Hello, and welcome to the Topdanmark 2024 earnings call. Please note that this call is being recorded. Everyone is on listen mode only to avoid any background noise. You will have an opportunity to ask a question to our speakers during the Q&A. I'd now like to hand over to the CEO, Peter Hermann. Please go ahead. Thank you, operator. Good afternoon, everybody, and good morning to the US. Thank you for joining us on this conference call. My name is Peter Hermann. I'm the Group CEO of Topdanmark, and 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 first half of 2024. I'll start by addressing key events in the quarter before handing over to Lars for comments on the results in detail, and I will then revert with comments to an updated profit forecast afterwards. So can we have slide two, please? Before diving into the results, let me briefly address the two large events that occurred since the publication of our interim report for the first quarter of 2024. On May first, we announced an agreement with Nordea on the completion of the IT separation of our old life company, while at the same time renewing the agreement with Nordea on the distribution of non-life insurance products by up to five years. The IT separation will take longer time than previously anticipated, and both we and Nordea have revised our respective obligations and tasks in that process. The new agreement has been entered in common interest and will ensure the full IT separation from Topdanmark. Financially, the agreement entails non-operational one-off cost of DKK 195 million after tax, which are provisioned for in the Q2 accounts. Then on seventeenth of June, we announced that we have entered into a combination agreement, pursuant to which Sampo will make a recommended public tender offer to potentially acquire all shares in Topdanmark. The consideration offered is 1.25 Sampo shares for every Topdanmark share, reflecting a premium of approximately 27% to the closing price of the Topdanmark share on the last trading day before the announcement. Our board of directors, and we as the executive board, find that the consideration represents attractive financial value to our shareholders and has unanimously decided, subject to his fiduciary duties, to recommend our shareholders to accept the offer from Sampo. Sampo has already obtained the necessary regulatory approvals and an authorization by its EGM to issue the Sampo shares needed for the consideration. Therefore, the next step, our publication of the prospectus and offer document, as well as a commencement of the offer period in early August, and Sampo expects the offer to conclude in September. But Lars, will you take us through the Q2 results in detail, please? Yes, I will, and thank you, Peter. Turning to the financial results for the second quarter of 2024, we delivered a low reported profit due to the mentioned one-off effect from the IT separation. However, looking at the profit after tax from continuing operations, we delivered a solid 6% beat versus medium consensus. The outperformance was mainly driven by a solid investment return in the quarter. The insurance service result amounted to DKK 410 million, with a combined ratio of 86.0 or 88.2 before run-off. Insurance revenue growth was a full 13.6% in the quarter, continuing the growth momentum from last quarter and underpinning the significant step change for Topdanmark. Naturally, a part of the growth is based on our acquisition of Oona Health, but organic growth was also strong and reached 5.8% in the quarter, up from 4.3% in Q1, underpinning the positive growth momentum. Growth was supported by indexation and our implemented pricing initiatives. In addition, we continue to see improved churn rates following our investments into retention efforts, both related to manpower, but more importantly, also to AI and machine learning, to pinpoint the strongest and most profitable leads by significantly raising efficiency and effectiveness of outbound calls. In addition, growth was supported by stronger new sales based on our improved competitive power, as witnessed over some quarters now. And finally, the growth momentum in Oona Health in the quarter remained good. Looking at the claims experience in the quarter, both weather-related and large-scale claims were within or around budgeted levels. The quarter was marked by a very dry environment in May, which caused more large fires in the private segment. In fact, we saw four times as many fires above DKK 5 million per event as we did in the same quarter last year. Please note that these fires are not captured by our large-scale claims definition. In addition, the timing of Easter caused us to underestimate the claims ratio in Q1, causing a correspondingly higher claims ratio in Q2 of approximately 1.1 percentage points. Finally, or further, we saw a continuation of the trends from Q1 in motor insurance. Adjusted for calendar effects, the claims frequency was in line with the level last year, while average claim size continued to rise due to inflation in wages and spare parts. As we have previously communicated, we started raising prices outside of motor insurance already last year, and we have also started raising prices on motor this year, starting with new sales at the beginning of the year, but also existing customers from April onwards. These pricing measures will offset the headwinds we're currently seeing, but as always, it does take 12-18 months to earn through. As we also commented last quarter, the acquisition of Oona Health brings seasonality, seasonally higher claims in H1 and seasonally lower claims in H2. This adversely impacted the claims ratio in Q2, but please know that it has no impact, sorry, on our model profit forecast for the full year. Underlying all these effects, we continue to see good results of our pricing initiatives as well as our ongoing efficiency program. This was also evidenced by our expense ratio, which continued the good momentum and was lower than anticipated, following tight cost control in addition to the effects from our efficiency program. Turning to the investment