Tryg A/s · OMXCOP:TRYG
Tryg A/s — TrygVesta — Investor Day (September 2009)
109 slides from Tryg A/s's investor day presentation, Sep 1, 2009
Slide 1: Capital Markets Day 2009
1 Capital Markets Day 2009 Capital Markets Day 1 September 2009 in London
Slide 2: Agenda
Agenda 2 Capital Markets Day 2009 09:30–10:00 Registration 10:00–10:05 Ole Søeberg – Welcome 10:05–10:40 Christine Bosse – Strategic targets 10:40-11:00 Lars Bonde – P&C direct in Denmark and Norway 11:00-11:25 Truls Holm Olsen – TrygVesta Corporate business 11:25-11:45 Kjerstin Fyllingen – Partner
Slide 3: Disclaimer
Disclaimer 3 Capital Markets Day 2009 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 re
Slide 4: Strategic targets
Strategic targets Christine Bosse, CEO
Slide 5: Delivering peace of mind for investors
Delivering peace of mind for investors 5 Capital Markets Day 2009 TrygVesta versus OMX C20 and DJ Euro Insurance Index Since IPO on 13 October 2005 250 200 150 100 50 0 October-05 April-06 October-06 April-07 October-07 April-08 October-08 April-09 TrygVesta OMX C20 DJ Euro Insurance Index
Slide 6: Financial performance
Financial performance 6 Capital Markets Day 2009 Gross premiums Combined ratio DKKm 9,000 8,820 95 8,571 91.9 8,500 91 8,106 7,965 88.5 8,000 7,769 87.4 87.6 87.1 87 7,500 7,000 83 H1 05 H1 06 H1 07 H1 08 H1 09 H1 05 H1 06 H1 07 H1 08 H1 09 Claims ratio Gross expense ratio 17.2 16.9 17.0 17.0 17.2 7
Slide 7: Strategic focus
Strategic focus 7 Capital Markets Day 2009 THE STRATEGY PLAN CONTAINS FOUR STRATEGIC THEMES Profitable growth Peace-of-mind delivery Self-service Human competencies
Slide 8: Strategy – profitable growth
Strategy – profitable growth 8 Capital Markets Day 2009
Slide 9: Peace-of-mind delivery
Peace-of-mind delivery 9 Capital Markets Day 2009 The peace-of-mind delivery is anchored in our handshake: Compassionate, Dynamic and Innovative
Slide 10: Self-service
Self-service 10 Capital Markets Day 2009 It is so easy ! Buy
Slide 11: Human competencies
Human competencies 11 Capital Markets Day 2009
Slide 12: Challenges and opportunities for the insurance industry
Challenges and opportunities for the insurance industry 12 Capital Markets Day 2009
Slide 13: Climate change
Climate change 13 Capital Markets Day 2009
Slide 14: Competition
Competition 14 Capital Markets Day 2009
Slide 15: Change in demographics
Change in demographics 15 Capital Markets Day 2009
Slide 16: Solvency II and political changes
Solvency II and political changes 16 Capital Markets Day 2009 Future 2012-14 Political changes
Slide 17: Summary
Summary 17 Capital Markets Day 2009 Peace of mind for investors Good financial performance Clear strategy, with four legs, which aims at creating value for all stakeholders Prepared to meet the opportunities and challenges of the future
Slide 18: Questions please
18 Capital Markets Day 2009 Questions please
Slide 19: P&C direct in Denmark and Norway
P&C direct in Denmark and Norway Lars Bonde 31.08.2009
Slide 20: The P&C markets in Denmark and Norway
The P&C markets in Denmark and Norway 20 Capital Markets Day 2009 Danish P&C portfolio Market shares in Denmark since 1995 % Workers' Other 50 comp. 8% 5% 40 Motor Personal 34% 30 lines 13% 20 10 0 1995 1997 1999 2001 2003 2005 2007 Property 40% TrygVesta Topdanmark Codan Alm Brand Other Market shar
Slide 21: Strong distribution platform and profitability
Strong distribution platform and profitability 21 Capital Markets Day 2009 Strong distribution platform Focus on profitability • 1,500 persons in sales • premium increases • 130 offices • improved segmentation • 80 Norwegian franchise offices • self-service and improved customer interface • Internet
Slide 22: Claim drivers 2005 - today
Claim drivers 2005 - today 22 Capital Markets Day 2009 Average claims Denmark H1 08 to H1 09 140 +0.8% 125 110 -2.8% 95 80 2005 2006 2007 2008 H1 09 Average claims Norway 130 +1.1% 120 110 -2.3% 100 90 2005 2006 2007 2008 H1 09
