Tryg A/s · OMXCOP:TRYG
Tryg A/s — TrygVesta — KBW European Financials Conference 2009
26 slides from Tryg A/s's conference presentation, Sep 16, 2009
Slide 1: KBW European Financials Conference 2009
For further information: www.trygvesta.com 1 KBW Conference KBW European Financials Conference 2009 London, 16 September 2009 Christine Bosse, CEO
Slide 2: Facts about TrygVesta
Facts about TrygVesta 2 KBW Conference Danish institutions • Expanding Nordic platform 18% • Prudent underwriting and risk selection Non-Danish • Exceed customer expectation institutions 6% TryghedsGrup • Vision: To be perceived as the leading pen smba 60% “peace of mind” provider in the Nordic Smal
Slide 3: The Nordic region - structure of the insurance market
The Nordic region- structure of the insurance market 3 KBW Conference Norway TrygVesta, EUR 4.4bn 18.0% Finland TrygVesta, Gjensidige, EUR 3.4bn Pohjola, 1.5% Tapiola, 23.4% 18.6% 29.3% Top 4 Top 4 Fennia, 86% 10.6% 78% If, 28.9% Sparebank1, 9.9% Other, Other, If, 25.3% 13.9% 20.6% Source: FNH.no So
Slide 4: Competitive landscape characteristics
Competitive landscape characteristics 4 KBW Conference Dominated by direct insurance. Brokers only in corporate area Danish price Price increases Solvency II competition impact due to claims in motor inflation in all countries Disciplined large Norwegian players bundling Need for capital competition
Slide 5: Key figures in first half 2009
Key figures in first half 2009 5 KBW Conference Gross premium income Combined ratio DKKm 9,000 8,820 95 8,571 91.9 8,500 91 8,106 7,965 88.5 8,000 7,769 87.4 87.6 87.1 87 7,500 7,000 83 H1 05 H1 06 H1 07 H1 08 H1 09 H1 05 H1 06 H1 07 H1 08 H1 09 Claims ratio Gross expense ratio 17.2 16.9 17.0 17.0 1
Slide 6: TrygVesta and Nordic competitors
TrygVesta and Nordic competitors 6 KBW Conference Overall growth in line with GDP growth Premium growth in % Combined ratio Gjensidige Codan 12 TrygVesta in 96 "CR" local Codan Gjensidige currency Operating 8 Codan ratio if… 92 4 TrygVesta 88 0 if… TrygVesta -4 84 2004 2005 2006 2007 2008 H1 09 2004
Slide 7: Challenges and opportunities for the insurance industry
Challenges and opportunities for the insurance industry 7 KBW Conference Climate Demography Competition Regulation
Slide 8: The route to improving profitability
The route to improving profitability 11.09.2009
Slide 9: Behind the curve but catching up
Behind the curve but catching up 9 KBW Conference Development since 2005…… …… and more recently Houses Denmark 150 Premium increases: 140 Houses Denmark 110 130 Houses Denmark: 100 120 New product Q4 2008 90 110 2008 2009 up 11% 100 90 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2005 2006
Slide 10: Recently implemented price increases
Recently implemented price increases 10 KBW Conference Finland Apr 09 Norway July 07 Jan 08 July 08 Jan 09 Jul 09 House content 11% Motor 9% House/building 2.0% 6.0% 1.8% 7.4% 4.5% Accident 11% Motor 4.8% 1.6% 1.0% 5.0% 6.6% Holiday house 10% Travel 10% MC 13% TrygVesta Total effect of price increas
Slide 11: Combined ratio development
Combined ratio development 11 KBW Conference Lower interest rate level Index/price Index/price increases in 2010 increases in 2009 Index/price increases in 2011 Index/price increases in 2012 Price increases prior years Price increases Price prior year Price increases increases prior year prior year
Slide 12: Impact from other external factors
Impact from other external factors 12 KBW Conference Discounting interest rate - 2006-2009 6% "Flat interest rate" 5% 4% 3% Sensitivity of interest rate changes 2% DKKm Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 1,500 Change in combined ratio 1,28
Slide 13: New Markets – Sweden & Finland