results, this was a solid profit of DKK 86 million in the quarter, significantly ahead of expectations, supported by positive contributions from both public and private equity markets, running yields, and lower provisions attributed to capitalization factors in workers' compensation. The matching portfolio also continued to contribute positively to the result. On the asset side, the continuation of the low volatility regime supported carry, carry assets, and we saw a positive impact from running yields and curve roll compared to the discounting curve. On the liability side, the Danish Economic Councils lowered their wage projections, leading to lower insurance provisions and thus a positive contribution to the result. On discontinued operations, we provisioned the full DKK 195 million after tax one-off cost related to the IT separation agreement with Nordea, as Peter mentioned. Let me also quickly comment on solvency. Our solvency cover rose to 215% from 210% at the end of Q1. The positive impact on own funds from retained earnings in the quarter was more than offset by lower profit margin and rising intangible assets as expected. The solvency capital requirement decreased by almost DKK 100 million, and that was driven by a gradual reduction in equity exposure over the quarter, coupled with a lower symmetrical adjustment to equity exposure in the solvency stress scenario. Peter, will you take us through the updated profit forecast? Yes, thanks, Lars. Can we have slide three, please? Then finally, let me provide some remarks to the profit forecast for 2024. On the top line, we have improved our expected organic growth from above 4.5 to now around 6%. This is a result of the strong first half, with an increasing growth momentum and driven by pricing actions, higher retention rates seen in the light of the ongoing pricing actions, and a stronger net inflow of customers, as well as stronger cross-sales of health insurance products. The assumed combined ratio is narrowed to 83-85, including one-off. We include the effects from the second quarter and update the expected impact from motor claims inflation for the remainder of the year. Again, please remember that our ongoing pricing measures will offset the headwinds we are currently seeing, but as always, it takes 12-18 months to earn through. And then we include the improved run rate for expenses, lowering the expected expense ratio to below 17% now. Also, taking into account the outperformance on investment results in the second quarter, we are narrowing the guided profit from continuing operations to DKK 1.25 billion-DKK 1.46 billion, including run-off. And within discontinued operations, we have provisioned the full non-operational one-off of one-off cost of DKK 195 million related to the IT separation agreement with Nordea in Q2, which was not part of the profit forecast model as at Q1. Further, on the line transaction costs, we include the expected one-off transaction costs related to Sampo's pending takeover offer totaling between DKK 90 million-DKK 110 million, with no assumed tax deductibility. As a result, the net profit forecast is lowered to between DKK 950 million-DKK 1.175 billion, including one-off. As we told you a quarter ago, we have an outstanding contingent liability regarding Nordea's reserved rights to raise certain claims against us for potential losses under the SPA from the sale of our life operations. These matters may result in us incurring costs that could affect our results, but we have not included such potential costs in our updated profit forecast for 2024. There's currently no news in relation to the ongoing dialogue, and we still cannot quantify the potential impact yet, but the minute we can, we will inform you, and hence, we will not be able to comment further at this point in time. And then slide four, please. And that—this actually concludes our opening remarks, so we are now ready to answer your questions. So 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. So Operator, may we have the first question, please? Thank you so much. We are now opening the floor for a question and answer session. If you'd like to ask a question, please press star and then one on your telephone keypad. That's star one on your telephone keypad. Our first question comes from Tryfonas Spyrou from Berenberg. Your line is now open. Oh, hi there. It's Tryfonas from Berenberg here. Thank you for the opportunity. I just have one question, mainly on the topic of motor. Clearly, you talk about little bit sort of higher claims inflation, so severity of claims being higher. I think that goes against maybe some of your peers have been sort of talking about frequency of claims in motor being higher. I guess I just want to get a little bit more, sort of dig a little bit more into your thoughts on what are the key underlying trends you're seeing. And presumably, you know, last year, you obviously updated your procurement agreements, et cetera. So I would expect that the severity and obviously the inflation you seem to be coming down and the frequency to be coming up, given the market is seeing more frequency. And again, maybe help us square that with the fact that, you know, you kept sort of pricing flat last year in motor. You went a little bit more competitive, and now you sort of seem to be raising prices. So maybe just help us a little bit more on what you're doing there in motor and what you're seeing. Thank you. Yeah, last year, I can start by the frequency part, and then Peter can maybe take it onwards from there. What we are saying is that if you clean out the numbers for the weather impact in Q1, then we actually see frequencies having stabilized, and frequencies are broadly the same as we saw last year. It's clear that if you look at it face value, we have an increased frequency, but as said, that is stemming from in the first half, sorry, but as said, that is stemming from the weather-driven events in January and February. And if you strip that out, we do see a flat, more or less, frequency development in our book. Yeah. On the contrary, you can say we can see that we have