Gjensidige Insurance Group Company presentation May 2014 1 1
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
Gjensidige in brief Attractive position in Nordic GI - market leader in Norway Balanced retail portfolio Accident & Health 21% Motor 33% Property 36% Earned premiums : NOK 19bn Equity: NOK 26bn Market cap: NOK 58bn Employees: 3,400 Private and SME exposure 80 % direct distribution Direct distribution 80% Market cap as at 12.05.2014. All other figures are FY 2013 figures. 3
Strong value proposition Total return development Strong, stable earnings Low-risk balance sheet Strong capitalisation Attractive dividend yield 240 190 140 90 40 08/05/2011 08/05/2012 08/05/2013 08/05/2014 Nordic Non-life Gjensidige Forsikring ASA EuroStoxx Insurance Source: Bloomberg, 08 May 2014. Nordic Non-Life: weighted average Sampo, Tryg, Topdanmark and Alm.Brand 4
Solid track record Earned premiums UW result 19 CAGR +3.2% CAGR +36.4% 3.0 NOK bn 18 17 NOK bn 2.0 1.0 16 2010 2011 2012 2013 0.0 2010 2011 2012 2013 Pre-tax ROE Dividend pay-out ratio 25% 100% 20% 80% 15% 60% 10% 40% 5% 20% 0% 2010 2011 2012 2013 0% 2010 2011 2012 2013 5
Attractive market place Market share 100% 80% 60% 40% 20% 0% Consolidated markets Norway Sweden Denmark Favourable macro environment Rational listed players Efficient distribution High internet penetration Automatic renewals Top 3 Top 5 Others Cost ratio 30% Cost efficiency Integrated value chain 25% 20% 15% 2007 2008 2009 2010 2011 10pp Customer European average Norway Source: Insurance Europe, DNB Markets Nordic average Gjensidige 6
Our unique strengths Strong brand Loyal costumers Unique customer dividend model Technological and analytical skills 7
Ambitious targets Combined ratio 90-93% ROE > 15% (from and including 2015) Attractive dividend policy > 70% (from and including 2014) 8
Value creation through skills, data mining and customer experiences Strong strategic platform for further success Customer orientation Operational performance Analytical customer and risk selection One Gjensidige Efficient work processes Customer and market insight Micro tariffs Management, competence and culture Brand IT platform 9
Customer orientation Stable customer base Further potential Record-high customer satisfaction 2009 2010 2011 2012 2013 Private Commercial (SME) Claims handling (motor, property, contents) Analytical CRM meeting the right customer at the right time with the right product and the right price Multichannel distribution customer chooses how and when Self-service solutions Self-service works 23% Simplification of products and services Standardisation of work processes 11% Claims reported online New solution launched 2012 2013 2014 10
Operational performance Proof of operational excellence Further potential Combined ratio % 120 110 100 More efficient sourcing Self-service solutions Automation of frequency claims handling Re-allocate resources to handling of more complex claims 90 80 2000 2013 Target CR corridor 90-93 11
Analytical customer and risk selection Proof of better risk pricing Further potential Better utilisation of data - 3% points Micro tariffs implemented in Norway effects occur over time Micro tariffs launched in Nordic in 2013 further products to follow Continuous improvement and finetuning of all tariffs 2008 2011 Loss ratio - private motor Norway 12
Capital discipline to meet 15% ROE-target Strategic flexibility Lower risk investment portfolio Disciplined / selective M&A Strategic flexibility and excess capital NOK 2.6bn Technical buffer NOK 0.7bn 6 % 9 % 3% 3% 7 % 7 % 34 % 16 % 15 % Capital requirement S&P A-rating NOK 14.8bn Match portfolio NOK 33.2bn Free portfolio NOK 26.4bn Money market Bonds at amortised cost Current bonds Money market Other bonds Convertible bonds Current equities PE funds Property Other 13 All figures as per 31. March 2014
Key messages Proven track record High and stable cash dividends Scalable business model and financial flexibility Strong position in attractive market place with high entry barriers 14
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Appendix
