Gjensidige Forsikring Asa

Hi, everyone, and welcome to this third quarter presentation of Jensidie. My name is Mitra Negoy and I'm head of MS Relations. As always, we will start with our CEO, Geir Holmgren, who will give you the highlights of the quarter, followed by our CFO, Justine Amdahl, who will run through the numbers in further detail. And we have plenty of time for a Q&A afterwards. Geir, please.

Thank you, Mitra, and good morning, everyone. Let us turn over to page two for comments on our third quarter results. Let us turn over to page two for comments on our third quarter results. The profit before tax was 2 billion and 250 million kroner. General insurance service result was 1 billion and 590 million kroner The general insurance service result was 1 billion and 590 million, up year on year, also when adjusting for the one-off expenses recognized in the third quarter last year. The strong growth momentum continued this quarter, with insurance revenue for the group increasing by almost 12%. Underlying profitability came in lower, negatively impacted by higher claims costs in Norway. We are not satisfied with underlying profitability, but I'm very pleased to see that due to the effective pricing measures, the insurance service result is increasing. Our investments generated returns of 1 billion and 307 million, which together with good results from our pension business contributed to delivering an analysed return on equity of 23.5%. Jostein will revert with more detailed comments on the results for the quarter. So a few words about property insurance on page three. As we have mentioned earlier, claims frequency for property insurance is volatile, being more exposed to weather and stochastic factors such as fires. Both private and commercial property claims increased this quarter when adjusting for the severe weather claims in the third quarter last year. Fires were the main drivers behind the increase in our private portfolio this quarter. Commercial property is highly prone to quarterly volatility. Claims inflation has been stable for some time and developed as expected. We assume the gradual decline in wage increases will bring down claims inflation. Therefore, our updated estimate for claims inflation for the next 12-18 months has come down to 4-6%, from our previous projection of 5-7%. We monitor the situation closely and are prepared for changes, especially from currency movements and energy prices. Staying ahead of the claims curve is our number one priority. We continue to increase prices to reflect the long-term impact of more frequent weather incidents. Our implemented measures so far this year will raise average prices by more than 10% by the end of 2024. Measures have been stepped up further with more than 60% price increase going forward. So over to page four and a few words on motor insurance in Norway. We saw a higher claims cost compared with the third quarter last year, reflecting a continued increase in claims frequency, higher repair costs and a shift in the claims mix towards more expensive losses. Although we do not rule out quarterly volatility, we expect claim frequency to remain at this level going forward. Repair costs have developed as expected and we assume the increase to remain at 4-7% over the next 12-18 months. The claims mix varies depending on weather, driving behaviour and the mix of type of cars in our portfolio. Motor is a core product and we have a strong focus on ensuring that our prices correctly reflect relevant long-term trends. As you can see on this slide, We have continued to pull through significant price increases in this quarter, raising average premiums by almost 13% during the last 12 months. We will increase prices further, currently with an average rate of 17.5%. By the end of this year, we expect the average premium to have increased by more than 40%. I am very encouraged to see that we are able to put through these significant and necessary price increases and that these measures are gradually improving profitability. Moving on to page 5. Private continued to generate strong revenue growth this quarter, driven by both Norway and Denmark. It is very encouraging to see the continued high retention in Norway despite the significant price increases. The good growth momentum in private Denmark continued in the third quarter, driven by organic growth and contribution from Pensa. Earned lying profitability for private was lower than the same quarter last year, and we will continue to meet this with targeted pricing measures. Growth in our commercial portfolios in Norway and Denmark was strong this quarter too. Customer retention in Norway remains at a very high level. Retention in Denmark was slightly down compared to the second quarter. Underlying profitability for the commercial segment was lower than the same quarter last year, driven by Norway. Although more prone to quarterly volatility in claims, we see the need to continue raising prices also for this portfolio. The Danish commercial portfolio showed a higher profitability. Our Swedish operations are progressing well with good revenue growth in both segments. Earned line profitability improved compared with the same quarter last year. We have a strong focus on improving risk selection and implementing pricing and cost efficiency measures. Over to page six, we continue to follow up on our strong sustainability ambitions. We have a number of innovative initiatives, as you can see on this slide. The initiatives will create a great customer value and reduce claims cost over time. With these, we are taking important steps towards delivering on our ambitious targets to contribute to a safer society, sustainable claims handling and responsible investments. So with that, I will leave the word to Jostein to present the third quarter results in more detail.

