ALM. Brand A/S

CSE:ALMB

Earnings Call Transcript 2022-Q1

[Operator]

Ladies and gentlemen, welcome to the Alm. Brand Interim Report First Quarter 2022. [Operator Instructions] Today, I am pleased to present CEO, Rasmus Werner Nielsen. Dear speaker, please go ahead.

[Rasmus Nielsen, executive]

Thank you. Good morning, everybody, and thank you for going the time to join us on our call on the Alm Brands results for the first quarter of 2022. I'm here with my CFO and Investor Relations.

Again, we had a quarter with plenty of actions. And only last week, we finally closed the deal to acquire Codan Denmark. Although we have spent a lot of time defining the road map ahead. We have also been dedicated to maintaining a strong focus on the day-to-day operations to ensure we stay on track to further strengthen our business. Thus, I believe the most important takeaway this time are the pickup in premise as well as the improvement in the underlying business so that we have a very strong platform, from which we can build a new and large Alm. Brand group.

Having said so, I must add that our business is not resilient to external negative effects. Both the storming weather and the stormy financial markets have negatively affected the numbers that we have presented today. But in the bigger pictures, these are manageable. On the following slide, I will walk you through both the highlights and our earnings numbers from the quarter. And after this, I will be happy to take your questions.

And we start on Slide 2 with our highlights. The process of acquiring Codan has taken almost 1.5 years, and I'm very happy that it has now been finalized so we can progress on the integration and shape our new combined entity. As you all know, we received the final approval from the Danish CAA on April 27, and we closed the transaction a few days later on May 2.

Secondly, we announced a new group management and an organization layout with a total of 5 client-facing units as well as 3 units that will support the group's operations and development. This Monday, we announced the second level of 45 leaders and they now have until before summer to shape the new organization and harvest the first round of synergies.

We have a very strong platform to build upon. Alm. Brand grew premiums by more than 5% in the first quarter of the year. It should be noted that both private and commercial have gained strong momentum and that our partnerships are also adding to the positive development.

Turbulence on the financial markets fueled by the Russian aggression in Ukraine has led to a sharp rise in the interest rates, which has cost clearly and admittedly, this is affecting our full year guidance. All in all, we are, however, able to balance this out, with the upgrade we are making on the Non-life technical result offset both the loss we are making on investments and the additional costs we have incurred on the short-term placing of the funds for the purchase of Codan.

On Slide 3, with our financial highlights for continuing activities, we are pleased with the strong development in the underlying business, and I will come back to this, but we also note that costs streaming from both weather-related and major claims are on the high side compared to what we normally witnessed.

Thus, the technical result amounted to DKK 45 million compared to DKK 104 million same quarter last year. Investment income was a loss of DKK 55 million. And adding the two together, and we get to a modest pretax loss for the first quarter of DKK 10 million against the profit of DKK 107 million in first quarter last year. Other costs increased to DKK 55 million.

Headquarter costs fairly unchanged, but short-term interest rates have remained negative has been caused to place the large sum of cash earmarked for the purchase of quarter Thus, we made a loss of DKK 65 million in the quarter against a profit of DKK 107 million in first quarter of 2021. Further special costs amounted to DKK 143 million, included in this mostly cost related to comparing the integration of Codan and the divestment of our Life business, but also an amount of DKK 20 million due to the bankruptcy of [indiscernible] insurance, where we like the rest of the sector, pick up our share of the total loss.

On Slide 4, we have made an overview of the results in Codan. Top line measured by gross earned premiums was reduced by 3.4% to DKK 1.2 billion. As expected, the pruning and the deliberate reduction in exposure towards large claims is leading to a reduction on the top line as well as delivering the improvements Codan has been targeting. In the private segment, Privatsikring is growing fast, leading to an overall growth in private lines. We believe that there's a lot of upside in this channel and understand that Codan is temporarily investing heavily to fuel this growth.

Due to these investments and because of high weather-related claims, Codan had a combined ratio of 97.4%, including runoffs, but underlying business still looks stable. All in all, this translates into a current year underwriting loss of DKK 38 million against the profit of DKK 100 million in first quarter last year.

