Tryg A/s · OMXCOP:TRYG
Tryg A/s — Danske Bank Copenhagen Winter Seminar 2014
25 slides from Tryg A/s's conference presentation, Dec 3, 2014
Slide 1: Building a world class insurer
Building a world class insurer CFO Tor Magne Lønnum Danske Bank Copenhagen Winter Seminar 3 December 2014 Download presentation on 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: Take aways about Tryg
Take aways about Tryg Leading Scandinavian insurer with strong track record Customer care Low risk and high Financial targets 2017 worth returns •ROE: ≥21% recommending •Expense ratio: ≤14% •Combined ratio: ≤87% •Efficiency programme: DKK 750m •Dividend – 60 to 90% Leading in Next level pricing effi
Slide 4: Take aways about Tryg
Take aways about Tryg Leading Scandinavian insurer with strong track record Customer care Low risk and high worth returns recommending Leading in Next level pricing efficiency 4
Slide 5: Leader in the attractive Scandinavian general insurance market
Leader in the attractive Scandinavian general insurance market Leading Scandinavian Insurer With Unrivalled Brand… …Well Diversified Platform by Product, Business Line and …Supported by Solid Operating Geography… Fundamentals… Geography 2013 Customer Satisfaction Employee Brand 3 Clear top 3 in Norw
Slide 6: Delivering accelerated improvement
Delivering accelerated improvement Combined ratio 2010 – H1 2014 Expense ratio – 2010 –H1 2014 1.4% one-off Combined ratio vs. European peers Expense ratio vs. European peers 6
Slide 7: Strengthening the core business
Strengthening the core business Technical result Expense ratio 18% 17% 16.7% 16.6% 16.4% 16% 15.6% 15.6% 15% 1.4% 14% 14.2% 13% 12% 11% 10% 2010 2011 2012 2013 1H 2014 One-off Combined ratio Return on equity (ROE) 7
Slide 8: New targets for 2017
New targets for 2017 - Announced at Tryg’s Capital Market Day, 5. November 2014 Targets 2015: Strong and necessary earnings and clean up focus Earnings Customers ROE > 20% - - Combined ratio < 90% Expense ratio < 15% Efficiency programme DKK 1,000m Targets 2017: Enhanced earnings capability and impr
Slide 9: Tryg – aiming for world class
Tryg – aiming for world class Earnings Customers Target drivers Customer Next level Leading in Low risk and care worth pricing efficiency high returns recommending 9
Slide 10: Take aways about Tryg
Take aways about Tryg Leading Scandinavian insurer with strong track record Customer care Low risk and high worth returns recommending Leading in Next level pricing efficiency 10
Slide 11: What does world class look like?
What does world class look like? Financial world class Customer world class Brand promise Customer experience Recommendation “Delivering peace of •Always available ”You should really mind and value to our •FCR (≥90%) consider moving your customers, employees •End2End > peers insurances to Tryg. •Fai
Slide 12: Customer promoters drive real growth
Customer promoters drive real growth Correlation between Net promoter score (NPS), retention and engagement NPS / Retention NPS / Loyalty NPS / Engagement • 1 pp change in retention rate = DKK 50-150m change in expenses depending on BU and timing. • The average premium of customers with ≥3 products
Slide 13: Examples of customer initiatives
Examples of customer initiatives 1. call resolution Follow up text Instant follow up on Rejections only by (target: ≥90%) message (1-10) low scores (1-3) phone Development in Tryg’s NPS Development in Tryg’s retention rate 13
Slide 14: Take aways about Tryg
Take aways about Tryg Leading Scandinavian insurer with strong track record Customer care Low risk and high worth returns recommending Leading in Next level pricing efficiency 14
Slide 15: Building pricing power
Building pricing power Pricing competitiveness 2013 2014 2017 Time to market Sales hit rate (index) Claims ratio -2% (-5%) 15
Slide 16: Take aways about Tryg
Take aways about Tryg Leading Scandinavian insurer with strong track record Customer care Low risk and high worth returns recommending Leading in Next level pricing efficiency 16
Slide 17: Continious improvement of operational efficiency
Continious improvement of operational efficiency Efficiency programme 2015 - 2017 Distribution of savings 2015 - 2017 DKKm DKKm Expense reduction DKK 750m Claims reduction Where will this take us? Target 2017: ≤14.0% 17
Slide 18: Expense and claims reductions towards 2017
Expense and claims reductions towards 2017 Sourcing • Staff functions • Business areas Expenses Simplification DKK • First contact resolution 250m • Reduced lead time • Continuous improvement Improved retention rates Utilising spend data and transparency from In4mo system. Claims Dedicated competenc
Slide 19: Take aways about Tryg
Take aways about Tryg Leading Scandinavian insurer with strong track record Customer care Low risk and high worth returns recommending Leading in Next level pricing efficiency 19
Slide 20: Strict capital discipline and robust low-risk balance sheet
Strict capital discipline and robust low-risk balance sheet Conservative reserves Low risk investment M atch P o rt f o lio 7 1% F re e B ank Depo sits / P o rt f o lio B o nds 29% 5% Co v. B o nds 95% Stable underlying capitalisation Deviation in quarterly returns since 2007 Min Max Average 5.0% 5.
Slide 21: Attractive and stable payout
Attractive and stable payout Tryg’s dividend policy Capital base H1 2014 • Payout ratio target of 60-90% Buffer • Steadily increasing nominal payout • Return on equity after tax of ≥21% • Capital adjustment via share buy back Overview of total shareholder distribution 2005 - 2013 New dividend policy
Slide 22: Subordinated capital
Subordinated capital • Solvency II will increase the potential for SCR = 6.7 mDKK Potential subordinated capital in the range DKK Max. under Solvens II Outcome I Outcome II Tier 1 : 10 % 1.5bn to DKK 2.5bn. of SCR 0.7 1.5 o During 2015 the future desired leverage in 2.5 view of Solvency II will be d
Slide 23: New extraordinary share buy back programme and share split in 2015
New extraordinary share buy back programme and share split in 2015 New extraordinary share buy back Share split Background for extraordinary share buy back of At the annual general meeting in March 2015, DKK 1,000m in 2015: Tryg will propose to split each share of DKK 25 • Strong results in combinat
Slide 24: Utilising UW and operational excellence to create value via M&A
Utilising UW and operational excellence to create value via M&A Growth through successful M&A Moderna our latest success story Continuous platform development Leading position in SE niche 1999 Acquisition of Vesta markets Acquisitions 2014: Securator Strengthened distribution 2014: Renewal rights to
Slide 25: Take aways about Tryg
Take aways about Tryg Leading Scandinavian insurer with strong track record Customer care Low risk and high Financial targets 2017 worth returns •ROE: ≥21% recommending •Expense ratio: ≤14% •Combined ratio: ≤87% •Efficiency programme: DKK 750m •Dividend – 60 to 90% Leading in Next level pricing effi