Alm Brand A/S

Hello, everyone, and thank you for joining us today for the on-brand Q4 2025 results call. My name is Sami, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by 1 on your telephone keypad. To change your mind, please press star followed by 2 on your telephone keypad to remove yourself from the question queue. I'll now hand over to your host, Rasmus Werner-Nielsen, CEO to begin. Please go ahead, Rasmus.

Thank you. Good morning, and thank you for joining us on our conference call. As usual, I have with me today our CFO, Andreas Ruben Madsen, and the head of our IR team, Mads Tinko. This morning, we published our interim report for the fourth quarter, and as usual, I will walk you through the operating highlights, and then Andreas will comment on the financials. Let us move to slide two. Overall, 2025 ended better than expected with an insurance service result of 1.91 billion, significantly up from 1.44 billion last year. Last claims of 5.2% and weather-related claims of 3.2% in 2025 were both below the new normal levels we expect, while the undiscounted underlying loss ratio improved by 3.1% compared to 2024, driven by our repricing and synergies. We had a strong growth of 9.7% in our personal lines in 2025, while also ending the year with a quarterly growth rate of almost 10%. Thanks to our strong partnership with local banks as well as countrywide banks, we are taking market shares in personal lines. We view growth in commercial lines as decent in 2025 with just below 3%. On the cost side, we improved the cost percentage to 17% in 2025 as planned. This is a satisfactory 1.3 percentage point reduction from 2024. Combined with the very satisfactory investment result for 2025 of above $0.3 billion, the profit before special cost and tax reached $2.12 billion. A proposed dividend of 0.66 crowns per share and total ordinary buybacks of $500 million represent a record high normal distribution of a total of $1.4 billion and a payout ratio of 98% for 2025. This is on top of the one billion extraordinary buyback we expect to do in 2026 related to the approval of our PIP model, as well as an extraordinary steady increase in our CSR coverage in Q4. Now I turn to slide three with our highlights for Q4. Q4 was supported by an improvement in the underlying undiscounted claims ratio of three percentage points related to our repricing and harvesting of synergies. Synergies also supported a further drop in our cost ratio. As mentioned on the slide before, growth in personal lines was strong at almost 10% year-on-year in Q4, while growth in commercial lines was a bit negative due to the built-in volatility in repricing our largest corporate customers. Furthermore, a technicality in Q4 last year gave a small headwind for the quarter as well. Please turn to slide four with our financial highlights for Q4. The insurance service result for Q4, $25 or $521 million, was an improvement for $440 million last year, mainly driven by lower underlying claims, but also with support from the strong growth in personal lines. The investment result of $73 million in Q4 was satisfactory, and on par with last year, and we entered 2025 at a very satisfactory level for the investment result of 337 million. Special cost of 39 million is somewhat lower than last year due to lower cost for the integration of coding and realization of synergy, as well as special cost for announced redundancies booked in Q4 last year. On slide five, you can see the payout ratio and Fs for 2025. The payout ratio was 98, and earnings per share ended at one Danish crown. The payout ratio is achieved as the net profit after tax, with some adjustment related to the cooling integration, amortization of intangible assets, and profit of the discontinued activities from energy and marine business. In 2025, we are close to 100% payout, as we have been in all recent years. This reflects our strong underlying capacity for distribution. Earnings per share came to one daily ground for 2025 based on adjusted profit after tax and the average number of shares. This serves as the baseline for the 2026 to 2028 EFS cargo target of 10%. So adding together the upcoming share buyback program of 1.5 billion and the dividend of 0.66 crowns to be paid in April, we expect to make a total of 2.4 billion in distributions in 2026. Let's go into the details with the insurance service results on segments on slide 7. Personal lines increased the insurance service results significantly to 314 million in Q4, The improvement in personal line was driven by double-digit premium growth, two percentage point improvement in the underlying undiscounted claims ratio, and higher runoff gains than the year before. The drop in the cost ratio followed the plan and thus helped as well. Commercial lines did a bit under last year with an insurance service result of $207 million compared to $238 million in Q4 last year. The main driver for the low result was major claims doubling to 8% in commercial lines, although this is still below the normal level in commercial lines of around 10%. In addition, commercial lines were impacted negatively by a runoff loss of 2.8%, primarily related to liability insurance. We are, however, very satisfied with a massive improvement in the undiscounted underlying claims in commercial lines this quarter. And now please turn to slide eight. Insurance revenue grew by 4.6% in the quarter thanks to continued strong growth in personal lines of almost 10%. In personal lines, we are still taking market shares due to our strong bank partnerships while repricing related to high motor claims help as well. The last effect is expected to dissipate in the coming quarters. Commercial lines are switching to negative premium growth in the quarter But the growth is slightly positive when adjusting for technicality in Q4 last year that carries a headwind of 1% to commercial lines growth in this quarter. Our work with increasing profitability of our largest customers does lead to some volatility from quarter to quarter in commercial lines depending on the acceptance of individual price increases. Q4 this year, premium growth was impacted negatively by this. And moving on to slide 9 and the claims ratio. The Q4 claims ratio was down 1.2 percentage point year-on-year, mostly due to a drop in underlying claims of 2.4 percentage points, while it was negatively impacted by the runoff loss in Q4. The 2.4 percentage point improvement in the underlying claims ratio was driven by repricing and harvested sanity gains while discounting was less of a help in Q4 this year due to a one-off, which led to a temporary 0.6 percentage point drop in the overall help from discounting in this quarter. On an undiscounted basis, the underlying loss ratio improved by three percentage points The personal lines had an improvement of about 2.1 percentage point, while the improvement in commercial lines reached 3.7 percentage point. And now please turn to slide 10 and the personal lines. The CAIMS ratio is down a massive 5 percentage point, driven by underlying improvements and higher runoff gains compared to last year. On top of this, the cost ratio still improves. quarter is reduced with 7.7 percentage points to 18.9%. Please turn to slide 11 and the commercial lines. The total claims experience worsened in commercial lines, which was driven by an increase in major claims to 8% compared to a very low level of just 4% last year. However, I know that this year is still below the normal level of 10%. An atypical runoff loss of 2.8 percentage points in commercial lines was also a factor behind an increase in the claims ratio of about 3 percentage points. However, I'm still very pleased with the undiscounted underlying claims in commercial lines improving 3.7 percentage points year-on-year. Our expense ratio in commercial lines in Q4 improved by And with these comments, I will now hand over the work to Andreas, who will walk us through the financials.

