Protector Forsikring Asa · OSL:PROT
Protector Forsikring Asa — Investor Day (August 2017)
99 slides from Protector Forsikring Asa's investor day presentation, Aug 22, 2017
Slide 1: Preparing for continued growth
Preparing for continued growth August 22nd 2017
Slide 2: Agenda
Preparing for continued growth Agenda 10.00-10:15: Coffee and snack 10.15-11.15: Company update and claims handling 11.15-11.45: Investments 11.45-12:00: Coffee and snack 12.00-12.30: IT and digitalization 12.30-13.00: UK 13.00-13.15: Summary and Q&A Questions allowed through presentation
Slide 3: Management Strengthened
Management Strengthened Continuity and fresh blood Sverre Bjerkeli (57) – Chief Executive Officer Henrik Høye (35) – Dir. Commercial & Public NO / Project Lead UK CEO since 2006 Employee since 2007 Protector since 2004 Director Public sector Director consumer and commercial sector Storebra
Slide 4: Company update with claims handling in focus
Preparing for continued growth 10.15-11.15: Company update with claims handling in focus 1) Keep up the good work 2) Strengthen the balance sheet 3) Strengthen competitive position through Next Level claims handling - Falcon
Slide 5: 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 5
Slide 6: Challenger Strategy 2020
Strengthen competitive position Challenger Strategy 2020 Lets further develop our DNA – Next Level • Don't change Strategy • Investments are Core, manage Risk • Strong balance sheet important • Growth comes before CR… must be balanced! • Focus Claims Handling and top 8 Next Level Management training
Slide 7: Strategy 2017-2020
Strengthen competitive position Strategy 2017-2020 Top 8 priorities 1. Claims Handling, great potential • Internal quality development (RR, Breitling, CleanDesk etc.) • 40 %/15% efficiency increase (Commercial/COI) - ultimo 16 to ultimo 19 2. Profitable growth in Nordic • Protakst – New technical so
Slide 8: Cost leader
Keep up the good work Cost leader Less than half the cost of competitors Creating cost leadership In-house IT services • Well defined and consistent strategy, understand value • Cost ratio of 1.1% vs 3.2% for industry (Gartner Inc.) chains and competent people to implement • No legacy, modern platfo
Slide 9: Quality leader in the Nordic market
Keep up the good work Quality leader in the Nordic market Broker Satisfaction Surveys • Consistently on top when brokers rank satisfaction with service and offerings. True for Norway and Sweden • Quality leader in Denmark three years in a row. Quality setback in Denmark in 2016. Still top three on q
Slide 10: Volume growth
Keep up the good work Volume growth Strong and prudent Sustainable growth • Profitability comes first volume growth second, but… • Low capex entering new markets • Reduced risk appetite in Denmark in 2017 – single-digit growth expected • Growth potential 2017 mainly in Sweden and UK – further streng
Slide 11: Profitability
Keep up the good work Profitability Back on track 2017 – Avg. CR 2005-2016: 88.3% Key comments • Combined ratio in 2016 of 97.0% was not satisfactory and was due to profitability issues in Denmark and cleanup in COI • Prudent and disciplined underwriting • Reinsurance used to reduce risk and reduce
Slide 12: Strong investment result over the business cycle
Keep up the good work Strong investment result over the business cycle Better than peers Overview • Risk management through; Operational routines, mandate given by board, FSA stress test quarterly, internal stress test • Investment portfolios in Norway, incl. Protector’s, have enjoyed avg. NIBOR rat
Slide 13: Commercial Lines of Business
Keep up the good work Commercial Lines of Business 61% of revenues Summary Market drivers • Corporate clients minimum size NOK 0.2m • Cost and quality leadership • Standardized products; Workers Compensation, Group Life, • Protector’s market appetite in Nordics is > NOK 15bn Other Insurance, Acciden
Slide 14: Public lines of business
Keep up the good work Public lines of business 24% of revenues Summary Market drivers • Protector is the market leader in the Nordics • Few players and tough market conditions • Insuring more than 600 municipalities • Tender processes are governed by public procurement • 280 Norwegian, 240 Swedish a
Slide 15: Change of ownership insurance (COI)
Keep up the good work Change of ownership insurance (COI) 15% of revenues The product Key market drivers • Insurance linked to the property • Market situation; few players & with critical mass • Covers substantial hidden defects for 5 years • High entry barriers; Reputation, distribution access and
