Quarterly Report • Jan 31, 2019
Quarterly Report
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JANUARY 31st 2019
Business going forward - 19% growth and CR 98,6%
The loss for the year 2018 was NOK – 309.8m against a profit of NOK 516.5m in 2017. The 2018 result is driven by significant reserve losses within Change of ownership insurance (COI) and by weak financial results in Q4 due to weak financial markets in November and December.
Protector has decided 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. COI is the only product in the company that directly represents the consumer market, and accounts today for less than 10% of the company's total business.
Following the decision to exit the COI market, COI is in the P&L defined as «discontinued operations». The net result of COI is presented on a separate line as discontinued operations. In the key figures table below are the figures also given as if COI was continued business to ease the comparison with earlier reported figures.
2018 shows following development compared to 2017:
Q4 2018 shows following development compared to Q4 2017:
| [1.000.000 NOK] Excluding COI | Q4 2018 | Q4 2017 | FY 2018 | FY 2017 | |
|---|---|---|---|---|---|
| Gross premiums written | 475,1 | 424,5 | 4 286,1 | 3 612,7 | |
| Gross premiums earned | 1 123,2 | 881,7 | 4 139,6 | 3 255,0 | |
| Gross claims incurred | (1 161,7) | (799,6) | (3 859,3) | (3 573,9) | |
| Earned premiums, net of reinsurance | 759,0 | 604,1 | 2 817,8 | 2 402,8 | |
| Claims incurred, net of reinsurance | (739,3) | (575,9) | (2 658,3) | (2 193,8) | |
| Net commission income | (0,1) | (58,1) | 103,1 | 117,4 | |
| Internal sales cost | (18,2) | (16,8) | (79,6) | (64,5) | |
| Operating expenses | (46,1) | 31,0 | (143,1) | (108,8) | |
| Other insurance-related income/expenses | 9,9 | (0,5) | 5,3 | (3,1) | |
| Technical result | (34,8) | (16,2) | 45,3 | 150,0 | |
| Other income/costs | (12,3) | (12,0) | (49,4) | (46,9) | |
| Net financial income | (141,9) | 124,9 | (19,8) | 337,8 | |
| Profit before tax | (189,1) | 96,7 | (23,9) | 441,0 | |
| Claims ratio, net of ceded business | (1) | 97,4 % | 95,3 % | 94,3 % | 91,3 % |
| Expense ratio, net of ceded business | (2) | 8,5 % | 7,3 % | 4,2 % | 2,3 % |
| Combined ratio, net of ceded business | (3) | 105,9 % | 102,6 % | 98,6 % | 93,6 % |
| Gross claims ratio | (4) | 103,4 % | 90,7 % | 93,2 % | 109,8 % |
| Gross expense ratio | (5) | 8,5 % | 7,5 % | 8,4 % | 8,0 % |
| Gross combined ratio | (6) | 111,9 % | 98,2 % | 101,7 % | 117,8 % |
| Retention rate | (7) | 67,6 % | 68,5 % | 68,1 % | 73,8 % |
| Earnings per share | (8) | (3,86) | 1,56 | (3,69) | 5,53 |
| [1.000.000 NOK] As if COI was continued operations | Q4 2018 | Q4 2017 | FY 2018 | FY 2017 | |
|---|---|---|---|---|---|
| Gross premiums written | 566,6 | 540,2 | 4 799,7 | 4 163,2 | |
| Gross premiums earned | 1 214,8 | 997,5 | 4 653,2 | 3 805,5 | |
| Gross claims incurred | (1 296,3) | (901,2) | (4 608,8) | (4 054,2) | |
| Earned premiums, net of reinsurance | 841,4 | 708,3 | 3 280,1 | 2 925,9 | |
| Claims incurred, net of reinsurance | (860,3) | (667,5) | (3 332,9) | (2 647,5) | |
| Net commission income | (23,7) | (57,6) | 76,8 | 117,0 | |
| Internal sales cost | (19,6) | (18,4) | (85,3) | (71,0) | |
| Operating expenses | (64,4) | 24,4 | (166,4) | (122,5) | |
| Other insurance-related income/expenses | 9,9 | (0,5) | 5,3 | (3,3) | |
| Technical result | (116,7) | (11,4) | (222,3) | 198,6 | |
| Other income/costs | (15,6) | (14,4) | (62,2) | (55,9) | |
| Net financial income | (217,5) | 161,9 | (56,2) | 419,5 | |
| Profit before tax | (349,8) | 136,2 | (340,6) | 562,2 | |
| Claims ratio, net of ceded business | (1) | 102,2 % | 94,2 % | 101,6 % | 90,5 % |
| Expense ratio, net of ceded business | (2) | 12,8 % | 7,3 % | 5,3 % | 2,6 % |
| Combined ratio, net of ceded business | (3) | 115,0 % | 101,5 % | 106,9 % | 93,1 % |
| Gross claims ratio | (4) | 106,7 % | 90,4 % | 99,0 % | 106,5 % |
| Gross expense ratio | (5) | 9,5 % | 7,5 % | 8,1 % | 7,4 % |
| Gross combined ratio | (6) | 116,2 % | 97,8 % | 107,2 % | 113,9 % |
| Retention rate | (7) | 69,3 % | 71,0 % | 70,5 % | 76,9 % |
| Earnings per share | (8) | (3,9) | 1,6 | (3,7) | 5,5 |
(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
Protector Forsikring ASA is a Norwegian general insurance company (P&C) operating in the Nordic region and in the UK.
