Ladies and gentlemen, welcome to the Topdanmark Q1 to Q3 2022 interim report. For the first part of this call, all participants are in a listen-only mode. Afterwards, there'll be a question and answer session. To ask a question during the Q&A, please press five star on your telephone keypad. I'll hand the call over to the speakers. Please begin your meeting. Thank you, operator, and good afternoon, everybody, and good morning to the USA. Thank you for joining us in this conference call. My name is Peter Hermann, and I'm the Group CEO of Topdanmark. With me is our Group CFO, Lars Kufall Beck, and Head of Investor Relations, Robin Løfgren. We are hosting this conference call because earlier today we published our interim report for the nine months of 2022. I would like to start with a few opening remarks before handing over to Lars to comment on the results in more detail. Slide 2, please. Overall, we delivered a good set of results in light of the historically high macroeconomic uncertainty and volatility in the financial markets. Net profit in Q3 amounted to DKK 259 million, with a technical result of DKK 496 million and a combined ratio of 80.1%. This is a testament to the robustness of our business model and the solid effects of our ongoing efficiency and pricing initiatives. However, the mentioned volatility in financial markets also meant that we reported a negative investment return of DKK 118 million in the quarter. Our life division reported a loss of DKK 14 million in the quarter affected by the financial market as well as the loss of risk return in three interest rate groups. Premiums grew 3.7% in the first nine months of the year and 3.3% in Q3 specifically. We are seeing continued growth across all business areas, partly driven by our pricing initiatives, but also by up- and cross-selling to new and existing customers. However, our continued work with pricing initiative has also caused a higher churn rate as expected, especially in the private segment. Our partnership with Nordea continues to deliver strong results with a referral rate twice the size of the old Danske Bank agreement. The first half of 2022, the Nordea agreement has led to more than 51,000 referrals and has thus more than compensated for the outflow from the old Danske Bank agreement in terms of premium. We expect this trend to continue throughout 2022 and also into 2023. A still important topic these days is the continuously increasing inflation. The Danish consumer price index reached 10% in September, the highest level since November 1982. However, the consumer price index is not a good proxy for inflation in an insurance company as we buy significantly different goods than those included in the index. In the short term, we are in a good position to handle rising cost inflation through procurement, underwriting, et cetera. We currently see somewhat lower claims inflation than the market inflation also underpinned by our combined ratio numbers. Our efforts to mitigate inflation continue as part of the efficiency program, and we take note of the current volatility, and we continue to closely monitor the market situation. To that end, we have continued our pricing initiatives and started to implement inflation related pricing initiatives across different product lines and customer segments with effect from 2023. We remain committed to our target of maintaining profitability by pricing at least in line with inflation over time. Lastly, before turning over to Lars, I would like to briefly comment on the process of selling our life division to Nordea. On the 19th of October, we received the formal approval from the European Commission, and we still await an approval from Danish FSA, and we continue to expect the sale to close in Q4 this year. We also continue to assume closing as of the 31st of December 2022 for forecast purposes. We will update the market of course as soon as we receive the final approval and the closing date is set. Lars, will you take us through the Q3 results in more detail, please? Yes, thank you, Peter. If we take a closer look at our Q3 results, the profit after tax amounted to DKK 259 million, as Peter mentioned. The result is affected by three items that I would like to address. First, a sound development in our technical results, secondly negative investment return following the significant market volatility seen, and finally, the small reported loss in the discontinued operations. In terms of the technical result, we delivered a combined ratio of 80.1 and a growth in non-life of 3.3% for the quarter. The quarter was affected by benign weather conditions during the summer, but some cloudbursts were seen at the end of August and in September. In addition, we saw a positive impact stemming from the rising interest rates. Regarding interest rates, we have changed the method for calculating the discount effect as of Q3 to use the end of quarter interest rate curve as opposed to the interest rate curve from the preceding quarter. We believe that this new approach best reflects the impact of changing interest rates on our claims ratio as we now see a direct impact of the interest rate movements in a quarter in the claims ratio of the same quarter. As a result, the discounting effect no longer lacks one quarter as previously communicated. This one-off impact on claims ratio in Q3 is around DKK 30 million positive. However, please note that for full year 2022, this is phasing only. At face value, the underlying claims ratio rose by 4.2 percentage points in the quarter, but it's important to note that the level in Q3 2021 was extraordinarily low. The tailwind from COVID-19 in Q3 2021 was included in the underlying reported number back then, as we stopped reporting on this after Q2 2021. Further claims frequencies have normalized after COVID-19 across a range of products, but most notably within travel and personal accident insurance. In fact, the claims frequency within travel insurance was significantly higher in Q3 than the pre-COVID levels, among other things due to the SAS strike, baggage handling issues, and the very long queues at security checkpoints throughout Europe due to the increased travel activity. We continue to see improved profitability within house and property insurance, and our efforts to become more efficient continue to deliver strong results. Please note that the synergies between non-life and life continue to affect our profitability positively until closing of the sale of life. Please also note that after a detailed analysis, we now believe the estimated synergies of DKK 80 million-DKK 100 million to be