Large claims are slightly up, but remains within what we would expect a range for business with the portfolio with a bias towards commercial, including [indiscernible]. Further, Codan a loss on investments of DKK 221 million in the quarter, and you should expect us to do a swift integration of investment processes and risk appetite following the takeover.

Now turn to Slide 5 for an update on how we are progressing on the Codan transaction. It has been a busy agenda, both leading us to the agreement to acquire Codan back in June last year, and in the following months to obtain financing from both the equity and the bond market. To obtain a credit rating and to ensure the necessary regulatory approvals from both the Danish FSA and DCCA now with no remarks.

All this has been completed to get the position where we could close the deal. This is truly a major achievement which has required enormous team from both Alm. Brand employees and external specialists.

Now we can finally turn our focus to what is next. And we are already -- we're ready to move forward on integrating 2 companies with strong traditions and strong brands into one new entity. We have already set the management team, and we will gradually roll out the long list initiative to be implemented across the operational platform so we can achieve the goals that we are targeting. And just to be assure, we will not slow down.

And now back to our operational performance on Slide 7. The Non-life business made a modest pretax loss of DKK 10 million in the first quarter of the year, which comprises a technical result of DKK 45 million and a negative investment result of DKK 55 million. Again, the technical result benefited from a good development in the underlying business and the positive runoff result.

However, external factors hit the overall result. The storm Malik we, of course, knew about when we did our guidance date in February, but nevertheless, it took away a good part of the profit in the quarter. Although our investment strategy remains a conservative long-term strategy with respect to overall portfolio exposure, we faced a headwind in the quarter leading to a loss of DKK 55 million as uncertainty and volatility in the financial markets increased on the back of the Russian invasion of Ukraine.

And just to put this into perspective, back in fourth quarter of last year, we had a positive investment income of DKK 47 million, i.e., we more or less just back to where we were 6 months ago. Also, please note that although high interest rates have affected our investment income negatively in the quarter.

And on the other side, we benefited from higher interest rates on our Non-life business as insurance provisions are reduced with a direct positive impact on the combined ratio. Please turn to Slide 8. Premium income grew by 5.5% in the quarter, i.e., a significantly higher pace than in the previous quarters and years with positive contribution from both the private lines and the commercial lines.

Again, growth has been very positive in the commercial lines, and we have seen a percent jump by 6.7% as a result of both influx of new customers and adjustment of prices within especially workers' compensation. Also in the private lines, we see a notable increase in momentum with premise of 4.3% on the back of a long strength of the initiatives implemented on pricing, customer retention and value proposition. We know it is out there.

And of course, we also see it in the numbers. Inflation is on the rise and we'll keep a sharp eye on any development that may affect our business. So far, we have been able to offset claims inflation by a combination of adjusting premiums based on development in price index and adding through the efficiency in claims handling. And not forgetting, our main focus continues to be our profitability rather than growth.

And now please turn to Slide 9 with the major claims and weather-related claims. For a large number of quarters, this has been a fairly small part of our story, but we are from time to time mentioned that at some point, we will have a quarter with high claims, and this happened in the first quarter of this year. The two stores Malik and Nora cost us a net of DKK 85 million and weather-related claim totaled 6.6 percentage points. At the same time, large claims climbed to 10.2 percentage points. Adding weather-related large claims together, this gives a total of DKK 234 million against DKK 124 million last year, almost a doubling and hitting pretax profit with additional DKK 110 million.

However, there's a little comfort to be found because of the high claims we had in the first quarter, the frequency program included in our total reinsurance program, we probably cover a large part of weather-related and large claims in the remainder of the year, thus reducing the amount of claims that we will have to cover our selves.

And now summing it together on Slide 10. Underlying combined -- buying ratio improved by a like-for-like, very strong 390 basis points after stripping out the positive COVID-19 effect in the last year's number. The development is based on a broad range of positives. First and foremost, the underlying claims ratio has improved and the cost ratio has been stable, but also workers' compensation is gradually moving towards a better balance between new premises and the claims we are receiving.

And as mentioned earlier, we do have an overall positive impact on the combined ratio from higher interest rates is accounting for around 1 percentage point of improvement. Runup gains contributed with 2.2 percentage primarily from movable and building insurance and we have, for now, a lower quarter seeing a stable runoff numbers around 2 percentage points.

