Results for Q3 2015 Investor presentation December 2015 G R O U P - - PowerPoint PPT Presentation

Alm Brand

Results for Q3 2015

Investor presentation December 2015

Financial highlights of Q3 2015 Pre-tax profit: DKK 230m

Outlook raised Forward-looking activities: Pre-tax profit: DKK 312m

Winding-up activities: Loss: DKK 82m

• Writedowns: DKK 74m

G R O U P

Non-life Insurance

Pre-tax profit: DKK 312m

• CR: 72.4
• Expense ratio: 15.5
• Premium growth: 0.0%

Life and Pension

Pre-tax profit: DKK 9m

• Risk result: DKK 11m
• Bonus potential: DKK 0.8bn
• Bonus rate: 8.2%

Banking

Pre-tax profit: DKK 3m

• Writedowns: DKK 5m
• Growth in lending
• Growth in full-service

customers

2

Comments on Q3

Negative impact from turbulent financial markets More customers and increased lending in the bank Initiation of a share buyback programme of up to DKK 300m Pre-tax profit outlook FY2015

• DKK 600-650m (from DKK 450-550m)

G R O U P

Financial highlights, 9M Group Pre-tax profit: DKK 536m

Non-life Insurance Pre-tax profit: DKK 763m

• CR: 78.6
• Expense ratio: 15.9

Life and Pension Pre-tax profit: DKK 49m Banking Pre-tax profit: DKK 1m Winding-up activities Pre-tax loss: DKK 234m

3

Customers First

New CRM system will improve customer service across business segments substantially 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 36

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 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

NON-LIFE INSURANCE Highlights

Q3 pre-tax profit of DKK 312m

• Technical result exceptionally good
• Negative investment return due to losses on

equities and wider 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

245 237 130 352 487 807

• 17

29

• 25
• 40
• 38
• 44

228 266 105 312 449 763 2012 2013 2014 2015 2014 2015 Q3 9M

Technical result Investment return after technical interest

Combined ratio exceptionally good

Combined ratio of 81.1 excl. run-off

• Better than expected
• Run-off gains improved CR by 8.7 ppts to 72.4

– Gains on workers’ compensation and motor liability

• Very few major claims

Underlying combined ratio of 75.0

• Discounting increased CR by 0.2 ppt
• More claims but lower average claims
• Negatively impacted by lower average premium
• Positively affected by an adjustment of provisioning

models for claims relating to 2015 Expense ratio up slightly Y/Y

• 2014 positively impacted by cost phasing
• Level as expected

N O N - L I F E I N S U R A N C E

Combined ratio

6

65,1 66,2 75,5 56,9 71,5 62,7 15,1 15,5 14,4 15,5 15,7 15,9 80,2 81,7 89,9 72,4 87,2 78,6 2012 2013 2014 2015 2014 2015 Q3 9M Claims ratio incl. reinsurance Gross expense ratio 76,9 74,1 77,2 75,0 78,3 78,9 2012 2013 2014 2015 2014 2015 Q3 9M

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 down by 3.7 ppts Y/Y Below expected range of 7-8%

• Very few major claims

Weather-related claims excl. reinstatement down by 3.8 ppts Y/Y Within normal expectation of 3-4%

• A few minor cloudbursts
• Q3 2014 was impacted by cloudburst

Weather-related claims ratio

7

6,6 7,4 6,7 3,0 5,3 2012 2013 2014 2015 2015 Q3 9M Major claims ratio Average expectation (7-8%) 2,9 0,7 6,9 3,1 2,5 0,3

• 0,1

Q3 9M 2012 2013 2014 2015 2015 Weather-related claims ratio Reinstatement Average expectation (3-4%)

Premiums impacted by intensified competition

Premium income unchanged Y/Y

• Private down by 1.6%

– Lower prices due to continued price competition – Retention rate declining due to competition but stilll at a satisfactory level

• Commercial up by 1.8%

– Growth primarily on workers’ compensation and property – Average prices still impacted by competition

