Alm. Brand Aktie

Hello, everyone. Thank you for joining us, and welcome to the Alm Brand Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Andreas Ruben Madsen, CEO at Alm Brands. Please go ahead.

Good morning, and thank you for joining us on our conference call. I'm Andreas Ruben Madsen, the CEO of Alm Brand. And as usual, I have with me the Head of our IR team, Mads Thinggaard. This morning, we published our interim report for the third quarter of '26, and I'll now walk you through the presentation of the results. Please turn to Slide 2.

Overall, I'm quite pleased with the financial performance in Q3. We delivered the highest insurance service results to date, which is driven by lower weather-related and major claims as well as run-off gains. We report an overall premium growth by 1.6%, mainly driven by Personal Lines, which recorded a growth of 4.7%. The growth slowed slightly in Q3 as expected. As a result of last year's repricing fading. A growth rate of almost 5% for private lines does, however, still indicate that we continue to gain market shares from the strong bank partnerships as the key driver.

In Commercial Lines, we reported a decline in the top line, reflecting our actions to improve profitability and reduce volatility at the same time. Adjusted for the workers' compensation and industrial customers, the commercial portfolio reflected a premium growth of 2.7% year-on-year, indicating and satisfactory growth in our focus area. Insurance operating expenses increased slightly during the quarter, bringing the expense ratio up to 16.1%. The movement reflects normal fluctuations over the quarters.

Today, we announced an FTE reduction of 85 consisting of 55 redundancies and 30 discontinued positions. We thus continue to focus on reducing our cost base and building a more efficient group. The ending sales ratio improved by 70 basis points year-on-year, whereas Personal Lines delivered an underlying improvement of 0.8 percentage points and Commercial Lines reported an improvement of 0.5%. The improvement was not lower than in H1 is due to the fateffects, assist increased coverage for workers' compensation following the ruling represented a 40 basis point headwind. While underlying claims improved by 130 basis points in the first 9 months of '26, supported by favorable forcastic effects -- we should expect a bit lower improvement for the full year, assuming a structural improvement in Q4 of 50 to 100 basis points.

Turning now to Slide 3. Let me take you through the financial highlights. Insurance revenue grew slightly, leading to an overall growth of 1.6% year-on-year, while service result amounted to DKK 755 million, which is our highest result to date. Insurance services was almost entirely driven by very low levels of weather and major claims as well as high one-off gains. Investments amounted to a loss of DKK 76 million in the quarter, primarily driven by rising interest rates. Finally, other income expenses are significantly lower than last year as we have as we no longer have integration costs related to Codan following the completion of the integration. And now please turn to Slide 5.

As I mentioned before, the group delivered the highest insurance service results. The significant improvement was driven by lower level of major and weather claims as well as higher runoff gains and an improved underlying claims ratio. In Personal Lines, the insurance service results increased DKK 90 million year-on-year to DKK 360 million. The strong performance was mainly driven by a significantly lower level of weather claims, which improved by 3.3 percentage points year-on-year, supported by lower major claims and continued improvements in the underlying business.

The cost ratio increased slightly to 17.0% in Q3 2026. In Commercial Lines, the insurance service results increased by DKK 130 million year-on-year to DKK 395 million. The strong performance was mainly driven by significantly lower major claims, improving by 6.2 percentage points year-on-year and higher runoff gains. This was partly offset by an adverse comparison for the risk adjustment as Q3 '25 benefited from the one-off positive effect related to the expansion of the partial internal model to include Coland activities. The expense ratio went up slightly by 0.2 percentage points against Q3 last year.

Turning now to Slide 6 on insurance revenue. Insurance grew by 1.6% in the quarter, almost unchanged compared to 1.7% last quarter. In Personal Lines, we continue to gain market share while the impact of reprices fading as expected. As such, growth of 4.7% is seen as a satisfactory outcome primarily driven by customer inflows and retention in our bank partnerships. During the quarter, we're also pleased that ALS bank renewed its partnership with Minibar Group reaffirming the strength of our bancassurance proposition. In commercial clients, we reported a decline in premiums of 1.8%, slightly improved versus a decline of 2.3% last year. Our efforts continue to focus on improving profitability as well as reducing volatility. Adjusted for the workers' compensation and industrial customers, the commercial portfolio reflected a premium growth of 2.7%, which I view as satisfactory. Moving on to Slide 7 and the claims ratio.

In Q3 claims rate by a very satisfactory 7.2 percentage points year-on-year, reflecting lower major and weather-related claims as well as strong runoff gains. The improvement was partly offset by 1.9 percentage point variation in the risk adjustment at Q3 '25 benefited from no effect related to the performance expansion of the partial internal martinclude coal and insurance activities. The underlying change ratio improved by 70 basis points year-on-year, reflecting the positive impact of our profitability initiatives, including strategic initiatives beginning to take effect. This was partly offset by the fanatic headwinds and the workers' compensation drilling for which the implication of the current year have now become clearer.

Metro lines improved by 50 basis points year-on-year while preselling improved to 80 basis points. The discounting effect contributed 20 basis points year-on-year, driven by higher interest rates, although this was partly offset by the workers' compensation model change introduced in Q4 '25. And now please turn to Slide 8 on personal lines.

The combined ratio in personal lines improved to 78.3% from 83.0% in Q3 last year. This was primarily driven by lower levels of major and weather-related claims as well as an 80 basis points improvement in the underlying claims ratio year-on-year, driven by the strategic initiatives kicking in, but also impacted Bataan Q3 last year. On the other hand, the cost ratio increased slightly to 17.0% in Q3. Premium growth was 4.7% despite the gradual phasing impact of repricing. Please turn to Slide 9, covering Commercial Lines. Commercial Lines delivered a strong Q3 with a combined ratio improving to 71.7% from 81.3% in the same period last year. This development was supported by runoff gains of 7.5 percentage points, primarily driven by workers' compensation and property. Major claims were also significantly lower to 5.1% and compared with 11.3% in Q3 last year. Despite the impact of the workers' compensation ruling has statically denied Q3 last year. The underlying claims ratio improved by 50 basis points year reflecting the positive effects of our profitability, enhancing measures, but take effect as well as lower reinsurance costs.

The cost ratio increased slightly compared to last year, mainly reflect the normal quarterly fluctuations. And now let's move to Slide 11 for the investment results. In Q3, the overall investment was a loss of DKK 76 million primarily driven by the free portfolio advanced led to a loss of DKK 34 million, primarily as a consequence of rising interest rates. The group's investment portfolio remains well diversified with a low risk profile.

Finally, let's turn to Slide 13 for our updated guidance. On October 5, we upgraded our '26 outlook and raised our guidance for the insurance services of DKK 250 million to DKK 1.5 billion to DKK 1.6 billion, excluding runoff gains in Q4 '26 in from the previous range of DKK 1.2 billion to DKK 1.4 billion. The upgrade reflects the roles of major claims and weather-related claims than previously expected as well as one-off gains. We continue to expect a cost ratio of around 17% for 2026. Excluding the runoff result in Q4, the combined ratio is now expected to be in the range of 86.5 to 87.5 -- adjusted for the impact of the Supreme Court ruling, this corresponds to a combined ratio of 81 to 82.

In addition, we reduced our guidance for the investment result by DKK 100 million to DKK 150 million for 26 million, reflecting the increase in interest rates. As a result, our guidance for profit before other income and expenses was increased by DKK 150 million to DKK 1.65 billion to DKK 1.75 billion. Guidance for other income and expenses is down by DKK 50 million to an expense of DKK 0.55 billion for 2026.

The increase is due through one-off costs related to the FTE reduction announced today. We expect to book the DKK 40 million one-off front in Q4.

With that, I conclude the presentation and hand over to our moderator. Thank you.

[Operator Instructions] Your first question comes from the line of Vash Gosalia with Goldman Sachs.

I have 2. One on the underlying claims ratio. So you have noted the 90 basis points headwind in the Commercial segment this year. Basically coming from workers comp. So 1 clarification on that. Like why has it come through underlying and not included in the DKK 700 million charge that you have taken. But more importantly, just wanted to understand next year as the business gets replaced, should we expect a similar sort of amount of tailwind in your underlying claims ratio in 2027? That's my first question.

The second 1 is just on your capital. Could you remind us of the seasonality within Solvency II numbers? And essentially, how should we think about the exit Solvency II ratio for 2026? And can we expect the statically better year to lead to a higher capital return? Or would you hold back some of the good news for the Guard arbitration?

Yes. Thank you. I can start on the first question. And then think Mats will do some of the capital or we can help each other at least start with the underlying loss ratio in commercial lines. It's true that we have approximately 90 basis points of headwind coming from the effect of small -- effect in the small claim, the underlying loss ratio coming from the Supreme Court ruling. And how does that sort of work against how is that connected to the DKK 700 million strengthening. The DKK 700 million is almost entirely prior year losses. Regarding the backdated effect of all the claims we have already handled for the last up to 30 years. .

So what happens is that -- that's the major effect, but all -- this is what you're seeing in the underlying loss ratio is the effect from -- on an onward-looking basis, we expect to get more claims simply because the threshold now is lower. And the effect in our books is estimated to around 90 basis points. So this is definitely something that we will need to sort of cater for in terms of pricing. And we will also be repricing the new business coming in to cater for that. So in a sort of -- a lot of the book would renew in the large segment on January 1. In the Commercial Lines business. So we should already see an effect there.

And then we'll get through the full transition will take around a year or fourth quarters, so to say, but we've already started repricing the new business coming in. So I hope -- so we would have a slight headwind next year, but we should get fully back the profits from this effect. And maybe, Mads, you can talk a bit into capital.

Yes. I mean, I can give some input on how -- I mean how you should see the capital evolving in -- by year-end and -- and it's -- I mean, 1 thing is that we have a very clear pattern through here where we see the profit margin that is part of our capital base tick up quite a bit in Q4 and then a decline in the rest of the core -- so when you mark in Q4, you should put in a healthy uptick in the profit margin. And that is also reflecting the -- that is quite heavy in at the start of Q1. So that is a kind of an addition to do there. And just to give a kind of structural number, then we are talking about effects of DKK 20 million to DKK 400 million uptick in Q4 structure due to the seasonality here. So I think that's 1 thing to look for -- and then another item is that immediately after Q3, we did issue a private placement on Tier 2 that can play in our capital base. And there, we should have a tailwind of around 5 percentage points as well, that should be muted into the Q4 solvency coverage. So think that's some of the elements. And then I think players will mention whether you should expect something from gas in Q4. Yes.

The short answer is that we find the card claim completely unfounded, also have to have interviewed the latest reply. And as such, there is no reason to see any effects translating in anywhere. We have not put a single penny in reservations for that, and I see no effect coming into capital either.

Can I just clarify on your first reply -- so you mentioned that you still expect some headwind next year. But if I understood correctly, you repriced most of the business on first Jan. So while I appreciate you will have a little bit of headwind, but net-net, you should still see a tailwind, right, because you will reprice most of the business. So this starting point of higher 90 basis points should not be the case. So you should almost see like probably 70 basis points statement, if that's a fair number.

Well, I think we would expect to get most of the 90 basis point headwind back we'll get a significant portion back in the beginning of the year, but we will actually reprice the portfolio for us to get fully there. So I think the -- what I said is that we haven't hit some headwinds now. and we expect to reprice that. We should see an effect already in Q1 next year, and then we will get it fully back during the year. Train actual tailwind. I don't think that would be the white gray to sort of view that in terms of underlying loss ratio.

Your next question comes from the line of Des Sukari with Autonomous Research. Please go ahead.

I've got 3 quick questions, actually. The first 1 is on the head count reductions you announced today. I was wondering whether at the time you unveiled your 2028 targets at the end of 2025, whether these reductions are included in the plan or whether these are new measures that offer you some sort of extra buffer at your targets? That's my first question.

And my second question is actually on Gord. -- and whether you have any side of the likely time line when this issue will be resolved. And then finally, on commercial, you are providing us with the growth rate adjusted for workers' comp and industrial customers. So I was wondering whether the measures you have been taking in these 2 lines, whether these are complete and therefore in 2027, the growth rate will look differently. .

Yes. Thank you. Well, the head count adjustments we did today I think the short answer is that we're working on a -- while we work on a number of initiatives. We also have data centers being what you call it, merged. So we deconsolidated that 1 shutdown one, also a meaningful impact of around DKK 50 million in full year run rate -- so just to name a major event also coming in. This, I would say, more or less is in line with what plans we've had and follows the line we set to become more efficient over the years. So I wouldn't see this as something that changes what you might call the expected track from what we said when we came with 2028 strategy, and it is not to be seen as us getting -- we're not in no way doing new targets just because we did this adoption.

Then going to the GA time line. We expect the guard arbitration to be concluded in the end of August next year. So just to maybe comment briefly on the process, as expected, there will be some iterations. We have received a reply from Guard in the middle of July, as I also recall, we mentioned back then -- we didn't have time at that point to sort of go through it, but we have been going through it thoroughly since then. And I think the important thing to highlight once more here is that we still consider it completely unfounded and now the arbitration will need to go its course. So that was that.

And then around top line growth in our commercial lines business. I heard the question that framed that we've had some headwind in terms of top line. We see a more sensible growth when adjusting for the larger segments and workers' comp were we have the 2.7% highlighted. And what does that mean for expectations going into next year. Well, I think we'll have -- we think we are in a good place in terms of profitability. If you adjust for some of the headwinds we mentioned, we have a strong track in commercial lines, both in this quarter and for the full year. We're seeing the effects from the profitability initiatives we've already done. But it's hard to sort of predict exactly how will the renewal go in terms of where will the market be. And will we need to walk away from further business, we'll have to see.

But as you know, we are about profitability first and remain so. So we'll have to see where the market is in workers' compensation, for 1 thing and especially in the large segment when we get to the 1/1 renewal.

Your next question comes from the line of Anders Hornbach with Danske.

Aman Wanda from Danske Marcus. Any chance you could split your premium growth into a price component and an underlying unit growth that would be helpful both for the commercial segment and the private segment -- and there's no reason to believe that one-off losses would stay at a level versus previous guidance.

Yes, starting with premiums I can do that in rough numbers. Private top line grew 4.7%, indexation, around 2%. The rest or at least the major rest -- part of the rest is to be considered market share growth, a lot of that coming from our bank partnerships. So that would be the main drivers of the main competition of private lines. Going to commercial lines. Total -- in total, we have a decrease of 1.8 percentage points and very rough numbers, but the major effects are, let's say, indexation around 2% and then a 4% effect from the profitability or the derisking of the book, walking away from some of the larger, especially workers' compensation and larger segment. So if we haven't had that sort of development in 11, we would be closer to normal indexation for commercial lines also. So I hope that helps with that competition.

And you asked about one-off runoff gains -- sorry, as a follow-up on that I'll go to runoff gains and we go and take an extra question if you need more on premiums. For run-off gains, I heard the question being -- now we've had a favorable development in -- also in Q3 and been a bit above normal for some of the quarters. The short answer is that this has not changed our structural expectation. we continue to expect in the long term setting around plus 2% in runoff gains. But as we have mentioned, before it fluctuates and can fluctuate from quarter-to-quarter, and we will not be including it as a guidance for that reason within a 1-year time frame. So yes.

Your next question comes from the line of Martin Berg with SEB.

Andreas, just maybe 1 more time on workers' comp. I guess you took -- you took the DKK 700 million in Q2. You report run-off gains of DKK 104 million in Q3 new commercial line segments and you -- how much is that is -- you say workers' comp and property releases, but how much of that is actually work has come and then then perhaps the 40 bps that you want to reclaim next year, given that this is a hypercompetitive market. Are you sure that you can actually price this full and the 40 bps if you manage prices to what kind of profitability level does that bring you at in your workers' comp?

And then maybe a third question, while we added -- you still guide for 100 bps run rate on your underlying this year, taking everything this into account. And in your head, what is the improvement rate going to be for 2027?

Yes. we can -- let me try to go through that and see if I got it all, but circle back if needed. I understand there the moving parts on workers' compensation. That's fair enough because they are -- so just to maybe put a few words on that. We already commented on the 40 basis points for the group or 90 basis points in commercial headwind which is a small frame effect from the -- on an ongoing basis from the future effect of the Supreme Court's roaming -- then we also have, and that's true of loss gain in commercial lines, where we mentioned workers' compensation in Q3, '26 and that is true.

And most of the effect without giving exact numbers, let's say, 2/3 or something. Most of the effect of the runoff would be from workers' compensation. And the driver behind that is that we got the yearly wage regulation index, which basically comes once a year and until it is fixed, we have to sort of estimate what we think our expenses will be -- and this year, it came in positively. So that's at least the major -- it's not all of the reason, but it -- that would be a mentionable factor within why we actually can see a runoff gain coming from.

And it has nothing just to say that it has nothing to do with the Supreme Court ruling, which still stands with the reservation we have communicated related to the backdated effect of the roughly DKK 700 million. It's a very good question, Martin. Again, I can -- you are right that how much would we get would to some degree, obviously, depends on how the well the market is in terms of the headwind we now need to reprice for I would say my sense is that the market is communicating that from the effect of the Freeport ruling, most players will be repricing -- but we'll have to see where it ends up. So -- but I would be -- for now, at least, I would expect that we would get that profit back through higher prices. That would be my base expectation.

Maybe, Matt, you could do the underlying loss ratio, and there's something about what to expect Yes, guidance.

Yes, for next year, and of course, that has a bit of an interface with what we just discussed whether the headwind from Vegas comp could be a small site next year when it's -- the year-over-year effect is out and perhaps some repricing is in -- but as a starting point for next year, I think I would start with the 50 basis points that we are core to at our Capital Markets Day where we are creating effects from initiatives that will support that run rate. and then we could have some plus/minus from this and stochastic effects. So I would say, start with 50 basis points of improvement.

Your next question comes from the line of Alessia Magni with Barclays.

One follow-up clarification. On the FTE reduction, I would have factor that you have actually a positive impact on essentially next year underlying and expense ratio. But the new said before, if I understood correctly, or -- I should actually expect.

No, let me clarify. But our 2 target is a reduction in interest rates of 100 basis points compared to 2025 levels. bringing us to 16%. We are now at 17% for this year guidance. And then we have -- so on top of that, we plan for structural improvement of in the claims ratio of 150 basis points over 3 years. So what I'm just saying is that the fact that we now need to also look at our wage base and do a reduction is just in line with that expectation that we expect to improve both our claims ratio and our expense ratio following our '28 target. But we're not -- so it's in line with that. That is what I was trying to say. So yes, you should expect an improvement in the expense ratios and claims ratios as Matt just mentioned before.

As a result of the FTE reduction. .

Well, yes, but of course, yes. But it should be seen as 1 of many levers or initiatives which we which will support a lower claims ratio and lower cost ratios.

Your next question comes from the line of Overa with DNB Kong. Please go ahead.

Just a small question on interest rates, really. Could you just remind us again how you do the discounting calculation? Is that a deaverage or a period-end number given how the interest rates have moved so far this quarter. Could you just almost going into Q4 and early next year at the current rate level.

Higher order, Matthew, I mean, we do the technical calculations of the discounting rate is done monthly. And the implication of that is that when we have a 2.4% discounting year on Q3, then the increases that we did see in the interest rate in September of some size are not fully baked into that level. So it would be reasonable to expect a discounting effect in Q4, that would be 20 basis points higher, I would say. So -- and that would also be a kind of a good place to start for 2027.

There are no further questions at this time. I will now turn the call back to Andreas Ruben Madsen closing remarks.

Yes. Thanks for joining today, and thanks for the questions. So have a good day.

This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone. Thank you for joining us, and welcome to the Alm. Brands Second Quarter 2026 Earnings Call. [Operator Instructions]. I will now hand the conference over to Andreas Ruben Madsen, CEO at Alm. Brand. Please go ahead.

Good morning. Thank you for joining us on our conference call. I'm Andreas Ruben Madsen, CEO of Alm. Bond Group. As usual, I have with me the head of our RR team, Mads Thinggaard. This morning, we published our interim report for the second quarter of '26, and I'll now I'll walk through the presentation of our results.

Let's now turn to Slide 2 and the key highlights for my first full quarter as CEO. Overall, I'm very pleased with the financial performance in Q2. We delivered a strong underlying improvement in the claims ratio, which improved by 200 basis points year-on-year. At the same time, results in Q2 were negatively impacted by a DKK 700 million one-off reserve strengthening following the Supreme Court ruling on workers' compensation.

In Personal Lines, growth slowed a bit in the quarter as expected due to the year-on-year effects from last year's repricing fading. However, a growth rate of above 5% during Q2 still indicates that we continue to gain market shares. In Commercial Lines, we experienced a decline in the top line, reflecting our actions to improve profitability in increasingly soft market for workers' compensation while seeking to reduce volatility at the same time.

Adjusted for the areas we work on in this respect, which is workers' compensation and industrial customers, the commercial portfolio reflected a premium growth of 1.0% year-on-year. Importantly, we improved the underlying claims ratio in commercial lines by 2.3 percentage points year-on-year. So overall, this reflects continued progress on profitability.

And now I'd likely to turn to Slide 3 for our financial highlights. In the table to the right, the middle column reflects our Q2 financials, excluding the impact from the Supreme Court ruling on workers' compensation. Insurance revenue grew to DKK 3.0 billion in the quarter. The adjusted insurance sales result was DKK 648 million, up from DKK 520 million in Q2 last year and this represents our highest insurance service result ever.

We continue the strong underlying trend from Q1 with a significant year-on-year improvement in underlying claims. Weather-related claims were higher than we would normally expect for Q2, while major claims were below normal levels. Runoff gains at a level of around 3.5 percentage points were almost double of the normally expected level. Investment income was strong in Q2 with a net gain of DKK 215 million, related to the rebound in the market impacting equities as well as bonds in a positive direction. Finally, other income and expenses are significantly lower than last year. Primarily, we no longer have integration costs related to Codan following the completion of the integration.