Slide 16: Protector vs IF Industrial and Tryg Corporate
Keep up the good work Protector vs IF Industrial and Tryg Corporate Closing the gap GWP vs competitors 2012-2016 5,500 Protector is gaining volume on the expense of our 5,000 competitors – growing through: 4,500 4,000 3,500 PRF vol. 1) Cost and quality leadership 3,000 2,500 If vol. 2) Diversified p
Slide 17: Protector vs IF Industrial and Tryg Corporate
Protector vs IF Industrial and Tryg Corporate Protector with best Combined Ratio • Beating our competitors at a level playing field Combined Ratio ’12 – H1‘17 • Same product mix 100.0 % 98.0 % • Same broker based sales channel 96.0 % • Same commission structure 94.0 % • Same average size of clients
Slide 18: Nordic Champion
Keep up the good work Nordic Champion Attacking UK 18
Slide 19: Keep up the good work
Keep up the good work Keep up the good work Profitable growth + Investments = Good results Compounded total return last 10 years* (%) 1,250 1,151.8 • The last 10 years only AF Gruppen has 1,050 performed better than Protector in the 877.2 787.9 Norwegian stock market 850 764.8 679.8 650 450 250 57.3
Slide 20: Preparing for continued growth
Preparing for continued growth 10.15-11.15: Company update with claims handling in focus 1) Keep up the good work 2) Strengthen the balance sheet 3) Strengthen competitive position through Next Level claims handling - Falcon
Slide 21: Preparing for continued growth
Preparing for continued growth 10.15-11.15: Company update with claims handling in focus 1) Keep up the good work 2) Strengthen the balance sheet 3) Strengthen competitive position through Next Level claims handling - Falcon
Slide 22: Finished building capital
Strengthen the balance sheet Finished building capital Ready to challenge Solvency based reinsurance solution Tier 1 Tier 2 capital capital SCR coverage ratio of 186%* The Challenger *Including Solvency based reinsurance solution (pr. 30.06.2017) 22
Slide 23: Raising capital
Strengthen the balance sheet Raising capital Tier 1 and Tier 2 successfully placed • Debt totalling NOK 1250m has been raised since end of April ‘16 • NOK 500m May ‘16 • NOK 750m March ’17 • In less than 1 year, the price Protector had to pay for Tier 2 dropped from 370 bps to 290 bps • On the back
Slide 24: Protector vs RSA
Strengthen the balance sheet Protector vs RSA Better bond terms than RSA Transaction background Simple comparison RSA vs Protector Full year 2016 PRF RSA • Both RSA Insurance Group and Protector Forsikring issued Cost ratio 6.8 % 15.2 % Tier 1 capital ultimo March ’17 in open market transactions Com
Slide 25: Balance sheet Q2 2017
Strengthen the balance sheet Balance sheet Q2 2017 Strong & growing fast [1.000.000 NOK] 30.06.2017 30.06.2016 31.12.2016 SCR ratio composition Owner-occupied property 13,7 13,6 13,7 (Standard formula calculation) Financial assets* 11 398,3 8 261,5 8 537,6 Bank deposits 285,5 45,9 204,3 3500 177 % O
Slide 26: Solvency II
Strengthen the balance sheet Solvency II SCR & Capital Composition of SCR: Available SII capital: • Net insurance risk 52 % • Assumed dividend of 40 % on YTD17 result • Net market risk 39 % • Guarantee provision subtracted from own • Other risks 9 % funds SCR composition Available SII capital 3,500
Slide 27: Solvency based reinsurance solution
Strengthen the balance sheet Solvency based reinsurance solution Cushion against negative solvency changes – effective from July 1st • Covers all lines of businesses – Solvency Margin Net Solvency Margin Gross across all jurisdictions 240% 10% 50% 10% • Signed by both parties and started Cession Ces
Slide 28: Dividends on hold
Strengthen the balance sheet Dividends on hold No payments from 2018 suggested • As the Board is of the opinion that the company's core Dividend of 40%* markets provide good opportunities for strong profitable Base growth in the coming years, it believes that the company 200% and the shareholders wi
Slide 29: Balance sheet summary
Strengthen the balance sheet Balance sheet summary Prepared for continuous growth Building blocks Capital consumption No dividends Tier 1 capital Continued strong growth Tier 2 capital Increased retention (NOK 100m) Increased investment risk when Solvency based reinsurance solution attractive SCR co
Slide 30: Long-term financial objectives
