The first quarter of 2020 was characterised by a solid underwriting result
driven by effective pricing measures and strong profitability. The Covid-19
situation had a limited impact on the underwriting result. However, the
investment portfolio was hit by the general turmoil in the financial markets.
The Group's long-term outlook remains good, but with considerable short-term
uncertainty on the investment side. The Board has resolved to withdraw the
dividend proposal in response to regulatory stance. It is the Board's intention
to distribute dividends to shareholders as soon as the situation will allow for
it.
Gjensidige Forsikring Group recorded a loss before tax of NOK 497.0 million
(profit of 3,030.7) for the quarter. The profit before tax for the first quarter
last year was significantly impacted by a gain of NOK 1.6 billion from the sale
of Gjensidige Bank. The result in the first quarter of 2020 was significantly
impacted by negative returns on the investment portfolio, reflecting the turmoil
in the financial market in the wake of the Covid-19 situation.
The profit from general insurance operations measured by the underwriting result
was NOK 1,057.6 million (798.1), corresponding to a combined ratio of 83.9
(86.6). The Covid-19 pandemic had a limited impact on the Group's underwriting
result. Claims related to travel insurance increased significantly, but
reinsurance coverage limited net claims incurred to NOK 90.6 million, of which
NOK 60.0 million was recognised in the Corporate Centre. Lower motor claims, due
to less driving during the latter part of the quarter, had a positive impact on
claims in the Private segment. The loss after tax expense from continuing and
discontinued operations was NOK 479.2 million (profit of 2,785.7) and the
corresponding earnings per share were minus NOK 0.96 (plus 5.57).
- I am very pleased that we have maintained a high customer service level and
been able to run all critical business functions during the extraordinary
circumstances in the wake of the pandemic. We have generated a strong
underwriting result for the quarter and maintain our superior position in
Norway. Our operations outside Norway have continued to progress, with strong
renewals and continued focus on efficiency, says CEO Helge Leiro Baastad.
Earned premiums from general insurance increased by 10.7 per cent to NOK 6,570.6
million (5,936.7) for the quarter. Measured in local currency, the premium
increased by 8.8 per cent. The underwriting result increased due to higher
premiums following solid renewals and effective pricing measures, which in
addition to more favourable weather conditions for motor in Norway resulted in a
6.4 percentage point improvement in the underlying frequency loss ratio. This
was partly offset by higher large losses, lower run-off gains and higher
operating expenses.
The Pension segment generated a lower profit for the period, driven by lower
financial income due to the financial turmoil and higher operating expenses.
The return on financial assets was minus 2.5 per cent (plus 1.2) or minus NOK
1,519.3 million (plus 682.2). All asset classes, except bonds held to maturity
and property recorded negative results for the quarter.
Dividend and AGM
The Board of Gjensidige Forsikring ASA has on 21 April 2020 resolved to withdraw
the proposal of a regular dividend for the 2019 financial year. The decision is
based on direct dialogue with the Norwegian FSA and the pronounced expectation
from regulators that financial institutions halt dividends payments until the
significant uncertainty related to the economic development is reduced.
The initial proposal of a special dividend was withdrawn on 20 March 2020 in
response to the Covid-19 situation.
It is the Board's intention to distribute dividends to shareholders as soon as
the situation will allow for it. In line with previous years' practice, the
Board will seek authorisation from the General Meeting to distribute dividends
later this year, which will give flexibility to revisit the dividend discussion
as soon as possible.
The Annual General Meeting will be held on 25 May 2020 and will be organised in
line with necessary safety measures to safeguard health and contain the virus
spread. Instead of physical presence, our shareholders will be able to
participate via our live web cast. Questions can be sent to us beforehand. And
we encourage our shareholders to use the possibility to vote before the meeting.
Highlights first quarter 2020 (first quarter 2019)
· Profit/loss before tax: NOK -497.0 million (3,030.7)
· Earnings per share: NOK -0,96 (5,57)
· Earned premiums: NOK 6,570.6 million (5,936.7)
· Underwriting result: NOK 1,057.6 million (798.1)
· Combined ratio: 83.9 (86.6)
· Cost ratio: 15.0 (14.9)
· Financial result: NOK -1,519.3 million (682.2)
Special factors and events
· Dividend proposal withdrawn
This release contains alternative performance measures (APMs). APMs are
described at www.gjensidige.no/reporting in a document named APMs Gjensidige
Forsikring Group Q1 2020.
Contact
Head of Communication Øystein Thoresen. Tel: 47 952 33 382
Head of Investor Relations Mitra Hagen Negård. Tel: 47 957 93 631
This information is subject to disclosure under the Norwegian Securities Act
section §5-12.
Gjensidige is a leading Nordic insurance group listed on the Oslo Stock
Exchange. We have about 3,700 employees and offer insurance products in Norway,
Denmark, Sweden and the Baltic states. In Norway, we also offer pension and
savings. The Group's operating income was NOK 28 billion in 2019, while total
assets were NOK 112 billion.