ANNUAL REPORT
HIGHLIGHTS 2023
THIS IS PROTECTOR
INCOME OVERVIEW
INVESTOR INFORMATION
FINANCIAL CALENDER
CEO
NORWAY
SWEDEN
DENMARK
THE UK
FINLAND
INVESTMENTS
BOARD OF DIRECTORS
BOARD OF DIRECTORS’ REPORT
FINANCIAL STATEMENTS AND NOTES
DECLARATION BY THE MEMBERS OF THE BOARD AND THE CEO
AUDITOR´S REPORT
CORPORATE GOVERNANCE
CORPORATE SUSTAINABILITY
APPENDIX
CONTENTS
04
06
10
12
13
14
18
20
22
24
26
28
30
32
34
78
79
85
91
113
2023 PROTECTOR FORSIKRING ANNUAL REPORT 2023 PROTECTOR FORSIKRING ANNUAL REPORT4 5
HIGHLIGHTS
2023
1
Premium growth
in local currencies
37 % 10.8 % 88.5 %
Cost ratio Combined ratio
(21) (11.1) (89.4)
Insurance service
result (NOKm)
1,080 944 1,509
Total investment
return (NOKm)
Profit
(NOKm)
(701) (1,084) (1,379)
Return on equity
after tax
37.7 % 18.3 195 %
Earnings per share
(NOK)
Solvency ratio
(42.9) (16.7) (195)
¹ The figures in brackets are the amounts or percentages for the
corresponding period previous year.
2023 PROTECTOR FORSIKRING ANNUAL REPORT 2023 PROTECTOR FORSIKRING ANNUAL REPORT6 7
THIS IS PROTECTOR
changes to policy terms, pricing, and risk management
initiatives. The renewal strategy shall always be rational
and data driven, ensuring that the profitability targets are
achieved at first renewal.
All business units have appointed a product owner or Chief
Underwriter (UW) for every product. This person is responsible
for sharing their experiences with colleagues cross-border,
maintaining and developing terms, risk selection according
to the company’s UW guidelines, understanding the local
market conditions and securing deliveries through the
established underwriting process.
Protector’s claims prevention measures are comprehensive,
and include, among other things, consultations and
inspections that uncover potential safety risks, and training
of employees and management in HSE and safety routines.
The aim of the measures is to be able to provide targeted
recommendations and action plans that are eective and
realistic based on patterns emerging from claims data.
Reinsurance protects Protector’s equity, allowing solvency
relief and ensuring an equalisation of the results over time.
Protector uses estimates from EIOPA as a framework for
determining protection through reinsurance (Excess of Loss).
The protection must normally cover a claim volume with a
return period of 200 years. Protector have limited their risk
for own account to a maximum of 100 MNOK/SEK/DKK, 10
MGBP or 10 MEUR for individual events.
Protector prepares a renewal strategy for the individual
reinsurance contracts in collaboration with the company’s
reinsurance broker. This strategy deals with both objectives
for commercial conditions, and changes in the capacity
(limit) of the individual contracts, evaluation of the level of
own account and contract scope, as well as general clauses,
terms and conditions. Protector normally buys reinsurance
through reinsurers with a credit rating of A- (S&P), or higher.
CLAIMS HANDLING
Claims handling is the “moment of truth” and is an integral
part of the company. Most claims are handled in-house, but
third parties are engaged when competence or capacity is
needed. Currently claims handling employees are 46% of our
operational workforce.
Protector’s claims handling is built on high quality standards
ensuring that injured parties can trust that they will receive
the compensation they are entitled to, in a way that provides
trust and security. To achieve this, we have set the following
five quality criteria as a basis:
1. Speed of settlement
2. Communication
3. Competency
4. Accuracy
5. Overall service
The most important criteria for perceived quality in claims
handling is speed of settlement. Protector has developed
a paradigm called Clean Desk; a framework with ways of
thinking and acting to ensure that claims handlers deliver on
time without compromising quality. All claims handlers are
evaluated on the five quality criteria. The company regularly
requests feedback from brokers and clients so that the
interests are aligned in the best possible way.
