Tryg A/s · OMXCOP:TRYG
Tryg A/s — Tryg A/S Ord New — Q3 2024 Earnings Presentation
59 slides from Tryg A/s's earnings presentation, Oct 11, 2024
Slide 1: Q3 2024 results
Q3 2024 results Investor presentation 1
Slide 2: Contents and disclaimer
Contents • Highlights Q3 2024 03 • Insurance revenue and portfolio 08 Disclaimer Certain statements in this presentation are based on the beliefs of our management as well as assumptions made • Claims developments 12 by and information currently available to the management. Forward-looking statement
Slide 3: Financial highlights Q3 2024
1 | HIGHLIGHTS Q3 2024 Financial highlights Q3 2024 Insurance service result of DKK 2,130M Combined ratio of 78.2% Investment result of DKK 444M Q3 DPS of DKK 1.95, solvency ratio 202% Ordinary dividend Claims ratio Expense ratio 2,130 83.8 78.2 7.40 7.00 13.3 6.29 1,513 13.3 1.85 5.85 4.28 1.95 1.8
Slide 4: Customer highlights Q3 2024
1 | HIGHLIGHTS Q3 2024 Customer highlights Q3 2024 Customer satisfaction KPI Group Group Q3 2023 Q3 2024 86 86 95 92 92 92 91 90 86 86 85 85 85 84 84 85 82 82 80 76 75 75 70 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Online touchpoints Phone touchpoints Meetings Claims process Onboarding process (PL) R
Slide 5: Higher ISR driven by price adjustments, improved underlying performance and lower large claims
1 | HIGHLIGHTS Q3 2024 Higher ISR driven by price adjustments, improved underlying performance and lower large claims Private Insurance service result and combined ratio DKKm 85.8 79.8 1,345 • Higher ISR driven by a lower level of weather claims and higher run-off 877 compared to Q3 2023 • Private c
Slide 6: Group insurance service result and geographical split
1 | HIGHLIGHTS Q3 2024 Group insurance service result and geographical split Denmark Insurance service result and combined ratio Group insurance service result walk DKKm DKKm 84.8 78.5 989 657 2,130 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Run-off Q3 2024: DKK 51m or 1.1 % (Q3 2023 : DKK 269m or 6.2%) Norway
Slide 7: RSA synergies reaching DKK 864m as per Q3 2024
1 | HIGHLIGHTS Q3 2024 RSA synergies reaching DKK 864m as per Q3 2024 DKK 58m of synergies in Q3 2024 and DKK 864m accumulated Realised synergies according to plan Accumulated synergy realisation vs. original baseline (DKKm) Main drivers in Q3 quarter synergies are cost initiatives within Procuremen
Slide 8: Insurance revenue and portfolio
Insurance revenue and portfolio 26-09-2023 8
Slide 9: Insurance revenue up 3.9% in local currencies compared to Q3 2023
2 | REVENUE AND PORTFOLIO Insurance revenue up 3.9% in local currencies compared to Q3 2023 Local currencies growth (%) Local currencies growth (%) Insurance revenue growth by segment Q3 2024 (local currencies) DKKm Q3 2023 Q3 2024 Q3 2023 Q3 2024 Private 6,180 6,646 5.0 6.7 6.7 4.5 3.9 Commercial 2
Slide 10: Rate increases in Q1-Q3 for the Private segment
2 | REVENUE AND PORTFOLIO Rate increases1 in Q1-Q3 for the Private segment Property (House and content) 15% Tryg continues to monitor inflation 10% and exercise price adjustments across markets and line of business. 5% 0% Denmark Norway Sweden Total Property Price adjustments continue to 2022 2023 Q
Slide 11: Customer retention remains broadly stable
2 | REVENUE AND PORTFOLIO Customer retention remains broadly stable Private retention 89 89 87 87 87 87 DK NO SE 94 92 90 88 86 DK NO SE 84 Q2 2024 Q3 2024 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Commercial retention 87 87 89
Slide 12: Claims developments
Claims developments
Slide 13: Underlying claims ratio improved 30 basis points for the Group
