Scandinavian insurers enjoy robust Q2 as pricing actions drive underwriting gains

By Ashish Tiwari

July 14 - (The Insurer) - Shares in Scandinavian insurers Tryg, Gjensidige and Storebrand rose during Friday trading after the trio reported second-quarter earnings earlier in the day.

Norwegian insurer Gjensidige led the gains with its shares closing up 7.79% at 282.40 Norwegian crowns per share, having risen as much 9.39% earlier in the day.

Shares in Storebrand closed at 12.38 euros, up 5.72% over Thursday's close.

Tryg shares rose to 167.20 Danish crowns when markets opened on Friday, before closing 0.68% higher at 163.0 crowns.

Pricing actions and portfolio adjustments helped all three companies to counter claims pressures and investment volatility during the period.

Gjensidige reported a 6 percentage point improvement in its combined ratio to 79%, as underwriting profitability rebounded sharply.

The insurance service result from the group's general insurance operations rose nearly 56% year on year to 2.20 billion Norwegian crowns, while profit before tax climbed to 2.95 billion crowns, driven by 10 point decline in the underlying frequency loss ratio and robust renewals in the commercial portfolio.

Analysts at KBW said Gjensidige's earnings beat estimates by 41%, describing it as a “strong underwriting performance primarily led by the Norwegian business”.

Gjensidige said it has lowered its near-term claims inflation outlook.

"Given ongoing geopolitical instability, rising defence and infrastructure spending and potential trade barriers, we see a reduced inflation picture and lower our near-term forecasts for claims inflation somewhat 3% to 5%," said CEO Geir Holmgren on an earnings call on Friday.

Elsewhere, Danish non-life insurer Tryg posted a combined ratio of 77.2%, a slight deterioration from 76.8% in the prior-year quarter, as improved expense and underlying claims ratios were offset by a more normalised level of large claims.

The underlying claims ratio improved by 30 basis points to 63.7%, while the insurance service result was up 4.3% to 2.31 billion Danish crowns owing to pricing actions, particularly in Norway.

Segmental results were mixed, with the private segment's insurance service result climbing 8% thanks to lower weather claims and an improved underlying claims ratio in Norwegian private lines.

In contrast, the commercial segment slipped year on year due to a normalisation of large losses after an unusually benign 2024.

Norway-based Storebrand also reported an improvement in non-life underwriting performance, with its combined ratio improving 6 points to 91%, in line with its full-year guidance of 90% to 92%.

Storebrand credited repricing across segments for the margin improvement, even as it flagged continued uncertainty in disability developments in the Norwegian market.

Insurance premiums grew 23% year on year, with the retail segment growing 27%.

However, CFO Lars Aasulv Loddesol said that this growth has come with a cost. "Strong sales have led to increased sales provisions. The increased sales cost weakens the combined ratio by approximately 2% points," he said on an earnings call on Friday.

Despite some headwinds, such as disability trends in Norway and a more normalised loss environment, the three insurers' performance shows that disciplined pricing and careful underwriting continue to offer opportunitires for profitable growth in the region.