Q4 presentation March 2016

Transcription

1 Q4 presentation March 2016 Espen Husstad, CEO Bård Standal, CFO

2 Executive summary Growth in premium income and portfolio New management team in place Underlying financial performance masked by one-offs Capital position positively impacted by Solvency II but still challenging Transition to solvency II from 1 January 2016 Solvency II capital margin ratio (SII) at 110% The Board of Directors has decided to evaluate and consider all strategic alternatives 2

3 New senior management in place Bård Standalappointed CFO in February Joined Vardia from the position as SVP Finance for the Orkla group - Significant experience from inside and outside the Nordic insurance sector - Extensive financial and legal background including SVP Strategic Execution in Statkraft and Chief Legal Officer in Statoil Fuel & Retail Jonas Billberg appointed Chief Operating Officer in October Oversees Nordic operations within distribution, claims handling, marketing and IT - Extensive experience from several leading positions at If P&C Insurance Both will play a key role in Vardia s future development 3

4 Strategy Vardia holds a sizeable Scandinavian portfolio The market cost of building it matches well the accumulated investment made in Vardia Significant earnings potential in place The Board of Directors has decided to evaluate and consider all strategic alternatives Vardia and its portfolio has significant strategic and financial value. in order to unlock the underlying potential and maximize shareholder value. Vardia has engaged financial advisors to assist in this process. Next step: Establish a sustainable operation Stabilizing the platform Capitalizing on the portfolio build-up 4

5 Focus on operational improvements Maturing Pruning 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% UW12/13 UW13/14 UW14/15 UW15/16 Cancellations of large wooden risks Cancellation of risks in the restaurant segment Commerical buildings Norway: Large Wooden Buildings Claims ratio 998,2% Premium ~6 MNOK Remaning of Portfolio Claims ratio 36,7% Premium ~50 MNOK 0% Portfolio: Motor Sweden & Norway The graph shows development of claims ratio per month (number of months) sincethe start of each UW-year, for the full UW-year.

6 Q4 financial highlights

7 Financial highlights Q4 continued premium growth GWP PER QUARTER +17% GWP YEAR TO DATE +25% Q Q Q Q Q Q Q Q * Please note PORTFOLIO Q adjusted END from previously OF QUARTER reported NOK (NOKm) 1.444m TOP LINE TAKEAWAY % Continued strong top-line growth in Q GWP up 17% Y-o-Y Portfolio growth of NOK 249m from 2014 Norway and Sweden up about NOK 105m each Denmark added NOK 37m Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 7

8 Loss ratio development special items blurring Q4 performance Q4 LOSS RATIO LOSS RATIO TAKEAWAY 79,2% 90,0% 107,6% 94,3% 115,6% 117,5% gross net Q Three large losses* with a total negative effect of NOK 47 million (13.0%-points) on gross losses IBNR reserves increased with NOK 130 million in Q4 to a total of 352 million (gross) Higher NatCat from increased market share (2.1%-points) Claims handling expense (CHE) at 7.7% 86,5% ,6% FULL YEAR LOSS RATIO 92,4% 90,5% 88,3% 82,6% gross net Full year ppt adverse from 2014 Large losses represent 8.5%-points of the gross loss ratio Gross loss ratio also includes claims handling costs at 7.2%- points. This is partly insourced from 1 January 2016 in order to reduce CHE * Large losses: losses > NOK 5 million

9 Combined ratio mainly influenced by adverse one-offs on losses Q4 COMBINED RATIO (GROSS) -11,8 157,6% 145,8% FULL YEAR COMBINED RATIO (GROSS) -1,8 129,8% 127,9% 107,6% 115,6% 88,3% 92,4% 50,1% 30,2% 41,5% 35,5% Q4 14* Loss Ratio Cost Ratio Q4 15 Q4 14* Loss Ratio Cost Ratio Q4 15 TAKEAWAY Q4 15 improving 11.8%-points from Q4 14, despite one-offs : Losses affected by IBNR strengthened by 59%-points (gross) Adverse gross effect from large losses, including the high profile Nedre Foss Gård, Oslo One-off costs largely driven by extraordinary items (audit fees, consultancy, legal counselling) related to Q3 15 audit Adverse effect on Combined Ratio from losses and costs mentioned above is 39%-points 9 * Figures are restated to reflect decreased deferral of incremental acquisition costs

