results for q3 2015 - alm. brand...•dkk 3.0bn at end-q3 2015 •reduced by dkk 0.7bn in q3...

Alm Brand

Results for Q3 2015 Investor presentation November 2015

Financial highlights of Q3 2015

Pre-tax profit: DKK 230m

Outlook raised

Forward-looking activities: Pre-tax profit: DKK 312m

Winding-up activities: Loss: DKK 82m • Writedowns: DKK 74m

G R O U P

Non-life Insurance Pre-tax profit: DKK 312m

• CR: 72.4 • Expense ratio: 15.5 • Premium growth: 0.0%

Life and Pension Pre-tax profit: DKK 9m

• Risk result: DKK 11m • Bonus potential: DKK 0.8bn • Bonus rate: 8.2%

Banking Pre-tax profit: DKK 3m

• Writedowns: DKK 5m • Growth in lending • Growth in full-service

customers

2

Comments on Q3

Negative impact from turbulent financial markets More customers and increased lending in the bank Initiation of a share buyback programme of up to DKK 300m Pre-tax profit outlook FY2015 • DKK 600-650m (from DKK 450-550m)

G R O U P

Financial highlights, 9M

Group Pre-tax profit: DKK 536m Non-life Insurance Pre-tax profit: DKK 763m • CR: 78.6 • Expense ratio: 15.9

Life and Pension Pre-tax profit: DKK 49m Banking Pre-tax profit: DKK 1m Winding-up activities Pre-tax loss: DKK 234m

3

Customers First

New CRM system will improve customer service across business segments substantially Retention rate declining due to competition • but remains high and

satisfactory

G R O U P

Group NPS

18 18

22 23 23

26 27

24

29 30

31 30

33 35

36

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2012 2013 2014 2015

4

Retention rate – Non-life Insurance

86%

87%

88%

89%

90%

91%

92%

dec-08 dec-09 dec-10 dec-11 dec-12 dec-13 dec-14

fjern evt. pladsholderen

NON-LIFE INSURANCE Highlights

Q3 pre-tax profit of DKK 312m • Technical result exceptionally good • Negative investment return due to losses on

equities and wider spread between mortgage bonds and government bonds

N O N - L I F E I N S U R A N C E

Pre-tax profit DKKm

5

245 237

130

352

487

807

-17

29

-25 -40 -38 -44

228 266

105

312

449

763

2012 2013 2014 2015 2014 2015

Q3 9M

Technical result

Investment return after technical interest

Combined ratio exceptionally good

Combined ratio of 81.1 excl. run-off - Better than expected • Run-off gains improved CR by 8.7 ppts to 72.4

– Gains on workers’ compensation and motor liability

• Very few major claims

Underlying combined ratio of 75.0 • Discounting increased CR by 0.2 ppt • More claims but lower average claims • Negatively impacted by lower average premium • Positively affected by an adjustment of provisioning

models for claims relating to 2015

Expense ratio up slightly Y/Y • 2014 positively impacted by cost phasing • Level as expected


Combined ratio

6

65,1 66,2 75,5

56,9

71,5 62,7

15,1 15,5

14,4

15,5

15,7

15,9

80,2 81,7

89,9

72,4

87,2

78,6

2012 2013 2014 2015 2014 2015

Q3 9M

Claims ratio incl. reinsurance

Gross expense ratio

76,9 74,1

77,2 75,0

78,3 78,9

2012 2013 2014 2015 2014 2015

Q3 9M

Underlying combined ratio

Weather-related and major claims


Major claims ratio

Major claims down by 3.7 ppts Y/Y Below expected range of 7-8%

• Very few major claims

Weather-related claims excl. reinstatement down by 3.8 ppts Y/Y Within normal expectation of 3-4% • A few minor cloudbursts • Q3 2014 was impacted by cloudburst

