Earnings call transcript: Alm. Brand’s Q1 2025 results miss expectations

Alm. Brand (market cap: 3.43B USD) reported its Q1 2025 earnings, revealing a significant miss on both earnings per share (EPS) and revenue compared to forecasts. The company posted an EPS of $0.10, falling short of the expected $0.25. Revenue reached 2.86 billion DKK, just under the forecasted 2.89 billion DKK. Following the announcement, Alm. Brand’s stock price dropped by 2.62% to $15.21 in pre-market trading, reflecting investor concerns over the earnings miss. According to InvestingPro analysis, the company currently trades at a P/E ratio of 29.86x, suggesting a premium valuation compared to industry peers.

Key Takeaways

• EPS of $0.10 missed the forecast by $0.15.
• Revenue of 2.86 billion DKK was slightly below expectations.
• Stock price declined by 2.62% after earnings release.
• Strong growth in Personal Lines premiums, up 8.2%.
• Focus on cost control and synergies.

Company Performance

Alm. Brand demonstrated solid growth in its insurance revenue, which increased to 2.8 billion DKK, marking a positive trend in its core business. The technical result also showed improvement, rising to 337 million DKK from 291 million DKK the previous year. Despite these gains, the company’s performance was overshadowed by the earnings miss, which contrasted with its historical trend of meeting or exceeding expectations.

Financial Highlights

• Revenue: 2.86 billion DKK, slightly below forecast.
• EPS: $0.10, missing the forecast by $0.15.
• Technical result: 337 million DKK, up from 291 million DKK YoY.
• Investment income: 96 million CHF.

Earnings vs. Forecast

Alm. Brand’s Q1 2025 EPS of $0.10 fell significantly short of the $0.25 forecast, marking a notable earnings miss. Revenue also came in below expectations at 2.86 billion DKK, versus the anticipated 2.89 billion DKK. This represents a negative surprise of approximately 60% for EPS and a marginal shortfall in revenue.

Market Reaction

Following the earnings announcement, Alm. Brand’s stock price decreased by 2.62%, trading at $15.21. This decline reflects investor disappointment over the earnings miss. The stock remains within its 52-week range, with a high of $16.99 and a low of $11.80, indicating room for recovery if future performance aligns with market expectations. Despite the earnings miss, the company maintains a healthy dividend yield of 3.84%, potentially offering value for income-focused investors.

Outlook & Guidance

Looking ahead, Alm. Brand has upgraded its Insurance Services results guidance to a range of 1,550-1,750 million DKK. The company anticipates a combined ratio of 85-87% for the remainder of the year and expects full-year synergies of 600 million CHF. Investment results are projected to reach 200 million CHF, supporting a positive long-term outlook. InvestingPro data reveals that analysts maintain a strong buy consensus on the stock, with multiple growth catalysts identified in the comprehensive Pro Research Report available to subscribers.

Executive Commentary

CEO Rasus Hailendelsten highlighted the company’s market share gains, stating, "We are clearly taking market share on top of utilization and the price increases we do." CFO Andreas Hooben Maesen expressed optimism about future momentum, saying, "We should see a further momentum gain as we go forward."

Risks and Challenges

• Competitive pricing dynamics in the insurance sector.
• Potential regulatory impacts from the Danish Competition Authority.
• Economic uncertainties affecting investment income.
• Challenges in maintaining cost control amid market pressures.

Q&A

During the Q&A session, analysts inquired about the impact of the Danish Competition Authority’s report and the potential Easter effect on claims. Executives addressed these concerns, emphasizing the company’s strategic focus on synergy realization and growth in Personal and Commercial Lines.

Full transcript - Alm. Brand (ALMB) Q1 2025:

Operator: Good morning or good afternoon all, and welcome to the Almbrand Q1 twenty twenty five Results Call. My name is Adam, and I’ll be your operator today. I will now hand the floor to Erasmus Bernd Nielsen to begin.

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Erasmus, please go ahead when you’re ready.

Rasus Hailendelsten, CEO, Almbrand: Good morning, and thank you for joining us on our conference call. I’m Rasus Hailendelsten. As usual, I have with me today our CFO, Andreas Hooben Maesen and the Head of our IR team, Maes Zinko. This morning, we published our interim report for the first quarter. And as usual, I will walk you through the operating highlights and then Andreas will comment on the financials.