Protector entered the Swedish insurance market in 2011, the Danish insurance market in 2012 and Finland and UK in 2016.
The company has after exiting the COI market, two business segments: commercial lines of business and public lines of business.
Protector Forsikring ASA is listed on the Oslo Stock Exchange.
FY:
Gross written premiums within the commercial and public lines rose by NOK 673.4m, or 19%, from NOK 3,612.7m in 2017 to NOK 4,286.1m in 2018.
The growth by country was:
| Gross premiums written | FY 2018 | FY 2017 | Growth FY | |
|---|---|---|---|---|
| Norway ex. COI | 1508,7 | 1517,4 | -8,7 | -1 % |
| Sweden | 1350,3 | 1078,3 | 272,0 | 25 % |
| Denmark | 792,5 | 703,6 | 88,9 | 13 % |
| UK | 504,6 | 252,9 | 251,7 | 99 % |
| Finland | 129,9 | 60,3 | 69,6 | 115 % |
| Total | 4286,1 | 3612,7 | 673,4 | 19 % |
Gross premiums earned increased by 27% from NOK 3,255.0 in 2017 to a total of NOK 4,139.6m in 2018.The growth per country was:
| Gross premiums earned | FY 2018 | FY 2017 | Growth FY | |
|---|---|---|---|---|
| Norway ex. COI | 1520,8 | 1418,3 | 102,5 | 7 % |
| Sweden | 1277,0 | 915,8 | 361,2 | 39 % |
| Denmark | 785,0 | 700,0 | 85,0 | 12 % |
| UK | 380,4 | 154,7 | 225,7 | 146 % |
| Finland | 176,4 | 66,3 | 110,1 | 166 % |
| Total | 4139,6 | 3255,0 | 884,6 | 27 % |
Premiums earned for own account increased by 17% to NOK 2,817.8m.
| Net premiums earned | FY 2018 | FY 2017 | Growth FY | |
|---|---|---|---|---|
| Norway ex. COI | 1161,8 | 1144,8 | 17,0 | 1 % |
| Sweden | 820,3 | 663,9 | 156,4 | 24 % |
| Denmark | 513,0 | 467,4 | 45,6 | 10 % |
| UK | 184,7 | 74,6 | 110,0 | 147 % |
| Finland | 138,0 | 52,0 | 86,0 | 165 % |
| Total | 2817,8 | 2402,8 | 415,1 | 17 % |
Q4:
Gross written premiums totalled NOK 475.1m, representing a 12% growth.
The growth by country was:
| Gross premiums written | Q4 2018 | Q4 2017 | Growth in quarter | |
|---|---|---|---|---|
| Norway ex. COI | 153,5 | 189,0 | -35,4 | -19 % |
| Sweden | 191,9 | 139,1 | 52,8 | 38 % |
| Denmark | 52,1 | 35,6 | 16,5 | 46 % |
| UK | 67,9 | 54,6 | 13,3 | 24 % |
| Finland | 9,6 | 6,2 | 3,4 | 54 % |
| Total | 475,1 | 424,5 | 50,6 | 12 % |
Gross premiums earned increased by 27% from NOK 881.7m to a total of NOK 1,123.2m.
The growth by country was:
| Gross premiums earned | Q4 2018 | Q4 2017 | Growth in quarter | |
|---|---|---|---|---|
| Norway ex. COI | 400,3 | 363,6 | 36,7 | 10 % |
| Sweden | 351,4 | 254,2 | 97,1 | 38 % |
| Denmark | 201,4 | 181,7 | 19,8 | 11 % |
| UK | 106,2 | 56,2 | 50,0 | 89 % |
| Finland | 64,0 | 26,1 | 37,8 | 145 % |
| Total | 1123,2 | 881,7 | 241,5 | 27 % |
The premiums earned for own account totalled to NOK 759.0m, an increase of 26% compared to Q4 2017.
The premiums earned for own account by country was:
| Net premiums earned | Q4 2018 | Q4 2017 | Growth in quarter | |
|---|---|---|---|---|
| Norway ex. COI | 305,1 | 275,1 | 30,0 | 11 % |
| Sweden | 203,1 | 176,5 | 26,6 | 15 % |
| Denmark | 127,8 | 110,1 | 17,7 | 16 % |
| UK | 71,3 | 22,0 | 49,3 | 225 % |
| Finland | 51,7 | 20,5 | 31,2 | 152 % |
| Total | 759,0 | 604,1 | 154,8 | 26 % |
FY:
The profit before tax totalled NOK -23.9m, down from NOK 441.0m in 2017, driven by a weak investment income and a weaker technical result. Inclusive change of ownership insurance the profit before tax totalled NOK – 340,6m.
The profit for the year totalled NOK - 309,8m, compared to NOK 516,5m in 2018. The weak result is mainly driven by a weak financial result and significantly reserve losses within change of ownership insurance (discontinued operations).
In 2018, the net combined ratio was 98.6%, compared to 93.8% in 2017, 4.8 percentage points higher than the reported in 2017.
The net combined ratio by country was:
| Net combined ratio | FY 2018 | FY 2017 |
|---|---|---|
| Norway (ex. COI) | 96,5 % | 87,7 % |
| Sweden | 95,4 % | 87,0 % |
| Denmark | 97,8 % | 108,9 % |
| UK | 115,6 % | 143,4 % |
| Finland | 115,6 % | 100,8 % |
| Total | 98,6 % | 93,6 % |
The net claims ratio was 94.3%, up from 91.3% in 2017, while the net expense ratio was 4.2% up from 2.3%.
