gjensidige bank presentation april 2008
TRANSCRIPT
24.04.2008 Gjensidige Bank2
Presentation team
Experience: Gjensidige Forsikring
SkandiaBanken AB, NUF
SkandiaBanken Bilfinans AS
SkandiaBanken Merkefinans AS
Vesta Forsikring/Vesta Finans
Education: Norwegian School of Management (BI)Bachelor of management, Masterprogram StrategicManagement, Project leadership
Experience: Gjensidige Forsikring SKIPPER Electronics ASSamarbeidende Revisorer ASKPMG ASGjensidige NOR Forsikring
Education: Norwegian School of ManagementNorwegian School of Economics
Tor Magne LønnumChairman of the Board
Jan Kaare Hellevang
CEO
Frank-Rune Ås
Sparebanken
Sogn og Fjordane
CFO
Experience: Lorenzen Lysaker Group
Norw. State’s Institute ofTechnology
Diary of Sogn og Fjordane
Sparebanken Sogn og Fjordane
Education: Norwegian School of Management(BI), siv. øk.
Norwegian School of Management, Masterprogram Investment and Finance
24.04.2008 Gjensidige Bank3
I. Gjensidige Forsikring - in brief
III. Cooperation with SSF
IV. Performance – key figures
V. Goals and outlook
II. Strategy and concept
Agenda
VI. Q&A
24.04.2008 Gjensidige Bank4
Norway International
General Insurance
Gross Written Premium (“GWP”) of NOK 12,987 mill (NOK 13,375 mill incl. Norwegian municipal portfolio) (85.3 per cent of Group) in 2007Staff of 2,033 (31 December 2007)Market shares (Q4 2007)1):
• Total 31.0%
• Private 30.4%
• Of which Agriculture 74.1%
• Commercial 32.7%
• Group Life (2006) 33.7%
• Marine (2006) 22.4%
Customers (Q4 2007)
• Total number of customers 1,051,000
• 956,000 customers in private and agricultural markets
• 70% of private/agricultural customers are members of loyalty or affinity programs, generating 88% of written premium
• 8% churn rate 2) for loyalty/ affinity customers (13% for all customers, 24% in the mass market)
International operations include:
• Tennant (Norway and Sweden)
• Fair and KommuneForsikring (Denmark)
• Gjensidige Baltic (formerly Parekss) and its agents (the Baltics)
GWP of NOK 2,243 mill (14.7%) in 2007Staff of 640 (31 December 2007)
Other Business Units
• Other operations include Gjensidige Pension and Savings, Gjensidige Bank and Help24 that operate in Norway
• Staff of around 787 (31 December 2007)
Gjensidige ForsikringIn brief
1) The Norwegian Financial Services Association (“FNH”), general insurance per 31-Dec-2007. Segments are based on company definitions, but drawn directly from FNH report. Marine numbers are from CFOR
2) Monthly churn rate consists of persons who were customers previous month, but with no insurance policy next month, divided on total amount of customers previous month. Yearly churn rate is computed by adding up the last twelve monthly churn rates. This definition applies throughout this presentation
24.04.2008 Gjensidige Bank5
Gjensidige ForsikringLeading position – strong brand
30,4 %28,3 %
18,1 %
12,7 %
Gjensidige If Vesta Sparebank1
74,1 %
16,5 %
7,3 %
Gjensidige If Terra
32,7 % 33,3 %
18,2 %
4,4 %
Gjensidige If Vesta Sparebank1
Market Share – Private Market Share – Commercial
Norwegian Market Share Development since 2002
Source: FNH, general insurance. The definition of Private and Commercial is adjusted to reflect Gjensidige’s business model
Of which: Agriculture
15 %
20 %
25 %
30 %
35 %
2002 2003 2004 2005 2006 2007
Gjensidige If Vesta Sparebank1
15 %
20 %
25 %
30 %
35 %
2002 2003 2004 2005 2006 2007
Gjensidige If Vesta Sparebank1
Market Share – Private Market Share – Commercial
24.04.2008 Gjensidige Bank6
NOK mill
Gross written premium
Claims ratio gen. ins.
Cost ratio gen. ins.
