Earnings call transcript: Alm. Brand Q2 2025 shows insurance growth

Alm. Brand reported its Q2 2025 earnings, showcasing a mixed financial performance with notable growth in certain segments. The company, with a market capitalization of approximately 4.06 billion USD, experienced an 8% decline in organic growth, but improvements in its adjusted EBITDA margin and insurance revenue growth were highlights. The stock responded positively, increasing by 4.71% following the earnings release. According to InvestingPro data, the company has shown strong momentum with a 25.91% return over the past six months.

Key Takeaways

• Alm. Brand’s insurance revenue grew by 8.3%, with Personal Lines up 11%.
• The company upgraded its full-year profit guidance to €1,700-1,930 million.
• Stock price rose by 4.71% post-earnings announcement.

Company Performance

Alm. Brand’s Q2 performance was characterized by a decline in organic growth, yet the company managed to improve its adjusted EBITDA margin. Insurance revenue growth was robust, particularly in Personal Lines, which saw an 11% increase. The company also reported synergies of €151 million and a reduction in cost ratios, indicating operational efficiencies.

Financial Highlights

• Revenue: Not specified in the earnings call.
• Earnings per share (EPS): Not specified in the earnings call.
• Technical result: DKK 20 million, down from DKK 312 million last year.
• Investment income: CHF 102 million.
• Group technical result: DKK 100 million.

Market Reaction

Alm. Brand’s stock price increased by 4.71% to 17.42, reflecting investor optimism following the earnings announcement. The stock is trading closer to its 52-week high, with InvestingPro analysis suggesting slight undervaluation based on their proprietary Fair Value model. The company maintains strong financial health with a current ratio of 41.9, indicating excellent liquidity. This uptick in stock price aligns with the company’s strong insurance revenue growth and upgraded guidance.

Outlook & Guidance

The company has upgraded its insurance service result guidance to a range of €550-1,600 million and its investment results guidance to €250 million. The expected full-year profit guidance has been raised to €1,700-1,930 million. These revisions reflect confidence in maintaining growth momentum and operational efficiencies.

Executive Commentary

"We’re pleased with the overall financial performance in Q2," stated CEO Rasmus Sperner Nielsen, emphasizing the company’s strong insurance revenue growth. Nielsen also highlighted the company’s strategic focus: "We see a clear path towards reaching the strategic target of our technical results."

Risks and Challenges

• Market conditions: Hardening reinsurance market could affect costs.
• Economic pressures: Macroeconomic factors may impact consumer spending.
• Competitive landscape: Intense competition in the insurance sector.
• Regulatory changes: Potential impacts from changes in insurance regulations.
• Operational costs: Continued focus needed on managing restructuring costs.

Q&A

During the earnings call, analysts inquired about Alm. Brand’s pricing strategy and renewal timeline, as well as capital solvency and potential future adjustments. The company addressed these concerns, emphasizing its robust capital position and strategic pricing initiatives.

Full transcript - Alm. Brand (ALMB) Q2 2025:

Seth, Moderator/Call Operator: Hello, everyone, and welcome to today’s Own Brand Q2 twenty twenty five Conference Call. Hello, everyone. My name is Seth. Today, I’ll be your Brand Q2 twenty twenty five.

Participant/Respondent: If you

Seth, Moderator/Call Operator: would like to ask a question I hand the floor begin. Go ahead. Will will now hand the floor to to Rasmus Resmiss Sperner Berna Nielsen, Nielsen, CEO, CEO. Go ahead.

Rasmus Sperner Nielsen, CEO, Own Brand: This morning, we published our interim and the Head of the Second Quarter IR team, Matt Dene. As usual, I will walk you through this morning’s highlights and then Andreas will the second quarter. As usual, I will walk you through slide three. Will comment I’m I’m pleased with the overall financial performance in the sales spectrum

Analyst/Questioner: in Q2,

Rasmus Sperner Nielsen, CEO, Own Brand: drop in the increased by synergies and past year, while the underlying organic growth was down about 8% in Q2 Organic by the synergies and price adjustment as growth of about 8%. Insurance revenue growth of 11% in the Personal Lines, which implies we’re taking quite a Insurance revenue growth of 11% in the Personal Lines partnerships, which implies we’re taking quite a bit of market share are kicking in. Our strong bank synergies are materializing just as we planned, currently we’re seeking good momentum for claims. Synergies are materializing just as we planned, adjusted EBITDA margin improvement in lower discount effect well as claims.

