Tryg A/s · OMXCOP:TRYG
Tryg A/s — TrygVesta — Q3 2009 Earnings Presentation
25 slides from Tryg A/s's earnings presentation, Nov 10, 2009
Slide 1: Q3 2009 – Webcast presentation
For further information: www.trygvesta.com 1 TrygVesta webcast presentation – Q3 2009 Q3 2009 – Webcast presentation 10 November 2009
Slide 2: Disclaimer
Disclaimer 2 TrygVesta webcast presentation – Q3 2009 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) regardi
Slide 3: Highlights
Highlights 3 TrygVesta webcast presentation – Q3 2009 Premium growth of 11.4% (7.3% in DKK) in Q3 2009. Growth excl Moderna was 4.1% Growth in Finland was 32%, Sweden (excl Moderna) was 40% and Moderna 14% Underlying claims ratio improved from 75.7 in Q3 2008 to 75.1 in Q3 2009 Claims ratio in Q3 20
Slide 4: Key performance indicators – Q3 2009
Key performance indicators – Q3 2009 4 TrygVesta webcast presentation – Q3 2009 Gross premium income Combined ratio DKKm 95 4,747 92.2 90.9 4,425 90 4,232 4,071 84.7 83.7 3,975 85 83.7 80 75 Q3 05 Q3 06 Q3 07 Q3 08 Q3 09 Q3 05 Q3 06 Q3 07 Q3 08 Q3 09 Claims ratio Expense ratio 16.7 16.6 16.1 16.0 15
Slide 5: Key performance indicators – 9M 2009
Key performance indicators – 9M 2009 5 TrygVesta webcast presentation – Q3 2009 The market TrygVesta Combined ratio Codan Combined ratio 96 "CR" Codan Gjensidige Operating 92.0 ratio 92 if… 88.7 87.2 86.1 88 86.0 TrygVesta 84 2004 2005 2006 2007 2008 latest 9M 05 9M 06 9M 07 9M 08 9M 09 TrygVesta Tr
Slide 6: TrygVesta and Nordic competitors
TrygVesta and Nordic competitors 6 TrygVesta webcast presentation – Q3 2009 TrygVesta The market Gross premium income Premium growth in % DKKm Gjensidige 17,323 12 TrygVesta 16,606 8 Codan 16,021 15,705 TrygVesta 4 excl. Moderna 0 if… -4 2005 2006 2007 2008 2004 2005 2006 2007 2008 latest
Slide 7: Effects on technical result
Effects on technical result 7 TrygVesta webcast presentation – Q3 2009 Effects on technical result Effects on technical result Q3 2008 to Q3 2009 9M 08 to 9M 09 DKKm DKKm 700 2,000 8 5 1,867 69 120 72 1,800 600 97 546 285 115 500 1,600 397 186 400 144 1,400 80 153 1,200 300 1,200 200 1,000 100 800 Q
Slide 8: Effects on gross claims ratio
Effects on gross claims ratio 8 TrygVesta webcast presentation – Q3 2009 Effects on gross claims ratio Effects on gross claims ratio Q3 2008 to Q3 2009 9M 08 to 9M 09 % % 76 76 3.2 71.9 72.2 3.9 0.7 71.8 72 72 1.4 2.6 3.6 2.0 0,1 1.4 68.4 0.3 1.0 68 68 0.6 64 64 60 60 Q3 2008 Large Weather Run-off I
Slide 9: Discounting interest rate
Discounting interest rate 9 TrygVesta webcast presentation – Q3 2009 Discounting interest rate vs. goverment bond rates 6% 5.6% 5.0% "Flat interest rate" 5% 4% 4.2% 4.0% 3.3% 3% 2% 1% Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Discounting interest rate Norwegian 2 year rate Danish 2 yea
Slide 10: Results before and after tax – Q3
Results before and after tax – Q3 10 TrygVesta webcast presentation – Q3 2009 • Pre-tax profit up by DKK 519m due to a better investment return of DKK 663m but lower technical result of DKK 149m • Profit after tax up by DKK 298m. Pre-tax results - DKKm Results after tax - DKKm 1,500 995 1,000 1,110
Slide 11: Results before and after tax – 9M
Results before and after tax – 9M 11 TrygVesta webcast presentation – Q3 2009 • Pre-tax profit up by DKK 1,039m due to a better investment return of DKK 1,707m but lower technical result of DKK 667m • Profit after tax up by DKK 794m • ROE post tax of 23.8% Pre-tax results - DKKm Results after tax -
Slide 12: Average price development
Average price development 12 TrygVesta webcast presentation – Q3 2009 Price increases implemented on main products Total effect of price increases (*) 2009 2010 2011 DKK 250m DKK ~650m DKK ~750m Average prices in Denmark Average prices in Norway 5,000 5,000 4,500 4,500 NOK DKK 4,000 4,000 3,500 3,00
Slide 13: Enhancing profitability
