DDFs Virksomhedsdag Finansanalytikerforeningens Virksomhedsdag 2008 CFO Morten Hübbe

Transcription

1 1 Finansanalytikerforeningens Virksomhedsdag 2008 CFO Morten Hübbe

2 Facts about TrygVesta 2 Shares outstanding 68m Market cap DKK 26bn (USD 5.4bn) Danish institutions 15% Non-Danish institutions 7% Smaller 18% Tryg i Danmark smba 60% Focused Nordic, non-life insurance company Vision: To be perceived as the leading peace of mind supplier in the Nordic region Strong brand and market position Attractive growth prospects Broad Shareholder distribution structure platform Q Smaller 18% Outlook 2008: GEP +5% (in local currency) CR ~ 89 Dividend policy: Payout of 50% of result after tax Share buy backs for additional surplus capital TrygVesta shares Tryg i Danmark 60% Non-danish institutions 7% Performance since IPO Danish institutions 15% 80 okt-2005 jan-2006 apr-2006 jul-2006 okt-2006 jan-2007 apr-2007 jul-2007 okt-2007 jan-2008 apr-2008 TrygVesta Euro index

3 The Nordic region structure of the insurance market 3 Norway EUR 4.4bn TrygVesta, 18.2% Gjensidige 31.9% Finland EUR 3.1bn Pohjola, 26.3% Tapiola, 18.6% Top 4 90% TrygVesta, 1.2% Top 4 83% Fennia, 10.4% IF, 30.0% Other, 10.0% Sparebank, 10.1% IF, 27.6% Other, 16.2% Denmark EUR 5.9bn Alm. Brand, 10.0% IF, 5.0% Other, 32.0% Sweden EUR 6.1bn Länsforsk., 30.0% Folksam, 15.0% TopDK, 19.0% Top 4 63% Vesta, 0.3% Top 4 83% Codan; 18,0% TrygVesta, 21.0% Codan, 13.0% IF, 20.0% Other, 17.0%

4 Customer culture UK vs. Denmark 4 IBM Global Business Services How customers differ - culture Denmark: Customers evaluate experiences with their insurer much more positive than in other countries Danish customers completely and strongly agree: 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 responds in an uncomplicated and helpful way I have full confidence in my persoal insurance agent My insurance is more cost effective than most other insurances % 10% 20% 30% 40% 50% 60% 70% 80% F UK DE DK 3 IBM Global Business Services Copyright IBM Corporation 2007

5 Customer culture - UK vs. Denmark 5 How customers differ - culture IBM Global Business Services Denmark: Customers look for a great variety of information sources Customers assign high importance to information sources as followed: Price comparison via Internet Recommendation family /friends Recommendation insurance agent Recommendation independent broker Recommendation bank Offers in advertising Offer from a vehicle dealer / estate agent % 10% 20% 30% 40% 50% 60% All UK DE DK 4 IBM Global Business Services Copyright IBM Corporation 2007

6 6 Corporate structure and key performance drivers

7 Premium income by business line and segments premium income of DKK 16.6bn and expecting 5% growth in 2008 Balanced and broad based distribution of premium income Growth from increased penetration in Finland and Sweden Business lines Finland & Sweden 2% Product segments Accident 10% Corporate 32% P&C Denmark 39% Other 13% Motor 34% P&C Norway 27% Workers comp 9% House & property 34%

8 Key performance indicators 8 TrygVesta Nordic groups Gross premium DKKm 4,400 4,200 4,071 4, % (5.9% DKK) Q vs. 1.7% (1% DKK) Q ,232 4,268 4, GEP growth in % Codan TrygVesta 4,000 3,960 4,005 3,985 3, if Gjensidige ,800 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Combined ratio Combined ratio Codan Gjensidige if TrygVesta Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q

9 Increasing growth contribution from Finland and Sweden 9 Gross premium (DKKm) 18,000 15,000 12, ,810 6,738 6,919 Q ,000 policies sold New Markets are a key driver 9,000 6,000 3, ,764 9,084 9, FI & SE 59% DK & NO 41% Denmark Norway Sweden/Finland

10 New Markets premium growth to remain strong 10 Focused sales effort fueled by expanding organisation Net growth of 47,000 insurances in New Markets in Q out of total Group net growth of app. 80,000 insurances Target 8% share of private market in 2010 in Finland and 2012 in Sweden DKKm Portfolio Q Sales during startup Sweden vs. Finland 14,000 Average monthly sales in Finland No. of insurances 12,000 10,000 8,000 6,000 4,000 2, Months Finland Sweden GEP Sweden Finland Portfolio Sweden Finland GEP Sweden + Finland Portfolio Sweden + Finland