And now let's turn to Slide 5. As I mentioned before, the group delivered the highest insurance service result ever in Q2, adjusted for the Supreme Court ruling on workers' compensation. The significant improvement was driven by strong underlying improvements as well as runoff gains when adjusting for the one-off charge.

In Personal Lines, the insurance result increased year-on-year by DKK 114 million to DKK 400 million. This was driven by continued growth, underlying improvements and runoff gains. The cost ratio increased marginally to 17.2%. In Commercial Lines, the adjusted insurance result was SEK 248 million, up from SEK 234 million last year. The increase was driven by a combination of significant underlying improvements, higher ordinary runoff gains than Q2 last year, and 30 basis points drop in the cost ratio.

On the other hand, weather claims and major claims were above the level in Q2 last year, while the decline in premiums had only a limited impact on earnings. Please turn to Slide 6. Insurance revenue grew by 1.7% in the quarter compared to 2.5% last quarter, reflecting effects from last year's repricing fading and an increasingly soft market for workers' compensation.

In personal lines, we continue to take market share while the effects of repricing are fading as expected. Therefore, I'm quite pleased that we delivered a growth rate of 5.2% year-on-year. In Commercial Lines, premiums declined by 2.3% percentage points year-on-year, reflecting our continued efforts with improving profitability in the soft market for workers compensation as well as reducing volatility among our larger customers. Adjusted for workers' compensation and industrial customers, the commercial portfolio grew at a muted level of 1.0% in Q2. The growth of 1% in the broad commercial book is too low in my view. It calls for a bit of management attention, especially on the SME side.

Now moving to Slide 7 and the claims ratio. The Q2 claims ratio improved by nearly 4 percentage points year-on-year, adjusted for the Supreme Court ruling. This reflects strong underlying improvements in relatively high ordinary run-off gains, partly offset by elevated weather claims from the Storm Dave in April. In addition, the year-on-year comparison benefited from the nonrecurrence of reinstatement premiums recognized in Q2 2025.

The underlying claims ratio was 200 basis points lower year-on-year, driven by our profitability initiatives. The underlying improvements were particularly strong in commercial lines with 230 basis points improvements in underlying claims year-on-year, while personal lines improved by 190 basis points.

Overall, the discounting effect was flat year-on-year at 2.2 percentage points, which may come as a surprise to some of you. This reflects model changes within workers' compensation that offset the positive impact from the higher interest rates in Q2 this year compared to last year. Looking ahead, I would expect the discounting to be at a level of about 2.2% with the current level of interest rates.

And now please turn to Slide 8. The combined ratio in Personal Lines improved to 75.5% from 81.6% last year. This was driven by lower underlying claims and runoff gains. On the other side, the cost ratio increased slightly to 17.2% in Q2. Premium growth remained strong at 5.2% despite the fading effects from repricing.

Please turn to Slide 9 for Commercial Lines. In Commercial Lines, we observed a reduction in the combined ratio to 81.8% in Q2 '26, adjusted for the Supreme Court ruling compared to 83.2% in Q2 last year. The improvement was driven by significant improved underlying claims and the reinstatement fee for reinsurance in Q2 '25 not being reported repeated. This was partly offset by somewhat higher large and weather-related claims, while the cost ratio decreased by 30 basis points year-on-year, providing additional support.

Now let's move to Slide 11 and the investment result. You may have noticed that we began disclosing returns on our free portfolio in Q1 this year. This was in response to requests from many of you. In Q2, the investment result was a gain of DKK 250 million primarily driven by the free portfolio, which contributed to DKK 209 million, especially with equities benefiting from the general rebound in the market following the geopolitical turmoil experienced during Q1.

Let me also briefly touch on the Tier 2 issuance in June. We issued DKK 900 million Tier 2 bonds at a spread of 140 basis points, slightly below the spread on the maturing Tier 2. The part not already tendered DKK 366 million. We'll have first call in October this year.

Finally, let's turn to Slide 13 and our updated guidance. We're revising our guidance for the insurance services result in '26 upwards by DKK 100 million to DKK 1.2 billion to DKK 1.4 billion, excluding run-off gains in second half of '26. This reflects the strong underlying performance in Q2 as well as one-off gains. Looking ahead, we continue to expect runoff gains of around 2%.

The new guidance corresponds to DKK 1.9 million to DKK 2.1 million in insurance service results adjusted for the DKK 700 million one-off charge related to the Supreme Court ruling on workers' compensation. We continue to expect a cost ratio of around 17% for '26. The combined ratio, excluding the one-off result in H2 is expected to be 88 to 90 in corresponding to 82.5% to 84.5% when adjusted for the impact of the Supreme Court ruling, an improvement of 100 basis points.

Following the strong result we had in Q2, as a result, guidance for profit before other income and expenses is upgraded by DKK 200 million to DKK 1.45 billion to DKK 1.65 billion or DKK 2.15 billion to DKK 2.35 billion adjusted for the Supreme Court ruling. Other income and expenses remain unchanged and guided at an expense of DKK 0.5 billion for '26.

And with this, I conclude our presentation and hand over the word to our moderator. Thank you.

[Operator Instructions]. Your first question comes from the line of Mathias Nielsen with Nordea.

Congratulations on the strong development in the underlying claims ratio this quarter. So my question is a bit about like how we should think about that in the coming quarters and also in the context of your '28 target, it seems like you're quite strong, quite off to a strong start, like how do you think about the stochasticity and other things with the development you have made both in Q1 and Q2 now on this. So maybe a few comments on that for the coming quarters. And then we can take my second question after that.

Yes. Thank you, Mathias. I can give some flavor to that. That a bit of different nuances going through private, personal lines and commercial lines separately. But if you want sort of the very big picture, we have some slight pricing overhang to name one thing. We have also a very slight synergy overhang also remaining. Then we also have some support from reassurance as we have talked about before, being highest in commercial lines, but around 0.5% or so on average for the group percent.

So if you sort of total that up, that adds up to around a percentage point or so, plus minus and then we have around the percentage points, which I would also consider to some degree, it's stochastic this quarter of improvements, which mainly are related to property-related lines, actually both in our commercial and private lines book.

So if we look at that going forward, the guidance we started for the year, and this point actually stands. We have a base expectation of around, let's say, 100 basis points improvements in the coming quarters. All else equal, that would be -- if you have -- if that holds, then that would come to around 1.5 percentage points for the full year. So that's sort of the rough guidance for that.

Okay. So around 100 basis points for the coming quarters. Is that like fading off to like bigger in Q3 than Q4? Is that how we should expect it as pricing came into trading? Or is there any -- or is that already the [indiscernible] budget?

Yes, I think the composition will be different because we've had, as I talked about, a slight repricing, we've had some synergies still, but that will fade and disappear completely. And then what we'll get on the other hand will be the first part of our strategic initiative coming through. And to name the main ones coming would be one is the consolidation of our data centers, which we have just implemented.

Then we have the work we're doing within our claims area, what we call smart repairs related to the motor area. And then the final one, procurement, especially within buildings for the claims area, those 3 would add up to something like, let's say, DKK 15 million -- roughly DKK 50 million per quarter roughly evenly divided between the 3. So that's sort of -- that will sort of start ticking in as the synergy and prices overhang go out, thereby getting back to the approximately 1 percentage points in total.

Okay. That was very clear. Then my second question is -- you almost sound quite bearish on the commercial line growth. But if you look on a Q-on-Q basis, like you're up 2.2%, like -- is that like the pace that we should expect in the coming quarters instead of like -- the 1st of January revenue that's kind of behind us like that was soft, but that's how it is. And we know that already.

But like when you look on a Q-on-Q basis, the growth is actually quite fine. Is that also how we should expect it to be in Q3 and Q4 that the Q-on-Q growth is one good question. How should we think about that?

I think the growth -- the vicinity of the growth we're seeing now is more or less, I think, a good status starting for what we would expect also in the coming year and a year-on-year growth of around a total decrease of just above 2%, I think, is a good starting point for the expectations also in the coming quarters. We do have some of the commercial book renewing 110, but I think it will take -- we'll have to go into the next year for us to really see a different trend in the total commercial lines premiums.

Your next question comes from the line of Asbjørn Mørk with Danske Bank.

It's actually a bit of a follow-up from one of the previous questions. Back on your guidance for the full year. Just trying to understand the journey that we've been on. So we got the Q1 numbers. You raised the guidance of DKK 150 million. Obviously, some of it was realized run-off gains, but still -- then we have the same day, the adjustment on the back of the workers' compensation case.

That was a full DKK 700 million clean cut. And then I'm just today, looking at the underlying trends that you print, both for Q1 and Q2, you're listing your guidance by DKK 100 million, essentially the runoff gains. But I do hear what you say in terms of the stochastic elements in, I guess, both Q1 and Q2, but still to me, it seems like there is also an underlying improvement within those 200 basis points that would be -- that wouldn't explain the full difference from 100 basis points to 200 basis points. Just really trying to understand, I know there's a rounding element as well in your guidance.

But just trying to understand if you see this purely as stochastic or if there is some sort of underlying still improving more than you expected also with the communication that you have? And I guess, going forward, the improvement into next year now that we are ahead of the plan for this year, how should we look at that improvement as a starting point is a more ambitious one, so to speak?

Yes. Well, let me start going through the current year, to begin with, I think -- I mean, as we also stated, it is -- it has to do with 2 things, as you also say, it's sort of very rough sort of numbers. We have some moving parts with large claims, a bit below normal. We have weather claims, a bit above. So things are sort of moving around.

The main things driving the upgrade would be our underlying loss ratio and the major one being our adjusted, so to say, the prior year gains. And I think if you look at it mechanically, also given what I'm saying around a base expectation of around 100 basis points in the underlying loss ratio, maybe having, let's say, just below that in a stochastic element, if you add up the math, you might -- you could do the argument that 100 is maybe slightly conservative. I think -- but we've chosen to stick with that. But I mean, mechanically, you might have an argument that we could also have gone a bit higher if we had chosen to. Sorry, I'm just saying it is that -- does that make sense, Asbjørn?

Yes. I mean, I guess, it's also difficult with the round of numbers to get the exact signs of this, and of course, it's a guidance, so I do get that. Which is more that if we get the said 100 basis points for Q3 and Q4, I guess your full year improvement is going to be 170 basis points or something like that, right?

So those extra 70 basis points, do you see that as a headwind for next year? So if you print 50 basis points improvement next year in your original plan, would you actually print 20 basis points deterioration to your underlying claims ratio next year?

Hi Asbjørn, Mads here. I think -- I mean, you are seeing from a mechanical point of view, you are right because we are thinking it a bit like 150 basis points of underlying improvement then for this year, where we look at it from -- at this point and with 50 basis points being stochastic.

And then you're right that we -- at our Capital Markets Day, we pointed to 50 basis points underlying improvement per year as kind of the structural thing from our strategy initiatives. So mechanically, that would mean having 50 structurally next year would be flat underlying, but we always strive to make a good underlying progress. So we would still believe that we could report at least a positive development in the underlying loss virtue next year.

All right. And then final question from my side. I know you're not sitting with the actual cases yourself. But do you have any sort of -- have you seen anything or heard anything on the back of the Supreme Court ruling in terms of number of cases or if the things -- if your sort of estimate is still on the conservative side? Any news on this front?

No, actually, we haven't received any claims being sort of say, reinitiated, which were already fully determined. So we've seen nothing and we have no -- in actuality, no news yet, which is also what we would have expected at this point in time.

Your next question comes from Martin Birk with SEB.

Thank you so much. Perhaps, and just on your initial comments about management actions in your commercial area regarding the 1% premium growth, underlying premium growth this quarter that you're not satisfied with, could you please elaborate on that? And then beyond the press that we have seen this quarter? And then in addition to that, I guess this workers' comp has been -- has been sort of has been blocking your premium growth in the commercial segment for now at least 3 quarters.

When do you expect this sort of headwind on workers' comp to clear up and how much technical result is actually in it. And then maybe a last question on premium growth, while we're at it. I mean, private lines continues to do very well. What kind of outlook do you see for private premium growth going forward?

Let me try to go through that. Starting with the commercial area. We have the 1% you mentioned for -- it's not really a segment as such, but it does give an indication of, let's say, it is an indication of what the broader-based commercial book is doing on average. Obviously, there are also moving parts within that. Some parts are going very well. Some parts are a bit was sluggish. But I think the -- the overall message here is that on sort of -- as an ambition, we would like and we would also expect to be able to grow more than 1% given the indexation we have right now in commercial lines.

So -- and with the management actions, I would say, I think we've had a very successful run just to state that within Commercial Lines. We've managed over the last few years and also in the last quarters, we've continuously brought down volatility, and we've improved profitability. And that has been successfully done by the previous management also by Lorne, who's been the head of that for the last few years. So I think when we now say this, we did an agreement with Lorne, also a mutual agreement.

And this is more about saying that where we are right now, we feel that new eyes are needed maybe to succeed a bit better with the growth, within the areas we want to grow profitably. So I think that was the management part. Then the workers' compensation, sorry.

And just to follow up on that management. I mean, what kind of levers can you pull to restore this growth without compromising our profitability. Do you see any pockets where you are -- were there any low-hanging fruits that hasn't been picked yet? Or how should we view this?

Well, I'm not saying -- I don't think -- obviously, I believe that we can do better. I don't think it's about price only within this area. It's about becoming even better at also translating the value proposition we have and the experience we have as a very experienced Danish commercial lines insurer with a full -- and sole focus on the Danish market, putting that into play and maybe being even better to put it into play for the smaller, let's say, the mid-sized small companies, not the very small, but the midsized small companies.

We also talked about that on our strategy in the CMD, which was a growth area. So that's just to say -- and I don't -- and I think there are a lot of things we can do to continuously improve that value proposition. So we become even more relevant for both the customers we have and the customers we want to have. So I think that's at least giving some flavor on that.

So moving on to workers' compensation. When will the headwinds dissipate in terms -- as I heard the question, it was related to the pricing, I think it's very difficult in honestly, to fully predict. We are in a market with other players and some of those players either they have a completely different view on the risk or they have different tactics around what they're willing to do than we are.

So we'll have to see how it goes. I can't give you any clear indication. I think it's obviously going to be interesting to see what will happen after the Supreme Court ruling sort of gets settled in the market also as one thing, what will people do there, but I can't give you any clear prediction. We'll have to see as we go along. I can just say that we will continue to demand that our business is profitable also within workers' compensation.

And the premiums that are leaving, do you have any at what kind of --

At least especially within the large commercial segment, it is almost no technical result, which is leaving those premiums. At least -- and especially if you're looking at the levels we would be needing to underwrite at that would be, in some cases, become loss giving as an alternative scenario. So -- and then for -- yes, then there was premiums in private lines -- personal lines what to expect there? Could you just repeat it? What was the specific --

I mean you do have this -- you have -- in your private lines, I guess you still have this funny dynamics that you still have a provision franchise, which is still steaming ahead at full bottle, right? And sort of those growth rates have, of course, been high for a while. They're still high, and how -- I guess my question is, should we expect this sort of mid-single digit to go on for also the coming year or years, so to speak?

Well, I mean, at least when -- in the market we're in right now with the trends we're seeing and the performance we're seeing with our banking partners, we have no reason to expect that to dissipate in the coming quarters. If we go further on that, it's always a question of how does the market overall develop. I think it becomes a bit more tricky to predict. But at least for now, I think I'll state that the momentum we see for now, we expect to continue for now.

Your next question comes from Alessia Magni with Barclays.

Two from my side. One is around the workers' comp pricing. And I'd like to know what's -- how do you think pricing in the business line will evolve after the ruling and what level of price increases do you think is needed for the industry to compensate the higher claim burden. And more broadly, can you talk about your expectation on pricing and volume evolution from here at the group level or if it is split by customer commercial?

Yes. Starting with workers' compensation. If we look at the Supreme Court ruling on the margin, so to say, that does have -- it does impact our expected claims in an upward direction for the same business going forward. We're looking at -- we're still doing the analysis on how much we feel exactly is needed to mitigate for that.

So on an overall, I would expect the market to have the same in terms of trend, viewpoint on higher premiums being needed. How much the premiums will in actuality in the market, so to say, be impacted. I think it's a more difficult question to answer. For one thing, it does -- yes, is it logically depends on what the different players will do -- and I just came back from answering questions, but we've seen historically, recently, some players be, in my view point, quite irrational about pricing. And what will they do with this event remains to be seen.

So honestly, I can't -- I don't have a clear viewpoint. I think that's what everybody is very keen on experiencing and seeing what will happen with that. But I can say that we are looking into it and the trend, obviously, all else equal, is for higher premiums given that event. More broadly, I think what we would expect to see in the coming years is that if you look at our group in total, I just meant -- we just talked about private lines.

I think there's no -- for now, we see that momentum continuing. We're able to take market shares particularly from our strong bank partnerships. So that trend, I think, will -- is what we expect for now to continue. So overall, having some base indexation of around 2% and then some added market shares on top of that 2% to 3%, maybe even a bit more if we do well, but something around the levels we're seeing now. And I think for commercial lines in a broad sort of sense, we'll have to see with workers' compensation.

Again, I think it's difficult to predict where that will end up exactly, but in sort of broad sense, I think we have no ambition -- we never guide for growth. We don't have an ambition to grow just to grow. But I would be very interested to see our ability to grow, especially within the segments we choose to grow come a bit up.

So something I think I would be very satisfied if we can continue in an overall commercial book growing with the market but improving profitability, bringing down volatility, still having that discipline but also beneath there having some growth come in on top of the indexation within the segments we choose to grow, such as agriculture, as we have seen actually quite strong growth and also within the general small to medium size, seeing some growth pick up there, then I will be very satisfied with that.

One follow-up, sorry, on the first question. So from your side, from what you were saying in your analysis and investigation, I mean, are we talking about the price increases of single digit, double digit? I mean, do you have any indication that you can share, that would be helpful.

Yes. I understand the question and the interest on this topic, but we are still looking into that and arriving at our final conclusion. So it's too soon for us to give that indication.

Your next question comes from the line of Carl Lofthagen with Berenberg.

The first relates to some press speculation that your distribution partners see markets potentially looking for a new insurance partner. Just wanted to check if there's -- is there any validity to do anything you can comment there?

And then the second is just on the arbitration case with Gard. I mean, I guess, I appreciate it's very early days, but could you provide a little bit of color just on time line for how this one to get some clarity? And also, why do you think the claims are unfounded? Any color there would be appreciated.

I'll start with distribution. I think what you are adhering to is the press coverage of our long-standing partner or partners within the now [ Luban ] Group looking into what the best solution for that -- for the insurance partnerships will be.

And the only thing I can say there is that we're very happy with the partnerships we have with all the banks in the [indiscernible] group. They've been long-standing with [indiscernible] and also with [indiscernible], we had a very successful recent onboarding of [indiscernible]. We feel we have a strong position on this in the Danish market, and we are obviously anticipating in that process with [indiscernible]. But I think any questions to that process or where they see how that time line or other considerations, I think I'll have to refer to [indiscernible].

Then the second question was around the Gard arbitration. I'll try to give some sort of some clarity on how the time line is. And so now we have this arbitration, which was initiated by -- and I think as we've talked about, it will -- the process will basically be a process where we get -- they will send a reply, then we will send a reply to that. And then there'll be some interactions.

And the final clarity, as I understand, could be somewhere around -- on the other side of summer break next year in '27. And I don't -- I can't give any guarantees for that. That's sort of what I hear could be a realistic time line. And then just to give an update on what's happened -- I mean, what just happened is that we got the first sort of -- I think it's actually the second.

We got a new reply from Gard, we just received. And we simply haven't had time to go through that. We got it there in the weekend. So we haven't -- it hasn't -- we haven't had time to form an opinion on that. So we're going through that now, and we'll be looking through to it. And then I think the realistic, as I said, process forward will be there will be a couple of more interactions on that, and then we'll see how it goes in the end.

And we have another question from Mathias Nielsen with Nordea.

So sorry for a follow-up questions on the details and maybe a bit an early one, but on the underlying claims ratio improvement when you said 100 basis points just to make sure that we're on the same line, is that the discounted or undiscounted one given the one-off things that you had in Q4 last year, I think that actually matters a bit on the discounting in the commercial line. So maybe if you could -- just to clarify which one we are talking.

I'm talking on an undiscounted basis.

Okay. There are no further questions at this time. I will now turn the call back to Andreas Ruben Madsen for closing remarks.

Thank you. Well, I have nothing really to add at this point. So thanks a lot all of you for calling in, and I hope you all have a great summer.

And that concludes today's call. Thank you for attending. You may now disconnect.

Ladies and gentlemen, thank you for joining us, and welcome to the Alm. Brand First Quarter 2026 Earnings Call. [Operator Instructions]

I will now hand the conference over to Andreas Ruben Madsen, CEO at Alm. Brand. Please go ahead.

Good morning, and thank you for joining us on our conference call. I'm Andreas Ruben Madsen, the CEO of Alm. Brand Group since March 1 this year. And as usual, I have with me our Head of IR, Mads Thinggaard. This morning, we published our interim report for the first quarter of '26, and I will now walk you through the presentation of our results.

Let's now look at the highlights from my first quarter as CEO. Please turn to Slide 2 for some of the headlines regarding our business in the first month of the year. I'm pleased with the overall financial performance in a very satisfactory Q1 with strong underlying improvement in the claims ratio. Growth in Personal Lines faded somewhat in Q1 '26 from a double-digit level in Q4 '25. This was as expected due to the year-on-year effects from last year's repricing fading out. Growth of over 6% during Q1 in private line, does, however, indicate that we are continuing to take market shares in this market.