10 Satisfactory capital position SOLVENCY MARGIN SOLVENCY 1 PER TAKEAWAY Satisfactory solvency margin as of 1 January 2016 under Solvency II 42 % SOLVENCY 2 PER Vardia has conducted a solvency margin audit Solvency margin recovered under the transition to Solvency II from Solvency I as previously communicated 110 % 10

11 Appendix

12 Results NOK thousands Q Q4 2014* 2015 Gross premiums written Gross premiums earned Premiums earned f.o.a Gross Incurred claims Incurred claims f.o.a Operating expenses for own account Other income/expenses Techn. result before changes in sec.reserves** Net financial income Operating result Changes in security reserves etc Profit/Loss before tax Profit/Loss after tax Gross loss ratio 115,6 107,6 92,4 Gross cost ratio 30,2 50,1 35,5 Gross Combined ratio 145,8 157,6 127,9 Loss ratio f.o.a. 117,5 94,3 90,5 Cost ratio f.o.a. 53,4 138,4 72,3 Combined ratio f.o.a. 170,9 232,8 162,8 * Figures are restated to reflect decreased deferral of incremental acquisition costs ** Figures are ex. allocated return on investment transferred from the non-technical account 12

13 Balance sheet NOKm Various Assets Bank deposits/money market funds Reinsurers share of gross technical reserves Receivables direct insurance and reinsurance Other Assets Total Assets Total Equity Subordinated loan Gross Premium Reserve Gross claims reserve Other technical provisions Pension liabilities Financial liabilities Total liabilities The Group s total assets increased from NOK 2,127 million in Q3 to NOK 2,241 million in Q4 Vardia pursues a conservative investment policy, with all liquid assets deposited in banks and money market fund Total equity and liabilities

14 Top 20 shareholders 23 February 2016 Shareholder s name No. of Shares Percent Nationality Avanza Bank AB (Broker account) ,72 % SWE Skandinavis ka Ens kilda Banken AB (Nominee) ,31 % SWE D. Carnegie AB ,69 % SWE Canica AS ,13 % NOR Nordnet Bank AB (Nominee) ,71 % SWE Skandinavis ka Ens kilda Banken AB (Nominee) ,68 % SWE Norway Marine Ins urance AS ,10 % NOR Nordnet Bank AB (Nominee) ,93 % SWE Nilvama AS ,63 % NOR Aakvik Holding AS ,63 % NOR Busebakk AS ,58 % NOR Saxo Bank (Nominee) ,76 % DNK Gyljandi AS ,73 % NOR Vikna Eiendom AS ,60 % NOR Hetlands Gecco Management AS ,51 % NOR Toluma Norden AS ,47 % NOR AHJ Holdings Ltd ,41 % GBR Høie, Karl ,34 % NOR Euroclear Bank S.A. (Nominee) ,31 % BEL Slethei AS ,24 % NOR Sum of all other s hareholders ,52 % Total ,00 % 14

15 Markets at a glance Strong growth in all three markets VARDIA NORWAY VARDIA SWEDEN VARDIA DENMARK +16% +17% +113% GWP GWP GWP 5 10 Q4 14 Q % Q4 14 Q % Q4 14 Q % GWP GWP GWP Portfolio Portfolio Portfolio

16 Gross loss ratio breakdown quarterly LOSS RATIO BREAKDOWN CHE 79,5% 7,4% 73,2% 6,6% 97,0% 7,2% 115,6% 7,7% 92,4% 7,2% Loss Ratio 72,1% 66,6% 89,8% 108,0% 85,2% Q1 15 Q2 15 Q3 15 Q4 15 YTD 15 16

17 Markets at a glance Loss development VARDIA NORWAY VARDIA SWEDEN VARDIA DENMARK Q4 4,4 Q4 25,1 Q4 59,0 115,6% 120,0% 79,8% 104,9% 59,5% 118,5% GROSS LOSS RATIO YTD 2,3 YTD 8,2 YTD 90,1% 92,4% 81,0% 89,2% ,6% 41, ,5% ,0% 122,3% 104,9% 116,0% 118,5% 114,8% Q4 Gross Q4 Net Q4 Gross Q4 Net Q4 Gross Q4 Net 17