Q3 2016 results - Amazon S3€¦ · Q3 2016 results Investor presentation Follow us on Twitter: @TrygIR. Contents 2 Highlights Q3 2016 3 ... are based on the beliefs of our management

Q3 2016 results

Investor presentation Follow us on Twitter: @TrygIR

Contents

2

Highlights Q3 2016 3

Premiums and portfolio 6

Claims and expenses 11

Investment, capital and targets 17

Background material 25

Appendix 41

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, financial condition, cash flows, business strategy, plans and future objectives can

generally be identified by terminology such as “targets”, “believes”, “expects”, “aims”, “intends”, “plans”, “seeks”, “will”, “may”, ”anticipates”, “continues” or similar expressions.

A number of different factors may cause the actual performance to deviate significantly from the forward-looking statements in this presentation including but not limited to general

economic developments, changes in the competitive environment, developments in the financial markets, extraordinary events such as natural disasters or terrorist attacks, changes in

legislation or case law and reinsurance.

We urge you to read our annual report available on tryg.com for a discussion of some of the factors that could affect our future performance and the industry in which we operate.

Should one or more of these risks or uncertainties materialise or should any underlying assumptions prove to be incorrect, our actual financial condition or results of operations could

materially differ from that described herein as anticipated, believed, estimated or expected.

We are not under any duty to update any of the forward-looking statements or to conform such statements to actual results, except as may be required by law.

Financial highlights Q3 2016- Higher technical result and substantially higher investment return

3

923

186

Q3 2016 Q3 2015

Pre-tax profit (DKKm)

14.5 16.3

Q3 2016 Q3 2015

Combined ratio

Expense ratio

• Pre-tax profit of DKK 923m (DKK 186m) driven by:

• Higher technical result of DKK 744m (DKK 647m), underlying performance almost in line as a restructuring charge of DKK 120m was booked in Q3 2015

• Substantially higher investment result of DKK 191m (DKK -441m), equity markets posted a good performance in Q3 2016 while fell heavily in Q3 2015

• Technical result of DKK 744m (DKK 647m)

• Lower level of large & weather claims but also significantly lower run-offs

• Underlying claims ratio (Private) shows a 60bps deterioration vs Q3 2015 (90bps in Q1 2016, 70bps in Q2 2016)

• Price adjustments continued as planned, impact expected primarily in 2017

• Expense ratio of 14.5 (16.3) and combined ratio of 83.7

(86.1)

• Investment income of DKK 191m (DKK -441m)

• Good equities performance in the quarter (large drop in Q3 2015) but also solid returns across all asset classes

• Solvency ratio of 217 including Skandia child portfolio

83.786.1

Q3 2016 Q3 2015

Customer highlights Q3 2016- Many new digital self-service and claims solutions launched

4

24

2022

Q3 2016 Q3 2015 Target 2017

NPS

57.0 56.761.3

Q3 2016 Q3 2015 Target 2017

Customers with ≥3 products (%)

88.0 88.1 88.9

Q3 2016 Q3 2015 Target 2017

Retention rate

• NPS score of 24

• New Tryg Pluss benefits programme launched in Norway

• Digital self-service solutions for house, contents, boat, caravan and holiday house launched in Norway.

• Cyber insurance developed in Corporate and Commercial in Denmark, Norway and Sweden – will be launched in Q4.

• 95,000 customers upgraded to new motor, accident and house products.

Key figures Q3/FY

5

DKKm Q3 2016 Q3 2015 FY 2015

Gross premium income 4,514 4,583 17,977

Gross claims -2,693 -3,512 -13,562

Gross expenses -644 -739 -2,720

Technical result 744 647 2,423

Return on investment after technicalinterest

191 -441 -22

Profit/loss before tax 923 186 2,310

Profit/loss 732 110 1,969

Claims ratio, net of reinsurance 69.2 69.8 71.5

Gross expense ratio 14.5 16.3 15.3

Combined ratio 83.7 86.1 86.8

Premiums and portfolio

Gross earned premiums development

(Local currencies)

0.0

0.6

Q3 2016 Q3 2015

Positive topline development in Private

7

DKKm Q3 2016 Q3 2015Local currencies

Q3 2016Local currencies

Q3 2015

Private 2,190 2,211 0.7% 0.3%

Commercial 977 1,022 -3.4% 0.2%

Corporate 968 984 0.0% 2.6%

Sweden 384 373 4.5% -1.4%

Group 4,514 4,583 0.0% 0.6%

Group premiums flat in local currencies, Private lines up, Commercial down & Corporate flat

In Commercial Q3 2015 top-line growth boosted by a one-off regulation of DKK20m, adjusting for this the

development is broadly flat.

