Good morning, everyone, and welcome to today's conference call titled Alm. Brand Interim Report for the second quarter of 2023. My name is Ellen, and I'll be the call operator for today. At the end of today's presentation, there'll be an opportunity to ask a question. If you would like to ask a question at that time, please press star followed by 1 on your telephone keypad to join the question queue. If at any point your question has been answered or you change your mind and would like to revoke your question, please press star followed by 2 on your telephone keypad. If you should require operator assistance at any point, please press star followed by 0. I would now like to turn the call over to Rasmus Werner Nielsen to begin. Rasmus, please go ahead whenever you are ready.
Good morning, and welcome to Alm. Brand Group's second quarter conference call. I'm, as usual, here today with our CFO, Andreas Madsen, and our IR team with Mads Tinggaard and Mikael Larsen. Without further, I will go straight to the highlights presented on slide two. For the first time ever, we made an insurance result of more than DKK 500,000,000 . I'm, of course, excited about this and about how our business has developed and improved during the second quarter, as we also continue to make steady progress on the integration of Codan. This is indeed a very strong result, and it represents the sum of many contributions made across our organization as we continue to move forward. We have continued to implement pricing initiatives and changes to our exposure to further optimize our business portfolio, and in this quarter, we have seen visible improvements.
In general, the claims ratio has developed satisfactory, including here in relatively low large claims and weather-related claims. This quarter, Commercial lines have had a very good quarter, and surely this is an important driver for the overall group result. We are also making the necessary progress on the synergies. Actually, we are a little bit ahead of the plan, and the cost that we take out make a direct positive impact on our net profits. Bottom line, we had a lot of positives adding to the strong performance this quarter. Now I turn to slide 3 with our financial highlights. Insurance revenue totaled DKK 2,900 ,000,000 in the quarter, reflecting both an exit of some business within Energy in order to reshape our overall risk exposure and an expected softening on growth in Personal lines.
Insurance service result amounted to DKK 507 ,000,000 , i.e, up against DKK 378 ,000,000 we made last year, and the investment income was a small plus of DKK 90 ,000,000 against a huge loss last year. When we compare the earning numbers this quarter with last year, we see a very positive progression. This is particularly important in terms of laying the stepping stones towards the realization of our financial targets for 2025. I think it's fair to say that the increased guidance, published early July, also embrace our optimism about the state of our business. Now let's continue on slide five. On the graph on the right side of the slide, we have chosen to compare the DKK 507 ,000,000 with the pro forma number, i.e, including quotas also for the full second quarter of 2022.
Thus, the base is DKK 399 ,000,000 . Similar to the previous quarters, we have also this quarter, some tailwind due to high interest rates. However, the steep improvement this quarter is primarily driven by a very strong development in commercial lines. We have successfully implemented a number of initiatives in connection with renewals, including both premium increases and changes to exposure, and it has, in the short term, produced the desired result. The development in the insurance service results reflects an overall satisfactory claims experience, including a continued positive effect on the claims provision from a higher interest rates, as well as a positive contribution from continued cost savings. Combined ratio for the group improved a healthy 170 basis points to 82.6.
A continued focus on profitability is seen to bear fruit, especially in Commercial lines, including Energy, that is gradually turning into a more robust business with strong underlying performance, thus enabling it to absorb the quarterly fluctuation in claims that this kind of business inevitable will face. Personal lines made a lower result compared to last year. Some of this is due to lower runoff gains, but also due to an increase in the underlying claims ratio. There's a special observation to make here. The number of auto accidents in Denmark has been on the climb and is now above pre-Corona levels. Official data shows that this is a general trend towards a higher frequency of car accidents, partly explainable by more traffic and more congestion on the roads, which leads to more accidents, i.e., different from the 1-off situation with icy roads in Q1.
