Banking | Insurance | Pension Results for Q3 2016 Webcast presentation November 2016
G R O U P Financial highlights of Q3 2016 Pre-tax profit: DKK 334m Forward-looking activities: Pre-tax profit: DKK 343m Non-life Insurance Life and Pension Banking Pre-tax profit: DKK 310m Pre-tax profit: DKK 23m Pre-tax profit: DKK 24m • CR: 76.7 • Growth in regular • Writedowns: Reversal of • Expense ratio: 16.1 premiums: 21.2% DKK 8m • Premium growth: -1% • Bonus rate: 17.5% • Growth in retail lending and in full-service customers Winding-up activities: Pre-tax loss: 9DKK • Writedowns: DKK 24m 2
G R O U P Comments on Q3 Financial highlights, 9M Group Pre-tax profit: DKK 817m Non-life Insurance Very strong performance in Non-life Insurance Pre-tax profit: DKK 736m driven by strong underlying results, run-off • CR: 81.5 gains, benign weather and investments • Expense ratio: 16.5 Life and Pension More customers in banking, insurance and Pre-tax profit: DKK 78m pension rug • But prices are under pressure, especially in Banking insurance and banking Pre-tax profit: DKK 47m , Fovourable investment results despite financial Winding-up activities turmoil Pre-tax loss: DKK 3m 3
G R O U P Customers First Group NPS 40 39 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 Q2 Q3 2012 2013 2014 2015 2016 Very strong customer Retention rate – Non-life Insurance satisfaction above target for the Group Commercial Private • Target 2016 of 30 already 92% rug reached in 2014 91% 90% 89% Very satisfactory retention rate , 88% • Improving for both private 87% and commercial customers 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 Highlights Investment return after interest on provisions Technical result 722 736 44 e 811 302 692 er 310 16 266 29 356 105 294 237 130 Pre-tax profit of DKK 310m in Q3 • High run-off gains -25 -54 -89 • Benign weather • Positive investment return 2013 2014 2015 2016 2015 2016 • Expensive major claims on Commercial Q3 9M 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 Combined ratio Run-off 91,1 89,8 88,0 86,4 82,2 1,2 81,1 8,3 11,3 7,8 0,5 8,9 Combined ratio of 76.7 Better than expected 89,9 81,7 81,5 78,6 76,7 72,2 + Run-off gains improved CR by 11.3 ppts excl. run-off gains on risk margin + Weather-related claims lower than expected 2013 2014 2015 2016 2015 2016 ÷ Major claims higher than expected Q3 9M ÷ Lower average premiums Underlying combined ratio Underlying combined ratio of 77.4 80,0 78,2 Better than expected 77,4 77,2 rug 74,8 + Delayed claims in Q2 was too high leading to lower 74,1 , actual claims in Q3 + Lower average claims ÷ Higher frequency of claims 2013 2014 2015 2016 2015 2016 Q3 9M 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 8,4 8,0 7,4 6,7 Major claims 8.4 Above expected range of 7-8% 3,0 • More major claims than expected on commercial customers 2013 2014 2015 2016 2016 • Claims impacted by large fire incidents Q3 9M • Major claims totalled DKK 107m Major claims ratio Average expectation (7-8%) Weather-related claims ratio Weather-related claims 1.9 8,0 7,0 Below normal expectation of 3-4% 6,0 5,0 • Relatively benign weather 4,0 6,9 3,0 rug • Net expenses totalled DKK 24m 2,0 3,1 1,0 1,9 1,7 0,7 0,0 , 2013 2014 2015 2016 2016 Q3 9M Weather-related claims ratio 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 1.281 1.277 1.280 1.267 Premium income down by 1% Y/Y Private unchanged 613 609 621 609 • Highly competitive market • More insurances sold • But at lower average prices • Price pressure primarily on motor insurances • Increased use of price differentiation • Retention rate improved again in Q3 2016 Commercial down by 2.1% 668 668 659 658 • Commercial market very competitive rug • Sales higher than expected • Lower average premiums on agricultural and , motor insurances in particular 2013 2014 2015 2016 • Customer retention still at a high level and slightly Q3 increasing 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 Gross expense ratio 87,4 