Gjensidige Forsikring ASA (GJF) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Gjensidige's Third Quarter 2026 Pre-close Call. My name is Berit Nilsen, and I'm Head of Investor Relations. With me, I have our IRO, Jonas Fougner. 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 by going through the Q3 reminder that was published on our website on Friday. This reminder highlights relevant public information and will not include any new business updates. Afterwards, we will open up for a Q&A session. As always, we will only answer questions related to information that has already been publicly disclosed. And please note that if you would like to ask a question, you need to log on via the Teams app. Over to you, Jonas.

Hello, everyone. Let us start with a few key dates. Our silent period begins on the 1st of October, and we will release our Q3 results on the 23rd of October. As always, we kindly ask you to submit your estimates using the template I sent to you on Friday. And please fill in all open cells in the sheet. We have included control lines to help you identify and avoid potential errors. Please make sure these are error-free before returning the file to us. The deadline for submitting your estimates is the 9th of October, and we will publish consensus on our website on the 16th of October. 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. This quarter, Scandinavia has experienced temperatures close to normal for the season with some regional variation. No significant natural peril events have occurred during the period. In July, Norway experienced one of the largest residential fire events in modern times. More than 100 homes were destroyed in Krokstadelva in the Drammen region. For Gjensidige, the event is covered by our reinsurance program. The impact for Gjensidige is expected to be limited to approximately NOK 100 million plus reinstatement premiums and will be reflected in our third quarter results. On the 15th of September, Gjensidige successfully completed the issuance of NOK 1 billion in a new subordinated Tier 2 capital bond issue. The issuance is Solvency II compliant and settlement took place on the 22nd of September. In addition, as previously announced, we exercised the call option on the remaining NOK 1.2 billion of our Tier 2 bond GJF03. However, settlement will not take place until the fourth quarter on the 7th of October. As always, please keep the results for the comparable period last year in mind. In Q3 '25, we reported two nonrecurring effects. The first was a negative effect of NOK 429 million following the termination of the core IT system CoreSuite which affected the pension results. The second was a positive impact in Private Norway related to a change in revenue recognition of home seller insurance. This contributed NOK 168 million to the insurance revenue and NOK 41 million to the insurance service results. Further details can be found in the Q3 '25 report.

Over to large losses. As communicated previously, the expected level of large losses for the current year is approximately NOK 580 million per quarter. For the sake of good order, please note that this is an estimate and not a quarterly guidance. Large losses are inherently random in nature and the quarterly estimate is simply calculated by dividing the annual estimate by 4. Turning to excess reserves. There is no change in our communication. We continue to set reserves according to our best estimate. And as history has shown, this may result in both runoff gains and runoff losses. On inflation, for the most recent comment on this topic, please refer to our Q2 2026 presentation material. Turning to Solvency. Bear in mind, the bond issuance Jonas mentioned. Also note, Gjensidige had NOK 200 million in Tier 2 capital, not included in eligible own funds as of Q2 2026. Eligibility of Tier 2 loans is restricted by the total capital requirement. We expect the eligible amount to increase over time as the capital requirement increases, driven by growth. Please refer to our reminder for the general explanation of the main drivers behind the solvency calculation. Moving on to our investment portfolio. As always, we believe a good starting point for estimating returns is to use the same asset allocation as the previous quarter, applying returns on the indices that we have listed in the appendix section of our quarterly presentation. Finally, on unwinding and change in financial assumptions, please keep the rules of thumb in mind. You can find an example spreadsheet on our website under Reports and Presentation, other documents. As usual, our reminder includes updated swap rates. And with that, we will now open up for questions. Please raise your hand, and we will open our line.

Vash?

Can you hear me now?

Yes.

Yes, we can hear you.

Perfect. Sorry, I just had two quick questions and potentially more like clarifications. So one is, could you just remind me of the allocation of that NOK 100 million for the wildfire, for the fire event, between Corporate Center and Private segment. So just how does that allocation work? And the second one, again, is a little bit more of a clarification. So following your comments on the bonds and the solvency, I just want to double check this implies that all else equal, there is no more Tier 2 debt outside of your own funds calculation.