Annual report 2016 200 years Gjensidige defended its market shares and achie- The ved record high customer satisfaction in 2016. Good and efficient operations year contributed to another 2016 strong result. Sports sponsorship of the year International award to Gjensidige was named the "Stay focused"-campaign Sports sponsor of the Gjensidige together with year 2016 by the Trygg Trafikk was declared Norwegian Sponsoring winner of the CSR and and Event Innovation categories for the Association. "Stay focused"-campaign at Robot handles routine the Digital Communication tasks Awards 2016 in Berlin. For the first time Gjensidige put a robot in charge of handling routine tasks. The robot answers questions from other insurance companies about our customers’ Record-high bonus on motor insurance. customer satisfaction Customer satisfaction continued to improve in 2016. The scoring Customer dividend reached the highest Gjensidige’s general level since the survey insurance customers in was introduced in Norway received customer 2009. Customers who dividend for the seventh had a claim or were in consecutive year. The touch with us for other Gjensidige Foundation paid reasons were the most NOK 1.95 billion in dividend. satisfied. That equals 13.5 per cent of premiums paid from Norwegian customers the preceding year. About the reporting Financial Gjensidige publishes a web-based annual calendar 2017 report on www.gjensidige.no/reporting. The annual report 2016 will not be printed. General Meeting 6 April Find further information about the Ex dividend date 7 April Group on www.gjensidige.no/group Q1-result 4 Mai In case of any discrepancies, the Norwegian Q2-result 14 July version of the annual report shall prevail. Q3-result 26 October Aqquisition in Sweden Gjensidige acquired the swedish general insurance Cyberinsurance portfolio from Vardia Gjensidige launched an Insurance Group. insurance to help companies minimize damages from a data 200 years breach. celebration In 2016, it was 200 years since the first fire mutual in the Gjensidige family Operations in was established. The Baltics integrated occation was The former PZU Lietuva celebrated in business was integrated arrangements in with Gjensidige’s other Denmark, Norway operations in the Baltics. and Sweden. Health 55+ We launched an insurance that combines traditional health insurance with innovative ways of preventing health Content problems. Key figures 2 Letter from the CEO 6 Operations in brief 8 Asset management 16 Additional information 18 Investor information 20 Corporate social responsibility 22 Corporate governance 36 The Board’s report 48 Financial statements and notes 73 Gjensidige annual report 2016 I 1 Key figures Gjensidige recorded a profit after tax of NOK 4.7 billion in 2016, corresponding to a return on equity of 21.4 per cent. For the general insurance operation the premium growth was 5.5 per cent and the combined ratio was 83.4 per cent. The earnings per Key figures share was NOK 9.34 and the Board has proposed a dividend of NOK 6.80 per share. Prot before tax Earned premiums general insurance NOK bn NOK bn 6 22 4 20 2 18 0 16 2013 2014 2015 2015 2016 2012 2013 2014 2015 2016 Return on equity Underwriting result general insurance % NOK bn 20 4 15 3 10 2 5 1 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Earnings per share Combined ratio general insurance NOK % 10 90 8 85 6 4 80 2 0 75 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2 I Gjensidige annual report 2016 Key figures 6.80.. ...NOK per share in proposed dividend Market value as at 31.12. Dividend per share Based on profit Distribution of NOK billion for the year excess capital 75 2016* NOK 6.80 55 2015 NOK 6.40 6.00 NOK 2014 NOK 5.90 35 2013 NOK 6.80 10.00 NOK 15 2012 NOK 6.85 2012 2013 2014 2015 2016 * Proposed Total return* 400 336 272 208 144 80 Juli 2011 Juli 2012 Juli 2013 Juli 2014 Juli 2015 Juli 2016 Des 2010 Des 2011 Des 2012 Des 2013 Des 2014 Des 2015 Des 2016 Gjensidige Nordic general insurance** * Dividend reinvested ** Non-weighted average in local currency for Tryg, Topdanmark, Sampo and Alm.Brand Last two Since IPO Total return * Last year years 10.12.2010 Gjensidige 5 % 28 % 275 % Nordic general insurance** 3 % 23 % 249 % * Dividend reinvested ** Non-weighted average in local currency