somewhat higher than previously communicated. The investment return for the quarter was a negative DKK 118 million, clearly impacted by volatility stemming from rising inflation and yield levels. These effects were further supplemented by increasing macroeconomic uncertainty and spread expansions on the financial markets. As a result, stock markets have underperformed substantially in the quarter. However, our performance is roughly on par with index for most asset classes. In Q3 our non-life business continued to reduce its exposure towards CLOs, and we will complete the reduction to zero in Q4 in order to simplify the investment structure in non-life as part of the carve out of our existing asset management operations. Discontinued operations saw a loss of DKK 14 million after tax in Q3. Profit on life insurance was +D KK 27 million affected by a lower investment return due to the volatile financial markets. The risk return was a loss of DKK 20 million as the collective bonus potential in three interest rate groups reduced to zero following the weak financial markets in 2022 to date, causing a reversal of the income booked in the first two quarters of the year. The cost result increased, but please note that this is affected by no amortization of IT intangibles being performed in the period from signing until closing the sale of life following IFRS 5. This has no impact on the expected implied goodwill of the transaction, as lower amortizations until closing will equally lower the gain to be realized upon closing. Illness and accident gave a loss of DKK 27 million in the quarter, largely as expected. Lastly, our solvency cover and solvency position increased to 282% in Q3 from 255% in Q2. This was mainly due to a decreasing solvency requirement caused by significantly lower stress on equity exposure and rising interest rates. In addition, the continued reduction of CLO exposure in non-life also lowered the solvency requirement. All else equal, the solvency requirement should therefore decrease further in Q4 as we reduce the CLO exposure in non-life to zero. Peter, will you comment on our updated profit forecast model, please? Yes, thank you, Lars. Slide three, please. Turning to the profit forecast model for 2022, we have now narrowed the assumed combined ratio for 2022 from between 82-85.5 to now between 82-83, excluding one-off in the last quarter. This is mainly due to the run-off and lower weather-related and large claims in Q3, as well as the effect of rising interest rates. Again, please note that the synergies between non-life and life continue to affect our profitability positively until closing of the sale of life. The assumed premium growth for 2022 is narrowed from 3%-4.5% to now 3.5%-4%, as the underlying business momentum remains solid in Q3, while the macroeconomic uncertainty remains at a historically highest level. The assumed profit after tax from discontinued operation is now lowered from DKK 1.3-DKK 1.35 billion to DKK 1.225-DKK 1.275 billion due to the market volatility in Q3 and the expectation of no risk return in three interest rate groups for the full year. Note that this expectation is still based on the assuming closing of sale this year. In conclusion, the post-tax profit forecast model for 2022 is lower to 2 billion-2.15 billion, excluding one-off in the last quarter, as the higher assumed technical result is more than offset by the impact of volatile financial markets in Q3. As per usual, we have provided you with our first view on 2023. For 2023, we assume a premium growth of 2%-3.5% and a combined ratio between 82.5%-85.5%, excluding one-off for the year. These ranges are based on the new IFRS 17 accounting standard, which will enter into force on January 1, 2023. IFRS 17 does not have a significant impact, effect on the reported levels of premium growth or combined ratio, but you can find more details in the difference in the report. The lower assumed premium growth in 2023 than in 2022 is mainly a result of a significantly lower indexation level for workers' compensation than last year, as well as the fact that we will be using more time internally on our project of replacing the core IT system in non-life, both on changing to the new system and migrating customers from the old system. As a result, we expect our new sales capacity to be somewhat lower in 2023. The assumed combined ratio in 2023 is a testament to the robustness of our business model and to our firm focus on profitability. Slide 4, please. This concludes our opening remarks, so we are now ready to answer your questions. Please keep your questions to one or two at a time, and if you have more questions, feel free to enter the queue again for a second round. Operator, may we have the first question, please? Thank you. Our first question is from Jakob Brink from Nordea. Please go ahead. Your line will now be unmuted. Thank you. Thank you, and good afternoon. First question's about investments, portfolio and capital. Last you said that the CLO portfolio would go to zero in Q4. Looking at it now, it did decrease from DKK 400 to DKK 200. What have you done with the proceeds? It doesn't look like equities have gone up and also unlisted shares have, I think, gone down a bit in the quarter. So where should we expect that money to go in? In sort of a follow-up on that, if we look at the capital, I think you promised us to come back with some more details on your big capital planning. I guess my first question ties into this one, but the SCR is now down to DKK 2.4 billion from DKK 3.5 billion last year. What should we expect with your debt issuance, the VA removal, which I guess you will do as well, so could maybe try and put all of this into one answer. Yeah. Thanks, Jakob, for the question. If we start out by where the CLO money has gone, it has primarily gone into equity. In terms of how that impacts the solvency position, just to be clear, CLOs are stressed by 100%, whereas equities these days with the counter-cyclical shock is stressed only by, I believe it's 33% or just around there. That is the impact. In terms of capital and the capital situation of the company, it is very much still work in progress, Jakob. There are a number of moving parts to this equation as you mentioned yourself. We are working on potentially looking at the Tier 1, the RT1 that we have, that we've called, and that we're gonna redeem in November. We are looking into potentially whether we should reissue something. Right now, in all honesty, we're looking very much at market condition and trying to reevaluate whether this is a good timing or not to do it. Our