Earnings Call: Q3 2017

Oct 27, 2017

Welcome to everybody. And my first question to you investors in Protectedor, which state is it today? It's not a very difficult question, is it? It's Friday. It's Friday, not a date, not day. So it's a pretty difficult question, I understand. It is October 27, which is a historical day in Protector. Why? Because the growth rate of the company is higher than 50. Of course, in previous years, we have seen quarters with higher than 50% growth, obviously. But with the kind of size we have at the moment to see a 50% or higher growth rate quarter versus last year quarter, it I guess, will never ever be seen again. So it is a strong date when delivering the kind of growth we have in this quarter. We all understand that it's not Pottery is not the biggest quarter in Protected Oil, but we are proud to deliver more than 50% growth in a quarter. But the bad news is that I don't think we will ever repeat it again. Even though we do expect a strong quarter volume wise also in quarter 4. As always, feel free to ask questions through presentation, but we will also kind of close with Q and A at the end of the presentation. I will do most of the walk through of the company today, but I also have Marietta Barnard here in the room, and she will kind of talk a little bit with you about the cultural development of the company. So I'll introduce her with a couple of words when we are there in the agenda. I'd like to draw attention again to the Grenfell Tower tragedy and situation. Obviously, the DNA of the company is tested out in such a situation which we do have in U. K. How does the market judge our credibility when working with the worst tragedy in U. K. Since the 2nd World War? What does the market the people we are working with in the claims handling situation or in other areas in U. K, do we walk the talk and continue to be open even in such a situation. Are we bold or are we committed? So our values are tested every week in U. K. And I would like to share a couple of comments with you on Grenfell Tower today as well. Not spend as much time as we did last time, but obviously give you a short walk through and an update on the tragedy in London. So let's start with the claims handling. It is about making sure that most of insurance payments are done correctly and are delivered to the victims of the tragedy and try to avoid unnecessary big, big spendings on legal costs. That's what we're doing at the moment. So we have received around 70 liability claims today as we speak. They are reported in to a claims handling team working inside Kensington and Chelsea. And then if necessary, coordinated with protected representatives based in U. K. So we are up and running in everyday type of situation handling the different claims. So he who is working on a daily basis is Phil, which you see on the picture here, and managed by our claims director sitting here in Oslo, Fredrik Messel. The process is key. So it is about establishing the right processes in order to avoid unnecessary legal spending and to deliver as quick as possible response to those who are in a situation where they need a quick decision from Protector as the insurer of Grenfell Tower. There are no actual news on the property side. The building is not released. We haven't been inside the building so far, and we don't expect to get our opportunity to get closer to the building before Q2 next year. It's a criminal investigation going on. It is still a lot of work to do internally in the building. So we are not doing anything actually, but we are prepared to do what we have to do when the property is released. And then it will be taken down, of course, which will take a lot of time after it has been released. On the liability side, however, the different structures are up and running. And we are capable today in order to handle any situation that derive from the different type of claimants in this area. With the rehabilitation scheme with the necessary specialists has been established, and there is a dialogue with the victims and or their representatives on a regular basis now. So the concerning activities, they are up and running in a demanding environment, obviously. Risk management and unwriting wise, it's stated here that 96% of all similar risks in U. K. In other portfolio has been inspected. That figure is today 100%. So this fall is a couple of days old, and we are today on 100%. So we have been outside and inside any critical risk in our own portfolio at the moment. We have introduced new technology for our clients, develop a new app that they can use themselves when they are doing their part of the totality. So to consider similar risks or other type of property risk and liability risks in the different portfolios we have. It's up and running, stable work. We have good communication with our client. And we are obviously learning how to evaluate a risk seen from an underwriting point of view and how to price risks for the future and also how to support our clients in order to improve the risks in that era. So in my opinion, both the risk engineers in Protector and the underwriting team managed by the 2 guys you see here on this screen. They are doing what they have to do in order to make sure that we have a credible underwriting procedure up and running post Grenfell. And in order to rebuild the credibility towards the reinsurance sector, so that we can have competitive prices on the reinsurance contracts going forward. As you know, from the Capital Market Day and from quarter 2 presentation, we had a renewal date in September 1 for the casualty reinsurance panel. The timing was not very good. It was very close to the Grenfell Tower tragedy. And it has been a busy summer and a busy autumn in order to renew the reinsurance contracts. They are renewed to acceptable terms. 