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Solid Försäkringsaktiebolag

Quarterly Report Feb 8, 2022

3199_10-k_2022-02-08_271fa069-8db9-48f9-ae98-b6db4f2c24f9.pdf

Quarterly Report

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Year-end Report for 2021 financial year

October–December 2021*

  • Gross written premiums increased 13 per cent to KSEK 281,012 (247,702)
  • Premiums earned, net of reinsurance increased 12 per cent to KSEK 258,486 (231,553)
  • Technical result declined 22 per cent to KSEK 27,731 (35,714) Technical result excl. non-recurring costs of KSEK 8,500 related to the separate listing process increased 1 per cent
  • The combined ratio was 91.0 per cent, 87.7 per cent excl. non-recurring costs (86.5)
  • Result of asset management declined to KSEK 6,722 (8,991)
  • Profit after tax increased to KSEK 25,329 (-18,125)
  • Basic and diluted earnings per share increased 240 per cent to SEK 1.27 per share (-0.91)

January–December 2021*

  • Gross written premiums increased 7 per cent to KSEK 1,013,421 (951,480)
  • Premiums earned, net of reinsurance increased 8 per cent to KSEK 981,291 (912,654)
  • Technical result declined 2 per cent to KSEK 114,236 (116,920) Technical result excl. non-recurring costs of KSEK 10,400 related to the separate listing process increased 7 per cent
  • The combined ratio was 89.3 per cent, 88.2 per cent excl. non-recurring costs (88.2)
  • Result of asset management rose to KSEK 41,888 (12,049)
  • Profit after tax increased to KSEK 119,980 (43,372)
  • The SCR ratio improved to 173 per cent (148)
  • Basic and diluted earnings per share increased 177 per cent to SEK 6.0 per share (2.17)
  • In accordance with previous communication in the prospectus and the listing process, the Board proposes to the Annual General Meeting that no dividend

be paid to shareholders for the 2021 financial year

Significant events during and after the end of the period

Solid Försäkringsaktiebolag's (publ) shares were listed on Nasdaq Stockholm on 1 December.

About Solid Försäkring

Solid Försäkring is a non-life insurance company focusing on niche insurance, with the Nordic region as its core market. The operations in Norway, Finland and Switzerland are conducted by branches, and operations in other countries are conducted as cross-border operations. The non-life insurance operations are divided into three segments: Product, Personal Safety and Assistance. The company partners with leading retail chains in various industries and the banking sector, has about 2.3 million customers across the Nordic region and has its head office in Helsingborg. Net premiums earned in 2021 amounted to SEK 981 million and the technical result to SEK 114 million.

* Some performance measures stated in this section have not been prepared in accordance with IFRS or the Solvency II regulations, which means that they are "alternative performance measures". The calculations and reconciliation against information in the financial statements of these performance measures are presented on the website under "Financial statements". Definitions of performance measures are presented on the company's website. Changes and comparative figures on this page and elsewhere in this yearend report refer to the same period last year. All amounts are presented in KSEK unless otherwise stated.

Comments from the CEO

Strong end to the year with growth both in premium income and in premiums earned

Many of our markets and all segments performed positively in the final quarter of the year. Premiums earned increased 12 per cent compared with the year-earlier period to SEK 258 million. Growth was primarily driven by the strong trend in the Assistance segment, which reported growth of 47 per cent in premiums earned, but also healthy growth in the Product segment.

Excluding non-recurring costs related to the separate listing process, technical result rose 1 per cent compared with the year-earlier period. Administrative expenses in the fourth quarter last year were exceptionally low, primarily due to dissolved salary-related provisions pertaining to 2020. Our combined ratio was 87.7 per cent (excluding non-recurring costs).

For the full-year, profit before appropriations and tax increased 34 per cent (excluding non-recurring effects) to SEK 162 million.

The strong trend in premiums earned in the Assistance segment (+47 per cent) for the quarter was due to a continuing strong recovery in insurance related to the travel industry and growth in insurance solutions for car warranties. Growth in premiums earned for the Product segment (+9 per cent) was primarily the result of larger consumer electronics partners reporting high sales.

Premiums earned for the Personal Safety segment fell slightly (-5 per cent), but displayed a positive trend since premium income rose 2 per cent for the period, primarily driven by recovery in the Norwegian market.

Premium income for the full-year amounted to SEK 1,013 million, which means that Solid exceeded the billion SEK barrier and reported growth of 7 per cent compared with 2020. Growth was driven by stable profitability, excluding nonrecurring costs related to the listing process.

Following an intense process during the year, Solid Försäkring's share was listed on Nasdaq Stockholm's main market on 1 December 2021.

New partnerships

The separation from Resurs Holding means that Solid is now an independent partner for banks and credit institutions in the Nordic market, which presents new opportunities. During the period, we signed an agreement with Svea Bank and its sales finance business. Svea Bank will offer its customers payment protection insurance that covers monthly payments in the event of involuntary unemployment or sick leave. The insurance policy offers the conditions for sustainable private finances that protect the customer when something unforeseen occurs. The launch is scheduled for Q4 2022.

Stability

Solid Försäkring has a strong financial position with an SCR ratio amounting to 173 per cent on 31 December (148), corresponding to an increase of 3 percentage points compared with the end of September this year (170).

Marcus Tillberg CEO of Solid Försäkring

+47% Growth in premiums earnings for Assistance segment

SEK 1,013 million

Gross written premiums 2021

1 December

Solid Försäkring's share listed on Nasdaq Stockholm

The company's earnings

Fourth quarter 2021, October–December

Gross written premiums increased KSEK 33,310 to KSEK 281,012 (247,702) for the period. Sales increased in all segments compared with the fourth quarter last year. The improvement was mainly due to the continuing positive performance in the Assistance segment in terms both of travel insurance products and of products related to car warranties. The higher sales in the Personal Safety segment were mainly due to the upward trend in payment protection insurance in Norway. In the Product segment, the increase was mainly attributable to the trend in the consumer electronics industry in Sweden and the expanded partnership with Power in Denmark that was launched in the third quarter.