INVESTMENTS AND CAPITAL ALLOCATION
The asset management mandate set by the Board of Directors
within the regulatory framework defines Protector’s
investment strategy. It allows for investments in equities,
fixed income, private equity and real estate. The company
manage its financial assets in-house; analysts thoroughly
assess and calculate returns for financial investment
alternatives and rank them by risk adjusted return. As a
Norwegian insurance company, Protector must comply with
EUs Solvency II directive, detailing the capital consumption
Protector is a non-life insurance company. The company
started underwriting insurance in 2004 and has been listed
on the Oslo Stock Exchange since 2007. Building on the
Norwegian success, the company entered Sweden in 2011,
Denmark in 2012 and Finland and UK in 2016. For all markets,
the company focus on commercial lines of business, public
sector and anity schemes, through insurance brokers and
agents only.
The company has grown from zero to NOK 10,423 million
in gross written premiums, and has over 500 permanent
employees. At year-end 2023, the geographical distribution
of gross written premiums was:
Protector will prioritise further profitable growth. This will be
achieved by delivering the lowest cost and the best quality in
the market. Our long-term financial objectives are:
• Combined ratio < 91%
• Solvency margin: > 150%
DISTRIBUTION STRATEGY
All of Protector’s business is done through selected brokers
and agents, with which the company has a broad and good
collaboration. A significant part the insurance portfolio is
channelled through the largest broker houses in the Nordics
and the UK.
The company has high and defined service standards, on which
both brokers and clients are oered service level agreements
(SLAs). All processes and steps necessary to meet the high
standards are reviewed and analysed at individual and team
level through KPI measurements.
Protector’s most important promise to brokers and clients is
to be easy to do business with, commercially attractive and
trustworthy.
MARKET STRATEGY
Protector’s prioritised market segments are commercial lines
of business, public lines of business and the anity market.
The company is a total provider of non-life insurance, and
clients represent a broad range of industries and risks.
The commercial segment includes both small and large
companies and anity programs. We tailor insurance
solutions for large companies and can develop own concepts
through anity programs as well as facilitate solutions for
cross-border clients.
The public segment consists primarily of municipalities and
county authorities. Protector is the largest insurance carrier
within municipal insurance in Scandinavia, insuring more than
600 municipalities and county councils. In UK public sector
and housing, Protector is currently the third largest insurance
carrier, with more than 270 municipalities, local authorities,
and 170 housing associations.
Protector’s long-term profitability target is a combined
ratio below 91%. This implies growth through consistent risk
selection, market pricing, cost-eective operations, and
risk improvements. By involving the correct expertise in the
process, the company aim to ensure consistent, eective,
and high-quality decision-making.
Existing clients are evaluated on the same basis as new risks.
The renewal process will constitute the basis for making
Protector is the Challenger. This is demonstrated through unique relations, best-in-class decision-
making and cost-eective solutions. The company´s main targets are cost and quality leadership,
which should lead to profitable growth, which again should put the company top 3 in the segments the
company decide to enter.
41 %
24 %
19 %
13 %
3 %
GWP
FY
2023
UK Swede n Norway Denmark Finland
2023 PROTECTOR FORSIKRING ANNUAL REPORT 2023 PROTECTOR FORSIKRING ANNUAL REPORT8 9
per risk alternative and the relationship between them. The
prudential regime aims to ensure adequate protection of
policyholders and other beneficiaries.
Protector performs stress tests to ensure that the balance
sheet can withstand the most severe financial distress; the
company tests the results being negatively impacted by poor
technical profitability and turmoil in all financial asset classes,
all at the same time.
Every quarter (at least) Protector make an overall assessment
of all risks in the company’s books and risks the company
may face in the future. Based on this, allocation of available
capital is made towards alternatives considered, maximising
risk adjusted return on equity. This includes, in prioritised
order, profitable insurance growth, financial investments,
cash as an option, and distribution of capital to shareholders
through dividends or buy-back of the company’s own shares.
