Tryg A/s · OMXCOP:TRYG
Tryg A/s — TrygVesta — Q1 2009 Earnings Presentation
44 slides from Tryg A/s's earnings presentation, May 2009
Slide 1: Investor presentation May 2009
1 Investor presentation Investor presentation May 2009 For further information: www.trygvesta.com
Slide 2: Disclaimer
Disclaimer 2 Investor presentation 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) regarding our future resul
Slide 3: Facts about TrygVesta
Facts about TrygVesta 3 Investor presentation Shareholder structure D a nis h • Focused Nordic, non-life insurance company • Vision: To be perceived as the leading ins t it ut io ns 20% “peace of mind” provider in the Nordic region N o n- D a nis h ins t it ut io ns • Strong brand and market positio
Slide 4: Overall performance of TrygVesta
4 Investor presentation Overall performance of TrygVesta
Slide 5: Highlights Q1 2009
Highlights Q1 2009 5 Investor presentation • Pre-tax result increased 76% to DKK 460m. • Premium growth of 5.6% before Moderna (-0.5 % in DKK*) and better than expected • Gross claims ratio of 70.4 compared with 67.5 in Q1 2008 affected by the heavy snow in Norway • Combined ratio of 91.4 compared w
Slide 6: Moderna acquisition strengthen distribution platform
Moderna acquisition strengthen distribution platform 6 Investor presentation Vahinkovakuutus Distribution channel Denmark Norway Finland Sweden Customer centre Local service centre Call centre Franchise Bancassurance Nordea online bank E-business/Self-service Insurance brokers Car dealers Real estat
Slide 7: Key performance indicators
Key performance indicators 7 Investor presentation Gross premium Combined ratio DKKm 92.0 83.0 83.7 87.2 89.6 84.8 83.7 86.2 87.9 87.3 90.9 90.3 91.4 4.0 1.0 4,425 1.4 5.1 3.1 4,338 4,327 1.2 1.4 4,268 4,233 2.2 2.5 4,232 4,212 1.4 5.1 1.9 6.2 2.6 4,107 4,071 4,005 90.4 3,960 3,985 3,999 88.0 88.2 8
Slide 8: Macro economic trends impacting performance
Macro economic trends impacting performance 8 Investor presentation The economic slowdown has both positive and negative impacts on our performance Topline impact Frequency impact Average claim impact Motor Fewer new cars sold, retention Fewer kilometers driven Lower materials prices insurance incre
Slide 9: Average price development
Average price development 9 Investor presentation Price increases implemented on main products House Car Other Denmark 11% 4% 4-15% Norway 14% 12% up to 10% Finland 11% 9% Sweden 21% 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 3,500 Q1 Q
Slide 10: Frequency and average claims
Frequency and average claims 10 Investor presentation Frequency Denmark Frequency Norway 130 105 120 100 110 95 100 90 90 80 85 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Q1 05 Q3 05 Q1 06 Q3 06 Q1 07 Q3 07 Q1 08 Q3 08 Q1 09 Average claims Denmark Average claims Norway 130 140 120 120 110
Slide 11: Gross premiums grew 5.6% (-0.5% in DKK due to NOK weakness)
Gross premiums Q1 2009 11 Investor presentation Gross premiums grew 5.6% (- 0.5% in DKK due to NOK weakness) • Growth driven by all business areas in local currency with Corporate and P&C Denmark as the biggest growth contributors • Growth in P&C Norway up 4.4%, driven by premiums increases • High g
Slide 12: Technical result down to DKK 427m from DKK 637m
Technical result 12 Investor presentation Technical result down to DKK 427m from DKK 637m • Heavy snow in Norway affected the result negatively for car and leisure house, which is main cause of lower result in P&C Norway • Lower interest rate level reduced the technical interest by DKK 63m and disco
Slide 13: Nordic groups
Nordic groups 13 Investor presentation Premium growth in % Combined ratio Gjensidige Codan 12 "CR" Gjensidige 96 8 Codan TrygVesta in Codan Operating if… local currency ratio if… 4 92 TrygVesta 0 if… TrygVesta 88 TrygVesta -4 TrygVesta -8 if… 84 2004 2005 2006 2007 2008 Q1 08 Q1 09 2004 2005 2006 20
Slide 14: Premium growth in Denmark and Norway
