Gjensidige Forsikring ASA

Quarterly Report • Jul 12, 2019

Gjensidige Forsikring Group – 2

nd quarter 2019 1

Group highlights First half-year and second quarter 2019

In the following, the figures in brackets indicate the amount or percentage for the corresponding period last year.

Year-to-date

Group

• Profit/loss before tax expense: NOK 4,753.6 million (1,639.9)
• Earnings per share: NOK 8.25 (3.08)

General Insurance

• Earned premiums: NOK 12,019.5 million (11,853.5)
• Underwriting result: NOK 2,055.7 million (1,118.0)
• Combined ratio: 82.9 (90.6)
• Cost ratio: 14.9 (15.2)
• Financial result: NOK 1,195.1 million (625.5)

Second quarter

Group

• Profit/loss before tax expense: NOK 1,722.9 million (1,034.9)
• Earnings per share: NOK 2.68 (2.01)

General Insurance

• Earned premiums: NOK 6,082.8 million (5,987.2)
• Underwriting result: NOK 1,257.6 million (706.8)
• Combined ratio: 79.3 (88.2)
• Cost ratio: 14.9 (15.2)
• Financial result: NOK 512.9 million (370.7)

Special factors and events

• Dividend for 2018 was paid on 9 April 2019: NOK 3,550 million, corresponding to NOK 7.10 per share

Profit performance Group

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
General Insurance Private	584.2	371.4	979.1	715.1	1,934.8
General Insurance Commercial	493.0	307.4	826.3	376.2	1,548.2
General Insurance Denmark	221.1	63.6	323.9	149.0	434.5
General Insurance Sweden	13.7	13.4	35.5	23.5	78.2
General Insurance Baltics	14.4	11.4	20.1	20.1	68.5
Corporate Centre/costs related to owner	(72.3)	(83.0)	(151.8)	(165.6)	(379.1)
Corporate Centre/reinsurance 1	3.6	22.8	22.6	(0.4)	(79.3)
Underwriting result general insurance	1,257.6	706.8	2,055.7	1,118.0	3,605.8
Pension	39.4	38.2	92.8	70.1	166.6
Financial result from the investment portfolio	512.9	370.7	1,195.1	625.5	820.9
Amortisation and impairment losses of excess value – intangible assets	(63.3)	(68.5)	(125.4)	(139.5)	(264.6)
Other items	(23.7)	(12.4)	1,535.4	(34.3)	(63.8)
Profit/(loss) before tax expense 2	1,722.9	1,034.9	4,753.6	1,639.9	4,265.0
Alternative performance measures
Large losses 3, 4	158.5	209.6	241.1	434.9	954.7
Run-off gains/(losses) 3	368.9	292.0	734.5	632.1	2,356.9
Loss ratio 3	64.4%	73.0%	68.0%	75.3%	69.8%
Underlying frequency loss ratio 3, 5	67.8%	74.4%	72.1%	77.0%	75.6%
Cost ratio 3	14.9%	15.2%	14.9%	15.2%	15.2%
Combined ratio 3	79.3%	88.2%	82.9%	90.6%	85.0%

1 Large losses in excess of NOK 30.0 million are charged to the Corporate Centre, while claims of less than NOK 30.0 million are charged to the segment in which the large losses occur. As a main rule, the Baltics segment has a retention level of EUR 0.5 million, while the Swedish segment has a retention level of NOK 10 million. Large losses allocated to the Corporate Centre amounted to NOK 22.0 million (95.9) for the year to date and NOK 22.0 million (26.8) in the quarter. Accounting items related to written reinsurance and reinstatement premiums are also included.

² The profit before tax expense is presented for the continuing operation (excluding Gjensidige Bank).

³ Defined as alternative performance measure (APM). APMs are described on www.gjensidige.no/reporting in document named APMs Gjensidige Forsikring Group Q2 2019. 4

Large losses = loss events in excess of NOK 10.0 million. Expected large losses for the quarter were NOK 295.0 million. ⁵ Underlying frequency loss ratio = claims incurred etc. excluding large losses and run-off gains/(losses) divided by earned premiums

A strong second quarter result

The second quarter 2019 result was strong, with the improvement from the corresponding quarter last year primarily driven by improved and good profitability for Norwegian motor insurance and more favourable weather conditions in Norway. The Group continued to put through significant profitability measures across all segments.

Group profit performance

Year-to-date development

Gjensidige Forsikring Group recorded a profit before tax expense of NOK 4,753.6 million (1,639.9) for the first half-year. The sale of Gjensidige Bank was completed on 1 March, with proceeds of approximately NOK 5.6 billion and a gain for the Group of NOK 1.6 billion recorded in the first quarter. The profit before tax expense excluding this gain was NOK 3,169.1 million.

The profit from general insurance operations measured by the underwriting result was NOK 2,055.7 million (1,118.0), corresponding to a combined ratio of 82.9 (90.6).

The return on financial assets was 2.1 per cent (1.2) or NOK 1,195.1 million (625.5).

The tax expense amounted to NOK 664.0 million (355.5), resulting in an effective tax rate of 14.0 per cent (21.7). The effective tax rate was impacted by the sale of shares in Gjensidige Bank and other realised and unrealised gains and losses on equity investments in the EEA.

The profit after tax expense from continuing and discontinued operations was NOK 4,127.2 million (1,539.1) and the corresponding earnings per share were NOK 8.25 (3.08).

Earned premiums from general insurance increased to NOK 12,019.5 million (11,853.5) for the first half-year. The underwriting result increased due to price increases, reunderwriting and efficiency measures in addition to more favourable weather conditions in Norway compared with the same period last year. Higher run-off gains and lower large losses also contributed to the improved results.

The profitability of the motor insurance line in Norway reached a turning point during the first quarter and continued to improve in the second quarter, as a result of effective profitability measures. Earned premiums in the Private segment increased by 1.4 per cent. The underwriting result increased, primarily due to more favourable weather conditions than in the same period last year.

Earned premiums in the Commercial segment increased by 7.4 per cent, which together with more favourable weather conditions, increased run-off gains and lower large losses, led to an increase in underwriting results.

The Danish segment recorded 3.0 per cent lower earned premiums measured in local currency. The underwriting result improved due to a lower underlying frequency loss ratio following repricing measures, higher run-off gains and lower large losses.

Earned premiums in the Swedish segment were 14.1 per cent lower measured in local currency. The underwriting result improved due to lower large losses, partly offset by the lower premium level.

Earned premiums in the Baltic segment increased by 0.1 per cent measured in local currency. The underwriting result was in line with the same period last year, driven by lower operating expenses and higher run-off gains, offset by a higher underlying frequency loss ratio.

The Pension segment generated higher profit for the first halfyear, driven by a growing customer portfolio and increased assets under management.

Gjensidige Bank was recorded as a discontinued operation until the closing of the sale on 1 March 2019. The profit after tax expense in the first two months of the year was NOK 37.6 million (254.6 in the first half-year 2018).

The return on financial assets was higher than in the same period last year, with the largest contribution coming from the free portfolio where bonds and current equities in particular yielded good returns.

Development during the quarter

The Group recorded a profit before tax expense of NOK 1,722.9 million (1,034.9) for the quarter. The profit from general insurance operations measured by the underwriting result was NOK 1,257.6 million (706.8), corresponding to a combined ratio of 79.3 (88.2). The return on financial assets was 0.9 per cent (0.7) or NOK 512.9 million (370.7).

The profit after tax expense was NOK 1,341.5 million (1,004.6). Earnings per share amounted to NOK 2.68 (2.01).

The underwriting result was driven by 1.6 per cent growth in earned premiums, an improved underlying frequency loss ratio, higher run-off gains and lower large losses. The underlying frequency loss ratio improved primarily due to profitability measures implemented for motor insurance in Norway and improved weather conditions compared to last year, which impacted the property insurance lines.

The Pension operation recorded increased profit due to higher net operating income, partly offset by lower returns on property investments.

The financial return in the quarter was higher than in the same period last year. All asset classes contributed positively in the quarter.

Equity and capital position

The Group's equity amounted to NOK 23,732.3 million (21,407.5) at the end of the period. The annualised return on equity was 36.8 per cent (14.2). Excluding the NOK 1.6 billion gain on the sale of Gjensidige Bank, the annualised return on equity was 23.5 per cent. The solvency margins at the end of the period were:

• Approved Partial Internal Model¹ : 242 per cent
• Own Partial Internal Model² : 289 per cent

Total comprehensive income for the year-to-date is included in the solvency calculations, minus a formulaic dividend pay-out ratio of 80 per cent of net profit (excluding the gain on the sale of Gjensidige Bank). The guarantee scheme provision is treated as a liability in accordance with instructions from the Financial

¹ Regulatory approved partial internal model

² Partial internal model with own calibration

Supervisory Authority of Norway. In Gjensidige's opinion, special Norwegian provisions that are actually an equity element must be treated as solvency capital. Gjensidige will continue to make endeavours to ensure that the regulations are in line with this view.

Gjensidige has an 'A' rating from Standard & Poor's.

General Insurance Private Year-to-date development

The underwriting result was NOK 979.1 million (715.1). The increase in the underwriting result was primarily driven by more favourable weather conditions than in the same period last year. The combined ratio was 77.3 (83.2).

Earned premiums increased to NOK 4,312.5 million (4,253.3), mainly due to price increases for motor insurance. Price increases were implemented for all main product lines. The number of insured objects declined somewhat during the first half of 2019, both as a result of the ongoing pricing measures for motor and property in particular, and because of the previously announced termination of the NITO partner agreement with effect from 1 January 2019.

Claims incurred amounted to NOK 2,771.5 million (2,999.3). The loss ratio improved to 64.3 (70.5), primarily driven by 6.9 percentage points improvement in the underlying frequency loss ratio. Lower large losses also contributed positively, while run-off gains were somewhat lower than in the same period last year. Both the motor and property insurance lines showed improved profitability, reflecting the difference in weather conditions compared to the same period in 2018.

The negative 12-month rolling underlying profitability trend for motor, excluding the extraordinary weather effects last year, reached a turning point during the first quarter of 2019, and continued to improve in the second quarter. The profitability improvement in motor insurance is a result of significant pricing measures and adjustments to terms and conditions in response to higher claims inflation.Operating expenses increased to NOK 561.9 million (538.9). The cost ratio was 13.0 (12.7).

Development during the quarter

The underwriting result was NOK 584.2 million (371.4). The increase in the underwriting result was primarily driven by the improved profitability of motor insurance and more favourable weather conditions compared to the same period last year. The combined ratio was 73.6 (83.0).

Earned premiums increased to NOK 2,211.0 million (2,178.3), mainly due to price increases for motor insurance. The number of insured objects declined during the quarter, although less than during the first quarter.

Claims incurred amounted to NOK 1,330.9 million (1,533.5). The loss ratio improved to 60.2 (70.4), mainly reflecting a 10.3 percentage points improvement in the underlying frequency loss ratio. Large losses and run-off gains were lower than in the same quarter last year. Motor insurance showed an improved loss ratio as a result of effective profitability measures. The property insurance lines also showed improved profitability, mainly reflecting the improvement in weather conditions compared to the same period last year.

Operating expenses increased to NOK 295.9 million (273.5). The cost ratio was 13.4 (12.6).

General Insurance Private

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Earned premiums	2,211.0	2,178.3	4,312.5	4,253.3	8,762.5
Claims incurred etc.	(1,330.9)	(1,533.5)	(2,771.5)	(2,999.3)	(5,720.7)
Operating expenses	(295.9)	(273.5)	(561.9)	(538.9)	(1,106.9)
Underwriting result	584.2	371.4	979.1	715.1	1,934.8
Amortisation and impairment losses of excess value – intangible assets	(7.9)	(4.6)	(12.3)	(8.9)	(17.5)
Large losses 1	-	23.8	8.1	52.1	142.2
Run-off gains/(losses) 1	123.4	147.4	227.2	297.9	787.2
Loss ratio 1	60.2%	70.4%	64.3%	70.5%	65.3%
Underlying frequency loss ratio 1	65.8%	76.1%	69.3%	76.3%	72.6%
Cost ratio 1	13.4%	12.6%	13.0%	12.7%	12.6%
Combined ratio 1	73.6%	83.0%	77.3%	83.2%	77.9%

General Insurance Commercial Year-to-date development

The underwriting result was NOK 826.3 million (376.2). The increase was driven by higher premium levels, more favourable weather conditions, increased run-off gains and lower large losses. The combined ratio was 79.3 (89.9).

Earned premiums increased to NOK 3,992.1 million (3,717.6), reflecting pricing measures and solid renewals. All main product lines recorded higher premiums. Overall portfolio quality is solid, reflecting good risk selection and risk pricing.

Claims incurred amounted to NOK 2,740.6 million (2,906.8). The loss ratio improved to 68.7 (78.2), reflecting a 5.8 percentage points improvement in the underlying frequency loss ratio, in addition to, lower large losses and higher run-off gains. The underlying frequency loss ratio decreased as a result of improved weather conditions in addition to effective pricing and re-underwriting measures. The improvement in profitability was mainly in the property insurance line.

Operating expenses amounted to NOK 425.3 million (434.6), corresponding to a cost ratio of 10.7 (11.7). The decrease was mainly due to higher earned premiums and continued efficient operations.

Development during the quarter

The underwriting result was NOK 493.0 million (307.4). The increase was primarily driven by improved underlying profitability, partly due to more favourable weather conditions, and increased run-off gains. The combined ratio was 75.3 (83.7).

Earned premiums increased to NOK 1,997.8 million (1,881.9), reflecting pricing measures and solid renewals. All the main product lines recorded higher premiums.

