Hello, and welcome to the Alm. Brand Interim Report first quarter of 2020. For the first part of this call, all participants will be in a listen only mode, and afterwards there will be a question and answer session. Today, I'm pleased to present Lars Holm. Please begin.
Yes. Thank you, good morning, everyone. Thank you for taking the time to join us at this call on Alm. Brand's results for the first quarter of 2020. As said, my name is Lars Holm, and I'm heading the Investor Relations department at Alm. Brand. With me today I have CEO Rasmus Werner Nielsen and Senior IR Officer Mikael Bo Larsen. As usual, we're going to take some time to highlight the results for this quarter. After this, we're going to hand over the phone to you so we can have a Q&A session. With this, I hand over the microphone to you, Rasmus.
Thank you, Lars, and good morning, everybody. This morning we announced a set of results in line with our expectations. As such, we are pleased with the development in all our business areas. It's been a quarter with a busy agenda, and we have made progress in adjusting to the new setup that we introduced end of January. It's also been a quarter with challenges and changes to our operations as Denmark has been partially locked down from mid-March. I'm proud to say that our organization have met the challenges in a positive way, and that Alm. Brand has successfully serviced our customers in a time when they needed us the most. Please turn to slide two.
The first quarter of the year was satisfactory, and although group profit amounted only to DKK 33 million, the underlying development in each of the three business areas were in line with our expectations. Despite all the turmoil in the quarter, the majority of our business was stable and in accordance with our forecast. Denmark was partially locked down on March 11th, which triggered a number of effects on our business. All in all, this only had a little direct effect on underlying earnings in the quarter. However, our business is not shielded from the effects of COVID-19. Both the turmoil on the financial markets and the effect on the credit ratings in the loan portfolio have hit our earnings, most as seen in the investment result in the securities portfolio in the non-life insurance.
On the internal agenda, focus has also been on a gradual implementation of the strategic initiatives announced late January, and we are making steady progress on this with the ultimate goal of creating a more customer-centric platform. Overall guidance for the full year is unchanged compared to the updated announcement on March 19th. We are now able to provide a little extra detail on how we see earnings develop in each of the business areas. With all the turbulence in both macroeconomics and business environments, I would like to stress again that our business is operating in a relatively stable setting. We are not unaffected, but the major part of our operation is pretty resilient to what is happening right now. I'm confident we're committed to our plan to reach our ambitious financial targets by the end of 2022. Please turn to slide three.
On this slide, I have summarized and quantified how we see the implications from COVID-19 in each of our three business areas. Non-life has seen changes in the insurance claims after the lockdown of Denmark. Travel restrictions were put in place and activity in general has been reduced. Consequently, we witnessed a large increase in travel insurance claims, and when comparing before and after March 11th, then the number of claims more than doubled. Almost everything else went down. Claims on motor insurance, on commercial accident, on private accident and so on, all went down. In total, the number of daily claims after the lockdown was down at an estimated 12% compared to the first part of March before the lockdown.
In total, the net effect on earnings for the quarter has been very much partly because of a higher average cost per accident on some of the insurance categories. The investment portfolio in non-life has taken a hit of approximately DKK 100 million in the quarter, a combination of losses on equities and bonds. In the life business, the financial markets, of course, also affected the investment results. The investment portfolio consists primarily of bonds, and the equity exposure is relatively [far]. Thus, the impact on the policyholders' investments has been relatively low, and the bonus rate, although down 3.3 percentage points, is still at a high level. Banking is affected in various areas. Trading income, investment return, and write-downs on loans are all directly hit by the situation.
Although underlying business is not affected to any large degree, these areas have a negative impact of around DKK 45 million in the quarter. When adding it all together, we get to a total negative impact in the quarter of around DKK 150 million, with the biggest single driver being the development on equity and credit bond prices. As you know, April has seen a positive development with a number of key markets regaining more than 50% of the loss. Now please turn to slide five. The non-life business made a pre-tax profit of DKK 25 million in the first quarter of the year.