Slide 23: Price increases to off-set claims inflation
Price increases to off-set claims inflation 23 Capital Markets Day 2009 Price increases implemented on main products House Car Other Denmark* 11% 4% 4-25% Norway 16% 18% up to 10% Finland 11% 9% Sweden 21% *Index will be regulated at 4.2% in 2010 Average prices in Denmark Average prices in Norway 5,
Slide 24: Recently implemented price increases
Recently implemented price increases 24 Capital Markets Day 2009 Norway Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 House building 2% 6% 1.8% 7.4% 4.5% Finland Apr 09 Holiday house 7.0% 5.0% Motor 9% Motor 4.8% 1.6% 1% 5.0% 6.6% House content 11% Accident 11% TrygVesta Holiday house 10% Total effect of price
Slide 25: Climate changes
Climate changes 25 Capital Markets Day 2009 Climate changes are likely to impact insurance business EUR DK DE SE BEL NLD FRA GBR CHE NO more severely than in the past Danish annual rain levels since 1870 We change coverage and increase prices to reflect new risk environment mm
Slide 26: The challenge: cloudbursts in Denmark since 1997
The challenge: cloudbursts in Denmark since 1997 26 Capital Markets Day 2009 DKKm 120 100 80 60 40 20 0 1997-2005 2006 2007 2008-Q2 2009 Annual average (1997-2009): DKK 76m 2007: DKK 312m
Slide 27: Changes in risk paves the road for innovation
Changes in risk paves the road for innovation 27 Capital Markets Day 2009 Changes in weather patterns changed the risk picture • more cloudburst related claims during summer What we did • designed a new house insurance, which covers the changed risk picture better • average prices increased by 11% d
Slide 28: Impact on the financials
Impact on the financials 28 Capital Markets Day 2009 How price and claim changes work their way into the figures DKK DKK 4,100 12,000 4,000 3,900 10,000 3,800 3,700 8,000 3,600 3,500 6,000 3,400 3,300 4,000 2006 2007 2008 2009 Average premium (LHS) Average claim (RHS)
Slide 29: House insurance in Denmark
Increasing prices impact retention… 29 Capital Markets Day 2009 House insurance in Denmark Premium for all new written polices Number of policies, net DKKm DKKm 40 0 30 -500 20 -1,000 10 0 -1,500 H1 08 H1 09 H1 08 H1 09
Slide 30: Retention remains at a solid level
...however, retention remains at a solid level 30 Capital Markets Day 2009 Retention is supported by real and perceived good service in the claims situation • Segmentation, add-on products and services add to retention and glue Retention since 2005 92% 90% 88% 86% 84% Q1 05 Q3 05 Q2 06 Q4 06 Q2 07 Q
Slide 31: Customer exchange ratio – example GF Insurance
Customer exchange ratio – example GF Insurance 31 Capital Markets Day 2009 GF Insurance DKKm 50 40 30 20 10 0 H1 07 H1 08 H1 09 GF - gross intake from TrygVesta TrygVesta - gross intake from GF
Slide 32: Total customer exchange ratio – Denmark and Norway
Total customer exchange ratio – Denmark and Norway 32 Capital Markets Day 2009 P&E Denmark P&E Norway DKKm DKKm 800 800 600 600 400 400 200 200 0 0 H1 07 H1 08 H1 09 H1 08 H1 09 Total gross intake from TrygVesta Total gross intake from TrygVesta TrygVesta - gross intake from other companies TrygVest
Slide 33: Summary
Summary 33 Capital Markets Day 2009 We have a solid market platform and strong distribution network We have taken the steps needed to improve profitability going forward Price increases coming through bode well for 2010 and 2011 profitability We are proactive on how climate changes impact our busine
Slide 34: Questions please
34 Capital Markets Day 2009 Questions please
Slide 35: TrygVesta Corporate business
35 Capital Markets Day 2009 TrygVesta Corporate business Truls Holm Olsen
Slide 36: TrygVesta Corporate
TrygVesta Corporate 36 Capital Markets Day 2009