Claims incurred amounted to NOK 1,288.2 million (1,352.7). The loss ratio improved to 64.5 (71.9), reflecting a 4.8 percentage points improvement in the underlying frequency loss ratio and higher run-off gains. The underlying frequency loss ratio decreased as a result of improved weather conditions in addition to effective pricing and re-underwriting measures, particularly for the motor insurance line.

Operating expenses amounted to NOK 216.6 million (221.8), corresponding to a cost ratio of 10.8 (11.8). The cost ratio was positively impacted by higher earned premiums and efficient operations.

General Insurance Commercial

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Earned premiums	1,997.8	1,881.9	3,992.1	3,717.6	7,603.3
Claims incurred etc.	(1,288.2)	(1,352.7)	(2,740.6)	(2,906.8)	(5,182.8)
Operating expenses	(216.6)	(221.8)	(425.3)	(434.6)	(872.3)
Underwriting result	493.0	307.4	826.3	376.2	1,548.2
Large losses 1	119.2	106.7	193.7	224.5	523.9
Run-off gains/(losses) 1	162.3	97.7	352.4	233.5	1,268.4
Loss ratio 1	64.5%	71.9%	68.7%	78.2%	68.2%
Underlying frequency loss ratio 1	66.6%	71.4%	72.6%	78.4%	78.0%
Cost ratio 1	10.8%	11.8%	10.7%	11.7%	11.5%
Combined ratio 1	75.3%	83.7%	79.3%	89.9%	79.6%

General Insurance Denmark

was 86.6 (93.9).

Year-to-date development The underwriting result was NOK 323.9 million (149.0). The increase was driven by a lower underlying frequency loss ratio, higher run-off gains and lower large losses. The combined ratio

Earned premiums amounted to NOK 2.409.2 million (2.456.8). Measured in local currency, earned premiums decreased by 3.0 per cent, as a consequence of continued price increases and reunderwriting in the commercial lines as well as in selected private lines.

Claims incurred amounted to NOK 1,730.5 million (1,949.8). The loss ratio improved to 71.8 (79.4), mainly driven by a 4.7 percentage point decrease in the underlying frequency loss ratio. Higher run-off gains and lower large losses also contributed positively. The decrease in the underlying frequency loss ratio reflects the gradual improvement in the profitability of private and commercial lines as the ongoing pricing measures feed through the portfolio.

Operating expenses amounted to NOK 354.8 million (358.0). The cost ratio was 14.7 (14.6).

Development and configuration of the new core IT system in Denmark was initiated in the first quarter.

Development during the quarter

The underwriting result was NOK 221.1 million (63.6). The increase in the underwriting result was driven by a lower underlying frequency loss ratio, higher run-off gains and lower large losses. The combined ratio was 81.8 (94.8).

Earned premiums amounted to NOK 1.212.9 million (1.223.2). Measured in local currency, earned premiums decreased by 2.1 percent, as a consequence of continued price increases and reunderwriting in the commercial lines as well as in selected private lines.

Claims incurred amounted to NOK 811.0 million (979.3). The loss ratio was 66.9 (80.1), positively impacted by a 8.7 percentage point decrease in the underlying frequency loss ratio, higher run-off gains and lower large losses. Improvements in commercial property lines and adjustments of claims provisions relating to the first quarter had a positive impact on the second quarter result.

Operating expenses amounted to NOK 180.8 million (180.4). The cost ratio was 14.9 (14.7).

General Insurance Denmark

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Earned premiums	1,212.9	1,223.2	2,409.2	2,456.8	4,904.6
Claims incurred etc.	(811.0)	(979.3)	(1,730.5)	(1,949.8)	(3,766.2)
Operating expenses	(180.8)	(180.4)	(354.8)	(358.0)	(704.0)
Underwriting result	221.1	63.6	323.9	149.0	434.5
Amortisation and impairment losses of excess value – intangible assets	(35.3)	(42.3)	(71.9)	(86.3)	(159.0)
Large losses 1	17.3	42.3	17.3	42.3	55.7
Run-off gains/(losses) 1	66.5	37.5	107.5	64.1	171.0
Earned premiums in local currency (DKK) 1	931.9	952.3	1,848.2	1,906.0	3,805.8
Loss ratio 1	66.9%	80.1%	71.8%	79.4%	76.8%
Underlying frequency loss ratio 1	70.9%	79.7%	75.6%	80.3%	79.1%
Cost ratio 1	14.9%	14.7%	14.7%	14.6%	14.4%
Combined ratio 1	81.8%	94.8%	86.6%	93.9%	91.1%

General Insurance Sweden Year-to-date development

The underwriting result was NOK 35.5 million (23.5). The increase in the underwriting result was driven by lower large losses partly offset by lower earned premiums. The combined ratio was 94.9 (97.2).

Earned premiums decreased to NOK 698.8 million (831.9). Measured in local currency, earned premiums decreased by 14.1 per cent, reflecting a reduction in the insurance portfolio following repricing measures in private insurance lines and the pruning of two large unprofitable accounts.

Claims incurred amounted to NOK 535.1 million (671.4). The loss ratio was 76.6 (80.7), positively affected by lower large losses as well as a 0.7 percentage point decrease in the underlying frequency loss ratio. The improvement in the underlying frequency loss ratio was related to both the private and commercial portfolios and come as a result of price increases and ongoing efforts to improve risk selection.

Operating expenses decreased to NOK 128.2 million (137.0). The cost ratio was 18.3 per cent (16.5), impacted by lower earned premiums. Measures to reduce cost further have been taken, and the development will be monitored closely.

Development during the quarter

The underwriting result was NOK 13.7 million (13.4). Lower large losses and operating expenses were offset by lower earned premiums and lower run-off gains. The combined ratio was 96.0 (96.7).

Earned premiums decreased to NOK 345.9 million (403.0). Measured in local currency, earned premiums decreased by 13.2 per cent, reflecting a reduction in the insurance portfolio following repricing measures in private insurance lines and the pruning of two large unprofitable accounts.

Claims incurred amounted to NOK 272.8 million (323.8). The loss ratio was 78.9 (80.4), positively impacted by lower large losses partly offset by lower run-off gains. The underlying frequency claims loss ratio increased by 0.1 percentage points.

Operating expenses decreased to NOK 59.4 million (65.7). The cost ratio was 17.2 per cent (16.3), negatively impacted by lower earned premiums.

General Insurance Sweden

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Earned premiums	345.9	403.0	698.8	831.9	1,569.2
Claims incurred etc.	(272.8)	(323.8)	(535.1)	(671.4)	(1,231.7)
Operating expenses	(59.4)	(65.7)	(128.2)	(137.0)	(259.3)
Underwriting result	13.7	13.4	35.5	23.5	78.2
Amortisation and impairment losses of excess value – intangible assets	(16.0)	(17.7)	(32.7)	(36.2)	(70.2)
Large losses 1	0.0	10.0	0.0	20.0	30.0
Run-off gains/(losses) 1	7.8	12.6	25.8	21.9	64.7
Earned premiums in local currency (SEK) 1	378.0	435.4	755.3	879.0	1,675.6
Loss ratio 1	78.9%	80.4%	76.6%	80.7%	78.5%
Underlying frequency loss ratio 1	81.1%	81.0%	80.3%	80.9%	80.7%
Cost ratio 1	17.2%	16.3%	18.3%	16.5%	16.5%
Combined ratio 1	96.0%	96.7%	94.9%	97.2%	95.0%

Development during the quarter

The underwriting result amounted to NOK 14.4 million (11.4), positively affected by lower operating expenses and a lower underlying frequency loss ratio. The combined ratio was 94.8 (95.8).

Earned premiums amounted to NOK 276.6 million (272.8). Measured in local currency, earned premiums decreased by 0.3 per cent reflecting fierce competition and high price sensitivity.

Claims incurred amounted to NOK 178.5 million (176.6). The loss ratio decreased slightly to 64.5 (64.7). The underlying frequency loss ratio improved by 1.0 percentage point following changes in terms for health and property insurance lines.

Operating expenses amounted to NOK 83.7 million (84.9). The cost ratio was 30.3 (31.1). The improvement was mainly due to effective ongoing restructuring and cost saving initiatives, with focus on operational efficiency.

General Insurance Baltics

Year-to-date development

The underwriting result amounted to NOK 20.1 million (20.1), positively affected by lower operating expenses and higher runoff gains, offset by a higher underlying frequency loss ratio. The combined ratio was 96.3 (96.2).

Earned premiums amounted to NOK 544.8 million (536.9). Measured in local currency, earned premiums rose by 0.1 per cent, reflecting sales growth in the health and motor insurance lines, offset by somewhat lower prices as a result of fierce competition.

Claims incurred amounted to NOK 356.0 million (345.8). The loss ratio was 65.3 (64.4), mainly impacted by a 2.5 percentage point increase in the underlying frequency loss ratio mainly due to less favourable weather conditions in the first quarter. The increase was partly counteracted by higher run-off gains.

Operating expenses amounted to NOK 168.7 million (171.0). The cost ratio was 31.0 (31.8). The improvement was mainly due to ongoing restructuring and cost saving initiatives, with the focus on operational efficiency.

General Insurance Baltics

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Earned premiums	276.6	272.8	544.8	536.9	1,078.8
Claims incurred etc.	(178.5)	(176.6)	(356.0)	(345.8)	(675.9)
Operating expenses	(83.7)	(84.9)	(168.7)	(171.0)	(334.4)
Underwriting result	14.4	11.4	20.1	20.1	68.5
Amortisation and impairment losses of excess value – intangible assets	(3.6)	(3.6)	(7.3)	(7.4)	(14.5)
Large losses 1	0.0	0.0	0.0	0.0	0.0
Run-off gains/(losses) 1	5.1	7.2	21.0	12.5	24.4
Earned preiums in local currency (EUR) 1	28.5	28.5	56.0	56.0	112.3
Loss ratio 1	64.5%	64.7%	65.3%	64.4%	62.7%
Underlying frequency loss ratio 1	66.4%	67.4%	69.2%	66.7%	64.9%
Cost ratio 1	30.3%	31.1%	31.0%	31.8%	31.0%
Combined ratio 1	94.8%	95.8%	96.3%	96.2%	93.7%

Pension

Year-to-date development

Increased operating and financial income drove growth in earnings. The profit before tax expense was NOK 92.8 million (70.1).

Administration fees increased to NOK 75.3 million (70.5) while insurance income increased to NOK 42.8 million (31.6), both driven by a growing customer portfolio. Management income increased to NOK 79.2 million (72.7) as a result of growth in assets under management.

Operating expenses increased to NOK 127.3 million (119.5), driven by increased business volume.

Net financial income, including returns on both the group policy portfolio and the corporate portfolio, amounted to NOK 22.8 million (14.7). The increased return was related to gains on divestments of loans and receivables during the first quarter.

The year-to-date return on the paid-up policy portfolio was 1.7 per cent (3.3). The decline was related to non-recurring effects last year due to a change in the classification of unrealised gains relating to property investments. The average annual interest guarantee was 3.3 per cent.

Assets under management have increased by NOK 3,479.2 million since year end 2018. Total pension assets under management amounted to NOK 34,167.4 million (30,244.2) including the group policy portfolio of NOK 6,946.2 million (6,339.5).

Development during the quarter

The pension segment reported a profit before tax expense of NOK 39.4 million (38.2).

Administration fees were NOK 37.7 million (35.6), insurance income NOK 21.4 million (16.4) and management income NOK 40.4 million (38.2), all for the same reasons as described above.

Operating expenses were NOK 64.3 million (59.7)

Net financial income was NOK 4.1 million (7.8) mainly reflecting lower returns on property investments than in the same quarter last year.

Pension

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Administration fees	37.7	35.6	75.3	70.5	144.4
Insurance income	21.4	16.4	42.8	31.6	72.6
Management income etc.	40.4	38.2	79.2	72.7	150.5
Operating expenses	(64.3)	(59.7)	(127.3)	(119.5)	(241.0)
Net operating income	35.3	30.5	69.9	55.3	126.5
Net financial income	4.1	7.8	22.8	14.7	40.2
Profit/(loss) before tax expense	39.4	38.2	92.8	70.1	166.6
Run-off gains/(losses) 1	0.0	0.0	0.0	0.0	0.0
Operating margin 1	35.44%	33.81%	35.46%	31.66%	34.41%
Recognised return on the paid-up policy portfolio 2			1.74%	3.26%	5.61%
Value-adjusted return on the paid-up policy portfolio 3			2.18%	2.08%	4.30%

¹ Defined as alternative performance measure (APM). APMs are described on www.gjensidige.no/reporting in document named APMs Gjensidige Forsikring Group Q2 2019. ² Recognised return on the paid-up policy portfolio = realised return on the portfolio

³ Value-adjusted return on the paid-up policy portfolio = total return on the portfolio

Management of financial assets and properties

The Group's investment portfolio includes all investment funds in the Group, except for investment funds in the Pension segment. The investment portfolio is split into two parts: a match portfolio and a free portfolio. The match portfolio is intended to correspond to the Group's technical provisions. It is invested in fixed-income instruments with a duration and currency that match the duration and currency of the technical provisions. The free portfolio consists of various assets. The allocation of assets in this portfolio must be seen in conjunction with the Group's capitalisation and risk capacity, as well as the Group's risk appetite at all times. Results from the use of derivatives for tactical and risk management purposes are assigned to the respective asset classes. Currency risk in the investment portfolio is generally hedged close to 100 per cent, within a permitted range of +/- 10 per cent per currency.

Year-to-date development

At the end of the period, the investment portfolio totalled NOK 56.6 billion (52.2). The financial result for the first half-year was NOK 1,195.1 million (625.5), which corresponds to a return on total assets of 2.1 per cent (1.2).