Strengthen the balance sheet Long-term financial objectives Higher SCR target (>150) Long term financial objectives • Net combined ratio: 92% • Solvency II capital ratio: >150 (New) • Return on Equity: >20% • GWP growth rate 2017-2019: 15% Net Combined Ratio Return on Equity* GWP Growth 40% 35% Targ
Slide 31: Profitable growth + Investment return
Strengthen the balance sheet Profitable growth + Investment return = Success 31
Slide 32: Preparing for continued growth
Preparing for continued growth 10.15-11.15: Company update with claims handling in focus Keep up the good work Strengthen the balance sheet Strengthen competitive position through Next Level claims handling - Falcon
Slide 33: Preparing for continued growth
Preparing for continued growth 10.15-11.15: Company update with claims handling in focus Keep up the good work Strengthen the balance sheet Strengthen competitive position through Next Level claims handling - Falcon
Slide 34: Do things right, do right things, prepare in due time
Strengthen competitive position • Do things right • Do right things • Prepare in due TIME 34
Slide 35: Ambition - World Leading Claims Handling
Strengthen competitive position Ambition - World Leading Claims Handling Table of Contents • Customer quality • Rolls-Royce • F17 • Clean Desk • Instant Feedback • Claims handling cost • Falcon 2020 Page 35
Slide 36: Quality leadership
Strengthen competitive position Quality leadership All criteria defined and measured in every claim 95 claims handlers in Protector handled approx. 80 000 claims in 2016. Large surveys show that five criteria are most important to customers in a claim: − TIME − Tone-of-voice − Professional subst
Slide 37: Customer Quality leadership
Strengthen competitive position Customer Quality leadership Also in claims handling Quality leadership Broker Satisfaction Surveys Quality leader – 11 years in a row Quality leader – 6 years in a row Consistently on top when brokers rank satisfaction with service and offerings. True for Norway and S
Slide 38: What is Rolls-Royce?
Strengthen competitive position What is Rolls-Royce? Reducing leakage and Recourse Definition Reducing leakage and Recourse Goal • Not picking up bills others should pay • Creating win-win situations Client/Protector • Target number of savings and volume Why? • Happy customers • Better insurance – d
Slide 39: Rolls-Royce
Strengthen competitive position Rolls-Royce On track to NOK 400m • Goal of NOK 400m of savings in 2017 • NOK 260m saved YTD – on track • All countries with increased RR in 2017 – 13 250 RR’s in 2017 (!) • Norway on top • Sweden moving faster • Denmark also going strong 39
Slide 40: Formel 1 2017 (F17)
Strengthen competitive position Formel 1 2017 (F17) Motor claims handling Sweden • Vision to ”handle twice the amount of claims per FTE with increased quality” • Started 2014 • Top-down vision based on top performers and external benchmarking • Bottom-up process involving all claims handlers • Indiv
Slide 41: F17 on track
Strengthen competitive position F17 on track Efficiency doubled in 3 years • Efficiency on target doubled in three years • Internal quality before target, large improvements 41
Slide 42: Clean Desk-project
Strengthen competitive position Clean Desk-project No delays in Claims Handling – without compromising on quality Company project, started in 2016 Clean Desk-standards defined on every Claims Handling-team. All Claims… • Answered within … • Handled within … • Settled within … Never compromise on qua
Slide 43: Clean Desk 2017
Strengthen competitive position Clean Desk 2017 Moving towards 100 % Clean Desk Jan Feb Mar Apr May Jun Jul • Total score of 98 % in July ’17 – Eierskifte 96 % 95 % 99 % 99 % 98 % 98 % 97 % best month so far, no reds Skadeoppgjør 91 % 98 % 97 % 98 % 97 % 98 % 99 % Prosess 100 % 92 % 100 % 100 % 98 %
Slide 44: Instant Feedback implementations
Strengthen competitive position Instant Feedback implementations Enhancing customer experience Project started February 2017 – live in April Norway Sweden Denmark Instant feedback pilot Instant feedback pilot Instant feedback pilot launched on Motor in launched on Liability launched on Person in May
Slide 45: Protector is world leading on cost
Strengthen competitive position Protector is world leading on cost However, behind peers in claims handling Gross cost ratio 2011 2012 2013 2014 2015 2016 If P&C 17,3% 16,9% 16,8% 16,7% 13,0%* 16,6% RSA scandinavia 17,6% 18,6% 19,5% 21,2% 16,4% 14,8% Protector is clearly ahead on gross cost ratio….