Premiums earned, net of reinsurance increased KSEK 26,933 to KSEK 258,486 (231,553). The increase was primarily due to the performance in the Assistance segment, but also the Product segment.

The technical result declined KSEK 7,983 to KSEK 27,731. Non-recurring costs related to the separate listing process impacted the result in the amount of KSEK -8,500. Excluding non-recurring costs, the technical result rose 1 per cent compared with the year-earlier period. Administrative expenses in the fourth quarter last year were exceptionally low, primarily due to dissolved salary-related provisions pertaining to 2020. Administrative expenses, excluding non-recurring costs, as a percentage of premiums earned amounted to 10.1 per cent for the period, which is in line with expectations but higher than last year when the percentage was 9.3 per cent.

The combined ratio fell during the quarter to 91.0 per cent (86.5) Excluding non-recurring costs, the combined ratio amounted to 87.7 per cent.

Result of asset management for the quarter amounted to KSEK 6,722, a decrease of KSEK 2,269 compared with the year-earlier period, which was mainly due to the trend in the interest-rate market in the final quarter of the year and that resulted in unrealised changes in value in the bond portfolio. Solid Försäkring's strategy is to hold bonds until maturity. However, the equities portfolio performed positively for the period.

Profit after tax increased KSEK 43,454 to KSEK 25,329 (-18,125). The quarter last year was charged with a Group contribution of KSEK 60,000.

Full-year 2021, January–December

Gross written premiums increased KSEK 61,941 to KSEK 1,013,421 (951,480). The increase was attributable to the positive trend in the Assistance segment.

Premiums earned, net of reinsurance increased KSEK 68,637 to KSEK 981,291 (912,654). The increase was primarily due to the performance in the Assistance segment, but also the Product segment.

The technical result declined KSEK 2,684 to KSEK 114,236. Excluding nonrecurring costs of SEK 10.4 million, related to the separate listing process, the technical result rose 7 per cent compared with the year-earlier period, primarily as a result of growth in premiums earned and lower claim costs. The claims ratio improved in all segments and is back at pre-pandemic levels in the Personal Safety segment.

The combined ratio was 89.3 per cent (88.2) Excluding non-recurring costs, the combined ratio amounted to 88.2 per cent. The expense ratio excluding non-recurring costs increased to 64.7 per cent (62.7) due to higher acquisition costs driven by a changed partner and product mix in the Assistance and Product segment as well as by lower claim costs. Administrative expenses, excluding non-recurring costs, were stable as a percentage of premiums earned and amounted to 10.2 per cent, which is in phase with the preceding year 10.3 per cent.

Fourth quarter

+13% Gross written premiums

+12% Premiums earned, net of reinsurance

-22%

+1% excl. non-recurring costs Technical result

91.0%

87.7% excl. non-recurring costs Combined ratio

Performance per quarter (SEK million)

Full-year

+7% Gross written premiums

+8% Premiums earned, net of reinsurance

-2%

+7% excl. non-recurring costs Technical result

89.3%

88.2% excl. non-recurring costs Combined ratio

The total investment portfolio, including cash and cash equivalents, contains a low share of equities, 6 per cent, and relatively high share of cash and cash equivalents, 47 per cent, on 31 December 2021. The trend in the capital markets in 2021 was favourable and impacted mainly the equities portfolio positively during the year. Result of asset management amounted to KSEK 41,888, an increase of KSEK 29,839 compared with the preceding year, which was primarily attributable to the positive trend in the equities portfolio during the year. The equities portfolio reported a negative result in 2020 due to the sharp decline in the capital market after the outbreak of COVID-19. The total return was 3.6 per cent (1.3)

Profit before appropriations and tax, excluding non-recurring costs, rose KSEK 41,161 to KSEK 161,765 (120,604)

Profit after tax increased KSEK 43,454 to KSEK 119,980 (43,372).

Financial position, equity and cash flow, 31 December 2021

Equity (2) on 31 December amounted to KSEK 714,979 (589,392) and Net Asset Value (2) to KSEK 692,434 (558,553). For the full-year 1 January–31 December 2021, annualised RoE (2)* amounted to 18.4 per cent (8.0) and annualised RoNAV (2)** to 20.3 per cent (9.8).

The SCR ratio improved to 173 per cent (148) as per 31 December. The company has a stable Solvency II position and company management and the Board do not believe that the ongoing pandemic will jeopardise stability or the capital situation in the future.

Cash flow from operating activities amounted to KSEK 163,056 (150,058). Cash flow from investing activities amounted to KSEK 173,275 (-105,296). The subordinated loan of KSEK 200,000 to Resurs Bank fell due for payment in April. Most of the funds have not yet been re-invested in alternative investments.

Cash flow from financing activities amounted to KSEK -59,000 (- 12,000). Group contributions of KSEK 60,000 for the 2020 financial year were paid to the former Parent Company Resurs Holding during the year.

Cash and cash equivalents increased to KSEK 613,139 (328,205).

* RoE (2) – annualised aggregated result after tax for the period in relation to the average adjusted equity (2). The average of the balance sheet items is calculated based on opening and closing values.

**RoNAV (2) – annualised aggregated result after tax for the period in relation to the average adjusted equity excluding intangible assets (2). The average of the balance sheet items is calculated based on opening and closing values.

20.3% RoNAV (2)