Slide 37: Nordic insurance market – Corporate market
Nordic insurance market – Corporate market 37 Capital Markets Day 2009 Total corporate insurance market estimated to be DKK 30-35bn International players Nordic players
Slide 38: TrygVesta’s Corporate business
TrygVesta’s Corporate business 38 Capital Markets Day 2009 Gross premiums in DDKm Group premiums 2008 Other, 575 Corporate, 5,512 in DKKm P&C NO, 5,512 4,636 5,285 4,921 4,801 4,666 P&C DK, 6,605 2004 2005 2006 2007 2008
Slide 39: The Corporate portfolio end 2008
The Corporate portfolio end 2008 39 Capital Markets Day 2009 Products Other Marine Motor 5% 7% 17% Workers' comp 19% Liability 9% Personal lines 20% Property 23%
Slide 40: TrygVesta’s corporate distribution channels
TrygVesta’s corporate distribution channels 40 Capital Markets Day 2009 Portfolio in DKKm* 6,000 4,603 4,603 4,800 5,193 5,335 4,500 2,355 2,373 1,759 1,896 2,049 45 % 3,000 2,838 55 % 3838 1,500 2,844 2,707 2,751 2,962 62 0 2004 2005 2006 2007 2008 Direct Broker 45 Brokers: * Excludes TrygVesta Gar
Slide 41: Solid underwriting leads to good results
Solid underwriting leads to good results 41 Capital Markets Day 2009 Our good risk selection and prudent underwriting have provided a good background for earnings growth Technical result Combined ratio in DKKm 94.6 1,092 92.4 11.7 84.9 86.7 11.4 83.4 83.6 842 842 9.5 80.0 11.0 10.7 11.3 636 10.3 464
Slide 42: One area where recession is likely to impact
One area where recession is likely to impact 42 Capital Markets Day 2009 Denmark Norway Number of unemployed (adjusted for seasonallity) Number of unemployed 200,000 120,000 160,000 90,000 120,000 60,000 80,000 30,000 40,000 0 0 Jan-03 2003Jan-04 Jan-052005 2004 Jan-062006 Jan-072007 Jan-08 Jan-09 2
Slide 43: Underwriting discipline – preferred sectors
Underwriting discipline 43 Capital Markets Day 2009 Preferred sectors Service providing industries Companies focusing on Consultancy services/ environment and climate architects and engineers Mail and telecommunications Food industry • Public sector • Chemical industry • Mining Deselected sectors •
Slide 44: Risk management
Risk management 44 Capital Markets Day 2009 Risk mapping Risk assessment Risk strategy Reduce/eliminate Keep risk Transfer risk risk
Slide 45: Strong customer team
Strong customer team 45 Capital Markets Day 2009 Underwriting Sales Team RM Claims
Slide 46: Focus on insuring the energy sector
Focus on insuring the energy sector 46 Capital Markets Day 2009
Slide 47: Summary
Summary 47 Capital Markets Day 2009 The Nordic Corporate business is stable and profitable Good risk selection Prudent underwriting and risk management lead to profitability Focus on insuring the energy sector
Slide 48: Questions please
48 Capital Markets Day 2009 Questions please
Slide 49: Partner Sales, Sweden & Finland
Partner Sales, Sweden & Finland Kjerstin Fyllingen 31.08.2009
Slide 50: Value proposition in partner sales, Sweden and Finland
Value proposition in partner sales, Sweden and Finland 50 Capital Markets Day 2009 • High growth in Sweden and Finland dominated by Nordea partner sales Sweden & Premiums in Q2 2009 • More channels in 2009 and forward Finland 7% • Expanding partner sales in Denmark and Norway Rest of TrygVesta 93%
Slide 51: The Nordic TrygVesta partner market
The Nordic TrygVesta partner market 51 Capital Markets Day 2009 Norway Finland Brands: Brands: Premiums: approx. DKK 2bn Premiums: approx. DKK 500m Denmark Sweden Brands: Brands: Premiums: approx. DKK 2.5bn Premiums: ~ DKK 1.8bn annual run- rate
Slide 52: Our partner strategy has three winners
Our partner strategy has three winners 52 Capital Markets Day 2009 TrygVesta Partner concepts End customer Partner
Slide 53: TrygVesta and Nordea have a strategic partnership