N O N - L I F E I N S U R A N C E

Premium income

DKKm

8

651 668 668 657 578 613 609 620 1.229 1.281 1.277 1.277 2012 2013 2014 2015 Q3 Private Commercial

Private

• Very satisfactory results

Combined ratio of 78.8

• Improved by 7.2 ppts Y/Y

Very few weather-related claims

• Weather-related and major claims below expected level
• Run-off gains higher Y/Y

– Improved CR by 7.3 ppts (up by 9.7 ppts Y/Y)

Underlying business still satisfactory

• Deteriorated Y/Y
• Higher claims frequency on accident, travel and motor

insurance

• Lower average premium, especially on motor insurance,

had a negative effect

N O N - L I F E I N S U R A N C E

Combined ratio

9

64,4 70,3 69,4 60,9 16,6 17,1 16,6 17,9 81,0 87,4 86,0 78,8 2012 2013 2014 2015 Q3 Claims ratio incl. reinsurance Gross expense ratio

Commercial

• Very satisfactory results

Combined ratio of 65.6

• Improved by 28.6 ppts Y/Y

Weather-related and major claims 13.5 ppts lower Y/Y

• Weather-related claims in line with expectations
• Major claims below expectations
• Run-off gains improved CR by 10.2 ppts (up by 4.9 ppts Y/Y)

– Primarily related to workers’ compensation Deteriorating underlying business

• Underlying claims ratio below expected level
• Positively affected by an adjustment of provisioning models
• n current-year claims
• Higher claims frequency but lower average claims

N O N - L I F E I N S U R A N C E

Combined ratio

10

65,9 61,6 82,1 52,6 13,5 13,9 12,1 13,0 79,4 75,5 94,2 65,6 2012 2013 2014 2015 Q3 Claims ratio incl. reinsurance Gross expense ratio

LIFE AND PENSION Highlights

Pre-tax profit of DKK 9m

• Down by DKK 11m Y/Y
• Results impacted by financial market turmoil
• DKK 10m transferred to shadow account
• Expected to be reversed in Q4

Bonus potential remains attractive

• Collective bonus potential down by DKK 214m
• Bonus rate reduced to 8.2%

L I F E A N D P E N S I O N

Pre-tax profit

DKKm

11

19 22 18 10 66 48 2 2

• 1

4 1 21 22 20 9 70 49 2012 2013 2014 2015 2014 2015 Q3 9M Underwriting profit/loss Return on investments allocated to equity

Pension contributions

Total pension contributions up by 15.3%

Pension premiums up by 17.0% Y/Y

• Single premiums up by 37.7%
• Regular premiums unchanged
• Growth of 2.3% YTD

Unguaranteed investment schemes in the bank up by 11.5% Growth expected from new corporate concept offering pension schemes to small companies

L I F E A N D P E N S I O N

Total pension contributions

DKKm

12

123 118 114 114 431 441 85 72 97 134 448 529 75 77 89 99 281 318 283 267 300 347 1.160 1.288 2012 2013 2014 2015 2014 2015 Q3 9M Regular premiums Single premiums Investment schemes

Profit impacted by financial market turmoil

+ Expense, risk and group life results

• Expense result positively affected by recognition
• f reinsurance commission

÷ Interest result

• DKK 10m transferred to shadow account due to

financial market turmoil

• Profit of DKK 4m before transfer to shadow

account

+ 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

28 21 12 15 2 2 5 4

• 5
• 1

1 1 2

• 1
• 2
• 10

24 22 19 9 2012 2013 2014 2015 Q3 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 impacted by financial turmoil

L I F E A N D P E N S I O N

Bonus potential

• Average bonus rate of 8.2%
• Bonus rate down by 2.3 ppts

– Primarily due to losses on equities – Still strong

• Attractive bonus rate for new

policyholders of 8.8%

Rate on policyholders’ savings

• Remains high for 2016
• Supporting growth

14

U74* Interest rate group Total 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

Rate on policyholders’ savings, 2016

4.00 5.00 5.00 6.00

Investment assets (DKKbn)

0.1 5.5 1.7 1.2 3.5 12.0

Bonus rate (%)