Premium growth in % in Denmark and Norway 14 Investor presentation Denmark Norway Gjensidige 9 9 7 TrygVesta 7 Alm Brand 5 if… 5 3 3 Spare- 1 1 TrygVesta bank 1 -1 -1 -3 Top- -3 danmark -5 2004 2005 2006 2007 2008 1. kvt. 09 2004 2005 2006 2007 2008 1. kvt. 09
Slide 15: Combined ratio in Denmark and Norway
Combined ratio in Denmark and Norway 15 Investor presentation Denmark Norway 118,0 105.6 102.4 100.6 99.6 98.3 97.9 97.8 95.1 95.4 94.3 93.9 94.4 92.6 93.5 93.2 92.6 93 91.5 91.4 92.0 91.5 90.8 88.8 87.3 86.8 85.8 86.2 85.6 82.4 Q1 06 Q1 07 Q1 08 Q1 09 Q1 06 Q1 07 Q1 08 Q1 09 TrygVesta Topdanmark Al
Slide 16: Claims
16 Investor presentation Claims
Slide 17: Claims ratio
Claims ratio 17 Investor presentation Claims ratio - net Claims ratio increased mainly due to Norwegian motor and 74.7 74.8 74.4 holiday houses 72.4 71.0 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009
Slide 18: Large claims and storm related claims
Large claims and storm related claims 18 Investor presentation • Storm related claims of DKK 6m in Q1 2009 against DKK 39m in Q1 2008. • Large claims of DKK 54m gross in Q1 2009 versus DKK 82m gross in Q1 2008 and expected DKK 125m. Large claims Storm related claims*, gross DKKm DKKm 911 1.042 637 5
Slide 19: Run-off and changes in reserves
Run-off and changes in reserves 19 Investor presentation Run-off in Q1 2009 of DKK 168m gross and DKK 175m net. • Impact on combined ratio of 4.2% in Q1 2009 versus 4.1% in Q1 2008 • Positive run-off results on Personal lines, whilst Liability, House and Contents needed extra reserves Run-off net Te
Slide 20: Expenses
20 Investor presentation Expenses
Slide 21: Expense management and cost ratio
Expense management and cost ratio 21 Investor presentation Expense ratio in line with same period last year, though a small increase in Finland and Sweden due to the expansion 17.2 16.7 16.6 16.8 17.2 16.8 16.1 16.6 16.9 17.1 16.0 19.4 17.0 2.7 0.4 0.7 1.1 1.5 1.9 0.7 1.2 1.4 1.5 1.2 1.6 1.4 1.3 16.
Slide 22: Investments
22 Investor presentation Investments
Slide 23: Investment results – Q1 2009
Investment results – Q1 2009 23 Investor presentation Gross investment return of DKK 527m vs. DKK 138m in Q1 2008 • Return of investment after transfer to insurance activities of DKK 46m against DKK -365m in Q1 2008 • The share of equity was 3.1% in Q1 2009. The lower share of equity has reduced Try
Slide 24: Portfolio structure – bonds and equities
Portfolio structure – bonds and equities 24 Investor presentation Conservative approach to the investment portfolio • Duration of bond portfolio is approximately 2 years • The equity portfolio is indexed and tracking leading MSCI indices • TrygVesta has in Q1 2009 made government guarantee positions
Slide 25: Capital and Outlook
25 Investor presentation Capital and Outlook
Slide 26: Outlook 2009
Outlook 2009 26 Investor presentation Expected 2009 Realised Mid February May Positive Negative DKKm 2008 2009 2009 scenario scenario Interest rate level 3.93% 3,5% Exchange rate DKK/NOK 0.85 0,84 Premium growth in local currency 4.9% 4% 8% Technical result before run-off 1,591 1,500 1,700 Technical
Slide 27: Capitalisation
Capitalisation 27 Investor presentation DKKm 12,000 11,000 10,000 9,000 8,000 7,000 6,000 2006 Q1 07 Q2 07 Q3 07 2007 2007 Q1 08 Q2 08 Q3 08 2008 2008 Q1 09 before after before after payout payout payout payout Target capital (A- level) Buffer (5%) Surplus capital
Slide 28: Business line performance
28 Investor presentation Business line performance
Slide 29: P&C Denmark
P&C Denmark 29 Investor presentation Denmark maintains strong earnings • Premium growth of 2.5% (3.7% before bonus) in Q1 2009. Positively affected on index of 4.3% and premium increases on Health Care and House. • Combined ratio of 85.8 versus 83.8 in Q1 2008. Higher claims ratio due to increased c
Slide 30: P&C Norway
P&C Norway 30 Investor presentation Profits under pressure by the harsh winter in Norway • Premium growth of 4.4% (-10.2% in DKK) in Q1 2009, mainly due to the positive impact of the implemented price increases • Combined ratio of 107.4 in Q1 2009 versus 97.3 in same period 2008. The harsh winter in
