If P&C Insurance
In 2011 If P&C’s operations developed favorably and the group delivered another year with a stable and solid result. Like last year, 2011 was marked by several events related to severe weather conditions. In the Nordics, winter was hard in January and February, a cloudburst struck Denmark in July and the year ended with winter storms sweeping over especially Norway and Finland.
Globally, industry claims cost spun out of natural catastrophes are estimated to have more than doubled compared to 2010 with major catastrophes like the earthquake in Japan and flooding in Thailand. However, extreme weather conditions are a natural element of the insurance business. Thus in moments like this If works hard to always live up to our customer promise - Claims handling the way it should be. These events affect If like the rest of the industry. But again If’s size, focus and benefit of being well diversified across regions and segments show the strength and capability to manage these events both from customer and financial perspectives.
The European financial crisis deepened at the end of the year, and after a positive beginning of the year the economic growth pace started to slow down also in the Nordics. Interest rates remained in low levels throughout 2011 and financial markets showed high volatility. From insurance industry perspective, this has increased the focus on underwriting result even further in all markets.
If reported for 2011 a combined ratio of 92.0 per cent which was an improvement of 0.8 percentage points compared to last year at the same time as the premium income grew with 5 per cent. Profit before taxes came to EUR 636 million (EUR 707 million). This is altogether a satisfactory and stable result. In the second quarter If’s holding in the Danish insurance company Topdanmark exceeded 20 per cent. With this Topdanmark became an associated company of If, and its share of If’s 2011 result is EUR 7 million.
Continuous improvements in underwriting and cost efficiency and further development of partnerships and customer relations continued to be If’s focus areas. Improvements in customer and claims service are also constantly made in all business areas and markets. Ifs goal is to increase organizational involvement in identifying business initiatives and continued in 2011 to work systematically to involve all employees in improving Ifs operations, services and customer experience.
In both distribution and service If has focused on digitalization and development of better electronic interfaces both externally and within the company. In the private market internet sales increased 30 per cent during 2011. Also other e-business solutions like e-policy and use of on-line services grew significantly. The amount of claims reported online grew 10 per cent in 2011, and almost one third of private claims are now reported in the internet. A new business system, part of the largest IT system investment made in Business Area Commercial, was successfully launched in Norway during the year. Synergies are effectively utilized, and the system is also in use in Sweden and under implementation in Denmark.
The preparation to comply with new regulatory demands (i.e. Solvency II) is well underway. If’s strong commitment to this effort and overall Risk Management approach was also acknowledged in the way that If was graded as ‘Strong’ by Standard & Poor’s on If’s Entreprise Risk Framework. If has systematically worked for the environment and reduced its carbon dioxide emissions significantly. In 2011 If became carbon neutral. Efforts towards creating a cleaner environment will be high on If’s agenda also in 2012.