In Commercial Lines, we experienced a decline in the top line revenue as a result of our efforts to improve profitability and reduce volatility in an increasingly soft market for workers' compensation. Adjusted for the areas we work on in this respect, which is workers' compensation and industrial customers, the Commercial portfolio reflected a premium growth of 2% year-on-year. We succeeded with an improvement in the undiscounted underlying claims ratio in Commercial Lines of 2.6 percentage points year-on-year, while Personal Lines are more impacted by icy road conditions in Q1, but still delivering an improvement of 1.3 percentage points in underlying claims.

And now I would like to turn to Slide 3 for our financial highlights. Insurance revenue grew to above DKK 2.9 billion in the quarter. The insurance service result was DKK 496 million compared to DKK 337 million in Q1 last year. We view this as a good start to the year, especially considering the strong underlying development. Weather-related claims were much lower than we would normally expect for Q1, while I would characterize large claims as being on a normal level in Q1. Investment income in Q1 was a loss of DKK 43 million, which related to the geopolitical turmoil impacting equities as well as bond returns in a negative direction. It's worth remembering that we, as a company, are set to benefit from increasing interest rates looking ahead. Other income and expenses are significantly lower compared to last year, primarily due to the absence of integration costs related to Codan, reflecting the completion of the integration process.

And now let's move on to Slide 5. The group made a technical result of DKK 496 million in the quarter, up from DKK 337 million last year. The significant improvement was driven by underlying improvements as well as higher runoff gains. In Personal Lines, year-on-year, we had an improvement in insurance service result of DKK 55 million to now DKK 246 million. This was due to underlying improvements, lower ratios for weather and large claims as well as continued growth. Insurance service results from Commercial Lines was DKK 250 million against DKK 146 million last year, driven by a combination of significant underlying improvement and much higher runoff gains than Q1 last year.

Please turn to Slide 6. Insurance revenue grew 2.5% in the quarter compared to 4.6% last quarter as a result of fading effects from last year's repricing and an increasingly soft market for workers' compensation. In Personal Lines, we're still taking market share, while the effects of repricing are fading as expected. Therefore, I'm quite pleased with the growth in Personal Lines of 6.4 percentage points year-on-year. In Commercial Lines, we see a decline in premiums of 1.8% due to our work with improving profitability and reducing volatility in an increasingly soft market for workers' comp. Adjusted for workers' compensation and industrial customers, commercial portfolio reflected a premium growth of 2%, which is acceptable.

And now moving on to Slide 7 with the claims ratio. The Q1 claims ratio was down 480 basis points year-on-year in a quarter with lower weather claims for -- than a normal Q1, a higher level of runoff gains and a strong underlying improvement. The underlying claims ratio was 160 basis points lower year-on-year, driven by profitability initiatives, 170 basis points on an undiscounted basis. The underlying improvements, especially visible in Commercial Lines with a 260 basis point improvement in underlying claims year-on-year, while Personal Lines, still positive, were impacted more negatively by icy road conditions. Personal Lines showed an improvement in undiscounted underlying claims of 120 basis points year-on-year.

And now please turn to Slide 8. The combined ratio in Personal Lines improved to 84.5 from 87.1 last year due to lower underlying claims decline in the cost ratio and lower weather and large claims. Premium growth is still on a high level of 6.4% despite fading effects from repricing.

Please turn to Slide 9 for Commercial Lines. In Commercial Lines, we observed a significant reduction in the combined ratio to 81.3 in Q1 '26, down from 89.3 in Q1 '25. This improvement was supported by higher runoff gains of around 600 basis points year-on-year, largely driven by cargo and property-related claims. Additionally, lower underlying claims contributed to a further 240 basis point reduction year-on-year. The cost ratio was also decreased by 50 basis points year-on-year in Commercial Lines, providing additional support, although the large claims rose to 11.3 percentage points in Q1, slightly above the normal level of 10% typically expected for Commercial Lines.

And now move on to Slide 11 for the investment results. You may notice that we, as of this quarter, have begun disclosing returns on our free portfolio in response to requests from many of you. The investment result in Q1 showed a loss of DKK 43 million in Q1, with DKK 35 million of this loss stemming from the free portfolio, which was adversely affected by a decline in share prices. Additionally, our bond portfolio was impacted by rising interest rates and widening credit spreads. As you'll be aware, this was driven by the geopolitical turmoil experienced during Q1.

I'd also like to take a moment to address our fixed income line, which amounts to DKK 0.9 billion, with approximately half that number placed in private debt and asset class, which has received some attention recently. I'd like to highlight that this exposure is limited to a well-diversified portfolio of loans to European companies.

And now finally, please turn to Slide 13. We are revising our guidance for the insurance service result in '26 upwards by DKK 150 million to DKK 1.8 billion to DKK 2.0 billion, excluding runoff gains for Q2 to Q4 of 2026. This follows a strong underlying development in Q1 as well as a high level of runoff gains. Continue to expect around 2% in runoff gains looking ahead.

The cost ratio is still expected to be at around 17% for 2026, while the combined ratio, excluding the runoff result in Q2 to Q4, is expected to be 83.5 to 85.5, an improvement of 100 basis points. Our guidance for the investment result is lowered by DKK 50 million to DKK 150 million in '26 following the loss in Q1. This adjustment also reflects a nice rebound in Q2 so far. Consequently, guidance for profit before other income and expenses is upgraded by DKK 100 million to DKK 1.95 billion to DKK 2.15 billion. Other income and expenses remain unchanged and guided an expense of DKK 0.5 billion for 2026.

And this -- with this, I conclude our presentation and hand over the word to our moderator. Thank you.

[Operator Instructions] Your first question comes from Asbjørn Mørk from Danske Bank. Please go ahead.

Yes. First question would be on something that is not part of the report, but the Supreme Court ruling that we will get in an hour. Just wondering, since you don't mention it as a contingent liability in your report -- you did mention in the annual report the dispute you had with Gard. So just wondering why you don't mention it as a contingent liability? You don't see it as a contingent liability or you don't see it as a material impact on your reserves? So how should we look at sort of the potential outcome here versus the DKK 7 billion of claims reserves you have in workers' compensation? So since we will get the ruling after this call, most likely it will be good to get a bit of flavor at this please.

Yes. Thank you, Asbjørn. Well, I mean, to answer your question, we see nothing new in this regard compared to the situation when we did our annual report not that many months ago. We have a general statement in our annual report regarding the general exposure we will always have as a group to these types of lawsuits or disputes. And we have -- we don't see no reason to sort of -- of that going into -- as we approach the ruling today.

And then to round off on that, I would say, as you also say, I think, let us now just wait. I think we'll get clarity very soon. And obviously, we will aim to provide clarity as soon as we can, and are following it closely up to the ruling coming here at 12.

Okay. Fair enough. But if I then may -- I mean you paid a dividend a little more than 2 weeks ago. And I guess, we're still waiting for you to initiate the buyback. Is there any sort of link between, first of all, the postponed buyback, but secondly, your dividend payment, your decision to pay a dividend and what you see as sort of a scenario and potential outcomes of this case?

In general, I would say, I think you're aware, we have a very comfortable solvency situation. We have a robust solvency situation. We're not postponing any buyback. We communicated that we were expecting to start it in Q2. We are now only 1 month into that. That being said, I think there's some good reason to -- we, first of all, had a Q1 -- a general Q1 financial statement we'd like to have provide clarity for and then we also have the Supreme Court ruling coming very soon. But we're still on within the overall time frame that we communicated, being sometime during Q2.

Okay. Fair enough. Then if I may, on your actual numbers and the underlying claims ratio improvement in Q1, the 170 basis points somewhat above the guidance that you've given for the full year and your communication on the improvement being back-end loaded during the year. How much of this -- also given that you raised your guidance by 150, which is, to a large extent, seems to be, you can say, low quality driven in Q1. So how recurring do you see this underlying improvement? How much has been stochastic and basically luck in Q1?

Yes. Well, I think, first of all, just -- I would confirm that you are right that most of our upgrade comes from weather and runoffs this time around, but does, however, provide a good solid bottom line in Q1, nonetheless.

I think to give you some flavor of it, I think something just above 1 percentage point, maybe slightly above that is probably more what I would consider a structural level for now. We did have some tailwinds within certain segments seeing both a favorable development in private lines and also in Commercial Lines, especially in Commercial Lines. But I would say, probably, you shouldn't expect quite as much on a growing basis for now.

But for the full year, is it fair to assume that we'll be above the 100 basis points given the good start of the year?

Yes, that would be our -- slightly above would be our sort of -- what we're aiming for.

Your next question comes from the line of Martin Birk with SEB.

Just following up on the questions in regards to the underlying improvements coming through. I guess you -- ahead of the quarter, you communicated them to be back-end loaded, and now they're suddenly front-end loaded. What has happened? And why is this only just above the 100 basis points for the full year?

Yes. I mean I think -- as I think we've commented on previously that you will see some fluctuations from quarter-to-quarter. And most of the improvements you're seeing are definitely structural, created by some of the effects we've been mentioning previously being, to highlight them, I would say, a bit of tailwind from synergy overhang in Q1. We also have a favorable impact from reinsurance, maybe around, let's say, 50 basis points for the group, most of that being in Commercial Lines. And then I also think it's fair to say that we have some support also in Q1 coming from our overall profitability initiatives in Commercial Lines, where, as you may have noticed also, we did see some workers' comp and industrial customers leave. So those are some of the effects playing in, but we also had, to be fair, some stochastic tailwind, on average, which we would not expect to see every quarter from now on.

And Martin, if I may add, it's Mads here. What we actually said ahead of Q1 was that the strategy, the effect from the strategy initiative would be back-end loaded, but in the start of the year, we would have support from still delta, from the synergies we implemented last year, from the integration of [indiscernible] that have a bit of effect still during the start of the year as well as the effects from the massive repricing last year kicking in mostly in the start of the year. So we were actually pointing to kind of a [indiscernible] improvement during the year, but from different sources.

Okay. All right. Just a final question from my side. In terms of the customer dividend, I guess you have shed some more light on it over the course of Q1. What has the response been so far in -- or what kind of feedback do you get on it? And what are sort of the ambitions with this customer dividend or this loyalty scheme?

Yes. Thank you, Martin. I think we're happy to see that we are getting the type of feedback that many of our customers sees as a definite positive. We feel it's -- it may not be unique for us compared to some of the other market players, but we feel that it is definitely new for us that we have the ability now because our main owner has gotten financial strength to support us in this meaningful way and we feel this is a good way to also -- we will benefit, especially our loyal customers, which have been for us -- with us for many years and which have a number of products with us, also the customers we would be aiming most to retain. So we're looking very much forward to seeing the effects of this.

Your next question comes from the line of Mathias Nielsen from Nordea.

So the first one I have is a bit on the revenue growth, especially for the Personal Lines, like the year-on-year growth you see in Q1, is that a good indication of where we should expect growth to be in the coming quarters or do we -- do you still expect some headwinds from pricing or other items that could indicate that growth to come down through the year? How should we think about that? If you could give a bit of guidance on that, as the first question, that would be nice.

Yes. Thanks, Mathias. Well, I think -- we're very happy to see a continued growth in Personal Lines, sort of rough indications we would consider. We would consider half of the growth around 3 percentage points coming from actual new customers being brought continuous to the group, much of that from our strong partnerships with the banks.

And then now we are in the beginning of Q1, as Mads also mentioned. So you might see a slight sort of tailwind in the beginning still from the remaining parts of the repricing fading. Even though we are starting to come down now, as you also have mentioned, as you've seen compared to last quarter. So I think an indication for the full year could be something for Personal Lines around, and we have the indexation and around 2 and then maybe, let's say, 2 or 3 coming from market shares on top of that.

That was very clear. And then if you move to the workers' compensation segment where you now say you lose out on a bit of -- on a few customers. Maybe you could say a bit more about the profitability of those lost contracts? Were they on par with the group combined ratio or the return on capital allocated? Maybe you could say something there on what's going on in that segment at the moment?

Yes. I'm happy to do that. I think many of you will recall that also from previous discussions that workers' compensation, both for us and for our peers, has historically been a product, which, from time to time and recently so, has struggled a bit in terms of overall profitability. We've had sort of a conviction that we have, for some time, quite skeptical around, especially stand-alone workers' compensation. We are -- we feel it typically creates a better balance for us if we can do it in combination with other products, where we typically, on average, would have a higher margin and earnings.

And what's happened this time, I would say, is that we have seen a development where, for reasons not completely known to us, we have certain players being willing to underwrite workers' compensation and levels that we would see as not profitable. And we have not been willing to do so this way around either. So most of the reduction would be from stand-alone customers and leaning towards the larger segments where we've been the most skeptical. And this is not a new theme for us, as I mentioned -- you would have mentioned -- I think you would recall that I have mentioned this in the past, but we see the effect now in Q1 also because we -- as you also may recall, we do have a large part of our commercial portfolio turning on 1/1.

Sure, sure. So just to clarify a bit of that. So is it fair to assume that the combined ratio and the return on capital has not been fantastic on those people that is leaving Alm. Brand at the moment, quite contrary. So it's improving the profitability despite that the revenue goes a bit down.

That is right. That's the way we see it or else we -- in general, we wouldn't have that approach. But we do not see this as something that's really adding meaningful margins to us. And also from a capital standpoint, this is not the best segment to be in.

If I may like do this last third question and then I'll jump back in the queue. On inflation, what are you seeing out there at the moment? There's a lot of stories out there on oil prices and what else. What are you seeing? And have you already started to adjust some prices or how long can you wait before you start to adjust price? Maybe you have something you could say there? And then I'll jump back in the queue.

Yes. Sure. Of course, we're following the situation closely. Also, I think you might be, I think, pointing at the -- especially the development we're seeing in energy prices after the situation in -- with the war in the Middle East, which may also start to translate into certain material prices.

I think as we see it for now, we do not see this as something that puts us in a position where we need to do repricing on any meaningful large scale. So we don't see that for now. And -- but that being said, obviously, we're following it closely. And if this turns in to be something that is very prolonged, then we'll have to reevaluate continuously to -- yes, to see where we go. But for now, we don't see that impact there.

Your next question comes from the line of Simon Brun with ABG.

Yes. Just a quick question, and I basically got a follow-up on Mathias' question on the Commercial Lines. Just in terms of the premium growth, how should we think of it? I appreciate that you write in the report that there is an ongoing initiative in workers' comp. Does that apply to industrial as well? Meaning that this is a continued sort of pruning process that will continue to impact the Commercial premium growth through the year? Or should that turn sort of positive on a quarter-on-quarter basis anytime soon?

Yes. Like, I can start by maybe giving some rough indications of the decomposition. We have 1.8 percentage points overall reduction. I would put indexation at around 2%. And we also -- we have a slight tailwind from some of the repricing fading out last year that could come to, let's say, around 0.5%. And then the initiatives or at least the effects of our renewal within -- especially workers' compensation and certain industrial clients would account for 3.5% in reduction of premiums.

And if you look at that effect, the last one is something that we would see continue through the year. Mechanically, we would probably see a slight fade towards the end, if you look at it on a relative basis to last year. But I think in an overall statement, it is something that will impact the group growth for the entire year. So if you put it sort of up and if you go in very high sort of numbers, you might argue that if you look at the Personal Lines, we still see some positive market intake of 3% to 4% on top of indexation and price repricing. And on the other hand, you have, on Commercial Lines, we have the opposite effect coming from the effects of this pruning, so to say.

Your next question comes from the line of Youdish Chicooree with Autonomous Research.

My first question is actually a clarification on your comments of Commercial Lines. I mean, judging that you started this repricing and portfolio pruning action recently. Is that going to be like a multiyear adjustment process? Or is that just an impact we should consider just for this year? So that's my first question.

And secondly -- sorry, go ahead, please.

Maybe start with that, and I'm happy to take a second one following. Well, I think, Youdish, if you go back in a slightly longer perspective than just recent quarters, I think this has been sort of a core part of our strategy and narrative for a long time. If you go back to the CMD, you'll also see our voiceover of what segments we sort of are most focused on growth, and within Commercial Lines, that would be agriculture and the sort of the larger part of the small to medium-sized.

We've always stated that we don't guide growth and that we need to be able to walk away from unprofitable business. So I don't think this is a new thing for us, but I would say that, to be fair, I think we couldn't have fully sort of foreseen what the market would be like in workers' compensation. And it's definitely not become better during the last year. It's gone worse. It's been -- become even, I would say, yes, even more soft. And so I wouldn't -- we wouldn't maybe fully have predicted this. How it will be next renewal for the major parts turning in the end of the year, we'll have to see. But that's sort of the situation. So now we are where we are.

All right. All right. And my second question, unfortunately, is on the upcoming ruling on workers' comp. Look, in the event of adverse ruling, we only have some offshore estimates from the Ministry of Employment. I was wondering, I mean, you must have already reviewed your own book post cases, et cetera. I mean how swiftly would you be able to come out and give us your best estimate of what the cost is likely to be? Is that going to be like a very -- like within a day or was that going to take weeks or months?

Well, I think, just to restate it, now we will have to see what the Supreme Court ruling will be. But as you adhere to, obviously, we prepared for what may come. And depending on how clear the ruling is, we'll have to see, but I can promise you guys that we will do our utmost to provide clarity as soon as possible.

There are no further questions at this time. I will now turn the call back to Andreas Ruben Madsen for closing remarks.

Yes. Thanks for joining today, and have a good day.

This concludes today's call. Thank you for attending. You may now disconnect.

Hello, everyone, and thank you for joining us today for the Alm. Brand Q4 2025 Results Call. My name is Sami, and I'll be coordinating your call today. [Operator Instructions] I'll now hand over to your host, Rasmus Werner Nielsen, CEO, to begin. Please go ahead, Rasmus.

Thank you. Good morning, and thank you for joining us on our conference call. As usual, I have with me today our CFO, Andreas Ruben Madsen; and the Head of our IR team, Mads Thinggaard. This morning, we published our interim report for the fourth quarter, and as usual, I will walk you through the operating highlights, and then Andreas will comment on the financials.

Let us move to Slide 2. Overall, 2025 ended better than expected with an insurance service result of DKK 1.91 billion, significantly up from DKK 1.44 billion last year. Large claims of 5.2% and weather-related claims to 3.2% in '25 were both below the new normal levels we expect, while the undiscounted underlying loss ratio improved by 3.1 percentage points compared to '24, driven by our repricing and synergies.

We had a strong growth of 9.7% in our Personal Lines in '25, while also ending the year with a quarterly growth rate of almost 10%. Thanks to our strong partnership with local banks as well as countrywide banks, we are taking market shares in Personal Lines. We view growth in Commercial Lines is decent in '25 with just below 3%.

On the cost side, we improved the cost percentage to 17% in '25 as planned. This is a satisfactory 1.3 percentage point reduction from 2024. Combined with a very satisfactory investment result for '25 of about DKK 0.3 billion, the profit before special costs and tax reached DKK 2.12 billion.

Our proposed dividend of DKK 0.66 per share and total ordinary buybacks of DKK 500 million represent a record high normal distribution of a total of DKK 1.4 billion and a payout ratio of 98% for 2025. This is on top of the DKK 1 billion extraordinary buyback we expect to do in 2026 related to the approval of our PIM model as well as an extraordinary steady increase in our CSR coverage in Q4.

Now I'll turn to Slide 3 with our highlights for Q4. Q4 was supported by an improvement in the underlying undiscounted claims ratio of 3 percentage points related to our repricing and harvesting of synergies. Synergies also supported a further drop in our cost ratio.

As mentioned on the slide before, growth in Personal Lines was strong at almost 10 percentage year-on-year in Q4, while growth in Commercial Lines was a bit negative due to the build-in volatility in repricing our largest corporate customers. Furthermore, a technicality in Q4 last year gave a small headwind for the quarter as well.

Please turn to Slide 4 with our financial highlights for Q4. Insurance service results for Q4 '25 was DKK 521 million, was an improvement from DKK 440 million last year, mainly driven by lower underlying claims, but also with support from the strong growth in Personal Lines. The investment result of DKK 73 million in Q4 was satisfactory and on par with last year, and we ended 2025 at a very satisfactory level for the investment result of DKK 337 million.

Special cost of DKK 39 million is somewhat lower than last year due to lower cost for the integration of Codan and realization of synergy as well as special cost for announced redundancies booked in Q4 last year.

On Slide 5, you can see the payout ratio and EPS for 2025. The payout ratio was 98% and earnings per share ended at DKK 1. The payout ratio is achieved as the net profit after tax with some adjustment related to the Codan integration, amortization of intangible assets and profit after discontinued activity from Energy & Marine business. In 2025, we are close to 100% payout as we have been in all recent years. This reflects our strong underlying capacity for distribution.

Earnings per share came to DKK 1 for 2025 based on adjusted profit after tax and the average number of shares. This serves as the baseline for the 2026 to '28 EPS CAGR target of 10%. So adding together the upcoming share buyback program of DKK 1.5 billion and the dividend of DKK 0.66 to be paid in April, we expect to make a total of DKK 2.4 billion in distributions in 2026.

Let's go into the details with the insurance service result segments on Slide 7. Personal Lines increased the insurance services result significantly to DKK 314 million in Q4. The improvement in Personal Lines was driven by double-digit premium growth, 2 percentage point improvement in the underlying undiscounted claims ratio and higher run-off claims than the year before. The drop in the cost ratio followed the plan and thus helped as well.

