Sampo (Helsinki:SAMPO) Q3 2026 Earnings Call

0:00 Good morning everyone and welcome to Sampo Group's conference call on the third quarter 26 results. My name is Mirko Hurmerinta, investor relations manager at Sampo. I'm joined on the call today by Group CEO Morten Torsrud and Group CFO Lars Kufal-Beck. The call will include a short presentation by Morten and Lars, followed by Q&A. Recording of the call will later be available at sampo.com. With that, I hand over to you, Morten. Please go ahead.

0:31 Thank you, Mirko. And warmly welcome to the Sampo Q3 conference call from my side as well. And perhaps thank you for taking time to participate in this meeting at a time when there is a lot of other interesting things happening in the world around us. But on Sampo then, the third quarter was once again a statement of our strong performance, driven by broad-based topland growth and strong margins across the group. Our like-for-like GWP growth accelerated to 6%, up from 5% in the second quarter. The performance is strong in all the largest divisions, with 6% growth in private Nordic, 7% in the UK and 7% in commercial Nordics, where growth in SME stands out with a staggering 9% growth in the third quarter.

1:29 The growth is also increasingly volume-based, which is good to see now that inflation is tapering off a little bit. So we see a growth in number of customers and number of objects in all of these three divisions. Meanwhile, our insurance revenue increased by 9%, supported again by positive development in all our segments. This time, perhaps also good to highlight industrial, where we benefit from a change in business mix following our de-risking actions in property. and lower reinsurance prices that are now more visible in the insurance revenue line.

2:16 The improved traction seen in the second quarter and even more in the third quarter brings our year-to-date like-for-like GWP growth to 4% and insurance revenue growth to 8%. Combined with disciplined underwriting and another quarter of favourable severe weather and large claims development, our underwriting result increased by 9% on a currency-adjusted basis in the third quarter. Operating EPS increased with 8% year-to-date, whilst a more moderate 2% in the third quarter isolated. The latter was on one hand driven by higher underwriting results and a positive effect from our recent buyback programs, but on the other hand largely offset by lower realized investment gains than in the prior comparison period.

3:19 Following this strong 9-month performance, and on back of robust growth and also favorable claims development throughout the year we have once again adjusted our outlook upwards for the full year on the insurance revenue side we increased it slightly up to now 9.75 to 9.85 billion euros and on the underwriting side we adjust the range from 1,550 to 1,625 million euros to now 1,600 to 1,650 million euros. The new outlook indicates 7-9% top-line growth and 8-11% underwriting result growth year on year. Needless to say, I'm of course extremely happy with a very strong performance over the first nine months of this year.

4:21 While again we had an excellent quarter and there will be a lot of things to highlight in each and every segment, I thought I should still reflect a little bit on the longer-term performance as we now are approaching the end of our current strategy period. As you can see from this page, we have ticked every box so far. And I'm very confident that this will also be the case when we close our books for 2026. Since 2024, we have delivered 8% topline growth and 11% underwriting result growth on average. If we use the midpoint of our 2026 outlook, we are set to deliver about 40% underwriting profit increase over this three-year period.

5:11 While the favorable claims environment in terms of benign outcome on severe weather and large claims had a positive contribution, the growth was primarily driven by our broad-based and durable top-line growth. At the same time, our underlying margins have remained strong and even improved a bit, thanks to our disciplined underwriting and consistent cost-efficiency improvement. This has been further fuelled by the strong delivery on top Denmark synergies that have been realising well ahead of our initial expectations at the time when we announced the acquisition. The headline figures have been driven by strong performance on our key operational ambitions.

5:57 For example, in the UK we have seen 20% underwriting result growth on average, which has been well above our initial ambition of 10-15% growth. Same thing with personal insurance, which has been enjoying double-digit like-for-like top-line growth. I'm really pleased to see at this time our retention has remained high and stable with impressive customer satisfaction score. And consequently, we have also been able to grow the number of customers as well as the insured objects in all key segments. That said, none of this was achieved due to any exceptional circumstances, M&As or other one-off effects. This is rather a result of consistent investments in our operational capabilities, cost efficiency and customer propositions over a much longer period.

