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.

Okay, to sum up on page 18, we continue to have a very strong growth momentum. We have navigated very well through a tough quarter, which was heavily impacted by harsh weather conditions. We delivered on our promise to the customers by also ensuring efficient operation and improved underlying profitability. Our number one Priority is the price ahead of claims inflation. It is very encouraging to see that we are able to push through necessary price increases without compromising on business volumes or portfolio quality. I am confident that our targeted measures will lead to a turning point for private Norway sometime during the next two quarters. The outlook for the insurance service result for the rest of the year remains good. We aim to deliver on our financial targets for 2024, although the significant value-related claims and the provisions in the first quarter may challenge delivery on the combined ratio target for the current year. we will continue to focus on profitable growth and further improve operational efficiency across the groups, which together with our strong product offering and solid capital position bode well for continued good results and attractive returns to our shareholders. And with that, we will now open for the Q&A sessions of this presentation.

Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Thank you. We'll take our first question from Freya Kong with Bank of America. Your line is open. Please go ahead.

Hi, good morning. Thanks for taking the questions. I have two, please. Firstly, on the trajectory of the improvement in the underlying frequency loss ratio in Norway private, given that you're putting through rate increases of around 8% and claims inflation of around 6%, and then on top of that you have about 0.7 points of benefit from deductibles, would it be unfair to assume something like two to three points of year-on-year improvement from maybe Q2 onwards? I just want to know how to think about the trajectory. Secondly, on the provision booking, can you give us some more color on what period this relates to, how many customers are affected, and your confidence that this remediation will be contained within the figure that you've booked in Q1? Thank you.

Okay, thank you. Yes, give some kind of details regarding the trajectory going forward for private Norway. If you look at the presentation, we are given some numbers about what we are doing on the price increases and the impact from how the average premium is increasing. If you look at what we say is that from... End of 22 to end of 23, we see that the price increases for private motor, for instance, will increase by 7%. If you look at what's happening during 24, the average premium will increase by more than 10%. Adding that together, you'll be probably between 18% and 19%. If you look at the claims inflation, actual inflation last year, 6.5%. What we say during 24 is that seven percent at the moment but going down during the next 12 to 18 months uh down to to four or five percent uh so adding having inflation probably between 12 13 percent in total look at the two years from 22 to 24 end of 24. um and increasing online frequency you probably have as you have seen 5% increase last year on the online frequency, but stable this year. So then you will actually end up having a positive impact in total by end of this year with 0.7% from the frequency and then adding the positive impact from the deductibles as well.

Okay, thank you.

On the second question of provision, it's important to emphasize that this is not in itself a court case that we are a part of, but we see that we have had a practice that could be similar to what has been that case. It is a practice that we ended doing after we became aware of the Danish Ombudsmans view at the year end 2020. But given the the verdict in the Danish scene commercial court, we see that it's prudent to set aside a best estimate of how that could affect us, and that's why we booked a premium reduction of 108 million kroner this quarter, and it relates then to years 2020 and earlier. The actual calculation is estimate, as you say, and I think it also has been important for us to emphasize that we have been very transparent to our customers in terms of price increases. What was the previous price? What is the new price? So we believe we've been behaving in a very transparent way towards the customers. But we see that, given the verdict, that this can also affect us.

Thank you. Thank you. And we'll now move on to our next question from Trifonel Spiro with Berenberg. Your line is open. Please go ahead.

Hi there. I've got a couple of questions. So the first one is on slide 21. You show a 60 basis point deterioration excluding the weather in online loss ratio. I think the number is higher when you exclude the discounting benefit. How should we reconcile this with the 20 basis point improvement in the group? It looks like the difference is due to the provision. I'm just not sure how to think about the two. So, Naveed, can you help me there? Related to that, the underlying loss ratio in Denmark actually increased a lot more in private than in Norway at around 4.2 points. I thought Norway had a structurally bigger issue in frequency and inflation than Denmark. So, I'm just wondering why is that deterioration there? Is it because you're growing a little bit faster in Denmark or any color on all of that? And then another question is on retention in Norway. It looks fairly stable despite the notable increases in churn. I guess I would have expected that to maybe increase somewhat any color on how to reconcile the two, given that churn is averaging about 10% now. Thank you.