173% SCR ratio

Performance measures

Oct-Dec Oct-Dec Cha Jan– Jan– Cha
KSEK, unless otherwise stated 2021 2020 nge Dec Dec nge
2021 2020
Gross written premiums 281,012 247,702 13% 1,013,421 951,480 7%
Premiums earned, net of reinsurance 258,486 231,553 12% 981,291 912,654 8%
Technical result 27,731 35,714 -22% 114,236 116,920 -2%
Result of asset management 6,722 8,991 -25% 41,888 12,049 248%
Profit after tax 25,329 -18,125 240% 119,980 43,372 177%
Earnings per share, SEK 1.27 -0.91 240% 6.00 2.17 177%
Claims ratio 21.6% 24.5% 23.5% 25.4%
Expense ratio 69.4% 62.0% 65.7% 62.7%
Combined ratio 91.0% 86.5% 89.3% 88.2%
31 Dec 31 Dec
KSEK, unless otherwise stated 2021 2020
Investment assets measured at fair value 682,621 821,505
Investment assets including cash and cash equivalents 1,295,760 1,149,710
Direct yield, from beginning of year, % 1.4% 1.5%
Total return, from beginning of year, % 3.6% 1.3%
Technical provisions, net of reinsurance 612,089 584,097
Net asset value 815,531 693,849
Equity 327,413 205,731
Equity (2)* 714,979 589,392
Net Asset Value, NAV (2)* 692,434 558,553
Return on equity (2), RoE (2) %* 18.4% 8.0%
Return on equity excl. intangible assets, RoNAV (2) %* 20.3% 9.8%
Eligible capital base to meet solvency capital requirement 797,379 661,968
Eligible capital base to meet minimum capital requirement 792,259 652,976
Solvency Capital Requirement (SCR) 461,754 446,189
Minimum Capital Requirement (MCR) 130,604 123,744
SCR ratio 173% 148%
MCR ratio 607% 528%
Solvency ratio, % 82.7% 74.5%
Number of employees at end of period* 68 70
Average number of FTEs* 66 68

* Alternative performance measures are performance measures that company management and analysts use to assess the company's development and are not defined by International Financial Reporting Standards (IFRS) or the Solvency II rules. Company management believes that the performance measures make it easier for investors to analyse the company's performance. The calculations and reconciliation against information in the financial statements of these performance measures are presented on the website under "Financial statements". Definitions of performance measures are presented on the website under "Financial data".

Personal Safety

Fourth quarter 2021, October–December

In December, Solid Försäkring AB (publ) signed an agreement with Svea Bank and its sales finance business. Svea Bank will offer its customers in Sweden payment protection insurance that covers monthly payments in the event of involuntary unemployment or sick leave, for example. The launch is scheduled for Q4 2022.

In the fourth quarter, sales in the segment increased 2 per cent compared with the year-earlier period. The increase was primarily driven by the recovery in Norway where sales of payment protection insurance increased 35 per cent compared with the year-earlier period.

Costs for claims incurred, net of reinsurance, fell sharply in the quarter and returned to levels before the outbreak of COVID-19.

Gross written premiums rose KSEK 2,010 during the period to KSEK 94,001 (91,991). Premiums earned, net of reinsurance declined KSEK 5,150 to KSEK 91,884 (97,034).

Gross profit increased KSEK 2,303 to KSEK 24,634 (22,331). The gross margin improved to 26.8 per cent (23.0), mainly due to lower costs for claims incurred, net of reinsurance.

Full-year 2021, January–December

Gross written premiums declined KSEK 8,912 to KSEK 369,547 (378,459). Premiums earned, net of reinsurance declined KSEK 22,254 to KSEK 374,391 (396,645) and costs for claims incurred, net of reinsurance fell KSEK 11,420. Gross profit increased 872 per cent to KSEK 98,937 (98,065).

The gross margin improved and returned to levels before the outbreak of COVID-19. The gross margin for the full-year 2021 was 26.4 per cent (24.7).

Share of premiums earned, net of reinsurance full-year 2021

Fourth quarter

+2% Gross written premiums

-5% Premiums earned, net of reinsurance

+10% Gross profit

26.8% Gross margin

Performance per quarter (SEK million)

Performance measures – Personal Safety

KSEK Oct-Dec
2021
Oct-Dec
2020
Cha
nge
Jan-Dec
2021
Jan-Dec
2020
Cha
nge
Gross written premiums 94,001 91,991 2% 369,547 378,459 -2%
Premiums earned, net of reinsurance 91,884 97,034 -5% 374,391 396,645 -6%
Claims incurred, net of reinsurance -8,392 -14,108 -41% -39,039 -50,459 -23%
Acquisition costs* -58,858 -60,595 -3% -236,415 -248,121 -5%
Gross profit** 24,634 22,331 10% 98,937 98,065 1%
Gross margin*** 26.8% 23.0% +3.8 p.p. 26.4% 24.7% +1.7 p.p.

* Acquisition costs include brokerage commission and costs for direct sales

** Gross profit = premiums earned, net of reinsurance minus claims incurred net of reinsurance minus acquisition costs

*** Gross margin = gross profit as a percentage of premiums earned, net of reinsurance

Product

Fourth quarter 2021, October–December

A developed insurance offering for white goods was launched in October with a partner of Solid Försäkring in the Swedish and Norwegian consumer electronics markets.

Together with Solid Försäkring's partner Power, a new insurance product for used products in the Norwegian market was launched during the quarter. The partnership with Power in Denmark that was initiated in the third quarter had a positive impact on sales volumes for the period.

Certain industries in the segment are continuing to experience a lack of goods, high shipping costs and a shortage of container vessels, which negatively impacted sales volumes for some partners. Signs of a slight easing of delivery problems in the bicycle industry were noted in the quarter.

Gross written premiums rose KSEK 4,984 during the period to KSEK 105,421 (100,437). The increase was mainly attributable to the consumer electronics industry in Denmark and Sweden. Premiums earned, net of reinsurance increased KSEK 7,907 to KSEK 91,179 (83,272). This increase was primarily attributable to insurance for consumer electronics.

Gross profit declined KSEK 1,176 to KSEK 17,804 (18,980), mainly due to higher acquisition costs, which was primarily the result of a changed product and partner mix in the segment. The gross margin declined to 19.5 per cent (22.8) due to increased acquisition costs.

Full-year 2021, January–December

Gross written premiums declined KSEK 643 to KSEK 361,090 (361,733). Premiums earned, net of reinsurance increased KSEK 21,857 to KSEK 346,577 (324,720). Gross profit increased 381 per cent to KSEK 63,323 (62,942).

Due to the changed product and partner mix in the segment, which drove slightly higher acquisition costs, the gross margin for the year declined to 18.3 per cent (19.4).

