Tryg A/s · OMXCOP:TRYG
Tryg A/s — TrygVesta — Q1 2008 Earnings Presentation
35 slides from Tryg A/s's earnings presentation, June 2008
Slide 1: Investor presentation May and June 2008
1 Investor presentation Investor presentation May and June 2008
Slide 2: Disclaimer
Disclaimer 2 Investor presentation 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 resul
Slide 3: Facts about TrygVesta
Facts about TrygVesta 3 Investor presentation Shares outstanding 68m •Focused Nordic, non-life insurance Market cap DKK 28bn (USD 5.8bn) company Danish •Vision: To be perceived as the leading institutions “peace of mind” supplier in the Nordic 15% region Non-Danish institutions •Strong brand and mar
Slide 4: The Danish non-life insurance market since 1996
The Danish non-life insurance market since 1996 4 Investor presentation Market size and profitability Market shares DKKm 50,000 50 4.8% CAGR 40,000 40 30,000 30 20,000 20 10,000 10 0 0 -10,000 1995 1998 2001 2004 1996 1998 2000 2002 2004 2006 TrygVesta Topdanmark Codan Net premiums Insurance result
Slide 5: The Norwegian non-life insurance market since 1996
The Norwegian non-life insurance market since 1996 5 Investor presentation Market size and profitability Market shares NOKm 40,000 3.8% CAGR 130 50 35,000 120 40 30,000 110 25,000 100 30 20,000 90 15,000 80 20 10,000 70 10 5,000 60 0 50 0 1996 1999 2002 2005 1994 1997 2000 2003 2006 Premiums (left)
Slide 6: The Nordic region – structure of the insurance market
The Nordic region – structure of the insurance market 6 Investor presentation Norway TrygVesta, Finland EUR 4.4bn 18.2% EUR 3.1bn Tapiola, Pohjola, 18.6% Gjensidige 26.3% 31.9% Fennia, TrygVesta, 10.4% 1.2% IF, 30.0% Sparebank, Other, 10.1% 16.2% Other, IF, 27.6% 10.0% Denmark Alm. Brand; IF; 5,0% S
Slide 7: Overall financial performance of TrygVesta
7 Investor presentation Overall financial performance of TrygVesta
Slide 8: Key performance indicators
Key performance indicators 8 Investor presentation Gross premium Combined ratio DKKm 4.9% (5.9% DKK) Q1 2008 vs. 4,400 1.7% (1% DKK) Q1 2007 96 4,268 92.0 4,232 4,233 92 89.6 4,200 87.9 88 87.2 4,107 86.2 4,071 84.8 83.7 83.7 4,005 84 83.0 3,985 3,999 4,000 3,960 80 3,800 76 Q1 06 Q2 06 Q3 06 Q4 06
Slide 9: Average prices for main products are trending upward
Average price development for TrygVesta 9 Investor presentation Average prices for main products are trending upward • Danish car insurance prices have been impacted by lower prices in 2006 and 2007 due to changed conditions in contracts (mileage) • New initiatives implemented April 2008 on Danish c
Slide 10: Gross premiums in Q1 2008
Gross premiums in Q1 2008 10 Investor presentation Gross premiums grew DKK 234m to DKK 4,233m • Good growth in Corporqate and New Markets (Finland & Sweden) • P&C Norway growth turning positive to 3.6% from 1.4% decline in Q1 2007 • Solid progress in retention rates in Denmark and Norway Gross premi
Slide 11: Technical result
Technical result 11 Investor presentation Technical result grew 20% to DKK 637m • Q1 2008 favourably impacted by mild winter and positive run-off • Technical result excluding run-off was DKK 464m, up 58m Technical result per business area DKKm 700 700 600 675 74 8 500 317 650 8 4 637 243 625 400 32
Slide 12: Claims
12 Investor presentation Claims
Slide 13: Trends in number of claims in Denmark
Trends in number of claims in Denmark 13 Investor presentation Total number of property and content and auto claims Property and content claims Motor claims In thousands In thousands 700 1.200 600 1.000 500 800 400 600 300 400 200 200 100 0 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 97 98 9
Slide 14: Frequency and average claims
14 90 92 94 96 98 100 102 90 95 100 105 110 115 120 Q Q 10 10 5 5 Q Q 20 20 5 5 Q Q 30 30 5 5 Q Q 40 40 5 5 Q Q 10 10 6 6 Frequency Norway Q Q 20 20 6 6 Q Q Average claims Norway 30 30 6 6 Investor presentation Q Q 40 40 6 6 Q Q 10 10 7 7 Q Q 20 20 7 7 Q Q 30 30 7 7 Q Frequency and average claims 40
Slide 15: Large claims and weather related claims
Large claims and weather related claims 15 Investor presentation 2008 has started out on a lower level than 2007 for large claims and weather related claims Large claims Weather related claims, gross DKKm DKKm 1,200 1,000 911 1,042 1,000 800 800 461 637 600 416 600 501 500 (2008e) 400 332 400 340 30
Slide 16: Run-off and changes in reserves
Run-off and changes in reserves 16 Investor presentation Run-off in Q1 2008 of DKK 163m gross and DKK 173m net • Impact on combined ratio of 4.1% in Q1 2008 versus 3.2% in Q1 2007 Run-off Technical result DKKm DKKm 744 743 800 3,000 2,820 600 Run-offs, net 555 of DKK 743m vs. DKK 618 2,500 2,512 555
Slide 17: Expenses
17 Investor presentation Expenses
Slide 18: Expenses management and cost ratio
