Solid underwriting result, financial result significantly impacted by market turmoil

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.

Strong operations, effective pricing measures, good risk selection and stringent cost control resulted in the highest quarterly underwriting result in the Group’s history, when adjusted for run-off gains. The investment portfolio was significantly hit by the development in the financial markets. The outlook for Gjensidige’s underwriting results remains good.

Gjensidige Forsikring Group recorded a profit before tax of NOK 1,485.5 million (2,022.0) for the quarter. The profit after tax was NOK 1,105.0 million (1,495.1) and the corresponding earnings per share were NOK 2.21 (2.99). The profit from general insurance operations measured by the underwriting result was NOK 1,908.8 million (1,804.0), corresponding to a combined ratio of 76.3 (76.0).

- We have delivered a very strong quarterly underwriting result. We are confident that we will continue to stay ahead of claims inflation. Together with our efficient operations, strong product offering and resilient markets, this should bode well for continued solid results and attractive returns. But of course, the most important drivers are our people and our culture. These are key prerequisites for our success, says CEO Helge Leiro Baastad.

Earned premiums from general insurance increased by 7.1 per cent to NOK 8,046.8 million (7,516.1) in the quarter. Measured in local currency, premiums increased by 8.2 per cent. Earned premiums increased due to solid renewals, effective and differentiated pricing measures and volume growth.

Premium growth, partly offset by higher large losses and lower run-off gains, drove the improvement in the underwriting result. Adjusted for the positive Covid-19 impact on claims in the third quarter 2021, the underlying frequency loss ratio improved by 0.8 percentage points. Commercial and the Baltics were the main contributors to the improvement.

The Pension segment generated a lower profit for the period, driven by reduced income as a result of the introduction of individual pension account last year and lower financial income. The number of pension members increased and contributed to the rise in insurance income.

The financial result for the quarter was minus NOK 328.1 million (207.5), which corresponds to a return on total assets of minus 0.6 per cent (0.3). The result was negatively impacted by higher interest rates, decline in the equity markets and higher credit spreads.

Year-to-date the Group recorded a profit before tax of NOK 4,129.7 million (5,949.3). The profit from general insurance operations measured by the underwriting result was NOK 4,681.5 million (4,370.9), corresponding to a combined ratio of 80.0 (79.8). The profit after tax was NOK 3,234.3 million (4,654.7). Earnings per share amounted to NOK 6.47 (9.31). The profit includes a NOK 0.8 billion gain on the sale of Oslo Areal in the first quarter, recorded under Other items. The increase in the underwriting result was driven by 8.0 per cent growth in earned premiums and an improved underlying frequency loss ratio, partly offset by higher large losses and lower run-off gains. Earned premiums rose by 8.9 per cent measured in local currency. Adjusted for the effects of the weather and Covid-19 claims in the same period last year, the underlying frequency loss ratio improved by 0.8 percentage points.

The Pension segment recorded a lower profit due to reduced income as a result of the introduction of individual pension accounts last year, higher operating expenses and lower financial income.

The financial result for the period was minus NOK 1,211.0 million (1,565.7), which corresponds to a return on total assets of minus 2.1 per cent (2.6). The rise in interest rates in 2022, combined with an increase in credit spreads, has had a negative impact on fixed-income investments. Due to the rise in interest rates, other asset classes also generated negative returns.

Highlights third quarter 2022 (third quarter 2021)

• Profit/(loss) before tax: NOK 1,485.5 million (2,022.0)
• Earnings per share: NOK 2.21 (2.99)
• Earned premiums: NOK 8,046.8 million (7,516.1)
• Underwriting result: NOK 1,908.8 million (1,804.0)
• Combined ratio: 76.3 (76.0)
• Cost ratio: 12.9 (13.6)
• Financial result: NOK minus 328.1 million (207.5)

Highlights year-to-date 2022 (2021)

• Profit/(loss) before tax: NOK 4,129.7 million (5,949.3)
• Earnings per share: NOK 6.47 (9.31)
• Earned premiums: NOK 23,395.8 million (21,664.8)
• Underwriting result: NOK 4,681.5 million (4,370.9)
• Combined ratio: 80.0 (79.8)
• Cost ratio: 13.6 (14.1)
• Financial result: NOK minus 1,211.0 million (1,565.7)

This release contains alternative performance measures (APMs). APMs are described at www.gjensidige.no/reporting in a document named APMs Gjensidige Forsikring Group Q3 2022.

This release is issued by Jon Aniksdal, Communication Mananger at Gjensidige Forsikring ASA.

Date and time of publication: 07:00, 21.10.2022

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 3,800 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 30 billion in 2021, while total assets were NOK 130 billion.