IT STRATEGY
IT is a major contributor to Protector’s profitable growth
through the availability of data, process support and
improvement and automation. IT covers Information
security, Information Compliance, Infrastructure stability
and Innovation through the use of technology, at industry
benchmark cost to ensure:
• Systems and processes are 100% secure, compliant and
documented
• Business critical systems are stable and perform well
• Relevant data is captured, managed and used to enable
best-in-class decision-making
• Processes in UW, contracting, broker service and claims
handling are improved
• Self-service and sharing of information with brokers and
clients for an ecient value chain
• Tasks that do not benefit from manual interaction are
automated
Protector’s core insurance systems are developed, maintained,
and operated by the company’s own IT professionals. In-house
IT is strengthened by close cooperation with the providers of a
modern technology stack, and a Cloud-based infrastructure.
This gives the company access to the latest technology and
enables recruitment of highly skilled resources, creating
a unique combination of advanced technology and deep
business understanding. A well-functioning cooperation in
the matrix puts ownership of IT initiatives in the business
units and reduces time to market for innovations. By sharing
common goals and KPIs, an important part of the One Team
Performance Culture, excellent business and IT cooperation
is further enhanced.
Protector’s IT department maintains close relationships
with brokers, clients, authorities, financial and insurance
organisations, and their IT departments. By recruiting,
developing, and retaining the right people, internal employee
satisfaction survey results show IT is an organisation that is
very attractive to be a part of.
ADMINISTRATION
Protector’s support functions operate largely as a centralised
hub, delivering services to the business units. These services
encompass data availability, data distribution and data analysis,
bookkeeping, business support, process development,
project management, compliance, overall risk assessment
and reporting, financial controlling, actuarial analyses, HR,
marketing, and cultural and leadership development. The
administration is committed to creating ecient support
functions that add value to the business units. Understanding
roles and responsibilities, along with managing the matrix
as One Team, is key to further improving the quality and
eciency of our support functions.
PERFORMANCE BASED CULTURE
Value based leadership defines Protector and is a fundamental
part of the company’s business strategy. All employees are
expected to not only know the company’s DNA, but also
live it every day. A Culture of discipline is a fundamental
prerequisite for employees to take responsibility for their
individual goals and work individually and as a team. Protector
invests a considerable amount of resources in employee
recruitment and development.
All employees have personalized performance contracts and
quarterly status and plan meetings (STPs) with their manager.
The meetings include a performance evaluation based on the
company’s core values, personalized targets and focus areas.
Protector also conducts annual 360 and 270 evaluations
which provides managers and employees with a multi-source
assessment regarding their cultural development.
Protector believes in developing key skills through continuous
learning. Protector has established Protector University
a virtual e-learning platform with the ambition to support
training/on-boarding of new employees, support continuous
development of senior employees, as well as give feedback
and map competence. The “Protector Profile”, a competence
map to which it is continually referred to, was developed to
continuously support the development agenda of each and
every employee, as well as the leader.
A long history of management development programs has led
to a group of leaders that understands and live the company
culture. Each management development program lasts for
18 months, with a 6 month break between the programs,
enabling new entrants enrollment within 24 months.
SUSTAINABILITY
Protector asserts that if an insurance company excels
in its core business, it also contributes to sustainability.
Consequently, Protector’s sustainability strategy supports its
core business and consists of the following pillars:
• People
• Climate resilience
• Climate-eective solutions
• Responsible business behaviour
In short, this means that the company strives for a good
working life throughout its value chain, that it considers
climate risk in its risk assessment and product development,
reduces its carbon footprint through loss prevention and
competent claims settlement, and takes responsibility in the
fight against corruption, money laundering, and through its
investments.
The company is a signatory of UN’s Principles for Sustainable
Insurance, and its approach to sustainability is aligned with
those principles. Protector reports on its climate footprint in
accordance with the GHG protocol, and uses this to further
optimize its sustainability eorts.
