Protector Forsikring ASA · OSL:PROT
Protector Forsikring ASA — Q2 2017 Earnings Presentation
42 slides from Protector Forsikring ASA's earnings presentation, 2017
Slide 1: Q2 2017 Results
Q2 2017 Results Grenfell Tower update and Investor presentation
Slide 2: Grenfell Tower Accident
Grenfell Tower Accident A Human Tragedy Our deepest, most heartfelt condolences goes out to the victims of the Grenfell Tower tragedy and their families.
Slide 3: Grenfell Tower - Day one and two
Grenfell Tower - Day one and two • 14th of June – Day one • Dramatic fire breaks out in Grenfell Tower, early morning communication within Protector Team • Notification to Oslo Stock Exchange • Large Loss Management group in place. Contact made with broker and reinsurance partners • Full internal pr
Slide 4: Grenfell Tower Accident - Timeline
Grenfell Tower Accident -Timeline First Meeting Meeting Fire at Communi- First Meeting Video More meeting with with Grenfell cation with meeting with conference meetings held with casualty casualty tower, involved with client, Kennedys with with LL team, reinsurers reinsurers 14.06, parties, broker
Slide 5: Grenfell Tower - Government involvement
Grenfell Tower - Government involvement 14th of June • Fire & Rescue on site • Reports of several casualties and injured • Mayor of London speaks • Prime Minister Theresa May calls for government meeting – investigation 15th of June • Statement from the Queen • Death tolls rising • Tower block searc
Slide 6: Large loss - Project organization day
Large loss - Project organization day 1 Organization and lines of communication established Phase 1 project goals established Subprojects defined, and responsible individuals appointed. Main focus on communication, claims handling and reinsurance Initial action points defined and executed 6
Slide 7: Large loss - Project organization day 2
Large loss - Project organization day 2- Underwriting/Risk Management added Organization and communication redefined for phase 2 Project aim, subprojects and corresponding leaders UW and Risk Management defined for phase 2 Subprojects for phase 2 defined and planned with action points, defining resp
Slide 8: Grenfell Tower Accident - Status, Claims Handling
Grenfell Tower Accident - Status, Property and Liability Claims Handling Status Property – Claims Handling • Kennedys picked as our legal counsel on regulatory issues • The client is represented by the Head of Insurance Services • Client has picked DWF as their legal counsel • Cunningham Lindsey app
Slide 9: Grenfell Tower - Other projects
Grenfell Tower - Other projects Reinsurance communication • Immediate contact after the event - done • Submission - done • Meetings in Manchester and London - done Media • Strategy in place; reactive but open / proactive and open • CEO and Regional Manager UK only • Expected Q&A discussed and agreed
Slide 10: Underwriting / Risk Management - RBKC good risk
Underwriting / Risk Management - RBKC was assessed as a good risk on Property • More than 100 different criteria evaluated for property • The most important factors are grouped into 6 different categories • Each factor is evaluated on a scale from 1 (red) to 5 (green) • Tri-Borough was scored white
Slide 11: Underwriting / Risk Management - RBKC inspections
Underwriting / Risk Management - RBKC results from inspections were very good • Properties evaluated on building class, standard, fencing, deviations, criticality of deviations, cctv and neighbourhood • Proportion of properties inspected broken down in groups (1 to 5) • Building class relates to con
Slide 12: Underwriting / Risk Management - Liability
Underwriting / Risk Management - Liability: Supporting premium decision and market levels • Combining white and green factors results in an • Combining all of the evaluation criteria allows overall green rating Protector to form an overall view of the risk at • Relevance and importance of factors ar
Slide 13: Risk Management - Post Grenfell Tower Tragedy
Risk Management - Post Grenfell Tower Tragedy • A stronger focus than ever is on Fire & Safety in UK • Thousands of people are now discussing and implementing improvements • New regulations and laws will gradually appear • Many risks will improve - but how much? • Protector Risk Management post Gren
Slide 14: Risk Appetite - Post Grenfell Tower Tragedy
