Tryg A/s · OMXCOP:TRYG
Tryg A/s — Tryg Forsikring — Debt Investor Presentation (May 2016)
26 slides from Tryg A/s's debt investor presentation, May 13, 2016
Slide 1: Tryg Forsikring A/S Tier 2 subordinated bond issue
Arranged by: Tryg Forsikring A/S Tier 2 subordinated bond issue Company presentation May 2016
Slide 2: Important information
Important information Disclaimer Certain statements in today’s presentations 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 res
Slide 3: Strong value propositions
Strong value propositions High profitability | Strong customer retention | Low balance sheet risk Stable inflow of cash I Leading Scandinavian non-life insurer DKK bn 35 Return on Equity (%) 35 30 30 25 25 20 20 II Strong earnings and high profitability 15 15 10 10 5 5 0 0 Robust capitalization and
Slide 4: Tryg Forsikring A/S at a glance (I)
Tryg Forsikring A/S at a glance (I) Leading Nordic non-life insurance company Tryg’s operating fundamentals 2015 premiums split by COUNTRY • Tryg’s history dates back to the Customer Satisfaction 18th century 11% Denmark • Pure non-life insurer active in Denmark, Norway and Sweden Attractive Brand N
Slide 5: Tryg Forsikring A/S at a glance (II)
Tryg Forsikring A/S at a glance (II) Operating in attractive market fundamentals 9% Tryg Tryg’s combined ratio development 5% Nordics Q4’14 Market share Topdanmark 42% If 110 EUR Codan 25.7bn 17% Gjensidige 105 Länsforsikringar 9% Other 100 9% 9% Sweden 95 Tryg is operating in Sweden 90 18% DENMARK
Slide 6: Tryg Forsikring A/S at a glance (III)
Tryg Forsikring A/S at a glance (III) Long term profitable growth Leading Scandinavian insurer with strong track record Low risk and Financial targets 2017 Customer targets 2017 Customer care high returns worth recommending • ROE: ≥21% • NPS +100% • Combined ratio: ≤87% • Retention rate +1 pp • Matc
Slide 7: Resilient business model through cycles
Resilient business model through cycles Proven operations ensure stable inflow of cash Pre-tax profit Technical result Investment result 4,000 High quality portfolio I with high retention rate Selected financial results 3,000 2,000 1,000 Highly attractive 0 II underlying profitability -1,000 -2,000
Slide 8: Sustainable efficiency program 2015-2017E
Sustainable efficiency program 2015-2017E Expense and claims reduction of more than DKK 750m within 3 years Overview of efficiency program 2015 - 2017E Annual cost savings 2012 - 2017E Old program New program Expense Claims DKK Expense 250m reduction 400 350 82 113 125 300 DKK 250 750m 200 75 DKK Cl
Slide 9: Tryg's strategic business initiatives
Tryg’s strategic business initiatives Focus on customer retention while increasing prices and product mix Private – Customer retention 92% I High customer retention level at 85-90% DK 90% 88% 86% Price increases of 3% to offset claims NO II inflation and improve profitability 84% 82% Product portfol
Slide 10: Sound investment approach and related return
Sound investment approach and related return Conservative asset allocation and low return volatility provides consistency Portfolio Q1’16 (DKK 40bn) Annual gross return* 2007 - 2015 Bonds/deposits, 5.7% (match) 7% 6.8% Equities, 6.2% HY, 2.1% 6% EM, 1.1% 4.8% 5% 4.6% Inv. Property, 4.4% 4.3% 4.1% 5.