2023 PROTECTOR FORSIKRING ANNUAL REPORT10
INCOME OVERVIEW
NOKm 2023 2022 2021
Gross written premium
10 423
7 098 5 951
Insurance revenue
9 386 6 619 5 812
Insurance claims expenses
(7 182) (5 045) (4 467)
Insurance operating expenses
(1 011) (735) (681)
Insurance service result before reinsurance contracts held
1 193 840 664
Net result from reinsurance contracts held
(113) (139) 201
Insurance service result
1 080 701 865
Net income from investments
1 328 477 878
Net insurance finance income or expenses
(384) 607 25
Other income/expenses
(91) (74) (64)
Profit/(loss) before tax
1 934 1 711 1 704
Tax
(439) (341) (324)
Discontinued operations
15 10 102
Profit/(loss) for the period
1 509 1 379 1 482
Key ratios (1)
Return on equity after tax
37,7 % 42,9 % 46,4 %
Earnings per share
18,3 16,7 18,0
Gross written premium growth in local currencies
37 % 21 % 10 %
Loss ratio, gross
76,5 % 76,2 % 76,9 %
Net reinsurance ratio
1,2 % 2,1 % -3,5 %
Loss ratio, net of reinsurance
77,7 % 78,3 % 73,4%
Cost ratio
10,8 % 11,1 % 11,7 %
Combined ratio
88,5% 89,4 % 85,1 %
Large losses, net of reinsurance (%)
5,9 % 6,4 % 4,7 %
Run-o gains/losses, net of reinsurance (%)
0,3 % -2,0 % 0,3 %
Change in risk adjustment, net of reinsurance (%)
1,5 % 1,2 % -4,1 %
Discounting eect, net of reinsurance (%)
-4,2 % -2,3 % 0,0 %
Retention rate
93,8 % 87,5 % 85,8 %
Combined ratio by business areas
The UK
82,4 % 88,8 % 103,7 %
Sweden
91,9 % 87,8 % 76,0 %
Norway
97,1 % 88,2 % 81,8 %
Denmark
86,8 % 94,6 % 75,8 %
Finland
86,1 % 92,8 % 88,6 %
(1) Defined as alternative performance measure (APM). APMs are described at
www.protectorforsikring.no in document APMs Protector Forsikring 2023.
DITLEV DE VIBE VANAY
CHIEF FINANCIAL OFFICER (CFO)
Employee since 2019. Vanay was also positioned as CFO in the period 2005-2015.
He holds a MSc in Economics and Business Administration from BI Norwegian Business
School. He has more than 25 years of experience within insurance, finance, business
controlling and IT, from Protector, Storebrand, If and Tinde.
Our promise to insurance brokers
and clients is that we will be easy
to do business with, commercially
attractive and trustworthy.
2023 PROTECTOR FORSIKRING ANNUAL REPORT 2023 PROTECTOR FORSIKRING ANNUAL REPORT12 13
INVESTOR
INFORMATION
Investor Relations (IR) is responsible for Protector’s
activities and communication with the capital markets.
Protector is committed to maintain open, transparent, and
consistent communication with investors, analysts, and
other stakeholders to ensure that they have equal access to
accurate and relevant information in order to form a true and
fair view of Protector’s results and development. Information
relevant to Protector’s stakeholders shall be easily available
on the company’s website. Protector’s IR policy can be found
on the company’s website.
Four analysts are currently covering the Protector share.
More details on the analysts and the share can be found on
the company´s website.
THE PROTECTOR SHARE
The Protector share is listed on the Oslo Stock Exchange.
Company announcements and trading announcements are
published in English - and in Norwegian on an optional basis.
Interim reports and annual reports are published in English
only.
In 2023, Protector’s share price increased by 43,1%. The
Oslo Benchmark (OSEBX) increased by 9.9% during the same
period. In 2022, Protector’s share price increased by 16.1%,
while the Oslo Benchmark index decreased by 1% during the
same period. The average daily trading volume of Protector’s
shares on the Oslo Stock Exchange was 95,332 shares in
2023, relative to 80,534 in 2022. At the end of 2023, the
Protector share was traded at NOK 180.0. The market value
of total outstanding shares was NOK 14,839 million.
QUARTELY DIVIDEND ASSESSMENT
In accordance with the company’s adopted distribution
policy, the intention in the coming years is to distribute
20 - 80% of the profit for the year to shareholders. The
final determination will be based on the company’s result,
capital requirements including satisfactory buers and the
necessary flexibility for growth and development in the
company. Distribution of dividends will be considered at a
solvency margin above 150%. With a solvency margin above
200%, the Board’s intention is to over time return surplus
capital to the shareholders in the form of special dividends or
buy-back of own shares.
The Board prepares quarterly distribution assessments on
the basis of the most recently approved annual accounts.
