Sampo Oyj (OTCPK:SAXPF) Q1 2024 Earnings Conference Call May 7, 2024 7:30 AM ET
Company Participants
Sami Taipalus – Head, Investor Relations
Torbjorn Magnusson – Group Chief Executive Officer
Knut-Arne Alsaker – Group Chief Financial Officer
Morten Thorsrud – Chief Executive Officer, If
Conference Call Participants
Alex Evans – Citi
Freya Kong – Bank of America
Tryfonas Spyrou – Berenberg
Faizan Lakhani – HSBC
Vinit Malhotra – Mediobanca
Ulrik Zurcher – Nordea
Youdish Chicooree – Autonomous Research
Johan Strom – Carnegie
Jan Erik Gjerland – ABG
Jaakko Tyrvainen – SEB
Michele Ballatore – KBW
Sami Taipalus
Good afternoon, everyone. And welcome to the Sampo Group First Quarter 2024 Conference Call. My name is Sami Taipalus, and I am Head of Investor Relations at Sampo. I am joined on the call by Group CEO, Torbjorn Magnusson; Group CFO, Knut-Arne Alsaker; and CEO of If, Morten Thorsrud.
The call will feature a short presentation from Torbjorn followed by Q&A. A recording of the call will later be available on sampo.com.
With that, I hand over to Torbjorn. Please go ahead.
Torbjorn Magnusson
Thanks, Sami, and good afternoon, everyone. The first quarter results follow our recent Capital Markets Day and the messages from that day are confirmed. The momentum in our organization is excellent. The underlying combined ratio development continues to improve at roughly the same pace and the increase in digital sales is very positive.
Our Q1 growth is a strong 10% for the Group, supported by positive development across all divisions. At the same time, we saw the most severe Nordic winter weather, since 2010 in January and February. This is non-life insurance, and now and then we have events or unusually large individual losses.
This quarter, the winter effect for If P&C was 8%, clearly much more than an average winter, whilst the large loss amount was some 3% below budget, so clearly less than normal. Definitions of winter losses vary between companies and markets, but we try to be as specific as we can, not excluding any line of business.
We see no reason at all to believe short-term volatility in this case, some €100 million from the winter will have any long-term effects for us, while we certainly do see clear and continuous improvements in our operations. Furthermore, the Nordic market has stayed rational, yet another quarter and our hit rates, for instance, indicate no change in market behavior. Hence, we narrowed our combined ratio outlook for 2024 and now expect to land in that 83% to 85% range. Indeed, April weather has been rather normal in the Nordics, which gives us further confidence.
At our Capital Markets Day on the 6th of March, we outlined an agenda that puts organic growth at the heart of our ambition to grow operating EPS by at least 7% per annum in 2024 to 2026. We have made an excellent start on this in the first quarter with Private in the U.K., growing premiums by 7% and 25%, respectively.
Our Private division saw premiums increase by 14% in Personal Insurance and 7% in Property Insurance. Both numbers clearly increasing Nordic market share in prioritized areas. Digital sales are up by 9% in the number of objects this quarter, again, increasing its proportion of the total.
In the U.K., we continue to see the effect of the significant price increases taken during the second half of 2023 and a rise in customer count, both in motor and in home. Technology continues to be a competitive advantage for us. For example, we are leading the development in telematics solutions with good profitability, now accounting some 240,000 policies.
Turning back to the Nordics. Claims inflation remained below our prudent pricing assumptions. The adjusted risk ratio in If P&C improved by around 30 basis points with Private seeing the most positive momentum. We continue to cover estimated Nordic claims inflation of 4% to 5% with price increases even as this appears to be trending towards the lower part of the range. And as usual, we are reducing the cost ratio for If P&C despite increasing the spend on digital developments.
