Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Gjensidige Forsikring ASA (GJNSY, Financial) reported a profit before tax of NOK2.215 billion, significantly higher than the same quarter last year.
- The company achieved an annualized return on equity of 23.5%, supported by strong investment returns and pension business results.
- Insurance revenue for the group increased by almost 12%, indicating strong growth momentum.
- Customer retention in Norway remains high despite significant price increases, showcasing strong customer loyalty.
- The company has a strong focus on sustainability, with innovative initiatives aimed at reducing claims costs and contributing to a safer society.
Negative Points
- Underlying profitability was negatively impacted by higher claims costs in Norway, particularly in the motor and property insurance segments.
- Claims frequency for property insurance is volatile, with an increase in private and commercial property claims this quarter.
- The company's combined ratio target for 2024 is not expected to be met due to significant weather-related claims and high claims levels.
- The solvency ratio decreased by 6 percentage points from Q2, partly due to increased capital requirements.
- Higher interest expenses on subordinated loans and increased amortization of intangible assets negatively impacted the financial results.
Q & A Highlights
Q: With the SCR increasing by about 10% year-to-date, how does this impact your solvency position and growth ambitions? Also, how does the sale of the Baltic operations affect your combined ratio target for 2026?
A: The SCR growth this quarter is higher due to underlying business growth, but we don't expect this to repeat. We generate sufficient own funds to support our dividend policy. Regarding the combined ratio target, despite the Baltic operations' sale, we maintain our target of below or equal to 83% for 2026.
Q: How certain are you that claims frequency in retail motor has stabilized, and what is the risk if it continues to rise?
A: We continuously monitor claims frequency and adjust pricing accordingly. While we can't guarantee stability, we are confident that our pricing measures and high customer loyalty will improve profitability over time.
Q: Can you provide insights into the claims frequency trend for property in Private Norway, given the volatility observed?
A: Property results are volatile, with recent increases in fire incidents impacting results. We are implementing significant pricing measures to address claims development, particularly in the private segment.
Q: Are the trends in motor and private claims in line with your expectations, and how are deductibles performing?
A: The third quarter showed slightly higher claims frequency in motor than expected, but deductibles are performing as anticipated. We continue to monitor these trends closely.
Q: Why have you increased targeted price increases in property and motor in Private Norway from Q2 to Q3?
A: The increase in pricing measures is a response to claims development. We continuously evaluate the situation and adjust pricing to ensure profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