Thank you, Rasmus. Now please turn to slide 13 for a final update on our synergies. Synergies in Q4-25 of 164 million is up by 26 million compared to Q4 last year, and thus we end 25 with 618 million in realized synergies. This underlines our successful takeover of Kodam, as this is above the target of 600 million per year. We actually finished the synergy program with a run rate of 650 million by the end of 2025, just to highlight how much we have won by acquiring Kodam. The improvement in harvested synergies in Q4 2025 of 26 million from 138 million in Q4 24 implies an improvement in our underlying claims ratio of 0.5 percentage points and our cost ratio by 0.4 percentage points year on year. This will be the ending of our CNT accounting. And now I move to slide 14 and the investment result. The investment result was a profit of 73 million given by a positive return from our free portfolio and a positive return from our match portfolio as well. Overall, I'm quite pleased with the investment result for 2025 of 337 million, which ended well above the 200 million guidance we started with at the beginning of the year. Even though we focus much more on the insurance service result than the investment result, it is clear that a positive investment outcome like the one we had in 2025 is a nice add-on to our distributions for the year. And now finally, please turn to slide 16 for the Outlook 425, initially stated January 21st. Our guidance includes a technical result excluding one-offs of 1.65 to 1.85 billion. The guidance reflects positive effects from our new strategy initiatives presented at the CMD in November last year. The cost ratio is expected to be unchanged at 17% in 26, and the combined ratio excluding one-offs result is expected to be 84.5 to 86.5. We expect an investment result of 200 million in 26, based on the current returns for the free portfolio and a zero result for the match portfolio. Consequently, group profit excluding other income and expenses is expected to be 1.85 to 2.05 billion before tax, excluding runoff gains for 26. As you may have noticed, this is a bit different from how we used to guide. We're now limiting ourselves to just one line with other income and expenses consisting of group costs, spend for education and development, and amortization of intangible assets. We guide at 0.5 billion net expenses for this single line below the line in 2026. And with this, I conclude our presentation and hand over the word to our moderator. Thank you.

