Protector Forsikring Ord

pricing and adjustments. But we're not very concerned about it. No change in risk appetite. We still believe that motor is an area where we should continue growing. Any questions on claims development? When you look at the timelines here, you see on the large loss side that we're not at the 8% that we now have as a normalized level. But we still believe that that's a sensible trend. normalized level and on the runoff side I have mentioned previously that best estimate is important for us both on the case reserving and on the actuarial reserving but coming from a period with more uncertainty you can expect that that uncertainty ends up on the conservative side it could obviously go both ways but that's some of what you're seeing now On the cost side, which we haven't talked about, we've talked about the growth and the claims development. On the cost side, there is a reduction. You'll see that broker commission is higher. That's because we grow in France, where broker commission is higher. But if you adjust for that... slightly bigger decrease from last year, but most of it is due to the share price reduction and the long-term bonus plan that we have talked about before that has gone the opposite way. So there's no real reduction in cost quarter over quarter. And again, that's investing in data and in AI. But obviously, At some point, we need to see that in the cost ratio. And I think we have good solutions and good process improvements that will drive a reduction and scalability on the cost ratio going forward. Investments, that's volatile, as you all know. And on the equity side, we had a big loss in the quarter. The two most important things to mention is the increased yield. So the yield has gone up due to the interest rate increase. And the other thing is that in the equity portfolio, there was a mistake in the... presentation that we sent out on estimated intrinsic value discount not that that necessarily is something everyone believe in but that said 30 it is the correct figure is 37 which makes more sense when the when the equity portfolio has had a loss. But the point is, on the equity side, is that the underlying performance of the companies has been good. So it's been okay for some time. We've had some... Some poorer performing companies now it is has turned around. So that's on a good trend. And so that's positive. And just as an example of the volatility, if you look at the equity portfolio today or a couple of days ago, year-to-date were plus, and you could figure that out because you have the list of equities. So the loss is gone and there is a positive return. As of today, but tomorrow could be different. Any questions on the investment side? Yeah, in the profit and loss, the only thing that you see is that the tax rate is high. That's obviously due to the profit coming from the insurance side, and there's tax on that, and that the reduction of the profit comes from equities where there's no tax. Capital position. So in the quarter, the largest reduction in the requirement on the capital side comes from a reduced equity portfolio. So that has some effect. There is also some reducing effects on the requirement from the exchange rate, the Norwegian kroner strengthening in the quarter. And then when it comes to the dividend here, the most important factors for that dividend is obviously that we have an after-stress strong capital position. But we also have... The UK portfolio, we have a high earnings capacity going forward. There's an increased yield in the bond portfolio, but the insurance portfolio is stable. So we know the earnings capacity from that portfolio and more transparency in that following 1st of January and 1st of April in the UK. And then the French portfolio, market now has five quarters and we don't see any signs of that being mispriced or that we've had wrong clients coming in. So we're more confident in the French portfolio, even though it will be volatile. But we see some good development in the French portfolio. And even though We see lots of opportunities for the future. We don't have in the short term, i.e. a year, we won't have many new markets started within one year. And during that time, we have a high earnings capacity. So those are the reasons for that. For the dividend, obviously, we would have liked to have opportunities to use that capital for at any time, but this is more a time element. And in the meantime, we will earn some more capital. So that's it on the summaries. Any more questions?

a bit more big picture the developments in the different markets and I appreciate maybe UK being the main focus more than concern maybe but just in terms of your competition I appreciate that more in general the underlying claims ratio is up but some of it is due to frequency but In some way, I guess pricing also has an impact on that. Where do you see your competition in terms of their profitability amid a market softening? Is this sort of like a timing issue that the industry will on a relative basis bleed out for a few years and then we're back to the 22-23 situation in the UK where you had pretty much the market for yourself? Or is it a change in your competition? Are there more efficient players out there now versus before? Just any comments to sort of ease our nerves that this is not in fact a structural issue. It's more of an irrational behavior type of thing.

I think it's interesting but first predicting where the market will go we don't spend a lot of energy on that because that's difficult but we don't see any competition that is different rather on the opposite where we see MGAs with high cost structures so there you know that one element is their commission level and that commission level is in many cases almost all cases double of our cost ratio and then there is a carrier and behind and there's other cost elements to it so so uh so so that's uh and and also the one who drives the price in the uk market if we focus on that In the Scandinavian market, we don't see any large changes for the Nordic market. The French market is a bit early to say, but we don't see... So if there is a difference between the French market and the UK market, because they're large markets, there are many players, many of the same players. So if there is a difference, it is that the brokers have a larger part of the value chain in France, which gives the relevant part of the cost ratio where we have an advantage, a smaller part to play. But at the same time, we see a change in that. It's not sustainable that the brokers have that large part of the value chain over time. So we don't see any signs of that. But obviously, we're paranoid about our cost position in the areas that we need to improve that. because someone could come or competitors can improve. So we need to continue that journey of improvement. And we are focusing on that. So that's important. But we don't see any signs of it. And how the market cycle goes, it's The historical facts are that market cycles are long in the Nordics. They're shorter in the UK. UK motor, the market cycles are – they can be almost quarterly. And that's driven by the consumer sector. But it – it is contagious to the sectors we are in. And in a way, it must be a good place to be if you have a consistent approach and a disciplined approach to underwriting. And there are quick market cycles. You don't need to be part of the cycle that is unprofitable. So if you stop there, and then you can be part of something that goes up, that must be a good thing. And it is in many ways irrational. And some of the segments we're in, we see irrational behavior now. So there's no way we would, and maybe we're wrong, but some of those segments where where you know that they're not excluding escape of water claims from their cover, our competitors, because then they wouldn't be able to win clients. Those escape of water claims, they won't change a lot. They cost £3,500 per claim, and the frequency of them in general you can predict fairly easily. And when insurance is priced on the level of those claims, then you don't have anything for cost, margin and large losses. So then at some point it will stop. So in some of those segments we think it will. Espen, thank you. Could you please elaborate on RE and what are the main opportunities and what are the main threats you see So it's an elaboration on AI and main opportunities, main threats. And I think I said some words previously, but one example of a threat is that we have one distribution channel. and thinking about whether that distribution channel is present sometime in the future and how that broker part of the value chain will be when you can use agents for parts of that work as a client. That is an interesting exercise. Not because we necessarily could argue against or for that scenario, that brokers have a smaller role and that we lose that distribution. So it's not necessarily believing or not believing in the scenario, but it's a very interesting exercise to do, both together with the brokers, but also for ourselves. And I think the outcome of that is that we will deliver As we go, we would deliver better to the brokers. And if that scenario ends up being, then we're prepared for them not being there. So that's a genetic wording, marketing, and pricing that can be done. But for... For the type of clients we have, remember that the average size of our clients is probably something like 150,000 euros. And UK has very large clients. To use an agent to quote that is a bit more complex because the data is not available like it is in the consumer sector where you have exactly the same cover and exactly the same exposure. So here there are very many tailor-made solutions. But what we believe is that we... can obviously get efficiency gains from ai solutions we already do so we can do more quotes we can do more claims per person and and in parts of the processes we have hq wise we can we can do a lot more on on hr and compliance and All the requirements that come from the outside, much more efficient. But that's kind of obvious, that you can get efficiency gains from large language models. What we focus on is to increase the decision-making ability for Protector, that we are more precise in our decisions. And that's more dependent on data than technology, because the technology is there. So that's, I don't know if it's answered your question exactly, but some words on that.