Gjensidige Forsikring Asa

Good morning everyone and welcome to this first quarter presentation of Jensidie. My name is Mitra Negoy and I'm head of investor relations. We will start this session with our CEO Geir Holmgren who will give you the highlights of the quarter followed by our CFO Jostein Amdahl who will discuss the results in further detail. And we have plenty of time for questions after that. Geir, please.

Thank you Mitra and good morning everyone. 2024 started off with a harsh winter in our region, particularly in Norway. Last time we had such a tough winter conditions was in 2010. Many days with heavy snow created very difficult driving conditions across the Nordics. Record low temperatures in Norway led to a significant increase in pipe burst. And the heavy rain we got on top of snow and ice resulted in many water damages. Adding to this, the storm Ingun caused significant damages in central and northern part of Norway. To put some numbers on this, both January and February broke our records in terms of number of claims for those months with an increase of 18% year on year. I'm very impressed by our organization's ability to handle yet another quarter with an extraordinary high number of inquiries and claims. We have taken good care of our customers when it matters the most, and processed claims in an efficient manner. The weather conditions in March were much more benign. Now, let us turn over to page 3 for comments on our first quarter results, which clearly reflect the tough weather conditions. The profit before tax was 1,076,000,000 kroner. The general insurance service result was 704,000,000 kroner. The result includes an estimated 577 million in weather-related claims, net of reinsurance. The result also includes provisions of 108 million related to the recent court ruling against an insurance company in Denmark on the practice of price increases. Adjusting for the extraordinary weather effects and the provisions, our insurance service result was 1 billion and 389 million, corresponding to a combined ratio of 85.5%. Our online frequency loss ratio, adjusted for the weather claims and provisions, improved by 20 bps, reflecting our increased pricing measures. and starting to show in the accounts. I'm very pleased that we are on a positive trajectory. Our investment generated returns of 448 million, reflecting the development in the capital markets. The annualized return on equity was 14.4%. Jostein will revert with more detailed comments on the result for the first quarter. So, over to page four. The rise in underlying claims frequency for motor in private Norway has leveled off as expected. Staying ahead of claims inflation is our number one priority. We took swift actions to address this last year and we have continued with targeted measures through the first quarter. Persistently high inflation and a weak Norwegian Corona continue to drive repair prices higher Thanks to our attractive terms with wide repair shop network, we are able to limit the impact on claims inflation. Our latest estimate for motor claims inflation is 7%, gradually declining towards 4% over the next 12 to 18 months. As you can see on this slide, we are putting through significant price increases, which together with higher deductibles will improve profitability. Property insurance is different from motor in the sense that claims frequency is much more volatile in nature, being more exposed to weather damage and stochastic factors such as fires. The significant increases in property claims Property claims frequency we saw in the first quarter was a consequence of the harsh winter and weather conditions. Lower activity in the construction industry has reduced prices of some materials, which, while higher wages, will put pressure on prices for repairs. we are able to contain the inflationary pressure for property repairs through our strong supplier agreements. Our current estimate for property claims inflation is 5-7% for the next 12-18 months, up from 46% in January. We have increased prices over several years to take account of not only claims to inflation, but also more frequent weather frequency and claims to inflation to ensure good profitability. We are gradually seeing a positive impact on profitability from the significant measures we have put through over the online frequency loss ratio for private Norway year on year, and sometimes during the next two quarters. It is important to emphasize that improvement will not stop there. As all measures gradually feel through the book, we will see further downward pressures on the loss ratio going forward. So, moving to page six. I'm very pleased to see that the strong growth momentum across the group continued in the first quarter. This was primarily driven by price increases, but also some volume growth. Performance for private was significantly impacted by the challenging weather conditions in Norway. Retention in Norway climbed further from an already high level, despite the significant price increases we have put through. We have grown the number of customers and maintain our superior market position. This is a strong vote of confidence from the market and confirms that we have an attractive value offering. And as you can see on this slide, our strong position combined with our predictive models and targeted differentiated pricing ensure that we keep the best customers. Our Danish private business was also impacted by the tough winter this year, although less than in Norway. The good growth momentum continued in the quarter and we saw further improvement in customer retention. We have a strong focus on implementing profit enhancing measures in Denmark through sharing best practice, realizing synergies, digitalization and cost efficiency measures. The commercial segment was significantly impacted by the weather this quarter. The strong growth momentum for both our Norwegian and Danish commercial business continued. And I'm very pleased to see that the retention in Norway climbed even further, despite the price increases we have put through. Thanks to our underwriting expertise and strong market position, we continue to improve the quality in our portfolio, as you can see on this slide. Our Danish commercial business was also impacted by the rough weather. However, profitability improved year on year. Sweden is progressing well. Operations are becoming increasingly efficient. Our portfolios are healthy and we are growing profitably. We will continue our efforts to increase profitability going forward through improving risk selection and implementing pricing and cost efficiency measures. Our Baltic business continues to generate strong revenue growth. I'm very pleased that our underlying profitability improved this quarter too, driven by tariff improvements, portfolio pruning and enhanced operational efficiency. So, over to page seven. We continue to make progress on sustainability. We have a number of innovative initiatives, as you can see on this slide. With these, we are taking important steps towards delivering on our ambitious targets to continue to a safer society, sustainable claims handling, and responsible investments. So with that, I will leave the virtual stand to present the first quarter results in more detail.