for Tryg, Topdanmark, Sampo and Alm.Brand. Gjensidige annual report 2016 I 3 Key figures Financial key figures Result 2016 2015 2014 2013 2012 Earned premiums, general insurance NOK million 22,441.9 21,272.0 20,386.8 18,736.9 17,797.3 Other operating income NOK million 3,049.5 2,883.4 2,711.9 2,147.6 1,720.4 Net income from investments NOK million 2,196.1 1,473.3 2,475.6 2,538.1 3,055.8 Claims incurred, general insurance NOK million (15,515.9) (14,597.5) (14,470.4) (13,859.6) (12,437.7) Other claims incurred, losses etc. NOK million (1,963.7) (1,927.8) (1,892.4) (1,435.7) (1,150.0) Operating expenses, general insurance NOK million (3,191.4) (3,217.6) (3,054.0) (2,857.8) (2,751.8) Other operating expenses NOK million (876.5) (836.0) (758.0) (695.4) (600.4) Tax expense NOK million (1,474.1) (1,265.0) (1,210.0) (903.5) (1,353.5) Profit for the year NOK million 4,665.9 3,784.7 4,189.6 3,670.6 4 ,280.1 Gains per share NOK 9.34 7.57 8.34 7.34 8.56 Regular dividend per share NOK 6.80 6.40 5.90 6.80 6.85 (Based on profit for the year) Special dividend per share NOK 6.00 10.00 (Based on distribution of excess capital) Main figures general insurance 2016 2015 2014 2013 2012 Underwriting result 1 NOK million 3,734.6 3,456.9 2,862.3 2,019.6 2,607.8 Large losses 2 NOK million 871.8 880.3 823.3 906.6 581.1 Run-off results 3 NOK million 1,023.4 724.8 493.7 299.6 342.0 Combined ratio 4 % 83.4 83.7 86.0 89.2 85.3 Loss ratio 5 % 69.1 68.6 71.0 74.0 69.9 Cost ratio 6 % 14.2 15.1 15.0 15.3 15.5 Balance sheet 2016 2015 2014 2013 2012 Investment portfolio 7 NOK million 53,957.7 57,173.9 56,538.8 58,148.2 56,296.0 Provisions for unearned premiums, gross NOK million 13,654.9 13,097.2 11,944.6 11,049.2 10,141.6 Claims provisions, gross NOK million 32,447.5 33,178.5 32,926.9 31,749.6 29,562.3 Equity NOK million 22,326.0 23,330.6 21,656.8 26,287.8 25,617.7 Total equity and liabilities NOK million 135,926.6 129,264.4 113,982.0 108,946.3 94,207.1 Return 2016 2015 2014 2013 2012 Return on financial assets 8 % 3.9 2.6 4.3 4.3 5.4 Return on equity 9 % 21.4 17.4 18.1 14.6 18.1 1 Underwriting result, general insurance = earned premiums - claims incurred etc. - operating expenses 2 Large losses = loss events in excess of NOK million 3 Run-off gains/(losses) = changes in estimates from earlier periods. Reserving is based on best estimate, and expected run-off result over time is zero. 4 Combined ratio = claims ratio + cost ratio 5 Loss ratio = claims incurred etc. /earned premium 6 Cost ratio = operating expenses/earned premium 7 Investment portfolio includes all investment funds in the Group, except Pension and Savings and Retail Bank 8 Return on financial assets = net financial income as a percentage of the average financial assets including property (excluding Pension and Savings and Retail Bank) 9 Return on equity, annualised = Shareholders’ share of net profit for the period/average shareholders’ equity for the period, annualised 4 I Gjensidige annual report 2016 Key figures AnsaEmployeestte pe per landr country Employees per business area as at 31.12.2016 as at 31.12.2016 2,250 Norway 705 Denmark 3,786 General insurance 665 Baltics 144 Retail Bank 385 Sweden 75 Pension and Savings Health, safety and the environment 2016 2015 2014 2013 2012 Sickness absence (Self-certified and doctor-certified), % 3.9 4.1 4.7 5.1 4.6 Gjensidige Forsikring Norway Injuries, Gjensidige Forsikring Number 0 0 0 0 0 Turnover of employees, Gjensidige Forsikring % 9.7 9.6 8.7 9.7 16.6 Employees 2016 2015 2014 2013 2012 Number of employees in the Group Persons 4,005 3,908 3,525 3,377 3,163 Average age Gjensidige Forsikring Scandinavia Year 43.0 44.3 43.1 44.4 44.3 Average amount spent on skills development per employee NOK 15,0001 17,5001 17,5001 15,8001 13,2001 Participation in a training programme Days 7,487 5,524 7,400 8,900 6,200 1 Starting in 2013, the amount refers to the Group as a whole. Figures for 2012 are adjusted accordingly. In addition to the financial statements according to IFRS, Gjensidige uses diffe- rent alternative performance measures (APM) to present the business in a more relevant way for its different stakeholders. The alternative performance measures have been used consistent over time, and relevant definitions have been disclosed in the quarterly reports.