First quarter 2008: Solid earnings improvement in general insurance

• Earnings improvement of NOK 278 million in general insurance
• Combined ratio in general insurance operations in the quarter: 97.9% (105.6% in 2007)
• Loss before tax in the quarter: NOK 497 million (profit of 501 million in 2007)
• Positive tax ruling resulting in reversal of tax provision of NOK 180 million in tax payable and NOK 584 million in deferred tax
• Profit after tax of NOK 254 million NOK 1,021 million in dividend approved by the General Meeting

Gjensidige Insurance Group posted a loss before tax in the first quarter of NOK 497 million, compared with a profit of NOK 501 million in the same period last year. The main reason for the decline in earnings is an accounting impairment of the holding in Storebrand of NOK 916 million, and generally weak financial markets during the quarter. The quarterly result also contains a gain of approx NOK 725 million on the sale of the head office at Sollerud, that is being leased back from the purchaser.

The underwriting result in general insurance saw a solid improvement of NOK 278 million, from a loss of NOK 201 million in the first quarter last year to a profit if NOK 78 million in the same period this year. Earned premiums, net of reinsurance, increased by 3 per cent in the quarter, compared with the same quarter in 2007.

“Financial market jitters are also affecting Gjensidige’s earnings. At the same time, it is particularly gratifying that we are seeing a strong improvement in underlying general insurance operations. Gjensidige is well capitalised, and we believe that we have a strong and competitive range of financial products in place through the establishment of banking services and pension and savings products.  All of this makes Gjensidige well-armed for the future,” says CEO Helge Leiro Baastad.   

Dividend.
The General Meeting of Gjensidige has approved the payment of NOK 1,021 million in dividend. 75 per cent of the dividend, or about NOK 766 million, is to be distributed to the customers of Gjensidige Forsikring. Gjensidige is the first major Norwegian insurer to share its profit with its customers. The remaining 25 per cent of the dividend will be paid to the holders of Gjensidige’s equity certificates. At the dividend date, the Gjensidige Foundation is the sole owner of the equity certificates.

Contact:
Deputy CEO Tor Magne Lønnum Telephone: +47 97164830
Chief Information Officer Øystein Thoresen. Telephone: + 47 95233382

Gjensidige reports its consolidated accounts in accordance with the International Financial Reporting Standards (IFRS) from 1 January 2007. The results, balance sheet, key figures and comparison figures are based on IFRS. Reference is made to a separate Transition Document that is available at www.gjensidige.no for a more detailed description of the effects of the implementation of IFRS

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