Results for Q3 2016 Webcast presentation November 2016 G R O U P [PDF]

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Banking | Insurance | Pension

Results for Q3 2016

Webcast presentation November 2016

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Financial highlights of Q3 2016 Pre-tax profit: DKK 334m

Forward-looking activities: Pre-tax profit: DKK 343m

Winding-up activities: Pre-tax loss: 9DKK

Writedowns: DKK 24m

G R O U P

Non-life Insurance

Pre-tax profit: DKK 310m

CR: 76.7
Expense ratio: 16.1
Premium growth: -1%

Life and Pension

Pre-tax profit: DKK 23m

Growth in regular

premiums: 21.2%

Bonus rate: 17.5%

Banking

Pre-tax profit: DKK 24m

Writedowns: Reversal of

DKK 8m

Growth in retail lending and

in full-service customers

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Comments on Q3

Very strong performance in Non-life Insurance driven by strong underlying results, run-off gains, benign weather and investments More customers in banking, insurance and pension

But prices are under pressure, especially in

insurance and banking Fovourable investment results despite financial turmoil

G R O U P

Financial highlights, 9M Group Pre-tax profit: DKK 817m

Non-life Insurance Pre-tax profit: DKK 736m

CR: 81.5
Expense ratio: 16.5

Life and Pension Pre-tax profit: DKK 78m Banking Pre-tax profit: DKK 47m Winding-up activities Pre-tax loss: DKK 3m

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Customers First

Very strong customer satisfaction above target for the Group

Target 2016 of 30 already

reached in 2014 Very satisfactory retention rate

Improving for both private

and commercial customers

G R O U P

Group NPS

18 18 22 23 23 26 27 24 29 30 31 30 33 35 36 34 36 40 39

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2013 2014 2015 2016

4

Retention rate – Non-life Insurance

86% 87% 88% 89% 90% 91% 92% dec-09 dec-10 dec-11 dec-12 dec-13 dec-14 dec-15 Commercial Private

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NON-LIFE INSURANCE Highlights

Pre-tax profit of DKK 310m in Q3

High run-off gains
Benign weather
Positive investment return
Expensive major claims on Commercial

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

Pre-tax profit

DKKm

5

Note: Figures for 2013 and 2014 based on previous accounting principles

237 130 356 294 811 692 29

25
54

16

89

44 266 105 302 310 722 736 2013 2014 2015 2016 2015 2016 Q3 9M Investment return after interest

n provisions

Technical result

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Combined ratio

Combined ratio of 76.7

Better than expected + Run-off gains improved CR by 11.3 ppts excl. run-off gains on risk margin + Weather-related claims lower than expected ÷ Major claims higher than expected ÷ Lower average premiums

Underlying combined ratio of 77.4

Better than expected + Delayed claims in Q2 was too high leading to lower actual claims in Q3 + Lower average claims ÷ Higher frequency of claims

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

Combined ratio

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Note: Figures for 2013 and 2014 based on previous accounting principles 81,7 89,9 72,2 76,7 78,6 81,5 0,5 1,2 8,9 11,3 7,8 8,3 82,2 91,1 81,1 88,0 86,4 89,8 2013 2014 2015 2016 2015 2016 Q3 9M Combined ratio Run-off 74,1 77,2 74,8 77,4 78,2 2013 2014 2015 2016 2015 2016

Underlying combined ratio

80,0 Q3 9M

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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 8.4 Above expected range of 7-8%

More major claims than expected on commercial

customers

Claims impacted by large fire incidents
Major claims totalled DKK 107m

Weather-related claims 1.9 Below normal expectation of 3-4%

Relatively benign weather
Net expenses totalled DKK 24m

Weather-related claims ratio

7

Note: Figures for 2013 and 2014 based on previous accounting principles 7,4 6,7 3,0 8,4 8,0 2013 2014 2015 2016 2016 Q3 9M Major claims ratio Average expectation (7-8%) 0,7 6,9 3,1 1,9 1,7 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 2013 2014 2015 2016 2016 Q3 9M Weather-related claims ratio Average expectation (3-4%)