Thank you very much. To ask a question, please press star followed by 1 on your telephone keypad now. If you change your mind, please press star followed by 2. Preparing to ask your question, please ensure your device is unmuted locally. Our first question comes from Matthias Nielsen from . Your line is open, Matthias. Please go ahead.

Thank you very much. Thank you very much and congratulations on a strong finish to the year. So if I may start by looking a bit into the year we have started now, if you maybe could share a few details on what we should expect in terms of top line development and especially related to how much pricing you have done already in January. I know one of your peers is saying the same in Norway, so maybe you could share a bit of details on that as well. And then also, in connection to this, like maybe a bit on claims inflation expectations for the year as well.

Yeah. Hi, Mattias. Andreas here. Try to talk you through that. We started November 24 of doing the repricing, which was mainly related to the uptick we had seen structurally in motor frequency. up until that point. And that has been sort of the main driver for the significant premium increases we've had running during the last year or so. But going into 26, we will expect that to dissipate. So we don't have the same sort of structural support from repricing anymore, logically so. Luckily also we have seen motor claims at least in terms of frequency moderate somewhat. And so even though we see some tendencies for spare parts still increasing and thereby also average claims, we don't see as we stand need for major structural increases in prices from motor anymore. So if we're looking at, just to give you a rough sort of indication, we would be thinking something along the lines one to two, sorry, two to 3% indexation for 26 on average across the different lines we have. And on top of that, we still expect to be able to take some market shares and maintain some of the momentum we've had in private lines. So a guidance of let's say, and it's not a guidance just to be clear, as you probably remember, we don't guide for top line. but let's say a rough indication where a starting point is around three and maybe with some, let's say, in some likelihood probably a bit above that, that's where we would imagine the group being.

Yeah, sorry. Sure, and is there any difference between, like, private, like, commercial and private lines on the pricing, like, going into 206? Sorry for the details.

No, no major differences, but we do still have, I would say, we're more sort of back to normal mode in both segments. We still maintain, for commercial lines, a focus on especially having the right price for the larger corporates. And we still, I would say, see some repricing needs within select lines. For instance, within larger workers' compensation, we have seen, but we've also been doing quite a bit of that already this year. So, but no major sort of differences there. And as I maybe also adhere to before, most of the market share we would expect to get would be as we've seen in private lines. And then I think you also asked a bit about claims and claims inflation. I sort of softly touched upon it within motor. The overall read is that we do see claims inflation, let's say, moderate, but we do, but as I mentioned before, for Molta at least, we're still a bit sort of, let's say, observant about the development there. But for now, we feel we're at a sort of stable development.

Thank you. And then maybe like a last question before I jump back in the queue. Q4 was obviously a quite benign quarter in terms of weather and how everything looked in Denmark during the quarter. How should we think about the start of 26? Is this on par with what you have in your normal assumption or is it slightly worse due to all the snow and cold weather that we have had in January so far? How should we think about what is actually a normal assumption for you?

Overall, Matthias, we would say we're more or less on par with what we would expect for January so far.

Thanks a lot.

Our next question comes from Asbjorn Mork from Danske Bank. Your line is open. Please go ahead.

Good morning. Thanks for taking my questions. If I may come back to the question, the previous question on the premium growth. If I take your mid-range of your guidance, so the 80 and a half on the combined ratio, and then I use your insurance of mid-range guidance, to sort of calculate backwards to see your premium growth assumptions. It seems to be more like in the tune of 2% for the growth for 26. Just wondering if there's something here, especially, I guess, on the corporate side, something we should be aware of that will continue to be a drag, pruning on the portfolio, because I guess with the price initiatives that you are, the indexation you are carrying through in private and with the continued growth in the private sector, I guess we should expect private lines to do apps above that in growth for 26.

Yeah, thank you, Ashwin. I'll start out and maybe Matt can help me out also. But I mean, I think I heard you say 2% implicit top line. I'm closer to 3%. And I also, between the combined and insurance search result factor, And I would say that you shouldn't read too much into that. I think that, as I said before, our overall expectation is something like two to three for indexation, and then a continued momentum, especially in private lines. So, a three as a starting point, and in all likelihood, maybe a bit more than that.