Let’s now look at the highlights and please turn to Slide two for some of the headlines regarding our business for the first month of the year. As mentioned before, I’m pleased with the overall financial performance in a satisfactory Q1 with sustained strong organic growth and good cost control leading to a significant drop in the expense ratio year on year. We reached a premium growth of 8.2% in Personal Lines despite one day less than in the first quarter of twenty twenty four. This implies we are taking quite bit of market share in Personal Lines with our strong bank partnership as a driver. Synergies are kicking in just as we planned and currently we see good momentum for claims as well as cost synergies.

Adjusted for a significantly lower discounting effect on claims as well as an underlying one off gain in Q1 last year, we reached an improvement in the underlying loss ratio of around two percentage points. In Q1, we streamlined our group executive management from five to four members with our CFO, Andreas Rubin Baesen stepping into stepping up as a Deputy CEO. Our Executive Board now consists of Andreas and myself. In the March, the divestment of Energy and Marine was finalized and soon thereafter a buyback program of DKK1.6 billion was launched. In April, a dividend of DKK0.6 per share linked to the 2024 earnings was adopted by the AGM.

Following the AGM, our Board pointed to the independent member, Jais Bohneur, as its new Chairman, as Johan Hesselbeer Mason did not stand for reelection. And now I’ll turn to Slide three with our financial highlights. Insurance revenue grew to about DKK 2,800,000,000.0 in the quarter with a very satisfactory growth in Personal Lines as mentioned before. The technical result was DKK $337,000,000 compared to $291,000,000 last year. We view this as a good start to the year also considering relatively low runoff gains and cost still being front end loaded in Q1 to some extent.

Investment income in Q1 was a satisfactory profit of CHF96 million. This relates to the fleet portfolio as well as the interest hedging of our technical provisions. Discontinuing activities after tax made up million, which was driven by the gain booked in relation to the divestment of Energy and Marine in March with disposals of intangible assets countering the gain and a run off loss in Q1 twenty twenty five being a negative component in the quarter. Now I’ll turn to Slide four and five. Both slides illustrate that we have had major claims below our normal level in eight out of the last nine quarters.

On a group level, we had major gains of just 4.8% on average during the last nine quarters compared to our normal expected level of 7%. Despite some volatility between the quarters, we feel we are in a better overall position in our continuing business following the divestment of Energy Marine. However, we will continue to work with a further reduction of the volatility in major claims. And now let us continue on Slide seven. The group made a technical result of $337,000,000 in the quarter from up from CHF $291,000,000 primarily due to synergies kicking in and premium growth.

The insurance service result from Commercial Lines was CHF146 million against CHF214 million last year as major claims grew from a very low level Q1 last year, while still being below a normal level. Personal Lines, we had an improvement in the insurance service result to million from CHF77 million last year. This was primarily due to lower weather related claims, high premium growth in the quarter of about 8% combined with lower nominal costs, but also higher run off case than last year. Please turn to Slide eight. Insurance revenue grew nicely by 5.2% in the quarter compared to 6.2% last quarter, considering a technicality of one day less in the quarter than compared to last quarter.

I would say overall premium growth is very satisfactory with the continuing strong momentum. In Personal Lines, we are clearly taking market share on top of utilization and the price increases we do. We do consider 8.2% growth in Personal Lines as a quite bright spot in our report. In Commercial Lines, we’re seeing a lower payment growth of 2.1%, but we view this as acceptable given the repricing efforts we are undertaking among our largest clients, especially in relation to unprofitable stand alone workers’ compensation. And moving on to Slide nine and the claims ratio.

In Q1 claims ratio was up 50 basis points year on year in the quarter with higher major claims, but also lower weather related claims than in Q1 last year as well as higher run off gains this year. The underlying claims ratio was 70 basis points worse year on year, driven by 140 basis point lower discounting effects. This especially had an adverse effect in Commercial Lines. Moving to an undiscounted basis adjusted for a write back of a sector bankruptcy helping 120 basis points in Q1 twenty twenty four, we see 190 basis point improvement in the underlying claims year on year, a broadly symmetrical improvement in both Commercial and Personal Lines. And now please turn to Slide 10.

