results for q2 2015 - alm. · pdf fileresults for q2 2015 investor presentation september 2015...
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Alm Brand
Results for Q2 2015 Investor presentation September 2015
Financial highlights of Q2 2015
Pre-tax profit: DKK 104m
Outlook up by DKK 100m
Forward-looking activities: Pre-tax profit: DKK 182m
Winding-up activities: Loss: DKK 78m • Writedowns: DKK 62m
G R O U P
Non-life Insurance Pre-tax profit: DKK 194m
• CR: 83.3 • Expense ratio: 16.0% • Premium growth: -0.6%
Life and Pension Pre-tax profit: DKK 14m
• Risk result: DKK 12m • Bonus potential: DKK 1.0bn • Bonus rate: 10.5%
Banking Pre-tax loss: DKK 8m
• Writedowns: DKK 0m • Growth in lending • Growth in full-service
customers
2
Comments on Q2
Negative impact from turbulent financial markets Intensified competition impacting insurance premiums Benign weather More customers and increased lending in the bank Pre-tax profit outlook • DKK 450-550m • Up by DKK 100m
G R O U P
Financial highlights, H1
Group Pre-tax profit: DKK 306m Non-life Insurance Pre-tax profit: DKK 451m • CR: 81.7 • Expense ratio: 16.1
Life and Pension Pre-tax profit: DKK 40m Banking Pre-tax loss: DKK 2m Winding-up activities Pre-tax loss: DKK 152m
3
Customers First
Group NPS reached a new high in Q2 Alm. Brand Bank rated best by users of MyBanker Number of filed complaints reduced again Retention rate declining due to competition • but remains high and
satisfactory
G R O U P
Group NPS
18 18
22 23 23
26 27
24
29 30
31 30
33 35
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2012 2013 2014 2015
4
Retention rate – Non-life Insurance
86%
87%
88%
89%
90%
91%
92%
dec-08 dec-09 dec-10 dec-11 dec-12 dec-13 dec-14
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NON-LIFE INSURANCE Highlights
Q2 pre-tax profit of DKK 194m • Technical result better than expected • Negative investment return due to increased
spread between mortgage bonds and government bonds
N O N - L I F E I N S U R A N C E
Pre-tax profit DKKm
5
217 198
222 210
357
455
-3
31
-10 -16 -13 -4
214 229 212
194
344
451
2012 2013 2014 2015 2014 2015
Q2 H1
Technical result
Investment return after technical interest
Combined ratio better than expected
Combined ratio of 83.3 - Better than expected • Run-off gains improved CR by 5.3 ppts
– Gains on workers’ compensation, motor, fire and property insurances
• Very few weather-related claims
Underlying combined ratio of 80.2 • Discounting increased CR by 0.9 ppt • Fewer claims but higher average claims • Negatively impacted by lower average premium
Expense ratio up slightly Y/Y
• Level as expected
N O N - L I F E I N S U R A N C E
Combined ratio
6
65,6 68,1 66,7 67,3 69,5 65,6
16,7 16,4
15,9 16,0 16,4
16,1
82,3 84,5
82,6 83,3 85,9
81,7
78,6
83,6
76,8
80,2 78,9
80,8
2012 2013 2014 2015 2014 2015
Q2 H1
Claims ratio incl. reinsurance
Gross expense ratio
Underlying combined ratio
Weather-related and major claims
N O N - L I F E I N S U R A N C E
Major claims ratio
Major claims up by 4.1 ppts Y/Y Within expected range of 7-8%
• Higher claims in both private and commercial
lines • Still low major claims YTD
Weather-related claims excl. reinstatement down by 5.7 ppts Y/Y Low compared with normal expectation of 3-4% • No material weather-related events in Q2 • YTD impacted by two storms in January but still
below normal expected level
Weather-related claims ratio
7
4,7
6,0
3,7
7,8
6,4
2012 2013 2014 2015 2015
Q2 H1
