Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Topdanmark Annual Results 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, again, press star one. Thank you. I would now like to turn the conference over to you, Peter Hermann, Chief Executive Officer. Mr. Hermann, you may begin your conference. Thank you, operator, and good morning, everybody, and thank you for joining us for 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 annual results for 2023. I will start by addressing the financial results in the fourth quarter before handing over to Lars to further comments on the results. Can I have slide two, please? Looking at the fourth quarter of 2023, it was extremely eventful. On a positive note, I was extremely pleased to welcome all the hardworking and skilled employees of Oona Health to the Topdanmark family on the 1st of December. This marked a significant milestone in our strategic journey to shape a full service P&C insurance company. We are all very much looking forward to driving the health agenda further and continue to deliver best-in-class health solutions in the coming years. On a slightly more worrying note, the quarter also brought a very high frequency of weather events, including storms, storm surges, cloudbursts, and generally heavy precipitation. Thus, 2023 became the wettest year on record in Denmark, and we recorded the highest level of weather-related claims in the last 10 years. For context, 2023 became the first year since 2015 to exceed the normalized budget for the weather-related claims. The multitude of events witnessed during 2023 is clearly stochastic of nature, and according to our internal model, we should experience storm and cloudburst frequencies at the 2023 levels every eight years. However, it's also important to note that the specific nature of the individual events experienced in 2023 caused a very low reclaimable amount through our reinsurance program, which is clearly not normal. So when we turn to the financial performance in Q4, this was clearly not a satisfactory quarter. Net profit amounted to DKK 157 million, with an insurance service result of DKK 227 million, and a combined ratio of 91.8 or 93.9 before run-off. Weather-related events were the main driver of the lower results, amounting to DKK 249 million compared to the normalized level of DKK 75 million. But large-scale claims were also above the normalized level due to a few fires in the commercial segment. If we adjust the weather-related and large-scale claims back to normalized levels, our reported combined ratio in Q4 would have been 83.6. In addition to these, we also saw headwind from rapidly falling interest rates, especially during December, which had an adverse impact on our results in Q4, and will have an even larger impact on our expectations for next year, which I will comment on in more detail. The insurance service result in the quarter was also affected by continued higher Motor claims frequencies, which were further fueled by the winter weather experienced in December. In addition, we saw a higher frequency of fire-related claims after the very low level experienced in Q3. However, I am pleased to see that these headwinds were offset by continued positive effects of our efficiency program and pricing actions carried out through the year. And as a result, the underlying claims ratio improved slightly in the quarter, which is pleasing. However, as we have continuously communicated over many quarters now, please do note that there is a significant level of stochasticity in the underlying claims ratio, which can affect positively or negatively in a single quarter. Looking at the insurance revenue, they grew by, it grew by 5.1% in the quarter, helped by the inclusion of Oona Health into the group from the 1st of December. Excluding Oona here, the growth was 2.5%. The organic growth has been low during 2023 for the same reasons as have been discussed on previous occasions. But I'm happy to see organic growth incrementally picking up, just as I'm pleased to show a significant better forecasted growth for 2024. Naturally, we will continue our pricing discipline in 2024 in order to mitigate the current headwinds and protect our profitability, and a large part of the adjustments have already been made from the 1st of January. As is evident at this stage, inflation has peaked, but we reiterate our commitment to pricing at least in line with inflation over time. Lars, will you take us through the rest of the Q4 results, please? Yes, I will. Thank you, Peter. Turning to the investment results, this was a solid profit of DKK 110 million after eliminations in Q4, which was significantly ahead of expectations, and that was driven by gains across equities, credit bonds, and running yields. As previously discussed, our equity exposure has been reduced significantly over the past year, but with returns on Danish and foreign equities of 7% and 9%, respectively, the contribution to our overall result from equity markets in Q4 was DKK 48 million. The matching portfolio also contributed positively to the result. Higher running yields and tighter spreads, especially on our low coupon mortgage bonds, outweighed the negative impact from a wider DKK to EUR yield spread. Duration matching of our insurance liabilities worked as intended, as did the matching of non-capitalized workers' compensation provisions. However, the capitalized part of workers' compensation provisions saw a positive effect of lower inflation expectations, which decreased the wage curve. In the fourth quarter, we also completed the reduction of our CLO exposure to zero. Doing so, while observing a positive return contribution over the full year from CLOs, is clearly a satisfactory outcome. The quarter also included a few one-offs that are worth mentioning. Within other items, we have included a further DKK 25 million provision for potential contribution to the Danish Guarantee Fund related to the bankruptcy of Gefion Insurance. The additional provision is based on updated information from the estate received in Q4. Further, other items includes one-off cost related to the redundancies that were carried out during the quarter. I also want to draw your attention to the new line item added in Q4, called Special Costs. This line item includes one-off costs related to the transaction and integration of Oona Health, as well as amortization of customer relations and brand rights within Oona. In Q4, DKK 39 million was expensed on the line, the vast majority of which was transaction costs. And finally, let me also quickly comment on solvency. Upon closing of the Oona acquisition, our solvency cover normalized in Q4, just as expected. Before dividends, the solvency cover amounted to 263%, as intangible assets rose significantly due to the inclusion of Oona and our continued IT investments. Similarly, the solvency requirement rose due to the inclusion of Oona, and as the symmetrical adjustment to equity exposures rose in the quarter. On the basis of the sound capitalization of Topdanmark, the board of directors has proposed an ordinary dividend of DKK 11.5 per share, which corresponds to a payout ratio of 98.4%, and a dividend yield of 3.6%. After deduction of the proposed dividend, our