8 of the 10 reinsurance companies on the panel, they are still on the new panel. 2 have left and 4 others have arrived. So there are 12 reinsurance companies behind Protector going forward on the reinsurance side now. And the capacity we have in the market, the size of the reinsurance contract is similar to what we had before Grenfell Tower. So it's thick. It's done. We have competitive prices, at least acceptable prices, and we can compete in the U. K. Market going forward. It's important. It is critical for U. K. That we manage to get through that. And as expected, it didn't arrive any surprises even though it was a busy couple of months in order to settle the new reinsurance schemes and the new reinsurance panel towards the market. On the communications side, it's not really too many situations arriving. The media have still a low profile on the insurance side of this tragedy, which is fine, and we hope that will continue. But communication wise, we are still open and altering the market and trying to share our experiences from this tragedy with others so that we can avoid such an event in future. I've given a presentation in a big claims summit in the London market, and the claims director of met 150 people in Copenhagen yesterday, risk engineers in order to share and discuss what happened, what can we do in order to prevent such situations in future. So communication wise, I think that we do what is expected. So my summary on UK is that we are fighting every day in order to live the values of the company. I do think that what we do has been received properly in the market. And I hope that our brand is still good in the U. K. Market. Next time we meet, you will know more about it because, as you know, one of the targets of Protector is to be the quality leader insurance wise in the U. K. Market. So when we recruited the first 10, 15 people in U. K, some 2 years ago when we started, we said that our target is to be quality leader in the U. K. Market. How much time do we have in order to take that position was the question from the new recruiting people before the sign up. I said, you have 18 months to go. And 18 months started April 1, 2016 because then we had the first client on board. So 18 months from April 1 is what? It's now, isn't it? So the question here, which is the basis for the quality survey, is actually out there in the market now. So it has just been sent out like within in Sweden, like within in Denmark 18 months after the first client arrived in protectorate. We will have this study summarized before Christmas, few weeks before Christmas, and we will update you when we are giving the presentation for the full year, a bit after New Year's EBITDA. So we are kind of keen to see how we are looked upon, say, from a quality point of view in U. K. And whether the rental tower has influenced, for instance, in a negative way or not or potentially in a positive way. Yes, the question? Is it so that your updated now view is that the charge for you will be still only £2,500,000 Yes. And can you also give us a number of how much the impact is on the gross claims that we have in the quarter? Yes. I'll come back to that. There is a follow-up giving the 2 answers on your question. What is the gross reserve situation on Grenfell Tower and what is the net effect profit wise in the quarter? I come back to the question. I do have a follow-up updating you on that one, okay? So qualitatively wise, we are keen to see what will happen when the survey is responded from the different people out there in the market, and we will give you an update at a later stage. Our ambition has always been clear. Global leadership is one out of the 2 elements, which gives Protector a competitive position in the market. Cost leadership, you know, quota leadership should lead to profitable growth, which again should lead to a top 3 position in the market. So what about the figures then? We are very satisfied with the volume growth in the quarter, which is 56 percentage points, up from quarter 3 last year. The combined ratio is, I guess, in line with what you should expect since we have guided on a combined ratio at the end of the year, 92, and we had slightly below 90 after the first half year, then you should expect somewhat higher than 90 in quarter 3 and quarter 4. So in my opinion, 90% is in line with our own expectations and guiding, possibly slightly better, slightly better, see, from my point of view in that area. We have a good return on investment quarter. And as you know, we have received an investment grade rating. We are happy about that rating. It is kind of needed in some client situations, both in Sweden and in U. K. We it has been a situation, especially in U. K, where we have lost some opportunities the last 6 months because we do not have a rating. And we think that this will support the company in getting access to more tenders and more possibilities in certain subsegments in the market. The solvency ratio based on the standard formula is one of the strongest ones in the Nordic market, up to 192 point 5%. The growth is coming this quarter from Norway, Sweden and U. K. So it's not a story about U. K. It's a story about Scandinavian growth coming out from Northern Sweden, but also what you could call an acceptable level of growth in the U. K. Market. A bit of luck in Norway, a bit of luck in Sweden, kind of as expected in U. K. So you shouldn't expect these kind of figures, obviously, going forward, not even close to it. But this quarter, it was on the right side and some other quarters maybe on the other side then. We have known for many months that the quarter will be good. So that is kind of expected and communicated to you earlier. So