Good morning, welcome to Gjensidige's 2026 Capital Markets Day. My name Mitra Hagen Negård, and I am Head of Investor Relations. Today, you will hear how we at Gjensidige are ready to unlock the next level of our operations. We will present our ambitious goals through 2028 and walk you through how our operational and strategic priorities, and our strong capabilities will enable us to deliver on them. We have six speakers today, all members of Gjensidige's group management team. We will start with our CEO, Geir Holmgren, who will present the highlights of our ambitions and how we plan to achieve them. The next presenter is Sverre Johan Rostoft, who leads our Technology and Insight division. He will discuss how our technology platform serves as a key enabler of operational excellence.
René Fløystøl, who heads our Private segment, will share how we are positioning for growth and enhanced efficiency across our Private business. We will move on to Lars Gøran Bjerklund, EVP for Commercial, who will explain how we're shaping our Commercial business for the next level. After a break, Vivi Kofoed, who leads our Claims division, will share our plans for driving the next level of Claims excellence. Our CFO, Jostein Amdal, will conclude the session by summing up our priorities to ensure that Gjensidige continues to deliver attractive returns. We will open up the floor for questions from the audience here in Oslo and those of you joining us virtually. I will now turn it over to our CEO, Geir Holmgren.
Welcome, everyone, thank you for joining us here today. Over the last two years, we set out to strengthen the foundations of our business and position Gjensidige for the next level. Today, I show you how our focus on operational excellence and discipline, capital, efficient, and profitable growth is delivering, and how we will raise the bar again. You see that the work we began at our previous Capital Markets Day to deliver superior customer experience and attractive returns, has moved from promise to practice, and it sets a strong base for what's come next. Over the period, we delivered strong and profitable growth, supported by advanced analytics, improved value propositions, and disciplined pricing. We also enhanced operational efficiency, unlocking synergies across the geographies while keeping a tight grip on costs. Our resilience improved as we advanced our technology platform and broadened our analytics capabilities.
Finally, we maintained capital discipline, actively managing solvency and shareholder distributions while funding our strategy. We continue to manage the business in line with these thresholds as we build towards our 2026 ambition. Our execution is strong, the levers are working, and we are set up to keep compounding improvements from here. Like the industry, we've seen higher claims frequency and elevated repair costs, particularly in motor and property for private in Norway. Our response has been targeted pricing and product measures, granular, data-driven, and sequenced to protect customer value. Frequency increased from 2023 - 2025 in motor. Property is inherently volatile. In addition, the absurd inflation has been high the last three years. We acted early and continuously, and we are tracking the impact cohort by cohort.
We succeeded in putting through significant and necessary price increases, which in turn gradually improved margins and led to our strong delivery. What we are very pleased with is that despite these necessary measures, retention remains high, underscoring the strength of our offering and the quality of customer relationships. A key reason behind our strong progress is how we have leveraged scale and technology, accelerated digitalization, simplified our processes, strengthened core operations, and improved data analytics. These fundamentals are embedded in how we run the business and are reflected in the outcomes we deliver, including significant same, claim savings across Norway and Denmark, and a substantial improvement in distribution efficiency in private, and at the same time, maintaining strong customer loyalty. Cross-border collaboration also plays an important role.
Our Norway-Denmark integration demonstrates how shared solutions and aligned execution can reinforce the gains, driven by our broader operational improvements. By streamlining end-to-end operations and systematically sharing proven practices across markets, we ensure that effective processes, models, and solutions scale quickly. Many of these improvements translate well into Sweden, too, where adopting shared Nordic standards, tools, and ways of working is already strengthening performance. These effects are structural and compounding. This is how we improve efficiency and reinvest in growth while protecting margins. Integration is not a one-off project, it's a capability. It strengthens execution today and expands our optionality for tomorrow. As we look ahead, there are some structural trends that will shape the development of the Nordic non-life insurance market, in addition to the ongoing geopolitical uncertainty. First, demographic change. An aging population and shrinking workforce will continue to drive higher demand for personal, health, and pension-related solutions.
Second, technology and artificial intelligence are reshaping industry rapidly, introducing both business risk and opportunities. Our technological capabilities are already delivering lasting improvements in cost efficiency, risk management, and customer experience, and we expect their impact to accelerate over time. We are proactively adapting our business strategy, distribution model, and operations to take advantage of future technological changes. Third, climate change. Increasing climate-related volatility makes pricing power, data-driven models, and effective loss prevention measures more important than ever. We are already seeing these trends influence market dynamics today, but their impact will become even more pronounced over the medium term. You can see it is well positioned to benefit from this shift, with strong capabilities, a solid market position, and a business model aligned with the direction of the industry change.
The Nordics, the Nordics are our home markets, and they remain one of the most attractive insurance markets in Europe. The region combines consistently high profitability, rational competition, and a structurally cost-efficient operating environment, supported by one of the most digitalized societies and fully integrated insurance value chains. Customers here expect seamless digital interactions, which allows us to run highly efficient processes across pricing, distribution, and claims, strengthening both customer experience and margins. Nordic customers show high loyalty to established providers. Local brands carry significant weight, and trust is a key currency. Retention rates remain high, meaning growth is driven primarily through brand recognition and brand strength, and partnerships, long-standing customer relationships, and distribution capacity. High customer loyalty integrated with digital ecosystems and well-established distribution partnerships create a very high thresholds for new entrants.
When we look at Gjensidige today, we stand on a very strong foundation, one that positions us exceptionally well for the future. First, our presence across the Nordics and across customer segments gives us a unique advantage. Our presence across the commercial and retail segments gives us scale, stability, and deep customer insights. Second, our ability to offer integrated customer journeys across pension, life, health, and general insurance is a real differentiator. It allows us to meet customer needs more holistically, increase relevance in their daily lives, and unlock meaningful cross-selling opportunities. Third, Gjensidige is one of the strongest and most trusted brands in our markets, supported by consistently high customer loyalty. This trust accelerates acquisition, strengthen retention, and reinforces our long-term position. Fourth, we are running a highly advanced data-driven business. Our high-quality data and modern processes give us competitive edge.
We are already applying advanced AI in pricing, risk assessment, distribution, and claims handling, and we see clear efficiency and accuracy gains. Vivi will discuss how our efficient claims handling will be further strengthened in her presentation. In addition, we are proactively adapting our business strategy to take advantage of future technological changes. This capability is central to being future ready. Fifth, sustainability is another important area. We have climate robust risk models and a strong focus on damage prevention. This not only protects our customers and reduces claims, it also ensures our business remains resilient in a changing climate. Finally, our capital position remains very solid, which gives us financial flexibility to invest where it matters, strengthening our core, accelerating innovation, and exploring new growth opportunities. Looking ahead, we will continue to explore both organic and inorganic opportunities within our geographic footprint.
Always with a focus on value enhancing and firmly within general insurance. Our strong position and disciplined approach give us flexibility to pursue opportunities that further strengthen our competitive advantage and long-term value creation. I'd like to point out three prioritized strategic areas, which are customer empathy, resilience, and profitable growth. Let me start with customer empathy. We are moving toward more personalized and relevant dialogue across the customer journey, making interaction timely and meaningful for our customers. An increased focus on damage prevention allows us to help customer avoid losses in the first place, reducing complexity, strengthening trust, and building confidence over time. Our next priority is resilience. It starts with safeguarding customers in uncertain times. Resilience is about being a stable and reliable partner. Resilience is about absorbing shocks. We do it without compromising trust, performance, or long-term value creation.
We are sharpening our technological resilience by continuing to improve underwriting precision, strengthening risk models, and ensuring our systems can withstand volatility from climate, inflation, repair complexity, and shifting customer behavior. High level of trust and a loyal customer base give an advantage when adapting business strategy and operating model to AI and the technological development. A solid solvency position remains a core strength in uncertain time with higher geopolitical tension. Our resilience is further supported by the competence and culture across the organization. Teams with strong expertise, disciplined execution, and a shared sense of accountability. Our third priority is long-term profitable growth. We will build on our market leading position in Norway to capture emerging growth opportunities. A well-functioning distribution model, supported by an integrated system landscape, give us a strong platform to scale.
We are also well positioned for growth in broader product areas, particularly within the home insurance, pension, health, and other offerings shaped by evolving customer needs. In Denmark, we are fully leverage our strong broker position by strengthening our own distribution. In addition, the new core IT system in Denmark enhances our ability to scale, innovate, and compete effectively. To deliver on our strategy, we rely on two core capabilities that are both powerful and difficult to replicate: our people and our technology. Johan will walk you through how our technology platform underpins this, built on structural, lean, and proven foundation that enables value today and creates even greater potential for the future. When we combine this strength with a strong brand, efficient operation, and a clear market position, we build competitive edge that drives margin and growth and is hard to match.
Sustainable solutions are essential for long-term value creation, both for us as a company and for the society we serve. On the slide here, you'll see several of the targets we set to guide our work. We are signatory of the Science-Based Targets initiative, and we continue to align our efforts with the Paris Agreement. This means we are committed to setting science-based targets that will define our pathway toward achieving this net zero emissions from our investment portfolio by 2050. Our contribution to sustainability goes beyond emissions. A core part of what we do is helping prevent damage in the first place, and when the damage does occur, we focus on sustainable claims handling, for example, through circle repair models, reuse programs, and preferred green suppliers.
This not only reduces environmental impact, but also supports better outcomes for our customers. Given the significant size of our investment portfolio, our investment decisions play a key role in reducing greenhouse gas emissions. We have recognized that capital allocation is one of the most powerful levers we have, and we take that responsibility serious. Let's now turn to our new financial targets. Our financial targets for 2026 remain unchanged. We are committed to delivering a combined ratio below 82%, a cost ratio around 13%, and a return on equity above 24%. A solvency ratio between 140 and 190%, and an insurance service result of more than NOK 7.5 billion, and more than DKK 750 million in Denmark.
We are executing against these goals with confidence, and we are already shaping a clear trajectory to create attractive returns beyond that horizon. Looking ahead to 2027 and 2028, in that period, we will aim to deliver a combined ratio below 81%, a cost ratio around 12%, and a return on equity above 28%. In 2028, our target is to deliver an insurance service result above NOK 10 billion. Our solvency ratio target will remain within the range of 140%-190%. This trajectory rests on three core drivers. First, we are leveraging our scale by pursuing profitable growth, by expanding in areas where we see attractive opportunities, building on strong customer insight and a clear data advantage. Second, we are completing the integration agenda and fully exploiting shared platforms to unlock structural efficiency.
Third, we are strengthening our leadership in core processes through claims excellence, deeper analytics, further digitalization, and enhanced customer journeys. Together, these drivers put us in a position to set even higher targets for the years ahead. You will hear more about this throughout today's presentations. Starting with mobility, our priority is to preserve the strong position we already hold and continue to build on it. We benefit from an extensive and well-established partner network that gives us reach and resilience. Our presence in the toll ecosystem through Flyt is becoming increasingly valuable, both as a source of high-quality leads and to create more frequent and more meaningful customer touchpoints.