Obviously, we have been monitoring this, and since the majority of this is assessed as permanent, initiatives will be initiated to improve, improve profitability. Now please turn to slide 6. Insurance revenue grew by 4.2% in personal lines and 2.3% in commercial lines. Growth softened, as expected, after a number of quarters with very high growth. In line, in line with previous quarters, sales through the partnerships and in particular, in particular, contributed to a positive development. On the other hand, a significant reduction in the premium volume have been implemented in energy based on select-selective exits to ensure the right balance between price and our risk appetite....
in line with the expectation, the annual indexation of the premium levels supplemented by selected premium increases are seen to gradually compensate for inflation in claims repair costs, and we expect that it will be fully compensated by the inflation by the end of the year. Now please turn to slide 7 for an overview of insurance service expenses. The development in claims expenses reflects a quarter with an overall positive development in minor claims and a more or less unchanged level of major claims and weather-related claims. It should be noted that included in the total is, as previously communicated, higher cost for reinsurance following capacity restraints in the reinsurance market at the beginning of the year. Insurance operating expenses are lower, reflected our continued efforts to streamline and further improve efficiency throughout the organization.
Part of this improvement, improvement is of course, directly linked to the realized synergies. Moving on to slide 8 and the claims ratio. The claims ratio for the group was a satisfactory 64.5, i.e., down 110 basis points relative to last year. However, even better was the development in the underlying ratio, combined ratio with a reduction of 220 basis points to 60.1. In the table on the right side of the slide, we have adjusted for the discounting of the claims provisions and the marginal positive effect from the change in our threshold for large claims. We then get to a like for like improvement of the undiscounted underlying claims ratio of 70 basis point.
I think this is a strong number, as we have thus been able to generate enough positive effects to trump the headwinds that we also had in this quarter. Now, please turn to slide 9. The combined ratio in Personal lines was, was 87.7, i.e., up 3.5 percentage points against the pro forma number driven by higher claims. On the general note, this quarter, Personal lines had, had a higher claims ratio, primarily to the higher frequency of motor claims, but also due to lower runoff gains compared to last year. As already mentioned, we will take appropriate measures to safeguard and improve profitability. On the positive side, we were able to make a substantial reduction of the expense ratio of 320 basis points year-to-year against the pro forma number, to 20.6%.
Including in this is, of course, the effect of the synergy initiatives implemented throughout the last quarters, and although I'm happy about the development, we do acknowledge that further actions will be needed. Please turn to slide 10 and the Commercial lines. The Combined ratio in Commercial lines was a very satisfactory 78.5, i.e., hitting a low point against previous quarters, driven by favorable claims experience, and also the expense ratio remains at a satisfactory level. However, the high jump of this quarter is the quota on part of Commercial lines, including a strong performance in industry, following the implementation of a series of measures to improve profitability. On a separate note, it should be highlighted that Energy, again, this quarter, had a very strong profitability with a Combined ratio of 66.5.
Not forgetting the tailwind from higher interest rates, that reduces the amount of long tail provisions , long tail provisions supports the numbers this quarter. However, as we move into the next quarters, this effect will be smaller. With these comments, I will now hand over the word to Andreas, who will walk us through the synergies, investments, and the guidance.
Thank you, Rasmus. Please turn to slide 12. We continue to push forward on our various synergy initiatives, and we are successfully getting the economic results that we have planned for. This quarter, we've realized DKK 62 ,000,000 on top of the DKK 57 ,000,000 in Q1. Thus, the half year total is now DKK 119 ,000,000 . Further, as we progress on this, we are gradually getting a more firm grip on the timing of the synergies from each initiative. Consequently, we are now in a position that enables us to slightly increase the amount of synergies that we expect to realize for the full year. Thus, we've increased the expectation from DKK 240 ,000,000 - DKK 260 ,000,000 , based on some of the synergies coming through faster, especially from fraud detection, as well as optimization of our claims processes.
This means that the expected run rate going into next year is up by DKK 25 ,000,000 - DKK 345 ,000,000 , thus providing us with a solid starting point towards the DKK 450 ,000,000 of synergies we will harvest next year. Now I move to slide 13, and a short comment on the investment results. We made a net investment result of DKK 19 ,000,000 , and with a positive contribution from the free portfolio and a small negative result from the hedge portfolio. You should consider this as being within the expected fluctuations that the hedging portfolios can give across the individual quarters, meaning this time a little negative and hopefully a bit positive in the quarters to come. Now finally, please turn to slide 15 for the outlook for 2023.
