Sjóvá-Almennar tryggingar (SJOVA) Q3 2024 earnings summary

Executive summary

• Net profit after tax for Q3 2024 was ISK 1,441 million, down 17% year-over-year; net profit for 9M 2024 was ISK 1,429 million, a 38% decrease from 9M 2023.

• Combined ratio improved to 89.9% in Q3 2024 from 92.7% in Q3 2023, reflecting strong core operations.

• Premium income grew 6.9% year-over-year in Q3 and 8.1% for 9M 2024, with market share gains.

• Investment returns were positive at 2.3% in Q3, but lower than last year, with 3.8% for 9M 2024.

• Large fire losses remain a concern, impacting results over the past two years.

Financial highlights

• Q3 2024: Net profit ISK 1,441m (-17% y/y), pre-tax profit ISK 1,599m; 9M 2024: Net profit ISK 1,429m (-38% y/y), pre-tax profit ISK 1,775m.

• Insurance contract profit before tax in Q3 was ISK 877m (+47.6% y/y); investment profit before tax ISK 710m (-46.2% y/y).

• Claims for the period increased by 3.8% year-over-year; claims incurred for 9M 2024 rose to ISK 18,391 million.

• Operating expenses for insurance contracts rose by nearly 12% in Q3 and to ISK 4,825 million for 9M 2024.

• Investment income declined 14% year-over-year due to a one-off gain from bond sales in the prior year.

Outlook and guidance

• Full-year pre-tax profit from insurance contracts is expected between ISK 1,100–1,600 million, with a combined ratio of 95–97%.

• For the next twelve months, pre-tax profit guidance is ISK 1.7–2.4 billion, with a combined ratio of 93–95%.

• Finance costs for insurance contracts are projected to remain high, around ISK 1,600 million, as long as interest rates stay elevated.

• Management highlights ongoing risk and uncertainty factors affecting the group.