Post on 09-Jun-2020
Hans Petter Madsen
Managing director
21 August 2015
DNB Insurance
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
Premium portfolio NOK 2 billions
DNB Life Insurance AS
Workmen compensation and group life
Individual Life and disability
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
Branches Customer centre eBusiness
Financial advisors Customer service
and Interactive Web Open pages Logged in
Insurance
advisor Mobile
5 000 000 100 000 50 000 3 000 75 000
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
• Substantial improvement in pre-tax profit
since 2009
• Portfolio premium increased by MNOK
1,229 since 2009
• # Customers 214,500 as of June 2015
• Reduction in “Academic-portfolio”
portfolio by MNOK 92 (19.4%) since
year-end.
2009 2010 2011 2012 2013 2014 1H 2015
Pre-tax profit -100 -178 31 203 240 242 94
-200
-100
0
100
200
300
Pre-tax profit
2008 2009 2010 2011 2012 2013 201430/06/2015
Portfolio premium 743 978 1173 1486 1656 1816 1996 1972
0
500
1000
1500
2000
2500
Portfolio premium
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
SCR MCR Solvency I
Solvency capital 823 712 594
Capital requirement 549 249 287
Solvency margin 274 463 307
Capital in % of
requirement
150 % 286 % 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
-
5
10
15
20
25
30
35
2008 2009 2010 2011 2012 2013 2014 2015*
If Gjensidige
Tryg Sparebank 1
Other companies
Market share-loss for the largest companies ... and DNB with the most significant growth
-
1
2
3
4
5
6
2008 2009 2010 2011 2012 2013 2014 2015*
DNB Storebrand Codan
Eika Frende
*as of 2nd. quarter 2015
Price development and market concentration
0.00
0.05
0.10
0.15
0.20
0.25
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
Q2-08 Q2-09 Q2-10 Q2-11 Q2-12 Q2-13 Q2-14 Q2-15
Growth average premium [y/y] Herfindahl–Hirschman Index
• Decline in market
concentration(HH-index)
• Under 15% indicates an
unconcentrated market
• Decrease in price growth
Motor
Development in the competitive environment - motor
10
15
20
25
30
Bancassurance
40
50
60
70
80
"The big three"
- 1 2 3 4 5 6
"Membership insurance"
-
5
10
15
“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
SMB, Corporate
LCI
Private banking
Autolease
Health
Loan insurance
DNB Forsikring,
personal lines DNB Forsikring,
personal lines
Future potential
Digitalization
14 000 000