New capital strategy and updated financial targets
On 21 October 2013, the Board of Gjensidige Forsikring ASA adopted a new capital strategy and updated financial targets.
Proposal extraordinary dividend
The Board proposes to distribute excess capital of NOK 3.0 billion, corresponding to NOK 6.00 per share, in extraordinary dividend in May 2014.
The Gjensidige Foundation, which is Gjensidige’s largest owner, has endorsed the proposal and at the same time communicated that extraordinary dividends from Gjensidige will be managed to, among other things, support the customer dividend model and contribute to increased stability in future customer dividends.
New capital strategy
Any future excess capital over and above the targeted capitalization will be distributed over time in the form of extraordinary dividends. By targeted capitalisation is meant capitalization that is adapted to Gjensidige’s strategic targets and risk appetite for at all times. The Group shall maintain its financial flexibility and at the same time have a stringent capital discipline.
The target capitalisation will be based on the most binding capital requirement plus a technical buffer and a buffer to ensure financial flexibility related to:
- changed framework conditions
- organic growth and minor acquisitions that are not financed by retained earnings
- stabilisation of ordinary dividend over time
At the moment, the most binding capital requirement is the ‘A’ rating requirement from Standard & Poor’s. The Board has approved a technical buffer in excess of this requirement of five per cent.
New dividend policy
At the same time, the Board adopted a new dividend policy that shall apply from and including the 2014 financial year, which states:
“Gjensidige targets high and stable ordinary dividend pay-outs to its shareholders.
The Board targets a pay-out ratio for ordinary dividends over time of at least 70 per cent of profit after tax. When determining the size of the ordinary dividend, the expected future capital need will be taken into account.
Over time, Gjensidige will also pay out excess capital above the targeted capitalisation as extraordinary dividends.”
The proposed dividend for the 2013 financial year will be based on the excisting dividend policy and can be expected to be in the range of 50–80 per cent of the profit after tax expense. The basis for the calculation will however be adjusted for the negative effect of the impairment loss on Storebrand in the first quarter.
New return on equity target
The Board also decided to change the return on equity target from minimum 15 per cent pre-tax to minimum 15 per cent after tax from and including 2015.
Interim report 3rd quarter 2013
Gjensidige Forsikring ASA today also reports third quarter 2013 results, and reference is made to the separate stock exchange / press release for information regarding the results.
This information is subject to disclosure under the Norwegian Securities Act section §5-12
Analysts and investors:
Head of Investor Relations Janne Flessum, Tel: +47 915 14 739
Investor Relations Officer Linn Soltvedt, Tel: +47 411 10 555
Investor Relations Officer Anette Bolstad, Tel: +47 416 77 722
Press:
Head of Media Relations Øystein Thoresen, Tel: +47 952 33 382