Tryg A/S held its annual general meeting on Friday, 16 March 2018, at 3.00 pm, at the address Klausdalsbrovej 601, 2750 Ballerup, Denmark.

Transcription

1 Tryg A/S, CVR. nr Tryg A/S held its annual general meeting on Friday, 16 March 2018, at 3.00 pm, at the address Klausdalsbrovej 601, 2750 Ballerup, Denmark. The Supervisory Board, the Executive Board, the company s auditors and invited guests participated in the annual general meeting. The Chairman of the Supervisory Board welcomed the participants to the annual general meeting. The Chairman informed the participants that, pursuant to Article 15 of the Articles of Association, the Supervisory Board had appointed lawyer Klaus Søgaard as chairman of the meeting. The Chairman then gave the floor to Klaus Søgaard. The chairman of the meeting thanked the Supervisory Board for the appointment and ascertained that the annual general meeting had been convened by advertisement in the Danish daily newspaper Berlingske Tidende on 10 February 2018, at the company s website on 9 February 2018, by company announcement and by written notice to all shareholders registered in the register of shareholders who had so requested. The notice convening the annual general meeting contained a specification of the time and place as well as the agenda for the annual general meeting in pursuance of Article 16 of the Articles of Association. Furthermore, the agenda, the full motions, a motion on a new remuneration policy, amended Articles of Association and the annual report had been available for inspection at the company s office within the time limits laid down in the Articles of Association. The chairman of the meeting informed the attendees that a total of 231 admission cards had been checked in of which 157 were to shareholders. Additionally, 19 shareholders had authorised the Supervisory Board by proxy and 570 shareholders had voted in advance. The chairman of the meeting stated that 71% of the capital was represented at the annual general meeting of which TryghedsGruppen owned the majority. There were no comments on this from the annual general meeting. The chairman of the meeting ascertained that the annual general meeting had been duly convened in accordance with the rules of the Danish Companies Act (Selskabsloven) and the Articles of Association and formed a quorum in any and all respects. The agenda was as follows: 1) The Supervisory Board s report on the company s activities in ) Adoption of the audited annual report for ) Resolution on the appropriation of profit in accordance with the adopted annual report 4) Discharge of the Supervisory Board and the Executive Board from their obligations 5) Adoption of the remuneration of the Supervisory Board for ) Motions from the Supervisory Board

2 a) Motion to renew, increase and extend authorisation to increase the share capital, cf. Articles 8 and 9 of the Articles of Association b) Motion on authorisation to acquire own shares c) Motion of adjustment of remuneration policy with guidelines for incentive pay d) Motion to amend Article 19 of the Articles of Association on election period and composition of the Supervisory Board 7) Election of members to the Supervisory Board 8) Election of auditor 9) Authorisation to the chairman of the meeting 10) Miscellaneous The chairman of the meeting stated that items 1-5 on the agenda would be presented together. The chairman of the meeting then gave the floor to the Chairman of the Supervisory Board. Re items 1-5 of the agenda The Chairman informed the meeting that 2017 had been an eventful year. Tryg achieved the financial targets set out for 2017, at the Capital Markets Day in November 2017 in London presented new targets to be achieved by the end of 2020 and at the year-end acquired Alka Forsikring, conditional, however, upon approval by the authorities. The insurance business returned a profit of DKK 2,789 million against DKK 2,390 million in Adjusted for a depreciation of intangible assets in 2016 of DKK 250 million the result was a handsome improvement of DKK 149 million, corresponding to 6%. Gross premium income increased by 1.7% in 2017, which was significantly more than in 2016 which had a growth of 0.1%. The positive development can particularly be ascribed to the development in the Danish Private business, which showed a growth of 3% and an increase in retention rate, taking into consideration a member bonus from TryghedsGruppen. The Norwegian business was generally under a little more pressure, among other things caused by a reduced retention rate in the market in general. Tryg keeps focus on the customers and in 2014 set concrete customer targets to be achieved by the end of The target of doubling the recommendation rate, the so-called NPS, was achieved with 22. Also, we are pleased to see that the targets for the number of customers with 3 or more products, the so-called 3+ customers, and the retention rate, were achieved in Denmark. In Norway, the retention rate was influenced by an increase in customer churn in the entire Norwegian market. The number of customers with 3 or more products increased significantly in 2017, however not enough to reach the target in Norway. Tryg keeps focusing on paying dividend to the shareholders and consequently, in 2017, Tryg began to pay dividends each quarter. During the first three quarters of 2017 Tryg has paid out DKK 1.60 each quarter. The Chairman then gave the floor to Morten Hübbe who elaborated on Tryg s results and development in 2017.

