Tryg A/s · OMXCOP:TRYG
Tryg A/s — KBW European Financials Conference 2014
16 slides from Tryg A/s's conference presentation, Sep 17, 2014
Slide 1: KBW European Financials Conference
KBW European Financials Conference 17 September 2014 CFO Tor Lønnum Download presentation at Tryg.com
Slide 2: Tryg – at a glance
Tryg – at a glance Share performance since IPO 320 300 Tryg incl. dividend Euro Insurance index 280 • Tryg goes back to 18th century 260 240 • The current Tryg was formed in 2002 by 220 sale of Nordea’s non-life activities – 200 with a continuing strategic partnership 180 160 • Non-life insurance in
Slide 3: Structure of the Nordic insurance markets
Structure of the Nordic insurance markets Nordic Denmark EUR 24.5bn (as at Q4 2012) DKK 50.3bn/ EUR 6.8bn (as at Q2 2013) 10.5 19.0 Tryg Tryg 29.0 Topdanmark If 18.2 C odan C odan 40.0 Percentage Alm. Brand Percentage Gjensidige 17.5 Gjensdige Länsförsäkringar If Topdanmark 9.1 6.2 Other Other 6.0 9
Slide 4: Financial targets
Financial targets ROE after tax of 20% to be achieved by delivering a full year combined ratio of 90 or lower. Expense ratio <15 in 2015 ROE after tax 40% 30% ROE target 20% 10% 0% 14 05 06 07 08 09 10 11 12 13 14 15 20 20 20 20 20 20 20 20 20 20 20 20 1 H 4
Slide 5: Strategic initiatives 2014
Strategic initiatives 2014 Increased price differentiation Customer journey & success culture Expenses/claims reductions IT operational stability 5
Slide 6: Price differentiation
Price differentiation Many new differentiated products with positive effects New differentiated products since 2013 Better selection and higher quality 17 Higher sales rate Positive feedback from customers and employees 140% 127% 113% 116% 120% 100% Simple 80% 60% 40% Improved Improved sales sales 2
Slide 7: Follow up on efficiency programme
Follow up on efficiency programme • Savings of DKK 740m achieved so far. • DKK 93m achieved in Q2 2014. DKKm Targeted and achieved savings on claims • DKK 28m reduction in expenses 1,200 1,000 • DKK 65m reduction in claims 1,000 800 700 740 • Increased benefit from Buildings and Contents 550 600 ini
Slide 8: Highlights Q2 2014
Highlights Q2 2014 - Improved results and positive trend in premium income. Pre-tax profit D KKm 1,150 1,200 • Pre-tax profit of DKK 1,150m (DKK 688m). 1,000 800 688 600 • Technical result of DKK 941m (DKK 684m). 400 200 0 • Combined ratio improved by 6.0 pp. to 80.7 Q2 2013 Q2 2014 (86.7). Combined
Slide 9: Topline and technical result
Topline and technical result Gross earned premiums reduced 1.2% (-2.6%) related to: • Continued high retention level in Private and even improved retention level in Commercial. • Higher sales level in general in Private compared to last year. • Commercial – improved retention but sales lower than ex
Slide 10: Customer retention
10 Q Q 1 1 82% 84% 86% 88% 90% 92% 82% 84% 86% 88% 90% 92% Q 10 Q 10 2 2 Q 10 3 Q 10 3 Private Q 10 Q 10 Commercial 4 4 Q 10 Q 10 1 1 Q 11 Q 11 2 2 Q 11 Q 11 3 3 Q 11 Q 11 4 4 Q 11 Q 11 1 1 Q 12 Q 12 2 2 Q 12 Q 12 3 3 Q 12 Q 12 4 4 Q 12 Q 12 1 1 Q 13 Q 13 2 2 Q 13 Q 13 3 3 Q 13 Q 13 4 4 Q 13 Custome
Slide 11: CR and claims ratios Q2 2013-14
CR and claims ratios Q2 2013-14 • Underlying development is adjusted for: Underlying claims, net Q2 2013/2014 • Large claims • Weather claims 78.7 79.3 76.7 • Run-off and interest 72.3 72.1 70 68.8 72.8 65.6 62.8 • Improved underlying development on Group level driven by: • one-off effects Q2 2013 Q
Slide 12: Large claims, weather claims and run-off
Large claims, weather claims and run-off Large claims, net DKKm Expected annual Weather claims, net DKKm Expected annual level 2014: DKK 550m level 2014: DKK 500m 200 200 150 150 207 100 100 50 50 65 60 78 0 0 Q2 2013 Q2 2014 Q2 2013 Q2 2014 Run-off, net DKKm Run-off net, effect on combined ratio 30
Slide 13: Investment result Q2 2014
Investment result Q2 2014 Investment return Free portfolio – Q2 2014 (DKK 12.7bn) DKKm 3 Equities (22) Free investment 244 37 Investment property (15) Match regulatory deviation 49 Bank deposits/bonds (15) Percentage 24 Match performance 50 Govt. Bonds (3) High yield (6) Other financials -84 C ov. B
Slide 14: Capital structure and status on share buy back
Capital structure and status on share buy back Capital – Q2 2014 DKKm • Capital buffer based on Individual 12,000 Solvency increased to 63% (2013 Q4: 50%) and was impacted by: Excess capital • H1 result 2014 8,000 4,218 Buffer • H1 share buy back deducted in buffer. Capital requirement 4,000 6,734 •
Slide 15: Dividend policy
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 distrib
Slide 16: Q&A
Q&A Follow us on Twitter: @TrygIR