Please turn to Slide 11. For the private lines, claims ratio was 71.5 against 66.7 same quarter last year, i.e., somewhat higher and primarily due to claims following the Malik storm in January. This quarter's cost has -- have remained at a relatively high level and 19.6%, partly reflecting the continued investment in our partnerships, but also in absolute numbers because of safe provisions increasing as Premiums has shown a very positive development. Adding the two together, combined ratio was 91.1, and as mentioned before, due to the weather-related claims, Thus, I'm confident that we have seen -- and what we have seen in the quarter is a very important step change in this development in private lines.

And then on Slide 12 for the commercial lines. Again, this quarter, we have seen a positive development in the underlying combined ratio with a reduction of 230 basis points towards -- to 79.0%. However, a very high level of both weather-related and large claims add significantly to the combined ratio, which then amount to 102 against 97.7 the same quarter last year. Expense ratio has been fairly flat at 16.4. And as such, a satisfactory level as we continue to keep a tight control on the cost development.

And now on Slide 14, I would like to comment on the inflation and how it affects our business. Just like all businesses -- all other businesses, we see that inflation is picking up and is beginning to affect our claims expenses, although it is still at a fairly moderate level. Our best forecast is that in 2022, there will be increase in claims expenses due to cost inflation of around 3% to 4%, which will be driven by construction-related claims cost. In areas such as building and home insurance, inflation may well exceed 5% and then an adjustment of premiums in some segments is, therefore, under consideration.

We work in a structured way with supply agreements, which is helping us to mitigate the inflation. But we also see that contracts with suppliers are renegotiated on an ongoing basis and that there may be a need to compensate them for additional costs due to the high energy prices.

And then please turn to Slide 15 for the outlook of 2022. In the guidance that we present today, we guide for the Alm. Brand, excluding any earnings contribution from Codan. But still, we have a lot of moving parts as we introduce a new guidance on the Non-life technical result. The overall full year guidance remains unchanged with the pretax result in the range of DKK 450 million to DKK 500 million. The guidance is based on an upgrade on Non-life technical result to DKK 650 million to DKK 700 million, excluding run offs, which reflects continued positive development in the underlying business.

This is an increase by DKK 150 million compared to what was in the February guidance. Further, investment income in the Non-life is expected to be a loss of DKK 100 million compared to our guidance in February of a modest gain, including this is the continued negative development in the financial markets also in April and May. Adding the two together leads to a small upgrade of Non-life net pretax result of DKK 25 million to DKK 550 million to DKK 600 million.

Going forward, we will focus on guiding on the core earnings of our Non-life business i.e., the technical results. Also, our guidance on group costs has been updated due to higher-than-expected costs related to the placing of the funds earmarked to the purchase of Codan we adjusted to DKK 100 million compared to our previous guidance of DKK 75 million. Adding the Non-life and the group cost together, we derive at a group pretax result guidance for continuing activities of DKK 450 million to DKK 500 million, i.e., unchanged, but we have a much stronger underlying business.

Our earnings guidance is based on increasing growth to around 4%, partly fueled by our partnerships and the continuation of the positive trajectory we have seen in the first quarter of the year. Adding it all together, we would expect the combined ratio to be at around 89, excluding any effects from runoffs. Finally, we are confident that we'll meet the synergy target and realized synergies of DKK 90 million this year, as previously stated in connection with the announcement of the acquisition.

Restructuring costs this year for the integration of Codan will be around DKK 300 million. In total, our guidance reflects a business with all major parts moving as we would like them to. And with this, I will conclude my presentation and hand over the word to our moderator. Thank you.

[Operator]

[Operator Instructions] Our first question comes from Asbjørn Mørk, Danske Bank.

[Asbjørn Mørk, analyst]

A couple of questions from my side. If we start with your existing business. And the growth for Q1 and the guidance for the full year, the 4% and the 5.5% for Q1. You seem to mention partnerships, sales, retention as driving factors. Could you sort of split this up a little bit? And how much is repricing? How much is new sales? How much is existing or sales to existing clients? Just to give us a little bit of a flavor of what are the moving parts on the premium side?