Commercial Lines did a bit under last year with an insurance service result of DKK 207 million compared to DKK 238 million in Q4 last year. The main driver for the lower result was major claims doubling to 8% in Commercial Lines, although this is still below the normal level in Commercial Lines of around 10%.

In addition, Commercial Lines were impacted negatively by a runoff loss of 2.8 percentage points, primarily related to liability insurance. We are, however, very satisfied with a massive improvement in the undiscounted underlying claims in Commercial Lines this quarter.

And now please turn to Slide 8. Insurance revenue grew by 4.6% in the quarter, thanks to continued strong growth in Personal Lines of almost 10%. In Personal Lines, we are still taking market shares due to our strong bank partnerships while repricing related to high motor claims helped as well. The last effect is expected to dissipate in the coming quarters.

Commercial Lines are switching to negative premium growth in the quarter but the growth is slightly positive when adjusting for technicality in Q4 last year that carries a headwind of 1% to Commercial Lines growth in this quarter.

Our work with increasing profitability of our largest customers does lead to some volatility from quarter-to-quarter in Commercial Lines depending on the acceptance of individual price increases. Q4 this year premium growth was impacted negatively by this.

And moving on to Slide 9 and the claims ratio. The Q4 claims ratio was down 1.2 percentage points year-on-year, mostly due to a drop in underlying claims of 2.4 percentage points, while it was negatively impacted by the runoff loss in Q4. The 2.4 percentage point improvement in the underlying claims ratio was driven by repricing and harvested synergy gains, while discounting was less of a help in Q4 this year due to a one-off, which led to a temporary 0.6 percentage point drop in the overall effect from discounting in this quarter.

On an undiscounted basis, the underlying loss ratio improved by 3 percentage points. Personal Lines had an improvement of 2.1 percentage points, while the improvement in Commercial Lines reached 3.7 percentage points.

And now please turn to Slide 10 and the Personal Lines. The claims ratio is down a massive 5 percentage points, driven by underlying improvements and higher runoff gains compared to last year. On top of this, the cost ratio still improves. This quarter it has reduced with 7.7 percentage points to 18.9%.

Please turn to Slide 11 and the Commercial Lines. The total claims experience worsened in Commercial Lines, which was driven by an increase in major claims to 8% compared to a very low level of just 4% last year. However, I note that this year is still below the normal level of 10%.

An atypical runoff loss of 2.8 percentage points in Commercial Lines was also a factor behind an increase in the claims ratio of about 3 percentage points. However, I'm still very pleased with the undiscounted underlying claims in Commercial Lines improving 3.7 percentage points year-on-year. Our expense ratio in Commercial Lines in Q4 improved by 1.3 percentage points year-on-year as well.

And with these comments, I will now hand over the word to Andreas, who will walk us through the financials.

Thank you, Rasmus. Now please turn to Slide 13 for a final update on our synergies. Synergies in Q4 '25 of DKK 164 million is up by DKK 26 million compared to Q4 last year. And thus, we end '25 with DKK 618 million in realized synergies. This underlines our successful takeover of Codan as this is above the target of DKK 600 million per year.

We actually finished the synergy program with a run rate of DKK 650 million by the end of '25, just to highlight how much we have won by acquiring Codan. The improvement in harvested synergies in Q4 '25 of DKK 26 million from DKK 138 million in Q4 '24 implies an improvement in our underlying claims ratio of 0.5 percentage points and our cost ratio by 0.4 percentage points year-on-year. This will be the ending of our synergy accounting.

And now I move to Slide 14 and the investment result. The investment result was a profit of DKK 73 million, driven by a positive return from our free portfolio and a positive return from our match portfolio as well. Overall, I'm quite pleased with the investment result for 2025 of DKK 337 million, which ended well above the DKK 200 million guidance we started with at the beginning of the year.

Even though we focus much more on insurance service result than the investment result, it is clear that a positive investment outcome like the one we had in '25 is a nice add-on to our distributions for the year.

And now finally, please turn to Slide 16 for the outlook for '25 initially stated January 21. Our guidance includes a technical result, excluding run-offs, of DKK 1.65 billion to DKK 1.85 billion. The guidance reflects positive effects from our new strategy initiatives presented at the CMD in November last year. The cost ratio is expected to be unchanged at 17% in '26 and the combined ratio, excluding run-offs result, is expected to be 84.5% to 86.5%.

We expect an investment result of DKK 200 million in '26 based on the current returns for the free portfolio and a 0 result for the match portfolio. Consequently, group profit, excluding other income and expenses, is expected to be DKK 1.85 billion to DKK 2.05 billion before tax, excluding run-off gains for '26.

As you may have noticed, this is a bit different from how we used to guide. We're now limiting ourselves to just one line with other income and expenses, consisting of group costs spend for education and development and amortization of intangible assets. We guide DKK 0.5 billion net expenses for this single line below the line in 2026.

And with this, I conclude our presentation and hand over the word to our moderator. Thank you.

[Operator Instructions] Our first question comes from Mathias Nielsen from Nordea.

Congratulations on the strong finish to the year. So if I may start by looking a bit into the year we have started now, if you maybe could share a few details on what we should expect in terms of top line development, and especially related to how much pricing you have done already in January? I know one of your peers is saying the same in Norway. So maybe you could share a bit of details on that as well. And then also in connection to this, like maybe a bit on claims inflation expectations for the year as well.

Yes. Mathias, Andreas here. I'll try to talk you through that. We started November '24 doing the repricing, which was mainly related to the uptick we have seen structurally in motor frequency up until that point. And that has been sort of the main driver for the significant premium increases we've had running during the last year or so.

So -- but going into '26, we will expect that to dissipate. So we don't have the same sort of structural support from repricing anymore and logically so.

Luckily also, we have seen motor claims, at least in terms of frequency, moderate somewhat. And so even though we still see some -- we see some tendencies for spare parts still increasing and thereby also average claims, we don't see, as we stand, a need for major structural increases in prices from motor anymore.

So if we're looking at -- just to give you a rough sort of indication, we would be thinking something along the lines of 1% to 2% -- sorry, 2% to 3% indexation for '26 on average across the different lines we have. And on top of that, we still expect to be able to take some market shares and maintain some of the momentum we've had in Private Lines.

So a guidance of, let's say -- and it's not a guidance, just to be clear, as you probably remember, we don't guide for top line, but let's say, a rough indication where a starting point is around 3% and maybe with some, let's say, in some likelihood, probably a bit above that, that's where we would imagine the group being. Yes, sorry.

Sure. Is there any difference between like private -- like commercial and private lines on the pricing like going into '26? Sorry for further details, but you can say a bit of that.

No, that's fine. No major differences. But we do still have -- would say, it's more -- we're more sort of back to normal mode in both segments. We still maintain for Commercial Lines a focus on especially having the right price for the larger corporates. And we still, I would say, see some repricing needs within select lines.

For instance, within larger workers' compensation, we have seen, but we've also been doing quite a bit of that already this year. So -- but no major sort of differences there. And as I maybe also adhered o before, most of the market share we would expect to get would be as we have seen in Private Lines.

And then I think you also asked a bit about claims and claims inflation. I mean, I sort of softly touched upon it within motor. I think the overall read is that we do see claims inflation, let's say, moderate, but we do -- but as I mentioned before, from motor at least, we're still a bit sort of, let's say, observant about the development there. But for now, we feel we're at a sort of stable development.

And then maybe like a last question before I jump back in the queue, like Q4 was obviously a quite benign quarter in terms of weather and how everything looked in Denmark during the quarter. How should we think about the start of '26? Like is this on par with what you have in your normal assumption? Or is it slightly worse due to all the snow and cold weather that we have had in January so far? How should we think about what is actually a normal assumption for you?

Yes. Overall, Mathias, we would say we're more or less on par with what we would expect for January so far.

Our next question comes from Asbjorn Mork from Danske Bank.

If I may come back to the question -- the previous question on the premium growth. If I take your midrange of your guidance, so the 85.5% on the combined ratio. And then I use the -- your insurance result mid-range guidance to sort of calculate backwards to see your premium growth assumptions, it seems to be more like in the tune of 2% for the growth for '26.

Just wondering if there is something here, especially, I guess, on the corporate side, something we should be aware of that will continue to be a drag pruning on the portfolio? Because I guess with the price initiatives that you are, the indexation you are carrying through in private and with the continued growth in private sector, I guess we should expect the Private Lines to do have above that in growth for '26.

Yes. Thank you, Asbjorn. I'll start out and maybe Mads can help me out also. But I mean, I think I heard you say 2% implicit top line. I'm closer to 3%, and I also -- between the combined and insurance service result factor. And I would say that you shouldn't read too much into that. I think that -- as I said before, our overall expectation is something like 2% to 3% for indexation and then a continued momentum, especially in Private Lines. So 3% as a starting point and in all likelihood, maybe a bit more than that.

Yes, Asbjorn, I didn't -- it's Mads here. I didn't hear if you kind of put in normal run-offs into your calculation here. So then you get to a bit different level when you do that.

No, but I just especially took your 85.5% midrange and your [ DKK 1.750 billion ] insurance service result midrange. So I guess that implies a insurance margin of 14.5%. So DKK 1.750 billion divided by 14.5% give me DKK 12 billion and DKK 7 billion in premium.

Yes. The thing is these calculations, they are very, very sensitive to what the combined ratio level you put in when you do the implicit calculation. So if you try to do the kind of the calculation on 83.5% which would be the case with a normal run-off of 2%, I think you would end at a bit different level. We get it to around 3%.

But then again, remember, if we were to move the combined rate to just a little bit in the guidance given that we are guiding in brackets of 0.5%, then you can actually get to, I mean, a quite different implicit premium growth level. So it's very sensitive. So I think listening to Andreas, it is a bit about starting at 3% and then we could have -- perhaps have a little plus to that. That is how we're now guiding.

Okay. Fair enough. Then on your underlying claims ratio improvement, so the 300 basis points undiscounted for the group, then if I read your slide correctly, you say that it's primarily driven by the corporate business. I guess there's a few run-offs in Q4, at least kind of year-over-year comparison, a few run-offs on the corporate side.

But if we do the sort of the development in your -- in the underlying that you do report for the corporate business, it seems to be more in tune of 2.5% underlying, but obviously, that's not discounted.

So just wondering, if we do sort of adjust for the various components, how do you see the underlying improvement in corporate in Q4? And how should we expect that to develop in '26 given that you continue to prune the portfolio?

Yes. I can start and hopefully give some flavor to it. When we look at it on an undiscounted basis, and keep in mind that the run-off we have is related almost entirely for Corporate Lines, the one relating to the discounting effect, which is from a model change this quarter regarding workers' compensation and therefore, also almost entirely relevant for Corporate Lines.

That means that on an undiscounted basis, we see a year-on-year improvement of 3.7 percentage points. And actually, because of the -- if I -- just to add an extra factor, which is not in that number, we also have the indexation from legislation we mentioned in regards to the premium in Commercial Lines, where we had DKK 15 million more premiums in Q4 last year than we actually, so to say, normally would have because we had 2 quarters coming in for 1 quarter in Q4 with a premium regulation there.

If you account for that also, then in the Corporate Lines, we would get even higher for the underlying year-on-year growth at least -- or sorry, yes, a change in underlying loss ratio. So I think in all actuality, we are quite happy with the improvements we see.

But just back to your question, when we look at the broad lines, and that was true both of commercial and of private lines, motor has been the major factor which we have needed on a broad sense to do repricing for. So we would also expect for underlying loss ratios in commercial that to start dissipating that momentum we've had from repricing.

Going forward, and maybe that's a relevant starting point for that. I guess other people would be interested in this on the call. If we look at what do we expect for underlying loss ratios in '25, well, we -- may be doing it in sort of simple terms, we have a net insurance service result improvement on a normalized basis of DKK 150 million with the guidance we put forth.

We have a cost ratio which is guided more or less at the same rate as before. So if you split that, we'd say at least 2/3 of it would be coming roughly from underlying loss ratios. And then we have a slight -- also a positive impact from some growth on top of that.

And looking -- so looking at something stylized along the line for the full year of an improvement of around 100 basis points in underlying loss ratios. And the factors there would be we realize we do have some tailwind. We have a bit of synergy hangover, maybe a slight bit of pricing, especially maybe in the beginning of the year.

And then so we could -- that would add some support. And then actually, we also have some improvements from our reinsurance coming in. So we're somewhere maybe, let's say, 50 to 75 basis points coming from that.

And then we also have the initiatives will start to get effect from our improvements we're doing in the strategy, especially towards the end of the year. So in sort of rough indication would be something along the lines of 100 basis points for the year.

For the combined group?

And that was for the combined group, yes, good question, yes, for the combined group.

Our next question comes from Alessia Magni from Barclays.

So I have three from my side. The first one is if you could provide the split of premium growth by price and volume for the group and if possible private and commercial.

The second question is regarding the share buyback that you announced last week. So the DKK 500 million recurring share buyback, should we look at it as the base for next years? Or should we consider it as recurring at DKK 500 million?

And then the last question, which is a more long-term strategic, is on the autonomous vehicles. What do you see or what do you expect to see in Denmark in the medium to long term?

Yes. Thank you. I can start at least with -- starting with premiums, we sort of touched upon that earlier. If I heard you correctly, it would be regarding the '26 expectations for premiums? Or is it regarded to the Q4 we see, just to be clear?

For the Q4 and then obviously, I mean, you already talk about...

Thanks for clarifying that. Well, we still -- what we see in Q4 is that we have the continued momentum being very strong in Private Lines. We have just around -- just below 10 percentage points year-on-year premium growth for Private Lines. So looking at that, we would say that we have something like 3 percentage points coming from indexation -- sorry, yes, 3% from indexation.

Then we have around roughly 4 percentage points coming from repricing, which is now, as I mentioned before, towards the end of that, but we still have some strong support coming from that. And then the net gain for these business, much of that coming from our banking partnerships would be around 3 percentage points support for the premium growth. So that's sort of stylized rough levels for that.

Then if you look at Commercial Lines, we have -- actually, the headline is sort of negative for premiums. And I can try to do the same bridge for Commercial Lines. We would start with something around 3 percentage points coming from indexation positive and then a positive support from -- also from repricing of around 2 percentage points. And then there's a one-off effect I mentioned earlier from workers' compensation premiums regulation last year, which would be a headwind of 1 percentage points.

And then implicitly, you could say that something along the lines of 5 percentage points negative is from premiums going out due to the repricing strategy we continue to have coming from our strong focus on profitability in -- especially in the larger corporate segments, where just one or two of the larger, let's say, customer engagements can add some volatility into our quarterly earnings.

So there's nothing sort of out of the ordinary, but obviously, it is a leap in the quarter here, but actually following the strategy we've had for some time now. So -- and then I think just going into -- shortly, briefly recapping on what we expect for the next year, we would see most of the repricing we've been doing is now fully in the books.

We don't have that much coming, and we don't see the need for structural repricing anymore. And that means that with the -- so an indication -- and again, not a guidance because we do not guide for top line growth, we need to have flexibility to cater for the focus on profitability first.

Then we would be talking something along a starting point of around 3 percentage points where 2 to 3 coming from indexation and also with support from our market shares being captured in private lines. So that would be what we expect for '26.

Then you asked about the share buyback. Well, I think -- maybe I think the best way to explain the DKK 500 million we have coming in, which we term sort of regarding the ordinary net earnings we've had this year. We have a payout of 98% for the year.

And so coming from, so let's say, the ordinary -- our dividends and the buyback of DKK 500 million. And the thinking we have is that we try to cater for a stable increase in dividends per share, something along the lines of 10% every year.

That's also very closely linked to our earnings per share target for the coming years. So we like to see that come up stably, something along the lines of 10%. And when we did that this year, that meant that we ended with a total payout of DKK 933 million. And then the rest is placed in an ordinary buyback. And this time, we had -- we were able to pay out all of it, so to say, is coming very close to a payout of 100.

So the DKK 500 million is -- that's how the DKK 500 million come around. And I think more or less you could say that, that makes it, all else equal, probably something along the lines of a rough starting point for where we would be next year, we would have more earnings in a sort of -- in an expected -- on an expected basis at least, and then we would need to cater for dividends per share also coming up a bit. So that's sort of how you should think about it.

And then if I heard the last question...

Yes, I can take it. It was the report from U.S. on self-driven cars, as I understood it. You, of course, noticed the report. We know about the issue for long. It's been discussed. It's also a matter of when will this happen in Europe, when will the legislation be in place and all that.

For the moment being, we are quite confident that it will not have a huge effect or any effect in this strategy period. But of course, we are very, very well aware of the issue and follow it quite closely.

Our next question comes from Martin Birk from SEB.

Just a couple of small questions from my side. I guess in relation to the jumbo share buyback you had just announced, you also comment on reinsurance coverage. What has changed in that perspective? That would be my first question.

Yes, Andreas here. We've had some, I would say, some tailwinds in general on reinsurance in this placing. So actually, as I mentioned before, we also -- we do see some improvements in terms of like-for-like premiums.

And on top of that, we've actually also been able to -- especially, I would say, or actually within our cat program, we've been able to in this placing, get better terms, meaning that the prepaid reinstatements, or we have been able to achieve prepaid reinstatements for some of the higher lines in the programs where we have the severe losses.

And that means that in actuality, our risk in a very severe catastrophe events has come down quite a bit, and that's what's the major factor within the insurance risk driving down the SCR this quarter. So I hope that makes...

So if you take, let's call this extra DKK 0.5 billion top up, right? So if you take that top-up, how is that split between reduced market risk, better reinsurance coverage and a higher profit margin?

Well, if you look at -- maybe looking it in a bit of a different way, the -- if we look at the SCR part of the capital change coming from the quarter from Q3, I'm just looking just a minute, Martin, just to find it here. We have an SCR now of DKK 1.9 billion roughly. DKK 1,914 million, and we're coming down from DKK 2,085 million. So that's a total decrease in SCR of DKK 172 million.

If you look at that number, roughly around DKK 200 million is coming from the reinsurance, including latest exposure updates. So that is sort of the main driver behind our total decrease. We have a few other moving parts in the other parts of the SCR, but that is the major driver of the SCR coming down.

And then on top of that, you also have, keep in mind that if you look at the -- so on top of that, you also have that the own funds sees quite a favorable movement, especially from the development in our profit margin from Q3 to Q4. That is more or less as would be expected in a normal cycle over the year. but that's sort of what -- those are the major explanations for our change in solvency coverage from Q3 to Q4.

Okay. I guess over the past many years, Alm. Brand has been sort of a story of excess capital distributions and you have managed to over and over again to find sort of new top-ups to your ordinary distributions. But with your sort of CFO eyes and ears, do you think that Alm. Brand is now a fully optimized company in terms of the solvency ratio? Or do you still see that there's more belly fat to dig into?

I think we are quite optimized now. We have a full internal model. That was a major change in this strategy period. We got that on the -- sorry, in '25, in the last strategy period, we just got that through. I think further optimization could at some point be relevant within reinsurance, as I just mentioned.

But again, that would be very dependent on us seeing a continued general improvement of the market conditions. So I'm not saying it's ruled out, but we have already gotten quite, I would say, good benefits there.

But then I would mention that the strong driver between -- or behind the favorable overall solvency regime or capital requirements for non-life P&C companies is that more or less when you have internal models, the first shield in your defense is the earnings you structurally make. And as we expect to structurally make more money in the insurance service results in coming years, that would also factor into lower solvency.

Okay. All right. Very clear. And then perhaps just the last question from my side. Could you please share a few words on the arbitration case?

Yes, do you want to talk to that?

Yes, I can take that. It was a case that got built here in beginning of 2026. And of course, just to be clear, we dispute the case, and it's regards to the principal applied for valuation of the divestment and how that was in line with our historical principles of assessing assets and liabilities. These principles are fully in line with how we have made the financial accounts, and it's been reviewed by our external accountants. So I actually or we actually sincerely doubt that this case will have any significant financial impact for our group in the future.

What do you think the time line is?

Normally, the time line for these arbitration cases are, I would say, 1 to 2 years.

Our next question is a follow-up question from Mathias Nielsen from Nordea.

Just a quick follow-up. So it's not because it's a major one, but it's also the first time that we meet after your CMD and your new strategy. So I thought it would also be interesting to hear like what is the pushback you get from the organization on your strategy?

Are people in general happy? Are some of them concerned about how they need to make more money and they need to be a bit more aggressive on pricing and so on? Like what is the pushback you're getting from internal? I think that could be interesting to hear given that it's the first time after you launched it.

Yes, it's actually a very good question, Mathias. We put quite an effort in starting with having the management team -- full management team on board when we did the strategy, of course, together with our Board. That means a lot of people were involved in creating this strategy. And of course, that gives us followers. So that was one thing.

And then the time after 2 months have passed, and we had -- just an example, we had a big management conference 2 weeks ago, where we put additional effort into discussing and finding out how to proceed with the strategy.

I would say the followup for the organization is very good, and it's good to the reason that now we will work with -- even more with our processes, with our thinking about how to improve the work with policies, with setting prices and all that.

But the very best thing is that we all agree that now it's time -- even more time to be there for our customers. It should be easy to be customers. It should be easy to write the insurance contracts, but also to fill in claims and all that. So on that note, it's very -- it's taking very positively for our people.

We currently have no further questions. So I'd like to hand back to Rasmus for some closing remarks.

Yes. And as usual, thank you very much for participating, and thank you for your questions. Thank you.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines.

Hello, everybody. Welcome to our Capital Markets Day. I am Mads Thinggaard, Head of Investor Relations in Alm. Brand Group, and I have been looking very much forward to seeing you here at our headquarters today. And I must say, it's a great pleasure to see so many investors and analysts showing up here at [ Medeon ]. I would also like to welcome our webcast participants. I hope the next 2.5 hour company with the executive management of Alm. Brand Group will be interesting for all of you.