The technical result amounted to DKK 131 million, and the combined ratio was 90.4%, with underlying performance in line with our expectations. In total, major claims and weather-related claims was in line with what we have witnessed the previous quarters, but not as low as in Q1 2019. As mentioned, the lockdown of Denmark had an impact on the number of claims, but not enough to translate into a real positive effect on the bottom line in the quarter. Please turn to next slide. Premium income grew by 3.7%, and as you see in the graph shown on the right side of the slide illustrated by the dark bars, this is a very good number compared to previous quarters. Our premium income is split between private and commercial customers almost 50/50.
Especially for the private customers, we have successfully increased premium income, although we continue to see a fierce competition. A lot of efforts is put into shaping our products so that they better support individual and personalized advice to our customers. This has been well received. Further, we have made some price adjustment to specific parts of the portfolio where claims have been high compared to the premiums, with the aim of ensuring that the price reflects the risk. This is an ongoing process. We will need to adapt to any softness in the market due to general changes in the economy, not at least due to COVID-19. Thus, you should not expect the same positive development in the coming quarters. Please turn to slide seven. The claims ratio, excluding runoff gains, was 74.7% against 69.3% in Q1 2019.
Although higher, we must remember that the 2019 number was exceptionally low. The expense rate was 70.6%, as the effects from the cost savings program has started to kick in. All in all, this leads to a combined ratio excluding runoff gains of 92.3%, which is in line with our expectations. The runoff results amounted to a gain of DKK 26 million, which corresponds to almost 2 percentage points against 2.8 percentage points in the first quarter of 2019. On this, we have seen positive results from building, accident, and motor insurance, but continued negative impact from the workers' compensation insurance. Unfortunately, we continue to experience a higher number of cases from the workers' compensation insurance at a higher than expected claim, which are the reason for the small negative runoff again in Q1. We are obviously not satisfied with this development and will take measures to fix this.
The combined ratio, including runoff gains, amounted to 90.4. Please turn to slide eight. Weather-related claims amounted to DKK 54 million or 4 percentage points and assessed within normal range. Somewhat higher at the very low level of only DKK 29 million back in Q1 2019. Although snow has been absent this year, then we have had a very wet and windy February which has cost somewhat. Major claims amounted to DKK 51 million or 3.8 percentage points, and thus at a low level. Again, not as low as seen back in Q1 2019, when the claims were only DKK 31 million. In total, the major weather-related claims amounted to DKK 105 million, against only DKK 16 million in the first quarter of 2019.
Compared to the previous quarters, this is a number pretty much in the middle of the range of what we have seen. We are pleased with that level. Please turn to slide nine. The combined ratio for private customers remains at a satisfactory level of 87.8, i.e., flat against the first quarter of 2019. The number is, as stated in the beginning of my presentation, affected by high claims within travel insurance of around DKK 10 million, which corresponds to an increase in the claims ratio of 140 basis points. On the other hand, marginally lower claims ratio on the other insurance claims as activity and accidents has been affected by the lockdown. Runoff gains were at a healthy 4.3%. Also, the expense ratio had a positive development as the effect of the reduced overheads flows through to the numbers.
Please turn to the last slide of non-life insurance, slide 10. For the commercial customers, the claims ratio is significantly up against the first quarter of 2019. When comparing to the previous two quarters, then we actually see that the level has stabilized following a return of major weather related claims being more in line with normal, i.e., this accounts for close to half of the increase. Further, the runoff results is negative against this quarter, primarily due to the workers' compensation claims. We are addressing this by imposing the necessary price increases to ensure that pricing and risk is balanced. The expense rate is fairly unchanged and at a satisfactory level. Now please turn to the life insurance on slide 12.