[Rasmus Nielsen, executive]

You're right. The growth, as we discussed for some quarters, that we would expect it to come is a combination of the things you are mentioning here. I think it's difficult to say what -- exactly what, but at least what I can say is that a very positive thing is that the customer seems to stay longer with us, which we are very happy for.

And that is a very positive thing. Then we have also the pricing, as you say. And all in all, we have moved with the basics of customers' experience. So this all comes up to the improvement we see now in the business.

[Asbjørn Mørk, analyst]

Any reason why you say 4% for the full year after a strong start to the year? Is it just being prudent? Or are you seeing something in the Q2 or Q3 numbers that should have a negative impact on your growth?

[Rasmus Nielsen, executive]

Yes, there's a reason. Of course, we would like and we also hope to end more than 4, maybe 5. But also what I've said for some years now, there are continuing competition out there, both in the private market, but also in the commercial part and that's why I think we have a very good beginning of the year. We hope it to continue, but there's still a 9 months to come.

[Asbjørn Mørk, analyst]

Okay. If I may ask then on your -- on the partnerships and also a little bit on the inflation slide you have. You start with the partnerships, how much is sort of the upfront payment when you take on new clients to see your operating costs are up 5% in private and 7% for commercial. So should we expect this to continue at these levels? Or will it come down in the next couple of quarters, if your growth sort of moderate to the 4% level? And from the inflation, how much are you taking into -- how much of what we're seeing right now is basically 2021 effects? And how much inflation do you see for 2023? I know it's early days, but just a little bit of flavor there.

[Andreas Madsen, executive]

Starting out with growth and the answers you had around, I'd say, partnership payments. The model we have is to verify based on running provisions to the partners. So we don't have as such significant amounts in numbers going to the partners at the moment of the sale.

As you know, we use our traditional side agents set up for a lot of our sales, and there is in all insurance growth. It's always costly in the beginning. The first year is not as profitable as the next because there are -- there's the commission especially going to the tight agents. So that's the main reason for the expenses there and [indiscernible]. And going to the claims inflation, as we tried to picture here, you're right that in the broad sense, we don't see this as a major issue for 2022.

It is a moderate effect we're looking into for the full year. We do see specifics, as we mentioned, especially buildings where we think it will be necessary to look at pricing in the short term. But going into next year, a lot of -- that's very hard to say at this point in time. If we see a stabilization from now on at the already increased levels in materials and earnings, then we would expect to be getting a significant portion from the ordinary indexation next year, and then the need for further pricing initiatives will be very moderate. If on the other hand it continues the rise as have been seen for the beginning of this year, then we'll have to take action. But that's why we're following that closely from now on.

[Asbjørn Mørk, analyst]

Okay. If I may ask on the Codan numbers. First, I mean, how much visibility do you actually have at this stage on the underlying trends? Is it just numbers that you get from Codan? Or is that your own interpretation of the numbers, especially looking into the Q1 technical result or the technical loss, if you look at it before runoffs. If there's any specialties here in the client business renewables business?

Anything there that we should be aware of -- that you are aware of at this stage? And also looking at the guidance for -- when you say that you will come with the guidance for the full year on the -- in August. How do you see the general development at the moment given relative to the business case that you bought into a year ago? Just a little bit of flavor on that as well.

[Andreas Madsen, executive]

Well, let me start with this. I would say we have -- now we have full visibility in the sense that now we have full access. But keep in mind, it's been a very short time period. So one thing is actually gaining access to employees to the organization and also the large portions of material, which lay behind -- which they have been working on and documenting. We haven't had time to fully dive in, but we do have visibility now.

So I'd say -- and we can see sort of what the moving parts are. So to give you some more flavor on the development in the underwriting result for this quarter, we see -- I'd like to focus on the current year underwriting result. We see a pickup in terms of combined ratio of a total of around 11 percentage points compared to the same quarter last year.

5 to 6 percentage points of that is weather-related. A significant portion of it is actually weather-related to the renewables lines where they have had some losses stemming from the windstorm Malik. You have 5% to 6% coming from weather, then you have, let's say, a slight increase in large claims of 1 to 2 percentage points still within the normal, but compared to Q1 last year, a net pickup, also primarily stemming from renewables this time.

And then to finish it off, they are spending quite some sums especially in the growth area around the basic end both in IT investments for the customers, which have been delivered now and also IT investments in lead management and optimization.