7:00 And importantly, this would not have been possible without our dedicated and talented employees across the group and also the strong support from our partners. All in all, I see us being well positioned to continue building on this strong foundation and further leveraging our scale and operational pole positions in a vast number of areas to deliver superior value to our customers and, as a consequence, also substantial value to our shareholders. Then switching focus a little bit and talking more about some exciting balance sheet items where I will hand over to Lars.

7:44 Thank you so much Morten. The third quarter of 2026 was another volatile quarter in the capital markets and this time more on the fixed income side. While our investment portfolio continued to deliver very solid interest and dividend income, the sharp increase we saw in interest rates during the quarter led to sizable mark-to-market losses this time around. However, remember that these are short-term effects, and higher interest rates enable us to reinvest at higher yields, supporting investment returns in the long term. In fact, our average deal rate on new fixed income investments during the quarter was 4.2%, slightly above our running yield at the end of Q3.

8:30 During the quarter, we also continued to reduce our ownership on NOBA by successfully selling just short of 15 million shares, generating 111 million euros in growth proceeds. Overall, both of our legacy assets, NOBA and Nexi, had a positive contribution to our net investment income, which was nice to see. Moving to the Solvency development, which was quite straightforward also this quarter. Strong operational performance and some extra on top of that from the market effects and the sale of NOBA shares. This was partly offset by the other items barred in the chart. This includes a number of various different factors. One of these is the underwriting seasonality as expected, which tends to be positive in the first quarter of the year and then unwinding into negative effect towards the end of the year. Also, the VAT part of the IT-related intangibles impairment that we announced in September had a small negative effect as well as the coupon payment on our hybrid debts. Then we also added some further prudency to our reserves, partly reflecting the prevailing uncertainty regarding claims inflation outlook due to the higher oil prices, and that in turn increases our insurance risk SCR. Overall, though, I am very, very happy with the 175% solvency coverage that includes the full 90% distribution accrual, particularly given that the symmetric adjustment is still quite high. And as a reference, with 0% symmetric adjustment

10:02 and all else equal, our solvency would have been 179% for the quarter. For those of you who made it to page 21 of our Q3 report, you will have noticed that we will make some changes to our operating result and operating EPS key figures in 2027. Firstly, to avoid any confusion with the new IFRS 18 line item Operating Profit, we have decided to rename these key figures to Core Result and Core EPS, effective from the beginning of 2027. At the same time, besides the naming, a few other changes will be made to the calculation of the new core result. Interest expenses on RT1 nodes will be included in the key figure, as they have cash effect. And then to have an even more consistent treatment of mark-to-market effects, certain derivatives will be excluded.

10:58 And finally, the fixed tax rate that we use for this metric have, for simplification reasons, been increased from 21 to 22% to better reflect the actual effective tax rate we see. As you can see from the right hand table, the impact of these changes is non-material. And I'm sure that some of you have already figured out that announcing these changes now might indicate that we will also continue to have an EPS metric as a final financial target in the next upcoming strategy period. And by doing it this way, we don't have to spend time at the upcoming investor update explaining and introducing the core EPS concept. That was all from my side this time around, and back to you, Morten.

11:42 Thank you, Lars. Before moving to Q&A, I would like to take a few minutes just to revisit some of the market dynamics of the Nordic PNC insurance market. Since there has been, once again, some concerns regarding what AI may or may not change in the future. And frankly, some of the arguments that we've seen have felt a bit strange given the market that we operate within. Starting with the fact that yes, AI will most likely have an impact on distribution in the future as consumer behavior continues to evolve. Although this is nothing new to us, as we have been part of shaping this development for more than two decades with our consistent investments in product innovation, process optimization, and in particular digital distribution to drive better customer outcomes.

