Alm Brand A/S

Ladies and gentlemen, thank you for joining us and welcome to the Ombrant First Quarter 2026 Learning School. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand. I will now hand the conference over to Andreas Rubin Madsen, CEO at Ombrant. Please go ahead.

Good morning and thank you for joining us on our conference call. I'm Andreas Ruben Madsen, the CEO of IndieBank Group since March 1st this year, and as usual I have with me our head of IRR, Mads Tindall. This morning we published our interim report for the first quarter of 26, and I will now walk you through the presentation of our results. Let's now look at the highlights from my first quarter as CEO. Please turn to slide 2 for some of the headlines regarding our business in the first months of the year. I'm pleased with the overall financial performance in the very satisfactory Q1 with strong underlying improvement in the claims ratio. Growth in personal lines faded somewhat in Q1 26 from a double digit level in Q4 25. This was as expected due to the year on year effects from last year's repricing fading out. Growth of over 6% during Q1 in private line does however indicate that we are continuing to take market shares in this market. In commercial lines, we experienced a decline in the top-line revenue as a result of our efforts to improve profitability and reduce volatility in an increasingly soft market for workers' compensation. Adjusted for the areas we work on in this respect, which is workers' compensation and industrial customers, the commercial portfolio reflected a premium growth of 2% year-on-year. We succeeded with an improvement in the undiscounted underlying claims ratio in commercial lines of 2.6%, percentage points year-on-year, while personal lines are more impacted by ice and roads conditions in Q1, but still delivering an improvement of 1.3 percentage points in underlying claims. And now I would like to turn to slide three for our financial highlights. Insurance revenue grew to above 2.9 billion in the quarter. The insurance service result was 496 million compared to 337 million in Q1 last year. We view this as a good start to the year, especially considering the strong underlying development. Weather-related claims were much lower than we would normally expect for Q1, while I would characterize large claims as being on a normal level in Q1. Investment income in Q1 was a loss of 43 million, which related to geopolitical turmoil, impact in equities, as well as bond returns in a negative direction. It's worth remembering that we as a company are set to benefit from increasing integration rates looking ahead. Other incoming expenses are significantly lower compared to last year, primarily due to the absence of integration costs related to Codon, reflecting the completion of the integration process. And now let's move on to slide five. The group made a technical result of 496 million in the quarter, up from 337 million last year. The significant improvement was driven by underlying improvements as well as higher run-off gains. In personal lines, year-on-year, we had an improvement in the insurance service result of 55 million to now 246 million. This was due to underlying improvements, lower ratios for weather, and large gains as well as continued growth. the insurance service results on commercial lines was 250 million against 146 million last year, driven by a combination of significant underlying improvement and much higher run-up gains than Q1 last year. Please turn to slide 6. Insurance revenue grew 2.5% in the quarter compared to 4.6% last quarter as a result of fading effects from last year's repricing and an increasingly soft market for workers' compensation. In personal lines, we're still taking market share while the effects of repricing are fading as expected. Therefore, I'm quite pleased with the growth in personal lines of 6.4 percentage points year on year. In commercial lines, we're seeing a decline in premiums of 1.8% due to our work with improving profitability and reducing volatility and increasing the soft market for workers' comp. Adjusted for workers' compensation and industrial customers, commercial portfolio reflected a premium growth of 2%, which is acceptable. And now moving on to slide 7 with the claims ratio. The Q1 claims ratio was down 480 basis points year-on-year in a quarter with lower weather claims than the normal Q1, a higher level of runoff gains, and a strong underlying improvement. The underlying claims ratio was 160 basis points lower year-on-year proven by profitability initiatives, 170 basis points on an undiscounted basis. The underlying improvements, especially visible in commercial lines, with a 260 basis point improvement in underlying claims year-on-year, while personal lines still positive, were impacted more negatively by icy road conditions. Personal lines showed an improvement in undiscounted underlying claims of 120 basis points year-on-year. And now please turn to slide 8. The combined ratio in personal lines improved to 84.5% from 87.1% last year due to lower underlying claims, decline in the cost ratio, and lower weather and large claims. Premium growth is still on a high level of 6.4%, despite fading effects from repricing. Please turn to slide 9 for commercial lines. In commercial lines, we observed a significant reduction in the combined ratio to 81.3 to 1.26%, down from 89.3 in 2021-25. This improvement was supported by higher runoff gains of around 600 basis points year-in-year, largely driven by cargo and property related claims. Additionally, lower underlying claims contributed to a further 240 basis point reduction year-in-year. The cost ratio was also decreased by 50 basis points year-in-year in commercial lines, providing additional support Although the last claims rose to 11.3 percentage points in Q1, slightly above the normal level of 10% typically expected for commercial lines. And now, move on to slide 11 for the investment results. You may notice that we, as of this quarter, have begun disclosing returns on our free portfolio in response to requests from many of you. The investment result in Q1 showed a loss of 43 million in Q1 with 35 million of this loss stemming from the free portfolio, which was adversely affected by a decline in share prices. Additionally, our bond portfolio was impacted by rising interest rates and widening credit spreads. As you'll be aware, this was driven by the geopolitical turmoil experienced during Q1. I'd also like to take a moment to address our fixed income line, which amounts to 0.9 billion DKK, with approximately half that number placed in private debt and asset class, which has received some attention recently. I'd like to highlight that this exposure is limited to a well-diversified portfolio of loans to European companies. And now, finally, please turn to slide 13. We are revising our guidance for the insurance service result in 26 upwards by 150 million to 1.8 to 2.0 billion excluding run-up gains from Q2 to Q4 of 2026. This follows a strong underlying development in Q1 as well as a high level of runoff gains. Continue to expect around 2% in runoff gains looking ahead. The cost ratio is still expected to be at around 17% for 2026, while the combined ratio excluding the runoff result in Q2 to Q4 is expected to be 83.5 to 85.5, an improvement of 100 base points. Our guidance for the investment result is lowered by 50 million, to 150 million in 26 following the loss in Q1. This adjustment also reflects Enly's rebound in Q2 so far. Antiquity guidance for profit before other income and expenses is upgraded by 100 million to 1.95 to 2.15 billion. Other income and expenses remain unchanged and guided at an expense of half a billion for 2026. And with this, I conclude our presentation and hand over the word to our moderator. Thank you.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you'd like to ask a question, please press star one on your telephone keypad to raise your hand. To withdraw your question, please press star one again. Please stand by while we compile the Q&A roster. Your first question comes from Asbjorn Moore from Danske Bank. Your line is now open. Please go ahead.

