Protector post Q2 2024- Buy - Target price 343
Volume;
+16% driven by UK is very very good👍👍, and the growth in Norway was a welcome surprise. "Clean up" in Sweden is finished for now and Scandinavia will probably do better on volume going forward. Add volume from France gradually in 2025 and 2026 and you can expect (high) double digit growth the next 3-5 years without significant commercial sector volumes in UK, with an exciting upside if they do manage to really get going in that market as well.
Combined ratio;
94,5% was high of course, but underlying was still strong. Figures in the table below.
A very important point to take note of is that UK is still delivering very strong claims results. This is yet another quarter of proof that Protector always focus on profitable growth (and the analysts that always worry about UK’s claims figures spiking should reconsider soon😊).
An increase of about 3%, but still fine for reaching a sub 90% CR over a year.
Investments;
Equities was poor, bonds good and it's volatile as always. Nothing to worry about and some reduced risk in bond portfolio is prudent when high yield margins are close to 10 year low.
Cost ratio;
You did probably not see how fast cost ratio is moving down (exclusive of commissions which is the only way to look at it)?
Down from 7,2% last year Q2 to 6,1% this year which means another 1,1% points down!🥇 Why is it important? Because they continue to improve their "world cost leadership" to even higher levels can continue to compete on price and still earn a decent margin😄
Conclusion;
Case intact, with our target price 343 unchanged, and we are buying on the dip. Expect a brutally good Q3 from Protector💪💪💪 due to; seasonality, finished clean-up in Sweden, and continued strong claims results in UK.
Disclaimer: Hvaler Invest is a significant shareholder so you cannot trust us (or perhaps you can?)
Lillestrøm, July 16th 2024
Sverre Bjerkeli David Bjerkeli
Analyst trainee Senior Analyst
Hvaler Invest AS Hvaler Invest AS