Tryg A/s · OMXCOP:TRYG
Tryg A/s — Tryg A/S Ord New — Q1 2024 Earnings Presentation
58 slides from Tryg A/s's earnings presentation, Apr 17, 2024
Slide 1: Q1 2024 results
Q1 2024 results Investor presentation 1
Slide 2: Contents
Contents • Highlights Q1 2024 03 • Insurance revenue and portfolio 08 Disclaimer Certain statements in this presentation are based on the beliefs of our management as well as assumptions made • Claims developments 12 by and information currently available to the management. Forward-looking statement
Slide 3: Financial highlights Q1 2024
1 | HIGHLIGHTS Q1 2024 Financial highlights Q1 2024 Q1 DPS of 1.95 and solvency ratio Insurance service result Combined ratio of 86.6 Investment result of DKK 117M 191 Ordinary dividend Claims ratio Expense ratio 167 1,474 84.0 86.6 1,275 7.40 13.5 117 7.00 13.3 6.29 1.85 1) 4.28 1.85 1,759 70.7 67.
Slide 4: Customer highlights Q1 2024
1 | HIGHLIGHTS Q1 2024 Customer highlights Q1 2024 Customer satisfaction KPI Group Group Q1 2023 -1 percentage point Q1 2024 86 85 95 94 92 92 92 90 86 86 86 85 85 84 83 83 81 81 80 77 75 74 70 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Online touchpoints Phone touchpoints Meetings Claims process Onboa
Slide 5: Lower insurance service result primarily driven by large and weather claims
1 | HIGHLIGHTS Q1 2024 Lower insurance service result primarily driven by large and weather claims Private Insurance service result DKKm 86.2 88.5 828 735 • A higher level of weather related claims impacted the Private figures • An increase in Motor frequency was recorded across Scandinavia partly d
Slide 6: Group insurance service result and geographical split
1 | HIGHLIGHTS Q1 2024 Group insurance service result and geographical split Denmark Insurance service result and combined ratio Group insurance service result excluding large and weather claims DKKm DKKm Approx. 200m 81.7 86.2 781 616 1,977 1,785 1,474 1,275 -311 -702 Q1 2023 Q1 2024 Q1 2023 Q1 202
Slide 7: Status on RSA synergies per Q1 2024
1 | HIGHLIGHTS Q1 2024 Status on RSA synergies per Q1 2024 DKK 43m of synergies in Q1 2024 and DKK 754m accumulated Realised synergies according to plan Accumulated synergy realisation vs. original baseline (DKKm) Main drivers in Q1 quarter synergies are cost initiatives within Procurement again dri
Slide 8: Insurance revenue and portfolio
Insurance revenue and portfolio 26-09-2023 8
Slide 9: Insurance revenue up 4.8% in local currencies compared to Q1 2023
2 | REVENUE AND PORTFOLIO Insurance revenue up 4.8% in local currencies compared to Q1 2023 Insurance revenue growth by segment Q1 2024 (local currencies) Local currencies DKKm Q1 2023 Q1 2024 growth (%) 7.4 5.1 4.8 Private 6,002 6,378 7.4 Commercial 2,273 2,369 5.1 Corporate 914 785 -12.6 -12.6 Gro
Slide 10: Rate increases in Private segment
2 | REVENUE AND PORTFOLIO Rate increases* in Private segment Property (House and content) 15% 10% 5% Tryg continues to monitor inflation and exercise price 0% Denmark Norway Sweden Total Property adjustments accordingly 2022 2023 Q1 2024 across markets and line of business Motor The price adjustment
Slide 11: Customer retention remains broadly stable
2 | REVENUE AND PORTFOLIO Customer retention remains broadly stable Private retention 90 90 87 87 87 87 DK NO SE 94 92 90 88 86 DK NO SE 84 Q4 2023 Q1 2024 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Commercial retention 88 88 90 90 89 88 DK
Slide 12: Claims developments
Claims developments
Slide 13: Underlying claims ratio improved 50 basis points for the Group