We in early July, we increased our guidance for the year to an insurance service result, excluding runoffs for the remaining quarters, to DKK 1,300 ,000,000 -1,450 ,000,000 , against our previous guidance of DKK 1,200 ,000,000 -1,400 ,000,000 . The expectation is based on continued growth in the group's insurance revenue across the various customer segments, supported by the annual indexation of premium level and individual premium adjustments. The cost ratio is expected to be in the range of 18%-18.5%, and the combined ratio is expected to be in the range of 87.5%-88.5%. We, we reiterate our guidance for an investment result of around DKK 300 ,000,000 , based on, based and for other activities, we guide a deficit of around DKK 125,000 ,000,000 .
Consequently, the group profits, excluding special costs, are expected to be DKK 1,525 ,000,000 -DKK 1,625 ,000,000 before tax. In addition, we guide for special costs in the range DKK 300 ,000,000 -DKK 350 ,000,000 for the integration of Codan and the realization of synergies. Lastly, depreciation on intangible assets is expected to affect the income statement by approximately DKK 360 ,000,000 . With this, I conclude my presentation and hand over the word to our moderator. Thank you.
Thank you. We will now enter our Q&A session. As a reminder, if you would like to ask a question, please press star followed by 1 on your telephone keypad to join the question queue. When preparing to ask your question, please ensure that your device is unmuted locally. Our first question comes from Jakob Brink from Nordea. Jakob, your line is now open. Please go ahead.
Thanks a lot. Congratulations on the strong Q2. If I can actually start on Q3. There has been a lot of, especially media, articles around the weather so far in Q3. Could you maybe put a few words on that? Is, is it as bad as it sometimes seems, or is it, is it, is it not? Then also continuing on Q3, I think you mentioned, and I asked, that you were potentially hoping for a bit better match portfolio, hedge portfolio in the second half of the year. I think so far this quarter, we've seen quite a, a, a reduction in the market spread, which is typically positive. Is, is that what you were alluding to or, or not? That's the first questions.
Yeah. Hi, Jakob. I will start with the first one at least. It has been quite a busy time throughout the summer with all the different things, the Storm Hans, hailstorm in Italy, and all the fire in Greece. You are right, it is, it is a little bit more vocal than it actually is in our accounts. It is a lot of smaller accidents, but, but in terms of, of the financial situation, it is nothing we cannot go for. It will not change anything in our guidance at all. But it, it has been busy, so we are doing our utmost to help our, our customers. In some of these instances, it's been really bad, especially in, in Italy.
I guess that is exactly why we are here as an insurance company. It also, you can look into the future, and this will just means that all the work we are doing with the prevention, we'll just continue and work with. Some of the things we are doing in the Danish media is also actually prevention. It comes out to a lot of our customers and a lot of people in Denmark, and I think the more vocal we are around this, the better prevention is. Of course, it has the backside of the coin is that it will take a lot of cost, but naturally is not that costly for us at all, the July incidents.
Okay, I think, then I can answer your question, Jacob, regarding the Q3 expectations for the match portfolio. I think, you should be careful to, to, to sort of read too much into my statement here. I think what I was primarily alluding to is the fact that, that a DKK 20 ,000,000 loss in a quarter is, is, practically a 0 result on, on the, let's say, DKK 17,000 ,000,000 -DKK 18,000 ,000,000 we have of, of, provisions in the match portfolio. There wasn't, as such, any, any, any, any more meaning in that. That being said, we now, we, we, we state the DKK 300 ,000,000 , and, and that, that, that holds still also with the developments we've seen until now.
Okay. Okay, thanks. Then on capital, if I may, getting closer to year-end, you have a quite strong solvency ratio, I think almost 15 percentage points better than consensus. I know, of course, you have still the, the extraordinary expenses to, to the Codan integration that will go off, but even adjusting for this, getting down to around 170% solvency ratio, I, I, I think I estimate around DKK 700 ,000,000 excess capital, and your dividend policy is only 80%. Could you be any more specific about your plans after, after New Year?
Hi, hi, Jakob, Mads from IR here. I think, I mean, you are, you are right that we are actually having a better better capital consensus, I guess, both compared to consensus and perhaps also what we would expect at the start of the year. We have seen some some improvements in our capital requirement linked to handling of of market risk in Codan. We also had some, I mean, some data modeling in our total risk modeling setup, where we are including more data and thus actually reducing the variance in our our frequencies used there. So we actually get a bit of, I mean, a reduction in the capital requirement.