Private lines up 0.7% with Denmark up 2.2% while Norway posting a slight negative development

Sweden development impacted primarily by the inclusion of the Skandia child insurance portfolio

117

195

Q3 2016 Q3 2015

744

647*

Q3 2016 Q3 2015

Technical result broadly in line with Q3 2015 adjusting for one-off

8

Commercial, DK & NO (DKKm)

Sweden (DKKm)

447398

Q3 2016 Q3 2015

Group (DKKm)

Corporate (DKKm)

Private, DK & NO (DKKm)

38 38

Q3 2016 Q3 2015

142 136

Q3 2016 Q3 2015

*Business segments not affected by the DKK 120m one-off charge

90

95

100

105

110

115

DK

NO

90

95

100

105

110

115

DK

NO

9

Private - average prices

Average price

4,200 5,700

• DK –1.3% decrease y/y driven bysmaller & safer cars partly offset by sale of additional coverages

• Competition remains strong in Motor DK but profitability veryhigh

• NO: small positive developmentreflects underlying price increases

Average price:

4,800 5,500

Motor insurance – average price (index 2011 = 100)

House insurance – average price (index 2011 = 100)

Average price development Y/Y

-1.3% 0.8%

(Q2 -2.1%) (Q2 0.9%)

Average price development Y/Y

-0.2% 0.2%

(Q2 -0.7%) (Q2 0.1%)

• DK: price adjustments help in softening negative developmentin average price

• DK: Y-o-Y development still slightly negative but R12 turningpositive thanks to priceadjustments

• NO: small positive developmentreflect underlying price increases

Customer retention

10

82%

84%

86%

88%

90%

92%

DK

NO

Commercial

82%

84%

86%

88%

90%

92%DK

NO

Private

• Customer retention at 89.9 in Denmark, stable development

• Stable development in Norway

• Modest fall in Denmark mostlydriven by price increases

• Retention moving slightlyupwards in Norway

Front page slide

Claims and expenses

85.1**

76.8

Q3 2016 Q3 2015

74.171.9*

Q3 2016 Q3 2015

Increase in underlying claims ratio, net

12

72.3 72.7

Q3 2016 Q3 2015

Commercial (DK & NO)

77.0 76.7

Q3 2016 Q3 2015

Sweden

69.4 68.8

Q3 2016 Q3 2015

Group

Corporate

Private (DK & NO)

Underlying development is adjusted for large claims, weather claims, run-off and interest.

*Q3 2015 figure is adjusted for a DKK 40m one-off related to the DKK 120m restructuring charge booked in that quarter

** Mainly driven by a higher level of medium-sized claims

48,377

67,449

89,569

123,907

H1 2014 H2 2014 H1 2015 H2 2015

Motor insurance, not all claims are coming down

13

LV H1 results ( London-Victoria, UK third largest Motor insurer with 11% market share) “In 2016 we are seeing motor claims inflation at the top end of our expectations driven by increases in technology in cars which makes repair costs more expensive”

Motor insurance accidents

Mobile phones data traffic (in ‘000 GB)

Source: Energistyrelsen (Danish Energy Agency)

Source: Forsikring & Pension (Danish Insurance Association)

Bumpers, price increases in % from 2011-2016

Source: Rådet for Sikker Trafik (The Danish Council for Traffic Safety) ”Drive a car when you drive a car”

24,710

25,402 25,491

26,505

27,978

2012 2013 2014 2015 2016

Monthly averagebased on Jan-Sept

Six times higherrisk of an accident

while texting*

* Source:Transport DTU, September 2016

Large claims, weather claims and run-off

14

8.8

6.4

5.0 5.0

6.16.7

2012 2013 2014 2015 Q3 2015 Q3 2016

Run-off net, effect on combined ratio (%)

