STOCKHOLM, Sweden, August 12, 2003 (PRIMEZONE) -- If P&C Insurance: Q2 report 2003
* MSEK 1 137 operating profit YTD (-1 573) * Combined ratio YTD 103.0% (107.8%) * Cost ratio YTD 27.1% (29.9%) * Investment result statutory YTD MSEK 2 101, current value MSEK 2 023 * Investment return 2.8% YTD (5.6% annualised) * Net cash flow from underwriting YTD MSEK 5 101
RESULTS IF GROUP Q2 2003 Q2 2002 6M 2003 6M 2002 FY 2002 MSEK Gross written premiums 8 569 8 891 24 447 23 493 38 136 Operating result 853 -1 114 1 137 -1 573 -2 080 Technical result1) 421 189 580 -129 321 Combined ratio 101.0% 104.4% 103.0% 107.8% 106.1% 1) Underwriting result plus allocated risk-free interest on net technical provisions.
Comments from Torbjorn Magnusson, CEO:
"Six months now remain of the 24-month turn-around programme launched in 2002. The programme implementation and results follow our plans and the combined ratio for the first six months of 2003 is 103.0% (107.8%). Bottom line results are also satisfactory as equity markets have been recovering and the operating result for the first six months is MSEK 1 137 (-1 573). The operating profit contributes to good net asset value growth and a strengthened balance sheet.
In the insurance operations, it is gratifying to see the results improving consistently in Private, Commercial as well as Industrial business. The technical profit has gradually improved over the last 5 quarters to MSEK 421 (189) in Q2. All fundamental plan parameters -- e.g. nominal costs, average premiums, average claims and frequency of claims - develop well and follow the expected seasonal pattern. A number of the activities in the turn-around programme, including pricing adjustments, cost reductions and service improvements, will continue to deliver results also going forward.
Large claims are marginally better than plan after the first six months, with relatively few major losses and weather events in the second quarter. However, simultaneously some reserve strengthening has been necessary following increased settlements for prior years, in particular for Motor TPL.
In our Marine & Energy book, we now expect to have commuted all material asbestos exposure. The commutation means a final settlement of all material asbestos exposure in the live business.
The cost awareness culture and enhanced cost control are proving to be efficient and continue to impact costs positively. Nominal costs have been further reduced in all business areas during Q2, as especially IT expenses and consultant fees have been lowered, in many cases using Nordic synergies. Manning reductions have also contributed to reducing the cost ratio to 26.8% (29.0%) in Q2.
Within investments, we have implemented a low-risk strategy that has produced a satisfactory return of 2.8%. The allocation to equities was particularly low in the first quarter but it was gradually increased towards the benchmark allocation during Q2, as market volatility decreased. Bond yields have declined and consequently our fixed-income portfolios performed well. Following the summer upturn in market yields, we have extended our durations somewhat. We have also finalised procuring Scandinavian asset management services, achieving savings and more specialisation, and new asset managers will start managing their mandates during the autumn.
In the autumn, we will follow the development of the financial and reinsurance markets, which are important parameters for the Nordic primary insurance markets. This development is, as yet, uncertain and I am pleased that our Q2 results provide a strong platform for our continued efforts.
If will continue to show determination and market leadership in the setting of appropriate terms and conditions, reflecting also long-term financial expectations. Simultaneously, we are advancing our service and product concepts with the competitive advantage of our scale, supporting the Nordic societies as the leading safety and security supplier in the region."
Group results
Premiums earned for Q2 2003 were MSEK 8 673 (MSEK 8 264). The technical result was MSEK 421 (MSEK 189). Claims incurred were MSEK -7 076 (MSEK - 6 912) and operating expenses MSEK -1 688 (MSEK -1 717). The statutory operating result before tax was MSEK 853 (MSEK -1 114).
In Q2, the risk ratio was 74.2 per cent (75.4%) and the cost ratio was 26.8 per cent (29.0%). The combined ratio was 101.0 per cent (104.4%).
For the first six months the premiums earned were MSEK 17 345 (MSEK 16 017). The technical result was MSEK 580 (MSEK -129). Claims incurred were MSEK -14 420 (MSEK -13 749) and operating expenses were MSEK -3 446 (MSEK -3 511). The statutory operating result before tax was MSEK 1 137 (MSEK -1 573).
For the first six months, the risk ratio was 75.9 per cent (77.9%) and the cost ratio was 27.1 per cent (29.9%). The combined ratio was 103.0 per cent (107.8%).
Solna, Sweden, August 12, 2003
Torbjorn Magnusson President and CEO
A combined web and teleconference will be held on August 12 at 16:30 CET. To register, please use the link below and follow the instructions.
http://213.86.178.134/inv/reg.html?Acc=4137072500&Conf=133196
Further details and the Q2 presentation are published under Financial Information on If's Internet site www.if-insurance.com
This information was brought to you by Waymaker http://www.waymaker.net
The full report is available for download:
http://www.waymaker.net/bitonline/2003/08/12/20030812BIT00010/wkr0001.doc
http://www.waymaker.net/bitonline/2003/08/12/20030812BIT00010/wkr0002.pdf
http://www.waymaker.net/bitonline/2003/08/12/20030812BIT00010/wkr0003.xls