REDGO gives us a strong on-the-ground presence. Because it is integrated in our claims processes, it enables efficient handling and consistently strong customer experience at competitive cost. Looking ahead, the rise of autonomous driving technologies will reshape customer expectations, risk profiles, and partnerships across the motor value chain. Our strong ecosystem position puts us in a good place to adapt early, capture new growth opportunities, and ensure we continue to meet customer needs as mobility becomes more automated. Turning to property, our focus is on broadening the offering we in ways that strengthen loyalty and drive cross-sales. As René will highlight, in housing, we operate the most complete value chain in the industry and holding a leading position in change of ownership insurance and damage prevention, giving us a defensible advantage in a market that is essential and growing.
For commercial customers, Lars Gøran will show how we are developing new concepts tailored to specific needs and industry dynamics. In life, health, and pension, we operate in a growing market, and our ambition is to strengthen our unique position even further. Pension plays a particular important role, both as a cost and a capital-efficient growth area, and as a key lever to broaden and reinforce our overall customer offerings. Building an attractive and scalable partner network will also be essential as we continue to expand in this space. Across all product verticals, we will increase our capacity and market activity level through higher distribution capacity and efficiency. I will hand the word over to Johan, who will discuss the priorities to further enhance our technology platform and show how this will contribute to delivering on our group ambitions going forward. Thank you.
Thank you, Geir. I'm Johan Rostoft, Head of Technology and Insight. It's good to see you all. I'm excited to be covering how technology is a strategic enabler of operational excellence in Gjensidige. As Geir highlighted, Gjensidige has set clear and ambitious goals. Technology is key to achieving these ambitions. As we translate the business goals into technology objectives, a set of outcomes emerge. We need to enable further distribution efficiency improvements, strengthen pricing and underwriting precision, capture new growth opportunities, last but not least, we need to maintain our cost leadership. This requires razor-sharp prioritization of investments into a simpler IT infrastructure platform that leverages shared and reusable data and AI capabilities. Before I outline our priorities going forward, let's look at the solid technical base these ambitions will be built on.
For many years, Gjensidige has had a strong technology foundation, and we continue to strengthen it. First, cost efficiency is built into the design. Shared platforms from cloud infrastructure to developer tooling and security, reduce duplication and increase developer productivity. Combined with strict application portfolio management, this ensures technology spend remains disciplined and tightly aligned with business value. This is reflected in Gjensidige's low cost ratio and competitive IT spend concentration. Second, automation already delivers significant impact. Automated claims processing has reached 67%, reducing manual handling and cycle time. Usage of the customer app, which leads the fields in terms of user ratings, has doubled over the last three years. Automation done right delivers both lower costs and improved customer experience for Gjensidige. Third, we have a solid foundation for machine learning and AI models in place.
Hundreds of production models support sales prediction, risk selection, fraud, and claims, providing a repeatable engine for higher conversion and underwriting accuracy. Developers also benefit from shared tools and platforms, resulting in a doubling of deploy frequency over the last three years. Let me share one example to illustrate the power of the model cluster we use for sales prediction and best offer generation. When Gjensidige bought Flyt, the road toll company that Guide also mentioned, and which has about half of Norwegian car owners as customers, we initiated cross-selling based on providing leads. Every month, we closed a material, but not very large number of new insurance sales on those leads. We established an automatic connection between the stream of leads and our CRM model cluster. Within a matter of months, we increased the run rate of sales by more than 10 x, generating significant value for Gjensidige.
Our Nordic organization governance model and joint prioritization process ensure value-driven decisions and capital allocation across segments and markets. Here I have to highlight the incredible talent pool of our employees. Employee engagement is well within the top quartile of technology companies, and this strong base makes it easier to attract and retain key talent. This gives us a strong foundation as we enter the next strategy period. Looking ahead, we will continue to deliver value. Our ambition going forward is not about large new IT projects, but rather about prioritizing what matters most to the business, creating impact for customers in a highly efficient way. This brings us to 3 strategic priorities towards 2028: simplifying our IT foundation, amplifying our data advantage, and accelerating automation and AI.
I will now go deeper into each and explain how they link to the business requirements. Number one, simplify our IT foundation. Simplification means fewer systems, shared platforms, and a more flexible technology stack, thereby reducing complexity and positioning us for future technology shifts. Today, I will focus on a key initiative within this area, core system consolidation. I'm starting with Denmark. We have now launched a new core system. It is the EDITH platform. In parallel, we have continued to consolidate all the core systems, and in the last 2 years, we have completed migration of 3 legacy systems into EDITH. The EDITH core system is live following a phased rollout designed to minimize risk and ensure continuity and robust operations as we progress towards a single core in Denmark. Lars will address how EDITH unlocks new opportunities for our business in Denmark.
In Norway, we were able to integrate the product and sales systems acquired in the Buysure transaction within a matter of months. Our extensive experience in consolidating core systems is a key capability, and we are enhancing our migration approach with AI capabilities to even further accelerate future migrations and future consolidations. Controlling technical debt by consolidating core systems is paramount to maintaining lean IT operations. The reduction of EDITH's book value that many of you might have questions about is not related to Denmark. In Norway, our core system remains one of the most stable and cost-efficient platforms in the industry. When we made a decision about EDITH as a group-wide system, we assumed a relatively short remaining life for our mainframe platform. Today, our experience and even external analysts now increasingly support the opposite view.
Continuous modernization beats a full mainframe exit on risk, cost, and business impact. In our planning, we look to modernize the system in Norway and rather move smaller system components out of the mainframe environment to a modern cloud infrastructure. The effect is that the value of the code we have built in Denmark is reduced for application in Norway and Sweden, but this method gives us more time and more optionality. We have one critical capability that is important here. We have strong in-house technical excellence and deep system knowledge. Together with experts from our partners, this lowers execution risks and gives us full control over how we evolve the core. Overall, this more modular approach reduces the need for large, extensive core replacement programs, while it maintains the high performance and evolving platform that the business has come to appreciate. Data is our second strategic priority.
Data is the backbone of personalization, efficiency, and AI impact. The goal is simple: the right data at the right time for every decision and customer interaction. We have built a group-wide data platform that provides a single data interface. After moving billions of data points, the platform is now live and operational, offering faster access to consistent, high-quality data and supporting stronger governance, model performance, and efficient data product development. Real-time data streaming allows us to react as customer signals occur across every touch point, decision, and model. This enables a more responsive AI and hyper-personalized journeys. René will dive into how Private utilizes this to unlock next generation distribution efficiency. New ways of working, self-service data products, APIs, and integrations supported by automated governance ensures resilience while giving teams the autonomy to move faster.
This shift in ways of working means the business can adapt faster to changing needs, build and launch without bottlenecks, and connect more easily to new partners. Vivi will highlight some exciting applications within claims. This data foundation allows us to deliver on clear business needs, supporting real-time personalization, faster time to market, lower cost to serve, and stronger model performance. Now to our third strategic priority, let me first set the stage. Gjensidige has invested in automation and machine learning for many years, giving us a strong starting position as AI enters a new phase with generative capabilities and agent-based workflows. Our ambition is clear: We want to be market leading when it comes to realizing value from AI. This means embedding AI into key processes, ensuring robust AI infrastructure, building competence, and strict prioritization of value-creating cases. To win, you need to have data.
In other words, you need your information to be digital. Then, there needs to be technology platforms on which you can run and orchestrate models, and then you need to develop and deploy models and agents at scale. Gjensidige is well positioned to succeed. Over the last decade, we have invested heavily in optimizing and automating our processes. We continue to expand digital coverage across customer journeys, channels, and modalities, enabled by voice, image, and text capabilities. This allows us to automate more interactions, increase straight-through processing, and reduce manual effort. A clear example is claims, where 86% of claims in Norway are now reported digitally, and straight-through processing levels continue to rise. It has also impacted fraud detection, and we will address this also later today.
Our CRM engine, which I described earlier, is of course, built on and continuously enhanced by AI and machine learning capabilities. More than 200 models in production constantly benefit from more data and better operating infrastructure. We are not limiting AI development to a few specific cases. Our group-wide initiative to build competence and support uptake helped increase internal adoption of GenAI by more than 70% in 6 months. More and more employees understand the potential, experience the benefits of this new technology. They see how it can provide value to their workdays. This means we are not only building technology, we are building the organizational capacity to apply it at scale. Going forward, we will continue to leverage our digital leadership to transition to an AI-driven operating model across more core business processes. I'd like to share a few examples.
Within pricing, more than 2,000 models generate the current tariff universe that we have today. The new pricing architecture that we are building will enable faster integration of new signals. Each of these 2,000 models will be provided by 5-10x the number of direct data points, thereby improving precision significantly. Also, in underwriting, the way we are exposing AI capabilities to the business opens new, exciting opportunities, and Lars will share more on this shortly. AI is accelerating how we build and ship software. Deploy frequency has more than doubled over the past years, as we scale low-code and agent-based platforms. This lets team develop and deploy models faster and with more consistency. To sum up, this is about scale and speed.
AI is already improving precision in pricing, underwriting, software delivery, and so on. We are set up to extend those gains across more of the core business processes. The foundation in place reduces duplication and allows new capabilities to be rolled out across the group, constantly translating innovation into measurable business impact. The priorities I have outlined today set a clear direction for what we want to achieve by 2028. They also set the stage for a strong technology foundation that we can rely on the years beyond. Towards 2028, our focus is on scaling real-time data, automation, and AI across the value chain, pursuing value creation opportunities, and ensuring we maintain our structural cost advantage.
With a lean core, shared platform, and a unified data foundation, we are positioned for the next phase with the ability to respond faster, innovate at lower marginal cost, and support the business with higher accuracy and resilience. By delivering on these priorities, we build momentum for technology-driven value creation and growth beyond 2028. Okay, as I started out saying, technology is a key enabler of operational excellence, and our technology priorities are carefully designed to deliver business impact. We will enable further distribution efficiency improvements, strengthen pricing and underwriting precision, new growth opportunities, and all of this while maintaining our cost leadership. Now I look forward to hearing how the business side will translate this into value creation. René, over to you.
Thank you, Johan. My name is René Fløystøl, and I'm responsible for Gjensidige's private segment in Denmark and Norway. We are focused on positioning private for further growth and higher efficiency. Our strong market position and momentum give us a good base to capture more profitable growth. To make that happen, we are strengthening customer relationships, so we keep the customers we have and attract new ones. We are improving operations, becoming more efficient, raising quality, and increasing our distribution power. Before we dive in, let's take a quick look at the results achieved since the last Capital Markets Day. Over the past years, our strong distribution power and pricing discipline have driven high revenue growth. Combined with our strong focus on efficiency, this has delivered solid profitability, and there is still room for further improvement as we continue to strengthen operations.
In Denmark, we have clearly seen the benefits of utilizing best practices across markets. We have generated strong revenue growth and achieved higher results, supported by pricing discipline, improved operations, and targeted cost efficiency measures. While we're encouraged by this progress, profitability still needs to be strengthened, which is a key focus throughout my presentation today. Behind our strong results lies a robust development of our key operational targets. Since 2023, our distribution efficiency has increased by 31%, well above our target and more than a year ahead of schedule. This improvement has mainly been driven by our market-leading pricing capabilities, better use of data and CRM technology, and new partnerships, such as the real estate agents through the acquisition of BuySure.