Expenses management and cost ratio 18 Investor presentation Gradual decline in cost ratio due to a combination of improved efficiency in Denmark and Norway and counter balanced by expansion in Finland and Sweden Cost ratio 17.2 16.7 16.6 16.8 17.2 16.8 16.1 16.7 16.9 18 0.4 1.1 0.7 0.7 1.2 1.4 1.5 1
Slide 19: Investments
19 Investor presentation Investments
Slide 20: Investment results Q1 2008
Investment results Q1 2008 20 Investor presentation Net investment result of minus DKK 365m compared with DKK 152m in Q1 2007. • Investment portfolio of DKK 38.5bn • Performance in 2007 and 2008 impacted by decline in equities • Weight of equities actively reduced to approximately 4% in January 2008
Slide 21: Acquisition of own domicile
Acquisition of own domicile 21 Investor presentation • Change in portfolio structure - Real estate increases to 9.4% • Financed primarily through bond sales • Acquisition will facilitate internal project ”The Living House” Portfolio structure Equities, Real estate, 4.5% after acquisition of 9.4% own
Slide 22: Capital and Outlook
22 Investor presentation Capital and Outlook
Slide 23: Outlook 2008
Outlook 2008 23 Investor presentation DKKm 2007 2008 - February 2008 – May* Negative scenario Positive scenario Premium growth 4% 5% 5% in local currency Technical result 2,077 2,200 2,200 2,050 2,350 before run-off Technical result 2,820 2,200 2,400 2,250 2,550 after run-off Investment result, net
Slide 24: Capitalisation
Capitalisation 24 Investor presentation DKKm 12,000 11,000 10,000 9,000 8,000 7,000 6,000 2006 Q1 07 Q2 07 Q3 07 2007 2007 Q1 08 before after pay-out pay-out Target capital (A- level) Buffer (5%) Surplus capital A- corresponds to a capital (equity + hydrid and after dividend pay-out) to net premiums
Slide 25: Shareholder repatriation for 2007 equals pay-out of 113%
Shareholder repatriation for 2007 equals pay-out of 113% 25 Investor presentation Policy for shareholder repatriation • 50% of annual net result to be paid out as cash dividend • Surplus capital to be repatriated via share repurchase • Share repurchase programme from 2007 results is DKK 1.4bn being
Slide 26: Medium term guidance
Medium term guidance 26 Investor presentation Guidance Combined ratio of 90-92 since IPO ROE after tax of 19-21% Growth & competition Efficiencies & cost Claims Capital Combined ratio of 89-91 New guidance ROE after tax of 21-23% Assumptions a.o. 8-10% equity weight in investment portfolio Run-off a
Slide 27: Business line performance
27 Investor presentation Business line performance
Slide 28: P&C Denmark
P&C Denmark 28 Investor presentation Gradual improvement in premium growth whilst maintaining solid profitability • Premium growth pre-bonus of 1.5% in Q1 2008 versus 0.7% in Q1 2007 • Combined ratio of 83.8 versus 85.4 in Q1 2007 • Retention increased 0.5% to 90.9% • Introduction of Tryg road assis
Slide 29: P&C Denmark retention
P&C Denmark retention 29 Investor presentation 90.9% retention rate in Q1 2008, up 0.5%-point • Solid customer loyalty and satisfaction underlines competitive strength Rentention since 2005 92.0% 91.5% 91.0% 90.5% 90.0% 89.5% 89.0% 05 06 07 05 06 07 Ap 5 Ap 6 Ap 7 08 Ja 5 Ja 6 Ja 7 0 0 0 -0 -0 -0 l-
Slide 30: P&C Norway
P&C Norway 30 Investor presentation Sales and market initiatives accelerate premium growth • Premium growth of 3.6% i NOK (6.0% in DKK) driven by improved customer loyalty, better sales and price increases • Combined ratio of 97.3 versus 99.6 in Q1 2007 • Renewal rates increasing 0.6% to 86.1%. Oslo
Slide 31: P&C Norway retention
P&C Norway retention 31 Investor presentation Retention rate 2008 of 86.1%, up 0.6% Market share of 18.1%, up 0.6% since end 2006 Retention rate 86.5% 86.0% 85.5% 85.0% 84.5% 84.0% 83.5% Jan- Jul- Jan- Jul- Jan- Jul- Jan- 05 05 06 06 07 07 08
Slide 32: Corporate
Corporate 32 Investor presentation Corporate showing solid growth and good profitability • Premium growth of 8.5% in Q1 2008 primarily due to intake of new customers • Combined ratio of 80.0 and impacted by lower claims ratio • Focus on profitable growth • Price increase in the Marine business after
Slide 33: Finland
Finland 33 Investor presentation Accelerating sales and solid risk selection • Broader sales platform implemented • 26,000 insurances sold in Q1 2008 – 1/3 of the full year sales target • Sales growth of 37% to DKK 78m in Q1 2008 and portfolio is now DKK 330m • Target 8% share of the private market
Slide 34: Sweden
Sweden 34 Investor presentation Focused sales effort fueled by expanding organisation Gross premium of DKK 45m and 21,000 insurances sold in Q1 2008 • Record in best selling week – 3,000 insurances • Claims ratio of 93.3% compared with 100.0% is satisfactory for a new portfolio • Target 8% share of
Slide 35: Questions
Questions 35 Investor presentation