12:39 We will of course talk more about AI at our investor update, so now I will rather focus on the things that make the Nordic P&C insurance market different from many other markets. and on the things that will not change due to AI. Unlike many other markets, in the Nordics, P&C insurance is increasingly a service product, not a commodity where price is all that matters. That said, Nordic customers are highly conscious of the value they receive for the money. No one is willing to overpay for value they don't get. For our customers, the value comes in the form of easy-to-use services, good digital setup, user-friendly mobile apps, wide coverage, and simply the fact that when, not if something happens, but rather again when something happens, they can trust that we are there to help a lot.

13:45 I'm saying and stressing then, not if, because claims do happen regularly in the Nordic region. They're often fairly small, but frequent. Our customers have a claim more frequently than every second year, on average. Meaning again, of course, that there will be a lot of customers that have more frequent claims than this, of course. And that's totally fine, as our business model and customer promise in the Nordics is that if helps a lot. Further, part of the service aspect is that customers usually bundle their insurances under the same provider. It's good to have one insurer. It's good to have one service provider.

14:30 On average, our household's customers have more than four policies with IF. Last time I checked my IF mobile app, my household had more than 10 policies, which is actually not uncommon. This is of course something that supports long-lasting customer relationships and high retention. But succeeding in this market requires creating value, of course, for the customers. In the end, that is all that matters. One key figure I'm very proud of is the one on the right-hand side on this page, showing how likely our customers are to recommend us after they have a claim. Turns out those are the most satisfied customers that we have.

15:18 Staying on the claims side, it's important to note that while large parts of the customer journeys will become increasingly digital, the claims resolution will remain fundamentally physical. Cars need to be repaired, leaking pipes needs to be fixed, and broken ankles needs to be treated. As I already alluded to, Nordic P&C Insurance is a service business and customers appreciate the convenience. This means for the most part, this is not a cash settlement business. In fact, over 70% of motor claims are repair services, procured on behalf of our customers, where we already have negotiated the price and the terms, and where we pay the repair shop.

16:07 We handle the hassle so that the customers don't have to. Hence, efficient claims handling from start to finish with superior customer service requires scale, advanced operational capabilities and an extensive partner network. To sum up, I am very confident that with our customer centricity built into our DNA and our sustained focus on innovation, we are more than well positioned to continue our superior service and create value for our customers amid evolving technology trends. So finally, a quick reminder on the upcoming investor update on the 17th of November in London, where we will provide more insight into our operational priorities and financial ambitions for the next strategic period.

17:07 Looking forward to meeting all of you at that event or also on roadshows that we will have after the investor update. And with that, I hand it over to you, Mirko.

17:21 Thank you, Morten and Lars. Operator, we are now ready for questions. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Yudish Chikore from Autonomous Research. Please go ahead.

17:49 Good morning, everyone. Thank you for taking my question. My first question is on the Nordic industrial segment. I was wondering whether the reversal growth was thanks to some one-off contracts or whether the growth is durable, especially as you go into the 1.1 renewals next year. And then secondly, on your private U.K., division. You've described the market as the pricing environment are soft, but you're still growing policy down by a decent number, like 4% in motor in one quarter and 2% in home. So I was wondering whether you can share with us the kind of price increases you're implementing at the moment in motor and home, and then maybe broadly comment on the market, whether there's been any improvement in maybe in the past month.

18:48 Thank you.

18:50 Good. Sure. Thanks. I'll try to cover these two. Nordic Industrial, small positive GWP growth in the third quarter should bear in mind that this is a quite low sort of renew or small quarter in terms of renewals in in industrial so any small movements will be giving kind of an impact there so wouldn't read too much into into that however What we try to highlight and stress a little bit is rather the growth in insurance revenues, so on the net side. Where we of course partly see benefit from a softening reinsurance market, so more attractive to us in that respect.

