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Gjensidige Forsikring Q2 profit rises YOY on investment returns

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Gjensidige Forsikring Q2 profit rises YOY on investment returns

reported second-quarter profit attributable to owners of the company of 1.30billion Norwegian kroner, up from 1.20 billion kroner in the year-ago period.

EPS forthe quarter was 2.60 kroner, compared to 2.39 kroner a year earlier.

Theinsurance firm said the second-quarter financial result was positively impactedby good returns on bonds and the investment in . The companyalso noted that runoff gains were around the expected level for the quarter andhigher than in the same quarter in 2015.

Overthe next 2.5 years to 4.5 years, the company expects average annual runoffgains to be about 800 million kroner, moving the expected reported combinedratio to the lower end of the 86% to 89% corridor.

Earnedpremiums from general insurance rose year over year to 5.54 billion kroner from5.19 billion kroner, while earned premiums from pensions dropped to 294.4 millionkroner from 303.3 million kroner. Claims incurred from generalinsurance reached 3.60 billion kroner, up from 3.34 billion kroner a yearearlier. Claims incurred from pension were 250.2 million kroner, compared to263.1 million kroner a year ago.

Theunderwriting result for general insurance was virtually flat year over year at1.07 billion kroner. The general insurance combined ratio was80.6%, compared to 79.4% a year ago.

Totalnet income from investments amounted to 591.0 million kroner, compared to 518.1million kroner in the second quarter of 2015.

Interestincome from banking operations totaled 349.8 million kroner, compared to 328.4million kroner in the second quarter of 2015.

Forthe first half, Gjensidige Forsikring posted profit attributable to owners ofthe company of 2.41 billion kroner, up from 1.94 billion kroner in the firstsix months of 2015.

AnnualizedROE was 21.7% during the half, compared to 18.3% in the year-ago period. Thegroup targets an after-tax ROE of 15%.

Asof June 30, the company's capital adequacy ratio at the retail bank stood at16.3%, compared to 16.1% at 2015-end and 15.1% at June 30, 2015. The commonequity Tier 1 capital ratio stood at 12.6% at the end of June, unchanged fromthe end of 2015 and up from 12.1% a year ago.

GjensidigeForsikring's solvency margin under the Solvency II standard formula was 192.1%as of June 30, compared to 176.9% at the end of 2015.

"Given reasonable market conditions, Gjensidige willconsider utilizing its capacity to issue Tier 1-compatible hybrid capital inorder to further optimize the capital structure," the company said, addingthat over time, dividend payouts will reflect its policy not to build capitalin excess of the targeted capitalization.

As of July 14, US$1 wasequivalent to 8.37 Norwegian kroner.