Tryg A/s · OMXCOP:TRYG
Tryg A/s — Merger or Acquisition (December 2017)
19 slides from Tryg A/s's merger presentation, Dec 4, 2017
Slide 1: Tryg acquisition of Alka
Tryg acquisition of Alka 04th December 2017 1 4 December 2017
Slide 2: A compelling opportunity for Tryg
A compelling opportunity for Tryg Acquiring a high-performing business in our core market • Alka is a best-in-class operator within the Danish non-life market • Attractive financial profile with average combined ratio over last five years of 84% Strong accretion of earnings and dividends • Alka’s te
Slide 3: Unique opportunity, attractive financial profile
Unique opportunity, attractive financial profile Purchase price • DKK8.2bn - valuing operations of Alka at DKK5.7bn, with DKK2.5bn of excess capital Financing sources • Placing of DKK4bn through issuing up to 10% of current shares outstanding through an accelerated bookbuilding • TryghedsGruppen wil
Slide 4: Strong strategic rationale
Strong strategic rationale Increased presence in Tryg’s core market segment • Results in market share for Tryg in Denmark of 22% • Alka adds market share in private lines of 6%* Strong complementary market proposition • Alka is a consistent top performer in terms of customer loyalty and satisfaction
Slide 5: 2020 Targets
2020 Targets Earnings CMD 2017 Post transaction Technical result DKK2.8bn DKK3.3bn Combined ratio ≤ 87% ≤ 86% Expense ratio ~14% reaffirmed ~14% reaffirmed RoE ≥ 23% ≥ 21% Customers CMD 2017 Post transaction TNPS 70 70 No. products per customer +10% +10% 5 4 December 2017
Slide 6: A success story in the Danish market
A success story in the Danish market • 8th largest Danish non-life insurance company with a market share of 4.3%, with an estimated private lines market share of 6% • ~380,000 customers, with a CAGR of 5% of policies over the last 5 years • Strong relationships with unions developed over more than 1
Slide 7: Strong brand awareness in Denmark
Strong brand awareness in Denmark Unaided knowledge of the Alka brand (%)* 51 40 24 18 17 Tryg Alka Codan Topdanmark Alm. Brand *As at Q2 2017 7 4 December 2017
Slide 8: Focused on private lines
Focused on private lines Gross premiums by business Gross premium, Non-life (DKK2.5bn in 2016) private (DKK1.9bn in 2016) 7% 4% 15% 25% 37% 78% 33% Non-life, Private Fire and property Motor Group life Non-life, Commercial Accident & health Other Gross premium, Non-life Technical result commercial (D
Slide 9: Strong and profitable growth profile
Strong and profitable growth profile Alka vs. Danish non-life insurance market: Development in Alka's Danish non-life market indexed gross premiums (%) share 4.3% 117.6 117.5 4.1% 114.5 4.0% 3.9% 111.3 112.4 3.7% 3.6% 108.0 110.9 110.7 105.6 108.1 107.5 103.2 105.3 101.7 100.0 101.0 100.0 99.1 2008
Slide 10: Strengthens position in core Danish market
Strengthens position in core Danish market Market share (latest available) Estimated private 27% lines market share of 6% 24% 6% 22% 5% 20% 4% 6% 21% 18% 19% 14% Non-life Motor A&H Fire and Property Alka Tryg Source: Forsikring & Pension. 10 4 December 2017
Slide 11: Best-in-class combined ratio profile
Best-in-class combined ratio profile Alka’s 2013 - 9M 2017 average 91% combined ratio: 84% 86% 85% 84% 84% 82% 83% 83% 82% 82% 2013 2014 2015 2016 9M 2017 Tryg Private Alka 11 4 December 2017
Slide 12: Compelling merger benefits of DKK300m
Compelling merger benefits of DKK300m DKK300m in run-rate merger benefits in Commentary combined entity 5% DKK300m • Full run-rate impact in 2021 of DKK300m 25% • 25% impact expected in 2019, 50% impact in 2020 • Drivers include: 25% • Claims procurement • Fraud detection 45% • Data analytics • Onli
Slide 13: Funding via a fully underwritten equity placing
Funding via a fully underwritten equity placing Sources of funding to finance the transaction (DKKbn) 8.2 2.5 Price paid for TryghedsGruppen operations of has underwritten at Alka DKK146 5.7 4.0 0.5 1.2 Price paid Alka excess capital Alka valuation Equity placing TrygTier new1AT1 Tryg capital capita
Slide 14: Combined Solvency II ratio of 170%
Combined Solvency II ratio of 170% Solvency II ratio Q3’ 17 pro forma 84 (110) 211 (21) 11 3 (9) 170 Solvency Ratio Extraordinary Internal Model Tier 1 Issue Capital Raise Goodwill Increased SCR Pro Forma Q3 '17 Dividend for DK WC Solvency Ratio Q3 '17 14 4 December 2017
Slide 15: Strengthening the core, while embracing the future
Strengthening the core, while embracing the future Acquiring a high-performing business in our core market Strong accretion of earnings and dividends Continuing on a strong financial foundation Long term profitable growth and attractive shareholder value creation 15 4 December 2017
Slide 16: Q&A
Q&A 16 4 December 2017
Slide 17: Contact details
Contact details Gianandrea Roberti Peter Brondt Tanja Frederiksen Investor Relations Officer Investor Relations Manager Head of Communications +45 20 18 82 67 +45 22 75 89 04 +45 51 95 77 78 gianandrea.roberti@tryg.dk peter.brondt@tryg.dk tanja.frederiksen@tryg.dk 17 4 December 2017
Slide 18: APPENDIX
APPENDIX 18 4 December 2017
Slide 19: Alka: Very strong financial track record
Alka: Very strong financial track record DKKm 2012A 2013A 2014A 2015A 2016A 9M 2017 Non-life Gross premiums 1,854 1,938 2,006 2,035 2,078 1,624 Technical result 363 368 335 357 191 288 Expense ratio 16% 15% 16% 18% 18% 16% Combined ratio 81% 82% 84% 83% 91% 82% Life insurance technical result 12 5 (