11157

323

542

447

614

2012 2013 2014 2015 Q3 2015 Q3 2016

Weather claims, net DKKm

199

42

471407

574 615

2012 2013 2014 2015 Q3 2015 Q3 2016

Large claims, net DKKm Expected annual

level 2016: DKK 500m

Expected annual

level 2016: DKK 550m

Claims reserves discounting rate (%)

2.01.5

1.2Q3 2015

1.0Q3 2016

0.7

2012 2013 2014 2015 2016

Efficiency programme, DKK 55m achieved in Q3

15

• Programme proceeds as planned, target to

achieve savings of DKK 750m over 3 years.

• Savings achieved in 2015 and 9m 2016

equal to DKK 316m vs DKK 375m target (FY

2015 & 2016)

• Claims initiatives of DKK 38m in Q3:

• Focus on helping injured policyholders to get back to work quickly

• Cash settlements through In4mo system

• Building claims inspection in Sweden through improved SLA and processes

• Expense initiatives of DKK 17m in Q3:

• Outsourcing Accounting

• Reorganisation of Agriculture & Small Commercial division

• Digital communication

Efficiency programme up until 2017 (DKKm)

100 105150

104

250

175

388395

5060

75

47

125

2012 2013 2014 Target2015

2015 Target2016

Q1-Q32016

Target2017

Expense Claims

Old programme New programme

Strong costs focus to meet 2017 target

16

• Expense ratio at 14.5, which is line with Q3 15 adjusted for one-off expenses (DKK 80m)

• Efficiency programme lowered costs by DKK 17m for Q3 mainly related to:

• Outsourcing within Finance and IT• Commercial reorganisation• Digital communication

• Important reduction in FTE in Norway (approx. 60 positions) in Q2 16

• New initiative in Norway in Q3 16 with a reduction of approx. 30 FTEs in car sales channel and back-office

• Initiatives in Norway support expense ratio target for 2017 at or below 14 but no impact in 2016

FTE - Development

16.3

14.5

16.4

15.6

14.6

15.315.3

14.914.6

2012 2013 2014 2015 Q3 2015 Q3 2016

Expense ratio

Adjusted for one-off effects

Nominal costs in business areas

313

162107

62

326

170

10459

Private Commercial Corporate Sweden

Q3 2016 Q3 2015

4,077

3,914

3,703

3,599

3,3593,310

2011 2012 2013 2014 2015 Q3 2016

Front page slide

Investment, capital and targets

3.7 (-10.3)

4.6 (-2.8) 5.2 (-1.9)

1.3 (1.3)0.6 (-0.9)

1.8 (-2.6)

Cov. Bonds67.8% (68.6)

Bonds/Deposits (match)4.6% (4.2)

Equities 5.8% (5.8)

HY 1.7% (2.2)

EM* 1.0% (1.0)

IG 0.5% (0)

Inv. Property 5.0% (5.1)

Bonds/deposits (free) 13.6% (13.0)

Investment return – low risk remains key

18

Free portfolio return Q3 2016 (%)

High-yield corporate bonds (DKK 0.7bn) Q3 2016

Portfolio (DKK 41.8bn) Q3 2016

Free11.5bn 28%

Match30.2bn 72%

Industrials77%

Energy (mostly oil)7%

Utilities3%

Other3%

Finance10%

* EM = Emerging markets (Sovereign bonds USD denominated)

99

7

100

1

25

0

5460

14

40

Bonds Equity HY & EM Inv. Property

Nordics EU ex Nordics North America EM/Other

Geographical exposure (%)

93

61 0

74

60

20

90

61 3

AAA AA-A BBB-B Lower

Match Free Total

Rating (%)

Solvency position Q3 2016

19

• Solvency ratio based on the Partial Internal Model is 217 (Q2 2016: 206).

• SCR main moves in the quarter are DKK 53m in ‘health’ which mostly represents the Skandia child insurance capital charge and DKK -38m in ‘non-life’ stemming from a more granular modelling of property risk

• Own Funds (OF) is primarily impacted by

• Result Q3 2016 of DKK 732m

• Deduction of goodwill & intangible assets (Skandia child insurance portfolio)

• Based on Solvency II Standard Formula the solvency ratio is 173 (Q2 2016: 169).