Okay, I'll see if I got your question right. The first one is that on slide 21, we are correcting for weather effects, whereas when we talk about what we call the adjusted underlying frequency loss ratio, we also adjust for this Danish court case. That's why I get to the 0.2 improvement in the percentage points improvement in the underlying frequency loss ratio and 0.4 percentage points in the loss ratio itself. So you need to adjust both for the weather effects and the Danish provision. Your second question, if I got the right one, the difference in the development in private Norway versus private Denmark, if I understood you correctly here. Yes, of course. Yeah. And I think if you look at the combination of price and mainly what Geir touched upon in Freya's question is the pricing and terms and conditions measures that are put through in Norway are very forceful And that is the kind of main reason why we now are so confident about the improvement in the underlying frequency loss ratio going forward. And, yeah, it's fair to say that we've now, after we started stepping up the measures in July last year, we're now seeing that feeding into the accounts gradually, and that is the reason why you see this lower deterioration in Norway than in Denmark. And the last question was on the retention levels in Norway, why they are not sinking.

Yeah. We have a long history, solid position in Norway. We see that customer satisfaction is at a very high number. Our value proposition, including the customer dividend, is very strong. What we have seen during the last quarters, and these are actually numbers we are following on more or less on daily basis. We're actually following the heat rays, following how we do in the day-to-day competition in the Norwegian market. So we have a very good insight in how our competitive position is day by day. I think that a strong position, a strong value proposition, our confidence on doing the necessary pricing measures, also having in mind that all our main competitors now are doing some price adjustments. We see that retention rates improving in the commercial area, but also picking up a little bit in the private segment as well. I'm confident that this will continue even though we are putting through

um heavy pricing measures and and change in terms and good condition as going forward as well so interesting uh just to come back on the private denmark um combined ratio there are things around a hundred percent um it isn't a risk that an underlying sort of um deterioration is sort of um appreciate improvement comes in norway but is there a risk that denmark sort of Offset that improvement given that the direction there is quite a strong in terms of how much about increase see that your Revenue growth is on 17 cents. So I was wondering how many how much of that is priceless is for you? Maybe share a little bit more color just to get more comfort on the fact that Underlying in Denmark would actually improve and not be very further from here as well.

Thank you Yeah We have been very clear that the combined ratio level or the overall profitability level in Denmark, in private Denmark, is not satisfactory. And that's part of the reason we talked about when we did the reorganization back in July last year, to get more power behind the improvement measures in the Danish business, and especially the private Danish business. It's a combination of... of going into at least now this quarter and the previous quarter. Before that, we had too low growth. Cost levels are too high. And the relative cost levels, as expressed as cost ratio at least, is too high. So we need to improve that. I think that is, for me, more important or more of a problem than the actual loss ratio level as such in private Denmark. But both of them need to improve. I definitely agree on that. When we talk about the turning point for private Norway, that's kind of what we focused on in the message here. That is, of course, private Norway we've talked about on the back of the issues we had in the third and fourth quarter of 2023.

Okay, thank you.

Thank you. And we'll now move on to our next question from Hakan Astrup with D&B Markets. Please go ahead.

Good morning. Thanks for taking the questions. Two questions from me as well. The first one on the Norwegian private business. In your experience, are you at the moment carrying out higher price increases than peers? That was the first question. And

The second question, I really appreciate the comments on March was more a normal March month compared to earlier what we've seen in March last year and earlier before that. So it has given us also more confidence in what's going to happen during the rest of the year and also being able to say that we see this turning point coming in sometimes within second or third quarter when we look at improvements in the online frequency loss ratio for private Norway.

First one, do we have higher or lower price increases than peers in private or I think that this I mean, it's not a price list, so it's a bit hard to tell, really. But what we can judge from is churn numbers. And they are, as we talked about, actually slightly positive. They're slightly lower churn now. So there could be many factors behind that. But I think at least one of them is that competitors are seeing at least the same need to reprice as we do. And I think you can also infer that from their reported profit figures.

Perfect. Thank you so much.

Thank you. And we'll now move on to our next question from Vinayit with Mediabunker. Your line is open. Please go ahead.

