Gjensidige is the leading Norwegian P&C insurer with strong Nordic/Baltic positions — a dominant brand, deep claims data and scale that produce a best-in-class combined ratio of 83.4% (and an exceptional 79.2% in Q1 2026), with disciplined underwriting the engine and a meaningful investment return on the float (~NOK 2.6bn). Returns are high — ROE ~23% on our GAAP calculation (the company's APM ROE is ~27%) — and capital return is generous (a high sustainable dividend at ~76% payout, ~5.8% total yield) on a 188-195% solvency ratio.
The catch is valuation. At 4.4x book, 19x earnings (P/TBV ~6x — goodwill-heavy), the stock trades well above a conservative Gordon fair P/B of ~3.5x (fair ~NOK 198 on a 23% ROE and ~8.75% COE). To justify ~249 you must underwrite a durable mid-to-high-20s ROE — which the recent run supports but which is above a normalised through-cycle level. Elite operations, full price.
Gordon fair P/B = (ROE−g)/(COE−g) with COE 8.75%, g 3% and ROE 23% gives ~3.5x → fair value ~NOK 198; on the company's 27% APM ROE the implied fair P/B (~4.5x) sits ~at the current price.
Base NOK 215 (a premium to the conservative fair P/B for best-in-class underwriting + dividend, below the current price); bull NOK 270 if the sub-80% Q1 combined ratio + mid-20s ROE prove durable; bear NOK 180 on combined-ratio normalisation + a multiple de-rate.
The operating reverse-DCF (NOPAT / invested capital / WACC) does not apply to a balance-sheet business — leverage is the raw material and "net debt" is not meaningful. The equity is valued on residual income: book equity plus the present value of returns above the cost of equity, discounted at Ke; the single-stage lens is the Gordon fair price-to-book, (ROE−g)/(Ke−g). The market prices in a sustainable ROE of 28.3% vs 23.2% currently earned; at a sustained 23.2% ROE the warranted P/B is 3.51× (NOK 198/sh, -20%).
| Scenario | 24m target | Impl. ROE | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 270 | 30% | +9% | 30% | Sub-80% CR + mid-20s ROE prove durable |
| Base | NOK 215 | 25% | -14% | 45% | Premium to conservative fair P/B for elite underwriting |
| Bear | NOK 180 | 21% | -28% | 25% | Combined ratio normalises; multiple de-rates |
| Prob-weighted | NOK 223 | — | -10% | 100% | Scenario-weighted expected value |
| Ke \ ROE | 10% | 14% | 18% | 22% | 26% | 30% | 34% |
|---|---|---|---|---|---|---|---|
| 7.25% | 93 | 147 | 200 | 253 | 306 | 360 | 413 |
| 8.00% | 79 | 125 | 170 | 215 | 260 | 306 | 351 |
| 8.75% (base) | 69 | 108 | 148 | 187 | 226 | 266 | 305 |
| 9.50% | 61 | 96 | 131 | 166 | 200 | 235 | 270 |
| 10.25% | 55 | 86 | 117 | 148 | 180 | 211 | 242 |
Green = fair value above the current price of NOK 248.80. For a financial the surface is dominated by cost of equity and sustainable ROE — not unit growth.
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Combined ratio 83.4% FY (79.2% Q1) — sector-leading discipline + pricing.
ROE ~23%, ~5.8% total dividend yield at ~76% payout, strong solvency.
Q1 revenue +10.6% local currency on rate + retention.
~NOK 2.6bn float return complements underwriting.
Gjensidige is an elite Nordic P&C underwriter (83.4% combined ratio, ~23% ROE, ~5.8% yield) whose quality is fully priced — at 4.4x book it sits ~20% above a conservative Gordon fair P/B (~NOK 198). HOLD; base NOK 215.
Superb franchise, demanding valuation; the rating clears to BUY only on a de-rate or durable proof of a mid-to-high-20s ROE.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Net income to owners | 6,556 | Annual Report 2025 p.191 — Consolidated income statement 📄 p.191 | Profit after tax attributable to owners — the ROE numerator. |
| Total equity (owners) | 28,307 | Annual Report 2025 p.193 — Statement of financial position 📄 p.193 | Owners' equity — the ROE / P-B denominator. |
| Intangibles (goodwill+other) | 7,759 | Annual Report 2025 p.193 — balance sheet 📄 p.193 | Stripped to reach tangible equity (P/TBV). |
| Combined ratio | 0.834 | Annual Report 2025 p.9 — Key figures (GI) 📄 p.9 | Underwriting profitability: <100% = underwriting profit; sector-best. |
| Claims ratio | 0.707 | Annual Report 2025 p.50 — Profit performance (GI) 📄 p.50 | Loss ratio component of the combined ratio. |
| Expense ratio | 0.127 | Annual Report 2025 p.50 — Profit performance (GI) 📄 p.50 | Cost component of the combined ratio. |
| Insurance service result | 7,081 | Annual Report 2025 p.50 — Profit performance (GI) 📄 p.50 | Technical/underwriting result (general insurance). |
| Investment return on float | 2,631 | Annual Report 2025 p.49 — Financial result 📄 p.49 | Return on the investment portfolio (float). |
| Dividend per share | 14.5 | Annual Report 2025 p.10 — Return and dividend 📄 p.10 | Ordinary 10.00 + special 4.50; ~5.8% total yield, ~76% payout. |
| Combined ratio Q1 2026 | 0.792 | Interim Report Q1 2026 p.3 📄 p.3 | Q1 combined ratio 79.2% — underwriting momentum. |
| Profit after tax Q1 2026 | 1,548 | Interim Report Q1 2026 p.4 📄 p.4 | Q1 profit NOK 1,548.5m. |
| Solvency II ratio | 1.88 | Annual Report 2025 p.301 — APM / solvency 📄 p.301 | 188% FY2025 (195% Q1 2026) — strong capital buffer. |
How the mttssn view has evolved — each prior dated note is preserved.