3 | CLAIMS DEVELOPMENTS Underlying claims ratio1 improved 30 basis points for the Group Group underlying claims ratio -30 bps 69.5 72.3 • Group underlying claims ratio at 67.2 an improvement of 30 basis points compared to 67.5 66.7 67.2 Q3 2023 • Group underlying claims ratio supported by profitabil
Slide 14: Large claims, weather claims, discounting and run-off
3 | CLAIMS DEVELOPMENTS Large claims, weather claims, discounting and run-off Large claims net Weather claims net DKKm DKKm 1,400 Expected annual 1,274 Expected annual 1,142 1,400 level DKK 800m 1,200 level DKK 800m 1,001 1,200 1,000 1,000 800 800 455 500 600 457 600 428 856 415 370 611 955 400 591
Slide 15: Investment activities
Investment activities — - ~ = _ ted
Slide 16: Investments – split in match and free portfolio
4 | INVESTMENTS ACTIVITIES Investments – split in match and free portfolio Match portfolio Scandinavian covered bonds, DKK 44bn Free portfolio assets split, DKK 19bn 7.8 23 13 3.4 2.6 9 2.0 1.1 1.0 0.7 Denmark Sweden Norway Government and Investment grade Emerging market High-yield bonds Diversifyin
Slide 17: Tryg investment return – low risk remains key
4 | INVESTMENTS ACTIVITIES Tryg investment return – low risk remains key Key figures investments (DKKm) Q3 2024 Q3 2023 Equity investments, DKK 2.6bn, split by sectors (%) 30 Free portfolio 431 -26 12 13 12 Match portfolio 83 268 10 5 7 4 4 1 2 Other financial income and expenses -70 23 Information
Slide 18: Solvency & Expenses
Solvency & Expenses
Slide 19: Solvency position Q3 2024
4 | SOLVENCY AND EXPENSES Solvency position Q3 2024 Solvency position Own funds walk 1,778 15,130 15,490 Solvency ratio based on the Partial Internal Model is 202% (Q2 2024: 195%). 3,013 -1,202 -70 -147 2,952 1,640 1,634 • Own Funds (OF) are primarily impacted by • Operating earnings and dividends •
Slide 20: Solvency ratio historical development
4 | SOLVENCY AND EXPENSES Solvency ratio historical development Solvency ratio historical development, % Approval of new partial internal model and dividend decision for 2020 moved to year-end as opposed to quarterly Own funds and SCR now including RSA 214 198 201 200 199 202 193 195 194 197 195 188
Slide 21: Solvency ratio sensitivities
4 | SOLVENCY AND EXPENSES Solvency ratio sensitivities Solvency ratio sensitivities, % 202 202 203 204 202 206 205 213 204 201 202 201 202 207 197 198 190 199 197 Q3 + 20% - 20% + 30% - 30% + 20% - 20% + 100 bps - 100 bps + 100 bps - 100 bps + 100 bps - 100 bps + 100 bps - 100 bps + 20% - 20% + 20%
Slide 22: Expense ratio of 13.3 impacted by tight cost control and RSA synergies
4 | SOLVENCY AND EXPENSES Expense ratio of 13.3 impacted by tight cost control and RSA synergies Expense ratio Key drivers in Q3 2024 15 • Expense ratio of 13.3% supported by tight cost control and positive impact from the RSA Scandinavia synergies 14 13.4 13.5 13.4 13.3 13.3 13.3 13.1 • Investments
Slide 23: Financial targets
Financial targets
Slide 24: Insurance service result target updated for IFRS 17
5 | Financial targets Insurance service result target updated for IFRS 17 Targets for Targets for 2024 2024 Volatile macroeconomic factors Insurance service result target for 2024 in Expense ratio and Combined ratio targets for September 2024 2024 The actual Insurance service result (within the DKK
Slide 25: 2024 strategy and targets will ensure highly attractive shareholders' returns
4 | Financial targets 5 Financial targets for 2024, updated for IFRS 17 2024 strategy and targets will ensure highly attractive shareholders’ returns 25