In 2018 the company had net run-off gains of 2.1% (ex. COI).
The gross combined ratio was 101.7 %, down from 117.8 % in 2017. The gross claims ratio was 93.2%, down from 109.8% in 2017. The gross claims ratio by country was:
| Gross claims ratio | FY 2018 | FY 2017 |
|---|---|---|
| Norway (ex. COI) | 104,1 % | 81,6 % |
| Sweden | 88,1 % | 78,6 % |
| Denmark | 90,9 % | 96,6 % |
| UK | 66,8 % | 618,0 % |
| Finland | 104,3 % | 96,3 % |
| Total | 93,2 % | 109,8 % |
The poor claims ratio in Norway is influenced by a very large claim in Q4 (second largest in history).
The gross expense ratio was 8.4 %, up from 8.0% in 2017. Including claims handling costs and excluding broker commissions, the cost ratio was 9.4% down from 10.1% in 2017, despite the lack of critical mass in UK and Finland.
| Gross expense ratio | FY 2018 | FY 2017 |
|---|---|---|
| Norway (ex. COI) | 5,4 % | 3,6 % |
| Sweden | 11,2 % | 13,4 % |
| Denmark | 5,7 % | 6,1 % |
| UK | 16,9 % | 22,1 % |
| Finland | 8,2 % | 14,9 % |
| Total | 8,4 % | 8,0 % |
Profit before tax totalled NOK -189.1m, down from a profit of 96.7m in Q4 2017. The weak Q4 result is mainly driven by a weak financial result. Inclusive Change of ownership insurance the profit before tax totalled NOK – 349,8m.
In Q4 the net profit was NOK -315.6m against a net profit of NOK 134.3m in Q4 2017.
The net combined ratio was 105.9%, 3.3 percentage points higher than the 102.6% reported in Q4 2017.
In Q4 the company had run-off gains of 1.6%.
The net combined ratio per country was:
| Net combined ratio | Q4 2018 | Q4 2017 |
|---|---|---|
| Norway (ex. COI) | 97,7 % | 98,8 % |
| Sweden | 128,7 % | 89,6 % |
| Denmark | 101,8 % | 132,3 % |
| UK | 102,5 % | 137,0 % |
| Finland | 79,0 % | 68,6 % |
| Total | 105,9 % | 102,6 % |
The net claims ratio was 97.4%, up from 95.3 % in Q4-17 while the net expense ratio was 8.5 %, down from 7.3 %.
The gross combined ratio was 111.9%, up from 98.2% in Q4-17. The gross claims ratio was 103.4%, up from 90.7% in Q4-17. The increase is mainly driven by 1 very large claim in Norway and reserve strengthening in Sweden. The gross claims ratio by country was:
| Gross claims ratio | Q4 2018 | Q4 2017 |
|---|---|---|
| Norway (ex. COI) | 118,4 % | 88,0 % |
| Sweden | 116,3 % | 71,7 % |
| Denmark | 81,2 % | 106,2 % |
| UK | 66,6 % | 152,4 % |
| Finland | 70,0 % | 72,3 % |
| Total | 103,4 % | 90,7 % |
The gross expense ratio was 8.5% up from 7.5% in Q4 2017.
| Gross expense ratio | Q4 2018 | Q4 2017 |
|---|---|---|
| Norway (ex. COI) | 6,3 % | 5,5 % |
| Sweden | 11,7 % | 12,7 % |
| Denmark | 5,4 % | 5,6 % |
| UK | 13,1 % | 5,6 % |
| Finland | 6,5 % | 3,9 % |
| Total | 8,5 % | 7,5 % |
Net investment portfolio amounted to a total of NOK 9.535m at 31 December 2017, up 1.7% compared to the portfolio end of Q4-17.
For the full year 2018, the investment result was NOK- 56.2m (-0.6%) against NOK 419.5m (4.8%) in 2017. Equities accounted for a NOK 177m loss (-12.0%) against a NOK 195.0m gain (12.1%) in 2017. Return on the fixed income portfolio totalled NOK 121m or 1.4% against NOK 224.4m or 3.1% in 2017.
In Q4, Investment activities yielded a total loss of NOK 217.5m or -2.2% compared to a return of NOK 161.9m or 1.7% in Q4-17. Equities accounted for a NOK 219.3m loss (-19.5%) against a NOK 127.3m gain (8.1%) in Q4-17. Return on the fixed income portfolio was 0.0% against 0.4% in Q4-17.
End of Q4, 9.9% of Protector's financial assets were invested in equities, down from 17.6% at the end of 2017.
The company is well capitalized. Solvency capital requirement (SCR) ratio using standard formula is 174.4% as of 31.12.2018, which is within the company's risk appetite. The company's goal is to maintain a solvency coverage ratio (calculated according to the Solvency II regulations) above 150%.
In July 2018, Protector purchased a total of 4,404,622 own shares. End of Q4, the company has a holding of 4,406,762 own shares.
In December, A.M. Best affirmed the Long-Term Issuer Credit Rating of BBB+ to Protector with a stable outlook.
The Board is not satisfied with the year end result. The company has both a weak technical result and a weak investment result.
The company has taken decisive decisions to improve the claims results through price increases and the exit of change of ownership insurance.
The company is now well positioned to focus on the commercial and public lines of business distributed through brokers in five countries.
Claims development, and the inherent volatility of capital markets, are continued to be the most important risk factors that could affect the company's profit in 2019.
