Tryg A/s · OMXCOP:TRYG
Tryg A/s — Investor Presentation (November 2016)
25 slides from Tryg A/s's investor presentation, Nov 8, 2016
Slide 1: Sales force presentation
Sales force presentation 8 November 2016 Follow us on Twitter: @TrygIR
Slide 2: 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 2
Slide 3: Scandinavia vs the rest of the world
Scandinavia vs the rest of the world Corruption Index Cost 1. Denmark High insurance penetration in the Nordics 2. Finland Premiums per capita (USD), 2015 3. Sweden 4. New Zealand 5. Netherlands 2,000 5. Norway 7. Switzerland Norway 1,401 1,380 1,330 8. Singapore 1,129 1,067 9. Canada GDP Per Capita
Slide 4: Insurers’ perception DKK vs UK (IBM study 2007)
Insurers’ perception DKK vs UK (IBM study 2007) 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 cove
Slide 5: 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 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 • Approx. 80% retail business. Liability Norwa
Slide 7: Tryg – at a glance II
Tryg – at a glance II Shareholder performance since IPO Shareholder remuneration since IPO DKK New dividend 10 policy 9 8 3.4 3.5 7 3.2 2.6 6 4.2 5 2.6 4 3 6.6 5.8 6.0 5.2 5.4 2 4.2 3.4 3.1 1 2.5 2.6 1.3 0.8 1.3 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1 H1 2015 2016 Cash dividend O
Slide 8: Financial highlights Q3 2016
Financial highlights Q3 2016 - Higher technical result and substantially higher investment return • Pre-tax profit of DKK 923m (DKK 186m) driven by: Pre-tax profit (DKKm) • Higher technical result of DKK 744m (DKK 647m), underlying performance almost in line as a restructuring 923 charge of DKK 120m
Slide 9: Premiums and portfolio
‘. Premiums and portfolio
Slide 10: Positive topline development in Private
Positive topline development in Private Group premiums flat in local currencies, Private lines up, Commercial down & Corporate flat In Commercial Q3 2015 top-line growth boosted by a one-off regulation of DKK20m, adjusting for this the development is broadly flat. Private lines up 0.7% with Denmark
Slide 11: Private - average prices
Private - average prices House insurance – average price (index 2011 = 100) • DK: price adjustments help in Average price development Y/Y softening negative development 115 NO in average price -0.2% 0.2% 110 (Q2 -0.7%) (Q2 0.1%) • DK: Y-o-Y development still 105 DK Average price: 4,800 5,500 slightl
Slide 12: Customer retention
Customer retention Private 92% DK • Customer retention at 89.9 in 90% Denmark, stable development 88% 86% • Stable development in Norway NO 84% 82% Commercial • Modest fall in Denmark mostly 92% driven by price increases 90% NO 88% • Retention moving slightly 86% upwards in Norway DK 84% 82% 12
Slide 13: Claims and expenses
Claims and expenses
Slide 14: Increase in underlying claims ratio, net
Increase in underlying claims ratio, net Group Private (DK & NO) Commercial (DK & NO) 72.3 72.7 69.4 68.8 74.1 71.9* Q3 2016 Q3 2015 Q3 2016 Q3 2015 Corporate Sweden 85.1** 76.8 77.0 76.7 Q3 2016 Q3 2015 Q3 2016 Q3 2015 Q3 2016 Q3 2015 Underlying development is adjusted for large claims, weather cla
Slide 15: Motor insurance, not all claims are coming down
Motor insurance, not all claims are coming down Motor insurance accidents Bumpers, price increases in % from 2011-2016 Monthly average based on Jan-Sept 27,978 26,505 25,402 25,491 24,710 2012 2013 2014 2015 2016 Source: Forsikring & Pension (Danish Insurance Association) LV H1 results ( London-Vict
Slide 16: 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 2016: DKK 550m level 2016: DKK 500m 574 615 542 614 471 407 447 323 199 111 42 57 2012 2013 2014 2015 Q3 2015 Q3 2016 2012 2013 2014 2015 Q3 2015 Q3 2016 Claims reserves dis
Slide 17: Strong costs focus to meet 2017 target
Strong costs focus to meet 2017 target • Expense ratio at 14.5, which is line with Q3 15 adjusted Expense ratio for one-off expenses (DKK 80m) • Efficiency programme lowered costs by 16.4 16.3 DKK 17m for Q3 mainly related to: 15.6 15.3 15.3 14.6 14.5 • Outsourcing within Finance and IT 14.6 14.9 •
Slide 18: Investment, capital and targets
Investment, capital and targets
Slide 19: Investment return – low risk remains key
Investment return – low risk remains key Portfolio (DKK 41.8bn) Q3 2016 Free portfolio return Q3 2016 (%) Bonds/deposits 4.6 (-2.8) 5.2 (-1.9) (free) 13.6% 3.7 (-10.3) (13.0) 1.3 (1.3) 0.6 (-0.9) 1.8 (-2.6) Inv. Property 5.0% (5.1) IG 0.5% (0) EM* 1.0% (1.0) Free 11.5bn HY 1.7% (2.2) 28% Match Equit
Slide 20: Solvency position Q3 2016
Solvency position Q3 2016 Solvency capital requirement walk • Solvency ratio based on the Partial Internal Model is 217 (Q2 2016: 206). 5,200 • SCR main moves in the quarter are DKK 53m in 5,150 8 -13 53 -38 28 4 -12 ‘health’ which mostly represents the Skandia child 5,100 -19 insurance capital char
Slide 21: Capital and solvency ratio development
Capital and solvency ratio development Capital Tiers • Tier 2 capacity fully utilised after issue of SEK 1bn subordinated debt 19 May 2016 2,546 50% • As per Q3 some DKK211m of Tier 2 instruments are 664 13% not included in the Own funds as they exceed the CETier 1 50% SCR cap 7,842 154% ATier 1 • A
Slide 22: Solvency ratio sensitivities
Solvency ratio sensitivities 240% 231% 230% 226% 219% 220% 217% 216% 217% 216% 215% 210% 208% 204% 200% 190% Q3 '16 +20% -20% +20% -20% +100 bps -100 bps +100 bps -100 bps -100 bps 2016 Equity Property Interest Spread UFR • The Solvency II ratio shows the highest sensitivity to spread risk • Assumpt
Slide 23: 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 24: Why invest in Tryg?
Why invest in Tryg? Pre-tax result by division (YE 2015 data) High insurance penetration in the Nordics Premiums per capita (USD), 2015 200% 2,000 150% 1,401 1,330 1,380 100% 1,129 1,067 50% 1,000 612 0% -50% 0 -100% Non-life Life Banking Other Motor combined ratios Nordics vs international Tryg is
Slide 25: 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