Tryg A/s · OMXCOP:TRYG
Tryg A/s — Investor Day (June 2019)
41 slides from Tryg A/s's investor day presentation, Jun 12, 2019
Slide 1: Tryg Analyst Day
Tryg Analyst Day Ballerup, 12 June 2019
Slide 2: Agenda
Agenda 14:00 Welcome to Tryg’s 4th Analyst day – IRO, Gianandrea Roberti 14:05 Update on CMD targets - Group CEO, Morten Hübbe & CFO, Barbara Plucnar Jensen 14:25 Deep dive on Private Denmark - Henrik Grønborg, Head of Private Denmark 15:10 Products development and Ancillary business - Johan Brammer
Slide 3: CMD targets – half-way update
CMD targets – half-way update Group CEO, Morten Hubbe and Group CFO, Barbara Plucnar Jensen
Slide 4: Tryg at a glance
Tryg at a glance Gross premium split by products 2018 • Tryg goes back to 18th century. • Very strong brand position especially in Denmark. • Non-life insurance in Denmark, Norway and Sweden. Percentage • Approx. 80% retail business. Retention rate - Private DK Business split 2018 Norway Market posi
Slide 5: Tryg’s equity story – a leading Scandinavian non-life insurer
Tryg’s equity story – a leading Scandinavian non-life insurer Tryg 2018 – 2020: Strengthening the core, while embracing the future Product & Service Claims Excellence Innovation DKK 600m in claims cost reduction +DKK 1bn in new Financial targets 2020 Customer targets 2020 products by 2020+ • Technic
Slide 6: Customer highlights
Customer highlights Number of products per customer TNPS • Transactional Net Promoter Score (TNPS) of 67 (62) 67 70 3.8 4.0 62 3.6 • Retention improved in all areas Q1 2019 Q1 2018 Target 2020 Q1 2019 Q1 2018 Target 2020 • Number of products per customer increased Awareness bonus (%) Non-customers M
Slide 7: Important contributers for reaching a technical result of DKK 3.3bn
Important contributers for reaching a technical result of DKK 3.3bn Underlying claims ratio is improving More private, less corporate business Alka synergies according to plan 55.4% 50.9% 49.1% +3,3% 300 ~ 0.8 improvement 331 342 21.5% 20.8% 18.5% 300 CMD 17 Today Private Corporate 2017 2018 Expecte
Slide 8: Strategic initiatives
Strategic initiatives Claims Excellence Product & Service Innovation DKK 600m in 2020 – DKK 95m in Q1 2019 DKK 1bn in 2020+ - DKK 475m in Q1 2019 600 1.000 1.000 900 800 700 600 500 475 400 150 300 275 95 200 100 0 2018 actuals 2019 Q1 actuals 2020 target 2018 actuals 2019 Q1 actuals 2020 target Dig
Slide 9: Implementing a new claims system is key
Implementing a new claims system is key Dedicated efforts to increase efficiency within claims Highlights from ‘Contents’ Norway… …degree of automation (STP) +45% STP on ‘Contents’, Norway (March, 2019) …use of digital submission 60% Customers submitting digital claims (March, 2019) 9
Slide 10: Customer satisfaction and empowerment increases
Customer satisfaction and empowerment increases TNPS increases…. …digital access is one of the enablers +8% Digital vs. manual contact 70 100 67 90 % 62 80 70 Digital 60 50 40 30 Manual 20 10 0 Jan Feb Mar Apr Maj Jun Jul Aug Sep Okt Nov Dec 60% Digital contactpoints (Q4, 2018) Q4 2017 Q4 2018 Targe
Slide 11: What will boost product and service innovation?