Oslo, 31st January 2019
The Board of Directors of Protector Forsikring ASA
| Q4 2018 | Q4 2017 | 2018 | 2017 | |
|---|---|---|---|---|
| Premium income | ||||
| Gross written premiums | 475,1 | 424,5 | 4 286,1 | 3 612,7 |
| Change in provisions for unearned premiums | 648,1 | 457,2 | (146,5) | (357,7) |
| Gross premiums earned | 1 123,2 | 881,7 | 4 139,6 | 3 255,0 |
| Ceded insurance premiums | (175,0) | (150,6) | (1 375,3) | (885,3) |
| Change in reinsurers' share of provisions for unearned premiums | (189,2) | (127,0) | 53,6 | 33,1 |
| Reinsurers' share of earned premiums | (364,2) | (277,6) | (1 321,8) | (852,2) |
| Earned premiums, net of reinsurance | 759,0 | 604,1 | 2 817,8 | 2 402,8 |
| Other insurance-related income | 12,0 | 0,8 | 25,5 | 5,1 |
| Claims paid | (887,1) | (689,1) | (3 047,9) | (2 169,7) |
| Change in provisions for claims | (274,7) | (110,4) | (811,5) | (1 404,3) |
| Gross claims incurred | (1 161,7) | (799,6) | (3 859,3) | (3 573,9) |
| Reinsurers' share of paid claims | 328,6 | 268,0 | 1 136,6 | 676,6 |
| Change in reinsurers' share of claims provisions | 93,9 | (44,4) | 64,3 | 703,6 |
| Reinsurers' share of claims incurred | 422,5 | 223,6 | 1 201,0 | 1 380,2 |
| Claims incurred, net of reinsurance | (739,3) | (575,9) | (2 658,3) | (2 193,8) |
| Operating expenses | ||||
| Sales costs | (49,4) | (97,5) | (205,6) | (151,5) |
| Administration costs | (46,1) | 31,0 | (143,1) | (108,8) |
| Commission from reinsurers | 31,1 | 22,7 | 229,2 | 204,4 |
| Total operating expenses, net of reinsurance | (64,4) | (43,9) | (119,6) | (55,9) |
| Other insurance-related expenses | (2,1) | (1,3) | (20,2) | (8,2) |
| Technical result | (34,8) | (16,2) | 45,3 | 150,0 |
| Net income from financial assets | (141,9) | 124,9 | (19,8) | 337,8 |
| Other income | 0,8 | - | 1,4 | - |
| Other expenses | (13,1) | (12,0) | (50,7) | (46,9) |
| Other income/expenses | (12,3) | (12,0) | (49,4) | (46,9) |
| Non-technical result | (154,3) | 112,9 | (69,2) | 291,0 |
| Profit before tax | (189,1) | 96,7 | (23,9) | 441,0 |
| Tax | 18,5 | (1,3) | 2,2 | (67,0) |
| Profit from continued operations | (170,6) | 95,4 | (21,8) | 373,9 |
| Discontinued operations | (145,0) | 39,0 | (288,2) | 102,8 |
| Profit before components of comprehensive income | (315,6) | 134,3 | (309,9) | 476,7 |
| Actuarial gain and loss from defined benefit pension plans | 0,3 | (8,4) | 0,3 | (8,4) |
| Currency changes from foreign enterprise | 25,9 | 39,8 | (0,1) | 61,5 |
| Taxes on components of comprehensive income | (6,6) | (7,9) | (0,1) | (13,3) |
| Profit for the period | (296,1) | 157,9 | (309,8) | 516,5 |
| Earnings per share | (3,9) | 1,6 | (3,7) | 5,5 |
| Earnings per share, diluted | (3,9) | 1,6 | (3,7) | 5,5 |
| [1.000.000 NOK] | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Assets | ||
| Intangible fixed assets | ||
| Other intangible fixed assets | 24,1 | 16,8 |
| Total intangible fixed assets | 24,1 | 16,8 |
| Buildings and other real estates | ||
| Owner-occupied property | 13,4 | 13,5 |
| Total buildings and other real estates | 13,4 | 13,5 |
| Financial assets | ||
| Shares | 745,2 | 1 385,3 |
| Securities, bonds etc | 6 386,6 | 6 316,1 |
| Financial derivatives | 25,7 | 2,5 |
| Bank deposits | 460,1 | 176,5 |
| Total financial assets | 7 617,5 | 7 880,5 |
| Reinsurers share of gross technical provisions | ||
| Reinsurers share of gross premium provisions | 292,6 | 228,6 |
| Reinsurers share of gross claims provisions | 1 899,8 | 1 738,1 |
| Total reinsurers share of gross technical provisions | 2 192,4 | 1 966,7 |
| Receivables | ||
| Policyholders | 256,9 | 207,6 |
| Intermediaries | 5,0 | 3,6 |
| Other receivables | 5,2 | 10,3 |
| Total receivables | 267,1 | 221,5 |
| Other assets | ||
| Tangible fixed assets | 25,8 | 15,7 |
| Cash and bank deposits | 278,6 | 316,6 |
| Total other assets | 304,4 | 332,3 |
| Total prepaid expenses | 235,4 | 155,2 |
| Assets discontinued operations | 2 117,2 | 1 685,7 |
| Total assets | 12 771,5 | 12 272,1 |
| [1.000.000 NOK] | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Equity and liabilities | ||
| Shareholders' equity | ||
| Share capital [86.155.605 shares] | 86,2 | 86,2 |
| Own shares | (4,4) | (0,0) |
| Other paid-in equity | 267,7 | 267,7 |
| Other paid-in equity | 263,3 | 267,7 |
| Total paid-in equity | 349,4 | 353,8 |
| Earned equity | ||
| Natural perils fund | 54,8 | 22,7 |
| Guarantee scheme | 88,5 | 85,9 |
| Other equity | 1 525,8 | 2 128,8 |
| Total earned equity | 1 669,1 | 2 237,4 |
| Total equity | 2 018,5 | 2 591,3 |
| Subordinated loan capital | 1 243,3 | 1 243,3 |
