Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — FY2009 Earnings Presentation
32 slides from Protector Forsikring ASA's earnings presentation, Feb 25, 2010
Slide 1: Investor presentation: Preliminary year-end results 2009
Investor presentation Preliminary year-end results 2009 February 25th 2010
Slide 2: Protector
Protector • A focused non-life Norwegian insurance company • Ownership; ODIN, Franklin Mutual Funds, Alfred Berg Norge/Gambak, • Established Jan.1, 2004. (Listed on Oslo Stock Exchange May 2007) employees, etc. • Vision: “Protector will be the challenger to the established insurance • Strong results
Slide 3: Highlights 2009
Highlights 2009 Strong growth, acceptable combined ratio and strong investment income • 20% growth in GWP – Commercial and public lines of business, up 29% – Change of ownership insurance, unchanged • Net combined ratio 96,5%, up 1,6 percentage points – Average combined ratio HTD, 92% • Return on in
Slide 4: Gross written premium 2009
Gross written premium 2009 GWP up 20%, from NOK 729m to NOK 871,4m • 29% growth within the commercial and public lines of business - Acceptable renewal rate, 89% down from 93% in 2008 - Strong new sales and good access to quotations - High hit-ratio in the commercial sector, low hit-ratio in the mun
Slide 5: Claims development 2009
Claims development 2009 Net claims ratio 82,4%¹, up from 80,5% in 2008 • 4 large claims (> NOK 5 mill) within the commercial sector with good reinsurance cover (3 large claims in 2008) – Net effect higher than normal – 1 large claim in Q4, 2 in Q408) • Run-off losses of NOK 11 mill – Change of owner
Slide 6: Cost ratio 2009
Cost ratio 2009 Gross cost ratio 17,6%, down from 18% in 2008 • Increased manning costs – Average no. of employees in 2009 96, up from 84 in 2008 – 3-year bonus programme, MNOK 6,4 in 2009 • One-off costs in 2009 – NEMI process, MNOK 4 – Pension agreement CEO, MNOK 3 • Cost cut program, 12 out of 15
Slide 7: Highlights 2009 - Commercial and public lines of business
Highlights 2009 - Commercial and public lines of business • 29% volume growth Gross written premium 2005 -2009 (NOKm) - Difficult in the municipality sector - Fast growing in the middle market, 51% growth - NEMI effect on volume growth, 5-6% 603 466 - First Swedish municipality contract signed Jan 1
Slide 8: Highlights 2009 - Commercial and public lines of business
Highlights 2009 - Commercial and public lines of business Personal lines of business in% of totality • Growth within the personal lines of business leads to 100 % - slightly increased risk (other illness) but… - …risk off set by quota share reinsurance contract 75 % 50 % 44 % 64 % 70 % - increased b
Slide 9: Overall satisfaction with the insurance companies
Overall satisfaction with the insurance companies Score from 0 - 100 72 2009 (n=97) Protector Forsikring 66 2008 61 2007 66 Competitor 1 66 61 61 Competitor 2 59 Competitor 3 63 59 57 Competitor 4 59 55 56 Competitor 5 62 54 56 Competitor 6 55 50 0 10 20 30 40 50 60 70 80 90 100 9
Slide 10: Highlights 2009 - Change of ownership insurance
Highlights 2009 - Change of ownership insurance Gross written premium 2005 - 2009 (NOKm) • Volume unchanged - Market share improving, above 50% - Weak market in H1, normalized in H2 - Hit-ratio close to 73%, all time high 372 • Real estate market continues to improve 271 297 263 268 - No. of sold pr
Slide 11: Highlights 2009 - Change of ownership insurance