What will boost product and service innovation? Target 2020+: DKK 1bn in new products & services Expanding existing business New products Add-on services 1.000 Health +55 Product Service Sharing eco. 70 PaYG 2017 2018 2019 2020 2020+ People Technology Tryg Garanti Other House insurance including a r
Slide 12: Distribution efficiency
Distribution efficiency DKK 150m technical result in 2020 Focus areas Levers (examples) • Digital integration to partners Efficiency through technology • Analytics • Packaging Product simplification • Pay as you go DKK 150m in technical result impact • Integrating claims and sales Exploring new chan
Slide 13: Continued high level of investments in IT
Continued high level of investments in IT Investments in IT is the foundation for digital leadership and continued internal efficiency Selected large projects running at the moment Cost (mDKK) New Claims System 120 Integration platform 57 Infrastructure solutions 54 GDPR 37 Digital Offerings - New C
Slide 14: Deep dive on Private Denmark
Deep dive on Private Denmark Henrik Grønborg, Head of Private Denmark and former CEO ALKA
Slide 15: Market position – potential and distribution power
Market position – potential and distribution power Market share Denmark Sales distribution including Alka 15% 7% Sales agents 22.0 21.7 1% Tryg Tied agents Topdanmark 23% If Customer service Codan 3.4 Outbound Gjensidige 21% Alm. Brand Online DK 4.8 16.2 LB Forsikring Bankdist. (Referral) 9.2 GF For
Slide 16: Multibrand strategy strengthening our market position
Multibrand strategy strengthening our market position Go-to-market strategy in Private DK • Tryg has chosen a strategy in Private DK to cover almost the entire market through direct HIGH sales and partnerships • Alka complements Tryg's other brands by addressing a new core target group and by distri
Slide 17: Tryg+Alka = 1+1=3
Tryg+Alka = 1+1=3 Next level integration – learning from each others core competences Best-in-class online among established insurance companies End-to-end datadriven Strong financial performance business Key competences within partner Strong culture agreements Quick and agil decisionmak
Slide 18: Advanced tariffs key driver behind growth and profitability
Advanced tariffs key driver behind growth and profitability Hit rate – Motor Frequent tariff changes improves hit rates Simplicity Agility and Customer- data-oriented oriented operation approach Innovation and digitalization 18
Slide 19: Knowledge about private customers risk can be used to improve tariffs
Knowledge about private customers risk can be used to improve tariffs Link between the residents' private risk and For example: the risk of damage to the building. Good Alka customers in the properties Same parameters can be used to understand (contents insurance) reduces fire risk by 60% the
Slide 20: Fraud Detection System – helps to detect fraud after initial contact
Fraud Detection System – helps to detect fraud after initial contact ALKA: Fraud hit rate pr type of damage 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Fraud reduction (DKKm) 70 60 50 40 30 20 10 0 2013 2014 2015 2016 2017 2018 (exp.) (forv) 20
Slide 21: Internal data analytics improves underwriting quality
Internal data analytics improves underwriting quality 60 10.000-20.000 kilometers driven p.a. Mileage max 10.000 km 50 Percentage of customers 40 30 Less than 10.000 Employees kilometers driven p.a. not following underwriting 20 guidelines 10 0 35 % 37 % 39 % 41% 43 % 56 % 1 2 3 4 5 Year Average emp
Slide 22: Innovation – focus on developing/expanding products and services
Innovation – focus on developing/expanding products and services CORE ADJACENT MOONSHOTS Upgrading the old world Expanding the old world Investing in the new Analytics Focused and agile development Learn from “the new world” Digitalization Improving product coverage Identifying new incom
Slide 23: Innovation – done and to come
Innovation – done and to come Connectivity – connected cars & homes Cyber & Digital Health & Welfare All ready done… TRYG ALARM TRYG DRIVE RAT BARRIER TRYG ID CYBER ONLINEBANK PERSONAL-INSURANCE DENTAL INSURANCE INSURANCE - BUNDLING INSURANCE Working on TRYG DRIVE TRYG CAR CHANNEL TRYG ID 2.0 DIGITA
Slide 24: Strong momentum improves results
Strong momentum improves results Private DK - Technical Result DKKm Synergies – harvest time! Alka incorporated in Tryg’s Procurement – size matters! Technical Result Fraud Detection System CR level ~80 in 2017-18 Data analysis and structure Common support functions 1,041 1,042 Termination
Slide 25: Continued high growth with strong profit margin expected
Continued high growth with strong profit margin expected New house insurance: Package distribution and rat barrier share Growth drivers: - New products with high customer penetration - Strong all time high customer retention - New partnership with Danske Bank - High performance in new sales channels
