In the first half of this year, twice as many new customers entered the doors of Danish ICMIF member GF Forsikring compared with the same period last year. Despite negative investment return, the insurance company has upgraded its expectations for the year and says it predicts it will show good results by the year-end that will benefit members through a range of good insurance products and by them receiving a share in the profits.
More customers are coming into GF Forsikring stores
The customer-driven insurance company says it saw a net increase of about 10,000 customers in the first half of the year, which is twice as many as the same period last year.
Customer growth has resulted in gross premium income rising to DKK 974.9 million, a growth of 8.4 per cent compared to the first half of 2017, according to GF Forsikring's recently issued interim report.
"We are riding a positive wave, where more and more customers are choosing to be a member of GF Forsikring, the customer-driven insurance company with profit sharing and local proximity," says Jesper Mortensen, CEO of GF Forsikring, in the announcement. He continues:
"At GF Insurance, we are currently harvesting the fruits of our growth initiatives over recent years, where, among other things, increased sales efforts and cooperation through strategic partnerships have increased pressure on the market, while gradually increasing activity within our new business area. In the first half of the year, a number of new local group agreements have also been added in addition to our existing strategic partnerships. "
Prognosis of profit sharing
Claims net of reinsurance have also risen, so that in the first half of 2018 they amounted to DKK 533.4 million compared to DKK 511.4 million for the same period last year. However, in terms of higher gross premium income, the gross claims ratio has decreased slightly to 60.3 compared to last year's 61.9.
"There have been fewer burglaries than last year, and weather has seen fewer big storms and clouds which means claims made to GF have been lower than in the previous year. Therefore, we can now announce that there will be a good profit sharing for our customers again next year. In concrete terms, we expect a profit sharing for our customers in 2019 of around DKK 130 million," says Jesper Mortensen.
Insurance operating costs net of reinsurance at GF Forsikring increased by 27.4% to DKK 241.1 million. In the interim report, however, GF denotes the cost level as "better than expected".
All in all, GF Forsikring has seen a slightly lower underwriting profit compared with the same period last year. The company has realised DKK 90.2 million against DKK 103.7 million last year. The company’s combined ratio, which measures expenses for compensation and operation against premium income, has come out at 89.9 against last year's 87.4
GF Forsikring's investment returns have also fallen to DKK -19.9 million for the first half of 2018 compared to DKK 101.7 million seen for the same period last year.
"The investment result is not satisfactory and has been adversely affected by large fluctuations in financial markets in the first half of 2018," says the interim report.
GF Forsikring has a profit for the period of DKK 55.3 million for the first half year of 2018 compared to DKK 160.5 million last year.
However, GF Forsikring says that, with its adjustments, it expects to see additional profit of DKK 30 million for 2018 after profit sharing and tax which would bring the total profit to DKK 80-100 million for the year. The combined ratio will be around 96 compared to 89.2 in 2017.
GF Insurance operates in a different way to many insurance companies. It is made up of insurance clubs which are independent and based in local departments throughout Denmark. These clubs offer the company's products and take care of the members' interests. The individual insurance clubs have shares in proportion to the number of members that each club has. The insurance clubs have daily contact with the members, both when an insurance policy is taken out and then on an ongoing basis. GF Forsikring is the overall insurance company for the independent insurance clubs. The insurance clubs are the direct owners of GF Forsikring together with the GF Fund. The GF Fund is funded by the insurance clubs and aims to ensure that the company remains an independent Danish insurance company.