Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — Q2 2022 Earnings Presentation
26 slides from Protector Forsikring ASA's earnings presentation, Jul 8, 2022
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: Q2 2022 Interim results Investor Presentation
PROTECTOR insurance Q2 2022 Interim results Investor Presentation Oslo, 8 July 2022
Slide 3: Vision, Business Idea, Main targets and Values
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/Open Bold Committed
Slide 4: Q2 2022 key highlights
235% 206% 206% 190% 161% Q2 Q4 Q2 Q4 Q2 ’20 ’20 ’21 ’21 ’22 Net combined ratio Gross written premium (MNOK) Investment return (MNOK) Solvency Capital Ratio Other highlights: • Large losses at 3.1 % (3.9 % lower than normalized) • Interest rates increasing and credit spreads widening • Running yield
Slide 5: Claims update
Claims update • Large losses1 at 3.1 % (1.8 %) in Q2, 6.8 % (1.5 %) in H1 • Majority from UK in Q2, UK and Sweden in H1. • Net run off gains at 3.4 % (-1.9 %) in Q2, 3.5 % (-1.1 %) in H1 • Mainly due to run-off gains in Sweden and UK • Aggregated COVID-19 effects at 0 % (-1.4 %) in Q2, 0 % (-1.7 %)
Slide 6: Large losses and run-off
Large losses1 and run-off Net large loss ratio excl. WC pr Q Normalized • Net large losses of MNOK 44, or 3.1 % (3.9 %-points lower than normalized) • H1: Net large losses of MNOK 188, or 6.8 % (1.5 % H1 21) • Net run-off gains at 3.4 % (-1.9 % in Q2 21) • H1: Net run off gains at 3.5 % (-0.9 % in H
Slide 7: Gross written premium growth
• MNOK 359 (25 %) growth (24 % in LCY) • Majority from UK, Sweden and Norway • April 1st a significant inception date for our UK business • Low new sales within commercial sector • Increased activity with brokers from medio Q2 • Renewal rate at 98 % (93% in H1) • Supported by low churn and price inc
Slide 8: Country-by-country key metrics
Country-by-country key metrics PROTECTOR -_ . insurance Quarterly volatility must be expected, especially by country Q2 2022 Norway Sweden Denmark Finland Protector MNOK Q222 Q221 Q222 Q221 Q222 Q221 Q222 Q221 Q2 22 Q221 Q222 Q221 Gross premium written 338 262 515 402 63 39 863 721 8 4 1788 1429 Gro
Slide 9: Vision, Business Idea, Main targets and Values
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/Open Bold Committed
Slide 10: Investments
Investments Investment is core
Slide 11: Investment performance
Investment performance Return at -1.2 % in Q2 and H1 • Q2 return on investment portfolio at -1.2%, or MNOK -175 Q2 investment results 10% • Equity portfolio returning -4.0%, or MNOK -97 • Bond portfolio returning -0.7%, or MNOK -81 5% -0.7% • Return on put options MNOK 2 0% -1.2% -5% -4.0% Equities1
Slide 12: What has happened in the quarter?
What has happened in the quarter? Increased interest rates and spread levels 3yr interest rate swaps in relevant countries, +50bps to +100bps in Q2 ‘22 Euro vs Nordic: iTraxx crossover index and Nordic spread development LTM Source: Bloomberg Source: Bloomberg and Carnegie 12
Slide 13: Higher interest rates effecting our Solvency
Higher interest rates effecting our Solvency Significantly increased interest rates implying increased duration and more “fixed yield” • Solvency effect of MNOK 200 from higher interest rates in Q2 • Historically, low interest rate duration in bond portfolio • Duration increased to 1.1 years through
Slide 14: Investment portfolio statistics
Investment portfolio statistics Bond portfolio yield at 3.9 %, before cost of risk – duration increased Investment portfolio statistics1 30.06.22 30.06.21 31.03.22 • Bond portfolio yielding 3.9 %, before cost of risk Size bond & cash eq. (MNOK) 12 114 12 139 12 368 Avg. ref. rate (NIBOR, STIBOR, etc
Slide 15: Vision, Business Idea, Main targets and Values
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/Open Bold Committed
Slide 16: Balance Sheet
Balance Sheet SCR ratio at 206% In millions 30.06.2022 30.06.2021 31.12.2021 Financial assets 13 708 13 379 13 067 SCR ratio composition Derivatives 142 63 94 Bank deposits 105 109 300 Other assets 4 913 4 796 4 338 5 000 SCR ratio: 206% Discontinued operations 1 090 1 712 1 448 Total assets 19 958
Slide 17: Solvency II
Solvency II SCR ratio at 206% Composition of SCR: Eligible solvency capital: • Net insurance risk 65% • Guarantee provision subtracted from own funds • Net market risk 25% • Other risks 10% SCR composition Eligible solvency capital 4 000 56 6 000 313 952 1 366 3 500 5 000 4 546 3 000 426 209 4 000 1
Slide 18: Profit and loss Q2 (& H1 22)
Profit and loss Q2 22 (& H1 22) PROTECTOR Profit of MNOK 66 (21) | EPS at NOK 0.6 (0.4) insurance MI Q222 Q221 H1 22 H121 FY 21 Gross premiums written 1788 1429 4899 4309 5951 Earned premiums, net of reinsurance 1428 1219 2764 2.395 4921 Claims incurred, net of reinsurance (1060) (931) (2218) (1854)
Slide 19: Risk and capital management process
Risk and capital management process Controlling all company risks and historical investment stress Main objectives Three main risk categories ILLUSTRATIVE 1 2 3 As is SCR Excess Investment Insurance Other Min SCR situation capital stress, ex. risks risks and tolerance VA initiatives 19
Slide 20: Capital allocation – maximize shareholder return
Capital allocation – maximize shareholder return Priority 1: Always profitable growth in insurance, if possible 1 2 3 4 5 Investments Insurance underwriting Cash as an option Buy backs Dividends Equities & bonds 1 Allocation towards profitable growth is preferred – stay disciplined 2 Allocated capit
Slide 21: Alternative performance measures
This presentation contains alternative performance measures (APMs). APMs are described here: https://protectorforsikring.no/en/investor/documents/spreadsheets/ 21
Slide 22: PROTECTOR insurance
PROTECTOR insurance
Slide 23: PROTECTOR insurance
PROTECTOR insurance
Slide 24: Appendix
Appendix
Slide 25: Responsible, trusted and credible ESG actor
Protector aims to be a responsible, trusted and credible ESG actor Accelerating our business through leveraging sustainability We commit to people We encourage and We focus on climate We have responsible value and employee motivate our insured to resilience to business behaviour at engagement in our
Slide 26: ESG Roadmap
ESG Roadmap A set of required activities to gradually take us to our ambition MILESTONES 2022 MILESTONES 2023 MILESTONES 2024 We have further improved systems and trained our employees to evaluate climate risk and impact, and to Protector aims to be a We have improved systems to understand and respo