The combined ratio in Personal Lines improved to 87.1% from 94.4 last year due to a steep decline in the cost ratio of 2.2 percentage points, lower weather related claims, but also higher runoff gains. We are seeing a stabilization in motor frequency, while price increases are countering a continued increase in the average motor repair cost. And please turn to Slide 11 and the Commercial Lines. In Commercial Lines, we see an increase in the combined ratio to 89.3% from 84.1% last year, primarily due to major claims moving up from a very low level of just 3.5% in Q1 last year. Major claims of 8.7% in Commercial Lines this quarter is still below the normal expected level of around 12%.

The cost ratio drops 1.1 percentage point, while synergies and cost initiatives tick in. On the other hand, lower discounting effects make up a significant headwind for the combined ratio in Commercial Lines in this quarter. And with these comments, I will now hand over the word to Andreas who will walk us through the synergies, investment and the guidance.

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Thank you, Arsnes. Please turn to Slide 13 for an update on synergies. We had a nice jump in harvest synergies in Q1 twenty twenty five to CHF145 million from CHF98 million in Q1 twenty twenty four. This implies a CHF47 million uptick in synergies year on year improving our underlying claims ratio of 0.9 percentage points and our cost ratio by 0.8 percentage points year on year. The synergy uptick is currently quite balanced between the cost side and the claims side.

We remain confident that the synergies for the full year will add up to the CHF600 million that we have previously stated. And now I move to Slide 14 and the investment result. The investment result was a satisfactory profit of CHF96 million driven by a positive return from our free portfolio as well as a profit from our Match portfolio, which was helped this time by the VA component, a component that we can’t hedge. Please turn to Slide 16 now for the outlook for 2025, which we update today. Today, we upgrade our guidance for the Insurance Services results in 2025 by 50,000,000 to DKK 1,550,000,000.00 to DKK 1,750,000,000.00.

This is primarily due to the realized runoff gains in Q1. The cost ratio is expected to be 17% for 25% and the combined ratio excluding the run offs for Q2 to Q4 is expected to be 85% to 87%, an improvement of 50 basis points, again primarily due to the run off gains we had in Q1. The guidance includes synergies of £600,000,000 and the effect of implemented pricing efforts in Commercial as well as Personal Lines. The guidance for 2025, investment results of £200,000,000 and other income and expenses of minus £125,000,000 remain unchanged following Q1. Consequently, group profit, excluding special costs, is expected to be DKK1.63 billion to DKK1.83 billion before tax excluding the run off gains for Q2 to Q4 of twenty twenty five.

In addition, we guide for restructuring costs of DKK175 million, of which DKK 25,000,000 relates to the separation of Energy and Marine. And while we still expect the depreciation on intangible assets to affect income by approximately $335,000,000 in 2025. Lastly, the result after tax and discontinued activities was CHF 181,000,000 with the divestment of Energy and Marine now being finalized in Q1. And now finally, please turn to the Slide 17. I’m pleased to announce that on Tuesday, November 18, we will host the Capital Markets Day at our headquarters here at Mittemollern in Copenhagen.

On the CMD, we will launch our strategy as well as our financial targets for the coming strategy period of twenty six to twenty eight. And we hope to see as many of you as possible. And with this, I conclude our presentation and hand over the word to our moderator. Thank you.

Rasus Hailendelsten, CEO, Almbrand: Thank you.

Operator: And our first question comes from Asbjorn Mork from Danske Bank. Asbjorn, your line is open. Please go ahead.

Asbjorn Mork, Analyst, Danske Bank: Yes. Hi, good morning and congratulations on the solid Q1 report. A couple of questions from my side. One, looking at synergies and the level you sort of realize in Q1 versus the full year target, you’re almost there. I was just wondering when December 31 becomes January 1, I guess synergy potential doesn’t end there.

But could maybe shed some light on what kind of initiatives you think and what kind of potential you see for sort of further realization of synergies going forward? I guess there is still something to have there.

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Adrian, Andreas here. Yes, you’re right that we are on a solid track for synergies. And in terms of run rate, we’ll probably end up somewhere around six fifty when we are when we are done this year corresponding to the 600 we we expect to realize in 2025. And I think touch briefly on what we see going forward. I think that’s that’s something we’ll dive into in more depth when we get back with the C and D at the end of the But I think we see definitely the potential to further improve our margins in a number of places in our business.

And to name one, I think, which in magnitude definitely is still very relevant would be the claims area that we see further improvement also in the years to come. But I think that would be it for now, and we’ll dive more deep into that when we get to the strategy for the next period.

