Tryg A/s · OMXCOP:TRYG
Tryg A/s — TrygVesta — Morgan Stanley Financial Conference March 2010
26 slides from Tryg A/s's conference presentation, Mar 25, 2010
Slide 1: Managing for value in an uncertain economic and regulatory environment
1 Morgan Stanley Financial Conference March 2010 Managing for value in an uncertain economic and regulatory environment 25 March 2010 - Morten Hübbe, CFO
Slide 2: Disclaimer
Disclaimer 2 Morgan Stanley Financial Conference March 2010 Certain statements in this presentation are based on the beliefs of our management as well as assumptions made by and information currently available to the management. Forward-looking statements (other than statements of historical fact) r
Slide 3: Facts about TrygVesta
Facts about TrygVesta 3 Morgan Stanley Financial Conference March 2010 • Expanding Nordic platform Danish institutions • Prudent underwriting and risk selection 13% • Exceed customer expectation Non-Danish institutions • Vision: To be perceived as the leading 13% TryghedsGrup “peace of mind” provide
Slide 4: The Nordic region - structure of the insurance market
The Nordic region - structure of the insurance market 4 Morgan Stanley Financial Conference March 2010 Norway Finland NOK 39.8bn TrygVesta, EUR 3.3bn 18.1% TrygVesta, EUR 4.7bn 1.4% Gjensidige, Tapiola, 28.8% Pohjola, 18.6% 27.9% Top 4 Nordic market share Top 4 Fennia, 85% Gjensidige, 10.6% If, 18.2
Slide 5: Not only a question of price – Denmark vs. UK
Not only a question of price – Denmark vs. UK 5 Morgan Stanley Financial Conference March 2010 IBM Global Business Services How customers differ - culture Denmark: Customers evaluate experiences with their insurer much more positive than in other countries Danish customers completely and strongly ag
Slide 6: Distribution power
Distribution power 6 Morgan Stanley Financial Conference March 2010 P&C Denmark Corporate P&C Norway 11% 3% 17% 30% 44% 56% 55% 72% 12% Local service centres Car dealers Local service centres Affinity Groups Nordea Direct sales Brokers Franchises Nordea P&C Finland P&C Sweden 16% 1% 31% 39% 35% 60%
Slide 7: Longer term performance and results 2009
7 Morgan Stanley Financial Conference March 2010 Longer term performance and results 2009
Slide 8: TrygVesta and Nordic competitors - 2009
TrygVesta and Nordic competitors - 2009 8 Morgan Stanley Financial Conference March 2010 TrygVesta The market 9.6% growth Gross premiums earned Premium growth in % in local currency DKKm Gjensidige 18,283 12 TrygVesta 17,323 8 Codan TrygVesta 16,606 excl. 15,705 16,021 Moderna 4 0 if… -4 2005 2006 2
Slide 9: Key performance indicators – 2009
Key performance indicators – 2009 9 Morgan Stanley Financial Conference March 2010 The market TrygVesta Combined ratio Codan Gjensidige Combined ratio 96 "CR" 94 Codan Operating 2.4 ratio 90 Lower 92 interest if… impacts * 86 1.7% 88 89.1 89.9 88.5 82 86.4 86.1 TrygVesta 84 78 2004 2005 2006 2007 20
Slide 10: Denmark & Norway vs. Sweden & Finland
Strong cost focus makes the difference….. 10 Morgan Stanley Financial Conference March 2010 Denmark & Norway vs. Sweden & Finland Expense ratio Expense ratio 64.5 17.0 16.8 16.7 17.3 16.9 60.4 0.4 1.5 0.8 1.3 50.0 2.6 45.8 16.6 16.4 29.6 16.6 16.2 16.0 15.8 15.4 14.3 15.5 15.4 2005 2006 2007 2008 20
Slide 11: Burglaries in Denmark 1995 – 2009 impact on earnings
Burglaries in Denmark 1995 – 2009 impact on earnings 11 Morgan Stanley Financial Conference March 2010 Number of burglaries per year Claims cost DKKm Number 50,000 1,500 45,000 1,000 40,000 35,000 500 30,000 0 25,000 1995 1997 1999 2001 2003 2005 2007 2009 2005 2006 2007 2008 2009 Burglaries in priv
Slide 12: When interest rates return to normal....
