Tryg A/s · OMXCOP:TRYG
Tryg A/s — Q3 2014 Earnings Presentation
22 slides from Tryg A/s's earnings presentation, Oct 10, 2014
Slide 1: Q3 2014 results
Q3 2014 results Webcast presentation Follow us on Twitter: @TrygIR 10 October 2014
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 Q3 2014
Highlights Q3 2014 - Strong result despite cloudbursts. Topline trend improving. Pre-tax profit D KKm 1,200 • Pre-tax profit of DKK 782m (DKK 907m) impacted 1,000 907 782 by lower investment return. 800 600 400 • Technical result of DKK 793m (DKK 766m). 200 0 Q3 2014 Q3 2013 • Combined ratio improve
Slide 4: Important news in Q3 2014
Important news in Q3 2014 • Heavy cloudbursts – however, implemented claims initiatives reduced claims costs. • Tryg acquires Securator and strengthens its position in the Nordic Market for product and extended warranty insurance for electronics. • Continued development of new price differentiated p
Slide 5: Combined ratio development in business areas
Combined ratio development in business areas Combined ratio – Private (DK & NO) Combined ratio – Commercial (DK & NO) 100 100 95 95 90 90 85.5 85.4 85 81.5 82.4 85 82.3 80.8 81.1 79.0 80 80 75 75 Q3 2014 Q3 2013 9M 2014 9M 2013 Q3 2014 Q3 2013 9M 2014 9M 2013 Group CR Q3 2014: 83.7 Q3 2013: 84.8 Com
Slide 6: Follow up on efficiency programme
Follow up on efficiency programme • Savings of DKK 835m achieved so far. • DKK 95m achieved in Q3 2014. DKKm Targeted and achieved savings on claims • DKK 30m reduction in expenses 1,200 1,000 • DKK 65m reduction in claims 1,000 835 800 700 • Claims initiatives – Craft Network, Scalepoint 615 600 an
Slide 7: Premiums and portfolio
Premiums and portfolio
Slide 8: Topline and technical result
Topline and technical result Gross earned premiums reduced 0.8% (-3.4%) related to: • Continued high retention level in Private and even improved retention level in Commercial. • Higher sales level in general in Private compared to last year. • Commercial – improved retention but sales lower than ex
Slide 9: Private - average premiums
Private - average premiums House insurance – average premium (index 2008 = 100) 150 Average premiums increase Y/Y 140 0.0% 2.2% 130 (Q2 0.5%) (Q2 2.6%) 120 110 100 90 08 09 10 11 12 13 14 20 20 20 20 20 20 20 Motor insurance – average premium (index 2008 = 100) 140 Average premiums increase Y/Y -0.9
Slide 10: Customer retention
10 Q Q 1 82% 84% 86% 88% 90% 92% 1 82% 84% 86% 88% 90% 92% 10 1 Q 0 Private Q 2 2 10 1 Q Q 0 3 3 Commercial 10 1 Q Q 0 4 4 10 1 Q Q 0 1 1 11 1 Q Q 1 2 2 11 1 Q Q 1 3 3 11 1 Q Q 1 4 4 11 1 Q Q 1 1 1 12 1 Q Q 2 2 2 12 1 Q Q 2 3 3 12 1 Q Q 2 4 4 12 1 Q Q 2 1 1 Customer retention Q 13 1 2 Q 3 2 13 1 Q Q
Slide 11: Private Sweden – CR and customer retention
11 Q 80 85 90 95 100 105 110 115 120 125 130 1- 10 Q 50% 60% 70% Q 80% 1- 1 125 2- 10 1 Q Q 2- 103 3- 10 1 Q 1 Q 99 4- 3- 10 1 Q 1 1- Q 11 4- 1 Q 1 Q 102 103 2- 11 1- Q 1 2 99 3- Q 11 2- Q 1 97 4- 11 Q 2 Q 3- 1 114 1- 12 2 Q Q 4- 1 110 2- 12 Q 2 Q 95 3- 1- 12 1 3 Q Q 91 4- 2- 12 1 Q Q 3 88 Customer
Slide 12: Claims and expenses
Tryg|© WY) Y Ww) Cc O oO. x oO z°, le © Y) = ac O
Slide 13: CR and claims ratios Q3 2013-14
CR and claims ratios Q3 2013-14 • Underlying development is adjusted for: Underlying claims, net Q3 2013/2014 • Large claims 87.3 • Weather claims 75.0 79.4 72.6 75.1 • Run-off and interest 70.1 67.8 67.2 68.5 66.9 • Improved underlying development on Group level driven by: • one-off effects Q3 2014
Slide 14: Large claims, weather claims and run-off
Large claims, weather claims and run-off Large claims, net DKKm Expected annual Weather claims, net DKKm Expected annual level 2014: DKK 550m level 2014: DKK 500m 350 400 350 300 300 250 250 200 200 150 328 373 356 150 100 202 100 147 50 50 80 83 2 0 0 Q3 2014 Q3 2013 9M 2014 9M 2013 Q3 2014 Q3 2013
Slide 15: Tivoli cloudburst claims 2011 vs. 2014
Tivoli cloudburst claims 2011 vs. 2014 ’Flood Barrier’ • Volume of water twice as massive in 2014 as in 2011. • Claims costs in 2014 were only 1/3 of the costs in 2011. Changes since 2011 • Tivoli now has a contingency plan for cloudburst. • Investments in protection initiatives (pumps, Before: Wood
Slide 16: Expense ratio development
Expense ratio development Expense ratio • Expense improved from 15.5 in Q3 2013 to 15.1 in Q3 2014 - an improvement of 0.4 point. 16.6 16.7 16.6 16.4 • Nominal expenses on Group level reduced 15.1 15.5 significantly in Q3 2014. 15.6 • Efficiency programme • Reduction in FTE by 127 (excl. Securator)
Slide 17: Investment, capital and financial targets
Investment, capital and financial targets
Slide 18: Investment result Q3 2014
Investment result Q3 2014 Investment return Free portfolio – Q3 2014 (DKK 12.8bn) DKKm 38 2 Equities (22) Free investment 21 Investment property (15) Match regulatory deviation 0 Bank deposits/bonds (15) Percentage 23 Match performance 16 Govt. Bonds (3) High yield (6) Other financials -38 C ov. Bon
Slide 19: Capital structure and status on share buy back
Capital structure and status on share buy back DKKm Capital – Q3 2014 12,000 • Capital buffer based on Individual Solvency increased to 64% (2013 Q4: 50%) and was impacted by: 4,297 • 9M result 2014 Excess capital 8,000 • Share buy back deducted in buffer Buffer Capital requirement • Based on Solven
Slide 20: Financial targets
Financial targets ROE after tax of 20% to be achieved by delivering a full year combined ratio of 90 or lower. Expense ratio <15 in 2015 ROE after tax 40% 30% ROE target 20% 10% 0% 14 05 06 07 08 09 10 11 12 13 14 15 20 20 20 20 20 20 20 20 20 20 20 20 1 H 20
Slide 21: Q/A
Q/A Follow us on Twitter: @TrygIR
Slide 22: Upcoming roadshows
Upcoming roadshows Date Place Participants from Tryg Arranged by Morten Hübbe, CEO Tor Magne Lønnum, CFO 10/10/2014 Copenhagen Nordea Markets Lars Bonde, Group EVP and COO Investor Relations Tor Magne Lønnum, CFO 20/10/2014 London Goldman Sachs Lars Møller, IR Director Morten Hübbe, CEO 22/10/2014 L