Slide 31: Norway hit by harsh winter in Q1 2009
Norway hit by harsh winter in Q1 2009 31 Investor presentation • Heavy snow in Norway resulted in substantial increase in claim expenses on car and leisure homes in Norway. 1,800 extra comprehensive claims on privately owned cars and 450 extra on business cars. Privately owned cars in Norway - numbe
Slide 32: P&C Denmark and Norway - Retention
P&C Denmark and Norway - Retention 32 Investor presentation Retention rate maintained on high level, which supports the competitive strength • Improved from 90.9 in Q1 2008 to 91.1 in Denmark • Improved from 85.9 in Q1 2008 to 86.4 in Norway • Retention rate was slightly reduced through Q1 2009 in N
Slide 33: P&C Finland
P&C Finland 33 Investor presentation Accelerating sales and premium increases strengthen our position in Finland • Gross premiums increased 40% to DKK 109m from Q1 2008 to Q1 2009 • Strong distribution set-up resulted in new sales record of 17,500 private insurances in March 2009 • Premium increases
Slide 34: New sales Finland - 2009
New sales Finland - 2009 34 Investor presentation Distribution in Finland Tied Agents 22% IN/Outbound 22% Car dealers Nordea 26% 24% Internet 6%
Slide 35: P&C Sweden
P&C Sweden 35 Investor presentation Gross premiums grew over 50% for the 7th quarter running • Gross premium of SEK 99m increased 76% from Q1 2008 to 2009 • Combined ratio of 135.8 in Q1 2009 improved from 159.9 • In Q1 alone, an increase of 27,000 insurances • Portfolio is now 115,000 customers, to
Slide 36: New sales Sweden - 2009
New sales Sweden - 2009 36 Investor presentation Distribution in Sweden Internet 2% Nordea 38% Call center 60%
Slide 37: Corporate
Corporate 37 Investor presentation Corporate sustains solid growth and good profitability • Premium growth of 4.3% in local currency (-1.2% in DKK) in Q1 2009. The Norwegian section contributed positively, but the Danish section dropped • Combined ratio of 80.2 in Q1 2009, which is in line with Q1 2
Slide 38: Thank you for your attention – questions?
38 Investor presentation Thank you for your attention – questions?
Slide 39: Not only a question of price – Denmark vs. UK
Not only a question of price – Denmark vs. UK 39 Investor presentation 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 agree: 72 Overall I am ver
Slide 40: New business written 1Q 2009
New business written 1Q 2009 40 Investor presentation P&C Denmark Corporate P&C Norway 6% 3% 11% 35% 47% 53% 53% 83% 9% Lokale service centres Car dealers Local service centres Affinity Groups Nordea Direct sales brokers Franchises Nordea Finland Sweden 2% 22% 22% 38% 60% 24% 26% 6% Call centres Car
Slide 41: Key financial figures 2004-2008
Key financial figures 2004-2008 41 Investor presentation In DKKm 2004 2005 2006 2007 2008 Gross premium income 15,266 15,705 16,021 16,606 17,323 Gross claims incurred -10,425 -11,159 -10,564 -11,175 -11,766 Operating expenses -2,611 -2,662 -2,697 -2,769 -3,003 Ceeded business -708 -7 -591 -343 -669
Slide 42: The Danish non-life insurance market since 1996
The Danish non-life insurance market since 1996 42 Investor presentation Market size and profitability Market shares DKKm % 60,000 50 4.8% CAGR 50,000 40 40,000 30 30,000 20 20,000 10,000 10 0 0 1995 1997 1999 2001 2003 2005 2007 -10,000 TrygVesta Topdanmark Codan 96 97 98 99 00 01 02 03 04 05 06 07
Slide 43: The Norwegian non-life insurance market since 1996
The Norwegian non-life insurance market since 1996 43 Investor presentation Market size and profitability Market shares % NOKm 40 45,000 3.8% CAGR 130 40,000 120 30 35,000 110 30,000 100 25,000 20 90 20,000 80 15,000 10 10,000 70 5,000 60 0 50 0 1994 1996 1998 2000 2002 2004 2006 2008 1996 1998 2000
Slide 44: The Nordic region - structure of the insurance market
The Nordic region- structure of the insurance market 44 Investor presentation Norway TrygVesta, EUR 4.7bn 17.8% Finland TrygVesta, EUR 3.2bn 1.4% Tapiola, Gjensidige Pohjola, 18.3% 30.1% 27.8% Top 4 Fennia, Top 4 87% 10.0% 82% If, 29.1% Sparebank, 9.8% Other, Other, 16.8% 13.2% If, 25.7% Sweden Denm