Slide 26: Strategic initiatives for the period
5 | Financial targets Approaching the end of the CMD period Strategic TRYG initiatives for 2024 the period Full speed 2021-2024 Change the Trygg-Hansa ahead in a succesful way to win in Shape the future and Codan (CMD 2021) B2B NO synergies core 26
Slide 27: We welcome you all to our Capital Markets Day Wednesday 4 December 2024
5 | Financial targets 4 We welcome you all to our Capital Markets Day Wednesday 4 December 2024 27
Slide 28: It is important to know your investment case
5 | Financial targets 4 It is important to know your investment case ”Do you know the only thing that gives me pleasure? It’s to see my dividends coming in.” John D. Rockefeller 28
Slide 29: Q3 2024 roadshows & conferences
6 | ROADSHOWS & CONFERENCES Q3 2024 roadshows & conferences Date Event Participants from Tryg Arranged by Johan Kirstein Brammer, CEO, Allan Kragh Thaysen, CFO, Mikael Kärrsten, CTO, 11/10/2024 Copenhagen roadshow Carnegie Investor Relations 23/10/2024 London Roadshow Johan Kirstein Brammer, CEO, Pe
Slide 30: Investor Relations
Investor Relations Gianandrea Roberti Peter Brondt Khoi Nguyen Frederik Brink Ilze Karahona Tobias Andersen Head of Investor Relations, SVP Director, Investor Relations Senior Analyst, Investor Relations Senior Analyst, Investor Relations Project manager, Investor Relations Analyst, Investor Relatio
Slide 31: Background material
Background material
Slide 32: Tryg at a glance
7 | BACKGROUND MATERIAL Tryg at a glance About Tryg Insurance revenue split by products Q3 2024 • Tryg goes back to 18th century. 8% 12% Motor • Very strong brand position especially in Denmark. 30% Workers' comp Health & accident Liability • Non-life insurance in Denmark, Norway and Sweden. 23% Fir
Slide 33: Insurance revenue split by geography
7 | BACKGROUND MATERIAL Insurance revenue split by geography DK: Insurance revenue by products 2023 SE: Insurance revenue by products 2023 8% 7% 11% 28% Motor 12% 31% Motor Workers comp Health and accident Health and accident Liability Liability Fire & property - private Fire & property - private 19
Slide 34: Reserves and run-off split by line of business
7 | BACKGROUND MATERIAL Reserves and run-off split by line of business Reserves by products 2023 Run-off net by products Q3 2024, DKKm 5% 6% 239 24% 7% Motor Motor 121 Workers comp 77 81 Workers comp 7% Health and accident 10 10 Health and accident Liability Liability Fire & property - private Fire
Slide 35: The run-off cycle
7 | BACKGROUND MATERIAL The run-off cycle Run-off cycle: Run-off development ◦ Initial assessment of the claims was DKK 18,000 but Tryg reserved 3 years for DKK 20,000 adding some conservatism to best estimate. 2,000 Run-off: 2,000+ ◦ At the time of setting up the claims reserves and booking the cla
Slide 36: Important things to remember in 2024
7 | BACKGROUND MATERIAL Important things to remember in 2024 Important key points for 2024 1 2 Other income and costs includes an approximate DKK 250m Synergies from the acquisition of RSA Scandinavia were quarterly intangibles amortisation (Codan Norway and Trygg-Hansa and Alka), around DKK 50-60m
Slide 37: Combined ratio development, 2014 – 2023
7 | BACKGROUND MATERIAL Combined ratio development, 2014 – 2023 Combined ratio development 86.8 86.7 84.2 84.4 85.1 85.1 84.5 84.5 84.7 84.0 83.2 82.8 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 10Y avg. 5Y avg. IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 4 IFRS 17 IFRS 17 37
Slide 38: Shareholder remuneration