Distribution - Nordea branches and market share 53 Capital Markets Day 2009 Finland: Branches: 345 2006 Market share: 32% Annual sale of private insurances via Nordea 2007 Sweden: 80,000 2008 Branches: 341 H1 2009 60,000 Market share: 18% Denmark: 40,000 Branches: 319 20,000 Market share: 21% Norway
Slide 54: Our bancassurance model
Our bancassurance model 54 Capital Markets Day 2009 2. Payment and registration TrygVesta Customer 4. Products and services 3. Commission and support Nordea 1. Initial insurance proposition Risk taker Sales Easy way of doing business Product development Financial advice Insurance need satisfied Afte
Slide 55: Partner agreements
Partner agreements 55 Capital Markets Day 2009 Ensuring More new high agreements retention rate Utilise existing agreements
Slide 56: Finland
Finland 56 Capital Markets Day 2009 Market share, private* Vahinkovakuutus Others, 16% Distribution channel Finland TrygVesta, If…, 25% 4.7% Customer centre Call centre Fennia, 10% Bancassurance Car dealers Pohjola, Tapiola, 27% 18% Insurance brokers Affinity groups TrygVesta Portfolio Other Real es
Slide 57: Finland – recent development
Finland – recent development 57 Capital Markets Day 2009 Development 2008/2009 Development 2008/2009 Private policies customers 140,000 150,000 100,000 120,000 50,000 100,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 80,000 2008 2009 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Q2 08 adj
Slide 58: Sweden – competitors, distribution and business lines
Sweden – competitors, distribution and business lines 58 Capital Markets Day 2009 Market shares TrygVesta, Folksam, 2.7% Distribution channel Sweden 13.9% Länsforsk., 30.3% Customer centre Codan, 17.2% Call centre Bancassurance Other, Car/boat dealers If, 19.6% 18.6% Insurance brokers TrygVesta port
Slide 59: Sweden performance
Sweden performance 59 Capital Markets Day 2009 Development 2008/2009 (excl. Moderna) Development 2009 (excl. Moderna) Private policies customers 150,000 120,000 120,000 100,000 90,000 80,000 60,000 60,000 30,000 40,000 0 20,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 2008 2009 Q4 06 Q4 07
Slide 60: Moderna – acquired in Q1 2009
Moderna – acquired in Q1 2009 60 Capital Markets Day 2009 • Moderna complements and strengthens position and distribution power in Sweden • Eases expansion of commercial and corporate insurance • Opens for reverse sales synergies in DK, NO and FI Increase TrygVesta EPS by 5% in 2010 and onwards
Slide 61: Summary
Summary 61 Capital Markets Day 2009 We have strong and self-sufficient bridgeheads in Sweden and Finland We have advanced and expandable partnership platforms We focus on profitable growth in Sweden and Finland Moderna strengthens our position, distribution power and earnings ability We leverage the
Slide 62: Questions please
62 Capital Markets Day 2009 Questions please
Slide 63: Major initiatives – Moderna and self-service
63 Capital Markets Day 2009 Major initiatives – Moderna and self-service Peter Falkenham, COO
Slide 64: Self-service / Human competencies
Self-service Human competencies
Slide 65: The Moderna acquisition in a strategic setting
Integration of Moderna 65 Capital Markets Day 2009 The Moderna acquisition in a strategic setting Vahinkovakuutus Distribution channel Denmark Norway Finland Sweden Customer centre Local service centre (Moderna) Call centre Franchise Bancassurance Nordea online bank E-business/Self-service (Moderna)
Slide 66: Moderna impact on Q2 numbers
Moderna impact on Q2 numbers 66 Capital Markets Day 2009 TrygVesta in Sweden break-even in Q2 after acquisition of Moderna • 10% premium growth for Moderna itself from H1 08 to H1 09 • Vesta grew the net number of insurances with 57,000 in Q2 09 • 63% growth in premiums in P&C Sweden (Vesta Forsäkri
Slide 67: Potential in the Moderna acquisition
