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Protector Forsikring
Quarterly Report • Jul 10, 2020
3719_rns_2020-07-10_60fde3a0-48ec-4560-89c0-53fc321ca3d3.pdf
Quarterly Report
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INTERIM REPORT Q2 2020 PROTECTOR FORSIKRING ASA
(UNAUDITED) 10 JULY 2020
Highlights Q2 2020
CR 92.1% and strong return on investments
Protector Forsikring ASA recorded a profit of NOK 580.4m (NOK -125.7m) for the quarter. The result is driven by a strong return on investments and a good technical result. The underwriting result was NOK 93.4m (NOK -72.0m) corresponding to a combined ratio of 92.1% (107.2%).
The improvement in the underlying result is somewhat weaker as we in Q2 2019 recorded an arbitration loss with a 7.4 percentage points negative effect on net CR.
In Q2, gross written premiums increased by 3% in local currencies. The growth is driven by UK. Significant price increases in the Nordics have resulted in a higher than normal churn. In Q2 the average overall price increases in our Nordic insurance portfolio came in at 13.6%.
Q2 2020 shows following development compared to Q2 2019:
- Premium growth of 16% (32%)
- Net combined ratio 92.1% (107.2%)
- Net return on investments NOK 638.8m (NOK 69.3m) or 5.2% (-0.6%)
- Profit for the period NOK 580.4m (NOK 125.7m)
- Solvency margin 161% (166%)
H1 2020 shows following development compared to H1 2019:
- Premium growth of 8% (20%)
- Net combined ratio 95.1% (106.6%)
- Net return on investments NOK 186.7m (NOK 41.9m) or 1.5% (0.4%)
- Profit for the period NOK 195.5m (NOK 33.8m)
Financial highlights and key ratios
| Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | FY 2019 | ||
|---|---|---|---|---|---|---|
| Gross premiums written | 1 288,0 | 1 105,9 | 4 116,0 | 3 819,2 | 5 100,5 | |
| Earned premiums, net of reinsurance | 1 154,9 | 1 011,9 | 2 277,3 | 1 902,5 | 4 147,5 | |
| Claims incurred, net of reinsurance | (946,3) | (999,8) | (1 952,7) | (1 884,2) | (3 949,1) | |
| Sales cost | (79,8) | (65,6) | (151,5) | (114,6) | (233,5) | |
| Administration cost | (56,0) | (42,9) | (104,3) | (80,9) | (179,9) | |
| Commission from reinsurer | 18,9 | 23,1 | 41,9 | 51,1 | 57,2 | |
| Other insurance related income/expenses | 1,7 | 1,3 | 1,5 | (0,7) | (5,2) | |
| Technical result | 93,4 | (72,0) | 112,1 | (126,6) | (163,0) | |
| Other income/costs | (17,7) | (13,2) | (33,4) | (27,4) | (50,3) | |
| Net financial income | 509,8 | (31,7) | 187,0 | 49,5 | 141,4 | |
| Profit before tax | 585,4 | (116,9) | 265,7 | (104,6) | (71,9) | |
| Tax | (119,9) | (0,1) | (80,2) | (0,1) | (4,1) | |
| Discontinued operations | 119,1 | (10,8) | 3,8 | 69,1 | 71,5 | |
| Net comprehensive income | (4,2) | 2,2 | 6,2 | 1,8 | (0,3) | |
| Profit for the period | 580,4 | (125,7) | 195,5 | (33,8) | (4,9) | |
| Claims ratio, net of ceded business | (1) | 81,9 % | 98,8 % | 85,7 % | 99,0 % | 95,2 % |
| Expense ratio, net of ceded business | (2) | 10,1 % | 8,4 % | 9,4 % | 7,6 % | 8,6 % |
| Combined ratio, net of ceded business | (3) | 92,1 % | 107,2 % | 95,1 % | 106,6 % | 103,8 % |
| Gross claims ratio | (4) | 80,7 % | 92,6 % | 83,1 % | 93,0 % | 94,6 % |
| Gross expense ratio | (5) | 10,1 % | 8,7 % | 9,7 % | 8,2 % | 8,3 % |
| Gross combined ratio | (6) | 90,8 % | 101,3 % | 92,8 % | 101,2 % | 102,8 % |
| Retention rate | (7) | 86,0 % | 81,5 % | 86,4 % | 77,7 % | 83,0 % |
| Earnings per share | (8) | 7,1 | (1,6) | 2,3 | (0,4) | (0,1) |
(1) Claims incurred, net of reinsurance in % of earned premiums, net of reinsurance
(2) Operating expenses in % of earned premiums, net of reinsurance
(3) Net claims ratio + net expense ratio
(4) Gross claims incurred in % of gross premiums earned
(5) Sales and administration costs in % of gross premiums earned
(6) Gross claims ratio + gross expense ratio
(7) Earned premiums, net of reinsurance in % of gross earned premiums
(8) Profit before other comprehensive income divided by weighted number of shares
Premiums
In Q2, gross premiums written increased by 16% or NOK 182.1m to a total of NOK 1,288.0m. In local currencies the growth was 3%. The volume growth is driven by strong volume growth in the UK.
The renewal rate was 85.6% supported by price increases in the Nordics. The client churn in Q2 was high but is expected to decline and start returning to normal levels entering 2021. Some very large clients were not renewed in Q2 for profitability reasons.
Covid-19 had in Q2 limited effect on top-line development.
The growth per country was;
| Gross written premiums (NOKm) | Q2 2020 | Q2 2019 | Growth | ||
|---|---|---|---|---|---|
| Norway | 266,2 | 334,0 | -67,8 | -20 % | |
| Sweden | 362,3 | 402,7 | -40,4 | -10 % | |
| Denmark | 41,2 | 40,2 | 1,0 | 3 % | |
| UK | 620,9 | 311,2 | 309,7 | 100 % | |
| Finland | -2,7 | 17,8 | -20,5 | -115 % | |
| Total | 1288,0 | 1105,9 | 182,1 | 16 % | |
| The growth per country was; | |||||
| Gross earned premiums (NOKm) | Q2 2020 | Q2 2019 | Growth |
Gross premiums earned increased by NOK 100.4m or by 8% to a total of NOK 1,342.3m.
| Growth | ||||
|---|---|---|---|---|
| Norway | 373,1 | 405,5 | -32,4 | -8 % |
| Sweden | 396,5 | 374,7 | 21,8 | 6 % |
| Denmark | 251,4 | 227,6 | 23,8 | 10 % |
| UK | 280,1 | 178,9 | 101,2 | 57 % |
| Finland | 41,2 | 55,2 | -14,0 | -25 % |
| Total | 1342,3 | 1241,9 | 100,4 | 8 % |
Premiums earned for own account amounted to NOK 1,154.9m, an increase of 14% compared to Q2 2019. Stronger growth in net premiums is due to an increased retention rate because of changes in the reinsurance structure in 2019 (from Surplus to Risk XL on property).
The growth in net premiums earned per country was;
| Net earned premiums (NOKm) | Q2 2020 | Q2 2019 | Growth | |
|---|---|---|---|---|
| Norway | 330,8 | 347,4 | -16,6 | -5 % |
| Sweden | 347,0 | 307,9 | 39,1 | 13 % |
| Denmark | 219,9 | 191,6 | 28,3 | 15 % |
| UK | 220,4 | 116,1 | 104,3 | 90 % |
| Finland | 36,7 | 48,8 | -12,1 | -25 % |
| Total | 1154,9 | 1011,8 | 143,1 | 14 % |
In H1, gross written premiums totalled NOK 4,116.0m, representing a 8% growth. Growth in local currencies was 1%. The volume growth is driven by strong growth in the UK.
The renewal rate was 85.8% supported by price increases in the Nordics.
