Banking | Insurance | Pension Results for Q1 2016 Webcast presentation 11 May 2016
G R O U P Financial highlights of Q1 2016 Pre-tax profit: DKK 234m Forward-looking activities: Pre-tax profit: DKK 228m Non-life Insurance Life and Pension Banking Pre-tax profit: DKK 205m Pre-tax profit: DKK 29m Pre-tax profit: DKK 8m • CR: 81.9 • Regular premiums: 3.6% • Writedowns: Reversal • Expense ratio: 16.0 • Bonus rate: 16.3% DKK 1m • Premium growth: 0.1% • Growth in lending and in full-service customers Winding-up activities: Pre-tax profit: DKK 6m • Writedowns: Reversals of DKK 1m 2
G R O U P Comments on Q1 The financial figures for Non-life Insurance and Life and Pension have been prepared according to new accounting standards Non-life Insurance favourably impacted by benign winter • No storms • No heavy snow Banking significantly improved • Profit of DKK 8m from forward-looking activities • Negatively impacted by financial market turmoil • Profit from winding-up activities of DKK 6m • Lifted by reversal of writedowns and improved funding 3
G R O U P Customers First Group NPS 35 36 36 34 33 29 30 31 30 26 27 24 22 23 23 18 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2012 2013 2014 2015 2016 Customer satisfaction remains at a high and satisfactory level Retention rate – Non-life Insurance First part of the new CRM Commercial Private system will be commissioned 92% during autumn 2016 91% 90% 89% Retention rate is improving 88% • Customer loyalty 87% programmes 86% dec-09 dec-10 dec-11 dec-12 dec-13 dec-14 dec-15 4
N O N - L I F E I N S U R A N C E Pre-tax profit N ON - LIFE I NSURANCE DKKm Technical result Highlights Investment return after technical interest 232 205 3 143 132 10 229 226 135 133 Pre-tax profit of DKK 205m • Strong technical result • Negative investment return -3 -21 • Losses on equities and wider spread between mortgage bonds and swap rates • New accounting principles increase interest 2013 2014 2015 2016 Q1 on technical provisions Note: Figures for 2013 and 2014 based on previous accounting principles 5
N O N - L I F E I N S U R A N C E Combined ratio Combined ratio Claims ratio incl. reinsurance Gross expense ratio 89,4 89,2 81,6 81,9 16,8 16,8 16,0 16,3 Combined ratio of 81.9 Better than expected 72,6 72,4 65,9 65,3 + Run-off gains improved CR by 3.9 ppts excl. run-off gains on risk margin • Gains primarily on accident and private property insurance 2013 2014 2015 2016 Q1 + Benign winter without storms or heavy snow Underlying combined ratio 82,0 81,1 81,1 Underlying combined ratio of 78.4 78,4 • Decreasing average claim partly offset by higher claims frequency • Increased frequency on travel insurance and motor liability as well as a few private contents coverages Expense ratio down Y/Y 2013 2014 2015 2016 • As expected Q1 6 Note: Figures for 2013 and 2014 based on previous accounting principles
N O N - L I F E I N S U R A N C E Weather-related Major claims ratio and major claims 10,3 Major claims up by 1.9 ppts Y/Y 7,0 Within expected range of 7-8% 5,7 5,1 • Very few major claims • But impacted by a single large fire-related claim 2013 2014 2015 2016 • Major claims totalled DKK 87m Q1 Major claims ratio Average expectation (7-8%) Weather-related claims ratio Weather-related claims excl. reinstatement down by 2.8 ppts Y/Y Below normal expectation of 3-4% 3,6 3,6 • Benign winter without storms or heavy snow • Total claims related to storms in Q4 2015 have 1,3 1,1 0,8 -0,4 been reduced • Net expenses totalled DKK 10m 2013 2014 2015 2016 Q1 Weather-related claims ratio Reinstatement Average expectation (3-4%) 7 Note: Figures for 2013 and 2014 based on previous accounting principles
N O N - L I F E I N S U R A N C E Premiums impacted by Premium income intensified competition DKKm Private Commercial 1.243 1.245 1.239 1.225 Premium income up by 0.1% Y/Y 590 602 603 587 Private up by 0.1% • Improved retention rate in Q1 2016 • Highly competitive market • More insurances sold and with higher deductibles • But at lower average prices • Price pressure primarily on motor insurances • Increased use of price differentiation 649 638 641 642 Commercial up by 0.1% • Customer retention still at a high level • Commercial market very competitive 2013 2014 2015 2016 • Lower average premiums on liability and motor Q1 insurances in particular 8 Note: Figures for 2013 and 2014 based on previous accounting principles
