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Investing.com -- Norwegian insurer Gjensidige Forsikring ASA delivered a significant earnings beat in its latest quarterly report, driven by favorable claims conditions and supportive market performance.
The company reported a profit of NOK2,245 million, exceeding consensus estimates by 40%. The insurance service result reached NOK2,201 million, 23% above expectations, with the Private division leading the outperformance, though all divisions showed positive results.
Gjensidige’s loss ratio improved to 67.1%, which was 3.5 percentage points better than consensus forecasts. This improvement stemmed from lower frequency losses due to benign weather conditions and underlying operational improvements. The underlying loss ratio was 62.8%, outperforming expectations by 4.9 percentage points, despite large losses being 1 percentage point higher at 5.2%.
Insurance revenues totaled NOK10,493 million, approximately 2% higher than consensus estimates. Private lines revenue increased about 15% year-over-year, primarily from price increases, while Commercial lines grew approximately 9% compared to the same period last year.
The company has revised its outlook for claims inflation, now projecting 3-6% in motor insurance (down from 4-7% previously) and 3-5% in property (reduced from 4-6%). Price increases are expected to moderate but remain elevated at 14.5% in Property (down from 17.5% in April) and 16% in motor (down from 19.5% in April).
The Pensions division reported a pre-tax profit of NOK201 million, substantially higher than the NOK94 million consensus estimate, benefiting from strong investment results and business growth.
Investment results reached NOK1,102 million, approximately 20% better than expected, reflecting high running yields, tightening credit spreads, and positive returns from equities and real estate investments.
The company’s solvency ratio stood at 182%, about 5 percentage points lower quarter-over-quarter, impacted by merger and acquisition costs and a higher Solvency Capital Requirement resulting from business growth.
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