Own funds walk

Solvency capital requirement walk

5,0925,080

-19

53 8 -13-38

28 4 -12

4,900

4,950

5,000

5,050

5,100

5,150

5,200

SC

R

Q2 '16

Mark

ed

Health

Life

Defa

ult

Non-L

ife

Opera

-

tional

Adju

st-

ment

Div

ers

i-

fication

SC

R

Q3 '16

11,053

10,449

732 -134-11 11

9,100

9,600

10,100

10,600

11,100

11,600

12,100

Ow

n F

unds

Q2 '16

Results

Q3 '16

Inta

ngib

le

assets

Subord

inate

d

debt

Mis

cellaneous

Ow

n F

unds

Q3 '16

Capital and solvency ratio development

20

• Tier 2 capacity fully utilised after issue of SEK 1bn subordinated debt 19 May 2016

• As per Q3 some DKK211m of Tier 2 instruments are not included in the Own funds as they exceed the 50% SCR cap

• As per Q3, Tryg has additional ATier 1 capacity of approximately DKK 1.3bn

• Solvency ratio development mostly a function of net profits (+) and dividend and buy backs (-) underlying development should remain pretty stable

• The Danish FSA has explained that a ratio lower than 125 would result in increased surveillance.

Capital Tiers

Solvency ratio development

7,842 154%

664 13%

2,546 50%

Q3 '16DKKm

Q3 '16% of SCR

CETier 1

ATier 1

Tier 2

212%

206%*

217%

Q1 '16 Q2 '16 Q3 '16

* H1 Dividend and FY DKK 1,000m buy backs deducted

Solvency ratio sensitivities

21

• The Solvency II ratio shows the highest sensitivity to spread risk• Assumption is for a 100bps widening/narrowing of our entire fixed income book (Danish government bonds, Danish

mortgage bonds, Norwegian government bonds, high yield etc.)

• The Solvency II ratio is not highly sensitive to equity markets movements as most of the ‘Own funds’ hit from a sharp fall in equity markets would be offset by a lower capital requirement (lower market values combined with the effect of a reduced charge due to equity-dampener)

• Interest rate risk is very low as function of our matching strategy

• A change in the UFR (Ultimate Forward Curve) from 4.2% to 3.2% would reduce the solvency ratio from 217 to 216

217% 216% 217%

226%

208%

215%219%

204%

231%

216%

190%

200%

210%

220%

230%

240%

Q3 '16 +20% -20% +20% -20% +100 bps -100 bps +100 bps -100 bps -100 bps

2016 Equity Property Interest Spread UFR

Targets and outlook

22

Efficiency programme proceeds as

planned.

Members’ bonus of 8% paid in June 2016

Price increases to offset claims inflation

2016 topline at the ‘lower end’ of 0%-2% including

Skandia child insurance portfolio

2016 expected tax rate 21

Markets remain very competitive

High focus on capital repatriation

Customer targets

Financial targets

Net Promoter Score (NPS) + 100%

Retention rate + 1 pp

Customers ≥ 3 products** + 5 pp

** Private (DK & NO)

2017

ROE after tax ≥ 21%

Combined ratio ≤ 87

Expense ratio ≤ 14

* Excl. One-off effects

0

10

20

30

40

ROE after tax (%)

It is important to know your investment case

23

”Do you know the only thing that gives me pleasure?

It’s to see my dividends coming in.”

