Q3 2026 Gjensidige Forsikring ASA Pre-Close Earnings Call
Speaker #1: Good afternoon, everyone, and welcome to NCDS Q4 2026 pre-close call. My name is Berit Nilsen, and I'm head of investor relations. With me I have our IRO, Ilmaz Fogner.
Speaker #1: Please note this call is being recorded and the recording will be published on our investor relations website after the call. We will start by going through the Q3 reminder that was published on our website on Friday.
Speaker #1: This reminder highlights relevant public information and will not include any new business updates. Afterward, we will open up for Q&A session. As always, we will only answer questions related to information that has already been publicly disclosed.
Speaker #1: And please note that if you would like to ask a question, you need to log on via the Teams app. Over to you, Ilmaz.
Speaker #2: Hi everyone. Let us start with a few key dates. Our silent period begins on 1 October and we will release our Q3 results on 23 October.
Speaker #2: As always, we kindly ask you to submit your estimates using the template I sent you on Friday. And please fill in all open cells in the sheet.
Speaker #2: We have included control lines to help you identify and avoid potential errors. Please make sure these are error-free before returning the file to us.
Speaker #2: The deadline for submitting your estimates is 9 October and we will publish consensus on our website on 16 October. Now let's move on to the reminder.
Speaker #2: As usual, we start with comments on the weather. For the second quarter, we always remind you of the seasonality in our business, with the summer quarter's Q2 and Q3 normally having lower claims ratios than the winter quarter's Q1 and Q4.
Speaker #2: This quarter Scandinavia has experienced temperatures close to normal for the season, with some regional variation. No significant natural peril events have occurred during the period.
Speaker #2: In July, Norway experienced one of the largest residential fire events in modern times. More than 100 homes were destroyed in Krokstadelva in the Drammen region.
Speaker #2: For NCDS, that is covered by our reinsurance program. The impact for NCDS is expected to be limited to approximately 100 million Norwegian kroner, plus reinstatement premiums.
Speaker #2: And we'll be reflected in our third quarter results. On 15 September, NCDS successfully completed the issuance of a 1 billion Norwegian kroner in a new subordinated Tier 2 capital bond issue.
Speaker #2: The issuance is solvented to compliance and settlement took place on 22 September. In addition, as previously announced, we exercise the call option on the remaining 1.2 billion Norwegian kroner of our Tier 2 bond GJF03.
Speaker #2: However, settlement will not take place until the fourth quarter on 7 October. As always, please keep the results for the comparable period last year in mind.
Speaker #2: In Q3 25, we reported 2 non-recurring effects. The first was a negative effect of 429 million Norwegian kroner, following the termination of the core IT system core suite, which affected the pension results.
Speaker #2: The second was a positive impact in private Norway related to a change in revenue recognition of home seller insurance. This contributed 168 million Norwegian kroner to the insurance revenue, and 41 million Norwegian kroner to insurance service results.
Speaker #2: Further details can be found in the Q3 25 report.
Speaker #1: Over to large losses. As communicated previously, the expected level of large losses for the current year is approximately 580 million Norwegian kroner per quarter.
Speaker #1: For the sake of good order, please note that this is an estimate and not a quarterly guidance. Large losses are inherently random in nature and the quarterly estimate is estimate by 4.
Speaker #1: Turning to excess reserves. There is no change in our communication. We continue to set reserves according to our estimate and as history has shown, this may result in both runoff gains and runoff losses.
Speaker #1: On inflation. For the most recent comment on this topic, please refer to our Q2 2026 presentation material. Turning to policy. Bear in mind the bond issuance Ilmaz mentioned.
Speaker #1: Also note the NCDS had a 200 million Norwegian kroner in Tier 2 capital not included in eligible bonds as of Q2 2026. Eligibility of Tier 2 loans is restricted by the total capital requirement.
Speaker #1: We expect the eligible amount to increase over time as the capital requirement increases. Driven by growth. Please refer to our reminder for the general explanation of the main drivers behind the solvency calculation.
Speaker #1: Moving on to our investment portfolio. As always, we believe a good starting point for estimating returns is to use the same asset allocation as the previous quarter.
Speaker #1: Applying returns on the indices that we have listed in the appendix section of our quarterly presentation. Finally, on unwinding and change in financial assumptions, please keep the rules of thumb in mind.
Speaker #1: You can find an example spreadsheet on our website under reports and presentation other documents. As usual, our reminder includes updated stories. And with that, we will now open up for questions.
Speaker #1: Please raise your hand and we will open our line.
Speaker #2: Thanks. Vash, please go ahead. Your line is now open.
Speaker #1: Vash?
Speaker #2: And please unmute so we can.
Speaker #3: Can you hear me now?
Speaker #1: Yeah.
Speaker #2: Yes, we can hear you.
Speaker #1: Yeah.
Speaker #3: Perfect. Sorry, I just had two quick questions and potentially more like clarifications. So one is, could you just remind me of the allocation of that 100 million kroner for the wildfire or for the fire event between corporate center and private segment?
Speaker #3: So just how does that allocation work? And the second one, again, is a little bit more of a clarification. So following your comments on the bonds and the currency, I just want to double check this implies that all else equal there is no more Tier 2 debt outside of your own funds calculation.
Speaker #1: For the first quarter, now for the first question, we allocate 30 million to the segment and everything above to the corporate center. When it comes to the second, was that okay?
Speaker #1: Did you clarify?
Speaker #3: Yes. Yes.
Speaker #1: Yeah. When it comes to the second question, I'm not sure I understood exactly what you were asking.
Speaker #3: Sorry. So I got a bit thrown off by the comment within your release which says that over time as your SCR grows or the business grows, your own the Tier 2 debt will become part of your own funds calculation.
Speaker #3: But 200 million, which is excess at the end of Q2, is seems to be exactly the difference between your now recalled bonds and issued bonds.
Speaker #3: So just want to double check which means like as of Q2 on a pro forma basis there is more excess debt outside of solvency 2.
Speaker #1: Yeah. That is correct if I understand your questions correct. Yeah.
Speaker #3: Perfect. Perfect. Thank you. Just those clarifications. Thanks.
Speaker #2: Is there any other questions?
Speaker #2: patience.
Speaker #1: The leader has not yet activated the meeting or the wait time has been exceeded. You can try again later or you might ask the organizer.