UW result gen. insurance
Net financial income
Profit after tax
Rating (S&P)
20062007
13,78715,727
75.9%78.6%
18.9%17.5%
669553
3,7112,820
4,0922,479
Gjensidige ForsikringStrong financial position
20,30319,017
2007 2006
Equity (NOK mill)
Pre-tax Return on Equity (%)
15.4
24.2
2007 2006
Single A Single A
24.04.2008 Gjensidige Bank7
Gjensidige Group
General InsuranceNorway
Gjensidige Pension and
Savings
Gjensidige Bank
General Insurance Baltics
Health Services
(Help24 and Other)
Private Commercial Private Commercial
General Insurance
Other Nordic¹)
PrivateCommercial/Municipal
7,911²) 5,455²) 1,810²) 433²) New business areas
The Gjensidige Group
Definitions:
• Private: Products sold to private and agricultural customers. Product groups include: motor, property, personal accident, agriculture and other (travel insurance, leisure boats and animals)
• Commercial: Products sold to SME and corporate customers. Product groups include: motor, property, personal accident, liability and marine
1) Sweden and Denmark
2) GWP in NOK millions, 2007
24.04.2008 Gjensidige Bank8
Parekss(Baltics)
Gjensidige in Denmark
Help24Gjensidige Pension
and Savings
Gjensidige Bank
Geographical expansion
Broadened product range
NorwegianGeneral
September 2004 January 2006 January 2007
September 2006
March 2006—acquisition of Fair
January 2007—acquisition of KommuneForsikring
Tennant(Sweden)
August 2007
RESO(Baltics) Regulatory approval pending
Gjensidige ForsikringExpansion Strategy
Rationale:
• Broaden product offering to leverage brand and customer base
• Grow and diversify the Group through Nordic/Baltic platform
24.04.2008 Gjensidige Bank9
Gjensidige ForsikringBroadened product range - banking
Strategic Rationale
• Represents the entry to the retail banking sector
• Allows Gjensidige to:
– Offer a new range of products and services to existing clients
– Protect general insurance market share against bancassurers entering the general insurance market space
• Provides opportunity to gain new customers to broaden the group’s overall customer base
• Gjensidige Bank aims to be profitable without any financial support from the Group
24.04.2008 Gjensidige Bank10
• Challenge the major, established, players by offering
• A broad range of products
• Low prices combined with aggressive marketing
• Differentiate itself from the established banks through the Gjensidige
– Brand
– Distribution capacity
– “Free banking model” and competitive prices
– Access to low-cost funding sources
• Target existing Gjensidige customer relations
– Large and loyal client base
– Bundled with other Gjensidige products in Gjensidige loyalty andaffinity programs
• Retain agile organisation
– Leverage the infrastructure of an existing player to achieve lowcost back office and thus more efficient start up
– Easy access through www.gjensidige.no and supported by a dedicated call centre
Gjensidige BankStrategy
Strategy
24.04.2008 Gjensidige Bank11
Gjensidige establishes internet bank for the retail market
• Customers meet Gjensidige Bank in the "Gjensidige Portal" www.gjensidige.no
• Internet bank with phone support from support centre in Førde
• Self-service concept with attractive terms
• Easy to use web pages which give a good customer experience
• A cost effective, modern and agile internet bank with full productspectrum
• Differentiated from other ”traditional” banks and internet banks primarily through connection with:
– Brand
– Customer base
– Distribution
• Established in co-operation with Sparebanken Sogn og Fjordane
Gjensidige BankConcept
24.04.2008 Gjensidige Bank12
Gjensidige Bank
2 jan 11 jan 12 jan 31jan 1 feb 6 feb 20 feb 15 may- 8 jun 15jul-15aug 29oct 1dec 15 dec 1 jan
Nationwidelaunch
4,000 customers
Launch for YS
Launch for other
employeesin
Gjensidige
Launch for the bank employeesand for Tekna
3,000 customers
1,000 customers
2,000 customers
2007
9,000 customers
13,000 customers
Awareness 10% Awareness 12.6% Awareness 14.6%
Launch ofadvantageprogram
18,000 customers
Autumncampaign
Launch for NITO
20,000 customers
Launch of sales through Gjensidige
branches
22,000 customers
Summercampaign
24.04.2008 Gjensidige Bank13
GjensidigeBank Holding AS
Gjensidige Bank ASA
Board
Management
Board
Management
Synergies
Mutual staff resourcesMutual research and
developmentMore power innegotiations
Gjensidige BankCooperation with SSF
Main deliveriesAccounts/bookkeeping Human Resources
Finance Foreign exchange
Legal Debt collection
Deposit department IT - Support
Property administration
24.04.2008 Gjensidige Bank14
308
3,381
1,276
2,105
1,033
4Q 2007 3M2007
6M2007
9M2007
12M2007
Gjensidige BankPerformance – key figures
Loans (NOK mill) Deposits (NOK mill)
726
122
388
975
1,701
4Q 2007 3M2007
6M2007
9M2007
12M2007
50.356.9
46.3
37.639.6
4Q 2007 3M2007
6M2007
9M2007
12M2007
Deposit Ratio (%) Customer Development
22,244
6,248
15,996
10,466
5,398
4Q 2007 3M2007
6M2007
9M2007
12M2007
Status as of 19 March 2008
Loans NOK 4,450 mill Deposits NOK 3,101 mill
Deposits ratio 69.7 per cent Customers 29,287
24.04.2008 Gjensidige Bank15
Gjensidige BankGoals & Targets
Goals
Targets
It is expected that the bank will initially be loss-making as it achieves scale – results in 2007 according to plan
Growth is expected to be relatively high for the first few years, until the bank reaches a level where growth will stabilise at a more normal level, in line with the established players
In 2008 Gjensidige is targeting a quarterly run rate for customer addition between 5,000 and 6,000
• Growth in customer base 3Q: 5,530 customers
• Growth in customer base 4Q: 6,248 customers
Gjensidige Bank have earlier communicated that the bank should have a capital adequacy ratio of around 16 %, which is high compared to statutory provisions of 8 %. By the end of 2007 the bank had a capitaladequacy ratio of 20.8%. In the future the bank will put more emphasison risk profile and growth plans when deciding on level of capitaladequacy ratio, but the bank still intends to have a good margin compared to statutory provisions.1. Customers or persons registered as interested in becoming customers
1
1
24.04.2008 Gjensidige Bank16
The bank’s adopted strategy will continue and will be developed during the
coming year. There will be a special focus on product development and
the improvement of customer processes to remain competitive. Efforts
to adapt the bank to the new capital adequacy requirements (Basel II) and
enhancement of the efficiency of internal processes will continue.