SHAREHOLDERS AND VOTING RIGHTS
The company has issued a total of 82,500,000 shares and
there is only one class of shares with equal rights for all
shareholders. A list of Protector’s largest shareholders is
provided in note 17 in this report.
ANNUAL GENERAL MEETING
The annual general meeting of Protector Forsikring ASA will
be held at the company’s premises at Støperigata 2, Oslo,
on Thursday April 11th, 2024 at 4.00 pm. The notice will be
sent to all shareholders and to the Oslo Stock Exchange. The
notice to the Annual General Meeting will also be published
on the company’s website
www.protectorforsikring.no
0
50
1 00
1 50
2 00
D ec -12
D ec -13
D ec -14
D ec -15
D ec -16
D ec -17
D ec -18
D ec -19
D ec -20
D ec -21
D ec -22
D ec -23
FINANCIAL
CALENDAR
Q1
Q2
Q3
Q4
11. April - Annual General Meeting
25. April - Interim Report Q1 2024
12. July - Interim Report Q2 2024
24. October - Interim Report Q3 2024
2023 PROTECTOR FORSIKRING ANNUAL REPORT 2023 PROTECTOR FORSIKRING ANNUAL REPORT14 15
COST AND QUALITY LEADERSHIP LEADING TO
PROFITABLE GROWTH
Our 2023 gross written premiums grew by 37% in local
currencies relative to 2022. Combined ratio was 88.5%,
corresponding to a profit margin of 11.5% from the insurance
business.
The large loss rate (5.9%) in the portfolio was slightly lower
than normalised (7%). The development in reserves from
earlier years (run-o) gave a negative eect of -0.3%.
Adjusted for these factors, underlying profitability is
somewhat weaker than reported results.
Results are derived from disciplined underwriting in renewals
and new sales, high-quality and ecient claims handling,
targeted actions to counter increasing inflation and change in
competitors’ behaviour in UK Public Sector and Housing. The
Scandinavian market can still be characterised as rational. All
countries contribute positively to both volume growth and
technical profitability.
Following some years with investments in portfolio clean-up
and control, the strong growth leads to a gradually improving
cost ratio. There is no significant eciency development in
2023, but investments in people and process improvements,
including better utilisation of available and emerging
technology, will ensure future cost control and scalability.
WELL PREPARED FOR EXTRAORDINARY MARKET
CONDITIONS THROUGH A CULTURE OF DISCIPLINE
This year we more than doubled our UK Public Sector and
Housing portfolio, following several years with very low hit
ratios. Prior years have been challenging, and we have gone
many rounds on why we have not won more volume; we have
been there quoting all the way, staying true to our models
and processes with data supporting our view. We have not
changed our underwriting processes and principles, nor our
risk appetite, but the conditions in the market have changed;
some competitors turned more conservative (both in pricing
and risk appetite), others were no longer present in the
market at all.
The UK Public Sector and Housing market is limited to
approximately £ 900 million, whereof approximately £ 600
million is within our current appetite. With our £ 218 million
in this market as per year-end, we now have a market share
at above 30%. Approximately one fifth (1/5) of the market
go out to tender per year. The growth in the segment
through 2023 is extraordinary and we expect competition to
normalise over time. We will stay disciplined and consistent
and use data as the basis for our decision-making, irrespective
of how the market should develop.
HIGH RUNNING YIELD ON THE BOND PORTFOLIO
AND DISCIPLINED FINANCIAL UNDERWRITING
The investment portfolio yielded a return of NOK 1,372
million (7.9%); equities at 12.1% excl. put options, and fixed
income at 7.6%. We invest for the long term; iinvestment
decisions are made based on expected development in
fundamental value with our portfolio companies relative to
their inherent risk and the capital they consume. The excess
return from our financial investment activities since October
2014 (in-house management) is exceptional.
Our average reference rate has increased by 0.6%-points
throughout the year, whilst the average risk premium
(spread) has decreased by 0.9. Hence, our expected annual
yield (before cost of risk) in the fixed income portfolio has
decreased from 6.0% by the end of 2022, to 5.8% by the end
of 2023.
Equity portfolio philosophy and research process has stayed
consistent, but with more focus on better documentation
of assumptions and investment rationale. Underlying
development in our equity positions has been good; at year
end we estimate a discount to intrinsic value at 35% on
average for our 32 holdings.