| Technical provisions | ||
| Provisions for unearned premiums | 1 104,7 | 964,7 |
| Provisions for claims | 5 997,4 | 5 171,0 |
| Total technical provisions | 7 102,1 | 6 135,7 |
| Provisions for other risks and liabilities | ||
| Pension liabilities | 13,0 | 12,1 |
| Current tax liability | (58,3) | 42,7 |
| Deferred tax liability | 117,7 | 151,0 |
| Total provisions for other risks and liabilities | 72,4 | 205,8 |
| Liabilities | ||
| Liabilities in connection with insurance | 93,0 | 59,2 |
| Liabilities in connection with reinsurance | 393,3 | 576,5 |
| Financial derivatives | 8,6 | 9,2 |
| Other liabilities | 205,6 | 49,3 |
| Total liabilities | 700,4 | 694,3 |
| Incurred expenses and prepaid income | ||
| Other incurred expenses and prepaid income | 328,2 | 378,7 |
| Total incurred expenses and prepaid income | 328,2 | 378,7 |
| Liabilites discontinued operations | 1 306,5 | 1 023,1 |
| Total equity and liabilities | 12 771,5 | 12 272,1 |
| [1.000.000 NOK] | Q4 2018 | Q4 2017 | 31.12.2018 | 31.12.2017 |
|---|---|---|---|---|
| Cash flow from operations | ||||
| Premiums paid | 926,7 | 698,7 | 4 903,0 | 3 962,8 |
| Claims paid | (1 141,5) | (816,9) | (3 642,0) | (2 574,0) |
| Paid reinsurance | (47,1) | 58,0 | (238,8) | (13,7) |
| Paid operating expenses including commissions | (38,8) | 16,8 | (348,8) | (227,7) |
| Interest / dividend income | 64,1 | 97,0 | 247,8 | 273,1 |
| Net payments from financial instruments | 817,4 | 167,5 | (117,0) | (2 055,6) |
| Payable tax | (72,0) | (56,1) | (119,1) | (33,2) |
| Net cash flow from operations | 508,8 | 165,0 | 684,9 | (668,4) |
| Cash flow from investment activities | ||||
| Net investments in equities | - | - | - | - |
| Investments in fixed assets | (8,1) | (5,6) | (39,0) | (25,1) |
| Net cash flow from investment activities | (8,1) | (5,6) | (39,0) | (25,1) |
| Cash flow from financial activities | ||||
| Dividend paid | - | - | - | (193,8) |
| Net payment on subordinated loan capital | - | - | - | 597,4 |
| Interest payments on subordinated loan capital | (15,8) | (14,7) | (61,4) | (56,3) |
| Repayment of equity | - | 3,6 | (259,0) | - |
| Capital raising expenses | - | - | - | - |
| Net cash flow from financial activities | (15,8) | (11,1) | (320,5) | 347,2 |
| Net cash flow for the period | 484,9 | 148,3 | 325,4 | (346,3) |
| Net change in cash and cash equivalents | 484,9 | 148,3 | 325,4 | (346,3) |
| Cash and cash equivalents opening balance | 358,9 | 374,9 | 537,7 | 856,1 |
| Effects of exchange rate changes on cash and cash equivalents 15,7 | 14,4 | (3,6) | 27,9 | |
| Cash and cash equivalents closing balance | 859,5 | 537,7 | 859,5 | 537,7 |
| NOK 1.000.000 | Share Capital Own shares Other paid-in | equity | Natural perils fund |
Guarantee scheme |
Other equity | Total | |
|---|---|---|---|---|---|---|---|
| Equity at 31.12.2016 | 86,2 | 267,7 | 8,3 | 83,3 | 1 822,7 | 2 268,2 | |
| Profit for the period | - | 8,5 | 1,4 | 71,1 | 81,0 | ||
| Own shares | (3,6) | (3,6) | |||||
| Equity at 31.03.2017 | 86,2 | (3,6) | 267,7 | 16,9 | 84,7 | 1 893,8 | 2 345,6 |
| Profit for the period | 6,9 | 6,1 | 152,0 | 165,0 | |||
| Dividend pay out | (193,8) | (193,8) | |||||
| Equity at 30.06.2017 | 86,2 | (3,6) | 267,7 | 23,8 | 90,8 | 1 852,4 | 2 317,2 |
| Profit for the period | 5,4 | (5,1) | 114,1 | 114,4 | |||
| Own shares | 3,5 | 3,5 | |||||
| Equity at 30.09.2017 | 86,2 | (0,1) | 267,7 | 29,2 | 85,7 | 1 966,5 | 2 435,2 |
| Profit for the period | (6,5) | 0,2 | 162,4 | 156,1 | |||
| Own shares | 0,1 | (0,1) | (0,0) | ||||
| Equity at 31.12.2017 | 86,2 | (0,0) | 267,7 | 22,7 | 85,9 | 2 128,8 | 2 591,3 |
| Profit for the period | 15,7 | (28,5) | 10,3 | (2,4) | |||
| Currency changes | (15,5) | (15,5) | |||||
| Own shares | (0,0) | ||||||
| Equity at 31.03.2018 | 86,2 | (0,0) | 267,7 | 38,4 | 57,4 | 2 123,7 | 2 573,3 |
| Profit for the period | 8,2 | 0,8 | 45,1 | 54,1 | |||
| Currency changes | (5,4) | (5,4) | |||||
| Own shares | 0,1 | 0,1 | |||||
| Equity at 30.06.2018 | 86,2 | (0,0) | 267,7 | 46,6 | 58,3 | 2 163,5 | 2 622,2 |
| Profit for the period | 8,4 | 0,6 | (75,2) | (66,2) | |||
| Currency changes | 8,1 | 8,1 | |||||
| Own shares | (4,4) | (254,7) | (259,1) | ||||
| Equity at 30.09.2018 | 86,2 | (4,4) | 267,7 | 55,0 | 58,9 | 1 841,7 | 2 305,0 |
| Profit for the period | (0,2) | 29,5 | (325,4) | (296,1) | |||
| Currency changes | 9,6 | 9,6 | |||||
| Equity at 31.12.2018 | 86,2 | (4,4) | 267,7 | 54,8 | 88,5 | 1 525,8 | 2 018,5 |
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 2017. 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 2017 annual report.