3 Morten Hübbe confirmed that 2017 has been a very good year for Tryg. Morten Hübbe went through the development in the technical result which in 2017 increased by 6% from DKK 2,640 million after adjustment for one-off effects in 2016 amounting to DKK 2,789 million in Also, the profit after tax in 2017 increased by 2% compared to the year before and the return on equity after tax increased from 26.2% in 2016 to 28.8% in Combined ratio dropped from 86.7 in 2016 to 84.4 in 2017 and the expense ratio dropped from 14.8 in 2016 to 14.0 in 2017, after adjustment for one-off effects. Tryg s acquisition of Alka is the biggest transaction in the insurance industry for more than 20 years. A transaction which ensures Tryg a long-term growth and attractive value creation for the shareholders by significantly strengthening Tryg s market position in the Danish private market. Morten Hübbe accounted for which efficiency improvements Tryg has implemented in later years, including, among other things, streamlining of non-life purchases and non-life suppliers by approx. DKK 500 million and an efficiency improvement of Tryg s expenses of approx. DKK 200 million. Tryg will continue to focus on efficiency and innovation by re-thinking products, among other things, e.g. sale of insurance packages which increase the sale of insurances and through technology by developing new, automated, digital solutions as Tryg aims at becoming the leading digital company in the Nordic region. Tryg s acquisition of Alka is part of Tryg s plan for efficiency improvements and innovation as the acquisition will strengthen Tryg s share of the Danish private market by approx. 6% by an addition of approx. 380,000 customers. Also, in addition to the earnings of approx. DKK 200 million from Forsikringsaktieselskabet Alka, mutual synergies of approx. DKK 300 million will contribute to the technical result over a period of 3 years with an amount of approx. DKK 500 million. Also in 2018, Tryg s Danish customers will receive a bonus from TryghedsGruppen as TryghedsGruppen has decided to pay out bonus at the amount of approx. DKK 750 million, corresponding to approx. 8% of the premium for In November 2017, Tryg hosted a Capital Markets Day in London where Tryg s financial targets and customer targets for the end of 2020 were presented. Tryg has a target for the extent to which customers recommend Tryg, the TNPS target, which is to be at least 70 at the end of 2020 and to increase the number of products per customer by at least 10%. Additionally, Tryg shall reach a technical result of DKK 3.3 billion, have a combined ratio of or below 86, maintain an expense ratio of around 14 and a return on equity of or above 21% after tax. The targets are conditional upon the final approval from the authorities of the acquisition of Forsikringsaktieselskabet Alka. Tryg has launched a new purpose, which is: As the world changes, we make it easier to be Tryg 1. Also, Tryg has a new strategy with four focal points, which are (i) new products and services, (ii) digitalisation of the customer journey, (iii) efficient distribution and (iv) better claims management. 1 Tryg means: feeling protected and cared for

4 Morten Hübbe then gave the floor to the Chairman who thanked for a thorough review of Tryg s result and development in On behalf of the Supervisory Board, the Chairman accounted for the Supervisory Board s motion to distribute a dividend for the 4 th quarter of DKK 1.6 per share, corresponding to a total of DKK 6.40 for the year. Also, the Chairman accounted for the Supervisory Board s motion to distribute an additional dividend of DKK 1,000 million, corresponding to DKK 3.31 per share. On behalf of the Supervisory Board, the Chairman then proposed the distribution of a total dividend of DKK 4.91 per share on 21 March The Chairman then outlined the Supervisory Board s proposed remuneration for 2018 which is unchanged in relation to It is thus proposed that the Supervisory Board members are to receive a fee of DKK 360,000, the Deputy Chairman DKK 720,000 and the Chairman DKK 1,080,000. The Supervisory Board members who are also members of the Audit Committee will receive an additional annual remuneration of DKK 150,000, however, the Chairman DKK 225,000. The members of the Risk Committee will receive a fee of DKK 140,000, however, the Chairman DKK 210,000. The members of the Remuneration Committee will receive a fee of DKK 100,000, however, the Chairman DKK 150,000. The Supervisory Board members who are members of the Nomination Committee will, as before, not receive any remuneration. In addition, the Supervisory Board proposes that the members of an ad-hoc IT committee, set up by the Supervisory Board, are to receive a lump sum fee of DKK 140,000. The Chairman then briefed the meeting on the Executive Board s remuneration in 2017 as well as the expected remuneration in The Chairman stated that the Executive Board s remuneration in 2017 was based on a fixed salary and that the only variable part of the salary was the option to buy matching shares. The chairman of the meeting asked whether there were any comments to the annual report, the Supervisory Board s report or the motion on the appropriation of profit. Niels Aage Larsen from the Danish Shareholders Association thanked the Supervisory Board for a good report and review of the annual report and he congratulated on the good result, which yet again shows prosperity in all essential areas and on Tryg s acquisition of Forsikringsaktieselskabet Alka. He then said that the Danish Shareholders Association was pleased to see that both the Supervisory Board and the Executive Board possess shareholdings in Tryg. Also, he expressed satisfaction with the fact that all items of the corporate governance recommendations are complied with, even though the earlier recommendation regarding age limit for the Supervisory Board members was not complied with in 2017, as the Danish Shareholders Association prefers companies to focus on qualifications rather than gender and age. He carried on to state that consequently the Danish Shareholders Association applauds the removal of the recommendation in question in the latest version of the corporate governance recommendations. Niels Aage Larsen also asked two questions: How does Tryg handle collection of data on Tryg s customers in the light of investments in more digital solutions, including the risk relating to big data?