3 | CLAIMS DEVELOPMENTS Underlying claims ratio1 improved 50 basis points for the Group Group underlying claims ratio Underlying claims ratio improved in Group but slightly deteriorated in Private • Group underlying claims ratio at 72.3, 50 bps improved compared to Q1 2023 -50bps 72.8 69.5 72.3 67.1
Slide 14: Motor frequencies development
3 | CLAIMS DEVELOPMENTS Motor frequencies development Increased motor frequencies driven mostly by harsh Scandinavian winter weather The increased in motor frequency is mainly driven by harsh weather condition ... 110 105 104 100 100 100 35% 50% 15% Higher-end of expectation Risk mix Weather Denmark
Slide 15: Large claims, weather claims, discounting and run-off
3 | CLAIMS DEVELOPMENTS Large claims, weather claims, discounting and run-off Large claims, net DKKm Weather claims, net DKKm DKKm DKKm Expected annual 1,142 * Expected annual 1,200 1,274 378 level 800m DKK 1,001 1,400 level 800m DKK 324 320* 1,000 1,200 DKKm 200* 1,000 800 DKKm 800 600 455 500 428
Slide 16: Investment activities
Investment activities — - ~ = _ ted
Slide 17: Investments – split in match and free portfolio
4 | INVESTMENTS ACTIVITIES Investments – split in match and free portfolio Match portfolio split, DKK 44bn Free portfolio split, DKK 17bn 22 6.9 14 3.2 8 2.6 1.8 1.1 1.0 0.7 Denmark Sweden Norway Government and Investment grade Emerging market High-yield bonds Diversifying Equity Real Estate Covered
Slide 18: Tryg investment return – low risk remains key
4 | INVESTMENTS ACTIVITIES Tryg investment return – low risk remains key Key figures investments (DKKm) Q1 2024 Q1 2023 Equity investments, DKK 2.6bn, split by sectors (%) 30 Free portfolio 133 151 Match portfolio 171 36 12 11 11 11 8 6 5 1 3 2 Other financial income and expenses -188 -20 Informatio
Slide 19: Solvency & Expenses
Solvency & Expenses
Slide 20: Solvency position Q1 2024
4 | SOLVENCY AND EXPENSES Solvency position Q1 2024 Solvency position Own funds walk 965 14,998 6 14,559 Solvency ratio based on the Partial Internal Model is 191 (Q4 2023: 197). 3,106 -1,238 -172 2,953 1,674 1,615 • Own Funds (OF) are primarily impacted by • Operating earnings and dividends • Lower
Slide 21: Solvency ratio historical development
4 | SOLVENCY AND EXPENSES Solvency ratio historical development Solvency ratio historical development Approval of new partial internal model and dividend decision for 2020 moved to year-end as opposed to quarterly Own funds and SCR now including RSA 214 198 201 200 199 197 193 195 194 1) 188 191 183
Slide 22: Solvency ratio sensitivities
4 | SOLVENCY AND EXPENSES Solvency ratio sensitivities Solvency ratio sensitivities: 191 191 191 193 191 195 194 202 188 193 190 191 191 190 195 186 187 179 187 Q1 + 20% - 20% + 30% - 30% + 20% - 20% + 100 bps - 100 bps + 100 bps - 100 bps + 100 bps - 100 bps + 100 bps - 100 bps + 20% - 20% + 20% -
Slide 23: Expense ratio of 13.5 influenced by good top-line growth, tight cost control and RSA synergies
4 | SOLVENCY AND EXPENSES Expense ratio of 13.5 influenced by good top-line growth, tight cost control and RSA synergies Comments on expense ratio Expense ratio1 • Expense ratio of 13.5% helped by good top line growth and positive impact from the RSA 15 Scandinavia synergies • Investments in busines
Slide 24: Financial targets
Financial targets
Slide 25: Insurance service result target updated for IFRS 17
5 | Financial targets Insurance service result target updated for IFRS 17 Insurance service result target for 2024 in April 2024 Volatile macroeconomic factors Expense ratio and Combined ratio targets for 2024 • The actual Insurance service result (within the DKK 7.2-7.6 bn target for 2024) may be i