solvency cover remains prudent at 193%. Can we turn to slide three, please? Let me provide you some remarks to the profit forecast model for 2024. Before diving into the actual figures, I want to draw your attention to the fact that we have changed practice for the forecast, so that it now includes run-off for the period. The change is made in order to align with market practice and analyst models, which typically include an estimated run-off profit. The profit forecast model is based on the same standard assumptions as you are all familiar with and as described in detail in the report. However, please note that the normalized weather-related claims were increased to DKK 350 million per annum, as from Q3 2023, and normalized large-scale claims are increased to DKK 110 million per annum, as from Q1 2024. Both increases are due to the experienced hardening of the reinsurance market. Using our standard assumptions, the assumed combined ratio for 2024 is 82-85, including run-off. Like- for- like, this is approximately one percentage point higher than what was assumed for 2023 at beginning of the year. This is primarily due to higher expenses, with an assumed expense ratio of around 17.5, due to the headwinds from higher amortization related to our IT system implementation and the inclusion of Oona Health, where a higher expense ratio in isolation lifts the group expense ratio by 20 basis points. Finally, the expense ratio continues to be impacted by the dissynergies related to the sale of our life operations. We continue to clearly target an expense ratio at the level experienced before the sale of our life operations, and our expense ratio should thus decline in 2025 and 2026. Please also note that most of the gains realized through the efficiency program as of today, affect the claims ratio and not the expense ratio. Peter, will you take us through the rest of the profit forecast, please? Yes, thank you, Lars. In addition to the high expenses just described by Lars, the rapid decline of interest rates in Q4, and especially in December, impacts the forecast negatively by around 70 basis points. As rates developed so quickly at the very end of the year, we have not yet incorporated this into our pricing. Besides these headwinds, we also factor in the higher claims, claims frequency levels currently experienced. To offset a good part of these headwinds, we naturally expect to see strong positive effects of our ongoing efficiency program and pricing measures. The assumed organic premium growth for 2024 is above 4.5%, while reported premium growth will be above 11.5% due to the inclusion of Oona Health. In conclusion, the post-tax profit forecast for 2024 amounts to between DKK 1.15 billion-DKK 1.425 billion, including run-off. Slide four, please. On this note, this concludes our opening remarks. Now we are 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? Your first question comes from the line of Asbjørn Mørk from Danske Bank. Please go ahead. Your line is open. Yes. Hi, good morning. A couple of questions from my side. If I may start with the slide 11 and the green box of around 2 percentage points. And then looking at your efficiency gains, you target DKK 544 million for this year, DKK 430 million last year, that's DKK 110 million. I guess there will be some sort of migration to that, so maybe the net number will be smaller. But last, did you say that the majority of this would actually go to your claims ratio, right? So basically, the 2 percentage points are roughly DKK 230 million. Is it then fair to assume that DKK 80 million, DKK 90 million of that is gonna come from efficiency, so then DKK 140 million, DKK 150 million is price initiatives? If that is true, then looking at this in connection also with slide number five and the price hikes you continue to sort of carry through, is it fair to assume that this will be sort of more back-end loaded during 2024, and hence with a bigger impact going into 2025? We start by the efficiency part. As what I said was that the vast majority of the efficiency gains so far has hit the claims ratio and not the expense ratio. As you also saw in Q4, we actually carried out redundancies and removed more than 60 positions from Topdanmark, and to that end had to let go of more than 35 people who were employed at that point in time. So also on the expense part, it is starting to kick in. But I agree with you, as we also say, we have efficiency and pricing measures in one, and reiterated at this call, we intend to maintain pricing, to protect our profitability, at least in line with inflation over time. And right now, we have a lower inflation than we have seen, but last year and the year before, we saw a high inflation. So over time, of course, means that we are also raising prices in 2024. Some of, or a large part of our portfolio renews on January 1st, but naturally, we have renewals throughout the year, and their price increases are carried out, as and when policies renew. So it's not a linear distribution of the impact over the year, no. And the world gives, of course, some tailwinds into 2025 as well. But just if you look also at the slides, as when we provided on the efficiency program, you can see that the biggest increase, the highest increase we have in the efficiency program in 2024 will be within procurement and cost efficiencies. That would be, you can say, the highest amounts, you can say, in the increase. So that will mainly go to the costs and so the claims ratio again. [crosstalk] Going forward, then we also said at one stage that we had at, additionally, we had DKK 500 million in target for efficiency program, then we raised it to DKK 650 million. You can say, and the re- the last part of it were main-- that would be mainly a part, actually, in the costs ratio as well, because that would be the work with the getting rid of the dissynergies after the sale of Life. So if you remember that statement we gave at that time. But since you only give us the sort of gross efficiency number, is it then fair still to assume that somewhat more than half of the green box is price initiatives carried through with effect in 2024? It's not a bad guess. Not a bad guess, no. Okay, that's good to hear. Then, then maybe if I may ask, on the cost ratio and the, and the communication you have, that you will bring down the cost ratio in the coming years back to the previous level. If I look at, if I look at my estimates, at least on, on the amortization of intangibles, I agree it's going to peak in 2024, but at least on my numbers, it's not going to fall like a cliff in 2025 and 2026. Obviously, depending on what kind of investments that are still to carry through in, in those years. And then obviously, we have Oona with 20 basis points, but, but maybe just if you can give us a little bit of the building blocks, how big are these sort of dis-synergies from Life, or the delta in 2024 and 2025 and 2026 from versus 2023? And, and how much of the sort of the, I guess it's DKK 150 million or so in total cost you will have to take out to, to meet the, the ambition, how much is going to be from the efficiency program then? You can say that, when we, when we talked about the dissynergies, we said around DKK 150 