Thank you, Geir, and good morning, everybody. I will start on page nine. As Geir mentioned, we delivered a profit before tax of 1 billion and 76 million kroner in the first quarter. The insurance service result was significantly impacted by the increase in weather-related claims. Our reinsurance coverage dampened the impact of these claims on our results. The provisions related to the court ruling in Denmark also had a negative impact on our results. Adjusting for these factors, the insurance service result increased by 195 million kroner compared with the first quarter of last year. Private showed a higher result when adjusting for weather claims, reflecting growth in revenues, higher runoff gains, a higher discounting effect, and a lower change in the risk adjustment. The underlying frequency loss ratio increased. Although there is some volatility in quarterly earnings, with our strong actions on both pricing and deductibles, I'm convinced that we will improve results with a year-on-year decline in the underlying frequency loss ratio in private Norway during the next two quarters. The ongoing improvement program in Denmark is also progressing well and will gradually result in improved results. The commercial segment reported a higher insurance result when adjusting for weather. driven by continuous strong revenue growth and a lower underlying frequency loss ratio in both Norway and Denmark. The tough winter also impacted our Swedish business. Together with lower runoff gains, higher large losses, and a higher change in the risk adjustment, this brought the insurance result down compared with last year. Revenues continued to pick up in Sweden, and I'm particularly pleased with the considerable improvement in the underlying frequency loss ratio. The Baltic segment reflected a runoff loss which offset the positive impact from a significantly lower underlying frequency loss ratio and an improvement in the cost ratio. Insurance revenue grew well. I'm very pleased with the progress in the Baltics and expect further improvement going forward. We need to bear in mind the inherent volatility in results for our Swedish and the Baltic segments due to the size of those businesses. However, the underlying direction in both segments is very encouraging. Our pension segment reported an increased profit compared to last year, reflecting adjustments in liabilities and changes in financial assumptions driven by the increased interest rates, in addition to a good underlying profitability for our unit-linked business. The development in other items reflects improved results from mobility services, which reported black figures this quarter. The integration process is moving towards completion, and the restructuring measures are gradually improving results. Higher interest expenses also aborted loans, and the provisions contributed negatively to the results from other items. Turning over to page 10. Our strong growth continued in the first quarter, with insurance revenues for the group increasing by 11% in local currency, adjusted for the provisions. Growth in private was driven by both Norway and Denmark. The increase in Norway mainly reflects price increases, although higher volumes of motor, property and travel insurance also contributed positively. Market shares remained broadly stable. The revenue growth in Denmark was strong, driven by price increases for all the main products and some volume growth. Pensum forsikring also contributed to the growth, but even excluding this, the growth in Denmark was 8.2%. Revenues for commercial continued to rise significantly, driven by both our Norwegian and Danish portfolios. The strong growth in Norway was driven by solid renewals, price increases in all products, and higher volumes for accident and health insurance. Growth in Denmark was driven by higher volumes and price increases for all main products, resulting in an organic growth of 10.8%. The portfolio from Sønderisk Forsikring contributed another 4.6 percentage points in growth in Denmark. High revenue in Sweden was driven by volume and significant price increases in both the private and commercial portfolios. The strong revenue growth in the Baltics continued this quarter, driven by price increases in all the main product lines. Turning over to page 11, the group's loss ratio increased by 5.6 percentage points from the first quarter last year, driven by the increase in weather-related claims in Norway, Denmark, and Sweden. The loss ratio improved by 0.4 percentage points, adjusted for weather-related claims and operations. The adjusted underlying frequency loss ratio improved by 0.2 percentage points. The change in risk adjustment increased the loss ratio, reflecting the higher claims reserves level. Higher interest rates resulted in an increase in the discounting effect. The improvement in the underlying frequency loss ratio when adjusting for the extraordinary weather effects was driven by commercial, Sweden, and the Baltics. The underlying frequency loss ratio for private increased even after adjusting for weather effects, driven by the elevated claims frequency for motor insurance and lower profitability for