Gjensidige Insurance Group Company Presentation October 2013
200 years of proactive transformation Samtrygd established as a joint reinsurance company for the mutual fire insurers Developed into a financial group offering a full range of general, life and pensions insurance products as well as banking and financial services Transforms into a standalone general insurer Initiates geographic growth and renewed product expansion in Norway Launches Gjensidige Bank Initiates process to list on Oslo Børs Acquisition of Citibank Norwegian consumer finance portfolio Acquisition of LF s Baltic operations 1816-1920s 1970s 1999 2006 2008 2010 1922 1980s and 1990s 2005 2007 2009 Gjensidige mutual fire insurers established throughout the country Samtrygd merges with Norsk Bilforsikring and Gjensidige (NBG) to create the largest auto insurer in the market Life and general insurance businesses are put under joint management under the Gjensidige brand Transforms from a mutual federation into an integrated mutual group Geographic expansion continues, acquisition of Tennant (Sweden), Parekss (the Baltics), Fair (Denmark) and KommuneForsikring (Denmark) Re-entered the pension and savings markets Acquisition of RESO Europa and NIMI Acquisition of Nykredit s general insurance operations Conversion into a public limited liability company (ASA) IPO December 2
Norwegian market leader, Nordic and Baltic growth opportunities Norway Sweden 1.2% 10.2% 24.6% 14.9% 25.4% 25.0% Gjensidige If Tryg Sparebank1 Other 19.1% 16.1% 15.7% 18.2% 29.7% Gjensidige If Lansförsäkringar Folksam Trygg Hansa Other Denmark Baltics 6.0% 29.5% 5.5% 12.5% 9.6% 17.3% 19.6% Gjensidige Topdanmark Tryg Alm.Brand Codan If Other 8.2% 22.8% 14.5% 12.9% 22.9% 12.3% 6.4% Gjensidige If Ergo BTA Seesam Codan Other Source: Norway: Finance Norway, 2nd quarter 2013. Sweden: Svensk Försäkring, 2nd quarter 2013, Denmark: Forsikring & Pension, 3. quarter 2012. Baltics Insurance Supervisory Authorities of Latvia and Lithuania, Estonia Statistics, competitor reports, and manual corrections 2nd quarter 2013 3
Our business Gjensidige Forsikring ASA* Norway Nordic Baltics General insurance Earned premiums: NOK 14.3bn Combined ratio: 82.8% Employees: 2,077 General insurance Earned premiums: NOK 2.9bn Combined ratio: 82.1% Employees: 476 General insurance Earned premiums: NOK 437m Combined ratio: 95.7% Employees: 435 Pension and Savings AUM: NOK 20.5bn Employees: 56 Retail Bank Gross lending: NOK 17.3bn Employees: 124 4 * 2012 figures, restated
Outperforming European peers 250 Total return since IPO +111% 200 150 +50% 100 50 0 des. 10 mar. 11 jun. 11 sep. 11 des. 11 mar. 12 jun. 12 sep. 12 des. 12 mar. 13 jun. 13 sep. 13 Gjensidige Forsikring ASA EuroStoxx Insurance Source: Bloomberg per close 18 October 2013 5
Key differentiators Strong macro environment Consolidated market Pricing discipline Efficient distribution No direct DB exposure Conservative investment portfolio Strong capitalization 6
Unique strengths Strong brand Loyal costumers Unique customer dividend model Advanced technology Gjensidige Gjensidige Foundation Shareholder dividends Customer dividends 7
From mutual to listed focusing on core business Underwriting discipline Sound RoE - attractive dividend CR % 120 110 100 RoE % (pre-tax) 30 15 Equity (NOKbn) 26 24 22 20 90 80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 R12M Q3 2013 Target CR corridor 90-93 0 Dividend (NOKm) 2010 2011 2012 YTD Q3 Equity 2013 RoE (pre-tax, annualised) Pre-tax RoE target 2010 2011 2012 2,350 2,275 3,425 Payout ratio 80% 83% 80% 18 8
Solid premium growth and good result NOKm YTD 2013 YTD 2012 2012 2011 2010* Private 913 1 100 1 439 979 788 Commercial 695 796 1 013 553 246 Nordic 296 372 520 142 (77) Baltics 20 11 19 3 17 Corporate Centre (279) (275) (383) (256) (178) Underwriting result 1 644 2 005 2 608 1 421 796 Pension and Savings / Retail Bank 177 95 131 82 5 Financial result 1 603 2 232 3 005 2 331 2 705 Amortisation and impairment losses of excess value Profit/(loss) before tax expenses (130) (96) (127) (181) (243) 3 291 4 252 5 634 3 647 3 254 * Not restated 9