Major claims ratio Average expectation (7-8%)
2,1 1,7
6,6
0,9 2,3
-0,3 -0,1
2012 2013 2014 2015 2015
Q2 H1
Weather-related claims ratio Reinstatement Average expectation (3-4%)
Premiums impacted by intensified competition
Premium income down by 0.6% Y/Y • Private down by 1.2%
– Lower prices due to intensified competition – Price adjustment on motor insurance
– Retention rate has been falling due to competition but has remained at a satisfactory level
• Commercial unchanged Y/Y – Intensified price competition in commercial
lines
N O N - L I F E I N S U R A N C E
Premium income DKKm
8
640 658 660 653
566 600 606 606
1.206
1.258 1.266 1.259
2012 2013 2014 2015
Q2
Private Commercial
Private - Very satisfactory results
Combined ratio of 85.8 - Worsened by 3.6 ppts Y/Y
Very few weather-related claims • Benign weather • Major claims higher Y/Y but at a normal level • Run-off gains lower Y/Y but still positive
– Improved CR by 3.7 ppts (down by 4.6 ppts Y/Y)
Underlying business still satisfactory • Lower claims frequency on fire and property insurances • Lower average premium affecting negatively
N O N - L I F E I N S U R A N C E
Combined ratio
9
70,7 68,1 64,1
68,4
17,7 18,5
18,1
17,4
88,4 86,6
82,2 85,8
2012 2013 2014 2015
Q2
Claims ratio incl. reinsurance
Gross expense ratio
Commercial - Very satisfactory results
Combined ratio of 80.7 - Improved by 2.2 ppts Y/Y
Weather-related and major claims 0.9 ppt lower Y/Y • Very few weather-related claims • Major claims up Y/Y but at a normal level • Run-off gains improved CR by 7.1 ppts (up by 6.8 ppts Y/Y)
– Primarily related to workers’ compensation, fire and property insurances
Worsened underlying business • Negatively impacted by higher interest rate (1.9 ppts Y/Y) • Higher claims frequency and average claims • Underlying claims ratio still below expected level
N O N - L I F E I N S U R A N C E
Combined ratio
10
59,7
67,9 69,3 66,2
15,6
14,1 13,6 14,5
75,3
82,0 82,9 80,7
2012 2013 2014 2015
Q2
Claims ratio incl. reinsurance
Gross expense ratio
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LIFE AND PENSION Highlights
Pre-tax profit of DKK 14m - Down by DKK 13m Y/Y • 2014 impacted by one-off income • Expense result negatively impacted by one-offs • Negative return on investments allocated to equity • Growth in regular premiums
Bonus potential remains attractive • Collective bonus potential down by DKK 81m • Bonus rate reduced to 10.5%
L I F E A N D P E N S I O N
Pre-tax profit DKKm
11
19 22
26
19
48
38 2
0
1
-5
2
2
21 22
27
14
50
40
2012 2013 2014 2015 2014 2015
Q2 H1
Underwriting profit/loss
Return on investments allocated to equity
Pension contributions
Total pension contributions up by 4.5%
Pension premiums up by 7.6% Y/Y • Single premiums up by 8.8% • Regular premiums down by 6.4%
– Inflow of new policyholders secured growth – Growth of 3.2% YTD
Unguaranteed investment schemes in the bank down by 2.9%
L I F E A N D P E N S I O N
Total pension contributions DKKm
12
128 135 139 146
317 327 78 56
139 152
351 395
96 110
117 114
192
219
302 301
395 412
860
941
2012 2013 2014 2015 2014 2015
Q2 H1
Regular premiums
Single premiums
Investment schemes
Profit impacted by lower risk result
÷ Expense, risk and group life results – Expense result negatively impacted by one-off
expenses – Satisfactory risk result – Q2 2014 impacted by an extraordinary reversal
of a provision
÷ Return on equity investments
– Loss due to lower interest rates
+ Portfolios without bonus entitlement
