Release Date: July 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Protector Forsikring ASA (STU:PR4, Financial) reported a strong growth of 16% in the UK market.
- Earnings per share for the second quarter stood at NOK3.1.
- The company will pay out a dividend of NOK2 based on last year's results.
- The France project is progressing well with plans to quote business in quarter three.
- Protector Forsikring ASA (STU:PR4) has a strong renewal rate of 101% for the quarter.
Negative Points
- The combined ratio for the quarter was relatively high at 94.5%.
- The quarter saw a significant increase in large losses, particularly in Denmark and the UK.
- The motor insurance segment is underperforming due to delayed adjustments for high inflation.
- Equity investment performance was relatively poor compared to general indices.
- The running yield on the bond side decreased by 0.4 percentage points due to a reduction in spreads.
Q & A Highlights
Q: Can you elaborate on the weak combined ratio of 94.5% for Q2?
A: Henrik Golfetto Hoye, CEO: The weak combined ratio is primarily due to a high number of large losses, which accounted for 12.5% of the ratio, compared to 4.7% in Q2 2023. This significant increase is mainly due to three large losses, two in Denmark and one in the UK.
Q: What is the outlook for the France project?
A: Henrik Golfetto Hoye, CEO: The France project is progressing well, and we expect to start quoting business in Q3. There have been no red flags so far, and we will continue to provide updates.
Q: How is the growth in different markets, particularly the UK?
A: Henrik Golfetto Hoye, CEO: We saw a 16% growth in the UK, driven by strong renewal rates and new sales, especially in the public sector. Norway and Sweden also showed strong new sales, although Sweden had negative growth due to the exit of consumer schemes.
Q: Can you explain the impact of inflation on your motor claims?
A: Henrik Golfetto Hoye, CEO: We have been late in correcting for high inflation in motor claims. The actions we are taking to improve profitability will take some time to reflect in the premiums, leading to a lagged effect.
Q: How do you view the investment results for the quarter?
A: Henrik Golfetto Hoye, CEO: The equity side performed relatively poorly compared to general indices, while the bond side was strong due to a favorable high-yield market. The reduction in spreads has decreased the running yield by 0.4 percentage points, indicating a decreased risk on the bond side.
Q: What is the current capital situation and dividend policy?
A: Henrik Golfetto Hoye, CEO: The capital situation is solid, with positive results contributing to equity. Despite growth driving up requirements, we believe it is appropriate to pay out a dividend of NOK2 this quarter, in line with our dividend policy.
Q: How are you managing relationships with brokers?
A: Henrik Golfetto Hoye, CEO: We are focusing on unique relationships with brokers, which are our only partners. We will conduct annual broker surveys in the UK during the summer and in the Nordic countries in early autumn to assess and improve these relationships.
Q: What actions are being taken to improve profitability?
A: Henrik Golfetto Hoye, CEO: We are correcting for inflation and poor profitability in specific markets and products. We have also exited some unprofitable clients, contributing to a renewal rate above 100%. We are confident in our profitability outlook.
Q: How does the first half of 2024 compare to 2023 after adjusting for large losses and run-off results?
A: Henrik Golfetto Hoye, CEO: After normalizing large losses and run-off results, the underlying reality for the first half of 2024 is 2 percentage points better than in 2023. This improvement reflects our actions to enhance profitability.
Q: Are there any questions from the audience?
A: Elisabeth Krey Helgesen, IR: No, there are no questions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