Slide 46: World leading claims handling
Strengthen com World leading claims handling 2017-2020
Slide 47: World Leading Claims Handling
Strengthen competitive position World Leading Claims Handling Peregrine Falcon (Vandrefalk) • The Peregrine falcon can reach 320 km/h, which makes it the fastest animal in the world • The bird uses its velocity and body weight to kill its prey by smashing into it • Under ideal conditions the Peregri
Slide 48: Falcon 2020
Strengthen competitive position Falcon 2020 Project plan Purpose, scope & delimitations KPI’s • World leading claims handling • # claims per product/FTE • 40% efficiency increase, halved lead time, increased customer satisfaction and improved claims cost control • Broker satisfaction index • Coordin
Slide 49: Falcon 2020 summary
Strengthen competitive position Falcon 2020 summary Strengthen competitive position • Cost and quality leadership Profitable growth Top 3 in all our segments • To ensure cost leadership claims handling is crucial • Good basis for new ambitions Rolls-Royce Clean Desk Customer quality F17
Slide 50: Preparing for continued growth
Preparing for continued growth 10.15-11.15: Company update with claims handling in focus Keep up the good work Strengthen the balance sheet Strengthen competitive position through Next Level claims handling - Falcon
Slide 51: Investments
Preparing for continued growth 11.15-11.45: Investments
Slide 52: Investments
Investments Beautiful “float” growing rapidly Net financial assets and float “Insurers receive premiums upfront 10000 9089 and pay claims later. ... This collect- 9000 8000 now, pay-later model leaves us 7000 holding large sums — money we call 6000 "float" — that will eventually go to 5000 others. M
Slide 53: The Investment Challenger
The Investment Challenger Investment Strategy Equities • Long term oriented (5 years to forever) • Patience – willing to wait for great opportunities Philosophy • Concentrated portfolio (10-20 holdings) • Focus on continuous improvement of process • Great companies • Strong management Type of invest
Slide 54: Sales development
Sales development The story continues 1 2 3 4 5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 201120122013201420152016 2011 2012 2013 2014 2015 2016 2013 2014 2015 2016 2005 2007 2009 2011 2013 2015 6 7 8 9 10 2008 2009 2010 2011 2012 2013 2014 2015 2016 200520072009201120132015 2011 2
Slide 55: Historical sales and EPS growth development
Historical sales and EPS growth development Portfolio of great companies Acc. portfolio sales growth 2006 – 2016, CAGR 19,5% Accumulated portfolio EPS growth 2006-2016, CAGR 22,2% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Top 10 Hol
Slide 56: Portfolio statistics
Portfolio statistics Equity portfolio vs. OSEBX end of June 2017 Key Figures Equity Portfolio OSEBX Performance – In-house managed portfolio vs. benchmarks (08.10.2014 – 30.06.2017) Performance 121,6% 13,3% 130 Dividend yield 2,3% 4,1% 121.63 P/E Next 12m* 13,9 14,8 110 3 yr sales CAGR 27% -2% 3 yr
Slide 57: EPS growth and performance