Our customer retention rate in Norway has stayed stable at around 90%, which is a very strong result given the significant and necessary price increases. In Denmark, we have had a positive development driven by best practice sharing from Norway and technical improvements, especially our new core system. Customer satisfaction has been a challenge across the industry, and our scores reflect the broader market situation. This gives us a good upside potential as we continue improving both customer experience and operational delivery. Let us look into our focus on capturing growth opportunities. Our growth agenda is anchored in our three core product verticals. They represent our entry point for new customers and future cross-selling opportunities. Within mobility, we already have a strong position in Norway as the market leader for insurance for both new and second-hand cars.
Our ambition is to maintain that position and capture at least our share of market growth. This is supported by our combined offerings across insurance, tolling, and roadside assistance. As an example, our ownership in Flyt gives us, in total, access to over 50% of Norwegian car owners. For property, our ambition is to drive volume growth and expand our market reach. We continue to build on our strong momentum by upselling to existing customers, scaling new offerings, building loyalty, and at the same time, preventing damage. Life and health is a smaller part of our current portfolio, but it's a growing market with attractive long-term potential. Going forward, we will strengthen our positioning by leveraging our strong brand, existing capabilities, and the solid platform we have built within mobility and property. Lars will address this in some more detail.
To drive growth, we are utilizing opportunities within ongoing market dynamics. First, new ecosystems are emerging, creating opportunities to broaden reach through new markets and partners. Second, AI-driven agents are reshaping the customer journey. AI-driven tools, bots, and automated solutions enable far more efficient customer dialogue. Lastly, customer expectations are evolving. People increasingly expect personalized, seamless, and high-quality digital experiences. By capitalizing on a strong brand, existing capabilities, and efficient operating model, we are well positioned to capture these growth opportunities. We will do this by focusing on two priorities: deepening customer relationships and enhancing our operation through new technology, which will give us both increased distribution power and next level efficiency. We operate in an industry with naturally few customer interactions. As new ecosystems and AI-driven solutions emerge, we see new opportunities to remain top of mind and secure customer attention.
One of our strategic priorities is to strengthen and differentiate our value proposition, to retain existing customers and attract new ones. To achieve this, we work systematically to meet customers' needs throughout the entire customer journey. We seek to be more proactive and solve more of our customers' problems. This means strengthening our presence in high engagement moments when attention and value potential are the highest. In the usage phase, we are complementing traditional insurance with value-adding and damage-preventing services. This approach strengthens our customer relationships and is the best way forward to secure profitable growth, because this will give us a differentiated value proposition. In other words, we will deliver more value than our competitors, and we will be present at the most relevant moments in the customer journey, making sure we increase both frequency and relevance towards our customers.
Finally, we will get lower customer acquisition cost because we are developing products and services customers are willing to pay for on a standalone basis. Let me show you how we apply this approach in mobility and property journeys. We have a proven track record with our approach in mobility. Here, we have strong presence across the customer journey, offering relevant services to both customers and partners. For example, to be present in both the transaction and the usage phase, we have established the Bilista app for our toll tag customers. It offers services such as car repair, booking, and gives us a strong platform for sales and upselling. This is performing even better than we expected. Building further on our presence in the usage phase, we also provide roadside assistance through REDGO.
This strengthens the customer and partnership experience at a critical moment and helps reduce claims cost. Our strong existing position means we're well prepared for the changes reshaping the auto industry. As technology, data, and new ecosystems transform mobility, including the gradual introduction of autonomous vehicles, our broad presence across the customer journey ensures we remain relevant and capture value as the market evolves. Building on what we have achieved in mobility, we are now applying the same customer-centric and insight-driven model to the property journey. The key reason for investing in the home and property insurance market is the importance of our home insurance customers. They are among the most valuable in our portfolio and represents Gjensidige's core customer base. In Norway, these customers hold 3x more policies, pay 3x higher premiums, and stay 50% longer than the average customer.
In Denmark, we see the same pattern: twice the product holdings, 2.5 x the premiums, and 40% longer tenure. This reflects both the strength of our offering and our focus on homeowners. Three selected examples show how we create business value by delivering direct and relevant services in the property market. First, our strong position in the change of ownership insurance market provides safety during an important life event. Through strong partnerships and strategic initiatives, we have access to around 35% of all property transactions in both Denmark and Norway. Second, by offering home insurance combined with smart alarm technology, we go beyond traditional insurance. In just nine months, 15% of all property insurance sales in Norway include smart insurance products installed in Norwegians' homes. This is driving loyalty and helping to prevent damage. Lastly, we have launched a new service called Hei Huset.
This gives customers real-time insights and proactive alerts that help them avoid costly damage. Let's take a closer look at how the change of ownership market gives us access to attractive growth opportunities within the property segment. The change of ownership market is sizable in both countries, with around 100,000 annual property transactions in Norway and about 85,000 in Denmark. This makes the change of ownership insurance a sizable opportunity, roughly NOK 2.5 billion in Norway and DKK 1 billion in Denmark in local currencies. This is a valuable position for us. Property transactions are critical decision points with high relevance and low switching barriers. That makes them a natural moment to also distribute home and content insurance. This gives us a strong opportunity to win new customers and build long-term loyalty. Let me show you another property example by highlighting our new service, Hei Huset.
It's built on AI technology, and this concept has the potential to drive both future growth and reduce claims cost. This service gives you the opportunity to talk to your house. It will, for example, give you relevant damage prevention advice at the relevant time. Hei Huset will use both external and Gjensidige-specific data to be relevant for the customer. Let us have a quick look at what Hei Huset looks like today.
Introducing a new AI service from Gjensidige, HusSmart. Homeownership made easier. We combine the customer's property information, real-time public and proprietary data, and more than 200 years of Gjensidige know-how. Severe weather approaching? We enable customers to act quickly and prevent damage through timely and personalized alerts with recommended actions. A customer needs guidance? All they have to do is ask. HusSmart provides instant answers and tailored advice to help them understand, prioritize next steps, and act, enabling us to better know our customers and meet their needs as homeowners. HusSmart, a unique service offering that leads to fewer claims, increased loyalty, and a whole new way to engage with our customers. It supports them in making smart decisions on maintenance and damage control for their most valuable of assets. Increased value for us and a better experience for them, a win-win.
Next level efficiency and distribution power is our second main focus area. We will continue developing one of our greatest strengths, delivering efficiency and quality through all customer touchpoints. As customer expectations rise and AI-driven solutions reshape how we interact with customers. New technology enables us to take the customer experience, our efficiency, and distribution power to the next level. We have proven that our in-house, data-driven, omni-channel model delivers strong efficiency gains. To raise the bar even further, we will maintain and build on our ongoing improvement efforts. We will continue to optimize channels and activities based on analytical approaches and data-driven insights. In addition, we see that technology creates new opportunities. This includes leveraging AI to enable next generation customer service and introducing next level CRM through hyper-personalization.
As we have different starting points across our markets, our short-term focus in Denmark is to optimize the existing distribution model and apply best practices from Norway. In Norway, we are further in exploring advanced AI solutions that will later be rolled out in Denmark. We expect these improvements to drive stronger top line growth through better customer experiences and improved distribution efficiency. We have already made solid progress in both countries. We are ready to improve it further. Let's take a look at how we are leveraging new technology. Based on AI, we can manage inbound traffic more efficiently. By handling inquiries at first contact, we can avoid rerouting. High-frequency tasks can be fully handled by bots faster and more correctly than by an advisor. The remaining human touch points can be handled faster, with improved quality and better customer experience.
The expected impact is significant, with potential for around 50% of interactions fully automated, around 15% increase in first contact resolution, and a 10% uplift in sales on inbound traffic. Next, let's look at how we create value by using hyper-personalization to take CRM to the next level. By building on our already advanced data analytics platform, we see an even greater potential through more sophisticated data orchestration. By analyzing real-time data, we can identify and reach up to 40% more potential prospects. With generative AI, we can approach these prospects with more tailored communication, making sure we communicate the right content, in the right channel, at the right time, enabling us to personalize all our customer campaigns. By providing customers with content that is relevant and useful, we expect to increase engagement and lift hit rates by 50%.
Going forward, we have set new ambitions for 2028, aiming to increase distribution efficiency by another 20% across both countries, maintaining our high retention and satisfaction in Norway, increase loyalty to 86% and satisfaction to 70% in Denmark. These ambitions reflect our commitment to build on what we are already good at, create stronger relationships, and sustainable value for Gjensidige and our customers. By keeping a strong focus on our priorities, we expect to capture profitable growth in the years ahead. We are coming out of a period where the priority has been to build an efficient and robust core, capitalizing on synergies and best practices across markets. With a stronger foundation, we are now in a position to drive growth through deeper customer relationships and technology-driven efficiency improvements.
The momentum we are building today gives us the ability to capture growth at an even greater scale beyond 2028. As I close, I want to briefly reconnect to where I started. Our goal is to position Private for continued growth and higher efficiency. We have a solid base to build from, and the work I've presented today, strengthening customer relationships and improving how we operate, is exactly what will help us capture that growth going forward. Now, I will hand the word over to Lars.
Thank you, René, good morning, everybody. My name is Lars Gøran Bjerklund, and I'm head of Commercial in Denmark and Norway, and I also head of our Swedish operations as well. I also oversee our pension distribution in Norway. Today, I'm going to focus first and foremost on our commercial business in Denmark and Norway. We have clear ambitions. In Norway, we are a market leader, and this position is intent to strengthen and to strengthen going forward through a relentless focus on customer experience and operational excellence. In Denmark, we aim to expand our position especially in the SME segment, leveraging on our market insight and expertise. The demand for life, health, and pension continues to rise, we have the required expertise and setup to capture this growth.
Our ambitions support a solid, profitable growth moving forward. Today, I'm going to share our 2028 operational targets and the actions behind them. First, starting with a quick look at the financial developments since 2023. Our continuous work to improve and optimize has resulted in a solid revenue growth and an improvement in the underlying frequency loss ratio in both Denmark and Norway. The combined ratio in Denmark reflects a very low large losses in 2023, versus a more normalized level in 2025, and costs related to preparing for EDITH. Commercial has delivered solid results, with a NOK 4.8 billion insurance service result in 2025. In 2023, we set ambitious operational KPIs. Looking at our performance so far, customer retention in Norway has remained very strong and above our target.
Customer retention in Denmark is somewhat below target, primarily driven by portfolio pruning. The inflow of small companies is volatile, and we are currently below the goal we set in 2023, but with the targeted initiatives in motion, I'm confident that we will reach our 2026 ambition. Finally, we are delivering on the ambition for net customer growth in Denmark. Summing up, we are on track to deliver on the KPIs, except retention in Denmark. What's next? We operate across Norway and Denmark, serving customers of all sizes in preferred industries. Deeper industry and risk expertise enable us to maintain and further develop a healthy and well-diversified portfolio. For larger customers, we have a selective approach, offering tailored solutions when risk is in line with our appetite. This approach has proven effective over time and will remain central also going forward.
I will start giving you an insight in our ambitions, and then move on to how we will deliver on them. In Norway, the number one market position is built on strong fundamentals and a well-diversified portfolio. It is realized through a combination of a strong own, the distribution and solid broker relations. Our priority is to retain customers, enhance portfolio quality, and increase distribution power to selectively pursue growth opportunities. Within this, small businesses stand out as an attractive segment due to profitability and receptiveness to digital solutions. They are also an entry point to the next generation of businesses. In Denmark, we are currently number four, with a portfolio shaped by past acquisitions. This has given us a tilt towards certain segments and industries, and our focus is profitable growth with SMEs as a key target.