19:40 And also the fact that the de-risking was larger on a gross side than on the net side. And also that industrial is growing in other lines of businesses than property. So liability, cargo, employee benefits. But the small top line growth in the third quarter isolated, I would not read too much into it. It's a fairly limited renewal quarter anyway. On private UK, I would say that the market is gradually improving. We see prices coming up on renewals. And then we see still, of course, quite a bit of competition on new sales. We still expect and would like to see that the market continue to improve going forward. But of course, we are starting to to come out of the situation where we have significant headwind from sort of year-on-year pricing levels we are growing absolutely in in the market this is partially and perhaps even mainly a result of investments that we've done in more data better pricing sophistication that had have enabled us to innovate increased our underwriting scope and be more competitive in certain pockets of the market we still right to meet the 88 to 90 operating

21:11 ratio so our growth is very much dependent on not only the pricing in the market but also sort of how sophisticated and and good our pricing models are so

21:27 And could you share the price increases you are implementing, if possible, please?

21:33 We're not commenting on the price increases as such, but of course we are clearly pricing now for the inflation that we expect to see going forward. But we don't publish any specific figure on that. All right, understood.

21:48 Thank you very much. The next question comes from Ulrik Zerker from Nordia. Please go ahead.

21:58 Thank you for taking my question, and I apologize, it's a bit boring this time. But I was just focusing down on the cost ratio in the Nordics. It looks maybe like you're heading more for 30, 20 bps improvement than 40 bps improvement. Is that correct? And then I also like just on the cost side, I'm wondering, are there any sort of new investment needs or cost inflation items that we should be aware of in 27? Or do you still think you can improve a bit on the cost ratio next year?

22:37 The underlying improvement is definitely there and of course still being largely fueled by the synergies from the top Denmark integration. There is a little bit of accounting effects back and forth, slightly different accounting practices in the previous top Denmark accounts compared to sort of how we do the accounting in Sampo, so some kind of fluctuations like that. But clearly underlying performance is in line with the 40 basis points. Then, of course, we're also at the same time doing investments and in particular sort of strengthening also the distribution setup.

23:22 But I think, again, largely I would focus on the underlying cost ratio improvement that is there and where we also expect it to come in in 2027. Yeah, that makes sense.

23:37 Sorry, I just forgot something here. No, that's it for me. Thank you. The next question comes from Vashka Salya from Goldman Sachs. Please go ahead.

23:54 Hi, thank you for taking my questions. I have two, potentially three. One is just quickly on your discount fit. That seems to be a bit large for this quarter. Could you just help us understand what's really driving that and what should we expect going forward? Second one is just on the SME growth rate in the commercial segment. Now, while you have reported 9% in this quarter, but it seems to be a bit volatile. across the quarters, because you had something like 7% 1Q, 5% 2Q, 9% 3Q, but you keep on flagging that this particular part of the business is more aligned or more akin to the private segment. So can you help us understand the volatility there?

24:41 And third one, just can you help us understand the change or the impact on your combined ratios from mix shift between product lines and geography? Thank you.

24:53 I'll leave the discount rate first to Lars, and then I'll try to address the two other ones.

24:58 Yes, absolutely. Yeah, you're absolutely right, Vash, that the discounting effect in the Nordic risk ratio that was 4% in Q3, that is somewhat high, and it's also higher than the run rate level we would have all else equal expected. A approximately half of the 1% increase that we saw from Q2, that was driven by the actual change in interest rates, while the other half is pretty much explained by reserve movements. One of the things we have done in Q3 is that we continue, of course, to closely follow up and monitor the development on workers' comp in Denmark following the Supreme Court ruling that we saw. And what we have been doing in this quarter is to reassess the events not in data reserve when it comes to which accident years we actually believe that will be mostly impacted by this.