Asbjorn Mork, Analyst, Danske Bank: All right. That’s fair enough. Then maybe if I may, on your on the growth and especially the private growth, the 8.2%, could you split that a bit into sort of what comes from not say from Kuwait’s sake and what comes from your partnerships and what comes sort of from your own sales channels, own brand sales distribution? Any insight there?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Yes. I can try to add some clarity to that also, Esperan. And this is just keep in mind, these are sort of rough numbers and stylized to some extent. But I think from indexation, we would say roughly 3% of the 8%. Then we would say that roughly our repricing initiatives would help with another two percentage points.

And then we are approaching now that that that we are looking at something around three, four percentage points also coming from from from actual market share growth. And most of that is coming from our banking distribution partners, but we are also seeing especially some of the other partnerships develop quite well. So but most of it in terms of the total numbers would be from our banking partners.

Asbjorn Mork, Analyst, Danske Bank: Okay. So does that mean that basically your own sales channels, they are sort of keeping your market share flattish. So you’re able to maintain your market share on your own

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Yes. That is more or less true, yes.

Asbjorn Mork, Analyst, Danske Bank: Okay. Fair enough. Okay. And then maybe on your guidance, you raised the guidance by

Matthijs Nielsen, Analyst, Nordea: CHF fifty million. You have DKK

Asbjorn Mork, Analyst, Danske Bank: 34,000,000 of runoffs in the quarter. But I guess if I look at weather and large claims, they’re also something like DKK 50,000,000 better than, I guess, you would have expected for normal Q1. And now you’re also saying that synergies will be somewhat above the €600,000,000 So was just wondering why you’re only raising the guidance with €50,000,000 Is there sort of an underlying negative trend somewhere that we should be aware

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: I can answer that also. Just one statement before I dive into this. What I said was that the run rate full year run rate of synergies would be picking up. I think that’s just a mathematical sort of that’s mathematically so also from us delivering realized €600,000,000 So that still stands. I think I think, mechanically, you have a point in the way you talk it through with the Q1 we’ve had.

I think to put it briefly, I think we feel this is sort of the prudent level to guide where we are now. We are comfortable we have the right momentum, and we feel that this is sort of the right guidance for now. But mechanically, you do have a point. All

Asbjorn Mork, Analyst, Danske Bank: right. That’s fair. A final question from my side, then I’ll move back in the queue. So now it’s a month since we got the DCCA report on the competition in the private insurance market in Denmark. So what are your sort of your overall thoughts now having had some time to digest views from the report?

Rasus Hailendelsten, CEO, Almbrand: Yes. I can take that as to say. First of all, we read the report, and of course, we’re always looking for a dialogue. But it’s our our our view is very firm that we do not agree in the conclusions of the report. We see a market where the the competition is actually quite fierce.

We need to be on the toes. We need to keep costs down. And we if we don’t have the right prices, right low prices, then the customers could go to to to to other companies. And and I think there’s a broad variety of insurance companies in Denmark with different models, working models, and I think that’s enough to pick between. So we will take up the discussion with the authorities, competition authorities in this matter, but we don’t agree in the conclusions.

Asbjorn Mork, Analyst, Danske Bank: But do you see any risk sort of like I think, I guess, there’s been some discussion around indexation, automatic indexation being at risk and stuff like that. But what are what would be sort of your your your outcome scenarios?

Rasus Hailendelsten, CEO, Almbrand: Yeah. We don’t know exactly the outcome scenario because we don’t know where it will end in. But, of course, we discussed internally what could happen. And indexation is, of course, I think it’s the right way to do it. And fact, that we’re able to increase prices nice, and I would say, not necessarily with the development in prices in the market.

But if we’re not able to do that, we would need to increase the prices no matter what, and then we would have to call the customers, so to say, in these matters anyway. So for the moment being, we don’t see a major change in our underlying business or results in this matter.

Asbjorn Mork, Analyst, Danske Bank: All right. That was very clear. Thanks a lot.

Operator: The next question comes from Jan Erik Jornan from ABG. Jan Erik, your line is open. Please go ahead.

Jan Erik Jornan, Analyst, ABG: Thank you for taking my questions as well. I can take some questions on the growth on the underlying for the corporate side, the commercial side. Since it seems like you have lost some business or unprofitable workers’ compensation business, how is the underlying for the rest of the book then running? Is it so that workers’ comp is minus 5% or minus 2% or minus 0% or something? How should they read it?