Share of premiums earned, net of reinsurance full-year 2021

Fourth quarter

+5% Gross written premiums

+9% Premiums earned, net of reinsurance

-6% Gross profit

19.5% Gross margin

Performance per quarter (SEK million)

Performance measures – Product

KSEK Oct-Dec
2021
Oct-Dec
2020
Cha
nge
Jan-Dec
2021
Jan-Dec
2020
Cha
nge
Gross written premiums 105,421 100,437 5% 361,090 361,733 0%
Premiums earned, net of reinsurance 91,179 83,272 9% 346,577 324,720 7%
Claims incurred, net of reinsurance -25,758 -23,674 9% -103,545 -108,720 -5%
Acquisition costs* -47,617 -40,618 17% -179,709 -153,058 17%
Gross profit** 17,804 18,980 -6% 63,323 62,942 1%
Gross margin*** 19.5% 22.8% -3.3 p.p. 18.3% 19.4% -1.1 p.p.

* Acquisition costs include brokerage commission and costs for direct sales

** Gross profit = premiums earned, net of reinsurance minus claims incurred net of reinsurance minus acquisition costs

*** Gross margin = gross profit as a percentage of premiums earned, net of reinsurance

Assistance (Roadside assistance/Car warranty and travel)

Fourth quarter 2021, October–December

The segment reported robust growth in premium income, premiums earned and gross profit for the fourth quarter. At the end of 2019, before the outbreak of COVID-19, collaboration with an existing partner in the travel industry was expanded to include more European countries, which together with higher demand for travel drove the trend in travel insurance products.

Sale of insurance policies linked to car warranties increased sharply during the period. The number of car dealerships that the company works together with increased compared with the preceding quarter, which contributed positively to the performance.

Gross written premiums rose KSEK 26,316 during the period to KSEK 81,590 (55,274). Premiums earned, net of reinsurance increased KSEK 24,176 to KSEK 75,423 (51,247). The increase both in gross written premiums and in premiums earned, net of reinsurance was attributable to insurance related to car warranties and travel insurance products.

Gross profit increased KSEK 3,862 to KSEK 15,382 (11,520) mainly as a result in growth in premiums earned. The gross margin declined to 20.4 per cent (22.5) mainly due to a changed product mix for the segment.

Full-year 2021, January–December

Gross written premiums increased KSEK 71,496 to KSEK 282,784 (211,288). Premiums earned, net of reinsurance increased KSEK 69,034 to KSEK 260,323 (191,289). Gross profit increased KSEK 12,453 to KSEK 53,326 (40,873) due to growth in car warranties and the recovery in the travel industry.

The gross margin declined to 20.5 per cent (21.4), as the result of a changed product mix in the segment with the share of travel insurance products increasing compared with last year.

Share of premiums earned, net of reinsurance full-year 2021

Fourth quarter

+48% Gross written premiums

+47% Premiums earned, net of reinsurance

+34% Gross profit

20.4% Gross margin

Performance per quarter (SEK million)

Performance measures – Assistance

KSEK Oct-Dec
2021
Oct-Dec
2020
Cha
nge
Jan-Dec
2021
Jan-Dec
2020
Cha
nge
Gross written premiums 81,590 55,274 48% 282,784 211,288 34%
Premiums earned, net of reinsurance 75,423 51,247 47% 260,323 191,289 36%
Claims incurred, net of reinsurance -21,615 -19,045 13% -88,437 -73,017 21%
Acquisition costs* -38,426 -20,682 86% -118,560 -77,399 53%
Gross profit** 15,382 11,520 34% 53,326 40,873 30%
Gross margin*** 20.4% 22.5% -2.1 p.p. 20.5% 21.4% -0.9 p.p.

* Acquisition costs include brokerage commission and costs for direct sales

** Gross profit = premiums earned, net of reinsurance minus claims incurred net of reinsurance minus acquisition costs

*** Gross margin = gross profit as a percentage of premiums earned, net of reinsurance

Significant events

January–December 2021

On 10 August, the General Meeting of Solid Försäkringsaktiebolag ("Solid Försäkring") resolved that the number of shares be increased on the basis of a split, whereby the shares would be divided into a total of 20,000,000 shares. The quotient value thus declined to SEK 1.5 per share.

On 4 October, the company's former owner Resurs Holding AB ("Resurs") announced that the Board had decided to propose to an Extraordinary General Meeting on 2 November 2021 to resolve to distribute all of the shares in Solid Försäkring to Resurs Holding AB's shareholders.

On 2 November 2021, the Extraordinary General Meeting of Resurs resolved to distribute all of the shares in Solid Försäkring to Resurs's shareholders.

On 22 November, Solid Försäkring published a prospectus for admission to trading on Nasdaq Stockholm.

Solid Försäkring's shares were listed on Nasdaq Stockholm on 1 December.

Except for the above, no other significant events occurred during the period in question.

Events after the end of the period

No significant events took place after the end of the period.

New partnerships 2021

Additional information

Risk management

The company's ability to manage risks impacts the company's financial position and ability to achieve set targets. Various types of risks arise in the operations, such as insurance risk, market risk, counterparty risk, operational risks and other risks. The Board has adopted policies for the operations in order to balance the company's risk-taking and restrict and control risks. All policies are updated as necessary and revised at least once a year. The Board and CEO are ultimately responsible for risk management. The company's risk management is described is more detail in the most recent annual report under the section Information about risks and uncertainties and in Note 2 Risk disclosures.

In general, no changes of material importance to risk management took place during the period, and the company does not believe that the ongoing pandemic will jeopardise the company's stability or capital situation in the future.

Information about the operations

Solid Försäkringsaktiebolag's (publ), Corp. ID. No. 516401-8482, has been listed on Nasdaq Stockholm (Small Cap) since 1 December 2021. The head office is located in Helsingborg, Sweden.

The focus of the operations is on niche insurance, with the Nordic region as its main market. The non-life insurance operations are divided into three segments: Product, Personal Safety and Assistance. The operations in Norway, Finland and Switzerland are conducted by branches, and operations in other countries are conducted as cross-border operations. Solid Försäkring partners with leading retail chains in various industries and the banking sector, and has about 2.3 million customers across the

Employees

Nordic region.

The number of employees, regardless of degree of employment, was 68 on 31 December, a reduction of two people compared with the end of December 2020.

