Gjensidige Forsikring (GJF) Q2 2024 (Q&A) earnings summary

Executive summary

• Profit before tax for Q2 2024 reached NOK 1,830.5 million, up from NOK 1,333.9 million year-over-year, driven by strong insurance revenue growth but offset by high claims in Norway, especially in motor and property lines.

• Insurance service result was NOK 1,434 million, including a NOK 402 million positive impact from a change in risk adjustment under IFRS 17.

• Annualized return on equity was 20.2%, with investment returns of NOK 540 million and a combined ratio of 85.4% in Q2 2024.

• High claims, particularly from fires and increased motor claims frequency and severity, negatively impacted profitability.

• Management remains committed to profitability improvement through significant pricing measures and operational efficiency.

Financial highlights

• Insurance revenue grew 9.7% year-over-year to NOK 9,832 million in Q2 2024, with strong growth in both Norway and Denmark.

• Group loss ratio increased to 72.2% in Q2 2024, mainly due to higher claims frequency and inflation.

• Group cost ratio improved to 13.2% in Q2 2024, reflecting efficiency measures and revenue growth.

• Pension segment pretax profit was NOK 186 million in Q2 2024, with assets under management at NOK 9.7 billion.

• Solvency ratio stood at 170% at quarter-end, supported by strong operating earnings and capital management.

Outlook and guidance

• Combined ratio target for 2024 is challenged by high claims, but all financial targets for 2025 and 2026 are maintained.

• Claims inflation expected to remain in the 5%-7% range for property and around 7% for motor in Norway for the next 12-18 months.

• Significant price increases implemented: average premiums for motor up 13% in 2024, with July renewals at 17.5%.

• Ongoing pricing and deductible measures are expected to gradually improve profitability as policies renew.

• Management is prepared to further adjust pricing and risk selection if claims trends persist.