Talking about our group executive management, I would like to make a brief introduction of today's speakers. Our Group CEO, Rasmus Werner Nielsen has been with ABG since 2017 and as CEO from 2019. Rasmus has transformed Alm. Brand from a financial conglomerate to add up 3 non-life insurer in Denmark. Rasmus didn't do the transformation alone our group CFO and Deputy CEO, Andreas Madsen was onboard for the entire transformation. Andreas joined Alm. Brand in 2016. Our Chief Commercial Officer, Camilla Amtrup, joined Codan in 2016 after many years within the tailored communications industry. And thus, she became part of Alm. Brand Group when Codan was acquired in 2022. And then I would like to introduce our Chief Operating Officer, Bo Krag Esbensen, who joined ABG in 2023 following a career for plus 10 years, Mackenzie of which some included a dedicated effort as consultant here at Medeon.

And now let's take a brief look at today's agenda. Rasmus will start out with our transformation how we unfolded the synergy part of the scale potential from the Codan acquisition and where we are today. Then Andreas will open for a deeper look into the 2028 and strategy with Camilla and Bo explaining about the strategy and initiatives in detail. We will end this section with a short Q&A and a little break. After the break, Rasmus will explain about the opportunities we have with our largest shareholder, the foundation of 1,792. Andreas will then make a deep dive into our financials as well as our new ESG strategy. When Rasmus has given his concluding remarks, we will go into a longer Q&A session followed by lunch around 1:00.

Rasmus, the stage is yours.

Thank you, Mads. Very nice to see you all the Midband also very nice to see you that are participating on the webcast. Well, we started on a journey and we say, journey, I think nobody could ever have believed on that we are where we are today. Today, we have 2,000 employees, leaders, managers that are highly skilled and highly motivated. We have more than 800,000 customers, and they come in at a flow that we are very happy about. We manage this company in a profitable way. And I think -- and I firmly believe that we do our utmost to serve the shareholders as well.

We are in such a good position. And even though we have worked hard, and we have done a lot of things, there's still a lot of things to do. That's why we call the next strategy unfolding the potential of scale. So 6 years ago, we start changing Alm. Brand Group, Alm. Brand to the better. After 1 year, we divested the bank. After 2 years, we took over Codan and at the same time, we sold a nonlife company transforming and brand into a purely non-life insurer. After 1 year, 1 year after we took over Codan, we got the keys finally. And just after that, we had our first Capital Markets Day in Alm. Brand Group, that was in 2022.

On that, we had 3 main topics. What then was very ambitious targets for 2025. The second one was how we would reach the DKK 600 million. And the third one that we discussed a lot with some of you is how we would manage our international business of Energy & Marine. We have worked with the synergies. We have reported that the quarter after quarter. And I'm happy to say that we will reach the target of DKK 600 million, and we will even reach a little bit more, so we'll go into next year with a level of DKK 650 million in synergies.

We also delivered on the Energy & Marine case. We prioritize that a lot from management. We had a firm hand on how to deal with the activities. After a year, so we made the activities profitable. And it actually became more and more profitable. And in the end, we concluded that it was not really our core business, and we sold it to Norske GARD. The proceeds from that freed up DKK 1.6 billion in capital. And as you know, we use that for [indiscernible] Share buyback. Quarter after quarter, we also worked on improving the underlying business. And as the claims ratio has decreased nice and steadily is done with the improvement of our portfolio, and it also helped the strong synergies we had in place. And that's even though we had quite a bit of hit for the increase in more frequency. The divestment of Energy Marine took out a lot of volatility in the malclaims, as you see here. And of course, the message here today is that we will continue to work on reducing volatility going forward on major claims.

So standing here in quarters and almost 3 years after the last CMD, I think we can say that we succeeded with the transformation. And we also succeeded with reaching the financial targets we set out at least 3 years ago. We are in a very strong position and we do have a strong team, we do have very committed employees, and I think we are ready to go into the next period.

As you know, it's not really up to me and I normally never comment on the share price. But I think it's fair to say now that the years that have gone, we have we have led to a nice increase in the share price and also the dividend spend. So if you take everything together the total returns should be okay, in my view. We started using share buybacks as a weapon, so to say, a tool. And we do that, of course, if we have surplus capital. So this brings us to where Alm. Brand Group is today. We are a firm non-life leading insurance company in Denmark. We do have 800,000 customers. We have a market share of 15%, hopefully, increasing nice and steadily. We have a balanced business split between the commercial lines and the personal lines. And we have 4 strong brands, 2 of them that are very well known, Alm. Brand and Codan and the 2 others that we use together with our partnership banks.

And then we are in the nice market in Denmark. It's a market where the insurance density is very high, it's a very attractive market. We are able to have, I think, as you know, quite okay buying ratio compared to other markets, and we are the important top 3 player here, and there's quite a far distance down to #4. Our business model is very strong. As you see, it's lined up here, we now have one platform in one country. It's a simple model. It's an agile model. We're able to resist if something happens, [indiscernible] .

We can increase prices with -- automatically with the annual wage inflation. So we are also resistant in terms of price increases on material and stuff like that. We are, in general, able to have agile prices if something should happen. So all in all, we can mitigate the risk. Then there's been a lot of discussion about climate. I also discussed that a lot. And of course, doing business in Denmark, climate is an issue. Denmark is flat. But I think with the way we deal with prevention -- discuss about prevention, we can mitigate that risk. And if it's not enough, then we can -- we have price adjustments to be used there as well.

So that was a little bit about our business. And then maybe a few words about our foundation. Our foundation dates back to 1792, most of you know that. And they own 47% of the group. The foundation only have one activity, and that is Alm. Brand Group shares in the Alm. Brand Group. And they are here for the long-term investments of their members, which are exactly our customers. And of course, I'm very happy that we today announced that the foundation has decided to make a contribution to Alm. Brand Group of DKK 185 billion. And that contribution is given to us so we can enhance the customer relations activities.

What we also announced today is that we in Alm. Brand Group, we have guided to use DKK 100 million of that of a new customer loyalty program. It's a program we haven't had before. Some of our competitors had are of course, very happy and very thrilled to be able to say that. It's a program where we will be able to pay out a cash rebate to the customers that are part of the program. I'll come back to the foundation and the program later in the presentation.

So summing up my introduction. We now have 100% focused non-life company. It takes some years, but we are there now. We have significant sales that gives us benefits. We are dealing with a low complexity. We have 4 well-known brands, and we have now also a very strong foundation based ownership. So I think all in all, we are in a very position and we are ready to take on the next 3 years.

Andreas will come up and tell you a little bit about our targets for the going period.

Thank you, Rasmus. Yes. I'll take you through in a very short minute. I'll go through the overall targets. I'm sure you're excited to see. And then we'll also dive into the overall building blocks and thinking around the strategy before Camilla and Bo in the next section will dive to the specifics of the strategy.

So let's start with the targets. This strategy we present today will deliver a significant increase in the insurance service results, DKK 500 million of increase towards 2028 compared to the '25 targets. That's DKK 2,350 million in Insurance result corresponding to a combined ratio of 82%. And within there, we also have a cost ratio of 16%. Combined ratio being down 2.5 percentage points in total and the 16% corresponds to a 100 basis points reduction compared to the '25 levels.

And then if we turn to the capital side of things. Today, we introduced a new target, focusing on our return on own funds of 40%. And as we'll go into more detail later, you'll see that this significant increase in Insurance Services coming from our core business, in combination with also our ability to do buybacks in the future period, will translate into us delivering an average yearly increase in earnings per share of 10% over the coming 3 years.

And then just to round it up, we stick to our strong commitment to pay out any proceeds, we don't need to run our business. And as such, we restate our minimum payout policy rate of 80% of net earnings. I think Rasmus was tied this up nicely. We had -- in the period, we just went through, I think we feel that we got the scale we needed to actually become viable in the market we now operate. The DKK 600 million synergies we heavily deliver this year, I see them as proof point for the Codan transaction, also the -- the price we paid for the Codan transaction, and it sort of shows that the returns we presented to shareholders 3 years ago came in as we planned.

What we present today is an actuality the potential we have to do further from that scale we achieved in the Codan transaction. And in a way, comes on top -- and even though we might not be the largest in the Nordics. I think the point here is that we do have the position we like with a simple model and viable scale in the Danish market. And that is the strong proof fund that enables us to do the DKK 500 million in net Insurance Service result improvements over the coming years. And we presented in this way, where we will come back to the key focus areas driving that. But we have DKK 650 million coming in gross benefits. And then we have DKK 150 million going the other way, so to say, for the needed investments and a few other moving parts. So, DKK 500 million on a net basis and improvements in Insurance Service results.

So now I'll spend a few minutes on the overall framework and the building blocks in our '28 Strategy, unfolding the scale potential. Starting with the first key focus area customer engagement. Customer engagement is about how we will focus on the full customer journey, making sure we play in the right segments in the right way. And that will deliver us DKK 125 million in benefits, which Camilla will go further into in a minute.

The next one is our insurance capabilities, the largest single block DKK 350 million in gross impact from there. That key focus area says a lot about how we will use data and insights to basically improve our core underwriting motor, our core underwriting profitability and also driving further efficiency within especially the claims area. And all that will translate into what we feel comfortable saying would be us coming with a market-leading position in terms of the claims ratio.

And then to round it up, we have the operational platform DKK 175 million in gross benefits coming from that. And that's a lot about using the advantage we have of having a simple platform today in one country and further streamlining that and taking home benefits and efficiency gains from that in the coming years. So all those strategic initiatives are based on what we term 2 key enablers. And the first is the strong foundation ownership we have. And as Rasmus already teased, we can look into the foundation having an even more direct impact towards supporting our strategy and business model in the coming strategy period and we'll be unfolding that further as we get into the next sections.

And then rounding it up, behind it all, we won't be able to deliver on this strategy and the initiatives in there if we don't have the right talent in the organization and engage employees to deliver on these targets. So that is the overlap for the strategy we will now dive into. On top of the overall financial targets I've already mentioned, we also, this time around, introduced overall strategic KPIs. The idea behind these KPIs are that we feel that they support from an operational standpoint, our ability to deliver on the financials i.e., if we deliver, when deliver on the strategic KPIs, we feel highly confident that we'll also with a very high likelihood, mean that we are delivering on the financials.

And to begin with, we introduce customer [indiscernible] We will set out to improve customer selection from 73% to 77%. On top of that, we also, regarding the customers, [indiscernible] Financials. And then we've operational KPI , which is our proposing, which we seek to increase to 50% of all claims handled in the future. That means that you don't have any manual or any people in that sort of claims being handled, all be automatically. [indiscernible] To further on all these later on.

Then we have adding one of our key enablers. We have employee engagement also. The firm ambition that success from also having engaged with the ambitious target of an engagement score of 80. And as you see, we'll dive into that later, but we are luckily the 79 at the current time. And then we'll also be introducing an ESG strategy today, where we even want to highlight here as a part of the [indiscernible] -- and the one we've chosen has to do with emission reduction in [indiscernible] Claims, which will also be unfolding later on in the presentation. So that's the overall map we have for our strategic KPIs.

Camilla will take us on to how we engage our customers in the right segments.

Thank you, Andreas. Before we dive into the first strategic focus area of customer engagement. I would like insights on our customer approach because there's a clear link between our customer engagement and our customer approach. Today, in Personal Lines, we have 3 strong brands. When Codan was acquired by Alm. Brand in 2022, we made an extensive study on market and customer behavior. And brand strategy, and it's worked really well for us. We have spent this strategy period developing distinct position, getting different customers and different needs.

In the coming towards '28, we will focus more on developing and value propositions to support each brands. Of course, for efficiency purposes, everything will be based on our one core platform, meaning that our core products will be the same across brands, but it will be the bundling of services and propositions that will differ from brand to brand.

You take Alm. Brand today, our main focus will be to increase our business with our existing customers. Its customers' primary living outside the larger cities, typically families. These customers, they value a customer experience where they feel recognized and by us using the insights that we showed and that we understand their unique life situation.

For Codan, our focus will be more on attracting new customers. Codan customers is typically mid- to high-income customers living in the larger seas. They value our customer experience with focus on fax and strong advisory and high degree of flexibility in our offerings. They also have a stronger preference for digital solutions. Privatsikring will continue to be our strong brand for bank distribution, and we will focus on adding the abilities for these customers to do self-service and buy additional products within their online banking solutions.

There's also no doubt that across all brands and all segments, there is an increased preference for digital solutions. So to prepare for the future, we have made an ambitious target of increasing our direct sales through digital channels. We know today, a lot of customers research online but end up buying off-line due to complexity, but we believe the time is right to increase our investments in digital solutions.

We have one digital platform already migrated all brands to the platform that enable us to develop services in a more efficient manner to fully gain the potential of this platform, we also need to have our customers migrated to our one core platform. We have actually experienced high growth on mainly brand digital sales, although it is from a very low starting point. And of course, we will take some of these learnings and apply them to code as soon as they are on our new platform.

For Commercial Lines, we have actually also have a multi-brand strategy approach. It's been based on the size of the customers. Codan has historically been very strong, focusing on corporates and large corporates. And that is actually a perfect fit with a [indiscernible] Brand that's primary focus on small and medium-sized enterprises as well as agriculture. We will grow our market share among the small and medium-sized enterprises as well as agriculture. It is a market, but with fierce competition, but we have experienced high growth already in the smallest part, up to 20 employees. And we actually believe that we can provide a strong competitive offering to the midsize segment, combining our industry knowledge from the [indiscernible] with our knowledge of how you should approach the smaller business.

On the agricultural side, we have also already seen an increase in our growth. We have been growing around 9% for the [indiscernible] And with the help from our bank distributions, we are also getting more leads. Agricultural customers with a pure Danish player. We have recently reorganized our sales organization, so we have a stronger focus on the midsize segment, which is also [indiscernible] And we're already starting to see now a much stronger pipeline for our Q1 corporates and [indiscernible] .

Large corporates, it is still very much about selective growth and balancing our portfolio. We have exited most of our compensation, and we will have a stronger focus on also generating full service customers among the corporates. So it's not only the lines that are exposed to large losses that we will underwrite. For the large corporates with [indiscernible] , we also have a strong focus on decreasing our lion's shares, and we will also exit some of the geographical areas for instance, decreasing our exposure in the U.S. for these Danish customers. So that will be all about reducing the volatility that atmos already mentioned. So all in all, the Commercial Lines strategy is very much about rebalancing the portfolio growth.

To support our service model for Commercial Lines, we will take an even stronger position as a trusted adviser. We want to improve the perception of Codan and [indiscernible] Commercial Lines as a company that actually provides strong advices when it comes to claim prevention, optimization of risk and so forth. We've just conducted a study around with our business customers, and they clearly state that they expect us to provide this information. Large corporates, they take the information and their own risk management organization changed it into corporate actions. For the medium-sized corporates and the agriculture, they also expect us to come up both claim prevention measurements, share insights and how they can reduce your damage cost.

Towards '28, we will launch several new initiatives focusing on risk management. We have just recently with the support of our foundation launched intention Service Check with our agricultural customers, and that has been really well received -- we will also launch a risk management event in Q2 targeting the large corporate and we will intend our investment in our claims stop that we have already learned a lot about the last 5 years, especially focusing on motor and Transportation segment. that will be extended to other lines of business and also to other industries within motor.

And as you can see, we have provided fairly high damage savings for these customers. That concludes what I would share on our insights or on our customer approach. Now I would like to return to our customer engagement as our first strategic key focus area. As Andre has already mentioned, strengthening our customer engagement is all about using our insights to improve customer journeys end-to-end and improve our sales and service models.

In the following slides, I will provide you with some concrete examples of how we are going to improve our insurance service result of around DKK 125 million, based on the 6 focus areas you see on this slide. We have spent the last couple of years building a very strong data foundation and integrating most of our data. And we've also rolled out our CRM system across all brands. Towards '28, we want to work more with tailoring our messages targeting customers in different ways with different messages and different setups depending on where they are in life.

Today, we have a one size fits all approach. Most of our customers actually get this yearly Service Insurance check without us actually knowing if that is what they actually need. In the future, we will use the insights and our ability to analyze our data within the CRM system to target the customer with the next best offer, the next best experience or messaging depending on where they are in their customer journey, which channels they prefer and when they prefer it. So we will shift from a one-size-fits-all approach to a tailored approach with next best experience.

In combination with our 360 data insights and the CRM system, we will also be able to enable our customer frontline employees to engage with the customers in a much more meaningful and proactive manner. And that's also why we expect we can increase our customer satisfaction from [indiscernible] because increasing our customer satisfaction is crucial in order to deliver on our customer engagement.

Increased focus on the customer journey and providing hassle-free service experiences will not only increase the customer experience is also expected to increase the customer lifetime. And in addition, we will put a stronger focus on getting more full service than we have today. For instance, in [indiscernible] , we have several partnerships where party assign, they generate a lot of one policy customers. It could be within motor, it could be within change of ownership. With our improved lead flows and our better understanding of the customers, we will be able to convert more of these customers from one policy to multi-quality customer.

It's a journey we have already started, and we've seen some positive results. So our target will be to increase our number of full-service customers from 51% to 55%. And there is also a close link between customer lifetime and number of products. So increasing the number of full-service customers, we will also increase the number -- the length of the customer lifetime. And with the support of our new loyalty program, we will be able to strengthen the lifetime even further, and Rasmus will get back to talk more about the loyalty program.

We will also continue to leveraging our strong existing bank partnerships. Today, we have a strong partnership with Privatsikring and also within [indiscernible]. We have just celebrated 25th anniversary to Privatsikring, and we now have more than 30-plus banks within Privatsikring, local banks and Asian-wide banks. We have seen very high growth through bank insurance. Just last year, we saw a growth of 17%. It is driven not only by high sales of full-service customers but also of a higher average lifetime.

In average, there is a 2.5-year longer lifetime on a Privatsikring customer compared to a Codan or a [indiscernible] Customer. We estimate that we have access to around 45% of the Danish bank market, and it is our aim to increase our penetration between -- within our partner banks from 11% to 13%. And there's quite a big variation between the banks and actually even the local branches within one bank that we believe that we can actually increase even further.

I also have a few more banks on my wish list for Privatsikring and one is starting up in March next year. We will, as I already mentioned, also invest in the integration with the bank's data centers that will enable our customers to do self-service and buy additional services through the bank's online student. That was the examples, I would like to share with you on customer engagement.

Now I will dive into strengthening our insurance capabilities. I will talk a little bit first, and then I will invite Bo on stage to finalize the [indiscernible] About claims handling and fraud prevention. There is no doubt that we need to continue strengthening our competitiveness and create even better customer experience. I've also touched upon the extensive work we have made on having a strong data platform with integrated data and now is the time to actually harvest from the benefits, all these insights provide. We will also continue to invest in our data and data modeling. And with the support of AI, we actually believe there is quite a lot of benefits that we can take out of strengthening our insurance capabilities, not only working with underwriting, portfolio optimization, but especially working with claims handling and fraud prevention.

That's also why this is the biggest part of our improvement in our insurance service result of DKK 350 million. We are constantly working on optimizing our portfolio and will continue to do so. I would say it is actually part of running the business. With our new data models, we have increased [indiscernible] To risk and get a much better understanding of our risk. [indiscernible] These changes. And that is one of the benefits we will get from our new one unified platform.

We will get a much more agile pricing toolbox that will enable us to faster, more free and on a granular level, it changed our prices. So we have a strong focus on migrating most of our customers to the new platform to the new standard products as soon as possible. For Commercial Lines, we also have a lot of underwritten customers. And we've already launched our next underwriting program, taking extra internal data and combine it with machine learning and AI, and that has helped us augment the underwriting decision from our underwriters.

We have already seen an increase in our hit rate. Of course, the hit rate should only increase if the claims ratio stay stable or decreases. And we actually expect that we can increase the hit rate a little bit further because we will extend the program to more lines of business but also include more functionalities. So our aim is that we will have a hit rate around 45% in a market that is very much driven by brokers and whether it's a strong focus on competition.

That what I would like to share with you about the data-driven underwriting and portfolio optimization. Now I would like to invite our COO, to the stage. Bo, please.

Thank you, Camilla. Then we move on to the claims side, and we start with the topic of fraud. In the last 3 years, we have quite significantly increased our ability to detect and prevent fraud. But fraud is still running through the system. So there's still an opportunity for us to professionalize those capabilities. and make sure that these cases do not come through.

By fraud, we mean the fraudulent behavior can be either from vendors or customers that often leads to inflated claims costs. This can be for a property where repair where larger repair is conducted than was actually the scope of the claim. We see the same things happening in motor. We have kind of fraudulent report of stolen and lost items. We have workers comp cases, et cetera.

To prevent fraud is all about pattern recognition. And today, we have technology that helps us with that. We have artificial intelligence that listens into some of our channels and try to identify what is a suspicious pattern and what are the cases we should take out for inspection. But technology is improving. And that also means that if we look at a 3-year horizon, we expect that we are going to increase our ability to detect those patterns, take those specific cases out for inspection. And furthermore, as you said, as an expect -- sorry, an inspector with these cases, today can be sometimes hard to actually prove if it's a fraudulent case or not. But again, new tools are coming in, and we think we can support our inspectors with an even better toolbox in order to go and prove whether this is a fraud case or not.

So in total, better detection and better ability in inspection will mean that we can prevent even more fraud than we are doing today. This, of course, has financial potential, but it's also important to state that this has a positive impact on all the customers not showing this behavior because, of course, today, it has a negative impact on everyone when we see fraud happening.