I didn't hear if you kind of put in normal runoffs into your calculation here. So then you get to a bit different level when you do that.

No, but I just mentioned it took your 85.5 mid-range and your 1750 insurance service result mid-range. So I guess that implies, say, an insurance margin of 14.5%. So 1750 divided by 14.5% gives me $12 billion and $17 billion in premiums.

The thing is, these calculations, they're very, very sensitive to what the combined ratio level you put in when you do the implicit calculation. So if you try to do the kind of the calculation on 83.5, which would be the case with a normal one of 2%, I think you would end at a bit different level. We get it to around 3%. But then again, remember, if we were to move the combined ratio just a little bit in the guidance, given that we are guiding in brackets of 0.5%, then you can actually get to, I mean, a quite different implicit premium growth level. So it's very sensitive. So I think listening to Andreas, it is a bit about starting at 3% and then we could have a, perhaps have a little plus to that. That is how we do it without guiding.

Okay. Fair enough. Then on your underlying claims ratio improvement, so the 300 basis points are discounted for the group. Then if I read your slide correctly, you say that it's primarily driven by the corporate business. I guess there's a few one-offs in Q4, at least kind of year-over-year comparison, a few one-offs on the corporate side. But if I do sort of the development in the underlying that you do report for the corporate business, It seems to be more in June of 2.5% underlying, but obviously that's not discounted. So, just wondering if we do sort of adjust for the various components, how do you see the underlying improvement in corporate in Q4, and how should we expect that to develop in 26, given that you continue to prune the portfolio?

Yeah, I can start and hopefully give some flavor to it. undiscounted basis and keep in mind that the one off we have is related almost entirely for corporate lines, the one relating to the discounting effect, which is from a model change this quarter regarding workers' compensation and therefore also almost entirely relevant for corporate lines. That means that on an undiscounted basis, we see a year-on-year improvement of 3.7 percentage points. And actually, because of the, just to add an extra factor, which is not in that number, we also have the indexation from legislation we mentioned in regards to the premium in commercial lines, where we had 15 million more premiums in Q4 last year than we actually, so to say, normally would have. because we had two quarters coming in for one quarter in Q4 with a premium regulation there. If you account for that also, then in the corporate lines, we would get even higher for the underlying year-on-year growth at least. Oh, sorry, yeah, change in underlying loss ratio. So I think in all actuality, we are quite happy with the improvements we see, but we Just back to your question, when we look at the broad lines, and that was true both of commercial and of private lines, motor has been the major factor which we have needed on a broad sense to do repricing for. So we would also expect for underlying loss rates in commercial that to start dissipating that momentum we've had from repricing. Going forward, and maybe that's a relevant starting point for that, I guess other people would be interested in this on the call. If we look at what do we expect for underlying loss ratios in 25, well, we may be doing it sort of simple terms. We have a net insurance service result improvement on a normalized basis of 150 million with the guidance we put forth. We have a cost ratio which is guided more or less at the same rate as before. So if you split that, we say at least two thirds of it would be coming roughly from from underlying loss ratios. And then we have a slight, also a positive impact from some growth on top of that. And looking, so looking at something stylized along the line for the full year of improvement of around 100 basis points in underlying loss ratios. And the factors there would be, we realize we do have some tailwind. We have a bit of synergy hangover, maybe a slight bit of pricing, especially maybe in the beginning of the year. And then so we could, that would add some support. And then actually we also have some improvements from our reinsurance coming in. So we're somewhere maybe let's say 50 to 75 basis points coming from that. And then we also have the initiatives will start to get effect from our improvements we're doing in the strategy, especially towards the end of the year. So in sort of rough indication would be something along the lines of 100 basis points for the year.

For the combined group.

And that was for the combined group, yes. Good question, yes. All right. For the combined group.

Our next question comes from Alessia Nagni from Barclays. Your line is open. Please go ahead.

Hi, morning. Thanks for taking my question. So I have three from my side. The first one is if you could provide a split of premium growth by price and volume for the group and, if possible, private and commercial. The second question is regarding the share buyback that you announced last week. So the 500 million recurring share buyback, should we look at it as the base? for next year, or should we consider it as recurring at 500? And then the last question, which is the more long-term strategic, is on the autonomous vehicles. What do you see and what do you expect to see in Denmark in the medium to long term? Thank you very much.

