Investor Presentation • Oct 23, 2019
Investor Presentation
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23 October 2019
This presentation contains alternative performance measures (APMs). APMs are described on www.gjensidige.no/reporting in document named APMs Gjensidige Forsikring Group Q3 2019.
1) Ipsos Reputation-survey, includes 109 companies in Norway, in 10 different sectors. Survey criteria: overall impression; social responsibility and moral; economy and profitability; marketing and information; environmental focus.
| NOK m |
|||||||
|---|---|---|---|---|---|---|---|
| 953 | 1 | (16) | 5 | 2 | 1 | (58) 888 |
888 |
| 8 01 2 3 Q |
e at v Pri |
al erci m m o C |
k ar m n e D |
n e d e w S |
cs alti B |
C C |
9 01 2 3 Q |
| Q3 2019 | % |
|---|---|
| Fixed income |
0.3 |
| Current equities |
0.1 |
| PE funds | 0.6 |
| Property | 1.9 |
| Total free portfolio |
0.5 |
1) Operating SII earnings comprise SII underwriting result and SII financial result of the match portfolio after tax 2) Based on 80 per cent pay-out ratio according to dividend policy
| Metric | Status Q3 2019 | Target 2022 |
|---|---|---|
| Customer satisfaction (CSI) |
78.1 | > 78, Group |
| Customer retention | 90% | > 90%, Norway |
| 79% | > 85%, outside Norway |
|
| Sales effectiveness | + 6.8% | + 10%, Group |
| Automated tariffs | 35% | 100%, Group |
| Digital claims reporting |
69% | 80%, Norway |
| Claims straight through processing |
18% | 64%, Norway |
| Claims cost | Annual reporting | Reduce by NOK 500 million, Group |
| Claims related CO2-intensity |
Annual reporting | Reduce year by year, Group |
| Metric | Target |
|---|---|
| Combined ratio | 86-89%1) |
| Cost ratio | <15% |
| Solvency margin (PIM) | 150-200% |
| ROE after tax | >20%1) |
| UW result outside Norway | NOK 750m (in 2022) 2) |
| Dividends | Nominal high and stable (and >80 % over time) |
| Date | Location | Participants | Event | Arranged by |
|---|---|---|---|---|
| 23 October | Oslo | CEO Helge Leiro Baastad CFO Jostein Amdal Head of IR Mitra H. Negård |
Roadshow | Pareto |
| 24 October | London | CFO Jostein Amdal IRO Kjetil Gill Østvold |
Roadshow | Bank of America Merrill Lynch |
| 24 October | Paris | CEO Helge Leiro Baastad Head of IR Mitra H. Negård |
Roadshow | Carnegie |
| 24 October | Amsterdam, Brussels |
EVP Janne Flessum Chief accountant Karen-Elise Christoffersen |
Roadshow | Carnegie |
| 31 October | Stockholm | CEO Helge Leiro Baastad Head of IR Mitra H. Negård |
Roadshow | SEB |
| 1 November | Frankfurt | CFO Jostein Amdal IRO Kjetil Gill Østvold |
Roadshow | Handelsbanken |
| 26 November | Milano, Lugano | EVP Janne Flessum IRO Kjetil Gill Østvold |
Roadshow | Barclays |
| 27 November | Munich | EVP Janne Flessum IRO Kjetil Gill Østvold |
Roadshow | Nordea |
Assuming Solvency II regime
CC = corporate centre. Large losses: Losses > NOK 10m. Weather related large losses are included. Large losses in excess of NOK 30m are charged to the Corporate Centre while up to NOK 30m per claim is charged to the segment in which the large loss occurred. The Baltics segment has, as a main rule, a retention level of EUR 0.5m. The Sweden segment has a retention level of NOK 10m.
Run-off % of earned premium
1) Reported UW result for Q1 2016 was NOK 1,251m. Adjusted for a non-recurring income of NOK 477m related to the pension plans, the UW result was NOK 774m.
2) Reported UW result for Q3 2016 was NOK 712m. Adjusted for a non-recurring NOK 120m restructuring cost the UW result was NOK 832m.
3) Reported UW result for Q4 2016 was NOK 700m. Adjusted for a non-recurring NOK 44m increase in provision for restructuring cost and NOK 23m provision for increased pay-roll tac the UW result was NOK 767m
4) Reported UW result for Q3 2018 was NOK 573m. Adjusted for a non-recurring NOK 80m restructuring cost the UW result was NOK 653m.
