Gjensidige Forsikring Asa

Hello and welcome to the Yenzi Digues Q2 2024 results presentation. My name is Laura and I will be your coordinator for today's event. Please note this call is being recorded and for the duration of the call, your lines will be on listen and remote. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star 1 on your telephone keypad to register your questions. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Mitra Nagar, Head of Investor Relations, to begin today's conference. Thank you.

Good morning, everyone, and welcome to this second quarter presentation of Yensidia. My name is Mitra Nehagoy, and I'm head of investor relations. As always, we will start with our CEO who will give you the highlights of the quarter, followed by our CFO, Jostein Amdahl, who will go through the numbers in further detail. And we have plenty of time for a Q&A afterwards. Guy, please.

Thank you Mitra and good morning everyone. We have put behind us a quarter with high claims in Norway. I will revert on how this has impacted our results and what we are doing to mitigate the impact on our profitability going forward. Now let us turn over to page two for comments on our second quarter results. The profit before tax was 1 billion and 830 million kronor, an increase from 1 billion and 334 million. The general insurance service result was 1 billion and 434 million. This result includes a positive impact of 402 million from a change in the risk adjustment. The strong growth momentum continued in this quarter, with insurance revenue increasing by almost 10%. Insurance service results decreased mainly due to higher motor and property insurance claims in Norway. Adverse claims in the first quarter also impacted results negatively. Our investments generated returns of 540 million and the analyzed return on equity was 20.2%. Jostein will revert with more detailed comments on the results for the quarter. A few words about property insurance on page 3. The significant increase in property claims in the second quarter for private and commercial in Norway was due to fires. As mentioned earlier, property insurance is different from motor in the sense that claims frequency is much more volatile in nature, being more exposed to weather and stochastic factors such as fires. While we see long-term decreasing trends in fires, water damage is rising due to climate changes. We will continue to develop relevant insurance solutions with incentives for loss prevention. The insurance industry is engaged in fruitful discussions and shares valuable knowledge with municipalities to prevent losses. To this end, the recent parliamentary notice in Norway is very encouraging, proposing extensive measures to prevent weather-related losses. These include physical measures, as well as mapping, planning, monitoring and alerts. In terms of claims inflation, we expect to remain in the 5-7% range for the next 12-18 months. We have increased prices over several years to take account of not only claims inflation, but also more frequent weather events. The implemented measures so far will raise average prices for more than 9% by year-end, and this will increase further due to ongoing pricing measures gradually improving profitability. So, over to page 4. we have seen continued increase in claims for motor in Norway this quarter. As you can see on this slide, motor claims frequency in private Norway was up 5.8%. Repair costs have developed as expected, which together with a higher share of more expensive type of losses has resulted in higher claims severity. Our analysis points to several reasons for the rising on-line frequency and claims severity in Norway. The growth in the vehicle fleet with an influx of wider, longer and heavier vehicles with more horsepower is one of the most important factors. The post-pandemic rebound in driving has also contributed to higher traffic density. Economic growth and high inflation, partly driven by the weak Norwegian krone, have also impacted claims. We expect claims to inflation for private motor in Norway to remain at around 7% throughout 2024, gradually declining towards 4% over the next 12 to 18 months. Other factors, such as weather conditions and modern cars with touch screens, have also impacted claims, in addition to the level of deductibles and bonus programs. We expect these factors to impact claims going forward, both in terms of short-term volatility and as long-term trends. Our prices shall reflect the expected long-term trend impact on claims. As you can see on this slide, we have continued to put through significant price increases The implemented measures will increase average premiums by more than 13% this year. This will increase further due to ongoing pricing measures, with the level of price changes being brought to 17.5% from July. We are fully committed to improve profitability, meaning that we are willing to sacrifice some volume to achieve this, if necessary. We will continue to strengthen pricing measures and adjust terms and conditions to ensure that the increase in claims is mitigated. So far, we have been able to do this without any negative impact on churn. This is a proof of our strong brand and position in this important market. Our significant measures will gradually improve profitability as policies are renewed and premium earned. Moving to page five. I am very pleased with the continued strong growth momentum in private Norway. Retention remains very high, despite the significant pricing measures. Our recent top ranking among general insurance companies in the Norwegian Business School survey on customer satisfaction and loyalty is very encouraging. The new core IT system for private Denmark is working well and supports sales activities. Revenues have increased strongly, both organically and with the contribution from Pensa. And customer retention is improving. Our new agency partner FOMO in Denmark will further strengthen our position in the Danish private segment. Growth in commercial in Norway continues to be strong. The July renewals have gone well so far. Customer retention is high, and our market share has increased, passing 31% in the first quarter. I'm very pleased with this, having in mind that we are prioritizing profit before growth. Growth in Denmark is also strong, with organic growth supported by the Sandusky portfolio. Sweden is progressing well, with profitable growth and continued improvements in operations. particularly for claims processes through digitalization and automation. We will continue our efforts to increase profitability going forward through improving risk selection and implementing pricing and cost efficiency measures. Our Baltic business shows strong growth and continued improvement in profitability, driven by tariff improvements, portfolio pruning, and enhanced operational efficiency. Over to page six. I have made a few changes in our group management team. After 18 years in Jensidie, Aysegul Kinn has decided to seek opportunities outside the group. She will be replaced by Vivi Kofod from the 19th of August. Vivi has extensive experience from our industry and she has held various positions in Jensidie in Denmark, Sweden and the Baltics. She is currently responsible for digital marketing and CRM in private. Vivi will be a strong contribution to the management team. Other changes to be mentioned are the strategy, M&A and group development, which now are part of the CFO division. The sustainable department is organized in analysis, product and price. and communication, brand and sponsorship are now part of our people and communication division. I'm very pleased with having a strong and very competent management team to run our operation. The management team is highly committed to improve profitability and do what's necessary on pricing, risk selection and cost efficiency. Turning to page seven, another unique customer dividend model, which is an important retention tool. The customer dividend model, together with our ESG measures, and Jens-Idiot's ambitions to promote a safer and better society, strengthen Jens-Idiot's important role in Norway. For the 16th time since 2008, The foundation has distributed its share of regular dividend from Jensidie to our general insurance customers in Norway. This year, 890,000 customers will receive a total of 2.5 billion kroner, corresponding to 11.1% of the premiums paid in 2023. Over to page 8 and a few words about our product innovations. Our SME customers in Norway are offered a new cyber insurance product with a more comprehensive assistance than earlier, including services such as technical and legal investigations, monitoring and media and crisis management. We also launched a new legal insurance for covering among others, legal advice and assistance in the event of a dispute. In Denmark, we have launched a new bundle insurance concept for young and an insurance concept related to violence and threats of work for certain occupational groups. These are examples of how we continuously work to further develop our offering to the SME segment and to strengthen our competitiveness in Denmark. Over to page 9. We continue to take important steps towards delivering on our strong sustainability ambitions, and it is very encouraging that our efforts are recognized, most recently in the year's top ranking among all insurance companies in Norway in this year's sustainability survey conducted by the Norwegian Business School. With that, I'll leave the virtual stand to present the second quarter results in more detail.