Tryg A/s · OMXCOP:TRYG
Tryg A/s — UBS Stockholm conference 2010
23 slides from Tryg A/s's conference presentation, Sep 2, 2010
Slide 1: Building the future
Presentation can be downloaded at Tryg.com Building the future Stine Bosse – CEO UBS - Stockholm 2 September 2010
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 1H 2010 Shareholder breakdown 3 8.2 16 Danish institutional Denmark Non-Danish Norway 13 institutional Percentage Percentage 50.3 Sweden Smaller Finland shareholders 60 TryghedsGruppen 38.5 10 Share performance since IPO (incl. dividends) 115 • A true Nordic plat
Slide 4: Competitive position
Competitive position Denmark Norway DKK 43.9bn/EUR 5.9bn NOK 39.2bn/EUR 4.6bn 18.2 19.6 20.8 Tryg 28.5 Tryg Alm. Brand Gjensidige If Sparebank1 Percentage Percentage Other Other 10.5 13.8 Alka If C odan 29.1 5 Topdanmark 14.2 3.5 10 26.8 Sweden Finland SEK 57.3bn/EUR 5.6bn EUR 3.4bn 2.6 2.3 16.9 14.
Slide 5: Recession impact on group
Recession impact on group Index % 160 74 140 72 120 70 100 68 80 66 60 64 40 20 62 0 60 2004 2005 2006 2007 2008 2009 Q2 2010 Building index Burglaries Unemployment DK Group claims ratio (RHH) Source: Danish National Statistics Building index Q1 data 5
Slide 6: Key performance indicators
Key performance indicators Given the same interest level as Q2 2009, CR Gross premium Combined ratio would have been 91.6% DKKm 4,890 108.4 110 4,637 4,611 4,650 4,497 100 15.1 4,425 4,338 4,327 4,233 90 4,117 } 80 90.9 90.3 90.9 91.5 92.0 94.0 93.3 92.5 70 87.9 87.3 60 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 7: Living in a low interest environment
Living in a low interest environment Discounting rate % 6.00 5.00 4.00 3.00 2.00 Q3 2006 Q2 2007 Q1 2008 Q4 2008 Q3 2009 Q2 2010 1% increase in interest level will: •increase pre-tax result by approx. + DKK 300m •improve combined ratio by approx. 1 %-point 7
Slide 8: Claims development
Claims development 90 80 70 60 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 Gross claims ratio Underlying claims ratio * Q2 Q2 H1 H1 2009 2010 2009 2010 Gross claims 72.7 73.1 71.2 80.8 ratio Large claims -5.0 -4.8 -3.1 -3.9 Weather c
Slide 9: Strong insurance operations are key
Strong insurance operations are key Crisis Cost Innovation Innovation Customer Price Price Optimising Management Efficiency Growth Growth add-ons increases increases 4,000 Investment (Gross) Insurance result 3,500 Net result before tax 3,000 2,500 2,000 1,500 1,000 500 0 2002 2003 2004 2005 2006 200
Slide 10: Repricing and timing
Repricing and timing Annual impact from price increases 2010 2011 2012 Before DKK ~900m DKK ~700m DKK ~300m Next wave DKK ~300m DKK ~300m Average prices in Denmark Average prices in Norway 5,000 5,000 4,500 4,500 4,000 4,000 3,500 3,500 3,000 3,000 05 05 Q 5 05 Q 6 06 Q 6 Q 6 Q 7 07 Q 7 Q 7 Q 8 08 Q
Slide 11: Building margin
Building margin 110 Combined ratio 105 Extraordinary Price increases winter 100 95 Price increases 90 85 80 2000 2001 2002 2003 2004 2004* 2005 2006 2007 2008 2009 Q1 Q2 2011 2012 2010 2010 • 2002-2004 substantial premium increases of DKK 2.1bn implemented. Reduced combined ratio from 107 to 94 • 20
Slide 12: Profitability focus in Sweden and Finland
Profitability focus in Sweden and Finland Result DKKm Gross premiums 150 DKKm 3.500 100 3.000 50 2.500 0 2.000 1.553 -50 1.500 -100 1.000 634 -150 -134 -141 500 358 -165,00 -200 - 2007 2008 2009 E2010 E-2011 E-2012 2007 2008 2009 E2010 E-2011 E-2012 160% Changed focus is expected to improve result b
Slide 13: Opportunities in our new markets
Opportunities in our new markets The market place 100% 21% 22% 20% 29% 75% 16% 22% 22% 13% 16% 50% 19% 18% 23% 25% 48% 38% 39% 35% 0% Inhabitants Households Summer houses Cars Sweden Norway Denmark Finland Unemployment rate 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2007 2008 2009 2010E 2011E Denmark Norw
Slide 14: Price increases crucial
Price increases crucial Examples of price development in Tryg Norway compared to market: Average premiums - Private Motor Average premiums - Private House Index Index 2003 = 100 2001= 100 140 170 120 140 100 110 80 80 60 50 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1998 1999 2000 2
Slide 15: Premium increase in Commercial
Premium increase in Commercial • Successful re-pricing of agriculture of 15% fulfilled during 2009-2010 • Premium increases in Commercial Property insurances of 10-15% accelerated to start October 2010 • Re-pricing of Commercial will continue until profitability is re-established • Focus on cost red
Slide 16: Rebalancing pricing and customer retention
Rebalancing pricing and customer retention • Retention rate stable and strong • Danish retention rate remains high despite influence from premium increases • High retention support competitive strength and cost ratio Nordic retention since 2005 92% 90% 88% 86% 84% 82% Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 17: Expense ratio
Expense ratio Continued focus on expenses drives expense ratio downwards by • streamlining the distribution platform • digital and paperless process handling • in-house rotation reduces need for external hiring • investments in branding and processes by new IT systems Number of employees reduced by
Slide 18: Expenses - Target "10 in 20"
Expenses - Target ”10 in 20” Continued focus on expenses drives expense ratio downwards by • streamlining the distribution platform • digital and paperless process handling • unified Nordic processes • investments in branding 2020: target 10% 2010 level: 17% 2000 level: 27% 10% 18 IFRS from 2004. Pr
Slide 19: New process revolution....
New proces revolution…. From the customers’ point of view From the employees’ point of view ge y -pa M SM S 19
Slide 20: Outlook and capitalisation
Outlook and capitalisation 20 2. september 2010
Slide 21: Outlook 2010
Outlook 2010 Assumptions: Run-off expected at DKK 0, large claims at DKK 500-600m and weather claims at DKK 200-300 Actual Outlook 2010 Outlook 2010 Outlook 2010 DKKm 2009 February May August Discouting rate 3.6% 3.2% 2.9% Premium growth in local currency (%) 4.7 3-4 3-4 3-4 Technical result 1,200-1
Slide 22: Capitalisation
Capitalisation DKKm 12,000 11,000 10,000 9,000 8,000 7,000 6,000 ) ) 07 07 p a 07 08 08 pa 8 09 09 p a 09 06 20 10 10 ut ut 20 u t pa t pa t pa t (* (* te you u te you 08 re 3 0 yo yo yo te yo 20 20 20 1 2 20 f or Q3 1 2 1 2 20 f or Q3 10 10 Q Q Q Q Q Q Q 1 2 Q Q r r r 07 e 09 e 1 2 o Q Q af af af f
Slide 23: Questions?
Questions? Investor relations contacts Ole Søeberg Investor Relations director +45 40 30 00 04 ole.soeberg@tryg.dk Lars Møller Investor Relations Manager +45 22 66 66 05 lars.moeller@tryg.dk 23 2. september 2010