Tryg A/s · OMXCOP:TRYG
Tryg A/s — Q2 2010 Earnings Presentation
28 slides from Tryg A/s's earnings presentation, Aug 17, 2010
Slide 1: Q2 and H1 2010 results
Q2 and H1 2010 results Webcast presentation 17 August 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: Highlights in Q2 2010
Highlights in Q2 2010 • Premiums grew 3.6% in local currency (8.7% in DKK) driven by strong growth of 7.6 in Private Nordic • Technical result of DKK 394m – despite more large claims • Combined ratio 92.5 in Q2 2010 (91.6 in Q2 2009) impacted by lower interest level • Gross claims ratio of 73.1 agai
Slide 4: Key performance indicators
Key performance indicators Given the same interest level as Q2 2009, CR Gross premium Combined ratio would have been 91.6% DKKm 4,890 108.4 110 4,637 4,611 4,650 4,497 100 15.1 4,425 4,338 4,327 4,233 90 4,117 } 80 90.9 90.3 90.9 91.5 92.0 94.0 93.3 92.5 70 87.9 87.3 60 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 5: Stable insurance results while investments fluctuate
Stable insurance results while investments fluctuate • Profit before tax was DKK 173m against DKK 896m in Q2 2009 heavily affected by DKK 706m lower net investment return • Profit for the period was DKK 128m against DKK 710m in Q2 2009 • Effective tax rate was 27 Profit before tax - DKKm Profit for
Slide 6: Nordic peers
Nordic peers Premium growth in % 14 Gjensidige Tryg 11 8 Tryg excl. 5 Moderna Gjensidige excl. Nykredit 2 -1 If -4 2004 2005 2006 2007 2008 2009 Q2 2010 Combined ratio 106 102 98 Gjensidige 94 90 If… 86 Tryg 82 2004 2005 2006 2007 2008 2009 Q2 2010 6
Slide 7: Segment performances
Segment performances Private Nordic - CR Commercial Nordic - CR Corporate Nordic - CR 110 110 110 104.6 100.0 100 100 97.3 100 92.1 91.2 90 87.7 90 90 83.5 84.3 80 80 80 77.7 70 70 70 Q2 08 Q2 09 Q2 10 Q2 08 Q2 09 Q2 10 Q2 08 Q2 09 Q2 10 • 7.6 % premium growth • 8.8 % premium growth • 7.6% decline i
Slide 8: Expense ratio
Expense ratio Continued 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 reduced by
Slide 9: Premium performance
Premium performance 9 17. august 2010
Slide 10: Premium performance
Premium performance Gross premium - Group Gross premium - Private DKKm DKKm 4,890 +3.6% +7.6%* 4,637 4,611 4,650 4,497 (+9.3%)** 4,425 2,562 4,338 4,327 4,233 2,425 4,117 2,378 2,391 2,294 2,044 2,068 2,022 1,987 1,988 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q1 08 Q2 08 Q3 08 Q4
Slide 11: Price increases and stronger NOK impact premiums
Price increases and stronger NOK impact premiums Strong growth of 3.6% in local currency • Premium increased by 8.7% in DKK and was helped by the stronger NOK and SEK • High growth in Finland and Sweden with 25% and 15% respectively • Recession impact and harder competition within Coporate result in
Slide 12: Next wave of price increases
Next wave of price increases 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 09 09 10 10 09 09 05 05 05 07 07 07 07 08 0
Slide 13: Premium increase in Commercial
Premium increase in Commercial • Successful re-pricing of agriculture of 15% fulfilled during 2009-2010 • Premium increases in Commercial Property insurances of 10-15% accelerated to start October 2010 • Re-pricing of Commercial will continue until profitability is re-established • Focus on cost red
Slide 14: Claims development
Claims development 14
Slide 15: Claims ratio performance
Claims ratio performance Claims ratio - Group Claims ratio -Private (ex winter 2010) (ex winter 2010) 80 80 75 75 70 78.4 70 79.8 77.3 78.3 76.2 76.1 75.2 75.4 75.7 74.4 75.0 73.7 73.8 73.3 71.8 71.4 65 70.3 69.5 70.2 65 68.1 60 60 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q1 08 Q2
Slide 16: 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 17: Frequency and average claims
Frequency and average claims Average claims private cars Frequency private cars 130 120 120 110 110 100 100 90 80 90 2005 2006 2007 2008 2009 1H 2010 2005 2006 2007 2008 2009 1H 2010 Frequency private houses Average claims private houses 150 130 140 120 130 110 120 110 100 100 90 90 2005 2006 2007 2
Slide 18: 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 19: Investments
Investments 19
Slide 20: Peer group investment return H1 2010
Peer group investment return H1 2010 Tryg Gjensidige Sampo P&C 2.5% 2.3% 2.4% return on assets return on assets return on assets 4.5% 13.0% 9.5% 13.2% 11.7% 86.0% 87.0% 75.1% Equities a.o Bonds and deposits Real estate Interest rate sensitivity Rates up loss loss loss Discounting gain zero zero Net
Slide 21: Investment result: 0.7 % gross return in Q2 2010
Investment result: 0.7 % gross return in Q2 2010 21
Slide 22: Assets allocation
Assets allocation 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 Equities Real estate C ov.
Slide 23: Outlook and capitalisation
Outlook and capitalisation 23 17. august 2010
Slide 24: Outlook 2010
Outlook 2010 Assumptions: Run-off expected at DKK 0, large claims at DKK 500-600m and weather claims at DKK 200-300 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
Slide 25: Capitalisation
Capitalisation 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 ut ut 20 u t pa t pa t pa t (* (* te you u te you 08 re 3 0 yo yo yo te yo 20 20 20 1 2 20 f or Q3 1 2 1 2 20 f or Q3 10 10 Q Q Q Q Q Q Q 1 2 Q Q r r r 07 e 09 e 1 2 o Q Q af af af f
Slide 26: 2010-2012 next wave of premium increases
2010-2012 next wave of premium increases 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. Reduced combined
Slide 27: Summary
Summary • Good premium growth despite recessionary impact on Commercial lines • Claims inflation starting to stabilize in some areas, however still at a high level – areas with profitability below targets to have premium increases and claims prevention actions • Costs and efficiency improvements bal
Slide 28: Questions?
Questions? Q2 and H1 2010 results Investor relations contacts Ole Søeberg Investor Relations director +45 40 30 00 04 [email protected] Lars Møller Investor Relations Manager +45 22 66 66 05 [email protected] 28 17. august 2010