Then, of course, we also have the very strong Q2 rolling into to the numbers. You are, you are right that we are, our current position is, is, perhaps having an excess element. I would say DKK 200 ,000,000 -DKK 300 ,000,000 is probably more how we look at it, compared to your DKK 700 ,000,000 .
DKK 200 ,000,000 -DKK 300 ,000,000 . I mean, if you take adjusted consensus profit or even roughly your own guidance for this year, that 20% would almost be DKK 250 ,000,000 . I guess we can agree that DKK 209 is higher than your target, so?
I mean, we have to, of course, allow, allow for a dividend to be paid if we talk about excess capital as well. We have to remove that as well as the around 15% of 15% in the bank for remaining integration costs. When we remove the, I mean, the expected dividend alongside our policy, and also the, I mean, the element that we keep for integration costs, I think you get to a lower number than DKK 700 ,000,000 .
Let's just say DKK 200 ,000,000 -DKK 300 ,000,000 then. Is that, is that a 2024 payout thing, or is it later?
I think I would hand that over to Andreas.
Yeah, maybe a quick comment also on that. Yes, I think reiterating also what Mads is saying, I think the, some of the, the, the tailwind we have this quarter is from a lower SCR, given, as Mads says, from model updates, and to some extent also from, from, lower market risk, to name another factor. I think we'll see how it, how it ends up. It's a bit hard to consider that as fully structural, yet I would say SCR can fluctuate, let's say, around these DKK 100 ,000,000 or so. That's, that's, that's, that's easily DKK 200 ,000,000 in, in surplus capital with, with the, with the aim we have. I think we shouldn't read too much into that right now.
Regarding timing, I think for now, we, we, we still have, as we've discussed before, our, our main aim is to, to within the payout, policy we have to, to hopefully ensure a continuous increase, steady increase in our dividends. That being said, we're also looking into possibilities, around a possible, share, repurchase, but we have no news, regarding timing on that yet.
Okay. Thanks for that. Last question from my side. The Codan and Privatsikring underlying claims ratio, if I look at that in your Excel sheet, is still up quite a bit year-on-year, even without adjusting for discounting. Could you just remind me what is going on there?
Yeah. I think Jakob, it alludes very much. You can say the numbers are maybe slightly slightly worse than we see in the other brands, in the Alm. Brand. That being said, the main factor we see for this quarter is the higher frequency on auto, which we see as at least to a large extent it being structural. We have more cars on the roads, there's more congestion. I also maybe want to take the opportunity to reiterate that that being said, the things that we saw in Q1 were still on top of that trend.
That, that was due to one-offs, and especially the combination of, of weather and icy roads, in, in the quarter. Below that, we still see a worsening of frequency, and, and we are looking into to handling that so we, so we ensure, getting back to a better track on, on profitability within personal lines in general.
Okay. Very clear. Thanks a lot.
Thank you. Our next question comes from Asbjørn Mørk from Danske Bank. Asbjørn, your line is now open. Please go ahead.
Thank you. Good morning from my side. A couple of questions, if I may, on your, on the Energy segment, and the very strong Q2, and obviously also the very strong Q1. Just wondering, basically, you, you've made profit in the first half of this year that is close to your 25 target. Just how do you see that stochastical element, in what we're seeing right now? How much is luck? How much is structural changes? Maybe if you could give us the data for how the Energy segment performed in Q2 last year, so just we have a comparison, that would be very helpful. Thank you.
I can start a bit, Asbjørn. Normally we don't talk about luck here, but we have seen a little bit lower level of large claims in the Energy segment, but it also, and I'm actually quite happy about that, that we now see some of all the hard work of pruning the business in the Energy part. We're getting rid of some, not, very profitable customers, but also increasing prices, serious increase of prices in other areas, and that is, to some extent, what we see now. We all know that large business can unfortunately cater for large claims. That's why we're here. There can definitely be a quarter with a large claim, and that we need to cater for in the long run.
I think for now we are very happy with seeing into a business that is getting more and more pruned, but also having an organization that now fully understands where it is that management wants to take this. It's also taking a little bit of time to change that culture, but I think we are really getting there now.