Our business Gjensidige Forsikring ASA Norway Nordic Baltics General Insurance Earned premiums: NOK 14.8bn Combined ratio: 84.5% Employees: 1,987 General Insurance Earned premiums: NOK 3.3bn Combined ratio: 89.7% Employees: 799 General Insurance Earned premiums: NOK 511m Combined ratio: 93.0% Employees: 400 Pension and Savings AUM: NOK 25.9bn Employees: 61 Retail Bank Gross lending: NOK 24.2bn Employees: 130 17 2013 figures. General Insurance Norway includes Swedish commercial portfolio
Norwegian market leader, Nordic and Baltic growth opportunities Norway Sweden 1.3% 25.3% 10.3% 14.7% 25.4% 24.4% Gjensidige If Tryg Sparebank1 Others 18.8% 16.0% 15.9% 18.2% 29.8% Gjensidige If Lansförsäkringar Folksam Trygg Hansa Others Denmark Baltics 29.1% 5.9% 17.5% 6.1% 19.1% 12.5% 9.8% Gjensidige Topdanmark Tryg Alm.Brand Codan If Others 23.6 % 23.4 % 8.0 % 13.7 % 12.6 % 12.4 % 6.3 % Gjensidige If Ergo BTA Seesam Codan Others Sources: Finance Norway, 4th quarter 2013. Svensk Försäkring, 4th quarter 2013, Forsikring & Pension, 1st quarter 2013. Baltics Insurance Supervisory Authorities of Latvia and Lithuania, Estonia Statistics, competitor reports, and manual calculations, 4 th quarter 2013. 18
Key figures Group NOKm Q1 2014 Q1 2013 2013 2012 2011 Earned premiums, total 5 188 4 666 19 641 18 478 18 081 Loss ratio, general insurance 77.6 76.6 74.0 69.9 75.5 Cost ratio, general insurance 15.3 15.7 15.3 15.5 16.4 Underwriting result, general insurance 349 343 2 020 2 608 1 421 Net income from investments 783 184 2 538 3 056 2 460 Profit/ (loss) before tax 1 156 541 4 574 5 634 3 731 Profit/ (loss) for the period 923 317 3 671 4 280 2 832 19
Split earned premiums Private Nordic 18.3% 10.1% 28.0% 43.5% Motor Property Accident & Health Other 9.9% Motor 4.7% Property 3.0% 31.1% Accident & Health 17.0% Liability 34.2% Agriculture Other Commercial Baltics 5.6% 4.0% 13.4% 25.6% 1.0% 21.2% 29.2% Motor Property Accident & Health Marine/Cargo Liability Agriculture Other 43.0% 1.8% 15.8% 15.2% 62.8% Motor Property Accident & Health Liability Other 20
Combined ratio (%) General Insurance split by cost ratio and loss ratio per segment Private 85.6 88.1 83.3 80.8 12.9 13.4 13.2 13.4 72.7 74.7 70.1 67.4 Commercial 90.5 91.0 85.9 85.0 11.5 12.6 11.7 12.0 78.9 78.4 74.2 73.1 Q1 2014 Q1 2013 2013 2012 Q1 2014 Q1 2013 2013 2012 Nordic Baltics 89.8 91.6 89.7 16.7 15.8 17.0 82.1 17.4 104.8 98.5 93.0 95.7 26.9 27.1 25.9 28.7 73.1 75.7 72.7 64.7 77.9 71.4 67.1 67.0 Q1 2014 Q1 2013 2013 2012 Q1 2014 Q1 2013 2013 2012 21
Pension and Savings 80 60 40 20 0 Market shares (%)* 35 30 25 20 15 10 5 0 8.4 9.2 Portfolio premium Assets under administration Positive development Income Cost 32.6 Recieved assets Q2 2007 Q4 2007 Q2 2008 Q4 2008 Q2 2009 Q4 2009 Q2 2010 Q4 2010 Q2 2011 Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Fourth largest player with AUA NOK 26.6bn 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 31 December 2013 22
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 52% of the customers in the Retail Bank are insurance customers Financial targets Support Group ROE-target NOKm 60 50 40 30 20 10 0 Pre tax profit Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Deposits and Lending NOKm 30000 25000 20000 15000 10000 5000 0 Deposits Lending 31.03.2014 31.03.2013 31.03.2014 31.03.2013 23
Sound investment returns from conservative asset allocation ROI: 4.4% 5.4% 4.3% 0.3% 1.3% Associated companies Other Property portfolio Equity portfolio Free portfolio Fixed income instruments Match portfolio Carrying Amount (NOKm): 2011 2012 2013 Q1 2013 Q1 2014 54,487 56,296 58,148 57,869 59,572 From and including 2014, Associated companies are included in the Equity portfolio. 24
Group capital position per 31.03.2014 2.6 11.5 0.7 S&P model Capital > A-rating requirement (incl. technical buffer) NOKbn 2.6 6.2 14.8 Total available capital (TAC) 18.1 5.4 9.5 Total capital charge for asset risk 6.6 Legal perspective Internal, riskbased perspective Rating-based perspective Total capital charge for insurance risk 9.3 Total gain diversification (1.1) Strategic buffer and excess capital Technical buffer Capital > Capital requirement Capital requirement Total capital requirement A-rating 14.8 Technical buffer 5% 0.7 NOKbn 25