seen higher average claims on motor, and that's mainly due to, of course, inflation on spare parts, but also inflation on salaries in the motor industry. So that we've seen and that, of course, we're trying to fight off with procurement deals, of course, but also that we also take pricing initiatives that we actually has enforcing on the portfolio. I think actually we already mentioned this with the on when we had the yearly result for 2023. We start already there increasing prices for new business on motor. We did that, and we have also actually increased it once more here before summertime. So now we are actually more than 15% price increases on motor insurance, personal cars in, yeah, in new business. We're also taking on price increases to the back book of the existing customers that we started with in April. That is going on as we speak and for the remainder of the year and also taking part next year. Remember, we have a lot of customers have renewal dates around the first of January, so you can say the effect on earned premiums will be bigger next year. But still we are doing it, and we also, you can say, at least people change cars often, more often than they change house. So we also have some possibilities to look at the price when people are changing cars. So yes, we're working with procurements, making sure that we use our procurement deals and guiding the right cars to the right vendors and auto repair shops and so on. But we are still also enforcing price increases. And as you mentioned, we were a little reluctant earlier on putting price increase on motor because it's more competitive, it's more sensitive. But as we said, we need to do it because we have done price increases on some of the other products. But we don't want it to be too much, you can say, price increase on some products to cover for the next product. So yes, we have done price increases on motor and sorry, home and house and, accident and so on, but we are now doing price increases, and we started on doing this in the beginning of the year and continuing on motor as well. So that will, you can say, fight off the headwinds we see now from motor. But it will take some time, as we said last mention, it will take, yeah, the next year or so, that so before you can say take full effect on your end premiums. Okay, that's great. And can you just clarify on slide five? You show the graphs there. Is that on a recent basis or on an earned basis in terms of the premiums and the price? Yeah, that's on an earned basis. And hence, as Peter said, the price increases we started early on the year was on new business only, and then starting price increases on the existing book in April. But since it's on an earned basis, you do not see the run rate impact from the pricing increases that we have implemented yet fully in the numbers. That will also take some time, just like it will take time, as Peter said, to fully earn through the impact. But the average frame will go up going forward. Brilliant. Thank you. Our next question comes from Youdish Chicooree from Autonomous Research. Your line is now open. Hello. Good afternoon, everyone. If I may please, if I could go back on the topic of inflation. I think you mentioned that on the front book, you put in 15% increases. I was wondering what level of increases are you putting through on your back book? And how does that compare actually to the actual level of severity inflation that you're seeing? That's my first question. And then secondly, just on the top line momentum improving quite a bit in the quarter, would it just be fair to assume that's all price driven, or is there something else that's happening there in terms of maybe you're getting volumes in other lines of business? Thank you. As we mentioned, it's more than 15% we have put on price increases on new business. You can say in terms of the existing book, the existing customers, it's based also on, you can say, the full customer view. So there it could be the same, or it could be less, but it could also be more. It depends a little, you can say, on our estimated risk going forward when we predict the combined ratio for the customers going forward. So that will be a little more individually based on the customer's different products. But we are also there, as I said, putting on price increases on motor. So, but if we don't have, you can say, a number to say that, because it will be different from customer to customer. When it comes to, to revenue and revenue growth, the vast, vast majority of the growth comes from indexation and from price increases. Net new customer inflow does contribute positively to the growth, but, but, but, with a small, small part compared to the, the, the impact from, from indexation and from price increases. All right. Thank you very much. Our next question comes from Jan Erik Gjerland from ABG. Your line is now open. Thank you for taking my question as well. The first one is back to the motor side, which you show on page five in the presentation. Why didn't you think about hiking prices when you saw this kind of frequency increase last year in motor? Seems like you're a little bit back-loaded when it comes to repricing from first of April of your existing book, which will take them another year, since most of your new renewables is first of January, if I understood it correctly. So it takes some time before you actually see that in earned premiums, if that is correct. So will you lag behind for too long on the motor side and then actually have a lower profitability on that product standalone? That is my first question. Yeah, I mean, I can answer that. I believe it's of course always easy to speculate, in particular on past events. But what we have done is actually delivering exactly what we say we would do. So late in 2023, when we did see the claim frequency increase in motor, we were vocal also on the analyst call, that we were not yet instilling price increases in motor because it was a, it was and is a very price sensitive product. Later on in the year, in combination with our annual results, we did say that... We did also say that with