25:53 So we haven't changed the size of it, but we've changed the distribution across accident years during the quarter. And that does have an impact in terms of giving us a somewhat higher discounting effect in the quarter than what we would all else have expected.

26:11 Then on the SME growth, first of all, of course, you know this, but this is gross written premiums. And of course, gross written premiums is always more volatile than insurance revenue, as it's sort of just exactly what we write in this quarter. So if you have a little bit strong quarter compared with a little bit weak quarter sort of the year before, for instance, you will get some volatility. And then when it comes to the SME market, you've seen a strong development there over time. I think quite many quarters we've been around six, seven percent, and the outlier was probably in the start of the year where it was a little bit softer.

27:00 So yes, nine is perhaps a little bit on the high side, but again, we see really strong traction in this market. To the combined ratio mix, obviously the biggest impact for us is Nordic versus UK. In the Nordics, we have a combined ratio sort of in the low 80s, whilst in the UK we focus on the operating range 88 to 90. So of course that is having an impact, but that you know. Apart from that, we have the same targets within the Nordics between the different segments and different markets. So there you shouldn't really see any large combined ratio effect from growing more in one segment than another.

27:50 We have the same targets for all the segments in the Nordics.

27:56 Got it. Thank you. The next question comes from Nimrat Kaur from Bank of America. Please go ahead.

28:06 Hi, good morning. Thanks for taking my questions. If I can get back to Rick's question on the cost ratio. In the private Nordics, we saw nearly 50 whips of versioning in the cost ratio, despite you're saying the synergies from the top 10 mark acquisition. So if you can give a little bit more color on like what's going on there and what we should consider going forward. and then the second one on the reserve strengthening you mentioned for solvency that has a small negative impact what does that relate to and how should we think about it going forward for that as well

28:46 I'll try to address the cost ratio again. If you look at the development on private and commercial, you will see that private is jumping up, commercial is going down. And I think on the cost ratio, one needs to look at the totality. There are some changes to allocations, there are some changes to portfolios, again as a result of the top Denmark integration. So that is, you know, not real underlying development, but just how portfolios are being kind of moved from one business area to another or how cost is being booked with one business area versus another and how that has been changing. So, unfortunately, until sort of...

29:38 until the top 10 mark business is kind of firmly into also the comparison figures, then there is still a little bit of volatility on the segments on this. Again, I would more look at the totality and then underlying development.

29:57 Thanks a lot for the question. I mean, Sampo has always had a very prudent approach to reserving, and I think a testament to that was also clearly how we dealt with the workers' comp ruling earlier this year. But given the current uncertainty regarding claims inflation or inflation in general, due to the higher oil prices and the conflict we see in the Strait of Hormuz, and the fact that we also had another quarter of so-called good luck with lack of severe weather and large claims, we did take the opportunity to add some prudency, further prudency to our reserves. I think as we do that, we do not change our risk margin. That stays stable at the 85th percentile. So what we do is we actually add reserves to the book. And that means that from a pure modeling point of view, as reserves go up, so does the reserve risk in our partial internal model.

30:51 And hence, all is equal. That does increase our solvency capital requirement related to reserving. So it's a model question rather than anything else.

31:03 Understood. Thank you. And if you mentioned claims inflation and everything, do you give any view? What's your view on the Nordics claims inflation in 2027, motor parts, wages, property, et cetera?

31:15 No. I think apart from what we already said, that inflation is slowly coming down. It's still a little bit elevated. We, of course, have a tight eye on the inflation and inflation development. But we don't give a precise guidance. And it's varying a little bit, of course, from country to country in the Nordic region. Still, highest inflation, obviously, in Norway, driven more by just wage increases domestically.

31:47 Understood. Thank you. The next question comes from Hans Rededal Christensen from Danske Bank Markets. Please go ahead.

