DNB Insurance Hans Petter Madsen Managing director 21 August 2015 - PowerPoint PPT Presentation

DNB Insurance Hans Petter Madsen Managing director 21 August 2015

Agenda DNB Insurance business area  DNBs competitive advantage  Growth versus profitability  Development in the competitive environment  Impact of new technology 

DNB Insurance business area DNB Insurance AS DNB Life Insurance AS P&C Personal lines Workmen compensation and group life Individual Life and disability Premium portfolio NOK 2 billions Premium portfolio NOK 1.2 billions DNB runs the insurance business area as one unit, disregarding the formal company structure Focus on products with similar risk structure, one management team. • Organized in the Product division in the DNB Group •

DNBs competitive advantage 100 000 50 000 3 000 75 000 5 000 000 Branches Customer centre eBusiness Insurance Customer service Financial advisors Web Open pages Mobile Logged in advisor and Interactive

Our strategy is being a quality provider based on the DNB Group’s customer flow Awarded by Aftenposten, Dagbladet and Norsk Familieøkonomi!

Growth versus profitability Pre-tax profit 300 • Substantial improvement in pre-tax profit 200 since 2009 100 0 -100 -200 2009 2010 2011 2012 2013 2014 1H 2015 Pre-tax profit -100 -178 31 203 240 242 94 Portfolio premium 2500 • Portfolio premium increased by MNOK 2000 1,229 since 2009 1500 • # Customers 214,500 as of June 2015 1000 • Reduction in “ Academic - portfolio” 500 portfolio by MNOK 92 (19.4%) since 0 30/06/ 2008 2009 2010 2011 2012 2013 2014 year-end. 2015 Portfolio premium 743 978 1173 1486 1656 1816 1996 1972

How will DNB adapt to lower income from financial portfolio? DNB distributes mainly short tailed products, which To compensate for 1% Low risk profile in the causes lower impact on decrease in interest rate, investment portfolio, reduction in interest rates combined ratio has to continuously under than the P&C market in improve by 1%. consideration general

Solvency II SCR MCR Solvency vency I Solvency capital 823 712 594 Capital requirement 549 249 287 Solvency margin 274 463 307 Capital in % of 150 % 286 % 207 % requirement DNB participated in the SII test reporting in week 22 • The reports show no dramatic reduction in solvency margin from SI to SII. • Still uncertainty with regards to regulatory issues, such as: • Calculated tax on capital requirements • Inclusion of guarantee reserve in solvency capital • T ax related to dissolution of security reserves •

Growth versus profitability Market ket shar are-lo loss for the lar arges est compa mpanies ies ... and DNB with th the most t significan ificant growth wth 35 6 30 5 25 4 20 3 15 2 10 5 1 - - 2008 2009 2010 2011 2012 2013 2014 2015* 2008 2009 2010 2011 2012 2013 2014 2015* If Gjensidige DNB Storebrand Codan Tryg Sparebank 1 Eika Frende Other companies *as of 2nd. quarter 2015

Price development and market concentration Motor Decline in market • 8.00% 0.25 concentration(HH-index) 7.00% 0.20 Under 15% indicates an • 6.00% unconcentrated market 5.00% 0.15 Decrease in price growth • 4.00% 0.10 3.00% 2.00% 0.05 1.00% 0.00% 0.00 Q2-08 Q2-09 Q2-10 Q2-11 Q2-12 Q2-13 Q2-14 Q2-15 Growth average premium [y/y] Herfindahl – Hirschman Index

Development in the competitive environment - motor Banca cassuran ance ce "The e big three ee" % % 30 80 25 70 20 60 15 50 10 40 "Member mbership ip insuran ance ce" “Price focus” % % 15 6 5 4 10 3 2 5 1 - -

Willingness to invest in sophisticated prices Historical data • Investment in analytical tools • Capacity of highly trained actuaries • Investment in external data • Illustrative example

Why DNB will not flatten out in the near future Autolease Loan insurance Future potential DNB Forsikring, DNB Forsikring, personal lines Private banking personal lines SMB, Corporate Health LCI

Digitalization

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