L I F E A N D P E N S I O N
Profit split* DKKm
13 * Profit before tax of the parent company Alm. Brand Liv og Pension A/S, which includes post-tax return on investment in the EMD Local Currency investment fund
18 20
25
10
3
3
4
4
-2
4
6
1
-5
2
-1 -3
1
27
22
27
14
2012 2013 2014 2015
Q2
Expense, risk and group life results
Interest result
Result of portfolios without bonus entitlement
Return on investments allocated to equity
Change to shadow account
Investment return
L I F E A N D P E N S I O N
Attractive bonus potential
• Average bonus rate of 10.5%
• Bonus rate down by 0.5 ppt
– Primarily related to interest rate group 0
– Groups 1 and 2 improved
– Group 3 still strong
• Attractive bonus rate for new policyholders of 11.7%
Rate on policyholders’ savings
• Still highest rate on private policyholders’ savings in Denmark
14
U74*
Interest rate group Total
0 1 2 3
Technical interest rate 0.5-1.5 1.5-2.5 2.5-3.5 3.5-4.5
Rate on policyholders’ savings, 2015 4.00 5.00 5.00 6.00
Investment assets (DKKbn) 0.1 5.6 1.8 1.3 3.7 12,5
Bonus rate (%) 11.7 19.1 6.9 4.5 10.5
Return (% YTD) 1.8 -0.6 -0.8 -1.4 0.1
Bonds 100% 57% 52% 74% 79% 65%
Equities 0% 27% 22% 9% 4% 17%
Property 0% 16% 13% 11% 9% 13%
Fixed-income derivatives 0% 0% 13% 6% 8% 5%
*Portfolios without bonus entitlement
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BANKING Highlights
Pre-tax loss of DKK 8m Down by DKK 14m Q/Q
• Turbulent financial markets
– Negative value adjustments on bond portfolio – Lower customer activity in Financial Markets
• Writedowns positively impacted by gains on lending
previously written off • Growth in full-service customers and lending
B A N K I N G
Pre-tax profit DKKm
15
29
34
-14
12
-8 -7 -3
0
-6
0
22
31
-14
6
-8
Q2 Q3 Q4 Q1 Q2
2014 2015
Profit before writedowns
Writedowns
Forward-looking activities
Pre-tax loss of DKK 8m (down by DKK 14m Q/Q)
Private • Lending up by DKK 36m in Q2 • Number of full-service customers increased • Lower fees
– Q1 was positively impacted by debt conversions
Financial Markets • Lower customer trading activity • Loss on investment portfolio • More customers and more assets under management
Leasing • Number of leased cars increased • Increased competition has reduced the growth rate
– Portfolio up by DKK 32m (DKK 228m Y/Y) • Costs impacted by investments in automation
Other • Result negatively impacted by low/negative interest rates in
combination with excess liquidity • Loss on bond portfolio
B A N K I N G
Profit before writedowns DKKm
16
-3 -4 -6
4
-1
18
7 4
18
1
2
-2
2
3
2
12
33
-14
-13 -10
29
34
-14
12
-8
Q2 Q3 Q4 Q1 Q2
2014 2015
Private Financial Markets Leasing Other
Targeted reduction in liquidity
Liquidity surplus • Liquidity surplus of DKK 3.7bn at end-H1 2015 • Reduced by DKK 0.2bn in Q2 Reducing surplus • Deposits reduced by DKK 0.3bn • Surplus expected to be reduced by DKK 1bn in H2
2015
B A N K I N G
Deposits DKKbn
17
3,4 4,0
4,5 5,4 5,4
6,5 5,6 5,4
2,9 2,6
1,4 1,3 1,2
1,0 1,0
11,3 10,9 11,1
9,3 9,0
2012 2013 2014 Q1 2015 Q2 2015
Deposits at call
At notice
Other deposits
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WINDING-UP ACTIVITIES Highlights
Pre-tax loss of DKK 78m In line with expectations
Writedowns of DKK 62m
• Negatively impacted by agriculture, offset by commercial lending and mortgage deeds
Results before writedowns: Loss of DKK 16m
• Positive net interest and fee income in Q2
• Value adjustments negatively impacted by shares taken over
