Third quarter 2008: Good results
The Gjensidige Insurance Group had a profit before tax in the third quarter of NOK 1,199.3 million, compared with NOK 843.3 million in the same period a year ago.
- Profit before tax: NOK 1,199.3 million (NOK 843.3 million in 2007)
- 5.3 per cent growth in the quarter in earned premiums, net of reinsurance, in general insurance
- Underwriting result: NOK 345.5 million (NOK 432.5 million)
- Combined ratio in general insurance operations: 91.5 (88.4)
- Net financial income: NOK 938.2 million (NOK 502.6 million) The cost trend continues to be positive
The Gjensidige Insurance Group had a profit before tax in the third quarter of NOK 1,199.3 million, compared with NOK 843.3 million in the same period a year ago. The results from general insurance operations, measured by the underwriting result, show a decline from the same period last year due to a greater number of large claims in the commercial segment in Norway. The performance of net financial income in the quarter was characterised by a gain on the sale of shares in Lindorff in the amount of NOK 935.9 million and further impairment on the investment in Storebrand in the amount of NOK 180.5 million.
The cost performance continues to be positive. The cost ratio in the quarter for the general insurance business was 15.4, compared with 15.9 in the same quarter a year ago.
Up until and including 2007, Gjensidige Forsikring was exempt from tax on income and net wealth attributed to fire and livestock insurance. The draft fiscal budget for 2009 proposes to eliminate this tax exemption starting with the 2008 tax year. The change has been implemented in the accounts starting with the third quarter of 2008.
In October, Gjensidige increased its stake in Storebrand to 24.05 per cent. Gjensidige has faith in the underlying value of the company, and the holding is considered to be a long-term strategic investment.
The Board of Directors has performed an evaluation of the Group’s strategy and financial targets. The Group’s growth strategy aimed at the broad Norwegian market and general insurance in the Nordic and Baltic countries remains firm. The target for the combined ratio for general insurance operations is lowered from the current level of 97 to between 90 and 93 from 2011.
“Profitability in insurance operations for the year is expected to be satisfactory, and new distribution channels will provide the basis for greater market power. At the same time, we must expect that the turmoil in the financial market will leave its mark on 2008 earnings. However, in these turbulent times, Gjensidige remains financially strong,” says Group CEO Helge Leiro Baastad.
| MNOK | Q32008 | Q3 2007 | 9M 2008 | 9M 2007 | 2007 |
| Gross premium written | 3 446 | 2 870 | 13 953 | 12 385 | 15 727 |
| Claims ratio general insurance | 76,0 % | 72,5 % | 77,2 % | 79,6% | 78,6 % |
| Cost ratio general insurance | 15,4% | 15,9 % | 16,7 % | 17,3 % | 17,5 % |
| UW-result general insurance | 346 | 433 | 693 | 332 | 553 |
| Net financial income | 938 | 503 | 516 | 2 307 | 2 820 |
| Profit before tax | 1 199 | 843 | 961 | 2 375 | 3 020 |
| Profit after tax | 813 | 654 | 1 313 | 1 890 | 2 479 |
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.
Head of Communication Øystein Thoresen, Tel.: 47 95233382
Deputy CEO Tor Magne Lønnum, Tel.: 47 97164830