Thank you, Geir. And good morning, everybody. I will start on page eight. As Geir mentioned, we delivered a profit before tax of 2 billion and 215 million kroner in the third quarter. This is significantly higher than the same quarter last year, driven by the insurance service result, the result from our pension business, and the financial result from our investments. The insurance service result in the third quarter last year included one-off expenses of 409 million kroner. But even adjusted for this, the result increased this year, driven by continued strong revenue growth, partly offset by higher claims, primarily in Norway. We are monitoring the development in claims closely, and we will swiftly adjust and implement higher prices where it is necessary. Although the underlying frequency loss rate for the group was higher compared to the same quarter last year, I find it encouraging that the deterioration is lower than the previous quarter, as our implemented measures are starting to earn its way into the profit and loss account. The development in other items reflects the right tone of goodwill related to the agreement on the sale of operations in the Baltics, as announced in late July. We have also generated a higher result for our mobility services, while higher interest expenses on subordinated loans and increased amortization of intangible assets impacted the results negatively. As announced earlier, the results for our Baltic operations are presented in one line from this quarter. As you can see on this slide, profit from discontinued operations amounted to 32 million kroner for the quarter. with the improvement driven by an increase in net finance income and the insurance service result. We are waiting for regulatory approvals of the sale and expect to close the transaction at the latest by the beginning of 2026. Turning over to page 9. The strong growth continued in the third quarter, with insurance revenues for the group increasing by 10.6% in local currency. Growth in private was driven by both Norway and Denmark. The increase in Norway reflects price increases in all main products, product lines, and especially for motor. The market share remained broadly stable. The strong revenue growth continued in Denmark, driven by price increases for all the main products and some volume growth. Pensam also contributed to the growth, but even excluding this, the growth in Denmark was 11.7%. Revenues for commercial continued to rise significantly, driven by both our Norwegian and Danish portfolios. The strong growth in Norway was driven by price increases for all products, solid renewals and some volume growth. Growth in Denmark was driven by price increases for all main products and higher volume for some products. Sønderjysk contributed with 2.6 percentage points to the growth. Premium accruals in this quarter also contributed to the increase. The growth in Sweden was driven by price increases in the private and commercial portfolios. Adjusted for a premium correction made in the fourth quarter last year, growth measured in local currency was 5.8%. Insurance revenue for private motor insurance decreased during the quarter due to lower volumes. Turning over to page 10. The group's loss ratio increased by 1.3 percentage points this quarter, reflecting a higher underlying frequency loss ratio in private and commercial. Large losses, including weather-related losses, were lower, whereas the discounting effect and risk adjustment contributed negatively. We are confident that the ongoing pricing measures will improve profitability over time. However, bear in mind that the implemented pricing measures take time to get fully reflected in the accounts, and that quarterly volatility in claims frequency and severity will impact the result also in the future. Let's turn to page 11. We have a dedicated focus on operational efficiency, and I'm very pleased that we have managed to bring our cost ratio further down to a very competitive level at 11.8% this quarter. Bear in mind the one-offs in the third quarter last year. But even adjusted for this, we managed to bring down the ratio by 20 basis points. The cost ratio in private improved due to cost recognized in the third quarter of 2023, following renewal of a distribution agreement in Denmark. Efficiency measures in Norway and growth in insurance revenue also contributed to the improved cost ratio. Commercial cost ratio was slightly higher both in Norway and Denmark, and the improvement in Sweden reflect the higher insurance revenue. Over to slide 12 for comments on the pension operations. Our pre-tax profit adjusted for the change in the contractual service margin was 182 million kroner. The insurance result was down when adjusting for positive effects from model changes and a write-down on the core IT system last year. The decline was driven by an increase in the number of settled claims for child pension insurance and the counting rules of recognisers' losses on onerous contracts immediately, whereas profitable contracts are recognised through the CSM over time. Net finance improved, mainly driven by lower interest rates in the quarter. Results for a unit-linked business improved, with higher administration and management fees due to the growth in the number of occupational pension members and assets under management. Assets under management rose to 84 billion from 79 billion in the second quarter, due to both good investment return and portfolio growth. Moving on to the investment portfolio on page 13. Our investment portfolio generated positive returns for all asset classes except private equity, which showed flat returns in the quarter. The matched portfolio, net of unwinding and the impact of changes in financial assumptions, returned 70 basis points, mainly reflecting lower credit spreads and the fact that the investments did not fully match the accounting-based technical provisions. The free portfolio returned 2.1 percentage points this quarter, reflecting positive returns from high running yields, falling interest rates, and positive equity markets. The risk in our portfolio was brought somewhat down from the second quarter. We have a balanced portfolio and solid fixed income investments, with the large majority having an investment grade rating. A few words on the latest development of our operational targets on slide 14. 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. Our retention in Norway remained high and stable. Retention in Denmark was slightly down, while in Sweden it improved compared with the second quarter. Digitalization and automation are key measures to maintain high cost efficiency, with effect on both the cost and the claims ratio. Our digital distribution index improved by 7.5% in the first nine months this year, with increasing Q3 driven by the higher digital sales. Digital claims increased during the quarter, driven by Norway and Sweden. Automated claims also increased in the quarter. We will start reporting on our new metric, distribution efficiency, from the fourth quarter of this year. Over to page 12. We had a solvency rate of 164% at the end of the third quarter, down six percentage points from Q2. Solvency to operating earnings and returns from the preportfolio contributed positively to eligible loan funds. The formulaic dividend reduced loan funds. As announced earlier, we have exercised a call option on one of our tier two bonds with an outstanding loan amount of 241 million kroner. Although the settlement took place in October, we took account of this in our calculations for the zones ratio for the third quarter. The capital requirement increased by approximately 0.5 billion, with the main drivers being higher underwriting risk due to growth increase in technical provisions and changes in currency rates. Market risk decreased due to low risk in investment portfolio. To sum up on page 16, we continue to have a very strong growth momentum. Sorry. Sorry, I'll leave that for Guy. One question.