Portfolio reduced by DKK 75m adjusted for writedowns (DKK 204m YTD)
• Expected reduction in 2015 raised from DKK 200m to DKK 300m
B A N K I N G
Pre-tax profit DKKm
18
-15 -21 -18
-11 -16
-60 -56
-81
-63 -62
-75 -77
-99
-74 -78
Q2 Q3 Q4 Q1 Q2
2014 2015
Profit before writedowns
Writedowns
Agriculture impacted writedowns
Writedowns of DKK 62m
Agriculture
• Low pork and milk settlement prices still contributing to high level of writedowns
• Lending grew by DKK 2m adjusted for writedowns
Commercial lending
• Reversal of writedowns again in Q2 2015
• Lending reduced by DKK 66m adjusted for writedowns
Mortgage deeds
Lower writedowns compared to previous quarters
• Writedowns of DKK 10m related to mortgage deeds held by Non-life Insurance
• Reversal of DKK 4m related to own mortgage deeds
B A N K I N G
Writedowns DKKm
19 Mortgage deeds include credit exposure from option agreement
15
71
57 60
10
-27
-12
-4
31
37
18
6
Q3
20
14
Q4
20
14
Q1
20
15
Q2
20
15
Q3
20
14
Q4
20
14
Q1
20
15
Q2
20
15
Q3
20
14
Q4
20
14
Q1
20
15
Q2
20
15
Agriculture Commercial lending
Mortgage deeds
CAPITAL MODEL
Excess capital higher than expected
• Capital target reduced by DKK 165m primarily related to Banking
• The group contemplates setting up a share buy-back programme during autumn based on the extraordinary capital improvement
G R O U P
20
Development in excess capital DKKm
Other includes reduction in tier 2 capital and change in treasury shares
383
667
96
37
165
-14
Excess capital Q1 '15
Q2 profit Change in tax asset
Change in capital target
Other Excess capital Q2 '15
Full-year outlook for 2015 - Lifted by DKK 100m
DKK 450-550m Pre-tax profit
Forward-looking activities: Pre-tax profit of DKK 800-850m
Winding-up activities: Loss of DKK 300-350m
G R O U P
Non-life Insurance Pre-tax profit: DKK 775m Lifted by DKK 125m
• CR at the level of 85 • Expense ratio at the level of 16 • Premiums in line with 2014
Life and Pension Pre-tax profit: DKK 75m Unchanged
• Expects to book risk
allowance for all contribution groups
• Regular premiums expected to grow by 4%
Banking Pre-tax profit: DKK 20m Lowered by DKK 20m
• Writedowns of around
DKK 20m • Negative impact from low
interest rate level
21
Non-life Insurance: Technical result better than expected, but investment result negatively impacted by turbulent financial markets
Life and Pension: Growth in regular pension premiums
Banking: Negatively impacted by turbulent financial markets. Increase in lending to private customers and continued growth in full-service customers
Winding-up activities: Overall performance as expected, but difficult conditions for agriculture
Outlook FY 2015 outlook raised to DKK 450-550m
G R O U P
22
Highlights
Appendix
23
Alm. Brand in brief
A financial group with DKK 7 billion in revenue and 1,600 employees Offering • Non-life insurance • Banking • Life insurance
Customer focus • Private customers multiple insurance, banking
pension needs • Agriculture and small to medium-sized
commercial customers (not bank)
Distribution of products through • 260 insurance agents • 6 call centres • 13 life and non-life sales centres • 11 bank branches
G R O U P
Sales distribution
Bank branches
Insurance and pension branches
Headquarter
Regional offices
24
NON-LIFE INSURANCE • 4th largest in Denmark
• 500,000 customers
– Private customers
– SMEs
– Agricultural customers
• Cost efficient
• Strongly improved claims scenario
• Competitive combined ratio
• High customer satisfaction
INVESTMENTS ETC.