And how should they think about the growth for the remaining 2025 and then potentially into 2026?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Hi, Henrik. I’ll try to add some clarity to that. You’re right that the overall growth number is not too impressive when you look at it in first glance in our corporate lines this time. And we have different effects, but and a lot of it is from the drag comes from our profitability focus. And the major part of that is we as we also mentioned, the workers’ compensation.

And we’ve chosen to exit some larger at least you can say that the customers have not chosen to accept the prices we felt were needed to continue with some of the larger clients there. And that in rough numbers, could translate to around, let’s say, two percentage points of the growth in Commercial Lines this time. Looking forward, I would we don’t guide for growth. I’m not going to give you sort of the specific guidance either for Commercial Lines. But putting it in this way, you might say that we do see we feel we have a very strong momentum in Private Lines I just touched upon, and we have a very good momentum there.

You might see some drag also from this profitability focus in Commercial Lines. So I wouldn’t put my books much above indexation or something around that level for Commercial Lines on average.

Jan Erik Jornan, Analyst, ABG: Okay. So more the indexation and then not this minus and on the top. So indexation three and this minus two, this is other one. Is that a fair conclusion? Or is that three a better number?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Again, going forward, I said if we didn’t have if we hadn’t had these exits of customers, we would have been maybe close to, let’s say, five percentage points in growth, just rough numbers. Forward, I’m just saying we might see some of the same drag. So on a normalized level, maybe 3% would be a better average. But again, we don’t guide because there can be some volatility for that.

Jan Erik Jornan, Analyst, ABG: No problem. The run rate, you mentioned 190 basis points. To reach your sort of guidance on the insurance service results, you probably need to improve that. Is it a gradual improvement throughout the year we should expect because of the impact of the profitability as well as the synergies? Is that how we should read it?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Yes. Janik, you’re right. Think just to start there, we’re very happy that we do see this improvement now. And I think especially in Commercial Lines, it’s good to show that we have turned it around. So we’re going from year on year increases to now at least a handsome improvement also there.

But you’re right that this is sort of the minimum, and we should see this increase gradually as we go through the year. That would be our base expectation.

Jan Erik Jornan, Analyst, ABG: Okay. Then on the capital side, 4,900,000,000.0 you now have in capital, that is deducted with the full buyback of SEK 1,600,000,000.0 as well as 80 percent of your dividend. Is that fair to assume? Because we don’t have been given sort of the full disclosure on that number. And on the requirement, we should now assume that the Marine and Energy book is fully out.

Is there anything else that has happened in on the requirement side that we should be aware of in the I mean, I’m

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: not sure I heard you right, Greg. Just to be clear, I mean, 4,900,000,000.0 is after we’ve committed to pay out the buybacks. So that’s sort of where we clearly are at now in terms of our own funds. And the SCR that we have in the numbers is also after divestment of Energy and Marine. So this should be more or less yes, it is a clean picture of where we are at this point in time after the full divestment and after the capital we’ve already committed to pay out to shareholders following that.

Jan Erik Jornan, Analyst, ABG: And any news on the call down standard book?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: The internal model or

Jan Erik Jornan, Analyst, ABG: Yes, towards internal model.

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Well, I think the good news there is that things are progressing as we have communicated and and have plan have planned. So for now, we still would have an expectation that we can get a model approval in q three of this year. And but we are still not at a point in time where we can communicate actual numbers for that expectation.

Jan Erik Jornan, Analyst, ABG: Okay. Finally then from my side, the DCA report. Since I’m not living in Denmark, is it so that they have now finalized the sort of hearing period and for what they should like to investigate? Have they formally started the investigation that then has to take at least or minimum or maximum two years, I’m sorry? Is that how we get to read it?

Rasus Hailendelsten, CEO, Almbrand: Yes. No. They I think it was two days ago, they finalized, you can say, the gathering of hearings, and then they had to conclude on that and see if they actually will move into this market investigation. We actually don’t know. But and if we come out with that, then they will also see what will it cover, how broad will it be, and then and then we need to take our from that.

It will they and it will run at mostly two two years plus maybe six months, so we can take it on time. Okay. Yes. So that’s how it is.

Jan Erik Jornan, Analyst, ABG: Okay. So but do you think they will actually tell the market if they start an investigation or not?

Rasus Hailendelsten, CEO, Almbrand: Yes, yes. They would I definitely expect them to come out with some kind of conclusion on what they intend to do.