Yes, if I may add also on your question on, I mean, on Q2 last year, we were at 67.2. I think normally Q2 is a quite good quarter in the energy segment, and normally, we, I mean, we would expect a bit of tilt of major claims towards Q4. Perhaps there is also a bit of seasonality in the very strong result. I think one thing we would like to note is that it's actually only, it's only including 1% in one-off gains. It is very much driven by lower underlying claims as well as lower major claims.
Yeah, quite strong quarter in that sense, it will probably not stay at this very low level. We do, I mean, we do see a picture of 2023 having a very, having very difficult times, not showing a path towards our target for 2025 of a combined ratio of 83.
If I just may follow up on that. The 70 basis point improvement, Q2 versus Q2 on your Energy segment on combined ratio, so what would be the underlying improvement in that period? You mentioned lower runoff gains this quarter.
Yeah, actually, I mean, when we, we sort out, the underlying improvements, we have, actually a double-digit improvement. Our change of, of thresholds, for major claims are also playing into that. In, in that sense, it's, I, I would say actually the improvement perhaps is, well in line with the initiatives, the effect of the initiatives we have, we have undertaken. It's a more of a small-- I mean, structurally, it's more of a, a smaller, steady progress, in the, in the development in, in Energy. That is, what we see, perhaps improving the, I mean, the structural combined ratio with 3, 4 percentage points.
Okay, fair enough. Well, we can take it bilaterally afterwards. Okay, if I may then on your private segment, and the 200 basis, 60 basis point deterioration in your underlying claims ratio. You mentioned motor frequencies, you also mentioned profitability initiatives. We have seen, I guess, similar trends for some of your peers. Could you maybe just a little bit of flavor on what do you expect sort of to be the net impact from this, considering that there is also increased competition in motor, that seems to be still a teaser product, to learn customers. You are growing in the private segment, want to take market share.
Just to comment on what, where do you see the 260 basis points deterioration land after we profitability measures?
Yeah, Andreas here. I think the, we, we are aiming firmly for that, to, sort of to, to catch that gap. We need to, to fill it up fully, going forward. To be realistic, this is not something that's going to go away in a single quarter or two quarters. It will take some time with this type of shift for, for, for the initiatives we put into place to be fully, in the book. I mean, realistically, we would expect some headwind from this, in, in the coming quarters, and probably, let's say, around a full year before we are fully there. The aim is to get fully there. In terms of the initiatives, we're looking into a wide array of, of, of options.
As you, as you adhere to here, I think, you're very right. We need to be smart about it. No, there's no question that, that, motor is a very important, sort of, product for many customers, in that segment. So we're not looking, with a very sort of, we're looking at it broader than just, in regards of motor in terms of initiatives. For personal lines, we need to get, fully there, and, and get, get that gap back, because this is something, as we adhere to in, in the report also, that we see this as a structural thing that has hit the market in general, and, and, and we need to, to catch up with that.
Okay, fair enough. On, on reinsurance, you mentioned that it has a 1% adverse impact on your underlying claims ratio year-over-year. Any comments on, because you also mentioned in the beginning of the year that the repricing should, should mitigate quite a bit of that. I guess we are looking into something that could become quite a big increase to reinsurance prices also going into next year, considering what has happened in the market the last couple of quarters. Maybe an update with you on both reinsurance prices going into next year and, and how much you can mitigate and where you expect to be mitigating?
Yeah. If we start with going into next year, I think it's too early to say how that will end up, both in terms of the general market and in terms of the Alm. Brand Group program. I, I do not, at least personally, yet have a firm expectation that we should see either significant price increases or decreases. I think that is simply too soon to say. It was a very big catch up we saw last years, with reinsurance having the upper hand. I think the dynamics are very hard to predict, so we'll have to see.
On top of that, there are initiatives within our program also where we at least remain optimistic that we may be able to further leverage the opportunity we have as a group to better structure and better, sort of, get better prices relative to the risk coverage within our current program. We are looking into every opportunity in the toolbox to see if we can get to a better place. I think it's simply too soon to say how it's going to end up for next year. We have taken a firm hold on trying to catch up with the 1 percentage point of loss ratio deterioration we already have in the books.
Maybe hard to say exactly where we'll end up for next year on that, but I, I feel that we are, let's say at least I would expect that over half the, the deterioration we will be able to catch up on. We are seeing in a general sense that a lot of the, the, the lines which are heavy on reinsurance are also the lines where we are able to put through quite handsome price increases and still retain the customers. We're seeing-- so, so we remain at least quite optimistic for that.
