Front page slide
Hordaland på BørsBergen - 13. august 2015
Tor Magne Lønnum, CFO Follow us on Twitter: @TrygIR
2
Disclaimer
Agenda
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.
3
Hvem er vi? Tryg Forsikring
1.9401.164
392
Denmark
Norway
Sweden
Organisering – Segmentsinndeling + Sverige
Antall medarbeidere Q2 2015: 3.495
Tryg
Privat Næringsliv Industri Sverige
• 1728 – Den store brannen i København. 30% av byens bygningsmasse brant ned. • 1731 – Forsikringsselskapet Københavns Brand blir etablert• 1880 - Det norske forsikringsselskap Vesta blir etablert • 1911 – ”Tryg” benyttes som selskapets navn i Danmark• 1999 – Tryg fusjonerer med Danmarks nest største bankgruppe, Unidanmark. I slutningen av 1999 bliver det norske forsikringsselskap Vesta en del av Tryg-konsernet• 2000 – Unidanmark fusjoneres inn i Nordea• 2002 - Tryg i Danmark smba kjøper Nordeas skadeforsikringsaktiviteter og danner TrygVesta• Tryg blir notert på København Fondsbørs den 14. oktober 2005. Åpningskursen er 230 DKK.
Historie
Hva skal til:
Vi skal være best i bransjen på:forsikring, mennesker oginntjening
Vårt formål:
Det handler om å være tryggVi skaper trygghet og verdi for kunder, medarbeidere og aksjonærer
13.6
22.6
25.1
10.1
28.6 Tryg
If
Gjensidige
Sparebank1
Other
4
Tryg Norge - Fakta
• 1880 – Vesta stiftes• 1952 – Vesta starter utplassering av livbøyer• 1989 – Skandia kjøper Vesta, Hygea danner Vital• 1990 – Vesta stifter Dial Forsikring, i dag Enter• 1995 – Vesta blir sekretariat for natteravnene• 1999 – Tryg kjøper Vesta• 2002 – Stiftelsen Tryg smba i Danmark kjøper Nordeas skadeforsikringsaktiviteteter, dvs. Tryg som også eier Vesta.• TrygVesta børsnoteres til kurs DKK 230• 2007 – Vesta endrer navn til TrygVesta og blir en filial av Tryg• 2010 – TrygVesta endrer navn til Tryg
Historie
Geografisk lokalisering
Trondheim
Haugesund
Tromsø
Bergen
Bodø
Oslo TønsbergDrammen Porsgrunn
Fredrikstad
Førde Gol
Hamar Hønefoss
Harstad
Kristiansand
Stavanger
Ålesund
Vi er en solid aktør, med store faglige ambisjoner.
Vi er en stor og attraktiv arbeidsplass. Bergen er hovedkontor for den norske
satsningen.
Markedsandel
NOK 55.4bn/EUR 6.3bn (as at Q1-2015)
Procent
Tryg – at a glance I
5
• 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%
Private
DK
NO
82%
84%
86%
88%
90%
92%
Commercial
DK
NO
NorwayMarket position: #3
Market share: 13.6%CR in 2014: 80.4
SwedenMarket position: #5Market share: 3.0%CR in 2014: 98.2
DenmarkMarket position: #1
Market share: 18.2%CR in 2014: 84.1
56
23
21
Private
Commercial
Corporate
Business split 2014
31
5
115
24
14
10
Motor
Workers' comp
Health & accident
Liability
Fire & property - private
Fire & property - comm.
Other
Gross premium split by products 2014
Percentage
Percentage
4.2
6.6
3.4
1.3
3.1
0.81.3
5.2 5.4 5.8
2.5
4.2
2.6
2.63.2
3.4
0
1
2
3
4
5
6
7
8
9
10
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 H1
2015
Cash dividend Ordinary buy back Extraordinary buy back
0%
10%
20%
30%
40%
50%
60%
60
9
14
17
Danishinstitutional
Non-Danishinstitutional
Smallershareholders
Tryg – at a glance II
6
• 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.