it's not a surprise. So it's, again, I would say, in line with expectation. And the accumulated growth in Norsvikrone is 18.9%. And in local currency, it's slightly above 21. So the underlying growth rate is slightly better than what you see in local currency strongly on the road side. And here, back to the kind of questions you have, so the gross reserves has been increased up from £50,000,000 to £75,000,000 And as I told you, after the Q2 presentation, it was a lot of uncertainty related to the reserves. You should maybe expect that to go upwards. It has done. It's not a surprise. It could go higher going forward. But it's also possible that it could go down in future, but it's more likely that it will go higher than lower. I would expect no changes on the grocery service in Q4. That's my expectation at the moment. And as you can see on the slide, the financial impact in Protectors' Q3 result is 0. So this reserve increase is fully covered by previously communicated net reserves from our side and will fully be picked up by the reinsurance world in that area. So this figure is, of course, far too high. But the underlying reality of the company is much, much better. You should take out the Grenfell Tower tragedy and do your evaluations based on our figures exclusive of Grenfell Tower, at least on the gross side, while the net claims ratio is slightly better. I wouldn't worry too much if I were you about this kind of reserve losses in Q3. As you can see, we have a stable reserve developments year to date. And there will be small changes between the different quarters, nothing special. It's a handful of products that have some kind of reserve losses in this quarter. I don't expect that to continue going forward. We think that our reserves are prudent. In the Capital Markets Day in August, we went through a video of our reserve history, which has been spot on the first 13 years. So no signs about anything arriving, neither on the positive side nor on the negative side when it comes to the kind of reserve losses in quarter 4 here. Just one question for the Resuriblos. I remember you had this particular product, which was this heater in Sweden you had very, very high market share in. Is these products if you can mention some of the products, is it so that you have high market share in all of them? Or is this, let's say, insignificant market share for these products? On the heat pump insurance area, we're very niche oriented, very low cost type of product. We have a significant market positioning, higher than 50% in that very small niche in the market. But the kind of reserve situation we're looking at, at the moment has nothing to do with that particular product in Sweden. It's not important. And the volume in it is still on the lower side even though it's growing here. So that niche product in Sweden doesn't really influence on the figures in Profitability in any significant way. Okay? Yes. Repricing of the reinsurance, will that affect your view on the combined ratio going forward? Because much more expensive. So the question is whether the renewal on the cash outtake contract side in U. K. Reinsurance wise, whether that will influence combined ratio going forward. And answer to that is no. So we have renewed the contract to acceptable terms. The most difficult element in the renewal situation was the change in the Ogden discount rates. That was the big challenge, not really rental power in that area. That influences the full market. So reinsurance prices, casualty in U. K. Is going up. And that will be reflected in pricing towards the market. They will go up. And our expectation combined ratio wise is that this situation does not influence on our expectation for the combined ratio development in the U. K. Market in future. But it's obviously a valid question, relevant. And I'm happy to say that answer is no. It will not influence on our expectation, combined with the UK. Where do you book it then? Say again? Where do you book it then if it increases or doesn't affect your combined ratio? I increase prices towards the market. I pay more for insurance. I ask more from the client and they accept. So it's pretty easy, isn't it? It's just increased prices. How difficult can it be? But in the market no, but seriously, in the market in what? 24 months to increase your prices, doesn't it? Say again? It takes 12 to 24 months to increase prices, doesn't it? Yes. But also, I don't have an immediate effect on the reinsurance either. So insurance prices takes 12 months to go through the cycle, and then you have the earn out situation. But the way we pay a price for reinsurance is equal. So that is equally balanced. So I will not pay reinsurance price today upfront. I will pay as I earn my premium. So it will take before the increased prices and reinsurance kick in, that will take 12 to 24 months before they those prices have been put into work in that area. So the technical two sides of it, they are equal, which again, it's not really obvious, but it's the way the market is working. Yes. Okay. We have, as you know, a very good cost ratio. The volume growth in Norway is very strong. On the in the change of ownership area, As you know, in Norway, the market is cooling down and the prices is going down compared with previous month. So we have had some help from the market price development the last years. And now we will not have that kind of support going forward. We might have a small decrease in prices going forward based on an annual view. And obviously, that will reduce the profitability slightly in the market. And our target is to take that kind of profitability back through improved technical surveys, which take time to implement. Not big successes in that area so far, but we will get through with