32:04 Good morning and thanks for taking my question. Firstly, you mentioned the sort of improved momentum in Q3 on insurance revenue private lines. And then you also say that it's increasingly volume based. So I was wondering, just in terms of how you're pricing, is it more aggressive than before, given that you're able to take volume? And then secondly, also on Norway specifically, how are you seeing sort of price competition there, given that we're coming from exceptionally high levels of price growth?

32:42 Absolutely no. That's my first question. Let's start with that one. Absolutely no change to our pricing sort of philosophy and behavior. We focus on pricing risk correct and we focus on having stable prices to our customers. That's the way that we also will have, of course, good retention. So no changes in that respect. In terms of market dynamics and Norway, As you mentioned, there's been high price increases now for quite many years in the Norwegian market. We see that we have extremely high new sales in the Norwegian market.

33:31 But we also see that of the first year customer, the churn is somewhat higher. So again, retention is very good with our existing customer base. But the customers you've been in the market on the first year basis, churn is higher. So of course, after three years of almost like double digit price increases, a certain part of the market is churning more. I think that is largely playing even to our strength as we have a very efficient and digital distribution model.

34:16 Thank you. Thank you for that. And then I guess my second question is because you elaborated a bit on AI towards the end. And thanks for the number of sort of degree of bundling that you have with four policies or more. um i guess it's a it's an answer you're probably not going to give me but i was wondering in sort of the bundling equation can you talk a little bit about the the degree of kind of that customers get when they bundle um and especially from with regards to kind of ai bots and and how that can be difficult to replicate

34:58 It was a little bit hard to hear the exact question. You asked about what do they get when they bundle, was that the question?

35:06 Yeah, exactly, because I mean, bundling is a sign of being happy with your product, but it can also be a sign of you giving discounts on the degree of bundling.

35:16 And of course, we do that. That is more or less a market practice in the Nordic region that is beneficial for us if customers have multiple products with us. And part of that benefit we share with the customers through a discount. So typically customers have a certain discount if they have multiple products. So that's a normal way of operating in this market and something that we have in all of the four markets.

35:51 And just the market dynamics work sort of in discounting. Is it based on the individual products or is it to find that kind of

36:06 It's typically the more products that you have, the more of the larger products that you have. So if you have both car and home, you get a certain discount. If you have more products, both car, home, and even a personal risk product, you get slightly more discount. And all competitors more or less operate with this type of collector discount in all the foreign markets more or less. So this is a natural way of operating it in the Nordics. Which of course again means that the customer looks at the total bill, the total insurance cost, and not only on each and every separate policy or object.

37:03 Okay, got it.

37:04 That's very clear and all from my side. Thank you so much. The next question comes from Karl Lofthagen from Barenburg. Please go ahead.

37:17 Hi, morning. Thank you for taking my question and hopefully you can hear me okay. I have two on the UK. The first is on the subsidence and some of the fire damage you flagged. in the third quarter. I'm just wondering how much of these subsidence claims you're still, I guess, expecting to come in, or do you feel like you now have a pretty good view of what the impact has been from the dry weather we've seen this summer? And then the second is just back to the private UK growth that you're seeing in the motor book. Wondering how much of that is coming from your telematics app-based product as I understand has been a strong growth drive for Hastings. And then I guess if you can share how much of the UK Motor book today is or has a Telematics product, that would be helpful.

38:09 Thank you.

38:13 Yes, Substance in the UK. As we all know, it's been an extremely hot summer in the UK, and we saw some negative effects of that, of course, on the risk ratio. First of all, as you mentioned on the subsidence side, and of course, what we have now in the books is our best estimate for what we expect will be the outcome of this, both in terms of reported and also potentially claims that have not yet been reported. So again, our reserve of the Q3 includes the expected full effect of this or our best estimate.

39:01 Then on top of that, it's also been a little bit elevated motor frequencies in the UK in July and August. seems to be a lot of driving during summertime in the UK, probably again related to weather. Frequencies went down to more normal levels in September, so I think it's more of a one-off. Then to the growth in the UK. Our growth is clearly more in what we could call core motor than in the telematics book. And again, the growth is coming from us investing more in data, more in pricing capabilities, making us then more competitive in certain pockets of the market, certain sort of specific segments.