plan is still to optimize our capital base in the best possible way during the remainder of the year. The same goes for Tier 2, where, as you can see, that already now we have excess capacity in our balance sheet. Here, you should also take duly note that it's not just about going and redeeming. We actually have to need to have an approval with the Danish FSA to be able to do it. That process, I can also say, is ongoing at the moment. We're working hard. At this point in time, Jakob, no news yet. Just to say, if you do plan to remove the VA support to liabilities, what would be the negative impact to own funds from that? It would be approximately DKK 200 million. Is that after tax? Yeah. Yes. DKK 200 million is the impact to own funds. Just finally on capital, what is the you said 1.5- Just one comment there, Jakob. Before you just add that straight into Excel, I mean, there are a number of other factors also, well, we are also working on, and not all of them are negative to our own funds, if I can put it like that. Okay. It could be offset more or less, or? Yes. That could be a working hypothesis to a certain degree, at least, yes. Thank you. Then just lastly on capital, the DKK 1.5 billion reduction that you mentioned back in March when you announced the sale of the life business, is that still DKK 1.5 billion, or has that part of the reduction in the SCR since the thirty-first of December, is that relating to life and diversification or yeah? Yeah. Part of the reduction. You could not just take another 1.5% at all where we are today. Part of the reduction is realized as a consequence of diversification, and of course, also the simplification already done on our balance sheet. I think in Q2, you did say that the majority of the 1.5 would still be there. Is that still the case? Yes, then a lot has happened since then. For instance, the equity stress has also continued to come down, and I think we said 1.5-2. That's around where we expect to end up all else being equal. Post the divestment, post CLO exposure, et cetera, we expect to end up somewhere between DKK 1.5 billion and DKK 2 billion in SCR. Okay. Thanks a lot. I guess that was my two questions. Okay. Thanks. Thank you. As a reminder, if you have a question for the speakers, please press five star on your telephone keypad. Our next question is from Youdish Chicooree from Autonomous Research. Your line will now be unmuted. Good afternoon, everyone. This is Yudish from Autonomous Research. I've got two questions, please. The first one is on the claims issues you suffered in travel and illness and accident. Just judging from your commentary and what you've written in the report, it seems that the travel claims is more a seasonal factor. But in illness and accident, do you think there is more of a structural trend there? And if you could tell us, you know, what you're seeing so far in Q3, that'd be very helpful. And then secondly, on your guidance for 2023, maybe you could just probably elaborate on your guidance for premium growth, because it seems to be based on automatic indexing. I believe that you will be increasing prices by higher than what's, you know, mandated by the automatic indexing to cover for inflation. If you could provide some detail around that'd be very helpful. Thank you. Yeah. I think if you take the first part about the claims issue, I think I would like to refer to slide nine in our investor presentation, where we look at the first three quarters and the development there. There we have, or we are illustrating the claims ratio development from 2021 to 2023 to 2022. I just wanna highlight that the other category of 2.8%, that equates approximately just north of DKK 200 million. Of that, we have approximately DKK 100 million headwind from travel and DKK 100 million headwind from the personal accident part. If you look at the travel part, there's no doubt that it's COVID related. I would say we probably now have a higher than normal level of travel. It seems like there has been this catch-up effect coming out of COVID, which combines with very high travel activity, which combines with the strikes, with the incapacity in the airports throughout Europe to handle it, has led to a lot of claims relating to baggage delays, et cetera. That's probably at a higher than normalized level. Whereas the personal accident part is frequency driven. Some of it I would claim is also to a certain extent COVID driven, as slip and fall and accidents relating to, for instance, sports activities, et cetera, were clearly at a very low level during COVID. That has picked up. Part of it is also a trend where we do see an increased frequency. I would say for travel, clearly COVID driven, for personal accident, partly COVID driven and partly underlying trend driven. Regarding the guidance, do you wanna comment on the growth? You can say the indexing, the building blocks of the premium growth for next year. It is, as we have also stated, of course, we have some indexing on the private portfolio and also some indexing on the SME portfolio. They are, you can say, in a range that looks like last year, almost you can say. If you look at the workers' compensation, it is quite clear that the index is actually more than 10 percentage point lower for 2023 than it were in 2022. We are pretty big, you can say, in terms of portfolio, a big player on workers' compensation. We have a portfolio around DKK 800 million. Just to say that a 10 percentage point there will of course have an effect on growth going forward. That will be something to do with the indexation. Of course, yes, we are doing some inflation related price increases, yes. But again, we have always said that, you were talking about inflation. People are always talking about the CPI, the consumer price index, and that's not a very good proxy for index. You can say, inflation looking at from a point of view from as an insurance company, 'cause we are not buying eggs and whatever we are buying, it's cement, tree, wood, steel, car bumpers and so on. Just to say that, we don't see at all inflation, our numbers at the level as consumer price index. That's the reason why we of course do some price increases to keep up with inflation. Look also at the combined ratio we've got at the moment. We've got 79% in Q2. We have 80% here in Q3, and we are also having, we think pretty strong, you can say, and solid combined ratios looking forward, both in the rest of the year, but also for next year. Yes, we're doing price increases. That of course comes on top of the growth. Then of course, we also have to estimate some kind of level of churn as