And then they -- as a [ mini-one ], it is just expenses to grow and it takes commission and it takes people on the road also to sell that amount of growth, which is starting to come. So rounding that off, if you look forward, as you mentioned, we'll be coming back with some more guidance in August. But I can say, to sum it up, we see this as mostly one-offs and temporary effects. We don't see anything that makes us work with the business case we have.

[Asbjørn Mørk, analyst]

A final question from my side on the communication on 2025 targets. You're reiterating the 1.7 to 1.8 pretax. It just sounds like you're basically just repeating what you said a year ago. But just looking at the discounting in this quarter, which I think is around DKK 70 million impact or the impact from the rising rates in your own business, rates have gone up further in Q2. I guess the discounting effect will be even higher for Codan given the lines of business they operate within, and of course, your investment results. So how do you look at the DKK 1.7 billion, DKK 1.8 billion ambition for 2025? I guess all things equal, you should increase that guidance at some point.

[Andreas Madsen, executive]

I think as credit short, I think you're correct in the sense that we are reiterating the old target. We've not fully sort of loaded the structural change and interest rates. And to be fair, it's also been a very short period. We've seen these hikes in. So we would like to -- we won't be changing that around every quarter. These are long-term targets. But if they stay at the levels we've seen, you're right, there might be a positive there. So we are comfortable with the levels. Let's put it that way. .

[Mikael Larsen, executive]

[ Larsen ] from Investor Relations, just to clarify on the DKK 70 million helped to our technical result guidance from the higher rates here in 2022. It's also including the interest rate increase after Q1. So it is both -- I mean, it's the total effect.

[Asbjørn Mørk, analyst]

Sure. Sure. But I guess with Codan having sort of the same-ish effect and then investment results in additional...

[Andreas Madsen, executive]

I forgot that question. Sorry, Asbjørn. But that's right. I would say, to put it in broader terms, quarter is a bit more sensitive to interest rates than [indiscernible] is, a bit more. So they have a slightly larger average duration on that claims divisions. So that's correct.

[Operator]

Our next question comes from Jakob Brink, Nordea.

[Jakob Brink, analyst]

Just to continue where you left off on discounting, just to make 100% sure we saw with Tryg Denmark when they sold now their life insurance business, then the rate sensitivity dropped quite a bit because apparently, a very big part of the sensitivity was related to the illness and accident part of the Life business. So just to make 100% sure that these numbers you're giving us now has been adjusted for the discontinuation of Life?

[Andreas Madsen, executive]

Yes, I can confirm that it's been adjusted from the discontinuation of life.

[Jakob Brink, analyst]

And then so it's around 1:1 in the old Alm. Brand, and it's more in Codan. Is that correct?

[Andreas Madsen, executive]

Slightly above yes.

[Jakob Brink, analyst]

Okay. Fair enough. And then second question on solvency. The 100 one, was it 95 post deal. If I do the math, I think I get somewhat higher now. But could you maybe give us some details of kind of a Q1 pro forma, including Codan. Will -- is 195 still the best guess? Or has it changed?

[Andreas Madsen, executive]

I can say that we are in a slightly more positive place in terms of solvency expectations. It's driven to a large extent by the lower SCR you're seeing also in a [indiscernible] we've had a slightly -- we also are expecting maybe a slightly lower SCR on the Codan side. To give you a flavor, and this is in round numbers, we're probably looking into something maybe around 190 for the end of the year, but that's after the restructuring we are planning and guiding at around 300 before tax. So we're in a comfortable place to -- and maybe a slightly more comfortable than last time.

[Jakob Brink, analyst]

So 190 in this year, including DKK 300 million. Does it also include dividends for '22?

[Andreas Madsen, executive]

It includes our minimum dividend of 70%.

[Jakob Brink, analyst]

Okay. What is the new SCR? So DKK 2 billion used to be the Codan number and DKK 1 billion used to be the Alm. Brand number. Now on brand is a bit lower, but how much lower is the DKK 2 billion from Codan?