Slide 26: 2024 strategy and targets will ensure highly attractive shareholders' returns
4 | Financial targets 5 Financial targets for 2024, updated for IFRS 17 2024 strategy and targets will ensure highly attractive shareholders’ returns 26
Slide 27: It is important to know your investment case
5 | Financial targets 4 It is important to know your investment case ”Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” John D. Rockefeller 27
Slide 28: Q1 2024 roadshows & conferences
6 | ROADSHOWS & CONFERENCES Q1 2024 roadshows & conferences Date Event Participants from Tryg Arranged by Johan Kirstein Brammer, CEO, Allan Kragh Thaysen, CFO, Mikael Kärrsten, CTO, 17/04/2024 Copenhagen roadshow ABGSC Alexandra Bastkær Winther, CCO, Investor Relations Johan Kirstein Brammer, CEO,
Slide 29: Investor Relations
Investor Relations Gianandrea Roberti Peter Brondt Khoi Nguyen Ilze Karahona Tobias Andersen Head of Investor Relations, SVP Manager, Investor Relations Senior Analyst, Investor Relations Coordinator, Investor Relations Analyst, Investor Relations +45 20 18 82 67 +45 22 75 89 04 +45 61 77 29 85 +45
Slide 30: Background material
Background material
Slide 31: Tryg at a glance
7 | BACKGROUND MATERIAL Tryg at a glance About Tryg Insurance revenue split by products Q1 2024 • Tryg goes back to 18th century. 8% 12% Motor • Very strong brand position especially in Denmark. 31% Workers' comp Health & accident Liability • Non-life insurance in Denmark, Norway and Sweden. Fire &
Slide 32: Insurance revenue split by geography
7 | BACKGROUND MATERIAL Insurance revenue split by geography DK: Insurance revenue by products 2023 SE: Insurance revenue by products 2023 8% 7% 11% 28% Motor 12% 31% Motor Workers comp Health and accident Health and accident Liability Liability Fire & property - private Fire & property - private 19
Slide 33: Reserves and run-off split by line of business
7 | BACKGROUND MATERIAL Reserves and run-off split by line of business Reserves by products 2023 Run-off net by products Q1 2024, DKKm 373 5% 6% 24% 202 7% Motor Motor Workers comp 71 81 Workers comp 62 7% Health and accident Health and accident 6 5 Liability Liability Fire & property - private Fire
Slide 34: The run-off cycle
7 | BACKGROUND MATERIAL The run-off cycle Run-off cycle: Run-off development ◦ Initial assessment of the claims was DKK 18,000 but Tryg reserved 3 years for DKK 20,000 adding some conservatism to best estimate. Run-off: 2,000+ 2,000 ◦ At the time of setting up the claims reserves and booking the cla
Slide 35: Important things to remember in 2024
7 | BACKGROUND MATERIAL Important things to remember in 2024 Important key points for 2024 1 2 Other income and costs includes an approximate DKK 250m Synergies from the acquisition of RSA Scandinavia were quarterly intangibles amortisation (Codan Norway and Trygg-Hansa and Alka), around DKK 50-60m
Slide 36: Combined ratio development, 2014 – 2023
7 | BACKGROUND MATERIAL Combined ratio development, 2014 – 2023 Combined ratio development 86.8 86.7 84.2 84.4 85.1 85.1 84.5 84.5 84.7 84.0 83.2 82.8 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 10Y avg. 5Y avg. IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 17 IFRS 17 36
Slide 37: Shareholder remuneration
