Tryg A/s · OMXCOP:TRYG
Tryg A/s — TrygVesta — Q1 2007 Earnings Presentation
41 slides from Tryg A/s's earnings presentation, May 2007
Slide 1: Investor meetings – May/June 2007
Investor meetings – May/June 2007 1
Slide 2: Capital Markets Day
Capital Markets Day TrygVesta will host its first Capital Markets Day for analysts and institutional investors on 21 June 2007 from 08.30 to 13.30 at Klausdalsbrovej 601, Ballerup, Denmark Please contact Investor Relations on +45 4420 4520 or e-mail [email protected] 2
Slide 3: Agenda
Agenda 1. Highlights Q1 2007 2. Claims and run-off 3. Business areas • Private & Commercial Denmark • Private & Commercial Norway • Corporate • Finland • Sweden 4. Return on investment activities 5. Outlook and capital structure 6. Consensus 3
Slide 4: Highlights Q1 2007
Highlights Q1 2007 • Technical result of DKK 533m – an increase of DKK 137m compared to Q1 2006 • Good development in new sales – net inflow of 60,000 policies • Profit before tax of DKK 683m driven by a good technical result • Combined ratio of 89.6 positively affected by low claims ratio • P&C DK:
Slide 5: Changed unwinding method
Changed unwinding method Impacts combined ratio – but nothing else FY 2006 Former New Larger transfer from claims to accounting Unwinding accounting policies adjustments policies technical interest Gross premiums earned 16,021 16,021 Gross claims incurred -10,796 232 -10,564 Gross expenses -2,697 -2
Slide 6: Income statement
Income statement Change Q1 DKKm Q1 2007 Q1 2006 2006/2007 Gross earned premiums 3,999 3,960 39 Claims ratio, gross 69.0 74.0 5.0 Business ceded as percentage of gross premiums 3.4 0.8 -2.6 Claims ratio, net of ceded business 72.4 74.8 2.4 Expense ratio, gross 17.2 17.2 0.0 Combined ratio 89.6 92.0 2
Slide 7: Development in key ratios
Development in key ratios Gross premium earned Combined ratio 4,050 94.0 3,999 4,000 92.6 3,960 92.0 3,950 92.0 DKKm In % 3,900 3,843 3,850 90.0 89.6 3,800 3,750 88.0 Q1 2005 Q1 2006 Q1 2007 Q1 2005 Q1 2006 Q1 2007 Claims ratio net of ceded business Expense ratio, gross 76.0 18,0 74.7 74.8 17,8 74.0
Slide 8: Gross premium drivers
Gross premium drivers 4.000 + 1% (1.7% in local currency) DKKm 3.900 3.800 Group Q1 P&C DK P&C NO Corp. Finland Others Group Q1 2006 2007 Note: Difference in DKKm. Q1 2007 less Q1 2006 – green indicates increase, red indicates reduction 8
Slide 9: Technical result drivers
Technical result drivers 600 +34,6% 500 DKKm 400 300 Group Q1 2006 P&C DK P&C NO Corp. Finland Others Group Q1 2007 Note: Difference in DKKm. Q1 2007 less Q1 2006 – green indicates increase, red indicates reduction 9
Slide 10: Frequency and average claims
Frequency and average claims Frequencies in Denmark Frequencies in Norway Index Index 120 110 105 110 100 100 95 90 90 85 80 80 5 5 5 5 6 6 6 6 7 5 5 5 5 6 6 6 6 7 10 20 30 40 10 20 30 40 10 10 20 30 40 10 20 30 40 10 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Average claim in Denmark Average claim in Norw
Slide 11: Claims
Claims Large claims Weather related claims 1000 911 600 501 461 Expected 800 416 2007 400 342 DKKm DKKm 600 236 Expected 400 200 202 2007 77 200 73 111 0 46 0 0 2003 2004 2005 2006 Q1 Q1 2003 2004 2005 2006 Q1 Q1 2006 2007 2006 2007 Run-offs 800 618 555 400 263 283 141 207 114 127 DKKm 0 -17 -71 -40
Slide 12: Business areas
TrygVesta’ Business areas 12
Slide 13: P&C Denmark
P&C Denmark - Good development in new sales and retention Change Q1 DKKm Q1 2007 Q1 2006 2006 / 2007 Gross premium earned 1,621 1,617 0.2% Claims ratio, gross 67.0 66.4 0.6% Business ceded as a percentage of gross premiums 1.4 1.4 0.0% Claims ratio, net of ceded business 68.4 67.8 0.6% Expense ratio
Slide 14: P&C Denmark - Highlights in Q1 2007
P&C Denmark - Highlights in Q1 2007 Financial highlights • Combined ratio of 85.4 continues at good level • Gross premium growth of 0.7% before bonus and 0.2% after bonus • Low claims ratio of 68.4 • Gross expense ratio on level with Q1 2006 (17.0) Operational highlights • New sales performing bette
Slide 15: P&C Denmark - Premiums, combined, claims and expense ratio
P&C Denmark - Premiums, combined, claims and expense ratio Gross premium earned Combined ratio 1,650 96 95.0 1,617 1,621 92 1,600 88 DKKm In % 84.8 85.4 1,555 84 1,550 80 1,500 76 Q1 2005 Q1 2006 Q1 2007 Q1 2005 Q1 2006 Q1 2007 Claims ratio net of ceded business Expense ratio, gross 80 77.1 18.0 17.
