Alm. Brand — Call Transcript 2026

Speaker 1: Hello everyone. Thank you for joining us and welcome to the Alm. Brand second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you'd like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. I will now hand the conference over to Andreas Ruben Madsen, CEO at Alm. Brand. Please go ahead.

Speaker 2: Good morning. Thank you for joining us on our conference call. I'm Andreas Ruben Madsen, CEO of Alm. Brand Group. As usual, I have with me the Head of our IR team, Mads Thinggaard. This morning we published our interim report for the second quarter of 2026. I'll now walk through the presentation of our results. Let's now turn to slide two and the key highlights for my first full quarter as CEO. Overall, I'm very pleased with the financial performance in Q2. We delivered a strong underlying improvement in the claims ratio, which improved by 200 basis points year-on-year. At the same time, results in Q2 were negatively impacted by a DKK 700 million, one-off reserve strengthening following the Supreme Court of Denmark ruling on workers' compensation. In Personal Lines, growth slowed a bit in the quarter as expected due to the year-on-year effects from last year's repricing fading. However, a growth rate of above 5% during Q2 still indicates that we continue to gain market shares. In Commercial Lines, we experienced a decline in the top line, reflecting our actions to improve profitability in an increasingly soft market for workers' compensation while seeking to reduce volatility at the same time. Adjusted for the areas we work on in this respect, which is workers' compensation and industrial customers, the commercial portfolio reflected a premium growth of 1.0% year-on-year. Importantly, I improved the underlying claims ratio in Commercial Lines by 2.3 percentage points year-on-year. Overall, this reflects continued progress on profitability. Now I'd like you to turn to slide three for our financial highlights. In the table to the right, the middle column reflects our Q2 financials, excluding the impact from the Supreme Court of Denmark ruling on workers' compensation. Insurance revenue grew to DKK 3.0 billion in the quarter. The adjusted insurance service result was DKK 648 million, up from DKK 520 million in Q2 last year. This represents our highest insurance service result ever. We continue the strong underlying trend from Q1 with a significant year-on-year improvement in underlying claims. Weather-related claims were higher than we would normally expect for Q2, while major claims were below normal levels. Run-off gains at a level of around 3.5 percentage points were almost double of the normally expected level. Investment income was strong in Q2 with a net gain of DKK 215 million related to the rebound in the market, impacting equities as well as bonds in a positive direction. Other income and expenses are significantly lower than last year. Primarily, we no longer have integration costs related to Codan following the completion of the integration. Now let's turn to slide five. As I mentioned before, the group delivered the highest insurance service result ever in Q2, adjusted for the Supreme Court ruling on workers' compensation. A significant improvement was driven by strong underlying improvements as well as run-off gains when adjusting for the one-off charge. In Personal Lines, the insurance service result increased year-on-year by DKK 114 million- DKK 400 million. This was driven by continued growth, underlying improvements, and run-off gains. The cost ratio increased marginally to 17.2%. In Commercial Lines, the adjusted insurance service result was DKK 248 million, up from DKK 234 million last year. The increase was driven by a combination of significant underlying improvements, higher ordinary run-off gains than Q2 last year, and a 30 basis points drop in the cost ratio. On the other hand, weather claims and major claims were above the level in Q2 last year, while the decline in premiums had only a limited impact on earnings. Please turn to slide six. Insurance revenue grew by 1.7% in the quarter compared to 2.5% last quarter, reflecting effects from last year's repricing fading, and an increasingly soft market for workers' compensation. In Personal Lines, we continue to take market share while the effects of repricing are fading as expected. Therefore, I am quite pleased that we delivered a growth rate of 5.2% year-on-year. In Commercial