Weather-related claims ratio

7

6,6 7,4

6,7

3,0

5,3

2012 2013 2014 2015 2015

Q3 9M

Major claims ratio

Average expectation (7-8%)

2,9

0,7

6,9

3,1 2,5

0,3

-0,1

Q3 9M

2012 2013 2014 2015 2015

Weather-related claims ratio Reinstatement Average expectation (3-4%)

Premiums impacted by intensified competition

Premium income unchanged Y/Y • Private down by 1.6%

– Lower prices due to continued price competition – Retention rate declining due to competition but

stilll at a satisfactory level

• Commercial up by 1.8% – Growth primarily on workers’ compensation and

property – Average prices still impacted by competition


Premium income DKKm

8

651 668 668 657

578 613 609 620

1.229 1.281 1.277 1.277

2012 2013 2014 2015

Q3

Private Commercial

Private - Very satisfactory results

Combined ratio of 78.8 - Improved by 7.2 ppts Y/Y

Very few weather-related claims • Weather-related and major claims below expected level • Run-off gains higher Y/Y

– Improved CR by 7.3 ppts (up by 9.7 ppts Y/Y)

Underlying business still satisfactory • Deteriorated Y/Y • Higher claims frequency on accident, travel and motor

insurance • Lower average premium, especially on motor insurance,

had a negative effect


Combined ratio

9

64,4 70,3 69,4

60,9

16,6

17,1 16,6

17,9

81,0

87,4 86,0

78,8

2012 2013 2014 2015

Q3


Gross expense ratio

Commercial - Very satisfactory results

Combined ratio of 65.6 - Improved by 28.6 ppts Y/Y

Weather-related and major claims 13.5 ppts lower Y/Y • Weather-related claims in line with expectations • Major claims below expectations • Run-off gains improved CR by 10.2 ppts (up by 4.9 ppts Y/Y)

– Primarily related to workers’ compensation

Deteriorating underlying business • Underlying claims ratio below expected level • Positively affected by an adjustment of provisioning models

on current-year claims • Higher claims frequency but lower average claims


Combined ratio

10

65,9 61,6

82,1

52,6

13,5

13,9

12,1

13,0

79,4

75,5

94,2

65,6

2012 2013 2014 2015

Q3


Gross expense ratio


LIFE AND PENSION Highlights

Pre-tax profit of DKK 9m - Down by DKK 11m Y/Y • Results impacted by financial market turmoil • DKK 10m transferred to shadow account • Expected to be reversed in Q4

Bonus potential remains attractive • Collective bonus potential down by DKK 214m • Bonus rate reduced to 8.2%

L I F E A N D P E N S I O N

Pre-tax profit DKKm

11

19 22

18

10

66

48

2 0

2

-1

4

1

21 22 20

9

70

49

2012 2013 2014 2015 2014 2015

Q3 9M

Underwriting profit/loss

Return on investments allocated to equity

Pension contributions

Total pension contributions up by 15.3%

Pension premiums up by 17.0% Y/Y • Single premiums up by 37.7% • Regular premiums unchanged

• Growth of 2.3% YTD

Unguaranteed investment schemes in the bank up by 11.5% Growth expected from new corporate concept offering pension schemes to small companies


Total pension contributions DKKm

12

123 118 114 114

431 441 85 72 97 134

448 529

75 77 89

99

281

318

283 267 300

347

1.160

1.288

2012 2013 2014 2015 2014 2015

Q3 9M

Regular premiums

Single premiums

Investment schemes

Profit impacted by financial market turmoil

+ Expense, risk and group life results • Expense result positively affected by recognition

of reinsurance commission

÷ Interest result

• DKK 10m transferred to shadow account due to financial market turmoil

• Profit of DKK 4m before transfer to shadow account

+ Portfolios without bonus entitlement


Profit split* DKKm

13 * Profit before tax of the parent company Alm. Brand Liv og Pension A/S, which includes post-tax return on investment in the EMD Local Currency investment fund