Information about the Solid share

Solid Försäkringsaktiebolag's (Solid) share was listed on Nasdaq Stockholm (Small Cap) under the ticker SFAB and its ISIN is SE0017082548. Since Solid was listed on Nasdaq Stockholm on 1 December 2021, the share price trend is presented for the period between 1 December and 31 December 2021 in this report.

On the listing date of 1 December 2021 (the first trading day), the share was first traded at SEK 55.00 and closed at SEK 60.16. The share price on the final trading day of the period was SEK 58.75. The highest price paid of SEK 65.75 was noted on 6 December and the lowest price paid of SEK 54.05 was noted on 23 December.

A total of 3,565,701 shares were traded during the period, corresponding to a turnover rate of 17.83 per cent during the measurement period of 1–31 December 2021.

The largest directly registered shareholders Percenta
on 31 December 2021 ges of share
capital
Waldakt AB 28.9%
Avanza Pension 5.6%
Swedbank Robur Fonder 3.1%
Vanguard 2.4%
Third Swedish National Pension Fund 2.1%
Livförsäkringsbolaget Skandia 2.0%
Dimensional Fund Advisors 1.8%
Janus Henderson Investors 1.7%
Catea Group AB 1.7%
Nordnet Pensionsförsäkring 1.6%
50.7%

Financial targets and dividend policy

Solid Försäkring has the following medium-term financial targets:

  • Annual growth in premiums earned of 4–7 per cent.
  • In addition, the company intends to grow through selective acquisitions.
  • Maintain a combined ratio below 90 per cent.
  • Achieve a return on RoNAV (2) of more than 14 per cent.
  • Maintain an SCR ratio of at least 150 per cent. Dividend policy:

According to the Board's dividend policy, the company intends to pay an annual dividend corresponding to at least 50 per cent of net profit for the year from and including the 2022 financial year. The dividend policy is conditional on the target for the SCR ratio and that no potential major acquisitions are carried out.

Dividends

In accordance with previous communication during the listing process, the Board proposes to the Annual General Meeting that no dividend be paid to shareholders for the 2021 financial year.

The Board's assurance

The Board of Directors and the CEO certify that this year-end report provides a fair review of the company's operations, financial position and results and describes the significant risks and uncertainties faced by the company.

Helsingborg, 7 February 2022

Marcus Tillberg, CEO

The Board of Directors

Lars Nordstrand, Chairman

Fredrik Carlsson David Nilsson Sträng

Marita Odélius Engström Lisen Thulin

Condensed financial statements

Income statement

KSEK Note Oct-Dec
2021
Oct-Dec
2020
Jan–
Dec
2021
Jan–
Dec
2020
Technical account of non-life insurance operations
Premiums earned, net of reinsurance 3 258,486 231,553 981,291 912,654
Allocated investment return transferred from the non-technical account 4,400 4,514 8,900 9,014
Claims incurred, net of reinsurance 4 -55,765 -56,827 -231,021 -232,196
Operating expenses 5 -179,390 -143,526 -644,934 -572,552
Technical result for non-life insurance operations 27,731 35,714 114,236 116,920
Non-technical account
Investment income 4,561 4,723 25,068 20,515
Investment charges -605 -520 -2,188 -1,937
Unrealised gains/losses on investment assets 2,766 4,788 19,008 -6,529
Result of asset management 6 6,722 8,991 41,888 12,049
Allocated investment return transferred to technical account -4,400 -4,514 -8,900 -9,014
Other non-technical income 1,392 3,285 6,750 3,655
Other non-technical expenses -503 -2,505 -2,609 -3,006
Profit before appropriations and tax 30,942 40,971 151,365 120,604
Appropriations 0 -60,000 0 -60,000
Profit before tax 30,942 -19,029 151,365 60,604
Tax on profit for the period -5,613 904 -31,385 -17,232
Net profit for the period 25,329 -18,125 119,980 43,372
Basic and diluted earnings per share, SEK 12 1.27 -0.91 6.00 2.17

Statement of comprehensive income

KSEK Oct-Dec Oct-Dec Jan– Jan–
2021 2020 Dec Dec
2021 2020
Net profit for the period 25,329 -18,125 119,980 43,372
Items that will be reclassified to profit or loss
Translation differences in foreign operations 580 -409 701 -691
Comprehensive income for the period 25,909 -18,534 120,681 42,681

Balance sheet

KSEK Note 30 Dec
2021
31 Dec
2020
Assets
Intangible assets 22,545 30,839
Investment assets 7 682,621 821,505
Reinsurer's share of technical provisions 3,811 3,667
Receivables 81,052 94,839
Property, plant & equipment 1,911 2,908
Cash and bank balances 613,139 328,205
Other assets 388 2,085
Prepaid expenses and accrued income 210,418 197,661
Total assets 1,615,885 1,481,709
Equity and liabilities
Equity
Share capital 30,000 30,000
Fair value reserve -777 -1,478
Retained earnings 178,210 133,837
Net profit for the period 119,980 43,372
Total equity 327,413 205,731
Untaxed reserves
Contingency reserve 488,118 488,118
Total untaxed reserves 488,118 488,118
Liabilities
Technical provisions, net of outward reinsurance 8 615,900 587,764
Other liabilities 164,926 183,183
Accrued expenses and deferred income 19,528 16,913
Total liabilities 800,354 787,860
Total equity and liabilities 1,615,885 1,481,709

Statement of changes in equity

KSEK Share
capital
Fair value
reserve
Retain
ed
earning
s
Net profit
for the
period
Total
equity
Equity, 1 Jan 2020 30,000 -787 34,382 49,455 113,050
Net profit for the period 43,372 43,372
Translation differences -691 -691
Comprehensive income for the period -691 43,372 42,681
Previous year's profit brought forward 49,455 -49,455 0
Owner transactions
Shareholders' contributions 50,000 50,000
Equity, 31 December 2020 30,000 -1,478 133,837 43,372 205,731
Equity, 1 January 2021 30,000 -1,478 133,837 43,372 205,731
Net profit for the period 119,980 119,980
Translation differences 701 701
Comprehensive income for the period 701 119,980 120,681
Previous year's profit brought forward 43,372 -43,372 0
Owner transactions
Option premiums received/repurchased 1,001 1,001
Equity, 31 December 2021 30,000 -777 178,210 119,980 327,413

