Investor meetings. March Visit for further information

Transcription

1 Investor meetings March 2007 Visit for further information 1

2 Contents Highlights Claims and run-off..8 Business areas...10 Outlook, capital and dividend..20 Outlook Overview of TrygVesta..27 Disclaimer

3 Highlights % growth in income before tax Dividend of DKK 33 a payout ratio of 70% 2.0% growth in gross premium income to DKK 16.0bn. Up 2.3% prebonus Combined ratio at all-time low of 87.8 vs in 2005 Profit Profit before before tax tax of of DKK DKK 3.9bn 3.9bn significantly significantly above above our our expectations expectations of of DKK DKK 2.2bn 2.2bn from from February February Good Good momentum momentum in in sales sales in in P&C P&C Norway Norway Strong Strong monthly monthly sales sales of of more more than than 10,000 10,000 new new policies policies in in Finland Finland and and Sweden Sweden Launch Launch of of several several new new features: features: travel travel evacuation evacuation extended extended warranty warranty risk risk advisory advisory service service for for corporate corporate customers customers 3

4 Income statement DKKm Q Q Change Change Gross premium income 3,985 3, % 16,021 15, % Claims ratio (3.40) (1.10) Expense ratio (0.10) Combined ratio (3.40) (1.20) Technical result % 2,533 2, % Investment income, net % 1, % Profit before tax excluding discontinued and divested business Profit before tax and including discontinued and divested business 1, % 3,709 2, % 1, % 3,869 2, % Profit for the period 1, % 3,211 2, % 4

5 Key financial indicators Gross premium income DKKm Combined ratio % Claims ratio net of ceeded business, in % Expense ratio %

6 Gross premium drivers DKKm 16,200 16, % 15,800 15,600 15,400 15,200 15,000 Group 2005 P&C DK P&C NO Corporate Finland Other Group 2006 Note: Difference in DKKm less 2005 green indicates increase, red indicates reduction 6

7 Technical result drivers DKKm 2,700 2, % 2,300 2,100 1,900 1,700 1,500 Group 2005 P&C DK P&C NO Corporate Finland Other Group 2006 Note: Difference in DKKm less 2005 green indicates increase, red indicates reduction 7

8 Frequency and average claim Frequency, Denmark Frequency, Norway Index 90 Index Average claim, Denmark Average claim, Norway Index Index

9 Claims DKKm Large claims DKKm 1000 Weather related claims Outlook 2006 Outlook Outlook 2006 Outlook Run-offs DKKm Gross Net 9

10 Business areas 10

11 P&C Denmark Another strong performance in combined ratio of 87.9 vs in % growth in gross premium income pre-bonus and 1.8% after bonus to DKK 6,390m Claims performance once again strong and claims ratio of 70.5 vs i 2005 Expense ratio of 17.4 vs Financial highlights Operational highlights New sales performing better than 2005 Slight decline in average premium for auto insurance due to price reductions in selected segments Introduction of extended warranty insurance in November and polices sold by year end Weather related claims in August and November with a total cost of DKK 109m. Impact of 1.7% on claims ratio 2007: continue our level of innovation introducing more new products and value propositions for core customers 11

12 P&C Denmark Gross earned premiums, DKKm Combined ratio, in % Mio. DKK I procent ,2 89,8 87,9 Claims ratio net of ceded business, in % Expense ratio, in % , I procent ,1 70,5 I procent

13 P&C Norway Combined ratio normalising to 86.2 vs in 2005 Gross premium income down 2.7 % due to increasing competition Claims ratio of 65.8 vs in 2005 Financial highlights Cost ratio of 20.4 unchanged despite wage inflation Positive development in renewals and new sales especially in 2H 2006 Increased competition strength in core customer segments Sales through Nordea up 42% Operational highlights Approval by Norwegian Financial Department to convert Vesta into a branch of Tryg 2007: implementation of customer oriented IT platform that will improve quality and efficiency 13

14 P&C Norway Gross earned premiums, DKKm Combined ratio, in % Claims ratio net of ceded business, in % Expense ratio, in % ,8 20, ,6 20,4 20,4 20, ,2 14