Pre-tax profit for the first quarter of 2020 amounted to DKK 32 million, which is both very satisfactory and a bit better than our expectation. The result reflects a fine development in the expense and risk results, which amounted to DKK 20 million against DKK 9 million in Q1 2019, and the technical result then amounted to DKK 36 million. The result on investments allocated to equity amounted to a minus of DKK 4 million following the turmoil on the financial markets, and the return on the policyholders' investment assets was a relatively small loss on 2.3%. Consequently, the bonus rate was reduced by 3.3 percentage points to a new level of 12.9%, which in the current economic environment is still seen as a satisfactory level. Now I'll move into slide 13. Premiums totaled DKK 425 million in the quarter, and is made up by DKK 246 million in regular premiums and DKK 178 million in single premiums.
The growth in regular premiums was 5.8%, and we believe it could even have been a little higher if not for the COVID-19 impact and the lower rate on policyholder savings. Now I turn to our last segment, banking, on slide 15. Core earnings in the bank amounts to DKK 16 million in the first quarter of the year, compared to DKK 11 in the first quarter of 2019. This is a satisfactory development that affects both some of the effects from the savings program put in place back in January, and the improvement of net interest and fee income following the changes introduced at the start of the year. We have both an income effect and a cost savings effect. Included in the number is also a drop in trading income following the negative development on the financial markets.
It is still quite early to quantify the scale of impact from the COVID-19, but we have made a further write-down of DKK 30 million on our loan portfolio to reflect a worsening in the economy. On the other hand, we have also made a reversal of write-downs as some of our customers have had an improvement in their economic situation, primarily in the agricultural sector. Hence, we have more or less balanced the write-downs in the quarter. All in all, we estimate that the total amount of write-downs reflect a prudent estimate on the quality of the loan portfolio, and we are pleased that most of our customers are private household. Total investment portfolio earnings were hit by the market turmoil and came out at a loss of DKK 14 million.
In total, the quarter generated a pre-tax loss of DKK 8 million. Without the COVID-19 number, this would have been some DKK 45 million better. Now please turn to slide 16. Business volume is up 6% compared to the first quarter of 2019, flat against year-end 2019. Again, it is very early to read anything out of the numbers regarding the potential COVID-19 impact. Far, we have seen only a relatively low number of customers who have applied for additional funding due to COVID-19. We will of course be monitoring this closely over the months to come. Please turn to slide 17. The negative result in the bank translate into a negative return on equity for the quarter. Again, we see a positive development in the underlying business.
Back in February, the bank raised DKK 150 million in an unsecured six-year senior loan to cover the phase in MREL supplement. Solvency is now at a robust level at 22%, up from 20% a quarter ago. Please turn to the last slide 19. Our guidance for 2020 is still that we expect a consolidated ordinary pre-tax profit of DKK 550 million-DKK 700 million, excluding any runoff result for the rest of the year. The range that we provide for the guidance is wider than normal, as we still see uncertainty on especially how the investment results will be. As usual, we provide a guidance on each business area. For non-life, we expect pre-tax profit of DKK 500 million against the guidance given back in January of DKK 525 million. However, with the losses that we have had on the investment portfolio, profit before tax is expected to be lower.
The base assumption is still that we will achieve a combined ratio of approximately 91. For life, we expect pre-tax profits of DKK 100 million. No changes to what we have guided before. Again, just underlying that we see a lot of transparency and predictability on this one. For banking, we expect a pre-tax profit of DKK 80 million against our previous guidance of DKK 100 million. Improvement in the underlying business gives us some comfort. The net impact of COVID-19 on write-downs and return on investments makes us lower the number. Other, i.e., primarily headquarter costs will be at around DKK 60 million, reflecting no extraordinary items expected here. In total, our guidance reflects a business with all major parts moving as we would like it to, but not forgetting that the situation with COVID-19 is affecting all of us.
With this, I conclude my presentation and hand over the word to our moderator. Thank you.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. Our first question comes from the line of Esbjørn Mark from Danske Bank. Please go ahead.
Yes, good morning. Couple of questions from my side. First, on non-life, your underlying combined ratio deteriorates 140 basis points year-over-year. You mentioned in the report that discounting is largely flat. The impact is non-existing, so to speak, year-over-year. You said that COVID-19 is also very manageable, the impact on your non-life. What's actually happening here with the 140 basis points underlying deterioration? Could you give us a little bit of the flavor on that?