Further portfolio diversification to better reflect the Danish commercial market, and to strengthen the distribution power. Our long-standing broker relationships remains key, especially in the short term. In the medium term, our new core system will enable us to build in-house, omni-channel distribution capabilities for the future. The ongoing migration to EDITH is a major transformation and an investment that will position us for a robust, scalable setup and superior customer interaction. In the product dimension, we address the continued strong market growth within life, health, and pension. The business landscape in Norway and Denmark is steadily shifting from traditional industries to more service and knowledge-based sectors, and this trend continues.
At the same time, the pressure on public healthcare systems across the Nordics is rising. This fuels a strong demand for employer-founded life, health, and pension solutions. Over time, it will drive demand for new solutions and more integrated offerings. For insurers, this means risk profiles are changing. We used to mainly insure physical assets. Now, we are increasingly insuring people. We have the necessary experience, insight, and the product suite needed to participate in this shift. As a result, we are well-positioned to capture growth within life and health across all segments. Beyond 28, we expect a shift, where life and health products will represent a relatively larger share of our portfolio....Let's look at pension and its strategic role in our offerings to Norwegian SMEs.
We provide this segment with a full life, health, and pension package that strengthens loyalty and delivers value. We hold a number 4 position in the defined contribution market, and the pension business delivers solid profitability. The market is set for strong long-term growth. We are well-positioned to capture our share. We aim to grow in the SME segment by offering a comprehensive, differentiating life, health, and pension package. We will achieve this by leveraging our efficient distribution model for cross-selling, seamless self-service solutions, more individualized customer experiences, and effective use of AI. Let's move on to how we will realize our ambitions. We stay focused on the fundamental drivers for long-term value. Our priorities are summarized as analytical and powered core. These 4 areas cover all aspects of our operations.
We always aim to go to the next level when it comes to customer experience, operational excellence, having a responsible value proposition, and our employees. Let me now show you examples of how we are developing within each of these areas. Starting with customer experiences. Insurance may not be top of mind for most business managers, but it is a critical part of a risk management and employee compensation, and we are committed to making the customer journey as seamless and effortless as possible. Over the past two decades, we have moved from manual advisor-driven processes to more data-driven journeys with self-service solutions. Advanced data management and modeling allow us to deliver the right message through the optimal channel at the right time, tailored to each customer. Now we are stepping up to the next level.
In Norway, we're moving beyond the traditional and annual activity cycle and introducing a continuous customer journey. This means less focus on the annual renewal and more automated ongoing customer updates. The result is a more dynamic and relevant experience. We ensure that being a customer of Gjensidige requires as little effort from the customer as possible. In Denmark, we are building awareness and trust in Gjensidige. Every positive customer interaction contributes. With Edith, we have a game changer that will significantly improve customer experiences once it's fully implemented. As one of the most advanced systems globally, it unifies digital access and high quality personal advice. Consolidating several legacy systems into one modern platform drives efficiency, scalability, and, of course, long-term profitability.
In Norway, we have spent years developing digital solutions step by step. We are currently one of the most digitally mature companies in our industry. We will leverage this advantage in Denmark, skipping many of the early stages and advancing faster. Customer adoption is critical. We are committed to driving usage of new solutions. We aim for customer experiences that are simpler, more relevant, and comprehensive. Digital solutions support this. We free up advisor capacity to support customers who really need personal guidance. Optimal pricing and favorable risk selection requires deep expertise, robust data insight, and advanced technology. We have the expertise and apply it in every customer interaction. Let me highlight two areas where we expect significant effects, starting with individual underwriting.
For unique or complex risks, we deploy our highly experienced underwriters and risk engineers, supported by data and underwriting tools. Since 2023, we have reorganized to leverage competence and capacity across countries and already seeing reduced handling times and strengthening industry insight. We are now entering a first phase of a major shift, transforming the underwriting value chain. We are building a unified, fact-based Nordic risk perspective, one risk appetite, one methodology, and one toolbox across the Nordics. Combined with local execution for speed, we secure competitiveness. Relevant AI and other system solution will help us extract insight and data efficiently, with outputs of this will be validated by our experts.
This will be a scalable setup that reduces time to market and decreasing distribution power and quality. The 2nd aspect I would like to highlight is the customer scoring models that are central to us in repricing all customers. We have implemented machine learning models across all portfolio segments in Norway, and we are now integrating customer churn prediction models directly in the repricing process. This takes modeling to the next level in portfolio optimization. We are currently most advanced in Norway, but Denmark is closing in. In the short term, we will implement both machine learning scoring models and churn prediction models there as well. These scoring models significantly improve risk selection, and we continue to secure sharper pricing differentiation and improving profitability. It will reduce, and we have a reduced churn for our most profitable customers. We are not stopping here.
We keep enhancing these models and implementing best practice going forward. Turning to responsibility. The need for action toward a more sustainable future is urgent. We anticipate the risk of tomorrow and are well positioned to meet changing customer needs. Life, health, and pension solutions are a central part to social responsibility, enabling employers to safeguard their most valuable assets, their employees. Let me give you 2 examples. First, Back to work, an offering included in several life, health, and pension products. The aim is to reduce sickness absence and prevent long-term disability. Combining expert support and tailored follow-up, employees return to work faster, while employer costs are reduced. We are now launching a new updated version, including tailored guidance for cancer survivors. This will make the offering even more impactful. Second example, pension customers benefit from responsible investments.
We are the only provider in Norway offering pension profiles investing exclusively in funds having sustainable investments as its primary goal. Our ambition is to set the market standard for damage prevention and responsible value propositions. In the commercial market, digital solutions are a key part of our omni-channel distribution model, especially for SMEs. But insurance still needs to be sold, and our employees remain central to our value creation. We invest in tools that make customer service smoother, more efficient, and consistently with a high quality. Efficiency gains are first and foremost about strengthening distribution power. In Norway, we run on the NCDS shared data platforms, complemented by targeted AI solutions that improve workflow efficiency, reinforce compliance, and enable first contact resolution. Several solutions are now being rolled out, and they are well-received.
In Denmark, EDITH is the backbone for building our omni-channel distribution model, enabling our frontline to deliver consistent quality at scale. Across both markets, empowering employees will continue to sharpen efficiency, quality, and relevance, and increase distribution capacity towards and beyond 2028. With this foundation, let's turn to the KPIs that will indicate our progress and underpin profitable growth. First, we target more than 12% improvement in distribution efficiency. This is about increasing distribution power through targeted measures. Given today's already highly efficient operations, the ambition is demanding, but achievable. Second, we aim to maintain customer retention above 90% in Norway and above 86% in Denmark. In Norway, keeping retention at this level requires continued strong execution. In Denmark, maintaining the current level during the EDITH transition is ambitious, but our ongoing initiatives give us confidence.
Finally, we aim for 5% growth in accident and health policies in both markets. This is well above today's run rate, but achievable with the right initiatives. As we look back and ahead, we have strengthened performance in the previous period and proven our ability to take actions that translate into financial impact. In the coming period, we will stay on this path, taking actions that drive profitable growth, elevate customer experiences, and strengthen our distribution power. These actions will generate effects towards 2028 and accelerate beyond. Let me close with our key priorities: strengthening our number one position in Norway, driving profitable growth with SMEs in Denmark, and capturing opportunities within life, health, and pension. We will now take a 20-minute break. After that, we will walk us through our ambitions in claims.
My name is Jostein Amdal. I'm the CFO of Gjensidige. As you've heard from my colleagues today, we have ambitious initiatives within all our business areas and plan to meet and capitalize on external trends, as well as invest in people, technology, and improved processes to meet financial targets, and build a platform for long-term value creation to our shareholders. First, a quick look back at what we have delivered in the last years. With a few exceptions, we have consistently outperformed our financial targets. We have, since the listing in 2010, chosen to focus on the overall profitability, measured through the combined ratio, operational cost efficiency, and a disciplined use of capital, as reflected in our high return on equity.
At our previous Capital Market Day in November 2023, we set ambitious targets, we introduced a new measure, a minimum requirement for insurance service result. The latter to capture that what really matters is profitable growth. Profitable growth, combined with an efficient use of capital, accommodating investments that set the stage for future competitiveness, is the recipe for creating value for our owners. I'm very pleased that we have succeeded in delivering on our goals so far, and I'm confident that we'll reach them also in 2026. We aim to strike the right balance between maintaining a solid capital position and having an efficient capital base. In a world of increased volatility and regulatory demands for robust financial institutions, we managed to stay broadly within our target solvency ratio in the period.
We are operating at a solvency level we deem well aligned with a very long-term perspective on running the business and at a reasonable level compared with our peers. At the same time, we have improved our capital situation using hybrid capital and through improvements to the internal model that have been improved by the Norwegian FSA. The combination of high and increasing results and the improvements to our capital situation has facilitated a steadily growing regular dividend and some special dividends over this period, all in line with our dividend policy. Moving towards 2028, we aim to grow the insurance service result to more than NOK 10 billion. As with all the targets announced today, this target is based on the current business, meaning it does not assume any acquisitions and reflects the current levels of inflation, interest, and exchange rates.
You have heard today from my colleagues in technology, claims, private and commercial, about our most important initiatives to deliver on our financial targets, and from our CEO about our view on the market developments and our overall strategy. To increase the insurance service result to more than NOK 10 billion in 2028, we need to deliver on these initiatives also in the short term, although most of them are aimed at improving Gjensidige's long-term competitive position. Compared to where we are today, this means improving most drivers of financial performance. The most important priorities are a continued focus on profit, raising prices, at least in line with claims, further strengthening distribution and pricing efficiency, and delivering on our claims program. We rely on scale benefits and the use of best-in-class practices across the group, all supported by investments in technology and our people.
Operational KPIs give us clear, measurable levers to ensure we deliver on our strategic priorities and financial targets. We have delivered strongly on many of the KPIs announced at our Capital Markets Day in November 2023, as illustrated here and presented during our Q4 2025 reporting. We will continue to report on these throughout this year. I'm particularly pleased with how we managed to keep a high customer retention in Norway and improve distribution efficiency in Private through times of significant premium increases on the back of the claims development over the last couple of years. Today, we'll also present our new operational KPIs towards 2028. Customer satisfaction and retention remain as the most relevant customer-oriented measures, and we keep our ambitions to exceed 78 on our customer satisfaction index at the group level.
We also maintain the target of retention level above 90% in Norway. In Denmark, we now aim to increase retention to over 86% in 2028. Digitalization and automation will continue to drive quality and cost efficiency. Our digital distribution index tracks progress in digital sales, service interaction with our customers, and share of digital customers. The index increased 19% in 2025, and we aim to lift this further by 5%-10% annually through 2028. As René explained, we are aiming to increase distribution efficiency for private by 20% by 2028. For commercial, as outlined by Lars, the ambition is to prove distribution efficiency by 12% by 2028, and Vivian has provided a thorough description of our NOK 600 million claims savings program.