Yes. Good morning. Thanks for taking my questions. First question would be on something that is not part of the report, but the Supreme Court ruling that we will get in an hour. I'm just wondering, since you don't mention it as a contingent liability in your report, you did mention in the annual report the dispute you had with GAAP. So, just wondering why you don't mention this as a contingent liability. You don't see it as a contingent liability or you don't see it as a material impact on your reserves. So, how should we look at sort of the potential outcome here versus the $7 billion of claims reserves you have in focus compensation? Since we will get the ruling after this call, most likely it will be good to get a bit of flavor this case. Thank you.

Yeah, thank you, Adrian. Well, I mean, to answer your question, we see nothing new in this regard compared to the situation when we did our annual report not that many months ago. We have a general statement in our annual report regarding you know, the general exposure we will always have as a group to these types of lawsuits and disputes, and we don't see no reason to sort of push that going into, as we approach the ruling today. And then to round off on that, I would say, as we also say, I think, let us now just wait. I think we'll get clarity very soon, and obviously we will aim to provide clarity as soon as we can, and are following it closely up to the ruling coming here as well.

Okay, fair enough. But if I then may, I mean, you paid a dividend a little more than two weeks ago, and I guess we're still waiting for you to initiate the buyback. Is there any sort of link between, first of all, the postponed buyback, secondly, your dividend payment, your decision to pay a dividend, and what you see as sort of a scenario and potential outcomes of this case?

In general, I would say, as I think you're aware, we have a very comfortable solvency situation. We have a robust solvency situation. We're not postponing any buyback. We communicated that we were expecting to start it in Q2. We are now only one month into that. That being said, I think there's some good reason to... We first of all had a Q1, a general Q1 proposal, financial statements we'd like to have to provide clarity for, and then we also have the Supreme Court ruling coming very soon. But we're still on within the overall timeframe that we communicated, being sometime during 2-2.

Okay, fair enough. Then if I may, on your actual numbers and the underlying claims ratio improvement in Q1 to 170 basis points, somewhat above the guidance that you've given for the full year and your communication on the back end during the year. How much of this, also given that you raised your guidance by 150, which is, to a large extent, seems to be low quality driven in Q1. So how recurring do you see this underlying improvement? How much has been sarcastic and basically luck in Q1?

Yeah, but I think, first of all, I would confirm that you are right that most of our upgrade comes from weather and run-offs this time around, but does, however, provide a good solid bottom line in Q1 nonetheless. I think to give you some flavor of it, I think something just above a percentage point, maybe slightly above there, is probably more what I would consider a structural advantage level for now. We did have some tailwind within certain segments, seeing both a favorable development in private lines and also in commercial lines, especially in commercial lines. But I would say probably you shouldn't expect quite as much on a growing basis for now.