Yes. Good morning, Esbj ør n. Yes, of course. Of course, we have the impact of the travel insurance. We have some impact from February with the weather, where the weather also somehow hit the underlying development. We have some impact from the workers' compensation as well.
When you're adding all this up, and then you take the positive parts from lower car insurance and these things, then we see this negative impact.
I guess your travel insurance that you mentioned is one of the issues. I guess that would be offset by the motor, et cetera, meaning that is included in the largely neutral impact that you have said COVID-19 had, correct?
Yeah. It's almost neutral. It's this weather-related part from February, we actually got quite some hit also in the underlying ratio there of around DKK 10 million.
Okay. Fair enough. The travel insurance claims that you have booked in Q1, does that include people that have filed for claim for Easter but have done that in March?
No, it is like that. When you file a claim, you can say the claim only raises two days before you should have left for vacation. It doesn't do that. It is only what is filed covering travels in March. Yeah. It's the same with the summer holiday. You could also already now make a claim for the summer holiday, but we only take it into account two days before, as we don't know if the borders are open, and if they do, then we don't have to cover.
Okay. The DKK 20 million reinsurance own coverage that you have, does that cover the entire period? How does that work?
It covers the period until, I think it was until we have said until somehow end of April. What we see in the figures until now, it is not really into any gain.
If you get a lot of summer travel claims, if the borders remain closed, that will not be covered by the reinsurance?
No, they will be covered by a new reinsurance, so you need to see it in different parts.
That's also DKK 20 million?
Yes.
Okay. All right. You mentioned motor TPL, you say that the average claim is rising. Could you elaborate a bit on what is it actually that you're seeing here?
What we have seen here is small developments, but still we see less cars on the streets. When they crash, they drive a little bit faster than we have seen else, the insurance we have to pay off is a little bit bigger. It's nothing really significant, but we can see some changes in the way accidents are done, so to say.
Okay. Fair enough. If I then may turn to the bank, the DKK 30 million charge you make on COVID-19, how have you estimated this?
What we did when the crisis started, we stressed the whole portfolio we have in the bank with a low stress, middle stress, and really high stress level. Of course, we need to take into account what we have, you can say, in our provisions already. When doing all this, we ended up with saying that we need a COVID-19, you can say, reservation of around DKK 30 million.
That is related to the central bank's scenarios for the Danish economy for 2020?
Yeah, I would say more or less it is.
Okay.
I think actually it's very much in line with what you see on the bigger bank. We have a very small portfolio compared to theirs, if you add it up, it's very much in line with what we see elsewhere.
Sure. Actually a twofold question, but on the bank's operating side as well. If I take the pre-provision, including the impact from old portfolio, you're still loss-making. I know that you say that the trading was impacted negatively in Q1, let's just say that it's more or less plus or minus zero. If you look at the operations before loan losses, should we expect this to improve the next couple of quarters, or are you expecting reversals of loan losses to sort of drive you to the DKK 80 million profit for the full year?
No, I would say Yeah, sorry.
No, go ahead.
No, just continue, Espen. You had two. I was a little bit quick.
Well, yeah. It was just because your guidance, you lower your guidance by DKK 20 million for the full year. You said that the impact from the bank from COVID-19 was DKK 45 million. I guess implicitly something.
Yeah
is doing better.
Yeah. No, what we have lowered our guidance is DKK 80 million, and that is with a, you can say, a zero development on loan losses. The guidance is lowered with DKK 20, mostly due to the impact of the trading activities and the loss on the investment portfolio. The underlying business should add up to the DKK 80 million. We expect them to do that.
The DKK 80 million is assuming zero loan losses for the full year?
Yes.
Okay, fair enough. When you had the guidance of DKK 100 million before, was that then implicitly assuming reversals or was it also zero loan losses?
It was assuming zero loss.
Really the trading effect.
Yes.
Okay.
It is the trading effect. I hope you also noticed that we have increased the top line somehow.
Sure. That was, I guess, in your plans.
Yeah, exactly.