On profitability in the U.K. the substantial price increases taken over 2023 are now earning their way into the P&L. Our headline U.K. operating ratio improved by 2 percentage points to 91.4% in Q1, which is also typically the toughest quarter seasonally. Together with strong premium growth, this enables Hastings to deliver a very high increase in underwriting profits year-on-year adding 5 percentage points to Group level growth.
Claims inflation in the U.K. has come down quite a bit, since last autumn and looks set to continue to trend lower in 2024, which gives some reason to be optimistic for the U.K. market results in this segment.
This final slide just gives all the numbers to the results for this quarter, boiling down for me to the improvement in the underlying combined ratio and the increased underwriting profit in the U.K., I think.
Let me instead comment on another piece of the jigsaw that finally found its place last week when we got the decision by the Swedish FSA to approve our internal model application, giving a reduction of the SCR by the expected €300 million or so.
The process was delayed by the change of regulator after the Mandatum demerger, but we are happy to have successfully completed it in less than a year. The Board and the management will now consider all the relevant effects and provide an update once we see the balance sheet run with a new model for our second quarter directly after the summer.
And with that, I turn back to you in questions, Sami.
Sami Taipalus
Thank you, Torbjorn. Operator, we are now ready to start the Q&A.
Question-and-Answer Session
Operator
[Operator Instructions] The first question comes from the line of Alex Evans calling from Citi. Please go ahead.
Alex Evans
Hi. Thanks for taking my questions. And firstly, just back to the Capital Markets Day. You talked about reducing the midpoint of solvency by 10 points and the partial internal model approval would lead to €700 million of deployable capital. Is that still the case there and you clearly highlighted you look at this at Q2. Is that just sort of a timing that it takes to work things through or are there any constraints in the short-term to making that decision? Secondly, just on Hastings. I appreciate small numbers, but there’s a quarter-on-quarter decline in policy count there in 1Q. Naturally, Hastings is a bit sort of leaner cost base and you would anticipate some growth. Is that just a reflection of the competitive market in 1Q and is it possible to give any color on the sort of that dynamics in Q2 so far? And sort of thirdly, if I may, just on the improved adjusted risk ratio. I know you don’t target this on a sort of yearly basis let alone quarterly, but if you could just help me understand sort of how you think about this through the year, should we expect sort of 1Q to be the low point, and clearly, there’s a bit of sort of favorable comps on frequency, particularly in 3Q and 4Q? Thanks.
Knut-Arne Alsaker
Good afternoon, Alex. It’s Knut-Arne here. If I take — at least the first one with in terms of the effect from the partial internal model and the change in the capital management framework from the CMD, there is no change to that €700 million and there is no sort of new restrictions. Obviously, we want to plug-in our internal model and calculate the solvency ratio officially for the first time, which now will then be in Q2. But that’s a formality and the numbers will be, like we talked about that at the CMD and like we announced when we got the approval the other day.
Torbjorn Magnusson
On the adjusted risk ratio, that is not a number that will be exactly the same every quarter, of course, and for If P&C, that has developed roughly in line with the past few years. So I don’t expect any particular pattern over the year there.
Declining policy count for Hastings in the first quarter is not the number that I have. We see stable development for the core motor portfolio with some good additions from a bike and van products, and of course, especially so for home insurance. So good development on policy accountant, and yes, and certainly on premiums, but you have seen that.
Alex Evans
Thanks.
Operator
The next question comes from the line of Freya Kong calling from Bank of America. Please go ahead.
Freya Kong
Hi. Good afternoon. Thanks for taking the questions. Just following up on Hastings. So the operating ratio improvement year-on-year has mostly just been driven by the expenses and operating leverage there and the loss ratio, I think, has actually deteriorated a bit, which is somewhat confusing, given insurance revenues there up over third, claims inflation is 12% and abating. I am just trying to understand what I am missing here in the deterioration both year-on-year and in the quarter? And secondly, on Hastings, is there any more color that you can share on the profitability development between motor and home? How is home claims inflation developing? Thanks.
