Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — Q3 2018 Earnings Presentation
27 slides from Protector Forsikring ASA's earnings presentation, Oct 26, 2018
Slide 1: Q3 2018 Interim Results
Q3 2018 Interim Results Investor presentation Oslo, 26th October 2018 1
Slide 2: 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
Slide 3: Ctenolepisma longicaudata – Gray silverfish (Skjeggkre)
Ctenolepisma longicaudata – Gray silverfish (Skjeggkre) Get used to them – Harmless and normal • First identified in Norway in 2013 – Protector’s first claim in 2015, court ruling in 2016 • Maximum length 19mm (body) • Antennas and tail longer than body • Likes dark places, both damp and dry • Sexua
Slide 4: "Pests" you can find in the Norwegian fauna
“Pests” you can find in the Norwegian fauna Why is the harmless little Gray Silverfish worse than… 4
Slide 5: Real estate investments will collapse if a normal bug could lead to ....
Real estate investments will collapse if a normal bug could lead to …. And many other consequences if you think it through The little bug eats paper • Potentially harmful to people, structure and contents • Not harmful to people, structure or contents • Some are common, some are uncommon • New, but
Slide 6: Reported Gray Silverfish claims development
Reported Gray Silverfish claims development Number of claims increasing rapidly in Q3 2015: 3 claims reported, first in Q3 2016: 20 claims reported 2017: 38 claims reported Q3 2018 to date: 208 claims reported, gradually escalating through the year with September on a very high level August 2018: 3
Slide 7: Development of the legal practice
Development of the legal practice Limited legal practice, no decision in appeal court or supreme court Innocent bug – Norway the only country in the world with property value decrease compensation… ...despite pretty similar/equal/harder consumer protection legislation in other countries. • After 3 l
Slide 8: Project Gray Silverfish
Project Gray Silverfish Established 11th October 8
Slide 9: Project Gray Silverfish workstreams
1: Gray silverfish 2: Actions and communication - external • Normal, and inhabitant in Norway • Information to leaders and employees in • Financial analyses the real estate broker market • Legal opinions, Norwegian and Nordics • Real estate Norway and NEF • Document experiences (incl. litigations) •
Slide 10: Gray silverfish excluded from COI product 1st Nov 18
Gray silverfish excluded from COI product 1st Nov 18 Without real estate broker acceptance – we will exit COI market • Gray silverfish excluded 1st Nov 18 • New Claims Handling practice implemented 18th October 2018 • Multiple actions taken before crisis arrived • Gray silverfish claims allocated to
Slide 11: Q3 COI reserve losses NOK 146m mainly Gray Silverfish
Q3 COI reserve losses NOK 146m mainly Gray Silverfish No guarantees that it could end worse or better Are the reserves right, now? • Remember, with an exclusion 1st Nov there is still a 3 month period where new risks arrive • Reserves could be somewhat higher • Reserves could be somewhat lower Drive
Slide 12: Change of Ownership 2019
Change of Ownership 2019 • Gray Silverfish excluded 1st Nov. 2018 • COI KPIs better than ever on many important areas • Strong signals of acceptance from the market • Action plan going forward well prepared 12
Slide 13: 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
Slide 14: Credible or not
Credible or not Guiding vs. Actual • Danish Workers comp. 2016 • Growth steady going Volume Profitability • Reserve losses COI 2016 • Sweden doing very well Year Guiding Actual Guiding Actual • Swedish Competition Authority 2017 • Always open communication (rate pressure) 2009 5% 20 % 92,00 % 96,50
Slide 15: Q3 2018 Interim Results
Q3 2018 INTERIM RESULTS Oslo, 26th October 2018
Slide 16: Highlights Q3 2018