Lines, premiums declined by 2.3% this point year-on-year, reflecting our continued efforts with improving profitability in the soft market for workers' compensation, as well as reducing volatility among our larger customers. Adjusted for workers' compensation and industrial customers, the commercial portfolio grew at a muted level of 1.0% in Q2. A growth of 1% in the broad commercial book is too low in my view. It calls for a bit of management attention, especially on the SME side. Now moving to slide seven and the claims ratio. The Q2 claims ratio improved by nearly 4 percentage points year-on-year, adjusted for the Supreme Court ruling. This reflects strong underlying improvements in relatively high ordinary run-off gains, partly offset by elevated weather claims following the storm Dave in April. In addition, the year-on-year comparison benefited from the non-recurrence of reinstatement premiums recognized in Q2 2025. The underlying claims ratio was 200 basis points lower year-on-year, driven by our profitability initiatives. The underlying improvements were particularly strong in Commercial Lines with 230 basis points improvements in underlying claims year-on-year, while the Personal Lines improved by 190 basis points. Overall, the discounting effect was flat year-on-year at 2.2 percentage points, which may come as a surprise to some of you. This reflects model changes within workers' compensation that offset the positive impact from the higher interest rates in Q2 this year compared to last year. Looking ahead, I would expect the discounting to be at a level of about 2.2% with the current level of interest rates. Now please turn to slide eight. The combined ratio in Personal Lines improved to 75.5% from 81.6% last year. This was driven by lower underlying claims and run-off gains. The cost ratio increased slightly to 17.2% in Q2. Premium growth remained strong at 5.2%, despite the fading effects from repricing. Please turn to slide nine for Commercial Lines. In Commercial Lines, we observed a reduction in the combined ratio to 81.8% in Q2 2026, adjusted for the Supreme Court ruling, compared to 83.2% in Q2 last year. The improvement was driven by significant improved underlying claims and the reinstatement fee for reinsurance in Q2 2025 not being repeated. This was partly offset by somewhat higher large and weather-related claims, while the cost ratio decreased by 30 basis points year-on-year, providing additional support. Let's move to slide 11 and the investment result. You may have noticed that we began disclosing returns on our free portfolio in Q1 this year. This was in response to requests from many of you. In Q2, the investment result was a gain of DKK 250 million, primarily driven by the free portfolio, which contributed DKK 209 million, especially with equities benefiting from the general rebound in the market following the geopolitical turmoil experienced during Q1. Let me also briefly touch on the Tier- 2 issuance in June. We issued DKK 900 million Tier- 2 bonds at a spread of 140 basis points, slightly below the spread on the maturing Tier- 2. The part not already tendered, DKK 366 million, will have first call in October this year. Let's turn to slide 13 and our updated guidance. We're revising our guidance for the insurance service result in 2026 upwards by DKK 100 million to DKK 1.2 billion-DKK 1.4 billion, excluding run-off gains in the second half of 2026. This reflects the strong underlying performance in Q2 as well as run-off gains. Looking ahead, we continue to expect run-off gains of around 2%. The new guidance corresponds to DKK 1.9 billion-DKK 2.1 billion in insurance service result, adjusted for the DKK 700 million one-off charge related to the Supreme Court ruling on workers' compensation. We continue to expect a cost ratio of around 17% for 2026. The combined ratio, excluding the one-off result in H2, is expected to be 88%-90%, corresponding to 82.5%-84.5% when adjusted for the impact of the Supreme Court ruling, an improvement of 100 basis points following the strong result we had in Q2. Guidance for profit before other income and expenses is upgraded by DKK 200 million to DKK 1.45 billion-DKK 1.65 billion or DKK 2.15 billion-DKK 2.35 billion, adjusted for the Supreme Court ruling. Other income and expenses remain unchanged and guided at an expense of DKK 0.5 billion for 2026. With this, I conclude our presentation and hand over the word to our moderator. Thank you.