28

21

12 15

2

2

5

4

-5 -1

1

1

0

2

-1

-2

0

-10

24

22

19 9

2012 2013 2014 2015

Q3

Expense, risk and group life results

Interest result

Result of portfolios without bonus entitlement


Change to shadow account

Investment return impacted by financial turmoil


Bonus potential

• Average bonus rate of 8.2%

• Bonus rate down by 2.3 ppts

– Primarily due to losses on equities

– Still strong

• Attractive bonus rate for new policyholders of 8.8%

Rate on policyholders’ savings

• Remains high for 2016

• Supporting growth

14

U74*

Interest rate group Total

0 1 2 3

Technical interest rate 0.5-1.5 1.5-2.5 2.5-3.5 3.5-4.5

Rate on policyholders’ savings, 2015 4.00 5.00 5.00 6.00

Rate on policyholders’ savings, 2016 4.00 5.00 5.00 6.00

Investment assets (DKKbn) 0.1 5.5 1.7 1.2 3.5 12.0

Bonus rate (%) 8.8 17.0 5.6 2.7 8.2

Return (% YTD) 1.8 -0.9 -1.0 -1.3 -0.7

Bonds 100% 62% 62% 78% 81% 69%

Equities 0% 24% 22% 8% 3% 16%

Property 0% 14% 13% 11% 9% 12%

Fixed-income derivatives 0% 0% 3% 3% 7% 3%

*Portfolios without bonus entitlement


BANKING Highlights

Pre-tax profit of DKK 3m Up by DKK 11m Q/Q

• Turbulent financial markets

– Negative value adjustments on bond portfolio

• Writedowns in line with expectations • Growth in full-service customers and lending

B A N K I N G

Pre-tax profit DKKm

15

34

-14

12

-8

8

-3 0

-6

0 -5

31

-14

6

-8

3

Q3 Q4 Q1 Q2 Q3

2014 2015

Profit before writedowns

Writedowns

Forward-looking activities

Private • Lending up by DKK 76m in Q3 (DKK 140m YTD) • Positively affected by cheaper funding and higher

lending • Increased fees related to mortgage bond conversions • Number of full-service customers increased

Financial Markets • Loss on investment portfolio • More customers

Leasing • Increased competition has reduced the growth rate

– Portfolio up by DKK 26m Q/Q (DKK 185m Y/Y)

Other • Result negatively impacted by low/negative interest

rates in combination with excess liquidity • Loss on bond portfolio and related hedging

arrangements

B A N K I N G

Profit before writedowns DKKm

16

-4 -6

4

-1

4 7

4

18

1

11

-2

2

3

2

4

33

-14

-13 -10 -11

34

-14

12

-8

8

Q3 Q4 Q1 Q2 Q3

2014 2015

Private Financial Markets Leasing Other

Targeted reduction in liquidity

Liquidity surplus • DKK 3.0bn at end-Q3 2015 • Reduced by DKK 0.7bn in Q3 • Liquidity Coverage Ratio (LCR) implemented on

1 October 2015 – LCR of 192% at end-September 2015

Reducing surplus • Surplus expected to be reduced by DKK 0.3bn in Q4

2015 • Expiry of fixed-term deposits totalling DKK 1bn in

the period up to early 2016

B A N K I N G

Deposits DKKbn

17

3,4 4,0

4,5 5,5 5,4

6,5 5,6 5,4

2,6 2,2

1,4 1,3

1,2

0,9 1,0

11,3 10,9 11,1

9,0 8,6

2012 2013 2014 H1 2015 9M 2015

Deposits at call

At notice

Other deposits


WINDING-UP ACTIVITIES Highlights

Pre-tax loss of DKK 82m In line with expectations

Writedowns of DKK 74m

• Impacted by agricultural exposures

Results before writedowns: Loss of DKK 8m

• Q2 was negatively impacted by shares taken over

Loan portfolio reduced by DKK 132m adjusted for writedowns (DKK 336m YTD)

