Alm Brand A/S

Hello, everyone. Thank you for joining us and welcome to the OMBRAND Third Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press Start 1 to raise your hand. To withdraw your question, press Start 1 again. I will now hand the conference over to Andreas Ruben Madsen, CEO at OMBRAND. Please go ahead.

Good morning, and thank you for joining us on our conference call. I'm Andreas Ruben Madsen, the CEO of Enmilde Brandt, and as usual, I have with me the head of our IR team, Mads Thinggaard. This morning, we published our interim report for the third quarter of 26, and I will now walk you through the presentation of the results. Please turn to slide two. Overall, I'm quite pleased with the financial performance in Q3. We delivered the highest insurance service results to date, which is driven by lower weather-related and major claims, as well as run-off gains. We report an overall premium growth of 1.6%, mainly driven by personal lines, which recorded a growth of 4.7%. The growth slowed slightly in Q3, as expected, as a result of last year's repricing fading. A growth rate of almost 5% for private lines, does however still indicate that we continue to gain market shares from strong bank partnerships as the key driver. In commercial lines, we reported a decline in the top line, reflecting our actions to improve profitability and reduce volatility at the same time. Adjusted for the workers' compensation and industrial customers, the commercial portfolio reflected a premium growth of 2.7% year on year, indicating a satisfactory growth in our focus area. Insurance operating expenses increased slightly during the quarter bringing the expense ratio up to 16.1%. The movement reflects normal fluctuations over the quarters. Today we announced a FTE reduction of 85 consisting of 55 redundancies and 30 discontinued positions. We thus continue to focus on reducing our cost base and building a more efficient group. The underlying claims ratio improved by 70 basis points year-on-year, whereas personal lines delivered an underlying improvement of 0.8 percentage points and commercial lines reported an improvement of 0.5. The improvement was notably lower than in H1, mainly due to stochastic effects. Additionally, the increased coverage for workers' compensation following the ruling represented a 40 basis point headwind, while underlying claims Improved by 130 basis points in the first nine months of 26, supported by favorable stochastic effects. We should expect a bit lower improvement for the full year, assuming a structural improvement in Q4 of 50 to 100 basis points. Turning now to slide three, let me take you through the financial highlights. Insurance revenue grew slightly, leading to an overall growth of 1.6% year-on-year, while the insurance service result amounted to 755 million, which is our highest result to date. The insurance service result was almost entirely driven by very low levels of weather and major claims, as well as high runoff gains. Investments amounted to a loss of 76 million in the quarter, primarily driven by rising interest rates. Finally, Other income and expenses are significantly lower than last year as we no longer have integration costs related to Kodam following the completion of the integration. And now please turn to slide five. As I mentioned before, the group delivered the highest insurance service result to date. The significant improvement was driven by lower level of major and weather claims as well as higher runoff gains and an improved underlying claims ratio. In personal lines, the insurance service result increased by 90 million year-on-year to 360 million. The strong performance was mainly driven by a significantly lower level of weather claims, which improved by 3.3 percentage points year-on-year, supported by lower major claims and continued improvements in the underlying business. The cost ratio increased slightly to 17.0 in Q3 2026. In commercial lines, the insurance search result increased by 130 million year-on-year to 395 million. The strong performance was mainly driven by significantly lower major claims, improving by 6.2 percentage points year-on-year, and higher runoff gains. This was partly offset by an adverse comparison for the risk adjustment, as Q3 2025 benefited from the one-off positive effect, related to the expansion of the partial internal model to include CODEM activities. The expense ratio went up slightly by 0.2 percentage points against Q3 last year. Turning now to slide 6 on insurance revenue. Insurance revenue grew by 1.6% in the quarter almost unchanged compared to 1.7% last quarter. In personal lines, we continue to gain market share, while the impact of repricing is fading as expected. As such, growth of 4.7% is seen as a satisfactory outcome, primarily driven by customer inflows and retention in our bank partnerships. During the quarter, we were also