But for the full year, is it fair to assume that we'll be above the 100 basis points given the good start of the year?

Yeah, that would be our – slightly above would be our sort of – what we're aiming for.

Okay, excellent.

Thank you so much. Your next question comes in the line of Martin Berg with SEB. Your line is now open. Please go ahead.

Thank you so much. Just following up on the questions in regards to the underlying improvements coming through, I guess you've headed the call, you communicated them to be back and loaded, and now they're suddenly front and loaded. What has happened and why is this only just above the 100 basis points for the full year?

Yeah, I mean, I think, as I think we commented on previously, that you will see some fluctuations from quarter to quarter, and most of the improvements you're seeing are definitely structural, created by some of the effects we've been mentioning previously, being, to highlight them, I would say, a bit of tailwind from synergy overhang here in Q1. We also have a favorable impact from reinsurance, maybe around, let's say, 50 basis points for the group, most of that being in commercial lines. And then I also think it's fair to say that we have some support also in Q1 coming from our overall profitability list within commercial lines. Whereas you may have noticed also we did see some workers' comp and industrial customers leave. So those are some of the things staying in. But we also have, to be fair, some stochastic tailwind on average, which we would not expect to see every quarter from now on.

And Martin, if I may ask you, what you actually said ahead of the one was that the strategy, the effect of the strategy initiative would be back-end loaded, but in the start of the year, we would have support from still ELSA, from the synergies we implemented last year, from the integration of related systems. that have a bit of effect still here in the start of the year, as well as the effects from the massive new prices last year, kicking in mostly in the start of the year. So we were actually pointing to kind of a roof increase in the period of the year, but with different sources.

Okay. All right. Just a fun question from my side. In terms of the customer dividend, I guess you have a... shed some more light on it over the course of Q1. What has the response been so far? And what kind of feedback do you get on it? And what are sort of the ambitions with this customer dividend or this loyalty scheme?

Yeah, thank you very much. I think we're happy to see that we're getting the type of feedback that many of our customers see as positive. We feel it may not be unique for us compared to some of the other market players but we feel that it is definitely new for us that we have the ability now because our main owner has gotten the financial strength to support us in this meaningful way and we feel this is a good way to also to benefit especially our loyal customers, which have been with us for many years, which have a number of products with us. Also the customers we would be aiming most to retain. So we're looking very much forward to seeing the effects of this.

Your next question comes from the line of Mathias Nielsen from Nordia. Your line is now open. Please go ahead.

Thanks a lot and thanks for taking my questions as well. So the first one I have is a bit on the revenue growth, especially for the personal lines, like the year-to-year growth you see in Q1. Do you see that as a good indication of where we should expect growth to be in the coming quarter? Or do we still expect some headwind from pricing or other items that could indicate that growth should come down through the year? How should we think about that? If you could give a bit of guidance on that as the first question, that would be super nice.

Yeah, thanks Mathias. Well, I think, you know, we're very happy to see a continued growth in personal lines. Sort of rough indications we would consider We would consider half of the growth around three percentage points coming from actual new customers being brought continuously to the group, much of that from our strong partnerships with the banks. And then now we are in the beginning of Q1, as Mads also mentioned. So you might see a slight tailwind in the beginning still from the remaining parts of the pre-pricing fading, even though we are starting to come down now, as you've seen compared to last quarter. So I think, you know, an indication for the full year could be something for personal lines around and we have the indexation and around two and then maybe let's say two or three coming from market shares and some of that.

Thank you. That was very clear. And then if we move to like the workers' compensation segment where you now say you're you lose out on a bit of, on a few customers. Like maybe you could say a bit more about the probability of those lost contracts, like where they are in part with the group combined ratio or the return on capital allocated. Maybe you could say something there on what's going on in that segment at the moment.

Yeah, I'm happy to do that. I think many of you will recall that also from previous discussions that workers' compensation, both for us and for our peers, has historically been a product which from time to time, and recently so, has struggled a bit in terms of overall profitability. We've had sort of a conviction that we've been for some time quite skeptical around, especially stand-alone workers' compensation. We feel it's typically... create a better balance for us if we can do it in combination with other products where we typically, on average, would have a higher margin and earnings. And what's happened this time, I would say, is that we have seen a development where, for reasons not completely known to us, we have certain players being willing to underwrite workers' compensation levels that we would see as not profitable. And we have not been willing to do so this way around either. So most of the reduction would be from standalone customers and leaning towards the larger segments where we've been the most skeptical. And this is not a new thing for us, as I mentioned. I think you would recall that I have mentioned this in the past, but we see the effect now in If you want also, because we, as you also may recall, we do have a large part of our commercial portfolio turning on 1.1.