EPS growth and performance Go hand in hand Key comments Protector Equity Portfolio vs OSEBX (TWR and EPS growth) from Q4’14 to H1’17 • Strong historic relationship between 170 CMD 2016 EPS growth and share performance 150 146.20 130 121.63 • Share performance has been lagging 110 EPS development for
Slide 58: The Investment Challenger
The Investment Challenger Investment strategy Fixed Income • Well diversified investment grade portfolio • No currency risk Philosophy • Strive toward low turnover and volatility • Search for pricing and rating inefficiencies in the market • Sound companies Type of investments • Trustworthy manageme
Slide 59: Fixed income portfolio data
Fixed income portfolio data Reduced risk, A- vs BBB+ last CMD – no reaching for yield Factor 30.06.2017 Total bond portfolio comments Market value (NOK m) 7 461 • Significant spread tightening Yield (%) 2,3 Spread (bp) 163 Average rating A- • Reduced risk in bond portfolio Duration (yrs) 0,4 Credit
Slide 60: Internally managed Fixed Income portfolio
Internally managed Fixed Income portfolio Sector distribution development Corporate HY market 30% 27% 25% 20% 15% 12% 10% 7% 6% 6% 6% 4% 4% 4% 4% 3% 5% 3% 3% 2% 2% 2% 2% 1% 1% 1% 0% 0% % share 30.06.2016 % share 30.06.2017 *Source: Stamdata and Arctic Data updated through 15th June 2017 Sector distr
Slide 61: Mrs. Bucket
Mrs. Bucket Portfolio surveillance 61
Slide 62: Mrs. Bucket
Mrs. Bucket Portfolio surveillance 62
Slide 63: Portfolio statistics
Portfolio statistics Internally managed portfolio vs. benchmark end of June 2017 Performance – Internally managed portfolio2 vs. benchmark3 (31.03.2015 – 30.06.2017) 10.00 Internally managed portfolio data 30.06.2017 8.61 Size NOK m 6 209 8.00 7.09 Yield 2,5% 6.00 Duration 0,4 Credit duration 3,2 4.
Slide 64: Protector's financial underwriting process
Protector’s financial underwriting process Continuous process improvements Protector’s analysis process Stress test Risk allocation • Stress test to survive volatility experienced in financial crisis • Portfolio allocation based on Bottom-up analysis Quarterly update New ideas and watchlist risk/rew
Slide 65: Compusoft
Compusoft One of our favorites 65
Slide 66: High level review – Compusoft
High level review – Compusoft One of our favorites Revenue (MEUR) Investment Highlights +12% 43 • Compusoft provides design and sales tool (CAD1) for multibrand 39 31 32 35 kitchen and bathroom retailers. 80% of revenue is subscription 26 28 18 21 21 based. 16 13 • Strong record as a capital light c
Slide 67: Financial Underwriting Summary - Compusoft
Financial Underwriting Summary - Compusoft Checklist approach to support investment evaluation 1 Moat and durability 2 Revenue and margin drivers – intact for the future? 3 Management and organization 4 Expected return and margin of safety 67
Slide 68: Moat and durability
Moat and durability Isn’t a CAD1 program a pure commodity? • Integrating all different manufacturers product catalogues (CAD drawing, price Barriers to entry and spec.) into system is a key competitive barrier • High investment requirements – 120 employees in Compusoft maintaining product catalogues
Slide 69: What have driven historical performance and are those drivers intact?