we have seen this year. We also said that for now, looking at our competitors, yes, we have a lower growth in our numbers, but I think also that we have pretty good, you can say, financial situation. Looking at it from our point of view. Yes, we'll do some price increases. We have some indexation, and then we will have some churn. Of course, we don't know exactly how much that churn will be. We're just looking at what has been, you can say, experiences until now. Again, we don't know how will the competition looks next year. This is also the reason why we do a guidance. Then we've stated that next year, and also we have started it, we are actually using a lot of time getting in touch with our customers to talk with them about the new system and all the new products they'll get. All is actually working fine in terms of our system migration and the building of a new system, but we're just using a lot of time getting hold of existing customers. That would also, you could say, decrease at least some efforts in our sales activities. That's the reason why we're saying between 2 - 3.5, meaning that we have faced some churn in that. Let's see how competition ends up next year, but that is at least how we see it at the moment. Just to follow up on the taxation work as well. Can you tell us what the number is actually for next year? Yeah. I think it's 2.5 or something. 2.5. Last year- Right. This year it could have been, yeah, 13 almost. 13.2. 13.2. Just to say it is more than 10 percentage point that is, lower next year. Okay. Got it. Thank you. Thank you. Our next question is from John Erik Giæver from ABG. Please go ahead, your line will now be unmuted. Thank you. John Erik Giæver from ABG here. Just to follow up on the last comment on the growth pace for next year, the 2%-3.5%. Could you give some more color to the price initiatives versus the volume? As you said, you expected some churn to come here, but you said that you will probably come up with some new pricing, price initiatives and price environment inflation. How much more is the price-driven part of this versus the churn on the volume loss you expect, so to speak, into next year? Thanks for the question, John Erik Giæver. We don't disclose the details there, but it is in our assumptions that we will grow also in terms of net number of customers in our agricultural and SME segment. We do foresee a negative churn in the private segment also next year. Hence, net growth in the private segment will be negative next year in terms of number of customers. Thank you. Our next question is from Asbjørn Mørk from Danske Bank. Please go ahead, your line will now be unmuted. Yes, thank you. A little bit on the same topic on premium growth and repricing, your comments, Lars, on the net loss of private customers, combined with your slide five, where we can see sort of the motor average premium sort of flatten out here. Again, considering the changes you made early in the year to your tariffing, just wondering first on motor specifically, what we should expect going forward, if this will actually start to trend down once the year-over-year effects are out. Continuing the expectations of loss of private customers, whether that will have an effect when it comes to your desire to reprice going forward, whether you'll be less aggressive on the repricing given that? That was the first question. The second question on the synergies from Life you say was understated before. Could you just help us a bit quantify how much was it understated? What does this mean for your ambition to sort of neutralize or limit the negative effect for the coming years? Should we expect a larger sustainable negative effect from the losses? Thanks. Thank you, Asbjørn Mørk. If we take the last part first about the synergies, I believe, to give you a quantification, it's probably much closer to DKK 150 million than DKK 100 million in synergies once we look into it. It's the lack of or the increase in these costs primarily from estimates around how IT costs can be taken over following the divestment of the Life business. In terms of impact, it will give us next year more than a percentage point headwind on the cost side. However, it does not change our long-term view or ambition to be able to offset the vast majority of the opportunities which we have had. As we've also said, we will not be able to do it in a year or even two years' time. This is a 50-year-long marriage that we are dissolving, so it will take us some time to reverse those synergies. We will not be able to get to zero, but our ambition of taking out the majority of the synergies is, it has not changed. Maybe, Asbjørn Mørk, we're not going to even say disclose exactly how much we are doing price increases on each individual product. It's true that, this is of course a balance between being competitive and also having, you can say, the right level of profitability. As you've seen and also seen in our numbers for this year also, we have already worked the prices, and that's the reason why we have, we think fairly solid combined ratios also this year and also looking into next year. It's true that the motor is lagging a little out in terms of average premium here. That of course also has something to do with the competition level here. So a lot of the things we're doing now in terms of price increases, in terms of these inflation-driven price increases, will be mainly on products like house and summer houses and content insurance, but also within the SME and agricultural sector within I don't know what's it called in English, but the business insurance, what's it called? Yeah, contents insurance also within SME segment here, but also liability insurance and Casco on their machinery and so on. That is where we will mainly do our price increases going forward. I think, as you know, a key cornerstone of our equity story is about profitable growth. We are, in particular, in these times of very high macroeconomic uncertainty, obviously not looking to sacrifice them. If you ask in the short term, where we're willing to sacrifice growth for bottom line, our focus with the surrounding conditions being as they are now is clearly on providing a satisfactory combined ratio, which is also what our guidance indicates, of course. Okay, fair enough. If I just may go back to the synergies. So now you've got, let's say, mid-range around DKK 60 million of higher cost synergies, basically. Could you just enlighten us a bit on what you said it, but I was just wondering because it sounds fair enough that there's more costs than you thought, but then you said we still expect to