Highlights Q3 2018 17,0 % growth, Combined Ratio 117,6 % - reserve loss Gray silverfish • Growth of 17,0 % (18,0 % local currency) Guiding 2018 – unchanged Net combined ratio significant higher than 94 % Volume growth 16 % • Net Combined ratio 117,6 % up from 93,3% Cost ratio ≈7,5 % • COI 246,9 % in
Slide 17: Gross written premiums Q3 2018
Gross written premiums Q3 2018 Growth of 17% (18 % LCY) – driven by strong growth UK • GWP total NOK 754,6m up 17,0% 900 Q3 GWP (NOK m) 800 755 • Norway Com. & Publ. YTD growth 1,7 % 700 645 600 • Small quarter in Denmark – two large unprofitable clients priced out 500 413 400 342 367 • COI volume d
Slide 18: Claims development Q3 2018
Claims development Q3 2018 Claims ratio ex COI 88,9% • Gross claims ratio 107,2%, down from 108,3% • Net claims ratio 111,7%, up from 86,2% Business unit Gross claims % Net claims % Q3 18 Q3 17 Earned 18 Q3 18 Q3 17 Earned 18 • COI 245,9 % in Q3 2018 Norway (incl. COI & FI) 132,6 % 89,2 % 544,9 127,
Slide 19: Nordic commercial sector – Price increases
Nordic commercial sector – Price increases And other profitability initiatives Public sector, personal and motor – all with substantial general and individual > 8% price increases Too early to say. Few general price increases, some individual price increases > 4% Very strong price increases WC and s
Slide 20: Grenfell Tower Property claim settled
Grenfell Tower Property claim settled Arbitration with Munich Re postponed to may 2019 • Property released to client 1st August 2018 • Tower not likely to be reinstated, memorial park in the future • Settlement agreed with client 17th Aug. – money transferred 14 days later • Good feedback from clien
Slide 21: Investment performance Q3 2018
Investment performance Q3 2018 11,1 % equities, 88,9 % bonds • Net investment result of NOK 46m Returns Q3 2018 • 0,5% return on investment portfolio 1,0% 0,7% • Equity portfolio return of NOK 9,5m or 0,7% • Benchmark: OSEBX (6,7%), OMXSGI (6,9%), OMXCGI (2,1%) • Portfolio consist of 15 companies 0,
Slide 22: Profit & loss Q3 2018
Profit & loss Q3 2018 17 % growth, Combined Ratio 117,6 % (95,7 % ex. COI) in millions Q3 2018 Q3 2017 YTD 2018 YTD 2017 FY 2017 Gross premiums written 754,6 645,1 4 233,1 3 623,0 4 163,2 16,8 % growth YTD Gross premiums earned 1 172,7 1 022,2 3 438,5 2 808,1 3 805,5 Gross claims incurred -1 257,2 -
Slide 23: Balance sheet Q3 2018
Balance sheet Q3 2018 SCR 182,8 % based on standard formula [1.000.000 NOK] 30.09.2018 30.09.2017 31.12.2017 SCR ratio composition Owner-occupied property 13,6 13,6 13,5 Financial assets 10.227,6 9.298,4 9.379,4 4000 Derivatives 11,6 6,0 2,5 Bank deposits 112,6 268,1 327,5 Other assets 2920,0 2.776,
Slide 24: Solvency II
Solvency II Composition of SCR - slight decrease in market risk Composition of SCR: Eligible SII capital: • Net insurance risk 63% • No dividend • Net market risk 27% • Guarantee provision subtracted from own funds • Other risks 10% SCR composition Eligible SII capital 4.000 4.500 3.500 232 105 4.00
Slide 25: Shareholder's matters
Shareholder’s matters Per 30.09.2018 SHAREHOLDER NAME # SHARES % Related parties shareholding STENSHAGEN INVEST AS 7 526 353 8,74 % • Management’s direct and indirect shareholding totals 3,5m shares or 4,0% of GLOBAL PORTFOLIO INVESTMENTS, S.L. 4 616 123 5,36 % current outstanding shares PROTECTOR F
Slide 26: Summary and Q&A Q3 2018
Summary and Q&A Q3 2018 Poor 2018, profitability actions gradually kicking in • Q3 Growth 17 % (YTD growth 17 %) • Gray Silverfish excluded from new COI policies from 1st Nov. 2018 • Combined ratio Q4 2018 > 100% • Profitability actions gradually kicking in • Very strong balance sheet with a SCR rat
Slide 27: Capital Markets Day topics
Capital Markets Day topics 26th October – 11:00-14:00 Status Company Investments • History • Historical results • HTD Reserves • Financial UW & process • Strategy • Capital allocation and RosC • Management and employee development • Portfolio statistics Reinsurance – update entering 2019 UK includin