The growth by country was:
| Gross written premiums (NOKm) | H1 2020 | H1 2019 | Growth | |
|---|---|---|---|---|
| Norway | 1086,7 | 1137,9 | -51,2 | -5 % |
| Sweden | 1151,3 | 1188,5 | -37,2 | -3 % |
| Denmark | 854,6 | 801,5 | 53,1 | 7 % |
| UK | 813,2 | 486,7 | 326,5 | 67 % |
| Finland | 210,2 | 204,8 | 5,4 | 3 % |
| Total | 4116,0 | 3819,2 | 296,8 | 8 % |
Gross premiums earned increased by 10% from NOK 2,388.8m to a total of NOK 2,635.6m.
The growth by country was:
| Gross earned premiums (NOKm) | H1 2020 | H1 2019 | Growth | |
|---|---|---|---|---|
| Norway | 740,0 | 781,1 | -41,1 | -5 % |
| Sweden | 793,9 | 720,5 | 73,4 | 10 % |
| Denmark | 485,3 | 435,2 | 50,1 | 12 % |
| UK | 507,2 | 332,4 | 174,8 | 53 % |
| Finland | 109,1 | 119,7 | -10,6 | -9 % |
| Total | 2635,6 | 2388,8 | 246,8 | 10 % |
The premiums earned for own account totalled to NOK 2,277.3m, an increase of 20% compared to H1 2019. The strong growth is due to an increased retention rate due to changes in the reinsurance structure in 2019 (from Surplus to Risk XL on property).
The premiums earned for own account by country was:
| Net earned premiums (NOKm) | H1 2020 | H1 2019 | Growth | |
|---|---|---|---|---|
| Norway | 658,7 | 661,9 | -3,2 | 0 % |
| Sweden | 695,6 | 569,7 | 125,9 | 22 % |
| Denmark | 424,1 | 365,5 | 58,6 | 16 % |
| UK | 401,4 | 199,7 | 201,7 | 101 % |
| Finland | 97,5 | 105,7 | -8,2 | -8 % |
| Total | 2277,3 | 1902,5 | 374,8 | 20 % |
Results
The profit before tax totalled NOK 585.4m (NOK -116.9m), while the profit after tax and discontinued operations was NOK 580.4m (NOK -125.7m). The result is driven by a strong investment result and a good technical result.
The technical result improved by NOK 165.3m from NOK -72.0m in Q2 2019 to 93.4m in Q2 2020. Underlying improvement in technical result is somewhat weaker as we had run-off losses of NOK 97.8m (9.7%) in Q2 2019 against NOK 22.3m (1.9%) in run-off losses this quarter. In Q2, the net combined ratio was 92.1% (107.2 %).
The net combined ratio by country was:
| Net combined ratio | Q2 2020 | Q2 2019 |
|---|---|---|
| Norway | 87,3 % | 91,6 % |
| Sweden | 102,7 % | 99,1 % |
| Denmark | 106,8 % | 109,5 % |
| UK | 74,2 % | 155,1 % |
| Finland | 53,3 % | 147,7 % |
| Total | 92,1 % | 107,2 % |
The claims ratio for own account decreased from 98.8% in Q2 2019 to 81.9 % in Q2 2020. Denmark had in Q2 run-off losses of NOK 44.3m and Finland run-off gains of NOK 38.1m. Run-off losses in the other countries totalled NOK 16m. In Q2 the large loss rate was slightly above a normal level.
Covid-19 had in Q2 less than 2 percentage points positive effect on net CR.
The net claims ratio by country was:
| Net claims ratio | Q2 2020 | Q2 2019 |
|---|---|---|
| Norway | 80,2 % | 89,4 % |
| Sweden | 89,6 % | 85,5 % |
| Denmark | 98,1 % | 102,9 % |
| UK | 61,5 % | 139,5 % |
| Finland | 50,8 % | 137,1 % |
| Total | 81,9 % | 98,8 % |
The expense ratio for own account amounted to 10.1%, up from 8.4 % in Q2 2019. The increase is due to somewhat higher personnel costs and the strong growth in the UK drives broker commissions upwards.
In H1, the profit for the half-year totalled NOK 195.5m against NOK -33.8m in H1 2019. The net combined ratio was 95.1%, compared to 106.6%, in H1 2019.
The net combined ratio for the half-year by country was:
| Net combined ratio | H1 2020 | H1 2019 |
|---|---|---|
| Norway | 94,0 % | 96,5 % |
| Sweden | 96,4 % | 99,2 % |
| Denmark | 113,7 % | 112,9 % |
| UK | 82,9 % | 140,0 % |
| Finland | 63,7 % | 124,8 % |
| Total | 95,1 % | 106,6 % |
In H1 the company had run-off losses of NOK 18.7m (0.8%) compared to run-off losses of 1.8% during the same period in 2019.
| Net claims ratio | H1 2020 | H1 2019 |
|---|---|---|
| Norway | 88,1 % | 92,1 % |
| Sweden | 84,2 % | 88,9 % |
| Denmark | 105,1 % | 107,4 % |
| UK | 69,9 % | 125,9 % |
| Finland | 62,1 % | 117,2 % |
| Total | 85,7 % | 99,0 % |
The net expense ratio was 9.4%, up from 7.6% in H1 2019, due to higher broker commissions and personnel costs while level of reinsurance commissions continued to decrease. Going forward the company expects higher broker commission due to growth coming from the UK.
| Net expense ratio | H1 2020 | H1 2019 |
|---|---|---|
| Norway | 5,9 % | 4,4 % |
| Sweden | 12,2 % | 10,3 % |
| Denmark | 8,5 % | 5,5 % |
| UK | 13,0 % | 14,0 % |
| Finland | 1,6 % | 7,6 % |
| Total | 9,4 % | 7,6 % |
Discontinued operations
In Q2, the technical result for discontinued operations (change of ownership insurance) was NOK 10.1m (NOK 30.0m) and the profit for the quarter was NOK 119.1m (-10.8m). In Q2, the company continued to sell change of ownership insurance due to existing agreements with some real estate brokers.
In H2, the technical result was NOK 10.4m (NOK 112.6m. The strong technical result in H1 last year is due to run-off gains of NOK 61m as a result of a win in the court of appeal regarding grey silverfish. The profit for the half-year was 3.8m (69.1m).
Investment return
The net investment portfolio amounted to a total of NOK 12,936m at 30 June 2020, up 18.7% compared to the portfolio end of Q2 2019.
The investment return on the company's total investment portfolio totalled NOK 638.8m, or 5.2% compared to a negative return of NOK -69.3m or -0.6% in Q2 2019. Equities accounted for a NOK 198m gain (22.4%) against a NOK 122.0m loss (-10.1%) in Q2 2019. The return on the fixed income portfolio totalled NOK 440.8m or 3.9% against NOK 52.7m or 0.5% in Q2 2019.
In H1, the investment result was NOK 186.7m (1.5%) against NOK 41.9m (0.4%) in H1 2019. Equities accounted for a NOK 133m loss (-11.3%) against a NOK 69.7m loss (-6.2%) in H1 2019. The return on the fixed income portfolio totalled NOK 319.7m or 2.9% against NOK 111.7m or 1.2% in H1 2019.
Among our investments, both in equities and bonds, there are very little exposure towards industries and companies directly affected by the corona virus disease.
At the end of 2019 about 16% of our total financial positions where allocated to High Yield (HY). By the end of Q2 2020 we have increased this allocation to 27%.
End of Q2 2020, 8.3% of Protector's financial assets were invested in equities, against 10.1% year end 2019.
Equity and capital position
The company's equity amounted to NOK 2,231.9m at the end of the quarter (NOK 2,019.1 at the end of 2019).
