Alm Brand A/S

Hello, everyone. Thank you for joining us and welcome to the AlmBrand second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you'd like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. I will now hand the conference over to Andreas Ruben Madsen, CEO at AlmBrand. Please go ahead.

Good morning. Thank you for joining us on our conference call. I'm Andreas Ruben Madsen, CEO of Anminni Brand Group. As usual, I have with me the head of our RR team, Mads Thinggaard. This morning, we published our interim report for the second quarter of 26. Now I'll walk through the presentation of our results. Let's now turn to slide two and the key highlights for my first full quarter as CEO. Overall, I'm very pleased with the financial performance in Q2. We delivered a strong underlying improvement in the claims ratio, which improved by 200 basis points year-on-year. At the same time, results in Q2 were negatively impacted by a 700 million one-off reserve strengthening following the Supreme Court ruling on workers' compensation. In personal lines, growth slowed a bit in the quarter as expected due to the year-on-year effects from last year's repricing fading. However, a growth rate of above 5% during Q2 still indicates that we continue to gain market shares. In commercial lines, we experienced a decline in the top line, reflecting our actions to improve profitability in an increasingly soft market for workers' compensation while seeking to reduce volatility at the same time. 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 1.0% year on year. Importantly, we improved the underlying claims ratio in commercial lines by 2.3 percentage points year on year. So overall, this reflects continued progress on profitability. And now I'd like you to turn to slide three for our financial highlights. In the table to the right, the middle column reflects our Q2 financials excluding the impact from the Supreme Court ruling on workers' compensation. Insurance revenue grew to 3.0 billion in the quarter. The adjusted insurance service result was 648 million, up from 520 million in Q2 last year. And this represents our highest insurance service result ever. We continue the strong underlying trend from Q1 with a significant year-on-year improvement in underlying claims. Weather related claims were higher than we would normally expect for Q2, while major claims were below normal levels. Runoff gains at a level of around 3.5 percentage points were almost double of the normally expected level. Investment income was strong in Q2 with a net gain of 215 million, related to the rebound in the market impacting equities as well as bonds in a positive direction. Finally, other income and expenses are significantly lower than last year. Primarily, we no longer have integration costs related to Kodan following the completion of the integration. And now let's turn to slide five. As I mentioned before, the group delivered the highest insurance service result ever in Q2, adjusted for the Supreme Court ruling on workers' compensation. A significant improvement was driven by strong underlying improvements as well as runoff gains when adjusting for the one-off charge. In personal lines, the insurance service result increased year-on-year by 114 million to 400 million. This was driven by continued growth, underlying improvements and runoff gains. The cost ratio increased marginally to 17.2%. In commercial lines, the adjusted insurance service result was 248 million up from 234 million last year. The increase was driven by a combination of significant underlying improvements, higher ordinary runoff gains than Q2 last year, and a 30 basis points drop in the cost ratio. On the other hand, weather claims and major claims were above the level in Q2 last year, while the decline in premiums had only a limited impact on earnings. Please turn to slide six. Insurance revenue grew by 1.7% in the quarter compared to 2.5% last quarter, reflecting effects from last year's repricing fading and an increasingly soft market for workers' compensation. In personal lines, we continue to take market share while the effects of repricing are fading as expected. Therefore, I am quite pleased that we delivered a growth rate of 5.2% year-on-year. In commercial lines, premiums declined by 2.3%. This points year and year, reflecting our continued efforts with improving profitability in the soft market for workers' compensation, as well as reducing volatility among our larger customers. Adjusted for workers' compensation and industrial customers, the commercial portfolio grew at a muted level of 1.0% in Q2. The growth of 1% in the broad commercial book is too low in my view. It calls for a bit of management attention, especially on the SME side. And now moving to slide seven and the claims ratio. The Q2 claims ratio improved by nearly four percentage points year and year, adjusted for the Supreme Court ruling. This reflects strong underlying improvements and relatively high ordinary runoff gains, partly offset by elevated weather claims following the storm Dave in April. In addition, the year-on-year comparison benefited from the non-recurrence of reinstatement premiums recognized in Q2 2025. The underlying claims ratio was 200 basis points lower year-on-year, driven by our profitability initiatives. The underlying improvements were particularly strong in commercial lines, with 230 basis points improvements in underlying claims year-on-year, while personal lines improved by 190 basis points. Overall, the discounting effect as flat year-on-year at 2.2 percentage points, which may come as a surprise to some of you. This reflects model changes within workers' compensation that offset the positive impact from the higher interest rates in Q2 this year compared to last year. Looking ahead, I would expect the discounting to be at a level of about 2.2% with the current level of interest rates. And now, please turn to slide eight. The combined ratio in personal lines improved to 75.5% from 81.6% last year. This was driven by lower underlying claims and runoff gains. On the other side, the cost ratio increased slightly to 17.2% in Q2. Premium growth remained strong at 5.2% despite the fading effects from repricing. Please turn to slide 9 for commercial lines. In commercial lines, we observed a reduction in the combined ratio to 81.8% in Q2 26 adjusted for the Supreme Court ruling compared to 83.2% in Q2 last year. The improvement was driven by significant improved underlying claims and the reinstatement fee for reinsurance in Q2 25 not being repeated. This was partly offset by somewhat higher large and weather related claims, while the cost ratio decreased by 30 basis points in a year, providing additional support. Now let's move to slide 11 and the investment result. You may have noticed that we began disclosing returns on our free portfolio in Q1 this year. This was in response to requests from many of you. In Q2, the investment result was a gain of 250 million, primarily driven by the free portfolio, which contributed 209 million, especially with equities benefiting from the general rebound in the market following the geopolitical turmoil experienced during Q1. Let me also briefly touch on the tier two issuance in June. We issued 900 million tier two bonds at a spread of 140 basis points, slightly below the spread on the maturing tier two, the part not already tendered, 366 million will have first call in October this year. Finally, let's turn to slide 13 and our updated guidance. We're revising our guidance for the insurance service result in 26 upwards by 100 million to 1.2 to 1.4 billion, excluding runoff gains in second half of 26. This reflects the strong underlying performance in Q2 as well as one-off gains. Looking ahead, we continue to expect one-off gains of around 2%. The new guidance corresponds to 1.9 to 2.1 in insurance service result adjusted for the 700 million one-off charge related to the Supreme Court ruling on workers' compensation. We continue to expect a cost ratio of around 17% for 26. The combined ratio excluding the runoff result in H2 is expected to be 88 to 90, corresponding to 82.5 to 84.5 when adjusted for the impact of the Supreme Court ruling and improvement of 100 basis points, following the strong result we had in Q2. As a result, guidance for profit before other income and expenses is upgraded by 200 million to 1.45 to 1.65 billion, or 2.15 to 2.35 billion adjusted for the Supreme Court ruling. Other income and expenses remain unchanged and guided at an expense of 0.5 billion for 26. And with this, I conclude our presentation and hand over the word to our moderator. Thank you.

Thank you. We will now begin the question and answer session. Please limit yourself to a couple of questions. If you'd like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking your question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Matthias Nielsen with Nordea. Your line is open.