Potential in the Moderna acquisition 67 Capital Markets Day 2009 PHASE 1 PHASE 2 FUTURE 2009 2010-2011 Investments Reinsurance Locations One branch IT/product development Corporate growth Market share 6-8% Tax Motor expansion Yacht expansion One Corporate division Scale efficiency One organisation P
Slide 68: Self-service
68 Capital Markets Day 2009 Self-service
Slide 69: The Self-service in a strategic setting
Self-service 69 Capital Markets Day 2009 The Self-service in a strategic setting Growth • Self-service complements existing distribution channels - not a substitution Growth Growth • Fits to the “peace-of-mind” mindset Claims costs Customer satisfaction Administration costs Cost Time to market • No
Slide 70: Self-service – an innovative step
Self-service – an innovative step 70 Capital Markets Day 2009 • Straight through processes • Automation and digitalisation – efficiency improvement also in back- office • “The paperless insurance company” • Self-service and digitalisation helps reducing CO2 Focus on processes
Slide 71: Self-service – the deliveries
Self-service – the deliveries 71 Capital Markets Day 2009 From the customers’ point of view From the employees’ point of view ge y -pa M SM S
Slide 72: Self-service - results
Self-service - results 72 Capital Markets Day 2009 • Target to sell 10,000 policies in Denmark in 2009 No. of No. of policies policies • 1.7m visitors to home page January to July 350 1,600 • 142,000 visitors to ”My-Page” in January to July. Increased by over 150% this year 300 1,400 • Branding camp
Slide 73: Self-service – the potential
Self-service – the potential 73 Capital Markets Day 2009 The self-service solutions will complement the existing distribution channels regarding: new sales, add-on sale, customer service and claims handling Long-term: • Solution launch will be based on “straight through processing” releasing back-of
Slide 74: Summary
Summary 74 Capital Markets Day 2009 Moderna is a perfect strategic fit Moderna acquisition increased earning per share Self-service improves customer service, claims handling and sales Self-service creates huge potential and high ambitions We constantly strive to improve efficiency, product quality
Slide 75: Questions please
75 Capital Markets Day 2009 Questions please
Slide 76: Reserves and run-off
Reserves and run-off Ole Hesselager, Head of Group Risk
Slide 77: Reserves - overview
Reserves - overview 77 Capital Markets Day 2009 Reserves consist to a great extent of Bodily Injury related claims BI – duration 3.94 years Status as of Q2 2009: • Total reserves of DKK 29.4bn Property & other short tail • Loss reserves 21.3bn Workers' comp 36% • Duration 3.2 years 29% 71% Motor TPL
Slide 78: Review
Review 78 Capital Markets Day 2009 Group reserves are reviewed regularly Internal review on annual basis – as Q3 • Supported by occasional external Annually/ reviews. Latest of its kind in 2005 in Review quarterly connection with IPO Tillinghast look-alike Fast track Monthly production model • Frame
Slide 79: Changes in estimated required reserves
Changes in estimated required reserves 79 Capital Markets Day 2009 Changes in estimates can be caused by adverse development or altered assumptions • This illustration shows how estimates change when new information is amended Traditional run-off pattern Changes in ultimate estimates NOKm NOKm 250 1
Slide 80: Margin in reserves
Margin in reserves 80 Capital Markets Day 2009 Favourable historic development in margin • TrygVesta target ratio ~ 7% 10% 8% • Consistent with Solvency II methodology 6% Workers’ comp, Development can be caused by Legislation, 2004 two separate drivers: 4% Auto, Legislation, Changes in estimated
Slide 81: Run-off results