BANKING • Approx. 50,000 private customers
• Financial Markets and Leasing
• Discontinued lending portfolio
LIFE AND PENSION • Approx. 80,000 customers
• Low costs for customers • Low-risk customer portfolio
• Stable results and high bonus rate
ALM. BRAND - A Danish financial services group
Revenue Approx
DKK 7bn
Integrated business model across insurance, banking and pension
G R O U P
68 %
13 %
10 %
9 %
25
Customer focus and sales - customer loyalty as a competitive parameter
G R O U P
Sales distribution
Customer focus Private customers requiring insurance, banking
and pension services Agricultural customers and SMEs (but not in
banking) Pluskunder
Distribution strategy • Focus on cross selling and referral between sales
channels • Five regions responsible for targeted sales and
service • In-depth knowledge of customers and local
conditions • Central functions provide support through
specialised resources
Distribution through: • 260 insurance agents • 6 customer service centres • 13 sales centres • 11 bank branches
Bank branches
Insurance and pension branches
Headquarter
Regional offices
26
CUSTOMER FIRST 2013-2016
Pre-tax return on equity target CIBOR +10 % in 2016
G R O U P
Efficiency • Improve expense
ratio through streamlining of processes
• Improve the banks interest margin by 1 ppt by 2016
Quality • Improve quality
in all processes • Reduce number
of complaints
Digitalisation • Investing in
digitalisation • Degree of
digitalisation to reach 33% in all customer faced processes
• Self-servicing possibilities to be improved
Customers • Focus on
customer service in all parts of the group
• Improvement of loyalty through good customer experiances
27
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NON-LIFE INSURANCE Highlights
4th largest non-life insurance company in Denmark
• 400,000 Private customers
– 200,000 PlusKunde customers
• 100,000 SMEs and agricultural customers
Competitive strengths
• Cost efficient
• Strongly improved claims scenario
• Competitive combined ratio
• High customer satisfaction
N O N - L I F E I N S U R A N C E
Return on equity
28
12,0%
23,2%
38,7%
32,7%
29,5%
2010 2011 2012 2013 2014
Product focus and distribution
Insurance agents still primary distribution channel High property exposure
N O N - L I F E I N S U R A N C E
Products
23%
26% 27%
6%
12%
6%
Fire and property, private Fire and property, commercial
Auto insurance Workers' compensation
Health and accident Other insurances
Premium income
DKK 5bn
29
59 75 74
41 10 20
15 6
Private Commercial Agricultural
Insurance agents Customer service centres Brokers
Distribution (pct.)
Premium development DKKm
2.504 2.540 2.579 2.626 2.642
2.258 2.232 2.287 2.405 2.416
4.762 4.772 4.866
5.031 5.058
2010 2011 2012 2013 2014
Private Commercial
N O N - L I F E I N S U R A N C E
30
Combined Ratio
Combined Ratio Underlying Combined Ratio
N O N - L I F E I N S U R A N C E
31
85,5
80,2 79,7
78,8
77,0
2010 2011 2012 2013 2014
80,6 76,4 67,1 71,4 69,9
17,6 15,9
16,2 16,0 15,6
98,2 92,3
83,3 87,4 85,5
2010 2011 2012 2013 2014
Claims ratio incl. reinsurance
Gross expense ratio
Development in private and commercial - Combined ratio
Private Commercial
N O N - L I F E I N S U R A N C E
32
80,9 77,1 70,0 67,5 68,7 67,4
20,1 18,8
15,3 17,7 17,8 17,4
101,0 95,9
85,3 85,2 86,5 84,8
2009 2010 2011 2012 2013 2014
Claims ratio incl. reinsurance
Gross expense ratio
78,0 84,6 83,6
66,7 74,4 72,4
16,8
16,3 16,6
14,6
14,0 13,6
94,8
100,9 100,2
81,3
88,4 86,0
2009 2010 2011 2012 2013 2014
Claims ratio incl. reinsurance
Gross expense ratio
Development in segments - Technical results
• Private property insurance are now generating profit
• CR of 89.1 in 2014
• Commercial property insurances still not performing satisfactorily
• Hit by storms in 2013 and cloudburst in 2014
• CR of 102.2 in 2014
• Auto insurances still showing very positive results
• CR of 80.6 in 2014
• Workers’ compensation is positively impacted by run-off gains
• CR of 74.9 in 2014
• Health and accident insurance positively impacted by run-offs in 2014
• CR of 65.9 in 2014
N O N - L I F E I N S U R A N C E
33
-300
-200
-100
0
100
200
300
400
Fire and property, private
Fire and property, commercial
Auto insurance Workers' compensation Health and accident Liability insurance & Other direct insurance
2007 2008 2009 2010 2011 2012 2013 2014
Peer group comparison
2012
Note: Combined ratio and expense ratio are stated at group level. Codan figures include Danish business only.