take out those costs eventually. It does sound like it's gonna be quite an uphill battle to find another DKK 60 million. How difficult is that going to be? What exactly is it on the outside that is much more complicated than you thought, half a year ago? I don't think actually you can say things have changed that much in terms of actually being able to get rid of some of the synergies here. Just to say that it should be fair that we have, when we looked into it, we said it were around DKK 80 million-DKK 100 million in synergies. Now when we have actually worked quite a lot in this period up to closing, we have just seen that we have some synergies in regarding IT license and so on. Yes. Should we have seen it before? Yeah, maybe. Just to say that we're just seeing that instead of DKK 80 million-DKK 100 million, it could be DKK 150 million, maybe. Just to say that yes, we never said that we could get rid of all these costs going forward just in one year time. Of course, yes, now we have to get rid of more, you can say. That is also the reason why we are saying that we will get rid of some of it. We've not said we will get rid of all of them. I think actually also that was the reason why we are getting paid for the company. We actually get a pretty okay price, I'm saying. That's of course part of also paying for the loss of synergies here. Yes, we will have, you can say, work to be done to get rid of some of these synergies going forward over the next period, 1-3 years or something. That is still the intention, and we will do our utmost. Next year it will definitely have more than 1 percentage point hurting the combined ratios. That's of course included in the 82.5%-85.5%. I don't think we can get any more clear than that actually, other than we have work in front of us to be done. We will look, you can say, on the combined ratio level and not only focusing on cost level. That's also important to say that even though our cost will be a little higher, then of course we'll then go for a lower claims ratio. All right. Thanks a lot. Thank you. Our next question is from Faizan Lakhani from HSBC. Please go ahead. Your line will now be unmuted. Hi there. This is Faizan Lakhani from HSBC. I had two questions. The first one is on your for next year's guidance in the combined ratio. When I simply just look at how much the interest rates have moved this quarter, I'm surprised that, you know, that we're not quite seeing the full reflection of that in next year's loss ratio guidance. What I'm trying to probably get at is what are you assuming for underlying loss ratio next year? 'Cause you provided the large loss numbers, you provided sort of indication on weather. It just feels a little bit conservative given where interest rates are. The second question is, can more be done to improve the personal accident and travel insurance side over the next sort of, you know, 5, 6 quarters? Do you expect this to be the sort of the new normal effectively? Thank you. Thanks for the question, Faizan. In terms of combined ratio guidance, I believe there are a few things to take into account here. First of all, as I started out alluding to, the discounting effect in the quarter is actually in isolation too big, but that is phasing only. When you look at the underlying claims trend for the quarter, I understand where you're coming from, but I also have to say that the discounting effect is overstated in the quarter. However, it's a phasing question only. Hence, coming back to looking at slide nine in our investor presentation, looking at our claims ratio development, I believe that is the appropriate benchmark to take. In terms of next year, as said, there are basically two things that are impacting the guidance that we have. One, as Peter also alluded to, and as we've also written in the report, we will have headwinds on the expense part from the loss of synergies, assuming closing this year on the life transaction, of more than a percentage point. Secondly, we have an improved underlying claims ratio going into the year. If you try to redo your model, there are no changes in terms of the modeled weather impact or large claims for large scale claims for our 2023 guidance. That remains unchanged. The second question was that regarding improvement on travel and accident, was that the question? Sorry. Yeah. Yeah. How to improve that, you can say as I see it for now, travel insurance, yes, there has been a lot of, you can say volatility here. A lot of, we didn't have any claims last year almost. This year we have just had a lot of other claims. People are getting eager to travel again and combined with all these strikes and package travel that has been all around Europe, that has just got a lot of, you can say claims this year. I'm not seeing specifically that the trend here is just fluctuations as we see it. On personal accidents, maybe another matter, of course, as Lars also alluded to it, last year, also lower frequencies. This year, more frequencies. At the moment we are, you can say, diving more into the different claims types within personal accident to see where is actually the issue here. Is this just, is it only COVID-19 effects or what is it? Of course, you can say this is difficult to prevent, but you can say, of course, we can over time use pricing as a tool to get even better results. For now, yes, it has actually, it's more than DKK 100 million that actually has been worsened by larger frequencies within personal accidents. Yeah, but, I think easy—there's no easy solution here other than to follow it and find out what kind of underlying claims frequencies we see in different areas. Then, of course, we have to look into pricing or other matters. Here it's a little difficult just to put in, you can say, for different types of procurement initiative, where they will not fix everything within personal accident. Only things going in with hospitals and so on. There, of course, we are also looking to procurement, getting better prices there. When it sums paid out, then it's only price at the end. Please note, of course, that this is already fully reflected in the actual combined ratios we're presenting, right? We've been now for two quarters in a row presenting something around the 80 mark, 79.8% in Q1 and 80.1% in Q3. Of course, these numbers and these trends are fully reflected in there. Sure. I'm sorry, just to quickly follow up. When I compare the underlying loss ratio quarter to quarter, it's significantly higher. Would that be mainly due to sort of seasonality, would you say? Or because obviously the COVID impact should have been reflected anyway