5) Reported UW result for Q4 2018 was NOK 1,914m. Adjusted for the extra run-off gains of NOK 1.1bn the UW result was NOK 834m .
| Asset class | Investments, key elements1) | Benchmark |
|---|---|---|
| Match portfolio |
||
| Money market | Norwegian money market | ST1X index |
| Bonds at amortised cost | Government and corporate bonds |
Yield provided in quarterly reports |
| Current bonds | Mortgage, sovereign and corporate bonds, investment grade bond funds and loan funds containing secured debt |
IBOX COR 1-3 yrs QW5C index |
| Free portfolio | ||
| Money market | Norwegian money market |
ST1X index |
| Other bonds | IG bonds in internationally diversified funds externally managed and current bonds |
Global Agg Corp LGCPTRUH index |
| High Yield bonds | Internationally diversified funds externally managed | BOAML global HY HWIC index |
| Convertible bonds | Internationally diversified funds externally managed | BOAML global 300 conv VG00 index / Exogen factors |
| Current equities | Mainly internationally and domestic diversified funds externally managed |
MSCIAC NDUEACWF index |
| PE funds | Oil/ oil-service/ general (Norwegian and Nordic funds) | OSEBX index / oil price |
| Property | 50% of Oslo Areal | IPD index Norway / Exogen factors |
| Other | Miscellaneous |
Average duration: 3.4 years
Carrying amount: NOK 22.8bn
28 1) Prior to 2014 former associated companies were not included in the Free portfolio.
| Split - Rating |
Match portfolio | Free portfolio | ||
|---|---|---|---|---|
| NOK bn | % | NOK bn | % | |
| AAA | 11.1 | 32.1 | 1.4 | 11.2 |
| AA | 3.4 | 9.8 | 2.3 | 17.9 |
| A | 6.1 | 17.6 | 2.7 | 21.1 |
| BBB | 3.9 | 11.3 | 1.8 | 14.3 |
| BB | 0.4 | 1.2 | 0.9 | 6.7 |
| B | 1.3 | 3.8 | 0.6 | 4.4 |
| CCC or lower | 0.1 | 0.2 | 0.1 | 0.7 |
| Internal rating1) | 5.4 | 15.7 | 1.9 | 14.6 |
| Unrated | 2.9 | 8.4 | 1.2 | 9.1 |
| Fixed income portfolio | 34.7 | 100.0 | 12.8 | 100.0 |
| Split - Counterparty |
Match portfolio | Free portfolio | ||
|---|---|---|---|---|
| NOK bn | % | NOK bn | % | |
| Public sector | 4.5 | 13.1 | 4.5 | 35.3 |
| Bank/financial institutions | 17.2 | 49.6 | 4.6 | 36.0 |
| Corporates | 13.0 | 37.3 | 3.7 | 28.8 |
| Total | 34.7 | 100.0 | 12.8 | 100.0 |
| (NOK bn) | Approved partial internal model (Group) |
Approved partial internal model (general insurance) |
Own partial internal model (Group) |
Own partial internal model (general insurance) |
Gjensidige Pensjons forsikring |
|---|---|---|---|---|---|
| Capital available |
24.5 | 22.2 | 24.6 | 22.3 | 2.5 |
| Capital requirement |
10.4 | 9.2 | 8.7 | 7.5 | 1.9 |
| Solvency margin |
235% | 241% | 283% | 298% | 137% |
Figures as at 30.9.2019. The legal perspective is the regulatory approved version of the partial internal model. Solvency margins reflect best estimate reserves. Total comprehensive income for the year-to-date is included in the solvency calculations, minus a formulaic dividend pay-out ratio of 80 per cent of net profit (excluding the gain from Gjensidige Bank).
1) Principle change in calculation of risk margin after tax
2) Operating SII earnings comprise SII underwriting result and SII financial result of the match portfolio after tax
3) Based on 80 per cent pay-out ratio according to dividend policy
Figures as at 30.9.2019. GPF = Gjensidige Pensjonsforsikring. Deferred tax: All differences in valuation of assets and liabilities are adjusted for tax. Tax is assumed on the security provision. Miscellanious: Main effects are related to the guarantee scheme provision and different valuation of Oslo Areal.
| NOK bn |
Approved partial internal model (Group) |
Own partial internal model (Group) |
|---|---|---|
| Eligible own funds | 24.5 | 24.6 |
| Capital charge for non-life and health uw risk |
7.3 | 6.2 |
| Capital charge for life uw risk |
1.8 | 1.8 |
| Capital charge for market risk | 7.7 | 6.6 |
| Capital charge for counterparty risk |
0.6 | 0.6 |
| Diversification | (4.9) | (5.0) |
| Basic SCR | 12.6 | 10.3 |
| Operational risk |
0.8 | 0.8 |
| Adjustments (loss-absorbing capacity of deferred tax) |
(3.0) | (2.5) |
| Total solvency capital requirement | 10.4 | 8.7 |
| Surplus | 14.1 | 15.9 |
| Solvency ratio | 235% | 283% |
Figures as at 30.9.2019. The legal perspective is the regulatory approved version of the partial internal model. Solvency margins reflect best estimate reserves. Total comprehensive income for the year-to-date is included in the solvency calculations, minus a formulaic dividend pay-out ratio of 80 per cent of net profit (excluding the gain from Gjensidige Bank). UFR-sensitivity is very limited.