Exp
en
se r
ati
o
Co
mb
ined
rati
o
2013
2014
H1 2015
83,3 88,0 88,2
93,8
87,4 91,5
87,7
94,7
85,5 86,0 84,2
94,9
81,7 85,7 86,4
N O N - L I F E I N S U R A N C E
34
16,2 15,8 16,4
22,3
16,0 16,2 15,6
22,7
15,6 15,7 14,6
24,5
16,1 16,1 15,4
Insurance competitors - largest Danish non-life insurance companies Q3 2014
Source: Forsikring og Pension
0% 5% 10% 15% 20% 25%
Tryg
Topdanmark
Codan
Alm. Brand
Gjensidige Forsikring
If
LB Forsikring
Alka
GF-Forsikring
N O N - L I F E I N S U R A N C E
35
Insurance competitors - Segments Q3 2014
Source: Forsikring og Pension
25,6%
15,8% 20,1%
30,7% 26,3%
15,0%
23,1%
24,1% 21,7%
17,9%
15,5%
19,4%
6,0%
6,6% 7,7%
7,4% 12,8%
8,6%
27,1%
26,5% 25,5%
22,4% 25,2%
33,1%
11,8%
11,0% 13,1% 9,0% 6,4%
8,2%
2,0%
6,5% 4,3% 3,7% 4,2% 5,6%
4,4% 9,5% 7,6% 8,9% 9,6% 10,1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Building / content (commercial) Building / content (private) WCA Motor Healt and accident Liability Other
N O N - L I F E I N S U R A N C E
36
fjern evt. pladsholderen
LIFE AND PENSION Highlights
90,000 insurance agreements • 60,000 agreements with regular payments
Market shares, measured in regular payments: • Individual retirement
and capital pension schemes 6% • Private installment pension schemes 3% • Insurances with regular disbursements 5% • Employer schemes <1%
Key strenghts • Low costs for customers • Low-risk customer portfolio • Stable results and high bonus rate
L I F E A N D P E N S I O N
Return on equity
37
12,0%
17,0%
13,3%
9,7%
8,8% 9,2%
2009 2010 2011 2012 2013 2014
Pension contributions
Pension premiums
L I F E A N D P E N S I O N
Total pension contribution DKKm
25%
38%
25%
12%
Investment schemes
Individually written insurance
Insurance written in employment relationship
Group life schemes
DKK 1.2bn
38
629 603 618 626 632
90 121
285 302
611
186
358
332 345
402
905
1.082
1.235 1.273
1.645
2010 2011 2012 2013 2014
Regular premiums Single premiums
Investment schemes
Earnings distribution
Risk result is the largest contributor to earning • Individual health assessment on
all customers
Interest result • 0.15% on provisions
Investments allocated to equity • Low risk bond investment
Shadow account • DKK 12m end 2014
L I F E A N D P E N S I O N
Profit split* DKKm
86 81 74
62
11 11
11
16
21
12
3
2
24
-9 -3 -5
-5 -2
137
90
86
77
2011 2012 2013 2014
Expense and risk results
Interest result
Return on investments allocated to equity
Result of portfolios without bonus entitlement
Change to shadow account
39 * Profit before tax of the parent company Alm. Brand Liv og Pension A/S, which includes post-tax return on investment in the EMD Local Currency investment fund
The discount rate of the Danish FSA declined in 2014 (10-year point): – 2014: 0.99% – 2013: 2.24%
L I F E A N D P E N S I O N
Provisions DKKm
40
10.931 11.332 11.832
10.198 10.920
517 454
586
827
912 45 43
45
49
46 11.493 11.829
12.463
11.074
11.878
2010 2011 2012 2013 2014
Life insurance provisions
Collective bonus potential
Outstanding claims provisions
Attractive bonus potential
