Gjensidige Forsikring ASA (GJF) Earnings Call Transcript & Summary

Good afternoon, everyone and welcome to Gjensidige's Q2 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. I will start with going through the Q2 reminder, which was published on our website yesterday. This reminder highlights relevant public information. Afterwards, I will open up for a Q&A session. As always, we only answer questions related to already disclosed and public information. [Operator Instructions] So let us start with a few key dates. Our silent period starts on the 1st of July and we will be releasing our Q2 results on Friday, the 11th of July. As always, we kindly ask sell-side analysts to forward your estimates using the template I sent you yesterday. And please fill in all open cells in the sheet. We have included control lines to help you identify and avoid potential errors in your sheet. Please make sure the control lines are error-free before sending the file back to us. The deadline for sending us your estimates is the 4th of July. We will publish consensus on our website on the 9th of July in the morning. 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 summer quarters, Q2 and Q3 normally having lower claims ratios than the winter quarters, Q1 and Q4. There have been no significant natural peril events in Scandinavia so far this quarter. Overall, Q2 '25 in Scandinavia has been somewhat warmer and drier than historical normals, though with some regional and month-to-month variations. As always, bear in mind the results for the comparable period last year. As you saw in our Q2 '24 report, the group's insurance service result was positively impacted by NOK 401.5 million related to a change in the risk adjustment. And as described in the Q2 report for last year, the insurance service result was negatively impacted by claims, which occurred in Q1 '24 but recognized in Q2 '24. We disclosed details on these figures in the Q1 '25 report and presentations and you will find the details in the pre-close reminder as well. 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/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 large losses, the expectation for 2025 is, as we have communicated earlier, approximately NOK 2 billion or NOK 500 million per quarter. And for the sake of good order, please note that this figure is an estimate and not a guiding per quarter. Large losses are random in nature, as you know. And in terms of the quarterly estimate, we simply divide the annual estimate by 4. In terms of excess reserves, there is no change in the communication. We continue to set reserves according to our best estimates. And bearing history in mind, we expect run-off 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 and pages in the Q1 '25 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 the end of the first quarter this year included approximately NOK 230 million of the NOK 900 million Tier 2 bond we issued back in October '24. We expect the eligible amount of the Tier 2 loan to increase over time as the capital requirement increases, driven by growth. Also, bear in mind the solvency impact from the acquisition of Buysure, which will be included in the Q2 calculation. As explained in our Q1 '25 presentation, the acquisition will reduce the solvency ratio of the group according to the approved partial internal model by approximately 4 percentage points based on the Q1 '25 solvency calculations. Moving on to our investment portfolio. 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. We have also a top-down approach in the reminder, 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. And as per routine, our reminder includes updated swap rates. So with that, I will now open up for questions. Please raise your hand, I will open your line.

Jan Erik. Just a moment. Yes. Erik, you have a question?

Could you just shed some light into the large losses. Last quarter, in Q1, you had some large losses in your book. Could you say where -- which areas it was, what kind of country, private, commercial, industrial, what kind of large losses it was?

Right. You will see all the breakdown, Jan Erik, as always in our report. You see large losses per segment and for private and commercial broken down by Norway and Denmark. Beyond that, we don't comment on the particular losses. So all the numbers were listed in the report.

Of course. This is in the corporate center where you moved a lot of the large losses. Could you shed some more light into what it was?

No, we don't comment on the particular losses from quarter-to-quarter. So unless it has been commented in the media, we don't comment on those sort of losses. But what we said was that there was one larger loss, which made up somewhat -- some of the increase year-over-year in Q1 '25 over Q1 '24.

Okay.

Any further questions? Okay. As far as I can see, there doesn't seem to be any further questions. So thank you very much for your attention, everyone and have a nice afternoon.