an improved quality on technical surveys in the market that will support Protector in 2019 2020. As you know, the DNA of the company is this is where we are. And we have nominated the change of ownership team to be our internal heroes in the company. And then I would like to introduce Marietta, who is Director in Charge of the Change of Armistice Ship segment and has been for the last, what, 10 years, Marietta, in the company. And she is also the HR Director. So a couple of slides about cultural development is on your side. So please give a few comments, Medea, to them. I'll say a few words about cultural. It's what is actually cultural? And what do we do to work with our culture in protector? We work with performance based culture. Culture is everything we think, everything we do, the way we interact, everything around us every day. It's sadly enough not in the wallpaper or in the walls as we say it in Norway. It's in us. So we work with everything from the little things with every and each one of us every day, the way we say good morning, the way we dress, the way we address each other, the way we work in a team or the way we develop individually. We believe that people is the biggest asset in our company. It's very easy to say. It's not always as easy to work with. But we spend a lot of investment in our people. Working in particular is probably not for everyone because you need to like the development. You need to like to develop yourself and you need to like to work in a team and you need to have positive energy. And I believe for those of you who have been visiting us, you will feel the energy in the people that work there. And for those of you who haven't, I'll say welcome, stop by and come and see us, because the energy of the people there is unique and it's special. And I think that's one of the things that makes us different and special. We give our leaders a lot of tools to work with their employees. We not only give them tools to work with and have meeting with their employees 4 times every year and we give them different tools. We evaluate the way and the quality of the leaders and the way they use their tools. So it's not enough just to use tools. It's not enough just to have a sit down with your employees. It's the way you do it, the quality in the way you work with your employees. Everyone in the company knows our DNA, every single one. You work in a company for a week, you know our DNA. For some part of the company, it's even something you know if you want to work there in an interview. If you don't know our DNA in an interview, they're not that interested. So everybody knows. Not everybody knows all the qualifications are in the DNA, but we don't either. It's a development all the time. Good is enemy of great. Good to great is that one of the books we have based all our values or our culture program on is good as M and A are great. And we work every day to be a little better in everything we do, also the culture. So we have people that are very young in particular. They come right from school. So we talk to them about everything, about how much to drink when you go out meeting customers, how to dress, how to say good morning, how does your negative morning feeling affect the people around you? How can each and every one of us we pick all the best people. But we don't think that's enough because the best people working together as a team will give us even more. So this is the most important thing we do to work with our people every day to have the best people and that makes us the best company. We have our own training program. Probably not because it's the best ever program, but because we train on the things we think are important. And the program is based on what we need as a company to develop in the right direction. We have a saying that strategy eat culture eats strategy for breakfast and we think so. But now our next level is that strategy is a part of our culture. It's not something on the side of the culture, it's a part of us. It's a part of who we are. And the strategy is always also based on our DNA and our goals and the quality of being better. So the next leading program, it goes for 18 months. We have a 6 months break and then we go back to a new program. What we're working now is on our value change, capitalization, discipline, how do we work together? Do we meet in a meeting on time every time? All the little things. And probably most important, we work on culture. So we sit together many times during the year, And that's what makes us different. Any questions? Thank you, Marietta. Just to give an example before yes, a question. How much of the cost in the product are related to volumes? How much are more sticky process? So what's the cost ratio in change of ownership department? Is that what you're asking about? How much does it depend on the annual volumes? Okay. So the cost ratio is what, merater, around 16.5 percent, including claims handling costs. So it's booked differently, as you know, but the cost ratio is 16.5%. And the scalability in change of ownership is less than in the commercial and public sector. So if volume goes down, the cost ratio will probably go slightly up. That's kind of a part of your question, I guess. Yes. So if volume is going somewhat down in 2018 and 2019, you will see a slight increase in cost ratio, maybe 1, 2 percentage points, which will reduce profitability accordingly. €10,000,000 of issuance per annum, annual profit reduction if such a situation arise. It's not at all sure that volume will go down. Even if real estate prices is coming down, this is about a turnover in the market. So if turnover is on the same level or picks up slightly again, it's on a rather low level at the moment. So if turnover is picking up, then