Full Year 2020 ALM. Brand A/S Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : I have a couple. One relating to your Non-life guidance for 2021. So Rasmus, just to be sure, I understood it correctly. So basically, Sydbank will compensate you the full 50% of the DKK 5 million for 2021. And then next year, that will be more or less neutral because you will be able to take out those costs, but Sydbank will not compensate you. So the net-net is going to be around 0 this year. And I guess, around 0 for 2022. Was that correctly I understood?

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : All right. And then just to clarify on the COVID-19 effects. If I understand you correct, you have included some estimated tailwind for Q1 and then headwinds for Q2, Q4. So just you could add some numbers to that, what is the sort of the tailwind you expect to get in Q1? And what is the full year effect that you expect for 2021?

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : Okay. So you expect the same tailwinds in '20 in Q2 to Q4 as you -- as the tailwinds you had in 2020 basically?

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : Okay. So in your guidance, if I take you... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2021 / 12:00PM, ALMB.CO - Full Year 2020 ALM. Brand A/S Earnings Call No. Just to on your full year guidance, you have DKK 45 million in Q1. And then basically, I guess, Q2, Q3, Q4 will have a headwind versus 2020 where you had the tailwind. So net-net, yes, in your guidance, you have a net headwind for 2021. Is that correct?

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : Okay. Okay. All right. That was the first question. Then taking on the cost ratio, so you're saying that the cost ratio should come down to 16% from the 17%, 17.5%. But then you still say that 90% is sort of a combined ratio level going forward. So does that mean you don't expect -- you basically expect that the cost benefits in the next couple of years, you will lose that in competition on the claims side?

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : Okay. But I guess, lower cost, I mean, there's no reason why you wouldn't -- I mean why your claims ratio should be impacted in an upwards trend from your lower cost?

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : Sure. Okay. On these new partnerships, what is the combined ratio on your new clients versus your current clients, is there a big difference there?

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : Okay. Fair enough. And then on Life, if I look at your growth this year, of course, there's good reasons why it wasn't as good as it could have been. But then you also mentioned the base rate adjustments from the FSA, the whole low rate environment that we're in. And I guess, the fact that unit link is going to be more and more through Sydbank. So I was just wondering, what should we really expect? Are you still so positive on the top line for the next couple of years? Or should we maybe moderate our expectations a bit here? And is like really a part of the long term on brand set up? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2021 / 12:00PM, ALMB.CO - Full Year 2020 ALM. Brand A/S Earnings Call

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : All right. Fair enough. And then a final question from my side on your dividend and capital. First, on the dividends. Have you been in dialogue with the FSA about the 4 and 3 krones? And if you have what have sort of been their arguments? And how they're looking at that? And then secondly, on the solvency, you mentioned the plus 300% solvency here in Q4. I guess, it doesn't say that much given your setup and your own capital targets or at least your former capital targets. So I was just wondering since you have sort of officially at least those financial targets, should we look more at the solvency ratio going forward? Or should we look more at the old capital targets that you had or the way that you look at capital back then? Or how should we really look at the 300% solvency?

Question: Asbj°rn Nicholas M°rk - Danske Bank A/S, Research Division - Analyst : Yes. I mean, I could agree that you're very well capitalized. I think there's a lot of financial companies that are very well capitalized, but still having sold back a bit on the dividends. But my question on that was more that if I look at least what the FSA has said, and I'm aware that you're not a bank, right? But at least they have said that the payout should be below the normal range. And I guess, U.S. would be 70% to 100%. So paying out 100% is not really doing what the FSA is seeing. So I was just wondering whether you would be afraid of basically crossing the line here or whether you're super confident that they would not have any issues at all? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2021 / 12:00PM, ALMB.CO - Full Year 2020 ALM. Brand A/S Earnings Call