Insr Insurance Group ASA – Contemplated private placement
The Board of Directors of Insr announces its intention to issue up to 13 468 750 new shares in a private placement, corresponding to around 10% of the outstanding share capital, pursuant to an authorization granted by the Annual General Meeting held May 22nd, 2019.
The additional equity capital will enable Insr to strengthen its competitive position and accelerate its profitable growth trajectory through a reduced reinsurance quota.
The internal solvency target has been increased to staying above 150%, from the previous target of above 130%. Based on gross proceeds of NOK 109 million, calculated based on yesterday’s closing price of NOK 8.08, the additional capital would strengthen the Q2 2019 solvency ratio on a pro forma basis to approximately 175% from 132%.
The positive net result momentum has continued since Q2, where Insr delivered its first profitable quarter. For July and August, Insr recorded a profit of NOK 10 million, and a net combined ratio of 95%.
The improved capital position will enable Insr to:
- Enhance capital efficiency through:
- Reducing 2020 reinsurance purchases, thereby completing the financial rightsizing program launched in 2016.
- Improved utilization of the available Tier 1 hybrid capital.
- Achieve growth targets by:
- Accelerating the IT investment program to improve Insr’s multi-brand capabilities, which are central to the company’s strategy. The investments will broaden the customer base and thereby improve growth prospects.
- Aligning the solvency position with peers, making Insr more attractive for customers and brokers with focus on solidity.
- Increasing flexibility for other growth-inducing investments.
- Improve the general robustness of Insr and relations to stakeholders. The private placement improves the current solvency position, which is expected to further strengthen as the gradual contributions from discontinuing the Danish operation and expected retained profit take effect.
Insr has undergone significant changes since a restructuring process was initiated in 2015. As this turnaround process is about to finalize, the company has been through substantial financial, strategic and operational change to improve the business. Such changes include:
- Concentrating business efforts in Norway through the merger with Nemi Forsikring, and by creating scale and operational efficiencies in one single market, instead of being present across all of Scandinavia. The restructuring of the capital base and the balance sheet is expected to enable future profitability.
- Offering an alternative go-to-market strategy compared to the leading insurers in the Nordics, redefining Insr as the regulated platform supporting insurance distributors as our customers. The strategy has been well received in the market and Insr is currently building a strong pipeline of potential customers that is expected to contribute to achieving the growth targets in the years to come.
ABG Sundal Collier has been appointed as Sole Bookrunner for the private placement.
The private placement will be directed towards existing shareholders, as well as other Norwegian and international investors, in each case subject to an exemption from prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum subscription and allocation amount in the private placement will be the NOK equivalent of EUR 100 000. The company may allocate an amount below EUR 100 000 to the extent applicable exemptions from prospectus requirements are available.
The bookrunner has received substantial indications of interest from existing shareholders and new investors. In addition, the following primary insiders will subscribe in the private placement:
Gyljandi AS (controlled by Chairman Åge Korsvold) NOK 600 000
Related parties to Board member Øystein Engebretsen 750 000 shares
Espen Husstad (CEO) NOK 750 000
Hans Petter Madsen (CFO) NOK 300 000
Cathrine Christiansen (Chief Commercial Officer) NOK 200 000
The application period for the Private Placement commences today, at 16:30 CEST on October 10th, 2019, and will close at 08:00 CEST on October 11th, 2019. The company, in consultation with the bookrunner, may at any time resolve to close or extend the subscription period at its sole discretion and on short notice. Allocation of the offer shares will be determined at the end of the application period, and final allocation will be made by the company's Board at its sole discretion. Notification of conditional allocation is expected to be sent by the bookrunner on or about October 11th, 2019.
The completion of the private placement is subject to (i) approval by the Board pursuant to an authorisation given by the Annual General Meeting held May 22nd, 2019, (ii) approval by the Norwegian Financial Supervisory Authority (NFSA) ), and (iii) registration of the share capital increase with the Norwegian Register of Business Enterprises and the Norwegian Central Securities Depository ("VPS").
The first day of trading for the offer shares is expected on or about October 22nd, and settlement and delivery of offer shares on or about October 24th, but these dates could be earlier or later.
The Board has considered alternative structures for raising new equity. Following careful consideration, the Board is of the view that it will be in the common interest of Insr and its shareholders to raise equity through a private placement, setting aside the pre-emptive rights of the shareholders. By structuring the transaction as a private placement, Insr will be in a position to raise capital in an efficient manner, with a lower discount to the current trading price, and with significantly lower risks, compared to a rights issue.
For further information, please contact:
Anne B. Knudtzon, SVP Business Controlling & Investor Relations
T: +47 926 10 606
E: anne.b.knudtzon@insr.io
Partnership insurance made easy. Insr enables you to broaden your customer or member offering through white label and co-branding insurance solutions. We provide insurance risk capital and insurance expertise, whilst you maintain your customer or member relationship. Insr is regulated by the Norwegian FSA (Finanstilsynet) and has a license for all groups of non-life insurance, except for credit and guarantee insurance.
Insr Insurance Group ASA was established in 2009 and is an independent insurance group listed on the Oslo Stock Exchange, with headquarters in Oslo. The Company’s main focus is on the market for property and casualty insurance for the retail and small enterprise segments in Norway. Insr distributes its products mainly through partners and insurance agents.