Speaker 1: Thank you. We will now begin the question and answer session. Please limit yourself to a couple of questions. If you'd like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking your question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Mathias Nielsen with Nordea. Your line is open.

Speaker 3: Thanks a lot. Congratulations on the strong development in the underlying claims ratio this quarter. My question is a bit about how we should think about that in the coming quarters and also in the context of your 2028 targets. It seems like you're quite off to a strong start. How do you think about stochasticity and other things with the development you have made both in Q1 and Q2 now on this? Maybe a few comments on that for the coming quarters, and then we can take my second questions after that.

Speaker 2: Thank you, Mathias. I can give some flavor to that. They had a bit of different nuances going through Personal Lines and Commercial Lines separately. If you want the very big picture, we have some slight pricing overhang, to name one thing. We have also a very slight synergy overhang also remaining. We also have some support from reinsurance, as we have talked about before, being highest in Commercial Lines, but around 0.5% or so on average for the group percent. If you total that up, that adds up to around a percentage point or so ± . We have around a percentage points, which I would also consider to some degree it's stochastic this quarter of improvements, which mainly are related to property-related lines, actually both in our Commercial and Personal Lines book. If we look at that going forward, the guidance we started for the year on this point actually stands. We have a base expectation of around, let's say, 100 basis points improvements in the coming quarters. All else equal, if that holds, then that would come to around 1.5 percentage points for the full year. That's sort of the rough guidance for that.

Speaker 3: Okay. Around 100 basis points for the coming quarter. Is that fading off, bigger in Q3 than Q4? Is that how we should expect it as pricing takeaways is fading? Or is that already-

Speaker 2: No.

Speaker 3: out by the year?

Speaker 2: Yeah, I think the composition will be different because we've had, as I talked about, a slight repricing. We've had some synergies still, but that will fade and disappear completely. What we'll get on the other hand will be the first parts of our strategic initiative coming through. To name the main ones coming would be, one is the consolidation of our data centers, which we have just implemented. We have the work we're doing within our claims area with what we call smart repairs related to the motor area. The final one, procurement, especially within buildings for the claims area. Those three would add up to something like, let's say, DKK 15 million per quarter, roughly evenly divided between the three. That will sort of start ticking in as the synergy and prices overhang go out, thereby getting back to the approximately one percentage points in total.

Speaker 3: Okay. That was very clear. My second question is, you almost sound quite bearish on the Commercial Lines growth, but if you look on the Qo Q basis, you are up 2.2%. Is that the pace that we should expect in the coming quarters instead of, like, the 1st of January, we knew that is kind of behind us. That was soft, but that is how it is, and we know that already. But when you look on a Qo Q base, the growth is actually quite fine. Is that also how we should expect it to be in Q3 and Q4, that the Qo Q growth is holding up quite well? Or how should we think about that?

Speaker 2: I think the vicinity of the growth we are seeing now is more or less, I think, a good starting point for what we would expect also in the coming year. As a year-on-year growth of around a total decrease of just above 2% I think is a good starting point for the expectations also in the coming quarters. We do have some of the Commercial Lines book renewing 110%, but I think it will have to go into the next year for us to really see a different trend in the total Commercial Lines premiums.

Speaker 3: Perfect. That was very clear. Thanks a lot.

Speaker 1: Your next question comes from the line of Asbjørn Mørk with Danske Bank. Your line is open.

Speaker 4: Good morning. Thanks for taking my question as well. It's actually a bit of a follow-up from one of the previous questions. Back on your guidance for the full year. Just trying to understand the journey that we've been on. We got the Q1 numbers. You raised the guidance DKK 150 million. Obviously, some of it was realized runoff gains, but still. We had, on the same day, the adjustment on the back of the workers' compensation case. That was a full DKK 700 million clean cut. I'm just today looking at the underlying trends that you print both for Q1 and Q2. You're lifting your guidance by DKK 100 million, essentially the runoff gains. I do hear what you say in terms of the stochastic elements in, I guess, both Q1 and Q2. Still, to me, it seems like there is also an underlying improvement within those 200 basis points that wouldn't explain the full difference from 100 basis points- 200 basis points. Just really trying to understand. I know there's a rounding element as well in your guidance, still just trying to understand if you see this purely as stochastic? Or if there is some sort of underlying still improving more than you expected also with the communication that you had? I guess going forward, the improvement into next year, now that we are ahead of the plan for this year. How should we look at that improvement as a starting point is a more ambitious one, so to speak?