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: I think by law, they actually have to do that.

Jan Erik Jornan, Analyst, ABG: Okay. Thank you. All from my side.

Operator: The next question comes from Matthijs Nielsen from Nordea. Matthijs, your line is open. Please go ahead.

Matthijs Nielsen, Analyst, Nordea: Thank you very much and thank you for taking my questions as well. And also nice to see that even though it looks like a small miss in the numbers, it’s less volatile than it used to be back in history. So well done on that. So if you start on the cost line, maybe I have one question. It seems like it’s a bit better this quarter.

Is that a reflection of the new run rate that is actually running a bit ahead on or a bit better on the cost line? Or how should we think about that?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: I think now it’s one quarter, but I can put it this way. I think we are very comfortable on our cost guidance for now.

Matthijs Nielsen, Analyst, Nordea: That was clear. And then maybe moving on to the underlying claims ratio. There was this last year, the thing that one of your competitors talked quite a lot about of the Easter effect of claims moving into Q2 instead of Q1. How should we think about the how should we think about this for you going into Q2? Like you are improving the underlying undiscounted by 190 basis points.

Is that like a fair baseline to use for Q2 as well? Or is there anything that we should be aware of there that it should be even higher because of disease defect? And how should we think about that? I think if you could say anything on last year, what you saw last year and then making the baseline even clear to us, that would be nice.

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: I think you’re touching on one effect out of there’s a lot of sort of moving parts, and Easter is should provide a slight tailwind because we’ve had Easter this time in April, so in Q2, for some lines that with all else equal, mean that there might be a bit less claims in that quarter. But I think you’re touching on one of many parts. Overall, I think I stick to what I also commented with Jan Jager. I think it’s fair to say that we need to now we are happy to show that we do see improvements, especially the turnaround in Commercial Lines in terms of the track we had there. And we should see also naturally, as we see the pricing initiatives that we’re doing move through the full book, we should see a further momentum gain as we go forward.

I think that’s the sort of important trends to say.

Matthijs Nielsen, Analyst, Nordea: Matthias, I just

Speaker 6: have an additional comment because we it’s also we also want to highlight that our actual airlines actually work with the Easter effect. So they are trying to kind of process the right picture of claims also during Easter. So we don’t really have in that sense some very big volatility. Of course, the assessment could deviate from reality, but we don’t have a picture of that that has been a very big effect.

Matthijs Nielsen, Analyst, Nordea: And when you say not very big, is that below 50 basis points or below 10 basis points or something like?

Speaker 6: Yes. I mean the kind of report we got was it would be kind of significant insignificant effect that we would have from Nesta.

Matthijs Nielsen, Analyst, Nordea: Okay. Thanks a lot of that. And then the last question, I had a drop off at some point, so sorry for that. So maybe you already said that once, but just from my understanding as well. On the investment result, it seems like you’re reiterating the guidance of DKK 200,000,000 even though that Q1 was like quite a lot better.

Is that because of something you have seen so far in Q2? Or how should we think about that? I’m sorry if you already said this. I had a small dropout.

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Yes, Matthias, I think that’s more or less right. I think we have seen some headwind through April, nothing major, but that meant that on the balancing point, I think also given all the uncertainties on the financial markets, we felt the 200,000,000 was the right guidance for now. But it has we have it has partly to do with the fluctuation we’ve seen since the end of the quarter.

Matthijs Nielsen, Analyst, Nordea: Thanks a lot. I’ll jump back in the queue then and then let others ask.

Martin Berg, Analyst, SEB: Thank you.

Operator: The next question comes from Martin Berg from SEB. Martin, please go ahead. Your line is open.

Martin Berg, Analyst, SEB: Thanks a lot. Just coming back to the question and answers that we’ve basically been dancing around. So you set to reach the $1,850,000,000 by year end, which basically gives you a quarterly run rate of €04,000,000 for the remaining three quarters. And that has given everything that is happening and given that the improvements are that are that will be gradually coming through over the year, how would you divide sort of those that quarterly run rate of $5.00 €4,000,000 out over the remaining quarters?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: I don’t think we are I’m not going to start sort of a practice of guiding for each quarter. I think that’s to stretch it too much. Think

Martin Berg, Analyst, SEB: But is that more giving us a sense of how you see it? Because, I

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: mean, it’s basically, it’s getting quite

Martin Berg, Analyst, SEB: a big step up already by Q2. Sorry.