Highlights 2009 - Change of ownership insurance • Profitability actions, annual bottom line potential > NOK 10m - Cost cut improvements possible - Improved quality on technical surveys possible - Major breakthrough with EM1 Trondheim - Slightly increased recourse level expected • New Supreme Court d
Slide 12: Evaluation of Protector among Real Estate Brokers
Evaluation of Protector among Real Estate Brokers What value-proposition would you say your customer receives by change of ownership insurance Which level of return do you as a real-estate broker receive from change of ownership insurance? If asked about Protector, to what degree would your comments
Slide 13: Customers satisfaction with Protector
Customers satisfaction with Protector 81 Overall impression of Protector 87 77 88 Handling of the claim 90 80 88 Security of the product 88 83 2009 Q1-Q2 92 2008 Q2-Q4 Necessity of the product 89 83 2008 Spring 80 Trustworthiness 80 76 84 Accommodativeness 86 79 83 Clear and understandable informati
Slide 14: Results 2009
Results 2009 MNOK Q4 2009 Q4 2008 FY 2009 FY 2008 Premiums written gross 126,5 93,0 871,4 729,0 Premiums earned gross 223,2 166,7 843,1 720,5 Claims incurred gross (161,3) (157,5) (649,2) (549,1) Premiums earned for own account 352,3 113,6 842,6 592,4 Claims incurred for own account (311,5) (95,6) (
Slide 15: Balance sheet 2009
Balance sheet 2009 MNOK 31.12.2009 31.12.2008 Financial assets 1 634,8 1 221,3 Bank deposits 85,6 37,2 Other assets 252,5 364,3 Total assets 1 972,9 1 622,8 Total equity 562,7 416,1 Total reserves 1 358,7 1 025,5 Other liabilities 51,5 181,2 Total equity and liabilities 1 972,9 1 622,8 Solvency capi
Slide 16: Investment performance 2009
Investment performance 2009 • Net investment result of NOK 224,6m (NOK -28,2m) - NOK 62,7m in Q4 (NOK -36,8m) • Equities; Return of 72,6% (-44,7%), OSEBX 64,8%, - Return of 12,8% in Q4 (-19,9%), OSEBX 14,9% • Bond portfolio (inc HTM-Bonds); Return of 5,8% (4,2%) - Return of 1,4% in Q4 (1,3%) • Inves
Slide 17: Investment performance 2008 - 2009
Investment performance 2008 - 2009 Return per asset class in the period 2008 and 2009 Investment return ( % ) 20,3 % 2009 2008 "Average" ¹ Protector 16,1 -2,1 7,2 TrygVesta ² 6,6 3,5 5,1 If.. 12,3 -3,1 4,6 KLP 8,4 0,4 4,4 7,2 % 6,0 % Sparebank1 6,6 0,5 3,6 5,0 % Gjensidige 5,5 -0,6 2,5 2,2 % ² Gross
Slide 18: Portfolio structure and quality bond portfolio
Portfolio structure and quality bond portfolio • Bonds 74,9% of portfolio, Norwegian equities 25,1% - Relative growth in equities through 2009 mainly driven by change in value • Duration (credit) of bond portfolio (ex HTM) is 1,99 years (1,59 years) - Interest duration (ex HTM) 0,16 years (0,32 year
Slide 19: Asset allocation
Asset allocation Asset allocation 31 December 2009 Asset allocation 31 December 2008 Equities Equities 16,8 % 25,1 % Money market Money 38,4 % market Bonds 50,7 % HTM Bonds 21,7 % HTM 14,5 % Bonds Bonds 9,6 % 23,1 % Total financial assets 31.12.2009 Total financial assets 31.12.2008 NOK 1.635m NOK 1
Slide 20: Development in earnings and key ratios
Development in earnings and key ratios Return on Solvency Capital Net combined ratio 50 % 100 % 94,9 % 96,5 % 38 % 38 % 85,9 % 40 % 35 % 30 % 80 % 74,7 % 20 % 20 % 59,6 % 10 % 60 % 2% 0% 40 % -10 % 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 Gross written premium (NOKm) Gross cost ratio 1 000
Slide 21: Long term financial objectives