15 Corporate Strong 5.5% growth in gross premium income to DKK 4,921m Low claims ratio of 75.9 vs in 2005 Expense ratio of 11.0 vs Financial highlights Combined ratio at all time low of 86.9 vs in 2005 Operational highlights Good performance in renewal and new sales among other things driven by introduction of Risk Advisory Service Good performance especially driven by the Norwegian part of the business Relatively low claims driven by auto and liability Increase in large claims of more than DKK 10m. Impact on claims ratio was 9.3% vs. 7.6% in : further introduction of internet based self-service for customers 15

16 Corporate Combined ratio, in % Gross earned premiums, DKKm 96,0 94, ,0 92,0 90,0 88,0 86,0 92,4 86, ,0 82,0 Claims ratio net of ceded business, in % Expense ratio, in % 84,0 82,9 11,8 11,7 82,0 81,0 11,6 11,4 80,0 11,4 78,0 75,9 11,2 11,0 76,0 11,0 74,0 10,8 72,0 10,6 16

17 Finland 41.4% growth in gross premium income to DKK 198m Expense ratio down to 32% from 50% before cost related to Commercial start-up. Including Commercial expense ratio was 41.7 Risk selection good and claims ratio was 78.3 vs in 2005 Combined ratio of 120,0 vs. 131,3 Financial highlights Operational highlights New sales continues at rapid pace and aprx policies sold in 2006 Sales via car dealers commenced and with good performance 2007: expand position further towards private customers and introduce services to smaller commercial customers as planned 17

18 Finland Gross earned premiums, DKKm Combined ratio, in % , , , Claims ratio net of ceded business, in % Expense ratio, in % ,0 73, ,0 60,0 50,0 40,0 30,0 50,2 41,7 32, ,0 2006* 18 * Expense ratio before cost related to Commercial start-up.

19 Sweden Commenced operation in June 2006 Operational highlights Sales of new policies at brisk pace compared with start in Finland Own call centers now account for 1/3 of new sales Number of sold policies Start-up in Sweden versus Finland Facts: Portfolio now at SEK 50m policies sold customers Sweden year 1 Finland year 1 Finland year 2 Finland year 3 Finland year 4 19

20 Outlook, capital and dividend 20

21 Interest rates Impact of change in interest rates on the full year result Denmark Norway Total Bonds Provision for claims Total Impact of change in interest rates on 4Q 2006 result Denmark Norway Total Bonds Provision for claims Total

22 Investment result Investment result, gross of DKK 2,071m Investment result, net of DKK 1,207m DKK 36,5bn in investment asset by year end 2006 Distribution of assets by end % 20% 21,2% 20,3% Real estate; 6,7 Equities; 14,8 Return in % 18% 15% 13% 10% 8% 5% 3% 2,8% 2,2% 15,0% 15,0% 5,8% 5,5% Bonds etc.; 78,5 0% Bonds etc Equities Real estate Total TrygVesta Benchmark 22

23 Outlook 2007 DKKm Realised 2006 Outlook 2007 Favorable scenario Negative scenario Premium growth 2.0% 3%* Assumed returns: Bonds 3.9% Equities 7.0% Real estate 6.8% Technical result 2,533 2,050 2,200 1,900 Investment income 1, Result before tax and discontinued business 3,709 2,500 Profit/loss for the year incl. discontined and divested business before tax 3,869 2,500 Result after tax and discontinued business 3,211 1,850 1,950 1,750 Combined ratio (%) * in local currency Outlook 2007: 3% growth in gross premiums in local currency and combined ratio of assuming zero run-offs Medium term target: Combined ratio: Return on Equity (after tax): % 23

24 Update on capital Current capital structure (DKKm) December 31, 2006 Equity % Hybrid % Other capital 0 0 % Total % Credit lines (Equity + hybrid dividend)/ NPE 57,6 % Current ratings S&P: A- (strong), stable outlook Moody s: A3 (strong), positive outlook Dividend policy Maintain minimum payout ratio of 50% AND Return any excess capital to shareholders 24

25 Capitalisation 175% DKKm 14,000 12,000 10,000 8,000 6,000 4, % 4, % 6, % 121.3% 6,817 6, % 128.0% 7,885 8, % 125% 100% 75% 50% 2,000 25% * 2005* 2006* 0% Capital less dividend S&P CAR Note: New capital requirement related to catastrophe risk has been added. Post tax amount is 174 mdkk. * IFRS. Previous years are Danish GAAP. 25

