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

Hans Petter Madsen Managing director 21 August 2015

DNB Insurance

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 P&C Personal lines Premium portfolio NOK 2 billions DNB Life Insurance AS Workmen compensation and group life Individual Life and disability 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

Branches Customer centre eBusiness

Financial advisors

Customer service and Interactive Web

Open pages Logged in

Insurance advisor

Mobile

5 000 000 100 000 50 000 3 000 75 000

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

• Substantial improvement in pre-tax profit

since 2009

• Portfolio premium increased by MNOK

1,229 since 2009

• # Customers 214,500 as of June 2015
• Reduction in “

Academic-portfolio” portfolio by MNOK 92 (19.4%) since year-end.

2009 2010 2011 2012 2013 2014 1H 2015 Pre-tax profit

• 100
• 178

31 203 240 242 94

• 200
• 100

100 200 300

Pre-tax profit

2008 2009 2010 2011 2012 2013 2014 30/06/ 2015 Portfolio premium 743 978 1173 1486 1656 1816 1996 1972 500 1000 1500 2000 2500

Portfolio premium

How will DNB adapt to lower income from financial portfolio?

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

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 requirement 150 % 286 % 207 %

• 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

• 5

10 15 20 25 30 35

2008 2009 2010 2011 2012 2013 2014 2015*

If Gjensidige Tryg Sparebank 1 Other companies

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

• 1

2 3 4 5 6

2008 2009 2010 2011 2012 2013 2014 2015*

DNB Storebrand Codan Eika Frende

*as of 2nd. quarter 2015

Price development and market concentration

0.00 0.05 0.10 0.15 0.20 0.25 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% Q2-08 Q2-09 Q2-10 Q2-11 Q2-12 Q2-13 Q2-14 Q2-15 Growth average premium [y/y] Herfindahl–Hirschman Index

• Decline in market

concentration(HH-index)

• Under 15% indicates an

unconcentrated market

• Decrease in price growth

Motor

Development in the competitive environment - motor

10 15 20 25 30

Banca cassuran ance ce

40 50 60 70 80

"The e big three ee"

• 1

2 3 4 5 6

"Member mbership ip insuran ance ce"

• 5

10 15

“Price focus”

% % % %

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

SMB, Corporate LCI Private banking Autolease Health Loan insurance DNB Forsikring, personal lines DNB Forsikring, personal lines

Future potential

Digitalization

14 00 14 000 000 0 000