Shareholder breakdown 2014
Strengthening of brand value
Shareholder performance since IPO
Low risk investment portfolio
New dividend policy
Shareholder remuneration since IPO
Standard deviation 2011-2013
DKK
Percentage
0
25
50
75
100
125
150
175
200
225
250
275
300
325
350
375
400
425
450
475
Tryg incl. dividend Euro Insurance index
Structure of the Nordic insurance market
7
Denmark
DKK 51.0bn/EUR 6.8bn (as at Q2-2014)
Sweden
SEK 70.9bn/EUR 7.5bn (as at Q1-2015)
Norway
NOK 55.4bn/EUR 6.3bn (as at Q1-2015)
Nordic
EUR 25.1bn (as at Q4-2013)
13.6
22.6
25.1
10.1
28.6 Tryg
If
Gjensidige
Sparebank1
Other
9.9
4.7
17.6
9.0
8.69.2
41.0
Tryg
Topdanmark
If
Codan
Gjensidige
Länsforsikringar
Other
18.2
17.7
6.1
11.86.4
9.8
30.0Tryg
Topdanmark
If
Codan
Gjensidige
Alm. Brand
Other
3.0
18.3
15.6
1.6
30.3
16.4
14.8
Moderna (Tryg)
If
Trygg-Hansa (Codan)
Gjensidige
Länsforsikringar
Folksam
Other
Percentage
PercentagePercentage
Percentage
Tryg’s equity story
8
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
• Payout ratio of 60-90%
• Aiming for a nominal stable increasing dividend
• 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
9
We aim to improve NPS to drive retention and engagement
Source: Company data
Correlation between
engagement and NPS
Correlation between
loyalty and NPS
Correlation between
retention and NPS
• 1 pp change in retention rate = DKK 50-150m change in expenses depending on BU and timing.
• The average premium of customers with ≥3 products is ~50% higher than the portfolio average.
• Customers with ≥3 products have a life time value ~120% higher than the portfolio average.
Customer highlights Q2 2015- Continued improvement in Net Promoter Score (NPS)
10
• New price-differentiated products launched:
• Personal accident insurance in both Denmark and Norway
• Holiday home insurance in Norway
• Change of car ownership insurance in Denmark
• The new car insurance launched in Q1 was recommended ‘best in test’ by the Danish Consumer Council.
• Conditional approval of TryghedsGruppen’s members’ bonus scheme by the Danish Business Authority, subject to final approval at the representative meeting in August 2015.
• Launch of Tryg Home Hotline – service hotline for customers to ask questions regarding issues related to their house, apartment or holiday home, such as damp issues.
• Tryg’s Swedish Corporate business voted the best company by insurance brokers for the third year running.
11
2022
CMD 2014 Q2 2015 Target 2017
NPS
56.3 56.661.3
CMD 2014 Q2 2015 Target 2017
Customers with ≥3 products (%)
87.9 88.0 88.9
CMD 2014 Q2 2015 Target 2017
Retention rate
Building pricing power
11
Avg. old product:
16 criteria
Avg. new product:
49 criteria
Number of pricing criteria per product – old vs. new
2013 2014
Pricing competetivness
2017
Reductions in expenses and claims costs
12
Expense reduction
Claims reduction
DKK 1,000m
Efficiency programme 2012 - 2015
Expense reduction
Claims reduction
DKK 750m
Efficiency programme 2015 - 2017
Expense reduction 2015 - 2017 Claims reduction 2015 - 2017DKKm DKKm
Expense reductions towards 2017
13
DKK
250m
Sourcing
• Staff functions
• Business areas
Simplification
• First contact resolution
• Reduced lead time at customer contacts
• Continuous improvement
Improved retention rates
Sourcing criteria
1. Customer experience
2. Cost efficiency
3. Standardisation and automation
4. Scalability and flexibility
5. Transition and risk
Sourcing in Tryg
2013: IT 2014: Finance
Accounting
(50 FTE)
2015-: Remaning
staff and BUs
Startup fase
Expense ratio improved from 15.4 to 15.2
14
• Expense ratio improved from 15.4 in Q2 2014 to 15.2 in Q2 2015 – (adjusted for one-off effects in Q2 2014).