property insurance. As mentioned earlier, we are confident that our targeted measures will result in a turnaround for private Norway sometime during the next two quarters. Let's turn to page 12. Our group cost ratio remained stable at 13.4%. Excluding the Baltics, our cost ratio was 12.7%. Also, this metric unchanged year on year. The cost ratio in Norway came further down this quarter, thanks to higher insurance revenue. The private and commercial portfolios in Denmark showed a higher cost ratio, mainly driven by the pensum acquisition and higher IT expenses in the private portfolio. The cost ratio in Sweden improved due to increased insurance revenue and stable operating expenses. And the Baltics showed a decrease in the cost ratio due to higher insurance revenue. We have a dedicated focus on operational efficiency and will continue to put strong efforts into maintaining a competitive cost level. Over to slide 13 for comments on our pension operation. Our pre-tax profit adjusted for the change in the contractual service margin was 208 million, compared with 152 million in Q1 2023. The increase in the insurance service result reflects adjustments to best estimate of future liabilities, and without these the insurance service result was slightly down. Net finance income improved due to the positive impact from higher interest rates and a lower allocation to real estate investments. The underlying results for our pension business continued to improve, driven by good growth in our unit-linked business. Assets and management rose to 75 billion. Moving on to the investment portfolio on page 14. Our investment portfolio generated positive returns for all asset classes. The match portfolio, net of unwinding, and the impact of changes in financial assumptions returned 40 basis points. reflecting a high running yield, lower credit spreads, and the fact that the investments did not fully match the accounting-based technical provisions. The free portfolio returned 90 basis points this quarter, reflecting positive returns from high running yields, lower credit spreads, and positive equity markets. The risk in our portfolio was broadly unchanged from the fourth quarter. We have a balanced portfolio and solid fixed income investments, with a large majority having an investment-grade rating. Over to page 15, a few words about our successful issue of two loans and buybacks in the quarter. We wish to utilize what we saw as attractive market conditions to ensure an optimal capital structure. Both loans were substantially oversubscribed and were settled with attractive terms. In February, we issued a Tier 2 loan of 800 million, with a spread to a number of 170 basis points, and in March a Tier 1 loan, also 800 million, with a spread of 280 basis points. We also took the opportunity to buy back 263 million in our T2 loan, which was issued in 2014 and has the first call in October this year. Net of the buyback or an outstanding amount on this loan is 241 million kroner. A few words on the latest development of our operational targets on slide 16. Customer satisfaction is at a very high level and confirms that our products and services are meeting or even exceeding the expectations of our customers, particularly in Norway. We will continue to seek further improvement in all our markets. Despite facing challenges such as rising prices, our customer retention in Norway increased from an already high level. And this applies both for private and commercial customers. Outside Norway, retention improved somewhat in Denmark, while it was slightly down in Sweden and the Baltics. Digitalization and automations are key measures to maintain high cost efficiency, with effect on both the cost and the claims ratios. Our digital distribution index improved by 3% in the first quarter, driven by all three parameters, digital sales, digital customers, and digital service. Later this year, we'll start reporting on our new metric, distribution efficiency. Digital claims reporting and automation were stable. Over to page 17. We had a solvency ratio of 177% at the end of the fourth quarter, up 11 percentage points from Q4, with the main driving being the new loans. Eligible loan funds increased by 2.1 billion. Solvency to operating earnings. Returns from the portfolios and the issue of the two loans contributed positively, partly offset by the loan buybacks and the formulaic dividend. The capital requirement increased by approximately 400 million, mainly driven by higher underwriting risk due to growth, both for general insurance and for life insurance. The approved version of our partial internal model differs from our own model. The differences lie in the calibration of certain important parameters in the model, including the storm model. We sent an application to the Norwegian FSA on the storm model earlier this year. We are in close dialogue regarding additional documentation and will continue to have a dialogue on the remaining differences between our own and the approved model. If all differences were approved, the capital requirement would be reduced by approximately 2.5 billion kroner. And I will now hand the word back to Geir.