Combined ratio General Insurance Combined ratio (%)- split loss ratio and cost ratio 88.2 15.3 85.0 85.3 15.3 15.5 91.9 16.4 95.3 16.5 73.0 69.7 69.9 75.5 78.9 YTD 2013 YTD 2012 2012 2011 2010 10
Sound investment returns from conservative asset allocation ROI: 5.2% 4.4% 5.4% 4.0% 2.8% Associated companies Other Property portfolio Equity portfolio Free portfolio Fixed income instruments Match portfolio Carrying Amount (NOKm): 2010 2011 2012 YTD 2012 YTD 2013 52,347 54,487 56,296 55,821 57,148 11
Group capital position per 30.09.2013 Available capital from different perspectives* NOKbn 7.8 10.9 4.6 0.7 Legal 15.8 Rating-based 19.1 Internal risk-based 22.9 IFRS equity 25.1 8.0 12.0 13.8 * YTD not included S&P model NOKbn Legal perspective Internal, risk-based perspective Rating-based perspective Capital > A-rating requirement (inc. technical buffer) 4.6 Total available capital (TAC) 19.1 Capital > most binding capital requirement (inc. technical buffer) Technical buffer Capital > Capital requirement Capital requirement NOKbn Total capital charge for asset risk 5.9 Total capital charge for insurance risk 9.0 Total gain diversification -1.1 Total capital requirement A-rating 13.8 Technical buffer 5% 0.7 12
Ambitious targets Combined ratio 90-93 % Cost ratio 15 % (within 2015) RoE Capitalisation Attractive dividend policy >15 % (from and including 2015) S&P A-rating > 70% (from and including 2014) Positioning strategy: Become the most customer-oriented player in the Nordic general insurance industry 13
Four keys to success 14
1. Customer orientation Analytical CRM Simplification of products and services Standardisation of work processes Self-service solutions Multichannel distribution customer chooses how and when 15
2. Efficient distribution Cost ratio % * 40 Employees* 3000 25 2000 10 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Employees Cost ratio 1000 * Norwegian general insurance 16
3. Optimal risk pricing based on data, methodology and experience Proof of better risk selection * Further potential Loss ratio Segment Premiums** (NOKbn) Status tariffs 3%-points reduction Private 7.5 Implemented Commercial 6.8 In progress Nordic /Baltics 3.3 To be implemented 2008 2011 * Private motor Norway ** Earned premiums 2012 17
4. Profitable growth based on proven model Norway Nordic Baltics Pension and Savings General insurance Disciplined geographic expansion in general insurance through M&A Support group RoE target within 3 years Meet CR target within 2-3 years Retail Bank Pension and Savings and Retail Bank to secure customer loyalty in Norway Support RoE target 18
Key take-aways Robust and proven business model Stable cash generation Attractive dividend policy Financial flexibility Platform for profitable growth 19
Appendix 20
Group management Catharina Hellerud Group Chief Financial Officer Group CFO since 2011 Executive positions in Gjensidige since 2007 5 years at the Oslo Stock Exchange 8 years in Ernst & Young Hege Yli Melhus Executive Vice President, Private EVP Private since 2011 1 year in Agito Nordic AS 7 years in Hafslund ASA 1 year in Kistefos Venture Capital AS Martin Danielsen Executive Vice President, Product and price EVP Product and price since 2009 Executive positions in Gjensidige since 2006 4 years in Storebrand/If 5 years in McKinsey Helge Leiro Baastad Group Chief Executive Officer Group CEO since 2003 Executive positions in Gjensidige since 1998 11 years in Jordan AS 3 years in Denofa and Lilleborg Fabrikker Sigurd Austin Executive Vice President, Commercial EVP Commercial since 2011 Executive positions in Gjensidige since 2003 Executive positions in Norwegians armed forces Jørgen Ringdal Executive Vice President, Group staff and general services EVP Group staff and general services since 2006 Executive positions in Gjensidige since 1996 3 years at KPMG Mats C. Gottschalk Executive Vice President, Strategy and M&A EVP Strategy and M&A since 2011 6 years in Goldman Sachs 5 years in J.P. Morgan Cecilie Ditlev-Simonsen Executive Vice President, Brand management and communication EVP Brand management and communication since 2011 3 years in JKL Group AS 5 years in Norsk Hydro ASA 2 years in Korn Ferry Int l/ Futurestep Kim Rud Petersen Executive Vice President, International general insurance EVP International general insurance since 2010 3 years in KommuneForsikring A/S 7 years in AON Denmark A/S 10 years in Codan A/S Kaare Østgaard Executive Vice President, Claims handling and IT EVP Claims handling and IT since 2011 Executive positions in Gjensidige since 2004 4 years in ErgoGroup 21