the development we were looking into, we were now also starting to do price increases on motor because we could not offset the impact on motor with the other products without screwing our portfolio too much. Clearly, our decision last year could have been a different decision, you are absolutely right. But at that point in time, we were also looking into probably a little bit of a different competitive environment than what we are now. What we can see and hear, and I guess you can also both hear and see that, is that all competitors are also raising prices now on motor, and hence, the competitive situation is a little bit different from what it was when we made the decision that we made last year. Okay, that's very clear. So secondly, on your cost, it was quite strong this quarter versus a little bit weak last quarter. So first half is probably a good level to look at. But what kind of back-loaded synergy should we expect for 2024 when it comes to your cost savings, and outlook for 2025? Is it still going according to these plans, or how should we think about your efforts into 2025 now, as you're about to merge with Sampo? So far, we are running this company as, as it was, as we ran it yesterday, or rather, as we ran it before the, the announcement made by, by Sampo. So our plans when it comes to, to cost and cost reductions remains exactly the same. And as we've committed to, we will over time, through, through 2026, and into 2027, we will make sure that our cost ratio returns to the level it was when we, before we sold off the, the life and pension business, i.e., at a level of around 16.5. We did have a very strong performance in Q2, as you say, and what we are also now saying implicitly in our forecast is that the tailwind we have on cost is not only abating, we have also made, you could say, real cost reductions in the year that will also benefit us this year. And that is what has led us to lowering our outlook on expense ratio to below 17%. Okay. Thanks a lot for your answers. Next question comes from Vinit Malhotra from Mediobanca. Your line is now open. Yes, good afternoon. So my—if I ask one question, I would say, I'm curious about the, you know, idea of contingent liability discussions you mentioned. Do you think that this could—the nature of these discussions, could it change with the change of ownership with Sampo? Do you think there's any possibilities there? Do you think, and this could just—maybe you can't comment on future, but is, is the nature of con—of these discussions going to be maybe better outcome with the new structure of the company? My, is my main question. Thank you very much. Thanks, thanks, Vinit. I believe it would be highly speculative to foresee or forecast anything on that side. As Peter alluded to in the introductory comments, we have had no updates since last quarter. Hence, if you take the wording in our note on contingent liabilities in the accounts, they are word for word the same as we said it last time. Of course, now the IT project being taken out. But I believe it would be highly speculative of us to start to considering any alternative scenario going forward. As said, for now, we run the business as we did yesterday. Sorry, just one more, just related, not exactly Nordea, but just on this change of club ownership, maybe. You know, do you have any sense that Sampo has plans on some different underwriting styles or any changes that they intend to make from, you know, where the book is? Because obviously, there's a lot of volatility in the underlying, even relative to peers. So is there anything that you understand that is part of this plan to change, or Sampo is looking at anything that you know? Thank you. Yeah, thank you. It's a good question. Of course, we cannot answer yet, what the plans will be, because first we need the deal to go through. We expect that, and also recommend it for the shareholders. I think it's a good thing that, being together in Denmark, with If having around 6%, Topdanmark having around 15% of market share, then we'd be an even bigger player in the market, having, you can say, economies of scale advantages. We also have a but a lot of, you can say, good people hired in both companies with a lot of good skills. Of course, looking at the risk, understanding, pricing, and so on, use of partnerships, procurement efforts, digitization. I think there's a lot of things that could be done even better than we're doing today, jointly. Instead of competing with each other, we can do it jointly. Whether that changes to the underwriting policies, I don't know. I'm just, I think it's important to say that we are quite strong on private, on SMEs, agriculture, If as well, in the Nordics as well. In Denmark, they are particularly strong, also in industrial, meaning that we do a more full service, for our joint customers. So, let's see what will happen, but we'll definitely take advantage of all the things we can do to make it even better for the customers and also, of course, for, for earnings going forward. So, but we cannot answer specifically on that question yet, but I hope that it gave you a little flavor to what we are looking into. And on the- Yeah. On the comment you made, Vinit, about volatility in the underlying. I assume that there is a sort of swings and roundabout principle also in non-life insurance here. So clearly, if you are in four markets compared to one, all else equal, you would see less volatility in the underlying result. So I'm not sure it's the nature of our portfolio, but more probably a nature of the geographical spread of our portfolio. Exactly. Well, thank you. So I was looking for this flavor anyways. Thank you very much for your help. Thank you. As of right now, we don't have any raised hands left. I'd now like to hand back over to the management for the final remarks. Yes. Thank you, operator, and thank you, all of you, for taking the time to attend our conference here. 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, and have a good summer. Bye. Thank you for everyone, for attending today's call. Have a wonderful day. You may now disconnect.