Gjensidige Forsikring ASA (GJF) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Gjensidige's First Quarter 2025 Pre-close Call. My name is Mitra Negård, and I am Head of Investor Relations. Please note that this call is being recorded, and the recording will be published on our Investor Relations website after the call. We will start with going through the first quarter reminder, which was published on our website yesterday. This reminder highlights relevant public information. Afterwards, we will open up for a Q&A session. As always, we only answer questions related to already disclosed and public information. And please note that if you want to ask questions, you need to log on via the Teams app. So let us start with a few key dates. We will be releasing our first quarter results on the 29th of April. Our silent period starts on the 1st of April. As always, we kindly ask you to forward your estimates using the template I sent you yesterday. And please fill in all open cells in the sheet. The deadline for sending us your estimates is the 10th of April. We will publish consensus on our website on the 24th of April. Now let's move on to the reminder. As usual, we start with comments on the weather. For the sake of good order, we always remind you of the seasonality in our business with the winter quarters, Q1 and Q4 normally having higher claims ratios than the summer quarters Q2 and Q3. We've had a normal winter in Norway so far this quarter, somewhat on the mild side. Varying temperatures and precipitation resulted in several days with slivering roads and challenging driving conditions. We had a flood and a winter storm during the quarter, primarily impacting the Western Coast and Central region of Norway. In the reminder on our website, we have added links to a few examples of press releases and media coverage on the weather conditions. For statistics on weather, please refer to the links in the section general information at the very end of the reminder. Denmark has had a normal to mild winter quarter so far in Q1. As always, bear in mind the results for the comparable period last year. In Q1 '24, we had significantly higher motor and property claims compared with Q1 '23 due to the tough weather conditions. We quantified the weather claims for Norway and Denmark to NOK 577 million in total, and you can find further details on this in the Q1 '24 report as well as on Page 22 to 25 in the Q4 '24 presentation. Also bear in mind the provision of NOK 124 million in total recognized in Q1 '24. You will find details on this in the reminder and the Q1 '24 report, of course. The next reminder is regarding the sale of aDB Gjensidige, our operations in the Baltics. As communicated earlier, the results for ADB Gjensidige are presented separately in the group accounts as profit or loss from discontinued operations until completion of the transaction, which we expect will take place at the latest in the beginning of 2026. Over to the dividends for 2024, which we approved -- which were approved at our AGM, which we held last week. NOK 5 billion in total dividends will be paid out on the 28th of March. On the 11th of March, we announced the acquisition of an insurance agent Buysure in Norway. We expect the annual insurance revenue from home seller insurance distributed by the new real estate agent to amount to approximately NOK 500 million over time. The transaction is expected to close in April this year. The price will be up to approximately NOK 430 million, which translates into a reduction in the solvency ratio of approximately 4 percentage points at the time of completion of the transaction. Over to large losses, the expectation for 2025 is approximately NOK 2 billion or NOK 500 million per quarter. This is up from NOK 476 million per quarter in 2024. This is an estimate and not a guidance per quarter. We simply divide the estimate for the year by 4 as we always do. And as you know, large losses, they are random in nature. In terms of excess reserves, there is no change in the communications. We continue to set reserves according to our best estimate. And bearing history in mind, we expect runoff gains and losses also in the future. On inflation, we will, as per routine, provide an update at our earnings call. Please see a reminder for references to the relevant slides in the Q4 '24 quarterly presentation and report. Moving to solvency. As usual, we have listed the main items for the eligible funds and capital requirement in the reminder. Remember that the eligible funds at year-end last year included NOK 250 million of the NOK 900 million Tier 2 bond we issued in October last year. We expect the eligible amount of the Tier 2 loan to increase over time as the capital requirement increases driven by growth. Moving on to our investment portfolio. Our reminder includes general explanations you have seen for some time. As always, we believe a good starting point for estimating returns is using the same asset allocation as the previous quarter, applying returns on the indices we have listed in the reminder. In our reminder, we also have a top-down approach, which is useful to combine with the bottom-up calculations. Bear in mind the separation of figures for ADB Gjensidige. And finally, on unwinding and change in financial assumptions, remember the rules of thumb and the example calculation, which we have published on our website. We have also included relevant swap rates for the different currencies in our reminder. There -- I just have to -- sorry for the disruption, just a moment. Where were we? We were at unwinding and changing financial assumptions? Yes. And as I said, we have also included relevant swap rates for the different currencies in our reminder. And bear in mind the separation of figures for ADB Gjensidige on this topic as well. So with that, I will now open up for questions.

[Operator Instructions] I cannot see any raised hands. So just to make sure if there are -- let's see. Faizan, yes? Let's see if we can open your line. There. Yes.

2 questions for me. One is for the past 2 years in Q4, you had an intra-year reserve charge associated with previous quarters. How should we think about Q1 on that front? Should we assume it to be a bit more normal and more reflection of the intergroup reserve just given the fact that you had a bit of a release in Q4. I just want to understand that. And secondly, on top line growth, obviously, you bring through quite strong rate increases in Norway. Just wanted to understand, are there anything in terms of business mix shifts, retention ratios, anything that you can comment on that would mean that you don't see the full translation of the rate going through the topline?

Well, we don't guide on our reserves. I cannot comment on what you asked on regarding the top line, Faizan. We will give you the results of our efforts and pricing in connection with our earnings release on the 29th of April. And we don't comment on any reserve changes if that should be any issue. They are -- if anything like that happens, we -- it is reported on an ongoing basis. Any further questions? No. Okay. Thank you very much for your attention. Have a nice afternoon.