39:53 For instance, newer cars is an area where we have improved our competitiveness quite a lot by having more data and better pricing models. When it comes to the size of the telematics book, a little bit about 600,000 customers now in the UK. Again, largest telematic book in the UK market.

40:23 That's great. Thank you. The next question comes from Henrik Glidhag from Mediobanka. Please go ahead. Hi, this is Benit from Mediobanka, sorry. just one question remaining on the private Nordics and I'm just looking at slide 7 the growth rate one thing that stood out is obviously motor seems to have you know I'm talking about the acceleration in GWP in Q3 versus Q2 the pickup in motor sorry the pickup seems to have come more from personal insurance and also private property and almost offsetting the motor reduction.

41:13 Is there anything to add about these two lines? Because I know personal insurance was a focus in previous and this day, so just curious on that. And then the second question is on just revisiting the Nordic commercials It's been two pretty strong quarters here after not a very strong one-in-one kill. I'm just trying to say some one-off claims, so we should expect some of these good numbers and Nordic commercial to continue. Thank you.

41:58 When it comes to growth in private in the Nordics, I would say that the changes quarter on quarter is quite small and normal volatility. So yeah, we continue to see super strong development on personal insurances, double digit. That has been a situation for quite a long time. This is an area where we benefit from a large customer base and excellent distribution setup. private property with good growth and then on motor also good overall small fluctuations from quarter to quarter then we have for a long time said that we hope that the new car sales in particular in Sweden will turn and we start to see perhaps some light in the end of the tunnel there but let's then see for future quarters I would sort of separate between, of course, the more upper commercial and the SME.

43:13 Upper commercial is, of course, a portfolio where you can see some volatility from losing individual clients or winning individual clients in a specific quarter. On the SME side, you should expect a more stable development. And if you look at the growth over the last few quarters, you see that it's typically 6%, 7% now. Clearly a little bit on the stronger side with 9% in the third quarter. But the performance there has been quite consistent if you look sort of over the last few quarters. Just if I can follow up on the Swedish car sales, new car sales.

43:59 There's been some pretty good prints in Q3 and I was thinking the GWP at least should have some effect.

44:11 If I remember correctly it was a good print in September. which means that the GWP effect from that will come in October and then of course you shouldn't you know focus too much on a development on one month or two months of course but if this now is changing if we will see growth in that market going forward then that will be beneficial but of course we need We need more than one good month for it to really sort of materialize and become visible. But of course, everything else equal. What we saw in September should be good for our motor growth in Sweden in October.

45:05 Thank you. Thank you very much. The next question comes from Michelle Balatore from KBW. Please go ahead.

45:17 Yes, thank you for thanking my question. So the first question, going back to growth in the Nordics, of course, you mentioned retention, you know, is an important component. But to what extent the... let's say upselling of new products to existing customers or acquisition of new customers um has been a driver so if you can talk about this two aspect um the second question is about the uk um How do you see the pricing cycle developing in the UK in general?

46:07 And I have a third question about your investment. I mean, I can see you have a running yield of 4%. If I remember correctly, it's increasing a little bit. So if you can tell me what is your reinvestment yield at the moment?

46:23 Thank you. Good, I'll start with the two first ones and then I'll leave investment to you, Lars. growth in the nordics retention is typically around 90 so 89 sort of about 89 is is what we report in private which means that you need to essentially net net get 10 10 11 new customers every year and that's always the dynamic of course the higher retention that you have the less customers you need in a way just to keep the portfolio at balance. Right now we are growing in terms of number of customers. So obviously we are winning more customers than we're losing.