• Expected reduction in 2015 raised by DKK 100m to DKK 400m

B A N K I N G

Pre-tax profit DKKm

18

-21 -18 -11

-16 -8

-56

-81

-63 -62 -74

-77

-99

-74 -78

-82

Q3 Q4 Q1 Q2 Q3

2014 2015

Profit before writedowns

Writedowns

Deteriorating conditions for agriculture in Q3

Writedowns of DKK 74m

Agriculture

• Pork and dairy settlement prices remain low

• Lending down by DKK 12m adjusted for writedowns

– Related to sale of a farm

• Loss ratio significantly increased in Q3

Commercial lending

• Reversal of writedowns again in Q3 2015

• Lending reduced by DKK 104m adjusted for writedowns

Mortgage deeds

• Writedowns remain at a satisfactory level

• Credit exposure reduced by DKK 61m adjusted for writedowns

B A N K I N G

Writedowns DKKm

19 Mortgage deeds include credit exposure from option agreement

71

57 60

68

-27

-12

-4 -6

37

18

6 12

9,9 9,0

10,5

13,5

-2,4 -1,1 -0,4 -0,7 1,7 0,8

0,3 0,6

Q4

20

14

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

14

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

14

Q1

20

15

Q2

20

15

Q3

20

15

Agriculture Commercial lending

Mortgage deeds

Losses and writedowns

Loss ratio

CAPITAL MODEL

Excess capital higher than expected

• Capital target reduced by DKK 64m primarily related to Banking

• The group has decided to initiate a share buyback programme of up to DKK 300m

G R O U P

20

Development in excess capital DKKm

Other includes reduction in tier 2 capital and change in treasury shares

667

936

636

177

32 64 -4

-300

Excess capital Q2 '15

Q3 profit Change in

tax asset

Change in

capital target

Other Excess capital Q3 '15

Share buyback

Excess capital

adjusted for share buyback

Full-year outlook for 2015

DKK 600-650m Pre-tax profit

Forward-looking activities: Pre-tax profit of DKK 950-1,000m

Winding-up activities: Loss at the level of DKK 350m

G R O U P

Non-life Insurance Pre-tax profit: DKK 925m Lifted by DKK 150m

• CR at the level of 82 • Expense ratio at the level of 16 • Premiums in line with 2014

Life and Pension Pre-tax profit: DKK 75m Unchanged

• Expects to book risk

allowance for all contribution groups

Banking Pre-tax profit: DKK 20m Unchanged

• Writedowns of around

DKK 20m • Negative impact from low

interest rate level

21

Outlook for 2016

Pre-tax profit of

DKK 450-550m

Forward-looking activities Pre-tax profit of DKK 550-650m at a combined ratio of 91-92 Winding-up activities Pre-tax loss at the level of DKK 100m

G R O U P

22

Non-life Insurance: Technical results exceptionally good, but investment result negatively impacted by turbulent financial markets

Life and Pension: Financial market turmoil impacted results negatively in Q3 Banking: Increase in lending to private customers and continued growth in full-service customers Negatively impacted by turbulent financial markets

Winding-up activities: Overall performance in line with expectations, but deteriorating conditions for agriculture

Outlook FY 2015 outlook raised to DKK 600-650m FY 2016 outlook of DKK 450-550m

G R O U P

23

Highlights

Appendix

24

Alm. Brand in brief

A financial group with DKK 7 billion in revenue and 1,600 employees Offering • Non-life insurance • Banking • Life insurance

Customer focus • Private customers multiple insurance, banking

pension needs • Agriculture and small to medium-sized

commercial customers (not bank)

Distribution of products through • 260 insurance agents • 6 call centres • 13 life and non-life sales centres • 11 bank branches

G R O U P

Sales distribution

Bank branches

Insurance and pension branches

Headquarter

Regional offices

25

NON-LIFE INSURANCE • 4th largest in Denmark

• 500,000 customers

– Private customers

– SMEs

– Agricultural customers

• Cost efficient

• Strongly improved claims scenario

• Competitive combined ratio

• High customer satisfaction

INVESTMENTS ETC.