Match portfolio

The match portfolio amounted to NOK 34.6 billion (34.6). The portfolio yielded a return of 1.2 per cent (1.3), excluding changes in the value of the bonds recognised at amortised cost. Bonds recognised at amortised cost amounted to NOK 15.8 billion (15.7). Unrealised excess value amounted to NOK 0.9 billion (1.0) at the end of the period. The reinvestment rate for new investments in the portfolio of bonds held at amortised cost was approximately 3.0 per cent on average for the quarter, and the running yield for the portfolio of bonds held at amortised cost was 3.7 per cent at the end of the period.

The average duration of the match portfolio was 3.3 years. The average term to maturity for the corresponding insurance liabilities was 3.8 years. The distribution of counterparty risk and credit rating is shown in the charts on page 13. Securities without an official credit rating amounted to NOK 8.8 billion (11.4). Of these securities, 5.7 per cent (6.6) were issued by Norwegian savings banks, while the remainder were mostly issued by Norwegian power producers and distributors, property companies, industry and municipalities. Bonds with a coupon linked to the development of the Norwegian consumer price index accounted for 6.4 per cent (7.2) of the match portfolio.

The geographical distribution³ of the match portfolio is shown in the chart on the next page.

³ The geographical distribution is related to issuers and does not reflect actual currency exposure.

Financial assets and properties

		Result Q2		Result 1.1.-30.6.		Carrying amount 30.6.
NOK millions	2019	2018	2019	2018	2019	2018
Match portfolio
Money market	20.7	17.3	47.4	30.5	5,080.4	4,903.4
Bonds at amortised cost	144.7	155.6	287.2	333.3	15,841.0	15,700.7
Current bonds 1	5.1	46.6	68.4	85.6	13,665.6	13,996.9
Match portfolio total	170.5	219.5	403.0	449.4	34,587.0	34,601.0
Free portfolio
Money market	13.4	6.8	26.4	15.4	4,710.8	3,432.3
Other bonds 2	103.6	(15.3)	173.5	(59.3)	4,860.9	2,641.1
High yield bonds 3	23.4	0.8	64.9	(2.8)	1,061.1	446.0
Convertible bonds 3	36.6	34.6	94.2	31.8	1,393.0	1,195.3
Current equities 4	48.6	47.2	246.9	47.7	2,818.1	3,453.5
PE funds	59.0	28.6	106.8	86.4	1,334.8	1,255.9
Property	107.2	66.0	151.9	107.3	4,657.4	3,926.4
Other 5	(49.5)	(17.5)	(72.6)	(50.4)	1,214.7	1,248.0
Free portfolio total	342.4	151.3	792.1	176.1	22,050.8	17,598.6
Financial result from the investment portfolio 6	512.9	370.7	1,195.1	625.5	56,637.8	52,199.6
Financial income in Pension	4.1	7.8	22.8	14.7
Interest expense on subordinated debt Gjensidige Forsikring ASA	(8.7)	(8.1)	(17.1)	(15.2)
Interest expense on the lease liability	(7.9)	-	(15.9)	-
Realised gains on subsidiaries	-	-	1,584.5	-
Net income from investments	500.5	370.4	2,769.4	625.1

¹ The item includes discounting effects of the insurance liabilities in Denmark and Sweden, and a mismatch between interest rate adjustments on the liability side in Denmark and the corresponding interest rate hedge. Investments include mortgage, sovereign and corporate bonds, investment grade bond funds and loan funds containing secured debt. ² The item includes investment grade, emerging markets and current bonds. Investment grade and emerging market bonds are investments in internationally diversified funds that are externally managed.

3 Investments in internationally diversified funds that are externally managed.

⁴Investments mainly in internationally diversified funds that are externally managed. In addition, there is negative derivative exposure of NOK 438.5 million.

⁵ The item includes currency hedging related to Gjensidige Sweden and Gjensidige Denmark, lending, paid-in capital in Gjensidige Pensjonskasse, profit/loss effects from a total return swap with Gjensidige Pensjonskasse, hedge funds and finance-related expenses.

Free portfolio

The free portfolio amounted to NOK 22.1 billion (17.6) at the end of the period. The return was 3.7 per cent (0.9). The increase in assets was mainly due to the sale of Gjensidige Bank ASA.

Fixed-income instruments

The fixed-income instruments in the free portfolio amounted to NOK 12.0 billion (7.7), of which money market investments, including cash, accounted for NOK 4.7 billion (3.4). The rest of the portfolio was invested in Norwegian government bonds and international bonds (investment grade, high yield and convertible bonds). The total fixed-income portfolio yielded a return of 3.0 per cent (minus 0.2). A fall in interest rates and lower credit spreads were the main drivers of the positive returns.

At the end of the period, the average duration in the portfolio was approximately 2.8 years. The distribution of counterparty risk and credit rating is shown in the charts on the next page. Securities without an official credit rating amounted to NOK 2.7 billion (2.0). Of these securities, 12.0 per cent (11.5) were issued by Norwegian savings banks, while the remainder were mostly issued by industry and municipalities. The geographical distribution⁴ of the fixed-income instruments in the free portfolio is shown in the chart above.

Equity portfolio

The total equity exposure at the end of the period was NOK 4.2 billion (4.7), of which NOK 2.8 billion (3.5) consisted of current equities and NOK 1.3 billion (1.3) of PE funds. The return on current equities was 9.2 per cent (1.4). PE funds generated a return of 8.0 per cent (6.9).

Property portfolio

At the end of the period, the exposure to commercial real estate in the portfolio was NOK 4.7 billion (3.9). The property portfolio yielded a return of 3.3 per cent (2.8).

⁴ The geographical distribution is related to issuers and does not reflect actual currency exposure.

Return per asset class

Per cent	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Match portfolio
Money market	0.4	0.4	0.9	0.7	1.2
Bonds at amortised cost	0.9	1.0	1.8	2.0	4.0
Current bonds 1	0.0	0.3	0.5	0.6	0.1
Match portfolio total	0.5	0.6	1.2	1.3	2.0
Free portfolio
Money market	0.2	0.2	0.5	0.3	0.6
Other bonds 2	1.9	(0.6)	3.6	(2.1)	(0.8)
High yield bonds 3	2.2	0.2	6.9	(0.6)	(2.8)
Convertible bonds 3	2.9	3.0	8.6	2.8	(1.1)
Current equities 4	1.8	1.4	9.2	1.4	(6.4)
PE funds	4.5	2.3	8.0	6.9	14.8
Property	2.3	1.7	3.3	2.8	7.0
Other 5	(4.6)	(1.4)	(7.5)	(3.3)	(8.4)
Free portfolio total	1.5	0.8	3.7	0.9	0.6
Return on financial assets 6	0.9	0.7	2.1	1.2	1.5

¹The item includes discounting effects of the insurance liabilities in Denmark and Sweden, and a mismatch between interest rate adjustments on the liability side in Denmark and the corresponding interest rate hedge. Investments include mortgage, sovereign and corporate bonds, investment grade bond funds and loan funds containing secured debt. ² The item includes investment grade, emerging market and current bonds. Investment grade and emerging market bonds are investments in internationally diversified funds that are externally managed.

3 Investments in internationally diversified funds that are externally managed.

4 Investments mainly in internationally diversified funds that are externally managed. In addition, there is negative derivative exposure of NOK 438.5 million.

⁵ The item includes currency hedging related to Gjensidige Sweden and Gjensidige Denmark, lending, paid-in capital in Gjensidige Pensjonskasse, profit/loss effects from a total return swap with Gjensidige Pensjonskasse, hedge funds and finance-related expenses.

Development during the quarter

The financial result for the total investment portfolio was NOK 512.9 million (370.7) in the quarter. This corresponds to a return on financial assets of 0.9 per cent (0.7).

Key risk and uncertainty factors

Managing risk is an integral part of Gjensidige's day-to-day operations. The identification, assessment, monitoring and control of risk exposure against risk appetite, as well as analysing the effects of potential strategic decisions on the risk profile, are an essential part of operations.

Insurance risk

General insurance operations account for most of the Group's business and most of the risk. The risk under any insurance contract is the probability of the insured event occurring and the uncertainty about the amount of the resulting claim. Because of the very nature of an insurance contract, this risk is random and must therefore be estimated. For a portfolio of insurance contracts to which the theory of probability is applied to calculate prices and technical provisions, the principal risk the Group faces under its insurance contracts is that the actual claims and benefit payments will exceed the carrying amount of the insurance liabilities. This could occur because the frequency and/or severity of claims and benefits are greater than estimated. Insurance events are random, and the actual number and amount of claims and benefits will vary from year to year in relation to the level calculated using statistical techniques.

The insurance markets in which the Group operates will continue to be characterised by strong competition. The risk of the general premium level not being satisfactory is continuously monitored. The same applies to developments in the frequency and average size of claims, and methods are continuously being developed to set prices more precisely. Gjensidige mainly manages these risks through close monitoring of profitability development, underwriting guidelines and proactive claims handling. If profitability shows an adverse development, sufficient measures will be implemented. This includes necessary premium increases to ensure that profitability remains within the accepted range.

The Group continuously endeavours to set the technical provisions at the correct level. There is nonetheless an inherent risk that the technical provisions will be insufficient. To reduce this risk, regular efforts are made to improve the actuarial methods used. Both external actuaries and the actuarial function are used to conduct independent reviews of the provisions. The reviews have confirmed that the technical provisions are

The match portfolio yielded 0.5 per cent (0.6), excluding changes in the value of the portfolio valued at amortised cost. The return on the free portfolio was 1.5 per cent (0.8). All asset classes contributed positively in the quarter.

sufficient, and that the risk of substantial run-off losses is low. Gjensidige purchases reinsurance to protect the Group's equity capital and reinsurance is a capital management tool. The maximum retention is approved by the Board.

Financial risk

Financial risk is a collective term for various types of risk relating to financial assets and liabilities. Financial investments are vulnerable to changes in macroeconomic factors and more short-term changes in the market's appetite for risk. The financial investments largely consist of fixed-income investments, property and equities. Continuous monitoring of financial performance in relation to adopted performance requirements and the expected development in profit performance, combined with a large proportion of highly liquid assets, makes it possible to quickly adapt the risk level in the event of negative developments. This entails a moderate fluctuation risk for future financial results.

The liquidity risk is quite limited for most general insurers. Premium income is paid up-front, and claims are paid out at a later stage. Future payments are not based on contractual payment dates, but rather on when claims arise and how long the claims handling takes.

The Group is exposed to credit risk, i.e. the risk that a counterparty is unable or unwilling to settle its liability on the due date or the risk that the credit spreads will increase. The exposure to credit risk is primarily related to investment operation and through receivables from insurance customers and reinsurers. Clear limits have been set for credit exposure in the investment operations, and reinsurers are required to have at least an A rating from Standard & Poor's or an equivalent rating.

Operational risk

Operational risk is the risk of financial consequences and/or adverse impact on the Group's reputation resulting from inadequate or failing internal processes or systems, human error or external events. To reduce the risk, emphasis has been placed on having well-defined and clear lines of reporting and a clear division of responsibility in the organisation. Operational incidents are continuously reported and followed-up.

Organisation

The Group had a total of 3,716 employees at the end of the second quarter, compared with 3,729 at the end of first quarter.

The composition of the Group's employees was as follows: 1,874 (1,875) in general insurance operations in Norway, 69 (67) in Gjensidige Pensjonsforsikring, 729 (738) in Denmark, 283 (280) in Sweden and 761 (769) in the Baltic states (excluding agents). The figures in brackets refer to the number of employees at the end of the first quarter.

Events after the balance sheet date

No significant events have occurred after the end of the period.

Strategy and outlook

The Group's annual financial and solvency targets for the period 2019 through 2022 are as follows:

• Combined ratio between 86 and 89 per cent (undiscounted)
  • Corresponding to 90 to 93 per cent given zero run-off gains
  • Average annual run-off gains of ~NOK 1 billion are still expected through 2022
• Cost ratio <15 per cent
• Solvency margin based on the Partial Internal Model (both the regulatory approved model and the model with internal calibration) between 135 and 200 per cent
  • The solvency margin should remain in the upper half of the range in order to support an 'A' rating, stable regular dividends over time, financial flexibility for smaller acquisitions and organic growth not financed through retained earnings, as well as providing a buffer for regulatory changes.
• Return on equity after tax > 20 per cent
  • Corresponding to > 16 per cent excluding run-off gains

These are financial targets and should not be regarded as guidance for any specific quarter or year. Unexpected circumstances relating to the weather, the proportion of large losses and run-off gains or losses could contribute to a combined ratio that is above or below the annual target range.

Gjensidige's ambition is to become the most customer-oriented general insurance company in the Nordic region. The Group's priority is to retain its strong and unique position in Norway and to continue improving its profitability outside Norway. Furthermore, the Group will focus on ensuring continued capital discipline, including delivering attractive returns to shareholders. The key operational strategic priorities with a view to achieving these ambitions are to deliver the best digital customer experiences, focus on business intelligence and advanced analytics, and develop dynamic organisational capabilities.

Geopolitical uncertainty, low interest rates and financial challenges in several key economies reflect an uncertain economic situation. The macroeconomic outlook in the Nordic region and the outlook for Gjensidige's operations are still regarded as good.

Organic growth is expected to be in line with nominal GDP growth in Gjensidige's market areas in the Nordic countries and the Baltic states over time. In addition, profitable growth will be achieved by pursuing a disciplined acquisition strategy, as has been done successfully in the past.

Competition is still strong in the Norwegian general insurance market. Gjensidige's competitiveness remains good. Continued efforts to maintain and further strengthen its position in the Norwegian market will be prioritised, ensuring cost-efficiency and improving digital customer experiences. At the same time, new, profitable opportunities for growth will be considered in the Nordic region and the Baltic states to ensure good utilisation of a scalable business model and best practice. Strong emphasis will also be placed on further developing cooperation with partners and distributors.

