Gjensidige (GJF) Q2 2024 (Q&A) earnings summary

Executive summary

• Profit before tax for Q2 2024 rose to NOK 1,830.5 million, up from NOK 1,333.9 million year-over-year, driven by 9.7% insurance revenue growth, but offset by high claims in Norway, especially in motor and property.

• Return on equity annualized at 20.2%, with a combined ratio of 85.4% in Q2 2024, reflecting higher claims frequency and severity.

• Significant pricing and deductible measures have been implemented to counteract claims inflation, with willingness to sacrifice volume if necessary.

• Customer retention remains high despite substantial price increases, supported by strong brand and customer satisfaction.

• Strong growth and improved profitability in Sweden and the Baltics, with continued high retention and organic growth in Denmark.

Financial highlights

• Insurance revenue grew 9.7% year-over-year to NOK 9,831.7 million in Q2 2024.

• Insurance service result was NOK 1,434 million, including a NOK 402 million positive impact from risk adjustment changes under IFRS 17.

• Investment returns totaled NOK 540 million; annualized return on equity reached 20.2%.

• Combined ratio for Q2 was 85.4% (up from 83.2%), with loss ratio at 72.2% and cost ratio at 13.2%.

• Solvency ratio stood at 170% at quarter-end.

Outlook and guidance

• Combined ratio target for 2024 (<84%) is challenged by high claims in H1, but all financial targets for 2025 and 2026 are maintained.

• Claims inflation expected to remain in the 5%-7% range for property and around 7% for motor in Norway for the next 12-18 months.

• Ongoing pricing and deductible measures are expected to gradually improve profitability as policies renew.

• Focus remains on profitability over growth, with continued cost efficiency and operational improvements.

• Organic growth expected to align with nominal GDP growth in Nordic and Baltic markets.