Torbjorn Magnusson
I will take this second one, whilst Knut is thinking of the first one. The home is still — average home premiums are quite low in the U.K. and the motor premiums are completely dominant in the overall result. And the first quarter this year for home insurance has been benign in terms of weather, and of course, we benefit from that, but as I said, these are small amounts. The driving force between — behind the improvements in the U.K. is the improvement in premiums compared to the claims inflation…
Knut-Arne Alsaker
In terms…
Torbjorn Magnusson
And sorry, and that is what we will be seeing over the coming quarters as well, of course.
Knut-Arne Alsaker
In terms of the start of the year for Hastings, it was also a good quarter with respect to frequency developments loss ratio, as you will have seen from our Group underlying combined ratio development, Hastings also contributed to making that a 1.1%, which means in clarity that we decided because of the very good frequency development to put aside a bit of conservatism in terms of balance sheet reserving.
Freya Kong
Okay. Thank you. Can I just follow-up on Alex’s question as well? It did look like quarter-on-quarter your motor policy is reduced a bit less than 1%. Is there any reason why you would be not more positive on the market or cautious on growth going forward?
Torbjorn Magnusson
Well, we are always cautious on growth, I guess, and a one quarter development in that product of 1% is a very small development. The overall bigger development is, of course, a good one. I think we had 6% growth…
Knut-Arne Alsaker
Year-over-year.
Torbjorn Magnusson
… year-over-year. But then we always take tactical discussions every month. I haven’t actually thought of that development as anything that will affect the longer term development. We see good growth opportunities for Hastings going forward.
Freya Kong
Okay. Thank you.
Operator
The next question comes from the line of Tryfonas Spyrou calling from Berenberg. Please go ahead.
Tryfonas Spyrou
Hi, there. I had two questions, one of it was answered just now on Hastings. I guess the other one is on If, specifically on gasoline. You made a comment, could be on the thing in your comments that some of the below budget large claims could be as a result of the tighter risk appetite last year. Can you maybe elaborate on this and might as well underwriting actions you have taken there, and I guess, how sustainable could this be for this year? Should we expect large losses to be structurally lower going forward? And finally, can you maybe say how much of that 13% increase in gross premiums in gasoline’s related to volume and price? And I guess, the question I had is on some weather. I think you gave a slide, on Slide 6 you gave some color on sort of the last three years and to be a weather claims have been averaging 1%. Clearly, Q1 was exceptional, and I think, the other worst quarter we had is — at 2010. So, I guess, I think, you are speaking of the weather impact, how should we look at it broadly going forward? It appears that the 1% seems on the low side and 8% seems very high. So should we — any number you can give us in terms of expected to sort of budgeted for the claims that we should be expecting on a normalized basis? Thank you.
Morten Thorsrud
It’s Morten here. I will try to answer your questions. First, the derisking on Industrial. That’s sort of something that we do in certain industries where we basically are taking down our lion’s share sort of in typically sort of exposures, where you have kind of structured programs where we can take down our lion’s share.
Of course, that derisking is included when we make a budget and so the budget, of course, is adjusted for the exposure that we have. So the large claim outcome favorable in the first quarter is simply that we had fewer large claims than budgeted, but again, already factored for the derisking.
The 13% price increase or volume increase in Industrial is fully driven from rate increases and value increases. So net gain of business is very marginal. So, again, fully driven by either values or rate changes.
Then on weather. This quarter, as you saw, we had 8% above what we assume being a normal sort of winter, and then, typically, we have been talking about that we sort of on a yearly basis, have roughly 1% or so in events. Of course, in the first quarter, there were some events, some storms as well, but 8% is sort of what we expect on top of a normal winter.
Then in terms of expectations going forward, of course, we expect to price for sort of a normal winter and we expect to price for normal events in our pricing. If you go back in time, I think 2023 was a little bit harsh winter, the two winters before that was sort of just around zero, 2021, I think, was slightly better than sort of a normal one.