Slide 16: P&C Norway
P&C Norway - Good development in new sales and retention Change Q1 DKKm Q1 2007 Q1 2006 2006 / 2007 Gross premium earned 1,083 1,120 -3.3% Claims ratio, gross 76.7 70.0 6.7% Business ceded as a percentage of gross premiums 1.7 1.3 0.4% Claims ratio, net of ceded business 78.4 71.3 7.1% Expense ratio
Slide 17: P&C Norway - Highlights in Q1 2007
P&C Norway - Highlights in Q1 2007 Financial highlights • Combined ratio of 99.6 vs. 93.4 due to increased claims ratio • Gross claims ratio increased 7.1 to 78.4 as a result of several large claims in Commercial, an increase of average claims and a decrease in gross premiums of 3.3% Operational hig
Slide 18: P&C Norway - Premiums, combined, claims and expense ratio
P&C Norway - Premiums, combined, claims and expense ratio Gross premium earned Combined ratio 1,150 104 99.6 1,119 1,120 100 96 DKKm In % 1,100 93.4 1,083 92 89.9 88 1,050 84 Q1 2005 Q1 2006 Q1 2007 Q1 2005 Q1 2006 Q1 2007 Claims ratio net of ceded business Expense ratio, gross 80 23.0 78.4 22.3 76
Slide 19: Corporate
Corporate - Continued strong growth Change Q1 DKKm Q1 2007 Q1 2006 2006 / 2007 Gross premium earned 1,229 1,183 3.9% Claims ratio, gross 64.6 87.9 -23.3% Business ceded as a percentage of gross premiums 7.6 -0.5 8.1% Claims ratio, net of ceded business 72.2 87.4 -15.2% Expense ratio, gross 11.3 12.0
Slide 20: Corporate - Highlights in Q1 2007
Corporate - Highlights in Q1 2007 Financial highlights • Good premium growth of 5.4 % (3.9 % after bonus) to DKK 1.229m • Low claims ratio of 72.2 • Strong combined ratio of 83.5 Operational highlights • Continued positive growth driven by good retention and new sales in Q1 2007 – especially persona
Slide 21: Corporate - Premiums, combined, claims and expense ratio
Corporate - Premiums, combined, claims and expense ratio Gross premium earned Combined ratio 1,250 105.0 1,229 99.4 100.0 1,200 1,183 95.0 90.9 DKKm In % 1,150 1,139 90.0 85.0 83.5 1,100 80.0 1,050 75.0 Q1 2005 Q1 2006 Q1 2007 Q1 2005 Q1 2006 Q1 2007 Claims ratio net of ceded business Expense ratio,
Slide 22: Finland
Finland - Continued strong growth and influx of customers Change Q1 DKKm Q1 2007 Q1 2006 2006 / 2007 Gross premium earned 57 41 39.0% Claims ratio, gross 73.7 81.4 -7.7% Business ceded as a percentage of gross premiums 0.0 0.0 0.0% Claims ratio, net of ceded business 73.7 81.4 -7.7% Expense ratio, g
Slide 23: Finland - Highlights of Q1 2007
Finland - Highlights of Q1 2007 Financial highlights • Satisfactory development driven by premium growth of 39.0% and good profitability • Expense ratio of 27, down from 39, in Private insurance. Total 45.6 due to start-up of Commercial • Good risk selection and claims ratio of 73.7% vs. 81.4% in 20
Slide 24: Finland - Premiums, combined, claims and expense ratio
Finland - Premiums, combined, claims and expense ratio Gross premium earned Combined ratio 60 57 150.0 50 140.1 41 140.0 40 30 130.0 DKKm In % 30 120.3 119.3 20 120.0 10 110.0 0 100.0 Q1 2005 Q1 2006 Q1 2007 Q1 2005 Q1 2006 Q1 2007 Claims ratio net of ceded business Expense ratio, gross 88.0 60.0 55
Slide 25: Sweden
Sweden - Satisfactory sales development in line with goals Operationelle højdepunkter • Increase of 24.000 policies in 1Q 2007 • High sales level continues compared to start-up in Finland – sales follows targets and strategies for market positioning • Own call center accounts for 1/3 of new sales St
Slide 26: Return on investment activities
Return on investment activities 26
Slide 27: Return on investment activities
Return on investment activities Highlights Q1 2007 • Return on investment activities before other financial income and expenses of DKK 426m in 2007 vs. DKK 419m in 2006 • Return on investment activities after technical interest of DKK 152m vs. DKK 311m • DKK 38.3bn in investment assets ultimo March
