Release Date: July 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alm Brand AS (OCSE:ALMB, Financial) reported a significant improvement in its technical result, increasing from DKK312 million last year to DKK520 million this quarter.
- The company achieved an impressive insurance revenue growth of 11% in personal lines, indicating a strong market share gain.
- Investment income was robust, with a profit of DKK102 million, driven by positive returns from the free portfolio.
- Synergies are materializing as planned, contributing to a 0.7 percentage point improvement in the underlying claims ratio and a 0.8 percentage point improvement in the cost ratio year-on-year.
- The company upgraded its guidance for the insurance service result in 2025 by DKK50 million, reflecting confidence in future performance.
Negative Points
- The combined ratio in personal lines increased to 81.6 from 80.2 last year, partly due to lower run-off gains and higher weather-related claims.
- Despite strong growth, the commercial lines segment faced a drag from repricing efforts, particularly in unprofitable standalone workers' compensation.
- The reinstatement premium related to the Mexico case was a financial drag, impacting the claims ratio.
- The expense ratio in commercial lines remained flat quarter-on-quarter, with no immediate tailwind from the strong premium growth.
- The guidance for the group profit excluding special costs remains cautious, with no significant increase beyond the run-off gains realized in the first half of the year.
Q & A Highlights
Q: Regarding the 2025 guidance, the mid-range is DKK1.7 billion, but with run-off gains, it seems short of the DKK1.85 billion target. Is the reinstatement premium from Mexico affecting this?
A: Andreas Madsen, Deputy CEO & CFO: The DKK1.7 billion is a round number and aligns with the overall expectation of DKK1.85 billion, including normalized run-off. The reinstatement premium is not a significant issue here.
Q: Can you break down the 11% growth in private lines into repricing, private-seeking, and underlying growth?
A: Andreas Madsen, Deputy CEO & CFO: Roughly 3% is from indexation, 4% from pricing strategy, particularly due to travel insurance repricing, and the remaining 4% from market share gains, largely driven by banking partners.
Q: Is the Erhvervssikring product contributing to growth in the corporate space, or is there potential for future impact?
A: Andreas Madsen, Deputy CEO & CFO: Erhvervssikring is still new and hasn't significantly impacted numbers yet. It's expected to take time to build its contribution within the ALM. Brand group.
Q: How much premium growth from repricing measures is still expected for the rest of the year?
A: Andreas Madsen, Deputy CEO & CFO: Approximately one-third of the portfolio is yet to be renewed for the year, with some pricing effects already initiated before year-end.
Q: With a solvency ratio of 194% and expected increase with PIM model approval, how will you address the capital position?
A: Andreas Madsen, Deputy CEO & CFO: The PIM model is expected to provide DKK500 million in SCR relief, translating to an 18 percentage point increase in solvency. A full review of capital targets will be discussed later this year.
Q: Regarding the Mexico case, is there more to expect from this divested business, and how does reinsurance retention work for large claims?
A: Andreas Madsen, Deputy CEO & CFO: The Mexico claim is the only remaining dispute from the old business. The reinsurance program is historical and not connected to current programs. Recent market changes have increased reinstatement fees, but this does not affect current business.
Q: Why hasn't the guidance increased more than the run-off gains, given strong premium growth and better-than-normal large claims?
A: Andreas Madsen, Deputy CEO & CFO: The guidance reflects round numbers and prudence. There is no cause for concern regarding the second half, and the overall target remains achievable.
Q: On the expense ratio, why are expenses in commercial lines almost flat despite strong premium growth?
A: Andreas Madsen, Deputy CEO & CFO: Growth from market share gains can initially create headwinds for the cost ratio due to provisions for tied agents. Tailwinds from growth will materialize over time.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
