Tryg A/s · OMXCOP:TRYG
Tryg A/s — Q1 2007 Earnings Presentation
23 slides from Tryg A/s's earnings presentation, May 9, 2007
Slide 1: Webcast and conference call – Q1 2007
Webcast and conference call – Q1 2007 Stine Bosse, CEO Morten Hübbe, CFO Ole Søeberg, Investor Relations 9 May 2007 1
Slide 2: Capital Markets Day
Capital Markets Day TrygVesta will host its first Capital Markets Day for analysts and institutional investors on 21 June 2007 from 08.30 to ~ 13.30 in TrygVesta, Ballerup, Denmark Please contact Investor Relations @ +45 4420 4520 or ir@trygvesta.com 2
Slide 3: Highlights Q1 2007
Highlights Q1 2007 • Technical result of DKK 533m – an increase of DKK 137m compared to Q1 2006 • Good development in new sales – net growth of 60,000 policies • Combined ratio of 89.6 positively affected by low claims ratio • 8 % upgrade of full year expectations of pre-tax result of 2,7bn DKK • P&
Slide 4: Income statement
Income statement Change Q1 DKKm Q1 2007 Q1 2006 2006/2007 Gross earned premiums 3,999 3,960 39 Claims ratio 69.0 74.0 5.0 Business ceded as percentage of gross premiums 3.4 0.8 -2.6 Claims ratio, net of ceded business 72.4 74.8 2.4 Expense ratio 17.2 17.2 0.0 Combined ratio 89.6 92.0 2.4 Combined ra
Slide 5: Key financial indicators
Key financial indicators Gross premium earned Combined ratio 4,050 94.0 3,999 4,000 92.6 3,960 92.0 3,950 92.0 DKKm In % 3,900 3,843 90.0 3,850 89.6 3,800 88.0 3,750 Q1 2005 Q2 2006 Q1 2007 Q1 2005 Q2 2006 Q1 2007 Claims ratio net of ceded business Expense ratio 75.0 74.7 74.8 18.0 17.8 74.0 17.5 In
Slide 6: Gross premium drivers
Gross premium drivers 4.000 3.980 3.960 + 1% 3.940 (1.7% in local 3.920 currency) DKKm 3.900 3.880 3.860 3.840 3.820 3.800 Group Q1 P&C DK P&C NO Corp. Finland Others Group Q1 2006 2007 Note: Difference in DKKm. Q1 2007 less Q1 2006 – green indicates increase, red indicates reduction 6
Slide 7: Technical result drivers
Technical result drivers 600 550 500 +34.6% DKKm 450 400 350 300 Group Q1 P&C DK P&C NO Corp. Finland Others Group Q1 2006 2007 Note: Difference in DKKm. Q1 2007 less Q1 2006 – green indicates increase, red indicates reduction 7
Slide 8: Distribution of result
Distribution of result •Technical result in Corporate improved further – increase of DKK 211m primarily due to significant decline in large claims compared to 2006 • Lower technical result in Private & Commercial Norway is mainly a result of expenses relating to several medium sized claims – affecti
Slide 9: Frequency and average claims
Frequency and average claims Frequencies in Denmark Frequencies in Norway Index Index 120 110 105 110 100 100 95 90 90 85 80 80 5 5 5 5 6 6 6 6 7 5 5 5 5 6 6 6 6 7 10 20 30 40 10 20 30 40 10 10 20 30 40 10 20 30 40 10 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Average claim in Denmark Average claim in Norw
Slide 10: Claims
Claims Large claims Weather related claims 1000 911 600 501 461 Expected 800 416 2007 400 342 DKKm 600 DKKm 236 Expected 400 200 202 2007 77 200 73 111 0 46 0 0 2003 2004 2005 2006 Q1 Q1 2003 2004 2005 2006 Q1 Q1 2006 2007 2006 2007 Run-offs 800 618 555 400 263 283 141 207 114 127 DKKm 0 -17 -74 -40
Slide 11: Finland – Highlights of Q1 2007
Finland - Highlights of Q1 2007 Financial highlights • Satisfactory development driven by premium growth of 39% and good profitability • Expense ratio of 27, down from 39, in Private insurance. Total 45.6 due to start-up of Commercial • Good risk selection and claims ratio of 73.7% vs. 81.4% in 2006