Speaker 2: Well, let me start going through the current year to begin with. As we also stated, it has to do with two things, as you also say. In sort of very rough sort of numbers, we have some moving parts with large claims a bit below normal. We have weather claims a bit above. Things are sort of moving around. The main things driving the upgrade would be our underlying loss ratio and the major one being our adjusted, so to say prior year gains. I think if you look at it mechanically, also given what I'm saying around a base expectation of around 100 basis points in the underlying loss ratio, maybe having, let's say, just below that in a stochastic element. If you add up the math, you could do the argument that 100 is maybe slightly conservative, I think, we've chosen to stick with that. Mechanically, you might have an argument that we could also have gone a bit higher if we had chosen to.

Speaker 4: If I look at sorry, you wanted to say?

Speaker 2: No, I'm sorry. I'm just saying, does that make sense, Asbjørn?

Speaker 4: Yeah. I gues s it's also difficult with the rounded numbers to get the exact science of this. Of course, it's a guidance, so I do get that. It's more that if we get, let's say, 100 basis points for Q3 and Q4, I guess your full year improvement is going to be 170 basis points or something like that, right? Those extra 70 basis points Do you see that as a headwind for next year? If you print 50 basis points improvement next year in your original plan, would you actually print 20 basis point deterioration to your underlying claims ratio next year?

Speaker 5: Yeah. Hi, Asbjørn . Mads here. I think, you are seeing from a mechanical point of view, you are right because we are thinking it a bit like 150 basis points of underlying improvements than for this year where we look at it from at this point and with 50 basis point being stochastic. You are right that we at our Capital Markets Day, we pointed to 50 basis points underlying improvement per year as kind of the structural thing from our strategy initiatives. Mechanically, that would mean having 50 structurally next year would be flat underlying, but we always strive to make a good underlying progress. We will still believe that we could report at least a positive development in the underlying loss ratio next year.

Speaker 4: All right. Thanks. Final question from my side. I know you're not sitting with the actual cases yourself, but have you seen anything or heard anything on the back of the Supreme Court ruling in terms of number of cases or if your estimate is still on the conservative side? Any news on this front?

Speaker 2: No, actually we haven't received any claims being sort of say, re-initiated, which were already fully determined. We've seen nothing and we have in actuality, no new news yet, which is also what we would have expected at this point in time.

Speaker 4: All right. Perfect. Thanks a lot.

Speaker 1: Thank you. Your next question comes from Martin Birk with SEB. Your line is up. Please go ahead.

Speaker 6: Thank you so much. Perhaps, Andreas, just on your initial comments about management actions in your Commercial area regarding the 1% premium growth, underlying premium growth this quarter that you're not satisfied with. Beyond the press that we have seen this quarter? In addition to that, I guess this workers' comp has been bucking your premium growth in the commercial segment for now at least three quarters. When do you expect this sort of headwind on workers' comp to clear up, and how much technical result is actually in it? Maybe a last question on premium growth while we're at it. Private lines continues to do very well. What kind of outlook do you see for private premium growth going forward? Thanks.

Speaker 2: Let me try to go through that. Starting with the Commercial area. We have the 1% you mentioned for, it's not really a segment as such, but it is an indication of what the broader based commercial book is doing on average. Obviously, there are also moving parts within that. Some parts are doing very well. Some parts are a bit more sluggish. I think the overall message we try to convey there is that on sort of a, as an ambition, we would like and we would also expect to be able to grow more than 1% given the indexation we have right now in Commercial Lines. With the management actions, I would say, I think we've had a very successful run just to state that within Commercial Lines. We've managed over the last few years and also in the last quarters, we've continuously brought down volatility and we've improved profitability. That has been successfully done by the previous management also by Lone, who's been the head of that for the last few years. I think when we now say this, we did an agreement with Lone, also a mutual agreement, this is more about saying that where we are right now, we feel that new eyes are needed maybe to succeed a bit better with the growth within the areas we want to grow profitably. I think that was the management part. The workers' compensation.

Speaker 6: Andreas, just to follow up on that management. What kind of levers can you pull to restore this growth without compromising your profitability? Do you see any pockets where there are any low hanging fruits that hasn't been picked yet, or how should we view this?