If we then move in to the actual handling of claims. Of course, Camilla talked about the customer experience. This is also a key element in the claims processes. But we also work with the effects of efficiency and quality. By efficiency, I mean the ability to handle more claims with less. And by quality, meaning that we make sure we pay out exactly the right amount for a claim, not less, not more, but being able to settle that at the right amount.

We talked a little bit about straight through processing earlier. This is the example I also brought here. Of course, if we can increase our ability to handle more claims without human involvement, it has an efficiency gain. But it also has a quality gain because if we can have the systems process the cases, then you at least take out the risk of human errors in a manual process.

Today, we have around half of our claims coming in through a digital channel. We want to improve that or increase that because that is the basics for being able to actually do a system processed straight through after. So you want to increase that to 80% by making it easier but also making sure that whenever we actually have customers in the digital first notice of loss, we make sure we capture all the information required in the next step, in order to be able to then straight through process 50% of those cases coming in digitally. This is a significant increase, but we firmly believe that, that is possible with establishing the right technology behind. Some of it will be rule-based, but again, artificial intelligence coming in, helping to increase even more the share of [indiscernible] Through processing on a claims case.

In 3 years' time, we will also have cases that are not suitable for straight through processing. We'll have our skilled employees to work on those. That can be either due to customer preference for a given case, but of course, very often driven by the complexity of the actual claim. Again, we have an opportunity to equip our employees with better processes, better system support, better technology support. We call that here also the AI support of our claims handlers. And with that support, we can again increase the efficiency of that. We can make sure we spend our time of the skilled people on what really adds value but have technology to support the surrounding processes.

That will lead to efficiency again, but also quality, making sure we settle claims at the right amount. So in total, there's a potential here when we talk customer experience, this also has a very positive effect. When you, as a customer, have a claim, all you want to do is get that process fast, get to pay out and move on in your life. If we can straight through process half of the claims coming in to us. That, of course, means a lot of customers can be helped faster and and move on. And we also believe that is a big contributor to customer experience.

Finally, within the claims area, we, of course, work with vendors. So when we have a claim and we need to go and repair that, we have vendors and partners helping us on that. I brought 2 examples here from -- one from motor and one from property. Of course, we have also partners, vendors across other lines but these are 2 of the biggest areas. If you look into motor, there are new technologies in the market now, which means that some of the smaller and medium-sized repairs can be done in new ways. Basically, that can mean that as a customer, you might have a dent or something in your car, not too big. You can go to one of these workshops, you hand in your keys, 2 hours later, you have your key back and you drive on, you can move on your claim is fixed. This is a great experience, but it also is more financially attractive to have the claims repaired in that way.

These technologies have been evolving over the last couple of years. We have a lot of discussions with the partners that are able to provide these. The challenge the last few years has been the capacity. So actually the ability to fix 6,000 claims per year, that is coming now. And it was the joint partnerships, we can actually establish that capacity to make sure we can steer 85% of our cases in this space onto these type of repair technologies in 3 years' time. So that is very attractive, both for the customer and for us.

In the property side, again, we have a network of partners that helps us when we have damages on properties. We have scale. And the next period is again unfolding that even more, making sure we have the right geographical cover across the country, making sure that we leverage our scale in the contracts that we have. And then thirdly, maybe even most important to make sure that we then actually steer our repairs towards that network. So shown here that we want to increase the steering rate from 50% today to 70% in 3 years' time, means more of the claims go through our network, we can guarantee that the customer will have a good experience because we know these vendors, and we stand by the quality they deliver.

And secondly, we, of course, have better deals with them. So there's a financial potential on that. So in total, we can optimize the way we work with vendors on the claims side for the best possible repair cost. That concludes a bit on the claims. I will then move into our third pillar, which is the operational platform. And Rasmus already mentioned in the beginning that we strongly believe in the competitiveness of operating on -- in one geography on one platform. We have taken a lot of benefits from the platform we have established since the acquisition of Codan, already in the previous period. But there is more potential as we fully leverage that. That means we can make sure we get all our customers onto the new platform, that will lead to further simplification in the way we do business and in the operating model below.

So again, it's about unfolding that, making sure we capture all the value of what we have established. I just want to put a few words on what we mean when we talk the one platform. After the acquisition of Codan, we have invested quite a lot of time and energy into this. What we have now is a scalable platform, and I will explain what that means. If we look at the front layer, so all the presentation layer towards customers and our web pages, et cetera, we have consolidated that to modern technology. We have built it in a way that now if we build a digital experience within sales and service for one of our brands, we can automatically use that across all the brands. So we do not need to build things 4 times, and we do not need to maintain them 4 times.

We have established what we believe is the world-class CRM system, rolled it out to all employees. That means when you are the customer, you now have perfect overview to give a good experience, but also make sure you act on all the leads that we have out there.

Our coinsurance platform is where all the products, policies billing, everything happens from. Again, it's now built scalable means if we build a product -- or that means we build a product once we can have a different proposition across a [indiscernible] Codan and Privatsikring but we build it once, we maintain it once and we can use that across all the different brands. That makes a huge effort -- huge impact in terms of being able to, again, leveraging the scale that we have, we can do it much more efficient.

Our data platform, we talk a lot about the data insights here. Now the data platform is there. We have most of our data in. That means we can start to leverage data in all our processes from financial reporting, risk calculations all the way down to the daily management of sales and service, claims handling, everything. We have a lot of it in use. In the next period, we'll make sure everything is used and then capture the full potential of that.

This will not only be scalable for us. This also means that we can make sure all our customers get the experiences that we're having. So making sure we get full leverage of that. On the back of having established the application landscape, it's natural to consolidate on the infrastructure side. We are coming from a scenario of having -- after the acquisition of Codan having multiple data center setups. In the next period here, we are going to consolidate that all into our own. We have already established the capacity in that to be able to do it. So relatively quickly in the next strategic period, we're going to in-source that and not only in the data center, but actually all the operations of that.

That is -- means we can run things at a lower point, leverage the scale of that, also has a positive impact on the risk, and it also contributes to agility and again, making things faster, changes faster going forward. So that will happen relatively quickly in the next period on the back of having established the platform.

Finally, within this strategic pillar, we introduced process excellence. We have cost harmonized, standardized, automated already a significant part of our processes in the operations. But there's still quite a lot [indiscernible] And by heavy, I mean, process of high volume or processes where many people involved. Identify those processes and streamline them, apply automation where we need to, but there's also a lot of streamlining we can do just by analyzing templates and tools available at the right time.

I'll show an example here from Commercial Lines. When we have analyzed quite in detail our processes from a first dialogue with a customer all the way to a policy being issued. What we can see is that there are a lot of handovers back and forth between the sales agents engaging with the customers and the back office support. There's no value on the customer for that. There's no value in -- for our employees in doing so. This is -- these are processes where we have an opportunity, again, with the right mandate out on the front with the right tools and templates available, we can take out a lot of these handovers as we move forward.

So here, we have shown taking 1/3 of those handovers out over time. There are similar examples within Personal Lines, similar Services within claims, but this is to give you a little bit of a flavor of what are the type of things we're going to look at in order to take out inefficiency in our processes and capture the benefits of that.

That concludes a bit the operational platform. So I will hand it back to Mads for the Q&A.

SPEAKER01

Thank you Bo and of course, we realized this was quite a bit of inflammation in a relatively low amount of time. So we thought it would be rather a good idea to have a small Q&A here. So -- but we will try to keep it a bit limited. So if you could limit yourself to one question and only relating to the first part of the presentation, then that would work quite fine. And if I can invite the executive management.

Who has the first question? I can see Martin from SEB.

Yes. So I think -- well, my first question goes to you, Bo, I know now, of course, you're biased, but if you take off your unbias glasses for a second. I'm sure you've seen many insurance companies on the back end. You are guiding for pretty aggressive digital targets. How do you -- how would you rank Alm. Brand digital capabilities today in the Nordic context? And once you achieve this, how would you -- would you change that rank?

Yes. Brilliant question. So if we take today go out in the back, we have the systems and platforms available, but we have not rolled out all our process into those. So I think if you rank it today, we are not leading. But we have a very clear opportunity to be leading in 3 years' time from now because the platform, the ability to move on to standard products based on standard processes, makes automation, everything a lot easier. So I think our potential is significant.

Okay. And then just perhaps just following up. So many of all these talks to you have? Are those based on use cases? Or are they based on you sort of trying to speculate on where technology is going or how are all those targets sort of ...

I think when you go through a target process, you use a bit of a combination of what you're seeing, right? We have -- we can take inspiration from companies around us, other industries, from other geographies when we set those targets, where is technology in 3 years' time from now, you have to -- but I think putting all that together, we believe we have put ambitious realistic targets out for instance, on the claims side. We don't know exactly what technology is available in a few years' time. But I think the development we see recently is giving a good comfort that we can automate and put systems behind a lot more things that we can do today.

And Asbjørn from Danske.

Now just one question. Is it looking at the DKK 650 million in gross benefits driven or technologies that you will have to buy or implement going forward in some of the internal measures -- I guess looking at the internal measures, it makes sense to assume you can sort of maintain those benefits also on a midterm horizon. But looking at the other measures, the smart repairs, the [indiscernible] Can sort of -- that your competitors will be able to use as well. How much do you think you will be able to retain? How much will be lost in competition? How much of the DKK 650 million is that really a growth number? Or is there a bigger growth number than then adjusted down to DKK 650 million, that would be interesting to hear.

Yes, I can try giving some flavor to that. We've tried to model it in this way of thinking gross number. We are -- we think we have -- we believe firmly that we can make a gross via the specific initiatives we have, and we've gone through a range of examples today, which will, in total, deliver DKK 650 million in gross impact. And then I think a bit of the answer to your question is hidden [indiscernible] And in reality, there are some places where we might have a bit of tailwind actually going from '25 into next year. But there are also some places where we can see some pressures coming in the years to come.

I think a very important statement for us is that the strategy is not about us squeezing more margin from the customers by increasing prices. We are becoming this strategy about us creating margin for ourselves by becoming more efficient and the insight, delivering the same overall products and services. So I hope that...

Yes. If I can just follow up, just more that the DKK 650 million is more how to interpret the growth element to it. Is that all the impact the other way around or is there more than DKK 650 million, but you're conservative in the DKK 650 million and then you have DKK 150 million investments, whatever you want to call it. I mean how much room for ever is there in the net [indiscernible]

Well, I think Asbjørn, I think it's a bit of an academic friction. I mean the reality is we have -- our best estimate is that we can do via specific strategic initiative DKK 650 million. And then on top of that, we estimate also that some of that will need to be handled specifically because we need to invest in solutions to actually create those impacts. And then we might also have a bit of headwind in specific areas. So -- and that's how we try to model it.

Mathias of Nordea.

So my question goes a bit back to Asbjørn's question on the timing of things. So obviously, you get the DKK 500 million in improvement when you get to '28, but you also say that you need to kind of invest as you just said, in some things. So should we think about improvement as being more of a straight line or should we think about -- how do you think about that in your way of thinking it?

Is it -- I'm very happy to answer it, but can we save that for after the next section when I've gone through the financials because I think we'll sort of try [indiscernible]

My question, if I can ask about customer engagement. Presumably, you've done some benchmarking exercise. And your peers talk about customer retention in the high 80s, low 90s. So how do you compare versus that versus those numbers? Just to get a sense of the runway you have to actually improve over the next 3 years?

Yes. We already seen also retention rates in the high 80s there is a bit of a difference compared to the brands, as I already mentioned, Privatsikring tend to have a longer lifetime, and they also have therefore, a higher retention. But we are also in the range of the end 80s. And retention is important for us because since this is a mature market, most of our initiatives should also help us increase the lifetime of our customers.

Did you have a question here in the front row? Alexander Vilstrup from DNB.

You briefly touched on it just now. You have a multi-brand strategy, and you also mentioned the full-service customer ambition. Could you just brief you have, do you have -- where do you see the most potential for improving full-service customers? And also since you mentioned the lifetime of the Privatsikring customers, how many brands did they have? Is that the reason for the higher lifetime?

The first part of the question, there is a difference in terms of full service customers and the biggest potential is within Enviniban and then Codan. Privatsikring, that typically generate full service customers. So that's very much about just upselling additional coverages depending on the customers' needs. So the biggest potential is within enveliban and Codan and for Privatsikring, [indiscernible].

Just to clarify.

And Simon from ABG.

Yes. Camilla, just following up on that, in terms of having a Lebron customers, which you also mentioned was sort of the most needy types of customers in terms of the full service offering and also leveraging on the scale and efficiency, could you just share some thoughts on how you managed to stay relevant for the more needy customers, but at the same time, leveraging scale benefits [indiscernible] Fits.

Yes. First of all, with the help from our one digital platform and our core platform and our data, I think we actually have a strong position in targeted customers individually. We will learn even more about what is the right offering in the right time. We have already some knowledge about what is the best way to approach customers. We have seen that making regular service checks talking through the customers. [indiscernible] . If they make changes, we actually see a higher lifetime. So having a regular -- based on the scales and the simplicities we get from the data and the CRM systems that some of the things that's going to help us, but we will be testing different approaches as well.

Do we have any final question? Otherwise, we will head for a short break now. [indiscernible] this room at 11:50, so in 15 minutes from now. And then, of course, there will be a longer Q&A session.

[Break]

[indiscernible] and after I talked a little bit about that, then Andreas new ESG strategy. But as said, the foundation only have one [indiscernible] Foundation March 2024, the foundation. And in that policy, stated that the dividend strengthening the capital base. They will use up to 25% purposes, and then they will use 25% -- up to 25% for customer-related purposes. And of course, we contribute with DKK 185 million to us next year, that philanthropic purposes they're supporting, going to be something. And there are a lot of initiatives coming. And it actually has a very positive effect to our employees.

They are even more in the [indiscernible] That the foundation supports these purposes. But it's also starting to be very positive towards our customers nowaday with a group that take things like that serious.

And a few words about the governance. In many years, it's been the same Chairman and the same CEO, they both as in the foundation. And since 3 years ago, then the CEO of the foundation, I'm only -- not only, but I'm very happy about being CEO Alm. Brand Group, but I -- and since March, our Chairman is an independent of the our Board in Alm. Brand Group will now consists of 9 members, 3 chosen by the employees, 3 in the Foundation and 3 in that's now our Chairman of the Board.

We in Alm. Brand Group has decided to use it in 3 different ways. We have talked about the DKK 100 million for the customer loyalty program. I will just come back to that briefly. DKK 45 million in customer adherence. And here is some of the things Bo talked about with AI, we want to have AI as the trigger for increased and improved customer experience. And you will see more than in the coming years.

And then we will use DKK 40 million for prevention initiatives. We have worked with that already throughout 2025. We made climate ready plant water leakage packages and Camilla also discussed some of them in her presentation. So things are moving on and the contribution we get, we are really using for something that for the benefits of the foundation members, our customers.

Switching to the Customer Loyalty Program. Of course, that is our largest initiative, and that program will benefit more than 100,000 Personal Line customers who benefited that, and that is spread throughout the 3 brands we have in the Personal Lines, Alm. Brand, Codan and Privatsikring. There will be further specifics around the program. We will not highlight them now. We will do that throughout first half when we go public with that. But I think the important thing is that it will be a cash rebate we are talking about that all these customers, they will benefit us. So that was a little bit about the foundation, Andreas will now take us into the financials.

There we go. So now I'll dive a bit further to the financials. Just restate to begin with, we already saw this once, but what the next section is about diving further into the compositions of both the insurance service results benefit. Where is it going to come from. [indiscernible] Camilla went into some detail around. We feel that we have the opportunity to do a significant push, leveraging the scale we have to push our insurance search result in a significant way, the plus DKK 500 million compared to the '25 targets we've had. That comes in combination with what we consider a continued robust capital situation, driver also there is the full internal partial internal model we have now covering both Codan and [indiscernible] Approved in August.

And when we look at the capital, we'll also be able to free up from [indiscernible] In the future, among other factors, from the internal model approval. That translates into this significant earnings per share growth in the coming years. And this is really the core part of the story today. So if we look at the combined ratio and the different parts of the targets, most of the improvements will come via the claims ratio. As we saw earlier, we've worked for many years also with some headwinds along the way, but actually managed to come down -- to put down the claims ratio. And in the future, 1.5 percentage points of the total 2.5 points will come from the claims ratio.

Intuitively so, I would say if you look also at where the growth effects are coming from a lot of the factors in the -- within the insurance capabilities, also the claims area, specifically would translate into the claims ratio. And then as we have been doing in the past, we'll focus on being vigilant around driving efficiency through our administrative cost base also. Here's where especially the operational platform will come into play. And we target the 100 basis points improvement in the cost ratio towards 2028.

Then diving into capital. We have this internal model approval I just mentioned. It came through in August this year. Those of you who were with us 3 years ago in the Capital Markets Day back then, we said that we will be working on this, and we're very happy that it came through just towards the end of the current strategy period. It's freed up around DKK 600 million in solvency requirements. And now it means that we now have a model fully covering all the material parts of our insurance risk in the solvency requirement. That both enables us to free up capital, and it also plays into the overall benefits we have within our ability to pay out a high capacity of our earnings on a going basis. I'll come back to that in a minute.

But starting with the ability to buy back shares from the capital freed up I think we've already given some soft guidance to this point, and this is along the lines of what we've said. We still believe that this [indiscernible] Requirement will translate into ability we have to to specifically initiate a new buyback of DKK 600 million coming from this particular capital being freed up. So then we have the overall capital coverage, and we've chosen to increase the solvency ratio from 170 in the previous strategy period to now 180. A few comments around that before I get to the composition of that.

We think it's very important to have a robust capital situation. You basically -- we don't want capital to be an issue. And where we are today, we feel the right number for us in terms of coverage is 180. Keep in mind that we freed up and put down solvency requirement by around DKK 600 million. We've also, after the divestment of Energy & Marine also come further down back then in terms of solvency requirement that just also means that the absolute amount of coverage has come down along with that journey. And all these facts together means that we feel that we -- it's the right balance for us to increase by 10 percentage points to 180.

And in terms of how we aim to cover that solvency requirement in the future, we still, as you can see on the slide behind me, we still have most of it coming from our Tier 1 equity. So the total Tier 1 equity will be approximately DKK 3 billion, DKK 2.9 billion in the illustration here. And on a long-term basis, we would aim for the restricted Tier 1 to be around the 2% level, meaning around DKK 300 million. We have a bit more than that today in Tier 1. And then on top of that, we have the Tier 2 capital. And this is where recalling that the Tier 2 capacity follows the overall solvency requirement after we divested the Energy & Marine business and solvency came came down.

And we finally got the approval for the internal model. We already executed on buying back around DKK 400 million of Tier 2 bonds because we didn't have any use for them. And it didn't make sense to pay any interest for something you can't use. So we are where we should be on that number already, and that totals the DKK 3.8 billion. So this is sort of the stylized way you can think about our capital base going forward.

Payout capacity. What you can see here is that we -- throughout the entire period -- strategy period we're just coming out of, we've returned a very high proportion of the earnings we have. And I'll come back to the dynamics that support that capacity in a minute. But we stand firm behind the minimum commitment of 80% and the payout ratio still stands. And then we will aim in many circumstances in normal circumstances we'll be able to do close to historical levels. And -- this is around exactly that point.

Today, we introduced a new way of looking at our capital return. We've chosen to focus on the own funds going forward. We do that for a number of reasons, but I think one of the main reasons is that it actually plays very well into also being disciplined in the way around the solvency requirement. We actually need to grow our business. That's the own funds coming from the requirement, and that's also what's actually feeding into the payout capacity we have. So being disciplined around own funds translates also into being able to deliver high payouts in the future.

And maybe let me try to explain that a bit further. If we look at the total target we have for '28 of [ 40% ] return on own funds, when we grow in a profitable manner as we have done in the past and as we are planning to do in the future, on a stylized basis, we only need to retain a small portion of the earnings we make to fund, so to say, the capital requirements. And you can also think of it in this way, the capital requirements, if we grow in a balanced way, are actually growing on a roughly the same nominal basis. And when earnings come up as we are able to do when you look at our targets today, that means that translates into a higher payout capacity in the future than we have today.

And roughly 2% of the 40%, meaning around 5% of earnings, that's what we basically need to fund the growth we have. And that's why we can have a payout capacity of around 95%. Then for good order. We also think it's a good opportunity, just restate and go through our thinking and expectations in our investment book also an important part of the balance sheet. There's nothing majorly new here, but let me just go through the overall thinking.

We, today have around, as you can see, DKK 7 billion of the investments, meaning roughly 1/3 of total investments in what we call the free portfolio. The free portfolio is where we actively take the risks we choose to drive the returns in for in a good balance, driving the relatively conservative approach, I would say, we still have and will also have in the future.

And then the match portfolio, the hedge portfolio is coming from -- that's where we hedge the market risk inherent handily coming from the insurance provisions and the premiums we attained through our core business. And we aim to hedge that as closely as we can. We won't be able to do that perfectly all the time. But on a long-term average, we should get close to 0 for the hedge portfolio. That means the return we create is entirely coming on a stylized expectational basis from the free portfolio. And as we have in the past, we will maintain the conservative approach, meaning that we have a high proportion coming from liquid assets, high-quality bonds. Only a quite moderate exposure to equities and then also moderate but slightly increasing exposure to illiquid credit because that's where we basically feel we get the best risk returns and also capital returns in terms of where it's most efficient for us to drive investments.

So that's the oral thinking we have. And that translates it as we stand today with the amount of free portfolio we have, that would mean that the 3.5% stylized average return would translate into DKK 250 million on a yearly basis. And then we deduct the costs we have for running the investment book. And then we also have this more technical placement of our Tier 2 interest rates, which also figure in this part of the financial statements.