in Q2, or am I missing something there? No, it's mainly seasonality. If you look closer actually on the growth side, there is a very high reinsurance ratio for the Q3 2022. That is a phasing. That's not because our normal expected net reinsurance ratio is at 4.6%. There you should rather use a historical average to adjust for that trend. That is a phasing issue in Q3 in isolation and not a run rate impact. Right. Thank you. Actually 60.5%. When we do the underlying in the table, we start out with a 65.1%. Just to say that that's a quite big difference between the gross and the net of reinsurance this time, and this is partly phasing. I see. That's super helpful. Thank you very much. Thank you. Our next question is from Tryfonas Spyrou from Berenberg. Your line will now be unmuted. Oh, good afternoon. Most of my questions have been answered. Just maybe two quick ones. On the expense ratio, you guide around 16.5% for next year. Appreciate you said you have probably just over 1% negative impact from the synergies. But you also say that I think the expense ratio should be benefiting from around DKK 70 million of R&D costs that are being moved into other income things due to IFRS 17. I just wanted to confirm whether the 16.5 is net of both. That's my first question. Secondly, it's on just on capital. You said, appreciate you doing some actions to optimize, including debt. I was just wondering if there's an optimum level of leverage you're thinking when you sort of working and trying to complete the optimization. Appreciate it probably is not the most important part you're looking at, but I was just wondering if you have an optimum leverage target you're looking for. Thank you. I can maybe start out for the first one. When maybe just to say that, yes, the expense ratio, yes, it is the 16.5% that you're mentioning is including, if we say this synergies from the life. The other thing is, yes, it is based on IFRS 17, where parts of the administration and development cost has been taken out to other expenses not included in that. Yes, if that were included, yes, it would look a little higher, of course. Both of it is included in the 16.5%. In terms of optimal capital, I mean, in terms of solvency ratio, we've stated numerous times that we don't see why we should be very different from peers post life, i.e. a range between, I don't know, 160%-180% or somewhere in that range would probably be a solvency ratio to look at. Of course, we are also looking into following the sale of life. We're also looking into how our leverage decision overall looks like. Again, there are no reason why we should be a significant outlier from peers in that sense. So very much still work in progress. I don't have an optimal ratio or number to give you today. Just to confirm that we don't see why we should be very different from any peers in this line. Maybe one comment is that if you look at this range that you could maybe conclude should be different from other players in the market, no. But just I think it's important to say that we are going into a timeframe where we're also having, you can say, quite a lot of depreciations on the building upon our IT system. You can say that that could maybe mean that in at least for a while, we would maybe be a little more on top of the range when we look at the first two or three years, maybe because the depreciation will peak in the around. 2024-2025. You can say that will probably put us up a little in the top of the range, if the solvency range. You can say after that, yeah, then we could go, you can say back into a normal level, so to speak. Okay. That's very clear. Thank you. Thank you. Our next question is from Martin Gregers Birk from SEB. Please go ahead. Your line will now be unmuted. I appreciate it. Thank you. Just coming back to the guidance. How much will the implementation of the IT system impact your growth in 2023? Thanks, Martin. That was the only question. We do not disclose or quantify that impact. I mean, we have one guidance that we give you. Just like we have also historically, we are not guiding on growth on the segments or product lines. I don't have a number to give you other than the fact that we believe we have made a prudent and responsible forecast that includes that we know that moving the whole private customer base from one system to the other, and also training our entire sales agents force to work in a new sales system will imply lower efficiencies and churn temporarily. All I can say is that we believe we've made a prudent and conservative forecast that takes into account all known factors. Okay. I know this is putting on the long lenses, but since you're working with private next year, and in 2024 and 2025 you'll be working with corporate, as far as I understand at least, then why shouldn't this or putting it straight out there, why wouldn't I, shouldn't I also be worried for your premium growth in 2024 and 2025? You say that, first of all, it's the same system that we're actually using. That's actually the big change here as part of our strategy, is we are building towards having the same underlying core system and you say customer system, sales systems across our divisions. Meaning that, we have now gone live with agriculture. If you look at the growth within agriculture, if you saw that it was also a little lower than it's been, also due to the fact as Lars mentioned, that we've used some time, educating people and so on. Yes, that will also happen within the private division, but also we'll be better going forward, of course, learning the tools. You can say agriculture and commercial is within the same division actually. So we'll of course learn. Yeah, maybe they can also have a little impact on the growth when we come to that. That I would not say it would not have that. It can maybe also have a potential effect on that when we reach that time in the project. Okay. All right. Then coming back to your combined ratio guidance and the 85.5%. What needs to happen for you guys to reach that? I mean, it seems like I don't know. Could there be extra costs associated with this IT system that could bring you there? Or, how should we think about the 85.5%? I think in terms of 85.5%, you should not think of that as a cost risk that we are running, at least not to our point. Clearly, we are running an insurance business, and there is fluctuations in our numbers, primarily driven by weather. I think if you go back and look at Q1 this year, you can see what a storm or severe weather event can do to our combined ratio. I agree with you, reaching 85.5% would require some quite severe weather