volume will be stable. So our expectation is that there will be minor volume changes the couple of next years. So you shouldn't actually see any cost ratio changes in that area. So it's a rather irrelevant question. Not irrelevant, but it's not a significant question more than that. Could that be? Because there is a point in the question that scalability is more limited in the area. But you shouldn't be too afraid of it, Okay? Just to give you one example before going into the figures. This morning, in the same room we have here, we had a walk through with our employees, obviously, as we always have when we release a new quarter figures. We divide the team in 2 because the room is not big enough for everybody. And then we have a walkthrough. And one of the words in the DNA of the company is the challenger utkordragran in Indonesian language. I talked for 15 minutes about that work, Okay? I went back to 2013, and I was doing some comments on today's situation. I walked into 2020. So I told a 7 year history about that single world. It took me 15 minutes. So that's an example of what we do. When we try to educate all of our people in order not to remember the different words in the DNA, but to educate ourselves and then to try to understand what does it really mean, the word challenger. So today, 15 minutes, a lot of energy in the group. And most of the people in Protector today understand slightly better the world challenger compared to yesterday, which is important. And I think that you, as investors, you would have smiled a lot if you had been inside early morning. And I may share this secret with you, what we talked about, if we would like to. But it will take €15,000,000 And we will not spend €15,000,000 on that single word today. But feel free to ask a different environment, and we will touch to you about it. We are happy to do it in that area. The Challenger, 15 minutes, you will smile. You are lucky what you hear in that area. Sweden, another good quarter in Sweden. Any questions? Denmark, small quarter, slightly volume development, not really important. For starting quarter 1, 2018, we have lost 1 significant portfolio. We have 1 win, which also is significant, but those 2 combined is negative volume development. So today, we foresee a rather limited growth, if any, in Denmark in quarter 1. Again, same from a company point of view, that is not a problem. It's in line with what we have guided on earlier that you will see a couple of years with a rather stable volume development, possibly slightly going down before picking up again. The important thing is that the new management team in Denmark reestablish the culture of the company on a high level and delivers quality leadership to the market. That will take another 2, 3, 4 quarters. So my expectation is that we will not take back the quality leadership in Denmark this year. It will take another year in order to get back. But our KPIs is developing in a good way in Denmark as we speak, but it does take time. I told you before, repeating it again, it will take time. In the meantime, the combined ratio is around 100, slightly below this quarter with 97.9, but slightly above yet to date, which also is in line with what we have said earlier. And as you have seen and can see now again, the workers' comp product is still unprofitable in Denmark. And further price increases will be issued in the market, and prices will go up January 1, 2018, again, in order to improve profitability. Most of these price increases has been accepted already. But there are some downside risk on the volume, which is okay in Denmark. So stable, acceptable or seem internally good development in Denmark. However, it will take time before we are back on track as the quality leader and delivering profits with acceptable margins. But we are on the right side. Year to date, we do have a profit in Denmark. So we are not currently reading anything in Denmark at the moment. It's not really the deviating here. I said that you would probably see weapons' comp claims ratios around €100,000,000 So this is consistent with previous communication. So no really development or expectation, which means that all other products must be profitable in order to get a profit, obviously, in that area because our claims ratio above 100 means a combined ratio above 110. And if that's half the volume, the combined on the rest of the product must be below 90 in order to get to 100 in that area. This is in line with expectation, in line with guiding. Prices are too low. We have to go up. It's nothing wrong neither with claims frequency nor with the average claim size. It's something wrong with the prices. They must continue to go up. And we took a rest of it last year, and we expect to take more on the pricing fee side entering January 1, '18. And as you know very well, the reserve development is very, very difficult to predict because it's fast moving and it takes a number of years. And the authorities are part of the claims handling process in Denmark because we do not handle the claim totally ourselves. It's a different value chain in Denmark compared with Norway. And they are very late on delivering their decisions, and they do delay all claims handling in reference compare around Denmark with more than 2 years compared with the kind of quality vehicles are delivered to the market. So this entity which the government has created in their mind, it's not working. They are far too late, and we all suffer. It's not only a protective problem. It's a problem related to all companies in the market. So a unit called Arbeit Scribeisterialesen, which is a public entity taking final decisions about whether a person is disabled for life or not. And we wait and wait and wait and wait and makes it even