John D. Rockefeller

Date Place Participants from Tryg Arranged by

11/10/2016 Copenhagen

Morten Hübbe, CEO

Christian Baltzer, CFO

Lars Bonde, COO

Investor Relations

ABG

12/10/2016 London

Morten Hübbe, CEO


Gianandrea Roberti, IR Officer

Peter Brondt, IR Manager

ABG

13/10/2016 EdinburghMorten Hübbe, CEO

Gianandrea Roberti, IR OfficerMediobanca

26/10/2016 Los AngelesChristian Baltzer, CFO

Peter Brondt, IR ManagerAutonomous

27/10/2016 San FranciscoChristian Baltzer, CFO

Peter Brondt, IR ManagerAutonomous

03/11/2016 Milan Gianandrea Roberti, IR Officer Barclays

07/11/2016 ParisChristian Baltzer, CFO

Peter Brondt, IR ManagerDanske Markets

23/11/2016 AmsterdamLars Bonde, COO

Peter Brondt, IR ManagerDanske Markets

28-29/11/2016 TokyoChristian Baltzer, CFO

Gianandrea Roberti, IR OfficerGoldman Sachs

01/12/2016 Singapore


Gianandrea Roberti, IR OfficerGoldman Sachs

09/11/2016 LondonMorten Hübbe, CEO

Gianandrea Roberti, IR Officer

Barclays Global Income

Conference

30/11/2016 CopenhagenMorten Hübbe, CEO

Peter Brondt, IR Manager

Danske Bank Copenhagen

Winter Seminar

Upcoming roadshows

24

Background material

9.2%8.3%

6.6% 6.9%

5.25.4

5.86.0

3

4

5

6

7

8

0%

2%

4%

6%

8%

10%

2012 2013 2014 2015

Total yield DPS (right axis)

1,401 1,330 1,380

1,129 1,067

612

0

1,000

2,000

60%

70%

80%

90%

100%

110%

120%

2010 2011 2012 2013 2014 2015

UK Germany Italy Denmark Norway

-100%

-50%

0%

50%

100%

150%

200%

Non-life Life Banking Other

Why invest in Tryg?

26

Pre-tax result by division (YE 2015 data) High insurance penetration in the Nordics

Tryg is a dividend stockMotor combined ratios Nordics vs international

Premiums per capita (USD), 2015

Total yield (dividend and buy backs / market cap) at year end

DKK

IBM study from 2007, probably little has changed

27

52%

57%

63%

64%

67%

72%

62%

62%

53%

62%

49%

50%

40%

36%

37%

39%

20%

33%

53%

46%

45%

42%

43%

43%

0% 10% 20% 30% 40% 50% 60% 70% 80%

F UK DE DK

• Overall I am very satisfied with the

services of my insurance company

• My insurance agent only sold me

insurance coverage that I really needed

• My present insurance coverage offers

me enough flexibility

• Claims: my insurance company in

uncomplicated and helpful way

• I have full confidence in my personal

insurance agent

• My insurance is more cost effective than

most other insurances

Danish customers completely and strongly agree

Source: IBM Institute for Business Value and I.VW University of St. Gallen 2007 Insurance Study

Tryg – at a glance I

28

• Tryg goes back to 18th century.

• Very strong brand position especially in Denmark.

• Non-life insurance in Denmark, Norway and Sweden.

• Approx. 80% retail business.

82%

84%

86%

88%

90%

92%

Retention rate - Private

DK

NO

82%

84%

86%

88%

90%

92%

Retention rate - Commercial

DK

NO

NorwayMarket position: #3

Market share: 13.4%CR in 2015: 87.9

SwedenMarket position: #5Market share: 2.9%CR in 2015: 82.7

DenmarkMarket position: #1

Market share: 18.1%CR in 2015: 85.2

56

22

22

Private

Commercial

Corporate

Business split 2015

31

5

115

24

14

10

Motor

Workers' comp

Health & accident

Liability

Fire & property - private

Fire & property - comm.