conditions, also in more than one quarter. Hence, of course, it's not our most likely scenario, but we are providing a range of guidance to give you our view of potential ranges, but both the upper and the lower does of course require things to go either significantly worse or somewhat better than expected. Maybe just one final question. I guess we have danced around in this call quite a number of times now. But Lars, if you were in my seat and you were to calculate the dividend that you guys are supposed to be paying out by year-end, and when I say dividend, I talk about ordinary dividend plus extraordinary dividend, what would be your starting point? I think, Martin, not to give you my calculation, but put it a little bit in the opposite direction here. I believe that if we are successful with the work we're doing in terms of optimizing our capital base, then I've seen consensus calculations for forecasting a dividend capacity of around DKK 50 or so per share. I do not see that being far off from at least the capacity we have. Of course, it's up to The Board to decide how much dividend we actually pay out. Okay. Thank you. Thank you. As a reminder, if you have a question for the speakers, please press five star on your telephone keypad. Our next question is from Vinit from Mediobanca. Please go ahead. Your line will now be unmuted. Oh, hi there. Good afternoon. Sorry. This is Vinit Malhotra from Mediobanca. Just one question from me, please, on just back on slide nine. So I'm just trying to understand all the comments around the underlying loss ratio and all the frequency comments. Just please correct me, but are you suggesting that once all the COVID effects are removed, there was still some pickup in accident frequencies in international accident, personal accident? Should we say that excluding these one-offs, the year-on-year trend is about flattening or is it slightly worse? I guess you are trying to say slightly worse, but I couldn't quite pin it down from, sorry about that. Second question just on this slide. I said one question was same topic, but the second point about this slide is the underlying improvements bar chart of the 1.9, which includes house insurance. Are there more such plans that could help in the future? Could you comment a bit about some more initiatives on the claims side like this? Thank you. Just maybe starting out with the COVID. To our best of our knowledge, of course, we can say that we don't see that much COVID-19 effect, you can say, on a positive note anymore. On the other hand, we see you can say now we're reversing in terms of, compared to next, the last year. Of course, we don't know what will happen during the winter. COVID-19, will it come up again or yeah. Best of our knowledge we're seeing that what we're seeing now is you can say more normal frequencies. Maybe as we said, travel is maybe actually over normalized. It could also be that personal accident could be over normalized. That is to be looked into I would say. Travel is as we see it may be over normalized. On the rest of it, we are seeing that COVID-19 effect. It's difficult to talk about that anymore. Of course we can see other things coming into the numbers maybe. You can say we have a crisis in terms of energy and so on. We are maybe looking into are we seeing a little more frequency on theft? Yes, a little more frequency. Will that continue? We don't know. Just to say that we've been on a very low level on theft. What about car accidents? Will people drive less due to higher gas prices? We saw that maybe during the summer, maybe a little, but not now as we're seeing in the fall. It's there will be different moving parts here. I think that we're looking more into saying that the claims level we have at the moment is actually clear of COVID-19, we'll say. That's the best guess we have, at least our best estimate looking at our numbers at least. The question relating to house and underlying improvements and whether we have any more initiatives to do. I would say both, yes, we have more initiatives in our plans for us ahead. Secondly, also I think it's important to note that on what we have already done, for instance on procurement side, we still have improvement potential already with the deals and agreements we have in place today. We are not at the level where we want to be in terms of compliance. That goes both for our preferred network on auto repair shops, but also on our preferred network in terms of carpenters and craftsmen. There's still more for us to do that we are actively working with, and that is also of course what is helping us deliver this strong underlying claims ratio, even in an inflationary environment that Peter has alluded to earlier on. to say that we have an efficiency program. We're aiming for DKK 260 million in gross efficiency this year. We still have a plan to reach the DKK 500 million in gross efficiency gains by 2025. that of course you can say that also shows that we still think that we have more to do. Thanks. Thanks very much. Thank you. Our next question is from John Erik Giæver from ABG. Please go ahead, John. Your line will now be unmuted. Thank you. John Erik Giæver from ABG again. Just to follow up on Martin's questions on the dividend side. Is it so that you intend to pay out the jumbo dividend in connection with the ordinary dividend or will you have that in front or ahead of the ordinary dividend? When is your AGM coming up next year? Thank you. Yeah. You can say that, now we are soon in the end of the year, so to speak, and we are looking into a closing that will happen as we expect before year-end. That probably will mean that we will actually say that so extraordinary dividends, we think that at least the plan for now is that we'll pay that out in connection with the ordinary AGM. That is planned on the 23rd of March next year. Thank you. Our next question is from Faizan Lakhani from HSBC. Please go ahead, your line will now be unmuted. Hi there, this is Faizan Lakhani from HSBC. I just had one follow-up question on the solvency position. A large part of your debt is no longer eligible for solvency purposes. Will you look to adjust that in Q4, maybe issue more Tier 1 debt? Or will you look to deleverage and maintain the leverage lower than it has been historically? Thank you. Yeah, thanks, Faizan Lakhani, for the question. Yes, we are looking to reduce the Tier 2 capacity we have in our balance sheet. As said earlier on, it's not something we can just do. We need to obtain the approval from the FSA to be able to do so, from Danish FSA. That process is ongoing. We are in dialogue with