Good afternoon, everyone, and welcome to Gjensidige's third quarter 2026 pre-close call. My name is Berit Nilsen, and I am Head of Investor Relations. With me, I have our IRO, Jonas Fougner. Please note that this call is being recorded, and the recording will be published on our Investor Relations website after the call. We will start by going through the Q3 reminder that was published on our website on Friday.
This reminder highlights relevant public information and will not include any new business updates. Afterwards, we will open up for a Q&A session. As always, we will only answer questions related to information that has already been publicly disclosed. Please note that if you would like to ask a question, you need to log on via the Teams app. Over to you, Jonas.
Hi, everyone. Let us start with a few key dates. Our silent period begins on October 1st, and we will release our Q3 results on October 23rd. As always, we kindly ask you to submit your estimates using the template I sent you on Friday. Please fill in all open cells in the sheet. We have included control lines to help you identify and avoid potential errors. Please make sure these are error-free before returning the file to us. The deadline for submitting your estimates is October 9th, and we will publish consensus on our website on October 16th.
Now let us move on to the reminder. As usual, we start with comments on the weather. For the sake of good order, we always remind you of the seasonality in our business, with the summer quarters Q2 and Q3 normally having lower claims ratios than the winter quarters Q1 and Q4. This quarter, Scandinavia has experienced temperatures close to normal for the season, with some regional variation. No significant natural peril events have occurred during the period. In July, Norway experienced one of the largest residential fire events in modern times.
More than 100 homes were destroyed in Krokstadelva in the Drammen region. For Gjensidige, the event is covered by our reinsurance program. The impact for Gjensidige is expected to be limited to approximately NOK 100 million, plus reinstatement premiums and will be reflected in our third quarter results. On September 15th, Gjensidige successfully completed the issuance of a NOK 1 billion in a new subordinated tier two capital bond issue.
The issuance is Solvency II compliant, and settlement took place on September 22nd. In addition, as previously announced, we exercised the call option on the remaining NOK 1.2 billion of our tier two bond, GJF03. However, settlement will not take place until the fourth quarter on October 7th. As always, please keep the results for the comparable period last year in mind. In Q3 2025, we reported two non-recurring effects.
The first was a negative effect of NOK 429 million following the termination of the core- IT system CoreSuite, which affected the pension result. The second was the positive impact in private Norway related to a change in revenue recognition of home seller insurance. This contributed NOK 168 million to the insurance revenue and NOK 41 million to the insurance service result. Further details can be found in the Q3 2025 report.
Over to large losses. As communicated previously, the expected level of large losses for the current year is approximately NOK 580 million per quarter. For the sake of good order, please note that this is an estimate and not a quarterly guidance. Large losses are inherently random in nature, and the quarterly estimate is simply calculated by dividing the annual estimate by four. Turning to excess reserves. There is no change in our communication. We continue to set reserves according to our best estimate, and as history has shown, this may result in both run-off gains and run-off losses.
On inflation. For the most recent comment on this topic, please refer to our Q2 2026 presentation material. Turning to solvency. Bear in mind the bond issuance Jonas mentioned. Also note Gjensidige had NOK 200 million in tier two capital not included in eligible own funds as of Q2 2026. Eligibility of tier two loans is restricted by the total capital requirement. We expect the eligible amount to increase over time as the capital requirement increases, driven by growth. Please refer to our reminder for the general explanation of the main drivers behind the solvency calculation.
Moving on to our investment portfolio. As always, we believe a good starting point for estimating returns is to use the same asset allocation as the previous quarter, applying returns on the indices that we have listed in the appendix section of our quarterly presentation. Finally, on unwinding and change in financial assumptions, please keep the rules of thumb in mind. You can find an example spreadsheet on our website under Reports and Presentation, Other Documents. As usual, our reminder includes updated swap rates. With that, we will now open up for questions. Please raise your hand and we will open our line.
Vash, please go ahead. Your line is now open.
Vash?
Vash, if you please unmute, then you can.
Hi. Can you hear me now?
Yeah, a bit.
Yes, we can hear you.
Yeah.
Perfect. Sorry, I just had two quick questions and potentially more like clarifications. One is, could you just remind me of the allocation of that NOK 100 million for the wildfire for the fire event between corporate center and private segment? Just how does that allocation work? The second one, again, is a little bit more for clarification. Following your comments on the bonds and the solvency, I just want to double-check this implies that all else equal, there is no more tier two debt outside of your own funds calculation.
For the first question, we allocate NOK 30 million to the segment and everything above to the corporate center. Was that okay?
Yeah.
Did it clarify?
Yes.
Yeah. When it comes to the second question, I am not sure I understood exactly what you were asking.
Sorry. I got a bit thrown off by the comment within your release, which says that over time, as your SCR grows or the business grows, the tier two debt will become part of your own funds calculation. But that NOK 200 million, which is excess at the end of 2Q, seems to be exactly the difference between your now recalled bonds and issued bonds. I just want to double-check, which means as of 2Q, on a pro forma basis, there is no more excess debt outside of Solvency II.
Yeah. That is correct, if I understand your questions correctly. Yeah.
Perfect. Thank you. Just those clarifications. Thanks.
Is there any other questions?
Okay. There does not appear to be any other questions, so thank you so much for your attention.