7 | BACKGROUND MATERIAL Shareholder remuneration Dividend per share and total share buy-back (DKK) Tryg initiated a DKK 5bn buyback following the sale of Codan DK to Alm. Brand 1.7 Tryg initiated a DKK 1bn 5,000 buyback after Q3 2023 7.0 7.4 6.6 6.8 6.3 4.3 1.95 1,000 2018 2019 2020 2021* 2022 2023
Slide 38: Market share of the Scandinavian insurance market
7 | BACKGROUND MATERIAL Market share of the Scandinavian insurance market Scandinavia market share EUR 26,3 bn (as at Q4 2022) Denmark market share DKK 68,1 bn/EUR 9,2bn (as at Q4-2022) 18% 24% Tryg 23% Tryg Topdanmark 40% If If Topdanmark Gjensidige 15% 4% Länsforsikringar Alm. Brand Gjensidige 4%
Slide 39: Distribution of new sales 2023
7 | BACKGROUND MATERIAL Distribution of new sales 2023 Distribution in the Scandinavian market Private 1% 5% Distribution in the Scandinavian markets differs from 6% 15% 10% Franchise many other insurance markets. 28% Sales agents 12% Agents 33% Customer service 9% Customer Service Online 25% Outbou
Slide 40: Things that you may not know
7 | BACKGROUND MATERIAL Things that you may not know Information: • Scandinavian economies have been performing better than most European countries for a long-time. The GDP growth y/y was approx. 2%, and unemployment rates remains much lower than European averages (2-3% in DK and NO). Government ind
Slide 41: Things that you may not remember
7 | BACKGROUND MATERIAL Things that you may not remember Information: • Our maximum annual net exposure to a single large Property claim is DKK 200m which falls to DKK 135m. This is based on our general reinsurance programme. • Our maximum net exposure for weather claims is DKK 300m per event. The u
Slide 42: IBM study from 2007, probably little has changed
7 | BACKGROUND MATERIAL IBM study from 2007, probably little has changed Danish customers either completely or strongly agree Overall I am very satisfied with the services of my insurance company My insurance agent only sold me insurance coverage that I really needed My present insurance coverage of
Slide 43: Every 4th Dane receives a bonus!
7 | BACKGROUND MATERIAL TryghedsGruppen and its member bonus Tryghedsgruppen Bonus Bonus has a positive effect on retention ‘I expect to be in Tryg next year’ Denmark's ‘biggest’ family 8% 8% 6% 6% Have heard about member bonus 90% 5% Have not heard about member Bonus 79% 2019 2020 2021 2022 2023 Tr
Slide 44: Organisational and remuneration structure
7 | BACKGROUND MATERIAL Organisational and remuneration structure Remuneration structure The Executive Board are remunerated according to Tryg’s remuneration policy: • Base salary ◦ A fixed car allowance and other standard CEO benefits in addition to the base salary Johan Kirstein Brammer • Pension
Slide 45: Sustainability & ESG governance
7 | BACKGROUND MATERIAL Sustainability & ESG governance Sustainability & ESG Board Sustainability-related incentive scheme Members of the Executive Board are covered by a Chair COO variable salary incentive programme (INP). Sustainability & ESG targets make up 15% of the total variable salary in 202
Slide 46: Sustainability & ESG strategy 2024
7 | BACKGROUND MATERIAL Re a d- on ly Sustainability & ESG strategy 2024 Driving sustainable impact Tryg wants to contribute to a sustainable future and create long-term value for our customers, employees, shareholders and society. We want to to integrate sustainability into every corner of our busi
Slide 47: ESG performance on targets 2023
7 | BACKGROUND MATERIAL ESG performance on targets 2023 Sustainable insurance Responsible company Green workplace Prevention and claims handling Responsible procurement Responsible investment Diverse workplace Climate impact 2024 targets 2023 2024 targets 2023 2024 targets 2023 2024 targets 2023 • 8