Long term financial objectives Net combined ratio • Medium term GWP growth rate: 10% 100 % 94,9 % 96,5 % 85,9 % Target < 92% • Net combined ratio: 92% 80 % 74,7 % 59,6 % 60 % • Solvency margin: 80% 40 % • Return on solvency capital: 20% 2005 2006 2007 2008 2009 Solvency margin Return on Solvency Cap
Slide 22: Combined ratio 2009
Combined ratio 2009 125 % 121% 112,8% 96,2% 96,5% 100 % 94,5% 95,5% 92,0% 92,4% 69,2 % 83 % 75 % 66,5 % 68,8 % 73,8 % 75,6 % 77,1 % 82,4 % 50 % 25 % 43,6 % 38 % 29,1 % 23,3 % 22,4 % 16,8 % 17,4 % 14,1 % 0% If… TrygVesta Gjensidige KLP Sparebank1 Protector Unison Storebrand Cost ratio Claims ratio 22
Slide 23: Shareholder matters February 2010
Shareholder matters 16 February 2010 Shareholder No. shares Percent Odin Norden 7 185 355 8,34 % Bank of New York, Mellon SA/NV 4 479 410 5,20 % Option program Alfred Berg Gambak 3 735 694 4,34 % DNB NOR Luxembourg SA 3 619 934 4,20 % • Outstanding options: 3.009.334 Ojada AS 3 563 116 4,14 % Strike
Slide 24: Summary 2009
Summary 2009 • Operating profit of NOK 258,8m, up from NOK 9,4m • Volume up 20% • Strong return on investments, 16,1%, up from -2,1% • Dividend of NOK 1,25 per share suggested 24
Slide 25: Outlook 2010
PROTECTOR forsikring Outlook 2010
Slide 26: Volume outlook 2010, up 15%
Volume outlook 2010, up 15% Commercial and municipality market Change of ownership insurance + Full, stable and competent team on board + Full, stable and competent team on board + Broker relationship continues to improve + Average price per property up 8-10% + Two new agency contracts signed + Slig
Slide 27: Net combined ratio, UW year
Net combined ratio, UW year • ART contract terminated • Reserve changes allocated to UW year Net combined ratio, UW year 2005 - 2009 100 % 96,5 % 95,3 % 93,7 % 94,9 % HTD 92,0% 90 % 86,5 % 88,7 % 90,0 % 85,9 % 80 % 74,7 % 70 % 60 % 59,6 % 50 % 2005 2006 2007 2008 2009 - UW year - Accounting year 27
Slide 28: Net claims ratio outlook 2010, 77%
Net claims ratio outlook 2010, 77% + Full, relatively stable and competent team on board + Identified improvement UW and claims handling, commercial sector + Identified improvements claims handling, change of ownership + Increased premiums per policy, change of ownership + Agent commissions will inc
Slide 29: Gross cost ratio outlook 2010, down to 16%
Gross cost ratio outlook 2010, down to 16% + Volume growth + Stable no. of employees + Lower one-off costs + Improved reinsurance commissions (without risk changes), improve net cost ratio - Agencies are driving cost ratio upwards Outlook gross cost ratio 16%, outlook net cost ratio 15% 29
Slide 30: Key figures, UW year
Key figures, UW year Net claims ratio, UW year - Outlook 2010 Net combined ratio, UW year - Outlook 2010 72,4 % 77 % 95,3% 93,7% 86,5% 88,7% 90,0% 92% 80 % 70,2 % 69,3 % 71,7 % 69,2 % 100 % 60 % 80 % 26,1 % 23,4 % 17,0 % 17,6 % 15 % 17,2 % 40 % 60 % 20 % 40 % 77 % 69,2 % 70,2 % 69,3 % 71,7 % 72,4 %
Slide 31: Outlook 2010
Outlook 2010 NOKm Realised Outlook Favorable Negative 2009 2010 scenario scenario Premium growth 20% 15% 20% 10% Operating profit 258.8 150 180 120 Investment income 224.6 88 Gross cost ratio(%) 17.6 16 Net combined ratio (%) 96.5 92 88 96 Return on solvency capital (%) 38 20 23 16 Return assumption
Slide 32: Summary 2009, outlook 2010
Summary 2009, outlook 2010 2009 Outlook 2010 • Volume growth 20% 15% • Net combined ratio 96.5% 92% • Gross cost ratio 17,6% 16% • Operating profit NOK 258.8m NOK 150m • Return on solvency capital 38% 20% • Dividend NOK 1,25 per share In line with policy 32