Yeah, thank you. I can start at least with starting with premiums. We sort of touched upon that earlier. If I heard you correctly, it would be regarding the 26 expectations for premiums. Or is it regarded to the Q4 we see, just to be clear?

Well, for the Q4, and then obviously, I mean, you already talked about.

Yeah. Thanks. Just for clarifying that. Well, we still, what we see in Q4 is that we have the continued momentum being very strong in private lines. We have just around, just below 10 percentage points year-on-year premium growth for private lines. So looking at that, we would say that we have something like three percentage points coming from indexation. Sorry, yeah, three percent from indexation. Then we have around roughly four percentage points coming from repricing, which is now, as I mentioned before, towards the end of that, but we still have some strong support from that. And then the net gain business, much of that coming from our banking partnerships, would be around three percentage points support for the premium growth. So that's sort of stylized rough levels for that. Then if you look at commercial lines, we have actually the headline is sort of negative for premiums. And I can try to do the same bridge for commercial lines. We would start with something around three percentage points coming from indexation, positive and then a positive support from also from repricing of around two percentage points. And then there's the one-off effect I mentioned earlier from workers' compensation premiums regulation last year, which would be a headwind of one percentage points. And then implicitly, you could say that something along the lines of five percentage points negative is from premiums going out due to the repricing strategy we continue to have coming from our strong focus on profitability, especially in the larger corporate segments where just one or two of the larger, let's say, customer engagement can add some volatility into our quarterly earnings. So there's nothing sort of out of the ordinary, but obviously it is a leap in the quarter here, but actually following this, the strategy we've had for some time now. So, and then I think just going into shortly, briefly recapping on what we expect for the next year, we would see most of the repricing we've been doing is now fully in the books. We don't have that much coming and we don't see the need for structural repricing anymore. And that means that with sort of an indication and again, not a guidance because we do not guide for top line growth We need to have flexibility to cater for the focus on profitability first. Then we would be talking something along a starting point of around 3%, such points where two to three coming from indexation and also with a support from our market shares being captured in private lines. So that would be what we expect for 26. Then you asked about the share buyback. Well, I think maybe, I think the best way to explain the 500 we have coming in, which we term sort of regarding the ordinary net earnings we've had this year, we have a payout of 98% for the year. And so coming from, so let's say the ordinary, our dividends and the buyback of 500 And the thinking we have is that we try to cater for a stable increase in dividends per share, something along the lines of 10% every year. That's also very closely linked to our earnings per share target for the coming year. So we like to see that come up stably, something along the lines of 10%. And when we did that this year, that meant that we ended with a total payout of 933 million. And then the rest is placed in an ordinary buyback. And this time we were able to pay out all of it, so to say, coming very close to a payout of 100. So the 500 is – that's how the 500 come around. And I think more or less you could say that that makes it – all else equal probably something along the lines of a rough starting point for where we would be next year. We would have more earnings in an expected, on an expected basis at least. And then we would need to cater for dividends to share also coming up a bit. So that's sort of how you should think about it. And then as I heard the last question.

I can take it, it was the report from from the U.S. on self-driven cars, as I understood it. We, of course, noticed the report. We know about the issue for a while. It's been discussed. It's also a matter of when will this happen in Europe, when will the legislation be in place and all that. For the moment being, we are quite confident that it will not have a huge effect or any effect. in this strategy period, but of course, we are very, very well aware of the issue and follow it quite closely.

Are you there?

Our next question comes from Martin Burke from SEB. Your line is open, Martin.

Please go ahead. Thank you so much. Just a couple of small questions from my side. I guess in relation to the jumbo share buyback you just announced, you also comment on reinsurance coverage. What has changed in that perspective? That would be my first question.

Yeah. Andreas here. We've had some, I would say, some tailwind in general on reinsurance in this pricing. So actually, as I mentioned before, we also, we do see some improvements in terms of like-for-like premiums. And on top of that, we've actually also been able to, especially, I'd say, or actually within our CAD program, we've been able to in this place and get better terms, meaning that the prepaid reinstatements or we have been able to achieve prepaid reinstatements for some of the higher lines in the programs where we have the severe losses. And that means that in actuality, our risk in a very severe catastrophe event has come down quite a bit. And that's what's the major factor within the insurance risk driving down the SPR this quarter. So I hope that made sense.