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Premiums impacted by intensified competition

Premium income down by 1% Y/Y Private unchanged

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%

Commercial market very competitive
Sales higher than expected
Lower average premiums on agricultural and

motor insurances in particular

Customer retention still at a high level and slightly

increasing

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

Premium income

DKKm

8

Note: Figures for 2013 and 2014 based on previous accounting principles 668 668 659 658 613 609 621 609 1.281 1.277 1.280 1.267 2013 2014 2015 2016 Q3 Private Commercial

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Private

Very satisfactory results

Combined ratio of 77.1

Improved 1.4 ppt Y/Y

Higher weather-related claims

Impacted CR by 1.9 ppts – still low

Higher run-off gains on claims Underlying business deteriorated in Q3 Y/Y

Higher claims frequency, lower average claim
Higher claims frequency, especially on travel and cars
Expense ratio at 17.5 – down by 0.3 ppts Y/Y

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

Combined ratio

9

Note: Figures for 2013 and 2014 based on previous accounting principles 70,3 69,4 60,6 59,6 65,7 62,4 17,1 16,6 17,8 17,5 17,4 17,7 87,4 86,0 78,4 77,1 83,1 80,1 2013 2014 2015 2016 2015 2016 Q3 9M Gross expense ratio

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Commercial

Very satisfactory results

Combined ratio of 76.3

Worsened by 10.9 ppts Y/Y Higher run-off gains on claims

DKK79m vs DKK70m in Q3 2015

Weather-related claims down to 2.0 ppts from 3.9 ppts in Q3 2015

Below expected level

Higher major claims

14.4 ppts on CR against 4.2 ppts in Q3 2015
Especially due to fire claims

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

Combined ratio

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Note: Figures for 2013 and 2014 based on previous accounting principles 61,6 82,1 52,4 61,8 59,5 67,8 13,9 12,1 13,0 14,5 14,3 15,3 75,5 94,2 65,4 76,3 73,8 83,1 2013 2014 2015 2016 2015 2016 Q3 9M Gross expense ratio

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LIFE AND PENSION Highlights

Pre-tax profit of DKK 23m Up by DKK 14m Y/Y

In 2015 DKK 10m was transferred to the shadow

account

Satisfactory underwriting profit
DKK 14m Y/Y

Bonus rate

Bonus rate is now calculated based on both

collective and individual bonus potentials

Bonus rate of 17.5% (down from 18.4 % in Q2)

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

Pre-tax profit

DKKm

11

22 18 10 21 48 71 2

1

2 1 7 22 20 9 23 49 78 2013 2014 2015 2016 2015 2016 Q3 9M

Return on investments allocated to equity Underwriting profit/loss

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Pension contributions

Pension contributions unchanged

Pension premiums up by 10.2% Y/Y

Single premiums up by 0.7%
Increased fee when making single payments
Regular premiums up by 21.2%
Including Forenede Gruppeliv
Excluding FG: Growth of 3.9%

Unguaranteed investment schemes in the bank down by 26.7% Y/Y

Typically negatively impacted by financial market

turmoil

Development not satisfactory

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

Total pension contributions

DKKm

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118 114 114 139 72 97 134 134 77 89 99 73 267 300 347 346 2013 2014 2015 2016 Q3 Regular premiums Single premiums Investment schemes

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Strong risk result in Q3

Expense, risk and group life results

Very satisfactory risk result
Expense result balanced

Interest result up by DKK 2m Y/Y

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

Profit split*

DKKm

13

* Profit before tax of Life and Pension, which includes post-tax return on investment in the EMD Local Currency investment fund

21 12 15 15 2 5 4 6

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1

1

2

1

2

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, risk and group life results Interest result Result of portfolios without bonus entitlement Return on investments allocated to equity