Yes, thank you. Good morning. I have two questions, please. One is on slide four. And thank you very much for this quarterly update of frequency. Just can't help noticing that the motor situation seems to be much better than even in 4Q where there was 11% all and one third was supposed to be underlying of that 11. And now we are seeing comments that there is nothing really underlying on motor except weather. In fact, Is that a fair read? Would you say that the 1Q24 motor was actually, excluding the weather noise, better than 4Q23? So that's my first question on motor frequency. Second question is on the private Norway, the property side. Of course, we're talking on motor all the time, but property is also interesting. And this slide 5 is also remarkable because obviously there's big improvement you're expecting in the claims of the property side in private Norway. Could you just comment a little bit about these claims? Because, you know, when I see this 45%, obviously it's all weather related. But could you just comment a little bit on private Norway and how we should expect or why we should expect that big normalization, maybe just the weather. So just curious on slide five for private Norway property. Thank you.

On the motor frequency unit, I think you got the slide for right. It's a stable frequency on the motor in Q1. Of course, you compare then quarter by quarter, so we saw an in the second to fourth quarter last year, but no further increase now. The weather effects that we saw now in the first quarter mainly affected the size of the average claim, not the number of claims, so more serious accidents in a way. On the property, I'm not quite sure how to answer that one. If there is a reason for normalization, as Gane mentioned in his presentation talking about this, property, quarter by quarter, is much more volatile due to fires. And this figure that we provide is not weather-adjusted or anything. These are the numbers. you would have a large impact also from weather events here. What we see is that we've been pricing above claims inflation for weather for a number of, expected claims inflation for a number of years. There's not really a frequency issue as such for private property, but we need to take into account that these weather events have been expected to kind of increase somewhat. And then we need to price above the claims inflation just to mitigate that. I think we've been very successful in doing that over these years. And that's why we say, you know, this normalization or whatever of the loss ratios are credible.

Sure. Thank you very much.

Thank you. Thank you. And we'll now move on to our next question from Johan Traum with Carnegie. Your line is open. Please go ahead.

Thanks for that. So I was wondering if it's possible to quantify the changes made in deductibles in Norway, particularly in the private market. Sorry, the motor segment. So how much is this deductible? average deductible up. And then secondly, I'll follow up on Triff's question. Discussed it a bit earlier in the call, but the balance between retention and price increases seems to be very good. But is it any area of business where you feel that you could have or maybe should have done more in terms of price hikes during the past year? Thank you for that.

On the motor deductibles, I mean, the standard default on the comprehensive cover was implemented late last year, and we moved up from 6,000 to 8,000 kroner. Of course, it's possible for the customer to choose a different deductible than with an effect on the price. On the windshield claims, we increased it from 2,500 to 3,000 Norwegian kroner from January 1st, and the road assistance deductible moved up from 500 to 750 from November 1st last year. So that is the actual changes. And the second one we don't have.

If you could have done anything more on repricing earlier, if I understood you right. I think we started with all repricing motor in July last year. Our experience is that we were probably the first one in the Norwegian market to do the repricing above inflation at that time. This is more or less based on the information we got day by day through our advisors having dialogue with our customers directly. What we say after the second quarter last year is that it has been an underlying development on the frequency loss ratio regarding motor that we haven't seen due to other weather-related impacts we had during the first and second quarter last year. So... Based on the experience we had after the second quarter last year, we could probably have started repricing a quarter earlier. That's the kind of experience we have had. But saying that and repeating what I just said, our experience is that we were the first insurance company to actually do the repricing above inflation at that time.

Thank you very much for that, Kate. And I hope to see this, like, 21 and 22 program in the future. That's very helpful. Thanks for my part.

Thank you.

Thank you. And we'll now take our next question from the guard to Rude with Pareto. Your line is open. Please go ahead.

Good morning. Thanks for taking the questions. I have a couple just to improve the understanding here. The first is on the reinsurance, if you could give some details to the reinsurance result. If I read it correctly, there's 500 million positive for the general insurance in the quarter. And secondly, if you could also help me understand the development in the corporate center. So I understand from your comments that there's 108 million put there from the Danish court case, and there's 250 million of large losses. Traditionally, there has been somewhat above 100 million of operating expenses, but it leaves me still around 150 million short from the reported number. And connected to this, I struggle to find the details for the corporate center this year. this quarter, so if you could point me to where I can find that information in the reporting material, that would be helpful.

