Tryg A/s · OMXCOP:TRYG
Tryg A/s — Jyske Bank's Company Day (September 2010)
24 slides from Tryg A/s's conference presentation, Sep 29, 2010
Slide 1: Towards higher profitability
Download this presentation on tryg.com Towards higher profitability Ole Søeberg – IR director Jyske Bank, Silkeborg 29 September 2010
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: Facts about Tryg
Facts about Tryg Gross premium split H1 2010 Key data 3 Market cap: DKK 21bn ( sept 2010) 8.2 2009 Premiumns: DKK 17.9bn Denmark Norway Insurance result DKK 1.6bn Percentage Sweden 50.3 Finland Investment result DKK 1.1bn 38.5 Net income DKK 2.0bn ROE 24% Share performance since Kursudvikling sidenI
Slide 4: Market environment – DKK 150bn market
Market environment – DKK 150bn market Denmark Norway DKK 43.9bn/EUR 5.9bn NOK 39.2bn/EUR 4.6bn 18.2 19.6 20.8 Tryg 28.5 Tryg Alm. Brand Gjensidige If Sparebank1 Percentage Percentage Other Other 10.5 13.8 Alka If C odan 29.1 5 Topdanmark 14.2 3.5 10 26.8 Sweden Finland SEK 57.3bn/EUR 5.6bn EUR 3.4bn
Slide 5: Insurance – taking the risk from others
Insurance – taking the risk from others Burglaries per year in Denmark and Norway Number 50,000 16,000 45,000 12,000 9,391 8,867 8,183 40,000 8,000 6,871 35,000 4,000 30,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 25,000 07 07 07 07 08 08 08 08 09 09 09 09 10 10 1995 1997 1999 2001 2003 2005 200
Slide 6: Large claims and weather related claims
Large claims and weather related claims Large claims gross Storm related claims* (gross) DKKm DKKm 400 300 332 200 202 100 112 121 62 0 3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 2006 2007 2008 2009 Q2 09 Q2 10 Expected level for 201
Slide 7: Claims reserves are discounted i.e. net present value
Claims reserves are discounted i.e. net present value Discounting rate % 6.00 5.00 4.00 3.00 2.00 Q3 2006 Q2 2007 Q1 2008 Q4 2008 Q3 2009 Q2 2010 1% increase in interest level will: •increase pre-tax result by approx. + DKK 300m •improve combined ratio by approx. 1 %-point 7
Slide 8: Rising claims and lower interest rates eroded profitability
Rising claims and lower interest rates eroded profitability 110 Combined ratio 105 Extraordinary Price increases winter 100 95 Price increases 90 85 80 2000 2001 2002 2003 2004 2004* 2005 2006 2007 2008 2009 Q1 Q2 2011 2012 2010 2010 • 2002-2004 substantial premium increases of DKK 2.1bn implemented
Slide 9: Repricing and timing
Repricing and timing Annual impact from price increases 2010 2011 2012 Before DKK ~900m DKK ~700m DKK ~300m Next wave DKK ~300m DKK ~300m Average prices in Denmark Average prices in Norway 5,000 5,000 4,500 4,500 4,000 4,000 3,500 3,500 3,000 3,000 05 05 Q 5 05 Q 6 06 Q 6 Q 6 Q 7 07 Q 7 Q 7 Q 8 08 Q
Slide 10: Rebalancing pricing and customer retention
Rebalancing pricing and customer retention • Retention rate stable and strong • Danish retention rate remains high despite influence from premium increases • High retention support competitive strength and cost ratio Nordic retention since 2005 92% 90% 88% 86% 84% 82% Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 11: Claims development
Claims development 90 80 70 60 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 Gross claims ratio Underlying claims ratio * Q2 Q2 H1 H1 2009 2010 2009 2010 Gross claims 72.7 73.1 71.2 80.8 ratio Large claims -5.0 -4.8 -3.1 -3.9 Weather c
Slide 12: Growth areas and cost focus
Growth areas and cost focus 12 29. september 2010
Slide 13: Profitability focus in Sweden and Finland
Profitability focus in Sweden and Finland Result DKKm Gross premiums 150 DKKm 3.500 100 3.000 50 2.500 0 2.000 1.553 -50 1.500 -100 1.000 634 -150 -134 -141 500 358 -165,00 -200 - 2007 2008 2009 E2010 E-2011 E-2012 2007 2008 2009 E2010 E-2011 E-2012 160% CR approaching 95 • Changed focus is expected
Slide 14: Continued focus on expense ratio
Continued focus on expense ratio Focus on expenses drives expense ratio downwards by • streamlining the distribution platform • digital and paperless process handling • in-house rotation reduces need for external hiring • investments in branding and processes by new IT systems Number of employees re
Slide 15: Expenses - Target "10 in 20"
Expenses - Target ”10 in 20” Continued focus on expenses drives expense ratio downwards by • streamlining the distribution platform • digital and paperless process handling • unified Nordic processes • investments in branding 2020: target 10% 2010 level: 17% 2000 level: 27% 10% 15 IFRS from 2004. Pr
Slide 16: Investments
Investments 16
Slide 17: 2.5% gross investment return in H1 2010
2.5% gross investment return in H1 2010 17
Slide 18: Conservative approach to investments
Conservative approach to investments Total assets allocation Assets allocation in the match portfolio 4 1 4.5 7 9.5 5 20 Equities Real estate C ov. Bonds C ov. Bonds Govt. Percentage 23 Percentage Govt. Deposits Deposits 65 Others High yield 54 Assets allocation in the free portfolio 5 10 19 Equitie
Slide 19: Outlook and dividend
Outlook and dividend 19 29. september 2010
Slide 20: Outlook 2010
Outlook 2010 Actual Outlook 2010 Outlook 2010 Outlook 2010 DKKm 2009 February May August Discouting rate 3.6% 3.2% 2.9% Premium growth in local currency (%) 4.7 3-4 3-4 3-4 Technical result 1,200-1,600 300-700 400-800 Investment result, net 200-300 300-400 100-200 Pre-tax profit 1,400-1,800 600-1,00
Slide 21: Capitalisation – S&P A- rating is the floor
Capitalisation – S&P A- rating is the floor DKKm 12.000 11.000 10.000 9.000 8.000 7.000 6.000 ) ) 07 07 p a 07 08 08 pa 8 09 09 p a 09 06 20 10 10 20 u t ut ut pa t pa t pa t (* (* te you te you u 08 re 3 0 yo yo yo te yo 20 20 20 1 2 20 f or Q3 1 2 20 f or Q3 1 2 10 10 Q Q Q Q Q Q Q 1 2 Q Q r r r 0
Slide 22: Key figures 2004-2009 and consensus
Key figures 2004-2009 and consensus Consensus after Q2 2010 report In DKKm 2004 2005 2006 2007 2008 2009 2010 2011 2012 Gross premium income 15,266 15,705 16,021 16,606 17,323 17,862 19,489 20,282 21,093 Gross claims incurred -10,425 -11,159 -10,564 -11,175 -11,766 -12,882 Operating expenses -2,611
Slide 23: Summary
Summary • Adverse impact from increase in claims cost and lower interest rates • Premium hikes and claims prevention action have been taken • Profitability to be gradually restored in coming years • Growth opportunities in Sweden and Finland • Strong focus on driving the cost-ratio significantly low
Slide 24: Questions?
Questions? tryg.com IR contacts ole.soeberg@tryg.dk lars.moeller@tryg.dk