Participant/Respondent: Slightly adjusted

Seth, Moderator/Call Operator: Adjusted EBITDA EBITDA was

Rasmus Sperner Nielsen, CEO, Own Brand: billion. The The technical result was very strong €20,000,000 versus DKK312 million last year. The technical result was a healthy DKK20 million supported by a strong underlying development and good cost control.

Analyst/Questioner: We view

Rasmus Sperner Nielsen, CEO, Own Brand: this as a clear path supported by a strong underlying development of our target of our technical results. We see a clear path towards reaching the strategic target of our technical results. Investment income in Q2 was a very sensitive profit of 102,000,000. Investment income in Q2 was a very sensitive profit of CHF102 million, which will provide our adjusted for the full Both slides illustrate that we have had On average during the last quarter, we had a better overall position in our continuing business. However, we will continue to work with the further reduction of IFRS Now let us continue on Slide seven.

Group made a technical result of 100,000,000 was commercial lines was impacted by very large major €6,000,000 as as well as underlying underlying

Seth, Moderator/Call Operator: losses. Commercial lines was impacted by

Rasmus Sperner Nielsen, CEO, Own Brand: very very large Personal lines, we had a small increase in insurance services last year with good $2.86 underlying improvement, countering much lower than last year. So even though the Insurance Services result was just slightly higher this year, the quality was much higher. Revenue grew strong by 8.3% the quarter compared to 5.2% last year. Insurance revenue grew strong by would five say credit growth quarter was very satisfactory with an accelerating strong momentum. I would say our Personal Lines growth very stable.

Do consider eight commercial lines share rebounding in premium growth despite a drag on the premium growth to come from our largest clients, especially in relation the And moving on to Slide nine on the claims ratio. Q2 claims ratio was down paid to our underlying claims ratio was based on a better year on year especially driven by Commercial Lines. Moving to a foreign discount basis on a better year on year, see a five twenty basis point improvement in the Moving to the underlying claims ratio. 300 basis The combined ratio in present lines increased now 81.6%. 82%.

The combined ratio in present lines increased last year 80 due one to 160 basis point run off gains from April compared to run off gains of 500 basis due to 160 basis points run off gains in the quarter. Better and the underlying loss premium adjustments are helping the cost ratio fall. Quality is getting much better premium motor frequency is helping the cost ratio as well as And the continuing increase in the average motor seeing motor increases starting in We see a bit

Analyst/Questioner: of

Rasmus Sperner Nielsen, CEO, Own Brand: that. See continuing increase in the average motor change. To Slide 11 and Commercial Commercial Lines, we see a significant decrease in combined ratio. Turning to Slide 11, see Lines, we see a 97 increase in the combined ratio. The metric is down due to a combination of major claims coming down from a very high level last year.

The metric while the underlying loss due to a combination of major claims coming down from a very high level last year. Cost ratio dropped while the underlying loss ratio improved by synergies and cost synergies. On the other hand, lower discounting effects

Participant/Respondent: costs

Rasmus Sperner Nielsen, CEO, Own Brand: making a significant headwind for the combined ratio. With

Matthias Nielsen, Analyst, Nordea: these comments,

Rasmus Sperner Nielsen, CEO, Own Brand: now I

Seth, Moderator/Call Operator: hand over to Andreas who

Rasmus Sperner Nielsen, CEO, Own Brand: will walk us through

Participant/Respondent: the financials. Now please turn to Slide 13 for an update on synergies. Thank you, Anders. We had a nice jump now from the synergies 2025 to €151,000,000 had a nice €6,000,000 out of the synergies in Q2 twenty twenty five to CHF 155,000,000 from CHF 166,000,000 in synergies year on year, improving our underlying claims ratio, which implies a 45,000,007 percentage points in our cost ratio year on year, improving our underlying claims ratio year on year. CHF 0.7 is currently quite reasonable.

