Danish ICMIF member LB Forsikring has announced that it will be sharing a loyalty discount of DKK 124 million (USD 18.07 million) with its members. The company says it believes that loyalty should be rewarded whenever possible, it is part of LB Forsikring’s DNA and therefore it is proud to announce the expected loyalty discount in 2024, which will be paid out in December.
CEO, Jan Kamp Justesen said: “Our finances look reasonable and solid, and this must of course benefit our members. Therefore, I am pleased to announce that our members can already now find out what we expect to pay out in loyalty discount to them at the end of the year.”
In order to receive a loyalty discount in 2024, members of LB Forsikring must have had home contents insurance in one of the company’s brands for at least three years. In addition, the size of the payment depends on how many insurance policies members have through LB Forsikring, the year’s discount rates and how long members have had their home insurance through LB. There is a minimum payout of 75 kroner.
In an earlier announcement about the company’s financial results for 2023, LB Forsikring said that its worst year for claims in 10 years had left its mark on the accounts for last year. The many weather-related claims have cost LB Forsikring dearly, however LB Forsikring still emerged from 2023 with a positive annual result of DKK 507.3 million before tax, after what it says was a good investment year.
2023 was an eventful year for LB Forsikring and its many members, with weather and climate in particular having a major impact on the claims picture and claims handling.
“We’ve had an unusual claims year with lots of claims as a result of cloudbursts, storms and storm surges, and it has been noticeable. Our members have been hit hard and our employees have been running hard and working overtime to keep up. I would like to take this opportunity to thank our hard-working colleagues for their efforts and focus on taking the best possible care of our members,” says Jan Kamp Justesen.
2023 was the worst claims year for LB Forsikring since 2013, with Denmark hit by two hurricanes, which therefore characterised the annual accounts. The many weather-related claims cost around DKK 150 million in 2023 alone.
The claims ratio was 83% in 2023 compared to 80.6% in 2022, while the expense ratio increased to 17.4% in 2023 from 16.8% in 2022 due to increased costs for IT and strengthening the member-facing part of the organisation.
The result was a combined ratio of 101.7% compared to 98.7% in the 2022 financial statements.
“We have a higher claims ratio in 2023, which is one of the reasons why the technical result ends up at 101.7 per cent. Another explanation is that we held back on making extraordinary inflation adjustments because we wanted to support our members, who experienced the rising inflation in their personal finances already in 2022. We therefore only started to include the impact of inflation and adjust during the spring and summer of 2023, and this naturally also affects the accounts,” said Jan Kamp Justesen, adding that LB Forsikring has had a good investment year, which pulled the company in a more positive direction.
In 2023, the investment portfolio generated a return of DKK 509 million.
LB Forsikring therefore reported that the total annual result was therefore positive, totalling DKK 507.3 million before tax and DKK 365.8 million after tax.
After LB Forsikring paid out a record-breaking loyalty discount of almost DKK 255 million to members in 2022, the Board of Directors took the extraordinary decision not to pay out a loyalty discount in 2023, because inflation adjustment was held back a little.
“We showed due diligence in 2023 by not paying out a loyalty discount. It turns out that was the right decision. But I’m also convinced that we made the right decision when we made the decision last year to promise that the loyalty discount will return in 2024, as we have positive expectations for the coming year,” says Jan Kamp Justesen.
The positive outlook for 2024 is based on inflation adjustment, investments in digital solutions and a focus on sound business in LB Forsikring.
“As a member-owned company, we are in a different position than many other companies because the money only works in favour of the members and must be returned to them either in the form of claims payments, obstacle solutions or loyalty discounts. We should not generate profits for shareholders. But we must of course focus on having a healthy core business and constantly realise the potential we have. In 2024, we need to continue on the path we’ve been on, while making sure we create the most value for our members and be the natural choice for them. In concrete terms, this means focusing on growth, claims handling, investments in efficiency, and developing our products over time,” says Jan Kamp Justesen.
LB Forsikring is a member-owned insurance company consisting of the insurance groups Lærerstandens Brandforsikring, Runa Forsikring, Bauta Forsikring and LB Forsikring til PFA, which has over 435,000 members. This makes LB Forsikring the largest member-owned private insurance company in Denmark.