[Andreas Madsen, executive]

Yes. I think we're looking at a total SCR now of around DKK 3 billion still where we were actually calculating on around 3.1% as I remember it. So -- and also keep in mind, these are -- I mean, it can change a bit also on the Codan side. So don't -- DKK 100 million in both the regions is not unexpected, and that's kind of fluctuation we must be able to handle.

[Jakob Brink, analyst]

Okay. And Rasmus you mentioned in your speech about the reinsurance sideways coverage or the frequency coverage, I think you called it. Could you just remind me, so what would be the exact way this works from now on?

[Rasmus Nielsen, executive]

Yes. We have had some large claims and also these weather-related claims like the storm. And of course, this all affects our reinsurance program. And it is almost full and that means that if we have a storm or some other weather-related that could be put into this then it will be fully covered by the reinsurance program. So you can say we have had all the expenses, unfortunately, in Q1. And if something more comes, then it will be taken up by this program.

[Jakob Brink, analyst]

What are the size limits that are required in order to be put into this sideways coverage? I mean, how big does the claims?

[Andreas Madsen, executive]

It's a minimum of DKK 10 million on single claims, which comes into the coverage.

[Jakob Brink, analyst]

Okay. So what would be your -- just wondering, so the large claims, obviously, your guidance for large claims is DKK 1 million to be included in large claims. So how would you adjust for this going?

[Andreas Madsen, executive]

Sorry, Jakob. Included in the guidance we're coming with today, we also have a slight positive effect from this. I think we are -- it's around DKK 25 million for the rest of the year, which -- where we -- if we use our capital model and large claims model we would expect something like that in benefit given the fact that we now are so close to the limit.

[Jakob Brink, analyst]

Okay. Very clear. Then back to also Asbjorn's question on inflation and your comments around 3% to 4% and 5% for House and potential need for price increases. But shouldn't you already be doing those price increases now. If I look back at the more recent conference calls, it's been about whether you were too high on prices.

And now I understand you might have lowered them a bit on some motor segments. So it looks more like you and competitors are actually lowering prices, and it's been quite a while since there's been any price increases, except for the annual indexation on 1st of January. So shouldn't you be moving now in order not to get behind the curve on inflation?

[Rasmus Nielsen, executive]

Yes, it's not fully the picture we are seeing on buildings insurances like that, we have -- on a continuing basis, we are putting risk and pricing together is what we have done in the past years. It's been as the profit has simply been too poor. But you're right on motor insurance, it's a little bit more competition on that side. But what we are seeing in the future and also what I think we see in our numbers with the underlying combined ratio we have, I think it's somehow is not prudent, you can say, too, just to increase prices on this right now, but we are following it, especially in the building side.

And of course, we are also looking how will this develop as Andreas said during the year because then we will have this inflation be able to calculate that into our products next year. So we're just -- we're keeping our breadth a little bit and then we will take action if we.

[Jakob Brink, analyst]

Okay. And on the investment income, the guidance you're giving now of DKK 100 million loss for the year, that includes April. So should I read that as if April has been negative DKK 45 million and you expect 0 profit for the rest of the year? Or should I read it as if April has been even weaker and then you expect some profits for the rest of the year?

[Andreas Madsen, executive]

I'd say it's mostly the first scenario. But we are -- we have had a bad April in terms of investments. It's a combination of both stock prices decline, but also the rate increases and the development in the hedging match portfolio have sort of summed up to something that amounts that now we say it's around 100.

There is also some parts to be fair from the fact that we now have a higher yield also on our free portfolio, so there's a slight number from a better positive result, especially on the bond side for the rest of the year. But most of it is the fact that April was just not very good.

[Jakob Brink, analyst]

Okay. Fair enough. And then last question on the Codan integration, just a bit of housekeeping. But -- so will you give us any numbers, sort of, restated numbers ahead of the Q2 report that would be really nice, if you could?

And also the investment risk on Codan you mentioned that previously that you would make a swift turnoff of their book into your investment standards. But do you know anything about sort of the beginning of May? Is it just as bad? And how fast can you restructure their investment risk?

[Rasmus Nielsen, executive]

In terms Codan, we will come back and we have listened to your question, Jakob the revised figures at latest with the Q2 results.