Other

Gross premium split by products 2015

Percentage

Percentage

4.2

6.6

3.4

1.3

3.1

0.8 1.3

5.2 5.4 5.8 6.0

2.5 2.6

4.2

2.6

2.63.2

3.4 3.5

0

1

2

3

4

5

6

7

8

9

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H12015

H12016

Cash dividend Ordinary buy back Extraordinary buy back

60

11

12

16

Danishinstitutional

Non-Danishinstitutional

Smallershareholders

Tryg – at a glance II

29

Shareholder breakdown 2015

Strengthening of brand value

Shareholder performance since IPO

New dividend policy

Shareholder remuneration since IPODKK

Percentage

Tryg – at a glance III

30

16

57

10

8

54 0

Motor

Workers' comp

Health & accident

Liability



Other

Run-off net by products Q3 2015

Percentage

21

35

42

5

5-9

2

Motor

Workers' comp

Health & accident

Liability



Other

Run-off net by products Q3 2016

Percentage

16

33

14

8

8

14

7

Motor

Workers' comp

Health & accident

Liability



Other

Gross claims reserve by products 2015

Percentage

31

5

11

5

24

14

10

Motor

Workers' comp

Health & accident

Liability



Other

Gross premium by products 2015

Percentage

Gross premium split by geography

31

14.5

20.1

4.2

6.7

38.6

13.7

0.3 2.0 Motor TPL

Motor Casco

Health & accident

Liability



Tourist assistance

Other

SE: Gross premium by products 2015

Percentage

11.5

12.6

64.4

13.8

-4.0

-5.4

0.45.4

1.4 Motor TPL

Motor Casco

Workers' comp

Health & accident

Liability



Tourist assistance

Other

Run-off net by products 2015

Percentage

6.8

18.8

6.5

11.2

6.4

24.3

16

3.36.8 Motor TPL

Motor Casco

Workers' comp

Health & accident

Liability



Tourist assistance

Other

DK: Gross premium by products 2015

Percentage

15.6

21.3

4.2

7.53.5

20.1

10.7

4.4

12.5 Motor TPL

Motor Casco

Workers' comp

Health & accident

Liability



Tourist assistance

Other

NO: Gross premium by products 2015

Percentage

Tryg’s equity story

32

Long term profitable growth and attractive shareholder value creation

Financial targets 2017

• ROE: ≥21%

• Combined ratio: ≤87%

• Expense ratio: ≤14%

Customer targets 2017

• NPS +100%

• Retention rate +1 pp

• ≥ 3 products +5 pp

Dividend policy

• Aiming for a nominal stable increasing dividend

• Pay-out ratio of 60% to 90% (secondary)

• Extraordinary buybacks to further adjust the capital structure

• 90% first contact resolution

• Annual coverage check

• 25% of tariffs better than peers in 2017

• Differentiated product offering

• Efficiency programme of DKK 750m

• Claims procurement

• Reducing expense level

• Matching assets and liabilities

• Low risk investment portfolio

Low risk and high returns

Leading in efficiency

Leading Scandinavian insurer with strong

track record

Customer care worth recommending

Next level pricing

Things that you may not know

33

• Motor insurance prices relatively similar in DK and the UK but cost of the insured good

(the car) substantially higher in DK driven by the registration tax for passenger cars

(100%-150% of taxable value on new vehicles approx.).

• Motor insurance remains a highly attractive business in Scandinavia unlike many

European countries.

• In Oslo, it costs approx. NOK 5,000 per month to hire a dog walker for 5 weekly walks,

each walk is minimum 60 minutes.

• In Sweden it is illegal to leave a dog home alone more than six hours, the dog has to be

out at least every six hours during the day.

• Pet insurance premiums totalled SEK 3.3bn at the end of September 2015 in Sweden

but that includes horses as well.

• Tryg believes that Pet insurance remains an attractive growth segment.

• Child insurance is an important product in Sweden with total market premiums above

SEK 2.5bn, the same product is virtually non-existent in Denmark and Norway. We

believe this will gradually change and plan to leverage on our recent Skandia child

insurance acquisition.

• In 2014, Tryg bought Securator reinforcing its leading position in the Nordic market for

product and extended warranty insurance, a market which is estimated at more than

DKK 2bn and expected to continue the growth in coming years.

Things that you may not remember

• Our maximum annual net exposure to a single large Property claim is

DKK 100m which falls to DKK 75m in case of a second event and

DKK 50m in case of a third/fourth event, maximum exposure is DKK

25m thereafter. This is based on our general reinsurance programme.

• Our maximum net exposure for weather claims is DKK 150m per

event. The upper limit of the programme is DKK 5.75bn, which is

statistically sufficient to cover at least a 250-year event.

• We have bought an additional ‘horizontal’ reinsurance programme

which will cover any weather claims in excess of DKK 300m up to DKK

600m. Weather claims have to be at least DKK 20m to end in the

‘horizontal’ agreement.