Risk Appetite - Post Grenfell Tower Tragedy • Protector is top 1 / top 3 in the Nordic Market • We stand firmly behind our UK operation • Targeting a top 3 position in the UK market – broker based • We will review, learn and develop – together with our brokers • We are here to stay
Slide 15: Grenfell Tower Accident - Financial Impact
Grenfell Tower Accident - Financial Impact • Too early to say, will take years, preliminary reserves are highly uncertain • We don’t give detailed information about products, liabilities or any other client and/or reinsurance confidential information. The following figures are preliminary, uncertain
Slide 16: Grenfell Tower Accident - Summary
Grenfell Tower Accident - Summary • A terrible tragedy, worst in decades • Claims handling project quickly up and running • Communication is challenging and important • Competent and experienced partners picked • Involved parties’ feedback and advice is appreciated • Let’s all learn from this traged
Slide 17: Q2 2017 Results - PROTECTOR forsikring
Q2 2017 Results PROTECTOR 7 forsikring
Slide 18: Our DNA
Our DNA Vision The Challenger Business Idea This will happen through unique relationships, best in class decision-making and cost effective solutions Main targets Cost and quality leadership Profitable growth Top 3 Values Credible Open Bold Committed
Slide 19: Highlights Q2 2017 result
Highlights Q2 2017 result - Profitable growth continues – despite Grenfell Tower • Grenfell Tower Fire • Tragic event, minimal net financial effect for Protector • Operating profit before tax of NOK 169,5m (NOK 254,9m) Unchanged guiding for 2017 • Net Combined ratio 90,7% (93,7%) Net combined ratio
Slide 20: Gross written premiums Q2 2017
Gross written premiums Q2 2017 - Nordic growth leader – slightly ahead of schedule • GWP total NOK 890,5m up 23,4% Q2 GWP (NOK m) 1 000 • Strong growth in UK (NOK 130,9m) 800 • Strong Norwegian growth Q3 expected 600 890,5 • Change of ownership: early cut off underlying growth 400 expected to be som
Slide 21: Claims development Q2 2017
Claims development Q2 2017 - Strong quarter • Grenfell Tower tragedy stands for 58,7% of the Q2 Gross claims ratio gross claims ratio 100,0% 95,0% • Gross claims ratio 77,4%1, down from 89,5% in Q2 90,0% 85,0% 16 80,0% 75,0% 70,0% • Q2 run-off gains amounted to NOK 24,3m or 3,2% 77,4%1 65,0% 60,0% •
Slide 22: Cost ratio Q2 2017
Cost ratio Q2 2017 - Cost leader in Europe • Gross expense ratio 7,5%, up from 5,1% • As explained last year, 5,1%, was underlying higher • No real cost issues Q2 Gross expense ratio 12,0% • Net expense ratio 1,5%, up from -0,5% 10,0% 8,0% Target gross expense ratio <7,0% • Cost on a normal, very lo
Slide 23: Commercial and Public lines Norway
Commercial and Public lines Norway - On track, focus on claims handling, very large win Q3 • Volume up 3,1% • Good hit-ratio P&C, poor hit-ratio EB • 1 very large win • Renewal rate 92% • #1 in Norwegian Broker Associations quality survey • 3rd year in a row, 2 out of 3 awards received • Strengthene
Slide 24: Change of ownership insurance (COI)
Change of ownership insurance (COI) - Technical surveys in focus • Number of Open Claims still on a good level • Court results slightly weaker than in Q1 • 37 % - 26 % - 37 % (win, draw, losses) • Very good recourse and claims prevention results • COI released report about Norwegian housing market •
Slide 25: Sweden
Sweden - Strong growth, profitability on track • Volume up 36,1% (+39,3% in SEK) • Renewal rate 71% • One very large non-renewal, 33m • Gross CR of 100,3% (72,5%) Q2 GWP Sweden (NOK m) • Gross combined H1 100,5% 250 200 • New Q-record for claims cost savings, 40,1m 150 204,0 • Net CR of 96,1% (87,0%
Slide 26: Finland
Finland - E-services launched • Public sector on track • Hit-ratio >30% on volume and nr. • Commercial sector advancement • Several new large Motor customers won • Three new broking companies placed customers • Tender volume still low but rising every month • E-services l@unched 1/7 • Update policy
Slide 27: Denmark results Q2 2017
Denmark results Q2 2017 - On track, H1 operating profits before tax NOK 8,7m • Net combined ratio 132,2% (YTD 103,7%) • Net claims ratio Workers Comp. ~ 110%. Slightly more conservative than earlier communicated (100%) • Gross combined ratio 116,4% (YTD 104,5%) • 25,9 % GWP decrease (-35,3 % in DKK)