In 2007 the bank decided to start a pilot project in financial distribution to
evaluate different service models that can improve the efficiency of the
Group’s distribution system. This work will continue in 2008.
Recruitment of new employees in step with the bank’s growth and development will also be a priority area in 2008.
Gjensidige BankOutlook
24.04.2008 Gjensidige Bank19
CEO
BUSINESS-
SUPPORT
(5 FTE)
SALES AND MARKETING
(13 FTE)
Jan Kåre Raae
Jan Kaare Hellevang
Frode Schanke
BUSINESS-
DEVELOPMENT
(4 FTE)
Synnøve M Ø IversenGunnar Klakegg
CREDIT
(17 FTE)
PRODUCT
(1 FTE)
Atle Kristian Hornnes
Organisation
24.04.2008 Gjensidige Bank20
Board of Directorscv
Name: Tor Magne Lønnum
Role: Chairman of the Board
Backgr: Gjensidige Forsikring, SKIPPER Electronics AS, Samarbeidende Revisorer AS, KPMG AS, Gjensidige NOR Insurance.
Edu: Norwegian School ofManagement, NorwegianSchool of Economics
Name: Arvid Andenæs
Role: Board member
Backgr: Sparebanken Sogn og Fjordane, Fokus Bank, KPMG Consulting, Sparebanken Nord Norge
Edu: Siviløkonom, Norwegian Schoolof Management (BI), Master ofManagement
Name: Ingun Ranneberg- Nilsen
Role: Board member
Backgr: Gjensidige Forsikring
Sparebanken NOR
ASM AS
Edu: Handelsøkonom (BI)
Management program (Dialog markedsføring, Elektronisk handel)Master of Technology, MBA
Name: Trond Rino Delbekk
Role: Board member (Nestleder)
Backgr: Nordea, Sparebanken NOR
Edu: Bachelor of economics, Master`s degree from the Norwegian Schoolof Management
24.04.2008 Gjensidige Bank21
Board of DirectorsCV
Name: Roger Nedrebø
Role: Board member (Employeerepresentative)
Backgr: Sparebanken Sogn og Fjordane
Edu: Diplomøkonom BI
Name: Marianne B. Einarsen
Role: Board member
Backgr: NSB, Personmarked DnB NOR,
Sparebanken NOR, Storebrand,
UNI Forsikring
Edu: Master of Mangement (BI), Diplommarkedsøkonomi BI/NMH, DH-kandidat Agder Distriktshøgskole
24.04.2008 Gjensidige Bank22
ManagementCV
Name: Jan Kåre Raae
Role: Manager business support
Backgr: Høyskolen i Sogn og Fjordane, Deloitte AS, Odda Smelteverk AS
Edu: Master program Agder University College
Name: Frode Schanke
Role: Manager of business Development
Backgr: Accenture
Edu: Bachelor of Commerce(Siviløkonom) The NorwegianSchool of Economics and Business Administration (NHH)
Name: Synnøve M. Iversen
Role: Manager of marketing and sales
Backgr: Orkla Foods - Stabburet
Naustdal Kommune
Edu: Master of marketing management –Handelshøyskolen BI-NMH
Name: Jan Kaare Hellevang
Role: CEO
Backgr: Gjensidige Forsikring, SkandiaBanken AB, NUF Skandiabanken Bilfinans AS, SkadiaBanken Merkefinans AS, Vesta Forsikring/Vesta Finans
Edu: Bachelor Norwegian School ofManagement (BI), Masterprogram Strategicmanagement, Project leadership
24.04.2008 Gjensidige Bank23
ManagementCV
Name: Gunnar Klakegg
Role: Manager Credit
Backgr: DnB NOR
Norsk Havfisk AS
Klakegg Eiendom AS
Cubus
Edu: Diplomøkonom, BI
Name: Atle Kristian Hornnes
Role: Product Manager
Backgr: Fjaler Sparebank, Dale ofNorway, Kaizen AS
Edu: Bachelor of Commerce(Siviløkonom) The NorwegianSchool of Economics and Business Administration (NHH)