more difficult to consider the reserve development in that area. But again, the results are best estimate. They are complex to evaluate. We haven't seen any changes to last quarter, but it will take years before we know for sure. Like and anywhere, this comp area. That's normal. This is business. It's the way it is here. You shouldn't be too afraid because the size of the reserves on a company level, they are not very big. And the volume in Denmark is not very big. It's 15% of the size of the company. And what we're talking about now, workers' comp, is around 7% of the size of the company. So it will not influence a lot on profitability, neither on the positive nor on the negative side going forward in Protected. That is an area of interest and uncertainty obviously. Okay. More questions about Denmark? Finland, small quarter. But a very good element is that I did visit Finland a couple of weeks ago, met many other brokers in the market, most of them actually in one event. And the atmosphere was very good. We feel warmly welcomed by the broker society in Finland. The quarter down volume looks very good. So we have a number of significant wins in Finland already. So we do expect that Finland will support growth in Q1 next year. So gradually, going from kind of project status in Finland to be something close to the coal like company then. They do have support from Sweden, Spain, but are gradually growing to be more and more competent in order to deliver whatever need and whatever quality towards the market. As you know, we went directly to the top quality wise in Finland, and we are proud to say that, that we are quality mover in the market. The broker position in Finland is rather limited, it will never ever be a significant market for Protector. Numbers will stay small for the next 5 to 10 years in Finland. But okay, if we double every year a couple of years now, that will be at least a few 100,000,000 Norwegian tonner will come out from Fed Lab during the next 3 to 5 years. So here is the figures, good growth and quarter 3 profitability, €150,000,000 before tax. And just have a look and comment with any questions if you would like to balance. Our balance sheet is stronger than ever, we are positioned for continued growth both in Scandinavia and U. K. Here is your question. That's good. If you look at the retention rates and the low compared, and you see the same one for illustrating the lower growth in the net premiums. Yes. How do you consider that? And what would you say is a likely growth in net premiums this year? That's an extremely relevant question. I apologize that we didn't really put any information on your screen related to your question because we obviously should have done it. Because what you see is that earned premium development is very limited compared to the gross premium development. And the reason why is there are 2 reasons. 1 is basically the excuse me, the new reinsurance contract. So the new Solvency based reinsurance contracts we technically influence the net earned premium situation. It's a zero gain on the bottom line. But we feed volume without ceding money to that solvency based reinsurance contracts. The other element is that in this quarter, the ceiling level is slightly higher than normal because we took on board a lot of property volume. And that's the only area where we have a quota share contract that will be more to the reinsurance world. So that's the only reason why the net earned premium development is surprisingly low. So no worries about it. It doesn't really influence the profitability of the company. The net profit at the bottom line will be basically equal. Of course, there are costs related to the solvency based reinsurance contract, but that's inside the figures. They are implemented. They are the prices are competitive compared with any capital cost in that area. We have to come back to you after quarter 4 in order to guide you better for a future of that service based contract with influence on some of the key figures here. So I apologize for not being good enough in the communication around your important question. But again, have a steady look at the gross development in Protector because that is what will drive the company towards the future. And then reinsurance wise, yes, we see it on the property side, not in real life on any other side. And what you will see is that when we continue our growth, the earnings per share down there shouldn't be influenced at all by the seating discussion we have at the moment. Yes? Just to have some things to take this on. The reinsurance, the increased property? Would you expect the net growth to catch somewhat up towards the growth by the end of the year? Or is the current level around 9% level to the expected growth by year? So the question is what kind of seeding have you actually done in quarter 3 and what and how do you consider this situation going forward? And I'm not really competent now to answer precisely on your question because we only saw the lack of information here kind of very late last evening, this morning. And we haven't really had the opportunity to go through the figures in the detail. Could you, on the spot, Rebecca, give a solid statement and educate me. The CFO is sitting in the room here. Or should we come back with a call? So what you're saying is that before and after this kind of seeding, it's 0.7% 0.7% influence on the net combined ratio. So if you didn't have this kind of ceding arrangement to the solvency based reinsurance program, it would have insignificant influence on the command ratio. What about the volume part of the question? €70,000,000 or €80,000,000? Yes. Yes. So €17,000,000 or €80,000,000 ceded to that reinsurance contract, which means that we would have been on 20, 