Run-off results 81 Capital Markets Day 2009 Run-off results have improved significantly Estimated Extraordinary changes 9% margin in % 7% of total • During the early part of this decade 5% reserves the weak reserving position was 3% strengthened leading to run-off losses 1% -1% 2000 2001 2002 2003 2
Slide 82: Building margin or unloading reserves
Building margin or unloading reserves 82 Capital Markets Day 2009 How to determine whether margin is increasing or decreasing? • Paid to incurred ratio (P/I ratio) is used to identify build-up or release of margin • Below “100%” => Built-up. • Above “100%” => Release 100% Warning Break-even level 10
Slide 83: Summary
Summary 83 Capital Markets Day 2009 Currently a positive margin (7%) in held reserves. Supported by internal and external reviews Consistent with expected future Solvency II requirements – as stipulated in QIS4 Margin has been built up during the period 2002-2007 Margin is intended to be maintained
Slide 84: Questions please
84 Capital Markets Day 2009 Questions please
Slide 85: Capital, investments and financial targets
85 Capital Markets Day 2009 Capital, investments and financial targets Morten Hübbe, CFO
Slide 86: Capital management and planning
Capital management and planning 86 Capital Markets Day 2009 Changing regulatory Solvency I environment • Capital requirements • Governance • Disclosure Individual solvency Dynamic capital planning • Moving target • Financial markets conditions • Rating • Modeling of risks Solvency II
Slide 87: Capital strategy
Financial crisis creates upward pressure 87 Capital Markets Day 2009 Dividend policy: Capital strategy • 50% of net earnings Considerations • share buy backs in addition Capitalisation Capital needed to Buffer fulfill strategy Self-imposed buffer Capital needed to Rating TAC Regulatory Capital S&P C
Slide 88: Capital planning – a moving target
Capital planning – a moving target 88 Capital Markets Day 2009 Quantitative impact Solvency II impact S&P RBC “A” model: 52 - 56% of premiums Financial crisis Operational risk Capital add-ons QIS 4 TrygVesta: 38% of premiums Internal modeling Diversifica- Solvency I : tion 16% of premiums Solvency I
Slide 89: Integration of internal model
Integration of internal model 89 Capital Markets Day 2009 Quantitative implementation 2002 2003 2004 2005 2006 2007 … 2011 Reinsurance Renewal Property Marine/Cargo All main programmes Reinsurance Policy Target Setting Investment Policy Individual Capital Assessment (quarterly) Solvency II Use test
Slide 90: TrygVesta – modeling stochastic
TrygVesta – modeling stochastic 90 Capital Markets Day 2009 The ALM model is a mathematical description of TrygVesta’s risk profile Storm Large claims X = Φ −1 (U ) The mathematical π (d ) = ∞ F ( x) dx descriptions are Small claims d F (d ) used to simulate 50- Nt X t = Yi i =1 100,000 drt = a(
Slide 91: Internal risk evaluation
Internal risk evaluation 91 Capital Markets Day 2009 Recession scenario e.g.: Risk identification in ERM environment • Equity risk • Spread risk • Real estate risk • Concentration risk • Down grading risk 70 Risk owners Scenarios – Total model Risk database Impact Strategisk valg Bortfald af partner
Slide 92: Investments – breaking the waves
Investments – ”breaking the waves”
Slide 93: Conservative approach and new split by portfolio purpose
Conservative approach and new split by portfolio purpose 93 Capital Markets Day 2009 Today: pct. 3.5 3.0 Current: 2.5 2.0 Total 1.5 1.0 0.5 DKK 38bn 0.0 -0.5 -1.0 May May May Jan 08 Jan 06 Jan 07 Jan 09 Nov Nov Jul Nov Jul Jul Mar Mar Mar Sep Sep Sep Tomorrow: pct. 3.5 3 Matching: 2.5 2 DKK 28bn 1.5
Slide 94: Match / free investment portfolio split
Match / free investment portfolio split 94 Capital Markets Day 2009 • The matching portfolio, all bonds, is managed in order to maximise negative correlation to the discounting curve/ reserves • The managing of the free portfolio is done by means of absolute return and risk optimisation. Basically w