So on a net basis, that would translate to DKK 175 million a year, given the amount of investments we have today in the free portfolio. And here, we get to one of the key slides. It's not really adding much news we've already said, but I think it's a nice way to illustrate it. What we are delivering today and what we've spent some time going through is that we feel that we have confidence that we can deliver significant improvements in the insurance results coming from the strategic initiatives we put out today.

Looking at the average earnings per share growth we expect over the strategy period, the next 3 years, that will translate to around 9 points on a gross basis, that's the DKK 650 million and then accounting for the investments we need and other factors such as competition or other headwind in costs that would get back to the 7%. And then we have, on top of that, because we have the ability to buy back shares, both explicitly coming from the surplus capital we have today, a lot of that generated from the internal model approval we had in August, the DKK 600 million, but also on a going basis because of the way we think around payouts, we feel that we will we expect also to use buybacks in the future to top up on top of what we would consider predictable increases in dividends per share.

And I can give you a rough guidance there, something along the lines of what I'm -- all we're seeing here on the earnings per share. So we would firstly prioritize seeing a meaningful increase in dividends per share, let's say, roughly around 10%, like the earnings per share is coming up. And then if we have capital on top, we will buy back shares. And if we for some unforseen reason, have some losses that could be from a big windstorm or something, the buyback would be the first thing to go. So that's the thinking we have. And on some of an average basis with the factors we put in there that would add support to around 3 percentage points of the 10 percentage points earnings per share growth. So that's sort of the mechanics of how we deliver the 10%.

So I'll [indiscernible] To the financial part. And now I'll go to something a bit different. But I think maybe a good [indiscernible] Be to say that hopefully now, we feel confident or we've at least tried to add some flavor to why we feel confident that we can deliver significant financial result improvements from our core business. And what the next part I'm going to dive into now is -- is that, that comes in conjunction with us is also working with minimizing the adverse effects we have on the world around us from the core business we run. And that's to put it very briefly, a big part of the ESG strategy we're putting forward.

Starting with the purpose, which is unchanged from -- we already have this press today, we secured today to create tomorrow together. It has this implicit duality there. We don't write, we insure today, but -- and meaning that the best claims we can sort of avoid are the claims actually avoided, expenses we can avoid. So if we can prevent a claim, that is both better for us, it's better for the customer and it's better for the world around us because then we will not need to actually repair a claim or in other ways, impact the world around us.

But in the foreseeable future, and specifically, I would say, for the next 3 years, there will be a big need also for the traditional insurance to come into play to help our customers when claims arrive. And this section is a lot about how we have targets to reduce the impact from the whole value chain, which we drive through our core business when we handle claims, and when we do investments, which are the 2 major parts of the impact we actually have.

So before I dive more into that, this is the total landscape of the ESG targets we set. The first one is the emissions target we already have relating to Scope 1 and Scope 2, that is unchanged, corresponding to a 42% decrease towards 2030. Then we today introduced 2 new targets. I'll be diving into in a minute, one relating to the buildings, repairs, the buildings claims of our insurance operations and the second to our investments. And those are the 2 major new impacts and really and where it matters for us.

And then within the total ESG landscape, we also have the employees and the engagement score of 80. And then as Camilla also already mentioned, rounding out another factor within the ABS, we have our customers and our ambition to further improve satisfaction to 77 by '28. I'll go through them one by one.

I think this is an interesting illustration. It will look like this for, I would imagine, many of our peers also. But just to state it, the type of emissions that we have had targets until now have been the type of emissions which are directly controlled by us. In reality, that has a lot to do with energy consumption in our buildings and our car fleet. That's Scope 1 and Scope 2 emissions. They account for a low 1% of the actual impact we have in terms of CO2. So in the total player things, it doesn't matter that much. It's obviously important that we need to also be ambitious around what we direct control. But in terms of our impact, scope free is where it comes.

And as you can see, we have investments accounting for almost half of scope free. And then we have the rest coming from the claims areas and the purchase of goods and services. And we in the claims area, the largest impact comes from the building sites, the 27%. And just restating this, we have an unchanged ambitious target of reducing the emission from Scope 1 and 2. It has a lot to do with energy efficiency on our locations, our buildings and secondly, on our car fleet. And we are working with initiatives to secure that we can maintain this further reduction in the coming years. But there's nothing new here.

The new thing comes here. This is the one we also put up on the strategic KPI, coming from the ESG part. This is the buildings area, where we set out to reduce emissions by 6%. And it's going to come from us working via the partnerships we have, the data we also now have access to both steer and incentivize our partners and our contractors to actually use more energy-efficient materials. And we haven't had a decision to do this yet. But with the framework we have in place now with the partnerships we have and also the data we now have available, we're actually able to start this journey and 6%, we feel is a meaningful and ambitious target, which also translates to quite a lot of CO2 emissions. So that's what we'll be working hard to achieve within the claims area.

Obviously, we will also work with other areas. We expect to also dive into motor along the way, but we are not quite at a point yet where we have the same quality in data to actually be able to do it. But -- so this is where we'll start out and it's also the biggest part of the claims side. Then we have investments a major part of scope free for us. And 15% is also a really, I would say, ambitious target. It will come from 2 things. For one thing, for us to reach 15%, we are also expecting to get some help from the companies and the assets which are behind the investments we have. The world is hopefully also transitioning to a better place. But on top of that, we'll need to be selective around the type of investments we choose to cater for at least the amount of ESG, so we can get to a 15% reduction.

So this is an ambitious target, which will discipline us. As we have had in the past, returns, financial returns are obviously also important, and we don't necessarily see an adversity here. getting to the 15%, but it will discipline us to be -- to cater for ESG emissions also when we select assets in the future.

Then we have the employees. Very maybe the key enabler in reality of delivering on any strategy. We need engaged employees to get to the journey. It's also what drives a lot of both the initiatives were -- and also, I think, the customer satisfaction. A lot of that comes from having engaged employees also. So this is a strong ambition we will maintain. We've chosen to maintain the 80 targets. I think it's safe to say that 80 is also regarded in all actuality as a very high engagement for an organization. And we've also seen in the past that we've not -- in recent past, recent history have been close to the 80 mark and especially when you have transitions and changes this engagement can temporarily come under pressure. So we feel 80 is a sound target. And not too long ago in '24, we were actually at 75. So we've seen a steep increase here towards the end of our current strategy period, but we still feel 80 is a good ambitious target for the future.

Then the customer satisfaction, I don't think I'll spend too much time here just restating what Camilla already went through, but this is a clear vision we set out to have to also improve the satisfaction customers have, which will translate into higher retention and in the end, also better financials for us. So that was it for me with ESG, and then Rasmus will wrap it all up.

Thank you, Andreas. And thank you all for joining here at Miramar and also at the webcast. To sum up, we've been through some hard years of work. We've done 4 major M&A transactions over DKK 1 billion each. We have merged 2 companies, it's historically done. And at the same time, we have reached our targets that when we set them, they were very, very ambitious, also seen from our side. So we are standing -- I think we're in a very, very bright spot at the moment. Bo and Camilla have shown the way forward with the potential we have. And I firmly believe that we can deliver on that and then reach the target Andreas just highlighted and hopefully, all that will be of the benefit of our shareholders.

So with these remarks, I will conclude and then we will start the M&A session, I guess. Thank you.

Yes. So let's see here. We -- it is right that now we have the long Q&A session. It's -- we have a bit -- actually, we have up to 40 minutes of Q&A. And of course, this time is related to the entire presentation. [Operator Instructions]. So if I can invite the group executive management, so to join us here.

So -- and then I think Mathias was a bit -- I think it's your turn.

So coming back to my first question on the other Q&A session. So like in terms of how we should think about the timing of the improvements that you target versus the investments that you will also need like should we think about it as a straight line or back-end loaded or front-end loaded, given the technology jumps we have seen in the recent quarters and years?

Yes. We -- I think it will be a bit split between what we'll see on the cost and the claims side. And we're not doing specific guidance, but I would say, roughly speaking, I think it's -- we would be aiming for something along the lines of a linear improvement with regards to the claims improvements we're aiming to have. The reality will be that there will probably be a bit more backloaded on the cost side. We need to do some investments also to drive these improvements and some of the initiatives we have, among others, within the IT simplification will come -- the benefits will come towards the end. So I think claims we would expect to start coming also next year, a meaningful improvement. And then over the rest of the period, cost would also start to kick in.

Sure, if I may take a second question down, and then I will leave the others and go back in the queue. On the pinball approval, you got DKK 600 million in relief that, then I think you put the DKK 600 million on the buybacks, you put the DKK 600 million upside down. So shouldn't that have been DKK 900 million, given the capital target that you have and given that if you want to reach the DKK 2.6 billion that you said in the in buildup afterwards, isn't it closer to DKK 900 million that you should come in buyback? Or is that just like relabeling that to be the earnings from this year instead?

No. I mean, we provided, I would say, also soft guidance when the FIM approval came that our thinking would be along the lines of a 1:1 translation into buybacks. And you're right that there is some effect also from the coverage we have. But also keep in mind that some of it is reduced from the Tier 2 capacity, which is lost. And then now we present the total capital we feel we need now, and there's also an increase of the 10 percentage points. And I think that roughly translate into us being able to stick to DKK 600 million and also come out of this with what we feel is the right robust capital situation.

Yes, Asbjørn from Danske.

If I just may follow up on the last question. So the 3 percentage points CAGR from buybacks based on your market cap, that's DKK 750 million on average per year in buybacks for the strategy period. So I guess if you look at the total buyback for next year with the DKK 600 million, that is fair back to the question -- previous question. I guess it's fair to put sizable amount in addition to the DKK 600 million in total buyback for the year?

That would be true, yes.

Good.

Then we got that clarified. Okay. Then a question on the customer loyalty program. You mentioned 100,000 customers will benefit from this. You have 800,000 customers. How are you going to play this out? I know you said you'd come back with more diesel, but just a little bit, if you can shed some light on how to play out that only 1 out of 8 customers will actually benefit from this?

We make it a little bit different than from others, this loyalty program. So of course, not all customers are loyal, at least not from the very first day. So what we will do is that the real customers that will benefit from this. That is the whole idea with them. And we want them to stay even longer.

It's going to be difficult to communicate, I guess, I mean some of your peers have been quite -- it's difficult for them to communicate even though they distributed to all clients.

Yes. But we're not the companies, I'm sure we will find a way to communicate this.

Sounds good. And then a final question, and then I'll move back in the queue as well. On the free portfolio, you maintain equities exposure in the free portfolio, but you only expect 5% return on equities. If you look at sort of the capital tied up to holding equities in the free portfolio, and considering your new solvency target, I get to something like a 7% return on own funds from your equity exposure. And then there could be some diversification, but still it's kind of drain your group roof target of 40%. So why do you maintain equity exposure in your free portfolio?

Well, we don't look only at capital expenditure in the different categories. We do an asset allocation, which -- where we actually do this in attack it from different angles, but our aim is to find what we feel is also balanced and well diversified portfolio, which will also stand the test of time over the years to come. Capital regimes can change a bit. Other fact expected returns can change. And we think this is what balances out for now. But you're right that on an isolated basis coming from capital expenditure, it is not the most attractive asset class for us. But it's always looking at what returns can we get from barns in absolute terms? And what can we get from the eliquids? And what do we feel is also, let's say, just factoring in the human perception and what a balance is, we feel it's right to have some equity exposure.

Yes, then we have Martin, from SEB.

Just continuing on the loyalty program. I guess the 100 million is a start, but I assume that your ambitions are higher than that?

Yes.

-- you're right. The 100 million is the start and to come back also to the other question. It's for the real loyal customers. And -- but we have 185 million. We are also doing other activities where other customers will benefit from. So we try to spread the amount out between all the members of the foundation.

Okay. And for those customers who will receive a bonus, what's going to be sort of the percentage point?

That is exactly what we will come back to later or early next year.

And did you sort out the tax?

Yes.

So those won't be taxable?

No. It will not. It's us giving a cash rebate to the customers.

All right. And then just coming on to the expense ratio, 16%. How is that -- what are the gross impacts? What should we think about FTEs, IT investments, et cetera?

There are many moving parts in the expense ratio. I think 16% is an ambitious target for us. It's no secret that we also have -- we have distribution model, which we are very happy with, which also really will -- has and also in the future will deliver sound improvements to the underwriting results, but which also comes with a slightly higher cost via the partnerships. So we will need to find real improvements, which we also believe we can to get to the 16%, and we also need to be able to do investments to get there. And that's -- we've tried to package that in the DKK 150 million, we sort of deduct. And there are -- because we also have some headwinds from some factors, you would probably remember the synergies running into next year. We had a little bit of repricing, roughly speaking, we could say that maybe DKK 150 million in either investments or something along those lines is not maybe a bad number to think about.

Okay. Still not sure how that translates into FTF and staff costs in general?

Okay. Let me get to the FTF -- sorry, Martin, I forgot that one. Well, I think we look at the total cost base. We have an operation now where actually sometimes -- in some cases, we actually in-source things and save money. We've done that within some areas within IT in recent years. So we don't have a target for FTEs, but when we look at the operational platform and some of the efficiencies coming there, from the back office function there would also be FTEs in there. So on an average, I would guess that we would be fewer employees within a lot of areas, especially we're in the more administrative areas in the future, but it's not a target as such, we aim for specifically.

Okay. And then the last question, which is perhaps a bit more fluffy, but I guess you have diligently reported on synergies over the past 3 years. And now you are guiding for a 250 basis points improvement on your combined ratio of DKK 500 million. How much of these are sort of round 2 of synergies, so to speak? Well, I think maybe what we tried to communicate is that these are not synergies, but they are improvements we can make because of the scale and the business we have today. So we don't have the regime in place. We're not thinking -- the other -- the previous strategy period came right in the back of a big rights issue and M&A transaction, where the term synergies is sort of what we use.

Now we're talking improvements. And obviously, we will maybe not be doing the same sort of rigid framework with the synergies, but I'm sure you guys will keep us on our toes in explaining where the improvements are coming from and we'll keep you along the way on that as we progress through this strategy period.

Yes, who has the next question. I think, [indiscernible] Autonomous?

My first question is actually on the Foundation. And I just wanted to understand why did they have to retain 50% to strengthen their capital? That's the first question. Secondly, just want to come back on the topic of the improvement in the insurance service results you're targeting over 3 years of DKK 650 million gross. I think you mentioned earlier that you're not planning to squeeze margins out of your customers. But you've done quite a bit of repricing actions for the best part of this year in both Personal and Commercial Lines. And presumably, those benefits are going to come through quite quickly in the next 12 months, potentially. So what are you actually assuming in your plan? Are you assuming that basically these improved margins you might pass on to your clients, you might invest? So that's my second question.

And then finally on capital and the higher minimum target that you've said. You said your CRS down, and therefore, you want to have on an absolute basis. Same or more capital. But at the same time, I think you've done quite a lot to reduce volatility in the business and you're planing, you take further actions. So I'm just trying to understand how hard does that fit in having a higher ratio when your business is potentially bigger and more stable now compared to, let's say, 2 years ago?

I can take the first one on the Foundation. I think it's a question you should pass on to the Foundation. But I would say from our point of view, this is a very good starting point and also Martin mentioned. We will receive now DKK 185 million. We've never done that before. It's very positive for us also for the organization. I also think for all those of us that are working with the customers is a very positive effect.

No matter what way we do it with a customer loyalty program with prevention or whatever, and then the other 25% is also, as I mentioned, is very, very positive for us as well, that the foundation works with this philanthropic issues. It is really a nice way to do it. It has a very positive effect for us as well. So we are happy with 50% and the other 50% you should pass the question to the foundation.

Yes. I think the question was regarding our thinking about keeping the margin and the repricing, where we were trending and what would happen with the benefits we expect to have. We've been doing -- we really got significant headwind in the last part of our current or previous strategy period from motor frequency coming up. And after that, also average the claims inflation within motor specifically in Denmark, coming up, which has meant that especially for the last year. But in actuality for the last 2 years, the last year being the magnitude being the largest, we've had quite significant repricing programs running through the books, both in Commercial Lines and Private Lines.

But we started actually doing this in the beginning of Q4 of '24. And we still have some -- we have some tailwind, but it's starting to come down, and it won't be of a smaller magnitude. And looking at the improvement in the insurance services result for the whole period, it will be more or less -- it's a moderate number. It's something I would -- it's one of the tailwinds I mentioned within the DKK 150 million of other effects, maybe DKK 40 million, let's say, all in a positive, let's say, spilled into the next year.

So we are not planning for us getting to the targets by sort of squeezing margin by people paying more for the same service. This strategy is about, and that's what we've tried to get through today, how we can improve in the service offering. We have in terms of the cost we expect to get to that product. So that's the main driver for the improvements.

And then the last one was around capital. And you're right, it is in the end of the day, it becomes an evaluation of what do we think in the largest [indiscernible] Situation, what is the right number for us with the business we have. You're right that volatility has come down. Energy & Marine was actually not that expensive in terms of capital requirement but was quite volatile. In actuality, it was on a standard model and not to not too expensive, maybe not in reality, as expensive as it should be on an internal model. But that being said, it's true that we have come to a balance now where we also have a more stable, diversified business.

When we said the DKK 170 million, it was in conjunction with a large rights issue of DKK 10.5 billion. So any -- we also said that we are comfortable doing the DKK 170 million -- but I think when we look at where we are today, we think DKK 180 million is probably not a bad number also if you look at our peers, where the other companies are running. And we just don't want capital to be an issue. So we think spending the DKK 200 million or so of the surplus saying, okay, let's get to an even more robust level, we still think is a good choice, and that's what we choose to do.

Yes. We have a question from Karl of [indiscernible]

It's kind of a slight follow-on from that. I mean I guess, if I'm just working backwards on the ISR and core targets, it's implying roughly 4% annual kind of revenue growth. Just trying to get a sense, it sounds like saying pricing essentially will be a driver kind of near term, but then are you seeing a more balanced outlook for, I guess, for the next few years from volume pricing taking market share? Just any color there?

I think I'll try that also. Our overall thinking is that we've put sort of what we see, we feel is sort of a balanced implicit growth assumption in there. maybe slightly to the conservative side, especially if you look at where we're trending today. But when we're looking over the next 3 years, we would expect on -- because we do -- we are about growing profitably across lines. The only place we're really sort of targeting explicit market shares on a sort of tangible meaningful scale and the total numbers would be via the banking partnerships.

So if we -- and if we put sort of what would be our base assumption for indexation, meaning something along the lines of wage inflation, we would also expect that to come down from around maybe expected 3% next year to come down maybe towards 2% towards the end. So that's the model we have. And we'll see how it goes. Right now, we are trending better than that, but that is -- so -- and we're not in that number, putting anything material from us repricing on top of existing pricing as we have had in the previous years.

Yes, Ola from DNB. Yes, the front.

I guess it turns back to something you said on the EC strategy, which was the the movement from petrol vehicles to more electric and hybrid vehicles. Now being a Norwegian, I have seen this development with one of your peers for a few years now. How is this in Denmark? Do you see it? I guess, repair costs, inflation, frequency, spare parts for these new types of vehicles. There has been something in the past during your previous strategy period. I just wondered going into towards 2028, how do you expect this to develop? And could this be a headwind or a tailwind, perhaps?

I can start out, maybe Camilla can help me out also. But I think our base assumption is that you're right, we have seen -- and in Denmark, almost all the cars being sold are EVs. And what we've seen is a quite rapid transition within the car park towards EVs because of favorable taxation. We just have the favorable taxation regime also continue -- just announced to continue also for next year. So a lot of -- almost all the new customers are buying EVs. We as insurers have had to sort of get our head around that, get some claims data working with what our perception of risk is and EVs are -- many EVs are more expensive to repair than traditional petrol. And then what we've seen on top of that in the Danish market is that the rapid transition to EVs, high horsepower, heavy cars, for the average consumer has also, in our view, driven up frequencies.

But -- so that would be where we are now. And we've seen actually now on average, also claims inflation within motor is seeming to sort of flatten out now. We've seen frequency actually come down a little bit in total compared to last year. So with the knowledge we have now, just to say that we don't see any I mean, we -- in a blue sky scenario, we might even get frequency down a bit also. And we also implicitly for EVs, would get claims cost regarding to that. But actually, there would be most of the cars being bought will also come down as people become more used to driving them. And so that would be a blue sky scenario.

For now, I think we're just saying we think we have to put the things in place to get back the margin we lost on Motor, at least in the future when it all runs through the books, and we don't see any need to do further. And then we'll have to see how it goes.

Yes, we have Nils Andersen from BankInvest.

Yes. I was wondering how much your partner banks have been involved, if at all, in this strategy, forming this strategy? Some of the efficiency gains, the manual handovers that was mentioned and there was a lot of other initiatives. How does that involve private banks, the member banks or the partner banks. Also on the growth target, you mentioned that you expect to grow faster from Privatsikring. Is that a bottom-up estimate that you have coordinated with the partner banks? And thirdly, the cash discount from the fund when that is paid out also to Privatsikring customers, would that impact the member banks or the partner bank's earnings in any way? Or are there any angles there we should be aware of that could impact the partner banks as the cash discount, I guess, will rise as the year comes along.

Should I start with the latter and then -- Yes. This cash rebate, as we call it. It's actually given from us to the customers, spread around the 3 different brands. We received a contribution from the foundation and really have chosen to some of that for this loyalty program. And it's not the intention that it will make a change to any payment to the membership banks as such. It's a loyalty program and hopefully these customers will stay even longer with us. That's the whole idea about this.

So the bank does not get a fixed commission of the total premium, which will then be lower with the cash discount. There's no earnings impact?

No.