Speaker 2: Well, obviously I believe that we can do better. I don't think it's about price only within this area. It's about becoming even better at also translating the value proposition we have and the experience we have as a very experienced Danish Commercial Lines insurer with a full and sole focus on the Danish market, putting that into play and maybe it being even better to put it into play for the smaller, let's say the mid-size small companies. Not the very small, but the mid-size small companies. We also talked about that on our strategy in the CMD, which was a growth area. That's just to say, and I think there are a lot of things we can do to continuously improve that value proposition so we become even more relevant for both the customers we have and the customers we want to have. I think that's at least giving some flavor on that. Moving on to workers' compensation. When will the headwind dissipate in terms, as I heard the question, it was related to the pricing. I think it's very difficult, in honesty, to fully predict. We are in a market where with other players, and some of those players either they have a completely different view on the risk, or they have different tactics around what they're willing to do than we are. We'll have to see how it goes. I can't give you any clear indication. I think it's obviously going to be interesting to see what will happen after the Supreme Court ruling sort of gets settled in the market also as one thing. What will people do there? I can't give you any clear prediction. We'll have to see as we go along. I can just say that we will continue to demand that our business is profitable also within workers' compensation.

Speaker 6: The premiums that are leaving, do you have any view?

Speaker 2: Oh, yeah, sorry.

Speaker 6: File any claims.

Speaker 2: Especially within the large commercial segment, it is almost no technical result which is leaving with those premiums. At least, especially if you're looking at the levels we would be needing to underwrite at. That would, in some cases, become loss giving as an alternative scenario. There was premiums in private lines, Personal Lines. What to expect there? Could you just repeat it? What was the specific angle?

Speaker 6: No, you do have in your private lines, I guess you still have this funny dynamics that you still have a private second franchise which is still steaming ahead at full throttle, right?

Speaker 2: Yeah.

Speaker 6: Sort of those growth rates have, of course, been high for a while. They're still high. I guess my question is, should we expect this sort of mid-single digit to go on for also the coming year or years, so to speak?

Speaker 2: Well, at least in the market we're in right now, with the trends we're seeing and the performance we're seeing with our banking partners, we have no reason to expect that to dissipate in the coming quarters. If we go further than that, it's always a question of how does the market overall develop. I think it becomes a bit more tricky to predict. At least for now, I think I'll state that the momentum we see for now, we expect to continue for now.

Speaker 6: Okay. All right. Thanks a lot.

Speaker 1: Your next question comes from Alessia Magni with Barclays. Your line is open. Please go ahead.

Speaker 7: Hi. Morning. Thanks for taking my questions. Two from my side. One is around the workers' comp pricing. I'd like to know how do you think pricing in the business line will evolve after the ruling, and what level of price increases do you think is needed for the industry to compensate the higher claims burden? More broadly, can you talk about your expectation on pricing and volume evolution from here, either at the group level or if you could split by Personal Commercial? Thank you.

Speaker 2: Starting with workers' compensation. If we look at the Supreme Court ruling on the margin, so to say, that does impact our expected claims in an upwards direction for the same business going forward. We're still doing the analysis on how much we feel exactly is needed to mitigate for that. On an overall, I would expect the market to have the same in terms of trend viewpoint on higher premiums being needed. How much the premiums will in actuality in the market, so to say, be impacted, I think is a more difficult question to answer. For one thing, it logically depends on what the different players will do, and I just came back from answering questions where we've seen historically, recently, some players be, in my viewpoint, quite irrational about pricing. What will they do with this event remains to be seen. Honestly, I don't have a clear viewpoint. I think that's what everybody's very keen on experiencing, seeing what will happen with that. I can say that we are looking into it, and the trend, obviously all else equal, is for higher premiums given that event. More broadly, I think what we would expect to see in the coming years is that if you look at our group in total, we just talked about Personal Lines. I think for now, we see that momentum continuing. We're able to take market shares, particularly from our strong bank partnerships. That trend, I think, is what we expect for now to continue. Overall, having some base indexation of around two, and then some added market shares on top of that, 2%-3%, maybe even a bit more if we do well. But something around the levels we're seeing now. I think for Commercial Lines, since we'll have to see with workers' compensation, again, I think it's a bit difficult to predict where that will end up exactly, in sort of broad sense, I think we have no ambition. We never guide for growth. We don't have an ambition to grow just to grow. I would be very interested to see our ability to grow, especially within the segments we choose to grow, come a bit up. Something I think I would be very satisfied if we can continue in an overall commercial book growing with the market, but improving profitability, bringing down volatility, still having that discipline. Also beneath there, having some growth come in on top of the indexation within the segments we choose to grow, such as agriculture, as we have seen actually quite strong growth, and also within the general small to medium size, seeing some growth pick up there. I will be very satisfied with that.