So this were — will vary a lot, but obviously sort of very little bit, but obviously, 2024 was exceptional, and again, you need to go back to 2010 in order to find the similar sort of harsh winter.
Tryfonas Spyrou
Sorry. Thank you. But just to confirm, so the Slide 6 sort of shows that severe weather claims a percent of insurance revenue. Is that what is above your sort of expectation or is that the absolute number of sort of severe weather claims…
Morten Thorsrud
Yeah.
Tryfonas Spyrou
… just to make sense?
Morten Thorsrud
Above our expectation of a normal winter.
Tryfonas Spyrou
Okay. Great. Thank you.
Operator
The next question comes from the line of Faizan Lakhani calling from HSBC. Please go ahead.
Faizan Lakhani
Hi. Thanks for taking my questions. The first one is coming back to Hastings. Thanks for your explanation on the loss ratio, but I just wanted to dig into a little bit more. Could you help disaggregate how much of the deterioration is down to the conservatism the better claims frequency, and if you could sort of split out how much you have actually benefited underlying from positive rate development there? The second question is, again, on Hastings, it’s severity you mentioned is near 12% year-on-year coming down slightly. But when I look at some of the key indicators in the U.K., like used car prices have come down significantly down sort of 9%, the suggestions are parts are more ready available, why is the claim severity so sticky within the U.K. motor market, if you could sort of clarify that? And the third question is on Finland, actually the combined ratio is up 6% year-on-year. There’s no indication that was weather related, if you could help break out what that’s related to? Thank you.
Torbjorn Magnusson
We don’t typically give, so detailed information as to the split that you are asking for, I think, suffice it to say that we have had a good first quarter in Hastings, which gave us an opportunity to make sure that we are fairly and prudently reserved.
The severity of 12% or 10% or whatever high number for the U.K. is compared to a year ago, and you are right that, a number of the key indices like used cars is looking a lot better now and we don’t expect or we expect claims inflation to fall as a consequence in the U.K. going forward.
Morten Thorsrud
And I think on Finland, I think, I rather would look at a combined ratio of 85.2%, which I think is a fair combined ratio for a winter quarter. There were clearly sort of winter effects also in Finland, but clearly much more than what we saw in Sweden and Norway.
So Sweden and Norway was accounted for almost 90% of the winter effects. But again, there were some winter effects in Finland. But I think the combined ratio of 85.2% again is a good fair combined ratio in the winter quarter also in Finland.
Faizan Lakhani
Thank you very much.
Operator
The next question comes from Vinit Malhotra calling from Mediobanca. Please go ahead.
Vinit Malhotra
Yes. Good afternoon. I hope you can hear me. My questions are mostly regarding the claims side. So that three, hopefully, very quick ones. So first one is the large losses proved to be better than budget also this quarter, also last year, 1Q. And I am just wondering if you could comment, is there any sort of conservatism built in or is it just good luck factors or is there anything that you could help us understand because it seems to be that it’s in two quarters in a row now, but not better than feared. So that’s the large losses? Second question is just on the — you commented April weather was more normal. I am just curious if you look at March and April, was it more normal or was it actually much better than previous year or something, because that’s what the — your peers have kind of hinted at, I am just curious on that clarity? And last thing is just the feedback, the U.K. inflation commentary you have said is more debt reduction in inflation. I am just curious, is there anything that is stickier because when we see headlines we think, oh, the inflation is getting much better. So also a base effect of last year. So I am just curious why it’s only moderately lower and not much lower? Thank you.
Torbjorn Magnusson
Can I just do the U.K. before?
Morten Thorsrud
Yeah.
Torbjorn Magnusson
Yeah. I agree, I think, everyone has been surprised how sticky claims inflation has been in the U.K. not only you. But now we clearly see, for instance, the used car prices at a lower claim — a lower inflation level than before.