Ownership 10 largest shareholders* Geographical distribution of free shares** No Shareholder Stake (%) 1 Gjensidigestiftelsen 62.2 2 Folketrygdfondet 4.1 25% 6% 41% Norway USA UK 3 DWS 2.5 4 Thornburg Inv. Mngt 1.6 14% 14% Europe excl. UK Other 5 UBS 1.5 6 Danske Capital 1.3 7 BlackRock 1.2 8 People s Bank of China 1.1 9 Greenlight Capital 1.1 10 DNB Asset Management 0.9 Gjensidige Foundation ownership policy: Long term target holding: > 60% Can accept reduced ownership ratio in case of acquisitions and capital issues when in accordance with Gjensidige s overall strategy Total 10 largest 77.5 * Shareholder list based on analysis performed by RD:IR of the register of shareholders in the Norwegian Central Securities Depository (VPS) as per 3 July 2013. This analysis provides a survey of the shareholders who are behind the nominee accounts. There is no guarantee that the list is complete. **) Free shares means total shares excluding shares owned by Gjensidigestiftelsen. 22
Unique policyholder relationship through the Gjensidige Foundation Dividends Gjensidige Foundation Customer dividends General Insurance customers in Norway Dividends Other shareholders Gjensidige Foundation passes on dividends to policyholders in Norway Customer dividends for 2012 above 15% of premiums paid Increases customer loyalty, decreases churn rates and reduces costs Alignment of interests between the Foundation and other shareholders In addition, the Foundation does charity work in Norway under Gjensidige s brand 23
Split earned premiums Private Nordic 29.7 % 17.2 % 10.1 % Motor Property 37.5 % 21.7 % 0.5 % 5.6 % 3.4 % Motor Property Accident and Health 43.0 % Accident and Health Other 31.3 % Other Agriculture Liability Commercial Baltics 25.2 % 2.0 % 13.4 % 5.4 % 3.5 % Motor Property Accident and Health Other 14.9 % 15.3 % 2.6 % 4.3 % Motor Property Accident and Health 28.9 % 21.7 % Agriculture Liability Marine/Cargo 62.9 % Other Liability 24
Pension and Savings 80 60 40 20 0 Market shares (%)* 50 40 30 20 10 0 8.5 9.4 Portfolio premium Assets under management Positive development Q2 2007 Q4 2007 Q2 2008 Q4 2008 Q2 2009 Income Cost Q4 2009 Q2 2010 Q4 2010 Q2 2011 46.7 Recieved assets Q4 2011 Q2 2012 Q4 2012 Q2 2013 Fourth largest player with AUM NOK 24.8bn Defined contribution only, capital light model Significant market potential, supportive environment Support commercial general insurance customers in Norway Distribution through Gjensidige s multichannel model and selected partners Cost efficient and scalable set-up Support Group ROE-target * Source: Finance Norway per 30 June 2013 25
Retail Bank Support private general insurance customers in Norway Secured and unsecured loans Savings products Current accounts Internet/call-centre distribution and sale through insurance sales offices Around 45% of the customers in the Retail Bank are insurance customers Financial targets Support Group ROE-target Core capital adequacy > 13,5 per cent Pre tax profit 5 Q1 2010 10 14 Q3 2010 4 14 Q1 2011 18 20 Q3 2011 14 21 Q1 2012 Deposits and Lending NOKm 18000 13000 8000 3000 Deposits 27 28 Q3 2012 38 48 Q1 2013 Lending 43 12,973 10,693 23,196 16,318 50 Q3 2013-2000 30.06.2013 30.06.2012 30.06.2013 30.06.2012 26
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Investor Relations Janne Flessum Head of Investor Relations janne.flessum@gjensidige.no Mobile: +47 91 51 47 39 Linn Soltvedt Investor Relations Officer linn-therese.soltvedt@gjensidige.no Mobile: +47 41 11 05 55 Anette Bolstad Investor Relations Officer anette.bolstad@gjensidige.no Mobile: +47 41 67 77 22 Address: Drammensveien 288, Oslo. Postboks 276, NO-1326 Lysaker, Norge. www.gjensidige.no/ir 28