[Andreas Madsen, executive]

And regarding investments, Jakob, the fact is that. both actually, you could say, so [indiscernible] and, in this case, Codan investment setup has just been radically different than the way Alm. Brand does it. They have had bonds taken up in the U.K. GAAP accounting principles at amortized costs. They haven't had mark-to-market.

So they have lived with a portfolio with a much larger duration mismatch than we are -- that we will be doing. And I expect already now. I know that the Codan portfolio is moving to a more balanced place and have moved to a more balanced place than it had been for large parts of Q1. And we will -- this is one of our main focus areas to get it in, and we'll run it in the way we plan to do it.

And that is not something that will take a long time. We're talking weeks at the most. I expect already next week to be doing, if needed, the first adjustments. And we're very close to also being, let's say, within months, we will have a fully integrated setup on the [indiscernible] side also handled by our investment and accounting systems.

[Jakob Brink, analyst]

So from Q3, we could expect a normal...

[Andreas Madsen, executive]

I would say when we get out of -- already now it is much less sensitive than it has been. And when we get out of May, you will not see major risks in the sense that they have had in Q1.

[Operator]

[Operator Instructions] Our next question comes from Martin Gregers Birk.

[Martin Birk, analyst]

If we can start on the premium growth and especially you stated the -- 4.2% premium growth that you guys reported within your private segment. I guess that number doesn't really say a lot since we don't really have any comps on that now that you have stripped out your health and accident business. If we go back to Q1 2021, stripping out your health and accident business, what would that number be?

[Rasmus Nielsen, executive]

But it's like-for-like, the growth is without both, you can say. We have split out.

[Martin Birk, analyst]

Agree, right? But sort of how much is that? I know that stripped out of the Q1 [ 2020 ].

[Andreas Madsen, executive]

We have seen even better growth rate, Martin. If we haven't stripped out, there's an accident.

[Martin Birk, analyst]

Because health and accident was underlying growing business...

[Andreas Madsen, executive]

No, I'm just saying mechanically, you see a growth that is like-for-like, correct without health and accident. We have chosen us to do that, you would have seen an even higher growth rate.

[Martin Birk, analyst]

Okay. And it's just sort of a bit puzzling. I mean, I guess we have debated this over and over again and sort of growth rates in your private segments have been very sluggish. And then out of a sudden, then you're able to report a 4.2% growth rate. So if we dig a little bit into the components, can you be more specific where is that exactly coming from? And why did you see that last quarter, for example?

[Rasmus Nielsen, executive]

Yes. I think we saw starting point last quarter, it was a cost because it was the full year as well. And I also think I mentioned that we have worked very hard with this throughout 2021, especially in the private part. I also mentioned that we changed the head of the private lines and also some of the leaders underneath him in October.

And all this together with the -- you can say, almost pooling of the portfolio, new focus on keeping our customers and all that leads to this increase. And you can say, more or less, it is an asset just in brackets, but it's just following the budgets we are selling now, especially in end of 2021, but also throughout the first half of Q1. So we are just -- we are very happy and thrilled, but also pleased finally to be able to show the results of the hard work we have done in the private part.

[Martin Birk, analyst]

For the -- isn't there more to it? I guess you would in insurance, you rarely see these step changes.

[Rasmus Nielsen, executive]

I don't know what you are thinking about. But I think for us, it's a matter of change in leadership, and it's also the long hard work coming up now with the setting prices, working with the portfolio, making right packages and stuff like that.

[Martin Birk, analyst]

Okay. Speaking to the private segment, the one-off loss in the quarter, what's the reason for that?

[Andreas Madsen, executive]

As I recall, I think it's a very small runoff loss -- sorry, DKK 3 million, yes. It's a number of things in there. I think we've had a slightly negative, as I recall, on some of the -- on the car lines, but it's nothing systematic. It's normal fluctuations.

[Martin Birk, analyst]

Okay. All right. Then moving to maybe the combined result, the life loss you guys see in the quarter, are those stemming from anywhere in particular?

[Rasmus Nielsen, executive]

What did you say?

[Martin Birk, analyst]

The large losses that you see in the quarter?

[Andreas Madsen, executive]

Sorry, on the [indiscernible] side, I'd say it's nothing structural. We have just had both, let's say, a slight increase in the number of large claims. And also, we've had 1 to 2 of, let's say, large claims in the significant end.

