Results for the quarter and the full year impacted by challenging weather conditions

This release contains inside information related to Gjensidige Forsikring ASA pursuant to the EU Market Abuse Regulation and is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.

Gjensidige generated a profit after tax of NOK 1.1 billion during the fourth quarter and NOK 4.1 billion for the full year, reflecting continued strong momentum in revenue growth, but also higher claims costs impacted by challenging weather conditions. The financial result from investments reflects the positive development in the capital markets. Gjensidige will continue to strengthen pricing measures and adjust terms and conditions to ensure that the increase in claims costs is mitigated over time. Delivery on financial targets for 2023 was impacted by challenging weather during the year and one-off expenses in the third quarter. The outlook for Gjensidige’s insurance service results remains good. The Board proposes a regular dividend of NOK 8.75 per share.

Gjensidige Forsikring Group recorded a profit before tax of NOK 1,606.5 million (1,674.1) for the quarter. The profit after tax was NOK 1,112.6 million (1,315.7) and the corresponding earnings per share were NOK 2.18 (2.60). The profit from general insurance operations measured by the insurance service result was NOK 734.3 million (1,101.0), corresponding to a combined ratio of 92.2 (86.8).

- Challenging winter conditions with heavy snowfall and low temperatures in the fourth quarter continued into 2024. Difficult driving conditions and frost damage on properties contributed to a large number of claims from customers. In cooperation with our suppliers, competent and dedicated employees have taken good care of our customers, says CEO Geir Holmgren.

- Our strong growth momentum is very encouraging. We are handling inflation well and we have strong measures in place to mitigate the effects of the elevated claims frequency in Norway. We will continue to focus on profitable growth, and further improve operational efficiency, says Holmgren.

General insurance

Insurance revenue increased by 12.8 per cent to NOK 9,394.6 million (8,324.9) in the quarter, or by 9.1 per cent measured in local currency. This was due to solid renewals, effective and differentiated pricing measures and volume growth. The insurance service result decreased by 33.3 per cent, due to a higher underlying frequency loss ratio, higher large losses and lower run off gains. Higher discounting effects contributed positively to the insurance service result.

The underlying frequency loss ratio increased by 4.7 percentage points, mainly driven by the Private segment. The claims frequency for motor insurance in Norway increased significantly, reflecting the difficult driving conditions caused by several periods with heavy snowfall and low temperatures. In addition, the increase in underlying claims frequency for motor continued in the fourth quarter. This was met with targeted measures that will have full effect on the insurance service result over time. The weather conditions in the fourth quarter also impacted claims frequency for property insurance in Norway. In addition, the profitability for Norway was negatively impacted by a strengthening of reserves for claims incurred earlier in 2023. The profitability of property insurance in Denmark was negatively impacted by windstorms and cloudbursts during the quarter. The cost ratio was broadly stable at 13.3 percentage points.

Pension

The Pension segment generated a profit before tax of NOK 113.7 million (134.7), mainly reflecting a lower insurance service result and an increase in net finance income. The decline in the insurance service result was mainly driven by a positive impact on the result in the fourth quarter 2022 related to a change in the actuarial model for paid-up policies, in addition to a strengthening of provisions for children’s disability pension.

Financial result

The financial result for the quarter was NOK 1,876.3 million (968.4), which corresponds to a return on total assets of 3.1 per cent (1.7). The result for the quarter was positively impacted by lower interest rates and credit spreads, a high running yield, as well as positive equity markets.

Result for the year as a whole

Year-to-date the Group recorded a profit before tax of NOK 5,551.5 million (4,317.5). The profit from general insurance operations measured by the insurance service result was NOK 4,468.9 million (5,536.2) corresponding to a combined ratio of 87.6 (82.8). The profit after tax was NOK 4,130.4 million (3,437.8). Earnings per share amounted to NOK 8.11 (6.78).

The decrease in the insurance service result was driven by an increase in the underlying frequency loss ratio, higher large losses and an increase in operating expenses. The large losses were significantly impacted by claims related to the storm ‘Hans’ and the torrential rain in Oslo during the third quarter. Higher run-off gains and the discounting effect contributed positively. The increase in the underlying frequency loss ratio was partly impacted by the difficult driving conditions in the first and fourth quarters in Norway, with a negative effect on profitability for private and commercial motor insurance, in addition to lower profitability of private property in Norway and private motor and property insurance in Denmark. Insurance revenue rose by 8.6 per cent measured in local currency.

The Pension segment recorded a result before tax of NOK 106.1 million (129.7), mainly reflecting a lower insurance service result and an increase in net finance income. The decline in the insurance service result was driven by the positive impact on the results in the fourth quarter of 2022 related to the change to the actuarial model for paid-up policies and the strengthening of provisions for children’s disability pension in the fourth quarter 2023.

The financial result for the period was NOK 2,590.3 million (minus 2,516.3), which corresponds to a return on total assets of 4.3 per cent (minus 4.3). Most asset classes contributed positively to the results for the year. A high running yield and lower credit spreads in the fixed income portfolio, rising equity markets and PE generated positive returns.

Highlights fourth quarter 2023 (fourth quarter 2022)

• Profit or loss before tax: NOK 1,606.5 million (1,674.1)
• Earnings per share: NOK 2.18 (2.60)
• Insurance revenue: NOK 9,394.6 million (8,324.9)
• Insurance service result: NOK 734.3 million (1,101.0)
• Combined ratio: 92.2% (86.8%)
• Cost ratio: 13.3% (13.4%)
• Financial result: NOK 1,876.3 million (968.4)

Highlights year as a whole 2023 (2022)

• Profit or loss before tax: NOK 5,551.5 million (4,317.5)
• Earnings per share: NOK 8.11 (6.78)
• Insurance revenue: NOK 36,162.0 million (32,217.7)
• Insurance service result: NOK 4,468.9 million (5,536.2)
• Combined ratio: 87.6% (82.8%)
• Cost ratio: 14.4% (13.2%)

• Financial result: NOK 2,590.3 million (minus 2,516.3)

Proposed dividend

• Proposed regular dividend: NOK 4,375 million (4,125), corresponding to NOK 8.75 per share (8.25)

This release contains alternative performance measures (APMs). APMs are described at www.gjensidige.com/reporting in a document named Alternative Performance Measures (APM).

This release is issued by Christian Haraldsen, Media Relations Officer at Gjensidige Forsikring ASA.

Date and time of publication : 24 January 2024, 07:00 CET.

Contact persons, Gjensidige Forsikring ASA:
Head of Communication, Øystein Thoresen. Tel: 47 952 33 382
Head of Investor Relations Mitra Hagen Negård. Tel:  47 957 93 631

Gjensidige is a leading Nordic insurance group listed on the Oslo Stock Exchange. We have about 4,500 employees and offer insurance products in Norway, Denmark, Sweden and the Baltic states. In Norway, we also offer pension and savings. The Group's operating income was NOK 36 billion in 2023, while total assets were NOK 148 billion.