Tryg A/s · OMXCOP:TRYG
Tryg A/s — FY2012 Earnings Presentation
23 slides from Tryg A/s's earnings presentation, Feb 7, 2013
Slide 1: 2012 results
2012 results Webcast presentation 7 February 2013 1 Follow us on Twitter: @TrygIR
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: Highlights Q4 2012
Highlights Q4 2012 - Result favoured by a strong insurance result Pre-tax profit • Pretax profit of DKK 638m (DKK 467m). D KKm 800 Technical result of DKK 648m (DKK 310m) 638 600 467 400 • Combined ratio of 87.4 compared with 94.5. 200 0 • Gross claims ratio of 70.2 (78.5) affected by Q4 2011 Q4 201
Slide 4: Highlights 2012
Highlights 2012 - Result favoured by initiatives, weather, large claims and high investment result Pre-tax profit D KKm 3,017 • Pre-tax profit of DKK 3,017m (DKK 3,200 2,800 2,400 1.603m). Technical result of DKK 2,491m 2,000 1,603 1,600 (DKK 1,572m). 1,200 800 400 • Proposed dividend per share of D
Slide 5: Major initiatives in 2012
Major initiatives in 2012 • Updated financial targets. • CR at 90 or below from Q3 2013 • Expense ratio below 15 in 2015 • Roe at 20% post tax • Savings program of DKK 1bn launched. • New partnership with Nordea. • Tryg Finland sold to If. • New house content product introduced. • New dividend polic
Slide 6: Strategic initiatives
Strategic initiatives - Value creation in mature markets Increased price differentiation Commercial back on track Building foundation in Sweden Expenses/claims reductions Simplification of products and systems 6
Slide 7: Combined ratio development in Business areas
Combined ratio development in Business areas - Significant improvement in all business areas Combined ratio – Private (DK & NO) Combined ratio – Commercial (DK & NO) % % 105 105 100 100 95 92.6 92.7 95 92.1 90 86.8 87.7 90 85.7 82.6 83.7 85 85 80 80 75 75 Q4 2011 Q4 2012 2011 2012 Q4 2011 Q4 2012 20
Slide 8: Low premium growth – better balanced technical result
Low premium growth – better balanced technical result Gross earned premiums, DKKm Gross earned premiums, DKKm 6,000 21,000 19,948 20,314 4,950 5,076 1654 5,000 1586 370 399 17,000 5,259 5,258 4,000 1,308 1,330 13,000 3,000 916 906 3,687 3,715 2,000 9,000 2,373 2,449 1,000 5,000 9,425 9,733 0 1,000 Q
Slide 9: Follow up on savings programme – 2012
Follow up on savings programme – 2012 Total Savings programme Targeted and achieved savings on claims Total reduction 300 120 in expenses 40 Q4 2012 DKK 400m 100 80 Q1-Q3 2012 700 100 Transfer to 250 Claims 250 Claims Claims 600 100 DKK 600m Total 2012 Achieved 2013 2014 2015 savings on Target claim
Slide 10: New dividend policy
New dividend policy - creating long-term value for our shareholders • Payout ratio of 60–90% • Aiming for a nominal stable increasing dividend. • Ambitious ROE target of 20% after tax calls for disciplined capital approach. • Adjustment of the capital level can be made via share buy back. Total dist
Slide 11: Premiums and portfolio
Premiums and portfolio 11
Slide 12: Customer retention and average premium development
Customer retention and average premium development Car insurance – average premium (index 2008 = 100) Private - retention rate Average premiums increase YoY 140 92% -0.2% 5.8% 130 90% 120 88% 110 86% 100 84% 90 82% 2008 2009 2010 2011 2012 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12
Slide 13: Retention, average premiums and CR - Sweden
Retention, average premiums and CR - Sweden Private - retention rate House insurance – average premium (index 2008 = 100) Average premiums increase YoY 10.6% 74% 140 72% 130 70% 120 68% 110 66% 100 64% 90 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 08 09 10 11 12 1- 2- 3- 4- 1- 2- 3-
Slide 14: Claims
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Slide 15: Claims ratios Q4 and 2011 / 2012
Claims ratios Q4 and 2011 / 2012 Underlying claims ratio 2011 / 2012 Underlying claims ratio Q4 2011 / Q4 2012 88.9 85.7 81.3 82.6 78.5 79.7 78.1 74.6 76 75.6 74.4 73.8 73.8 72.7 70.7 70.6 71.1 68.9 64.9 61.4 2011 2012 Q4 2011 Q4 2012 Group Private C ommercial C orporate Sweden Group Private C ommer
Slide 16: Large and weather claims and run-off
Large and weather claims and run-off - High level of large claims offset by lower level of weather claims Large claims, gross DKKm Weather claims, DKKm Expected annual 1756 1,800 Expected annual 1,000 level 2012: DKK 550m 857 level 2012: DKK 600m 1,400 800 714 398 1,000 600 318 721 400 600 323 356 2
Slide 17: Investment and capitalisation
Investment and capitalisation 17
Slide 18: Investment result Q4 and full year 2012
Investment result Q4 and full year 2012 Assets Return Q4 2012 Return 2012 Assets Gross investment return Gross investment return Return DKKm Return DKKm Bonds (1.0%) 381 Bonds (4.5%) 1,770 DKK Equities (2.8%) 67 Equities (13.%) 269 32.2 mia. 35bn DKK Real estate (2.0%) 43 Real estate (9.7%) 204 Tota
Slide 19: Assets allocation
Assets allocation Total assets – Q4 2012 2 5 10 5 Equities (5) 3 Real estate (5) C ov. Bonds (57) Percentage Govt. Bonds (17) Bank deposits/bonds (14) 75 High yield (2) Free portfolio – Q4 2012 Match portfolio – Q4 2012 30 Equities (24) 9 3 Real estate (27) C ov. Bonds (64) Bank deposits/bonds (5) 9
Slide 20: Optimisation of capital structure and extraordinary buyback
Optimisation of capital structure and extraordinary buyback • Capital buffer based on Individual Solvency Capital buffer 60% increased to 38% (2011: 23%) and impacted 50% by: • Strong 2012 result 40% • Ordinary dividend payout 30% • Stable increase in the capital requirement 20% due to a limited gro
Slide 21: Combined ratio target
21 CR % ta Ex rge p t 0% 10% 20% 30% 40% en Q 80 82 84 86 88 90 92 20 03 se 3 /c 20 la 13 20 Cl im 04 ai s m in s it i < 90 20 in at 05 fla iv t io es 20 W n 06 ea ab th ov 20 er e Le an CP 07 gi d I sl la 20 at rg io e 08 n cl et ai 20 c m 09 (W s C, ROE after tax 20 ta 10 xe s. Combined ratio targ
Slide 22: Q/A
Q/A Follow us on Twitter: @TrygIR
Slide 23: Upcoming roadshows
Upcoming roadshows Date Place Participants from Tryg Arranged by 7. February Copenhagen Morten Hübbe, CEO Danske Bank Tor Magne Lønnum, CFO Lars Bonde, COO IR Tor Magne Lønnum, CFO 11.-12. February London Peter Brondt, IR Manager Carnegie Morten Hübbe, CEO 19.-22. February USA / Canada Peter Brondt,