million. You can say, have we been able to work on that? Actually not, because we have said that, until we can even say the whole of, you can say, the, the old life and pension system out of the books, then we're running the company as well through TSAs and, and so on. So it's, it's not you can say that the dissynergies is actually getting lower at the moment. It's on the same level. That's the reason why it also will affect 2024. And you can say, and then if from 2025 onwards, also according to the efficiency program being from DKK 500 million to DKK 650 million, then we are working towards getting the dissynergies away in 2025 and 2026. So it's not that you can say that the dissynergies are linear, because they're decreasing. It's actually the same level at the moment, but will decrease in the coming years, in 2025, 2026. Hope that helps a little. Yeah, just maybe it does, but it's just the DKK 150 million. In your ambition to bring, let's say, the 26 cost ratio down to the level it was before, what kind of vicinity would you assume? We have assumed we have not changed our assumption to the total, the synergy estimate following the year, the life, the sale of life and pension. So that remains at DKK 150 million. But what we have said, and what Peter also just said, is that there's last part of that, that we cannot offset because, sorry, before the actual separation has been carried out, and that work is, as you know, still ongoing. So after that is done, then we'll be able to work more effectively with the cost base in terms of setting off these synergies. The synergies are- And that's one part. The other thing is, of course, you can say going forward, we also have, you can say, different looking into our cost program, saying: How can we actually manage to get the right, you can say, level staffing, and you can say, with the procurement efforts also, and license and IT cost and so on. That's part of it when we look at the DKK 150 million. So some of it will go to the claims, but also a lot of into the, usually the cost ratio. But it's not only the synergies, it's also, you can say, working with being more efficient in terms of processes, straight through processing, and so on. But some of those, you can say, effects will not take place. We have already taken some of it, but will also take place over the coming years, when we also have, you can say, the capacity to building new processes that actually will also lower cost, both in operational but also in IT. What is the last part? Just final question, what is the last part of the DKK 150 million that you can't take out? It's simply because we still have people working on the separation and people delivering services to the life company on an ongoing basis. So that we cannot take out before the program has been finalized, and only then we can start of it. And then, as we've also said before, quite a few of these services is a scale game. So if we administer an IT solution today that was used both by the non-continuing business but also on the life and pension business, there's limited synergy to be harvested in that application alone. And hence, as Peter alluded to, it's more about looking more broadly into efficient processes, automation, et cetera, et cetera, to be carried out after the program has been finalized. All right. Thanks a lot. Your next question comes from the line of Jakob Brink from Nordea. Please go ahead. Your line is open. Thanks a lot. And I would actually like to start on the cost side as well. Could you just remind us, what is the step up in the depreciation of IT intangibles in 2024 versus 2023 and also into 2025? So basically, how much did you book or recognize in the P&L last year, and how much is the delta this year and next year? We are not disclosing the long-term build-up and also the long-term depreciation part. But what we can tell you is that the head point in isolation for 2024 compared to 2023 is more than 50 basis points on our expense ratio. So 50 basis points, and it's still- More, more than 50. +50 basis points in 2024. And it's still 25, that they should peak at around DKK 230 million? Yeah. [crosstalk] That's still our expectation. Obviously, this depends a little bit upon when you go live with the individual waves of the, of the program. So there can be, of course, some, some movement in there, but yes, that's still our assumption. Okay. Okay, cool. And then on top line, the +4.5% organic growth, how much of that is related to Oona, and how much is from the old Topdanmark? What we have—Well, now we have taken over Oona and as Peter also alluded to, we are more than happy to welcome 250+ employees to the Topdanmark family now. And based upon what we have seen so far, there are no changes to the overall outlook of the company. And what we've said earlier on was that we expected Oona to, in isolation, contribute by a percentage point or so to our organic growth, and that is still our belief. Okay. And the higher than implicit growth in Topdanmark, old Topdanmark, is that related to higher indexation and the workers' compensation indexation, or is it also other things? As you can see, as you described, yes, it's both a high index in general, also a high index on workers' compensation. Then we can also see that our sales volumes has actually increased over the year, and the churn, you can say, has also been in a better situation over the years. So this is both, you can say, higher sales and better churn, and also, as you're stating, Oona, and then the indexation. And of course, the work with price increases to, you can say, fight off the headwinds we have got on from reinsurance and other parts that has been implemented here, most of it's by the 1st of January. So that in connection will give more than 4, 4.5 on the year, organically. Could you just remind me, what was the normal indexation last year? [crosstalk] 2.3 in 2022 and 3.6. Sorry, 2023, and 3.6 for 2020. Yeah, 3.4 and3.6 this year, depending a little on the different products, but 2.3 last year, yeah. It's the same, you can say, it's the same ratio of our, you can say, portfolio being indexed, the 70%. So you can use that same number, but on a higher ratio. And on workers' compensation, it was 4.5 this year. Last year, it was 2, 2.5. So I'm just trying to be, because, of course, 1+% higher and 70% of the book, and then what is it, 2 percentage points higher on workers' compensation. I'm just trying to figure out the +4.5%, how much plus it is? Yeah. You can say that the tricky part is, of course, when you do, you can say additional price increases again, then you could, of course, discuss what to use in your churn. And this is, you can say, we have put in, you can say the churn we expect to get from working with prices again, you can say, because we have put in, you can say, price increases before. So this is, of course, you can say that, that is, that is the calculation we have done. So the tricky part is here, the churn. The rest of it is we can - we have a pretty good view on, but the churn level is also very much depending on other, you can say, competitors, how they react and how would they act in the market. Mm-hmm. Okay. And then just finally, two small questions. The weather guidance, you