New Markets – Sweden & Finland 13 KBW Conference New plan – profitability focus DKKm DKKm 3,500 Gross premiums Result 300 3,000 200 2,500 2,000 100 15 6 8 1,500 0 1,000 543 -100 500 322 0 -200 2007 2008 outlook E 2010 E 2011 E 2012 2007 2008 outlook E 2010 E 2011 E 2012 2009 2009 150% 143% CR approa
Slide 14: Investments, outlook, capital and ROE
14 KBW Conference Investments, outlook, capital and ROE
Slide 15: Investment portfolio structure
Investment portfolio structure 15 KBW Conference Conservative approach to the investment portfolio of DKK 38.3bn • 3.3% gross return in H1 2009 and 6.7% annualised and boosted by strong equity markets • The equity portfolio is primarily indexed and tracking leading MSCI indices Bonds are 87% of port
Slide 16: Conservative approach and new split by portfolio purpose
Conservative approach and new split by portfolio purpose 16 KBW Conference Today: pct. 3.5 3.0 Current: 2.5 2.0 Total 1.5 v 1.0 0.5 DKK 38bn 0.0 -0.5 -1.0 May May May Jan 08 Jan 06 Jan 07 Jan 09 Nov Nov Jul Nov Jul Jul Mar Mar Mar Sep Sep Sep Tomorrow: pct. 3.5 3 Matching: 2.5 2 DKK 28bn 1.5 1 v 0.5
Slide 17: Outlook 2009
Outlook 2009 17 KBW Conference Expected 2009 Realised Mid February May Positive Negative DKKm August 2009 2008 2009 2009 scenario scenario Interest rate level 3.93% 3.5% 3.4 % Exchange rate DKK/NOK 0.85 0.84 0.83 Premium growth in local currency 4.9% 4% 8% 8% Technical result before run-off 1,591 1,
Slide 18: Capitalisation
Capitalisation 18 KBW Conference Dividend policy: 50% of net income as cash dividend Surplus capital to be used for share buy backs DKKm 12,000 11,000 10,000 9,000 8,000 7,000 6,000 09 09 07 07 07 08 08 08 06 t t ut ut u u yo yo yo yo 20 1 2 3 1 2 3 1 2 Q Q Q Q Q Q Q Q pa pa pa pa r r re re te te fo
Slide 19: Return on equity 2010-2012
Return on equity 2010-2012 19 KBW Conference 40% 36% 35% Interest 30% 28% 5.5%- 7% 27% 25% 26% 25% 24% 25% 24% 21% 23% 22% 23% 20% 19% 19% 18% 18% Interest 17% 16% 1%-3% 17% 15% 12% 11% 11% 10% 9% 8% 5% 5% 4% 2% 1% 1% 1% 0% 2004 2005 2006 2007 2008 Outlook E-2010 E-2011 E-2012 2009 -5% -7% -10% ROE
Slide 20: Summary
Summary 20 KBW Conference No. 2 insurance company in the Nordic region Strong take on improving profitability in all markets Changing investment portfolio into matching section and active section Focus on improving combined ratio and ROE Peace of mind for investors
Slide 21: Questions please
21 KBW Conference Questions please
Slide 22: Disclaimer
Disclaimer 22 KBW Conference 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
Slide 23: Key financial figures 2004-2008 and consensus
Key financial figures 2004-2008 and consensus 23 KBW Conference Consensus. Aug 2009 In DKKm 2004 2005 2006 2007 2008 2009E 2010E 2011E Gross premium income 15,266 15,705 16,021 16,606 17,323 18,112 19,047 19,808 Gross claims incurred -10,425 -11,159 -10,564 -11,175 -11,766 Operating expenses -2,611
Slide 24: Moderna acquisition strengthens distribution platform
Moderna acquisition strengthens distribution platform 24 KBW Conference Vahinkovaku utu s Distribution channel Denmark Norway Finland Sweden Customer centre Call centre Bancassurance Car dealers Insurance brokers Affinity groups Real estate agents Nordea online bank E-business/Self-service Franchise
Slide 25: The Danish non-life insurance market since 1996
The Danish non-life insurance market since 1996 25 KBW Conference Market size and profitability Market shares DKKm % 50 60,000 5.4% CAGR 50,000 40 40,000 30 30,000 20 20,000 10,000 10 0 0 1995 1997 1999 2001 2003 2005 2007 -10,000 TrygVesta Topdanmark Codan 96 97 98 99 00 01 02 03 04 05 06 07 08 19
Slide 26: The Norwegian non-life insurance market since 1996
The Norwegian non-life insurance market since 1996 26 KBW Conference Market size and profitability Market shares % NOKm 40 50,000 7.2% CAGR 130 120 40,000 30 110 30,000 100 20 90 20,000 80 10 70 10,000 60 0 50 0 1994 1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008 If… Gjensidig