From a capital perspective, we have been steering interest
rate risk during 2023. This is considered more reasonable
in a higher interest rate environment. By matching size and
duration of fixed income securities with our Solvency II-
based provisions per country, we reduce balance sheet risk
and to a certain degree also P&L volatility.
In Protector, we consider investments core business; it is all
about calculating risk vs reward, both within insurance and
investments. Our assets under management have grown
to NOK 18.7 billion (up from NOK 14.9 billion). At year
end about 16.0% was allocated towards equities and 84.0%
towards fixed income securities and interest rate hedging
instruments.
2023
- EXTRAORDINARY, BUT
DISCIPLINED GROWTH
CAPITAL ALLOCATION WITH A RISK APPROACH
To assess risks and opportunities from a capital perspective,
we maintained a strengthened process and wide involvement
of competence from a wider part of the company in 2023.
Both existing and new elements are assessed, discussed,
and quantified quarterly, or more often if found necessary.
This forms the groundwork for correct capital allocation
decision-making and contributes to being well prepared and
capitalised in turbulent times.
In times where we see opportunities for profitable growth
within insurance, see attractive financial investment
opportunities, have other attractive allocation alternatives,
or consider the macro environment to be turbulent (or a
combination of above), we will be reluctant to distribute
excess capital to shareholders.
The solvency capital ratio (SCR-ratio) by year end 2023
is 195%. With this, we have a solid base for the future, and
we value the flexibility it entails. Our prior solvency-based
reinsurance agreement was not renewed going into 2023.
A.M Best has reiterated their investment grade credit rating
of bbb+ and revised their outlook on Protector from stable
to positive.
IMPRESSED BY TEAMS AND INDIVIDUALS
When the results are strong in all business units, it is driven by
good performance from all teams. This includes centralised
IT and HQ functions. The collaboration between people,
teams, units, and functions has continued developing
throughout 2023. I am impressed and proud of how sharing
of “best practice” makes us stronger and of how we support
each other across functions and geographies. Thank you
to all employees for evolving our culture every day and for
delivering great results.
In Protector, we have a history of growth, both in terms of
volume and careers. Through profitable growth we can give
opportunities and invest in the development of our people.
By focusing on our employees’ passion and purpose, and
combining that with what drives our economic engine, role
development becomes natural. Looking ahead, continued
profitable growth will open new opportunities for employees
to pursue. For management that means active, open and
transparent succession planning.
With strong growth we must strengthen the team to continue
delivering. We have a standing ambition to continuously
increase the number and diversity of applicants. This implies
increased visibility in more channels and innovation in how
we best can give potential applicants a view of our every day
in Protector. This is one step in developing diversity, to the
best for our company.
BESTINCLASS DECISIONMAKING IN FOCUS
An important part of our performance culture is our ability
to make decisions. In Protector everyone should make a
decision within their area of responsibility. We believe in
local autonomy, in combination with common tools and
guidelines assisting the decision-making process. If we allow
for everyone to make decisions, we must expect that not all
decisions turn out to be good. With the right culture and tools,
we can celebrate our mistakes as learning opportunities;
best-in-class decision-making is also about the quality of our
decisions.
Starting with the leaders in our internal leadership
development program, we have set more focus on developing
this culture and guidelines during 2023. To facilitate even
more learning from our decisions, we have become better at
documenting our assumptions and rationale, but also making
this documentation more available for others to challenge,
learn and take inspiration from.
BROKERS; A PART OF OUR “ONE TEAM”
Insurance brokers and agents are also a part of our team.
Our best and only friends grew their market share also in
2023, especially through further developing arrangements
for smaller clients than those who usually are a part of the
brokered market. We are part of that journey and see a lot
of future opportunity to compete on quality and eciency
against our competitors’ direct distribution channels.
Our brokers and clients have given us very good feedback
throughout the year, following targeted action to increase
quality and eciency in our joint value chain. This involves
processes, data quality and technology. In addition to our own
survey, placing our British, Danish and Norwegian branches
on top, our Finnish branch second and Swedish branch third,
we have external surveys and awards in Denmark and Norway
confirming our relatively high-quality service level.