Profitability of the motor insurance line in Norway has improved significantly following effective pricing measures and adjustments of terms and conditions. Price increases will continue going forward to counter the impact from expected claims inflation. Profitability is expected to remain at the current high level.

Efforts to deliver the best digital customer experiences in the Nordic and Baltic general insurance industry will be intensified. To support this, Gjensidige has started the process of developing and configuring the new core IT system, starting with Denmark. The investment in a new core system is expected to be handled within the current cost ratio target, and will be made step-by-step, starting with Denmark, then Sweden and finally Norway.

Gjensidige has a robust investment strategy, although returns are affected by challenging market conditions. There are still some outstanding uncertainties relating to changes to the regulatory framework conditions for the financial sector in Norway and internationally.

The Group has satisfactory capital buffers in relation to internal risk models, statutory solvency requirements and its target rating. The Board considers the Group's capital situation and financial strength to be strong.

The sale of Gjensidige Bank will have a temporary negative impact on the Group's return on equity, until the proceeds have been reinvested in value-enhancing opportunities or returned to shareholders. The gain on the sale will be excluded from the basis for calculating the payout ratio for regular dividends.

There is always considerable uncertainty associated with the assessment of future developments. However, the Board remains confident in Gjensidige's ability to deliver solid earningsand dividend growth over time.

Oslo, 11 July 2019 The Board of Gjensidige Forsikring ASA

Consolidated income statement

NOK millions	Notes	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Operating income
Earned premiums from general insurance	4	6,082.8	5,987.2	12,019.5	11,853.5	24,052.8
Earned premiums from pension		1,034.1	555.0	1,708.6	1,121.6	2,050.5
Interest income etc. from banking operations
Other income including eliminations		42.0	40.0	82.2	76.2	158.2
Total operating income	3	7,158.9	6,582.1	13,810.3	13,051.3	26,261.6
Net income from investments
Results from investments in associates and joint ventures		92.2	55.7	123.0	139.2	291.8
Interest income and dividend etc. from financial assets		241.6	251.6	482.4	520.4	1,032.2
Net changes in fair value on investments (incl. property)		215.4	199.8	837.0	(208.9)	(502.8)
Net realised gain and loss on investments		(15.4)	(103.9)	1,388.4	230.9	129.8
Expenses related to investments		(33.4)	(32.8)	(61.3)	(56.5)	(120.8)
Total net income from investments		500.5	370.4	2,769.4	625.1	830.2
Total operating income and net income from investments		7,659.3	6,952.5	16,579.7	13,676.3	27,091.7
Claims
Claims incurred etc. from general insurance	5, 6	(3,916.4)	(4,371.0)	(8,173.3)	(8,930.5)	(16,791.1)
Claims incurred etc. from pension		(974.9)	(503.0)	(1,590.6)	(1,019.4)	(1,833.5)
Interest expenses etc. and write-downs and losses from banking operations
Total claims		(4,891.4)	(4,874.0)	(9,763.8)	(9,949.9)	(18,624.6)
Operating expenses
Operating expenses from general insurance		(908.7)	(909.3)	(1,790.6)	(1,805.0)	(3,655.9)
Operating expenses from pension		(64.3)	(59.7)	(127.3)	(119.5)	(241.0)
Operating expenses from banking operations
Other operating expenses		(8.7)	(6.1)	(19.1)	(22.6)	(40.6)
Amortisation and impairment losses of excess value - intangible assets		(63.3)	(68.5)	(125.4)	(139.5)	(264.6)
Total operating expenses		(1,045.0)	(1,043.6)	(2,062.3)	(2,086.6)	(4,202.1)
Total expenses		(5,936.4)	(5,917.6)	(11,826.1)	(12,036.5)	(22,826.7)
Profit/(loss) before tax expense	3	1,722.9	1,034.9	4,753.6	1,639.9	4,265.0
Tax expense		(381.4)	(193.6)	(664.0)	(355.5)	(883.5)
Profit/(loss) from continuing operations		1,341.5	841.3	4,089.6	1,284.4	3,381.6
Profit/(loss) from discontinued operations			163.3	37.6	254.6	334.9
Profit/(loss) from continuing and discontinued operations		1,341.5	1,004.6	4,127.2	1,539.1	3,716.4
Profit/(loss) attributable to:
Owners of the company continuing operations		1,341.5	841.6	4,089.5	1,285.6	3,382.7
Owners of the company discontinued operations			163.3	37.6	254.6	334.9
Non-controlling interests			(0.3)	0.1	(1.2)	(1.2)
Total		1,341.5	1,004.6	4,127.2	1,539.1	3,716.4
Earnings per share from continuing and discontinued operations, NOK (basic and diluted)		2.68	2.01	8.25	3.08	7.44
Earnings per share from continuing operations, NOK (basic and diluted)		2.68	1.68	8.18	2.57	6.77

Consolidated statement of comprehensive income

Profit/(loss) from continuing and discontinued operations 1,341.5 1,004.6 4,127.2 1,539.1 3,716.4 Other comprehensive income Other comprehensive income that will not be reclassified subsequently to profit or loss Remeasurement of the net defined benefit liability/asset (50.8) Share of other comprehensive income of associates and joint ventures Tax on other comprehensive income that will not be reclassified subsequently to profit or loss Total other comprehensive income that will not be (38.1) reclassified subsequently to profit or loss Other comprehensive income that will be reclassified subsequently to profit or loss Exchange differences from foreign operations 13.3 (127.2) (189.7) (299.8) 14.9 Share of exchange differences of associates and joint ventures Tax on other comprehensive income that will be reclassified (0.7) 21.3 34.0 50.9 (0.7) subsequently to profit or loss Total other comprehensive income that will be reclassified 12.6 (105.9) (155.7) (248.9) 14.2 subsequently to profit or loss Total other comprehensive income of continuing 12.6 (105.9) (155.7) (248.9) (23.9) operations Total other comprehensive income of discontinued operations 0.1 Total comprehensive income from continuing and 1,354.1 898.7 3,971.5 1,290.2 3,692.6 discontinued operations Total comprehensive income attributable to: Owners of the company continuing operations 1,354.1 735.7 3,933.8 1,036.7 3,358.8 Owners of the company discontinued operations 163.3 37.6 254.6 335.0 Non-controlling interests (0.3) 0.1 (1.2) (1.2)	NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Total 1,354.1 898.7 3,971.5 1,290.2 3,692.6

Consolidated statement of financial position

NOK millions	Notes	30.6.2019	30.6.2018	31.12.2018
Assets
Goodwill		3,506.5	3,448.5	3,577.0
Other intangible assets		1,222.2	1,361.2	1,288.1
Deferred tax assets		12.5	10.7	13.1
Investments in associates and joint ventures		3,096.5	2,776.0	2,959.7
Interest-bearing receivables from joint ventures		2,439.8	1,971.9	2,513.1
Owner-occupied property, plant and equipment		1,413.5	302.5	251.9
Pension assets		156.6	206.0	156.6
Financial assets
Financial derivatives	8	685.5	503.5	577.9
Shares and similar interests	8	6,077.9	6,630.7	5,134.9
Bonds and other securities with fixed income	8	28,745.1	31,186.0	26,374.8
Bonds held to maturity	8	217.6	694.0	391.5
Loans and receivables	8	20,933.9	67,889.7	20,477.9
Assets in life insurance with investment options		27,135.1	23,834.7	23,909.5
Reinsurers' share of insurance-related liabilities in general insurance, gross		1,265.5	826.9	926.9
Receivables related to direct operations and reinsurance		7,748.6	7,575.2	6,784.7
Other assets and receivables		949.0	1,050.5	1,081.7
Prepaid expenses and earned, not received income		150.9	433.8	81.7
Cash and cash equivalents		2,125.4	2,694.5	2,363.3
Assets held for sale				57,898.8
Total assets		107,882.0	153,396.3	156,762.9
Equity and liabilities
Equity
Share capital		1,000.0	1,000.0	999.9
Share premium		1,430.0	1,430.0	1,430.0
Natural perils capital		2,560.9	2,429.8	2,491.1
Guarantee scheme provision		653.9	638.3	653.9
Perpetual Tier 1 capital Gjensidige Bank (held for sale)				444.8
Other equity		18,087.0	15,908.9	17,824.9
Total equity attributable to owners of the company		23,731.7	21,407.0	23,844.7
Non-controlling interests		0.6	0.5	0.5
Total equity		23,732.3	21,407.5	23,845.2
Provision for liabilities
Subordinated debt		1,498.2	1,947.6	1,498.0
Premium reserve in life insurance		6,648.0	6,077.5	6,336.2
Provision for unearned premiums, gross, in general insurance		12,583.0	12,253.5	10,051.1
Claims provision, gross	7	28,227.8	30,486.4	29,355.8
Other technical provisions		398.3	366.6	353.2
Pension liabilities		561.7	577.1	562.4
Other provisions		243.4	253.5	319.3
Financial liabilities
Financial derivatives	8	714.3	740.4	869.9
Deposits from and liabilities to customers	8		24,066.0
Interest-bearing liabilities	8	1,231.2	25,616.1
Other liabilities	8	2,417.8	2,951.7	2,838.4
Current tax		218.2	396.3	638.8
Deferred tax liabilities		1,034.5	902.6	1,093.0
Liabilities related to direct insurance and reinsurance	8	828.6	803.2	1,174.5
Liabilities in life insurance with investment options	8	27,135.1	23,834.7	23,909.5
Accrued expenses and deferred income	8	409.6	715.7	403.3
Liabilities held for sale				53,514.4
Total liabilities		84,149.7	131,988.8	132,917.7
Total equity and liabilities		107,882.0	153,396.3	156,762.9

Consolidated statement of changes in equity

							Re measure ment of the net
NOK millions	Share capital	Own shares	Share premium	Other paid-in capital	Perpetual Tier 1 capital	Exchange differ ences	defined benefit liab./asset	Other earned equity	Total equity
Equity as at 31.12.2017 attributable to owners of the company	1,000.0	0,0	1,430.0	48.2	1,369.4	602.0	(1,936.7)	21,172.2	23,685.1
Non-controlling interests as at 31.12.2017									18.0
Equity as at 31.12.2017									23,703.1
Adjustment due to amendment to IFRS 2				8.5					8.5
Adjustment on initial application of IFRS 9 in the bank								(10.4)	(10.4)
Equity as at 1.1.2018									23,701.2
1.1.-31.12.2018
Comprehensive income Profit/(loss) (the controlling interests' share)					47.5			3,670.1	3,717.6
Total components of other comprehensive income				0.1		14.1	(38.0)		(23.8)
Total comprehensive income				0.1	47.5	14.1	(38.0)	3,670.1	3,693.8
Transactions with owners of the company Own shares		0,0						(10.9)	(11.0)
Paid dividend								(3,549.9)	(3,549.9)
Equity-settled share-based payment transactions Perpetual Tier 1 capital				7.9	75.4			(0.6)	7.9 74.7
Perpetual Tier 1 capital - interest paid Net effect of purchase of non-controlling interests					(46.9)			(7.2)	(46.9) (7.2)
Total transactions with owners of the company		0,0		7.9	28.4			(3,568.6)	(3,532.3)
Equity as at 31.12.2018 attributable to owners of the company	1,000.0	(0.1)	1,430.0	64.7	1,445.3	616.0	(1,974.6)	21,263.3	23,844.7
Non-controlling interests as at 31.12.2018									0.5
Equity as at 31.12.2018									23,845.2
Adjustment on initial application of IFRS 16								(61.4)	(61.4)
Equity as at 1.1.2019									23,783.8
1.1.-30.6.2019
Comprehensive income Profit/(loss) (the controlling interests' share)					27.2			4,099.9	4,127.1
Total components of other comprehensive income				(0.1)		(155.4)	(0.1)		(155.7)
Total comprehensive income				(0.1)	27.2	(155.4)	(0.1)	4,099.9	3,971.4
Transactions with owners of the company Own shares		0,0						(4.5)	(4.5)
Paid dividend Remeasurement of the net defined benefit liability/asset of								(3,549.9)	(3,549.9)
sold companies							4.4	(4.4)
Equity-settled share-based payment transactions Perpetual Tier 1 capital				(1.6)	(445.9)			4.6 (0.3)	3.0 (446.2)
Perpetual Tier 1 capital - interest paid Total transactions with owners of the company		0,0		(1.6)	(25.4) (471.2)			(3,554.6)	(25.4) (4,023.0)
Equity as at 30.6.2019 attributable to owners of the
company	1,000.0	0,0	1,430.0	63.0	1,001.3	460.6	(1,970.4)	21,747.2	23,731.7
Non-controlling interests as at 30.6.2019									0.6
Equity as at 30.6.2019									23,732.3
1.1.-30.6.2018
Comprehensive income Profit/(loss) (the controlling interests' share)					23.2			1,517.1	1,540.2
Total components of other comprehensive income				(0.2)		(248.5)	(0.2)		(248.9)
Total comprehensive income				(0.2)	23.2	(248.5)	(0.2)	1,517.1	1,291.3
Transactions with owners of the company Own shares		0,0						(6.2)	(6.2)
Paid dividend Remeasurement of the net defined benefit liability/asset of								(3,549.9)	(3,549.9)
liquidated companies
Equity-settled share-based payment transactions Perpetual Tier 1 capital				4.1	0.3			(0.3)	4.1
Perpetual Tier 1 capital - interest paid Purchase of non-controlling interests					(22.9)			(7.2)	(22.9) (7.2)
Total transactions with owners of the company		0,0		4.1	(22.6)			(3,563.6)	(3,582.1)
Equity as at 30.6.2018 attributable to owners of the company	1,000.0	0,0	1,430.0	60.7	1,369.9	353.5	(1,936.9)	19,129.8	21,407.0
Non-controlling interests as at 30.6.2018									0.5
Equity as at 30.6.2018									21,407.5