End of Q2, the volatility adjusted solvency ratio using the standard formula was 161% (166%), down from 172% year end 2019. The company's long term objective is to maintain a SCR-ratio (calculated according to the Solvency II regulations) above 150 %.
Protector has a BBB+ rating from A.M. Best.
Prospects
The COVID-19 situation has to this point had limited effect on the company's insurance business. Products in our portfolio that may be adversely affected by COVID-19 is limited. The situation may lead to some increased pay-outs within products like other illness and business interruption, but at the same time reduced economic activity has led to stronger profitability expectations on other products.
In the first half-year price increases were 13.5%. The client churn has been high but is expected to decline and start returning to normal levels entering 2021.
Claims development, and the inherent volatility of capital markets, continue to be the most important risk factors that could affect the company's profit in 2020.
Oslo, 9th July 2020
The Board of Directors of Protector Forsikring ASA
Income statement
| NOKm | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | FY 2019 |
|---|---|---|---|---|---|
| Premium income | |||||
| Gross written premiums | 1 288,0 | 1 105,9 | 4 116,0 | 3 819,2 | 5 100,5 |
| Change in provisions for unearned premiums | 54,3 | 136,1 | (1 480,4) | (1 430,4) | (104,7) |
| Gross premiums earned | 1 342,3 | 1 241,9 | 2 635,6 | 2 388,8 | 4 995,8 |
| Reinsurers' share of earned premiums | (187,4) | (230,0) | (358,3) | (486,3) | (848,2) |
| Earned premiums, net of reinsurance | 1 154,9 | 1 011,9 | 2 277,3 | 1 902,5 | 4 147,5 |
| Other insurance-related income | 3,9 | 3,2 | 8,2 | 6,4 | 10,5 |
| Gross claims incurred | (1 083,3) | (1 150,0) | (2 189,1) | (2 221,7) | (4 723,9) |
| Reinsurers' share of claims incurred | 137,0 | 150,2 | 236,4 | 337,5 | 774,8 |
| Claims incurred, net of reinsurance | (946,3) | (999,8) | (1 952,7) | (1 884,2) | (3 949,1) |
| Operating expenses | |||||
| Sales costs | (79,8) | (65,6) | (151,5) | (114,6) | (233,5) |
| Administration costs | (56,0) | (42,9) | (104,3) | (80,9) | (179,9) |
| Commission from reinsurers | 18,9 | 23,1 | 41,9 | 51,1 | 57,2 |
| Total operating expenses, net of reinsurance | (116,9) | (85,4) | (213,9) | (144,3) | (356,2) |
| Other insurance-related expenses | (2,3) | (1,9) | (6,6) | (7,1) | (15,7) |
| Technical result | 93,4 | (72,0) | 112,1 | (126,6) | (163,0) |
| Net income from financial assets | 509,8 | (31,7) | 187,0 | 49,5 | 141,4 |
| Other income | (2,7) | 0,4 | (2,7) | 0,7 | 1,7 |
| Other expenses | (15,0) | (13,6) | (30,7) | (28,1) | (52,1) |
| Other income/expenses | (17,7) | (13,2) | (33,4) | (27,4) | (50,3) |
| Non-technical result | 492,0 | (45,0) | 153,5 | 22,1 | 91,1 |
| Profit before tax | 585,4 | (116,9) | 265,7 | (104,6) | (71,9) |
| Tax | (119,9) | (0,1) | (80,2) | (0,1) | (4,1) |
| Discontinued operations | 119,1 | (10,8) | 3,8 | 69,1 | 71,5 |
| Profit before components of comprehensive income | 584,6 | (127,9) | 189,3 | (35,6) | (4,5) |
| Actuarial gain and loss from defined benefit pension plans | - | - | - | - | (1,8) |
| Currency changes from foreign enterprise | (5,7) | 2,5 | 8,2 | 1,9 | 1,3 |
| Taxes on components of comprehensive income | 1,4 | (0,3) - |
(2,1) | (0,1) - |
0,1 - |
| Profit for the period | 580,4 | (125,7) | 195,5 | (33,8) | (4,9) |
| - | - | - | |||
| Earnings per share | 7,14 | (1,56) | 2,31 | (0,43) | (0,06) |
| Earnings per share, diluted | 7,14 | (1,56) | 2,31 | (0,43) | (0,06) |
Balance Sheet
| NOKm | 30.06.2020 | 30.06.2019 | 31.12.2019 |
|---|---|---|---|
| Assets | |||
| Intangible fixed assets | |||
| Other intangible fixed assets | 44,7 | 26,6 | 34,6 |
| Total intangible fixed assets | 44,7 | 26,6 | 34,6 |
| Buildings and other real estates | |||
| Owner-occupied property | 12,6 | 13,1 | 12,8 |
| Total buildings and other real estates | 12,6 | 13,1 | 12,8 |
| Financial assets | |||
| Shares | 923,7 | 896,3 | 916,9 |
| Securities, bonds etc | 8 743,8 | 7 164,2 | 6 773,5 |
| Financial derivatives | 25,9 | 16,7 | 32,6 |
| Bank deposits | 1 500,5 | 839,0 | 1 529,4 |
| Total financial assets | 11 194,0 | 8 916,3 | 9 252,5 |
| Reinsurers share of gross technical provisions | |||
| Reinsurers share of gross premium provisions | 293,8 | 288,0 | 130,3 |
| Reinsurers share of gross claims provisions | 1 580,1 | 1 679,6 | 1 686,9 |
| Total reinsurers share of gross technical provisions | 1 873,9 | 1 967,6 | 1 817,2 |
| Receivables | |||
| Policyholders | 578,5 | 628,1 | 416,2 |
| Intermediaries | 2,7 | 6,6 | 5,1 |
| Other receivables | 141,3 | 19,1 | 48,3 |
| Total receivables | 722,6 | 653,8 | 469,7 |
| Other assets | |||
| Tangible fixed assets | 33,2 | 38,1 | 34,1 |
| Cash and bank deposits | 274,2 | 151,4 | 343,3 |
| Total other assets | 307,4 | 189,5 | 377,4 |
| Total prepaid expenses | 621,7 | 415,0 | 349,7 |
| Assets discontinued operations | 2 401,8 | 2 828,8 | 2 428,5 |
| Total assets | 17 178,6 | 15 010,7 | 14 742,2 |
Balance Sheet
| NOKm | 30.06.2020 | 30.06.2019 | 31.12.2019 |
|---|---|---|---|
| Equity and liabilities | |||
| Shareholders' equity | |||
| Share capital [86.155.605 shares] | 86,2 | 86,2 | 86,2 |
| Own shares | (4,3) | (4,4) | (4,4) |
| Other paid-in equity | 267,7 | 267,7 | 267,7 |
| Total paid-in equity | 349,6 | 349,4 | 349,4 |
| Earned equity | |||