Statement of cash flows (indirect method)

Jan– Jan–
KSEK Dec Dec
2021 2020
Operating activities
Profit before tax 151,365 60,604
Adjustment for non-cash items -24,648 122,069
Income taxes paid -13,894 -20,219
Cash flow from operating activities before changes in working capital 112,823 162,454
Change in operating receivables 11,035 -14,976
Change in operating liabilities 39,198 2,580
Cash flow from operating activities 163,056 150,058
Cash flow from investing activities 173,275 -105,296
Cash flow from financing activities -59,000 -12,000
Cash flow for the period 277,331 32,762
Cash and cash equivalents at the beginning of the year 328,205 305,305
Cash flow for the period 277,331 32,762
Exchange differences in cash and cash equivalents 7,603 -9,862
Cash and cash equivalents at end of period 613,139 328,205

The reported cash flows only include transactions involving cash inflows and outflows. The cash transactions are classified under operating activities, investing activities and financing activities. Cash and cash equivalents are bank deposits.

Notes to the financial statements

Note 1 Accounting policies

Solid Försäkring's year-end report has been prepared in accordance with IAS 34 Interim Financial Report and the applicable parts of the Swedish Annual Accounts Act for Insurance Companies (1995:1560), the Swedish Financial Supervisory Authority's regulations and general guidelines on Annual Accounts at Insurance Undertakings (FFFS 2019:23), including all applicable amendment regulations, and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities. Disclosures pursuant to IAS 34.16A are presented in the financial statements and the accompanying notes as well as elsewhere in this year-end report.

The ESMA guidelines on alternative performance measures are applied. These are performance measures that are not defined in applicable regulations (IFRS, ÅRFL, FFFS 2019:23 and FRL), but that Solid Försäkring believes to be relevant for monitoring and describing the company's financial situation and to provide additional useful information for users of the financial statements. Since these measures have been developed and adapted for Solid Försäkring, they are not fully comparable with similar performance measures presented by other companies.

The same accounting policies and basis for calculations were applied as those used in the most recent annual report. The following accounting policies were applied for the first time during the quarter: IFRS 8 Operating segment, refer to information

in Note 2 IAS 33 Earnings per share.

No other IFRS or IFRIC interpretations have come into force since 1 January 2021 that have had a material impact on the company.

Note 2 Segment information

Solid has established three operating segments: Personal Safety, Product and Assistance. These operating segments are reported in a manner consistent with the internal financial reporting provided to the chief operating decision maker. For Solid, the chief operating decision maker is the CEO since this is the person who is responsible for allocating resources and evaluating results. The financial information reported to the CEO, used as a basis for allocating resources and assessing the Company's results, as gross profit and gross margin specified by three product areas, which have also been determined as the Company's three operating segments: Personal Safety, Product and Assistance. The Company uses the same valuation principles in its segment report according to IFRS 8 as in its financial statements.

Oct-Dec 2021
Personal Safety Product Assistance N Total
KSEK ot
specified
by
segment
Gross written premiums 94,001 105,421 81,590 281,012
Premiums earned, net of reinsurance 91,884 91,179 75,423 258,486
Claims incurred, net of reinsurance -8,392 -25,758 -21,615 -55,765
Acquisition costs* -58,858 -47,617 -38,426 -144,901
Gross profit** 24,634 17,804 15,382 57,820
Gross margin*** 26.8% 19.5% 20.4% 22.4%
Administrative expenses -34,489 -34,489
Allocated investment return transferred from non-technical account 4,400 4,400
Technical result 27,731
Result of asset management 6,722 6,722
Allocated investment return transferred to non-technical account -4,400 -4,400
Other non-technical income 1,392 1,392
Other non-technical expenses -503 -503
Profit before tax 30,942
Oct-Dec 2020
KSEK Personal Safety Product Assistance N
ot
specified
Total
by
segment
Gross written premiums 91,991 100,437 55,274 247,702
Premiums earned, net of reinsurance 97,034 83,272 51,247 231,553
Claims incurred, net of reinsurance -14,108 -23,674 -19,045 -56,827
Acquisition costs* -60,595 -40,618 -20,682 -121,895
Gross profit** 22,331 18,980 11,520 52,831
Gross margin*** 23.0% 22.8% 22.5% 22.8%
Administrative expenses -21,631 -21,631
Allocated investment return transferred from non-technical account 4,514 4,514
Technical result 35,714
Result of asset management 8,991 8,991
Allocated investment return transferred to non-technical account -4,514 -4,514
Other non-technical income 3,285 3,285
Other non-technical expenses -2,505 -2,505
Appropriations -60,000 -60,000
Profit before tax -19,029
Jan–Dec 2021
KSEK Personal Safety Product Assistance N
ot
Total
specified
by
segment
Gross written premiums 369,547 361,090 282,784 1,013,421
Premiums earned, net of reinsurance 374,391 346,577 260,323 981,291
Claims incurred, net of reinsurance -39,039 -103,545 -88,437 -231,021
Acquisition costs* -236,415 -179,709 -118,560 -534,684
Gross profit** 98,937 63,323 53,326 215,586
Gross margin*** 26.4% 18.3% 20.5% 22.0%
Administrative expenses -110,250 -110,250
Allocated investment return transferred from non-technical account 8,900 8,900
Technical result 114,236
Result of asset management 41,888 41,888
Allocated investment return transferred to non-technical account -8,900 -8,900
Other non-technical income 6,750 6,750
Other non-technical expenses -2,609 -2,609
Profit before tax 151,365
Jan–Dec 2020
ot
KSEK
specified
by segment
Gross written premiums
378,459
361,733
211,288
951,480
Premiums earned, net of reinsurance
396,645
324,720
191,289
912,654
Claims incurred, net of reinsurance
-50,459
-108,720
-73,017
-232,196
Acquisition costs
-248,121
-153,058
-77,399
-478,578
Gross profit
*
98,065
62,942
40,873
201,880
Gross margin***
24.7%
19.4%
21.4%
22.1%
Administrative expenses
-93,974
-93,974
Allocated investment return transferred from non-technical account
9,014
9,014
Technical result
116,920
Result of asset management
12,049
12,049
Allocated investment return transferred to non-technical account
-9,014
-9,014
Other non-technical income
3,655
3,655
Other non-technical expenses
-3,006
-3,006
Appropriations
-60,000
-60,000
Profit before tax
60,604

* Acquisition costs include brokerage commission and costs for direct sales, included in Note 5 Operating expenses.