Ownership 10 largest shareholders* Geographical distribution of free shares** No Shareholder Stake (%) 1 Gjensidigestiftelsen 62.2 2 Folketrygdfondet 4.8 3 Deutche Bank 2.9 4 BlackRock 1.6 21% 5% 13% 6% 15% 41% Norway North America UK Asia Europe excl. UK Other 5 UBS 1.3 6 Standard Life 1.2 7 Danske Bank 1.1 8 Thornburg Inv. Mngmt 1.1 9 SAFE Inv. Company 1.0 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 78.2 * Shareholder list based on analysis performed by Orient Capital Ltd of the register of shareholders in the Norwegian Central Securities Depository (VPS) as per 31 March 2014. 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. 26
New dividend policy from and including the accounting year 2014 Gjensidige targets high and stable dividend payouts to its shareholders. The Board targets a payout ratio over time of at least 70 per cent of profit after tax. When determining the size of the dividend, the expected future capital need will be taken into account. Over time, Gjensidige will also pay out excess capital above the targeted capitalisation. 27
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 28
Disclaimer The information contained herein has been prepared by and is the sole responsibility of Gjensidige Forsikring ASA ( the Company ). Such information is confidential and is being provided to you solely for your information and may not be reproduced, retransmitted, further distributed to any other person or published, in whole or in part, for any purpose. Failure to comply with this restriction may constitute a violation of applicable securities laws. The information and opinions presented herein are based on general information gathered at the time of writing and are therefore subject to change without notice. While the Company relies on information obtained from sources believed to be reliable but does not guarantee its accuracy or completeness. These materials contain statements about future events and expectations that are forward-looking statements. Any statement in these materials that is not a statement of historical fact including, without limitation, those regarding the Company s financial position, business strategy, plans and objectives of management for future operations is a forward-looking statement that involves known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which the Company will operate in the future. The Company assumes no obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors affecting these statements. This presentation does not constitute an offer or invitation to sell, or any solicitation of any offer to subscribe for or purchase any securities and nothing contained herein shall form the basis of any contract or commitment whatsoever. No reliance may be placed for any purposes whatsoever on the information contained in this presentation or on its completeness, accuracy or fairness. The information in this presentation is subject to verification, completion and change. The contents of this presentation have not been independently verified. Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company or any of its owners, directors, officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this presentation. None of the Company, any selling equity holder, any member of the underwriting syndicate, or any of their respective affiliates, advisors or representatives or any other person shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation. Investors and prospective investors in securities of any issuer mentioned herein are required to make their own independent investigation and appraisal of the business and financial condition of such company and the nature of the securities. Any decision to purchase securities in the context of a proposed offering of securities, if any, should be made solely on the basis of information contained in an offering circular or prospectus published in relation to such an offering. 29
Investor relations Janne Flessum Head of Investor Relations janne.flessum@gjensidige.no Mobile: +47 91 51 47 39 Anette Bolstad Investor Relations Officer anette.bolstad@gjensidige.no Mobile: +47 41 67 77 22 Linn Soltvedt Investor Relations Officer linn-therese.soltvedt@gjensidige.no Mobile: +47 41 11 05 55 Address: Schweigaards gate 21, Postboks 700 Sentrum, 0106 Oslo, Norway. www.gjensidige.no/ir 30