Gjensidige Forsikring SWOT and PESTLE Analysis

Strength

1. 200 years strong brand with leading market share in 5 countries, enjoying high customer loyalty: Gjensidige is a leading general insurer in the Nordic and Baltic countries. According to statistics from Finance Norway, the Company is the largest player in the Norwegian land-based general insurance market, with a market share of just below 26% in 2020, out of a total market worth more than NOK 66 billion. Gjensidige is a well-established player in the Danish market and has a market position which provides economies of scale. Gjensidige’s market share in Sweden is lower than in the other markets, and the Company is in a challenger position in relation to the big, established players. In the Baltics, Gjensidige is well-positioned for further growth. The Company’s operations outside Norway is based on a number of small and medium-sized acquisitions over the past 15 years. The Norwegian market represents 68% of Gjensidige’s net premiums earned, and the private and commercial is fairly equally split in the Norwegian market. Denmark is the second largest market with 22% of net premiums earned for the company. Gjensidige has an ambition to grab 79% market share in Norway, 65% in Denmark, 82% in Sweden, 95% in Finland and 80% in the Baltic states. The insurance company has very high customer satisfaction (79% as of Q4 2020) and high customer retention (92% in Norway and 79% outside of Norway). The sales effectiveness of the company increased 10% in 2020. Gjensidige is a leading insurance player in the Scandinavian countries and is positioned to grow in the Scandinavian market. The company is also present in USA, Luxembourg and the UK.

2. Gjensidige Forsikring has an extremely strong value proposition and acquisition activity: The Norwegian Insurance company holds competitive market shares in the Scandinavian region and is number one in Norway. Due to its long history of establishment and operations, the company enjoys increased customer loyalty and retention. This is due to the attractive value proposition it offers to both its customers and investors. Gjensidige Forsikring has a proven track record of strong growth, underwriting, cost discipline as well as a strong value creation since its IPO ten years ago. It holds a strong position in attractive market places, with efficient distribution and loyal customers. The company has a scalable, hard-to-copy business model, efficient capital structure and good financial flexibility as well. The company has an attractive dividend policy, and has been able to secure profitability over the years. The company expects further consolidation through acquisitions in attractive market places and expand through strong local brands. In 2020, Gjensidige was ranked top in the Norwegian financial industry, both in the Norwegian Customer Survey, which measures customer satisfaction, and in the Ipsos profile survey, which measures reputation. We also received the Stockman award from the Norwegian Society of Financial Analysts for our investor communication, and our sustainability reporting was ranked best in the industry by The Governance Group. Gjensidige acquired an ownership interest in Mimiro, a company that offers digital services to help farmers optimize production and reduce the risk of damage. Gjensidige offers a wide range of insurance products to both private individuals and businesses. This gives customers comprehensive protection against financial losses in connection with different claims events.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. More businesses becoming climate-neutral to address climate change: Gjensidige became a climate-neutral business in 2020 by purchasing UN Golden Standard carbon offsets to compensate for emissions from Gjensidige’s own operations. The compnay also became a signatory to initiatives that highlight their commitment to sustainable development, including the UN Principles for Sustainable Insurance (UNEP FI PSI) and the Principles for Responsible Investment (UN PRI). Gjensidige was the main sponsor of Norway's largest climate conference, the Zero Emission Conference. Gjensidige used the opportunity to draw attention to the following: a safer society, sustainable claims settlements and responsible investments. In 2020, Gjensidige’s carbon intensity reduced from 0.29 to 0.08 through reduction in greenhouse gas emissions of its own operations. Increased degree of digitalized claims processes reduce paper use; the insurance company has 80% paperless customers and 80% digital claims reports in Norway. To reduce the use of materials, Gjensidige has implemented initiatives in all the countries it operates in to see which measures are most effective in reducing greenhouse gas emissions. Examples of initiatives: include: Compensation for emissions from the claims processes for household contents insurance for young people, 1050 tons of carbon emissions, by purchasing Gold Standard carbon offsets and new requirements for environmentally certified materials in connection with damage to property in Denmark. Several new initiatives have been implemented as dedicated projects to increase the proportion of repairs, retain residual value and reuse, as well as handling/recycling objects that cannot be repaired in an environmentally acceptable manner. For example, Gjensidige initiated pilot project for bicycle repairs in partnership with Panter Verdisikring and Oslo Prison.

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