So if you take the, let's call it, let's call this extra half a billion a top-up, right? So if you take that top-up, how does that split between reduced market risk, better insurance coverage, and a higher profit margin?

If you look at maybe looking in a bit of a different way, if we look at the SCR part of the capital change coming from the quarter from Q3, I'm just looking just a minute, Martin, just to find it here. We have an SDR now of 1.9 billion, roughly, 1914 million, and we're coming down from 2085. So that's a total decrease in SDR of 172. If you look at that number, roughly around 200 is coming from the reinsurance, including latest exposure updates. So that is sort of the main driver behind our total decrease. We have a few other moving parts in the other parts of the SCR, but that is the major driver of the SCR coming down. And then on top of that, you also have to keep in mind that if you look at the – so On top of that, you also have that the own funds sees quite a favorable movement, especially from the development in our profit margin from Q3 to Q4. That is more or less as would be expected in a normal cycle over the year, but that's sort of what – those are the major explanations for our change in solvency coverage from Q3 to Q4.

I guess over the past many years, Alan Brandt has been sort of a story of excess capital distributions, and you have managed to, over and over again, to find sort of new top-ups to your ordinary distributions. But with your sort of CFO eyes and layers, do you think that Alan Brandt is now a fully optimized company in terms of the solvency ratio, or do you still see that there's more belly fat to dig into?

I think we are quite optimized now. We have a full internal model. That was the major change in this strategy period. We got that on the, sorry, in 2025. In the last strategy period, we just got that through. I think further optimization could at some point be relevant within the as I just mentioned, but again, that would be very dependent on us seeing a continued general improvement of the market conditions. So I'm not saying it's ruled out, but we have already gotten quite, I would say, good benefits there. But then I would mention that the strong driver between or behind the favorable overall solvency regime or capital requirements for non-life P&T companies is that more or less when you have internal models, the first field in your defense is the earnings you structurally make. And as we expect to structurally make more money in the insurance service result in coming years, that would also factor into lower solvency.

Okay. All right. Very clear. And then perhaps just a last question from my side. Could you please share a few words in the arbitration case?

Yeah, I can take that. It was a case that Gaut filled here in the beginning of 2026, and of course, just to be clear, we dispute the case, and it regards the principle applied for valuation of divestment and how that was in line with our historical principles of assessing assets and liabilities. These principles are fully in line with how we have made the financial accounts, and it's been reviewed by our external accountants. So I actually – we actually sincerely doubt that this case will have any significant financial impact for Google.

What do you think the timeline is?

Normally, the timeline for these arbitration cases are, I would say, one to two years.

Okay.

All right. Thank you. Thanks. Our next question is a follow-up question from Matthias Nielsen from . Please go ahead.

Thank you very much. Just a quick follow-up, so it's not because it's a major one, but it's also the first time that we meet after your CMD and your new strategy, so I thought it would also be interesting to hear, like, what is the pushback you get from the organization on your strategy? Are people in general happy? Are some of them concerned about how they need to make more money and they need to be a bit more aggressive on pricing and so on? Like, what is the pushback you're getting from insulin? I think that could be interesting to hear, given that it's the first time after you launched it.

It's actually a very good question, Mathias. We put quite an effort in starting with having the management team, full management team on board when we did the strategy, of course, together with our board. That means a lot of people were involved in creating the strategy, and, of course, that gives us followers. So that was one thing. And then the time after, two months had passed, and we had a – Just an example, we had a big management conference two weeks ago where we put additional efforts into discussing and finding out how to proceed with the strategy. I would say the follow-up for the organization is very good, and it's good to the reason that now we will work even more with our processes, with our thinking about how to improve the work with policies, with setting prices and all that. But the very best thing is that we all agree that now is time, even more time, to be there for our customers. It should be easy to be customers. It should be easy to write insurance contracts, but also to fill in claims and all that. So on that note, it's taken very positively for our people.

Thank you very much. That was all from my side.

We currently have no further questions, so I'd like to hand back to Rasmus for some closing remarks.

Yeah, and as usual, thank you very much for participating, and thank you for your questions. Thank you.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines.