Gjensidige Forsikring ASA (GJF) Earnings Call Transcript & Summary

[Presentation] Good morning, everyone, and welcome to Gjensidige's 2023 Capital Markets Day. My name is Mitra Negård, and I'm Head of Investor Relations. Today, you will hear that we at Gjensidige are ready to release the full potential in our operations. We will present our ambitious goals for the next 3 years. And we will take you through how our operational and strategic priorities and strong capabilities will enable us to deliver on these. We have 6 speakers here today, all members of Gjensidige's executive management team. We will start with our CEO, Geir Holmgren, who will give you the highlights of our ambitions and how we will achieve them. The next presenter on the stage is Janne Flessum, who leads our Strategy and Group Development division. She will discuss key trends and how we plan to navigate in the industry landscape. Rene Floystol, who leads our Private division, will share with you how we plan to enhance growth and profitability for our Private business in Norway and Denmark. We will then move on to our EVP for Commercial Lars Gøran Bjerklund, who will explain how core is key to value creation in our commercial business. Our fifth speaker today is Aysegul Cin, who leads our Claims division. She will share with you our plans for ensuring operational excellence and next-level customer centricity in claims. And after a break, we will continue with our CFO, Jostein Amdal, who will conclude the presentation session today, summing up our priorities to ensure that Gjensidige continues to deliver attractive returns. After that, we will open up for questions from the audience here in Oslo and those of you who are watching this webcast. So without further ado, I will hand you over to our CEO, Geir Holmgren.

Welcome, everyone. Those following on the webcast, welcome to you, and welcome to all of you present here in Oslo. I have been in Gjensidige during the last 11 months. I have met great people. I met investors and analysts. I met our highly competent employees, customers and partners. And together with my management team, we have revised and changed the strategy, sharpen the strategy. We have changed the organizational structure in Gjensidige, and I have put in place a new executive management team, who will be present here today, and you can have -- meet them later on. So -- and I have been looking forward to this Capital Markets Day, having this great opportunity to share our ambitions towards 2026. And I'd like to emphasize our core capabilities, including our employees, great, competent, skilled employees and our modern technology platform make us, enable us to deliver strong results in the next coming years and releasing the full potential. We live in uncertain times. There are wars and unrest in Ukraine, in the Middle East, and there is a shift in the geopolitical landscape. The negative effects of the climate changes we have seen lately, pose a challenge we all need to address. In this situation, our customers ask for advisers, predictability, try to give some certainty, and this is the core of our value proposition. And change is accelerating at a faster pace than we've ever seen. The regulatory landscape is becoming increasingly complex, requiring careful attention and expertise. New technology is reshaping the insurance industry, and consumer expectations are increasing with demands for personalized customer experiences. Online platform and digital solutions become prominent in customer interactions. In addition, we also see development of more transformative technologies like Generative AI. So in this dynamic environment, Gjensidige has a strong position in attractive markets. We will embrace the opportunities by these changes with a solid base of deeply customer-oriented culture, unique competencies and a solid technology platform. I have spent time with my management team to consider how we can release our full potential. What can we further -- how can we further develop our strength? What opportunities do we see? How can we further improve our business based on our skilled employees and state-of-the-art technology platform? Today, we will go into these questions. But let me be clear, let me be clear. It's all about having a stronger focus on core business, delivering the best customer experiences, having brilliant underwriting excellence, being focused on efficiency in our operations, and finally, having disciplined capital management. So to release the full potential, we have made changes in our organizational structure. This will help us streamline our operations and sharing best practice across borders. The purpose is to extract more group synergies. So the next presentations, we address how we will continue to create long-term value for all our stakeholders in this dynamic environment. We have had a strong performance over the past year since the last previous Capital Markets Day in 2021. We have delivered on our ambitious targets and for some metrics well beyond what we set as goal back in 2021. As mentioned earlier, due to severe weather effects and one-off expenses in the third quarter, it will be challenging to deliver on our financial targets for 2023, but we are confident that we will continue to deliver solid results. For 2024 and '25, we will maintain our ambitious combined ratio and cost ratio targets of below 84% and 14%, respectively. We raised our return on equity target to above 22% on the back of higher yields and continued strong capital management. And our solvency target range has been adjusted to 140% to 190%, supporting our rating ambitions, giving some financial flexibility and not keeping more than necessary surplus capital within the group. We are convinced of the benefit of our close integration of our operations in Norway and Denmark. And we have strong expectations from our growth agenda and efficiency measures in the next couple of years. Therefore, we are confident in raising the bar even further for 2026, and we will aim for a combined ratio below 82%, cost ratio of around 13%, and return on equity above 24%. We also introduced a new target metric, the insurance service result for our general insurance business, which we aim to increase to at least NOK 7.5 billion in 2026. This is up NOK 2.4 billion from the result last year based on expected improvements across all our markets, although Norway and Denmark will be the main drivers. Sustainable solutions are the key for value creation. We have set several targets for our 3 focus areas, as you can see on the slide here. We contribute to overall sustainability by offering products that comply with our ambitious ESG framework. We can make a difference by helping customers in preventing damages and the damages occur, we will ensure sustainable claims handling. With a significant size of our investment portfolio, our investment decisions are important contributors to reducing greenhouse gas emissions. And we are signatories of the Science Based Targets initiative, and continue our work to support the Paris Agreement. This will lay the path to reach 0 net emissions from our investments by 2050. So our road map is unchanged. Gjensidige has always played an important role in our customers' lives. This is the core of Gjensidige's more than 200 years long history, successful history. Insight, relevant data and direct customer dialogue have contributed to efficient sales operations and made us relevant for all our customers. We will maintain and further develop this great position and we will become an even stronger partner for our customers by safeguarding their life, health and asset property in the future as well. Our long-term ambition is to be a leading general insurance company in the Nordics. A strong focus on our core business is important to create a common direction and facilitate synergies in the group across all segments. This includes risk products for retail and commercial customers and covering the areas life, health, property, motor and other assets. Scale, competence, investment capability and Nordic presence will become even more important in the years ahead. We will continue to pursue growth, building our strong position in Norway, while at the same time, improving our presence outside Norway. During our strategy period towards 2026, we will have a particular focus on profitable growth in Denmark. We will see collaborative and strategic partnerships across our geographies to drive mutual growth. Our strong brand name and our need for direct customer interaction set a framework for how the strategic partnerships will work. To be able to deliver on our ambitions, we need to focus on our key enablers. We will apply and strengthen our analytical and data-driven approach throughout the value chain and across all our geographies. Our brand will be further developed in all countries we operate in, and we will defend our pole position in Norway. Of course, throughout all our processes, we will make sure that we will live up to our commitment to social responsibility. Continued investment in technology and data are key to reducing costs and achieving enhanced functionality and flexibility. This is necessary to improve -- this is necessary to enable improved digital solutions, more flexible partner interactions and product modularity. Our investments in the new core system and IT infrastructure are important to succeed in becoming an analytics-driven company. And thus, provide better customer experiences, further improve operational efficiency, and create efficient and capacity for innovation. Our greatest asset is our employees. And our ability to retain, attract and develop necessary strategic competencies is key to succeed also in the future. We work continuously on measures to ensure that we are an attractive employer. I am very pleased with the strong recognition we get shown in internal and external service confirming that Gjensidige is an attractive employer. We aim to have a stimulating and engaging working environment, and we are highly convinced of the value of having a strong corporate culture that promotes new thinking and valuable initiatives. We have strong capabilities, which are instrumental to succeed in our industry. We have a unique competitive advantage in our deep underwriting skills, strong distribution setup and our superior claims handling. These capabilities have been developed over many, many years based on a culture of strong customer orientation, continuous development of CRM capabilities, training of staff and relentless efforts to continuously improve operations. These are indeed true differentiators and hard to copy. Leave no doubt, leave no doubt, we will continue to pursue improvements in all aspects of our business model. Rene, Lars Goran and Aysegul will discuss this in their presentations later on today. We have sharpened our strategy to ensure that we will release our full potential. The changes we are implementing will gradually strengthen our fundamentals and enable us to deliver on our strong ambitions. We will prioritize profitable growth in Norway and Denmark, which includes improving underlying frequency loss ratios and the insurance service results. This is due to our excellent underwriting skills and pricing models and also ability to do repricing when necessary. We will extend our core capabilities by offering products and services to strategic partners, which can expand our reach. And we will tap further into attractive market segments and explore untapped opportunities within our core business with innovative and customized products, increasing retention rates and driving cross-selling will be focused areas. This is supported by our ability to leverage digital platforms and data analytics to create personalized customer experiences. Structural growth opportunities, which meet our criteria for value creation will continue to be on our agenda. Second, the new group structure we have in place, we make it easier to release scale benefits and realize synergies across our markets. The executive management team will be able to focus more on strategic initiatives and value-creating business improvements. And third, we are also creating a more agile organization, bringing people, processes, technology together to find the most appropriate and effective way of working. This is a program to further improve our ability to quickly meet changing customer needs, make process more efficient and improve the pace when developing new products and new digital solutions. It's a comprehensive process. It will take some time. But I'm convinced, I am convinced that this will enable us to continue generating strong results. So with this introduction, I will now hand you over to Janne, who will discuss our landscape and strategy in further detail. Thank you.

Thank you, Geir, and good morning to you all. My name is Janne Flessum, and I have the overall responsibility for strategy and group development in Gjensidige, including M&A, Sweden, the Baltics and also our mobility operation. And I'll spend the next 20 minutes or so, introducing you to some of the key trends that will affect our industry going forward as well as our strategic direction and priorities. But first, let me just start by reminding you of some of the key characteristics of the Nordic general insurance marketplace. The Nordics has been and still is a very attractive general insurance marketplace. Competition is high, but with several listed players having clear return on equity targets, competition is also rational. It is probably the most cost-efficient market in the world, and the explanation lies very much in the high degree of digitalization in our society at large, but also within our industry, combined with integrated value chains and direct customer dialogue and interaction. Together with strong local brands, representing trust, this contributes to high customer loyalty, good customer and risk selection and also low distribution cost. For more than 200 years, Gjensidige has shown the ability to continuously adapt to and drive change. And I would dare to say that this is also the core capability necessary to be able to succeed also going forward. Given the increasingly changing environment that we are operating within, and this capability should not be underestimated. Our pinpoint 3 trends, in particular, that will reshape the future of our industry going forward, and create new opportunities. On the one hand, technological development and digitalization is a key enabler. Our strong ability to collect, analyze and use new and existing data in combination with technological investments and integrations with third parties are crucial to continue to improve our customer offerings and provide more integrated solutions for them, staying ahead of competition also when competing for talent. On the other hand, new regulation increases complexity and cost and will likely also accelerate industry consolidation over time. New regulation also means new opportunities and large players, in particular, have a relative advantage. And at the intersection of the technological and regulatory shifts, industry boundaries are blurring, resulting in exciting new business models, innovations and opportunities. And I'll come back to some relevant examples within mobility, within property and also within health insurance in a bit. Overall, our industry is, by its very nature, exposed to the underlying forces in society. And I would pinpoint the climate change in particular, resulting in higher frequency of weather-related events and the need for action. The magnitude and complexity of all these trends and forces make scale and size important. We, therefore, consider a pan-Nordic presence strategically important for Gjensidige, especially in light of the emerging digital global platforms as we, for instance, see within mobility. And this sufficient presence in each market is also important to realize scale benefits and be relevant in local distribution. And in this gradually changing environment, we must keep track on also the changing customer needs and expectations both for today and for the future. Our customers need to feel safe and secure will never disappear. And Gjensidige will never stop securing life, health and assets. That is the very core of what we do and who we are. At the same time, our customers want convenience and no hassle in their everyday life and in their operations, meaning more personalized, integrated and seamless customer journeys. And increasingly, our customers want sustainable solutions. In response, we will lead the way finding new paths to deliver on these expectations because we shall always know our customer best, and we shall always care the most. Therefore, we will gradually seek an even deeper relevance for our customers and partners in the years to come, delivering faster and more integrated services along the customer journeys, always based on a strong and sustainable core insurance offering, but increasingly also supported by strategic partnerships and collaborations to be relevant in the digital world where industry boundaries are gradually raised. Being available for our customers whenever and wherever they need us and expect us to be there and making sure that we are relevant in every single touch point with our customers with relevant products and services, will improve customer experiences, will improve customer loyalty and of course, also insurance sales and profitability even further. In particular, we will help our customers to secure safe and good lives at home. We will help our customers to secure pension, lives and health, and we will also aim at being the preferred mobility partner. In the Nordics, our homes are often the largest Private asset that we hold, and therefore, also a central part of our identity. At the same time, being a house owner has become increasingly complex and challenging due to increased technical standards and requirements and also due to more weather-related events, navigating the fragmented and local provider landscape can be difficult. So together with partners, we will help our customers throughout their housing journey, be it when buying or selling a house, moving in, renovating or living, ultimately also improving the quality of our underlying portfolio. We recognize also that an increasing share of our customers will live in apartments going forward, where the administration is often managed through a housing association. In order to gain access to more insurance customers, housing associations will play an increasingly important role across both private and commercial lines going forward. Climate change, in particular, is driving the need for more preventive measures and sustainable solutions, no matter where you live or how you live. And we are proud of being the very first in the market with taxonomy aligned property products, both within our private and our commercial lines, incentivizing our customers to choose sustainable solutions. We are also testing sensory IoT solutions for damage prevention. And our new home-seller insurance has been very well received in the market, fostering partnerships with real estate brokers, giving us an early data point of an important life event where the insurance need changes. The need for securing pension lives and health will increase going forward driven by an aging population, pressure on the public welfare system, the development of new health technology and also the increased digitalization, and Gjensidige is well positioned with a full range of risk products as well as our pension operation in Norway. New and changing customer needs will create room for new insurance products and services and also new partnerships for even more personalized and seamless customer journeys for well-being and health promotion. One example is our online consultation service with doctors and psychologists where prevention is key. And prevention is key, we are particularly aware of the increasing need for preventing mental illness. We aim at being the perceived insurance company that provides broad, integrated and comprehensive product and service offerings in pension, life and health across both commercial and private lines, be it for companies and their employees or for private individuals. And we are currently working on several important initiatives to make sure that we get there. The automotive industry is currently undergoing the largest changes in many, many decades, driven by the digitalization of the car itself, but also in the way they are produced, distributed and used and as a leading insurer, these changes matter to us. The rapidly electrifying market is valuable for those wanting to stay on top of these changes. And per capita, Norway is the #1 market globally with 84% of all new car sales now being EV. And 24% of the overall car stock is now electrified. The electrification combined with a high degree of digitalization has made Norway a test bed for both the OEMs for new distribution models and advanced software-defined vehicles. And as the market leader, Gjensidige has the unique position, insight and understanding around these trends, and the pace and the strength of our approach towards the mobility industry is a response to these changes. We aim to become the preferred mobility partner going forward. And I'll spend a couple of minutes explaining how. This illustration gives you an idea of the mobility customer journey. Our approach within mobility can be divided into 2 categories: it is about strengthening our attractiveness as a partner longer term, and it is about operational improvements shorter term. When it comes to strengthening our attractiveness as a partner, it is about developing our toolbox for value-adding services and leveraging our local market expertise were natural in the customer journey. Examples include end-to-end deliveries across insurance and warranties, such as branded insurance, roadside assistance through RedGo and value-adding feet-on-the-ground services. And for global OEMs and third-party distributors, we expect these capabilities to be crucial when looking for local or regional insurance partners going forward. As for the operational improvements, we are focused on further improving our core capabilities. Although our distribution model is already very efficient, we continuously look for even more targeted and effective sales measures. And with the acquisition of Flyt, with more than 800,000 car owners in their portfolio, we see further increase in our distribution power. Claims excellence through digitalization and analytics is another key driver for our performance. And following the acquisition of RedGo, we can collect more incident information, settle claims earlier and steer more efficiently to repair shops, handling claims in a more efficient way and a more sustainable way. Rene and Aysegul will elaborate more on these operational effects later on. In sum, we are well prepared for the changes ahead, firmly convinced that our market position will further strengthen in the years to come. Important to note, however, despite the emergence of new business models in mobility, our main scenario is still that the traditional car insurance market will continue to grow and dominate for many years still. And while working on our preparedness strategies, to make sure that we have access to the customer dialogue also in the future, our key priority is still to continuously improve what we are already very good at. And that is hard core general insurance, where our risk appetite also is the highest. And every complementary initiative should contribute to our growth and profitability within general insurance. So to put it very simple, core is king, which brings me on to our -- the priorities at the very core of our operation going forward. Gjensidige has an underlying healthy and profitable portfolio, and we strive for a diversified portfolio based on a good distribution within customer segments, within distribution channels, products and geographies and always with the right risk at the right price. As for customer segments, we seek to have an optimal mix between private, SME and larger enterprises in our portfolio with focus on growing within private and SME in particular. These markets are less volatile and more profitable. We operate an omnichannel distribution model and in the markets in which we have established a position and a sufficient brand strength, we prioritize the channels where we have the direct customer dialogue for increased loyalty and lower acquisition costs. In other markets, a larger element of third-party distribution is more natural. At group level, we have a balanced product portfolio, but in each market, we see a slightly different profile in the product mix. And this is partly due to the relative size of the markets we are in and partly also to the market characteristics and the different customer needs. However, we also see potential, especially outside Norway for significant improvements by utilizing best practices, introducing new products and by diversifying and increasing the number of products per customer even further, strengthening again, customer retention. And last but not least, a strong underwriting discipline is key to delivering on our targets. Higher interest rates does not change this. We need to continue to price ahead of claims inflation and profitability comes before growth, securing optimal risk selection and pricing and allocation of capital for the highest returns. Our priority #1 is to release the full potential across Norway and Denmark by utilizing best practices across borders. In Norway, we have a well-balanced portfolio, and we will take the measures in the direction of a gradually more balanced portfolio also in Denmark. Over time, we will revitalize our products and tariffs and take measures to improve distribution power and our analytical CRM. We'll also increase the digital and automated claims handling and preventive measures along with improved operational efficiency measures, among other things also helped by our new core IT system. And Rene, Lars and Aysegul will return to this in even more detail. So to succeed with our long-term ambition of being a leading general insurer in the Nordics, we will pursue a focused Nordic general insurance growth agenda. We will continue to pursue growth, building on and strengthening our unique position in Norway, while at the same time, strengthening our profitability and growth outside of Norway, but never losing sight of a prudent capital discipline and securing our dividend capacity. Gjensidige is the largest P&C insurer in Norway, and the unique customer dividend model stands strong, supporting our superior brand position and recognition as the #1 insurance company. We will ensure future growth by defending and strengthening our position through healthy growth in commercial lines and even stronger focus on profitability and growth in private lines through world-class risk selection and pricing, omnichannel distribution and claims handling. And our pension operation will continue to be an important complementary business area in Norway. Outside of Norway, Denmark is our most important market today with the biggest potential in utilizing best practices, and we are dedicated to delivering on our ambitious targets. In Sweden and the Baltics, our main focus short term is to continue improving operational efficiency according to existing strategies and the ongoing transformation program. Longer term, we expect to see more strategic alliances and consolidation across the Nordic general insurance market, and we will make sure that we are well positioned to take part in such transformations. Our capital strategy will continue to underpin our attractive dividend policy, and we will continue our proactive but disciplined approach to M&A. And with that, I leave the stage to Rene to introduce you to our Private division. Thank you.

Thank you. My name is Rene Floystol, and I'm responsible for the Private segment in Denmark and Norway. I'm happy to be here today to share with you our ambitions for the Private segment going forward. Today, I will explain why our strong and efficient distribution is crucial for both growth and profitability. We are confident that our data-driven in-house distribution is a competitive advantage for us. Our long-term ambition is to strengthen our position in Norway, and to realize significant profitable growth in Denmark. We have 3 priorities going forward, becoming a digital front-runner, unlock synergies across markets and build for further growth. In Norway, we are a market leader with strong results. We have had a strong sales and customer growth over the last years. Our customer retention is high, with over 50% staying with us for over a decade. In Denmark, we are a market challenger. Now with our organization across markets and our new core system in place, we expect a significant potential going forward. We will utilize our strengths to realize synergies and growth in both countries. Let me start by explaining the reasons for our strong results in Norway. We are convinced of the benefits of direct customer relationships in the Private segment. And therefore, all our distribution activities are carried out through our own channels. Each channel has a specific role and a specific competence and do not compete when it comes to sales. We have a custom-built CRM platform, which we believe is market leading. It is data driven, always on and always learning. This platform steers all the activities in our distribution. We continuously adjust roles and functions in our sales force as new technology becomes available and customer preferences change. As we digitize tasks and gradually implement AI in our processes, we increase distribution efficiency. This means that our employees spend more time with our customers, less time on manual tasks, and we can adapt the size of our workforce accordingly. Our investment in competence, a strong sales force and our CRM platform paved the way for a market-leading customer experience. At our previous Capital Markets Day in 2021, we set a target of increasing our distribution efficiency by 30% by 2025. We are well ahead of reaching this target and have raised the bar further. We aim to increase our distribution efficiency by 25% from 2023 to 2026. This goal applies to both Denmark and Norway. To enhance growth and profitability going forward, we have 3 strategic focus areas: first, we aim to become a digital front-runner. We do this because this will secure profitable customer growth through use of our vast amount of data and new technology, and we will improve our customer satisfaction through improved digital solutions and increased use of AI in our processes. This is why it's crucial to further invest in our CRM platform as this is our main driver to further optimize our distribution and deliver on customer expectations. Second, we will unlock our significant synergy potential across Denmark and Norway. The customer needs and internal processes are similar in these countries. As we're nearly finished with migrating the Danish Private portfolio into a new core system, we are now ready to move technology and best practice across borders. We will focus on improving self-service and customer satisfaction, reduce costs and further improve profitability through better customer segmentation and risk selection. Last, we will build for further growth. We will continue to adapt to customer needs by developing new products and services, which also contribute to damage prevention. We will strengthen our customer relations and make sure that we take our share of the total market growth. Now I would like to try to show an example of how our distribution works in Norway, both for our customers and internally. And hopefully, it will show you how this directly affects top line, cost and profitability. Meet Clara, our customer. Clara currently lives with Peter and they have 2 kids. They have just bought a house and are planning to move. Today, they have their car insured with us. Heading home with her daughter, Clara is reading news on her phone, when she sees an ad for Gjensidige home insurance. The reason Clara gets this personalized offer is because we know through our prediction models that Clara is among the 2% of the population currently planning to move within the next 60 days. And our customer scoring model indicates that is good risk with low probability of damage. In fact, 40% of our customers receive these digital and personalized offers today. We aim to increase this to 70% by 2026. Now back to Clara. As she finds the offer interesting, she clicks on the ad to find out more. But life happens and she gets interrupted. These customer insights generates leads to our outbound sales platform. Clara's phone number is automatically put in the queue, and we call her. The customer adviser making the call is supported with a broad set of relevant data to make sure she gives Clara the right advice. 1,200 data variables enables us to predict Clara's current insurance needs. Clara has high probability of purchasing child insurance and home content insurance as well as home insurance. By offering Clara what's most relevant to her, we increased the likelihood of her buying child insurance by 38% and 75% for home content insurance. In general, use of insight in our ads and our sales platform gives more than a 45% increase in likelihood to buy compared to a randomly target customer. This, we aim to increase to 60%. But unfortunately, Clara doesn't pick up. So our system generates an e-mail with a personalized offer, including a discount due to our loyalty program. Clara uses the information provided when discussing the offer with our partner. Our loyalty program is analytically calculated, rewarding broad customer engagements, as we know that it's an important driver for customer retention. Customers with several products has a significantly higher retention rate than customers with fewer products. We aim to increase the share of our customers with 2 or more products from 64% to 69%. As the offer is highly relevant, Clara decides to sign all 3 products digitally. As you can see, when combining our internal and external real-time data with machine learning and our in-house distribution model, we're able to respond quickly, deliver on customer expectations and increase sales. It enables us to realize the effects as piece by piece of our processes are being digitized. I'm excited to build upon this when improving distribution efficiency in Norway and accelerate our progress in Denmark. Let me walk you through a few supporting initiatives. In Norway, we have an ambitious road map. Our continued investment in real-time data and AI allow for increased automation. This will enable timely and relevant offers to our customers across all channels. We expect a 15% reduction in manual handling costs related to digital quotes. Each year, we handle over 1 million insurance quotes in our customer centers. We are now developing a modernized user interface, which will reduce manual handling time by 25% when fully implemented. We are automating and improving our follow-up process of insurance quotes. This will increase sales by 10% as our conversion rate improves. And lastly, we are automating and improving -- we're automating forms manually handled today. This will reduce handling time of forms by 20% within the next couple of years. These examples show that we still have a substantial potential in Norway. Moving to Denmark. Private consumers in Denmark and Norway share many similarities. Combined with our new core system, this enables us to move best practice across borders. One example is moving the technology, enabling the customer journey Clara experienced to Denmark within the next 6 months. Additionally, we have a list of over 50 planned initiatives. A few examples are process automation with a potential of 30% increase in sales and service efficiency. Improved task management and implementation of AI with an expected 40% increase in back office efficiency. Establishing our web shop on our Nordic architecture with an expected 20% increase in digital conversion rate. And lastly, increasing self-service jobs by 40% by implementing AI-based personalized content and digitized customer tasks. Altogether, the initiatives in Norway and Denmark will help us realize our target of 25% increase in distribution efficiency. We expect a continued market growth within our main products. Over the next 5 years, we expect an accumulated growth in Norway in number of policies by 5% in motor insurance, also 5% in life and health insurance, while a more moderate 2% in home insurance during this period. We are well positioned to take our share of this market growth as well as increasing our revenue through new products and services. We will, of course, make sure that our products are in line with the taxonomy regulation. This is important to secure correct pricing and help our customers prevent damages. Our home content, car and boat insurance products are already in line with the requirements. In terms of pricing, there's no change in our plans. We'll continue to price at least in line with expected claims inflation. Thanks to our strong position, we are confident that we will be able to put through the necessary price increases. Janne touched upon our mobility investment. Our toll tag company Flyt, gives us access to more than 50% of the Norwegian car fleet. We are planning several initiatives to capitalize on these opportunities. One example is our app Bilista, which aim to simplify car ownership. We see a growing number of new customers through Flyt. The manual leads we have got so far has been highly relevant with a conversion rate of 8%. As the infrastructure to automate leads and hence, increase sales, now is in place, we aim for 10,000 new policies per year by 2026. In Denmark, we are well established in the change of ownership insurance market. We drew valuable lessons from this when we entered the market in Norway with a similar product back in 2021. We have achieved a 19% market share in only 1.5 years. We expect to reach at least 30% by 2026. In terms of home insurance, we will continue to develop our offering to include damage preventing measures. Our cooperation with the Norwegian Computing Center has given us valuable insights in the risk of water-related damages. We are utilizing this knowledge in our pricing and in our dialogue with our customers. Another example is Boligblikk. Boligblikk is a product that combines home insurance with sensors to prevent damages. We plan on testing this together with RedGo in the market next year, expanding to both Norway and Denmark, if well received. With an aging population, we know that the public health care system will need support with -- from private services. This represents a very attractive opportunity for Gjensidige as 40% of Norwegians are insured with us through their employer. We will capitalize on this starting off with improving our offering across commercial, private and pension lines. Wrapping up, we expect our digitization efforts, use of data and AI to improve profitability, growth and customer satisfaction. As our ambitious road map indicates, we expect a 25% increase in distribution efficiency, impacting both increased sales and reduced costs. In Norway, we have kept our retention rate at 90% the last 10 years, and our customer satisfaction is high. We expect our efforts to keep us at the same level going forward. For Denmark, we expect our new core system and new digital solutions to improve both customer satisfaction and customer retention. We are confident that we have built a business that will deliver strong, top and bottom line results for the years to come. Our key priorities towards 2026 is to become a digital front-runner with a technology-driven optimization of our distribution, unlock significant potential across Denmark and Norway and build for further growth and solving our customers' needs even better. This will ensure profitability and growth in the Private segment. Now I will pass the word over to my colleague, Lars, who will present to you our ambitions for the Commercial segment.

Thank you, Rene, and good morning, everybody. My name is Lars Goran Bjerklund, and I'm Head of the Commercial segment in Gjensidige. I have been responsible for the Commercial segment in Norway since back in 2018 and since July this year, I'm also responsible for the Commercial segment in Denmark. So let's take a look at our ambitions. Our long-term ambition is to substantially strengthen our footprint in Denmark to become a top 3 player, and to further strengthen our footprint in Norway. That's a solid #1. A top 3 position in Denmark will require both organic and inorganic growth. And being a top 3 to us means having top quality in the operations is about having a top 3 portfolio size and of course, having a strong and good profitability. Our ambitions to grow in the Danish commercial market. It's about unleashing the full potential. And let it be clear, profitability is always, always our #1 priority. To support these ambitions and towards 2026, we will prioritize delivering superior customer experiences. We will prioritize win in the market for smaller companies, and we will prioritizing strengthening our competitive position in Denmark. And today, I would like to give you some more insight into how and why we will succeed. And hopefully, you will also recognize that I'm talking about many of the same core operational areas that I was focusing on back in the Capital Markets Day in 2021. During the past few years, we have seen a strong development in both Denmark and in Norway, as you can see illustrated behind me. But the operations in Denmark and Norway have different prerequisites. In the Norwegian operations, we have during the past few years spent significant time and resources on developing those areas that support our highly competent employees. And this is areas like analytical tools, analytical insight. We have been working a lot with process development and systems support. And this is key when it comes to being an attractive profitable insurance and provider. And it's also important to be an attractive employer. Looking at Denmark, the strong performance you see illustrated here is, first and foremost, delivered by our highly competent employees, supported by an increase in the brand awareness during this period. During this period, our Danish operation have been focused on designing and developing our -- the new core system, and they have not been able in the same way as in Norway to prioritize developing our system support. And to me, this proves the tremendous effort made by our Danish team, and it also indicates there is a great potential going forward. The size, the maturity and the profitability within the Danish commercial portfolio have now reached a level where it makes good sense to integrate it into our Commercial segment. We have also established a Danish Norwegian management team with cross-border responsibility. And this will support our efforts to realize the synergies going forward. Moving forward, we see the largest potential for profitable growth in Denmark. However, in -- and as you will see through this presentation, there is still room for further improvement also in Norway. There are numerous factors contributing to our strong performance. Our focus on the fundamentals is an important one. And this focus will enable us creating value, both short and long term. And we have summarized these fundamentals as core analytical and powered core. And this may seem basic, and by all means, this is areas that are important to any insurance company. But as simple as it may seem, it takes deep expertise to execute on it, and it has a great value to perform better than peers. So let's take a look at what we mean by the term of core, starting with customer experiences. For decades, Gjensidige has kept customer centricity top of mind, and we will continue to do so. We will develop solutions that meet customer expectations, both to quality and to availability. Operational excellence, it's about using the best practice. It's about portfolio management, daily operations and processes. Responsibility reflects our commitment, to ensure that our value proposition are responsible with regards to people, planet and profit. And finally, we need to make sure that our employees spend their time on what's really, really create value for our customers and to us. And this employee part is strongly connected to how we are developing customer solutions, how we work with operational excellence and that we are delivering a responsible value proposition. And I would now like to give you a few examples of ongoing core initiatives and how this will support our ambitions going forward. Being available when needed is among top 3 criteria when a commercial customer choosing their insurance provider. And user-friendly self-surface interfaces are key when it comes to provide the expected availability 24/7. And the more there are customers using these interfaces, the more time our advisers can spend on those customers for whom these self-service interfaces are not a good option. Back in the Capital Markets Day in 2021, I described a digitally mature commercial insurance market. And in Norway, we have now made significant advances during the past few years, while by developing efficient customer interaction with the best insurance expertise. We have developed a digital adviser, including a wide range of nonlife products and pension. And for a number of products, the customer may also finalize the purchase online, with direct connection to the core system, and this is enabling a true self-service purchase. And for those products where this -- where you cannot push online, the customer adviser, we follow up, supported by machine learning models they will efficiently solve the customer needs. We have come far in Norway, but -- and effects are starting to show, but there is still a need for significant development before we reach a more or less full-scale digital offering where selected customers to handle all their insurance needs online. And at that point, we expect to see a step change when it comes to use and effects. In Denmark, our efforts over the past few years have been concentrated on the new core system. And next year, in Denmark, we will start doing thorough testing. And in 2025, we will start using the system in our Danish Commercial portfolio. Following the migration in Denmark, we will start building a digital solution on top of the core system, and we will build it on the fundamentals and the experience from our Norwegian organization. And this is important because this will further improve our availability and efficiency in Denmark. So let's move on to the broad area of operational excellence. And I would like to share with you an example on how we work with portfolio management and repricing customers. Portfolio management is and will continue to be crucial when it comes to risk selection and profitability development. And important areas are monitoring the past development, predicting the future development, considering pricing measures, other measures on how to allocate it and ensuring that we are using the best approach and involve the relevant resources when it comes to sales and renewals. And by developing this increasingly advanced customer scoring models, we see that retention rate improving, we see that customers leaving us are less profitable than those choosing to stay. And we see that sales efficiency increases significantly. The effects I just showed you are to a large extent a result of how we have developed and implemented our current repricing process in Norway during the past 5 years. And we started out with a high-level customer segmentation and the more traditional rule-based customer scoring model. Today, 5 years down the road, we are significantly more mature. We have robust processes. We have more granulated segmentation and we're utilizing machine learning models. And this is resulting in higher accuracy and more differentiated pricing. And these models are important because they are strengthening over time, and they are increasing our competitiveness. Establishing such models requires an extensive amount of data and making it difficult to replicate and compete with, especially for the smaller players. For the large customer segment, we have started introducing analytical tools supporting the manual processes handled by our underwriters and our advisers. When we have migrated into the new core system, we will have a solid base for building robust models and processes also in Denmark. And we will enter narrow and eventually close the gap between Norway and Denmark. Moving forward, in Norway, it will be more of the same. While in Denmark, we see much of the same potential that we saw in Norway back in 2018. So let's move on to responsibility. Acting responsible is far more than reporting to new standards and making sure we are compliant with new regulations. We are a part of a global transformation for a sustainable future. In order to succeed moving forward, our ability to cease opportunities, mitigate risk and incorporate ESG in our business processes will be essential. Customers' expectation to us changing along with the general focus in the society. And our largest customers are way ahead of us and they make specific requirements in ESG-related topics. And we have seen a significant increase in information requests, both in tenders and directly to our advisers. Severe weather events and related damages and claims are also important factors with significant impact on our operations. We have experienced a rise in both the frequency and severity of weather events most recently during the third quarter this year. And of course, we are paying close attention to this. Incorporating ESG considerations into our daily operations is essential, and I will now give you some more insight into how we are doing this. While we strive to deliver on the group's sustainability targets, our priority is to create customer value and to support our customers in their own ESG efforts. To illustrate this approach, I would like to give you a few examples on how E, S and G are incorporated into our customer offering. And as you will see, this is very, very much at the core of what we do. We are integrating climate scenarios into our pricing models and we incentivize our customers to prevent damage from future weather events. And this is contributing to more climate robust businesses. We also offer accident, health and pension solutions, which are important in a social perspective. And this also contributes to employer attractiveness to our customers while they are taking responsibility for their employees. And in addition to offer cyber insurance, we are offering a cyber maturity evaluation tool in cooperation with DNV. DNV is an independent expert within assurance and risk management. And this tool contributes to more awareness and robustness against cyber crime among businesses. And finally, moving on to our employees. The enablers of realizing our strategy, realizing our ambitions and our initiatives. Our employees representing Gjensidige towards the customer every day. And their ability to come through as a relevant adviser is essential to our customers. But we also acknowledge that this takes more than ever. Not only do we have a range of customers from industries with really great variety. Our advisers also need to know detailed information about the wide range of products. They need to be up to speed when it comes to the ESG transformation, and they need to handle an increasingly amount of new regulations. With this as a backdrop, I would like to illustrate how we systematically work on the developing competence which makes an important contribution to our attractiveness as an employer and to our competitiveness. Providing support to our advisers so that they can spend their time on the right customers with the right message at the right time and efficiently solve customer needs is a top priority. The examples I shared with you through this presentation support this in one way or another. But in the commercial market, we will continue to require some expert consideration and personal customer dialogue. Therefore, it is essential that we continuously invest in developing competence to ensure that our advisers are always updated. In Norway, we have established a structured approach to this, specifically designed for our commercial advisers, and this is a combination of internal classes, mandatory certification and weekly training. Combining this individual expertise with system support, enable our people to devote their time generating the best possible customer value. And moving forward, we see a potential -- in the Norwegian Danish organization to ensure a structured approach to competence development for all our commercial employees. The core examples we have looked at illustrates a few of the things we are developing. And this will support our ability to deliver on our priorities across Norway and Denmark towards 2026. We will deliver superior customer experiences. This is about smooth processes. It's about system support and delivering a responsible value proposition. We will win the market for smaller companies. This is a profitable segment, and it is a significant share of our markets. By utilizing online solutions and our analytical and powered advisers, we will ensure an efficient distribution and we will have an industry-specific value proposition. And we will strengthen our competitive position in Denmark. To start with, we will focus on system development, portfolio integration, and we will further developing the portfolio management. Delivering on these targets will add another gear to customer loyalty, top line growth and to profitability. So let's wrapping up. Our long-term ambition are reaching a profitable top 3 position in Denmark, while further strengthening our position in Norway as a solid #1. In Norway, we will continue developing in the same direction that we have done over the past few years. While in Denmark, it will be much about closing the gap. Our priorities towards 2026 are a part of this journey, and it will support a profitable growth delivered by a highly efficient organization. Our focus on the core areas will enable our success and our ability to unleash the full potential across Denmark and Norway. And I will now give the floor to my colleague, Aysegul, who will share with you our ambitions for Claims.

Thank you, Lars. My name is Aysegul Cin, and I'm responsible for Gjensidige's Claims division. I'm very happy to be here today and share with you our ambitions and plans and give you also some really good deep dives into our operations. So our joint claims organization was established across our Danish and Norwegian operations in connection with the reorganization that happened 1st of July. Now we have robust plans for how we will develop 1 claim operation to unleash the full potential, we believe there is, and ensure that we will continue to deliver operational excellence in the future. Our ambition is to make sure and contribute to the group's continued growth and profitability by realizing synergies, improving our operations and in turn, reducing claims costs. Digitalization, data and analytics are very important enablers for operational efficiency and also to reach our targets both in Norway and in Denmark. And through my presentation, I will revisit this topic several times. When it comes to sustainability, we are on good track to achieve our targets in carbon emission reduction, and we will continue to make sustainability a core part of our operations. Since 2016, we have shown a strong track record in improvements in Norway in terms of efficiency gains and customer satisfaction. NOK 1 billion in cost claims cost savings has been realized through several improvements and initiatives, and the most important enablers has been digitalization, automation and process reengineering. And this happened in a period where the reported number of claims increased by 19%. I believe this is a strong demonstration of our continuous focus on creating value for Gjensidige and our execution power in claims. And looking ahead, our 1 claim operation put us in a very good position to unleash the potential in Denmark as well. And in Norway, we are ready to take new big steps. Gjensidige's strength is our competent and engaged employees. They are all very committed to our future ambitions. And therefore, I'm very confident that we will be successful in reaching our targets also going forward. Our joint claims operation handled more than NOK 18 billion in claims costs and more than 750,000 claims cases. With this high number of claims, I firmly believe there are scale benefits and potential in both countries. And to ensure that the new organization has a unified approach and enables best practice sharing across countries and departments, we have launched a program with our prioritized initiatives. Synergy realization, claims cost reduction, of course, and strengthening the customer satisfaction will be main focus in our program, and I will give you more insight into some of the initiatives today. Digitalization, data and analytics are essential to further develop our operations, and we will continue to invest in those areas. We have a good foundation to start with. We have highly skilled employees in-house. We have scalable solutions, and more importantly, we have the know-how to achieve efficiency in our operations and reduce claims costs across borders and lines of business. We have several ongoing initiatives to reduce our carbon emission in claims processes and are making really good progress. We will continue to put strong effort into damage prevention, which ultimately had the biggest impact on sustainability. So through our program, we have identified a substantial potential of claim cost savings of NOK 800 million by 2026. This is combined for Norway and Denmark, and we expect savings will come from several areas, such as fraud, procurements, recourse and general process optimization. Our approach to cost reduction initiatives is based on a systematic assessment of all parts of our claims processes and claims payments. We identified potentials with a recognized bottom-up model and involved broadly in the process. In this way, we can swiftly execute on initiatives and measures in the next steps. So let us look at some of the most important activities -- initiatives sorry, starting with fraud. Fraud detection has historically contributed substantially to claims cost savings. And the good news is that we still see more potential. Our expectation is an impact of NOK 150 million by the end of 2026. The heart of the fraud detection is a state-of-the-art fraud filter, which is built on analytics and machine learning models that are fed with external and internal data from multiple data sources. Machine learning are not only used to build a model, but also to improve them and update them automatically. The fraud filter is scalable and can easily be expanded with more data sources. In Denmark, we have implemented fraud filter for motor insurance and are now ready to scale the solutions for all main lines of business. Continued improvements of our fraud solutions, including optimization of the control processes, higher quality in the data and improvements in filter -- fraud filter, we now will contribute to higher hit rates and in turn, cost savings. For example, based on a recently completed pilot in Norway, we were able to increase the hit rate from 40% to 65% in [indiscernible] claims. The use of falsified documents is a growing concern. However, we are meeting this risk with new technology based on AI, which enables us to efficiently detect fake documents among the vast number of documents we receive in claim. The detection tool will also help us increase the automation level in cases where we need to do the document assessments. So to the second example, is in procurement. To be successful in -- with procurement in claims, first of all, we need an extensive network of suppliers that meets the customers' needs when the damage occurs. Secondly, close integration of suppliers in our claims processes. And thirdly, data-driven automated processes and cost control is important. Both in Denmark and in Norway, we have a wide network of suppliers. In Norway, the steering degree is high at 90% and in Denmark at 50%, which represents a potential. With our proven procurement solutions, we will increase the automation level and boost our steering ability in Denmark. Our experience from Norway is that automated processes with suppliers enable higher quality assessments and superior cost control. In Norway, we will continue to develop our partner platform with new functionality. We see interesting opportunities in taking a more holistic approach to customers' interaction with suppliers and also to strengthen the steering ability. Steering of claims is not only relevant initially in a claim, but also in the following process steps. Our aim is to support our customers in every step of a claim process and lead them through the interaction with our different suppliers. The third example I will present is RedGo. Janne presented our long-term ambition within mobility and in shorter term, the integration activities with RedGo is in focus. We see positive progress in the integration and we can confirm a synergy of NOK 23 million per third quarter this year. Our ambition with RedGo is to create a seamless customer experience and a close integration between the 24/7 first line, the roadside system and the claims handling. RedGo enabled us to be first on-site for the customers which has several benefits. First of all, it ensures a better customer experience because we can take care of the customers from the get-go. Secondly, it gives access to more comprehensive data about the accident and the claim early on. And thirdly, it enables a higher degree of steering. Gjensidige has established RedGo as the first line management for all customers with property and motor claims. This will benefit both our customers with 24/7 availability and for Gjensidige, it will free up time spent on the phone, allowing more dedicated time to claims handling and to more complex tasks. We are working on several new initiatives. For example, are we working to establish a process tool for the roadside assistance team that will enable RedGo to steer the claims early on to the repair shops, that is a part of Gjensidige's network, and also images could be uploaded that will be automatically registered on the claim on site. And alongside with claims cost saving initiatives, we will, of course, also make sure that we take care of our customers and meet their expectations in the future. And when it comes to customer experience, we will not settle for less than the wow effect. Given the nature of our business, we have no or little contact with our customers before a claim arises. Therefore, their experience with us and their satisfaction and their loyalty is greatly determined by the way we manage their claim. Customers who have experienced a claim in Gjensidige are Gjensidige's most satisfied customers. And we keep pride in keeping it that way going forward. We are not only measuring the customer satisfaction but also our ability to make our customers enthusiastic about the claim experience. Looking at our claims operation, we can say that we have turned it into an effective machine, it's digitalized, automated, and we have decreased the number of customer contact to a minimum. Our customers appreciate our speedy claims processes and Gjensidige can operate efficiently and at a low cost. However, creating excellent customer experiences requires continuous work, and we always look ahead and prepare for meeting our customers' expectations also in the future. And going forward, we will deliver more personalized experiences and build claims customer journeys based on our customers' needs rather than the type of claim. We will lead and support our customers throughout our claim process more proactively and create a more seamless experience regardless of all the different parties involved in a claim. Every touch point for the customer should be easy and hassle-free and we will enable a more dynamic sharing of information and advices along the way. And to deliver this experience, we will develop what we call a customer experience layer on top of our efficient operations, consisting of data, analytics and technological tools that will support this customer journey. And as I said, our aim is to create new customer experiences that exceeds expectations. Looking at this picture, I can say we are really proud of our achievements within digitalization and automation so far. Nevertheless, we are not stopping here. In Denmark, our colleagues has put an extraordinary effort into our core system implementation. And now we are ready to accelerate the digitalization and automation level in Denmark as well. We are ready to export our digital solutions and our know-how from our digital transformation in Norway. Our solutions covers all part of our processes. It's fraud detection coverage assessments, steering to suppliers to mention some. And we have established departments with cross-Nordic responsibility with highly skilled employees so we can utilize our expertise across borders. In Norway, there is still some potential to increase the digital reporting. However, our focus will be on further automation where most of the potential is. Implementing AI in our core processes and scale our solutions further to new areas will have major impact on efficiency in claims handling. Let us dig further into that topic. We have worked systematically with automation. We have automated parts of our processes fully end-to-end and so on. However, as you can see here with examples from Norway, we can do more in several areas. AI, including generative AI, opens up for new opportunities for automation and process improvements that will really have an impact on efficiency and strengthen customer satisfaction as well. Manual processing of a high number of documents, images and customer touch points such as e-mails and chats, suggest a potential to increase the proportion of automation with AI. We also see possibilities in reducing handling time in our more complex cases by using AI tools as support for decision-making for our claims handlers. We have already tested solution, and we are ready to scale. Chat analyzer is 1 example. Chat analyzing enables customer requests to be managed with no human touch and with automatic responses. We started with simple and frequent chats and are continuously working to improve and expand chat analyzer to new areas. Another example is image recognition, which we use to classify claims -- sorry, classify claims based on pictures. It could be a picture of a damaged car, for example. And with this classification, we can steer the claim to a preferred repair shop and also decide on the repair methods automatically only based on this picture. As clearly stated throughout our presentation today, sustainability is a natural part of our operation. That also goes for claims. We have well-established processes with our suppliers to ensure sustainable repair choices for our customers. Our strong steering capacity puts Gjensidige in a unique position to increase awareness and willingness of customers and suppliers to adopt circular economy principles, minimize waste and extend the lifespan of components. Claims accounts for the largest carbon emission in Gjensidige with majority coming from motor claims. And we closely monitor our carbon emission reduction, and we are on track to receiving -- to achieving our 35% reduction by 2025 compared with the base year 2019. In addition, we have several ongoing initiatives to explore new areas. One example is a flood risk pilot with a climate tech start-up that uses AI to prevent climate damage on buildings. With data points on address level, we are able to predict future climate risk on that specific building and can implement risk-reducing measures accordingly. A second example is our continuous dialogue with the automotive industry and battery recycling companies to support recycling and repair of EV batteries. And third is a collaboration with Fire Research and Innovation Center, where we get access to science-based insight about fire safety. The biggest impact on sustainability is to prevent damages from happening. And going forward, we will focus even more on loss prevention and believing the claims moment gives opportunities to advise customers to make choices that reduces risk of loss in the future. By advancing our analytical platform and customer solutions, Gjensidige will be able to give advices for each single customers personalized for them on damage prevention. So coming to an end in my presentation, I will sum up our 4 priorities in Claims division: we will realize synergies and reduce claims cost in Denmark and in Norway worth NOK 800 million by 2026. We will excel further in customer experience fueled by advanced analytics. Continuing digitalization and automation of operations are key for operational excellence. And preventing damages from happening and ensuring sustainable claims handling will be in focus. Thank you for your attention.

Thank you, Aysegul. So we are ready for a break. Let's take it now, and we can come back here at 10 past 11. [Break]

Welcome back, everyone. I'm Jostein Amdal, Chief Financial Officer of Gjensidige. As you've heard from my colleagues today, we have ambitious plans for the next 2 years, and I'm confident that we will continue to show strong performance and deliver attractive returns. With a few exceptions, we have consistently outperformed our targets every year since 2011. We raised the bar further at the previous Capital Markets Day in 2021 and again last year. I'm very pleased that we are mostly succeeded in delivering on our goals and for several of them, well beyond the target level despite the pandemic and rising inflation. This is thanks to our consistent customer centricity, investment in digitalization, cost discipline and putting profitability ahead of growth for its own sake, and that is our recipe going forward as well. With underlying profit growth and capital optimization, we have been able to pay out dividends according to our dividend policy with regular dividends growing over time and the occasional special dividend. The dividends not only benefit our owners, but also our customers through our unique customer dividend model in Norway. Our results ratio has most of the time been within our target range, providing us with sufficient flexibility to maintain our S&P A rating, fund smaller acquisitions, organic growth and holding a buffer for regulatory changes. As Geir mentioned, we have set our annual financial targets for the next 2 years through 2026. These are ambitious yet realistic goals, which we seek to achieve through continued profitable growth, further efficiency improvements and capital discipline. We aim to deliver an insurance result of at least NOK 7.5 billion in 2026, driven by growth in revenues and enhanced efficiency in our operations. We are confident that our new organization structure in combination with completion of the new core system in Denmark over time, will lift our results both in Denmark and Norway. To support this target for the group, we have set a goal of delivering an insurance service result of at least DKK 750 million in Denmark in 2026. Both goals are a solid improvement compared to where we are today. But at the same time, they are, of course, not the end of the journey, but rather step on the way. We will continue to invest in people and technology and implement measures to further increase results beyond our target period. We'll continue to price at least in line with expected claims inflation in the coming years and improve underwriting skills and tariffs amongst others, by utilizing best practice across Norway and Denmark. Given the current pricing measures, we expect revenue growth to continue to exceed nominal GDP growth in the short term. Enhanced operational efficiency is key to delivering on our insurance service result target. As Aysegul explained, we have an ambitious program to cut claims costs in Norway and Denmark. We will be realizing scale advantages and improving processes through sharing best practice across borders. Over time, growth increased digitization, improved customer loyalty outside Norway and stringent cost control together with the measures I mentioned, will enable us to deliver on our goal of bringing our combined ratio below 82% in 2026 and supported by a cost ratio of around 13%. We keep our current combined ratio and cost ratio targets for 2024 and 2025 as you combined underlying improvements with the additional investments, especially in our business in Denmark. As a result of the higher interest rates, we have raised our ROE target to over 22% for the next 2 years and further up to over 24% in 2026. We launched a new set of operational targets at our Capital Markets Day in November 2021. They are important to support delivery of both strategic priorities and our financial targets. We have achieved strong results on the KPIs in Norway. However, there is still potential for improvement, especially outside Norway. Customer satisfaction and retention are the most relevant measures to go to success in our customer orientation. And as you can see on the slide here, we will keep our ambition to exceed 78 of our customer satisfaction index and the retention level above 90% in Norway and about 85% outside Norway. Digitalization and automation are key drivers to secure higher quality and cost efficiency. Our metric to Gjensidige, the digital distribution index, measured progress in our digital sales, service interaction with our customers and share of digital customers. We have a significant improvement over the last years, mainly driven by an increase in digital sales in Norway and the higher share of digital commercial customers in Norway, an increase in digital customers in the Baltics has also contributed. We see further potential for the 3 metrics across our geographies and aim to increase the index by 5% to 10% every year through 2026. As Rene explained, we're also aiming to increase distribution efficiency for private by 25% by 2026. And this is lifted as a new group KPI. They have come far in digitalizing claims reporting in Norway. The biggest improvement potential now is outside Norway where we see considerable savings potentials. We aim for 85% of claims across all segments to be digitally reported by 2026. Automation of the whole claims settlement process is also an area with significant savings potential. We aim for more than 70% of all claims processes in Norway to be automated. We will return with a similar target for Denmark whilst we have moved a bit forward with a new core system. We expect to continue to deliver strong results in Norway, both within private and commercial, significantly improve our Danish business and continued improvements we have seen over the last couple of years in Sweden and the Baltics. Today, we have described our ambitions for our non-life businesses in Norway and Denmark, which is natural after reorganization from July 1. However, it's important for us also that the businesses in Sweden and the Baltics continue their journey towards a more sustainable profit and growth level. We have improved tariffs and processes, prudent parts of the portfolio where we deem the profitability not to be high enough and invested in digitization and automation to pave the way for this development. And we target combined ratio levels in the longer term at around 90% or even lower, acknowledging that in 2026, we will more likely see low 90s combined ratios in both segments. This level is sufficient to put a decent return on the capital required for these businesses. Pension is an excellent complementary business in Norway. And we expect it to grow in importance as the excellent health lines of business over time will become a larger part of the overall portfolio. In addition, we expect our pension company to deliver more than 15% return on equity as the overall market continues to grow. In addition to its strategic importance, the Gjensidige Mobility Group is, as Rene and Aysegul have told you, part of the toolkit when improving sales and claims handling. But the legal entities compromising Gjensidige Mobility Group is also on its own expected to be profitable, returning a pretax profit of NOK 100 million in 2026. Excluding the restructuring costs, the businesses are in positive territory already as we speak. The main purpose of our investment activities is to hedge our insurance liabilities. The investments also contribute to our results, supporting our ability to deliver our ROE target. The portfolio is well diversified, consists of high-quality investments and is predominantly sensitive to changes in interest rates. The free portfolio is expected to return on average 1 to 2 percentage points more than money market rates depending on risk premium and the amount of risk taken in the portfolio. Fixed income yields have risen significantly over the past 2 years. The yield on our fixed income investments in the free portfolio are currently close to 5%. The investments in the match portfolio have an average credit spread of approximately 60 basis points. We expect yields to stay high for an extended period. This supports the increase in our financial targets for the coming years. We are a signature to and endorsing several initiatives within sustainable investing. We will continue to cut climate emissions in our investment portfolios. We are in the process of setting our climate targets to be approved by the science-based targets initiative. And with that reached a new milestone in our work and create confidence that we are on a steady course towards net zero emissions by 2050. Moving on to capital. In 2022 and '23 and so far in '23, we have generated NOK 6.6 billion in capital through operating Solvency II earnings and returns in the free portfolio. Most of this is returned to our shareholders as dividends. In total, NOK 6.5 billion, of which NOK 4.1 billion already paid out for the financial year 2022 and NOK 2.4 billion earmarked so far as form like dividend for 2023. During this period, we've used our capital to strengthen our position in Denmark through acquisitions of Gjensidige Forsikring and the commercial portfolio from Gjensidige Forsikring. We also invested in the mobility sector with acquisitions of the roadside existing company, Falck, now renamed Redgo, as you have seen. The number here also includes the latest capital management action, issuing a new Tier 2 loan and redeeming part of an existing one with a call date next year. Our dividend policy remains unchanged, and we are satisfied that even in years such as 2023 with headwinds from weather-related losses, our solvency position remains strong and we expect to be able to continue to pay out a regular dividend at least in line with the previous year. We continuously evaluate what is the right level of capital and capital structure for the group. And we've lowered our capital target zone for the approved model to 140% to 190%. Based on our own full calibration of the model, the target zone would have been higher at approximately 150% to 210%. This considerable difference also implies that if more of the own calibration of the internal model gets approved, we will reassess the target zone. The floor of the target zone provides us with a solid buffer which transfers that the regulatory requirement is fulfilled also in a severe stress event, in addition to retaining an A rating from S&P. The upcoming changes in the S&P capital model is part of the reason why we're taking the opportunity now to lower the floor in our target range. The target range also allows for absorption of normal volatility in the results and are built to remain a high and stable stream of regular dividends. It also ensures sufficient capital for organic growth and smaller acquisitions that are not final for retained earnings in addition to a buffer for regulatory uncertainty. As you know, the approved version of our internal model differs from our own model. The differences lie in the collaboration of certain important parameters in the model. We are very confident that our own model reflects the best estimate of risk, and this is the model that we use for internal management such as allocating capital for setting profit targets for different lines of business, access reinsurance programs and for setting investment risk limits. We aim to have our own version approved in the long run, but this will take time. The main differences now between own and approved model versions are related to the modeling of Windstorm risk, the correlation between market risk and writing risk and potential markets. The FSA has asked for more assessments, more documentation, more validation to approve these parts of the model, and we're working on it. We have got a couple of changes approved so far since the initial approval back in 2017 and accumulated these have reduced the capital requirement by approximately NOK 0.5 billion. The next change we're planning for is approval of our storm risk model, and we will continue to have a dialogue on the remaining differences between own and approved calibration of the model. If all differences get approved, the capital requirement will be reduced by another NOK 2.2 billion. We believe the Nordic insurance markets over the coming years will be fairly stable. The global market outlook, both short and long term seems more uncertain than a year ago with geopolitical unrest and macroeconomic imbalances. But relatively speaking, Scandinavia seems well positioned. We do expect moderate economic growth in the next few years, reduced inflation from today's elevated levels in combination with interest rates, approximately where they are or slightly lower. We are seeing the effects of climate changes, form of more volatile weather-related losses and increases in reinsurance premiums. But we are well prepared to our investments over the years in models that consider risk of heavy precipitation that help us both in pricing and advising our customers in reducing their exposure and also through a well-designed reinsurance program and a solid capitalization. The basis for our revised financial targets in addition to this macro backdrop is a keen focus on improving the basics of running our general insurance business. We have shown here today some glimpses into what we are doing with in both the private and commercial segments and within the claims division. It is so often based on an analytical and data-based approach to meet customer demands, digitization of customer interaction and automation of processes. This is made possible to our modern technology platform, analytical capabilities, availability of data and not the least competent and dedicated employees. Combine all of this, and you will find us strengthening the already strongest brand in the financial sector in Norway at the same time as we continue to deliver on our dividend policy, maybe not for the next [ 207 ] years, but at least for a very long time to come. And with that, I leave the word to Mitra to open the Q&A session.

Thank you, Jostein. So we will now spend a minute to get ready for our Q&A session. Please bear with us. Can the presenters gradually start moving towards the stage, please. Okay. Ready? Right. We're now ready for our Q&A session. And with me on the stage today here are our presenters. And we also have other members of Gjensidige's executive management team as well as our Head of Sustainability, present in the room and ready to answer your questions. We will open up for questions from our audience here in Oslo first, and then move on to questions from our web audience a bit later. So please raise your hand, and our colleagues will come over to you with a microphone. And please remember to state your name and affiliation. And for our web audience, please type your questions, and we will read them out in a few minutes. All right. I saw you first, [indiscernible]

[indiscernible] from ABG Sundal and Collier. I have some couple of questions to some of you here. First one is towards the M&A and the potential levels in Denmark, what you can do and what you can do on Alliance potentially in Sweden because still have a very small market share. So maybe that is the first question now is, how should we really think about you using capital to step up the game in Denmark? And how can you do the alliance thinking in Sweden since there are so many mutuals there?

Yes. What I have seen in Denmark during the last quarter. We have made some small acquisitions like PenSam and SanDisk. I think having this smaller bolt of acquisitions are still on the agenda. We -- as mentioned earlier today, when we went through the solvency target range, we want to keep some flexibility -- financial flexibility to do the minor bolt-ons, and we still consider that. And as you know, the market in Denmark is not so consolidated as we see in Sweden and Norway as well. So we still work on that agenda. If you look at more transformative acquisitions, this is definitely on the agenda, but it will be more a long-term ambition and something we have to consider and assess and have a dialogue and of course, you have to create value when going into such a process. In Sweden, we already do have partnerships in Sweden. We do co-branding in Sweden and to increase our business volume in Sweden is still look for some various types of partnerships, strategic partnerships to improve and increase the business volume. Anything to add?

Okay. Then just one follow-up on to Rene and one to Janne. The first one to Rene is about your distribution cost and sales because you would like to increase your sort of profitability on sales around 25%. So how should we understand your sort of the current distribution costs you have in Norway and Denmark? What -- how much is that currently? And how much can you actually improve it versus your premium, something like that. Normally, we have 10% to 12% cost normally for selling insurance in the Nordics, so is it possible to lower it down to 5%? Or what is your intention there really to improve your sort of distribution cost?

A lot portion of the cost ratio is what we count into the distribution costs. So we are pretty confident of reaching 25%. I don't know if we translate that into nominal numbers, but...

It will be within the cost ratio...

Okay. So you cannot share anything more about that level there?

No, I can't.

Okay. And then you say that you do some risk mitigation factors on the customers' hand, probably you do also Rene, but you're more systematically on the commercial side. So how much are you preventing cost or for the customer side is sort of then giving to the client? And how much are you picking up on your own side? Do you share that sort of gain from preventing claims?

We are steering the profitability towards our targets, that's the only thing I can say. I can't go into the details of how we are sharing this mitigating actions. Typical discounts to clients who do much on risk, so to speak. Yes, of course, for those customers that go into mitigating risk and reduce if the -- for future weather events for fires or water leaks and we give you a reduction in the premiums because, and this is what we're always doing when we are looking at our risk appetite and how we're choosing customers and selecting our customers. So this is a normal approach to how we are approved in the portfolio.

Let us try to limit our questions to one, just to get through the list. There's a lot of interest also from our web audience. Yes.

Is it my turn?

Yes.

So -- okay, one question. Okay, changes the game. So -- Vinit, Mediobanca. So if I had to ask 1 question, then I'll try to bundle 3 or 4 in that. But my 1 question would be that when you look at either the 25% that Rene talked about or automation in Norway, where suddenly, it's a hockey stick big time, suddenly '26 just goes up. And then your combined ratio from 84% to 82% in '26. So a lot seems to be happening in 2026. Is it the technology that you think will certainly come in and then the CTO who joined, I think, in September, he has to deliver a lot or? So I'm just curious, what do you think is such a big 2.5 year lag and suddenly, a lot of changes in these numbers 2 years from now. And it looks like it's technology-driven, but -- and just if I can squeeze 1 just because of the 25% number that you talked about, even the starting point, '23 on that chart is hugely different from '22, big jump in just this 1 year in the distribution efficiency. If you have any thoughts on why that happened, it will be magic.

I think I can start. What I will start to say is that we'll not stand still 2 years, and then you will have all the positive results and FX. But what's happening is that, we have spent the couple of last months within private, within commercial, within claims and in the organization to make a road map for what to do during the next couple of years to improve the results, to succeed with integration of the Norwegian and Danish business to see how we can improve the operational excellence. We set ambitious targets to what we should achieve during the next couple of years. During next year, we will spend time on implementing the measures to be -- being able to improve the cost efficiency, to improve our underwriting skills across borders in the group and so on. And then you will see the positive impact gradually in '25 and reaching the targets in '26.

Yes. in Norway is not a hockey stick. It's been investments over time, brick by brick. So we can see what have taken us to where we are today, just a couple of years, we see that a lot of real-time data instead of data that are 24 hours old, has given us a great impact on the hit rates. So our outbound sales platform are selling much more efficient now than they did just 2 years ago. And in Denmark, it's a bit more of a hockey stick, much due to the time and effort, the organization has spent on a new core system implementing that one. So now we are ready to move some of the technology that we have used in Norway to Denmark. And then we need to implement it, and then we will pretty quickly get effects, but it, of course, takes a little time.

What happened to '23 distribution efficiency?

Sorry?

'23 distribution efficiency, very high versus '22, something happened? That was the main question.

We've seen pretty steep increase in sales through our web shops. We see that we have invested in data. So we are -- to a great extent, simplified the customer journey through a web shop. So if you compare it with the last 3 or 4 years, it's been a big change this year due to prefilled data. So it's much easier to complete your purchase online and you don't have to call our customer centers. That's one of the main drivers.

Yes, please.

Johan Ström, Carnegie. Just 1 question then for me. It's -- just curious on hearing the discussions you've had on maintaining a fairly wide range on the Solvency II margin. It doesn't sound like you want to go all the way down to 140%. So why stick with a fairly wide range that gives a pretty -- it's a big number between the top and the bottom of that range.

Yes. We kept the size of the range as it was before. This -- the floor is kind of designed to be as kind of a security buffer against regulatory requirements. It is pure good risk management to stress test and see that the overall long-term survival of the company is more important than anything else. That's why we have a buffer of other regulatory requirements. And the range gives us ample flexibility to continue to dampen somewhat effects of result volatility and still finance smaller acquisitions through the capital we have. We do not keep any capital on the balance sheet to finance something big, then will go to the market. The range is may be wide, but it's not that wide.

Sorry for repeating something you said. But just on the -- you talked about the formulaic dividend, the accrued dividends for the first 9 months, that's only something like half of the 2022 dividend. So the solvency range would be quite a bit lower unless you have a really strong Q4 coming up. Is that right?

That's correct.

As far as I understood the sales efficiency, in. It takes total sales and total costs. But you are repricing also ahead of inflation according to yourself. So if we apply an adjusted sales efficiency with the number of sales divided by total cost, what is the ambition for 2026 compared to 2030? .

I don't have the accent number on that one, but it's both. It's both. So...

Help you a bit on the start and then you might fill me out. But the sales efficiency of distribution efficiency, how we measure it is sales divided by sales costs. So also sales cost is also somewhat inflated because of pure inflation and cost inflation. So both of the parts of this calculation is affected by inflation. So it's not just that one moves and the other one is still here. But we don't -- we haven't formulated that as a physical volume, it is a only measure.

It appears that most of the 25% increase then comes from repricing?

I wouldn't say so. I mean, we do have an inflation level at around 5%, 6% at the moment and claims inflation, the varying between lines of business between to 5% to 7%, 4% to 7%. So there is some higher increase in prices on the insurance products than in general inflation, but still 25% is much more than that.

Yes. Thomas Svendsen.

Thomas Svendsen from SEB. So you highlight the need for further digital investments. So how much visibility do you think you have on the further investments there? And how much more than competition do you think you invest? And about -- yes, and the reason I ask about this, your visibility is that you recently wrote down a lot on your new IT system in Denmark?

Yes. Starting with last one. Probably I will reflect no comment from a side, but when they did this write-down, we explained that last quarter in -- this is nothing we have on the radar at the moment to see that we should actually come in a situation where we have to do another write-down down the road. We are aiming for reaching our cost ratio targets below 14% in the next 2 years and then below or about 13% in 2026. That's how we how we actually target and run also the IT investments. What we do at the moment is to reinvest in -- so we can actually come through the road map we have described today, but we use the resources, we use the capacity we use the competence, the skills in the group already to do that kind of investments. And we will be within the cost ratio targets we have already mentioned today.

But do you think you do more than competition on the digital side to sort of stay ahead of competition on the investments?

Hard to evaluate the assets, whether we are more or less than the competition. It's not that much clarity from how much they invest or there, but -- I mean, we have fairly clear and transparent targets for what we want to achieve rather than how much we're going to spend. And I think that must be the way to judge it.

But if I like to add something here. If you see the pace we are having on digital solutions, it's -- we aim for being and still being a front runner when it comes to digital solutions and use of data, which is a part of the total IT investment we do. If you compare the efficiency, we have in our IT division. It's very good compared to our competitors or other peers in the industry, like we have seen from some external service as well. So I'm very confident that we are running our IT operation on a very cost-efficient way, but still having high competence and being a front runner in some areas.

Roy?

Roy Tilley from Arctic. So just had a question on -- I noticed we talked a lot less about the Baltics in Sweden today than we've done before on the Capital Markets Day. Just wondering if that -- does that reflect any change in your strategic thinking? Has the rationale changed there? We talk about M&A, you're mainly focused on Denmark, but -- do you see Sweden and the Baltics making any meaningful contribution without M&A? And how much of that NOK 7.5 billion is Sweden and the Baltics in 2026?