Slide 12: Sweden – Satisfactory sales development in line with goals
Sweden - Satisfactory sales development in line with goals Operationelle højdepunkter • Increase of 24.000 policies in 1Q 2007 • High sales level continues compared to start-up in Finland – sales follows targets and strategies for market positioning • Own call center accounts for 1/3 of new sales St
Slide 13: Morten Hübbe, CFO
TryeVesta’ po tif EG el | EE | Es : Ty - BR a Morten Hubbe, CFO 13
Slide 14: P&C Denmark – Highlights in Q1 2007
P&C Denmark - Highlights in Q1 2007 Financial highlights • Combined ratio of 85.4 continues at good level • Gross premium growth of 0.7% before bonus and 0.2% after bonus • Low claims ratio of 68.4 • Expense ratio on level with Q1 2006 (17.0) Operational highlights • New sales performing better than
Slide 15: P&C Norway – Highlights in Q1 2007
P&C Norway - Highlights in Q1 2007 Financial highlights • Combined ratio of 99.6 vs. 93.4 due to increased claims ratio • Claims ratio increased 7.1 to 78.4 as a result of several large claims in Commercial, an increase of average claims and a decrease in gross premiums of 3.3% Operational highlight
Slide 16: Corporate – Highlights in Q1 2007
Corporate - Highlights in Q1 2007 Financial highlights • Good premium growth of 5.4 % (3.9 % after bonus) to DKK 1.229m • Low claims ratio of 72.2 •Strong combined ratio of 83.5 Operational highlights • Continued positive growth driven by good retention and new sales in Q1 2007 – especially personal
Slide 17: Investment result
Investment result Highlights Q1 2007 • Return on investment activities before other financial income and expenses of DKK 426m in Q1 2007 vs. DKK 419m in Q1 2006 • Return on investment activities after technical interest of DKK 152m vs. DKK 311m in Q1 2006 • DKK 38.3bn in investment assets ultimo Mar
Slide 18: Outlook 2007
Outlook 2007 Outlook Outlook Favorable Negative Realised 2006 DKKm 28 Feb 2007 9 May 2007 scenario scenario Premium growth 2%* 3%* 3%* Technical result 2,512 2,050 2,250 2,400 2,100 Return on investment activities 1,228 500 500 Result before tax and discontinued business 3,709 2,500 2,700 Result aft
Slide 19: Changed unwinding method
Changed unwinding method Impacts combined ratio – but nothing else FY 2006 Former New Larger transfer from claims to accounting Unwinding accounting policies adjustments policies technical interest Gross premiums earned 16,021 16,021 Gross claims incurred -10,796 232 -10,564 Gross expenses -2,697 -2
Slide 20: Update on capital
Update on capital Current Current capital capital structure structure March 31, 2007 (DKKm) (DKKm) Equity 8,192 88% Hybrid 1,099 12% Other capital 0 0% Total 9,291 100% Credit lines 2,000 (Equity + hybrid – dividend)/ NPE 60.3% Current Current ratings ratings • S&P: “A-” (strong), stable outlook • M
Slide 21: Capitalisation
Capitalisation - Stable financial platform 175% 14,000 148.0% 132.5% 150% 12,000 125.3% 128.5% 128.0% 121.3% 125% 10,000 8,806 9,291 93.7% 7,885 100% DKKm 8,000 6,817 6,852 6,060 75% 6,000 4,268 4,000 50% 2,000 25% - 0% 2002 2003 2004 2004* 2005* 2006* Q1 2007* Capital less dividend S&P CAR * IFRS.
Slide 22: Q&A Session
TrygVesta’ Q&A Session 22
Slide 23: 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. Such statements may constitute forward-looking statements. These forward-looking statements (other than statements of hi