ● ● Liability for incurred claims (LIC) replaces claims provisions ○ ● Liability for remaining coverage (LRC) replaces ● premium reserves and provision for unearned premiums ○ • ○ • ○
Slide 9: Equity bridge IFRS 4 to IFRS 17
NOK m Equity Best Discounting of RA added to CSM in Fair value on Deferred tax Equity 1.1.2022 estimate reserves. Positive reserves Pension financial 1.1.2022 (IFRS 4) insurance effect in General assets (IFRS 9 & liabilities Insurance offset 17) (release of by negative excess effect in Pension reser
Slide 10: Discount rates and Risk Adjustment
Discount rates Risk Adjustment ● General Insurance: Swap interest rates ● Percentile approach; ultimate risk ● Pension: EIOPA interest rates ○ 85% per legal entity (95% 1-year risk) ● Choices based on market practice ○ 89% on Group level (97% 1-year risk) ● Good hedge between liabilities and assets
Slide 11: Lower gap with new standards
● Lower gap with new standards ● ○ 2.4 3.4 ● (3.9) 3.5 (1.4) (0.0) ○ ● (5.7) (0.1) (0.2) ○ ○ IFRS Sub- Divi- In- Discounting Risk SII SII Deferred Misc. Eligible equity ordinated dend tangible margin premium technical tax own funds ○ 1.1.2022 debt preliminary assets pro- provisions liability visions
Slide 12: Operational and risk impacts of IFRS 17
● No impact on operations or risk appetite ● Risk diversification reduced due to split of the portfolio into cohorts and groups ● Recognition of loss on onerous contracts ● Profits distributed over the whole coverage period, instead of upon recognition of contracts ● Higher sensitivity to interest r
Slide 13: Karen-Elise Berg Christoffersen, Chief Accountant
Karen-Elise Berg Christoffersen, Chief Accountant
Slide 14: IFRS 17 implementation timeline
Effective from 1.1.2023 Opening balance 1.1.2022 2017 2022 22 November 16 February 28 April 2022 2023 2023 IFRS 17 Project Monthly start up parallel run Webinar and Transition Interim report Mandatory for Group publication of guide according to entities except transition included in IFRS 17 and 9 Gj
Slide 15: Impacts on financial statements and KPIs
Impacts on financial statements and KPIs IFRS 4 Operating income Earned premiums from general insurance Earned premiums from pension Claims Claims incurred etc. from general insurance Claims incurred etc. from pension Operating expenses Operating expenses from general insurance Operating expenses fr
Slide 16: Impacts on financial statements and KPIs
Impacts on financial statements and KPls IFRS 4 Operating income Earned premiums from general insurance Earned premiums from pension Claims Claims incurred etc. from general insurance Claims incurred etc. from pension Operating expenses Operating expenses from general insurance Operating expenses fr
Slide 17: Impacts on financial statements and KPIs
Impacts on financial statements and KPls IFRS 4 Operating income Earned premiums from general insurance Earned premiums from pension Claims Claims incurred etc. from general insurance Claims incurred etc. from pension Operating expenses Operating expenses from general insurance Operating expenses fr
Slide 18: Impacts on financial statements and KPIs
Impacts on financial statements and KPls IFRS 4 Operating income Earned premiums from general insurance Earned premiums from pension Claims Claims incurred etc. from general insurance Claims incurred etc. from pension Operating expenses Operating expenses from general insurance Operating expenses fr
Slide 19: Impacts on financial statements and KPIs
Impacts on financial statements and KPls IFRS 4 Operating income Earned premiums from general insurance Earned premiums from pension Claims Claims incurred etc. from general insurance Claims incurred etc. from pension Operating expenses Operating expenses from general insurance Operating expenses fr
Slide 20: Impacts on financial statements and KPIs
Impacts on financial statements and KPIs IFRS 4 Assets Receivables related to direct operations and reinsurance Reinsurers' share of insurance-related liabilities in general insurance, gross Liabilities Premium reserve in life insurance Provision for unearned premiums, gross, in general insurance Cl
Slide 21: Impacts on financial statements and KPIs
Impacts on financial statements and KPIs IFRS 4 Assets Receivables related to direct operations and reinsurance Reinsurers' share of insurance-related liabilities in general insurance, gross Liabilities Premium reserve in life insurance Provision for unearned premiums, gross, in general insurance Cl
Slide 22: Impacts on financial statements and KPIs
Impacts on financial statements and KPIs IFRS 4 Assets Receivables related to direct operations and reinsurance Reinsurers' share of insurance-related liabilities in general insurance, gross Liabilities Premium reserve in life insurance Provision for unearned premiums, gross, in general insurance Cl
Slide 23: Impacts on financial statements and KPIs
Impacts on financial statements and KPIs IFRS 4 Assets Receivables related to direct operations and reinsurance Reinsurers' share of insurance-related liabilities in general insurance, gross Liabilities Premium reserve in life insurance Provision for unearned premiums, gross, in general insurance Cl
Slide 24: Current KPI, new KPI and change
Current KPI New KPI Change Definition new KPI Loss ratio, gross Insurance claims expenses/ Insurance revenue Net reinsurance ratio Net expense from reinsurance contracts held/Insurance revenue Loss ratio Loss ratio, net Due to discounting and Loss ratio, gross introduction of RA1) + Net reinsur
Slide 25: Loss ratio, cost ratio and combined ratio under IFRS 17
Discounting reduces loss ratio Reclassification reduces cost ratio Improved combined ratio Loss ratio Cost ratio Combined ratio 95% 80% 75.4 % 13.8 % 13.9 % 90.0 % 14% 74.4 % 13.4 % 13.6 % 85% 88.6 % 70% 12.8 % 65.7 % 12% 81.1 % 65.5 % 12.5 % 79.5 % 63.6 % 78.8 % 60% 63.6 % 10% 75% 77.3 % Q1'22 Q2'2
Slide 26: General Insurance and Pension portfolio as at 1.1.2022
NOK bn As at 1.1.2022 Pension General 15.49 15.85 4.74 5.62 5.72 44.31 Group policy Insurance portfolio
Slide 27: Summary
● Fundamental economics of our business remain unchanged ● No major impact on earnings ● No change in solvency position or dividend policy ● Lower equity for opening balance 2022 ● New KPIs and adjusted definitions of some current KPIs ● Revised financial targets from 2023, reflecting new accounting
Slide 28: Investor Relations contacts
Mitra Hagen Negård Marius Michelsen Fjellbo Head of Investor Relations Investor Relations Officer Mitra-Hagen.Negard@gjensidige.no Marius-Michelsen.Fjellbo@gjensidige.no Mobile: (+47) 957 93 631 Mobile: (+47) 995 67 593 Address: Schweigaards gate 21, PO Box 700 Sentrum, 0106 Oslo, Norway, gjensidige
Gjensidige Forsikring — Investor Presentation (November 2022) on 6ix