8.8 17.0 5.6 2.7 8.2

Return (% YTD)

1.8

• 0.9
• 1.0
• 1.3
• 0.7

Bonds

100% 62% 62% 78% 81% 69%

Equities

0% 24% 22% 8% 3% 16%

Property

0% 14% 13% 11% 9% 12%

Fixed-income derivatives

0% 0% 3% 3% 7% 3%

*Portfolios without bonus entitlement

BANKING Highlights

Pre-tax profit of DKK 3m

Up by DKK 11m Q/Q

• Turbulent financial markets

– Negative value adjustments on bond portfolio

• Writedowns in line with expectations
• Growth in full-service customers and lending

B A N K I N G

Pre-tax profit

DKKm

15

34

• 14

12

• 8

8

• 3
• 6
• 5

31

• 14

6

• 8

3 Q3 Q4 Q1 Q2 Q3 2014 2015 Profit before writedowns Writedowns

Forward-looking activities

Private

• Lending up by DKK 76m in Q3 (DKK 140m YTD)
• Positively affected by cheaper funding and higher

lending

• Increased fees related to mortgage bond conversions
• Number of full-service customers increased

Financial Markets

• Loss on investment portfolio
• More customers

Leasing

• Increased competition has reduced the growth rate

– Portfolio up by DKK 26m Q/Q (DKK 185m Y/Y) Other

• Result negatively impacted by low/negative interest

rates in combination with excess liquidity

• Loss on bond portfolio and related hedging

arrangements

B A N K I N G

Profit before writedowns

DKKm

16

• 4
• 6

4

• 1

4 7 4 18 1 11

• 2

2 3 2 4 33

• 14
• 13
• 10
• 11

34

• 14

12

• 8

8 Q3 Q4 Q1 Q2 Q3 2014 2015 Private Financial Markets Leasing Other

Targeted reduction in liquidity

Liquidity surplus

• DKK 3.0bn at end-Q3 2015
• Reduced by DKK 0.7bn in Q3
• Liquidity Coverage Ratio (LCR) implemented on

1 October 2015 – LCR of 192% at end-September 2015 Reducing surplus

• Surplus expected to be reduced by DKK 0.3bn in Q4

2015

• Expiry of fixed-term deposits totalling DKK 1bn in

the period up to early 2016

B A N K I N G

Deposits

DKKbn

17

3,4 4,0 4,5 5,5 5,4 6,5 5,6 5,4 2,6 2,2 1,4 1,3 1,2 0,9 1,0 11,3 10,9 11,1 9,0 8,6 2012 2013 2014 H1 2015 9M 2015 Deposits at call At notice Other deposits

WINDING-UP ACTIVITIES Highlights

Pre-tax loss of DKK 82m

In line with expectations Writedowns of DKK 74m

• Impacted by agricultural exposures

Results before writedowns: Loss of DKK 8m

• Q2 was negatively impacted by shares taken over

Loan portfolio reduced by DKK 132m adjusted for writedowns (DKK 336m YTD)

• Expected reduction in 2015 raised by DKK 100m to

DKK 400m

B A N K I N G

Pre-tax profit

DKKm

18

• 21
• 18
• 11
• 16
• 8
• 56
• 81
• 63
• 62
• 74
• 77
• 99
• 74
• 78
• 82

Q3 Q4 Q1 Q2 Q3 2014 2015 Profit before writedowns Writedowns

Deteriorating conditions for agriculture in Q3

Writedowns of DKK 74m

Agriculture

• Pork and dairy settlement prices remain low
• Lending down by DKK 12m adjusted for writedowns

– Related to sale of a farm

• Loss ratio significantly increased in Q3

Commercial lending

• Reversal of writedowns again in Q3 2015
• Lending reduced by DKK 104m adjusted for

writedowns Mortgage deeds

• Writedowns remain at a satisfactory level
• Credit exposure reduced by DKK 61m adjusted for

writedowns

B A N K I N G

Writedowns

DKKm

19

Mortgage deeds include credit exposure from option agreement 71 57 60 68

• 27
• 12
• 4 -6

37 18 6 12 9,9 9,0 10,5 13,5

• 2,4 -1,1
• 0,4 -0,7

1,7 0,8 0,3 0,6 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Agriculture Commercial lending Mortgage deeds Losses and writedowns Loss ratio