47:13 So that is driving up growth as we speak. Up sales is of course always an element of this. But that doesn't typically change fundamentally from a quarter to a quarter. It's something you always work on. However, a large part of the growth that we see on the personal insurance side is essentially up sales on existing customers. And that is also part of the market that is growing. The customers are clearly willing to spend more money on securing their own health, the health of their spouse, the kids and so forth.

47:59 So personal insurance is a little bit more of an upsell product than the other ones. But again, no kind of new development or changes to this. This is the way that the market is operating in Nordic. So this is how it's always been. To the UK cycle. I think as we already mentioned, or I already mentioned, it's clearly a positive development. We see clearly price increases on renewals, and then we still see a very competitive new sales market. Still would like to see prices coming further up in the UK market, but of course remains to be seen whether now this positive development continues.

48:48 But clearly, again, better situation in the UK market this quarter than the previous quarter. And that has been a little bit of story that we've been communicated for a number of quarters now. So going in the right direction, at least. Investments and running yields.

49:06 Yeah, sure. Thanks. Thanks for that. Thanks for the question. Just just to just to state the opposite. Nothing has changed in terms of our appetite, our philosophy or our investment mix in our investment portfolio. I guess I highlighted in the comments when we went through the slides, our deal rate year to date now stands at four point. 2%, which is slightly higher than the running yield of the book at end of Q3, which was 4.0%. So there is clearly an uptick and an increase in the yield on the investments that we have been making throughout the year. And I think just as a final comment, just in case anyone is interested, I just want to confirm that we have actually no exposure to French government bonds in our portfolio.

49:58 The next question comes from Nimrat Kaur from Bank of America. Please go ahead.

50:20 Hi, just sorry, one last one for me. On your operating result to core result transformation, would the 90% payout ratio be then calculated on the core result? And then do you expect some volatility on this year on year, given this exclusion of the certain derivatives? Any more color on this would be helpful.

50:43 Yeah, I think if I take the last one first, no, we would actually be expecting less volatility on this year and year. If you recall our Q1 results this year, we had a, I would say, a somewhat high operating EPS growth, which we back then alluded to was actually primarily a result of the development on these derivatives. So hopefully this should actually make it even more stable and less volatile. And as we also try to say in the slides, and as you can also see from the reconciliation we're doing between the old operating EPS operating result and the new core result, core EPS numbers that we have in the slide deck, there is absolutely no meaningful impact in the actual size of it. So no, definitely do not expect that to have any impact either on distribution going forward. And remember that the new core EPS and core result will only come due in 2027.

51:43 So for 2026, everything will be based on the existing operating result and operating EPS definition. Understood. Thanks for the clarification. The next question comes from Vashka Salya from Goldman Sachs. Please go ahead.

52:01 Hi, thank you for the opportunity again. I just had a clarification question on a comment you made earlier. So you mentioned that you're seeing renewal rates in the UK motor book going up, but the market continues to be soft and competitive in the new business market. I'm here, probably lack of my understanding, but I thought that after the JIP reforms, your renewal rate and new business rate has to move in line for your book. So which means at a market level, that also has to be true because everyone needs to price new business and renewals at the same rate. So can you just help me understand the dynamic there as to why is it you see a deviation between your renewal rates and competition in the new business market?

52:48 That's a good reflection. The difference here is that there are some new products, new players, and new products from existing players in the market. So on the same products, same offering, of course, you have the same price on new sales and renewals. But if companies come with new products, then of course the pricing is different. And you see a little bit of an inflow of new products in the UK market. So that's the difference.

53:23 And just to clarify, these new products can have like the... versus the old product, or does there need to be a material difference between the old product and then sort of shift pricing?

53:35 Yeah, they need to be different at least. And then, of course, it's always difficult to say exactly how different do they need to be, but they need to be different. It cannot be essentially the same product. It needs to be a different product.

53:54 Got it. That's really helpful clarification. Thank you. There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

54:07 All right. Thank you very much. That concludes the call for today. Thank you for listening in and looking forward to seeing you at the investor update in London.