said also DKK 315 million, that's the normalized level. And I guess that's because the guidance was done on the thirteenth of December. But given all the snow, which I guess has been quite unusual for Denmark in January, if you should make the forecast now, how much higher would the weather be? I don't think actually we will change that at the moment, Jakob. You can say that if you look at it, as you also mentioned in the—in the—in our—when we started, is you can say this 2023 can happen, you can say every eight years. We actually would expect 1.9 storm and 3.9 cloudburst over the year. What has been different is, you can say also the level of precipitation in general. So it's been very wet, and these kind of claims have not been, you can say, helped by reinsurers whatsoever, because they are smaller, but a lot of them. And you can say that is actually the unnormal part. That's actually what we, we can reclaim from reinsurance. You can say snow is also part of the modeling, you can say, and remember, when you have Motor claims due to snow, that's not part of the weather-related claims, that's Motor claims. So you can say the weather-related claims due to snow and so on, that's, that's included in our internal modeling when we look at, you can say, yeah, cloudburst and the storms and, and so on. So I don't think we should change it now, but I think it's an important fact. Of course, we would look at this, both looking at, you can say, looking backwards on the numbers, but also looking at all the reinsurers, what we can get hold of. And of course, how much should you then put weight on what you have just seen in the last couple of months, and how much weight should you put on what you have seen maybe previously? And, but we think the 350, as you can say at the moment, is a sound level for use for the price setting of products that has weather-related claims in them. But of course, this we will follow and also adjust if we look into a normalized level higher, then it will of course also affect the pricing. But at the moment, the 350 is what we think is the best view on 2024. Let me just ask another way then. Did you include any January snow impact in the guidance for the combined ratio? If not in weather, then in underlying, I guess. No, I mean, we have assumed the modeled weather level for 2024, which includes DKK 90 million of expected weather claims in Q4. And based upon what we've observed so far, we have not seen any reason to change that estimate. We are looking at, you can say, for all other products, you can say, we're of course looking at the history and also put it in, you can say, and we do a pricing also, of course, with a little prudence in it. So did we expect exactly that would happen in January? We are not, you can say, making prices on what happened in January, but you can say in overall on the year, because we cannot adjust the prices as quick as you are saying, as you are alluding to. So we will do this on a yearly manner. There will probably be some months, you can say, with lower frequencies, maybe, than in the forecast, but we will of course look at this and do price to protect profitability going forward. If, for example, there will be more claims due to winter or whatever going forward. But remember, it's an expected price level, and not because we have seen high claim amount in January. Okay. Last question. You changed the methodology for not or including run-off gains, I guess, for the first time since 1996. So I was just wondering why. Why did you change now? As we stated, it was simply to bring our guidance into align with market practice as we see it. We have been changing our guidance on some parts over the years to bring it more into line with what is happening in the market and actually to cater for your needs as well. So we're actually listening to your asks, and this change was made simply to bring it in line with market practice. It's not a signal of us having, you can say, another reserving policy or anything else. We will do the same, you can say, reserving strength and going forward, both in pricing and reserving. So this is just as Lars is alluding to, the market standard and not a change of, you can say, the way we work. Okay, fair enough. Thank you. Your next question comes from the line of Tryfonas Spyrou from Berenberg. Please go ahead. Your line is open. Hi there. Good morning. I had two questions. So the first one is just coming back on the weather. It feels like you're kind of thinking that 2023 is an outlier in terms of the type of weather patterns we saw, and hence why your sort of weather budget remained flat. I was just wondering if you can share maybe a few more words on how you get comfortable that the weather budget is adequate going forward, particularly if you think about the structurally high nominal value of claims due to inflation, but also the growth in the business, obviously, if you take the weather budget being flat and the premiums, they actually you see a slight decline in the ratio. So any thoughts on that? And the second one will be on Oona. Obviously, you have it, you have Oona for a couple of months now, and you can maybe share on what, what is that sort of profitability level, in terms of the combined ratio, and if you can remind us what, what pricing actions you have taken, so far in 2024, and with the year pricing the entire book, and what has been the impact on, on return as well, that'd be helpful. Thank you. If we start out by the weather, as we said and alluded to, when we look at the storms and the cloudburst, we do not see 2023 as an outlier. It's something that we would expect every seventh, eighth year on each event level to see that. What is an outlier on 2023 is the impact from reinsurance. Because the gross level of weather claims experienced in 2023 is actually pretty much in line with our expectation. But what is different is that the nature of the events has implied that we basically get nil reinsurance recovery from those claims. And hence, that is why we say we are comfortable with the level of model weather claims that we have now, because it does not stick out. But of course, as Peter alluded to, we will and are monitoring and following this up closely, and are adjusting both our model levels, but also ultimately, of course, our pricing as and when we see reasons to do so. Regarding Oona, just to say that, remember, we have only had Oona on the books for one month. So we took over, you can say, as owners, the 1st of December, and a lot of the customers within Oona also have renewal day on the 1st of January. So you can say that's a little late to do price increases from our part. But you can say Oona has already themselves taken actions to mitigate, you can say, the higher frequencies that has been on, especially mental treatments, that has been, you can say, a very high level in Denmark. Not only in Oona, but in the rest of the sector as well, and they have catered for that, and putting price increases forward for, you can say, also for 2024. So you can say, so that is of course that is on Oona. And then just to give you a little flavor, a December month in a health insurance company will normally be a good month, because people are too busy having a