| Natural perils fund | 83,0 | 67,8 | 76,9 |
| Guarantee scheme | 87,6 | 89,2 | 89,2 |
| Other equity | 1 711,7 | 1 481,6 | 1 503,8 |
| Total earned equity | 1 882,3 | 1 638,6 | 1 669,9 |
| Total equity | 2 231,9 | 1 988,0 | 2 019,3 |
| Subordinated loan capital | 1 243,3 | 1 243,3 | 1 243,3 |
| Technical provisions | |||
| Provisions for unearned premiums | 2 766,6 | 2 493,4 | 1 211,5 |
| Provisions for claims | 7 643,4 | 6 332,4 | 7 127,7 |
| Total technical provisions | 10 410,1 | 8 825,8 | 8 339,2 |
| Provisions for other risks and liabilities | |||
| Pension liabilities | 16,0 | 13,0 | 16,0 |
| Current tax liability | 47,6 | 12,5 | - |
| Deferred tax liability | 96,5 | 123,2 | 103,1 |
| Total provisions for other risks and liabilities | 160,1 | 148,8 | 119,2 |
| Liabilities | |||
| Liabilities in connection with insurance | 187,1 | 143,8 | 70,5 |
| Liabilities in connection with reinsurance | 1 157,0 | 536,7 | 727,7 |
| Financial derivatives | 51,2 | 22,1 | 45,5 |
| Other liabilities | 298,0 | 354,9 | 325,7 |
| Total liabilities | 1 693,3 | 1 057,5 | 1 169,4 |
| Incurred expenses and prepaid income | |||
| Other incurred expenses and prepaid income | 101,7 | 119,2 | 299,6 |
| Total incurred expenses and prepaid income | 101,7 | 119,2 | 299,6 |
| Liabilites discontinued operations | 1 338,3 | 1 628,1 | 1 552,2 |
| Total equity and liabilities | 17 178,6 | 15 010,7 | 14 742,2 |
Cash flow statement
| [NOKm] | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | FY 2019 |
|---|---|---|---|---|---|
| Cash flow from operations | |||||
| Premiums paid | 1 403,6 | 1 188,8 | 3 919,2 | 3 393,4 | 5 343,9 |
| Claims paid | (1 006,2) | (825,8) | (2 266,7) | (1 830,5) | (4 004,0) |
| Paid reinsurance | 380,2 | 281,1 | 211,8 | 240,7 | 659,2 |
| Paid operating expenses including commissions | (491,1) | (196,4) | (533,1) | (429,1) | (581,5) |
| Interest / dividend income | 81,8 | 81,7 | 142,4 | 139,3 | 268,9 |
| Net payments from financial instruments | (934,9) | (347,5) | (1 558,1) | (1 019,8) | (278,3) |
| Payable tax | (36,5) | (18,1) | (27,0) | 2,9 | 4,2 |
| Net cash flow from operations | (603,1) | 163,9 | (111,6) | 496,9 | 1 412,5 |
| Cash flow from investment activities | |||||
| Investments in fixed assets | (10,3) | (14,9) | (21,0) | (28,9) | (47,8) |
| Net cash flow from investment activities | (10,3) | (14,9) | (21,0) | (28,9) | (47,8) |
| Cash flow from financial activities | |||||
| Interest payments on subordinated loan capital | (16,4) | (16,3) | (34,3) | (32,1) | (66,6) |
| Net cash flow from financial activities | (16,4) | (16,3) | (34,3) | (32,1) | (66,6) |
| Net cash flow for the period | (629,8) | 132,7 | (167,0) | 435,8 | 1 298,1 |
| Net change in cash and cash equivalents | (629,8) | 132,7 | (167,0) | 435,8 | 1 298,1 |
| Cash and cash equivalents opening balance | 2 659,7 | 1 155,3 | 2 155,1 | 859,5 | 859,5 |
| Effects of exchange rate changes on cash and cash equivalents | (12,6) | (1,0) | 29,2 | (8,2) | (2,5) |
| Cash and cash equivalents closing balance | 2 017,3 | 1 287,1 | 2 017,3 | 1 287,1 | 2 155,1 |
Statement of changes in equity
| NOKm | Share Capital | Own shares | Other paid-in equity |
Natural perils fund |
Guarantee scheme |
Other equity | Total |
|---|---|---|---|---|---|---|---|
| Equity at 31.12.2018 | 86,2 | (4,4) | 267,7 | 54,8 | 88,5 | 1 540,4 | 2 033,0 |
| Profit for the period | 24,3 | 0,5 | 67,1 | 91,9 | |||
| Currency changes | (10,5) | (10,5) | |||||
| Equity at 31.03.2019 | 86,2 | (4,4) | 267,7 | 79,1 | 89,0 | 1 597,0 | 2 114,5 |
| Profit for the period | (11,3) | 0,2 | (114,6) | (125,7) | |||
| Currency changes | (0,8) | (0,8) | |||||
| Equity at 30.06.2019 | 86,2 | (4,4) | 267,7 | 67,8 | 89,2 | 1 481,6 | 1 988,0 |
| Profit for the period | 5,2 | 0,2 | (13,8) | (8,3) | |||
| Currency changes | (1,2) | (1,2) | |||||
| Equity at 30.09.2019 | 86,2 | (4,4) | 267,7 | 73,0 | 89,5 | 1 466,6 | 1 978,5 |
| Profit for the period | 3,9 | (0,3) | 33,7 | 37,3 | |||
| Currency changes | 3,6 | 3,6 | |||||
| Equity at 31.12.2019 | 86,2 | (4,4) | 267,7 | 76,9 | 89,2 | 1 503,8 | 2 019,3 |
| Profit for the period | 3,9 | (0,7) | (388,1) | (384,9) | |||
| Currency changes | (4,1) | (4,1) | |||||
| Equity at 31.03.2020 | 86,2 | (4,4) | 267,7 | 80,8 | 88,5 | 1 111,7 | 1 630,4 |
| Profit for the period | 2,2 | (0,9) | 579,1 | 580,4 | |||
| Currency changes | 21,0 | 21,0 | |||||
| Own shares | 0,1 | 0,1 | |||||
| Equity at 30.06.2020 | 86,2 | (4,3) | 267,7 | 83,0 | 87,6 | 1 711,7 | 2 231,9 |
Notes
Accounting principles
These interim accounts have been prepared in accordance with the Financial Statement Regulation for Non-life Insurance Companies (Forskrift om årsregnskap for skadeforsikringsselskaper) and IAS 34 and in line with the accounting principles described in the annual report for 2019. The company's financial statements are prepared in accordance with the Norwegian Accounting Act, Financial Statement Regulation for Non-life Insurance Companies and generally accepted accounting principles. For further information, please see the 2019 annual report.
Segment information
Protector Forsikring ASA's operations comprise the segments Norway, Sweden, Denmark, Finland and the UK. The segments are evaluated regularly by Protector's executive management based on financial and operational information specially prepared for each segment for the purpose of following up performance and allocating necessary resources.