BANKING • Approx. 50,000 private customers

• Financial Markets and Leasing

• Discontinued lending portfolio

LIFE AND PENSION • Approx. 80,000 customers

• Low costs for customers • Low-risk customer portfolio

• Stable results and high bonus rate

ALM. BRAND - A Danish financial services group

Revenue Approx

DKK 7bn

Integrated business model across insurance, banking and pension

G R O U P

68 %

13 %

10 %

9 %

26

Customer focus and sales - customer loyalty as a competitive parameter

G R O U P

Sales distribution

Customer focus Private customers requiring insurance, banking

and pension services Agricultural customers and SMEs (but not in

banking) Pluskunder

Distribution strategy • Focus on cross selling and referral between sales

channels • Five regions responsible for targeted sales and

service • In-depth knowledge of customers and local

conditions • Central functions provide support through

specialised resources

Distribution through: • 260 insurance agents • 6 customer service centres • 13 sales centres • 11 bank branches

Bank branches

Insurance and pension branches

Headquarter

Regional offices

27

CUSTOMER FIRST 2013-2016

Pre-tax return on equity target CIBOR +10 % in 2016

G R O U P

Efficiency • Improve expense

ratio through streamlining of processes

• Improve the banks interest margin by 1 ppt by 2016

Quality • Improve quality

in all processes • Reduce number

of complaints

Digitalisation • Investing in

digitalisation • Degree of

digitalisation to reach 33% in all customer faced processes

• Self-servicing possibilities to be improved

Customers • Focus on

customer service in all parts of the group

• Improvement of loyalty through good customer experiances

28


NON-LIFE INSURANCE Highlights

4th largest non-life insurance company in Denmark

• 400,000 Private customers

– 200,000 PlusKunde customers

• 100,000 SMEs and agricultural customers

Competitive strengths

• Cost efficient

• Strongly improved claims scenario

• Competitive combined ratio

• High customer satisfaction


Return on equity

29

12,0%

23,2%

38,7%

32,7%

29,5%

2010 2011 2012 2013 2014

Product focus and distribution

Insurance agents still primary distribution channel High property exposure


Products

23%

26% 27%

6%

12%

6%

Fire and property, private Fire and property, commercial

Auto insurance Workers' compensation

Health and accident Other insurances

Premium income

DKK 5bn

30

59 75 74

41 10 20

15 6

Private Commercial Agricultural

Insurance agents Customer service centres Brokers

Distribution (pct.)