7 | BACKGROUND MATERIAL Shareholder remuneration Dividend per share and total share buy-back (DKK) Tryg initiated a DKK 5bn buyback following the sale of Codan DK to Alm. Brand 1.7 Tryg initiated a DKK 1bn 1.95 5,000 buyback after Q3 2023 7.0 7.4 6.8 6.3 1.95 4.3 1.95 1,000 2019 2020 2021* 2022 2023
Slide 39: Market share of the Scandinavian insurance market
7 | BACKGROUND MATERIAL Market share of the Scandinavian insurance market Scandinavia market share EUR 26,3 bn (as at Q4 2022) Denmark market share DKK 68,1 bn/EUR 9,2bn (as at Q4-2022) 18% 24% 23% Tryg Tryg Topdanmark 40% If If Topdanmark Gjensidige 15% 4% Länsforsikringar Alm. Brand Gjensidige 4%
Slide 40: Distribution of new sales 2023
7 | BACKGROUND MATERIAL Distribution of new sales 2023 Distribution in the Scandinavian market Private 1% 5% Distribution in the Scandinavian markets differs from 6% 15% 10% Franchise many other insurance markets. 28% Sales agents 33% 12% Agents Customer service 9% Customer Service Online 25% Outbou
Slide 41: Things that you may not know
7 | BACKGROUND MATERIAL Things that you may not know Information: • Scandinavian economies have been performing better than most European countries for a long-time. The GDP growth y/y was approx. 2%, and unemployment rates remains much lower than European averages (2-3% in DK and NO). Government ind
Slide 42: Things that you may not remember
7 | BACKGROUND MATERIAL Things that you may not remember Information: • Our maximum annual net exposure to a single large Property claim is DKK 200m which falls to DKK 135m. This is based on our general reinsurance programme. • Our maximum net exposure for weather claims is DKK 300m per event. The u
Slide 43: IBM study from 2007, probably little has changed
7 | BACKGROUND MATERIAL IBM study from 2007, probably little has changed Danish customers either completely or strongly agree Overall I am very satisfied with the services of my insurance company My insurance agent only sold me insurance coverage that I really needed My present insurance coverage of
Slide 44: Every 4th Dane receives a bonus!
7 | BACKGROUND MATERIAL TryghedsGruppen and its member bonus TryghedsGruppen Bonus Bonus has a positive effect on retention ‘I expect to be in Tryg next year’ Denmark's ‘biggest’ family 8% 8% 6% 6% Have heard about member bonus 90% 5% Have not heard about member Bonus 79% 2019 2020 2021 2022 2023 Tr
Slide 45: Organisational and remuneration structure
7 | BACKGROUND MATERIAL Organisational and remuneration structure Remuneration structure The Executive Board are remunerated according to Tryg’s remuneration policy: • Base salary ◦ A fixed car allowance and other standard CEO benefits in addition to the base salary Johan Kirstein Brammer • Pension
Slide 46: Sustainability & ESG governance
7 | BACKGROUND MATERIAL Sustainability & ESG governance Sustainability & ESG Board Sustainability-related incentive scheme Members of the Executive Board are covered by a Chair COO variable salary incentive programme (INP). Sustainability & ESG targets make up 15% of the total variable salary in 202
Slide 47: Sustainability & ESG strategy 2024
7 | BACKGROUND MATERIAL Re a d- on ly Sustainability & ESG strategy 2024 Driving sustainable impact Tryg wants to contribute to a sustainable future and create long-term value for our customers, employees, shareholders and society. We want to to integrate sustainability into every corner of our busi
Slide 48: ESG performance on targets 2023
7 | BACKGROUND MATERIAL ESG performance on targets 2023 Sustainable insurance Responsible company Green workplace Prevention and claims handling Responsible procurement Responsible investment Diverse workplace Climate impact 2024 targets 2023 2024 targets 2023 2024 targets 2023 2024 targets 2023 • 8