Consolidated statement of cash flows

NOK millions	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Cash flow from operating activities
Premiums paid, net of reinsurance	16,366.5	16,472.1	31,022.5
Claims paid, net of reinsurance	(9,985.9)	(9,789.7)	(20,168.4)
Net payment of loans to customers	827.8	(2,151.1)	(5,498.6)
Net payment of deposits from customers	(589.9)	300.4	(647.0)
Payment of interest from customers	279.5	797.5	1,612.1
Payment of interest to customers	(15.0)	(64.3)	(297.2)
Net receipts/payments of premium reserve transfers	(1,306.7)	(758.7)	(1,266.8)
Net receipts/payments from financial assets	(3,974.2)	69.5	(984.1)
Operating expenses paid, including commissions	(2,294.7)	(2,281.5)	(4,586.8)
Taxes paid	(1,179.3)	(1,288.0)	(1,281.7)
Net other receipts/payments	(9.1)	146.8	204.3
Net cash flow from operating activities	(1,881.1)	1,453.0	(1,891.7)
Cash flow from investing activities
Net receipts/payments from sale/acquisition of subsidiaries and associates/joint venture	5,275.4	(31.2)	(34.7)
Net receipts/payments on sale/acquisition of owner-occupied property, plant and equipment and intangible assets	(233.5)	(240.5)	(403.6)
Net cash flow from investing activities	5,041.9	(271.7)	(438.3)
Cash flow from financing activities
Payment of dividend	(3,549.9)	(3,549.9)	(3,549.9)
Net receipts/payments on subordinated debt incl. interest	(22.7)	(20.1)	(41.8)
Net receipts/payments on loans to credit institutions	(140.9)	2,628.8	6,455.4
Net receipts/payments on other short-term liabilities	52.9	(22.8)	(26.7)
Net receipts/payments on interest on funding activities	(61.6)	(138.3)	(349.7)
Net receipts/payments on sale/acquisition of own shares	(4.5)	(6.2)	(11.0)
Repayment of lease liabilities	(88.8)
Payment of interest related to lease liabilities	(16.3)
Tier 1 issuance/installments			74.7
Tier 1 interest payments	(26.1)	(28.6)	(58.6)
Net cash flow from financing activities	(3,857.9)	(1,137.0)	2,492.5
Effect of exchange rate changes on cash and cash equivalents	(17.4)	(35.0)	(7.9)
Net cash flow	(714.4)	9.3	154.6
Cash and cash equivalents at the start of the period	2,839.9	2,685.2	2,685.2
Cash and cash equivalents at the end of the period	2,125.4	2,694.5	2,839.9
Net cash flow	(714.4)	9.3	154.6
Specification of cash and cash equivalents
Deposits with central banks		61.1	53.9
Cash and deposits with credit institutions ¹	2,125.4	2,633.4	2,786.0
Total cash and cash equivalents	2,125.4	2,694.5	2,839.9
Specification of cash and cash equivalents from discontinued operations
Deposits with central banks			53.9
Cash and deposits with credit institutions			422.6
Total cash and cash equivalents from discontinued operations			476.6
Specification of cash and cash equivalents from continuing operations
Deposits with central banks		61.1
Cash and deposits with credit institutions	2,125.4	2,633.4	2,363.3
Total cash and cash equivalents from continuing operations	2,125.4	2,694.5	2,363.3
Cash flows from discontinued operations
Net cash flow from operating activities	(7.0)		(6,162.0)
Net cash flow from investing activities	(4.5)		(28.3)
Net cash flow from financing activities	(150.8)		6,236.8
Total cash flows from discontinued operations	(162.3)		46.5

Notes

1. Accounting policies

The consolidated financial statements as of the first half-year of 2019, concluded on 30 June 2019, comprise Gjensidige Forsikring ASA and its subsidiaries (collectively referred to as the Group) and the Group's holdings in associated companies. Except for the changes described below, the accounting policies applied in the interim report is the same as those used in the annual report for 2018.

The consolidated financial statements as of the first half-year of 2019 have been prepared in accordance with IFRS and IAS 34 Interim Financial Reporting. The interim report does not include all the information required in a complete annual report and should be read in conjunction with the annual report for 2018.

New standards adopted

IFRS 16 Leases (2016)

Gjensidige implemented IFRS 16 at 1 January 2019 and there were significant implementation effects on the balance sheet, as well as an effect on equity. Please refer to note 11 for further details.

Amendments to IAS 12: Changes in classification of tax on equity items that are classified as liability for tax purposes In accordance with IAS 12 paragraph 57A, tax on equity items classified as liability for tax purposes are no longer classified as part of the equity transaction, but as part of the tax expense in the income statement.

New standards and interpretations not yet adopted

A number of new standards, changes to standards and interpretations have been issued for financial years beginning after 1 January 2019. They have not been applied when preparing these consolidated financial statements. Those that may be relevant to Gjensidige are mentioned below. Gjensidige does not plan early implementation of these standards.

IFRS 9 Financial instruments (2014) in the insurance operations

IFRS 9 addresses the accounting for financial instruments and is effective for annual periods beginning on or after 1 January 2018. The standard introduces new requirements for the classification and measurement of financial assets, including a new expected loss model for the recognition of impairment losses, and changed requirements for hedge accounting.

IFRS 9 contains three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income, and fair value through profit or loss. Financial assets will be classified either at amortised cost, at fair value through other comprehensive income, or at fair value through profit or loss, depending on how they are managed and which contractual cash flow properties they have. IFRS 9 introduces a new requirement regarding financial liabilities earmarked at fair value where changes in fair value that can be attributed to the liabilities' credit risk are presented in other comprehensive income rather than over profit or loss.

Amendments to IFRS 4 Applying IFRS 9 Financial

Instruments with IFRS 4 Insurance Contracts (2016) The amendments to IFRS 4 permit entities that predominantly undertake insurance activities the option to defer the effective date of IFRS 9 until 1 January 2021. The effect of such a deferral is that the entities concerned may continue to report under the existing standard, IAS 39 Financial Instruments. In

addition, the insurance sector of a financial conglomerate is allowed to defer the application of IFRS 9 until 1 January 2021, where all of the following conditions are met:

• no financial instruments are transferred between the insurance sector and any other sector of the financial conglomerate other than financial instruments that are measured at fair value with changes in fair value recognised through the profit of loss account by both sectors involved in such transfers;
• the financial conglomerate states in the consolidated financial statements which insurance entities in the group are applying IAS 39;
• disclosures requested by IFRS 7 are provided separately for the insurance sector applying IAS 39 and for the rest of the group applying IFRS 9.

Gjensidige is a financial conglomerate which primarily operates insurance business and has therefore decided to make use of this exception. According to the Exposure Draft "Amendments to IFRS 17" published June 2019, the IFRS 9 will be effective 1 January 2022, at the same date as IFRS 17.

IFRS 17 Insurance Contracts (2017)

IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. IFRS 17 is a complex standard that includes some fundamental differences to current accounting for liability measurement and profit recognition. Insurance contracts will be recognised at a risk-adjusted present value of the future cash flows plus an amount representing the unearned profit in the group of contracts (the contractual service margin). If a group of contracts is or become loss-making, the loss will be recognised immediately. Insurance revenue, insurance service expenses and insurance finance income or expenses will be presented separately. IFRS 17 is expected to be effective 1 January 2022. The standard is expected to have an effect on the group's financial statements, significantly changing the measurement and presentation of income and expenses.

Based on our preliminary assessments and based on Gjensidige's current operations, other amendments to standards and interpretation statements will not have a significant effect.

The preparation of interim accounts involves the application of assessments, estimates and assumptions that affect the use of accounting policies and the amounts recognised for assets and liabilities, revenues and expenses. The actual results may deviate from these estimates. The most material assessments involved in applying the Group's accounting policies and the most important sources of uncertainty in the estimates are the same regarding preparing the interim report as in the annual report for 2018.

Comparable figures are based on IFRS. All amounts are shown in NOK millions unless otherwise indicated. Due to rounding-off differences, figures and percentages may not exactly add up to the exact total figures.

Notes are presented on a Group level. Separate notes for Gjensidige Forsikring ASA (GF ASA) are not presented as GF ASA is the material part of the Group and therefore the notes for the Group give a sufficient presentation of both the Group and GF ASA.

A complete or limited audit of the interim report has not been carried out.

2. Seasonal variations

For some insurance products, seasonal premiums are used. This is because the incidence of claims is not evenly distributed throughout the year, but follows a stable seasonal pattern. Normally, premium income (earned premiums) is accrued evenly over the period of insurance, but for products with a seasonal pattern, premium income must also be allocated according to the incidence of claims. Gjensidige Forsikring has a seasonal premium for the following products: pleasure craft, snowmobiles and motorcycles. For example, for motorcycles, earned premiums for the period from April to September amount to a full 85 per cent of the annual premiums.

3. Segment information

Gjensidige Bank was discontinued from the third quarter 2018 and is no longer a separate segment in Gjensidige Group. The sale was completed on 1 March.

The Group´s core operations comprise the segments general insurance Private, Commercial, Denmark, Sweden and Baltics. The Group also has operation in the Pension segment.

The segments are evaluated regularly by Gjensidige´s senior group management based on financial and operational information specially prepared for each segment for the purpose of following up performance and allocating necessary resources. Another consequence of a seasonal premium is that if the customer cancels the insurance contract before the renewal date, only the portion of the seasonal premium is refunded for which the Company did not bear any risk. For motorcycle insurance taken out on 1 April, but cancelled on 1 October, the policyholder will only be refunded 15 per cent of the annual premium, even though the insurance was in effect only for six months.

Segment income is defined as earned premiums for general insurance and earned premiums and other income for Pension.

The segment result is defined as the underwriting result for general insurance and the profit before tax expense for Pension.

As from 1 January 2018 the former Nordic segment has been divided into two new segments: Denmark and Sweden. Comparable figures are changed accordingly.

		Claims, interest Segment income 2 expenses, loss etc.			Operating expenses		Net income from investments		Segment result/profit/(loss) before tax expense
Second quarter
NOK millions	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
General Insurance Private	2,211.0	2,178.3		(1,330.9) (1,533.5)	(295.9)	(273.5)			584.2	371.4
General Insurance Commercial	1,997.8	1,881.9		(1,288.2) (1,352.7)	(216.6)	(221.8)			493.0	307.4
General Insurance Denmark	1,212.9	1,223.2	(811.0)	(979.3)	(180.8)	(180.4)			221.1	63.6
General Insurance Sweden	345.9	403.0	(272.8)	(323.8)	(59.4)	(65.7)			13.7	13.4
General Insurance Baltics	276.6	272.8	(178.5)	(176.6)	(83.7)	(84.9)			14.4	11.4
Pension	1,074.5	593.1	(974.9)	(503.0)	(64.3)	(59.7)	4.1	7.8	39.4	38.2
Eliminations etc. 1	40.1	29.8	(35.0)	(5.1)	(144.3)	(157.7)	496.3	362.6	357.2	229.6
Total	7,158.9	6,582.1		(4,891.4) (4,874.0)		(1,045.0) (1,043.6)	500.5	370.4	1,722.9	1,034.9

		Segment income 2		Claims, interest expenses, loss etc.		Operating expenses	Net income from investments		Segment result/profit/(loss) before tax expense
1.1.-30.6.
NOK millions	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
General Insurance Private	4,312.5	4,253.3		(2,771.5) (2,999.3)	(561.9)	(538.9)			979.1	715.1
General Insurance Commercial	3,992.1	3,717.6		(2,740.6) (2,906.8)	(425.3)	(434.6)			826.3	376.2
General Insurance Denmark	2,409.2	2,456.8		(1,730.5) (1,949.8)	(354.8)	(358.0)			323.9	149.0
General Insurance Sweden	698.8	831.9	(535.1)	(671.4)	(128.2)	(137.0)			35.5	23.5
General Insurance Baltics	544.8	536.9	(356.0)	(345.8)	(168.7)	(171.0)			20.1	20.1
Pension	1,787.8	1,194.2		(1,590.6) (1,019.4)	(127.3)	(119.5)	22.8	14.7	92.8	70.1
Eliminations etc. 1	65.2	60.6	(39.6)	(57.4)	(296.2)	(327.7)	2,746.6	610.3	2,475.9	285.8
Total	13,810.3	13,051.3		(9,763.8) (9,949.9)		(2,062.3) (2,086.6)	2,769.4	625.1	4,753.6	1,639.9

¹ Eliminations etc. consist of internal eliminations and other income and expenses not directly attributable to one single segment, and large losses of NOK 22.0 million (95.9) for the year to date and NOK 22.0 million (26.8) in the quarter. Interest on subordinated debt is included in Net income from investments. ² There is no significant income between the segments at this level in 2019 and 2018.

4. Earned premiums from general insurance

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Earned premiums, gross	6,280.6	6,181.6	12,384.6	12,211.0	24,779.3
Ceded reinsurance premiums	(197.8)	(194.5)	(365.0)	(357.6)	(726.5)
Total earned premiums, net of reinsurance	6,082.8	5,987.2	12,019.5	11,853.5	24,052.8

5. Claims incurred etc. from general insurance

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Gross claims	(4,059.2)	(4,384.0)	(8,383.5)	(8,999.1)	(17,111.6)
Claims, reinsurers' share	142.7	13.0	210.3	68.6	320.5
Total claims incurred etc. from general insurance	(3,916.4)	(4,371.0)	(8,173.3)	(8,930.5)	(16,791.1)

6. Run-off gain/(loss) from general insurance

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Earned premiums from general insurance	6,082.8	5,987.2	12,019.5	11,853.5	24,052.8
Run-off gain/(loss) for the period, net of reinsurance 1	368.9	292.0	734.5	632.1	2,356.9
In per cent of earned premiums from general insurance	6.1	4.9	6.1	5.3	9.8

¹ Run-off gains/(losses) from general insurance includes run-off from the general insurance segments in addition to run-off on Corporate Centre/reinsurance.

