Tryg A/s · OMXCOP:TRYG
Tryg A/s — Tryg Forsikring — Debt Investor Presentation (February 2013)
21 slides from Tryg A/s's debt investor presentation, Feb 8, 2013
Slide 1: Tryg Forsikring A/S Tier 2 NOK 800m perpetual
Tryg Forsikring A/S Tier 2 NOK 800m perpetual (NC 10 year) CFO Tor Lønnum Oslo - 8 February 2013 1 Presentation can be downloaded at Tryg.com
Slide 2: Disclaimer
Disclaimer Certain statements in today’s presentations 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 results of operations, fi
Slide 3: Introduction
Introduction • Tryg Forsikring A/S (“Tryg”) is approaching the market with a NOK 800m perpetual non-call 10-year tier 2 bond issue • The motivation for the issue is refinancing of existing tier 2 issue and capital optimization 3
Slide 4: Tryg - Quick overview
Tryg - Quick overview Tryg is a non-life insurance company present DKKm 2011 2012 in Denmark (No. 1), Norway (No. 3) and Sweden (No. 5). Gross earned premium 19,948 20,314 Gross claims -15,783 -14,675 60.5m shares and a market cap of DKK Gross expenses -3,271 -3,295 25.2bn (Jan 13). Insurance result
Slide 5: Tryg – at a glance
Tryg – at a glance 250 Share performance since IPO 225 200 175 • Tryg goes back to 18th century 150 • The current Tryg was formed in 125 2002 by sale of Nordea’s non-life 100 activities – with a continuing 75 strategic partnership 50 25 • Non-life insurance in Denmark, 0 00 5 06 06 06 00 6 07 07 00
Slide 6: Structure of the Nordic insurance markets
Structure of the Nordic insurance markets Nordic Norway EUR 23.2bn (Q4 11) NOK 47.4 bn/ EUR 6.4bn (Q3 12) 11.5 15.6 Tryg 23.4 Tryg If If 17.4 C odan Gjensidige 39.8 Gjensidige Percent Sparebank1 Percent Länsförsäkringar 10.3 25.1 Other Topdanmark 9.0 Other 5.0 8.7 8.6 25.6 Sweden Denmark SEK 64.0bn/
Slide 7: Nordics - a stable insurance sector
Nordics- a stable insurance sector Combined ratio 100 98 96 o it a 94 R 92 d e 90 n i b 88 m 86 o C 84 82 80 2005 2006 2007 2008 2009 2010 2011 2012 Denmark Norway Sweden Tryg Group portfolio DKK 20,300m 40% 49% 11% Denmark Norway Sweden 7
Slide 8: Strategic initiatives
Strategic initiatives - Value creation in mature markets Increased price differentiation Commercial back on track Building foundation in Sweden Expenses/claims reductions Simplification of products and systems 8
Slide 9: Transformation of Tryg
Transformation of Tryg - From high growth to global slow-down • Growth focus • Profitability focus 2005-2009 2010- Growth Profitability Growth Profitability • Solidarity in prices • Price differentiation • Cost growth inline with premiums • Ambitious cost agenda • Peace of mind in claims handling •
Slide 10: Tryg delivers stable pre-tax profit
Tryg delivers stable pre-tax profit Turn around Growth focus Price increases Cost focus 4,000 3,500 Investment result Technical result 3,000 Pre-tax profit 2,500 Average pre-tax profit DKK 2,300m 2,000 DKKm 1,500 1,000 500 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -500 -1,000 10
Slide 11: Combined ratio performance
Combined ratio performance 110 Premium Premium Savings hikes hikes programme 105 100 Smaller 95 adjustments 90 85 80 * 00 01 02 03 04 05 06 07 08 09 10 11 12 04 20 20 20 20 20 20 20 20 20 20 20 20 20 20 • 2002-2004 price increases of DKK 2.1bn implemented. Reduced combined ratio from 107 to 94 • 201
Slide 12: Highlights 2012
Highlights 2012 - Result favoured by initiatives, weather, large claims and high investment result Pre-tax profit D KKm 3,200 3,017 • Pre-tax profit of DKK 3,017m (DKK 2,800 2,400 1.603m). Technical result of DKK 2,491m 2,000 1,603 1,600 1,200 (DKK 1,572m). 800 400 0 • Proposed dividend per share of
Slide 13: Follow up on savings programme – 2012
Follow up on savings programme – 2012 Total Savings programme Targeted and achieved savings on claims Total reduction 300 120 in expenses DKK 400m 100 700 100 Transfer to 250 Claims 250 Claims Claims 600 100 DKK 600m Total 2012 Achieved 2013 2014 2015 savings on Target claims Targeted expense level
Slide 14: Investment and Capital structure
Investment and Capital structure 14
Slide 15: Retain low risk investment portfolio
Retain low risk investment portfolio - fewer surprises and focus on core business ROE target Free portfolio – 2012 30 Equities (24) Investment result Real estate (27) Bank deposits/bonds (5) 9 Percentage 24 Govt. bonds (7) 2 High yield (8) 15 20 C ov. Bonds (29) Technical result Match portfolio – 20
Slide 16: Optimisation of capital structure and extraordinary buyback
Optimisation of capital structure and extraordinary buyback • Capital buffer based on Individual Solvency Capital buffer 60% increased to 38% (2011: 23%) and impacted 50% by: • Strong 2012 result 40% • Ordinary dividend payout 30% • Stable increase in the capital requirement 20% due to a limited gro
Slide 17: Capital structure
Capital structure • Conservative approach to size and composition of the capital structure. • Capital base consist to a large extent of own capital and only to a lesser extent of subordinated capital. Capital leverage 100% After transaction 90% 80% 70% 19% 60% 50% 40% Own capital 30% Subordinated lo
Slide 18: New dividend policy
New dividend policy - creating long-term value for our shareholders • Payout ratio of 60–90% • Aiming for a nominal stable increasing dividend. • Ambitious ROE target of 20% after tax calls for disciplined capital approach. • Adjustment of the capital level can be made via share buy back. Total dist
Slide 19: Combined ratio target
19 CR % ta r 0% 10% 20% 30% 40% 20 Ex ge 03 p en t Q 80 82 84 86 88 90 92 se 3 20 /c 20 04 la 13 Cl im ai s 20 m in 05 s it i < 90 in at 20 fla iv t io es 06 W n ea ab 20 th ov 07 er e Le an CP 20 gi d I 08 sl la at rg io e 20 n cl et ai 09 c m (W s 20 C, 10 ROE after tax ta xe 20 s. .) Combined rat
Slide 20: Closing remarks and Q/A
Closing remarks and Q/A Follow us on Twitter: @TrygIR
Slide 21: Key Investment Considerations
Key Investment Considerations • Disciplined general insurance market with profitability focus • Focused Nordic general insurance company with strong performance • From growth to profitability focus • 3 years savings programme to cut claims and costs with a total of DKK 1bn. • Combined ratio at 90 or
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