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BANKING Highlights

Pre-tax profit of DKK 24m

Up by DKK 21m Y/Y

Continued growth in full-service customers and

lending – 13% more full-service customers Y/Y

Profit better than expected
Reversal of writedowns again in Q3 2016

– DKK 8m

B A N K I N G

Pre-tax profit

DKKm

14

14 34 8 16

18
3
5

8

4

31 3 24 2013 2014 2015 2016 Q3 Profit before writedowns Writedowns

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More customers in all segments

B A N K I N G

Profit before writedowns

DKKm

15

Private

Results up by DKK 8m Y/Y

– Impacted by positive writedowns – Negatively impacted by reduced funding requirement for winding-up activities

Gross lending up by DKK 26m in Q3 and DKK137m Y/Y
Lending via Totalkredit up by DKK 235m and DKK 1.1bn

Y/Y Leasing

Unchanged profit
Continued growth in number of leased cars

Financial Markets

Positive value adjustments improved results Y/Y
More customers and assets under management in Q3

2016 Other

Results negatively impacted by low/negative interest rates

in combination with excess liquidity

Favourably impacted by value adjustments

Note: Other excluding effects from Alm. Brand Formue

5 -4

4

1

2

2

4 4 16 7 11 15 4 33

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2

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 Private Leasing Financial Markets Other

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WINDING-UP ACTIVITIES Highlights

Pre-tax loss of DKK 9m

Writedowns of DKK 24m

Q3 2015: DKK 74m

Profit before writedowns of DKK 15m

Improvement driven by cheaper funding and by

non-recurring positive value adjustment on shares taken over Loan portfolio reduced by DKK 25m adjusted for writedowns

B A N K I N G

Pre-tax profit

DKKm

16

24
21
8

15

75
56
74
24
99
77
82
9

2013 2014 2015 2016 Q3 Profit before writedowns Writedowns

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Writedowns

Writedowns of DKK 24m

Agriculture

Conditions in agriculture still difficult
Major writedowns back in 2015 as conditions

worsened significantly Commercial lending

Writedowns DKK 1m

Mortgage deeds

Writedowns still at a low level
Reversal of DKK 6m on the bank’s portfolio of mortgage

deeds due to resumed debt servicing

Other writedowns at expected level

B A N K I N G

Writedowns

DKKm

17

Mortgage deeds include credit exposure from option agreement 89 9 10 14

19
13
6

1 37 3 9 8 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Agriculture Commercial lending Mortgage deeds

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CAPITAL MODEL

Excess capital DKK 342m higher in Q3 Profit in Q3 contributed significantly to capital development Excess capital increased by utilisation of tax asset and lower capital target

Lower capital target in the bank

G R O U P

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Development in excess capital

DKKm 668 1.010 265 48 19 10

Excess capital Q2 '16 Profit after tax Q3'16 Change in tax asset Change in capital target Other Excess capital Q3'16

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Outlook for FY2016

Raised by DKK 200m

DKK 900-1,000m

Pre-tax profit

Forward-looking activities: Pre-tax profit of DKK 925-1,025m

Winding-up activities: Loss adjusted to about DKK 25m

G R O U P

Non-life Insurance

Pre-tax profit: DKK 900m Raised by DKK 200m

CR at the level of 83-84
Expense ratio at the level of 16.5
Premiums down by 1%

Life and Pension

Pre-tax profit: DKK 90m Unchanged

Banking

Pre-tax profit: DKK 50m Unchanged

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Non-life Insurance: Higher investment results. High positive run-offs. Benign weather. Major claims in commercial. Life and Pension: Satisfactory results and growth in regular premiums in line with expectations Banking: Increase in lending and continued growth in full-service customers Winding-up activities: Overall performance better than expected Outlook FY2016 profit of DKK 900-1,000m

G R O U P

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Highlights

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“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.”

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Banking | Insurance | Pension Webcast presentation November 2016