Speaker 7: That was very clear. Thanks. One follow-up, sorry, on the first question. From your side, from what you are seeing based on your analysis and investigation, are we talking about price increases of single digit, double digit? Do you have any indication that you can share that would be helpful? Thank you.

Speaker 2: Yeah. I understand the question and the interest on this topic, we are still looking into that and arriving at our final conclusion, it is too soon for us to give that indication.

Speaker 7: Understood. Thank you.

Speaker 1: Your next question comes from the line of Carl Lofthagen with Berenberg. Your line is open. Please go ahead.

Speaker 8: Yes, hi. Thank you for taking my question. The first relates to some press speculation that your distribution partner, Sydbank, is potentially looking for a new insurance partner. I just wanted to check if there is any validity to this, if you can comment there. Then the second is just on the arbitration case with Gard. I appreciate it is very early days, but could you provide a little bit of color just on timeline for how this could take to get some clarity? Also why do you think the claims are unfounded? Any color there would be appreciated. Thank you.

Speaker 2: Let's start with distribution. I think what you are adhering to is the press coverage of our long-standing partner or partners within the now AL Sydbank Group, looking into what the best solution for the insurance partnerships will be. The only thing I can say there is that we're very happy with the partnerships we have with all the banks in the AL Sydbank Group. They've been long-standing with Sydbank and also with Vestjysk, and we had a very successful recent onboarding of Arbejdernes Landsbank. We feel we have a strong position on this in the Danish market, and we are obviously participating in that process with Sydbank. I think any questions to that process or where they see how that or timeline or other considerations, I think I'll have to refer to Sydbank on that, AL Sydbank. The second question was around the Gard arbitration. I'll try to give some sort of clarity on how the timeline is. For now we have this arbitration which was initiated by Gard. I think as we've talked about, the process will basically be a process where we get. They will send a reply, then we will send a reply to that, and then there'll be some interactions. The final clarity, as I understand, could be somewhere around on the other side of summer break next year in 2027. I can't give any guarantees for that. That's sort of what I hear could be a realistic timeline. Just to give an update on what's happened. What just happened is that we got the first sort of, I think it's actually the second. We got a new reply from Gard we just received, and we simply haven't had time to go through that. We got it here in the weekend, so we haven't had time to form an opinion on that. We're going through that now, and we'll be looking through to it. I think the realistic, as I said, process forward will be there'll be a couple of more interactions on that, and then we'll see how it goes in the end.

Speaker 8: Okay. Thank you. Very clear.

Speaker 1: We have another question from Mathias Nielsen with Nordea. Your line is open. Please go ahead.

Speaker 3: Thanks a lot. Sorry for follow-up questions on the details and maybe a bit nerdy one, but on the underlying claims rate of improvement, when you said 100 basis points, just to make sure that we're on the same line. Is that the discounted or undiscounted one? Given the one-off thing that you had in Q4 last year, I think that actually matters a bit on the discounting in the Commercial Lines. Maybe if you could just clarify which one we are talking.

Speaker 2: I'm talking on an undiscounted basis.

Speaker 3: Okay, good. Perfect. Thought that was clear.

Speaker 1: Okay. There are no further questions at this time. I will now turn the call back to Andreas Ruben Madsen for closing remarks.

Speaker 2: Thank you. Well, I have nothing really to add at this point, thanks a lot all of you for calling in, I hope you all have a great summer.

Speaker 1: That concludes today's call. Thank you for attending. You may now disconnect.