Quarter
| Norway | Sweden | Denmark | UK | Finland | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| [NOKm] | Q2 2020 | Q2 2019 | Q2 2020 | Q2 2019 | Q2 2020 | Q2 2019 | Q2 2020 | Q2 2019 | Q2 2020 | Q2 2019 | |
| Gross premiums written | 266,2 | 333,9 | 362,3 | 402,7 | 41,2 | 40,2 | 620,9 | 311,2 | (2,7) | 17,8 | |
| Gross premiums earned | 373,1 | 405,6 | 396,5 | 374,7 | 251,4 | 227,6 | 280,1 | 178,9 | 41,2 | 55,2 | |
| Gross claims incurred | (299,7) | (343,3) | (356,9) | (374,4) | (247,2) | (233,8) | (159,4) | (124,2) | (20,1) | (74,4) | |
| Earned premiums, net of reinsurance | 330,8 | 347,4 | 347,0 | 307,9 | 219,9 | 191,6 | 220,4 | 116,1 | 36,7 | 48,8 | |
| Other insurance related income | 2,3 | 1,6 | (0,1) | 0,1 | (0,4) | 0,7 | (0,8) | 0,5 | 2,9 | 0,3 | |
| Claims incurred, net of reinsurance | (265,3) | (310,6) | (311,1) | (263,2) | (215,7) | (197,1) | (135,5) | (162,0) | (18,6) | (66,9) | |
| Sales cost | (14,9) | (3,4) | (35,0) | (40,8) | (5,5) | (2,7) | (23,3) | (15,7) | (1,1) | (3,0) | |
| Administration cost | (13,5) | (10,9) | (14,4) | (7,4) | (13,1) | (12,3) | (13,3) | (12,0) | (1,7) | (0,3) | |
| Commission from reinsurer | 4,9 | 6,7 | 4,1 | 6,4 | (0,7) | 2,3 | 8,6 | 9,6 | 2,0 | (1,9) | |
| Other insurance related expenses | 0,5 | (1,8) | (1,3) | (0,2) | 0,0 | - | (1,2) | (0,3) | (0,3) | 0,4 | |
| Technical result | 44,8 | 29,0 | (10,8) | 2,8 | (15,4) | (17,5) | 55,0 | (63,8) | 19,8 | (22,6) | |
| Other income/costs | (15,5) | (13,1) | (0,1) | - | (0,9) | (0,1) | (1,6) | - | 0,4 | - | |
| Net financial income | 395,8 | (52,2) | 75,7 | 13,6 | 10,4 | 0,8 | 7,0 | 0,5 | 20,8 | 5,6 | |
| Profit before tax | 425,2 | (36,3) | 64,8 | 16,4 | (5,8) | (16,8) | 60,4 | (63,3) | 40,9 | (17,0) | |
| Claims ratio, net of ceded business | (1) | 80,2 % | 89,4 % | 89,6 % | 85,5 % | 98,1 % | 102,9 % | 61,5 % | 139,5 % | 50,8 % | 137,1 % |
| Expense ratio, net of ceded business | (2) | 7,1 % | 2,2 % | 13,0 % | 13,6 % | 8,8 % | 6,6 % | 12,7 % | 15,6 % | 2,5 % | 10,7 % |
| Combined ratio, net of ceded business | (3) | 87,3 % | 91,6 % | 102,7 % | 99,1 % | 106,8 % | 109,5 % | 74,2 % | 155,1 % | 53,3 % | 147,7 % |
| Gross claims ratio | (4) | 80,3 % | 84,6 % | 90,0 % | 99,9 % | 98,3 % | 102,7 % | 56,9 % | 69,4 % | 48,8 % | 134,8 % |
| Gross expense ratio | (5) | 7,6 % | 3,5 % | 12,5 % | 12,9 % | 7,4 % | 6,6 % | 13,0 % | 15,5 % | 7,0 % | 6,0 % |
| Gross combined ratio | (6) | 87,9 % | 88,2 % | 102,5 % | 112,8 % | 105,7 % | 109,3 % | 70,0 % | 84,9 % | 55,8 % | 140,8 % |
(1) Claims incurred, net of reinsurance in % of earned premiums, net of reinsurance
(2) Operating expenses in % of earned premiums, net of reinsurance
(3) Net claims ratio + net expense ratio
(4) Gross claims incurred in % of gross premiums earned
(5) Sales and administration costs in % of gross premiums earned
(6) Gross claims ratio + gross expense ratio
Half-year
| Norway | Sweden | Denmark | UK | Finland | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| [NOKm] | H1 2020 | H1 2019 | H1 2020 | H1 2019 | H1 2020 | H1 2019 | H1 2020 | H1 2019 | H1 2020 | H1 2019 | |
| Gross premiums written | 1 086,7 | 1 137,9 | 1 151,3 | 1 188,5 | 854,6 | 801,5 | 813,2 | 486,7 | 210,2 | 204,8 | |
| Gross premiums earned | 740,0 | 781,1 | 793,9 | 720,5 | 485,3 | 435,2 | 507,2 | 332,4 | 109,1 | 119,7 | |
| Gross claims incurred | (645,8) | (675,7) | (676,0) | (700,5) | (492,8) | (456,2) | (308,6) | (249,8) | (66,0) | (139,4) | |
| Earned premiums, net of reinsurance | 658,7 | 661,9 | 695,6 | 569,7 | 424,1 | 365,5 | 401,4 | 199,7 | 97,5 | 105,7 | |
| Other insurance related income | 2,8 | 2,1 | 0,4 | 0,2 | 0,4 | 0,9 | (0,0) | 1,9 | 4,6 | 1,2 | |
| Claims incurred, net of reinsurance | (580,3) | (609,5) | (585,7) | (506,6) | (445,7) | (392,6) | (280,4) | (251,5) | (60,5) | (123,9) | |
| Sales cost | (29,1) | (14,2) | (69,9) | (65,7) | (10,1) | (9,7) | (40,4) | (21,0) | (2,0) | (3,9) | |
| Administration cost | (27,2) | (23,3) | (27,4) | (18,1) | (21,8) | (18,7) | (24,4) | (17,7) | (3,5) | (3,1) | |
| Commission from reinsurer | 17,1 | 8,3 | 12,7 | 25,0 | (4,3) | 8,2 | 12,5 | 10,7 | 4,0 | (1,0) | |
| Other insurance related expenses | (0,7) | (3,0) | (1,7) | (2,6) | (1,5) | (0,5) | (1,7) | (0,7) | (1,0) | (0,3) | |
| Technical result | 41,4 | 22,2 | 24,0 | 1,9 | (59,0) | (46,9) | 66,9 | (78,6) | 38,9 | (25,3) | |
| Other income/costs | (31,2) | (27,2) | (0,1) | (0,1) | (0,9) | - | (1,6) | - | 0,4 | (0,2) | |
| Net financial income | 168,3 | 16,0 | 26,6 | 21,7 | (3,5) | 2,6 | 8,6 | 3,3 | (13,2) | 6,0 | |
| Profit before tax | 178,5 | 11,0 | 50,5 | 23,5 | (63,4) | (44,3) | 73,9 | (75,3) | 26,1 | (19,5) | |
| Claims ratio, net of ceded business | (1) | 88,1 % | 92,1 % | 84,2 % | 88,9 % | 105,1 % | 107,4 % | 69,9 % | 125,9 % | 62,1 % | 117,2 % |
| Expense ratio, net of ceded business | (2) | 5,9 % | 4,4 % | 12,2 % | 10,3 % | 8,5 % | 5,5 % | 13,0 % | 14,0 % | 1,6 % | 7,6 % |
| Combined ratio, net of ceded business | (3) | 94,0 % | 96,5 % | 96,4 % | 99,2 % | 113,7 % | 112,9 % | 82,9 % | 140,0 % | 63,7 % | 124,8 % |
| Gross claims ratio | (4) | 87,3 % | 86,5 % | 85,1 % | 97,2 % | 101,6 % | 104,8 % | 60,8 % | 75,2 % | 60,5 % | 116,5 % |
| Gross expense ratio | (5) | 7,6 % | 4,8 % | 12,3 % | 11,6 % | 6,6 % | 6,5 % | 12,8 % | 11,6 % | 5,1 % | 5,8 % |
| Gross combined ratio | (6) | 94,9 % | 91,3 % | 97,4 % | 108,9 % | 108,1 % | 111,4 % | 73,6 % | 86,8 % | 65,5 % | 122,3 % |
Discontinued operations
Protector decided in 2018 to exit the COI market due to the product's recent years weak technical performance, and due to the significant uncertainty related to the product's future premium development and profitability. After the decision to exit the COI market, COI is defined as "discontinued operations" in the accounts. Net profit and assets and liabilities associated with COI are presented on separated lines as discontinued operations.