Towards 2028, we will focus on straight-through processing for claims, as it captures true end-to-end automation and has the greatest impact on both customer experience and cost efficiency. Our target is to reach 55% in Norway in 2028, up from 41% at the year-end 2025. The private and commercial segments in Norway remain the cornerstone of our performance. We've delivered solid and profitable growth through disciplined pricing, improved sales processes, and higher operational efficiency. These segments will therefore target combined ratio levels significantly below the group target of 81%. Looking ahead, we see clear opportunities to further strengthen profitability. Our investments in strong distribution capabilities are already paying off through higher hit rates and better retention, and we expect continued gains as cross-selling increases and sales efficiency improves.
At the same time, our claims organization continues to excel, delivering faster and more cost-effective settlements and better customer experience. Combined with opportunities to capture additional growth in attractive segments, these initiatives position us well for further profit growth. In Denmark, the actions we initiated, including focused portfolio improvements, sharper pricing, improved partner distribution, and operational streamlining, are now reflected in healthier growth and stronger underlying profitability. Together with improved claims performance and higher degrees of digitization and automation, Denmark continues to move toward the level of returns we expect from a core Nordic market. Sweden has maintained a strong momentum of recent years. With improved underwriting discipline, better pricing models, more digitalized processes, strong cost control, and enhanced claims handling capabilities, the Swedish business continues to steadily strengthen. We also see solid growth through partners and brokers, who remain important channels for selected market niches.
With these measures continuing, we expect improvements both in profitability and growth going forward. As Lars mentioned, pension remains an excellent complement to our Norwegian non-life business. The shifting customer needs, particularly the growth in accident and health and pension, continues to work in our favor. Through our combined offering, we are well positioned to capitalize on this trend. We have low distribution costs, and there is significant potential for cross-selling to our existing customers. Due to diversification benefits against non-life insurance, we can grow profitably and capital efficiently within pension. We target a pre-tax profit adjusted for the change in the contractual service margin of above NOK 400 million in 2028. Across all markets, our ambitions remain unchanged: to deliver consistent, sustainable profitability built on a strong technological platform.
Our migration to more modern systems, broader use of advanced analytics, and increasingly automated customer journeys are enabling ongoing efficiency improvements and a more scalable operating model. Our capital strategy is the foundation for how we create shareholder value, maintain financial resilience, and allocate investment assets. This slide summarizes the three core pillars of our approach. We aim to deliver attractive and growing dividends in line with our established dividend policy. This sends a strong signal to the market about our profitability and capital strength. At the same time, we balance dividend payouts with the need to reinvest in the business and maintain a solid equity base. The second pillar is about ensuring a strong solvency position, which is absolutely critical in our industry, where trust and financial robustness are key, but at the same time, optimizing on the cost of this solvency.
We actively use reinsurance as a capital management tool. It reduces downside risk from large single claims and catastrophic events and reduces the capital requirement. In addition, we use subordinate debt to optimize our capital structure, giving us flexibility to meet regulatory requirements and adapt to market developments. We've set a target solvency range of 140%-190%. The floor of this target zone provides us with a solid buffer, which ensures that the regulatory requirements is fulfilled, also in a severe stress event, in addition to retaining an A rating from Standard & Poor's. The target range also allows for absorption of normal volatility in the results and the ability to maintain a high and stable stream of regular dividends. It also ensures sufficient capital for organic growth and smaller acquisitions, in addition to a buffer for regulatory uncertainty.
Finally, we assess our asset allocation, balancing expected investment returns with effect on solvency requirements. The degree of liquidity in the portfolio is high, leaving us with ample options to reallocate to optimize the capital position. The main purpose of our investment activities is to hedge our insurance liabilities, and the match portfolio therefore consists of fixed income assets with low credit risk. The free portfolio contributes to our results and supports our ability to deliver on our return on equity target. We take moderate investment risk in the free portfolio, where the aim is to generate excess return with controlled downside risk. The portfolio is well diversified, consists of high-quality investments, and is predominantly sensitive to changes in the interest rates. The free portfolio is expected to return on average 1 - 2 percentage points above money market rates, depending on risk premium and the level of risk taken.
Fixed income yields have risen significantly over the past two years. At year-end, the yield on our fixed income investments in the free portfolio was 4%. The investments in the match portfolio have an average spread of approximately 30 basis points. We expect yields to remain at these levels for some time, supporting our financial targets in the coming years. Over the last two years, we've generated NOK 15.4 billion in surplus capital through operating solvency earnings and the returns in the free portfolio. We paid and proposed NOK 16.6 billion in return to our shareholders as dividends. During this period, in addition to funding organic growth, we've used capital to strengthen our position in Denmark through the acquisition of PenSam Forsikring, in Sweden through Varsamma, and within Home Sellers Insurance in Norway through Buysure.
Issuance of new Tier 1 and Tier 2 loans has also combined, contributed positively to the surplus capital and is an effective tool to optimize our solvency position and capital structure. In addition, approval of some parts of the internal model has had a positive effect, especially the approval of the windstorm model in 2024, which increased the capital surplus by NOK 1.3 billion. We started our pension business from scratch in 2006, and now have a well-run operation, capitalizing on the growth in the defined contribution pension market and delivering solid returns on equity standalone. It is strategically important for the group, complementing our customer offering within employee benefits, as explained by Lars. An important point financially is that the growth here is very capital efficient for the group.
As we show here, the capital requirement for pension at year-end 2025, from the group perspective, was NOK 1.3 billion lower than the standalone requirements. The contribution to the group's surplus capital, as measured by the difference between own funds and the cap requirement, was almost NOK 2 billion. Since 2020, this contribution to the group's surplus capital has increased by almost NOK 1.3 billion, thus supporting our increased dividends in the period. If you also take into account the midpoint of the solvency target range of 165%, the surplus contribution is approximately NOK 0.9 billion over these years. As you know, the approved version of our partial internal model differs from our own model due to the calibration of several key parameters.
We believe that our own model reflects the best estimate of risk, and we therefore use it for internal management purposes, such as capital allocation for profit targets, reinsurance assessments, and setting investment limits. The approved model is used for setting the overall capital targets. Our ambition to have our own version approved, but this will take time. The remaining differences relate to the modeling of correlation between market risk and underwriting risk, prudential margins, and the calibration of certain lines of business. The FSA has previously approved several minor recalibrations, and further applications within all three areas are planned for 2026. If all remaining differences were to be approved, the capital requirement would be reduced by an additional NOK 1.9 billion. The prudential margin for underwriting risk represents the largest share of this, while the other two are roughly equal in size.
Gjensidige operates in attractive markets. The Nordics continue to stand out for stability, both economically and politically. Inflation is gradually moving down, and although the interest rate outlook varies somewhat between the countries, the overall picture remains constructive for our industry. We thrive in markets characterized by cost-efficient and rational companies, integrated value chains, strong brands, and high trust between customers and insurance providers. Against this backdrop, the ambitions you've heard today across technology, private, commercial, and claims position us well for the years ahead. We continue to focus on profitable growth in all our segments, combined with improved operational performance across the value chain and more satisfied customers with deeper relationships with Gjensidige. These ambitions are supported by a modern technology platform, strong analytics, high-quality data, and highly capable teams. With this foundation, we are well-placed to continue delivering attractive returns to our shareholders.
With this, I'll hand the word back to Mitra for some Q&A.
Thank you, Jostein. We will now spend a few minutes to get ready for our Q&A session.
All right, we're now ready for our Q&A session. With me on the stage here are today's presenters, and we also have other members of the Gjensidige Group Management Team and our Head of Sustainability present in the room and ready to answer your questions. We will open up for questions from our audience here in Oslo first, and then move on to questions from our web audience a bit later. Please raise your hand, and our colleagues will come over to you with a microphone. Please remember to state your name and affiliation. For our web audience, please type your questions, and we will read them out in a few minutes.
Thank you. Simon Bruns, ABG Sundal Collier. Two questions, if I may. The first on the assumed premium growth for 2028, a combined ratio below 81, for a NOK 10 billion underwriting result implies roughly 7% premium growth per year. Could you decouple that? How much is assumed coming from pricing efforts? How much is volume growth through either home insurance or life and health? That's the first question. The 2nd question is about the costs and claim savings program. Obviously, very strong results on the former target. The NOK 800 million became NOK 1.1 billion. Was that due to sort of a conservative approach when you assumed that?
If so, is the same cautiousness applied to the new 600 target or is that more realistically based? Thank you.
On the premium growth, I say our main starting point is that we price at least in line with the claims development. That is, we've given you some indications, especially on the Norwegian business going forward on the main products, motor and property, that we see a claims inflation picture going forward of, say, 3%-6% or 4%-6%, depending on products, with a wider range for motor. That should be kind of your starting point. We also need to mitigate changes in frequency in motor especially, where we see a still continuing claims frequency development, but much more moderate than what we saw in 2023 and 2024.
We said that, you know, we expect some 1%-2% increase in claims frequency from motor. Then you have some more volatility on the property side, but long term, we do think that climate risk will drive, especially water-related, claims also for on the property side. We take all these factors into account and try to balance our pricing efforts accordingly. Then we will not provide you with any specific guiding on volume versus price for the longer term, but kind of for this short term, this is our assessment.
yeah, the second question is about the claims program. First phase, I think we had a very good start. A lot of things happened from 2023 - 2024, 2025, when it comes to claims frequency. I also think that we did a successful investments when doing all kind of automation, update our agreements with our supplier network and so on. Going forward, having in mind that 2028 is actually two years ahead, we are building our claims operations where we are aiming for a great success also beyond 2028.
I would not say that we are have been conservative when setting the ambitions. I'm very confident that we will reach the ambition, and that we have a great pace going forward also after 2028.
if I can
Yes.
reply to that. Thank you for the question. I love that. I asked the same question when we did the calculations. I think the difference between the target we set in 2023 and now, it's not that we're conservative, but it's the structural cost improvements that we're heading for, and not just the efficiency gains. We want a run rate, an early run rate, from 2028 that keeps on providing strong financial results. When you're working with data capabilities the way we are now in claims, we are at very advanced level now. We are very interested in having the right quality all the time, so a bit strict on the discipline before we scale.
When we scale and when we see the quality is high, as you saw with the 95%, then we're still like, "Let's get 96%, let's get 98%." Because we wanna.
... you know, hit the numbers right. When we have that in place and scaling, sometimes we get even higher effects than we could calculate on in an early on. Yeah. Does that make sense? Maybe we'll, yeah, we'll give you good results again.
Okay, next question. Hans?
Thank you. Hans Johansson in Danske Bank Markets. First question is on sort of the updated targets, and especially then on the cost ratio. It's always a bit difficult to look at cost ratio because it sort of mixes premiums and nominal costs. My question is, if you exclude the write-off you've done in 2025, you're not very far off the ratio that you're saying you will be at in 2028. How should we look at, in terms of what you've been saying in operational efficiency investments and such, how much of that is sort of harvesting the cost improvements you've already done? How much sort of nominal costs are you expecting to increase nominal costs going forward?
The last part is, how much of it is sort of defensive investments versus kind of growth investments in especially the markets where you're smaller today? Second question is on the updated return on equity target and how that changes your sort of participation choices going forwards. There, especially considering private Denmark and Sweden, where you're much smaller than the other places. Sort of does it change your thinking around there? I guess we didn't hear so much about those two markets in the presentation today.
Yeah, I can probably start.