• Local accounting rules driven by Danish FSA means that all assets are

marked to market. This is different from Nordic/International peers

where many fixed income portfolios are hold to maturity and/or the

marked to market hits the NAV and not the P&L. The unrealised gains

and losses item does not show up in the P&L of some of our Nordic

peers (as most bonds are hold to maturity) or hits the NAV as

opposed to the P&L.

2013 2014 2015

Other Unrealised gains and losses

Realised gains and losses Interest income and dividends

Gross investment return

774237

1,071

34

The run-off cycle

35

-18,000

-2,000

+2,000

Run-off development

3 years

Claims buffer:

Run-off:

Claims estimate:

We assessed the claim at DKK 18,000 but reserve for DKK 20,000

• Initial assessment of the claims was DKK 18,000 but Tryg reserved for

DKK 20,000 adding some conservatism to best estimate.

• At the time of setting up the claims reserves and booking the claims in the P&L the

Loss ratio (hence the combined ratio) is worse than what should be if our initial

assessment is correct.

• After three years (approx. and using average for Tryg group) the DKK 2,000 added

for conservatism comes back in the P&L as a positive run-off gain or reserves

releases. All the above assumes that initial assessment was correct and nothing

has changed in the three years period.

• Figures in the example above are purely illustrative.

5,000

5,200

5,400

5,600

5,800

6,000

Population growth (2000-2016)

4,000

4,400

4,800

5,200

5,600

DK 7%

NO 16% Growth 2000-2016:

0-17 years 7.1%

18+ years 19.3%

Total 16.4%

Growth 2000-2016:

0-17 years 1.9%

18+ years 8.5%

Total 7.1%

Population development in Norway in ‘1,000

Population development in Denmark in ‘1,000

36

Structure of the Nordic insurance market

37

Denmark

DKK 52.0bn/EUR 7.0bn (as at Q1-2015)

Sweden

SEK 73.0bn/EUR 7.9bn (as at Q4-2015)

Norway

NOK 55.8bn/EUR 6.2bn (as at Q2-2016)

Nordic

EUR 25.7bn (as at Q4-2014)

13.3

21.2

25.4

10.0

30.1 Tryg

If

Gjensidige

Sparebank1

Other

9.3

4.8

17.2

8.7

8.79.1

42.2

Tryg

Topdanmark

If

Codan

Gjensidige

Länsforsikringar

Other

18.1

17.4

5.8

11.36.5

9.7

31.2Tryg

Topdanmark

If

Codan

Gjensidige

Alm. Brand

Other

2.9

18.2

15.4

1.6

29.8

16.3

15.8

Moderna (Tryg)

If

Trygg-Hansa (Codan)

Gjensidige

Länsforsikringar

Folksam

Other

Percentage

PercentagePercentage

Percentage

51

3

31

15

Own sales

External partners

Online & others

Atlantica/Bilsport MC

57

29

14

Own sales

Affinity

Nordea

44

12

38

6

Own sales

Car dealers

Affinity

Nordea

4555

Own sales

Brokers

Distribution of new sales 2015

38

Norway

Corporate Sweden

Denmark

Percentage

PercentagePercentage

Percentage

80

85

90

95

100

105

110

Combined ratio development

39

Premium hikes

Premium hikes

Smaller adjustments

Efficiencyprogramme

Customer andefficiency focus

2002-2004 price increases of DKK 2.1bn implemented. Reduced combined ratio from 107 to 94.

2011-2012 price increases will improve underlying combined ratio.

2012-2015 operational focus with target to cut expenses and claims costs by DKK 1bn in total.

2015-2017 New efficiency programme of DKK 750m launched.

*IFRS from 2004. Previous years are Danish GAAP.

Data before 2009 is not corrected for the sale of Marine Hull business, and Finland before 2008.