Yes. And if I should add, I think 1 of the reasons we can actually celebrate 25 years anniversary is actually because we have an ongoing close dialogue with the banks, and we have a governance around running Privatsikring also involves the banks. And of course, we haven't been able to disclose a lot about our strategy, but in some areas about our visions about growing in Privatsikring is actually part of the dialogue. And that also means that the bank is actually got to their targets in terms of delivering the leads and providing the facilities so we can actually meet customers locally around in their banks. And that is also one of the ways that should help us improve the penetration because the banks is just as committed and some banks actually also use insurance as a part of their loyalty program because they're experiencing that the banks also has a positive impact on our insurance offerings.

Did you have a part of your question was also with the improvements coming from the efficiency?

And the efficiency -- Yes. An example, you had an ambitious target, how you could reduce that. But I guess there's a lot of manual handles together with the partner banks as well.

I think most of this -- the things -- the improvements which are being driven in our source are the part of the value chain on our side. So that's where the efficiencies will come. It won't relate to the banks in materiality.

If the service model we have the banks is that they set up the meetings and then it is our own tight agents that actually talk with the clients in the banks. So it will all be improvements on our side to the benefit of the customer.

And the shareholders.

Yes, of course, it goes without saying.

Yes, I think, Asbjorn, you were before?

Two follow-up questions, if I may. One of the things you mentioned was the increased focus on full-service customers. I think the last time you talked about full service customers, it was a different management team. I was a financial conglomerate, was banking with U.S. well having insurance, et cetera, was a completely different setup. But just looking at what some of your peers have done in the last 5 years, they've also mentioned they talk about significant improvements in lifetime and combined ratios, et cetera. Could you shed some light on sort of what are the assumptions behind the DKK 50 million in benefit in terms of combined ratio? I guess also the full-time customers today that have 3 products will probably also be -- you will be able to expand those 4, 5, 6 products, et cetera. So maybe a little bit more flavor there, that would interesting.

Yes, the improvement is a mix of course of increasing lifetime but also increasing the share of products. We have a much stronger knowledge base about which customers actually use which products. And we also have a knowledge about, okay, which products is really crucial if you want to increase lifetime. Some products actually drive longer lifetime than others. We also have some variations between the brands, so we can actually take the knowledge, for instance, on Privatsikring, we're actually able to have a high level of full-service customers. So is these insights and understanding on what is actually driving the full service customers, where it's the best product to start and then grow these customers. We can also have that focus on our digital services, and that's the way we're going to build. So it's a mix of understanding lifetime and the actual products.

But is it fair to assume that you've only recently started this journey because you didn't mention the last Capital Markets Day hasn't been mentioned over like 5, 6 years. So is there easy gains here?

I would say in some of our channels, for instance, with tied agents, there's always been a strong focus on generating full service customers. But with our data across brands, we can improve and especially learn from the knowledge that we can actually benefit from. So yes, it's an increased focus, but in some areas, both been there.

All right. And then just over the overall sort of competitive landscape in the next 3 years, I would like to hear some comments on how you view Argo for instance, Munich lease, entrances to Nordic markets, Gamil, -- we've seen a couple of new entrants in the Danish market. So how do you see sort of the competitive landscape changing.

I can take that. We see some agents coming into the market. Some of them are -- most of them are backed up by foreign insurance companies. Some are well-known insurance companies and some are less -- well known, there's some agent agents for other agents. So the there are differences in market, and we have to see how the market conditions are developing in that area. I'm not too worried about that at the moment.

And then we see ERGO coming in, and I think I would almost say it's about time that somebody shows up and then we have to see how that works out. It's a difficult market, as you saw here with this picture, we don't chase all that. We managed to have very, very low combined ratios. And you've come in as a foreigner and you have like combined ratio as in Germany and all that, they really need to be on their toes in order to be able to participate in competition. So we have to see. But yes, we have the same year view. We see the same things. And for now, it's not something you think too much about.

Sorry, the questions that is a bit early. The first one is on the investment result, you had DKK 175 million as the normalized investment result. But how does that look when you get to the optimized capital then you kind of need to reduce the line [indiscernible] The free portfolio about, let's say, DKK 1 billion or something like that, given the excess capital that you have right now, would you then need to take out some percentages for getting to around DKK 25 million or something like that to get to the ...

I mean we have -- during the year, we would increase our free portfolio when we earn. And then on average, you would have some average free portfolio over the course of the year. in a normal cycle where would be higher towards the end of the beginning. So right now, I would say we have DKK 600 million, which is extraordinary, which is the -- coming from the internal model, which we will send out next year. So roughly speaking, when that is sent out at least the DKK 600 million, that would translate to around 10% less in the book and then 10% lower returns. So just below DKK 20 million lower returns. So yes, we are higher now than we would be after freeing up the capital.

So there's more like if it wasn't because I understood it on Q3, right. So -- this is -- so like when you get ex that, that would be DKK 150 million or something like that. Perfect. I know that was a bit nerdy one. Sorry for that. And then also on the ESG side, like if you could say something about the CO2 emissions and the building claims like you mentioned, how much of that is actually activity based versus spend based like is I know that there's a few companies that just use like how much money they spend on the claims for doing the calculations on CO2? So if you could share a bit of light on ...

I mean, in terms of the technical part, maybe Mads can answer that.

Yes. Absolutely. So you are right that, I mean, what -- today, I mean, it's actually spend based. But what we are going to do in this strategy period is we are going to change a part of that. So we are trying to get more volumes on our -- with our partners that can deliver data. So we will actually using EPDs, which is kind of a very precise way of measuring impact from building materials, we will be able to make a hybrid accounting on building claims where we can have a part that is actually the -- I mean, the very precise outlet of C2 emissions that we are using. And then kind of the thing we will do in -- I mean, in cooperation with our suppliers is we will try to incentivize and steer our -- I mean, the or help us in the network. I mean, the guys who are -- I mean, preparing building and making the customers whole on the claims, trying to incentivize them to use materials with less emissions.

It also has the implication that we will actually try to steer, I mean, more business into our procurement network, and that will also lead to kind of a higher higher discount given to us from the wholesalers. So it will actually help profits at the same time.

Okay. So in terms of the hybrid accounting, like -- do you have any indication of the share that will be spent based versus like? Because if you have minus 6% of the overall and half of it is spend base, then you need to ...

Yes. You're right. We need to move some percentage points by the end of the period. So we should have perhaps up to 10% on that model. But then, of course, I mean, working with prevention at the same time and also limiting the size of claims when we have them could also bring down the -- I mean, the average emission in the claim. Of course, as well as the economic benefit to that.

Sure. And then my last is more of a high level one. Like if you go back to the helicopter and like thinking where we should expect the improvement to come from? Like is there any meaningful difference between the 2 the 2 lines like the Commercial Lines and the Personal Lines where you think like one of them to benefit or deliver more improvement than the other ones? Or is it more equally split? How do you think about that?

It's equally split -- would be the short answer, across the whole business, yes.

I think all of you marked a bit ago.

This map for you be. Just on the -- you mentioned the fraud prevention. And then shortly after you mentioned the digital sales targets and the ambitions. And I just wanted to sort of -- how do you sort of see a relationship between increased digital sales, digital claims handling more digital channels altogether and fraud and fraud prevention. How is the relationship there?

Yes, it's a brilliant question. [indiscernible] Going forward, we need to be across all channels, because in a digital sale, you don't have the opportunity that is human takes any suspicious pattern. So a digital sales going forward, you can imagine that no maybe the fraud doesn't necessarily happen in the sales part of the process, but you need to be aware of all the different patent interactions that we have with the customer. I think the better example is that when we have a target of 50% straight rule processing in the claims, then you need to -- we need to be very good at spotting these patterns also in the claims notice of loss. So technology will look at everything from how do you behave when you report a claim. Is it realistic that you kind of would have those type of claims from depending on where we are, what do we see with other people like you. So technology will listen in to all the different channels. for pattern recognition.

Would it be fair to say that you would sort of invest more in fraud prevention in order to sort of get that digital development as well?

Yes. We have to develop our abilities. And as I said, when I talked about the maturation of AI tools, et cetera, will, I think, be an important lever in identifying some of those patents that are harder to find today.

Yes. And then I think we have time for one final question from Martin.

Maybe just a clarification on the net investment income. So the DKK 175 million, that's the normalized, right?

Normalized given the Q3 amount of investment in the [indiscernible] . Also given the capital surplus we have today.

Okay. And what has changed since the DKK 200 million?

Well, we have Energy & Marine as a big factor that brought down the ...

Wasn't it the DKK 250 million on the Energy & Marine?

No, no, I'm talking investments, right?

Yes.

Yes. But what I'm saying is free around 10% of our portfolio came out. So 10% of returns also went out. So I'm just saying that's a major factor from when we stood here on the CMD last time. And then the rates and the expected returns have also been changed. But the main factor between then and now has been the change in the amount of investments given as from our capital surplus. So DKK 1.6 billion going out after the divestment is the major factor from our old guidance to now.

Yes. Thank you. I think, in the interest of time. I think it's time to conclude the presentation and lunch will be served next door. So thank you for coming. Hope you had a good time. Thank you.

Hello, everyone, and thank you for joining the Alm. Brand Q3 2025 Call. My name is [ Sami ], and I'll be coordinating your call today. [Operator Instructions]

I would now like to hand over to our host, Rasmus Nielsen, CEO, to begin. Please go ahead, Rasmus.

Thank you. Good morning, and thank you for joining us on our conference call. I'm Rasmus Nielsen. As usual, I have with me today, our CFO, Andreas Ruben Madsen; and the Head of our IR team, Mads Thinggaard. This morning, we published our interim report for the third quarter. And as usual, I will walk you through the operating highlights, and then Andreas will comment on the financials.

Please turn to Slide 2. I'm quite pleased with the overall financial performance in Q3, which has strong organic growth and good cost control at the same time as the underlying loss ratio was improving, helped by synergies and price adjustments. We reached an insurance revenue growth of 10% in Personal Lines, which implies we are taking quite a bit of market share with our strong bank partnerships as a driver, while price adjustments are still kicking in as well.

Synergies are materializing better than planned. In Q3, we have reached a run rate that exceeds the DKK 600 million synergies per year originally communicated. Adjusted for a lower discounting effect on claims, we reached an improvement in the underlying loss ratio of about 3 percentage points year-on-year. Lower costs and lower underlying losses were the main drivers behind an improvement in combined ratio to 82.2% from 85.7% in Q3 last year.

And now I'll turn to Slide 3 with our financial highlights. Insurance revenue grew to above DKK 3 billion for the first time ever, while the insurance service result of DKK 535 million was our highest technical result to date in the quarter. As mentioned on the previous slide, the quarter was characterized by strong growth and cost control, combined with a healthy improvement in the undiscounted underlying claims of about 300 basis points. We therefore see a clear path towards reaching our strategic target of a technical result in '25 of DKK 1.85 billion. Investment income in Q3 was a satisfactory profit of DKK 66 million, which was primarily driven by a positive result in the fees portfolio.

And now let's continue on Slide 5. The group made a technical result of DKK 535 million in the quarter, up from DKK 400 million in Q3 last year due to synergies, premium growth and profitability improvements. The insurance service result from Commercial Lines was DKK 265 million against DKK 197 million last year, primarily driven by lower underlying claims. In Personal Lines, we also had a sizable increase in the insurance service result to DKK 270 million from DKK 203 million last year, driven by higher premiums and lower underlying claims as well as strong cost control.

Please turn to Slide 6. Insurance revenue grew strongly by 7.5% in the quarter, just a bit lower than 8.3% in last quarter. I would say overall premium growth is very satisfactory with a continuing strong momentum. In Personal Lines -- I would say overall premium growth is very satisfactory with a continuing strong momentum. In Personal Lines, we are clearly taking market shares on top of indexations and the price increases we have implemented. We do consider the 10% growth in Personal Lines as a very bright spot in our report. In Commercial Lines, we see a continuation of the rebound last quarter to a premium growth of around 5%.

And moving on to Slide 7 and the claims ratio. The Q3 claims ratio was down 220 basis points year-on-year in a quarter with a bit higher weather and large claims, but also with help from gain in the risk adjustments related to the approval of our PIM model to cover the Codan business. Run-off gains were 1 percentage point lower than in Q3 last year. The underlying claims ratio was 260 basis points better year-on-year, especially driven by repricing in Personal and Commercial Lines.

Moving to an undiscounted basis, we see a 320 basis point improvement in the underlying claims ratio year-on-year. Commercial Lines stands out with an improvement of about 400 basis points year-on-year, while Personal Lines improved by more than 200 basis points.

And now please turn to Slide 8. Combined ratio in Personal Lines improved to 83% from 86% due to a 1.3 percentage point lower cost ratio and 200 basis points lower underlying claims ratio. We are seeing motor frequency starting to drop, but still a continued increase in the average motor repair costs. In total, we therefore see a bit of stabilization in the overall motor claims expenses, while executed repricing and synergies are helping the underlying claims ratio down.

Please turn to Slide 9 and the Commercial Lines. In Commercial Lines, we see a significant decrease in the combined ratio to [ 81.3% ] from [ 85.5% ] last year. The massive drop is driven by lower underlying claims as well as lower cost ratio. The same picture as in Personal Lines just with a more massive drop in the underlying claims.

And with these comments, I will now hand over the word to Andreas, who will give an update on expectations for weather and large claims. Andreas will also walk us through the synergies, investments and guidance.

Thank you, Rasmus. Now please turn to Slide 11. The slide illustrates the level of major claims in the last 11 quarters compared to our indication of a normal level. We've decided to reduce the normal level indicated to 6% from 7% before. This change assessment follows the recent approval of our PIM model, but it's also backed by quite low actual levels since Q1 '23 and ongoing portfolio changes. The 6.3% level of major claims in Q3 '25 is thus slightly above the new normal level for the group.

And on Slide 12, we show Commercial Lines being relatively high with 11.3 percentage points of major claims compared to the new normal indicated of 10 percentage points. The normal level for major claims in Commercial Lines was 12 percentage points before the change.

And now turn to Slide 13 regarding the weather-related claims, where we also introduced a new normal level as well as an indication for the seasonal pattern of claims. As you may have noted, weather claims have climbed a bit up in recent years and the average for the last 11 quarters of 3.3 percentage points is above our old expectation of 2 to 3. We have reassessed the structural level after the recent PIM approval, and we now see 3 to 4 percentage points as a better indication of the yearly normal level. We're also providing an indication of seasonality for the weather claims. We point to 35% for Q1, 10% for Q2, 25% for Q3 and finally, 30% for Q4 as a normal distribution over the year. Overall, our change assessment of structural large claims and weather claims do not change our structural expectations for the insurance service result going forward.

Now I turn to Slide 15 for an update on synergies. With the DKK 158 million in synergies harvested in Q3 '25, we have actually passed the promised run rate of DKK 600 million per year back from the acquisition of Codan. And as flagged previously, we expect to end the year with a run rate of around DKK 650 million. This will be the ending of our synergy accounting. We had a nice jump up in harvested synergies in Q3 of DKK 40 million from [ DKK 118 ] million in Q3 '24. This implies an improvement in an underlying claims ratio of 0.5 percentage points and in our cost ratio of 0.7 percentage points year-on-year.

And now move to Slide 16 and the investment results. The investment result was a satisfactory profit of DKK 66 million, primarily driven by a positive return from our free portfolio in combination with a small profit from our match portfolio. Returns on bond and equity were the key drivers for the strong result. I should also mention that we expect our Tier 2 cost to drop looking ahead as we have now bought back DKK 400 million of Tier 2 bonds out of the previous DKK 1.3 billion issued. The buyback of Tier 2 bonds was driven by our lower capacity for Tier 2 capital following the PIM model approval.

And finally, now move to Slide 18 and the outlook. We upgraded our guidance for the insurance service result in '25 by DKK 100 million to DKK 1.75 billion to DKK 1.85 billion. This is due to realized run-off gains in Q3 as well as a strong underlying result. At the same time, we narrowed the guidance range to DKK 100 million due to being close to the year-end. The cost ratio guidance is unchanged at 17% for '25, while the combined ratio, excluding run-off results in Q4 is expected to be 84.5% to 85.5%. The combined ratio guidance range is narrowed as well. The guidance includes synergies of DKK 600 million and the effect of implemented pricing efforts in Commercial as well as Personal Lines.

We upgraded the guidance for the investment result in '25 by a new DKK 50 million to a guidance of DKK 300 million, while the guidance for other income and expenses of minus DKK 125 million remains unchanged. Consequently, group profit, excluding special costs is expected to be DKK 1.93 billion to DKK 2.03 billion before tax, excluding run-off gains for Q4 '25. In addition, we guide for our restructuring costs of DKK 175 million, of which DKK 25 million relates to the separation of our Energy & Marine business, while we expect depreciation of intangible assets to affect the income statement by around DKK 335 million in 2025.

Please recall that we are hosting a CMD here at our headquarters on November 18, and we hope to see as many of you as possible.

And with this, I conclude our presentation and hand over the word to our moderator. Thank you.

[Operator Instructions] Our first question comes from Mathias Nielsen from Nordea.

My primary question on the first thing is if you could remind us a bit on like what we should think about the pricing tailwinds into the Q4 top line growth. If I remember right, I think it was around 1st of November last year, you started to implement the price hikes a bit more broader. So what should we think about the top line growth year-on-year when we look at Q4 numbers and into '26 as well?

Yes. Thank you, Mathias, Andreas here. Let me try to give some flavor to that. Well, you're right to remember that we did actually start the current repricing in Q4 of last year. So as such, we would expect to see the effects coming from the extraordinary price initiatives slow down a bit as we go into Q4 and further as we obviously migrate into next year. So it will be coming down a bit from what we've seen in this quarter. And maybe I could just give you those numbers also to help you out because if we look now, it's more or less what we also communicated the last time around. But looking at Personal Lines, where we have a 10 percentage points growth year-on-year, pricing would come to around 4% of that. And in Commercial Lines, we see of the total of 5 percentage points growth, we would approximate something like 2 percentage points coming from repricing on a net basis.

That's very clear. If we then move into the next year and think about that, like what is the expectations on claims inflation when we look into '26? What should we think about that? This is above ranges when you ask some of the Nordic P&C insurers at the moment. So what are you looking into?

Yes. Well, I think our overall read is that we still -- our main focus or our main sort of -- the area where we are most affected by claims inflation remains motor. We still see some quite significant price hikes in motor coming, especially from higher spare parts. So what we're also communicating around what we're seeing this year is that motor claims in total is more or less where we expect it to be given that frequency has come down a bit. But on the other hand, we've seen this uptick in claims inflation.

For now, I would expect that to more or less, let's say, flatten out at these levels. That would be our overall expectation. We don't have evidence yet that this has softened. In the longer run, at some point, we would expect market dynamics to help us to push down again to a more normal level for motor. But we're not -- for now, we are expecting more flat movements. And I don't see any very big themes for the rest of our book as it stands right now.

So if we try to put some numbers on that on claims inflation, is that around 3% to 4% claims inflation next year? Is that what you're trying to allude to? Or how should we think about that?

That's not off. I would say something around the vicinity of 3 percentage points, also maybe roughly corresponding to what you would expect to see from wages on an overall basis.

Sure. And then my last question on the capital side, like in terms of expectations of buybacks into next year. If my memory serves me right, like the ongoing buyback is ending in March, and that's why we should expect a new one if there's going to come a new big one, if that's correct. That was the first part of that question. And the second part of that, is there any -- do you see any limitations on how much you can buy back and then need to go to the foundation again? Or is that something that you think you would be able to handle in the market at the current situation?

Yes. As a general comment, I think I'll start by saying that before we dive into very specifics on the whole strategy around capital and buybacks, I think we like to leave some [ news ] effect also for the CMD. But -- so what I can do is I can restate that we -- you're right to assume that we are sort of at full capacity until sometime in the spring next year. We do have a surplus capital. And in an overall sense, we would like to prioritize also a share buyback in all likelihood when we handle most of that surplus capital. We don't see any news in terms of liquidity. We do -- the amount of buybacks, which we are able to do at this point within the year would be -- within the safe harbor regime would more or less stand also in the next year.

[Operator Instructions] Our next question comes from Martin Birk from SEB.

Andreas, maybe if you could just continue along the lines of capital. You have a solvency ratio target of at least 170%. How is that impacted by this PIM model improvement? I assume that now -- well, I assume that it's also going to be -- we also need to address sort of the total absolute capital base, which will be strictly lower following the payout, which is due in March.

Yes. I mean -- thank you, Martin. Well, in overall terms, the 170% is our capital ratio. That's what we have been aiming for. We've had that for some time now. You're right that we also naturally have a lower surplus in absolute numbers. All else equal, the 170% stands. But I think as I also adhered to before, we'd like to give the full update and transparency both in terms of overall capital, how we strategize around the surplus and also how the different parts of the capital base, we see the targets for Tier 2, RT1 and so forth. We see that as natural to give an update for when we get back to our CMD on the 18th of November.

Okay. So a bit of a cliffhanger again, Andreas. But would you also provide an update on when you actually expect to reach the 170% or just above the 170%?

I think we would at least give you, I think, the guidance needed in the toolbox to sort of make the right assumptions about that. But the exact timing and others, I think, is a very specific sort of exercise that we could maybe do that. I don't see maybe that as a core part of the CMD presentation as such. But we hope to give guidance that will give you qualified -- sort of the qualified assumptions needed to get to the right timing.

We currently have no further questions. So at this time, I'd like to hand back to Rasmus for some closing remarks.

Yes. Thank you for listening in again, and we look forward to see you -- hopefully, all of you on 18th of November at our headquarters [indiscernible]. Thank you.

This concludes today's call. We thank everyone for joining. You may now disconnect your lines.