Protector Forsikring Ord

Hello and welcome to the presentation of second quarter 2026 results for Brotektøy. If you have any questions please ask them through email address ir at brotektøyforsikring.no during the presentation and we will answer at the end. As always we have started the day with all employees and which in the Oslo office were very few but what we then speak about is our culture related to targets and performance and with the picture changing with the world changing we have been focusing on defining the challenge what the challenger means in 2030 for some time today one of the focus areas was to link our values to that vision which is about data people and innovation and we have one value that is different from the others in that it is something we say we are and it is committed and one thing it is important that we are committed to and that will not change is our performance culture and our performance culture is something one of the reasons why we are different this goes every day but also in recruitment so if you don't like our performance culture then we probably shouldn't start in Protektor so we've linked that especially to data and AI which will be a part of our performance support structure, which is a monthly run-through in the teams where we look at results and performance on an individual and a team level and give each other feedback so that we can learn from what is done well and what mistakes were done. So it's a structure where we can add on elements that are changing around us and data is obviously a part of it, but technology is a bit more difficult to quantify, but we will add that to the structure for all employees. Then to the results, so it is quarter two is a very strong profitability quarter, 81.5% combined ratio. The growth is on the weaker side but we have communicated most of the growth which is related to the 1st of April inception date in the UK previously and the strong insurance service result together with the investment result gives a nine kroner per share result the other highlights there is we have confirmed or AMVEST has confirmed our credit rating with a stable outlook and the dividend I can get back to through the capital side when it comes to the growth so most of it is UK and most of it is 1st of April and we look at the local currency growth because that's what says something about what is going on in the different markets and we've always done that so we grow in all markets in the UK we have a situation where public sector especially the local authorities, municipalities are not out in the market due to a waiting game for the LGR, the local government reorganization or reform. So we don't see as much business there. and in addition to that it is the softening market that I have talked about previously and that is well known so rates are going down and so it's a similar situation in the biggest markets in the quarter UK and Sweden where we lose some existing clients and one part of it is about discipline So we can even know what rate we need to go to, so get a chance to get to that rate, but competitors are too far below the price that we think is possible, and then we have to let it go. So that's one part of it. On the rest of the portfolio, we managed to get price increases, at least to counter claims inflation. So the renewal process is running well, and obviously there are some unprofitable clients that go out. So our renewal rate in the quarter is 88%, and it's mostly driven by the factors that I have mentioned in the UK and Sweden. On the new sales side, we have the reduced volume in UK public sector. We see more in the commercial sector. We have quoted quite a lot of real estate business, but not with inception dates in quarter two. So that's more for quarter three. and potentially some quarter three clients and and we see quite a lot of volume in in the commercial sector in the Scandinavian countries Sweden has come further on the facilities with the brokers where brokers put together larger groups of clients and that has been longer in Sweden than it has in Norway and Denmark. So Sweden is having success, especially on the motor side, in these facilities and is back on a growth path and after being a slower growth in that market. in Norway and Denmark we are lagging on seeing the volume that we should see from the facilities that we already have access to and have one previously but that is also something that we believe will come but there is work to do in order to make it work both on our side and on the broker's side and then We have won the biggest client that we have ever won in the UK. It's a motor client. It is won because it is large enough that it is difficult to be irrational. Most competitors and us will come to the same conclusion when it comes to calculating the claims forecast. so this is a margin game but mostly a cost game so a client like this should be protector territory and we should win it and especially when it is possible to have a good long-term agreement that is transparent always then the cost leader should win So we're happy to win that client, and we will also use a client like this, which is a large fleet of homogenous drivers and cars, to work on how we can reduce the average claim size and make claims handling better. It's easier when you have a large client like that. So we have some good projects on making that client a success. Obviously, we can be wrong in what we have calculated, and there is risk in getting that type of a client on board, but we're very happy that we won that client. That's quarter three effect. When it comes to the claims, as I said, it is a very strong quarter, but we have lower than a normal level of large losses. in the quarter. So 4.6 is comparable to the 8% normalized level that we usually do. In addition to that, we have runoff gains in the quarter at 4%. So adjusting for those on the total level gives you a slightly improved loss ratio compared to quarter to 2025. And in a market that is softening, rates are going down. It is not necessarily an improvement that you're looking for, more like a stable situation. So we have a portfolio we are very comfortable with. it is property that it has the best loss ratio in all countries except for Denmark where we have some large losses and Malta where we have had some profitability issues previously is improving in Norway and Sweden where Denmark is still experiencing some issues we need to make adjustments are some medium-sized losses in in that portfolio as well but but there it is necessary to to make some price adjustments there and the same in Norway but not to the same no UK sorry so the same in UK where we have had poor profitability over some time on the motor product so we still need to increased prices and make adjustments to get back to profitability a good profitability level there On a longer level, you can see that we have not changed our view on what the normalized level of large losses is. 8% is still our view and runoff should be stable, but as I've mentioned previously, when there is more uncertainty in inflation and extraordinary inflation which we've had historically then uncertainty creates a bit more volatility and most likely on the side that we see now that there will be some runoff gains but it is best estimate always both for the case reserving and for our other reserving practice so we need to to to expect volatility on a quarterly level and even even on an annual level but the last thing that I haven't talked about this is cost is very stable and and this is a conscious choice that we use the excess capacity we have from efficiency improvements to develop and use that capacity in in projects to look at new markets and to make our work smarter so better processes and obviously data and technology that is our main focus going forward so because compared to last year is if you if you correct for or normalize for the long-term bonus plan which we have done for some time now which is connected to the share price there is a slight reduction for the second quarter on the cost side but it's very flat on the first half yeah on the investment side we there is not a lot going on there's a lot going on in the world but not not here so the bond portfolio is slightly down on yield due to spread tightening. And our companies in the equity portfolio have had a okay to good reporting quarter, quarter one. So, and no large changes there. for the income statement I think that there's one there's one figure here that that is can catch someone's eyes is the reinsurance ratio and as we've said previously that will be volatile we have some reinsurance that is Commission based and we don't book a commission in the first two quarters and if and if it continues to run well we will start booking that in quarter three and quarter four and then the other thing is that we have not had basically any recoveries from reinsurance in the quarter previous reinsurance contracts including workers Denmark have given some recoveries continues because they are more on a attritional basis than the excess or loss contracts we have now. So that's the reason. I should expect that to be lower in quarter three and quarter four, but this is normal practice and the right practice. and on the capital side obviously the capital increases with the result for the quarter and the requirement increases with the growth in the balance sheet and then we're back to the summary so it's a short run through of results now and the question is did we get any questions on the

Yes, we have some questions. You've talked a bit about some, answered some of them already, but could you kind of add some color on the expected profitability on this large new client in the UK?

So our target, long term target is 91% below 91% combined ratio and all clients should be there but what we have to do in a situation like this is to include the long term view meaning that the first year profitability is above the long-term target, but over time it should be close to the long-term target. Obviously, we can make mistakes here, and it's a large client.