5 What will be the consequence to Tryg s portfolio of bonds should a sudden interest increase decrease the value of these bonds? Conclusively, Niels Aage Larsen thanked the Chairman for his good performance through the years. Also, he thanked management and all employees for their performance during the year. On behalf of Tryg, Morten Hübbe said thank you for the nice words. He stated that Tryg is indeed focusing on collection of data and that this is done in compliance with applicable law, in force at any time. It is important to Tryg to have transparency in order for the customers to know which data Tryg collects, why it is collected and for which purposes, and he stated that Tryg will use this data with appropriate care. To the question how a sudden interest increase will affect Tryg s portfolio of bonds, Morten Hübbe stated that the composition of Tryg s portfolio of bonds is such that it matches Tryg s insurance provisions. Therefore, a sudden interest increase resulting in a possible loss on bonds will result in a corresponding gain on the discount of Tryg s provisions and consequently the net impact on Tryg s result will be just about zero. Jan Steen Knudsen had two questions: - What are Tryg s expectations for the future return on investments, including shares and bonds? - What are Tryg s expectations for the future run-off result? Morten Hübbe stated that in later years the return on investments has contributed a great deal to Tryg s result. The very low interest level has resulted in value increases in more risky types of assets which has benefited Tryg s return on investments. Tryg has, however, pointed out that in future Tryg expects to see a more normal return on investments and that this would be significantly lower. Historically, Tryg has had an expected return of 7% on shares. Return on property has been decreasing and even though interest levels have begun to show an increase the yield on bonds is still very low. Taking into account a relatively short duration in Tryg s obligations Tryg will also have a low yield on bonds going forward. As Tryg expects a relatively low return on investments in the future, Tryg will continue to focus on the insurance business which ensures Tryg s profit performance. As for Tryg s expectations for the run-off result, Morten Hübbe stated that over a period of years the average run-off result has been approx. 6% and that the previous year actually it was close to 7%. Subsequently it was lowered a little in Tryg expects a more normal level of 3-5% around Already in 2014, Tryg announced that there would be a period showing an abnormally high run-off level as Tryg s level of provisions was very high. As there were no further comments, the chairman of the meeting ascertained that the annual general meeting: 1) adopted the Supervisory Board s report, 2) adopted the annual report for 2017, 3) adopted the motion on appropriation of profit as stated in the income statement in the company s annual report, page 103, including distribution of dividend of DKK 4.91 DKK per share, 4) discharged the Supervisory Board and the Executive Board from their obligations, and 5) adopted the remuneration of the Supervisory Board for 2018.