the FSA on that. In terms of Tier 1 capacity and to give you some idea about what we're looking into, we had DKK 400 million that we are redeeming. I don't see a significant variation to future RT1 capacity in our balance sheet to that number. For modeling purposes, going with DKK 400 million is probably a fair base case. Does that mean that you won't be issuing more Tier 1 given that the Tier 2 is not eligible anymore? Actually, to be perfectly honest with you, I don't see it as an either/or. To me, those two are not necessarily alternatives. They are instruments to use in combination with equity to optimize our balance sheet. I don't necessarily see it as either/or. At least, we see both of them as attractive options for us in the process that we are currently putting together regarding our capital structure. There's a balance between leverage ratio, you can say the right level of solvency and the risk we're going to take for that money, so to speak. That's, as Lars is saying, this is simply both one and two, but in a better combination, so we'll be more effective using our capital. Perfect. Thank you very much. Thank you. Our next question is a follow-up from John Erik Giæver from ABG Sundal Collier. Please go ahead. Your line will now be unmuted. Thank you. My final question then is on the swap rate. Which kind of swap rate do you use? Do you use the Danish swap rate we can read on our screens, or do you use the EIOPA ones? Or how should we think about the current interest rate level versus what we have today, which is pretty similar, and what we should expect for next year? What kind of interest rate level have you put into your combined ratio and IFRS 17 thinking for next year? Is it the current one, or how should we read your curves there? The current EIOPA assumptions. Okay. It's easy to read every quarter then. Just one thing I was unable to talk earlier about, and that was the competition level. It seems like there is some kind of competition when you have some churn in your private book. Who is your main competitor these days, and what is driving this competition? Is it because you're repricing too high, or is it they are having too good prices in your view? I think that you could take. We have, there's a lot of competitors out in the Danish market. Sorry. It's also some of the players in Denmark that could be seen as competitors. There's a lot of players in Denmark that could be seen as competitors. It is still a competitive market. I would say that you could of course speak, have we repriced too much. That of course that is for you to decide. We are looking at growth in combination with combined ratios. We think that with these turbulent times and all these macroeconomic uncertainties, we think that we are in a pretty good position with a good solid combined ratio standings and also with a decent growth. Also looking to next year, we would rather have a situation where we actually have, you can say, you can say economy financials under control and with a little less growth maybe, instead of having too much growth and not having, you can say, the right level of profitability. This is, you can say, our strategy and has been our way of working. Of course, we are looking into this. That was also the question early on regarding growth next year. It will, of course, depend on the repricing also from competitors' point of view, how much we will actually be able to either reprice or maybe take some market share. We'll follow that, and that's the reason why we give ranges, because things are moving. Thank you. Our next question is from Martin Gregers Birk from SEB. Please go ahead. Your line will now be unmuted. Thank you so much. Just a couple of small questions here. The first one is back to your premium growth guidance for next year. How much tailwind do you guys get on from moving bonus rebates out of your premium growth calculation? That was my first question. The second question, I can maybe also give you that. In terms of the andelspension here in Denmark, what is the expected tax rate that you guys are going to report in 2023 and 2024? I think, Martin, to start off by the premium growth, if you use, of course, you have to also restate 2022 on IFRS 17 standards. Hence, we don't see any major changes to the underlying portfolio split or mix, and hence taking out the bonus and premium rebates will actually not change the growth guidance by any means. We do not guide the exact element of bonus and premium rebates numbers, so I don't give you that. In terms of andelspension, I would say that we are still saying that as the worst case, we will be hit by an amount corresponding to the increase in the effective tax rate for financial companies in Denmark. I believe we are, as many others, we are right now awaiting the outcome of the general election, as at least we've heard a few parties saying that they would be looking into the financing model of the early retirement reform if they come to power. Right now, that is the best answer we can give you. I mean, Lars, you must come up with a better answer than that because I assume that you have other things that go against the what 24 points. No, the is it 25.2% next year or something like that was the worst-case scenario? Yes. Yes. 20, and then moving up to 26, the year after. Exactly. Exactly. You also, I assume you also do have a number of moving elements that goes against that, right? What are those elements? Like you can say that the taxation is for financial institutions. Of course, you have other companies, subsidiaries that will not be hit by- Exactly. Yeah. That is something of course we look into because we already, you can say, have different, whether it's IT or whether it's operations and so on. We don't disclose our plans for that now. As Lars said, we are still awaiting the election, and of course, we're looking into should we actually look at this from a tax point of view. Yeah. This is not something that we'll disclose yet. That's something to discuss whether we can look into, we can say, see that some of the effect that will actually go away due to these measures here. No guidance on that yet. When we return in January, or as usual, we will come with a full profit and net profit forecast for the year. Yes. Including this. Okay. Roger that. Thank you. Thank you. As we have no further questions, I'll give the word back to the speakers for any closing remarks. Thank you for taking your time to attend our conference. As you know, you're always welcome to reach out to Robin if you have any further questions. I wish you all a pleasant rest of the day. Thank you.