8.40, something like that on the earned premium year, exclusive of that reinsurance contract. So thanks a lot for your support. Rebecca, you are expected to have more difficult questions that I cannot handle. That's the way it works and it worked. Okay? On the investment side, we have an equity portfolio delivering slightly worse than the market and a fixed income portfolio delivering slightly better. And on these two pages, you see kind of the accumulated development compared with different indexes. And here, you see on the fixed income side, our development versus relevant indexes. And what you can see here is that as we have updated to you on earlier, we took risk down in the beginning of 2017 in the fixed income side, growing gradually from a BBB type of portfolio to an A- type of portfolio today. It makes us relevant to compare Protectors Development with a different mix of competitors. So the basket you see here is different from the black basket, which makes sense because the risk profile of all the portfolio has changed. And then we should change baskets to compare with in that area. And in smaller words here, it's explained what type of basket we will compare with compared with the risk profile of protected portfolio until the beginning of the year and what kind of basket is more relevant now. So we're trying to do this as almost and as good as possible is far too difficult to do an exact kind of analysis of it. But this is kind of our development compared to different baskets in basically the Norwegian to a certain extent than the Scandinavian market. So what I'm trying to say is that the investment department in the fixed income side has done a good quarter also compared to peers and compared to risk. That will change a little bit between the different quarters. The equity side, we are a bit behind in this quarter. But the last couple of years, we have done very well on the equity side as well. If we put these kind of figures together, there will be a 1.2 percentage points investment return in this quarter. And as you know, it will be difficult to deliver good return on investment going forward because the fixed income portfolio is yielding 2.2. We are not looking for a situation to take a risk in order to get a better year at the moment. There is no good ideas we have in the market. So we will stay tuned with possibly taking more risk off the table going forward. So we hope for a correction in the markets soon. A crash would be appreciated so that the market is bleeding and we can go on risk again and buy on a lower level. And we can handle a correction in the market. We are more than solid enough. And since our float is growing, we would prefer a market correction then. Do you agree? If you have a long term horizon, that's the best thing that could happen to protect them. In short term, it will, of course, influence negatively. In the long run, it will probably influence them positively. So Doug Marius, our Chief Investment Officer, is smiling behind me and looking for a correction in the market then. We hope this will arrive soon. Now significant development on the shareholders' side as far as we are aware of. And the summary is that we think it's very nice. It's a historical strong quarter. The profitability is on track. U. K. Reinsurance Renewal is behind us, and we are positioned to fight in the market. And we are in the middle of the hunting season, obviously, now looking forward to the January 1 renewal, not only in U. K, but in also in the Nordic market. Obviously, we expect significant growth in 2018, which will be guided in the second half of January next year. So you have to kind of look into our financial calendar. We will update that one and tell in advance when we will guide volume for 2018, normally around January 20th or 25th or something like that. So any questions? Yes. On the new volume, will you target the combined ratio of roughly 92? Yes. So combined ratio guiding for future has not been changed. It has been 92% and it is 92%. So until we say otherwise, you should expect 92%. And we have no nothing new on the agenda now. And I wouldn't expect that to change the next quarters to come. I wouldn't expect anything to change. It could. So what we have discussed with yourself related to that question that we might accept a combined HSS94 4 in future because that will add more shareholder value if we if that support, for instance, 20% growth. I think that situation have slightly changed because the revenue on the fixed income portfolio is even worse than when we met in August, which means that underwriting discipline should stay at least as strong as earlier, maybe slightly stronger because we going forward, we will obviously earn you should expect less investment income relative to technical profitability development. So yes, it is not it hasn't been a significant change in opinion from our side because you have a longer view on the question, let's say, 5 years or 10 years ahead. So then basically, we believe in the same story that we could accept the combined rates of going to slide cloud in order to support future growth. But in the short term, this market is moving towards a slightly increased discipline because fixed income return is expected to be lower. So that's the reason why I think that it's prudent to say today that my expectation for a combined ratio future guiding may stay at 92% for the next year, may stay at 92%. But we will come back next year obviously in that area. There has been some questions through the webcast system here. Vivek, if you could take read the first one. Yes. So the first one is from Peter Testar. Can you please explain more specifically the background of the road map losses? What insurance areas are responsible? And have you