Okay, I'll start with the two first ones. On the reinsurance, yeah, the reinsurance result is slightly less than 500 in the quarter. It is mainly driven by reinsurance on these weather-related events, but there is also kind of other losses which we normally have here. The main reinsurance program for natural catastrophes, it has a retention level of 300, and then we do have kind of other more underlying, more ad hoc reinsurance programs that have also hit this quarter, but we're not kind of going into the details of the reinsurance program. But the main part of that is whether losses that has been catered for through reinsurance. On the corporate center, sorry.

Just to follow up on that, if I understand slide 21 for instance correctly, there's 331 million connected to large losses, which are better related. And that's offset by a 500 million positive gain, if you would call it that, on reinsurance. It just seems that the magnitude of the positive reinsurance effect is very large compared to the the other numbers here.

No, sorry, that is a misunderstanding. What you see in slide 21 are net-of-free insurance numbers. It also says net-of-free insurance, it says. Okay. On the corporate center, I think you, I mean, we'll check whether there's some information lacking, and of course, correct, if that's so. Yes, it includes the provision from Danish court case mentioned. As you also know, and there is some kind of central costs that are there, which are kind of quite typical level this quarter. And then, as we kind of have done for, I don't know, 15 years, if you have a large loss in the In the segments, a part, about 30 million kroner in general, is kind of moved to corporate center, which then also handles all the reinsurance arrangements, so both the recoveries and the premiums are covered through the corporate center. It's a way of making the running of the reinsurance and capital more efficient. And then there is some other items, but that's the main issues there.

There are a couple of sheets in the Excel sheet that we have published. It seems like a couple of them are by mistake, not included. We will publish them shortly, including all the information.

Yes, thank you. That's very helpful. Just to you, Jostein, I understand the dynamics there. It's just that the 626 million... seems like a quite large number compared to the 250 million of large losses and the 108 million of additional court case losses. So I'm just trying to understand what else is driving that up. But we can come back to that.

Yeah, we'll get back to that. Thank you.

We'll now move on to our next question from Uday Shikori with Autonomous Research. Your line is open. Please go ahead.

Morning, everyone. Thank you for taking my questions. I've got two, please. The first question is on frequency loss ratio. I mean, you have said on several occasions that you are quite confident or very confident that the frequency loss ratio in private Norway will improve sometimes. in the coming quarters. I was quite surprised you didn't say the same thing around the group frequency loss ratio. Is that because you are somewhat concerned that the development in other parts of the business might derail that? That's my first question. And then secondly, I wanted to understand your outlook on the frequency development, the underlying frequency development in private Norway in MOTA I mean, if I look at your chart on slide five, there is a very clear trend, a rising trend since 2021. So I presume you're saying that, and then it just flattens out, basically, or even improves. I presume you're saying that in the market, maybe frequency is rising, but you believe your deductibles are at such a level, people are basically not going to be claiming on their policies. Is that understanding correct?

on the group underlying frequency loss ratio. I mean, we did actually show an improvement, kind of adjusted underlying frequency loss ratio. I acknowledge that there are a lot of adjustments to this one, but there has been a specific, very special weather quarter, and also the Danish court case is one of related to all the years. We think it's fair to adjust for that. And doing that, we see an improvement in the group underlying frequency loss ratio of 0.2 percentage points in the first quarter and 0.4 if we look at the loss ratio level. Sorry, just to follow up. Sorry, I'll let you finish, sorry. And then why didn't we focus the comments on the outlook for that rather than private? No, I think that has been a consequence of where the focus has been over the last few quarters on the development within... within private Norway business, where we have had this fair focus on development in the motor frequency, which we have addressed quite forcefully, I would say, and successfully as well. So I think that has been the reason why we communicated what we have done, but repeat, we have seen now in the first quarter an improvement in the underlying frequency loss ratio and in the loss ratio for the group as such. If you look at the segment-wise development in the underlying frequency loss ratio this quarter, it is only private that has a deterioration. And these are just for the weather effects.

Yeah, I don't know. I was just saying that, you know, I mean, if you're talking about the year-on-year improvement, that was largely thanks to discounting. Otherwise, it was probably still worse.

It is true that if there was, I think, a 0.4 effect from discounting in the first quarter, so if you then adjust the adjustments again for the discounting, it would be at 0.2 negative. And that's fine. But we are using IFRS 17, so that's the numbers we do focus on now. But absolutely. And the numbers are all there for you to see, so... you can kind of take your own measure there. But I commented on the IFRS 17 numbers.

All right, okay, thank you.