7. Claims provision, gross from general insurance

NOK millions	30.6.2019	30.6.2018	31.12.2018
Claims provision, gross, as at 1 January	29,355.8	31,322.7	31,322.7
Claims for the year	9,048.8	9,658.1	19,484.7
Claims incurred in prior years, gross	(665.9)	(658.2)	(2,361.1)
Claims paid	(9,425.9)	(9,447.3)	(19,083.6)
Discounting of claims provisions	25.3	35.4	68.9
Change in discounting rate	152.3	1.8	(55.4)
Exchange differences	(262.7)	(426.1)	(20.4)
Claims provision, gross, at the end of the period	28,227.8	30,486.4	29,355.8
Discounted claims provision, gross - annuities	5,818.4	5,821.8	5,941.8
Nominal claims provision, gross - annuities	6,088.8	6,593.3	6,573.4

The claims provisions shall cover future claims payments. The claims provisions for insurances with annuity payments are converted to present value (discounted), whereas other provisions are undiscounted.

The reason why the claims provisions for annuities are discounted is due to very long cash flows and substantial future interest income. The claims for occupational injuries in Denmark are paid either as annuities or as lump-sum indemnities (which are calculated mainly as discounted annuities). Therefore, it is

most expedient to regard the whole portfolio as annuities. For Swedish MTPL personal injuries are paid as lifelong annuities. The discount rate used is a swap interest rate.

Over the next four years, average annual run-off gains are expected to be around NOK 1,000 million, moving the expected reported combined ratio to the lower end of the 86-89 corridor (undiscounted).

8. Financial assets and liabilities

Fair value

Financial assets and liabilities measured at fair value are carried at the amount each asset/liability can be settled to in an orderly transaction between market participants at the measurements date at the prevailing market conditions.

Different valuation techniques and methods are used to estimate fair value depending on the type of financial instruments and to which extent they are traded in active markets. Instruments are classified in their entirety in one of three valuation levels in a hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety.

The different valuation levels and which financial assets/liabilities that are included in the respective levels are accounted for below.

Quoted prices in active markets

Quoted prices in active markets are considered the best estimate of an asset/liability's fair value. A financial asset/liability is considered valued based on quoted prices in active markets if fair value is estimated based on easily and regularly available prices and these prices represent actual and regularly occurring transactions at arm's length principle. Financial assets/liabilities valued based on quoted prices in active markets are classified as level one in the valuation hierarchy.

The following financial assets are classified as level one in the valuation hierarchy

• Listed shares
• Norwegian government/government backed bonds and other fixed income securities
• Exchange traded funds

Valuation based on observable market data

When quoted prices in active markets are not available, the fair value of financial assets/ liabilities is preferably estimated based on valuation techniques which are based on observable market data.

A financial asset/liability is considered valued based on observable market data if fair value is estimated with reference to prices that are not quoted, but are observable either directly (as prices) or indirectly (derived from prices).

The following financial assets/liabilities are classified as level two in the valuation hierarchy

• Currency derivatives, equity options and forward rate agreements, in which fair value is derived from the value of underlying instruments. These derivatives are valued using common valuation techniques for derivatives (option pricing models etc.).
• Equity funds, bond funds, hedge funds and combination funds, in which fair value is estimated based on the fair value of the underlying investments of the funds.
• Bonds, certificates or index bonds that are unlisted, or that are listed but where transactions are not occurring regularly. The unlisted instruments in this category are valued based on observable yield curves and estimated credit spreads where applicable.

• Listed subordinated debt where transactions are not occurring regularly.

Valuation based on non-observable market data When neither quoted prices in active markets nor observable market data is available, the fair value of financial assets/liabilities is estimated based on valuation techniques which are based on non-observable market data.

A financial asset/liability is considered valued based on nonobservable market data if fair value is estimated without being based on quoted prices in active markets or observable market data. Financial assets/liabilities valued based on non-observable market data are classified as level three in the valuation hierarchy.

The following financial assets are classified as level three in the valuation hierarchy

• Unlisted private equity investments. The private equity investments that are not organised as funds are valued using cash flow analysis, price multiples and recent market transactions. The private equity investments that are organised as funds are valued based on NAV (Net Asset Value) as reported by the fund administrators in accordance with IPEV guidelines (International Private Equity and Venture Capital Valuation. Because of late reporting from the funds, the NAV from the previous quarterly reporting is used in estimating fair value. The NAV is then assessed for discretionary adjustments based on objective events since the last reporting date. Objective events may be the development in underlying values of listed companies since the last reporting, changes in regulations or substantial market movements.
• Real estate funds. The real estate funds are valued based on reported NAV values as reported by the fund administrators. Because of late reporting from the funds, the NAV values from the previous quarterly reporting are used in estimating fair value.

The valuation process for financial assets classified as level three

In consultation with the Investment Performance and Risk Measurement department, the Chief Investment Officer decides which valuation models will be used when valuing financial assets classified as level three in the valuation hierarchy. The models are evaluated as required. The fair value and results of the investments and compliance with the stipulated limits are reported weekly to the Chief Financial Officer and Chief Executive Officer, and monthly to the Board.

Sensitivity financial assets level three

The sensitivity analysis for financial assets that are valued based on non-observable market data shows the effect on profits of realistic and plausible market outcomes. General market downturns or a worsening of the outlook can affect expectations of future cash flows or the applied multiples, which in turn will lead to a reduction in value. A fall in value of ten per cent is deemed to be a realistic and plausible market outcome for shares and similar interests, as well as bonds and other securities with a fixed return that are included in level three of the valuation hierarchy.

	Carrying		Carrying
NOK millions	amount as at 30.6.2019	Fair value as at 30.6.2019	amount as at 30.6.2018	Fair value as at 30.6.2018
Financial assets
Financial derivatives
Financial derivatives at fair value through profit or loss	685.5	685.5	503.5	503.5
Financial derivatives subject to hedge accounting
Financial assets at fair value through profit or loss, designated upon initial recognition
Shares and similar interests	6,077.9	6,077.9	6,630.7	6,630.7
Bonds and other fixed income securities Shares and similar interests in life insurance with investment options	28,745.1 24,169.5	28,745.1 24,169.5	31,186.0 20,889.1	31,186.0 20,889.1
Bonds and other fixed income securities in life insurance with investment options	2,965.6	2,965.6	2,945.7	2,945.7
Loans	48.9	48.9
Financial assets held to maturity
Bonds held to maturity	217.6	219.3	694.0	701.2
Loans and receivables
Bonds and other fixed income securities classified as loans and receivables	20,873.0	21,985.7	19,801.5	20,936.9
Loans	2,451.8	2,451.8	50,060.1	50,060.1
Receivables related to direct operations and reinsurance	7,748.6	7,748.6	7,575.2	7,575.2
Other assets and receivables	949.0	949.0	1,050.5	1,050.5
Prepaid expenses and earned, not received income	150.9	150.9	433.8	433.8
Cash and cash equivalents	2,125.4	2,125.4	2,694.5	2,694.5
Total financial assets	97,208.8	98,323.1	144,464.6	145,607.2
Financial liabilities
Financial derivatives
Financial derivatives at fair value through profit or loss	714.3	714.3	740.4	740.4
Financial derivatives subject to hedge accounting
Financial liabilities at fair value through profit or loss, designated upon initial recognition
Interest-bearing liabilities at fair value through profit or loss
Debt in life insurance with investment options	27,135.1	27,135.1	23,834.7	23,834.7
Financial liabilities at amortised cost
Subordinated debt	1,498.2	1,489.9	1,947.6	1,944.7
Deposits from and liabilities to customers, bank			24,066.0	24,066.0
Interest-bearing liabilities	1,231.2	1,231.2	25,616.1	25,834.5
Other liabilities	2,417.8	2,417.8	2,951.7	2,951.7
Liabilities related to direct insurance	828.6	828.6	803.2	803.2
Accrued expenses and deferred income	409.6	409.6	715.7	715.7
Total financial liabilities	34,234.8	34,226.5	80,675.4	80,890.9
Gain/(loss) not recognised in profit or loss		1,122.6		927.1

Valuation hierarchy 2019

The table shows a valuation hierarchy where financial assets/liabilities are divided into three levels based on the method of valuation.

	Level 1	Level 2	Level 3
		Valuation	Valuation
	Quoted prices	techniques based on	techniques based on non
	in active	observable	observable
NOK millions	markets	market data	market data	Total
Financial assets
Financial derivatives
Financial derivatives at fair value through profit or loss		685.5		685.5
Financial assets at fair value through profit or loss, designated upon initial recognition
Shares and similar interests	67.3	4,601.3	1,409.4	6,077.9
Bonds and other fixed income securities	11,396.7	16,604.8	743.6	28,745.1
Shares and similar interests in life insurance with investment options	24,132.4	37.0		24,169.5
Bonds and other fixed income securities in life insurance with investment options	2,945.6	20.0		2,965.6
Loans		45.0	3.9	48.9
Financial assets at amortised cost
Bonds held to maturity	219.3			219.3
Bonds and other fixed income securities classified as loans and receivables		21,985.7		21,985.7
Loans			2,451.8	2,451.8
Financial liabilities
Financial derivatives
Financial derivatives at fair value through profit or loss		714.3		714.3
Financial liabilities at fair value through profit or loss, designated upon initial recognition
Debt in life insurance with investment options	27,078.0	57.0		27,135.1
Financial liabilities at amortised cost
Subordinated debt		1,487.7	2.2	1,489.9
Interest-bearing liabilities		1,231.2		1,231.2

Valuation hierarchy 2018

The table shows a valuation hierarchy where financial assets/liabilities are divided into three levels based on the method of valuation.

	Level 1 Quoted prices	Level 2 Valuation techniques based on	Level 3 Valuation techniques based on non
	in active	observable	observable
NOK millions	markets	market data	market data	Total
Financial assets
Financial derivatives
Financial derivatives at fair value through profit or loss		503.5		503.5
Financial assets at fair value through profit or loss, designated upon initial recognition
Shares and similar interests	82.0	5,271.2	1,277.5	6,630.7
Bonds and other fixed income securities	11,715.8	16,849.5	2,620.7	31,186.0
Shares and similar interests in life insurance with investment options	20,873.2	15.9		20,889.1
Bonds and other fixed income securities in life insurance with investment options	2,930.3	15.4		2,945.7
Loans
Financial assets at amortised cost
Bonds held to maturity	268.2	433.0		701.2
Bonds and other fixed income securities classified as loans and receivables		20,933.4	3.5	20,936.9
Loans			50,060.1	50,060.1
Financial liabilities
Financial derivatives
Financial derivatives at fair value through profit or loss		740.4		740.4
Financial liabilities at fair value through profit or loss, designated upon initial recognition
Debt in life insurance with investment options	23,803.5	31.3		23,834.8
Financial liabilities at amortised cost
Subordinated debt		1,944.7		1,944.7
Interest-bearing liabilities		25,834.5		25,834.5

Reconciliation of financial assets valued based on non-observable market data (level 3) 2019

	As at	Net realised/ unrealised gains recognised in profit or	Purch		Settle	Trans fers into/out of level	Cur rency	As at	Amount of net realised/ unrealised gains recognised in profit or loss that are attributable to instruments held as at
NOK millions	1.1.2019	loss	ases	Sales	ments	3	effect	30.6.2019	30.6.2019
Shares and similar interests	1,359.1	28.1	119.3	(96.9)			(0.1)	1,409.4	47.7
Bonds and other fixed income securities	778.7	22.7		(42.8)			(15.0)	743.6
Loans at fair value						3.8		3.9
Total	2,137.8	50.7	119.3	(139.7)		3.8	(15.1)	2,156.9	47.7

Sensitivity of financial assets valued based on non-observable market data (level 3) 2019

NOK millions		Sensitivity
Shares and similar interests	Change in value 10%	140.9
Bonds and other fixed income securities	Change in value 10%	74.4
Loans at fair value	Change in value 10%	0.4
Total		215.7

Reconciliation of financial assets valued based on non-observable market data (level 3) 2018

									Amount of net realised/
									unrealised gains
		Net							recognised in
		realised/							profit or loss
		unrealised				Trans			that are
		gains				fers			attributable to
		recognised				into/out	Cur		instruments
	As at	in profit or	Purch		Settle	of level	rency	As at	held as at
NOK millions	1.1.2018	loss	ases	Sales	ments	3	effect	30.6.2018	30.6.2018
Shares and similar interests	2,211.8	7.4	56.9	(86.8)		(911.7)	(0.2)	1,277.5	29.1
Bonds and other fixed income securities	904.3	1,850.8		(89.5)			(44.9)	2,620.7
Total	3,116.2	1,858.2	56.9	(176.4)		(911.7)	(45.1)	3,898.1	29.1

Sensitivity of financial assets valued based on non-observable market data (level 3) 2018

NOK millions Sensitivity

Shares and similar interests	Change in value 10%	127.7
Bonds and other fixed income securities	Change in value 10%	262.1
Total		389.8

9. Contingent liabilities

30.6.2019	30.6.2018	31.12.2018
		0.1
757.7	1,337.2	702.2
	0.1	0.1

As part of its ongoing financial management Gjensidige has committed, but not paid up to NOK 757.7 million (1,337.2) in loan funds containing secured debt and various private equity and real estate funds, over and above the amounts recognised in the balance sheet.

Gjensidige Forsikring is liable externally for any insurance claim arising in the cooperating mutual fire insurers' fire insurance operations.