What have driven historical performance and are those drivers intact for the future? • Historical growth mainly by European market share gains within kitchen solutions, which constitute 70% of sales. • Compusoft is the leading player with ~30% market share in Europe. Still untapped runway in market
Slide 70: Strong founding management and an organization aligned with shareholders
Strong founding management and an organization aligned with shareholders • Limited booked tangible and intangible assets. Balance sheet and capital allocation • Net cash of ~1-1,5x EBIT– no change expected, but significant untapped debt capacity is a plus • ~All earnings distributed as dividend • Al
Slide 71: Probabilistic approach to forecasting
Probabilistic approach to forecasting Stock Return = [Earnings Growth] + [Dividend / Share Buyback] + [Multiple Expansion / Contraction] Expected Returns 17,0 % Sales Per Share Margin Utbytte Reprising1 Forventet Comment Scenario 1 - Management meets internal budget (2020). Continued MS gains kitche
Slide 72: Summary: Investments is core business
Summary: Investments is core business Better than peers, prepared for future • HTD ROI better than peers o Also risk adjusted • Insourcing Q4 2014 – first phase delivered • 7 people on board o 2 Portfolio Managers o 5 Analysts • Financial Underwriting further developed • Strengthened balance sheet o
Slide 73: Coffee and snack
Preparing for continued growth 11.45-12.00: Coffee and snack
Slide 74: IT and digitalization
Preparing for continued growth 12.00-12.30: IT and digitalization
Slide 75: Protector has a different IT strategy
Protector has a different IT strategy Internal Development External Days or weeks Time to market Months or years > 1600 in 2016 Innovations ?? 500 a year Releases Monthly? 1% Cost ratio 3,5% Insourced Operations Outsourced 112
Slide 76: A changing world
A changing world • Algorithm “Our intuition about the future is linear. The biggest risk is not taking any risk... In But the reality of information technology a world that changing really quickly, the • Digitalization is exponential, and that makes a only strategy that is guaranteed to fail is prof
Slide 77: Protector: Back to 2003
Protector Back to 2003 Protector’s «founding fathers», the Chairman, the CEO and the IT director all has extensive background from the IT/Insurance industry All core insurance systems are developed in-house, it’s religion Protector Insurance Application (PIA) Claims application (CLAIMS) 77
Slide 78: The first five years
The first five years Good enough, not robust but first robot made in 2004 • Silo based development • Highly skilled IT-professionals devolped systems idiosyncratically • First UW robot made 2004 • First five years characterized by: «Waiting for Critical mass» • IT operations outsourced • Policies we
Slide 79: The next five years
The next five years Gradually moving towards robustness, but… • Gradually developing an unified architecture • New people on board • New impulses and ways of thinking • Insourcing of IT operations in 2013, improved quality and cost • IT cost moving downwards, despite “no budget restrictions” • User
Slide 80: The “last” five years
The “last” five years Stabilisation and standardisation DDoS • Architecturally stabilisation • Transformation process • Operational and security improvements • Cyber attacks increases • Stable systems, SLA 99,5 % or higher • Standardized platform (tools, comm. platform, data models and databases) •
Slide 81: Today's situation
Today’s situation IT as an accelerator • IT + Insurance = • Business competency more aligned with the business • More holistic involvement in projects • Sound, prudent and scalable IT architecture • Launched multiple new systems and solutions, with the use of mature technology • More system changes
Slide 82: Prepared for continuous growth
Prepared for continuous growth It’s not about digitalisation Broker desktops - Policy admin - Claims handling Rebalance resources Develop user - From 70/30 to professionalism, 30/70 and discipline Educate users to prevent cyber attacks Internal Compliant or Automatisation die - More robots Smaller i
Slide 83: UK
Preparing for continued growth 12.30-13.00: UK
Slide 84: Grenfell Tower
Grenfell Tower Unprecedented accident – but financial impact limited • Financial impact: Very limited due to reinsurance • Estimated loss from own account is GBP 2,5m • Kensington one of the most affluent areas in UK - lower frequency of fire and criminal damage • No UW mistakes made – same procedur
Slide 85: Risk Management