Protector has entered into a 50% quota share agreement (reinsurance) for the entire COI portfolio. The quota share agreement includes the historical portfolio as well as new business written. Premium income in 2020 is due to some continued agreements with real estate brokers.
| NOKm | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | FY 2019 |
|---|---|---|---|---|---|
| Gross premiums earned | 64,2 | 109,9 | 127,1 | 198,6 | 356,1 |
| Reinsurers' share of earned premiums | (29,6) | (50,5) | (58,6) | (59,4) | (132,0) |
| Earned premiums, net of reinsurance | 34,6 | 59,3 | 68,5 | 139,2 | 224,1 |
| Gross claims incurred | (49,8) | (77,0) | (107,9) | (78,2) | (269,8) |
| Reinsurers' share of claims incurred | 26,2 | 45,3 | 52,7 | 45,4 | 139,8 |
| Claims incurred, net of reinsurance | (23,6) | (31,7) | (55,2) | (32,8) | (130,0) |
| Total operating expenses, net of reinsurance | 1,1 | 2,3 | 1,3 | 6,2 | (5,7) |
| Other insurance-related income/expenses | (2,1) | (0,0) | (4,2) | (0,0) - |
(6,6) |
| Technical result | 10,1 | 30,0 | 10,4 | 112,6 | 90,9 |
| Net income from financial assets | 129,0 | (37,6) | (0,3) | (7,5) | 15,7 |
| Other income/expenses | (2,1) | (3,2) | (4,6) | (6,4) | (11,4) |
| Non-technical result | 126,9 | (40,8) | (4,9) | (13,9) | 4,3 |
| Profit before tax | 137,0 | (10,8) | 5,5 | 98,7 | 95,3 |
| Tax | (17,9) | (0,0) | (1,7) | (29,6) | (23,8) |
| Profit for the period | 119,1 | (10,8) | 3,8 | 69,1 | 71,4 |
Financial assets, fair value estimation
| Financial assets through profit or loss [NOKm] | Currency | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|
| Shares | NOK | 235 | 828 | 1 063 | |
| Bonds and other fixed income securities | NOK | 10 034 | 10 034 | ||
| Cash and cash equivalents | NOK | 1 895 | 1 895 | ||
| Derivatives: | |||||
| Foreign currency contracts | NOK | 14 | 14 | ||
| Options | NOK | 16 | 16 | ||
| Total assets 30.06.2020 | NOK | 2 130 | 10 892 | 0 | 13 022 |
| Total assets 30.06.2019 | NOK | 1 237 | 9 745 | 37 | 11 019 |
| Financial liabilities at fair value through profit or loss [NOKm] | Currency | Level 1 | Level 2 | Level 3 | Total |
| Foreign exchange contracts | NOK | (51) | (51) | ||
| Other financial liabilities | NOK | (35) | (35) | ||
| Total financial liabilities 30.06.2020 | NOK | (35) | (51) | (86) | |
| Total financial liabilities 30.06.2019 | NOK | (101) | (22) | (190) |
The fair value of listed investments is based on the current sales price. Financial instruments measured at fair value are valued on a daily basis. Directly observable prices in the market are used as far as possible. The valuations for the different types of financial instruments are based on recognised methods and models.
Level 1: Financial instruments valued on the basis of quoted prices for identical assets in active markets
INTERIM REPORT Q2 2020 | PROTECTOR FORSIKRING ASA | PAGE 16 of 22
This category encompasses listed equities that over the previous three months have experienced average daily trading equivalent to approximately NOK 20 million or more. Based on this, the equities are regarded as sufficiently liquid to be included at this level. Bonds, certificates or equivalent instruments issued by national governments are generally classified as level 1.
Level 2: Financial instruments valued on the basis of observable market information not covered by level 1
This category encompasses financial instruments that are valued on the basis of market information that can be directly observable or indirectly observable. Market information that is indirectly observable means that the prices can be derived from observable related markets. Level 2 includes shares or equivalent equity instruments for which market prices are available, but where the volume of transactions is too limited to fulfil the criteria in level 1. Shares in this level will normally have been traded during the last month. Bonds and equivalent instruments are generally classified in this level. Foreign exchange derivatives are classified as level 2. Fund investments are generally classified as level 2.
Level 3: Financial instruments valued on the basis of information that is not observable in accordance with level 2
The instrument is included in level 3 if one or more essential data are not based on observable market data.
Solvency Margin
| (NOKm) | 30.06.2020 | 30.06.2019 | 31.12.2019 |
|---|---|---|---|
| Total solvency capital requirement | 1 943 | 1 744 | 1 726 |
| Total eligible own funds to meet SCR | 3 120 | 2 902 | 2 967 |
| Ratio of eligible own funds to SCR | 161 % | 166 % | 172 % |
| Totalt minimum capital requirement | 874 | 785 | 777 |
| Ratio of eligible own funds to MCR | 266 % | 279 % | 291 % |
* Use of volatility adjustment (VA) from and including Q1 2020; historical results recalculated to include VA
Alternative performance measures and key figures
| Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | 1.1-31.12.2019 | ||
|---|---|---|---|---|---|---|
| Gross premiums written ¹ | ||||||
| Norway | NOKm | 266,2 | 333,9 | 1 086,7 | 1 137,9 | 1 540,5 |
| Sweden | NOKm | 362,3 | 402,7 | 1 151,3 | 1 188,4 | 1 549,5 |
| Denmark | NOKm | 41,2 | 40,2 | 854,6 | 801,5 | 937,1 |
| UK | NOKm | 620,9 | 311,2 | 813,2 | 486,6 | 852,7 |
| Finland | NOKm | -2,7 | 17,8 | 210,2 | 204,8 | 220,7 |
| Total premiums written | NOKm | 1 288,0 | 1 105,9 | 4 116,0 | 3 819,2 | 5 100,5 |
| Gross premiums earned | ||||||
| Norway | NOKm | 373,1 | 405,6 | 740,0 | 781,2 | 1 583,9 |
| Sweden | NOKm | 396,5 | 374,7 | 793,9 | 720,5 | 1 491,9 |
| Denmark | NOKm | 251,4 | 227,6 | 485,3 | 435,2 | 921,5 |
| UK | NOKm | 280,1 | 178,9 | 507,2 | 332,3 | 744,4 |
| Finland | NOKm | 41,2 | 55,2 | 109,1 | 119,7 | 254,0 |
| Total gross premiums earned | NOKm | 1 342,3 | 1 241,9 | 2 635,6 | 2 388,8 | 4 995,8 |
| Earned premiums, net of reinsurance | ||||||
| Norway | NOKm | 330,8 | 347,4 | 658,7 | 661,9 | 1 367,1 |
| Sweden | NOKm | 347,0 | 307,9 | 695,6 | 569,7 | 1 264,8 |