fun time up to Christmas and whatever. So they are not, they are too inside, there's too much things, and instead of going to a doctor and so on. So normally, a December will be a good month, and there's also been a little contributor to, you can say, having a better result in the in December, but it's only one month out of, you can say, our results here. Going forward, in terms of our own price increases we put forward, it's a little too early to say something about the churn levels yet. Because you can say, it's, if you don't—it's not always you get the first reaction, just the first two weeks or whether three weeks. So, so we have to come back on that after Q1 and say a little more about how did we experience, you can say, churn level after the price increase we put forward here on the 1st of January, both when it comes to private and also agriculture and commercial, agriculture and commercial. So we cannot answer that question yet. Okay, maybe I can ask you in Q1. Maybe, let me just on weather again. Sorry to come back, but shouldn't we expect a higher sort of nominal claims amount coming from weather given, you know, it costs a lot more to fix a property claim or versus, you know, two years ago, by definition, that sort of number should be going up? Is that not the right way to think about it, in terms of the weather budget? That's included. You can say when we have the DKK 350 million— DKK 315 million, you can say, that's, you can say, that is the gross or the net amount after when we think how much claims will we get, how much will we get, back eventually at all, potentially from the reinsurance, and also looking at how much will the, you can say, the effects on, on inflation and so on. So that's an inflation view on, and also reinsurance view in total on the DKK 315 million. So that is the expected, you can say, claims in order to both pay out and repair things, including what is the market price at that stage. That is, that is the best guess we have. We have made some efficiencies on this. Yes, we got a higher reinsurance price, but this is, you can say, in total, what we think will happen in terms of weather claims. As Peter said, this is also impacted by the procurement and efficiency initiatives that we do. One of the examples we have actually been mentioning beforehand on the procurement part is our damage control procurement setup, and the change that we have made to that, which of course also helps offset the increase in weather losses, because that helps it. We do take into account the efficiency and procurement initiatives when we model our weather losses. Okay, that, that's good to hear. Thank you. Your next question comes from the line of Vinit Malhotra from Mediobanca. Please go ahead, your line is open. Morning. Good morning. Just on the... You commented on the reinsurance, lower recovery. Is it the element of luck of the nature of claims, or is it also obviously the contractual terms were very different? Is it a bit hard to, I mean, do you think there's a solution here? Do you think that there's something to be done here, or you just hope that this doesn't happen again? So this is the first question on [reinsurance and the whole thing]. And second question then, this will be slide 11, please. Can you just give us more on the- Excuse me, can you—the second question here, it's very hard to hear you. Can you maybe, I don't know what you can do maybe to get it more clear through. We cannot almost not hear what you're saying. This is slide 11. Slide 11? Yes. [audio distortion] frequency already. So why should 2024 still have the more frequency problems? Maybe we can start with the first question. The first question on the reinsurance part. No, I mean, our terms and conditions on the reinsurance program is market standard. So the fact that we get no recovery this year is not because of our contract or our terms. It is simply driven by the nature of the claims itself. So, I mean, to put it simply, all of the weather that we saw in Q4 this year, had we had all of that in one single storm, instead of having it as precipitation, as storm surge, as one storm, as rain, et cetera, et cetera, as Peter alluded to. Had we had that by one event, then our combined ratio for the whole year would actually have been a percentage points better, so 100 basis points better than what we are reporting now. So it is simply the nature of the claims that we have seen this year, weather-related claims we've seen this year, that impacts the reinsurance cover and not our terms and conditions, because they are by no standard worse than the market. And even though we have a higher retention level now in the [CAP] program, actually, even though if we had had the old, you can say, retention level, that wouldn't actually have helped either, so. And maybe to your second question, actually, it was very hard for us to hear, but you mentioned slide 11. You mentioned something about frequencies, and I, as I understood the question, why it shouldn't get higher next year? You can say in terms of, we have said through the year that we have seen frequencies on Motor going up, both this year when we compared with last year, because it has been influenced a lot by COVID-19. And also remember last year, we had an energy crisis with, you can say, high prices on gas and fuels and so on, making people drive less and thereby also fewer accidents. We have now seen, you can say, a level of claims within Motor that we think is the new normal, and actually we are back to the levels that we saw before COVID-19. Of course, you can say the claims mix is a little different now because we see more electric vehicles on the roads, and there we have also adjusted prices because they, at the beginning, had a lot of, you can say, the frequencies were higher, and also the average claims cost was also higher. Now we're seeing that at least the frequencies is coming a little down because people are getting used to driving electric cars. It is still more expensive to do repairs on, you can say, EVs, but you can say why—we don't think that in frequencies alone should then, you can say, be even higher. That is put into the forecast between 82 and 85, because this is, of course, also to do with, you can say, the level of pricing we have, because we are taking into consideration the higher, you can say, weight of electronic values in our portfolio. But I don't know whether that answered your question because it was hard to hear the specific question. Please, please note, Vinit, that the bridge on slide 11 does not compare to actual 2023. It compares to the assumed combined ratio for 2023 in the annual report for 2022. So what we are combining here is our expectation at the beginning of 2023 to 2023, with the expectation that we now put forward for 2024. So it's not actual- to- actual, it's forecast- to- forecast. Your next question comes from the line of Youdish Chicooree from Autonomous Research. Please go ahead. Your line is open. Good morning, everyone. Thank you for taking my question. If I could come back on the expense ratio again, please. Basically, you've got an efficiency plan that essentially stretches out to 2025. So, is the ambition then that in 2026 you can hit, you can revert