Premium development DKKm

2.504 2.540 2.579 2.626 2.642

2.258 2.232 2.287 2.405 2.416

4.762 4.772 4.866

5.031 5.058

2010 2011 2012 2013 2014

Private Commercial


31

Combined Ratio

Combined Ratio Underlying Combined Ratio


32

85,5

80,2 79,7

78,8

77,0

2010 2011 2012 2013 2014

80,6 76,4 67,1 71,4 69,9

17,6 15,9

16,2 16,0 15,6

98,2 92,3

83,3 87,4 85,5

2010 2011 2012 2013 2014


Gross expense ratio

Development in private and commercial - Combined ratio

Private Commercial


33

80,9 77,1 70,0 67,5 68,7 67,4

20,1 18,8

15,3 17,7 17,8 17,4

101,0 95,9

85,3 85,2 86,5 84,8

2009 2010 2011 2012 2013 2014


Gross expense ratio

78,0 84,6 83,6

66,7 74,4 72,4

16,8

16,3 16,6

14,6

14,0 13,6

94,8

100,9 100,2

81,3

88,4 86,0

2009 2010 2011 2012 2013 2014


Gross expense ratio

Development in segments - Technical results

• Private property insurance are now generating profit

• CR of 89.1 in 2014

• Commercial property insurances still not performing satisfactorily

• Hit by storms in 2013 and cloudburst in 2014

• CR of 102.2 in 2014

• Auto insurances still showing very positive results

• CR of 80.6 in 2014

• Workers’ compensation is positively impacted by run-off gains

• CR of 74.9 in 2014

• Health and accident insurance positively impacted by run-offs in 2014

• CR of 65.9 in 2014


34

-300

-200

-100

0

100

200

300

400

Fire and property, private

Fire and property, commercial

Auto insurance Workers' compensation Health and accident Liability insurance & Other direct insurance

2007 2008 2009 2010 2011 2012 2013 2014

Peer group comparison

2012

Note: Combined ratio and expense ratio are stated at group level. Codan and Tryg figures include Danish business only.

Exp

en

se r

ati

o

Co

mb

ined

rati

o

2013

2014

9M 2015

83,3 88,0

85,4

93,8

87,4 91,5

87,5

94,7

85,5 86,0 84,1

94,9

78,6

85,9 84,5


35

16,2 15,8 14,5

22,3

16,0 16,2 15,0

22,7

15,6 15,7 15,1

24,5

15,9 15,7 14,2

Insurance competitors - largest Danish non-life insurance companies Q3 2014

Source: Forsikring og Pension

0% 5% 10% 15% 20% 25%

Tryg

Topdanmark

Codan

Alm. Brand

Gjensidige Forsikring

If

LB Forsikring

Alka

GF-Forsikring


36

Insurance competitors - Segments Q3 2014

Source: Forsikring og Pension

25,6%

15,8% 20,1%

30,7% 26,3%

15,0%

23,1%

24,1% 21,7%

17,9%

15,5%

19,4%

6,0%

6,6% 7,7%

7,4% 12,8%

8,6%

27,1%

26,5% 25,5%

22,4% 25,2%

33,1%

11,8%

11,0% 13,1% 9,0% 6,4%

8,2%

2,0%

6,5% 4,3% 3,7% 4,2% 5,6%

4,4% 9,5% 7,6% 8,9% 9,6% 10,1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Building / content (commercial) Building / content (private) WCA Motor Healt and accident Liability Other


37


LIFE AND PENSION Highlights

90,000 insurance agreements • 60,000 agreements with regular payments

Market shares, measured in regular payments: • Individual retirement

and capital pension schemes 6% • Private installment pension schemes 3% • Insurances with regular disbursements 5% • Employer schemes <1%

Key strenghts • Low costs for customers • Low-risk customer portfolio • Stable results and high bonus rate


Return on equity

38

12,0%

17,0%

13,3%

9,7%

8,8% 9,2%

2009 2010 2011 2012 2013 2014

Pension contributions

Pension premiums


Total pension contribution DKKm

25%

38%

25%

12%

Investment schemes

Individually written insurance

Insurance written in employment relationship

Group life schemes

DKK 1.2bn

39

629 603 618 626 632

90 121

285 302

611

186

358

332 345

402

905

1.082

1.235 1.273

1.645

2010 2011 2012 2013 2014

Regular premiums Single premiums

Investment schemes

Earnings distribution

Risk result is the largest contributor to earning • Individual health assessment on

all customers

Interest result • 0.15% on provisions

Investments allocated to equity • Low risk bond investment

Shadow account • DKK 12m end 2014


Profit split* DKKm

86 81 74

62

11 11

11

16

21

12

3

2

24

-9 -3 -5

-5 -2

137

90

86

77

2011 2012 2013 2014

Expense and risk results

Interest result


Result of portfolios without bonus entitlement

Change to shadow account

40 * Profit before tax of the parent company Alm. Brand Liv og Pension A/S, which includes post-tax return on investment in the EMD Local Currency investment fund

The discount rate of the Danish FSA declined in 2014 (10-year point): – 2014: 0.99% – 2013: 2.24%