Yeah
... continue, Jostein. When it comes to cost ratio, I think it's important to have in mind that we live in kind of uncertain times. Many thing happening now during technology, AI. There are many good and probably many bad opportunities as well when it comes to investments. Going forward, we like to have some room to do the right investments, to improve the business going forward, also to have a growth and more efficiency to come after 2028. When we now talk a lot about improving distribution efficiency, talk about improving the claims processes, it also gives us room to reinvest, to prepare, Gjensidige for what's coming next beyond 2028. I agree with you.
If you look at the ambition regarding combined ratio and compared to what we have achieved during the last couple of years, but also having in mind that it's, it gives us room and some kind of flexibility to what we can do next. Then saying that, we are not going to invest in things that we are not sure will create value. We will still be very disciplined when it comes to cost, very disciplined when it comes to use of capital. Return on equity target and what to do with the business in Denmark and Sweden, I think during the last couple of years, we have moved from being a large Norwegian player with some kind of business in Denmark and Sweden.
We have sold our business in the Baltics and raised our focus on being a Nordic player. That's important going forward as well. Our strategy is to be a good player in the Nordics. We are having a lot of ambition to improve our business in both Denmark and Sweden. I think we have achieved a lot during the last couple of years. You looked at the numbers, both when it comes to exchanging operational excellence, exchanging competence, exchanging skills. We see that we have improved results in Denmark. We have great results coming from the small business in Sweden as well. That's a very good starting point for the years to come, when we are seeking for both new opportunities and also improving the business further.
As I tried to highlight on my slide on the segment, profitability targets, we do accept and expect combined ratio targets outside of Norway, which are higher than the 81% that we set for the group level. Then, of course, the Norwegian business, which is the cornerstone of all relative measures here, are targeting much stricter profitability targets.
Mm.
Still, it is value creating, because it does return share dividend capacity. It does actually give a high return on capital than any reasonable capital return target.
Thank you.
Ola?
Yes, Ola Bjerke , DNB Carnegie. I have two questions as well. One is easy, and the other is, might be impossible. The easy one first. Since you have a solvency range and not a fixed solvency target, and you're so close to your top of that solvency range, I was just wondering, what kind of world should we look for in which you would go for 140% solvency, if that is even a level you actually see as reasonable, since it is part of your target range?
Mm-hmm.
For the impossible question, on autonomous vehicles, which has been a trend for some while now, it seems to me like it's going to be something in the commercial segment for this going forward, if it happens. In Norway, most of the companies, as you highlight, are very small. It's SMEs for 99% of all companies. What kind of company would this sort of become in the future? Is it gonna be an industrial segment, large corporate segment? How do you sort of position yourself, given that Gjensidige is so strong in the small corporate segment? Thank you.
Yeah. I'll probably take this one, and then I'll let my colleague take the latter part. You know, we have a kind of broad range when it comes to solvency. Gjensidige has a very solid capital position. It's normal to have some kind of flexibility. You could have probably some macroeconomic effects, impacts, which will also hit the solvency position. You could have. We have to have some room to do minor bolt-ons, like we did with Buysure, like we did in Denmark a couple of years ago, which from quarter to quarter and from time to time gives some kind of flexibility, which also leads to having a range when it comes to the solvency position.
Saying that, we are very capital discipline approach to what we do. We are seeking to reduce the capital requirement due to continually improving our internal model and having a good dialogue with the FSA as well. So it's definitely a very capital discipline organization, but having some kind of room and flexibility to having buffer for some external impacts, which could happen in an unpredictable world, and some flexibility when it come to bolt-ons. Autonomous cars. Probably René could say something about the car fleet and what's happening, because before letting you getting a word, we probably expected the pace of change within mobility to be happen earlier.
If you go a couple of years back, to having a larger proportion of the car fleet to be more on the commercial side instead of, instead of the private segment. In that period, we have built up great relationships with the OEMs directly. If you look at our distribution, we have improved and expanded our relationships with local car dealers in Norway, especially. We are very connected to what's happening within the mobility industry. René?
Yeah. Geir covered most of it, but what's important for us is to be an attractive local partner. The OEMs are huge. The Nordics are pretty small to them. What we are working on, also when we invested in REDGO, was to be a relevant partner, because if we're gonna work with autonomous cars, pricing, you know, in regardless of how you drive, we need to have the partnerships with the big OEMs. Our mobility strategy is being a local relevant partner, being able to get the deals-
Mm
... with the OEMs. We have already tested how we price on driving behaviors, and we have discussed this with some of our partners and tested it for a while. We haven't realized any products yet. We know how to do it when we find the right partners who says that they would like to have an insurance product for autonomous cars and with the telematic part.
If you look at development the last couple of years, what we have seen is that we have been in a period with an increasing claims frequency regarding motor. In addition, we are also seeing that the claims cost for newer cars are higher. When you gradually introduce autonomous cars, you could probably expect that more technology, more sensors, and even more expensive cars to repair when something happen. You know, Nordic driving conditions, when it’s foggy, it will take time probably before you have licensed level four, level five autonomous cars, and then having a greater impact on what’s being a larger proportion of the car fleet in the Nordics.
We are doing whatever we can do to be prepared for that kind of development. One of the key messages is that the dialogue and relationship with the OEMs are important.
We have waited for. We are talking about for years, that there will come more cars from the private portfolio over to the commercial portfolio with the fleets, but we can't see that in our numbers so far. It's a good question. What kind of company will Gjensidige be in the commercial market for the future when we are focusing on SMEs? You saw in my presentation that 99% of the companies in the Norwegian market is SMEs. When you're doing a cap at 100 employees and NOK 100 million in revenues, it's more or less the whole market. From my perspective, it's important for a company as Gjensidige to have customers of all sizes in our preferred industries.
A few large accounts, many medium-sized, but a lot of small companies. you hear a lot of presentation, I think, almost everybody talking about the SME market. Everybody want to expand there, and there's many reasons why we want that. if you're only approaching the SME market, you will have a random portfolio because it's all the whole market. From our perspective, it's where to play within the SME market, which is important. When we are working with SME market, we're looking at different preferred industries. We're looking at the pockets in these industries. We're looking at the sizes of different companies within these industries, and we see where do we have what kind of profitability, where do we have what kind of market share?
The most important thing, one thing is to understand the market, see the market, and know where do you want to play in the market. The most important thing is to have the ability to steering the operation, steering the activity in your operation, in your distribution, against those to into the those pockets where you want to build the portfolio. That is the how we have succeeded over years, how we have strengthened the profitability over years, is that we're steering our activity into those areas, into those segments, into those products where we and how we want to build the portfolio. When we are looking, sometimes I have the question, what are the new areas you want to build? Where do you want to grow going forward?
From my perspective, it is important to grow where you know the business. You have seen our development within the market in the commercial market over the last 6-7 years in Norway. We have increased the market share from 28% to 31%, approximately, at the same time, improving the profitability. We have done this through steering the operation within those pockets where it's profitability, and that is important for us going forward as well. So when you have this on one side and combining this with what I was talking about in my presentation, how you are pruning the portfolio, how you're steering the portfolio optimization, then you're combining activity management, portfolio steering in an efficient way.
Then you will have a company in NCD going forward that have the capabilities, that have the improve capabilities to improve the profitability and building a portfolio in control. That is the important answer on that. Yes.
I think the next question was Thomas, behind there.
Hello, Thomas Svendsen from SEB. Two questions. First on cost cutting and on Gjensidige's bridge there, the operational improvements. Could you share with us the size or sort of the cost base that this operational or cost-cutting measures applies, so we can sort of get a feeling of the percentage of the cost base?
Mm.
Secondly, on your advanced underwriting processes, could you say something about for a certain vehicle, what is the lowest price and sort of a high price versus the average for the same vehicle, but with a different driver? Also, on the placing of the vehicle, the high and low level there, and possible on the combination of the geographical location of a certain vehicle and the difference between the high and low price versus the average.
Mm.
On the cost by base, we're talking about on the cost expense ratio of 12%. The cost base we're talking about there is round numbers, NOK 5 billion, which is then the cost base, not including the costs used for handling claims, which are recorded to the claims ratio. You add those, there is approximately NOK 2.5 billion more there. That includes everything, which is IT and whatever, and you'll see that from the annual accounts, where we have a note on this. That is the base, really.
As you talked about in the previous question, there we are, we are at the level of, say, around this, but what we need to do is to invest in all these initiatives that will give us the long-term competitive position that we are talking about there. That is the, our important share, and we do this within the below 81% combined ratio, above NOK 10 billion in insurance result in 2028. It won't be that we are kind of going to squander money to have just to stay at the same cost ratio level. It is designated investments to improve the long-term competitive position within the below 81% combined ratio target.
Mm.
Next question, yes?
It's about motor insurance.
Oh, sorry.
Yeah.
I don't think I can answer the question, but you asked how much does it differ for the same type of car and between the cars, and the same type of customers, and between the customers? It differs a lot, but I don't think we have any numbers. From car to car, it's surprisingly how much it can differ, and also within the same customer having different cars, it's a really big difference. We have customer pricing and market pricing to sometimes adjust it a bit, because some of the times, if we do straight out risk pricing, the differences is pretty high. Then we go to the customer pricing, see which is the most important customers, which are the most loyal customers, and then we adjust it in order to take customer segment or different markets.
Mm.
I guess that was the boring answer, I guess.
Probably Berit can give you some more precise numbers afterwards.
Yeah.
Christian Igor here. I have a question on the cost. You presented a number of measures that you've taken to reduce costs and at least increase efficiency, still it seems like your operating expenses have increased quite a lot in nominal terms. I'm not referring to the relative number, which is obviously influenced by the high premium inflation. If you could just expand a bit on why costs are up in spite of all your measures taken. Secondly, I was quite comforted by your comment that your non-Norwegian operations does not dilute, or at least, is not below a certain level on returns on capital. If you could share a number, that would be highly appreciated. Thanks.
Sounds like me. Yes, normal costs have increased. We do see if you divide our cost base, it's basically, you know, it's more than half of that is, yes, salary costs, and we've decreased the number of persons in the core insurance business over time. Then, of course, we do have outside the core insurance business, both in the Baltics and in the mobility space, quite a lot of quite people sensitive business. Over time, the even including salaries, wage costs will shrink as a share of the total. What we see also is that there is a large increase in IT cost. Inflation for IT services or IT costs is much higher than the wage increases, and that's behind much of the of the increase there.
Going forward, I think this will only be, and this trend will only be strengthened, given the measures we've taken and the KPIs we've introduced in terms of distribution, efficiency, digitalization, automation, this trend will be strengthened in the not so long term, really. Numbers on the return on kind of allocated capital per segment is not something we have provided for the market. We've gotten that question sometimes, but, I mean, given the numbers that we have produced, I think it's fairly obvious that these are fairly okay returns on allocated capital if you kind of just do simple measures there, and we use this for internal management, but have decided not to make that public for the market.
Nash?
Hi. Thank you. Vash Gosalia from Goldman Sachs. I have two questions, one on the cost again.
Mm-hmm.
Here, probably a little bit of accounting and a clarification. One, how much are you going to invest to get the NOK 600 million savings? Would you be capitalizing that, or would you be expensing that? Just some clarification on that.
Mm.
The second one is a little bit on utilization of capital. You've sort of suggested you're open towards doing M&A, but can you share with us, one, the region in which you would like to do M&A, and potentially the size, just to get a sense of what is it that we can expect?