Frequency in the market.

Thank you.

And the second question for Yiddish, the frequency in the markets as such. What we commented on now, actually on the previous slide here, was that the weather effects now affected severity. and we don't see any further increase in the claims frequency for motor. We have no information about the market as such. We can only refer to our own numbers. And they show a flattening out of the frequency. I don't quite see why the market either should see an increase in the frequency going forward. But, you know, we'll talk about it next quarter probably.

All right. Got it. Thank you very much.

Thank you. And we'll now move on to our next question from Jan Erik with ABJ. Your line is open. Please go ahead.

Thank you for taking my questions as well. Going back to slide five and the motor frequency, et cetera, in Norway here, you have a nice trend towards upwards on the revenue side, and then you sort of try to make a wave on where it's going to happen for the remaining part. It looks though that what happened in 2016 to 2019, and then we had the COVID effect, and then something else happened thereafter. Is it so that you also normalize the frequency back to a normal level again? Is that sort of the base case for your thinking about improving effects in the next couple of quarters when it comes to private Norway motor? And secondly, then, just to follow the trajectory, which was the first question, the 80-90% price increases over the last two years, and then 12-13% normal inflation. And then you only have seen this 5% frequency inflation last year. But then the second part of this question is then, what Have you thought about the average claims inflation when it comes to motor? Is that part of the 7.1% you have on page four? Because you talked about severity, which means that it's a more costly claim, so to speak. Is that part of the claims inflation or is that general inflation? Or how should you read that? Or is that the 5% if I have misunderstood totally these nice slides?

I'll start on the first question, Jan-Erik. We don't kind of forecast any specific increase or decrease in the claims frequency going forward. So we're not going back to the frequency levels seen back in, say, 2016. I assume you remember the increase back from 16 to 19, much related to structural changes in the car fleet. and we've seen now an increase after COVID again. There has been speculations for the reasons there in terms of driving behavior, the use of these information screens in the cars and so on. We kind of have a base case of around a flat frequency development going forward where there might be some increases in the short term still, but this offsets by the increased deductibles so net effect would be flattish, and they have tried to illustrate that, and I don't know how it looks in color because I have a black and white PowerPoint here in front of me, but it's supposed to be an area, an uncertainty area there.

Yeah, we see the area, so it's sort of clear.

But on the revenue side, I think we're extremely confident here. We have been able to put through. We are putting through price increase measures. It doesn't have any significant effect on retention for reasons I talked about in one of the previous questions, where there is a market need to raise prices if profitability is to be restored. And it's probably higher in other companies than in CEDAW.

Probably add a comment as well on the first question. We prioritise profitability before growth. What we have seen in the first quarter is that retention numbers are actually growing from a very high number. Over time, we will work on maximising the profitability within the business, including especially motor private as well. So we don't look backward to actually see on previous loss ratio or combined ratio for motor private, but we look forward to see how we can actually maximize the profit and still having a good competitive market position. So this is a balancing act, but we see now that we have a very strong, even stronger position than we had in the past, which also makes us confident to continue doing the necessary price increases and improve profitability. The second question is about, yeah, Jan-Erik.

Sorry to interrupt. The price increases you talked about from July last year will then of course come now from fully in the second half of this year and then move your sort of earnings and profitability higher. Is that what you alluded to when you talked about your confidence in improved profitability or is it something else you see because the price changes you implemented from 1st of January sort of hitting your books next year. So is it that last year price increases you sort of are confident, together with the lower inflation?

What we have done in the past regarding price increases, it's one topic. We also see that during this quarter the frequency development has been stable, so we don't see The developments we saw last year has leveled off, adding to all the price increases and change in deductibles we have done in the past. It started July, but actually has been an ongoing business, to put it that way, month by month during the last nine months. So adding all that together, we see that we'll meet the turning point when it comes to development on the online frequency loss ratio, sometimes during the next two quarters. And then after that, we will still see improvements because then all the additional pricing measures will come through.

Okay, very clear. General, my second question is the fantastic life results you have this quarter. Could you give some insight to the run rate from here? Is this a new starting point, or how should we read the IFRS 17 numbers in your books?