CAPITAL MODEL

Excess capital higher than expected

• Capital target reduced by DKK 64m

primarily related to Banking

• The group has decided to initiate a share

buyback programme of up to DKK 300m

G R O U P

20

Development in excess capital

DKKm

Other includes reduction in tier 2 capital and change in treasury shares

667 936 636 177 32 64

• 4
• 300

Excess capital Q2 '15 Q3 profit Change in tax asset Change in capital target Other Excess capital Q3 '15 Share buyback Excess capital adjusted for share buyback

Full-year outlook for 2015 DKK 600-650m

Pre-tax profit

Forward-looking activities: Pre-tax profit of DKK 950-1,000m

Winding-up activities: Loss at the level of DKK 350m

G R O U P

Non-life Insurance

Pre-tax profit: DKK 925m

Lifted by DKK 150m

• CR at the level of 82
• 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

Banking

Pre-tax profit: DKK 20m

Unchanged

• Writedowns of around

DKK 20m

• Negative impact from low

interest rate level

21

Outlook for 2016 Pre-tax profit of

DKK 450-550m

Forward-looking activities Pre-tax profit of DKK 550-650m at a combined ratio of 91-92 Winding-up activities Pre-tax loss at the level of DKK 100m

G R O U P

22

Non-life Insurance: Technical results exceptionally good, but investment result negatively impacted by turbulent financial markets Life and Pension: Financial market turmoil impacted results negatively in Q3 Banking: Increase in lending to private customers and continued growth in full-service customers Negatively impacted by turbulent financial markets Winding-up activities: Overall performance in line with expectations, but deteriorating conditions for agriculture Outlook FY 2015 outlook raised to DKK 600-650m FY 2016 outlook of DKK 450-550m

G R O U P

23

Highlights

Appendix

24

• 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

25

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 %

26

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

27

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
• f 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

28

Focus on the customer experience

The groups’ NPS reached a new high in Q3 2015 NPS has improved in all segments New CRM system will improve customer service across business segments substantially

G R O U P

Net Promoter Score (NPS)

29

• 20
• 10

10 20 30 40 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 Group Non-life insurance Life and Pension Banking

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

30

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

31

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

32

The large adjustments completed

Sector saw a significant increase in claims in 2008- 2010 Significant improvement in results

• Expenses reduced
• Procurement strategy

reduced average claims costs But also

• Reduced number of thefts
• Safer and smaller cars
• Benign winters

N O N - L I F E I N S U R A N C E

Combined ratio excl. run-off

70 75 80 85 90 95 100 105 2009 2010 2011 2012 2013 2014 9M 2015 Long term target

• Alm. Brand

Tryg Topdanmark

33

Combined Ratio

Combined Ratio Underlying Combined Ratio

N O N - L I F E I N S U R A N C E

34

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

Weather-related and major claims

Weather-related claims ratio

N O N - L I F E I N S U R A N C E

Major claims ratio Major claims

• Claims prevention have

been a key focus area

• Visits to larger customers to

assess risk and coverage individual Weather-related claims

• Latest years have seen

benign winters with little snow

• However more extreme

weather events

• Risk prevention and re-

insurance in focus

35

7,8 7,1 6,8 6,2 7,2 5,8 5,3 2009 2010 2011 2012 2013 2014 2015 FY 9M Major claims ratio Average expectation (7-8%) 3,1 8,5 6,9 2,1 3,7 4,2 2,5 1,6 0,2 1,8 1,1

• 0,1

2009 2010 2011 2012 2013 2014 2015 FY 9M Weather-related claims ratio Reinstatement Average expectation (3-4%)

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

36

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

37

• 300
• 200
• 100

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 and Tryg figures include Danish business only.