Okay, thanks for that. Final question from my side would be just to follow up on the first question on the weather claims for Q3. The hailstorms and the general storms that we've seen. You mentioned that was not spectacular relative to your weather claims budget for Q3, which is also what I have on my numbers. I was just wondering if there's anything else than the hailstorm in Italy and obviously the Storm Hans in Denmark, anything that has gone a little bit under the radar, we should be aware of weather claims in Q3 to date?
No, it's more or less what you can read in the papers. We are quite accurate about the number of accidents. It is around 1,000 on the Storm Hans and around 300-400 on the hailstorm in Italy, and almost nothing in terms of Greece fire. That is it. Yeah, if you take that all and put it together, we are well below the expectations for a normal quarter. We don't change anything in our expectations.
All right. That was all from my side. Thanks a lot.
Thank you. Our next question comes from Jan Erik Gjerland from ABG. Jan, your line is now open. Please go ahead when you're ready.
Thank you for taking my questions as well. I just want to return to this retention levels in the private side versus your price increases. How is that actually going here? You are increasing quite sharply in, in your other business areas and, or, or the distribution. So how should we read your own Alm. Brand and core brand versus the Gjensidige when it comes to retention, after you sort of try to hike the prices for private? That's my first question.
Yeah. I'll try to answer that. In general, as we see that we do have, we do have better retentions levels with the partnerships, also with our banking partners. So to answer the first part of the question regarding to where we stand relatively, we do see a better retention continuously in the especially Privatsikring and the Sydbank, our other major partner. And that is also what we've seen historically. So that fact remains. And I can say that retention is still on the absolute top list of our priorities within both our business in general, but especially within personal lines.
I think it's fair to say that there is there is competition out there, especially, especially in personal lines. We also see that especially the larger players are becoming increasingly good at actually so to say, rescuing customers once you, you, you try to get them over. We do have factors we need to handle, as do our competitors, and we need to keep becoming even better at that going forward. Obviously, price increases are not in an isolated way, good for retention. We realize that. Also, that's also why I said before that we are not looking to, to just mechanically hammer on prices for, for motor. We, we try to do it in a more intelligent way so that we still can remain competitive, both in terms of our sales and our retention.
This is within the sort of core of what makes the balance difficult within insurance business.
Okay. Understand that you work hard for our brand and core brand. When it comes to the smaller, or the reduction in the smaller claims, which you mentioned, versus the sort of more, unchanged levels for, for weather and the larger claims, how should we read that? Is that sort of a frequency potential that you, you see, or is it so that the change in the, the smaller claims level is just sort of stochastic as well as large claims? How should we read that into the, the way ahead, so to speak?
I think, in general, I think what we are mostly seeing is an improvement on the group level in the relative factor between the frequency and cost to small claims and the premiums. We are, we are seeing an improvement in the group underlying loss ratios driven by that, but that is driven, as we've mentioned by, on the positive side, our strong improvement in commercial lines, a lot about better risk, risk, risk mix, and higher rates, especially for the large corporates and the energy segment, and an improvement in that business. Then on the other hand, we do see, as we just talked to, talking to before, also being the largest single product line we have in personal lines and in the group as such, we do see the other trends.
We do see higher frequency there and larger, small claims. It's a bit of a mixed picture.
Is the change in terms and conditions as important factor to sort of take away smaller claims levels? Or, or is that something we should not think about happen this time around?
... No, I think, definitely we look into the full array of options here. We're not only looking to, to prices, which is, which could be one option, at least, selectively. We're also looking to different chains in terms and conditions, looking into market dynamics. Basically, we're not ruling anything out, in, in the toolbox.
Okay. When it comes to the Alm. Brand and the sort of the Energy part of Codan, and the volatility here, how should we think about the Alm. Brand industrial or Commercial lines versus the Energy business in Codan here? Is it so that we have seen this quarter's quite big changes to, to the claims levels in both brands, or is it more mainly in the Codan brand we have seen this sort of improved trends on the claim side?