Yes. We have spent a lot of time today to talk about Norway, Denmark integration, a road map for achieving ambitious targets. The reason is that the main drivers for the result improvement is coming from Norway, Denmark due to the size and position we do have in Norway and Denmark. Denmark is our home market #2. Coming to Sweden, we do have a minor position. It's important for us to improve that position over time. We talked about how we think about acquisition. This absolutely includes Sweden, but it's a long-term consideration as well. At the moment, we are focusing on doing the right things on when it comes to cost efficiency in Sweden when it comes to having the right distribution setup with the right partners, having the right underwriting skills and having -- improving the results on ongoing basis in Sweden. And we have the same type of focus in the Baltics, started the journey in Baltics back in 2005, 2006, with low penetration when it comes to insurance in the Baltics. But we've also seen over time that it's a volatile market. It's rather a little bit different from what we see in the Nordics, other players as well that we have in the Nordics, more international or East European players, we meet there. But important for us to improve the results we have in Baltics this year until third quarter, we have seen green numbers and positive step-up from where we have been during the last couple of years. And we still focus on underwriting skills, cost efficiency, distribution setup and various measures to actually improve the business as is.

Hans.

Hans Rettedal, Danske Bank. I was just wondering on the commercial portfolio for you Lars. You mentioned that you have a top 3 ambition in Denmark. And my -- correct me if I'm wrong, but in Denmark, you have 3 large players with over 20% market share and then you have -- and you with sort of 10% and then the rest of the market is also 10%. How is it possible to double your market share? You would basically have to acquire every other small player in the market.

We have approximately in the commercial market, around 13% of the market approximately. And that's right that you say 7%, 8% up to reposition. But it is important to mention that it's not is -- this is not our position towards our competitors that are important. For us, this is about the depression of how to -- this is scale how important it is because we are developing implementing a new core system. We are planning for digital solution on top of it, portfolio management, activity management. And all this gives a lot better results when you have scale. And you see it in the numbers in Norway. But -- and we have a really strong cost and risk appetite discipline and this is always our #1 priority. So as I mentioned in the presentation, it must be a combination of organic and inorganic growth because profitability is always, always the most important thing for us. But obviously, that's a big step between that.

Yes. And just quickly, in the NOK 7.5 billion target, is there any inorganic measures included there?

Not the NOK 7.5 million is based on the existing business.

Håkon?

Håkon Astrup from DNB Markets. Just following up on the discussion on your pan-Nordic strategy. And as I understand it, a rationale to be pan-Nordic is to take part in changing market dynamics in the market, for example, in motor, your position in Sweden, is that large enough to be a relevant partner if we see changing market dynamics? .

Do you want me to answer? Of course, we would like to be even bigger in Sweden. But as you know, Sweden is also the largest motor market. It's important to be present there. And again, coming back to the discussion around alliances and opportunities to also be part of bigger ecosystems is part of our strategy. And we think it's important to have a position in Sweden, in particular, related to the mobility dynamics that we see going forward.

If we see large tenders for fleet insurance, et cetera, for the Nordic as a whole, is your current position good enough to be a part of that? Or do you need to improve your Swedish?

Not today. Not today, but we will work on both improving our local capabilities in each and every market but also make us able to take part in pan-Nordic tenders some years ahead. So that is part of our strategy going forward to build that capabilities necessary and also then to take part in collaborations and strategic alliances to make that happen.

Ulrik?

Ulrik Zürcher, Nordea. Just continuing on motor, but moving to Norway. I don't think you're #1 on electric vehicles in Norway. It's one of your large competitors. Do you plan on increase -- like how should we view your market share going forward when all the new sale in private is electric vehicles. Is the competition tougher there? Or any thoughts around this?

When the Tesla came, it was pretty difficult because the claims situation changed a lot. Then we were really careful not to take in too many EV cars. Now it's a much more mature market. And our profitability on the EV are at the same level as the other type of cars. So now our market share is rising within EVs. So we are pretty strong on the EVs at the moment.

We would expect it to converge to your overall market share? Just double checking.

Yes.

Michele?

Michele Ballatore from KBW. So my question in general is about growth, which appears to be quite a theme today. To what extent this growth comes from, let's say, niches of the various segments or markets which are not -- there is not enough penetration. And to what extent comes from actually gaining market share at the expense of your competitors? So across -- especially across Norway and Denmark. I'm referring, for example, in Slide 39, you have increased market share in Norway from 1 seller insurance from 19% to 30% in 2026, which is quite strong. So how is the mix and...

I can start, and then probably someone can comment on the different segments. Starting in Norway, we have, as you know, a solid market leader position in Norway, both in commercial and the private segment. What we have seen during the last year is that we have actually improved our position when it comes to rather much -- when it comes to the commercial segments. We are -- have been early in order to price at least inflation. And within motor, we are pricing ahead of the inflation at the moment due to the frequency consideration we had a couple of quarters ago. So this will have actually also made us to -- put us in a situation where we had good premium growth in our core market. When we it comes to Denmark, setting up new targets ambitions, we see that succeeding with what we aim to do within commercial to have high inflow of SME customers when it comes to the private division, working with data, data analytics, more partnerships within sales. It will improve. We have ambition to improve our growth and sales. But saying that, it should always be profitable. We have shown our metrics today when it comes to combined ratio. We are lowering the combined ratio targets in 2026, which also means that growth today has to be profitable, both in Norway, both in Denmark. And the main drivers for the growth we are seeing will come from Norway, Denmark, especially when it comes to the insurance service result, but expecting especially short term in Denmark, growth above market growth, yes, I assume that. Anything to add? Yes.

We don't have a very clear segment strategy. It's more like segment on 1 when it comes to the private segment. And when it comes to the home insurance market, it's important to understand that we are not picking 1 and 1 customer. It's getting the agreements with the brokers. So it's possible if we focus on quality because the brokers are not that focused on price. They are focused on quality. So it's possible to win pretty large partners, pretty easily, you don't have to pick each in -- each single customer. So that's why it's possible to go pretty fast without compromising profitability.

Okay. I think we will...

Yes. As I showed you earlier in the presentation, you have seen the growth in Norway, and we have slightly increased the market share since 2018. We had approximately 28.7% something. And today, we are aiming for 31%. But in the presentation, I was talking about the smaller companies and taking this into consideration when you are building portfolio. But this is more about efficiency. You can build tariffs, you can steer in that activity and you can steer in the portfolio as well. What is really important when you -- when we are looking at the market, is that we are having an industry-specific approach this. For us in Gjensidige, we are having 6 areas within the commercial segment where which is more important to us, and we have teams working with a forward-looking perspective, and we're combining this information with the numbers we see in our portfolio, because the circumstances in the market changes rapidly these days. So that is why activity management is so important, combining it with this small customer SME part. Because if you're only focusing on the one side, you got the random portfolio. That is why steering activity into the right segment is important. And this is important both in the inflow of new tenders and when you're approaching the market yourself? So this is the way we are working and have done built the portfolio in Norway over the last few years, and this is maybe the most important area where we are going to use synergies into our Danish operations.

Right. I suggest we move over to questions from the web. Some of them have been answered, so I'll go -- move on to those who haven't been answered yet. Why is the ambition for Denmark for the Danish insurance service result just DKK 750 million, given the significant growth ambitions given the 9 months run rate in 2023 of NOK 522 million, which is around DKK 700 million annualized.

I think as I tried to point out, the NOK 750 million or above NOK 750 million in Denmark is just 1 point of the way towards so much more profitable Danish operations long term. We are moving out of a core system change in private business in Denmark. We were moving on to the same change within the commercial business, which is much larger. I think we'll need to go through that process and then kind of take the next step change on the improvement processes in Denmark, and it's about NOK 750 million. We'll see how much able.

Okay. Moving over to the next. How is the NOK 800 million of claims cost savings phased over the next few years? Roughly how much of these savings do you expect to flow through earnings versus reinvesting for growth?

Yes. I guess it's a period of 3 years. And of course, it will be back-loaded towards 2026, but we expect to gain the benefits also in all 3 years in total. And the second question was, yes, regarding underwriting -- effect on the underwriting result, right. I think our aim is to do a lot of the things we did in Norway when we started in 2016. And it was a combination of investing further in our operations to increase the efficiency possibilities also going forward and also to contribute to the underwriting results. So I think that's the same plan we have now going forward. And hopefully, our aim is now to do it much faster in a 3 years horizon, then we will be able to do because we have the solutions already that we will scale both in Norway and in Denmark as well. So yes.

What proportion of claims do you currently manage to steer to your own repair or supplier networks.

Yes. So the number of steering in Norway is 90% today, above 90%. And in Denmark, it's about 50%. So definitely still a potential to increase the Danish numbers. And so we are working towards that as well.

You mentioned you want to improve the average product number per customer. Can you comment what the number is now? And what is the aim split between Norway and Denmark for private?

It's 3.4 in Norway, and it's been pretty steady, much due to we have increased our web sales and we have increased our sales through the car dealer channel, which provides definition, 1 product per customer. And in Denmark, it's 2.1, and it's been reduced a little bit the last 2 years due to the core system migration.

Can you please clarify how the leads are generated using AI when people are looking to buy a house? Are there any privacy concerns or risks here?

We are well within the GDPR regulations. So -- we are always discussing how safe we're going to be within those regulations. But at the moment, we are clearly within the GDPR regulations.

In Denmark, do you see your growth and margin improvements as mainly coming from the private or commercial business? Do your growth assumptions rely on market share gains or growth alongside the market?

We expect growth in Denmark, both on the -- in the Private Division or private segment and in the commercial segment as described today, SME inflow in the Commercial segment, a lot -- we have a large -- great ambitions to actually improve our operational excellence in the private segment in Denmark using more data, improve our efficiency when it comes to the sales. So this has also strengthened our ability to grow organically in the private segment in Denmark. So yes, both in the Private segment and in the commercial segment, I would say. Or yes, I think you have probably almost the same question earlier today. So Lars and Rene commented on that.

Could you please talk a bit about the electrification journey in Norway? I'm interested to learn about the differences in claims repair processes and costs between EVs and ICEs or internal combustion engines, as well as premium trends. In some markets, we're seeing quite a noticeable divergence.

Like I mentioned earlier, we had a pretty rough journey when the Tesla has arrived in the market. Now we are pretty confident that we understands the claims history of these types of cars. It's been -- it's a much more mature market, a lot more cars, stronger sales repair network. So now it's not very different from the other types of cars.

In the EV repair process, are you seeing more examples of OEMs looking to control the repair process more? Do some brands require repairs at their own shops? How are you dealing with this?

We don't see a lot of that at the moment. But there are, of course, some OEMs that won't have a bit stricter requirements than others, but we don't see very much -- not a large portion of our portfolio is not affecting us very much at the moment. .

Yes, and as the insurer, we are actually in a position where we can manage the steel, the cars to our supply network, and we also see that in more new OEMs from China actually seeking to have feet on the ground to have collaboration. So it could also be a potential.

Are you seeing -- or do you expect to see increased competition on underwriting driven by higher investment income?

I can start and have the same story. We will focus on the insurance services result, our underwriting result stand-alone. Even though we have high yields, high income from investment side, we were still focusing on reaching our combined ratio targets, which have been lowered. So we have separate view on that. We will not subsidize our underwriting results or fuel our competitive level in the market to reprice us using price as a mechanism due to higher yields.

In addition to our combined ratio target of below 82% in 2026, below 84% in the next 2 years in the ways there is targets to be below, it's not to be at. And of course, higher interest rates has a positive effect on the insurance services as well through discounting of reserves and that will help us somewhere in the way to how much below we end up. But I mean, now we have seen behind us a couple of years of rising interest rates at around 5% now. Our main scenario is that this is more or less flat or slightly lower going forward, and we'll still keep that combined ratio target.

