Tryg A/s · OMXCOP:TRYG
Tryg A/s — Investor Presentation (February 2016)
20 slides from Tryg A/s's investor presentation, February 2016
Slide 1: Sales force presentation
Sales force presentation February 2016 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: Our investment case in a nutshell
Our investment case in a nutshell ”Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” John D. Rockefeller 3
Slide 4: Tryg's equity story
Tryg’s equity story Leading Scandinavian insurer with strong track record Financial targets 2017 Customer targets 2017 • ROE: ≥21% • NPS +100% Low risk and high Customer care worth returns • Combined ratio: ≤87% • Retention rate +1 pp recommending • Expense ratio: ≤14% • ≥ 3 products +5 pp • Matchin
Slide 5: Why invest in Tryg?
Why invest in Tryg? Only pure non-life group (YE 2014 data) High insurance penetration in the Nordics Premiums per capita (USD), 2014 200% 2,000 1,722 1,716 1,617 150% 1,350 100% 1,185 50% 1,000 746 0% -50% 0 -100% Non-life Life Banking Other Motor combined ratios Nordics vs international Tryg is a
Slide 6: Tryg – at a glance I
Tryg – at a glance I Gross premium split by products 2015 • Tryg goes back to 18th century. 10 • Very strong brand position especially in Denmark. 31 Motor 14 Workers' comp • Non-life insurance in Denmark, Norway and Sweden. Health & accident Percentage • DKK18bn of premiums, Approx. 80% retail busi
Slide 7: Tryg – at a glance II
Tryg – at a glance II Shareholder performance since IPO Shareholder remuneration since IPO DKK 500 New dividend Tryg incl. dividend Euro Insurance index 10 450 policy 9 400 8 3.4 3.5 350 7 3.2 2.6 300 6 4.2 5 250 2.6 4 200 3 6.6 5.8 6.0 5.2 5.4 150 2 4.2 3.4 3.1 100 1 1.3 0.8 1.3 50 0 2005 2006 2007
Slide 8: IBM study from 2007, probably little has changed
IBM study from 2007, probably little has changed Danish customers completely and strongly agree • Overall I am very satisfied with the 43% 33% services of my insurance company 50% 72% • My insurance agent only sold me 43% 20% insurance coverage that I really needed 49% 67% • My present insurance cov
Slide 9: Today's IR insurance experiences
Today’s IR insurance experiences Some 58% of the entire UK households often Denmark and Norway have non-life market is Motor described as savvy when some of the highest insurance with a 10 years avg COR it comes to financial penetration in Europe. High of 99%. Motor tariff services. Very low brand b
Slide 10: Financial highlights 2015
Financial highlights 2015 • DPS of 6.0 for the FY and buy backs of DKK 1bn in 2016 • DPS growth in line with our aim Dividend, buy back & total yield • Extraordinary buy backs of DKK 1bn in 2016 10% DKK 15 • Total yield approx. 7% on share price end of 2015 12 8% 6% • Solvency II ratio (int. model)
Slide 11: Customer highlights Q4 2015
Customer highlights Q4 2015 - NPS doubled since CMD, 2017 target already met • New health care insurance launched in Denmark including a NPS prevention app ‘TrygHealth’. The app provides access to a medical hotline via mobile video conferencing. 22 22 11 • New car product ‘Moderna Smart’ launched in
Slide 12: Efficiency programme, DKK 47m achieved in Q4
Efficiency programme, DKK 47m achieved in Q4 • Programme deliver as planned with target to Efficiency programme up until 2017 (DKKm) achieve savings of DKK 750m over 3 years. Old programme New programme • Lower 2015 savings than in 2014. • Claims initiatives: • Increased collection from third partie
Slide 13: Expense ratio improved before one-off
Expense ratio improved before one-off • Expense ratio improved 0.7 pp. to 14.2 in Q4 and Expense ratio reached 14.9 for the FY excluding Q3 one-off costs. • One-off provisioning of DKK 120m in Q3 related to 16.4 efficiency programme. 15.6 15.3 15.3 14.9 • Efficiency programme delivered savings of 14
Slide 14: Positive topline development in Private
Positive topline development in Private Gross earned premiums decreased by 1.6% (-0.1%) in local currencies driven by: • Private trend helped by lower rebates but also improved growth and retention in Denmark. • Commercial trend reflects a structural challenge with too low sales compared to current
Slide 15: Customer retention
Customer retention Private 92% DK • Customer retention in Denmark 90% at highest level since Q3 2013 88% 86% • Slight improvement in Norway NO 84% 82% Commercial • Modest fall in Denmark 92% 90% DK • Retention decreased in Norway 88% impacted by economic situation 86% NO 84% 82% 15
Slide 16: Increase in underlying claims ratio, net
Increase in underlying claims ratio, net Group Private (DK & NO) Commercial (DK & NO) 68.3 68.9 67.5 72.2 65,5 70.2 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Corporate Sweden 85.0 79.4 76.1 71.9 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Q4 2015 Q4 2014 Underlying development is adjusted for large claims, weather claims
Slide 17: Investment return – low risk remains key
Investment return – low risk remains key Portfolio (DKK 38.9bn) Free portfolio return Q4 2015 (%) 4.5 3.5 Bonds/deposits 13.0% 1.8 1.5 0.3 Inv. Property 5.3% -0.5 EM 1.0% Free HY 2.2% 10.7bn 28% Equities 6.2% Match Bonds/deposits 28.1bn 3.3% 72% Geographical exposure (%) Cov. Bonds 69.0% 100 100 63
Slide 18: Solvency II ratio @ 176 as per 1 Jan 2016
Solvency II ratio @ 176 as per 1 Jan 2016 Solvency II ratio development • Solvency II ratio (internal model) @ 176 as per 1 Jan 2016 up from 154 at year-end 2015, this includes the recent Skandia’s child insurance acquisition and the H2 2015 dividend 176% 155% 159% 154% • The capital base benefits f
Slide 19: Targets and outlook
Targets and outlook Premium growth Combined ratio 100 9 6 95 3 90 0 85 -3 -6 80 2015 2017 ROE after tax (%) Financial targets 40 ROE after tax = 20% ≥ 21% 30 Combined ratio ≤ 90 ≤ 87 Expense ratio < 15* ≤ 14 20 * Excl. One-off effects Customer targets 10 Net Promoter Score (NPS) + 100% Retention rat
Slide 20: Our investment case in a nutshell
Our investment case in a nutshell ”Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” John D. Rockefeller 20