Gjensidige Forsikring ASA Q3 2021 Earnings Call Transcript

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

Question: Hskon Astrup - DNB Markets, Research Division - Analyst : Two questions from me. The first one, on inflation. So just based on your judgment, have you so far seen any repricing activity on the back of the current inflationary pressures on materials, et cetera, either from you or from peers? That was the first question. And the second question, on runoff. Just wondering if you, at some point, will provide some guidance to indicate the levels you expect for runoffs in 2023, for instance, on your Capital Markets Day next month.

Question: Hskon Astrup - DNB Markets, Research Division - Analyst : Sorry. If I understood you correctly there, you will not provide any, say, guidance with regards to the runoff level after 2022. Is that correct?

Question: William Fraser Hardcastle - UBS Investment Bank, Research Division - Analyst : Just following up on that runoff. Obviously, it's coming -- the surplus runoff coming to an end in, again, 2022. Can you say anything about how the reserve buffers are now compared to when you initially announced this level of excess runoff per annum? Have they sort of trended exactly in line with what you assumed? I presume so because that's what's coming through your solvency, but just to be clear on that. And the second one, how should we think about your solvency level now within the range? Is it fair to simply say post the acquisition completions, you're broadly now at the midpoint of the range and that's where you feel most comfortable, and so we should think about distributions each year to land around this level? Is that a fair assumption?

Question: William Fraser Hardcastle - UBS Investment Bank, Research Division - Analyst : Yes. Was the reserve prudency as broadly as you expected when you initially set it?

Question: William Fraser Hardcastle - UBS Investment Bank, Research Division - Analyst : That's brilliant. And if I may just follow up on the solvency, was there any model approval within the quarter in terms of moving the models closer together?

Question: William Fraser Hardcastle - UBS Investment Bank, Research Division - Analyst : No change.

Question: Thomas Svendsen - SEB, Research Division - Analyst : Could you talk a little bit of -- more about this new change in ownership market? What do you think about the potential market size there, if it's more liabilities to ensure so it will be bigger than the old change in ownership market? And what do you think about your market share there? And how are you going to distribute this new insurance?

Question: Thomas Svendsen - SEB, Research Division - Analyst : Okay. But do you think it will be -- is it possible to say or to try to think it will be bigger than the whole market? Or is it fair to say it will be smaller than the whole market just because you do a much more check of the real estate before you sell it? Or is it impossible to say?

Question: Thomas Svendsen - SEB, Research Division - Analyst : Yes, on the whole change of ownership market. I think that the size of the market -- yes, the size of the change of ownership market...

Question: Thomas Svendsen - SEB, Research Division - Analyst : Yes, versus the whole change of ownership...

Question: Vegard Toverud - Pareto Securities AS, Research Division - Analyst : I also have some questions about the inflation part of business and for the property product. Is it so that the construction cost index is the starting point or basis for your repricing discussions?

Question: Vegard Toverud - Pareto Securities AS, Research Division - Analyst : And when I take the latest numbers and use the same share for materials and labor, I guess still somewhat higher number. Is the reason for your number being lower that you further divide this into even more gradual parts and your material consumption is different from that of the index?

Question: Vegard Toverud - Pareto Securities AS, Research Division - Analyst : But shouldn't this set you up for a significant margin expansion then going into next year?

Question: Vegard Toverud - Pareto Securities AS, Research Division - Analyst : Yes. And -- but this starting point for that claims inflation, is that your expected claims inflation? Or is it what the market expects or the CCI?