Skagi hf. – Valuation as of 1 Jan 2026

Valuation Summary

• The value per share as of 1 January 2026 is estimated at ISK 28.6.
• The valuation is based on a ten-year forecast using the residual income method, with a 10% nominal required return on equity and a 4% terminal growth rate (1% real).
• The increase in value from the prior valuation reflects 2025 performance and higher dividend payments in the updated forecast.

Key assumptions

• Insurance revenue grows at an average annual rate of 5.7% over the forecast period (2.4% real).
• The claims and reinsurance ratio is 75%.
• The expense ratio in insurance operations averages 20% over the forecast period.
• Net fee and commission income grows at an average annual rate of 5.7% over the forecast period.
• Bond portfolio returns are 7.5% per year in 2026–2027 and 6.5% thereafter. Shares earn almost nothing in 2026 but about 12% per year after that.
• In calculating the finance components of insurance contracts, a 3% annual interest rate is applied to the opening balance of the insurance liability each year.
• Corporate income tax is 20% (excluding earnings from associates and equities). In addition, financial activities tax of 6% applies to taxable profit above ISK 1 billion. The proposed additional tax on financial services is not included.
• Shares account for 33% of the investment portfolio during the forecast period.
• Loan growth averages 6.7% per year.
• Insurance contract liabilities are assumed to equal 100% of revenue.
• Dividends amount to 40% of total comprehensive income from the previous year in 2026, and 70% thereafter.
• The solvency ratio averages 1.4.
• Other general assumptions are presented under “Valuation”.