Change of ownership insurance is in the P&L and balance sheet classified as discontinued operations. Comparable figures are revised.
| Norway excl. COI | Sweden | Denmark | UK | Finland | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| [1.000.000 NOK] | Q4 2018 | Q4 2017 | Q4 2018 | Q4 2017 | Q4 2018 | Q4 2017 | Q4 2018 | Q4 2017 | Q4 2018 | Q4 2017 |
| Gross premiums written | 153,5 | 189,0 | 191,9 | 139,1 | 52,1 | 35,6 | 67,9 | 54,6 | 9,6 | 6,2 |
| Gross premiums earned | 400,3 | 363,6 | 351,4 | 254,2 | 201,4 | 181,7 | 106,2 | 56,2 | 64,0 | 26,1 |
| Gross claims incurred | (474,0) | (320,0) | (408,7) | (182,2) | (163,6) | (192,9) | (70,7) | (85,6) | (44,8) | (18,9) |
| Earned premiums, net of reinsurance | 305,1 | 275,1 | 203,1 | 176,5 | 127,8 | 110,1 | 71,3 | 22,0 | 51,7 | 20,5 |
| Other insurance related income | 11,1 | 0,7 | 0,5 | (0,0) | 0,2 | 0,0 | 0,0 | - | 0,2 | 0,0 |
| Claims incurred, net of reinsurance | (278,1) | (265,7) | (230,8) | (133,1) | (135,0) | (133,1) | (58,3) | (29,8) | (37,0) | (14,3) |
| Sales cost | (11,3) | (40,7) | (29,4) | (32,6) | (2,6) | (16,2) | (6,8) | (6,5) | 0,7 | (1,5) |
| Administration cost | (14,1) | 20,8 | (11,8) | 0,3 | (8,1) | 6,0 | (7,1) | 3,3 | (4,9) | 0,5 |
| Commission from reinsurer | 5,4 | 13,7 | 10,6 | 7,3 | 15,6 | (2,4) | (0,9) | 2,8 | 0,4 | 1,2 |
| Other insurance related expenses | (0,7) | (0,9) | (1,1) | (0,0) | (0,0) | (0,0) | (0,3) | (0,2) | (0,0) | (0,2) |
| Technical result | 17,4 | 3,1 | (58,9) | 18,3 | (2,1) | (35,6) | (2,1) | (8,3) | 11,0 | 6,3 |
| Other income/costs | (12,3) | (12,0) | (0,0) | (0,0) | (0,0) | 0,1 | (0,0) | - | (0,0) | (0,0) |
| Net financial income | (136,6) | 121,6 | 0,0 | 7,7 | (5,7) | (4,4) | 0,3 | 0,0 | 0,0 | (0,0) |
| Profit before tax | (131,5) | 112,6 | (59,0) | 26,0 | (7,8) | (39,8) | (1,8) | (8,3) | 11,0 | 6,2 |
| Claims ratio, net of ceded business | 91,2 % | 96,6 % | 113,7 % | 75,4 % | 105,6 % | 120,9 % | 81,7 % | 135,5 % | 71,6 % | 69,5 % |
| Expense ratio, net of ceded business | 6,5 % | 2,2 % | 15,1 % | 14,2 % | -3,8 % | 11,4 % | 20,9 % | 1,5 % | 7,4 % | -0,9 % |
| Combined ratio, net of ceded business | 97,7 % | 98,8 % | 128,7 % | 89,6 % | 101,8 % | 132,3 % | 102,5 % | 137,0 % | 79,0 % | 68,6 % |
| Gross claims ratio | 118,4 % | 88,0 % | 116,3 % | 71,7 % | 81,2 % | 106,2 % | 66,6 % | 152,4 % | 70,0 % | 72,3 % |
| Gross expense ratio | 6,3 % | 5,5 % | 11,7 % | 12,7 % | 5,4 % | 5,6 % | 13,1 % | 5,6 % | 6,5 % | 3,9 % |
| Gross combined ratio | 124,8 % | 93,5 % | 128,1 % | 84,4 % | 86,6 % | 111,8 % | 79,7 % | 158,0 % | 76,5 % | 76,2 % |
| Norway excl. COI | Sweden | Denmark | UK | Finland | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| [1.000.000 NOK] | FY 2018 | FY 2017 | FY 2018 | FY 2017 | FY 2018 | FY 2017 | FY 2018 | FY 2017 | FY 2018 | FY 2017 |
| Gross premiums written | 1 508,7 | 1 517,4 | 1 350,3 | 1 078,3 | 792,5 | 703,6 | 504,6 | 252,9 | 129,9 | 60,3 |
| Gross premiums earned | 1 520,8 | 1 418,3 | 1 277,0 | 915,8 | 785,0 | 700,0 | 380,4 | 154,7 | 176,4 | 66,3 |
| Gross claims incurred | (1 583,2) (1 158,0) (1 124,4) | (719,7) | (713,7) | (676,5) | (254,1) | (956,0) | (183,9) | (63,8) | ||
| Earned premiums, net of reinsurance | 1 161,8 | 1 144,8 | 820,3 | 663,9 | 513,0 | 467,4 | 184,7 | 74,6 | 138,0 | 52,0 |
| Other insurance related income | 21,3 | 3,7 | 1,0 | 0,1 | 1,4 | 0,9 | 1,0 | 0,4 | 0,9 | 0,1 |