Okay, fair enough. Then on my final question on capital. Capital model, excess capital, how should we look at that?
Hi, Esbjørn. This is Lars Holm here. Are you on a group level now, or are you specifically in the bank?
On a group level.
Yeah. Well, we have basically viewed that we have sufficient capital. If you're referring to the dividend, we have said that we have postponed the decision to the autumn, whether or not we could pay out a dividend for 2019. Generally, we are very robust when it comes to capital. Does that answer your question?
Yeah, the capital model.
Okay. Yeah, but well, okay. Yeah, we don't disclose that any longer. We've changed that. Now we have a dividend policy that we're going to pay out at least 70% of our annual result, and that's still the case.
You're not going to be as loyal or whatever you want to call it to the excess capital model anymore. If there's excess capital, that will not necessarily be paid out to shareholders in the short term.
We're not ruling that out. What we are saying, at least 70% of our earnings is going to be paid out. As you remember, the intention for 2019 was actually to pay out a bit more than 70%. We actually paid out, even though we changed that along with the Q4 results. We are definitely going to be very strict when it comes to our capital management. That's not going to change. Our policy is that we now have a dividend policy instead of having this capital modeling by each quarter, basically.
Why are you not disclosing the capital model anymore?
Yeah. We changed that, so we want to have a more, shall you say, steady capital management linked to the payout ratio. You have this fluctuation in capital models that we sort of want to get out of, instead communicate on a more steady basis with a dividend route.
Okay. I guess my question is really, the general view on how you look at your capital and your requirement, that will still be the same, more or less?
Yes.
You're not going to look at the regulatory requirement or, I mean, it's going to be your own requirement.
Yeah. True.
Yeah. It's a minimum of 70%, and the last 30% is used for increase in premiums and all that.
Yeah. If that's not the case, then we're definitely going to look into how to distribute that as dividend as well.
Fair enough. That was all from my side. Thanks a lot for taking my question.
Thank you, Esbjørn.
The next question comes from the line of Per Grønborg from SEB. Please go ahead.
Yes. Thank you. First of all, not that much a question, more a question whether we can get some information. Yes, you are finally dividing in the bank, the NII and commissions out on two lines. Thanks for that. Any chance that we can get the split for 2019? Will it come in the financial figures that I can see hasn't been uploaded to your homepage yet?
Yeah, it will. Otherwise, we'll make sure. We knew that you were going to ask that, Per, so we're definitely going to send it to you. The intention is that it's going to be included in the figures on our website.
When will those figures be uploaded?
Today. Otherwise, I'm going to send it to you guys.
Perfect. Thank you. Remortgaging activity this quarter, how large was the positive impact?
It was minor. Only a couple of DKK millions in the bank.
couple of million. Perfect.
Yeah.
When I look at your P&C cost, you are targeting a 16% full year cost ratio. We saw quite limited impact of the lower cost burden in the first quarter. If you should reach that implies that your underlying run rate will be more like 15.5% for the remaining part of the year. Is that a fair assumption?
Well, Per, the 60% is our goal for 2022.
Okay. Fair enough.
Not for 2020. That's going to be a gradual decrease in the cost ratio towards 2020.
Okay.
Towards 2022.
I read that a bit too fast.
Per, just to be clear, of course, we expect the cost side is exactly in line and a little bit lower than we have in our budget. It's clearly following the path we have estimated for the year. The percentage will, of course, decline throughout the year as normal, so to say.
I guess it would be fair to assume that we will see a visible decline in the second quarter, where you have the first clean quarter after the-.
Yes
the cost-cutting program.
Yeah.
Okay.
A bit lower, yes.
Yeah. On travel insurance, you mentioned reinsurance program of DKK 20 million. Is that mentioned anywhere in the report? I don't know where that information is coming from.
Yeah. Come again, the figure. I didn't get the figure, Per.
The DKK 20 million for own account on travel insurance. I don't see that.
That's the reinsurance program. Sorry. That's the reinsurance program. Whenever they are hitting DKK 20 million, the rest will be captured by reinsurance. For this quarter, we have expenses of DKK 10 million due to travel.