Risk Management Post Grenfell Tower Tragedy A stronger focus than ever is on Fire & Safety in UK Thousands of people are now discussing and implementing improvements New regulations and laws will gradually appear Many risks will improve - but how much Protector Risk Management post Grenfell Tower St
Slide 86: Internal Risk Management and Underwriting improvement
Internal Risk Management and Underwriting improvement Post Grenfell Subproject & Milestones Deadline Status Technical education of UW’s -Training stage 1 6.7.17 -Training stage 2 Autumn UW, current Tower Block exposure and portfolio analyses -Internal UW review 13.7.17 -Tower Exposure (high priority
Slide 87: Grenfell Tower Summary
Grenfell Tower Summary • Grenfell Tower is an unprecedented accident and human tragedy - with at least 80 people dead • We are there to help: Projects are running, experts nominated and first pay-out decision taken • The financial impact will be limited – estimated loss of GBP 2,5m • Protector stand
Slide 88: Studies of 11 Countries over 1 year and > 1 000 pages
Studies of 11 Countries over 1 year and > 1 000 pages The basis for deciding entry in UK Public High scores given to: • Markets with high cost ratios • Markets where broker penetration is high • Markets with little competition or in a oligopoly situation • Markets where quality of service are assume
Slide 89: Copying a Winning Formula entering new Markets
Copying a Winning Formula entering new Markets In-depth analysis through 2015 Cost leadership Fact: 1/2 of competitors Target UK: 1/3 of competitors • Competitors higher than Scandinavia • Larger average clients than Scandinavia People and culture Quality leadership Top 3 Fact: # 1 in Scandinavia Fa
Slide 90: UK database increasing rapidly
UK database increasing rapidly Already large database, best quality of all markets • Significant dataset purchased from market leading broker before market entry • Additional data collected through tender processes • Currently approximately 1/4 of the UK market, with 10 years ground up claims histor
Slide 91: Housing Associations
Housing Associations Risk evaluation based on Public Sector methodology – adjusted for key factors • Large database collected (historical performance and publicly available statistics) • > 100 risk factors systemized and benchmarked • Structured approach to flood and fire risks 91
Slide 92: Motor Fleet UW Public Sector
Motor Fleet UW Public Sector Cost advantage is key, avoid the wrong (red) risks • Statistical exercise, get the facts right • Extensive risk management information evaluated • Cost leadership leads to increased market share 92
Slide 93: Market situation in UK is similar to Nordics
Market situation in UK is similar to Nordics Estimated figures per Q2 2017 NORWAY DENMARK MARKET SHARE UK LOCAL AUTHORITIES Others 10% KLP 38 % PRF PRF 32 % 43 % RMP GJF 42 % 20% ZM 55% Travellers Øvrige 1% 10%Protector OF-AS GJF DNB Øvrig Alm. B TopD Codan 5% 11 % 12 % 2 %2 % 2 % 5% 8% SWEDEN SCAND
Slide 94: The challenger's location in UK
The challenger’s location in UK Close to the brokers • UK (non-life) insurance market is big: • Commercial: ~ £6bn • Public incl Housing: £600m • Manchester; a good hub • High density of brokers 19? • 2nd largest insurance hub in the UK • Access to skilled workforce – lower cost than London • Cheape
Slide 95: UK – Operational development
UK – Operational development Controlled growth in a market with many opportunities • >20 people on board • A good mix of experience and quickly developing talents • New recruitment phase started April 2017 – double in 18 months • Very good growth - £17m on board, 3 segments delivering • Public secto
Slide 96: Volume estimates UK
Volume estimates UK Volume full year 2016 Estimate 2017 Preliminary estimate 2018 Volume 25 MNOK 150 - 200 MNOK 400 – 500 MNOK Ahead of schedule 96
Slide 97: UK summary
UK summary • Prepared for 2 years (2014 and 2015) • Tested the market (2016) • 16 people on board - volume arriving 2017 • Grenfell Tower unprecedented accident o Will not change our strategy o Protector brand already well known • Brokers • Public sector • Strong potential in housing and public sect
Slide 98: 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 98
Slide 99: Summary and Q&A
Summary and Q&A Preparing for continued growth • Keep up the good work • Balance sheet strengthened – improved structure • Volume guiding increased • SCR target increased and dividend policy changed • Strategy 2020 and top 8 • Claims handling is number 1 – Falcon • Investments is core business • It’