86,0 83,1 80,1 78,4 77,1 17,1 16,6 17,4 17,7 17,8 17,5 Combined ratio of 77.1 Improved 1.4 ppt Y/Y 70,3 69,4 Higher weather-related claims 65,7 62,4 60,6 59,6 • Impacted CR by 1.9 ppts – still low Higher run-off gains on claims rug Underlying business deteriorated in Q3 Y/Y , • Higher claims frequency, lower average claim 2013 2014 2015 2016 2015 2016 • Higher claims frequency, especially on travel and cars Q3 9M • Expense ratio at 17.5 – down by 0.3 ppts Y/Y 9 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 Commercial Combined ratio - Very satisfactory results Gross expense ratio 94,2 12,1 83,1 76,3 75,5 73,8 15,3 14,5 13,9 65,4 14,3 13,0 Combined ratio of 76.3 Worsened by 10.9 ppts Y/Y 82,1 Higher run-off gains on claims 67,8 • DKK79m vs DKK70m in Q3 2015 61,6 61,8 59,5 52,4 Weather-related claims down to 2.0 ppts rug from 3.9 ppts in Q3 2015 • Below expected level , Higher major claims 2013 2014 2015 2016 2015 2016 • 14.4 ppts on CR against 4.2 ppts in Q3 2015 Q3 9M • Especially due to fire claims 10 Note: Figures for 2013 and 2014 based on previous accounting principles
L I F E A N D P E N S I O N Pre-tax profit L IFE AND P ENSION DKKm Highlights Return on investments allocated to equity Underwriting profit/loss 78 7 49 Pre-tax profit of DKK 23m 1 Up by DKK 14m Y/Y e er 71 In 2015 DKK 10m was transferred to the shadow • account 23 22 48 20 0 2 2 • Satisfactory underwriting profit 9 • DKK 14m Y/Y 22 21 18 10 Bonus rate -1 • Bonus rate is now calculated based on both 2013 2014 2015 2016 2015 2016 collective and individual bonus potentials Q3 9M • Bonus rate of 17.5% (down from 18.4 % in Q2) 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 Investment schemes 347 346 Pension contributions unchanged 300 73 99 267 89 Pension premiums up by 10.2% Y/Y 77 • Single premiums up by 0.7% 134 • Increased fee when making single payments 134 97 • Regular premiums up by 21.2% 72 • Including Forenede Gruppeliv • Excluding FG: Growth of 3.9% rug 139 Unguaranteed investment schemes in the bank 118 114 114 down by 26.7% Y/Y , • Typically negatively impacted by financial market turmoil 2013 2014 2015 2016 • Development not satisfactory Q3 12
L I F E A N D P E N S I O N Strong risk result in Q3 Profit split* DKKm 21 15 15 12 6 5 4 2 2 2 1 0 0 -1 -1 -1 Expense, risk and group life results rug • Very satisfactory risk result Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2013 Q3 2014 Q3 2015 Q3 2016 • Expense result balanced , Expense, Interest Result of Return on risk and result portfolios investments Interest result up by DKK 2m Y/Y group life without allocated to results bonus equity entitlement * 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 31 24 8 34 3 e 16 14 8 Pre-tax profit of DKK 24m er Up by DKK 21m Y/Y -3 -5 -18 • Continued growth in full-service customers and lending – 13% more full-service customers Y/Y -4 • Profit better than expected 2013 2014 2015 2016 • Reversal of writedowns again in Q3 2016 Q3 – DKK 8m 14
B A N K I N G More customers in all Profit before writedowns DKKm segments 33 Private • Results up by DKK 8m Y/Y – Impacted by positive writedowns – Negatively impacted by reduced funding requirement for winding-up activities 16 • Gross lending up by DKK 26m in Q3 and DKK137m Y/Y 15 • Lending via Totalkredit up by DKK 235m and DKK 1.1bn 11 Y/Y 7 4 4 4 4 Leasing 2 • Unchanged profit • Continued growth in number of leased cars -1 -2 -2 -5 -4 Financial Markets • Positive value adjustments improved results Y/Y rug • More customers and assets under management in Q3 -11 2016 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2013 Q3 2014 Q3 2015 Q3 2016 Q3 2013 Q3 2014 Q3 2015 Q3 2016 , Other • Results negatively impacted by low/negative interest rates Private Leasing Financial Other in combination with excess liquidity Markets • Favourably impacted by value adjustments Note: Other excluding effects from Alm. Brand Formue 15
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