Morgan Stanley Conference Morten Hübbe Group CEO. 31 March Presentation can be downloaded at

Transcription

1 Morgan Stanley Conference Morten Hübbe Group CEO 31 March 2011 Presentation can be downloaded at

2 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. 2

3 Facts about Tryg Gross premium split 2010 Shareholder breakdown Percentage 49.5 Denmark Norway Sweden Finland 60 Percentage Danish institutional Non-Danish institutional Smaller shareholders TryghedsGruppen Index Share performance since IPO (incl. dividends) A true Nordic platform Prudent underwriting and risk selection Exceed customer expectation Vision to be perceived as the leading peace-of-mind provider in the Nordic region

4 Structure of the Nordic insurance markets Denmark Norway DKK 46.6bn/EUR 6.3bn (per Q4-09) NOK 42.5bn/EUR 5.3bn (per Q3-10) Percentage Tryg Alm. Brand If Other Alka Codan Topdanmark Gjensdige Percentage Tryg Gjensidige Sparebank1 Other If Private: 5.1% Sweden Finland SEK 60.3bn/EUR 6.3bn (per Q3-10) Percentage Moderna Folksam Länsforsäkringar Other If Codan EUR 3.3bn (per Q4-09) Percentage 10.2 Tryg Tapiola Fennia Other If Pohjola

5 Basis for value creation Mid-term targets Leading peace-of-mind provider RoE: 20% Profitability and efficiency Growth Sweden and Finland Solid capital base Combined ratio: 90 5

6 Key focus areas Price Price hikes hikes Claims Claims initiatives initiatives Cost Cost reduction reduction Tryg Tryg Transition Transition 6

7 Long term view 110 Combined ratio Annual impact from price increases 105 Premium hikes Premium hikes 2010 DKK ~0.9bn DKK ~1.0bn 95 Smaller adjustments New ruling workers comp. Extraordinary winter 2012 DKK ~0.6bn * premium increases of DKK 2.1bn implemented. Reduced combined ratio from 107 to 94 (DK GAAP) premium increases will improve combined ratio going forward 7 *IFRS from Previous years are Danish GAAP Data before 2009 is not corrected for the sale of Marine Hull business

8 Premium increases visible in Private Nordic Average price has declined for a number of years Increase in 2010 : Motor insurance - average premium (Index 2005 =100) 2.4% % Pricing in House lagging claims development Increase in 2010: House insurance - average premium (Index 2005 = 100) 11.9% 10.0%

9 Customer retention Retention rate relatively stable in Denmark during 2010 despite uppricing Retention rate in Norway increased during % 90% 88% 86% 84% 82% Private Retention rate stable and strong Danish retention rate remains high despite influence from premium increases High retention support competitive strength and cost ratio 92% 90% 88% 86% 84% Commercial

10 Improvement in claims ratio House DK* Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 House NO* Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Finland Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q *) Excluding winter and cloudburst effect

11 Major claims initiatives Surveying Surveying Pruning Pruning House House condition condition report report Large Large claims claims process process Craftsman Craftsman controlling controlling New New contents contents coverage coverage Windscreen Windscreen car car claims claims Documentation Documentation 11

12 Previous claims Previous customers Stricter customer screening Red/Green Customer 12 Examination rules

13 Managing cloudburst risk Cloudburst in Copenhagen Cloudburst hits locally and damage is influenced by local conditions such as pavement, sewer system etc. Model to identify water risk of heavy rain established Frequency for customers with basements approx 10 times larger Analytical results will form the basis for future: - Risk assessment - Conditions - Pricing Illustration of water flow Geomatic water risk 13

14 Expense ratio Expense ratio Growth in Sweden and Finland affects cost development Focus on reducing costs through Optimising distribution Papirless processes Denmark & Norway Finland & Sweden Internal recruitment Old markets vs new Markets Denmark & Norway Finland & Sweden 14

15 Efficiency improvement Sales Direct Better customer service by more availability in call centres Closure of sales offices in DK and NO Internet / self-service focus 1,300 1,250 1,200 1,150 1,100 1,050 Employees, Sales Direct Claims 1,020 Employees, Claims Focus on paperless processes Process improvements Increase in claims = higher productivity

16 and the future vision for 10 in Cost reductions Lower distribution and admin cost 17% Head count reduction and increased 10% market position Tryg Transition Drivers to achieve the vision Tryg Transition Efficiency Markets Other cost reductions Self-service Automation Reduce admin and distribution cost New products Organisational structure Outsourcing non-core processes Meet profitability targets Increase market share in Sweden and Finalnd customer communication Lower/reduced commission rates Fewer local offices 16

17 17 Capitalisation DKKm 12,000 11,000 10,000 9,000 8,000 7,000 Q1 08 Q2 08 Q before payout 2008 after payout Q1 09 Q2 09 Q before payout 2009 after payout Q Q Q before payout 2010 after payout 6,000 Capital requirement Buffer (5%) Surplus capital

18 Summary Basis for value creation Initiatives Targets Leading peace-of-mind provider Premium increases Focus on retention RoE 40% Profitability and efficiency Growth Sweden/Finland Solid capital base Claims initiatives Customer screening Improved risk selection Efficiency improvements Lower distribution costs Tryg Transition 10 in 20 30% 20% 10% 0% x 18

19 Questions? Investor Relations contacts Ulrik Andersson Investor Relations Director Lars Møller Investor Relations Manager Presentation can be downloaded at