According to the agreement with Gjensidige Pensjonskasse the return, if not sufficient to cover the pension plans guaranteed interest rate, should be covered from the premium fund or through contribution from Gjensidige Forsikring.

10. Related parties

There have not been any significant transactions with related parties other than ordinary current agreements conducted at arm's length distance.

11. Leasing

IFRS 16 requires all contracts that qualify under its definition as a lease to be reported on a lessee`s balance sheet as right of use assets and lease liabilities. Earlier classification of leases as either operating leases or finance leases are removed. Shortterm leases (less than 12 months) and leases of low-value assets are exempt from the requirements. A lessee shall recognise a right-of-use asset and a lease liability. The interest effect of discounting the lease liability shall be presented separately from the depreciation charge for the right-of-use asset. The depreciation expense will be presented with the group's other depreciations, whereas the interest effect of discounting will be presented as a financial item.

To determine whether a contract contains a lease, it is considered whether the contract conveys the right to control the use of an identified asset. This is for Gjensidige considered to be the case for rental contracts, leases for cars and some office machines, etc. However, the main part of the latter group is exempted for recognition due to low value. IT agreements are not considered to fall under IFRS 16 since these are based on the purchase of capacity that is not physically separated and thus not identifiable.

The rental period is calculated based on the duration of the agreement plus any option periods if these with reasonable certainty will be exercised. Joint expenses etc. are not recognised in the lease liability for the rental contracts.

The discount rate for the rental contracts is determined by looking at observable borrowing rates in the bond market for each of the countries in which Gjensidige operates. The interest rates are adapted to the actual lease contracts duration etc. The discount rate for the leasing cars is determined based on an assessment of which loan interest Gjensidige would achieve for financing cars from a financing company.

Gjensidige has recognised its lease liabilities at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate at the date of initial application, as well as the recognition of related right-of-use assets to an amount corresponding to the lease liability according to the modified retrospective approach. However, for the largest rental agreements in Norway, Sweden and Denmark, Gjensidige has chosen to recognise the right-of-use asset at the carrying amount as if the standard had been applied since the commencement date, but discounted using the lessee's incremental borrowing rate at the date of initial application. Comparative figures were not adjusted. The difference between this and the lease liability, less deferred tax, amounted to NOK 61.4 million and was recognised directly in equity on 1 January 2019.

NOK millions	30.6.2019	1.1.2019
Leases in the balance sheet
Assets
Right-of-use assets - property	1,111.8	1,210.2
Right- of-use assets - plant and equipment	10.4	13.6
Total	1,122.2	1,223.8
Liabilities
Lease liabilities	1,204.7	1,304.4
Leases in the income statement
Depreciation right-of-use assets	(77.4)
Interest expense on lease liabilities	(15.9)

Declaration

Today, the Board and the CEO have considered and approved the half-yearly report and the consolidated half-yearly accounts for Gjensidige Forsikring ASA for the period 1 January to 30 June 2019.

We confirm to the best of our knowledge that the condensed set of financial statements for the period 1 January to 30 June 2019 has been prepared in accordance with current accounting

standards and gives a true and fair view of the Group's assets, liabilities, financial position and result for the period viewed in their entirety. Furthermore, that the interim management report includes a fair review of any significant events that arose during the six-month period and their effect on the half-yearly financial report, a description of the principal risks and uncertainties for the business in the following accounting period and related parties' significant transactions.

Oslo, 11 July 2019 The Board of Gjensidige Forsikring ASA

Alternative performance measures and key figures

		Q2 2019	Q2 2018	1.1.-30.6.2019		1.1.-30.6.2018 1.1.-31.12.2018
Gjensidige Forsikring Group
Equity	NOK millions			23,732.3	21,407.5	23,845.2
Equity per share	NOK			47.5	42.8	47.7
Earnings per share in the period, basic and diluted 1	NOK	2.68	2.01	8.25	3.08	7.44
Return on equity, annualised 2	%			36.8	14.2	17.3
Return on tangible equity, annualised 2	%			46.8	18.5	22.4
Return on financial assets 2	%	0.9	0.7	2.1	1.2	1.5
Total eligible own funds to meet the group SCR 3	NOK millions			24,433.2	21,697.0	23,665.1
Group SCR margin 4	%			241.8	160.5	168.5
Total eligible own funds to meet the minimum consolidated group SCR 5	NOK millions			21,364.8	14,178.5	15,772.6
Minimum consolidated group SCR margin 6	%			430.2	289.6	321.9
Gjensidige Forsikring ASA
Total eligible own funds to meet the SCR 7	NOK millions			24,014.9	19,532.7	21,899.5
SCR margin 8	%			254.5	213.9	234.6
Total eligible own funds to meet the MCR 9	NOK millions			21,079.0	16,640.4	19,051.8
MCR margin 10	%			512.9	407.4	465.0
Issued shares, at the end of the period	Number			500,000,000	500,000,000	500,000,000
General Insurance
Gross premiums written 2
Private	NOK millions	2,200.4	2,102.9	4,965.3	4,925.9	8,942.2
Commercial	NOK millions	1,468.0	1,364.6	5,391.2	4,945.3	8,017.9
Denmark	NOK millions	946.1	918.0	3,168.6	3,180.6	5,196.8
Sweden	NOK millions	315.1	410.2	775.2	929.0	1,495.1
Baltics	NOK millions	283.3	276.4	588.8	568.9	1,110.1
Corporate Centre/reinsurance	NOK millions	(0.1)	0,0	113.4	105.7	105.7
Total General Insurance	NOK millions	5,212.8	5,072.1	15,002.5	14,655.4	24,867.8
Premiums, net of reinsurance 2	%			96.0	95.9	97.1
Earned premiums
Private	NOK millions	2,211.0	2,178.3	4,312.5	4,253.3	8,762.5
Commercial	NOK millions	1,997.8	1,881.9	3,992.1	3,717.6	7,603.3
Denmark	NOK millions	1,212.9	1,223.2	2,409.2	2,456.8	4,904.6
Sweden	NOK millions	345.9	403.0	698.8	831.9	1,569.2
Baltics	NOK millions	276.6	272.8	544.8	536.9	1,078.8
Corporate Centre/reinsurance	NOK millions	38.6	28.0	62.2	57.0	134.4
Total General Insurance	NOK millions	6,082.8	5,987.2	12,019.5	11,853.5	24,052.8
Loss ratio 2
Private	%	60.2	70.4	64.3	70.5	65.3
Commercial	%	64.5	71.9	68.7	78.2	68.2
Denmark	%	66.9	80.1	71.8	79.4	76.8
Sweden	%	78.9	80.4	76.6	80.7	78.5
Baltics	%	64.5	64.7	65.3	64.4	62.7
Total General Insurance	%	64.4	73.0	68.0	75.3	69.8
Underlying frequency loss ratio 2
Private	%	65.8	76.1	69.3	76.3	72.6
Commercial	%	66.6	71.4	72.6	78.4	78.0
Denmark	%	70.9	79.7	75.6	80.3	79.1
Sweden	%	81.1	81.0	80.3	80.9	80.7
Baltics	%	66.4	67.4	69.2	66.7	64.9
Total General Insurance	%	67.8	74.4	72.1	77.0	75.6
Cost ratio 2
Private	%	13.4	12.6	13.0	12.7	12.6
Commercial	%	10.8	11.8	10.7	11.7	11.5
Denmark	%	14.9	14.7	14.7	14.6	14.4
Sweden	%	17.2	16.3	18.3	16.5	16.5
Baltics	%	30.3	31.1	31.0	31.8	31.0
Total General Insurance	%	14.9	15.2	14.9	15.2	15.2

Combined ratio 2
Private	%	73.6	83.0	77.3	83.2	77.9
Commercial	%	75.3	83.7	79.3	89.9	79.6
Denmark	%	81.8	94.8	86.6	93.9	91.1
Sweden	%	96.0	96.7	94.9	97.2	95.0
Baltics	%	94.8	95.8	96.3	96.2	93.7
Total General Insurance	%	79.3	88.2	82.9	90.6	85.0
Combined ratio discounted 2	%	78.4	87.1	82.0	89.4	84.0
Pension
Assets under management pension, at the end of the period	NOK millions			34,167.4	30,244.2	30,688.2
of which the group policy portfolio	NOK millions			6,946.2	6,339.5	6,586.4
Operating margin 2	%	35.44	33.81	35.46	31.66	34.41
Recognised return on the paid-up policy portfolio 11	%			1.74	3.26	5.61
Value-adjusted return on the paid-up policy portfolio 12	%			2.18	2.08	4.30
Share of shared commercial customers 13	%			68.0	69.0	70.0
Return on equity, annualised 2	%			17.6	13.9	16.0

Q2 2019 Q2 2018 1.1.-30.6.2019 1.1.-30.6.2018 1.1.-31.12.2018

1 Earnings per share from continuing and discontinued operations, basic and diluted = the shareholders' share of the profit or loss from continuing and discontinued operations in the period/average number of outstanding shares in the period

2 Defined as alternative performance measure (APM). APMs are described on www.gjensidige.no/reporting in document named APMs Gjensidige Forsikring Group Q2 2019.

³ Total eligible own funds to meet the group SCR = Total eligible own funds to meet the group solvency capital requirement, where the group solvency capital requirement is based on approved partial internal model. Total comprehensive income for the year-to-date is included in the solvency calculations, minus a formulaic dividend pay-out ratio of 80 per cent of net profit (excluding the gain from Gjensidige Bank).

4 Group SCR margin = Ratio of total eligible own funds to group solvency capital requirement, where the group solvency capital requirement is based on approved partial internal model.

⁵Total eligible own funds to meet the minimum consolidated group SCR = Total eligible own funds to meet the minimum consolidated group solvency capital requirement, where the minimum consolidated group solvency capital requirement is based on approved partial internal model. Total comprehensive income for the year-to-date is included in the solvency calculations, minus a formulaic dividend pay-out ratio of 80 per cent of net profit (excluding the gain from Gjensidige Bank).

6 Minimum consolidated group SCR margin = Ratio of eligible own funds to minimum consolidated group solvency capital requirement, where the minimum consolidated group solvency capital requirement is based on approved partial internal model.

⁷ Total eligible own funds to meet the SCR = Total eligible own funds to meet the solvency capital requirement for Gjensidige Forsikring ASA, where the solvency capital requirement is based on approved partial internal model. Total comprehensive income for the year-to-date is included in the solvency calculations, minus a formulaic dividend pay-out ratio of 80 per cent of net profit (excluding the gain from Gjensidige Bank).

⁸ SCR margin = Ratio of total eligible own funds to solvency capital requirement for Gjensidige Forsikring ASA, where the solvency capital requirement is based on approved partial internal model.

⁹Total eligible own funds to meet the MCR = Total eligible own funds to meet the minimum capital requirement for Gjensidige Forsikring ASA, where the minimum capital requirement is based on approved partial internal model. Total comprehensive income for the year-to-date is included in the solvency calculations, minus a formulaic dividend pay-out ratio of 80 per cent of net profit (excluding the gain from Gjensidige Bank).

¹⁰MCR margin = Ratio of eligible own funds to minimum capital requirement for Gjensidige Forsikring ASA, where the minimum capital requirement is based on approved partial internal model.

¹¹ Recognised return on the paid-up policy portfolio = realised return on the portfolio

¹² Value-adjusted return on the paid-up policy portfolio = total return on the portfolio

¹³ Share of shared commercial customers = customers having both pension and general insurance products with Gjensidige

Quarterly earnings performance

	Q2	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2
NOK millions	2019	2019	2018	2018	2018	2018	2017	2017	2017
Earned premiums from general insurance	6,082.8	5,936.7	6,081.2	6,118.1	5,987.2	5,866.3	5,969.5	6,056.4	5,824.7
Other income	1,076.0	714.7	511.7	499.2	595.0	602.8	522.9	553.6	352.2
Total operating income	7,158.9	6,651.5	6,592.9	6,617.4	6,582.1	6,469.1	6,492.3	6,610.0	6,177.0
Total net income from investments	500.5	2,268.9	(224.6)	429.7	370.4	254.7	487.1	475.5	471.0
Total operating income and net income from investments	7,659.3	8,920.4	6,368.3	7,047.1	6,952.5	6,723.8	6,979.5	7,085.5	6,648.0
Claims incurred etc. from general insurance	(3,916.4)	(4,256.8)	(3,268.9)	(4,591.7)	(4,371.0)	(4,559.5)	(4,468.4)	(4,013.7)	(3,961.7)
Claims incurred etc. from pension	(974.9)	(615.6)	(408.1)	(406.1)	(503.0)	(516.4)	(444.9)	(478.1)	(282.6)
Total claims etc.	(4,891.4)	(4,872.4)	(3,676.9)	(4,997.8)	(4,874.0)	(5,075.9)	(4,913.3)	(4,491.9)	(4,244.2)
Operating expenses from general insurance	(908.7)	(881.8)	(897.9)	(953.0)	(909.3)	(895.7)	(945.7)	(892.5)	(890.7)
Other operating expenses	(136.3)	(135.5)	(132.3)	(132.3)	(134.3)	(147.3)	(124.9)	(123.1)	(132.1)
Total operating expenses	(1,045.0)	(1,017.3)	(1,030.2)	(1,085.3)	(1,043.6)	(1,043.0)	(1,070.7)	(1,015.6)	(1,022.8)
Total expenses	(5,936.4)	(5,889.7)	(4,707.1)	(6,083.1)	(5,917.6)	(6,118.8)	(5,984.0)	(5,507.5)	(5,267.0)
Profit/(loss) for the period before tax expense	1,722.9	3,030.7	1,661.2	964.0	1,034.9	605.0	995.5	1,578.1	1,381.0
Underwriting result general insurance	1,257.6	798.1	1,914.4	573.4	706.8	411.2	555.4	1,150.2	972.3
	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2	Q1
NOK millions	2017	2016	2016	2016	2016	2015	2015	2015	2016
Earned premiums from general insurance	5,547.7	5,685.6	5,705.5	5,536.8	5,514.0	5,493.5	5,471.2	5,188.1	5,119.2
Other income	539.1	476.5	440.2	315.1	338.1	498.6	357.4	333.4	364.0
Total operating income	6,086.8	6,162.1	6,145.6	5,851.9	5,852.2	5,992.1	5,828.6	5,521.5	5,483.2
Total net income from investments	568.6	541.5	709.2	573.9	328.0	618.7	(156.5)	508.0	518.1
Total operating income and net income from investments	6,655.4	6,703.6	6,854.8	6,425.8	6,180.2	6,610.8	5,672.1	6,029.4	6,001.3
Claims incurred etc. from general insurance	(3,957.9)	(4,013.8)	(4,004.3)	(3,599.6)	(3,898.1)	(3,734.7)	(3,588.0)	(3,341.8)	(3,933.0)
Claims incurred etc. from pension	(456.2)	(387.1)	(371.2)	(250.2)	(275.1)	(432.8)	(286.4)	(263.1)	(293.5)
Total claims etc.	(4,414.1)	(4,400.9)	(4,375.5)	(3,849.8)	(4,173.2)	(4,167.5)	(3,874.3)	(3,604.9)	(4,226.5)
Operating expenses from general insurance	(857.6)	(971.3)	(989.4)	(865.6)	(365.2)	(879.5)	(792.3)	(776.1)	(769.6)
Other operating expenses	(121.5)	(120.0)	(115.7)	(119.7)	(114.7)	(176.0)	(111.1)	(93.8)	(95.8)
Total operating expenses	(979.0)	(1,091.3)	(1,105.1)	(985.2)	(479.9)	(1,055.5)	(903.4)	(869.9)	(865.4)
Total expenses	(5,393.1)	(5,492.2)	(5,480.6)	(4,835.1)	(4,653.1)	(5,223.0)	(4,777.7)	(4,474.8)	(5,091.9)
Profit/(loss) for the period before tax expense	1,262.2	1,211.4	1,374.2	1,590.8	1,527.1	1,387.7	894.4	1,554.6	909.3