So we have good hopes that this is now going to improve a lot. And then Morten will ask the surprising question that now that we have had two quarters of good large loss outcome. We get a question whether that is permanent.
Morten Thorsrud
No. And that’s, of course, the large loss pattern is purely random. So even, though, obviously, we saw a good large claim outcome in Q1 2023 and Q1 this year, that’s of course, purely random. So there is no kind of quarterly sort of pattern on that.
And on the April sort of March weather, I guess, it doesn’t make a lot of sense starting to comment sort of weather on a per month or per week or per day level really. But, of course, I mean, there’s been no big storms, no big floodings, no big events and a good decent sort of insurance weather, but I guess, yeah.
Vinit Malhotra
No. No. Thanks. It’s good to know. Thank you very much.
Operator
The next question comes from the line of Ulrik Zurcher calling from Nordea. Please go ahead.
Ulrik Zurcher
Thank you. Three questions from me, if I may. Is it fair to assume that the 7% growth within Private lines for If will be quite sticky this year given that the inflation is high and your peers appears to be chasing quite big margin improvements? Secondly, I wonder if you could comment on how much your motor claims frequencies have gone up since 2022, again, for If even if they are in line with your expectations? And thirdly, just why not grow more in Commercial, it’s the lowest growth rate you have and it seems like a quite good combined ratio? Thank you.
Morten Thorsrud
Yeah. Morten here again. 7% growth in Private. Yes, I think, we have a rather good growth prospects and outlook for the Private business area. It’s worthwhile bearing in mind that sort of over the last couple of years, we have had quite a bit of headwind from low motor sales as we talked about many, many time in these conference call. That headwind is starting too, is not as we start to compare with the years with also low new car sales.
So in Private 8.1% growth this quarter excluding the mobility business, 5.6% was the corresponding figure excluding mobility business last year. And I think we see that we benefit from maintaining the high retention rates, and of course, then continue high price actions.
And we expect price actions also to remain at a somewhat elevated level also going forward since we see that inflation is still, even though it’s kind of gradually coming down, we see that it’s still on a high level compared to historic levels.
In terms of motor claims frequencies, the development that we have seen, and I think, you have a good graph on this in the Capital Markets Day material actually. It’s a very gradual increase from sort of the time after COVID until today.
Of course, varying a little bit from country-to-country quarter-to-quarter. But for us, it has been very stable and very minor increase in frequencies, and again, very much what we had expected returning sort of to more normal traffic levels after COVID.
On Commercial growth, yes, we have an ambition to grow further in that market. We are making heavy investments in particular in digital solutions and remote distribution setup, and I do expect us to be able to grow as the market will become more digital. Of course, the other alternative will be to invest in the more old fashioned distribution capacity, which would be a fairly shortsighted sort of way of growing in the SME market.
Ulrik Zurcher
Yeah. Just on the claim frequency for motors. Is there — as this is increasing slowly or marginally, but you still have to reprice for that top of the claims inflation, right?
Morten Thorsrud
Yes. The three factors that you need to sort of price for in motor, one is the underlying inflation, second one is a slight decrease in frequencies, and the third one is that the repair cost of repairing a new car is significantly higher than the repair cost of repairing an old car. And that latter one, we are not sort of in our calculations kind of calling inflation, because that’s something that we price for when selling new insurances for new cars.
But again, you need to get all of those three rights in order to kind of have good pricing or correct pricing within motor. And I think sometimes people confuse and sort of mix inflation and frequencies and also this more underlying increased repair costs from repairing new cars and mix all of that into claims inflation.
Ulrik Zurcher
So you are talking about claims inflation plus a couple of percent maybe growth and then a potential market share. Is that the topline growth then?
Morten Thorsrud
That’s fair to say. I mean it’s the underlying inflation, some extra for frequencies and also for sort of increased repair cost of newer cars, some on motor and then on top of that would be sort of market share growth.
Ulrik Zurcher
Yeah. Excellent. Thank you.
