ALM. Brand A/S Q4 2019 Earnings Call Transcript

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

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : A couple of questions from my side. First, maybe a high-level question. But now you've spent a couple of months on the strategy, what have been your mandate from the beginning? Have everything been in play? Or has the structure of the Alm. Brand group sort of been fixed from the beginning, so this is what you've been working with? Could you just elaborate a bit on that?

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : But that means just hypothetically you did not have a mandate to, for instance, sell the bank if you did not see it as a core part of the group.

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : Okay. That's helpful. Then I need to go to the bank because I think that, as you also said, is going to be a question -- focused point on questions today. First, if I look at the outlook from here, I acknowledge the DKK 40 million and the DKK 50 million you mentioned going into 2020 as high income and lower cost. But if you're going to cut quite a lot of FTEs, and if I do the back tracking, it sounds like 60% of your restructuring will be within the bank, how are you able to take out more than 70 FTEs in the bank and still grow earnings at the same time? It seems a bit ambitious to me.

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : And how much has been, you can say, extraordinary income during 2019 from the remortgaging?

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : Okay. And then if you need to deliver more than 10% pretax ROI, acknowledge this is before intangible impairments, so we need to look at this number growing to almost DKK 200 million by 2022. If this does not materialize, you said if we can't make 10%, we need to do something else. Does this mean -- because the 10% has been mentioned also by your predecessor a couple of times. Does this mean that if you're not able to deliver 10%, then the bank is not necessarily part of the core setup?

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : Okay. And then a final question on the bank. The -- we had the FSA report last week where they basically stated that they did not find the core earnings satisfying for an ongoing business. How have your discussions been with them around the announcement that you came with today? And I guess, my question is, are they satisfied, will they be satisfied with what you're doing today? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JANUARY 30, 2020 / 10:00AM, ALMB.CO - Q4 2019 ALM. Brand A/S Earnings Call

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : Okay. If I may go to Non-life then and your targets for 2022. So the 3% premium growth per year going forward, do you expect that this means you will have to take market shares? Or do you think this is going to be growth in line with the market?

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : And how will you do that?

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : It's just that, to me, it sounds a bit peculiar that you will take market shares and be more disciplined on pricing, at the same time, while you have a distribution that, all things equal, is less strong than your peers. But maybe that's the glass half empty look at it?

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : Yes. Just a follow-up question from me on the runoffs in Q4, Non-life. So the negative and the runoff losses, you mentioned the Labour Market Insurance. I just wanted your thoughts on whether you see this as a one-off or whether you think there is a risk that you might be underprovisioned here and that we should see a risk here going forward? And then if I may add on top of that question, what kind of runoff level do you expect in 2022?

Question: Asbj°rn Nicholas M°rk - Danske Bank Markets Equity Research - Analyst : Okay. And then if we look at 2022, what -- does this mean we should expect 2% runoff rather than 3.5%? Or how would you look at that?