Matthijs Nielsen, Analyst, Nordea: I was

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: on my way to try to do that, given statement there that I won’t give exact numbers for each quarter. I think it’s you already know that Q1 is also, by nature, quite heavy because of our cost load, and we have the partnerships and other things that is a drag in that quarter, all else equal. And then we can also see some fluctuations across, as you know, the quarters, especially from the weather component, there will be variations. And where typically, Q2, or I think, would be a good quarter in terms of weather, to name something. But I think the important thing is that if you look at the underlying, and that’s the one I’ve been commenting on so far, we that’s the one that we’re following, and we should see pickup in that as we progress naturally.

And that’s, at least on average over the quarters, we should see a pickup coming from the fact that more of these initiatives are translating into the books. So I think that’s the effect I would mainly focus on for now. And also, as I mentioned, costs, I think we are confident there, and I think we have a good track also to at least also maintain some of the improvements we’ve seen so far. So I think that’s I hope that’s okay for now.

Martin Berg, Analyst, SEB: I mean, it’s

Matthijs Nielsen, Analyst, Nordea: but Andreas, I hope to get

Martin Berg, Analyst, SEB: you a little bit closer to an answer here because it’s if you’re looking at your underlying and if you’re looking keeping the five zero four million as a quarterly run rate in mind and the seasonality and the improvements that you are guiding for, I mean, you’re sort of putting in normalized last claims and normalized run offs and also keeping discounting in mind. So that your undiscounted underlying claims ratio is set to see a quite substantial improvement from next quarter already. Isn’t that isn’t that a fair assumption?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: It’s a fair assumption.

Martin Berg, Analyst, SEB: In the 400 or 500 basis points.

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: But I’m just I’m just trying to say, I think, you know, and I I know I realize this. We’ve been through this sometimes. I think, it’s hard for in a base case assumption, I think you’re right. And that being said, we can see fluctuations year on year from quarters to quarters and other effects also. But on average, you’re right, we should see this start to pick up also from the next quarter.

Martin Berg, Analyst, SEB: Okay. Okay. Alrighty. I mean, it could be very nice if you could shed a little bit more clarity on this perhaps on Monday. Thanks.

That’s it from my side.

Operator: The next question comes from Bhavan Ratham from HSBC. Your line is now open. Please go ahead.

Bhavan Ratham, Analyst, HSBC: Hi, thank you for taking my questions. The first one would be on your commercial line with the strengthening. Can you just provide more color on what’s driving that sort of strengthening? And how should we think about that reserve strengthening for the full year? Should we expect more strengthening for the remainder of the quarter?

Or would you say that more or less of the strengthening is already there in place?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: If I hear you correctly, you’re asking about the underlying improvements in Commercial Lines and how we would expect that to progress also going forward and what it’s coming from. It is from the repricing and profitability initiatives that we have we are going through. So obviously, we have had some business renewed. It’s one of the bigger the biggest is 1.1. That being said, when we still have quite a lot of profitability initiatives also running through the book, which are not in effect yet for Commercial Lines.

So I think it would be more or less the same answer I’ve had in general that we should see the improvement that we have shown now begin pick up momentum in terms of underlying improvements for Commercial Lines also when we go ahead. I hope that answers the question.

Bhavan Ratham, Analyst, HSBC: Yes. Partly, yes. Just more looking at the run off results for the Commercial Lines, which came in a bit adverse at 0.7%. If could provide more color on what’s driving that and how should we think about that evolving for the remainder of the quarter?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: The run off result well, the run off result this time is below what we would consider a normal long term average, which we sort of expect to be around the two percentage points of premiums. This time, it has been as regrettably so, it’s been so for we’ve had the same effects in also some of the previous quarters. When we see these runoffs, there’s been a tendency that we that workers’ compensation is one of the main culprits, and that’s also the fact this time. So in the quarter as such, there are moving parts, but what’s dragging the numbers down in Commercial Lines and also for the group in terms of runoffs comes from a few single workers’ compensation claims being upgraded in the quarter. A single workers’ comp claim could, in some instances, be around DKK 10,000,000, just to give you a feel.

So it doesn’t take that much to come into the books to put some adverse developments. But the main point is that these are normal fluctuations. On average, we would not expect anything else than what we expect on a long term basis also for Commercial Lines going forward, which would be the two percentage points in a long term average for Commercial Lines.