| Denmark | NOKm | 219,9 | 191,6 | 424,1 | 365,5 | 786,0 |
| UK | NOKm | 220,4 | 116,1 | 401,4 | 199,7 | 504,9 |
| Finland | NOKm | 36,7 | 48,8 | 97,5 | 105,7 | 224,6 |
| Total earned premiums, net of reinsurance | NOKm | 1 154,9 | 1 011,9 | 2 277,3 | 1 902,5 | 4 147,5 |
| Gross claims incurred | ||||||
| Norway | NOKm | (299,7) | (343,3) | (645,8) | (675,8) | (1 591,5) |
| Sweden | NOKm | (356,9) | (374,4) | (676,0) | (700,6) | (1 343,3) |
| Denmark | NOKm | (247,2) | (233,8) | (492,8) | (456,3) | (885,1) |
| UK | NOKm | (159,4) | (124,2) | (308,6) | (249,8) | (543,9) |
| Finland | NOKm | (20,1) | (74,4) | (66,0) | (139,4) | (360,1) |
| Total gross claims incurred | NOKm | (1 083,3) | (1 150,0) | (2 189,1) | (2 221,7) | (4 723,9) |
| Claims incurred, net of reinsurance | ||||||
| Norway | NOKm | (265,3) | (310,6) | (580,3) | (609,6) | (1 356,6) |
| Sweden | NOKm | (311,1) | (263,2) | (585,7) | (506,6) | (1 058,1) |
| Denmark | NOKm | (215,7) | (197,1) | (445,7) | (392,6) | (776,5) |
| UK | NOKm | (135,5) | (162,0) | (280,4) | (251,6) | (436,4) |
| Finland | NOKm | (18,6) | (66,9) | (60,5) | (123,9) | (321,5) |
| Total claims incurred, net of reinsurance | NOKm | (946,3) | (999,8) | (1 952,7) | (1 884,2) | (3 949,1) |
| Gross expenses | ||||||
| Norway | NOKm | (28,4) | (14,3) | (56,2) | (37,5) | (83,4) |
| Sweden | NOKm | (49,4) | (48,2) | (97,3) | (83,8) | (170,5) |
| Denmark | NOKm | (18,5) | (15,0) | (31,9) | (28,4) | (59,2) |
| UK | NOKm | (36,5) | (27,7) | (64,8) | (38,7) | (86,7) |
| Finland | NOKm | (2,9) | (3,3) | (5,5) | (7,0) | (13,5) |
| Total gross expenses | NOKm | (135,8) | (108,5) | (255,8) | (195,4) | (413,4) |
| Net expenses | ||||||
| Norway | NOKm | (23,5) | (7,6) | (39,2) | (29,3) | (82,9) |
| Sweden | NOKm | (45,3) | (41,8) | (84,7) | (58,8) | (139,2) |
| Denmark | NOKm | (19,3) | (12,7) | (36,2) | (20,3) | (46,3) |
| UK | NOKm | (27,9) | (18,1) | (52,3) | (28,0) | (64,1) |
| Finland | NOKm | (0,9) | (5,2) | (1,5) | (8,0) | (23,8) |
| Total net expenses | NOKm | (116,9) | (85,4) | (213,9) | (144,3) | (356,2) |
Alternative performance measures and key figures
| Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | 1.1-31.12.2019 | ||
|---|---|---|---|---|---|---|
| Gross claims ratio | ||||||
| Norway | % | 80,3 % | 84,6 % | 87,3 % | 86,5 % | 100,5 % |
| Sweden | % | 90,0 % | 99,9 % | 85,1 % | 97,2 % | 90,0 % |
| Denmark | % | 98,3 % | 102,7 % | 101,6 % | 104,9 % | 96,0 % |
| UK | % | 56,9 % | 69,4 % | 60,8 % | 75,2 % | 73,1 % |
| Finland | % | 48,8 % | 134,8 % | 60,5 % | 116,4 % | 141,8 % |
| Total gross claims ratio | % | 80,7 % | 92,6 % | 83,1 % | 93,0 % | 94,6 % |
| Claims ratio, net of ceded business ¹ | ||||||
| Norway | % | 80,2 % | 89,4 % | 88,1 % | 92,1 % | 99,2 % |
| Sweden | % | 89,6 % | 85,5 % | 84,2 % | 88,9 % | 83,7 % |
| Denmark | % | 98,1 % | 102,9 % | 105,1 % | 107,4 % | 98,8 % |
| UK | % | 61,5 % | 139,5 % | 69,9 % | 126,0 % | 86,4 % |
| Finland | % | 50,8 % | 137,1 % | 62,1 % | 117,2 % | 143,1 % |
| Total claims ratio, net of ceded business | % | 81,9 % | 98,8 % | 85,7 % | 99,0 % | 95,2 % |
| Gross expense ratio | ||||||
| Norway | % | 7,6 % | 3,5 % | 7,6 % | 4,8 % | 5,3 % |
| Sweden | % | 12,5 % | 12,9 % | 12,3 % | 11,6 % | 11,4 % |
| Denmark | % | 7,4 % | 6,6 % | 6,6 % | 6,5 % | 6,4 % |
| UK | % | 13,0 % | 15,5 % | 12,8 % | 11,7 % | 11,7 % |
| Finland | % | 7,0 % | 6,0 % | 5,1 % | 5,8 % | 5,3 % |
| Total gross expense ratio | % | 10,1 % | 8,7 % | 9,7 % | 8,2 % | 8,3 % |
| Expense ratio, net of ceded business ¹ | ||||||
| Norway | % | 7,1 % | 2,2 % | 5,9 % | 4,4 % | 6,1 % |
| Sweden | % | 13,0 % | 13,6 % | 12,2 % | 10,3 % | 11,0 % |
| Denmark | % | 8,8 % | 6,6 % | 8,5 % | 5,5 % | 5,9 % |
| UK | % | 12,7 % | 15,6 % | 13,0 % | 14,0 % | 12,7 % |
| Finland | % | 2,5 % | 10,7 % | 1,6 % | 7,6 % | 10,6 % |
| Total expense ratio, net of ceded business | % | 10,1 % | 8,4 % | 9,4 % | 7,6 % | 8,6 % |
| Gross combined ratio | ||||||
| Norway | % | 87,9 % | 88,2 % | 94,9 % | 91,3 % | 105,7 % |
| Sweden | % | 102,5 % | 112,8 % | 97,4 % | 108,9 % | 101,5 % |
| Denmark | % | 105,7 % | 109,3 % | 108,1 % | 111,4 % | 102,5 % |
| UK | % | 70,0 % | 84,9 % | 73,6 % | 86,8 % | 84,7 % |
| Finland | % | 55,8 % | 140,8 % | 65,5 % | 122,3 % | 147,1 % |
| Total gross combined ratio | % | 90,8 % | 101,3 % | 92,8 % | 101,2 % | 102,8 % |
| Combined ratio, net of ceded business ¹ | ||||||
| Norway | % | 87,3 % | 91,6 % | 94,0 % | 96,5 % | 105,3 % |
| Sweden | % | 102,7 % | 99,1 % | 96,4 % | 99,2 % | 94,7 % |
| Denmark | % | 106,8 % | 109,5 % | 113,7 % | 113,0 % | 104,7 % |
| UK | % | 74,2 % | 155,1 % | 82,9 % | 140,0 % | 99,1 % |
| Finland | % | 53,3 % | 147,7 % | 63,7 % | 124,8 % | 153,7 % |
| Total combined ratio, net of ceded business | % | 92,1 % | 107,2 % | 95,1 % | 106,6 % | 103,8 % |
| Retention rate ¹ | ||||||
| Norway | % | 88,7 % | 85,7 % | 89,0 % | 84,7 % | 86,3 % |
| Sweden | % | 87,5 % | 82,2 % | 87,6 % | 79,1 % | 84,8 % |
| Denmark | % | 87,5 % | 84,2 % | 87,4 % | 84,0 % | 85,3 % |
| UK | % | 78,7 % | 64,9 % | 79,1 % | 60,1 % | 67,8 % |
| Finland | % | 89,0 % | 88,4 % | 89,3 % | 88,3 % | 88,4 % |
| Total retention rate | % | 86,0 % | 81,5 % | 86,4 % | 79,6 % | 83,0 % |
Alternative performance measures and key figures
| Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | 1.1-31.12.2019 | ||
|---|---|---|---|---|---|---|
| Run-off gains/(losses) | ||||||
| Net run-off-gains/losses | NOKm | -22,3 | -97,8 | -18,7 | -34,6 | -49,8 |
| Net run-off-gains/losses | % | -1,9 % | -9,7 % | -0,8 % | -1,8 % | -1,2 % |
| Return on investments ¹ | ||||||
| Total net income from investments, continued business | NOKm | 509,8 | (31,7) | 187,0 | 49,5 | 141,4 |
| Total net income from investments, discontinued business | NOKm | 129,0 | (37,6) | (0,3) | (7,5) | 15,7 |
| Total net income from investments | NOKm | 638,8 | (69,3) | 186,7 | 41,9 | 157,1 |
| Average investments, continued business | NOKm | 10 464,7 | 8 936,0 | 10 495,6 | 8 639,9 | 8 455,1 |