Attractive bonus potential Also bonus potential in interst rate group 3 with the highest guarantee
L I F E A N D P E N S I O N
Collective bonus potential DKKm
41
1%
52%
29%
8%
10% Risk groups
Interest rate group 0
Interest rate group 1
Interest rate group 2
Interest rate group 3
Bonus potential per group 2014 454
587
827
912
1.005
3,65% 3,65%
3,00%
4,00% 4,00%
2011 2012 2013 2014 2015
H1
Bonus potential
Rate on policyholders' funds (new agreements)
Competitive position
Alm. Brand has some of the lowest costs for customers
L I F E A N D P E N S I O N
Costs for private customers
42
0%
1%
2%
3%
Alm
.Bra
nd
AP
Pen
sio
n
Da
nic
a,
ba
lan
ce
No
rdea
PF
A
SE
B
Sk
an
dia
, b
asi
c
To
pd
an
ma
rk
Premium 15,000 - depository 100,000 Premium 30,000 - depository 250,000
Premium 50,000 - depository 500,000 Premium 80,000 - depository 2,000,000
8 January 2015 Source: Fakta om Pension & omkostningsmålere
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BANKING Highlights
Forward looking activities
Nation-wide bank focused on
• Retail banking with 50,000 private customers (households)
• Financial Markets
• Leasing of cars
Winding-up activities
• Agriculture
• Commercial lending
• Mortgage deeds
B A N K I N G
Return on equity
43
-67%
-95%
-42%
-34%
-17%
2010 2011 2012 2013 2014
Funding development
Significant changes in funding structure and costs Funding primarily consists of deposits, hybrid capital and central banks
B A N K I N G
Funcing costs DKKm
44
643
421
513
457
321
216
2009 2010 2011 2012 2013 2014
Credit institutions and central banks
Deposits and other payables
Bonds issued
Total subordinated debt
10%
89%
1% Credit institutions and central banks
Deposits and other payables
Total subordinated debt
DKK 12.5bn
Funding development
B A N K I N G
Quarterly funcing costs DKKm
45
73
68
61
53 50
52
36
23
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2013 2014 2015
Total subordinated debt
Deposits and other payables
Credit institutions and central banks
Deposits
A significant reduction of deposits at notice expected in 2015
B A N K I N G
Development in deposits DKKm
46
3,4 4,0
4,5 5,5
6,5 5,6 5,4
2,6
1,4 1,3 1,2
1,0
11,3 10,9 11,1
9,0
2012 2013 2014 H1 2015
Deposits at call
At notice
Other deposits
Winding-up lending
Agriculture • 80 customers • 45% pig farmers, 45% dairy
farmers, 10% arable farming • Gross lending DKK 1.3bn
Commercial lending • Primarily lending to investment
properties
Mortgage deeds • Private and commercial mortgage
deeds • Risk on non-delinquent mortgage
deeds sold to Non-life Insurance
B A N K I N G
Development in lending DKKm
47
955
1.757
2.930
0
820
1.455
2.497
0
668
1.094
307
1.874
543
940
279
1.740
Agriculture Commercial lending Mortgage deeds Credit exposure, mortgage deeds
2012 2013 2014 H1 2015
CAPITAL TARGET 30 June 2015
Capital target reduced by DKK 265m in H1 2015
• Risk reduction in the bank and subsequently reduction of buffer related to winding-up portfolio
G R O U P
DKKm Target 2014
Target Q2 2015
Non-life Insurance (40% of premiums) 2,023 2,023
Life and Pension (8.50% of provisions for insurance contracts) 928 903