As I mentioned in my presentation on that slide, there are on the insurance results, part of the results. There are a couple of one-offs effects there, and I think we talked about, and as I mentioned in the report, that adjusted for these, there's a small negative development in the insurance service result from around nine to 12 million, minus nine to minus 12 million. So that is kind of, these one-offs is, part of that is repeatable, but mainly it's a one-off. But what is important here for, and of course on the financial result, increased interest rates during the quarter has a positive effect. And that is probably not going to repeat itself every quarter going forward. But the main message, I think, is that we have a growth in assets and management of around 6 billion. We have growth in insurance revenue of around 6%. We have growth in the number of pension members here. So that means that the run rate on the profits going forward is increasing because there's no change in the margins.

Okay, just a follow-up on the paid-ups, because you have a paid-up book, don't you?

Yeah, that's correct.

So is that because it looks like you sort of hinted for a profit-sharing something to happen at the year-end. Is that fair, or how large could that be?

Yeah, we had one of the kind of one-offs we had at the year-end. It was a negative effect from profit-sharing on the paid-up policies, so there are The adjustments were both positive and negative, but the net effect of these adjustments to future liabilities and profit sharing were a positive one. But the actual one just on the fully paid policies was a negative effect.

Okay. Thank you.

Thank you. And we'll take our next question from Thomas Swenson with SEB. Your line is open. Please go ahead.

Yes, good morning. So my question to capital. In Q4 at 166%, Solvency said your capital position was strong, or even very strong. And despite this, you are raising a bouncer, including tier one capital, paying 7.5% on that. So what is the logic behind going from strong to even stronger? Should we see it as a of potential for extraordinary dividend, or is it more like a management buffer versus the previous strong level?

First of all, I think we are at 177 percent, well within the communicated range of 140 to 190 percent, so there shouldn't be any surprises there. Also, Part of the reason for one of the loans was to be a bit early on the redemption of the October 24 tier two bonds. And then we also saw that the spread levels we achieved on these bonds was rather the spread rather than the overall cost as you referred to, which I think is relevant for judging what it is. is smart enough or not. And we saw that these spread levels, which would lock in for a number of years through an issue, was what we deemed as an attractive level. I think that is the main reason. And then as you know, the actual solvency level will fluctuate somewhat during the year because we have this formulaic dividend, which is take out 80% of the profit after tax. And that is a, The dividend policy rather starts with a high and stable nominal dividend. So that's kind of what you need to take into account when you look at these figures coming forward and making your predictions.

Okay, thank you.

Thank you. And we'll now take a follow-up question from Trifonas with Barry Burke. The line is open. Please call the hype.

Oh, hi there. I just had one follow-up quickly on Ombudsman sort of case in Denmark. I guess I'm just wondering why, what made you sort of jump the gun a little bit and put that reserve provision in? It looks like Trigg was actually involved in the case. They haven't actually done that yet. So I was wondering if you had any conversations with the Ombudsman and you'll be looking into other companies in Denmark as well. That's why you try to come on top of that. And related to that, I think your market share is around 7-ish percent in Denmark. Could you maybe give us some call on how much of that would be affected so we can estimate which part of your market share is affected from that provision? Thank you.

I think the first one is, I mean, we are not directly a part of this case, but we see that we've had for some years back in the 17 to 20, had some similar practices. Although we believe we've been very transparent towards the customers that we've shown the price increases in a very clear way. We said, you know, we might be affected by the same type of judgment as around the tricks practice. And when we have a clear court case, even though it's appealed, our accounting policy would be to reserve for that. So it's more of a mechanical exercise, is seeing that what has happened in the Danish court. And then of course we'll follow this case towards the Supreme Court and whether that will change this estimate of the potential liability. So it's what, from our perspective, it's how we see accounting regulation and how we interpret that. It's mainly related to the private part of the Danish businesses.

Can you say how much, what percent of that 7% market share cohort will be related to that or is that something you can provide at this stage?

No, I think that would not be a meaningful number, no.

All right, I think we need to conclude. Thank you, everyone. Mitra, that was our last question. Yes. Sending it back over to you for closing remarks, Mitra. Thank you. Thank you. Everyone, thanks once again for all your good questions. We will be speaking with you in our analyst call shortly. We will be participating in roadshow meetings in Oslo, a virtual one in London and Copenhagen this quarter. We will also be participating in several group investor meetings organized by brokers. And we will also be participating in the Goldman Sachs conference in June. Please see our financial calendar for more details. Thank you for your attention and have a very good day. Bye.