When interest rates return to normal.... 12 Morgan Stanley Financial Conference March 2010 1% increase in interest level will: ¾ increase pre-tax result by approx. + DKK 300m ¾ improve combined ratio by approx. 1%-point Discounting interest rate in Denmark Discounting interest rate in Norway % % 5 6
Slide 13: Average price development
Average price development 13 Morgan Stanley Financial Conference March 2010 Price increases implemented on main products Effect of price increases and indexation* 2010 2011 DKK ~900m DKK ~700m Average prices in Denmark Average prices in Norway 5,000 5,000 4,500 4,500 NOK DKK 4,000 4,000 3,500 3,000
Slide 14: Enhancing profitability
Enhancing profitability 14 Morgan Stanley Financial Conference March 2010 Combined ratio Price increases 108.8 110 107.2 104.4 100.7 Price increases 100 93.8 90.0 92.3 90 88.2 89.1 86.4 86.1 80 00 01 02 03 04 06 07 08 09 * * 04 05 20 20 20 20 20 20 20 20 20 20 20 • 2002-2004 substantial price increa
Slide 15: Profitability focus in Sweden & Finland
Profitability focus in Sweden & Finland 15 Morgan Stanley Financial Conference March 2010 DKKm Gross premiums DKKm Result 3,500 150 3,000 100 2,500 50 2,000 0 1,553 1,500 -50 1,000 -100 634 500 358 -150 -134 -141 - -200 2007 2008 2009 E2010 E-2011 E-2012 2007 2008 2009 E2010 E-2011 E-2012 160% CR ap
Slide 16: +20% growth in Nordea portfolio from 2008-2009
+20 % growth in Nordea portfolio from 2008-2009 16 Morgan Stanley Financial Conference March 2010 DKKm 1800 1600 1400 1200 1000 800 600 400 200 0 1 2 3 12 1 2 3 4 5 6 7 8 9 20 0 1 2 01 02 03 04 05 06 07 Q Q Q -0 -0 -0 -0 -0 -0 -0 -0 -0 -1 -1 -1 09 20 20 20 20 20 20 20 09 09 09 08 08 08 08 08 08 08 0
Slide 17: Solvency II and capitalisation
17 Morgan Stanley Financial Conference March 2010 Solvency II and capitalisation
Slide 18: Having the right assets during the right time period
Having the right assets during the right time period 18 Morgan Stanley Financial Conference March 2010 • Asset allocation vs. business cycles In the beginning of a boom, equity performs well as investors implement positive earnings expectations in valuations. IG performs well during the bottom- In t
Slide 19: Reducing interest exposure
Reducing interest exposure 19 Morgan Stanley Financial Conference March 2010 • The matching portfolio, all bonds, is managed in order to maximise negative correlation to the discounting curve / reserves • The managing of the free portfolio is done by means of absolute return and risk optimisation. B
Slide 20: Development of regulatory capital requirement
Quantitative impact of Solvency II 20 25Morgan Stanley Financial March 2010 Conference TRYGVESTA March 2010 PRESENTATION Development of regulatory capital requirement • 4 out of 5 QIS-rounds have been completed Pct. of • SCR standard model requirements changes premiums with new Consultation Papers (
Slide 21: Outlook 2010
Outlook 2010 21 Morgan Stanley Financial Conference March 2010 DKKm 2009 Outlook 2010 Discouting rate 3.6% Premium growth local currency* 4.7% 3-4% Insurance result 1,200-1,600 Investment result, net 200-300 Pre-tax profit 1,400-1,800 Effective tax rate approx. 26% Combined ratio before run-off 96.2
Slide 22: Capital
Capital 22 Morgan Stanley Financial Conference March 2010 DKKm 12,000 11,000 10,000 9,000 8,000 7,000 6,000 07 07 07 08 08 pa 8 09 09 pa 9 06 ut ut ut ut ut ut 0 0 20 yo yo yo yo yo yo 1Q 2Q 3Q 1Q 2Q 3Q 1Q 2Q 3Q pa pa pa pa r r r re re re te te te fo fo fo af af af be be be 07 08 09 08 09 07 20 20 2
Slide 23: Total distribution to shareholders
Total distribution to shareholders 23 Morgan Stanley Financial Conference March 2010 40 A total yield of app. 8.5% 35 30 21 DKK per share 25 12.5 20 33 15 10 21 17 15.5 5 6.5 0 2005 2006 2007 2008 2009 Cash dividend Share buy-back
Slide 24: Summary - Nordic insurance company with high yield
Summary - Nordic insurance company with high yield 24 Morgan Stanley Financial Conference March 2010 Strong growth of 9.6% (4.7% excl. acquisition) in 2009 despite economic slowdown Premium increases and stringent cost control are supportive for earnings Strong investment results due to rise in stoc
Slide 25: Questions please
25 Morgan Stanley Financial Conference March 2010 Questions please
Slide 26: Notes
Notes 26 Morgan Stanley Financial Conference March 2010
TrygVesta — Morgan Stanley Financial Conference March 2010 on 6ix