I can start, and then, I think, Vivi Kofoed and I can.
Yeah
... work together on that one, on the sides. First of all, these investments that we will do to reap the benefits within the claims are to 100% more or less, expended. They're not capitalized. The main thing that we are capitalizing is related to the core system and the big long-term projects there. Otherwise, we're really expensing most of it. The actual investments needed is for the NOK 600 million.
I would say we're very cheap in. We have already strong capabilities in place. Right now, it's the manpower, utilizing data, advancing the technology.
Mm.
We have the things we need.
Yeah
Yeah, more or less.
We're talking about kind of teams and squads going on, and just step by step, improving the processes, utilizing already existing technology within the AI, and that is the main driver, I would say, for the NOK 600 million in terms. Changing processes is much more about how people work rather than investing in technology as such.
Mm-hmm. Yeah. Second one, about M&A opportunities. We are focusing on what's happening in the Nordics. That's also the reason for selling the business we have in the Baltics. Outside Norway, purely P&C business, that's our core competence, that's our core approach. You know also that the market in the Nordics, when it comes to P&C business, are very consolidated. You have a long tail with smaller businesses in Denmark, but then you have more larger companies and indicates that the market is consolidated.
Our core focus on daily basis is how to do the operational improvements, how to improve our business, how to make sure that we seek growth opportunities within the market we know, within the customer base we have and the customer base we know. I think during the next couple of years and after beyond 2028, we are seeking very interesting growth opportunities, which are also profitable. Today, I mentioned about what's happening within the housing market and how we can improve our approach there.
... life and health, that's increasing demand, which is within the insurance space, but very interesting. As you know, in Norway, we have a pension business, 11% market share. If you look at our P&C customer portfolio, we see that 27% of our P&C customer in the commercial segments in Norway have also bought occupational pension from Gjensidige. That has actually had a very good growth during the last couple of years. We are now investing more in distribution capacity, and in solutions and concepts to actually grow that business further. This is capital efficient, as also Jostein showed, due to all the diversification effects in the group as well when it comes to capital requirement for pension business.
I would say that, yes, we have a focus on P&C in the Nordics, and a little bit broader approach in Norway due to our pension business. From day to day, it's more on the operational side, how to improve our own business.
Herman?
Herman Zahl from Pareto Securities. First, one question on data. I think it's to Johan. On, if I interpreted the slide correctly, Slide 25, you said that you will increase the amount of data you use for pricing by 5% to 10% over the two, three coming years. Could you just be more specific about what type of data that would be, and if you already have that data, or you would have to gather it in those years?
Yes, I can start to answer, and then I think also Berit can assist. What I refer to is the way we are now feeding the pricing models. With the new data infrastructure, we will not increase by 5% to 10%, but by 5 -1 0 x. Today we have a lot of composite data points. For instance, the customer score goes into the pricing model to calculate what is the right price. With the new structure, we can use a lot of individual data points that can also explain even finer variations in the pricing, if it makes sense. It doesn't look like it makes sense.
Could you possibly be more specific about the type of the data?
Berit, can you elaborate a little bit on the different kind of data streams that we are connecting to the new pricing architecture?
Of course. I think it was a really good answer, Johan. Of course, we're using more customer-related data also into the risk pricing, not only the product by product, but also using more behavioral data when it comes to the actual risk pricing and on more customer level. Looking forward, we do need to also look into more real-time data, of course, and more external sources and how to automate that even further. Yeah.
In addition, I might add, because we are so related, Berit and I, we are also gathering new data from generative AI. Before we had the very structural data sources, and now the more unstructured data sources as writing and pictures, you gain a lot of more information than you did before. Taking those data and utilizing them, that could be for mitigating damage, or it could be to optimizing risk profiles. I would say that some of the new as well.
Yeah. Okay, thank you. Then just on the sort of longer term, how do you see the risk of more efficient, AI-driven price comparison tools? If you don't use it as a risk, what are the sort of structural barriers remaining in place? Also just some perspectives on the private segment, like corporate, because it could differ a bit.
Thanks. Probably start on René, probably continue. I think it's where we stand now, it's more interesting to talk about AI when it comes to distribution, instead of autonomous cars. If today we are, especially in U.K., but other places as well, some examples in the Nordics, you have, the traditional pricing comparison models, and portals. They are giving the customer, the best price for a specific product. When you use ChatGPT or a generative model, you will definitely change that kind of concept. You will, as a customer, you will get help to understand what kind of product you need, what kind of... You get help to get a good answer on your need and requirement when it comes to, comes to insurance.
For Gjensidige and other providers, it's not only price that matters. Now, you using these models, you will probably see that our way of doing processes, claim sending processes, our quality, when it comes to our core processes, when it comes to terms and conditions, when it comes to customer complaints and so on, you'll definitely have a broader aspect on how you do the kind of assessment when comparing different providers. For Gjensidige, we are in the customer dialogue, we are always talking about price in addition to terms and conditions, and what actually it means to be a customer Gjensidige. I think that it's helpful to use AI models instead of the more traditional pricing comparison models, which tends to be very pricing focused.
I think that ChatGPT and other distribution models, based on AI, will look at a whole product and actually look at how the different providers could give the right offering to the customers.
Yes, there are two opportunities. The one, the customer journey will change. It will be more cost efficient, so that's an opportunity for us, which we believe that we're well prepared for. The second one, which is, I think is just as important, is that these bots will be an advisor who can advise it to a much greater extent on quality, and we believe that that is to our advantage. Being able to differentiate the bots will, to a much greater extent, be able to pick up that information, which is more, difficult for a normal customer. Being able to differentiate, have a more quality in our products and services.
Mm
... being able to have more frequent and relevant contact with our customers, that's important in order to take advantage of the AI revolution and the AI bots. Quality is a huge opportunity for us.
Mm.
You had a question about the difference between the private market and commercial market. You only talked about it in your presentation. Data must be available. If you're looking at the private market and the commercial market, the big difference is the maturity within the digital solutions. We are one of the most mature players in our, in the commercial market. We have really good solutions when it come to working with renewals, doing service at your cover. You can buy a few products. There is not that many competitors that having solutions that can drive everything straight through. You can have everything available. That's mean that you have to have an API to the core to drive everything through.
On the advisory side, I think that is the first point where we can see it on the commercial side. I think it will be a little bit slower to see in the commercial market. Yeah.
Carl?
Hi, Carl Lofthagen from BERENBERG. two quick questions. The first one is a short one. Just on private Denmark, in Slide 31, you're showing improving retention in 2025, but declining customer satisfaction, which seems counterintuitive. Just wondering, is this a kind of a blip, or did you see that customer satisfaction decline just, I guess, across the market as a whole? The 2nd question is on the competitive landscape. I mean, if I look at market share developments in Norway and Sweden, where, the data is reasonably up to date, we're seeing kind of smaller players increasingly take market share, from the incumbents, admittedly from a much kind of smaller base. I guess just wondering, how did you think about the competitive landscape when setting these targets? Thank you.
If you start, René?
The first one, in Denmark, it's been a drop in the industry average, which has been pretty brutal due to much of the price increases. We've seen the same in Norway, but it's been a bit more brutal in Denmark. It's an industry average, actually.
When it comes to competitive landscape, starting with Norway, in the Norwegian market, you have a couple of major players, larger players, which are disciplined when it comes to pricing. Something happening about inflation, claims frequency, you see a instant reaction and activities when it comes to terms and conditions and pricing, which actually meets the actual development. You have probably one player in Norway at the moment, which are more aggressive on the and taking market share. From our side, we have the very stable position. Over the last years, we have improved our position when it comes to commercial segment. Last quarter, we actually improved our position in the private market as well.
We are very satisfied with the position we have, and we have managed to combine keeping the right business volume, keeping opportunities to improve our ambition when it comes to cross-selling. We are seeking new opportunities like housing, where you can have seen growth in the past, and that's what we're focusing going forward. My impression about the market in Norway. Yes, you have seen shifts when it comes to market share, but not a concern for us as a larger player, how the market develop. In Sweden, we are a smaller player. We have a great opportunity to improve the business, but we have a unknown brand name, so we are seeking partners to develop the business.
We are seeking using co-brand, co-branding in some situations as well. Also, I have to admit, during the last couple of years, the core focus in Sweden has been to more or less a turnaround to improve the profitability and to make a robust, solid, and a profitable business in Sweden, which we have now. Have a very interesting position as a more challenging player.
Next question. Yes?
Thank you. Roy Tilley from Arctic Securities. I have one or maybe two questions. Can I do two?
Of course.
Perfect. Just to follow up on Ola's question on the solvency range. I believe in your last supervisory report from the FSA, they kinda argued that the lower end should be 150%, not 140%, after your partial internal model. Do you think if you get more of the internal model approved, then your nominal requirement goes down, will the FSA kind of push for a higher percentage floor? That's the first question. Then the second to you, I guess, just on the core system in Norway. Lars talked a lot about the benefits in Denmark, but your assessment is that it's better to keep the original systems in Norway and Sweden.
Just kind of wondering, is it the risk part or the reward part of the assessment that changed to make you do that? Thank you.
Starting with solvency range. The legal requirement is 100%. That's should probably be the starting point for the discussion and considerations. Going to 140%, we have a still a good capital position. It's but comparing to the peers in the Nordics and in Europe, 140% should be a lower, a weaker position. Still, we run a business which is capital efficient. We have a great opportunity to in quite quick build capital, if necessary, due to high premium income and definitely a broad spectrum of capital light products. We are not share any conclusion on what to do if we gets larger part of the internal model approved.
Then it should be a kind of consideration between the management and our board to do that. At the moment, the legal requirement is 100%, so that's the starting point for the discussion.
Okay. On the core system, I'll try to be short because I could speak about that for hours. I think it's a mix of risk and reward. You have to remember that the situation in Denmark when we made a decision to go to a new core system, a new cloud-based core system, the EDITH, that both of these guys are benefiting from now. We were in a situation where we had a lot of different legacy systems, and the main core system was also approaching end of life, and it wasn't our own system, it was a vendor that provided it, so we didn't have full control over how to modernize it.
The decision in Denmark was that we need to get out of that system, and we need to consolidate all of these different smaller systems because it's weighing heavily on our cost position. In terms of consolidating into one core system, it's even more important to do it in one market because you have to respond to every new regulatory requirement or every new kind of customer that wants to see all their data. You have to do the integration with every system if you have multiple systems in one market. It was more urgent there to consolidate into fewer systems. Whereas in Norway, we have a very well-working core system. It seems like the platform it is built on will have a longer life expectancy than we thought previously.
We are also, in the way we are modernizing this system, we are actually taking out small components where we need to do something in a different way or we need a more modern approach. We take that out of the mainframe environment and into a cloud-based platform. We are able to get some of these advantages of a new and more modern system without doing the full core replacement. I think that's the kind of the main difference in thinking between the Denmark and the Norway situation.
Mm.
Okay, next question. Thomas, you had the 2nd one?
Hi. Thomas from SEB again. Question to the Norwegian motor segments, the market there towards 2028? Are there any changes we should be aware of, cheaper cars or more expensive cars or larger cars or smaller cars, or is it a steady projection, the best thing we can do?