• 2015 will be impacted by one-off costs relatedto new efficiency programme.
• Efficiency programme delivered savings of DKK 15m related to:
• Outsourcing within financial area• IT sourcing
• Reduction in FTE by 104 since Q4 2014.
4,077
3,914
3,703
3,599
3,495
2011 2012 2013 2014 Q2 2015
FTE - Development
15.4 *15.2
16.6 16.4
15.6
14.6
2011 2012 2013 2014 Q2 2014 Q2 2015
Expense ratio
* Adjusted for one-off effects
Nominal costs in business areas
340
171109
61
281
13398
70
76
46
19
-6 Private Commercial Corporate Sweden
Q2 2015 Q2 2014 One-off effects
15
DKK 500m
Utilising spend data and transparency from In4mo system.
Dedicated competence team to help customers quickly back to normal life.
Enhanced fraud detection.
Further consolidation and utilisation of Nordic procurement volume.
DKK
500m
New claims initiatives towards 2017
Reduction in suppliers Distribution of savings 2015 Distribution of savings 2017
46,000
26,000
69.570.0
Q2 2015 Q2 2014
Improved underlying claims ratio
16
63.6 62.8
Q2 2015 Q2 2014
Commercial (DK & NO)
75.672.8
Q2 2015 Q2 2014
Sweden
68.3 68.8
Q2 2015 Q2 2014
Group
76.579.3
Q2 2015 Q2 2014
Corporate
Private (DK & NO)
Underlying development is adjusted for large claims, weather claims, run-off and interest.
4,5504,711
Q2 2015 Q2 2014
-1.4%
Gross earned premiums reduced by 1.4%
17
Gross earned premiums (DKKm)
DKKm Q2 2015 Q2 2014Local currencies
Q2 2015Local currencies
Q2 2014
Private 2,226 2,275 -0.3% 0.1%
Commercial 997 1,053 -4.3% -3.9%
Corporate 993 1,030 -1.4% 1.8%
Sweden 342 358 -1.8% -9.3%
Group 4,550 4,711 -1.4% -1.2%
Gross earned premiums reduced 1.4% (-1.2%) related to:
• Private impacted by the competitive situation. Retention was stable in Denmark but decreased slightly in Norway
• Commercial Norway impacted by a weaker economic situation and the competitive situation
• Corporate development impacted by loss of large accounts and one-off impact in same quarter last year
90
95
100
105
110
115
DK
NO
18
Motor insurance – average premium (index 2011 = 100)
Private - average premiums- DK profitability strong but competition increasing
90
95
100
105
110
115
DK
NO
House insurance – average premium (index 2011 = 100)
Average premiums increase Y/Y
-2.3% 0.5%
(Q1-1.9%) (Q1 0.8%)
Average premiums increase Y/Y
-0.8% 1.1%
(Q1 -0.8%) (Q1 1.4%)
• NO: price increases from July
• DK: changed selection reducesaverage price
• DK –2.3% decrease y/y driven by:• improved frequency• Competitive situation
• Profitability very strong on motor
Customer retention
19
82%
84%
86%
88%
90%
92%
DK
NO
Commercial
82%
84%
86%
88%
90%
92%DK
NO
Private
• High and stable customerretention in Denmark
• Slight decrease in Norway
• Customer retention stablein Denmark
• Retention decreased in Norwayimpacted by changed distribution set-up and competition
Tryg’s equity story
20
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
• Payout ratio of 60-90%
• Aiming for a nominal stable increasing dividend
• 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
Questions?
21