Expense ratio Combined ratio

2013 2014 9M 2015

83,3 88,0 85,4 93,8 87,4 91,5 87,5 94,7 85,5 86,0 84,1 94,9 78,6 85,9 84,5

N O N - L I F E I N S U R A N C E

38

16,2 15,8 14,5 22,3 16,0 16,2 15,0 22,7 15,6 15,7 15,1 24,5 15,9 15,7 14,2

Insurance competitors

• largest Danish non-life insurance companies 2014

Source: Forsikring og Pension

0% 5% 10% 15% 20% 25% Tryg Topdanmark Codan

• Alm. Brand

Gjensidige Forsikring If LB Forsikring Alka PFA Pension

N O N - L I F E I N S U R A N C E

39

Insurance competitors

• Segments 2014

Source: Forsikring og Pension

25,6% 16,0% 20,1% 30,9% 25,9% 15,1% 23,0% 24,0% 21,6% 17,9% 15,4% 19,3% 6,1% 6,6% 7,7% 7,5% 13,0% 8,6% 27,1% 26,3% 25,4% 22,3% 24,6% 32,6% 11,7% 11,0% 13,1% 8,9% 6,3% 8,3% 2,0% 6,3% 4,3% 3,7% 4,1% 5,6% 4,5% 9,8% 7,7% 8,8% 10,6% 10,5% 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

40

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

41

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

42

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

43

* 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

44

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 interest rate group 3 with the highest guarantees

L I F E A N D P E N S I O N

Collective bonus potential

DKKm

45

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

454 587 827 912 791 3,65% 3,65% 3,00% 4,00% 4,00% 2011 2012 2013 2014 2015 9M 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

46

0% 1% 2% 3% Alm.Brand AP Pension Danica, balance Nordea PFA SEB Skandia, basic Topdanmark 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

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

47

• 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

48

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

16% 82% 2%

Credit institutions and central banks Deposits and

• ther payables

Total subordinated debt

DKK 10.4bn

Funding development

B A N K I N G

Quarterly funcing costs

DKKm

49

73 68 61 53 50 52 36 23 20 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 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

50

3,4 4,0 4,5 5,5 5,4 6,5 5,6 5,4 2,6 2,2 1,4 1,3 1,2 0,9 1,0 11,3 10,9 11,1 9,0 8,6 2012 2013 2014 H1 2015 9M 2015 Deposits at call At notice Other deposits

BANKING Highlights

Forward-looking bank generates profits now

• Writedowns are now normalised
• Profit before writedowns improving
• Results are sensitive to developments in

the financial markets

B A N K I N G

Pre-tax profit

DKKm

51

• 59

10 28 78 8

• 105
• 57
• 118
• 17
• 5
• 164
• 47
• 90

61 3 2011 2012 2013 2014 2015 9M Profit before writedowns Writedowns

Lending demand has been low in recent years The bank is today seeing an increase in customers and lending Increasing activity in Financial Markets and Leasing Lending

DKKm

52

Customers and Lending

3.494 2.983 2.647 2.431 2.493 3.077

2010 2011 2012 2013 2014 9M 2015

Lending to private customers Other loans and advances

7.709 11.614

Q1-2012 Q3-2012 Q1-2013 Q3-2013 Q1-2014 Q3-2014 Q1-2015 Q3-2015

Number of plusCustomers +51%

Profitability on segments

Private

• Results significantly improved during the years

– New customers and lending – Full-service customers with better quality – Cheaper funding Financial Markets

• The groups investment portfolio handled by

Financial Markets

• More new customers and increasing activity
• Turbulent financial markets have been a challenge

Leasing

• Improved profitability due to growth in portfolio
• Increased competition has reduced the growth rate in