6 Re item 6 of the agenda The chairman of the meeting ascertained that no motions had been submitted by the shareholders and outlined the Supervisory Board s motions on: a) Renewal, increase and extension of authorisation to increase the share capital The Supervisory Board moved that the the Supervisory Board s authorisation to extend the share capital with and without pre-emption rights to the existing shareholders be reinstated in Article 8 of the Articles of Association and that the authorisation is given with expiry on 16 March Also, the Supervisory Board proposed to increase the authorisation to a nominal value of DKK 151,000,000, corresponding to an unchanged approx. 10% of the share capital. At the same time, the Supervisory Board proposed to extend the Supervisory Board s authorisation in Article 9 of the Articles of Association to issue employee shares and to increase it to DKK 15,100,000, corresponding to an unchanged approx. 1% of the share capital. b) Authorisation to acquire own shares The Supervisory Board moved that the annual general meeting authorised the Supervisory Board to let the company acquire its own shares up to a total nominal value of DKK 151,000,000, corresponding to 10% of the share capital, until 31 December The company s holding of own shares after the acquisitions must not exceed 10% of the company s share capital at any given time. The acquisition price must not deviate by more than 10% from the market price at the time of acquisition. c) Adoption of Remuneration Policy for Tryg A/S as recommended to adoption of the annual general meeting by the Supervisory Board on 22 January 2018 The Supervisory Board proposed a comprehensive adjustment of the Remuneration Policy due to changed rules on remuneration and to create an adequate coherence and transparency in the Remuneration Policy. The Remuneration Policies for Tryg A/S and Tryg Forsikring A/S are consolidated into one common remuneration policy as the remuneration policies have been practically identical. The Chairman accounted for the most substantial changes such as the introduction of overall targets for Tryg's incentive programme for the Executive Board, risktakers and other participants, that the concrete structure of payment in the incentive programme is described in detail and that the conditions for a one-off remuneration are generally loosened. Also, the Supervisory Board proposed an adaptation of the framework for severance pay applying at present. d) Motion to amend Article 19 of the Articles of Association on election period and composition of the Supervisory Board The Supervisory Board proposed various amendments to the rules in the Articles of Association on election period and composition of the Supervisory Board which are in line with the rules of the corporate governance recommendations and which will provide more flexibility. The Chairman accounted for the most substantial amendments in Article 19 of the Articles of Association such as allowing for a Supervisory Board member being able to resign if he or she has been a member for 12 years (earlier 9 years), the deletion of the requirement that in a transitional period the position as Chairman of the Supervisory Board is filled with the Chairman of the Supervisory Board in TryghedsGruppen smba and that the Supervisory Board appoints only one Deputy Chairman instead of two. The chairman of the meeting outlined motions a) and b).

7 The Chairman was given the floor to provide more detailed reasons for motions c) og d). The chairman of the meeting ascertained that all the motions were adopted by the required majority. Re item 7 of the agenda The chairman of the meeting stated that in the notice of the annual general meeting, the Supervisory Board had motioned for the Supervisory Board to consist of 9 members. However, TryghedsGruppen had decided only to nominate 3 candidates for the Supervisory Board. Consequently, the Supervisory Board altered the original motion for the Supervisory Board to consist of 9 members to 8 members instead. The chairman of the meeting then gave the floor to the Chairman. The Chairman presented the three candidates from TryghedsGruppen, Anders Hjulmand, Jesper Hjulmand and Ida Sofie Jensen. The Chairman gave an account of the candidates executive positions in other commercial enterprises. The Chairman then presented the 5 independent candidates nominated by the Supervisory Board. The Supervisory Board renominated Jukka Pertola, Torben Nielsen, Lene Skole, Mari Thjømøe and Carl-Viggo Östlund. The Chairman gave an account of the candidates executive positions in other commercial enterprises There were no other nominations. The annual general meeting elected the 8 candidates: Anders Hjulmand, Jesper Hjulmand, Ida Sofie Jensen, Jukka Pertola, Torben Nielsen, Mari Thjømøe, Lene Skole and Carl-Viggo Östlund. The Chairman mentioned that after the annual general meeting, the Supervisory Board will consist of the 8 members elected by the annual general meeting as well as the 4 members elected by the employees in Tryg. The employee-elected members are the Danish employees Tina Snejbjerg and Lone Hansen, the Norwegian employee Tom Eileng and the Swedish employee Elias Bakk. The Chairman used the occasion to thank for the election of the Supervisory Board, which this year, however, was not on his own behalf as he is resigning from the Supervisory Board immediately after the annual general meeting. The Chairman said thank you for his time as chairman in Tryg and congratulated the company on now getting and independent Chairman of the Supervisory Board. Re item 8 of the agenda The annual general meeting elected Deloitte Statsautoriseret Revisionspartnerselskab as the company s auditor. Re item 9 of the agenda The annual general meeting authorised the chairman of the meeting (with a right of substitution) to notify the adopted resolutions to the Danish Business Authority and the Danish Financial Supervisory Authority and to make such changes and amendments as might be required by the authorities as a condition for registration or approval.

8 Re item 10 of the agenda No matters to be discussed under this item. On behalf of the entire Supervisory Board the Deputy Chairman thanked the Chairman for a good co-operation. The annual general meeting adjourned.