11 Profitability ratios improving rapidly 11 Claims ratio Private Finland , Claims ratio Cost ratio

12 Corporate competition and competitors 12 Corporate showing solid growth and good profitability Combined ratio of 80 in Q Focus on profitable growth Gross premium 7.6% (8.5% DKK) DKKm Q ,450 1,387 1,400 1,378 1,333 1,350 1,291 1,300 1,264 1,229 1,245 1,250 1,229 1,200 1,183 1,150 1,100 1,050 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Business lines Finland & Sweden 2% Corporate Client Breakdown P&C Norway 27% Corporate 32% 31% 30% P&C Denmark 39% 39% Below DKK 1 MM Between DKK 1-10 MM Above DKK 10 MM

13 Retention a key value driver 13 Rentention Denmark 92.0% 91.5% 91.0% 90.5% 90.0% 89.5% 89.0% New Sales customersinitiatives Health care Sweden & Finland Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Retention Norway 86.5% 86.0% Existing customers 85.5% 85.0% 84.5% 84.0% Loss of customers 83.5% Jan- 05 Jul- 05 Jan- 06 Jul- 06 Jan- 07 Jul- 07 Jan- 08

14 Average price development for TrygVesta 14 Average prices for main products are trending upward Danish car insurance prices have been impacted by lower prices in 2006 and 2007 due to changed conditions in contracts (mileage) New initiatives implemented April 2008 on Danish car insurance having limited negative impact on the average price Norwegian prices are trending upward since mid-2007 due to price increases related to claims inflation Average prices in Denmark Average prices in Norway 5,000 5,000 4,500 4,500 DKK 4,000 NOK 3,500 4,000 3,000 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 3,500 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08

15 Q307 Q407 Q108 Q307 Q407 Q108 Q107 Q207 Q107 Q207 Q406 Q406 Q108 Frequency and average claims 15 Average claims Norway Average claims Denmark Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q108 Frequency Norway Frequency Denmark Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q105 Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407

16 16 Claims

17 Large claims and weather related claims has started out on a lower level than 2007 for large claims and weather related claims Large claims Weather related claims, gross DKKm DKKm 1,200 1,042 1, , (2008e) (2007e) (2008e) Q Q Q1 07 Q1 08 Gross Net indicates assumed level for 2008

18 Run-off and changes in reserves 18 Run-off in Q of DKK 163m gross and DKK 173m net Impact on combined ratio of 4.1% in Q versus 3.2% in Q Run-off Technical result DKKm Run-offs, net 555 of DKK 743m vs. DKK 555m 127 Reserve releases from auto, accident and liability Reserve strengthening in workers comp Impact on combined ratio of 4.5% vs. 3.8% in 06 Gross Net Q Q DKKm 3,000 2,500 2,000 1,500 1, ,820 2,512 2,047 1,957 2,077 1, Q1 07 Q1 08 Including run-offs Excluding run-offs

19 19 Expenses

20 Expenses management and cost ratio 20 Gradual decline in cost ratio due to a combination of improved efficiency in Denmark and Norway and counter balanced by expansion in Finland and Sweden Cost ratio Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Denmark & Norway Finland & Sweden

21 21 Investments

22 Investment results Q Net investment result of minus DKK 365m compared with DKK 152m in Q Investment portfolio of DKK 38.5bn Performance in 2007 and 2008 impacted by decline in equities Weight of equities actively reduced to approximately 4% in January 2008 from 15% since mid 2007 Real estate weight to increase as corporate headquarters have been bought for DKK 1.1bn Portfolio structure Real estate, 6.7% Equities, 4.5% Equity concentration Europe, 20.0% Nordics, 21.3% Bonds, 88.8% UK, 12.8% Others, 26.8% USA, 19.1%

23 23 Capital and Outlook

24 Outlook and shareholder repatriation 24 Outlook 2008 Premium growth 5% on top of DKK 16.0bn in 2007 Pre-tax result of DKK 2.3bn Net income of DKK 1.6bn ~73% total payout DKKm % cash payout ~ 23% share repurchase 40 Total payout per share and yield Net result Capital requirement Cash dividend Share repurchase Total payout per share Yield based on y.e or latest

25 Capitalisation and the route to repatriation 25 DKKm 12,000 11,000 10,000 9,000 8,000 7,000 6, Q1 07 Q2 07 Q before payout 2007 after payout Q1 08 Target capital (A- level) Buffer (5%) Surplus capital A- corresponds to a capital (equity + hydrid and after dividend payout) to net premiums of 52 to 56%

26 Medium term guidance 26 Guidance since IPO Combined ratio of ROE after tax of 19-21% Growth & competition Efficiencies & cost Claims Capital New guidance Combined ratio of ROE after tax of 21-23% Assumptions a.o. 8-10% equity weight in investment portfolio Run-off at zero

27 Disclaimer 27 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 our website at 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.