Hi, hi, Jan Erik. It's, it's Mads here. I mean, when we look at Alm. Brand, we don't really have any, any industrial clients in, in the old business. It's in-- They're all coming from, from Codan. Then we have, we have Energy, and we have another, another area that is not that well known, externally, but it's called resolution, where we have, large clients that are not related to the Energy, segment. Actually, what we are seeing in this quarter is that we have made, we have made a lot of changes in, in Energy, and we also have a, a, a good quarter, so to say.
We have implemented rate plans in the resolution part of our business, where we have significantly raised premiums for the same risk, and that is, of course, going down to the technical result. I would say when we look at our corporate business overall, we are seeing large, a good help from the Energy segment, but we are also seeing improvements in resolution, the other industrial clients, and that is a structural improvement that we will expect to continue in the next quarter.
Perfect. That makes sense. Just one final from my side then. The reinsurance, sort of retention levels when it comes to weather, for this, this weather. Did I recall that you said DKK 1,000, Rasmus, on, on the, on the weather in, in the Nordics, as well as DKK 300-400 in, in Italy? How much will then sort of be your retention level from the Hans versus the retention levels on the Italian hail? Thank you.
Yeah, sorry, I had a bit, a bit of a cough here. I'm not sure I, I understand the question fully, but we do have, apologies, the same retention level across all types of weather-related events for the group. The one maybe, let's see. The, the only difference from that being that Energy business is within its own program, and that's an all-risk program also covering weather events for that. Apart from that, our retention is the same across the different events. Just to be clear, what Rasmus said, that I think I can, I can say safely that these events are nowhere near the retention levels we have in our reinsurance program.
Okay, thank you.
Thank you. Our next question comes from Martin Birk from SEB. Martin, please go ahead. Your line is now open.
Hey, thank you so much. Just one question on my side. I guess when you send out the profit upgrade on the 6th of July, you probably did not know the technical result of 507, which is a lot better than what we consensus had expected. Given your comments on Q3, that we are still below normalized weather, I assume that you are basically on, well, on the right trajectory, especially in terms of your guidance, and I'm sort of wondering why another upgrade today wouldn't have been, or why you guys did not upgrade again today?
Yeah, Andreas here. Thank you, Martin. I think, well, I understand, I understand where you're coming from. I think, just to mention something, we did, we did hike the, the, the, the lower part of our interval, by DKK 150 ,000,000 . That being said, it's true that if you, if you take out our runoffs of around DKK 65, we, we probably don't see the full effect of, of the overperformance in the Q2. We have some factors here I'd like to, to take the opportunity to talk through. There is one factor, especially, which is to, which is related to our reinsurance.
As you may recall, we've had we successfully got an Aggregate frequency coverage across property for risk and weather-related claims for the Alm. Brand Group. In the program, we had it in Alm. Brand particularly historically, but we also got that in place for this year. Now we've had a very good first half year with quite low frequencies of both major claims and weather-related claims. The consequence of that is that the likelihood of any coverage on that program is lower and is quite low at the point in time we have now after we got the June in the numbers also.
That effect is roughly around DKK 50 ,000,000 reduction, if you compare to what we would consider an average year when we start out a year with, with no claims on the books yet. That is, that is one effect. I would say, also key, if you look at our weather-related claims, we, we do come out with only 0.4. I think if you take account to the seasonality, that is probably, let's say only around 1 percentage point or so better than, than what you would normally expect in a Q2. Not, not maybe so, so not the full improvement you would expect considering an average quarter, because Q2 is typically a bit better.
That's also a factor there you should keep in mind. With large claims, I would also say, and this is not something we, we, we factor in very mechanically, but Mads also mentioned that we do see a tendency for some cyclicality in especially the Energy business. Maybe I could factor that into. So that, thereby meaning that I would expect all else equal, that Q4, especially, typically is a bit tougher on large claims. You have a lot of the crews coming in in the wintertime, claims that haven't been reported for some time. So there's sort of a mechanics there, and, and, at least that, that's also something that we, that we factor in to some extent.
And then I would say, in general, we, we, we, we, we wish to remain sort of on a prudent and conservative path here, and that's also maybe what we should read into it.
Okay. All right. Thank you so much. Much appreciated.
Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. We'll pause for just a moment to compile any remaining questions. Okay, there are no further questions, so I'll now hand back to Rasmus for any closing remarks.
Yeah. Thank you, everybody, for joining this call. I hope you will have a nice day. Bye.
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