Seth, Moderator/Call Operator: Zero

Participant/Respondent: remain confident that the synergies of the full year will add up by the balance of €100,000,000 we have stated. Move to Slide €14,000,000 primarily driven by a positive from our return on bonds and equity held by the VA drivers and the strong components that we can’t hedge. Return on bonds and finally, with the key drivers for Slide 16, for the outlook for 2025, which we update finally, we upgrade our guidance for the insurance service outlook in 2025, euros $550,000,000 to 1,600,000.0 So we upgrade our guidance for the insurance service result in 2020 the realized run off gain is 1.22%. The cost ratio is unchanged at 17% due to 5% realized run off gains, but the combined ratio excluding the run off expected to be 84%. Results point five The guidance includes synergies of €56,000,000 again and the effect of implemented pricing efforts in commercial as a guidance guidance of personal includes synergies of 600,000,000 We upgraded the guidance for the investment results of €50,000,000 to €250,000,000 while the guidance for other income were minus €150,000,000 €250,000,000 the guidance for other income and expenses were Consequently, profit one excluding million special costs excluding one offs 100 gained for the second half 7,300,000,000.0 to €1,930,000,000 In addition, we forecast the unchanged restructuring costs for the second half of €175,000,000 in addition of which 25,000,000 unchanged from the restructuring costs of our Energy and Marine business.

175,000,000

Matthias Nielsen, Analyst, Nordea: And with this,

Participant/Respondent: I conclude

Seth, Moderator/Call Operator: our presentation. Thank you. Question here is from Asbjorn Mork from Danske Bank. Please go ahead. First question here is from Asbjorn Mork

Participant/Respondent: from Danske Just

Analyst/Questioner: one question of the EUR 1,700,000,000.0, and I guess guidance sort of like run off in the second half. 120,000,000,000, midrange I guess just to EUR 18,200,000,000.0, strong development in the first half of the year should

Participant/Respondent: be Yes. Think I’ll try to add to that. I think mechanically, you’re right. I would, however, say that I’ll try to We guide to that sort of round numbers. I think mechanically, you’re right.

I would, however, say the round number. I mean, we guide to sort of round numbers is in line with an overall expectation around 18

Seth, Moderator/Call Operator: including a 50

Participant/Respondent: normalized Then on the growth

Analyst/Questioner: side, first, if you could sort of split the 11% growth private side into what sort of weaker pricing, what is the 11% growth in what is the private underlying growth in your

Participant/Respondent: 11% we’re very satisfied with that. Tried to do that impressive number, we also believe. 11%, we do do have

Seth, Moderator/Call Operator: I also believe.

Participant/Respondent: I would put around 3% We from do have the rough rough numbers, Jason. I would put around 3%, I would say, around 4% indexation time is from the pricing And I would say around 4%, quite high in time is also that from the pricing strategy and the reason for that being quite high in time travel insurance for this quarter now have some big changes into repricing of travel insurance. That actually accounts for roughly around two percentage changes just for that going into So that’s why we are high on the pricing. That actually accounts for roughly around two percentage And then the rest around So that’s why we are higher on the pricing. We would consider market share gain.

Then the rest a lot of that is also from banking partners, we also have

Seth, Moderator/Call Operator: momentum in the other brands. Still, a

Participant/Respondent: I would say, it’s true that’s

Analyst/Questioner: true. On the corporate, the Avelsikring, very helpful. On two years ago, we haven’t had that much

Seth, Moderator/Call Operator: Is that one of the drivers as well as few years ago and we haven’t had that much

Analyst/Questioner: space space for for commercial space? Or is there sort of a

Participant/Respondent: deal that we should take commercial lines, which is about 5% closer to what we would say, let’s say, We’re just above 5% price and utilization Not we have in the numbers, let’s say, a lot of market shares being had there. Not a

Seth, Moderator/Call Operator: Not a

Participant/Respondent: lot lot of of market market shares shares have have been been changed Impacted. It is still I say something where we have yet to tap into the potential. And how come Last time, it’s not really numbers for now.

Analyst/Questioner: Delivering anything or is that something you’ll come back

Participant/Respondent: to in the end of anything or is that something you’ll come back to in think end of to think Well, I it’s quite new. Think can to look at the basic and a brief comment around it. I think Investigating is also private. Personal lines, hard for basic and long standing to to something that matters to an IndiFine.