So just to clarify a bit of that, so like, first you assume that the combined ratio and the return on capital has not been fantastic on those people that are leaving Avram at the moment. Quite the contrary, so it's improving the possibilities, despite that the revenue goes a bit down.

That is right, that's the way we see it, or else in general we wouldn't have that approach, but we do not see this as something that's really adding meaningful margins to us, and also from a capital standpoint, this is not the best segment to be in.

Thank you. If I may, like, do this last first question, then I'll jump back in the queue. On inflation, like, what are you seeing out there at the moment? Like, there's a lot of stories out there on oil prices. And what else? What are you seeing? And have you already started to adjust some prices? Or how long can you wait before you start to adjust prices? Maybe you have something you could say there. Then I'll jump back in the queue.

Of course, we're following the situation closely. Also, I think we might be pointing at, especially those we're seeing in energy prices after the situation with the war in the Middle East, which may also start to translate into certain material prices. I think as we see it for now, we do not see this as something that puts us in a position where we need to do repricing on any meaningful large scale. So we don't see that for now. But that being said, obviously, we're following it closely. And if this turns into be something that is very prolonged, then we'll have to re-evaluate continuously to see where we go. But for now, we don't see that impact there.

Thanks a lot. That was very clear.

Your next question comes from the line of Simon Bruun with ABG. The line is now open. Please go ahead.

Yes, thank you, guys. Just a quick question and basically a follow-up on Mattias' question on the commercial line. Just in terms of the premium growth, how should we think of it? I appreciate that you write in the report that there's an ongoing initiative in workers' comp. apply to industrial as well meaning that this is a continued sort of pruning process that will continue to impact the commercial premium growth through the year or should that turn sort of positive on a quarter on quarter basis anytime soon thank you yeah like i can start by maybe giving some some rough indications of our decomposition we have 1.8 percentage points overall reduction

I would put indexation at around 2%. Then we also would have a slight tailwind from some of the repricing fading out last year that could come to let's say around half a percent. And then the initiatives or at least the effects of our renewal within especially workers' compensation and certain industrial clients would account for 3.5% in reduction of premiums. And if you look at that effect, the last one, it's something that we would see continue through the year. Mechanically, we would probably see a slight fade towards the end if you look at it on a relative basis to last year. But I think in overall statement, it is something that will impact the group growth for the entire year. But if you put it sort of up, if you go in very high sort of numbers, you might argue that If you look at personal lines, we still see some positive market intake of at least 4% on top of indexation and repricing. And on the other hand, you have on commercial lines, we have the opposite effect coming from the effects of this pruning, so to say.

Okay, super helpful. Thank you. Your next question comes from the line of Judith Shikori with Autonomous Research. Your line is now open. Please go ahead.

Thank you for taking my question. My first question is actually a clarification on the comments of commercial lines. I mean, the thing that, you know, you started this repricing and portfolio pruning action recently, Is that going to be like a multi-adjustment process, or is that just an impact we should consider just to be here? That's my first question. And secondly, sorry, go ahead, please. Maybe start with that, and I'm happy to take a second one.

Well, I think, Ulrich, if you go back in a slightly longer perspective than just recent quarters, I think this has been sort of a core part of our strategy and narrative for a long time. If you go back to the CMD, you also see our voiceover of what segments we sort of are most focused on growth and within commercial lines, that would be agriculture and the sort of larger part of SME, the small to medium sized. We've always stated that we don't guide growth and that we need to be able to walk away from unprofitable business. So I don't think this is a new thing for us, but I would say that to be fair, I think we couldn't have fully sort of foreseen what the market would be like in workers' compensation. And it's definitely not become better during the last year. It's gone worse. It's become even more soft. And so we wouldn't maybe fully have predicted this. How it will be next renewal for the major parts turning in the end of the year, we'll have to see. But that's sort of the situation. Now we are where we are.

Alright, thank you very much. And my second question unfortunately is on the upcoming ruling on workers' comp. Look, you know, in the event of an adverse ruling, we only have some official estimates from the Ministry of Employment. I was wondering, I mean, you must have already reviewed your own book, past cases, etc. I mean, how swiftly will you be able to come out and and give us your best estimate of what the cost is likely to be. Is that going to be within a day, or is that going to take weeks or months?

Well, I think, just to restate it, now we will have to see what the Supreme Court ruling will be. But as you adhere to, obviously we're prepared for what may come, and depending on how clear the ruling is, we'll have to see. But I can promise you guys that we will do our utmost to provide clarity as soon as possible.

All right. Thank you very much.

There are no further questions at this time. I will now turn the call back to Andreas Ruben Madsen for closing remarks.

Yeah. Thanks for joining today and have a good day.

This concludes today's call. Thank you for attending. You may now disconnect.