2015 Other

• Result negatively impacted by low/negative interest

rates in combination with excess liquidity

B A N K I N G

Profit before writedowns

DKKm

53

• 45
• 35
• 22

7

58 85 46 30

• 2

1 4 9

• 1
• 23

50

• 38

10 28 78 8 2012 2013 2014 2015 9M Private Financial Markets Leasing Other

WINDING-UP ACTIVITIES Highlights

Very significant risk reduction

Writedowns have remained at a high level

• 2014 and 2015 impacted by deteriorating

conditions for agriculture

• Mortgage deeds have come down significantly

in 2015 Results before writedowns improved

• Reduction in funding costs
• Offset by reduction in lending to most

profitable customers

B A N K I N G

Pre-tax profit

DKKm

54

• 101
• 49
• 123
• 76
• 35
• 889
• 423
• 256
• 260
• 199
• 990
• 472
• 379
• 336
• 234

2011 2012 2013 2014 2015 9M Profit before writedowns Writedowns

Winding-up lending

Agriculture

• 60 customers
• 45% pig farmers, 45% dairy

farmers, 10% arable farming

• Gross lending DKK 1.2bn

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

55

955 1.757 2.930 820 1.455 2.497 668 1.094 307 1.874 463 842 260 1.686 Agriculture Commercial lending Mortgage deeds Credit exposure, mortgage deeds 2012 2013 2014 9M 2015

Winding-up lending

B A N K I N G

Development in writedowns

DKKm

56

227 435 226 156 96 155 101

• 23

177 115 8 136 1 185

• 22

5 31 Agriculture Commercial lending Mortgage deeds Credit exposure, mortgage deeds 2011 2012 2013 2014 9M 2015

Agriculture

• Market conditions deteriorated in

Q4 2014 and 2015

Commercial lending

• Stable portfolio with low

writedowns today

Mortgage deeds

• Improved real-estate market have

reduced writedowns

Winding-up lending

B A N K I N G

Loan reduction adjusted for writedowns

DKKm

57

Agriculture Commercial lending

• Stable portfolio with low

writedowns today

Mortgage deeds

• Improved real-estate market have

reduced writedowns

66

• 2.092

1.190 73

• 1.014
• 69
• 34
• 325
• 256
• 37
• 353
• 179
• 20
• 274
• 199

Agriculture Commercial lending Mortgage deeds 2011 2012 2013 2014 9M 2015

CAPITAL TARGET

30 September 2015

Capital target reduced by DKK 329m in the first 9M of 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 Q3 2015

Non-life Insurance (40% of premiums) 2,023 2,017 Life and Pension (8.25% of provisions for insurance contracts) 928 913 Banking (16.0% of risk-weighted assets)* 1,475 1,244 Buffer related to winding-up portfolio 506 429 Diversification effects

• 300
• 300

Total capital target 4,632 4,303

*Calculated as the individual solvency requirement as at 30 September 2015 plus 3 ppts 58

CAPITAL MODEL

Excess capital higher than expected

• Capital target reduced by DKK 329m

primarily related to Banking

• The group has decided to initiate a share

buyback programme of up to DKK 300m

G R O U P

59

Development in excess capital

DKKm

Excess capital FY 2014 adjusted for DKK 85m dividend paid in May Other includes reduction in tier 2 capital and change in treasury shares

126 936 636 428 86 329

• 33
• 300

Excess capital FY '14 9M profit Change in tax asset Change in capital target Other Excess capital Q3 '15 Share buyback Excess capital adjusted for share buyback

Investment mix

• As of 30 September 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 9.8bn

• Mortgage bonds accounts for
• approx. 80% of the portfolio
• Mortgage deeds acquired from

the bank

• Shares account for approx. 3%
• Mandate increased in Q3 ‘15

Banking

DKK 5.6bn

• Primarily mortgage bonds

60

Shares 3% Mortgage bonds 80% Mortgage deeds 17% Shares 16,8% Property 11,3% Mortgage bonds 47,2% Government bonds 12,9% index-linked bonds 5,2% Credit bonds 2,8% Emerging markets 3,8% Shares 5% Mortgage bonds 81% Government bonds 2% Credit bonds 2% Liquidity 10%

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

61

Rasmus Lynge

Marketing Director Employed:2015

History

G R O U P

62

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

• bligation to update these statements, whether as a result of new information,

future events, or otherwise.”

63

Alm Brand Investor presentation December 2015