Provisions DKKm

41

10.931 11.332 11.832

10.198 10.920

517 454

586

827

912 45 43

45

49

46 11.493 11.829

12.463

11.074

11.878

2010 2011 2012 2013 2014

Life insurance provisions

Collective bonus potential

Outstanding claims provisions

Attractive bonus potential

Attractive bonus potential Also bonus potential in interest rate group 3 with the highest guarantees


Collective bonus potential DKKm

42

1%

52%

29%

8%

10% Risk groups

Interest rate group 0




Bonus potential per group 2014 454

587

827

912

791

3,65% 3,65%

3,00%

4,00% 4,00%

2011 2012 2013 2014 2015

9M

Bonus potential

Rate on policyholders' funds (new agreements)

Competitive position

Alm. Brand has some of the lowest costs for customers


Costs for private customers

43

0%

1%

2%

3%

Alm

.Bra

nd

AP

Pen

sio

n

Da

nic

a,

ba

lan

ce

No

rdea

PF

A

SE

B

Sk

an

dia

, b

asi

c

To

pd

an

ma

rk

Premium 15,000 - depository 100,000 Premium 30,000 - depository 250,000

Premium 50,000 - depository 500,000 Premium 80,000 - depository 2,000,000

8 January 2015 Source: Fakta om Pension & omkostningsmålere


BANKING Highlights

Forward looking activities

Nation-wide bank focused on

• Retail banking with 50,000 private customers (households)

• Financial Markets

• Leasing of cars

Winding-up activities

• Agriculture

• Commercial lending

• Mortgage deeds

B A N K I N G

Return on equity

44

-67%

-95%

-42%

-34%

-17%

2010 2011 2012 2013 2014

Funding development

Significant changes in funding structure and costs Funding primarily consists of deposits, hybrid capital and central banks

B A N K I N G

Funcing costs DKKm

45

643

421

513

457

321

216

2009 2010 2011 2012 2013 2014

Credit institutions and central banks

Deposits and other payables

Bonds issued

Total subordinated debt

16%

82%

2%




DKK 10.4bn

Funding development

B A N K I N G

Quarterly funcing costs DKKm

46

73

68

61

53 50

52

36

23

20

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2013 2014 2015




Deposits

A significant reduction of deposits at notice expected in 2015

B A N K I N G

Development in deposits DKKm

47

3,4 4,0

4,5 5,5 5,4

6,5 5,6 5,4

2,6 2,2

1,4 1,3

1,2

0,9 1,0

11,3 10,9 11,1

9,0 8,6

2012 2013 2014 H1 2015 9M 2015

Deposits at call

At notice

Other deposits

Winding-up lending

Agriculture • 60 customers • 45% pig farmers, 45% dairy

farmers, 10% arable farming • Gross lending DKK 1.2bn

Commercial lending • Primarily lending to investment

properties

Mortgage deeds • Private and commercial mortgage

deeds • Risk on non-delinquent mortgage

deeds sold to Non-life Insurance

B A N K I N G

Development in lending DKKm

48

955

1.757

2.930

0

820

1.455

2.497

0

668

1.094

307

1.874

463

842

260

1.686

Agriculture Commercial lending Mortgage deeds Credit exposure, mortgage deeds

2012 2013 2014 9M 2015

CAPITAL TARGET 30 September 2015

Capital target reduced by DKK 329m in the first 9M of 2015

• Risk reduction in the bank and subsequently reduction of buffer related to winding-up portfolio

G R O U P

DKKm Target 2014

Target Q3 2015

Non-life Insurance (40% of premiums) 2,023 2,017

Life and Pension (8.25% of provisions for insurance contracts) 928 913

Banking (16.0% of risk-weighted assets)* 1,475 1,244

Buffer related to winding-up portfolio 506 429

Diversification effects -300 -300

Total capital target 4,632 4,303

*Calculated as the individual solvency requirement as at 30 September 2015 plus 3 ppts

