Finnish general insurance

Our Finnish branch provides insurances to private household customers and small enterprises under the brand name of Nordea Vahinkovakuutus. Insurances are sold by Nordea’s branches, our own sales people, own sales centre, car dealers and via the Internet. The Finnish business has some 127 employees, and together with the Swedish branch, it contributes around 1% of total gross earned premium growth. The Finnish business was set up in 2002 and is still being developed. Our ambition is to hold 8% of the private market by 2010.

Another sales record

Gross earned premiums at DKK 251m were 26.8% higher in 2007. The portfolio amounted to some DKK 300m in late 2007. More than 100,000 policies were sold, equivalent to an average of around 2,000 policies sold every week. By comparison, we sold some 80,000 policies in 2006. The higher sales were very much attributable to our good ongoing collaboration with Nordea’s branches and a new concept which Nordea’s customer advisers began applying in 2007, and which helps advisers provide broader consultancy services, thereby strengthening motivation and insurance sales. We increased the number of employees from 93 to 127 in 2007 to maintain the high level of sales activity.

In early 2007 we began selling commercial insurances to small commercial customers. Setting up a commercial sales organisation and effecting commercial sales through Nordea took longer than expected, limiting sales of commercial insurance in 2007. We expect sales to become stronger going forward in step with the implementation of Nordea’s commercial sales and thanks to Nordea’s large share of the commercial market.
 

Financial results in 2007

The private business improved the technical result for 2007 by DKK 32m and recorded a loss of DKK 2m. The improvement was primarily attributable to positive premium growth. The commercial business recorded a loss on the technical account of DKK 47m due to significant costs of launching commercial sales. For the total business the technical result was thus a loss of DKK 49m.
 

Expenses

The expense ratio for the private business fell by 12.7 percentage points to 29 in 2007. The overall business (Private & Commercial) reported an expense ratio of 49.8. The expense ratio was adversely impacted by the costs of the launch of the commercial business.
 

Focus areas in 2008

We had a 3% share of the Finnish private market at the end of 2007. In 2008, we will continue to focus on growth, aiming to achieve our ambition of holding an 8% share of the private market by 2010. We intend to expand our sales channels while also focusing on sales through Nordea. Continued strong growth requires us to continue to give high priority to new recruitment and retention of current employees in 2008.