Operator
The next question comes from the line of Youdish Chicooree calling from Autonomous Research. Please go ahead.
Youdish Chicooree
Hi. Good afternoon, everyone. I have got two questions, please. The first one is on the cost ratio at If. You think the ambition there is to actually improve it by 20 basis points annually. But given the development in 2023 and in Q1 this year, I mean, is it possible that you would probably be achieving closer to 40 basis points improvement this year? That’s my first question. And then secondly, on the fixed income running yield at If, which was stable quarter-on-quarter. So I think at the Capital Markets Day, you showed a slide showing a flat development to declining going forward. But I think today, as you mentioned in your slide deck, you were investing above 5%. So as things said, so should the fixed income revenue be trending upwards going forward? Thank you.
Torbjorn Magnusson
I can start on the cost ratio. I think as we often comment looking at cost ratio on a quarterly basis is not necessarily meaningful. We are not — I mean some cost items come in different quarters. So it’s, and of course, we do nothing to try to smoothen this out. But, of course, we have a target of around 20 basis points improvement. Last year we delivered a bit more than that. So that’s what you should expect also going forward sort of at least around 20 basis points.
Knut-Arne Alsaker
On the fixed income side, you are absolutely right referring to the sort of trying to forecast the running yield at a CMD, there is nothing developments over the last month, if you like that, that makes us less confident that we can maintain the running yield at a high level for some time, which means that we have been able to add some investments to support that 4.2% level also going forward.
Youdish Chicooree
All right. All right. Thank you.
Operator
The next question comes from the line of Johan Strom calling from Carnegie. Please go ahead.
Johan Strom
Thank you. So two questions from me. If we look at the 2024 Group combined ratio guidance of 83% to 85%, I assume you are not going to give us that the If P&C combined ratio for 2024. But do you think it’s fair for us to assume it could be lower, maybe a percentage point lower than the Group range given that the U.K. will most likely would be run with a slightly higher combined ratio than you do in the Nordics? And then on the solvency position, what would the dividend adjusted solvency margin of 180% then if you would have used the PIM model. Am I right in calculating something slightly more than 15-percentage-point higher solvency margin with the PIM model? Thank you.
Torbjorn Magnusson
Those are sort of almost entirely numerical questions, you want to take Knut-Arne, even the first one, almost by definition is sort of in the right range.
Knut-Arne Alsaker
It’s — given that the focus on underwriting profit in the or operating ambition in the U.K. is underwriting profit and not an exact combined ratio, although we will, of course, grow at attractive margins, but it’s not the same as the Nordic margins will not be, but growth will be higher. It means that If and our Nordic business, including from top needs to support a solvency ratio of 83% to 85% to make that average work.
So it depends on where you want to put your estimates in that range in terms of what you think about the target for If for this year. So as we say, we are not setting a specific target for If as such. But it needs to be a bit below the Group average exactly as you say. And the internal model has a positive impact on the solvency ratio of €300 million on the SCR, but on the solvency ratio of around 17 percentage points.
Torbjorn Magnusson
It wasn’t an exercise for mathematical purposes, when we are at the Capital Markets Day said that the target for Hastings or the ambitions for Hastings is underwriting profit or increase of that.
We need to have a very agile decision process to increase the underwriting profits for Hastings and that will necessarily mean that we balance the combined ratios and the growth prospects all the time. So I encourage you to try to look at the underwriting profit for Hastings even before you look at the combined ratio separately.
Johan Strom
That’s very clear. Thank you very much, Torbjorn, and that’s all for me.
Operator
The next question comes from the line of Jan Erik Gjerland calling from ABG. Please go ahead.