back to 16% expense ratio? So that's my first question. And then secondly, on just on claims inflation. I think you've talked about inflation peaking for quite a few quarters now, but you've you have not changed your inflation expectation of 2%-4% for quite some time. So I was wondering, could you just be a bit more specific on where inflation currently stands? If possible, if you could talk about, you know, the levels of inflation you're seeing in your main lines of business, please. Thank you. If we take the expense part, first, I mean, we're not giving long-term guidance. That has not been historically the case for Topdanmark, and that practice we are not changing now. But what we are saying is that we have a target to bring our expense ratio down in 2025 to 2026, and our ambition is clearly to make it back to the levels that we saw, before, life and pension. Does that mean that it will be 15 or 16 in, as you said, in 2026? No, that's not what we're saying. We have a target that we work towards, but we are not today guiding that it will end up there, but that is the target that we're working towards. And then, of course, also, as you said, Oona is giving us some headwind on the expense ratio, and we do not foresee that to go away anytime soon. So there are many moving parts here, but bottom line, not giving the long-term guidance here. We have a target, and that's where we're working towards, but we're not giving a guidance. All right, got it. Thank you. And on the inflation part, we can say that, yes, it's true that we're writing and have done for a while that it's 2%- 4%, but that's on a long term. It's not saying that we're not using, you can say, other aspects of our pricing, because there, of course, we're looking towards the inflation we experience in our claims, as well, also, you can say from compared to the market inflation on different product lines. And yes, we still see in some product lines inflation, for example, but in most of them there are still spare parts, but on some parts we actually have still a pretty high inflation. It could be bumpers or new headlights and so on, with a lot of electronics in it. So that we know, and we also know it per, you can say, per brand of car. And, so when we're doing it, we are, you can say, cleaning and getting it down to the same claims mix, with the same, you can say, brands and so on, when we are doing the pricing, so we can compare it, like for like. So yes, we still see inflations and, it's still, it's still high on the Motor. And, and yes, we are also putting forward, you can say price increases on Motor now, as you can see in our investor report. You can see it has been a little flattish, if you look at the price, on the average price, on you can say Motor, and that is we have been discussing before. Yes, we still see some inflation on that part. That's also the reason why we have actually changed prices on car actually lately. There's a little bit to it, because when you look at the average price, that can also be affected both by, you can say, additional coverages maybe, but can also be affected by different claims mix. And for example, if you have, you can say, a portfolio of cars where you have maybe the cars are getting a little bit older instead of newer cars, then that can also mean something from the, you can say, the average price. So it's not, I can say, it's not a bad thing alone just because the average price is a little flat. It can also be, you can say, to cater for its different mix of cars you got in your portfolio, but we are putting forward price increases as well on Motor. What is the... I mean, do you have, like, a blended inflation figure for Motor and property separately? No, not you can say that we are, you can say, disclosing, because it's very much into what kind of, car brands and so on. And that's, you can say, for us, it's a competitive thing that we're using both in procurement and also pricing. So we don't have it. That would just be an average you cannot use for that, that much. All right. Okay. Okay, then. Thank you very much. Bye. Your next question comes from the line of Martin Birk from SEB. Please go ahead. Your line is open. Thank you so much. Just a couple of, I guess, follow-ups, but coming back to Oona, to be a little bit more specific on the numbers. So in return, in relation to Oona's own guidance, how did it do in respect to premiums and also combined ratio in 2023? Yeah, you can say, going forward, I think it's important also to say to everybody that we're not going to every time disclose, you can say, and then point out every aspects of Oona. And, so that that's one thing. But I can at least say that, you can say the growth has not been as high, and the combined ratio has not been as good as you can say in the forecasted levels. And you can say, I mentioned earlier here, just a minute ago, that the you can say the increase in mental treatments has been quite high. They have, you can say, a quite high average price as well. And as you have got a lot of them, then you also have need to get another, you can say, more people staff on. So that also means your cost. So it will be lower, for the full year than, guided in their, that, that, what they guided for. But you can say- But what does this mean in terms of numbers? I mean, I have no clue where. No, but me neither. But we're not disclosing 2023 numbers for Oona in our accounts. We only had them under our ownership for one month, and that is included in our books. As Peter and as has also been can be seen in the public here in Denmark, the claim frequency, in particular, on mental health claims in 2023 was very, very high. And that, of course, also impacted Oona. But as Peter said, they've been working actively with price increases, and as I also said earlier on to one of the questions, our fundamental view of the case and the performance of Oona, compared to what we looked into when we announced the acquisition, has definitely not changed. And back then, we said that they would contribute with approximately a percentage points plus on the organic growth, and that they would be at least margin neutral to the combined ratio levels of Topdanmark. And both of those two statements are definitely still valid, also for 2024. Okay. All right, and then, following along in Oona, the Swedish operation of Oona, are there any conclusions in that? Not yet. We have it, you can say we're looking into it, and needs to have a discussion with our board on it, but so the decision has not been taken yet. Just to clarify that, it's included in our forecast. So in other words, the Swedish entity of Oona is part of the forecast that we've been giving. Okay. And then maybe last question, as you said, a solvency ratio of 193, I believe, after the dividend. How do you see your solvency ratio developing or how low do you think it, how low do you see it going over the coming years? It will be lower going forward due to the amortization and, and the building of the intangibles. So that's, you can say, is, it will be lower. That's also the reason why we said, as we are in the period now, we think it's, it's good to be, and you can say in the upper end of a, you can say, come some kind of range, which it is, and then