| Claims incurred, net of reinsurance | (1 085,8) (1 003,4) | (722,6) | (523,1) | (512,8) | (524,0) | (189,1) | (97,5) | (148,0) | (45,7) | |
| Sales cost | (45,7) | (35,9) | (105,1) | (84,3) | (13,4) | (16,2) | (39,3) | (13,6) | (2,1) | (1,5) |
| Administration cost | (35,7) | (14,9) | (38,2) | (38,6) | (31,6) | (26,5) | (25,1) | (20,5) | (12,4) | (8,3) |
| Commission from reinsurer | 46,4 | 50,3 | 83,3 | 68,8 | 56,3 | 57,5 | 40,2 | 24,6 | 3,0 | 3,2 |
| Other insurance related expenses | (4,2) | (7,4) | (13,9) | (0,2) | 0,5 | (0,1) | (2,4) | (0,2) | (0,2) | (0,2) |
| Technical result | 58,1 | 137,2 | 24,8 | 86,5 | 13,4 | (40,8) | (30,1) | (32,3) | (20,8) | (0,6) |
| Other income/costs | (49,1) | (46,5) | (0,2) | (0,3) | (0,1) | 0,0 | 0,0 | - | (0,0) | (0,1) |
| Net financial income | (50,5) | 291,4 | 29,0 | 35,3 | (2,4) | 11,2 | 1,2 | 0,0 | 2,9 | (0,0) |
| Profit before tax | (41,5) | 382,1 | 53,6 | 121,5 | 10,9 | (29,6) | (29,0) | (32,3) | (17,9) | (0,7) |
| Claims ratio, net of ceded business | 93,5 % | 87,6 % | 88,1 % | 78,8 % | 100,0 % | 112,1 % | 102,4 % | 130,7 % | 107,2 % | 87,9 % |
| Expense ratio, net of ceded business | 3,0 % | 0,0 % | 7,3 % | 8,2 % | -2,2 % | -3,2 % | 13,1 % | 12,7 % | 8,4 % | 12,9 % |
| Combined ratio, net of ceded business | 96,5 % | 87,7 % | 95,4 % | 87,0 % | 97,8 % | 108,9 % | 115,6 % | 143,4 % | 115,6 % | 100,8 % |
| Gross claims ratio | 104,1 % | 81,6 % | 88,1 % | 78,6 % | 90,9 % | 96,6 % | 66,8 % | 618,0 % | 104,3 % | 96,3 % |
| Gross expense ratio | 5,4 % | 3,6 % | 11,2 % | 13,4 % | 5,7 % | 6,1 % | 16,9 % | 22,1 % | 8,2 % | 14,9 % |
| Gross combined ratio | 109,5 % | 85,2 % | 99,3 % | 92,0 % | 96,7 % | 102,7 % | 83,7 % | 640,0 % | 112,5 % | 111,2 % |
| [1.000.000 NOK] Ex. COI | Q4 2018 | Q3 2018 | Q2 2018 | Q1 2018 | Q4 2017 | Q3 2017 | Q2 2017 | Q1 2017 |
|---|---|---|---|---|---|---|---|---|
| Gross premiums written | 475,1 | 624,3 | 838,3 | 2 348,4 | 424,5 | 486,1 | 739,0 | 1 963,0 |
| Gross premiums earned | 1 123,2 | 1 042,4 | 1 015,7 | 958,3 | 881,7 | 863,3 | 775,8 | 734,2 |
| Gross claims incurred | (1 161,7) | (937,1) | (889,3) | (871,2) | (799,6) | (943,2) | (1 167,9) | (663,3) |
| Earned premiums, net of reinsurance | 759,0 | 689,7 | 699,8 | 669,4 | 604,1 | 606,5 | 606,3 | 585,8 |
| Other insurance related income | 12,0 | 9,5 | 2,9 | 1,2 | 0,8 | 2,3 | 0,8 | 1,1 |
| Claims incurred, net of reinsurance | (739,3) | (613,2) | (670,5) | (635,3) | (575,9) | (498,9) | (581,6) | (537,3) |
| Sales cost | (49,4) | (55,4) | (49,3) | (51,6) | (45,0) | (35,1) | (41,6) | (29,8) |
| Administration cost | (46,1) | (28,9) | (35,0) | (33,2) | (21,5) | (29,7) | (30,6) | (27,0) |
| Commission from reinsurer | 31,1 | 37,7 | 61,0 | 99,4 | 22,7 | 21,8 | 58,3 | 101,6 |
| Other insurance related expenses | (2,1) | (10,8) | (6,0) | (1,3) | (1,3) | (1,7) | (1,6) | (3,6) |
| Technical result | (34,8) | 28,6 | 2,8 | 48,5 | (16,2) | 65,3 | 10,1 | 90,9 |
| Other income/costs | (12,3) | (12,5) | (12,6) | (12,0) | (12,0) | (13,7) | (13,6) | (7,6) |
| Net financial income | (141,9) | 35,5 | 78,7 | 8,0 | 124,9 | 100,0 | 101,2 | 11,7 |
| Profit before tax | (189,1) | 51,7 | 68,9 | 44,6 | 96,7 | 151,6 | 97,7 | 95,0 |
| Claims ratio, net of ceded business | (1) 97,4 % |
88,9 % | 95,8 % | 94,9 % | 95,3 % | 82,3 % | 95,9 % | 91,7 % |
| Expense ratio, net of ceded business | (2) 8,5 % |
6,7 % | 3,3 % | -2,2 % | 7,3 % | 7,1 % | 2,3 % | -7,6 % |
| Combined ratio, net of ceded business | (3) 105,9 % |