49

CAPITAL MODEL

Excess capital higher than expected

• Capital target reduced by DKK 329m primarily related to Banking

• The group has decided to initiate a share buyback programme of up to DKK 300m

G R O U P

50

Development in excess capital DKKm

Excess capital FY 2014 adjusted for DKK 85m dividend paid in May Other includes reduction in tier 2 capital and change in treasury shares

126

936

636

428

86

329

-33

-300

Excess capital FY '14

9M profit Change in

tax asset

Change in

capital target

Other Excess capital Q3 '15

Share buyback

Excess capital

adjusted for share buyback

Investment mix - As of 30 September 2015

G R O U P

Life and Pension DKK 13.2bn

• Large exposure to bond markets • Shares and property accounts for

more than 25% of the portfolio

Non-life Insurance DKK 9.8bn

• Mortgage bonds accounts for approx. 80% of the portfolio

• Mortgage deeds acquired from the bank

• Shares account for approx. 3% • Mandate increased in Q3 ‘15

Banking DKK 5.6bn

• Primarily mortgage bonds

51

Shares 3%

Mortgage bonds 80%

Mortgage deeds 17%

Shares 16,8%

Property 11,3%

Mortgage bonds 47,2%

Government bonds 12,9%

index-linked bonds 5,2%

Credit bonds 2,8%

Emerging markets

3,8%

Shares 5% Mortgage

bonds 81%

Government bonds

2%

Credit bonds 2%

Liquidity 10%

Organisational structure

G R O U P

Søren Boe Mortensen CEO: Since 2001 Employed:1987

Jesper Mørch Sørensen Managing Director Non-life Insurance Employed:2004

Mikael Sundby Managing Director Life and Pension Employed:1985

Kim Bai Wadstrøm Managing Director Banking Employed: 2011

Anne Mette Barfod CFO Employed:1996

52

Rasmus Lynge Marketing Director Employed:2015

History

G R O U P

53

Great Copenhagen Fire of 1728 Major farm fires and

resulting bankruptcies

1728 1792 1984 1988 1989 to 2001 2002 2002 to 2009

Alm. Brand established By order of King Christian VII Only fire insurances Outside Copenhagen and

provincial towns

Alm. Brand Liv & Pension established Acquisition of

Nordlyset renamed Alm. Brand Liv & Pension

Alm. Brand Bank established Through the

acquisition of SLJ Bank

Acquisitions (1989 to 2001) Det Kjøbenhavnske Reassurance-Compagni (Kjøbenhavnske Re) fra

1915. Aktieselskabet Utrecht. Controlling interest in Finansieringsselskabet Gefion A/S. Gefion A/S

subsequently became the parent company for the Group's financial activities and renamed Alm. Brand A/S.

The Danish activities of Zurich Life Insurance. Provinzial Danmark, SamLiv and Cykelhandlernes Forsikringsselskab.

Consolidation of insurance activities Alm. Brand A/S acquires non-life

insurance portfolio from Alm. Brand af 1792 G/S

Alm. Brand af 1792 G/S transformed to a fmba

Acquisitions and disposals Provinsforsikring merged with

Alm. Brand Acquisition of Henton

Børsmæglerselskab A/S Disposal of Kjøbenhavnske Re.

2014

Liquidation Solvent liquidation of the listed

subsidiary Alm. Brand Formue

“The statements made in this presentation are based on current expectations, estimates and projections made by management. All statements about future financial performance are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by the statements. All statements about future financial performance made in this presentation are solely based on information known at the time of the preparation of the last published financial report, and the company assumes no obligation to update these statements, whether as a result of new information, future events, or otherwise.”

54

Alm Brand

Investor presentation November 2015

results for q3 2015 - alm. brand...•dkk 3.0bn at end-q3 2015 •reduced by dkk 0.7bn in q3...

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