Bhavan Ratham, Analyst, HSBC: Right. That’s very helpful. The other one that I had was, again, on the DCCA report and on the findings. Would you be able to provide any sort of colors in terms of what’s the average duration of your customers and what’s the kind of delta between the new and renewing customer for for for the group? And do you see that being any different versus the other players in the market in terms of margin between the new and the renewing customers?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: I I can try. I’m not if you ask for the average duration of a of a personal lines customer, I guess it is if we are talking this report. It depends a bit on how you measure it. But if you look at the a customer as such, when I think most of us have a duration of something like we lose around 10% of customers a year or maybe a little bit above that now. That’s

Matthijs Nielsen, Analyst, Nordea: if

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: you look at the full customer engagement as such. And then if you measure in terms of how much business actually leads, the number becomes higher in the sector. If I answer to answer, what do we expect from the report as such, If if and and as Asu said, it’s we’ll have to see. We don’t agree with the report as it stands today. We see the main theme for now being around indexation.

If eventually, after the investigation is done, just to say that we are not in the sector in Denmark allowed to index our premiums, I would not we would not expect that to structurally do anything for retention levels or lifetime expectations for Personal Line customers in the Danish sector.

Bhavan Ratham, Analyst, HSBC: That’s very helpful. Thank you so much.

Jan Erik Jornan, Analyst, ABG: We

Operator: have a follow-up from Matthijs from Nordea. Matthijs, please go ahead.

Matthijs Nielsen, Analyst, Nordea: Thank you very much. So maybe coming a bit back to Martin’s question and maybe asking in a bit different way. So can you maybe like give a bit numbers on like your renewals slow like? When does the higher prices tick in for the clients? How many renew in Q1, Q2, Q3, Q4?

Maybe a bit on split on those things. I think like the majority it sounded early on like the majority was on January 1 on the commercial side, maybe you can give a bit of flavor on that, that you’d be able to quantify the price impact on the underlying, if you know that, that could help a lot, I guess.

Speaker 6: Yes. Matthias. Matt here. You are right that we have been targeting, I think, I mean, to the bulk of our clients having January 1 renewals. So we did, I mean, the 200 basis almost 200 basis points improvement in here in Q1 was also driven by these price increases.

But we are probably we are still having some clients where it’s not fully rolled into to the numbers and thus being earned yet. And I think that could perhaps be around an overhang of 10% to 20% still that could kind of lift the I mean the underlying effects.

Matthijs Nielsen, Analyst, Nordea: So 10% to 20% of clients in commercial only or is that in the total?

Speaker 6: I’m talking about the total for the total book.

Matthijs Nielsen, Analyst, Nordea: 10 to 20% of the overall clients you have has not seen the price hike yet. And they will see it when?

Speaker 6: I think they will see it gradually throughout the year. And remember, this is a very rough estimate from the top of my head.

Operator: Okay.

Matthijs Nielsen, Analyst, Nordea: So that means like you have like around 10% each quarter besides January 1, we have the remaining part. Is that a fair thinking of that? Is that okay?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: I think it’s maybe adding some other points, I think it’s a bit conservatively put if you look at the total. Our Personal Lines is a bit is quite evenly distributed without if you look at outside the banking partnership, most of it is more evenly distributed there. It’s in Commercial Lines, we have that very strong tilt in the oneone renewal. And the second largest renewal in Commercial Lines is oneone hundred

Matthijs Nielsen, Analyst, Nordea: Okay. So If we can get

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: back to that this topic also on Monday, we will Yes.

Matthijs Nielsen, Analyst, Nordea: I think that would be great. Guess, put on that, that would be very helpful, like just on the actual data, maybe that would be very nice. Then like the last follow-up question I had like for now is like on the discounting. Have you seen any material changes to you to the discounting in Q2 so far?

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: Not significant.

Matthijs Nielsen, Analyst, Nordea: Not significant?

Operator: We have no further questions. So I’ll hand the call back to Rasmus and the team for some closing comments.

Rasus Hailendelsten, CEO, Almbrand: Thank you for all your questions. We hope you have

Andreas Hooben Maesen, CFO/Deputy CEO, Almbrand: a nice day. Thank you.

Operator: This concludes today’s call. Thank you very much for your attendance. You may now disconnect your lines.

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