Slide 95: The route to improving combined ratio
The route to improving combined ratio
Slide 96: Behind the curve but catching up
Behind the curve but catching up 96 Capital Markets Day 2009 Development since 2005… … and more recently Houses Denmark 150 Premium increases: Houses Denmark 140 110 130 100 Houses Denmark: 120 90 New product Q4 2008 110 2008 2009 up 11% 100 90 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2
Slide 97: Underlying claims development
Underlying claims development 97 Capital Markets Day 2009 Underlying is adjusted for large claims, weather claims, run-off and change in interest rates Underlying claims ratio improved from Q1 09 to Q2 09, while gross claims ratio rose Claims ratio 80% 75% 70% 65% * 60% * TrygVesta starts communicat
Slide 98: Catching up – and timing
Catching up – and timing 98 Capital Markets Day 2009 Lower interest rate level Index/price Index/price increases in 2010 increases in 2009 Index/price increases in 2011 Index/price increases in 2012 Price increases prior years Price increases Price prior year Price increases increases prior year pri
Slide 99: Impact from interest rates
Impact from interest rates 99 Capital Markets Day 2009 Discounting interest rate - 2006-2009 6% "Flat interest rate" 5% 4% 3% Sensitivity of interest rate changes 2% DKKm Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 1,500 Change in combined ratio 1,
Slide 100: Costs
Costs 100 Capital Markets Day 2009 Cost ratio 17.0 16.8 16.7 17.3 16.7 0.6 0.4 0.8 1.3 1.5 1.5 Segmentation 16.6 16.0 15.4 15.2 15.2 2005 2006 2007 2008 2008* Self-service Danmark & Norge Finland & Sweden ”The Living House” *Cost ratio excl. ”The Living House”
Slide 101: Growth outlook 2010-2012
Growth outlook 2010-2012 101 Capital Markets Day 2009 % 10 Macro uncertainty will reduce growth outlook Full year effect from Moderna 8.0% adds 1% • volume decline within workers’ compensation 8 due to unemployment • fewer new cars sold, retention increase • fewer new houses 6 4.8% 5.0 4.4% E2010-20
Slide 102: New Markets – Balancing growth and profit
New Markets – Balancing growth and profit 102 Capital Markets Day 2009 Old plan – growth focus DKKm 3,500 Gross premiums Combined ratio 150% 143% 3,000 127% CR > 100 125% 2,500 64.5% 44.9% 100% 2,000 0.2% 0.3% 1,568 75% 1,500 50% 1,000 78.6% 82.1% 543 25% 500 322 0 0% 2007 2008 outlook 2009 E-2010 E
Slide 103: New Markets – significant earnings trigger
New Markets – significant earnings trigger 103 Capital Markets Day 2009 New plan – profitability focus Gross premiums DKKm Result DKKm 300 3,000 200 2,000 1,568 100 0 1,000 543 322 -100 0 -200 2007 2008 outlook E 2010 E 2011 E 2012 2009 2007 2008 outlook E 2010 E 2011 E 2012 2009 150% 143% CR approa
Slide 104: Summary
Summary 104 Capital Markets Day 2009 Solid capital position and prepared for the future More transparent investment strategy going forward Strong take on improving profitability in all markets Peace of mind for investors
Slide 105: Questions please
105 Capital Markets Day 2009 Questions please
Slide 106: Concluding remarks
Concluding remarks Stine Bosse, CEO
Slide 107: Return on equity 2010-2012
Return on equity 2010-2012 107 Capital Markets Day 2009 40% 36% 35% Interest 30% 28% 5.5%- 7% 27% 25% 26% 25% 24% 25% 24% 21% 23% 22% 23% 20% 19% 19% 18% 18% Interest 17% 16% 1%-3% 17% 15% 12% 11% 11% 10% 9% 8% 5% 5% 4% 2% 1% 1% 1% 0% 2004 2005 2006 2007 2008 Outlook E-2010 E-2011 E-2012 2009 -5% -7
Slide 108: Summary
Summary 108 Capital Markets Day 2009 Peace of mind for investors Good financial performance Clear strategy, with four legs, which aims at creating value for all stakeholders Prepared to meet the opportunities and challenges of the future
Slide 109: Questions please
109 Capital Markets Day 2009 Questions please Please visit www.trygvesta.com