pleased that AL Sudbank renewed its partnership with a mini-bank group, reaffirming the strength of our bank assurance proposition. In commercial lines, we reported a decline in premiums of 1.8%, Slightly improved versus a decline of 2.3% last year. Our efforts continue to focus on improving profitability as well as reducing volatility. Adjusted for the workers, compensation and industrial customers, the commercial portfolio reflected a premium growth of 2.7%, which I view as satisfactory. Moving on to slide 7 and the claims ratio. The Q3 claims ratio improved by a very satisfactory 7.2 percentage points year-on-year, reflecting lower major and weather-related claims as well as strong runoff gains. The improvement was partly offset by a 1.9 percentage point deterioration in the risk adjustment, as Q3-25 benefited from a one-off effect related to the before-mentioned expansion of the partial internal model to include cold-end insurance activities. The underlying claims ratio improved by 70 basis points year-on-year, reflecting the positive impact of our profitability initiatives, including strategic initiatives beginning to take effect. This was partly offset by stochastic headwinds and the workers' compensation ruling, for which the implications for the current year have now become clearer. Commercial lines improved by 50 basis points year-on-year, while personal lines improved to 80 basis points. The discounting effect contributed 20 basis points year-on-year driven by higher interest rates, although this was partly offset by the workers' compensation model change introduced in Q4-25. And now please turn to slide 8 on personal lines. The combined ratio in personal lines improved to 78.3 from 83.0 in Q3 last year. This was primarily driven by lower levels of major and weather-related claims, as well as an 80 basis point improvement in the underlying claims ratio year-on-year, driven by the strategic initiatives kicking in, but also impacted by a stochastically benign Q3 last year. On the other hand, the cost ratio increased slightly to 17.0 in Q3. Premium growth was 4.7%, despite the gradually fading impact of repricing. Please turn to slide 9, covering commercial lines. Commercial lines delivered a strong Q3, with a combined ratio improving to 71.7 from 81.3 in the same period last year. This development was supported by runoff gains of 7.5 percentage points, primarily driven by workers' compensation and property. Major claims were also significantly lower, amounting to 5.1%, compared with 11.3% in Q3 last year. Despite the impact from the workers' compensation ruling and the stochastically benign Q3 last year, the underlying claims ratio improved by 50 basis points year-on-year, reflecting the positive effects of our profitability-enhancing measures starting to take effect as well as lower reinsurance costs. The cost ratio increased slightly compared with last year, mainly reflecting normal quarterly fluctuations. And now let's move to slide 11 for the investment results. In Q3, the overall investment result was a loss of 76 million, primarily driven by the free portfolio where bonds led to a loss of 34 million, primarily as a consequence of rising interest rates. The group's investment portfolio remains well diversified with a low risk profile. Finally, let's turn to slide 13 for our updated guidance. On October 5th, we upgraded Our 26 outlook and raised our guidance for the insurance services sold by 250 million to 1.5 to 1.6 billion, excluding runoff gains in Q4 26 from the previous range of 1.2 to 1.4 billion. The upgrade reflects lower levels of major claims and weather related claims than previously expected, as well as runoff gains. We continue to expect a cost ratio of around 17% for 2026. Excluding the runoff result in Q4, the combined ratio is now expected to be in the range of 86.5 to 87.5 adjusted for the impact of the Supreme Court ruling. This corresponds to a combined ratio of 81 to 82. In addition, we reduced our guidance for the investment result by 100 million to 150 million for 26, reflecting the increase in interest rates. As a result, our guidance for profit before other income and expenses was increased by 150 million, to 1.65 to 1.75 billion. Guidance for other income and expenses is down by 50 million to an expense of 0.55 billion for 2026. The increase is due to one-off costs related to the FTE reduction announced today. We expect to book the 40 million one-off costs in Q4. With that, I conclude the presentation and hand over to our moderator. Thank you.

We will now begin the question and answer session. If you would like to ask a question, please press Start 1 to raise your hand. To withdraw your question, press Start 1 again. We ask that you pick up your handset when asking a 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 Vash Gozelia with Goldman Sachs. Your line is now open. Please go ahead.