Tryg A/s · OMXCOP:TRYG
Tryg A/s — Q1 2014 Earnings Presentation
21 slides from Tryg A/s's earnings presentation, Apr 10, 2014
Slide 1: Q1 results 2014
Q1 results 2014 Webcast presentation 10 April 2014 Follow us on Twitter: @TrygIR 1
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: Highlights Q1 2014
Highlights Q1 2014 - Strong result with 5% improved technical result despite DKK 150m higher level of large claims. Pre-tax profit D KKm 759 800 • Pre-tax profit of DKK 602m (DKK 759m). Technical 600 602 result improved 4.6% to DKK 523m (DKK 500m). 400 200 • Combined ratio of 89.2 compared to 90.3 a
Slide 4: Important news in Q1 2014
Important news in Q1 2014 • New customer focused organisation in Commercial and Corporate. • New costumer concept Nordea Tryg Plus launched. • Tryg acquires agriculture renewal right from Codan. • MC - new price differentiated product in Denmark. • Efficiency programme progress as planned. DKK 90m r
Slide 5: Combined ratio development in Business areas
Combined ratio development in Business areas Combined ratio – Private (DK & NO) Combined ratio – Commercial (DK & NO) % % 100 100 95 95 90.0 89.9 90 88.0 90 85 85 81.9 80 80 75 75 70 70 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Group CR Q1 2014: 89.2 Q1 2013: 90.3 Combined ratio – Sweden Combined ratio – Corp
Slide 6: Follow up on efficiency programme
Follow up on efficiency programme • Savings of DKK 647m achieved so far. DKKm Targeted and achieved savings on claims 1,200 • DKK 90m achieved in Q1 2014. 1,000 1,000 • DKK 25m reduction in expenses 800 700 647 • DKK 65m reduction in claims 600 485 400 300 • Increased benefit from use of Scalepoint.
Slide 7: Premiums and portfolio
Premiums and portfolio 7
Slide 8: Topline and technical result
Topline and technical result Gross earned premiums reduced by 2.0% (2.5%) related to: • Continued high retention level in Private and even improved retention level in Commercial. • Higher sales level in general in Private. • Commercial affected by price initiatives and pruning in previous years. • C
Slide 9: Customer retention
9 Q Q 1 1 82% 84% 86% 88% 90% 92% 82% 84% 86% 88% 90% 92% 09 09 Private Q Q 3 3 09 09 Commercial Q Q 1 1 10 10 Q Q 3 3 10 10 Q Q 1 1 11 11 Q Q 3 3 11 11 Q Q 1 1 12 12 Q Q 3 3 12 12 Q Q 1 1 13 13 Q Q 3 Customer retention 3 13 13 Q Q 1 1 14 14
Slide 10: Private - average premiums
Private - average premiums House insurance – average premium (index 2008 = 100) 150 Average premiums increase Y/Y 140 0.6% 2.9% 130 120 110 100 90 2008 2009 2010 2011 2012 2013 Motor insurance – average premium (index 2008 = 100) 140 Average premiums increase Y/Y 130 -0.9% 2.3% 120 110 100 90 2008 2
Slide 11: Private Sweden – CR and customer retention
Private Sweden – CR and customer retention Customer retention 78% 69% Nordea portfolio 60% 08 09 09 10 10 11 11 12 12 13 13 14 3- 1- 3- 1- 3- 1- 3- 1- 3- 1- 3- 1- Q Q Q Q Q Q Q Q Q Q Q Q 130 125 125 120 114 115 110 110 105 103 103 102 99 99 100 97 95 95 94 95 91 90 88 89 88 88 85 80 Q1-10 Q3-10 Q1-1
Slide 12: Claims and expenses
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Slide 13: CR and claims ratios Q1 2013-14
CR and claims ratios Q1 2013-14 Underlying claims ratio, net Q1 2013/2014 • Underlying development is adjusted for: • Large claims 87.2 81.8 • Weather claims 76.2 76.7 75 75.3 69 71.4 67.7 68.4 • Run-off and interest • 1.2 %-point improved underlying claims ratio on Group level driven by efficiency
Slide 14: 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 2014: DKK 550m level 2014: DKK 500m 200 200 150 150 215 100 100 140 50 114 50 67 0 0 Q1 2013 Q1 2014 Q1 2013 Q1 2014 Run-off, net DKKm Run-off net, effect on combined ratio
Slide 15: Expense ratio development
Expense ratio development • Expense ratio improved from 16.0 in Q1 2013 to 15.9 in Q1 2014. Expense ratio • Nominal expenses on Group level reduced significantly in Q1 2014. • Efficiency programme. • Adapting to lower premium level by reducing 16.6 16.7 16.6 16.4 nominal expenses by more than 2% in
Slide 16: Investment, capital and financial targets
Investment, capital and financial targets 16
Slide 17: Investment result Q1 2014
Investment result Q1 2014 Investment return Free portfolio – Q1 2014 (DKK 13.6bn) Q1 2014 DKKm Equities (22) 36 Free investment 129 3 Investment property (15) Match regulatory deviation -3 Bank deposits/bonds (17) Percentage 22 Match performance 30 Govt. Bonds (1) High yield (6) Other financials -67
Slide 18: Capital structure and status on share buy back
Capital structure and status on share buy back DKKm 12,000 Capital – Q1 2014 • Capital buffer based on Individual Solvency increased 10,000 1,770 to 53% (2013 Q4: 50%) and was impacted by: 3,591 • Q1 result 2014 8,000 • Increase in capital requirement due to transition to new capital regime. 6,000 •
Slide 19: Financial targets
Financial targets ROE after tax of 20% to be achieved by delivering a full year combined ratio of 90 or lower. Expense ratio <15 in 2015 ROE after tax 40% 30% ROE target 20% 10% 0% 14 5 6 7 8 9 0 1 2 3 4 5 0 0 0 0 0 1 1 1 1 1 1 20 20 20 20 20 20 20 20 20 20 20 20 1 Q 19
Slide 20: Q/A
Q/A Follow us on Twitter: @TrygIR 20
Slide 21: Upcoming roadshows
Upcoming roadshows Date Place Participants from Tryg Arranged by Morten Hübbe, CEO 10/04/2014 Copenhagen Tor Magne Lønnum, CFO Carnegie Investor Relations Morten Hübbe, CEO 11/04/2014 London Tor Magne Lønnum, CFO Danske Markets Investor Relations 24/04/2014 Brussels/ Amsterdam Peter Brondt, IR Manag