You said that this is not a program that covers on event, that covers by time? Meaning, if we don't see any changes to the current lockdown, you will still have to pay for a new reinsurance program running into the summer holidays.
Yes. It is like in a first event was there mid-March when the prime minister said, "Now we close down." She expanded it by two weeks, and we said, "That is how we see it as one event." As of now, we see the next thing coming as a second event. Of course, it's up to be discussed with the reinsurance company. It's not really stated in the policy how to cope with these things.
I guess up until now, there haven't been a second event.
No
open the borders again.
Yes. Exactly.
Then people would be allowed to travel.
Yeah.
Okay. On life, I assume the very strong risk result, that is a lucky quarter. Is that fair to say?
Lucky luck. You can say in the health part, it's a little bit up and down. I would say it was up with DKK 10 million in this quarter.
That's what I'm addressing. That was basically luck this quarter.
Yeah, that's also why we don't increase the expectations for 200.
Fair enough.
Yeah.
The buffer, that still looks very strong. Can you share with us what was the trough level of your buffers when we had the trough of the market?
I think you should see in a different way. When we were in August last year when we experienced also the big depreciation share prices and all that, we took some measures, we made some, you can say, some activities within the portfolio in order to ensure that we would not see such a big decline another time. Of course, it cost a little bit on the upside, we covered more on the downside. We have not seen a real worsening in the situation. We have been around the level where we are now. From, yeah, during it has not been any worsening in the last two weeks of March around this level yet.
Okay. Interesting. On the prior year gains, you said that you will take measures to fix the losses on your one-off on your workers' compensation.
Yeah.
That seems like you will hike current year's prices, but I guess that will not remove the losses on the old years.
No.
It is simply a question of that you have basically reversed two large claims reserves previously, and now you are basically maybe even slightly under-reserved on this business line.
No. I understand your question. One, in terms of pricing, then we were just about to pull the trigger when the COVID-19 started, and then we said, "We cannot do this to our customers, increase prices right now." We have to wait a little bit until the market gets back a little bit more to normal, and then definitely we will increase prices on workers' compensation. In terms of our reservations, it was a small hit. I think this end of March when this motor insurance thing, they came back with that they had fixed more of these claims. We said, "Okay, we take them now, and we don't use what we have on the shelf," so to say, from this reservation.
We still have things, otherwise we should have made a one-off when we got into this new situation with higher claims, and we haven't done that. We are somehow well reserved there still. It goes a little bit, we need to expect that now and then it goes a little bit up, it goes a little bit down on these workers' compensations. Yeah, that's how it is.
Okay. Finally, on the payout, assuming you end up having two strong pressure from EIOPA and Danish FSA not to pay out anything for 2019, should we expect that you're basically emptying your excess capital at the AGM in 2021 as you have done historically?
Yes.
That was very clear. Thank you.
Yeah.
Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. The next question comes from the line of Martin Tegelsvik from Carnegie. Please go ahead.
Thank you. My first question goes on premium growth. You report 3.7% in the quarter. What is the targeted rate for full year 2020?
I think we don't have a special target year, internally we think about 3%. Even though we had a good start, I think it will be very tough under these circumstances to reach 3%. I will say we have made a good start of the year, and we are very happy with that.
Okay. My second question comes on with respect to reinsurance. You say DKK 20 million and assume there is still some DKK 10 million to go until you reach the DKK 20 million threshold. You can refer those claims back to the lockdown date. What if the borders are open, but there aren't any flights? Why wouldn't that go back to the same lockdown date?
Yeah, that we have to see. It's about who's sitting with the problem end of day. If I understand that if the government changes the ruling that now everything is green instead of red, then as such, we are not covering.
Okay.
Of course, it is a matter of what does the, you could say, airplane companies do at that level, and that we have to think about when we reach into that. It's a matter of what is happening within the last 48 hours before actually they have to take off to what you have to do.