You have reduced the Solvency II range to 140% to 190%, but suggest that if adjusted for your own model, it is 150% to 210%. That means a 10% to 20% uplift. If I look at your third quarter own model, it suggests a 47% uplift to the approved level. Am I comparing the same numbers here? Why the sizable downgrade in view of own model and why the move down in operating range?

I will have to think about the math on that one for a second. I think the point is -- important point to keep in mind there is that the main effect from getting the full approved internal model is on the denominator of that equation. So the percentage moves can be higher and if we look at the same solvency margin number, you don't have the same kroner effect. I think the important number here is a NOK 2.2 billion effect on the capital requirement. It's easier than you're working at the denominator and nominator level, NOK 2.2 billion is a difference in capital requirement from the approved and the own calibration model. That is what gives room to more capital flexibility if it gets approved.

The NOK 800 million claims cost savings are based on -- based off a baseline of 2022. How much of this has already been achieved this year? How much of these claims efficiencies do you expect to be priced out? What makes you think you can achieve a better run rate than the previous NOK 1 billion claims savings, having already done a lot of the work and when the new core IT system will only be in Denmark across this period?

Yes. I'll start maybe help me with the question. So the majority of the NOK 800 million is definitely for next year and the 3 coming years. So you can expect NOK 800 million definitely be delivered going forward. And the second question, I think I answered regarding the proportion of investments which is, yes, underwriting results. So we need to look at that as we go, but definitely, it will be a combination of contribution to the insurance result and further investors also presented. So the run rate question, I think in Norway, we had 6 or 7 years for the same journey. And we started with -- we didn't have that -- the digital solutions at that point. We have those now. And in Denmark, we have implemented the core system for private. So quite ready to export our solutions and accelerate the digitalization and automation journey. So we're aiming for the same -- approximately the same benefits in a much shorter time.

You say you aim to continue to price above claims inflation. Can you please share your expectations for claims inflation and price increases over the next couple of years?

Yes. Starting with the main products. Motor Norway, we expect claims and inflation to be between 5% to 7%, closer to 7% short term. We are doing repricing at the moment, pricing at least with inflation. But when it comes to motor in Norway, as mentioned earlier, in July, we started to reprice -- increase the prices more than the inflation rates we are facing to handle the frequency development we have seen in the last quarter. So that's the situation for motor. When it comes to property, 4% to 6%. We see that the high inflation numbers we have seen lately, we see probably a change from inflation due to material changing to wage increases. So it's -- the wage increases is a larger proportion of what we see within property when it comes to inflation. And yes, I think that's the main numbers we see at the moment, and we are transparent about these numbers and showing what we think each quarter.

Rene, on growth, your slide regarding growth, the projections that you had per market. The question is whether these are annual figures or total growth for the period of 5 years?

It's accumulated for the 5 years, and like we discussed in the break earlier, this is -- we believe it's pretty moderate. If we go a couple of years back, if we will look to motor insurance, the average growth in number of policies were between 2% and 3%. And then we see that this year and probably next year will not have that much growth, but 5% in motor insurance is pretty moderate estimate.

Great. Let's switch back to the room. Are there any further questions? Yes.

I have a question regarding the data availability and processing that you seem to benefit tremendously from. The question is whether competitors, smaller challengers will benefit relatively more because the data becomes more available for everybody versus the situation we had previously where you had sort of all the data in-house? And secondly, we also see that cars get connected and software suppliers are sort of getting able to monitor a larger extent of the behavior of the drivers, et cetera. So is this a threat to your future profitability?

Okay. Starting with the data question. When it comes to P&C business in the Nordics, size matters. Being large is very helpful. We -- there is -- we have to attract employees due to getting the right strategic competence. So size matters. We have to have the muscles to do the right investments within data and technology. We have -- so I think it's -- and also due to the regulatory requirement and compliance requirements size matters. So it will be next year as well, and we have seen that in the past, cost disadvantage to be a small player in the Nordics. So saying that, I'm very confident that size matters, having the -- over time, capture data and insights regarding our customers and customer behavior, which is our insight and how we have used that over time. I think that's very helpful going forward as well. I think even though you get more data sources externally, you can buy and use. You always need to have relevant data from connected to what your customers do and how they behave. And that's more internal data. So we have captured that over time due to our size and how we have worked with data. So I'm not worried about our competitive situation going forward when it comes to use of data. Yes, about connected cars. And the second one was -- the change in the mobility industry, I think...

Yes. Okay. It was more just about other types of players like Google, for example, in the car, they get the information that you previously had in-house?

Yes. What we have seen so far is that in the Nordics, you have 3 Nordic players like [indiscernible], you can see the tree and you have local players, some mutual, some are not. It's what has shown us over the past years is that it is hard to be a non-Nordic player to enter the market due to many reasons, brand names means a lot in the Nordics. We see that Gjensidige is #5, 6 in Norway when it comes to reputation. And that creates stand-alone great loyalty within our customer base. So brand name means a lot. It could be -- so it's harder for a more international player or a technology company to actually enter the market and into that kind of providing securities, safety like the local insurance players are doing. We see the change in the mobility industry. It will take time, but that's also the reason for why we are changing mindset. We're having great partnerships with car dealers today, but we're also preparing Gjensidige to meet the changes we see in the mobility industry described here today with how we look at the whole customer journey within mobility, but also our relationships directly with the OEMs.

To comment on the data, the thing is we have real-time internal and external data, the combination is important. And we have our custom-built CRM platform with machine learning and in combination with our in-house distribution, which we are able to adjust roles and content in. So it's the combination that's really hard to copy. And we have -- we are hiring people from pretty big insurance companies working in their outbound sales centers. And when they come to us, we can see that they are sometimes doubling their sales due to the quality in our CRM platform. So we are pretty confident that the totality is difficult to copy.

[indiscernible]

Just a follow-up on the growth questions we have here. How is it possible to get actually access to so many clients you're seeking without taking the price down. We're actually paying more sales cost to get there. How is it possible to attract so many clients either in the retail area or in the SME side or on the commercial side without actually change the prices and come down a little bit. What is sort of your attraction when it comes to the client choosing you rather than my competitor?

I can start to comment on that. This is a good question because this is maybe the most important part where we have changed a lot of the past few years in Norway, where we are using CRM steering the activity. We're having our own distribution, as Janne talked about as well. And this change where we are having a more random approach to the market going to a situation where we are building competence within certain industries and steering the activity into this. And we have -- we know that when we're contacting a customer, this is within with an industry we want into our portfolio, and we have a more precise value proposition into every single customer. And through this, we have a higher -- a better result in the sales in the long run. And then this is important because if you have -- if you're not steering the activity, both to what you are using a part of the income in tenders and how you approach the market, then we'd use too much resources in approaching the market and this is important. In the commercial side, it's important.

Well, in the private segment, we are investing in not that much data anymore. Now it's important to get in touch with the customer at the relevant touch points. We see that the main driver for our increased hit rate is that we are able to contacted customers at the relevant time when they actually are interested in talking about insurance. So it's very much about the relevance and the timing. And that's why it's important to have real-time data and are being unable to react on it real time.

Vegard Toverud again. On the -- our -- the improved ROE target, does that in any way impact your hurdle rate for M&A or any other assessments you make for structural opportunities?

No, the hurdle rate for M&A is more based on the long-term perspective on what is the cost of equity capital rather than what we aim to achieve within our company. So it doesn't affect that in the same way. No.

We had a question we had before -- [indiscernible] to be fair.

I'll be quick. Just a quick question for you Jostein. You mentioned interest rates affect the insurance service results. So just wondering in the 82% combined ratio, what kind of interest rate assumptions are baked in there? And if there are any runoff assumptions also in that number?

Below 82% assumes that we are at today's interest rate levels, and it includes any runoff. Yes, so it's a reported combined ratio target that we're referring to. And as I answered to a previous question, we are not going to change the combined ratio target as such if there is kind of smaller movements of lean interest rates, it will still -- it will just tighten the real profitability or just bake it in.

Just to clarify, that's the current rate level, not the forward rates for '26, for example? It's...

That's not that much difference for 2026.

Okay. It's Johan now. We have 5 minutes left. I have noted Johan, Thomas and Hakon. And after that, we will need to conclude.

Johan Ström, Carnegie again. Following up on Vegard's question, what is the current cost of capital, Jostein?

What is this?

Your cost of capital...

We have a 7.5% after tax cost of equity, which is quite low. But as I've talked to one of you guys in the breaker, this is just the cost of equity capital, what we need to do if there is a transaction is to create a good sign of value above that for it to be value accretive for shareholders.

And then just following up on that, are you seeing any larger M&A potential, especially in Denmark?

I think we see the same picture as you do, Johan. We know the players, you know the players. It's not so consolidated in Denmark, but that includes the smaller one. We -- it's a long-term hard work and many considerations.

Thomas?

Thomas Svendsen from SEB again. So on the mobility segment, Jostein, you talked about some restructuring charges, it being in positive territory, excluding restructuring charges. Could you just give an update on that, what that is? And secondly, on this Redgo car rescue operations that you bought, are you still happy with return on investment there?

Yes. I'll start with the latter part of the question. I mean the return on investment is based on our view on what we will gain from that, both in -- within the claims and sales side in Gjensidige and on the core business and what we expect to have as a result from the business itself. And we're still happy with that expected return on investment. I think we talked about that we have the special analyst or webinar around mobility. And as -- it's a double-digit return on investment. That still holds. And at the Q3 numbers, we were a minor negative sum in the third quarter from including the restructuring costs in that business. We are -- part is the carve-out cost from taking it out of the old Falck system, and part of it is integrating the different businesses within what is now called Redgo with common IT systems and everything. There is some startup costs there. They have taken a bit longer than they expected to get everything in place, which is not totally uncommon in IT projects, but it is -- it will be in commonplace.

And the last question from Håkon.

Just to follow up the discussion on cost of equity and M&A, the 7.5% has that been changed recently? Or just looking at the development of long-term rates up around roughly 2 percentage points in the last 2 to 3 years. Does that change your view on cost of equity.

Yes. We do actually evaluate that total rate regularly, and it's updated during the last year. Yes. I think it was 6.5% when we go 1 year back. So it's changing. And it's not black or white. We do have to -- we always think how can you create values. And it's not a hurdle rate defining what's good and not good.

Yes. But you have increased that recently.

Yes, yes.

Thank you. Thank you so much for all the good questions both from the audience here and on the web. We've reached the end of our Q&A session. For those who have further questions, please don't hesitate. Send us an e-mail at IR, and we will revert as soon as we can. So in a moment, we will move on. Okay. Let me hand the word over to Geir Holmgren for concluding remarks today.

Thank you. Okay. Last couple of minutes. Today, you heard about our ambitions and strategic priorities, helping us to continue delivering superior customer experience and shareholder returns. We will focus on our core business, and we will aim to be a leading general insurance company in the Nordics. As explained by Janne earlier today, our strategic priorities are further improving our unique position in Norway, raising profitability and seeking further growth outside Norway, while maintaining capital discipline and continue to deliver attractive dividends. Rene, Lars Gøran Bjerklund, Aysegul Cin have discussed how we will achieve this through sharing best practice across segments, realizing synergies, further digitalizing our business and implementing other cost efficiency and capital measures. So putting all this together, I am confident that we have the organizational capabilities to release the full potential of Gjensidige. So I would like to conclude our message today with a reminder of our strong value proposition, as you can see on the slide here. I will not go through them all. I think it's being the main statements from what you have heard earlier on today, but we are committed to deliver, engage and highly competent organization. And today, you have met the management team, and we are committed to deliver on these ambitious targets. So with these final words, I thank you for your attention and invite those of you present here today to a short introduction on [indiscernible]. And for those following us on the webcast, thank you for joining us today.