Slide 28: Outlook and capital structure
Outlook and capital structure 28
Slide 29: Outlook 2007
Outlook 2007 Outlook Outlook Favorable Negative Realised 2006 DKKm 28 Feb 2007 9 May 2007 scenario scenario Premium growth* 2.0% 3.0% 3% Technical result 2,512 2,050 2,250 2,400 2,100 Return on investment activities 1,228 500 500 Result before tax and discontinued business 3,709 2,500 2,700 Result a
Slide 30: Update on capital
Update on capital Current Current capital capital structure structure 31 March 2007 (DKKm) (DKKm) Equity 8,192 88% Hybrid 1,099 12% Other capital 0 0% Total 9,291 100% Credit lines 2,000 (Equity + hybrid – dividend)/ NPE 60.3% Current Current ratings ratings • S&P: “A-” (strong), stable outlook • Mo
Slide 31: Capitalisation
Capitalisation 175% 14,000 148.0% 132.5% 150% 12,000 125.3% 128.5% 128.0% 121.3% 125% 10,000 8,806 9,291 93.7% 7,885 100% DKKm 8,000 6,817 6,852 6,060 75% 6,000 4,268 4,000 50% 2,000 25% - 0% 2002 2003 2004 2004* 2005* 2006* Q1 2007* Capital less dividend S&P CAR * IFRS. Previous years are Danish GA
Slide 32: Appendix
3) TrygVesta SAN Vy Appendix 32
Slide 33: Facts about TrygVesta
Facts about TrygVesta • Shares outstanding 68m. • Focused Nordic, non-life insurance • Market cap DKK 32bn (USD 5.8bn) company • Shareholders (free float) april 2007: • Our vision: To be perceived as the leading “peace of mind” supplier in USA UK 12% 6% the Nordic region Others 5% • Strong brand and
Slide 34: The Nordic insurance market
The Nordic insurance market Denmark Norway DKK 41.3bn (EUR 5.5bn) NOK 35.2bn (EUR 4.5bn) IF Other 6% 7% Codan IF Other 13% Sparebank 27% 30% 17% Tryg 22% Alm Brand 10% Vesta Gjensidige 19% 30% TopDK 19% Finland Sweden EUR 3.0bn SEK 54.8bn (EUR 5.9bn) Other Other IF 9% 16% 20% Lahviak IF 9% 27% Vesta
Slide 35: Peace of mind in the Nordic region
Peace of mind in the Nordic region Private & Commercial Norway Finland Started in 2003 18% share 3% share of Private Corporate Sweden Started in 2006 Private & Commercial Denmark 22% share 35
Slide 36: Distribution in business areas
Distribution in business areas P&C Denmark P&C Norway 4% 4% 10% 28% 15% 55% 71% 13% Local service centres Affinity groups Nordea Car dealers Local service centres Car dealers Franchises Nordea Corporate Sweden Finland 2% 16% 38% 46% 54% 22% 60% 62% Direct sales Brokers Call centres Nordea Internet C
Slide 37: Premium drivers
Premium drivers Maturity P&C DK P&C NO Corporate Finland New markets add roughly 1 percentage point Healthcare to Group growth Sweden Time 37
Slide 38: Segments - Gross premium income and technical result
Segments - Gross premium income and technical result 2006 Gross premium income Technical result Other Other 11% 17% Workers Workers Motor comp & comp. comp. TPL 7% 1% 34% Accident & Motor comp & Accident & health TPL health 10% 46% 14% Fire & content (commercial) Fire & content 16% (commercial) Fire
Slide 39: Business areas - Gross premium income and technical result
Business areas - Gross premium income and technical result 2006 Gross premium income Technical result P&C NO P&C NO Corporate Corporate 28% 29% 31% 33% Finland & Finland & Sweden Sweden 1% 0% -3% P&C DK P&C DK 40% 38% 39
Slide 40: Distribution of technical result
Distribution of technical result • Technical result in Corporate improved further – increase of DKK 211m primarily due to significant decline in large claims compared to 2006 • Lower technical result in Private & Commercial Norway is mainly a result of expenses relating to one large and several medi
Slide 41: 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