| Intermediate Equity Content | Constraint | ||||
|---|---|---|---|---|---|
| S&P | 25% of | TAC | For the general insurance group, both Solvency II Tier 1 and Tier 2 instruments are classified as Intermediate Equity Content. Capital must be regulatory eligible in order to be included. |
||
| T1 | T2 | Constraint | |||
| SII | Max 20% of Tier 1 capital |
Max 50% of SCR less other T2 capital items |
Must be satisfied at group and solo level |
Figures as at 30.9.2019. Legal perspective is the regulatory approved version of the partial internal model. The FSA's view on the Guarantee provision as a liability for solvency purposes has not been reflected in the debt capacity figures, as Gjensidige still assumes that the Guarantee provision will count as solvency capital. 1)Sub debt Gjensidige Forsikring ASA NOK 1.2bn, Gjensidige Pensjonsforsikring NOK 0.3bn
| Element | Solvency surplus effect (NOK bn) |
Comment |
|---|---|---|
| Guarantee scheme provision |
~ (0.1) – 0.5 |
Increase in provision suggested, no news regarding treatment in Solvency II |
• Market shares Denmark • Market shares Sweden
• Market shares Baltics
Sources: Insurance Sweden, 2nd quarter 2019 (Gjensidige including Vardia), The Danish Insurance Association 3rd quarter 2018. Baltics Insurance Supervisory Authorities of Latvia and Lithuania, Estonia Statistics, competitor reports, and manual calculations, 2nd quarter 2019
| No | Shareholder | Stake (%) |
|---|---|---|
| 1 | Gjensidigestiftelsen | 62.2 |
| 2 | Folketrygdfondet | 4.0 |
| 3 | Deutsche Bank | 3.7 |
| 4 | Caisse de Depot et Placement du Quebec |
3.0 |
| 5 | BlackRock Inc |
2.5 |
| 6 | Nordea | 1.4 |
| 7 | Societe Generale |
1.2 |
| 8 | ORIX Corporation | 1.0 |
| 9 | The Vanguard Group, Inc |
1.0 |
| 10 | State Street Corporation | 1.0 |
| Total 10 largest | 81.0 |
Gjensidige Foundation ownership policy:
This presentation and the information contained herein have been prepared by and is the sole responsibility of Gjensidige Forsikring ASA (the "Company"). Such information is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to any other person or published, in whole or in part, for any purpose. Failure to comply with this restriction may constitute a violation of applicable securities laws. The information and opinions presented herein are based on general information gathered at the time of writing and are therefore subject to change without notice. The Company assumes no obligations to update or correct any of the information set out herein.
These materials may contain statements about future events and expectations that are forward-looking statements. Any statement in these materials that is not a statement of historical fact including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which the Company will operate in the future. The Company assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements.
This presentation does not constitute or form part of, and is not prepared or made in connection with, an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. The information in this presentation is subject to verification, completion and change. The contents of this presentation have not been independently verified. While the Company relies on information obtained from sources believed to be reliable, it does not guarantee its accuracy or completeness. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its owners, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of the Company, its affiliates or any of their respective advisors or representatives or any other person shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. The Company's securities have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act"), and are offered and sold only outside the United States in accordance with an exemption from registration provided by Regulation S of the US Securities Act.
This presentation should not form the basis of any investment decision. Investors and prospective investors in securities of any issuer mentioned herein are required to make their own independent investigation and appraisal of the business and financial condition of such company and the nature of the securities. Any decision to purchase securities in the context of a proposed offering of securities, if any, should be made solely on the basis of information contained in any offering documents published in relation to such an offering. For further information about the Company, reference is made public disclosures made by the Company, such as filings made with the Oslo Stock Exchange, periodic reports and other materials available on the Company's web pages.
Gjensidige Forsikring provides alternative performance measures (APMs) in the financial reports, in addition to the financial figures prepared in accordance with the International Financial Reporting Standards (IFRS). The measures are not defined in IFRS (Internation Financial Report Standards) and are not necessarily directly comparable to other companies' performance measures. The APMs are not intended to be a substitute for, or superior to, any IFRS measures of performance, but have been included to provide insight into Gjensidige's performance and represent important measures for how management governs the Group and its business activities. Key figures that are regulated by IFRS or other legislation, as well as non-financial information, are not regarded as APMs. Gjensidige's APMs are presented in the quarterly report and presentation. All APMs are presented with comparable figures for earlier periods. The APMs have generally been used consistently over time. Definitions and calclualtions can be foundat www.gjensidige.no/reporting.
Mitra Hagen Negård Head of Investor Relations [email protected] Mobile: +47 95 79 36 31
Live Christine Bjønness Investor relations officer [email protected] Mobile: +47 48 21 16 61
Address: Schweigaards gate 21, PO Box 700 Sentrum, 0106 Oslo, Norway www.gjensidige.no/ir
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