reviewed the reserves in these areas to determine whether as these mature, whether we should see future amount of losses? Yes. I don't think that is necessary to give a name. So if you are asking the different questions, that was a good one. It could be a single one, so don't draw the names out of out there in the market. So the question is to the reserve side. I think I have commented it already. It has something to do with a handful of products and don't expect it to contribute to go forward. And I will not go more into detail about exactly what type of product. Don't worry. The run off situation year to date is 0, and that's what you should expect going forward. Okay. Another question. Gross claims ratio has been rising every year since 2014. Are you worried about the quality of underwriting? No, I'm not. So we have had extremely strong underwriting results 5, 6, 4 years ago. They were not kind of expected to continue. So we are now going into a more normal level where we are going towards 90 2 in combined ratio. So it has absolutely nothing to do with underwriting quality, but it has something to do with how we use our competitive position in order to grow the book of business and protect it. So if we had taken a more conservative view and tried to protect 88% in combined ratio, our growth level today would have been 0. That would have been stupid for the company and for shareholders. So our handwriting quality remains strong in my opinion even though we have to prove that towards here in the U. K. And it will take some years. But if we know what we're doing in Nordic market, hopefully, we know what we're doing in the U. K. Market as well. The differences between hyperspector and the Nordic U. K. Competitors calculate cost ratio? No, it's not. So we calculate cost ratios equally. So you can compare other cost ratio with competitors. However, it's not really relevant to see the NCD cost ratio and Protector because they have a consumer based portfolio. So it's not apple to apple. But if you are looking into the same segment on the competitive side like TRIG and EF, you will see that Protectors' cost advantage is equal as what you see on a company level. So we are very eager on cost in the same market segment, and it's accounted equally in the different markets and as far as we know, also in the U. K. Market. Last question. Does the lower investment return embedded in the bond portfolio lead you to require a tighter view on the pricing of insurance risk to compensate? Yes. And that was the question we had previously from the audience as well. So slightly more conservative, but not a lot, but slightly. However, we have a long view, 5 to 10 years in order to build the company. So it will not influence a lot. Another question? Your BBB plus rating, is that satisfactory enough for your customers in the U. K? Or is it so that you wish you would now go for single A-, isn't it? It could be slightly on the positive side to have an A-, but it is satisfactory and we don't expect that to develop. It will stay stable for the next couple of years. And the reason why is that we are growing that fast that this rating agency has indicated that if you keep up with the growth rate, we will probably keep you on BBB plus in that area, which basically makes sense. Whether we should have had a slightly better or not, my personal opinion, I guess, you know what I would answer to that. We are a much stronger company than a triple B plus company. However, it is good enough for our for an improved market situation. Some clients might say, hey, then we are on to business, but this is improving our position. It was another hand here, is it? Okay. Well, one more. Why is the business compensation so difficult in Denmark? You have sort of the same products in almost every country, maybe except for 1. But why is it more difficult there? Is it just because of this side, but it's just whatever you call it, So why is workers' content more difficult than any other product area? Basically, it's not No, no, no. Compared to other workers' compensation, in the context. Yes. So I would say basically, it's not. It is difficult in Norway. We didn't know 10 years ago what would happen when we entered the Gertonskoynt Norwegian market. It turned out to be very good. And we have been possibly slightly too aggressive on price. Workmans come Denmark. It's difficult to judge. It will take years before we know for a fact. And then when but when we think we have been a bit too low on price, we increase them and we'll be back on track. We take risks with open eyes both in workers' comp and in many other areas. And in some project areas, we take years before we know the answer. That's who we are. And it's a part of the growth story of the company. Historically to date, we have demonstrated that we can balance that risk in totality. Something is going better than expected and something is developing poorer than expected. On average, it has been a pretty good story, hasn't it? So risk taking, a bit too aggressive, fix it, earn money, but again, it will take care. There will be another kind of risk taking situation in U. K. When employee liability product is getting into our books on a limited level, but there's a similar situation in writing, which will repeat itself the next 5 to 10 years. It's a part of the growth story. It's impossible to be absolutely sure on pricing or long term products in new markets before you enter the market. Impossible. It's difficult even for us to have been in market for 20 years. But our cost rate at the end of the day, we benefit a lot, making our money when others moves. That's the competitive advantage of Protected. So thanks a lot for your patience and for a lot of good questions. Still have a beautiful day.