Slide 28: UK - Large volume quarter, high activity
UK - Large volume quarter, high activity, Grenfell Tower • GWP YTD NOK 157,1m(> 80 clients) • GWP Q2 NOK 140,8m • Grenfell Tower Projects up and running • Net and gross combined ratios influenced by Grenfell Tower, underlying reality too early to say • Very good feedback from the brokers • The chall
Slide 29: Protector's key success factors
Protector’s key success factors - Cost, quality, profitability and growth Gross expense Quality leadership 2012 2013 2014 2015 2016 Q2 2017 ratio PRF 7,7 % 8,8 % 7,6 % 7,5 % 6,8 % 7,5 % Quality leader – 10 years in a row Quality leader – 5 years in a row Gjensidige 15,5 % 15,3 % 15,0 % 15,1 % 14,2 %
Slide 30: Profit & loss Q2 2017
Profit & loss Q2 2017 - Strong growth and improved technical result [1.000.000 NOK] Q2 2017 Q2 2016 YTD 2017 YTD 2016 FY 2016 Gross premiums written 890,5 721,8 2 977,9 2 634,0 3 439,0 GWP growth 23,4% in Q2, 13,1% YTD Gross premiums earned 927,3 873,0 1 785,9 1 655,9 3 250,4 Gross claims incurred (
Slide 31: Investments Core business
Investments Core business 31
Slide 32: Investments - Float growing rapidly
Investments - Beautiful “Float” growing rapidly Net financial assets (NOK m) 10 000 9 089 8 000 6 000 4 000 2 000 0 2012 2013 2014 2015 2016 Q2 2017 % Equity share % Bond portfolio split 25,0 % 100,0 % 20,0 % 17,9 % 80,0 % 69,9 % 60,0 % 15,0 % 40,0 % 10,0 % 20,0 % 12,2 % 5,0 % 0,0 % 0,0 % 2012 2013
Slide 33: Portfolio statistics - Equity portfolio vs. OSEBX
Portfolio statistics - In-house managed equity portfolio vs. OSEBX end of June 2017 In-house Performance – In-house managed portfolio vs. benchmarks (08.10.2014 – 30.06.2017) Managed Key Figures Portfolio OSEBX 130 121,63 Performance 121,6% 13,3% Dividend yield 2,3% 4,1% 110 P/E NTM* 13,9 14,8 90 3
Slide 34: Portfolio statistics - Bond portfolio vs. benchmark
Portfolio statistics - In-house managed portfolio vs. benchmark end of June 2017 Performance – In house managed portfolio2 vs. benchmark* Portfolio data 30.06.2017 (31.03.2015 – 30.06.2017) Size NOK m 6209 10,00 Yield 2,54% 8,61 Duration 0,37 8,00 7,09 Credit duration 3,17 6,00 Average rating BBB+1
Slide 35: Investment performance Q2 2017
Investment performance Q2 2017 - Strong underlying development • 1,3% return on investment portfolio, net investment result of NOK 116,1m Return Q2 2017 • Equities; return of 4,0% 4,5% 4,0% 4,0% • Portfolio consist of 15 companies 3,5% • Good underlying development 3,0% • Two companies sold as their
Slide 36: Balance sheet Q2 2017
Balance sheet Q2 2017 - Strong & growing fast [1.000.000 NOK] 30.06.2017 30.06.2016 31.12.2016 SCR ratio composition Owner-occupied property 13,7 13,6 13,7 (Standard formula calculation) Financial assets* 11 398,3 8 261,5 8 537,6 Bank deposits 285,5 45,9 204,3 3500 177 % Other assets 2 173,8 1 372,1
Slide 37: Solvency II - SCR & Capital
Solvency II - SCR & Capital Composition of SCR: Available SII capital: • Net insurance risk 52 % • Assumed dividend of 40 % on YTD17 result • Net market risk 39 % • Guarantee provision subtracted from own • Other risks 9 % funds SCR composition Available SII capital 3 500 4 500 199 60 4 000 368 3 00
Slide 38: Shareholder matters
Shareholder matters - Per 30.06.2017 Shareholder No. Shares Percent Related parties shareholding STENSHAGEN INVEST AS 6,550,000 7.60% ODIN NORDEN 4,485,857 5.21% • Management’s direct and indirect shareholding totals SWEDBANK ROBUR SMABOLAGSFOND AND NORDENFON 5,763,756 6.69% 3,5m shares or 4,0% of c
Slide 39: Profitable growth + investment return = success
Profitable growth + investment return = success 39
Slide 40: Summary Q2 2017
Summary Q2 2017 - Profitable growth continues – despite Grenfell Tower • GWP growth of 23,4 % or NOK 168,7m • On track to 20% annual growth Unchanged guiding for 2017 Net combined ratio 92% • Net Combined ratio 90,7% (93,7%) Volume growth 20% (22% local) Cost ratio <7% • Solvency ratio of 177%, prep
Slide 41: Q&A Q2 2017 Results
Q&A Q2 2017 Results
Slide 42: Key ratio description
Key ratio description Ratio (1) Claims ratio, net of ceded business (2) Expense ratio, net of ceded business (3) Combined ratio, net of ceded business (4) Gross claims ratio (5) Gross expense ratio (6) Gross combined ratio (7) Retention rate (8) Earnings per share (9) Return on Equity (ROE) (10) Ret