** Gross profit = premiums earned, net of reinsurance minus claims incurred net of reinsurance minus acquisition costs

*** Gross margin = gross profit as a percentage of premiums earned, net of reinsurance

Premiums earned, net of reinsurance in the Personal Safety segment for Solid Försäkring's largest partner amounted to KSEK 89,270 (94,775) in Q4 and KSEK 364,951 (387,900) for the full-year 2021.

Note 3 Premiums earned, net of reinsurance

KSEK Oct-Dec
2021
Oct-Dec
2020
Jan–
Dec
2021
Jan–
Dec
2020
Gross written premiums, geographical specification
Sweden 168,151 158,070 646,602 615,509
Norway 49,110 46,750 170,667 176,392
Denmark 22,755 15,874 69,978 65,365
Finland 12,104 14,496 48,669 58,909
Rest of Europe 28,892 12,512 77,505 35,305
Total gross written premiums 281,012 247,702 1,013,421 951,480
Outward reinsurance premiums -9,193 -4,825 -27,605 -19,922
Change in provision for unearned premiums and unexpired risks -12,612 -11,324 -4,634 -18,890
Reinsurers' share of change in provision for unearned premiums and
unexpired risks
-721 0 109 -14
Total premiums earned, net of reinsurance 258,486 231,553 981,291 912,654

Note 4 Claims incurred, net of reinsurance

Oct-Dec Oct-Dec Jan– Jan–
KSEK 2021 2020 Dec Dec
2021 2020
Claims paid, net of outward reinsurance -58,952 -57,594 -232,902 -228,583
Reinsurers' share of Claims paid 1,798 1,454 6,325 6,073
Change in Provision for claims outstanding, net of outward reinsurance 1,399 -506 -4,434 -9,515
Reinsurers' share of Change in provision for claims outstanding -10 -181 -10 -171
Total claims incurred, net of reinsurance -55,765 -56,827 -231,021 -232,196
17

Note 5 Operating expenses

KSEK Oct-Dec
2021
Oct-Dec
2020
Jan–
Dec
2021
Jan–
Dec
2020
Specification of income statement item operating expenses
Acquisition costs* -154,277 -127,925 -539,232 -486,015
Change in item Deferred acquisition costs* 8,848 5,418 2,920 5,873
Administrative expenses -34,489 -21,631 -110,250 -93,974
Operating expenses and profit-sharing in outward reinsurance* 528 612 1,628 1,564
Total income statement item operating expenses -179,390 -143,526 -644,934 -572,552
Other operating expenses
Claims adjustment costs included in Claims paid -6,032 -6,022 -23,030 -24,937
Financial management costs included in Investment charges -300 -300 -1,200 -1,200
Total other operating expenses -6,332 -6,322 -24,230 -26,137
Total operating expenses -185,722 -149,848 -669,164 -598,689

* The marked items comprise total acquisition costs

Note 6 Result of asset management

Oct-Dec Oct-Dec Jan– Jan–
KSEK 2021 2020 Dec Dec
Investment income 2021 2020
Dividends on shares and participating interests 915 639 3,561 1,521
Interest income, etc.
Bonds and other interest-bearing securities 1,966 1,877 7,670 7,486
Other interest income * 1,206 1,601 4,061 7,676
Exchange gains (net) 424 -840 1,468 76
Capital gains (net) 47 1,409 8,291 3,713
Other 3 37 17 43
Total investment income 4,561 4,723 25,068 20,515
Investment charges -605 -520 -2,188 -1,937
Unrealised gains/losses on investment assets recognised through profit or loss
Shares and participating interests 5,938 2,797 20,057 -4,325
Bonds and other interest-bearing securities -3,172 1,991 -1,049 -2,204
Total unrealised gains/losses on investment assets 2,766 4,788 19,008 -6,529
Result of asset management 6,722 8,991 41,888 12,049

* All Other interest income consists of interest income on assets measured at fair value.

Note 7 Investment assets

KSEK 31 Dec
2020
Shares and participating interests 78,788 98,207
Bonds and other interest-bearing securities 574,581 493,616
Subordinated loans 29,252 229,682
Total investment assets 682,621 821,505

Note 8 Technical provisions, net of outward reinsurance

KSEK 30 Dec
2021
31 Dec
2020
Opening balance technical provisions, net of outward reinsurance 587,764 585,557
Provision for unearned premiums and unexpired risks, gross
Opening balance 532,931 538,318
Insurance policies written during the period 1,013,421 951,480
Premiums earned during the period -1,008,787 -932,590
Currency effects 17,540 -24,277
Closing balance 555,105 532,931
Provision for claims outstanding, gross
Opening balance 54,833 47,239
Settled claims from previous financial years -21,940 -21,814
Changes in the expected cost of claims incurred in previous years (run-off result) -8,332 -9,200
Provisions for the year 34,706 40,529
Currency effects 1,528 -1,921
Closing balance 60,795 54,833
Closing balance technical provisions, net of outward reinsurance 615,900 587,764

Note 9 Pledged assets for own liabilities

KSEK 30 Dec
2021
31 Dec
2020
Policyholders' priority rights
Assets encompassed by policyholders' priority rights 1,296,131 1,150,416
Technical provisions, net -612,089 -584,097
Surplus from registered assets 684,042 566,319

Note 10 Disclosures on related parties

Solid Försäkringsaktiebolag is 28.9 per cent owned by Waldakt AB, and of the remaining owners, no individual owner has a holding of 20 per cent or more. Normal business transactions have taken place between Solid Försäkring and other related parties with significant influence, which are presented below. Operating expenses in the table refer to market-based remuneration paid for the distribution of insurance to related parties' customers. Disclosures for 2020 include the former Parent Company Resurs Holding AB (publ) and fellow subsidiary Resurs Bank AB (publ).