Analyst/Questioner: Okay. Then on the actual repricing, so the Q1 report we discussed on the call. On the structural repricing, was quite a lot of from repricing that you had already sort of in the rest of

Participant/Respondent: the year or Where are

Analyst/Questioner: we now in terms of how much do we have still sort of on the revenue table from repricing measures? Where are we now in terms of how much do we have

Participant/Respondent: still on the premiums table in terms of the pricing? Mean, we gave some clarity around renewals in overall. I would say, around If numbers are you look at total renewals, we would have around 50% renewals in months are, and we would have 50% renewing, we would have around Q3. 50%, and then we have 50%. Would have 5070%, and would 50%.

Means that right now, be rough numbers somewhere around onethree of the portfolio still. Means that right now, we would be roughly somewhere around And then you can say, okay, we maybe started a bit before. Yes, and also true. So that might and then you could say, okay, but we may be starting at 54 of our pricing. So max around our max around one third

Analyst/Questioner: All right.

Seth, Moderator/Call Operator: Our

Analyst/Questioner: And then final question from my side, on the capital side. So your solvency comes out on capital side with the PIM model. So your solvency approval obviously comes out, I guess, you’ll be something like 43% at PIM higher approval, which I guess you’ll be almost 300% higher

Participant/Respondent: in the

Analyst/Questioner: next quarter, which I guess How should we look at that almost two forty Should we wait until how should we fully get that 25% before you will address the capital position? Or is it going to

Participant/Respondent: topic? Or is this going be already Q3? The TIM model for now, as we’ve already guided, is around I mean million TIM model for now, as we’ve already guided, is around 500 I think that comes to around 18 percentage points or so on solvency. I think that comes all around 18 percentage points As or we I think our guidance for now would be that all sort of moving factors, we have some Tier two. On the other hand, we also do have some surplus

Seth, Moderator/Call Operator: think for now, we have surplus factors.

Participant/Respondent: Factors. Factors. But But SGR now, we like capital reduction coming out around a one on one. We also have ratings factors like SGR relief and our ratings and other factors. We also have ratings factors we sort

Seth, Moderator/Call Operator: to in numbers and other factors. You’re right. Of would

Participant/Respondent: So then number one is how we will see sort of Just to understand, Andreas,

Analyst/Questioner: the 18% That would

Participant/Respondent: be a story for later

Analyst/Questioner: So is that because you’re just to understand, Andreas, so the 18% will drop or is that because you’re

Participant/Respondent: Well, I just took the 500 and divided by minus 800.

Analyst/Questioner: Why is it only 18%?

Participant/Respondent: Which is our SCR for now. I just took that 500 and violation. And what I said before is I mean, if you look at it all else equal, as Ben, you could do that same And what I said before, multiply if you look at it all else equal, Adven, you could we should maybe multiply 600. That’s from 1.2. 50% of Adven disappears because of that 600.

That’s from SCR? 50% of it. Then we have coverage surplus cap coverage of 1.7 But on the SCR what I’m saying is I think we should guide around to 500 for now. Think about 500 because we also also have rating and other factors. What I’m saying is to analyze either we are able to 500 for now, we think about 500 because we also have rating and other factors.

No, I fully agree. More that I take the burden where we

Analyst/Questioner: are in the big No, no, I fully agree.

Participant/Respondent: I was looking at it from a segment perspective.

Rasmus Sperner Nielsen, CEO, Own Brand: No. Okay. Got it. That’s very different. Just have decide what we will do with that.

Analyst/Questioner: All right. But that’s very clear. Thanks

Seth, Moderator/Call Operator: next question is from Matthias Nielsen at Nordea. Please go ahead.

Matthias Nielsen, Analyst, Nordea: So my first question is a bit around this Mexico we’ve reinsurance part. And then related to this like retention,

Participant/Respondent: only worried about or how to think about that? Coming on the Mexico claim, that is as you also mentioned, we’re just thing coming on the Mexico claim. That claims we also mentioned from the old is the only Energy and Marine business, which the only distill and claim in the minibund. All else is not in the industry. Is not a part we’re actually tapping into a program, which is dated Reinsure all the way back to for that February.

We’re actually tapping into a Historically, they determine all the way back to in Basel, we still tap into. That’s the way our tax reinsurance works. So we have prepayment and other things are type of reinsurance work. We have the historic program, which is not relevant for us to stay in the middle part. Also, it was within historic programs and not relevant for us today.