26 Dividend DKK % Dividend per share (left) Pay-out ratio (right) 26

27 Overview of TrygVesta 27

28 Facts about TrygVesta Shares outstanding 68m. Market cap 31,7 DKKm (EUR 4,3bn) Shareholders (free float) end 2006: Others 5% The Nordics 3% UK 16% USA 6% Denmark 70% Focused Nordic, non-life insurance company Our vision: To be perceived as the leading peace of mind supplier in the Nordic region Strong brand and market position Attractive growth prospects Broad distribution platform Outlook 2007: GEP +3% CR Pre-tax DKK 2,500m The TrygVesta share TrygVesta i forhold til danske peers og DJ Euro Insurance Index 13. oktober 2005 =100 og inkl. udbytter 180 Dividend policy: Proactive capital management Excess capital will be returned to shareholders /13/2005 5/1/ /12/2006 Topdanmark Codan Sampo index TrygVesta Alm B Euro 28

29 The Nordic insurance market Denmark DKK 41.3bn (EUR 5.5bn) Norway NOK 35.2bn (EUR 4.5bn) Other 30% IF 6% Codan 13% Sparebank 17% Other 7% IF 27% Alm Brand 10% TopDK 19% Finland EUR 3.0bn Tryg 22% Gjensidige 30% Vesta 19% Sweden SEK 54.8bn (EUR 5.9bn) Lahviak 9% Other 9% Other IF IF 16% 20% 27% Fennia 10% TrygVesta 2% Folksam 15% Vesta 0% Tapiola 18% Pohjola 25% TryggHansa 18% Länsforsk. 31% 29

30 Nordic Peer Comparison Nordic peers % p.a. Premium growth Combined ratio e 2008e e 2008e TrygVesta if Codan TrygVesta if Codan Combined ratio, gross method 2006: full year figures if released, otherwise 9M and 2008 equity analyst consensus 30

31 Peace of mind in the Nordic region Private & Commercial Norway 18% share Finland Started in % share of Private Corporate Sweden Private & Commercial Denmark Started in % share 31

32 A broad distribution platform Channel Denmark Norway Finland Sweden Customer service center Local service center Call centers Franchisees Bancassurance (Nordea) Internet/SOLO Insurance brokers Car dealers Real estate agents Affinity groups P&C Denmark P&C Norway Corporate Finland 11% 4% 5% 18% 29% 42% 22% 71% 15% 52% 58% 67% 6% Local service centres Affinity groups Nordea Local service centres Car dealers Franchises Nordea 32 Direct sales Brokers Call centres Car dealers Internet Nordea

33 Premium drivers Maturity P&C DK P&C NO Corporate Sweden Healthcare Finland New markets add roughly 1 percentage point to Group growth Time 33

34 Key figures Gross earned premiums, DKKm Combined ratio, in % ,2 100,7 93,8 91,1 89,0 87, * 2005* 2006* * 2005* 2006* Technical result, in % Earnings per share, in % * 2005* 2006* ,5 31,3 14,1 21,5 22,0-26, * 2005* 2006* * IFRS. Previous years are Danish GAAP. 34

35 Segments Gross premium income and technical result 2006 Gross premium income Technical result Workers comp. 7% Accident & health 14% Other 11% Motor comp & TPL 34% Workers comp. 1% Accident & health 10% Other 17% Motor comp & TPL 46% Fire & content (commercial) 15% Fire & content (private) 19% Fire & content (commercial) 16% Fire & content (private) 10% 35

36 Business areas Gross premium income and technical result 2006 Gross premium income Technical result P&C NO 28% Corporate 31% P&C NO 29% Corporate 33% P&C DK 40% Finland & Sweden 1% P&C DK 38% Finland & Sweden -3% 0% 36

37 Distribution of result Good balance in results Combined ratio below 88 in the three main business areas Significant improvement in Corporate Divestment of Chevanstell Limited with a DKK 157m profit DKKm Technical result Geographical distribution DKKm Technical result per business area Denmark Norway 0 Private & Commercial Denmark Private & Commercial Norway Corporate

38 Creating peace-of-mind 38

39 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. Such statements may constitute forward-looking statements. These 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, would, could, 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. 39