Slide 49: Environmental, Social and Governance (ESG) data
7 | BACKGROUND MATERIAL Environmental, Social and Governance (ESG) data Climate and environmental data Unit 2023 2022 2019 Total direct and indirect carbon emissions (location-based) Tonnes CO2e 4,805 4,540 6,436 4,180 3,926 Total direct and indirect carbon emissions (market-based) Tonnes CO2e 9,376
Slide 50: Responsible investment
7 | BACKGROUND MATERIAL Responsible investment 2024 KPI 2030 milestone 2023 results All external asset managers are UN PRI signatories ESG is an integrated part of the investment process across all External managers Percentage of UN PRI signatories 100% External managers responsibility integration m
Slide 51: Reported figures Q3 2024 and Consensus 2024-2026
7 | BACKGROUND MATERIAL Reported figures Q3 2024 and Consensus 2024-2026 Q3 2024 2024 2025 2026 DKKm reported Consensus Consensus Consensus Insurance revenue 9,786 38,697 40,333 41,915 Insurance service result 2,130 7,365 7,724 8,095 Net investment result 444 958 649 670 Other income and costs -441
Slide 52: Appendix
Appendix
Slide 53: Group
8 | BACKGROUND MATERIAL Group Insurance revenue (DKKm) Gross premiums Combined ratio (%) 100.0 40,000 37,379* 37,135 86.8 84.4 84.3 83.2* 82.8 80.0 30,000 25,369 22,404 23,442 60.0 20,000 40.0 10,000 20.0 0.0 — 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Claims ratio, net of reinsurance (%) Ex
Slide 54: Private
8 | BACKGROUND MATERIAL Private Insurance revenue (DKKm) Gross premiums Combined ratio (%) 100 30,000 83.8 83.9 84.1 82.3 * 84.5 24,453* 24,455 80 20,000 60 16,554 14,154 15,096 40 10,000 20 0 — 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Claims ratio, net of reinsurance (%) Expense % ratio (%
Slide 55: Commercial
8 | BACKGROUND MATERIAL Commercial* Insurance revenue (DKKm) Gross premiums Combined ratio (%) 100 10,000 9,295 * 9,178 88.4 82.5 82.9 81.9 * 78.1 80 7,500 60 4,978 5,350 4,795 5,000 40 2,500 20 0 — 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Claims ratio, net of reinsurance (%) Expense % rati
Slide 56: Corporate
8 | BACKGROUND MATERIAL Corporate* Insurance revenue (DKKm) Gross premiums Combined ratio (%) 120 4,000 3,508 3,631* 3,502 3,366 3,464 97.4 100 89.4 87.6 92.3* 83.2 3,000 80 60 2,000 40 1,000 20 0 — 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Claims ratio, net of reinsurance (%) Expense % rati
Slide 57: Geographical combined ratio
8 | BACKGROUND MATERIAL Geographical combined ratio Denmark % (%) Sweden (%) 100 91.1 100 85.0 88.1 86.8 87.2 79.3 80.5 81.6 77.2 78.2 80 80 60 60 40 40 20 20 0 0 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Norway (%) 100 92.7 92.3 91.7 86.8 85.0 80 60 40 20 0 2019 2020 2021 2022 2023 57
Slide 58: Tryg has a long and proud history, with the 2021 RSA acquisition pushing the boundaries even further
8 | BACKGROUND MATERIAL Tryg has a long and proud history, with the 2021 RSA acquisition pushing the 2022 boundaries even further Demerger 1 April Completed separation of RSA Scandinavia into 2018 DK, NO, SE 2005 TrygVesta is listed Tryg receives the final on the OMX Nordic approval of the Alka 1731
Slide 59: Macroeconomic forecasts
8 | BACKGROUND MATERIAL Macroeconomic forecasts Denmark Norway % 2023 2024 (forecast) 2025 (forecast) % 2023 2024 (forecast) 2025 (forecast) GDP growth 2.5 1.8 2.0 GDP growth 1.1 0.7 2.0 Private consumption 1.3 1.0 2.1 Private consumption -0.8 1.3 2.9 Unemployment 2.8 2.9 3.1 Unemployment 1.8 2.1 2.