Related-party transactions, significant influence

KSEK Oct-Dec
2021
Oct-Dec
2020
Jan–
Dec
2021
Jan–
Dec
2020
Income and expenses
Premiums earned 385 1,812
Investment return, interest income 1,470 7,503
Shareholders' contributions 50,000
Group contributions -60,000
Brokerage commission -20,037 -73,594 -64,016 -286,060
Operating expenses -6,393 -19,651
Total income and expenses -20,037 -78,132 -64,016 -306,396
31 Dec
KSEK 2021 2020
Assets and liabilities
Receivables 5,059 39,388
Cash and bank balances 1,297
Other loans 200,000
Liabilities -21,072 -116,443
Total assets and liabilities -16,013 124,242

Related parties – Key individuals

Marcus Tillberg CEO
Lars Nordstrand Chairman of Solid Försäkringsaktiebolag
Fredrik Carlsson Board member of Solid Försäkringsaktiebolag
David Nilsson Sträng Board member of Solid Försäkringsaktiebolag
Marita Odélius Engström Board member of Solid Försäkringsaktiebolag, took up her position at the Extraordinary General
Meeting on 28 June 2021 Lisen Thulin Board member of Solid Försäkringsaktiebolag, took up her position at the Extraordinary General
Meeting on 28 June 2021

Remuneration of key individuals

In accordance with a separate bonus agreement linked to the listing process, a transaction bonus of KSEK 850 was paid to CEO Marcus Tillberg in December. There were no other material changes to the scope of remuneration and benefits for senior executives during the period.

Note 11 Financial instruments

The table below shows financial instruments measured at fair value, based on their classification in the fair value hierarchy. The different

levels are defined as follows:

  • Other observable inputs for assets or liabilities other than listed prices included in level 1 directly (i.e., price quotations) or indirectly (i.e., derived from price quotations) (level 2).

  • Inputs for assets or liabilities that are not based on observable market data (i.e., unobservable inputs) (level 3).

- Listed prices (unadjusted) in active markets for identical assets or liabilities (level 1).

KSEK Measurement
level
30 Dec
2021
31 Dec
2020
Financial assets at fair value through profit or loss
Bonds and other interest-bearing securities 1 603,833 523,298
Listed shares 1 78,788 98,207
Total 682,621 621,505
Financial liabilities at fair value through profit or loss
Derivatives 2 -660 -508
Total -660 -508
30 Dec 2021 31 Dec 2020
Assets, KSEK Amortise
d
cost*
Fair value
through profit
or loss
Carryin
g
amou
nt
Amortise
d
cost*
Fair value
through profit
or loss
Carryin
g
amou
nt
Financial assets
Shares and participating interests 78,788 78,788 98,207 98,207
Other interest-bearing securities 603,833 603,833 523,298 523,298
Subordinated loans 200,000 200,000
Receivables, direct insurance and reinsurance 81,042 81,042 77,493 77,493
Cash and bank balances and other cash equivalents 613,193 613,193 328,253 328,253
Prepaid expenses and accrued income 1,031 1,031 1,214 1,214
Total financial assets 694,235 683,652 1,377,887 605,746 622,719 1,228,465
Non-financial assets 237,998 253,244
30 Dec 2021 31 Dec 2020
Liabilities, KSEK Amortise
d
cost*
Fair value
through profit
or loss
Carryin
g
amou
nt
Amortise
d
cost*
Fair value
through profit
or loss
Carryin
g
amou
nt
Financial liabilities
Liabilities, direct insurance and reinsurance 158,712 158,712 119,453 119,453
Derivatives 660 660 508 508
Other liabilities 5,554 5,554 63,222 63,222
Total financial liabilities 164,266 660 164,926 182,675 508 183,183
Non-financial liabilities 635,428 604,677

* Assets and liabilities are recognised at amortised cost, which is a good approximation of fair value

Note 12 Earnings per share

Basic earnings per share are calculated by dividing the earnings attributable to the company's shareholders by a weighted average number of ordinary shares outstanding for the period. The average number of shares between January and December 2021 amounted to 20,000,000 with a quotient value of SEK 1.5 (1.5). There was no dilutive effect as per 31 December 2021.

Oct-Dec Oct-Dec Jan– Jan–
2021 2020 Dec Dec
2021 2020
Net profit for the period, KSEK 25,329 -18,125 119,980 43,372
Average number of shares outstanding in the period 20,000,000 20,000,000 20,000,000 20,000,000
Basic and diluted earnings per share*, SEK 1.27 -0.91 6.00 2.17

* All periods have been calculated based on the current number of shares in Solid Försäkring, i.e. 20,000,000 shares. The number of shares increased from 30,000 to 20,000,000 due to a share split in August 2021.

Teleconference in connection with publication of the interim report

In connection with the publication of the interim report, CEO Marcus Tillberg and CFO Sofia Andersson will hold a teleconference on 8 February 2022 at 11:00 a.m. CET. To participate in the conference, call +46851999383 or click on the following link https://tv.streamfabriken.com/solid-q4- 2021. Presentation material will be available on Solid's website: https://corporate.solidab.se/en/investors/reports-and-presentations/

Interim reports

The complete year-end report for January to December 2021 will be available on https://corporate.solidab.se/en/investors/reports-and-presentations/

Financial calendar

Future reporting dates
22 Mar 2022 2021 Annual Report
27 Apr 2022 Fourth quarter 2022
28 Apr 2022 2022 Annual General
Meeting
21 Jul 2022 Second quarter 2022
25 Oct 2022 Third quarter 2022

This information is such information that Solid Försäkringsaktiebolag (publ) is required to disclose pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, on 8 February 2022 at 7:30 a.m. CET.

For further information, contact

Marcus Tillberg, CEO, [email protected], +46 703 78 20 65 Sofia Andersson, CFO, [email protected], +46 700 42 11 77 Johan Hähnel, Head of IR, [email protected], +46 705 05 63 34

Solid Försäkringsaktiebolag

Landskronavägen 23 Box 220 68 SE-250 22 Helsingborg

Tel: +46 42 38 21 00 www.solidab.se

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