going forward, it will be lower. But, I will not say guide for a long-term guidance on solvency. We will still expect that we will to be able to pay out 100%, you can say, of the, in dividends, if, if the board chooses to do so going forward. And remember that this time around, the balance sheet includes the full intangibles from the Oona acquisition, and going forward, the amortization of the, of the customer and brand part will, will actually give some tailwind to the, to the solvency compared to where we are right now. And that amortization, that is included in this, so the new special cost line that you have invented, right? Yeah, and we actually give you the exact numbers. The— in total is DKK 585 million, split on customer and brand. And we also give you the depreciation period in the report. [crosstalk] Y ou can say, taken out of the P&L, but it will be neutral in, in terms of actually be better in, in the, in the solvency, right? Yep. If you look at the special cost, section under the, under the forecast or profit forecast model on page 19 in the report, we give you both the amount and also the amortization period for, for both customer relationship and for brand rights. Okay. Very clear. Thanks. Thanks. Your next question comes from the line of Jan Erik Gjerland from ABG. Please go ahead. Your line is open. Thank you for taking my questions as well. I have just a couple of follow-up then. On the competition side, you mentioned that, of course, the churn is sort of there, potential churn. Where do you see the toughest competition in Denmark now? Is it in the bank channel? Is it the normal competitors, which is listed, or is it the mutuals who are still very tough on you? So how should we read competitive picture in Denmark, just as of today? Oh, I would say that, there are some smaller players that has been quite aggressive on workers' compensation. We have seen that at least, for a while, still are, but, we also hear that some of them are putting forward price increases at, on net as well. So maybe that picture can change. But otherwise, you can say, I think it's the competitive environment is actually not much different from what we have seen, you can say, during the year here. It's still, they're competing with some good competitors. It's not only mutuals. Of course, mutuals can be a competitor, and, they have maybe some other requirements. And, but it's actually abroad. It's not only on different segments. We can see that in private, it has been, there's been competition on, for example, car insurance has been quite competitive. And then you can see that, and on commercial and agricultural, there's also been, as I mentioned before, workers' compensation has been one of the product that has been lower in price, and also in some situations that we wanna, that we wanted to give. But I don't think actually the picture has changed much in the last quarter, for example. Okay. So it's more, it's still a sort of fierce competition, so we should still expect some churn, as you said, and, then maybe have to think overall on, on, how big it should be. When it comes to the reinsurance- Yeah, just the one, just one thing you can say. It, of course, depends a lot on what the competitors will do in terms of pricing also here. A lot of them also have, you can say, renewal dates on 1st of January, and we don't know that. That's the reason why I said that we cannot give you a clear answer on the level of churn yet, because we need to see more reactions here in the first quarter and come back to that after Q1. But of course, it depends, and we can see that some of our competitors are also doing price increases, and that has, you can say, also helped, you can say, in terms of churn and sale on our numbers. But exactly how that will end is, you can say, that is what we have put forward in the guidance with the more than 4.5. Exactly. But if we go to how much of the price increases happening then in the 1st of January versus the other ones, is this the commercial, which is sort of 40%, 50% on 1st of January on Oona all, or you should just think about it like a private channel being more split towards the full year? The private is actually more split, you can say. There's the main part of the commercial agriculture segment is actually by 1st of January. So most of the price increases put forward on the commercial CVR segment will be done here the 1st of January. On private, it is a little more divided, but still with the, with a bigger ratio on the 1st of January. Okay. And Oona? It's they have also, you can say, they have also quite a big part of their numbers, of their customers being renewed on the 1st of January. That's the same. Like, in the professional market, most of them are in the 1st of January. Okay, I see. When it comes back to Vinit's question then on reinsurance coverage, are you rethinking about taking more coverage into that so that you can actually have more of the reinsurance covered, like whether you didn't do this summer, this summer around, or is it just a 1 percentage point improvement that would sort of end up, so it will be very expensive to do more sort of reinsurance coverage on the weather side? How could we bulk it more into a number of millimeters with precipitation during a month or a quarter or something? Is that something one can work on, or how should we read you there? We always reevaluate and evaluate the reinsurance structure we have in place at each renewal date, both on January 1st, where most of our programs renew, and also on July 1st, where our catastrophe program renews. We do believe right now that we have a comprehensive cover in place and probably more comprehensive than most of our peers. As we also alluded to earlier on, we have a whole account cover in place that takes out the frequency part of storms and also frequency parts of cloudburst. But basic precipitation is at least something where it so far has been difficult to buy a specific protection on that in the market. But it's, of course, something we evaluate, and if a market for that should and would open up, then, of course, we'll be looking into it. But it's- and a ggregate stop loss for simple precipitation claims is at least not something we've seen in the market so far. Just one follow-up then on page five, you show the average premium trend for your different kind of products. Could you just remind me what happened in 2015, 2016, and 2017, where you saw Motor average premiums going down? Was it because of competition? Was it because you had change in your product structure, or changed cars, et cetera? And also, why did contents also show sort of a prolonged flat level? Just for a reminder of myself. Yeah, I'm not... None of us were there at that stage, but, I can at least remember that if you look at Motor, you can say, Motor liability. For some time, you can say we saw all, you can say, new security technology put into cars, sensors, and so on, and that actually made, you can say, the expected level of risk and claims actually way lower. So in a period of time, we saw, you can say, lower pricing on Motor liability. That is the main driver behind the Motor decrease, and then afterwards, then we saw, of course, more electronic cars, and also