Slide 26: Strong momentum in both customer and portfolio development
Strong momentum in both customer and portfolio development POSTIVE DEVELOPMENT IN NUMBER OF CUSTOMERS DRIVERS BEHIND PORTFOLIO DEVELOPMENT Number of products Customer growth Pricing D J F M A M J J A S O N D Primo Transfer New Churn Subtotal Price Subtotal Cross Downward Upselling Ultimo INCREASING
Slide 27: Important new strategic partnership for Private DK
Important new strategic partnership for Private DK Background Tryg and Danske Bank have entered into a new strategic Nordic partnership in Denmark, Norway and Sweden. Tryg will start offering general insurance to Danske Bank’s personal, private banking and business customers in Denmark and Norway an
Slide 28: Products development and Ancillary business
Products development and Ancillary business Johan Brammer, CCO
Slide 29: Prevention drives differentiation, helps to embrace technology and increases customer interaction
Prevention drives differentiation, helps to embrace technology and increases customer interaction TRYG INITIATED AN AMBITIOUS PREVENTION STRATEGY IN 2017 Insurance-only leaves door open for … while a proactive approach secures competitors... stronghold! PRODUCT PACKAGES; easy to sell/retain and matc
Slide 30: Consumers have a clear and increasing need for safety, and Tryg is well positioned
Consumers have a clear and increasing need for safety, and Tryg is well positioned to drive a proactive prevention agenda … but non-customers associate Tryg with Consumers feel a record-high insecurity… ‘tryghed’ Non-customers’ perception of a company’s Study on ”insecurity factors” among consumers*
Slide 31: Our efforts within prevention is already showing results
Our efforts within prevention is already showing results, albeit very early days … with long term reduction in claims costs, Prevention included in insurance products at higher increased retention, and very low capital premiums… employment Very preliminary observations Classical insurance …bundled w
Slide 32: Example 1: Rat blocker increases in-home comfort & reduces claims outlook
Example 1: Rat blocker increases in-home comfort & reduces claims outlook Packaging makes sales dialogue Prevention value-add a standard Thereby Tryg has matches needs in uncomplicated feature in ‘Super’ variant every customer segments Portfolio traction due to Rat block in ‘Super’ has lock-in Claim
Slide 33: Example 2: Telematics have increased penetration and avg. premium among young drivers
Example 2: Telematics have increased penetration and avg. premium among young drivers Tryg Drive (DK): 47% increase in sales to SideKick (NO): 36% increase in avg. young drivers premium among young drivers Car insurance premiums to customers <30 Increase in avg. premiums to customers <30 years years
Slide 34: Tryg Garanti update
Tryg Garanti update Mads Løgstrup, Head of Tryg Garanti
Slide 35: TMG (Tryg/Moderna Garanti) in a nutshell
TMG (Tryg/Moderna Garanti) in a nutshell • Leading provider of surety and trade credit in the The TMG business model: Nordic market • Financials 2018: Seller Contract Buyer Gross premium: MDKK 470 (MDKK 445) Combined ratio: 59,9 (58,8) • Main clients: contractors and capital goods Peace of mind Peac
Slide 36: TMG Europe
TMG Europe From Capital Markets Day presentation, November 2017: 36
Slide 37: TMG Europe: The journey and status
TMG Europe: The journey and status We are on track in Germany. The Netherlands and Austria in progress Prior to 2016 2016 2018 2019 Follow Nordic customers outside Follow all existing customers TMG Europe Phase 1: TMG Europe Phase 2: the Nordics outside the Nordics Local SME-business in Germany Neth
Slide 38: Germany – parallel roll-out
Germany – parallel roll-out Henrik Stigkær Country Manager Germany Jan Boris Plantiko Region manager, Hamburg Ex. Euler Hermes Ralph Koch Region manager, Cologne Ex. Atradius André von Friedeburg Region manager, München Ex. Euler Hermes, 38
Slide 39: German teams have traction
German teams have traction Strong similarities between the successful start up in Norway and the new German teams Start-up years 1-3, premium volume (MDKK) 14.0 12.0 New TMG clients in Q1 2019; 10.0 8.0 29% Germany 6.0 71% TMG Nordics 4.0 2.0 Expected annual premium volume from new clients 0.0 2007
Slide 40: New geographies
New geographies Potential for profitable growth by modular roll-out Roll-out principles Finland Norway 2008 • Step by step modular roll-out 2006 • Local teams, local mandate, central UW control Sweden 2007 • Direct sales - focus on local SME segment UK * • Reuse TMG IT and infrastructure Denmark Sin
Slide 41: Must wins and major risks
Must wins and major risks Local expertise, central UW-control and excessive reinsurance 1 Organizational risk from new geographies – mitigated by central roll-out competence and modular roll-out principle 2 Access to the right local team manager with local specialist knowledge 3 Local team understan