Jan Erik Gjerland
Thank you for taking my questions as well. I have three or four. And the first one is opposite to your peers, it seems like you have a very strong Norwegian combined ratio. Could you give us some impact if you have sort of dress it up with some prior gains or something else or is it equally distributed throughout the different kind of countries? That will be my first question. The second one is on the profitability in Private, it seems that Private taken most of the winter effects and negative ones versus the Commercial and Industrials, and if so, why? And the third one is the phasing of this potential share buyback. You talked about €1,100 million, the €700 million plus €500 million on the Capital Markets Day. We still have some 10 quarters to go to 2026, if we start with this in August, would €100-million-plus per quarter be sort of a good proxy for phasing in all this or will it be more front-end loaded? Thank you.
Morten Thorsrud
I will start with your kind of combined ratio questions and profitability questions on Norway and the Nordics. I think to your first question on profitability in Norway, yes, I think, we have a good underlying profitability in Norway. I think we have been disciplined in pricing for the inflation that we have seen and expected to see in the Norwegian market.
So, and then in terms of runoff that we only disclosed at the If Group level, there is not anything specially sort of sticking out in terms of sort of country or line of business or anything like that. It is a little bit higher than sort of a normal runoff this quarter, but nothing spectacular. So I think the Norwegian combined ratio, good underlying performance, good underlying business there.
Private profitability and winter effect, yes, the winter clearly affects Private the most and these were typically sort of motor damages to normal sort of passenger cars, there were sort of damages to houses, pipes bursting from frost and so forth. And we didn’t have any sort of larger winter-related claims in Commercial or Industrial. So there were typically sort of frequency claims and then typically affecting business area Private.
Knut-Arne Alsaker
On your buyback question, Jan Erik. I am not sure I fully understood the rationale. It wouldn’t make sense for us to start €100 million buyback each quarter to spread it out over a number of years. Like we said, also at the CMD, we would sort of consider deployable capital about once every 12 months to 18 months, which means that we would come back in Q2 in August with consideration around the deployable capital we have generated them.
And then a buyback takes the time it takes, so to speak that, of course, depends on volume, on the exchanges we buy back, so our trading volume at the Helsinki, Nasdaq Helsinki and sort of what we can buyback to not influence the share price just in terms of how large of a share that we can — of the daily trading volume that we can take. If not that there is a question on the buyback, but if I just looked at some of the latest buyback we have done that would be what submit to the tune of €5 million per day, €6 million per day.
Jan Erik Gjerland
So it means that you saw sort of — when you come back in August, you will then start sort of a larger mandate and then you start for your AGM or — and then you will ask for a new mandate and then you will restart again in, let’s say, May 2025 and then continue till you have done whatever you want to plan, depending on deployable capital and your overcapitalization, if I understand you correctly now. So we should not take it like evenly distributed throughout the years?
Knut-Arne Alsaker
If we are talking about the buyback, it becomes a bit evenly distributed given that it sort of takes the time it takes, if volume is constantly take some months. But — and let’s come back to the exact size, but given the fact that we talked about making such consideration once a year and we have sort of done what we have done generating the €700 million of deployable capital, it would make sense for us to consider a buyback that takes sort of more than a quarter.
Jan Erik Gjerland
Okay. I agree. Just…
Torbjorn Magnusson
Just spread it out for a longer protracted period for some reason.
Knut-Arne Alsaker
No, no, no. Just spread it out. No, no. So it’s not like we split those €1.2 billion into exact sort of even buckets and we already have sort of the €700 million of the €1.2 billion in capital management actions in the books.
Jan Erik Gjerland
And that points me to the write-up of Nexi. There was a transaction in Q1, if I understood correctly. So that is alluded to, the €41 million you have unfolding is alluded to that transaction, which then gave an indication of valuation of Nexi. Is that fair to say?
Knut-Arne Alsaker
It’s not — that’s the share price, what the way that Nexi is accounted for in our books given that it actually is a private equity holding for us. Is with one quarter’s lag in valuation. So the €42 million profit we had from Nexi in Q1 reflected Nexi’s share price development in Q4. And it is, of course, also well known that Nexi’s share price did not perform as good in Q1, which will be reflected in our holding profit in Q2.