Key figures 2011-15 and consensus 2016-18

40

Consensus

DKKm 2011 2012 2013 2014 2015 2016 2017 2018

Gross premium income 19,948 20,314 19,504 18,652 17,977 17,659 17,881 18,081

Technical result 1,572 2,492 2,496 3,032 2,423 2,630 2,770 2,794

Investment income, net 61 585 588 360 -22 359 196 193

Pre-tax profit 1,603 3,017 2,993 3,302 2,310 2,918 2,906 2,927

Net income 1,140 2,208 2,369 2,557 1,969 2,288 2,271 2,289

Combined ratio 93.2 88.2 87.7 84.2 86.8 85.2 84.7 84.7

Expense ratio 16.6 16.4 15.6 14.6(*) 15.3(**) 14.6 14.1 13.9

Earnings per share 3.8 7.3 7.9 8.7 6.9 8.1 8.3 8.5

Dividend per share 1.3 5.2 5.4 5.8 6.0 6.3 6.5 6.7

Share buy back 0 800 1,000 1,000 1,000 976 753 643

Based on 18 estimates ahead of Q3 2016 * 15.3 excluding one-off, ** 14.9 excluding one-off

AppendixFollow us on Twitter: @TrygIR

Group

42

12

13

14

15

16

17

18

Expense ratio

75

80

85

90

95

100

Combined ratio

60

65

70

75

80

Claims ratio, net of reinsurance

-4

-3

-2

-1

0

1

2

3

4

15,000

16,000

17,000

18,000

19,000

20,000

21,000

Gross premiums

%DKKm

GEP (LHS) Local currency (RHS)

Private

43

12

13

14

15

16

17

18

Expense ratio

75

80

85

90

95

100

Combined ratio

60

65

70

75

80


-3-2-101234567

7,000

7,500

8,000

8,500

9,000

9,500

10,000

10,500

Gross premiums

%DKKm


Commercial*

44

14

15

16

17

18

19

20

Expense ratio

75

80

85

90

95

100

Combined ratio

55

60

65

70

75


-4

-3

-2

-1

0

1

2

3

4

2,500

3,000

3,500

4,000

4,500

5,000

Gross premiums

%DKKm


* Less than 100 employees and less than DKK 100m turnover

Corporate*

45

10

11

12

13

14

15

Expense ratio

75

80

85

90

95

100

Combined ratio

65

70

75

80

85


-4

-3

-2

-1

0

1

2

3

4

2,500

3,000

3,500

4,000

4,500

5,000

Gross premiums

%DKKm


* More than 100 employees or more than DKK 100m turnover

Sweden

46

15

16

17

18

19

20

Expense ratio

75

80

85

90

95

100

105

Combined ratio

60

65

70

75

80

85


-8

-6

-4

-2

0

2

4

6

8

10

500

1,000

1,500

2,000

2,500

Gross premiums

%DKKm


Geographical segments

Norway

DKKmQ3 2016 Q3 2015 FY 2015

Gross premiums earned1,612 1,687 6,766

Technical result357 262 844

Key ratios:

Gross claims ratio58.7 69.9 70.9

Result of ceded business4.7 0.1 2.1

Gross expense ratio63.4 70.0 14.9

Combined ratio78.1 84.8 87.9

Sweden

DKKmQ3 2016 Q3 2015 FY 2015

Gross premiums earned518 517 1,894

Technical result21 56 328

Key ratios:


Result of ceded business5.2 1.5 1.7



Denmark

DKKmQ3 2016 Q3 2015 FY 2015

Gross premiums earned2,389 2,386 9,346

Technical result366 449 1,371

Key ratios:


Result of ceded business12.9 -13.6 -9.2



47

Norway

% 2016 2017

GDP Growth (mainland) 0.8 1.8

Inflation 3.3 2.2

Unemployment 4.8 4.8

Current account balance in % of GDP

5.6 6.3

Budget balance in % of GDP 5.1 5.8

Public debt in % of GDP 0.0 0.0

Sweden

% 2016 2017

GDP Growth 3.0 1.9

Inflation 1.5 1.7



4.4 4.7

Budget balance in % of GDP 0.0 -0.5


Economic key figures

48

Source: Economic Outlook, Nordea Markets, September 2016

Denmark

% 2016 2017

GDP Growth 1.0 1.5

Inflation 0.5 1.4



6.5 6.5

Budget balance in % of GDP -1.0 -1.5


Documents

Q3 2016 results - Amazon S3€¦ · Q3 2016 results Investor presentation Follow us on Twitter: @TrygIR. Contents 2 Highlights Q3 2016 3 ... are based on the beliefs of our management