Slide 48: Environmental, Social and Governance (ESG) data
7 | BACKGROUND MATERIAL Environmental, Social and Governance (ESG) data Climate and environmental data Unit 2023 2022 2019 Total direct and indirect carbon emissions (location-based) Tonnes CO2e 4,805 4,540 6,436 4,180 3,926 Total direct and indirect carbon emissions (market-based) Tonnes CO2e 9,376
Slide 49: Responsible investment
7 | BACKGROUND MATERIAL Responsible investment 2024 KPI 2030 milestone 2023 results All external asset managers are UN PRI signatories ESG is an integrated part of the investment process across all External managers Percentage of UN PRI signatories 100% External managers responsibility integration m
Slide 50: Key figures Q1 2024 and Consensus 2024-2026
7 | BACKGROUND MATERIAL Key figures Q1 2024 and Consensus 2024-2026 Q1 2024 2024 2025 2026 DKKm reported Consensus Consensus Consensus Insurance revenue 9,531 39,034 40,579 41,960 Insurance service result 1,275 7,348 7,842 8,207 Investment return 117 590 618 640 Other income and costs -384 -1,454 -1
Slide 51: Appendix
Appendix
Slide 52: Group
8 | BACKGROUND MATERIAL Group Insurance revenue (DKKm) Gross premiums Combined ratio (%) 100.0 40,000 37,379* 37,135 86.8 84.4 84.3 83.2* 82.8 80.0 30,000 25,369 22,404 23,442 60.0 20,000 40.0 10,000 20.0 0.0 — 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Claims ratio, net of reinsurance (%) Ex
Slide 53: Private
8 | BACKGROUND MATERIAL Private Insurance revenue (DKKm) Gross premiums Combined ratio (%) 100 30,000 83.8 83.9 84.1 82.3 * 84.5 24,453* 24,455 80 20,000 60 16,554 14,154 15,096 40 10,000 20 0 — 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Claims ratio, net of reinsurance (%) Expense % ratio (%
Slide 54: Commercial
8 | BACKGROUND MATERIAL Commercial* Insurance revenue (DKKm) Gross premiums Combined ratio (%) 100 10,000 9,295 * 9,178 88.4 82.5 82.9 81.9 * 78.1 80 7,500 60 4,978 5,350 4,795 5,000 40 2,500 20 0 — 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Claims ratio, net of reinsurance (%) Expense % rati
Slide 55: Corporate
8 | BACKGROUND MATERIAL Corporate* Insurance revenue (DKKm) Gross premiums Combined ratio (%) 120 4,000 3,508 3,631* 3,502 3,366 3,464 97.4 100 89.4 87.6 92.3* 83.2 3,000 80 60 2,000 40 1,000 20 0 — 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Claims ratio, net of reinsurance (%) Expense % rati
Slide 56: Geographical combined ratio
8 | BACKGROUND MATERIAL Geographical combined ratio Denmark % (%) Sweden (%) 100 91.1 100 85.0 88.1 86.8 87.2 79.3 80.5 81.6 77.2 78.2 80 80 60 60 40 40 20 20 0 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Norway (%) 100 92.7 92.3 91.7 86.8 85.0 80 60 40 20 0 2019 2020 2021 2022 2023 56
Slide 57: Tryg has a long and proud history, with the 2021 RSA acquisition pushing the boundaries even further
8 | BACKGROUND MATERIAL Tryg has a long and proud history, with the 2021 RSA acquisition pushing the 2022 boundaries even further Demerger 1 April Completed separation of RSA Scandinavia into 2018 DK, NO, SE 2005 TrygVesta is listed Tryg receives the final on the OMX Nordic approval of the Alka 1731
Slide 58: Macroeconomic forecasts
8 | BACKGROUND MATERIAL Macroeconomic forecasts Denmark Norway % 2022 2023 (forecast) 2024 (forecast) % 2022 2023 (forecast) 2024 (forecast) GDP growth 2.7 1.1 1.0 GDP growth 3.0 1.3 1.4 Private consumption -1.6 1.0 1.8 Private consumption 6.2 -1.0 1.2 Unemployment 2.5 2.8 3.1 Unemployment 1.8 1.9 2