Enhancing profitability 13 TrygVesta webcast presentation – Q3 2009 Combined ratio, in % Price increases 110 109 104 107 Price increases 101 100 94 91 89 92 90 88 86 86 80 00 01 02 03 04 06 07 9M 08 * * 09 04 05 20 20 20 20 20 20 20 20 20 20 20 • 2002-2004 substantial price increases implemented in
Slide 14: Key economic statistics impacting performance
Key economic statistics impacting performance 14 TrygVesta webcast presentation – Q3 2009 Number of unemployed in Denmark and Norway 160,000 120,000 80,000 40,000 0 2003 2004 2005 2006 2007 2008 2009 Denmark Norway
Slide 15: Development in passenger cars
Development in passenger cars 15 TrygVesta webcast presentation – Q3 2009 New registered New registered Development No. of cars insured in Tryg- 2008, YoY change 9M 2009 YoY change in no. of cars Vesta 9M 2009 YoY change Finland 11% -39% -0.4% +20% Sweden -17% -24% +0.4% +35% -1.1% Norway -14% -22%
Slide 16: Frequency and average claims
Frequency and average claims 16 TrygVesta webcast presentation – Q3 2009 From 9M 08 to 9M 09: From 9M 08 to 9M 09: Frequency Norway House increases 10.8% House increases 5.7% Frequency Denmark Car increases 4.2% Car decreases 1.9% 130 115 110 120 105 110 100 100 95 90 90 2005 2006 2007 2008 9M 2009
Slide 17: Large claims and storm related claims
Large claims and storm related claims 17 TrygVesta webcast presentation – Q3 2009 • Storm related claims of DKK 98m in 9M 2009 compared with DKK 90m in same period 2008. • Large claims gross of DKK 429m in 9M 2009 compared with DKK 467m in same period 2008 and expected DKK 375m. • In Q3 2009 storm r
Slide 18: Run-off and changes in reserves
Run-off and changes in reserves 18 TrygVesta webcast presentation – Q3 2009 Run-off of DKK 482m in 9M 2009 equivalent to 3.6% on combined ratio Claims provisions increased in 2009 due to consolidation of Moderna and stronger NOK/DKK Run-off net, DKKm Insurance provision - DKKm 32,000 7,196 793 24,00
Slide 19: Conservative approach to the investment portfolio of DKK 39.8bn
Investment portfolio structure 19 TrygVesta webcast presentation – Q3 2009 Conservative approach to the investment portfolio of DKK 39.8bn • 2.0% gross return in 9m 2009 and 8.0% annualised and boosted by strong equity markets and gain from narrowing spread on Danish mortgage bonds • 3.3% invested i
Slide 20: Quality bond portfolio
Quality bond portfolio 20 TrygVesta webcast presentation – Q3 2009 Conservative approach to the investment portfolio – plain vanilla • Bond portfolio used for matching the discounted claims liabilities • Duration of bond portfolio is approx. 2 years • No structured products, CDO’s etc held • 76% of
Slide 21: Outlook 2009
Outlook 2009 21 TrygVesta webcast presentation – Q3 2009 Expected 2009 Mid Realised May November Positive Negative DKKm February August 2009 2008 2009 2009 scenario scenario 2009 Interest rate level 5.1% 3.93% 3.5% 3.4% 3.3% Exchange rate DKK/NOK 0.92 0.85 0.84 0.83 0.85 Premium growth in local curr
Slide 22: Capitalisation
Capitalisation 22 TrygVesta webcast presentation – Q3 2009 DKKm 12.000 11.000 10.000 9.000 8.000 7.000 6.000 07 07 07 08 08 08 09 09 09 06 t t ut ut u u yo yo yo yo 20 1 2 3 1 2 3 1 2 3 Q Q Q Q Q Q Q Q Q pa pa pa pa re r re r te te fo fo af af be be 07 08 07 08 20 20 20 20 Target capital (A- level)
Slide 23: Summary
Summary 23 TrygVesta webcast presentation – Q3 2009 Strong growth of 11.4 % in Q3 despite economic slowdown Premium increases and stringent cost control are supportive for earnings Strong investment results due to rise in stock prices and narrowing of bond spread Upgrading outlook. Capital position
Slide 24: Thank you for your attention – questions?
24 TrygVesta webcast presentation – Q3 2009 Thank you for your attention – questions?
Slide 25: Upcoming roadshows
Q&A session 25 TrygVesta webcast presentation – Q3 2009 Upcoming roadshows Date Place Participants from TrygVesta Arranged by 11 November 2009 Copenhagen Morten Hübbe, CFO SEB Enskilda Ole Søeberg, Head of IR Lars Møller, IR Manager 16- 17 November 2009 London Morten Hübbe, CFO Danske Markets Lars M