We have one grossing around DKK 100 million. And we're looking closely into all these claims. Nothing structural. It just seems like normal fluctuations, and it's large claims related to property and fires.

[Martin Birk, analyst]

Okay. So it's not like a portion of that can be dedicated to a fire out in bandwidth, for example?

[Andreas Madsen, executive]

So no. And the segment we've seen -- actually, some of it is in the Agricultural segment and the type of -- in our portfolio, these types of clients, we have very few actually. So it's not something we see as a structural thing, but just basically bad luck.

[Rasmus Nielsen, executive]

Our involvement in many was very small, a few apartments and a few shops.

[Martin Birk, analyst]

Okay. And under your comment on Codan, you say significant interim -- were significant increase in interim costs to strengthen your private lines. What does that mean?

[Andreas Madsen, executive]

Yes. It's basically three things. It's -- let's say, ordinary ramp-up costs related to headcount and commissions to the sales personnel, which are driving written premiums and growth higher. So that's a part of it. And then you have, let's say, two components which are more temporary in nature, which have to do with -- both have to do with IT investments.

One, as I understand it comes from delivery of sort of client, basically an online client portal where the customers can go in and see their insurance and buy insurances in the place. That's a delivery that's been -- that came in this quarter and has driven some IT costs.

And then they've also invested in IT systems to better handle the whole lead management and the booking of meetings and the channeling of meetings to get basically, hopefully, in the end, better penetrations on the customers. So those are the 3 things driving costs this quarter.

[Martin Birk, analyst]

Okay. Okay. Final question from my side. On the restructuring charges, I guess, you guys had back when this was announced a year ago, you guided for an all-in restructuring charge of DKK 1 billion. Now we've had a number of one-offs so far booked for your P&L. What's the balance on the DKK 1 billion? How much is outstanding basically? And do you have any idea about how much of that is going to go through your P&L and how much is going to be booked straight on equity?

[Andreas Madsen, executive]

Martin, I'm not sure I understand the question with the one-offs in restructuring. Could you clarify that for me?

[Martin Birk, analyst]

No, I mean when you guys -- I guess when you guys announced this transaction, almost those in June last year, right? You funded DKK 1 billion for restructuring implementation cost, right?

[Andreas Madsen, executive]

Yes.

[Martin Birk, analyst]

And now we have seen a number of one-offs flowing through your P&L in recent quarters. So I wonder how much of that DKK 1 billion has been expensed? And how much of that DKK 1 billion is left to be expensed and how much would be over your P&L and how much would be over your equity?

[Andreas Madsen, executive]

The short version is that I'm not 100% following the one-offs you're mentioning, but we are completely on plan with the amount of restructuring we've done. We have around DKK 60 million coming this quarter, and we had DKK 90 million before tax -- sorry, DKK 30 million before tax in Q4, so a total of just above DKK 90 million in restructuring costs until now, and that's fully in line with the expectations we originally had.

So we have nothing changed, and we are on target, and the DKK 300 million we're guiding in total for this year, that's including the DKK 60 million we just had in Q1 is also completely in line with our original expectations.

[Martin Birk, analyst]

Okay. Maybe just final touch on guidance and maybe also why we need to wait for Q2, precast issue your new guidance, I assume that you guys already know by now what Codan is going to make this year?

[Rasmus Nielsen, executive]

I can take that. The quick answer to that, Martin, is we really need to get into the details now. And it does take some time, businesses coming in. We also need to sit our foot down and find out exactly how to manage what we have received. So that will take some time.

And therefore, we will come at latest at Q2. Focus is, as you also have seen, also, at the same time on getting a new organization to fly. That's why we changed the whole first top management last Monday and this Monday, we changed the second level. And we are really focusing on keeping business as is, but also selling new organization within in the next month or so and also harvesting the synergies, and then we'll come back with a full package later on.

[Martin Birk, analyst]

And then you also say that you are going to come back in Q4 with an update on the plan?

[Rasmus Nielsen, executive]

Yes, we'll definitely do that.

[Operator]

We have no further questions. Dear speakers, back to you.

[Rasmus Nielsen, executive]

Yes. Thank you, everybody, for listening in, and have a good day. Bye.

[Operator]

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for attending. You may now disconnect.