where at least some people getting injured in, and, and then came price increases again, you can say, with the spare parts being more expensive and so on. On content insurance, I think actually during this timeframe, it was due to the fact that burglaries and theft has actually, in that period of time, gone down, both due to, you can say, more global economics. If it goes well in other countries, Eastern Europe, whatever, then actually we saw that that actually meant fewer burglaries. And that is the reason for content insurance being a little flattish in the development. So that [crosstalk] Yeah. When it comes to the last sort of 18 months, you also see a more sort of flattish development on Motor. What kind of trends are driving that? Because you now see the frequency part, et cetera, coming through. So we should thought you should have a little bit higher level versus what you saw, seeing, but are reporting. So how should you read you there? You should read that you can say the competitive level have been on a certain level, yeah. You can say that that competition has meant that, that you would probably expect with the, with the spare parts, have inflation on it and the frequency going up, that, that this, you would say, would go up. And we also expected forward, going forward, that it would go up a little more than that you're seeing now. But it is due to competition and COVID. COVID has also, you can say, in a, in a period of time, we saw way fewer claims during COVID and the energy crisis, but now it's picking up. But, so competition and, and some, some structural things, some years ago has meant that it's been more flat. And then, as I mentioned before, a little change of the mix of in the portfolio between new and old cars. Mm-hmm. Mm-hmm. Thank you for that clarity. That's all from my side. Thank you. Thank you. Your next question comes from the line of Faizan Lakhani from HSBC. Please go ahead. Your line is open. Hi there. Thank you for taking my questions. The first one is on the dividend per share. Sorry, line is a little bit poor. I apologize about that. Will you be looking to pay out as a payout ratio, as a percentage of the EPS headline or on an adjusted EPS basis, given the fact that the special costs are a non-cash item and don't impact the Solvency II ratio? If you could help me understand how you're thinking about that. And I guess linked to that as well, I know it's a small point, but the DPS payout ratio was a touch below 100% this year. Is there any reason why you didn't use a 100% payout ratio? Are there any restrictions from a solvency perspective, if you could help sort of understand that? My next question is on the frequency in your waterfall chart in 2024. Are you assuming the same level of frequency in 2023, or are you forecasting a step up once again, especially sort of Q1 2024? Thank you. Yeah, if we take the dividend first, we're calculating it on, on the reported net profit, so after, after special, after special cost, as well. So that's, that's how we're calculating the, the dividend payment. And then you say we are below 100. Yes, that's right. We have not had a history for, for doing, you say, odd numbers in our dividends. So in our case, it was either 11.5 or 12, which would have brought it to just below or, excuse me, just above, 100, but we chose to go with, with 11.5. So I think there's no, no signaling or, or, or any hidden message in the, in the fact that we end up at a, at a payout ratio north of 98 and not north of 100. It's simply 11.5 versus 12, and we choose, or rather the board, chose 11.5. Frequencies. Frequencies for 2024, just to remind again, in the chart we have on page 11, is comparing forecast to forecast and our actuals to actuals. So what we've said before is that the frequencies we see in Motor now, we believe is the new normal. And we've also seen claims and claim frequency increases on a number of products in 2023, and that is expected to be the new normal level that we are seeing. So I hope that that answers the question. The reason why I ask is because I assume in Q1 2023, frequency hadn't picked up to the same level as Q2 2023. So is there not a case that there is one quarter of relatively benign frequency in 2023 that needs to be adjusted for as well? [crosstalk] Have you allowed for that? If you compare forecast- to- forecast, yes, there is, but our forecast for 2024 takes its outset in the current run rate, and not the forecast for 2023. So it's always run rate based when we do our forecasting. That's true. When you compare this quarter in 2024 with the first quarter in 2023, then, of course, there will be some kind of difference because we're on another level at that stage. But we have put that, you can say, into the forecast for the whole year with the new levels. That's very clear. And sorry, just coming back to the Solvency II build. So, so that suggests that the amortization or headwind that you were facing prior to the Oona Health will be less onerous because now you have effectively a DKK 40 million non-cash item that hits P&L, but not the Solvency II, and therefore, the fall in Solvency II should be less, less than it was prior to the Oona Health transaction. Is that the correct way to think about it? Well, all else equal, yes. My comment was just related to remember that there are, we have some headwinds from continuously building intangibles on our IT investments. But also when you compare and look at the reported profit figure, there's also now going forward some tailwind from a solvency point of view in this special cost item. So I think that was just to remember that you include both sides of the coin. But in all things being equal, yes, if everything was just normal and nothing with depreciation, amortization, and something, then it's true that you can say you could, of course, expect that then we could pay out a dividend ratio above 100 because the P&L would be lower, but the solvency actually improved. So that's right. But you can say, I think that you have to put to look at it, you can say in a more joint perspective, looking at all the things, any other things moving, and that is also, for example, the amortization of intangible. So we still expect that we could be able to do a, you can say, 100% payoff of dividend of the year results if the board allows it. Of course, let's see how it will develop, and if you can say our solvency goes even higher, then of course, at that stage, would of course consider actually doing, we would recommend at least as a management, that the dividend ratio would be over 100. Because we have always said that our policy is to pay out all unnecessary cash. So that's, that's what we will do, at least as a management, and let's see what the board will then decide on. That's very clear. Thank you. Thank you. We have no further questions in our queue at this time. Mr. Hermann, I'll turn it to you for closing remarks. Yes, thank you. Thank you for taking the time to attend the conference. As you know, you're always welcome to reach out to Robin if you have any further questions. We all wish you a pleasant rest of the day. Thank you. This concludes today's conference call. Thank you for your participation, and you may now disconnect.