| Average investments, discontinued business | NOKm | 1 838,5 | 1 951,8 | 1 841,4 | 1 951,8 | 2 369,9 |
| Total average investments | NOKm | 12 303,2 | 10 887,8 | 12 337,0 | 10 591,7 | 10 825,0 |
| Return on investments, continued business | % | 4,9 % | -0,4 % | 1,8 % | 0,6 % | 1,7 % |
| Return investments, discontinued business | % | 7,0 % | -1,9 % | 0,0 % | -0,4 % | 0,7 % |
| Total return on investments | % | 5,2 % | -0,6 % | 1,5 % | 0,4 % | 1,5 % |
| Total net income from shares | NOKm | 198,0 | (122,0) | (133,0) | (69,7) | (44,5) |
| Total net income from interests | NOKm | 440,8 | 52,7 | 319,7 | 111,7 | 201,7 |
| Total net income from investments | NOKm | 638,8 | (69,3) | 186,7 | 41,9 | 157,1 |
| Average investments shares | NOKm | 884,0 | 1 203,8 | 1 181,5 | 1 129,1 | 1 146,8 |
| Average investments interests | NOKm | 11 419,2 | 9 684,0 | 11 155,6 | 9 462,5 | 9 678,1 |
| Total average investments | NOKm | 12 303,2 | 10 887,8 | 12 337,0 | 10 591,7 | 10 825,0 |
| Return on investments, shares | % | 22,4 % | -10,1 % | -11,3 % | -6,2 % | -3,9 % |
| Return investments, interests | % | 3,9 % | 0,5 % | 2,9 % | 1,2 % | 2,1 % |
| Total return on investments | % | 5,2 % | -0,6 % | 1,5 % | 0,4 % | 1,5 % |
| Return on equity, annualised ¹ | ||||||
| Profit before comprehensive income | NOKm | 584,6 | (127,9) | 189,3 | (35,6) | (4,5) |
| Average sharholders equity | NOKm | 1931,1 | 2051,2 | 1943,3 | 2145,7 | 2026,2 |
| Return on equity, annualised | % | 121,1 % | -24,9 % | 19,5 % | -3,3 % | -0,2 % |
| Equity | NOKm | 2 231,9 | 1 988,0 | 2 231,9 | 1 988,0 | 2 019,3 |
| Equity per share | NOK | 27,3 | 24,3 | 27,3 | 24,3 | 24,7 |
| Earnings per share in the period, basic and diluted ² | NOK | 7,14 | -1,56 | 2,31 | -0,43 | -0,06 |
| Issued shares (excl. own shares), at the end of the period | No. | 81 886 229 | 81 761 926 | 81 886 229 | 81 761 926 | 81 761 926 |
¹ Defined as alternative performance measure (APM). APMs are described on www.protectorforsikring.no in
document named APMs Protector Forsikring Q2 2020
² Earnings per share from continuing and discontinued operations, basic and diluted = the shareholders' share of the profit or loss from continuing and discontinued operations in the period/average number of outstanding shares in the period
Quarterly outline continued business
| [NOKm] | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2019 | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2018 | Q2 2018 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Gross premiums written | 1 288,0 | 2 828,0 | 548,8 | 732,5 | 1 105,9 | 2 713,4 | 475,1 | 624,3 | 838,3 | |
| Gross premiums earned | 1 342,3 | 1 293,2 | 1 315,6 | 1 291,4 | 1 241,9 | 1 146,9 | 1 123,2 | 1 042,4 | 1 015,7 | |
| Gross claims incurred | (1 083,3) (1 105,8) (1 363,2) (1 139,0) (1 150,0) (1 071,7) (1 161,7) | (937,1) | (889,3) | |||||||
| Earned premiums, net of reinsurance | 1 154,9 | 1 122,3 | 1 132,9 | 1 112,1 | 1 011,9 | 890,6 | 759,0 | 689,7 | 699,8 | |
| Other insurance related income | 3,9 | 4,2 | 2,0 | 2,2 | 3,2 | 3,1 | 12,0 | 9,5 | 2,9 | |
| Claims incurred, net of reinsurance | (946,3) (1 006,4) (1 129,7) | (935,2) | (999,8) | (884,4) | (739,3) | (613,2) | (670,5) | |||
| Sales cost | (79,8) | (71,7) | (65,3) | (53,7) | (65,6) | (48,9) | (49,4) | (55,4) | (49,3) | |
| Administration cost | (56,0) | (48,3) | (61,0) | (38,0) | (42,9) | (38,0) | (46,1) | (28,9) | (35,0) | |
| Commission from reinsurer | 18,9 | 23,0 | (2,3) | 8,4 | 23,1 | 28,0 | 31,1 | 37,7 | 61,0 | |
| Other insurance related expenses | 1,7 | (4,3) | 2,9 | (11,5) | (1,9) | (5,2) | (2,1) | (10,8) | (6,0) | |
| Technical result | 93,4 | 18,8 | (120,6) | 84,2 | (72,0) | (54,7) | (34,8) | 28,6 | 2,8 | |
| Other income/costs | (17,7) | (16,3) | (8,3) | (14,7) | (13,2) | (14,0) | (12,3) | (12,5) | (12,6) | |
| Net financial income | 509,8 | (322,8) | 107,3 | (15,3) | (31,7) | 81,2 | (141,9) | 35,5 | 78,7 | |
| Profit before tax | 585,4 | (320,3) | (21,5) | 54,2 | (116,9) | 12,5 | (189,1) | 51,7 | 68,9 | |
| Claims ratio, net of ceded business | (1) | 81,9 % | 89,7 % | 99,7 % | 84,1 % | 98,8 % | 99,3 % | 97,4 % | 88,9 % | 95,8 % |
| Expense ratio, net of ceded business | (2) | 10,1 % | 8,6 % | 11,4 % | 7,5 % | 8,4 % | 6,6 % | 8,5 % | 6,7 % | 3,3 % |
| Combined ratio, net of ceded business | (3) | 92,1 % | 98,3 % | 111,1 % | 91,6 % | 107,2 % | 105,9 % | 105,9 % | 95,7 % | 99,2 % |
| Gross claims ratio | (4) | 80,7 % | 85,5 % | 103,6 % | 88,2 % | 92,6 % | 93,4 % | 103,4 % | 89,9 % | 87,5 % |
| Gross expense ratio | (5) | 10,1 % | 9,3 % | 9,6 % | 7,1 % | 8,7 % | 7,6 % | 8,5 % | 8,1 % | 8,3 % |
| Gross combined ratio | (6) | 90,8 % | 94,8 % | 113,2 % | 95,3 % | 101,3 % | 101,0 % | 111,9 % | 98,0 % | 95,8 % |
(1) Claims incurred, net of reinsurance in % of earned premiums, net of reinsurance
(2) Operating expenses in % of earned premiums, net of reinsurance
(3) Net claims ratio + net expense ratio
(4) Gross claims incurred in % of gross premiums earned
(5) Sales and administration costs in % of gross premiums earned
(6) Gross claims ratio + gross expense ratio
The Board of Directors and the CEO's statement
We confirm, to the best of our knowledge, that the condensed set of financial statements for the period 1 January to 30 June 2020 has been prepared in accordance with Norwegian Accounting Act, financial statement regulations for insurance companies, IAS 34 – Interim Financial Reporting and generally accepted accounting principles, and gives a true and fair view of the Company's assets, liabilities, financial position and profit and loss as a whole.
We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties transactions.
Oslo, 9th July 2020
The Board of Directors of Protector Forsikring ASA
(styreleder) (nestleder)
Jostein Sørvoll Arve Ree Else Bugge Fougner
Kjetil Garstad Randi Helene Røed Kristine Røkeberg Nilsen
Mathews V. Ambalathil Sverre Bjerkeli
(CEO)