Jan Erik Gjerland
Okay. Just one question left for Morten then. And the Borsen in Denmark fire, is that sort of any news you can tell us about that or is it a large enough loss or is it €25 loss or what should we think about it?
Morten Thorsrud
There is not much to comment on that. It’s — of course, it’s had a claim for Denmark. But from an insurance perspective, it’s a large claim, but it’s sort of nothing out of the extraordinary from an insurance perspective. So we have sort of our normal reinsurance cover which gives us of net €30 million and then plus the reinstatement premium, of course, on that. But, yeah, it will be part of sort of the large claims budget and outcome in Q2 then.
Jan Erik Gjerland
Yeah. Thanks a lot. That’s all from my side.
Operator
[Operator Instructions] The next question comes from the line of Jaakko Tyrvainen calling from SEB. Please go ahead.
Jaakko Tyrvainen
Yes. Good afternoon. Jaakko Tyrvainen from SEB. Could you give us a bit more flavor on the current market dynamics in the Nordics? Have you seen, for example, any rival being a bit more aggressive in terms of market shares lately or is that kind of a risk that you are seeing, given the inflation is slowing down clearly and the bond portfolios have been rolled into the higher rate levels?
Morten Thorsrud
I would say that the market dynamics in the Nordics is still very disciplined. I think, generally, there are still a need for price increases if you look at sort of the different company’s performance varying a little bit from country-to-country most clear in Norway, but I think sort of quite many sort of players seems to need to have quite hefty price increases. But, again, it’s a very disciplined market.
Jaakko Tyrvainen
Okay. Good. Then second one on If P&C Private customer volumes, which seems to be — which seems to remain kind of flat or actually margin are down in Q1, still you are reporting growth in certain areas like Personal Insurance and on Property. Is the right conclusion that you are kind of gaining those volumes in those growth pockets in — by just cross-selling to your existing portfolio or how aggressively you are chasing totally new customers?
Morten Thorsrud
This — somewhat low development in terms of number of customers in Private is more or less exclusively driven from the development in Sweden and on single car customers, than car brand type of setup. So this is almost pure mechanics that you get when the new car sales is lower year-on-year, sort of as we see now for the last few years.
If you would have adjusted for those sort of single car customers, we would see a growth in number of customers in business area Private. So, typically, the customer segment that have multiple products, those — that segment sort of within Private is growing.
Jaakko Tyrvainen
Okay. Good. That’s all from my side.
Operator
And the last question comes from the line of Michele Ballatore calling from KBW. Please go ahead.
Michele Ballatore
Yes. Thank you for taking my question. So the first question is just, sorry if I missed this, but in terms of the more prudent in Hastings, can you also reserve prudent. Can you tell me the reason behind this? Probably sorry if I missed this. And the other question is about, in 4Q you released some reserves related to inflation. Can you tell me if there is a positive development related to inflation also in the first quarter 2024? Thank you.
Torbjorn Magnusson
The prudence which could have been other parts of the Group as well. Sampo, we like to have prudency in our reserves, and from time to time, when we see a really good frequency development, we use the opportunity to create a little bit of prudency in case the next quarter is not developing in the same excellent way as it did for Hastings in Q1. Again, going back to the contribution to the underlying claims development. No specific worries other than now wish to have a prudent reserving position.
Morten Thorsrud
And to the prior gain on If. We reported 4.2% prior gains. That’s a little bit higher than what we normally would assume being kind of more longer term prior year gain percentage, but it’s purely driven by kind of normal quarterly volatility. So nothing sort of in particular that stands out on that one.
Michele Ballatore
Okay. Thank you.
Operator
There are no further questions, so I will hand you back to your host to conclude today’s conference. Thank you.
Sami Taipalus
Okay. Perfect. Thank you very much everyone for attending and that concludes the call today.
