DNB Insurance

DNB Insurance
Hans Petter Madsen
Managing director
21 August 2015
Agenda

DNB Insurance business area

DNBs competitive advantage

Growth versus profitability

Development in the competitive environment

Impact of new technology
DNB Insurance business area
DNB Insurance AS
P&C Personal lines
DNB Life Insurance AS
Workmen compensation and group life
Individual Life and disability
Premium portfolio NOK 2 billions
Premium portfolio NOK 1.2 billions
DNB runs the insurance business area as one unit, disregarding the formal company structure
•
Focus on products with similar risk structure, one management team.
•
Organized in the Product division in the DNB Group
DNBs competitive advantage
5 000 000
100 000
3 000
Web
Insurance
advisor
Customer service
and Interactive
75 000
eBusiness
Customer centre
Branches
Financial advisors
50 000
Open pages
Logged in
Mobile
Our strategy is being a quality provider based on the DNB Group’s customer flow
Awarded by Aftenposten, Dagbladet and Norsk Familieøkonomi!
Growth versus profitability
Pre-tax profit
• Substantial improvement in pre-tax profit
since 2009
300
200
100
0
-100
-200
Pre-tax profit
2009
-100
2010
-178
2011
31
2012
203
2013
240
2014
242
1H 2015
94
Portfolio premium
2500
• Portfolio premium increased by MNOK
1,229 since 2009
2000
1500
• # Customers 214,500 as of June 2015
1000
500
0
Portfolio premium
2008
2009
2010
2011
2012
2013
2014
743
978
1173
1486
1656
1816
1996
30/06/
2015
1972
• Reduction in “Academic-portfolio”
portfolio by MNOK 92 (19.4%) since
year-end.
How will DNB adapt to lower income from financial portfolio?
DNB distributes mainly
short tailed products, which
causes lower impact on
reduction in interest rates
than the P&C market in
general
To compensate for 1%
decrease in interest rate,
combined ratio has to
improve by 1%.
Low risk profile in the
investment portfolio,
continuously under
consideration
Solvency II
Solvency capital
Capital requirement
Solvency margin
Capital in % of
requirement
SCR
MCR
Solvency I
823
549
274
150 %
712
249
463
286 %
594
287
307
207 %
• DNB participated in the SII test reporting in week 22
• The reports show no dramatic reduction in solvency margin from SI to SII.
• Still uncertainty with regards to regulatory issues, such as:
• Calculated tax on capital requirements
• Inclusion of guarantee reserve in solvency capital
• Tax related to dissolution of security reserves
Growth versus profitability
Market share-loss for the largest companies
35
... and DNB with the most significant growth
6
30
5
25
4
20
3
15
10
2
5
1
-
2008
2009
2010
2011
2012
2013
2014
2015*
-
2008
2009
2010
2011
2012
If
Gjensidige
DNB
Storebrand
Tryg
Sparebank 1
Eika
Frende
2013
2014
2015*
Codan
Other companies
*as of 2nd. quarter 2015
Price development and market concentration
Motor
8.00%
0.25
• Decline in market
concentration(HH-index)
7.00%
0.20
6.00%
• Under 15% indicates an
unconcentrated market
5.00%
0.15
• Decrease in price growth
4.00%
0.10
3.00%
2.00%
0.05
1.00%
0.00%
0.00
Q2-08
Q2-09
Q2-10
Q2-11
Growth average premium [y/y]
Q2-12
Q2-13
Q2-14
Q2-15
Herfindahl–Hirschman Index
Development in the competitive environment - motor
%
30
Bancassurance
%
80
25
70
20
60
15
50
10
40
%
6
5
4
3
2
1
-
"Membership insurance"
%
15
10
5
-
"The big three"
“Price focus”
Willingness to invest in sophisticated prices
•
•
•
•
Historical data
Investment in analytical tools
Capacity of highly trained actuaries
Investment in external data
Illustrative example
Why DNB will not flatten out in the near future
Loan insurance
Autolease
Future potential
DNB Forsikring,
personal lines
SMB, Corporate
DNB Forsikring,
personal lines
Health
Private banking
LCI
Digitalization
14 000 000