Banking (16.2% of risk-weighted assets)* 1,475 1,286
Buffer related to winding-up portfolio 506 455
Diversification effects -300 -300
Total capital target 4,632 4,367
*Calculated as the individual solvency requirement as at 30 June 2015 plus 3 ppts
48
Investment mix - As of 30 June 2015
G R O U P
Life and Pension DKK 13.2bn
• Large exposure to bond markets • Shares and property accounts for
more than 25% of the portfolio
Non-life Insurance DKK 10.4bn
• Mortgage bonds accounts for approx. 80% of the portfolio
• Mortgage deeds acquired from the bank
• Shares account for approx. 2%
Banking DKK 5.1bn
• Primarily mortgage bonds
49
Shares 2%
Mortgage bonds 81%
Mortgage deeds 17%
Shares 15,7%
Property 12,7%
Mortgage bonds 46,5%
Government bonds 12,8%
index-linked bonds 5,3%
Credit bonds 2,8%
Emerging markets
4,2%
Shares 4% Mortgage
bonds 81%
Government bonds
1%
Credit bonds 1%
Liquidity 13%
Organisational structure
G R O U P
Søren Boe Mortensen CEO: Since 2001 Employed:1987
Jesper Mørch Sørensen Managing Director Non-life Insurance Employed:2004
Mikael Sundby Managing Director Life and Pension Employed:1985
Kim Bai Wadstrøm Managing Director Banking Employed: 2011
Anne Mette Barfod CFO Employed:1996
50
Rasmus Lynge Marketing Director Employed:2015
History
G R O U P
51
Great Copenhagen Fire of 1728 Major farm fires and
resulting bankruptcies
1728 1792 1984 1988 1989 to 2001 2002 2002 to 2009
Alm. Brand established By order of King Christian VII Only fire insurances Outside Copenhagen and
provincial towns
Alm. Brand Liv & Pension established Acquisition of
Nordlyset renamed Alm. Brand Liv & Pension
Alm. Brand Bank established Through the
acquisition of SLJ Bank
Acquisitions (1989 to 2001) Det Kjøbenhavnske Reassurance-Compagni (Kjøbenhavnske Re) fra
1915. Aktieselskabet Utrecht. Controlling interest in Finansieringsselskabet Gefion A/S. Gefion A/S
subsequently became the parent company for the Group's financial activities and renamed Alm. Brand A/S.
The Danish activities of Zurich Life Insurance. Provinzial Danmark, SamLiv and Cykelhandlernes Forsikringsselskab.
Consolidation of insurance activities Alm. Brand A/S acquires non-life
insurance portfolio from Alm. Brand af 1792 G/S
Alm. Brand af 1792 G/S transformed to a fmba
Acquisitions and disposals Provinsforsikring merged with
Alm. Brand Acquisition of Henton
Børsmæglerselskab A/S Disposal of Kjøbenhavnske Re.
2014
Liquidation Solvent liquidation of the listed
subsidiary Alm. Brand Formue
“The statements made in this presentation are based on current expectations, estimates and projections made by management. All statements about future financial performance are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by the statements. All statements about future financial performance made in this presentation are solely based on information known at the time of the preparation of the last published financial report, and the company assumes no obligation to update these statements, whether as a result of new information, future events, or otherwise.”
52
Alm Brand
Investor presentation September 2015