Slide 11: Solvency II and Capital (I/IV)
Solvency II and Capital (I/IV) Solvency II finally went alive on January 1, 2016 Solvency Capital Requirement and Own Funds Q1’16, DKKm 12,000 10,000 898 -1,173 8,000 3,531 -2,663 6,000 10,794 256 4,000 2,209 5,098 2,000 2,041 0 Market Health Default Non-Life Opera- Deferred tax Diversifi- SCR Own f
Slide 12: Solvency II and Capital (II/IV)
Solvency II and Capital (II/IV) A strong Solvency II position and a solid capitalization Solvency ratio development Q1’15 – Q1’16 Solvency ratio in a peer context Q1’16* 250% 250% 200% 212% 200% 212% 199% 198% Update with Q1 numbers ** 181% 177% 175% 181% 150% 150% 173% and remove adj. PIM after 155
Slide 13: Solvency II and capital (III/IV)
Solvency II and capital (III/IV) Solvency II ratio displays low sensitivities to market movements Solvency ratio sensitivity 250% 220% 223% 212% 215% 209% 210% 213% 203% 207% 200% 200% 150% 100% 50% 0% Q1 +20% -20% +20% -20% +100 bps -100 bps +100 bps -100 bps -100 bps 2016 Equity Property Interest
Slide 14: Solvency II and Capital (IV/IV)
Solvency II and Capital (IV/IV) Subordinated debt in SEK will improve Tryg’s risk management Own funds impact from a 10% increase in local currencies Key comments • Tryg’s presence in the three Nordic countries means exposure Own Funds NOK/DKK SEK/DKK to fluctuations in the local currencies NOK and
Slide 15: Tryg in a peer group context
Tryg in a peer group context Better capitalized and more profitable than most financial peers Equity to total assets 2015 Return on average equity 2015 30% 30% 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% * * * * * * * Combined ratio 2015 Key comments • The equity base in relation to total assets is
Slide 16: Strong A2 rating with positive outlook from Moody's
Strong A2 rating with positive outlook from Moody’s …reflecting our leading position, strong profitability, strong asset quality & low leverage Rating and underlying rationale Key comments • Moody’s assigned an “A2” rating with a positive outlook Insurance Financial Strength Rating (IFSR) reflecting
Slide 17: Achievable long-term business plan
Achievable long-term business plan Well defined strategic targets reveal ambitious plans for the company Financial targets Customer targets Return on Net I Equity (ROE) after tax 2017: ≥ 21% I Promoter Score (NPS) 2017: + 100 II Combined ratio 2017: ≤ 87 II Retention rate 2017: + 1pp Customers III E
Slide 18: Transaction summary
Transaction summary Indicative key terms Issuer: Tryg Forsikring A/S Instrument: Solvency 2 Compliant Subordinated bond issue (Tier 2 Capital) Moody’s Ratings: A2 (Issuer Rating) / [Baa1] (Expected Instrument Rating) Volume: SEK [Benchmark] Maturity Date: [] 2046 Ordinary calls on [] [2021], and a
Slide 19: Key investment considerations
Key investment considerations Nordic footprint | Lean operations | High profitability | Strong capitalization Dedicated Nordic non-life insurance company, with proven operations and favourable outlook, diversified across both 1 countries and products Operates in mature markets, with high entry barri
Slide 20: Appendix
Appendix
Slide 21: Distribution of new sales 2015
Distribution of new sales 2015 Broad distribution power through diverse sales channels is key Denmark Norway 14% 6% Own sales Own sales 38% 44% Car dealers 57% Affinity 29% Nordea Affinity 12% Nordea Sweden Corporate 15% Own sales External partners Own sales 51% Online & others 31% 55% Brokers 45% A
Slide 22: Key financial figures and consensus 2011-2018E
Key financial figures and consensus 2011-2018E Overview Consensus(***) DKKm 2011 2012 2013 2014 2015 2016 E 2017 E 2018 E Gross premium income 19,948 20,314 19,504 18,652 17,977 17,789 18,004 18,240 Technical result 1,572 2,492 2,496 3,032 2,423 2,623 2,789 2,768 Investment income, net 61 585 588 36
Slide 23: Established ownership structure
Established ownership structure 60% owned by TryghedsGruppen (foundation) and 40% free float TOP 10 shareholders Q1 2016 (*) Geographical distribution of free float (40%) 2015(**) TryghedsGruppen 60.00 % 3% Denmark 12% Tryg A/S 1.78 % UK 12% US Black Rock Fund Advisors 1.42% Other 14% 59% Nordea Ban
Slide 24: Strong A2 rating with positive outlook from Moody's: Rationale
Strong A2 rating with positive outlook from Moody’s …reflecting our leading position, strong profitability, strong asset quality & low leverage Rating and underlying rationale Base-case scenario assumptions and methodology Insurance Financial Factors that can lead to an upgrade Current Expected new
Slide 25: Key economic figures in the Nordic region
Key economic figures in the Nordic region Stable outlook Tryg exposure % 2016E 2017E GDP Growth 1.3 1.8 Inflation 0.6 1.2 Denmark Unemployment 4.2 3.9 Current account balance in % of GDP 7.3 6.8 Budget balance in % of GDP -2.7 -2.2 Public debt in % of GDP 40.9 42.6 TOP5 % 2016E 2017E GDP Growth 1.0
Slide 26: Tryg Forsikring A/S contact details
Arranged by: Tryg Forsikring A/S | Klausdalsbrovej 601 | 2750 Ballerup | Denmark | Tel: +4570112020
Tryg Forsikring — Debt Investor Presentation (May 2016) on 6ix