Gjensidige Forsikring (Hold, TP: NOK216.00) - Sustained solid underwriting
With an 82.0% combined ratio and 8.7% YOY growth in reported premiums, Gjensidige continued to demonstrate a solid underwriting performance in Q4, supported by a low level of large losses. Although no special dividends were announced in addition to the NOK7.70 ordinary 2021 DPS, we expect extraordinary distributions going forward and see scope for ~11% of the current market cap to be paid out in 2022–2023e. While acknowledging Gjensidige’s unparalleled competitive position, we reiterate our HOLD and NOK216 target price, as we continue to find the valuation fair at a 2023e P/E of 20.0x.Gjensidige Forskring provides insurance products to private and commercial customers in Norway, Denmark, Sweden and the Baltic states. Co.'s activities are divided into six segments in addition to the asset management unit which manages Co.'s investment portfolio. The Private segment provides a range of general insurance products besides banking, savings and investment products. The Commercial segment provides a range of general insurance products to the commercial and municipality markets. Co.'s investment portfolio includes all investment funds in Co. except for investment funds in the Pension and Savings and Retail Bank segments. Co.'s other segments include Nordic and Baltics.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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