Income statement

Gjensidige Forsikring ASA

NOK millions	Q2 2019	Q2 2018	1.1.-30.6.2019	1.1.-30.6.2018	1.1.-31.12.2018
Premiums
Earned premiums, gross	5,862.2	5,759.4	11,553.7	11,377.1	23,105.9
Ceded reinsurance premiums	(196.2)	(193.4)	(358.3)	(347.5)	(715.9)
Total earned premiums, net of reinsurance	5,666.0	5,566.0	11,195.4	11,029.6	22,389.9
General insurance claims
Gross claims	(3,774.5)	(4,102.2)	(7,798.4)	(8,414.8)	(15,973.9)
Claims, reinsurers' share	148.5	10.3	207.8	67.5	324.5
Total claims incurred, net of reinsurance	(3,626.0)	(4,091.8)	(7,590.6)	(8,347.3)	(15,649.4)
Insurance-related operating expenses
Insurance-related administration expenses incl. commissions for received reinsurance and sales expenses	(885.0)	(902.3)	(1,732.0)	(1,770.2)	(3,558.6)
Received commission for ceded reinsurance and profit share	14.9	15.2	26.1	23.4	51.0
Total insurance-related operating expenses	(870.1)	(887.1)	(1,705.9)	(1,746.8)	(3,507.6)
Profit/(loss) of technical account general insurance	1,169.9	587.1	1,898.9	935.4	3,233.0
Net income from investments
Income from investments in subsidiaries, associates and joint ventures			3,097.3	94.9	374.0
Impairment losses of investments in subsidiaries, associates and joint ventures		(76.0)	(58.0)	(76.0)	(76.0)
Interest income and dividend etc. from financial assets	251.0	246.2	491.4	512.5	1,043.1
Changes in fair value on investments	210.2	198.1	815.2	(207.5)	(494.7)
Realised gain and loss on investments	(16.0)	(99.8)	(195.7)	237.3	143.2
Administration expenses related to investments, including interest expenses	(41.7)	(32.9)	(82.2)	(61.3)	(166.2)
Total net income from investments	403.5	235.6	4,067.9	500.0	823.4
Other income	3.1	2.1	5.7	5.1	10.3
Other expenses	(9.0)	(8.1)	(18.1)	(18.8)	(37.1)
Profit/(loss) of non-technical account	397.5	229.6	4,055.6	486.2	796.6
Profit/(loss) before tax expense	1,567.4	816.7	5,954.5	1,421.6	4,029.5
Tax expense	(367.5)	(174.2)	(634.5)	(333.0)	(995.0)
Profit/(loss) before components of other comprehensive income	1,199.9	642.5	5,320.0	1,088.7	3,034.5
Other comprehensive income
Other comprehensive income that will not be reclassified to profit or loss
Changes in estimates related to defined benefit plans					(49.4)
Tax on other comprehensive income that will not be reclassified to profit or loss					12.3
Total other comprehensive income that will not be reclassified to profit or loss					(37.0)
Other comprehensive income that may be reclassified to profit or loss
Exchange differences from foreign operations	3.3	(87.9)	(138.8)	(208.3)	3.2
Tax on other comprehensive income that may be reclassified	(0.7)	21.3	34.0	50.9	(0.7)
to profit or loss
Total other comprehensive income that may be reclassified to profit or loss	2.6	(66.5)	(104.8)	(157.4)	2.5
Total comprehensive income	1,202.4	575.9	5,215.2	931.3	3,000.0

Statement of financial position

Gjensidige Forsikring ASA

NOK millions	30.6.2019	30.6.2018	31.12.2018
Assets
Goodwill	1,804.7	1,776.4	1,846.6
Other intangible assets	929.4	1,028.1	1,013.0
Total intangible assets	2,734.1	2,804.5	2,859.5
Investments
Buildings and other real estate
Owner-occupied property	28.5	28.5	28.5
Right-of-use property	1,031.7
Subsidiaries and associates
Shares in subsidiaries	3,834.1	6,110.5	3,832.7
Shares in subsidiaries, held for sale			2,461.5
Shares in associates and joint ventures	1,086.9	1,086.9	1,086.9
Interest-bearing receivables on subsidiaries and joint ventures	2,439.8	1,971.9	2,513.1
Financial assets measured at amortised cost
Bonds held to maturity		397.2	105.8
Loans and receivables	15,635.4	15,144.6	15,471.3
Financial assets measured at fair value
Shares and similar interests (incl. shares and similar interests measured at cost)	6,052.9	6,587.2	5,061.4
Bonds and other fixed-income securities	24,669.1	21,460.5	22,152.3
Subordinated loans	48.9		44.3
Financial derivatives	685.5	421.6	577.9
Other investments	111.0	111.0	111.0
Reinsurance deposits	1,156.5	507.3	1,094.7
Total investments	56,780.4	53,827.3	54,541.4
Reinsurers' share of insurance-related liabilities in general insurance, gross
Reinsurers' share of provision for unearned premiums, gross	275.7	281.8	39.6
Reinsurers' share of claims provision, gross	552.3	440.3	473.6
Total reinsurers' share of insurance-related liabilities in general insurance, gross	828.0	722.1	513.2
Receivables
Receivables related to direct operations	7,329.9	7,086.3	6,323.5
Receivables related to reinsurance	62.7	112.0	75.5
Receivables within the group	85.2	24.1	339.6
Other receivables	708.8	761.7	820.2
Total receivables	8,186.6	7,984.1	7,558.9
Other assets
Plant and equipment	230.5	247.3	203.7
Cash and cash equivalents	1,546.5	1,368.2	1,656.4
Pension assets	155.2	204.4	155.2
Total other assets	1,932.2	1,819.9	2,015.2
Prepaid expenses and earned, not received income
Other prepaid expenses and earned, not received income	103.9	88.1	46.2
Total prepaid expenses and earned, not received income	103.9	88.1	46.2
Total assets	70,565.1	67,245.9	67,534.4

NOK millions	30.6.2019	30.6.2018	31.12.2018
Equity and liabilities
Paid in equity
Share capital	1,000.0	1,000.0	1,000.0
Own shares	0,0	0,0	(0.1)
Share premium	1,430.0	1,430.0	1,430.0
Perpetual Tier 1 Capital	1,001.3	1,000.1	1,000.5
Other paid in equity	61.1	54.6	58.2
Total paid in equity	3,492.4	3,484.7	3,488.6
Retained equity
Funds etc.
Natural perils capital	2,560.9	2,429.8	2,491.1
Guarantee scheme provision	653.9	638.3	653.9
Other retained earnings	15,710.0	12,236.7	10,655.3
Total retained earnings	18,924.8	15,304.8	13,800.3
Total equity	22,417.2	18,789.5	17,288.9
Subordinated debt	1,198.4	1,198.1	1,198.3
Insurance-related liabilities in general insurance, gross
Provision for unearned premiums, gross	11,877.5	10,992.1	9,399.6
Claims provision, gross	27,663.8	29,866.9	28,769.8
Provision for premium discounts and other profit agreements	72.5	67.0	75.4
Total insurance-related liabilities in general insurance, gross	39,613.8	40,925.9	38,244.9
Provision for liabilities
Pension liabilities	559.2	551.0	559.9
Current tax	144.9	257.7	591.3
Deferred tax liabilities	1,225.8	984.1	1,289.0
Other provisions	242.5	248.6	316.5
Total provision for liabilities	2,172.3	2,041.4	2,756.7
Liabilities
Liabilities related to direct insurance	330.7	271.1	381.5
Liabilities related to reinsurance	240.9	220.4	40.9
Financial derivatives	714.3	663.1	869.9
Accrued dividend			3,550.0
Other liabilities	3,468.7	2,793.0	2,766.0
Liabilities to subsidiaries and associates	75.8	13.8	104.9
Total liabilities	4,830.4	3,961.4	7,713.3
Accrued expenses and deferred income
Other accrued expenses and deferred income	333.0	329.6	332.3
Total accrued expenses and deferred income	333.0	329.6	332.3
Total equity and liabilities	70,565.1	67,245.9	67,534.4

Statement of changes in equity

Gjensidige Forsikring ASA

							Changes in
							estimates
							related to
	Share	Own	Share	Other paid-in	Perpetual Tier 1	Exchange differ	defined benefit	Other earned	Total
NOK millions	capital	shares	premium	capital	capital	ences	plans	equity	equity
Equity as at 31.12.2017	1,000.0	0,0	1,430.0	45.1	999.8	383.8	(1,932.8)	15,945.9	17,871.7
Adjustment due to amendment to IFRS 2				5.5					5.5
Equity as at 1.1.2018	1,000.0	0,0	1,430.0	50.6	999.8	383.8	(1,932.8)	15,945.9	17,877.2
1.1.-31.12.2018
Comprehensive income
Profit/(loss)					35.0			2,999.5	3,034.5
Total components of other comprehensive income				0.1		2.4	(37.0)	-	(34.5)
Total comprehensive income				0.1	35.0	2.4	(37.0)	2,999.5	3,000.0
Transactions with owners of the company
Own shares		0,0						(10.9)	(11.0)
Accrued and paid dividend								(3,549.9)	(3,549.9)
Equity-settled share-based payment transactions				7.6					7.6
Perpetual Tier 1 capital					0.6			(0.6)	-
Perpetual Tier 1 capital - interest paid Total transactions with owners of the company		0,0		7.6	(34.9) (34.3)			(3,561.5)	(34.9) (3,588.2)
Equity as at 31.12.2018	1,000.0	(0.1)	1,430.0	58.2	1,000.5	386.2	(1,969.8)	15,384.0	17,288.9
Adjustment on initial application of IFRS 16								(61.4)	(61.4)
Equity as at 1.1.2019	1,000.0	(0.1)	1,430.0	58.2	1,000.5	386.2	(1,969.8)	15,322.6	17,227.6
1.1.-30.6.2019
Comprehensive income
Profit/(loss)					24.7			5,295.3	5,320.0
Total components of other comprehensive income				(0.1)		(104.6)	(0.1)		(104.8)
Total comprehensive income				(0.1)	24.7	(104.6)	(0.1)	5,295.3	5,215.2
Transactions with owners of the company
Own shares		0,0						(4.5)	(4.5)
Accrued and paid dividend								0.1	0.1
Equity-settled share-based payment transactions				3.0					3.0
Perpetual Tier 1 capital					0.3			(0.3)
Perpetual Tier 1 capital - interest paid Total transactions with owners of the company		0,0		3.0	(24.1) (23.8)			(4.8)	(24.1) (25.5)
Equity as at 30.6.2019	1,000.0	0,0	1,430.0	61.1	1,001.3	281.6	(1,969.9)	20,613.2	22,417.2
1.1.-30.6.2018
Comprehensive income Profit/(loss)					17.1			1,071.6	1,088.7
Total components of other comprehensive income				(0.2)		(157.0)	(0.2)		(157.4)
Total comprehensive income				(0.2)	17.1	(157.0)	(0.2)	1,071.6	931.3
Transactions with owners of the company
Own shares Accrued and paid dividend		0,0						(6.2) 0.1	(6.2) 0.1
Equity-settled share-based payment transactions				4.2					4.2
Perpetual Tier 1 capital					0.3			(0.3)	-
Perpetual Tier 1 capital - interest paid					(17.1)				(17.1)
Total transactions with owners of the company		0,0		4.2	(16.8)			(6.4)	(19.0)
Equity as at 30.6.2018	1,000.0	0,0	1,430.0	54.6	1,000.1	226.7	(1,933.0)	17,011.1	18,789.5

Gjensidige Forsikring Group – 2

nd quarter 2019 37