So basically, you can say there’s no direct connection between this program and the programs we have. So basically, you can say there’s no direct connection But in this program, you’re right, has been in recent years to date hardening of the reinsurance The general comment, you’re right, there has been to in recent years, the hardening of the prepayment reinsurance market for the reinstatement. In the old days and the old good days, a lot of our programs didn’t have reinstatement for the reinstatement. Whereas in the old days and the old good days, a lot of our programs didn’t

Rasmus Sperner Nielsen, CEO, Own Brand: have reinstatement.

Participant/Respondent: So what statement? Just to restate, the actual claim here and the program is being handled and has no connection Just to to restate the actual Luv. Claim here and the program has have been handled and has no no That’s very clear. Thank That clarity is just one question we have for our operation.

Matthias Nielsen, Analyst, Nordea: No risk in that one. It sounds

Rasmus Sperner Nielsen, CEO, Own Brand: And given the rate on the Is there any front loading

Matthias Nielsen, Analyst, Nordea: premium growth, correct, we expected that how you feel more favorable pay for your sales? Is there any front loading? How does that cost you when you said something like how is the variable pay for

Participant/Respondent: your Overall, I would say that the BPC has more or less what you would expect on average going forward. Overall, I would say that also roughly the guidance we keep in mind, that some of the growth we have when you grow a lot to also roughly the guidance we have, keep in mind, pricing some of the markets we have, you grow a lot, that’s not that’s typically also there’s some headwind the program. But because the market share actually pay that’s not that’s typically also for the FID headwind in some of the cost raises, but instances you would also pay going forward. Also for the partners. So you it’s not in the beginning.

Actually, that table comes with a lot of tailwind from the growth we see in the beginning. Okay. That’s like one, two quarters away still. You’ve been out of this

Matthias Nielsen, Analyst, Nordea: year, like the tailwind from the growth that you saw this quarter. So that’s like one, three quarters away still that we would want to see.

Participant/Respondent: Not exactly. I I think I’m talking more broader terms, but at least it’s something that takes some time to materialize.

Seth, Moderator/Call Operator: With it’s something

Participant/Respondent: insurance,

Seth, Moderator/Call Operator: takes some time to

Participant/Respondent: when you sell. Sell by in general when you actually grow a lot, you will have a cost of sales in the quarters you grow is when you saw a headwind from that. So in general, when you grow a light, you will have a type of sale in

Rasmus Sperner Nielsen, CEO, Own Brand: the quarter, so you grow And then my last one, so

Matthias Nielsen, Analyst, Nordea: it’s a bit coming back to

Rasmus Sperner Nielsen, CEO, Own Brand: Yes, that we be worried I

Participant/Respondent: think without reading too much into it, I think, as I said, we’ve guided for round numbers. There’s nothing to be worried about. Think without reading too much into it, I think we should be in any way guidance around numbers. And we should be no way in the balance anyway. I think this would correspond fine with what we’re worried about in the second target.

And I can also understand and mechanically, can see where

Rasmus Sperner Nielsen, CEO, Own Brand: we are

Participant/Respondent: going, but fine. And I wouldn’t read too much into that target. And I can also understand,

Analyst/Questioner: so what I can tell you,

Participant/Respondent: but again,

Matthias Nielsen, Analyst, Nordea: I would eighteen fifty was based on normalized large scale. So what was I see? How from the normalized to 1850 was based on normalized

Participant/Respondent: word different approach here. We’ve tried to be maybe adding 100 and And adding, sorry, here for now, if I hadn’t read more into it than that. Perfect. Thanks, was a little bit Couldn’t jump here for now, but I wouldn’t read more into it than that. Perfect.

Thanks, Lars. That was Thank a you.

Seth, Moderator/Call Operator: So we have no further questions on the call. So Rasmus, I’ll hand back to you for any closing comments. Yes. Thank We have you no further questions on the call. So Rasmus, I’ll hand back to you for any closing comments.

Rasmus Sperner Nielsen, CEO, Own Brand: You all for for participating.

Seth, Moderator/Call Operator: This concludes today’s conference call. Thank you all for joining. You may now

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.