Tryg A/s · OMXCOP:TRYG
Tryg A/s — Morgan Stanley Conference (March 2011)
19 slides from Tryg A/s's conference presentation, Mar 31, 2011
Slide 1: Morgan Stanley Conference
Morgan Stanley Conference Morten Hübbe – Group CEO 31 March 2011 Presentation can be downloaded at www.tryg.com
Slide 2: Disclaimer
Disclaimer 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 results of operations, financ
Slide 3: Facts about Tryg
Facts about Tryg Gross premium split 2010 Shareholder breakdown 2.9 9.1 13 Danish institutional Denmark Non-Danish 17 Norway institutional Percentage Percentage 49.5 Sweden Smaller Finland 60 shareholders TryghedsGruppen 38.5 10 Share performance since IPO (incl. dividends) Index 250 • A true Nordic
Slide 4: Structure of the Nordic insurance markets
Structure of the Nordic insurance markets Denmark Norway DKK 46.6bn/EUR 6.3bn (per Q4-09) NOK 42.5bn/EUR 5.3bn (per Q3-10) 5.8 17.0 20.8 Tryg 26.2 Alm. Brand Tryg 18.6 If Gjensidige Other Percentage Sparebank1 Percentage 10.1 Other Alka C odan 28.1 If 10.7 13.9 5.0 Topdanmark 18.0 Gjensdige 3.5 22.3
Slide 5: Basis for value creation
Basis for value creation Mid-term targets Leading peace-of-mind provider RoE: 20% Profitability and efficiency Growth Sweden and Finland Combined ratio: 90 Solid capital base 5
Slide 6: Key focus areas
Key focus areas Price Pricehikes hikes Claims Claimsinitiatives initiatives Cost Costreduction reduction Tryg TrygTransition Transition 6
Slide 7: Long term view
Long term view Annual impact from 110 Combined ratio price increases 2010 Premium Premium 105 hikes hikes DKK ~0.9bn 2011 100 DKK ~1.0bn Smaller New ruling workers’ comp. 2012 adjustments Extraordinary winter DKK ~0.6bn 95 90 85 80 2000 2001 2002 2003 2004 2004* 2005 2006 2007 2008 2009 2010 2010 20
Slide 8: Premium increases visible in Private Nordic
Premium increases visible in Private Nordic Motor insurance - average premium (Index 2005 =100) • Average price has declined for 120 a number of years • Increase in 2010 : 110 100 2.4% 90 5.2% 80 2005 2006 2007 2008 2009 2010 House insurance - average premium • Pricing in House lagging 140 (Index 20
Slide 9: Customer retention
Customer retention • Retention rate relatively Private stable in Denmark 92% during 2010 despite up- pricing 90% 88% • Retention rate in Norway increased during 2010 86% 84% 82% 2005 2006 2007 2008 2009 2010 • Retention rate stable and Commercial strong 92% • Danish retention rate 90% remains high d
Slide 10: Improvement in claims ratio
Improvement in claims ratio 160 150 140 House DK* 130 120 110 100 90 80 70 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 110 100 House NO* 90 80 70 60 50 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 100 95 Finland 90 85 80 75 70 Q3-08 Q4-08 Q1-09
Slide 11: Major claims initiatives
Major claims initiatives Surveying Surveying Pruning Pruning House Large Largeclaims Housecondition condition claims process report report process New Newcontents contents Craftsman coverage coverage Craftsmancontrolling controlling Documentation Documentation Windscreen Windscreencar carclaims clai
Slide 12: Stricter customer screening
Stricter customer screening u s c laims o Previ Red/Green Customer Examination rules ers om sc ust e vio u P r 12
Slide 13: Managing cloudburst risk
Managing cloudburst risk Cloudburst in Copenhagen • Cloudburst hits locally and damage is influenced by local conditions such as pavement, sewer system etc. • Model to identify water risk of heavy rain established • Frequency for customers with basements approx 10 times larger • Analytical results w
Slide 14: Expense ratio
Expense ratio Expense ratio 17.0 16.9 16.8 17.1 17.2 17.0 0.4 • Growth in Sweden and Finland 0.8 1.3 1.5 2.7 2.9 affects cost development • Focus on reducing costs 16.5 16.0 15.5 15.6 14.5 through 14.1 • Optimising distribution 2005 2006 2007 2008 2009 2010 • Papirless processes Denmark & Norway Fin
Slide 15: Efficiency improvement
Efficiency improvement Employees, Sales Direct Sales Direct 1,300 • Better customer service by 1,250 more availability in call centres 1,200 • Closure of sales offices in DK 1,150 and NO 1,100 • Internet / self-service focus 1,050 2008 2009 2010 Employees, Claims Claims 1,020 990 • Focus on paperles
Slide 16: …and the future vision for 10 in 20
…and the future vision for 10 in 20 2010 2015 2020 2025 Cost reductions Lower distribution and admin cost 17% Head count reduction and increased 10% market position Tryg Transition Drivers to achieve the vision Tryg Transition Efficiency Markets Other cost reductions • Self-service • New products •
Slide 17: Capitalisation
17 DKKm Q 6,000 7,000 8,000 9,000 10,000 11,000 12,000 1 08 20 Q 08 2 08 be Q 20 f or 3 0 8 e p 08 af a te you r Capitalisation pa t yo ut Capital requirement Q 1 09 20 Q 09 2 09 be Q 20 f or 3 09 e 0 pa 9 af yo te r u pa t Buffer (5%) yo Q ut 1 20 Q 10 20 2 20 10 10 be Q3 20 f or 20 10 e p 10 af ay
Slide 18: Summary
Summary Basis for value Initiatives Targets creation Leading peace-of-mind provider • Premium increases RoE • Focus on retention 40% • Claims initiatives 30% Profitability and efficiency • Customer screening 20% x • Improved risk selection 10% 0% • Efficiency improvements Growth Sweden/Finland 03 04
Slide 19: Questions?
Questions? Investor Relations contacts Ulrik Andersson Investor Relations Director +45 21 71 30 18 ulrik.andersson@tryg.dk Lars Møller Investor Relations Manager +45 22 66 66 05 lars.moeller@tryg.dk Presentation can be downloaded at www.tryg.com 19