Okay. Just to help me clarify here, because so let's say I book a ticket with Norwegian and Norwegian doesn't fly, but they're not able to refund me the money, then you get still covered, right?
As such? Yeah, you're right. We will cover.
Okay.
We'll have a claim on Norwegian.
Yeah. They're never going to pay that, right?
I don't know.
in any case, it could be on the book.
I don't know. I think if they exist, they have to cover. You had to have material yesterday in the European Parliament saying that the airplane companies have to cover if they want to continue to exist.
Okay. My final question on combined ratio going into Q2 in particular, where you get the full effect of the lockdown in April. What should we expect? What are the moving parts between travel, motor, accident, et cetera?
Yeah, that is a good question, Martin. I can, of course, not answer that exactly. In April, we have seen less cars on the street and all that, as you have seen yourself. There are some positive effects. The question, and the same, of course, in the investment part as well, is also positive. I would say that I'm a little bit more curious to see what is happening in May now when people are getting back to work and all that I think things will stabilize quite quickly. At least we see in tendencies it too, that it's actually only the travel things that are really down. The other ones are coming back to not a normalized level, but getting closer to a normalized level in May, I would expect.
Okay. When you by year-end 2020 report your segment business line breakdown on your different parts and your non-life insurance, and you see that there could be potential super normal profit in certain business lines, is that something that you are afraid of? Do you fear that there are going to be any sentiment for insurers to either pay back premiums or reduce 2021 premiums? How should we think about that?
No, not at the moment, Martin. Not at the moment. I think except for the travel insurance, I think we'll get back to a normalized level quite quickly. We haven't had any customers really asking for what you are talking about. I think there could be some competition and maybe also a little bit more investigations for some of the corporate companies on what they pay in premiums. As we are covering the lower part of the segment, I think it's mostly the real big companies that will have to spend the time and effort to get into this.
Okay. Just finally on following up on Per's question on the dividend. If in order to pay out the 2019 dividend later in the year, do you need a letter from EIOPA or Danish FSA? If this is stabilized, are you willing to do it without seeking any approval or seeking any indications from regulators?
No. I would say that I think we need to see how the market develops, then we will follow that. Again, as Lars said, we have the funding. I can also think, as you see in our accounts, that we have enough capital at the moment to provide a dividend. We are leaning a little bit back and then waiting what is happening in the market.
Okay. You will need a thumbs up or a positive nod from the regulator in order to go.
I'm on weekly calls with the Danish FSA, and yeah, I think if they continue, then I will discuss with them.
Okay. Excellent. That was all that I have for now.
Thank you, Martin.
We have a follow-up question from the line of Per Grønborg from SEB. Please go ahead.
Yes, directly turned it from one into being two. Just to be clear on Martin's last question, do you need to seek formal approval from the FSA on your capital planning before making an extraordinary dividend or launching a buyback?
No. The short question here is no, we don't do that.
We don't do that.
It has been a, you can say, how do you say in English?
Recommendation.
It's been a recommendation. It's not been an order.
The reason I'm asking is because the banks, they need to ask to get a formal approval. That's the difference between the banking office and the insurance office.
Exactly. Here we are discussing the group. For sure, we have stated that in 2020, the bank will not provide any dividend for 2019.
Of course not.
We will do it. We still keep the same dividend level on group level.
Yeah. Okay, perfect. Just on the travel claims, to what extent should we expect that the company clearing the card payments will be held liable? We have any experience how many have paid with a Dankort with no covers and how many have paid with international credit card, where basically you can go back to the credit card company and get the money from them instead?
No, we don't have the figures for that, Per, to be honest.
What's your guess? One-third, 25% or no clue?
To be honest, your guess is as good as ours. It's not an issue we have had to deal with. Maybe that answers your question.
On the other hand, that could be a pretty good second line of defense.
Yeah. You're right about that. Yeah.
Okay. Perfect. Thank you.
As there are no further questions, I'll hand it back to the speakers.
Okay. Thank you for listening, and thank you for all the good questions. Look forward to see you maybe later, some of you at least. Have a good day. Thank you.