It's pretty steady. Our volume comes from long-term agreements with a lot of dealers. That's our most important growth factor. When it comes to cars, I think the EVs is now a pretty stable portfolio, so we don't see any big changes during the next couple of years when it comes to types of cars. There, of course, there are coming new producers and new cars that we know a bit less, and we're pretty strict on pricing on all the new cars, not only because of the cars, but because of the whole value chain when it come to workshops, spare parts, et cetera. We are pretty strict if there enter new brands into the market.
Thank you.
All right. Perhaps we can switch to questions from the web. We can start with Michele Ballatore from KBW. With regards to your AI and your technological improvements you're planning, and in light of the recent changes to your technological platform in Denmark and Norway and the pension business, what would it mean to integrate these new tools into the existing systems? Would that be difficult?
Yeah. I think actually one of the earlier questions illustrated a little bit how we're thinking about this. Because, with the new capabilities, like AI and new automation opportunities, the way we are working with technology is that we want to provide a platform that makes it easy to, both test and experiment, but also to deploy these new tools. The way Viv is able to get a lot of these NOK 600 million without doing deep IT investments is because we have provided a platform on which you can basically run models and algorithms, and get access to the data you need to make these things happen.
The way we are working with a more kind of layered approach and a platform approach in the IT infrastructure, is to avoid having these deep integrations that are costly and complex.
Yeah.
What we're doing is that if he gives us a platform for building a bots, if he gives us the right data, then a lot of the organization are able to build the bots. In our customer service, more and more of the advisors are trying to build bots themselves.
Mm.
We are able to use a greater share of our employees building bots, being close to the customer, having the right competence, as long as we get the platform and the data.
The guardrails. The development guardrails.
Yeah, to add to that, we've already proven that we can scale models very easily, not just across product areas, but also across geographies. What we do when we use the scalable architecture that Johan speaks about, is that we customize the data to different regions, countries, customers, and so on and so forth. In there lies the, you could say, the symphony between technology and business now. Adding more data and leveraging it by a scalable infrastructure. It's very exciting, and that's why you see those beautiful ramp-ups and hockey sticks in our numbers sometimes, because when we scale it always... It often has very good surprises with it. Yeah.
That is also why the claims ambition is very ambitious, towards 2028. Yeah.
Thank you. All right, the next question is from Qian Lu, from UBS, partly related to what we've answered here before, but I'll read it anyway. Just on the upper end of the solvency range, think you said in the past that you would revisit the solvency target zone if more internal model changes got approved. You have had a couple of approvals since the last CMD, but have kept the range the same. Have there been any changes to the way you manage solvency? We have another one afterwards.
I would say, it, we regularly, at least annually, do visit the solvency range and what should be the target, and we visited all the times that we have got changes to the model, and we stayed with this level so far. Whatever happens, as Geir mentioned on the previous question, if we get other parts approved in the future, that will be a decision for the future when we get these approvals.
Thank you. Also, the second one for you, Jostein, how are you thinking about the upcoming debt calls in 2026?
Yeah, we have the first one in April, I believe, early April, and that is really already refinanced from the previous issuance in last fall. The second one is in October, and we'll decide when we get there, whether we will refinance, but it's our obvious intention to call the loans at the first call date. That is customary in the industry.
Great. Okay, back to the room. Simon?
Simon from ABG again. On your 2026 targets, I appreciate you keeping them unchanged. Just on your thinking for doing so, obviously, the consensus expectations are well above, and I appreciate you not setting targets after the expectations. Is there an element of cautiousness given sort of the start of the year, or did you just choose to focus on the new targets for 2028 and keeping the 2026 targets unchanged? On that, do you have any comments on the developments year to date?
You have to be patient and wait for the first quarter when we announce that. We decided early when we start the preparation for this Capital Markets Day, that we keep with the targets we have for 2026, not to come in a situation where we are guiding to where we end, now we are more on the short term, so we haven't go into that consideration now.
Yeah, I think that's the basic answer on that one.
Yeah, thank you. Just following up on that then, on the trajectory towards the NOK 10 billion, is it fair to assume that your targets are based on a sort of a linear improvement? Or is there any factors pointing to any sort of a hockey stick or a front-end loaded profile?
It's, if you look at the development since 2023, it's definitely from 2023, it has actually been front-loaded. It's tends to be a little bit front-loaded as we see it. That's due to all the pricing measures and everything we had done in last year, which will have also an impact in 2026 as well. We are having so many different types of measures, improving the way we are doing business, that we will see gradual effect throughout the whole period.
Mm.
Anything to add, Jostein?
No, I mean, as you saw from my slide, we are at 7.5 in 2025, exclude the write-down of the EDITH system. We are approximately at 7.5, at least. At points that we have with the premium growth numbers that we showed you in the fourth quarter of 2025, it means we have quite a good speed into 2026, which should bode for a fairly okay profit improvement in 2026. The accumulation of all these measures that we have talked about today, which are already on the way, and they will continue to improve these results.
Importantly, as I tried to stress on the presentation, what we're doing today or these years is to build a foundation for profits after 2028 as well. We are investing in things that will have a continuous improvement after 2028, even though we've forced Vivi to stop at 600 in 2028. There is improvements going on after that.
Yeah. I think that's the claims there is a good example on, an area where we can expect more to come after 2028. Many things happening at the moment, doing new investments, using AI, very much more extensive, and also being precise to how we can improve our way of doing business, which will gradually have an effect, but that will continue beyond 2028. Absolutely.
Yeah. Thank you.
We have a question, Youdish.
Hi, Youdish Chicooree from Autonomous Research. I've got a few questions. The 1st one is on your combined ratio target. You reported 83.4% combined ratio last year. If you adjust for, you know, the one-offs, even large claims, you're already at 81.5%. I was wondering, you know, to what extent, if you factor in the price increases you have implemented recently or still implementing, and the claims savings you are targeting, some have suggested that you're very strongly positioned to be significantly better than 81% already. I was wondering to what extent is that just pure conservatism versus you planning to possibly sacrifice margin improvement and maintain top line growth? That's the first question.
Secondly, more on the long-term front, again, going back to your comments on autonomous cars and AI risk around distribution. On autonomous cars, you said you are in dialogue with the OEMs, but, you know, a lot of these, the companies that are involved in this are big tech firms, large manufacturers. How do you ensure you've got, like, an early front foot in this space when this technology starts to be deployed in Norway? On the distribution side, you mentioned, you know, with the chatbots, they're gonna advise also about quality, not just about pricing. Does that mean that, you know? How do you ensure Gjensidige, again, is there when somebody searches for, you know, insurance quotes?
How do you ensure that the service quality and the claims handling, you know, potential of the company is actually available for customers to see on these new platforms? Thank you.
Good. I can start with the first one. Combined ratio, 81%, if that's a conservative approach, question mark. Couple of topics I'd like to mention. On the cost side, which is part of the combined ratio, we are saying that we will have some flexibility, some room for investments going forward. We have to build profitable, but also seeking growth for what comes next after 2028, and that's the part of how we think about the cost ratio. Approximately 12% gives that kind of room. We have also showed a couple of pockets or segments or areas where we could seek growth, which should be profitable, like the housing, as mentioned, life and health, which is interesting.
If you look at health insurance in Norway, we have a market share of 25%. In Denmark, close to 10%. We are one of the leading companies in the Nordics when it comes to health insurance, which is a very good starting platform to improve and grow that business within the market, which will definitely have high growth going forward. We have done a lot within our health insurance product, both with the supply network and introducing retention levels and so on, to make that robust and profitable. I would not say that saying 81%, below 81%, which is the target, not equal to 81, below 81% in when it comes to combined ratio.
It's not a situation where we are giving away margins to put more pressure on growth areas. It's a combination where we have some room to do investments and dig into areas which will grow the business and make a great Gjensidige after and beyond 2028.
Autonomous.
It seems to be René again.
Yeah. When it comes to the autonomous cars and the OEMs, of course, these, some of them are huge, but we see that we actually are a bit interesting due to the high numbers of EVs, and that makes the Nordic a pretty interesting place to test. I had a meeting with Toyota yesterday, which we are a co-insurer with, and they were pretty clear on that Scandinavia and especially Norway, is really interesting when it comes to testing. They would like to test more with us. Nordic is pretty interesting due to the EVs, and it's just important to us to have a few strong enough relationships, so we are early in the testing, building capabilities together with partners.
I guess that's the answer on the partnership and the EVs and autonomous vehicles. There was a question about quality versus pricing. I think it's at least twofolded. One is to actually build the APIs, making our products, services, and the quality in our offering available for the AI platforms. Making sure that if they are looking for different kind of services, they're looking for the quality in our offering, they are able to find it. There's a lot of details in how to make that available for the bots, and we are working on that at the moment. The second part is making sure that what they find is differentiating us. Like the, for instance, the alarm service.
When the bot sees that you have a house insurance in Gjensidige with the sensors and alarm services, they see that you are not able to get that, if you move to a competitor. We are able to deliver sensors and alarm service in a better and more cost-efficient way due to the synergies to our brand, our distribution power, et cetera. That's an example of what's important to us to share with the bots so that they actually see that we are differentiating us from the competitors.
Just one comment on that. That's important. That's a good question. That's important also when it comes to AI and that kind of solutions in the commercial market. We see that customers that having example only motor and property compared to those having motor, property, and personal health products, the last is more satisfied, they're more profitable. We are talking about health insurance when you're combining with the pension solutions as well, we saw that those customers stay 13% longer than the rest of the portfolio, and they're more profitable, and they are more satisfied. What we are making, what kind of value proposition we are making available, then we also have to combining this with risk management models and advisory.
Mm-hmm.
We see that when you're combining this in our value proposition, that is how we seek to be differentiating in the market going forward, also in the commercial market.
You can say to your question about claims handling, when it comes to the value chain, you know, sales, service, and claims handling, due to ChatGPT, then the information sharing is important. You probably do it today, so yes, "Can you help me write something clever to the insurance company so I could get my, you know, claims payouts?" We'll see more of that going forward. The depth in the value chain when it comes to claims handling is very regulated. We are not gonna see ChatGPT suddenly do the payouts. Well, it's more than welcome, but it's different in the value chains today. It's different risk profiles as we go through ChatGPT as new distribution, which is more on the informative side.
Mm-hmm.
Okay. Do we have any other questions here? No, we don't have any further questions from the web. All right. We've reached the end of our Q&A session. For those of you who have further questions, please send an email to us in IR. We will revert as soon as possible. Thank you, everyone. I will now hand the word to Geir for concluding remarks.
As you have heard today, Gjensidige is standing on a very strong foundation that position us exceptionally well for the future. Our priorities are clear: customer empathy, resilience, profitable growth, and sustainability. These priorities guide how we serve customers, how we strengthen our operations and organization, and how we manage capital, and how we create long-term value. Johan, René, Lars, Vivi, Jostein, have shown how our strong platform enables us to stretch further by growing our top line, improving margins, and keeping customers loyal and satisfied, and strengthening our work on sustainability. Finally, but not at least, delivering cost and capital efficiency that support attractive returns for our shareholders. With this foundation and a clear path forward, I'm confident in our ability to meet the financial targets and achieve the next level for Gjensidige.
With these final words, I thank you for your attention and invite those of you present here today to join us for a short introduction on Edvard Munch. To all of you following the webcast, thank you for your participation. Thank you.