Skagi (SKAGI) investor relations material

Executive summary

• Achieved best Q1 insurance result in eight years, with combined ratio at 98.3% and strong premium growth, especially in life & health insurance (+11.2% YoY).

• Core pre-tax profit improved by ISK 200m YoY, but group reported a net loss of ISK 336m due to negative equity returns in the insurance investment portfolio.

• Group assets totaled ISK 87,231m and equity stood at ISK 22,675m at quarter-end.

• Financial services segment saw modest profit growth despite a soft revenue quarter, with cost reductions offsetting lower fee income.

• Strategic refresh and structural changes implemented after merger talks with Íslandsbanki ended, aiming for annual cost efficiencies of up to ISK 180m.

Financial highlights

• Insurance revenue grew 7% YoY to ISK 8,048m; insurance service result improved by ISK 189m YoY.

• Net interest income up 43% YoY; net fee and commission income down 9% YoY.

• Investment income rebounded to ISK 366m (0.7% return), but still below target due to weak equity markets.

• Operating expenses decreased 8% YoY; group FTEs reduced to 234 from 240 YoY.

• Pre-tax loss of ISK 333m, a 76% improvement YoY; loss after tax ISK 336m, a 75% improvement YoY.

Outlook and guidance

• Financial targets for 2026 remain broadly on track, with confidence in reaching full-year goals despite short-term volatility in investment returns and financial services revenue.

• Combined ratio ahead of Q1 target and tracking above full-year target; investment returns and financial services revenue currently below target.

• Combined ratio target for 2026 set at 92–95%.

• Financial services revenue expected above ISK 3,500m (range: ISK 3,300–3,800m); expected return on insurance investment assets is 9.5%.

• Skagi operations and investment performance expected to remain volatile on a quarterly basis.