N O N - L I F E I N S U R A N C E Private Combined ratio - Very satisfactory results Claims ratio incl. reinsurance Gross expense ratio 90,0 87,8 86,0 18,0 77,6 18,2 17,2 16,9 Combined ratio of 77.6 Improved by 8.4 ppts Y/Y Lower weather-related and major claims • Impacted CR positively by 2.5 ppts (down by 4.4 ppts Y/Y) Run-off gains on level with 2015 72,0 69,6 68,9 • Improved CR by 6.9 ppts of which 1.6 ppts relates to risk 60,8 margin Underlying business still satisfactory • Better Y/Y due to lower average claims • But claims frequency on travel insurance and some 2013 2014 2015 2016 content insurances has increased • Expense ratio down by 0.3 ppt Q1 Note: Figures for 2013 and 2014 based on previous accounting principles 9
N O N - L I F E I N S U R A N C E Commercial Combined ratio - Very satisfactory results Claims ratio incl. reinsurance Gross expense ratio 91,0 88,5 86,4 15,3 15,6 76,9 15,2 15,4 Combined ratio of 86.4 Worsened by 9.5 ppts Y/Y Run-off gains in Q1 2016 down DKK 52m Y/Y • 2015 was impacted by extraordinary run-off gains • Run-off improved CR in Q1 2016 by 3.9 ppts of which 1.5 75,7 72,9 71,2 ptts relates to risk margin 61,6 Weather-related and major claims up by 2.8 ppts Y/Y • Very few weather-related claims • Major claims impacted by one large fire incident Underlying business 2013 2014 2015 2016 • Underlying business improved Y/Y Q1 • Expenses slightly better than last year Note: Figures for 2013 and 2014 based on previous accounting principles 10
L I F E A N D P E N S I O N Pre-tax profit L IFE AND P ENSION DKKm Highlights Underwriting profit/loss Return on investments allocated to equity 29 27 3 26 1 23 1 7 Pre-tax profit of DKK 29m Up by DKK 3m Y/Y 26 26 • Satisfactory underwriting profit 22 • Up by DKK 7m Y/Y 19 • Return on investments allocated to equity favourably impacted by lower interest rate level Bonus rate • Bonus rate is now calculated based on both 2013 2014 2015 2016 collective and individual bonus potentials Q1 • Bonus rate of 16.3% 11
L I F E A N D P E N S I O N Pension contributions Total pension contributions DKKm Regular premiums Single premiums 529 Investment schemes 465 105 75 406 Pension contributions down by 23.3% • From a very high level 68 330 Pension premiums down by 20.3% Y/Y 243 56 212 • Single premiums down by 38.1% 150 • Increased fee when making single payments 89 • Regular premiums up by 3.6% • Target of 5% growth for FY2016 188 185 181 178 Unguaranteed investment schemes in the bank down by 35.3% • Typically negatively impacted by financial market turmoil 2013 2014 2015 2016 • Development not satisfactory Q1 12
L I F E A N D P E N S I O N Profit impacted by financial market Profit split* DKKm turmoil Expense, risk and group life results Interest result Result of portfolios without bonus entitlement Return on investments allocated to equity Change to shadow account 29 27 26 1 3 1 23 3 7 5 Expense, risk and group life results 3 1 • Very satisfactory risk result up by DKK 8m 1 4 • Includes part of group life results in 2016 4 • Negative expense result as expected 23 21 Interest result up by DKK 1m Y/Y 16 15 • Principles for estimating interest result adjusted in 2016 • Lifted by 5 bps to 20 bps -1 -1 -1 Return on investments allocated to equity • Favourably impacted by lower interest rate level in 2013 2014 2015 2016 Q1 2016 Q1 * Profit before tax of Life and Pension, which includes post-tax 13 return on investment in the EMD Local Currency investment fund
B A N K I N G Pre-tax profit B ANKING DKKm Highlights Profit before writedowns Writedowns 17 27 6 3 8 1 12 Pre-tax profit of DKK 8m 8 7 Up by DKK 2m Y/Y 0 -5 • Continued growth in full-service customers and -6 -8 -10 lending -8 • Profit lower than expected due to wider spread between mortgage bonds and swap rates Q1 Q2 Q3 Q4 Q1 • Reversal of writedowns in Q1 2016 2015 2016 – Normal underlying loss ratio of 0.7% p.a. 14
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