Tryg A/s · OMXCOP:TRYG
Tryg A/s — Q1 2011 Earnings Presentation
20 slides from Tryg A/s's earnings presentation, May 12, 2011
Slide 1: Q1 2011 results
Q1 2011 results Webcast 12 May 2011 Morten Hübbe, CEO 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: Headlines Q1 2011
Headlines Q1 2011 • Combined ratio of 95.9 vs 108.6 in Q1 2010 • 5.4% premium growth driven by Private Nordic with 9% growth • Claims ratio of 75.7 compared with 88.9 in Q1 2010. • Q1 2011 positively impacted by normal winter • Cost ratio of 16.6 underlines cost control. Denmark/Norway expense ratio
Slide 4: Segment performance in Q1 2011
Segment performance in Q1 2011 Private Nordic - CR Commercial Nordic - CR Corporate Nordic - CR 110 100 130 100 90 110 90 107.8 137.7 80 89.3 94.3 95.1 90 85.3 80 105.3 100.2 77.8 70 70 70 Q1 2009 Q1 2010 Q1 2011 Q1 2009 Q1 2010 Q1 2011 Q1 2009 Q1 2010 Q1 2011 • 9% premium growth in local • 2.6% pre
Slide 5: Combined ratio drivers Q1 / Q1
Combined ratio drivers Q1 / Q1 108.6 14.7 4.9 0.6 0.2 95.9 5.0 1.0 2.5 Q1 2010 Extraordinary Premium hikes Claims inflat ion Storm Corporate- Expense rat io Ot hers Q1 2011 wint er st rong Q1 2010 5 |
Slide 6: Underlying claims ratio
Underlying claims ratio Private and Commercial Q1 usually has the highest claims ratio primarily due to normal winter effect 95% 90% 85% 84% 80% 80% 75% 70% 65% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Claims ratio is adjusted for items that fluctuate and distort
Slide 7: Quarterly claims ratio - Corporate
Quarterly claims ratio - Corporate 90 80 70 60 50 40 30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 08 08 08 08 09 09 09 09 10 10 10 10 11 • When adjusted for winter, claims ratio Q1 2010 was extraordinary low 7
Slide 8: Danish market workers' comp. - challenging
Danish market workers’ comp. - challenging Number of awarded loss of ability 2000 • Figures shows how 1800 loss of ability claims 1600 are determined by 1400 National Board of 1200 Industrial injuries 1000 • Rapid increase in 800 number of awards 600 between 2007 and 400 2008 200 • Especially many 0
Slide 9: Premium hikes
Premium hikes Norway Denmark % % 14 15 12 10 10 8 6 4 5 2 0 0 2009 2010 2011 2009 2010 2011 Private Property M otor Commercial Property P rivate P ro perty Other P rivate P roperty Sweden Finland % % 15 15 10 10 5 5 0 0 2009 2010 2011 2009 2010 2011 P rivate P roperty M oto r Other P rivate P rivate
Slide 10: Development in premiums
Development in premiums Motor insurance - average premium (Index 2005 =100) Average price has declined for a number of years. 120 Increase past 12 months: 110 100 2.4 % 90 4.8 % 80 2005 2006 2007 2008 2009 2010 2011 House insurance - average premium Pricing in House lagging claims (Index 2005 = 100)
Slide 11: Customer retention – Private
Customer retention – Private Customer retention rate • Retention rate in Norway is 92% gradually improving 90% • Retention rate stable in Denmark 88% despite premium hikes. 86% • Retention primarily decreasing 84% among customers with only one 82% product 2005 2006 2007 2008 2009 2010 Q1 11 100% 2+
Slide 12: Macro development and inflation
Macro development and inflation GDP Building costs Change Change 4% 6% 2% 0,0 0,0 0,0 4% 0% 0,0 0,0 0,0 0,0 2% 0,0 -2% 0% -4% 0,0 -0,1 -6% -2% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 CPI Motor repair costs Change 4% 8% 0,0 6% 0,1 0,0 2% 0,0 0,0 4% 0,0 0,0 0,0 0,0 0,0 2% 0% 0% 2008 2009 201
Slide 13: Major claims initiatives - annual benefits
Major claims initiatives - annual benefits Improved Improvedprocesses processes Alarm Alarmagreement E-auction E-auctionetc. DKK 50m DKK 50m etc. DKK agreement DKK10m 10m Large Largeclaims claims Recourse Recourse DKK DKK10m 10m Building Buildinginsurance DKK insurance DKK25m 25m Improved Im
Slide 14: Large and weather claims
Large and weather claims Large claims gross Weather claims (gross) DKKm DKKm 1.000 600 813 800 597 400 600 537 466 491 400 200 332 291 200 202 50 112 121 0 57 0 2006 2007 2008 2009 2010 Q1 11 2006 2007 2008 2009 2010 Q111 Expected full year level based on history Expected full year level based on hi
Slide 15: Discount rates
Discount rates % 6.0 5.0 4.0 3.0 2.0 2007 2008 2009 2010 2011 2012 Interest rates are increasing after dive in 2010 Discounting effect Q1 2011 only slightly higher than Q1 2010 Market expects increasing interest rates in 2011 1% increase in interest level will: -increase pre-tax profit by around DKK
Slide 16: Expenses
Expenses No. of employees • Decreasing trend in no. of employees continues 4291 4285 • Strict hiring policy continues 4280 4280 • New agreement with tied agents in Denmark approved 4268 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Expense ratio Breakdown of Group expense ratio 17.0 16.9 16.8 17.1 17.2 17.0 16.6 64
Slide 17: Investment result Q1
Investment result Q1 Assets Return Q1 2011 Gross investment return (DKKm) (mio. DKK) Bonds 5 1,185 Equities 99 261 32.2bn 32.2 mia. Real estate 56 300 DKK Total 160 1,746 Match 9.4 mia. 9.4bn Mismatch Result 0.01% -28m DKK Mismatch 0.01% Free investment Result 188m188m Return 2.1% 2.1 % (≈ 8.5% p.a.
Slide 18: Summary
Summary • Strong improvement in technical result helped by price hikes and normal winter • Visible price increases will push earnings towards mid-term target • New agreement with 300 tied agents in DK to ensure continued strong cost focus • Initiatives on claims handling with stronger focus on claim
Slide 19: Q&A session
Q&A session Investor Relations contacts Ulrik Andersson Investor Relations Director +45 21 71 30 18 [email protected] Lars Møller Investor Relations Manager +45 22 66 66 05 [email protected] 19
Slide 20: Q&A session
Q&A session Upcoming roadshows Date Place Participants from Tryg Arranged by 12 May 2011 Copenhagen Morten Hübbe, CEO ABG Investor Relations 24 May 2011 London Morten Hübbe, CEO Danske Markets Peter Brondt, IR Manager 25 May 2011 London Morten Hübbe, CEO Autonomous Conference Peter Brondt, IR Manage