Effective, precise knowledge enables GF Forsikring to invest securely

GF Forsikring is a member-owned insurance company, so high earnings are not its purpose.

The target is a so-called combined ratio of 96. This means that out of each DKK 100 received by the insurance company, DKK 96 will be spent on compensations, costs and annual profit sharing among the members. The remaining DKK 4 are used to consolidate and develop GF Forsikring to benefit the members in the long term. For example, money is returned to the members in the form of digital self-service solutions, and in the security of knowing that the company has sufficient resilience.

When GF Forsikring invests, the company uses independent financial key figures to manage investments and comply with legal requirements.

Professional Procedures

Every day, GF Forsikring receives a file with risk key figures from RIO, Vitec Scanrate’s fixed income system, such that they can carry out analyses, calculate prices, and assess risks on bonds and interest rate derivatives. GF Forsikring transfers these figures to its portfolio management system, PORTMAN, which provides an overall view of all the company’s investments.

“From the risk key figures, we calculate the best way to align our investments with our long-term strategy while ensuring robustness in the short term. Whether we face a pandemic or a financial crisis, we must ensure that our investments do not adversely affect our insurance operations,” says Sarah Vingaard, Head of Investments at GF Forsikring, who manages DKK 6 billion.

“That is twice as much as ten years ago, and that is why, in 2020, we embarked on an educational journey towards even greater professionalism in our investments and to ensure the most effective processes,” she explains.

Precise Calculations

As a result, GF Forsikring's investment portfolio was divided into two parts: a so-called hedging portfolio designed to ensure the insurance company can fulfill its guarantees to its members, and an investment portfolio which is more independent of insurance operations.

“Here, the risk key figures have been crucial. They allow us to divide the portfolio more precisely rather than simply relying on averages. It’s like knowing the average height in a population is 180 centimeters, but with key figures, you can see how many people are 170 cm tall or 210 cm tall. This enables us to make more precise calculations of interest rate risks and currency fluctuations, improving our risk monitoring and providing a better basis for decision-making,” says Sarah Vingaard, Head of Investments at GF Forsikring.

Independent Data

It is also vital for GF Forsikring that key figures come from an independent provider such as Vitec Scanrate because the insurance company has outsourced its asset management.

She also values the ongoing collaboration with Vitec Scanrate, which has effectively assisted with integrating systems at GF Forsikring and has been flexible in defining particularly important interest rate sensitivity calculations that are not standard.

“The advantage is that we don’t have to fit into the system; the system adapts to our requirements and precisely the challenges we face here. We also appreciate their customer service: they were not just attentive before we bought the system, but have continued to provide support in our daily operations.”