95,7 % | 99,2 % | 92,7 % | 102,6 % | 89,3 % | 98,2 % | 84,1 % |
| Gross claims ratio | (4) 103,4 % |
89,9 % | 87,5 % | 90,9 % | 90,7 % | 109,3 % | 150,5 % | 90,3 % |
| Gross expense ratio | (5) 8,5 % |
8,1 % | 8,3 % | 8,8 % | 7,5 % | 7,5 % | 9,3 % | 7,7 % |
| Gross combined ratio | (6) 111,9 % |
98,0 % | 95,8 % | 99,8 % | 98,2 % | 116,8 % | 159,8 % | 98,1 % |
(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
INTERIM REPORT Q4 2018 | PROTECTOR FORSIKRING ASA | PAGE 16 of 18
Protector has decided 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. COI is the only product in the company that directly represents the consumer market, and accounts today for less than 10% of the company's total business.
| P&L COI | Q4 2018 | Q4 2017 | YTD 2018 | YTD 2017 |
|---|---|---|---|---|
| Gross premiums earned | 91,6 | 115,7 | 513,6 | 550,6 |
| Reinsurers' share of earned premiums | (9,2) | (11,6) | (51,4) | (27,5) |
| Earned premiums, net of reinsurance | 82,4 | 104,2 | 462,3 | 523,1 |
| Gross claims incurred | (134,5) | (101,7) | (749,5) | (480,3) |
| Reinsurers' share of claims incurred | 13,5 | 10,2 | 74,9 | 26,5 |
| Claims incurred, net of reinsurance | (121,1) | (91,5) | (674,5) | (453,8) |
| Total operating expenses, net of reinsurance | (43,3) | (7,8) | (55,2) | (20,6) |
| Other insurance-related income/expenses | (0,0) | (0,0) | (0,0) | (0,2) |
| Technical result | (81,9) | 4,9 | (267,5) | 48,6 |
| Net income from financial assets | (75,5) | 37,1 | (36,4) | 81,6 |
| Other income/expenses | (3,3) | (2,4) | (12,8) | (9,0) |
| Non-technical result | (78,8) | 34,7 | (49,2) | 72,6 |
| Profit before tax | (160,8) | 39,5 | (316,7) | 121,2 |
| Tax | 15,7 | (0,5) | 28,5 | (18,4) |
| Profit for the period | (145,0) | 39,0 | (288,2) | 102,8 |
| Financial assets through profit or loss [1.000.000 NOK] | Currency | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|
| Shares | NOK | 14 | 883 | 37 | 934 |
| Bonds and other fixed income securities | NOK | 8 007 | 8 007 | ||
| Cash and cash equivalents | NOK | 577 | 577 | ||
| Derivater: | |||||
| Foreign currency contracts | NOK | 7 | 7 | ||
| Options | NOK | 18,7 | 19 | ||
| Total assets 31.12.2018 | NOK | 591 | 8 916 | 37 | 9 543 |
| Total assets 31.12.2017 | NOK | 859 | 8 523 | 9 382 | |
| Financial liabilities at fair value through profit or loss [1.000 NOK] | Currency | Level 1 | Level 2 | Level 3 | Total |
| Foreign exchange contracts | NOK | -9 | -9 | ||
| Total financial liabilities 31.12.2018 | NOK | -9 | -9 | ||
| Total financial liabilities 31.12.2017 | NOK | -9 | -9 |
INTERIM REPORT Q4 2018 | PROTECTOR FORSIKRING ASA | PAGE 17 of 18
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 recognized methods and models.
Level 1 - Financial instruments valued on the basis of quoted prices for identical assets in active markets
This category encompasses listed equities that over the previous three months have experienced average daily trading equivalent to approximately MNOK 20 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.
| (1.000.000 NOK) | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Total solvency capital requirement | 2 895 | 1 834 |
| Total eligible own funds to meet SCR | 1 659 | 3 656 |
| Ratio of eligible own funds to SCR | 174 % | 199 % |
| Totalt minimum capital requirement | 747 | 773 |
| Ratio of eligible own funds to MCR | 297 % | 374 % |
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