Gjensidige Forsikring ASA

Earnings Release • Jan 24, 2024

Results for the quarter and the full year impacted by challenging weather conditions

Results for the quarter and the full year impacted by challenging weather conditions

This release contains inside information related to Gjensidige Forsikring ASA

pursuant to the EU Market Abuse Regulation and is subject to the disclosure

requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.

Gjensidige generated a profit after tax of NOK 1.1 billion during the fourth

quarter and NOK 4.1 billion for the full year, reflecting continued strong

momentum in revenue growth, but also higher claims costs impacted by challenging

weather conditions. The financial result from investments reflects the positive

development in the capital markets. Gjensidige will continue to strengthen

pricing measures and adjust terms and conditions to ensure that the increase in

claims costs is mitigated over time. Delivery on financial targets for 2023 was

impacted by challenging weather during the year and one-off expenses in the

third quarter. The outlook for Gjensidige's insurance service results remains

good. The Board proposes a regular dividend of NOK 8.75 per share.

Gjensidige Forsikring Group recorded a profit before tax of NOK 1,606.5 million

(1,674.1) for the quarter. The profit after tax was NOK 1,112.6 million

(1,315.7) and the corresponding earnings per share were NOK 2.18 (2.60). The

profit from general insurance operations measured by the insurance service

result was NOK 734.3 million (1,101.0), corresponding to a combined ratio of

92.2 (86.8).

- Challenging winter conditions with heavy snowfall and low temperatures in the

fourth quarter continued into 2024. Difficult driving conditions and frost

damage on properties contributed to a large number of claims from customers. In

cooperation with our suppliers, competent and dedicated employees have taken

good care of our customers, says CEO Geir Holmgren.

- Our strong growth momentum is very encouraging. We are handling inflation well

and we have strong measures in place to mitigate the effects of the elevated

claims frequency in Norway. We will continue to focus on profitable growth, and

further improve operational efficiency, says Holmgren.

General insurance

Insurance revenue increased by 12.8 per cent to NOK 9,394.6 million (8,324.9) in

the quarter, or by 9.1 per cent measured in local currency. This was due to

solid renewals, effective and differentiated pricing measures and volume growth.

The insurance service result decreased by 33.3 per cent, due to a higher

underlying frequency loss ratio, higher large losses and lower run off gains.

Higher discounting effects contributed positively to the insurance service

result.

The underlying frequency loss ratio increased by 4.7 percentage points, mainly

driven by the Private segment. The claims frequency for motor insurance in

Norway increased significantly, reflecting the difficult driving conditions

caused by several periods with heavy snowfall and low temperatures. In addition,

the increase in underlying claims frequency for motor continued in the fourth

quarter. This was met with targeted measures that will have full effect on the

insurance service result over time. The weather conditions in the fourth quarter

also impacted claims frequency for property insurance in Norway. In addition,

the profitability for Norway was negatively impacted by a strengthening of

reserves for claims incurred earlier in 2023. The profitability of property

insurance in Denmark was negatively impacted by windstorms and cloudbursts

during the quarter. The cost ratio was broadly stable at 13.3 percentage points.

Pension

The Pension segment generated a profit before tax of NOK 113.7 million (134.7),

mainly reflecting a lower insurance service result and an increase in net

finance income. The decline in the insurance service result was mainly driven by

a positive impact on the result in the fourth quarter 2022 related to a change

in the actuarial model for paid-up policies, in addition to a strengthening of

provisions for children's disability pension.

Financial result

The financial result for the quarter was NOK 1,876.3 million (968.4), which

corresponds to a return on total assets of 3.1 per cent (1.7). The result for

the quarter was positively impacted by lower interest rates and credit spreads,

a high running yield, as well as positive equity markets.

Result for the year as a whole

Year-to-date the Group recorded a profit before tax of NOK 5,551.5 million

(4,317.5). The profit from general insurance operations measured by the

insurance service result was NOK 4,468.9 million (5,536.2) corresponding to a

combined ratio of 87.6 (82.8). The profit after tax was NOK 4,130.4 million

(3,437.8). Earnings per share amounted to NOK 8.11 (6.78).

The decrease in the insurance service result was driven by an increase in the

underlying frequency loss ratio, higher large losses and an increase in

operating expenses. The large losses were significantly impacted by claims

related to the storm 'Hans' and the torrential rain in Oslo during the third

quarter. Higher run-off gains and the discounting effect contributed positively.

The increase in the underlying frequency loss ratio was partly impacted by the

difficult driving conditions in the first and fourth quarters in Norway, with a

negative effect on profitability for private and commercial motor insurance, in

addition to lower profitability of private property in Norway and private motor

and property insurance in Denmark. Insurance revenue rose by 8.6 per cent

measured in local currency.

The Pension segment recorded a result before tax of NOK 106.1 million (129.7),

mainly reflecting a lower insurance service result and an increase in net

finance income. The decline in the insurance service result was driven by the

positive impact on the results in the fourth quarter of 2022 related to the

change to the actuarial model for paid-up policies and the strengthening of

provisions for children's disability pension in the fourth quarter 2023.

The financial result for the period was NOK 2,590.3 million (minus 2,516.3),

which corresponds to a return on total assets of 4.3 per cent (minus 4.3). Most

asset classes contributed positively to the results for the year. A high running

yield and lower credit spreads in the fixed income portfolio, rising equity

markets and PE generated positive returns.

Highlights fourth quarter 2023 (fourth quarter 2022)

· Profit or loss before tax: NOK 1,606.5 million (1,674.1)

· Earnings per share: NOK 2.18 (2.60)

· Insurance revenue: NOK 9,394.6 million (8,324.9)

· Insurance service result: NOK 734.3 million (1,101.0)

· Combined ratio: 92.2% (86.8%)

· Cost ratio: 13.3% (13.4%)

· Financial result: NOK 1,876.3 million (968.4)

Highlights year as a whole 2023 (2022)

· Profit or loss before tax: NOK 5,551.5 million (4,317.5)

· Earnings per share: NOK 8.11 (6.78)

· Insurance revenue: NOK 36,162.0 million (32,217.7)

· Insurance service result: NOK 4,468.9 million (5,536.2)

· Combined ratio: 87.6% (82.8%)

· Cost ratio: 14.4% (13.2%)

· Financial result: NOK 2,590.3 million (minus 2,516.3)

Proposed dividend

· Proposed regular dividend: NOK 4,375 million (4,125), corresponding to NOK

8.75 per share (8.25)

This release contains alternative performance measures (APMs). APMs are

described at www.gjensidige.com/reporting in a document named Alternative

Performance Measures (APM).

This release is issued by Christian Haraldsen, Media Relations Officer at

Gjensidige Forsikring ASA.

Date and time of publication : 24 January 2024, 07:00 CET.

Contact persons, Gjensidige Forsikring ASA:

Head of Communication, Øystein Thoresen. Tel: 47 952 33 382

Head of Investor Relations Mitra Hagen Negård. Tel:  47 957 93 631

Gjensidige is a leading Nordic insurance group listed on the Oslo Stock

Exchange. We have about 4,500 employees and offer insurance products in Norway,

Denmark, Sweden and the Baltic states. In Norway, we also offer pension and

savings. The Group's operating income was NOK 36 billion in 2023, while total

assets were NOK 148 billion.