Storebrand posts 100% combined ratio in Q4 earning miss

By Ryan Hewlett

Feb 12 - (The Insurer) - Norwegian insurer and financial services firm Storebrand has missed analyst consensus for the fourth quarter, with profits falling below expectations despite a 15 percentage point improvement in its combined ratio.

• Insurance result of NOK64mn (Q4 2023: NOK390mn)

• Insurance segment CR of 100% (Q4 2023: 115%)

• Group profit of NOK1.065bn (Q4 2023: NOK946mn)

• Proposes a dividend of NOK4.7 per share for 2024

• New share buyback programme of NOK1.5bn

Storebrand – which has insurance, savings, pension and asset management operations across Scandinavia – said on Wednesday that its combined ratio stood at 100 percent for the fourth quarter of 2024, an improvement from the 115 percent recorded in the same period of 2023.

Jefferies analysts described the Q4 combined ratio as “disappointing”, with the figure coming in 4.0 points higher than expected.

For the full year, Storebrand reported a combined ratio of 97 percent, substantially above its 90-92 percent long-term target.

Oslo-headquartered Storebrand noted that its P&C and group life results were negatively affected by ~NOK100mn ($8.9mn) caused by run-off losses and large losses above the normalised level.

The insurance result rose to NOK394mn, compared with NOK64mn in Q4 2023. Despite the year-on-year improvement, the result missed consensus by 13.2 percent.

Profit in the insurance unit rose to NOK106mn, up from a loss of NOK193mn in 2023’s fourth quarter.

Storebrand posted portfolio premiums of NOK2.13bn in Q4, up 20.1 percent compared to the corresponding quarter in the previous year.

Jefferies’ Philip Kett highlighted in a note on Wednesday that a large proportion of the group's miss relative to consensus stemmed from the insurance business, but welcomed management commitments to the profitability targets in the segment.

“While we understand that price rises are starting to earn through positively, the presentation highlights elevated large losses, and unfavourable reserve development as being notable headwinds,” said Kett.

At group level, profit was NOK1.065bn in the Q4, up 46 percent compared to the same period the previous year. For the full year, group profit totalled NOK5.9bn, up from NOK3.48bn in 2023.

Operating profit amounted to NOK702mn in the Q4 and NOK3.15bn for the full year, up by 49 percent from 2023.

CEO Odd Arild Grefstad described 2024 as a “record strong year” for Storebrand in terms of results and capital distribution.

“Across the year we achieved double-digit growth across all business areas, including in asset management, where the acquisition of the Danish infrastructure business AIP Management was a significant milestone. Assets under management reached a record NOK1,469bn, solidifying our number one position in Norway. I want to thank the organisation for their efforts during the year,” said Grefstad.