Sampos Analyst Day 17 August 2018 Insight into Topdanmark s strategy and organizational structure CEO Peter Hermann 17. august 2018
Agenda CEO Peter Hermann Strategic initiatives Development - Facts and numbers 2
CEO Peter Hermann Born 1973 Master of Actuarial Science Feb 2018 May 2016 May 2014 May 2011 Nov 1995 Topdanmark Insurance Topdanmark Life and Pension PFA Pension Nordea Life and Pension PFA Pension
CEO Peter Hermann Management principles Ambitious goalsetting The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it. Michelangelo Continuously improving the performance of the organization at all levels through Performance Management Continuously developing the business into new areas and services.
CEO Peter Hermann Executive board CEO Peter Hermann Responsible for HR, Communications, IR, CSR, Group Secretariat, Corporate Legal Matters and Topdanmark Life Insurance. CFO Lars Thykier Responsible for Asset Management, Finance, Accounts, Statistical Services, Reinsurance, Tax and Credits COO Brian Rothemejer Jacobsen Responsible for Personal and Commercial, Claims Handling, customer service and Marketing CIO Thomas Erichsen Responsible for Digitalisation, IT and Group Development. 5
Agenda CEO Peter Hermann Strategic initiatives Development - Facts and numbers 6
Top 1-2 - 3 1 Topdanmark More joint development and exploiting larger synergies focusing on best principles in the Topdanmark Group 2 Customer types The customer journey for private and corporate clients must reflect the full experience across divisions 3 Distribution channels Direct sales, partner sales and digital sales 7
Customer aspiration Being a Topdanmark customer, you need not worry about insurance and pension. We take care of that for you. Based upon your requirements, we make provisions for your security making sure that being a customer is easy and simple. We are proactive and available when you need our assistance. 8
How to differentiate ourselves Risk management We know the risk and quote the right price. We contribute to damage prevention and security. Customer relation We provide focused services (insurance and security) on time - and proactively when customer requirements can be predicted by use of experience and data Market access We offer purchase of insurances through the most suitable channel: Distribution partners Digitally Personal Non-life and Life Any insurance requirements within Nonlife, Life and Pension are covered by the Topdanmark Group joint customers experience advantages from this Commitment and leadership Future technology Execution
New organisation to ensure flexibility and synergy Five divisions merge in to three Focus on sales (on-line, partner and personal) and profitability Shared service in claim, customer service and business development Focus on efficiency and development Personal Partners Commercial Agriculture Life/Pension Personal Commercial Life/Pension Claim Customer service Business development P/L responsibility Prioritization Excellency Utilization Innovation 10 Joint standard systems
Cooperation agreement with Coop Coop is the largest supermarket chain in Denmark counting 1,750,000 customers >800,000 customers use the Coop app Digital set-up Simple, modular products Competitive prices Digital first in Sales, Service and Claims handling Push strategy insurances must be sold Fully integrated with Coop s bonus scheme for members Launch Soft launch of Coop motor insurances in April 2018 Other products to be launched later Contents, accident, house etc.
Agenda CEO Peter Hermann Strategic initiatives Development - Facts and numbers 12
Market shares Non-life insurance H1 2017 Life insurance 2017 5.5% 1.3% 20.1% 17.9% 6.6% 8.6% 29.8% 3.4% 4.1% 16.8% 8.8% 4.9% 5.6% 7.1% 9.6% 10.5% 17.6% 21.8% Tryg Topdanmark Codan Alm. Brand Gjensidige If Lærerstanden Alka Forsikring GF-Forsikring Others PFA Pension Danica Pension Nordea Liv & Pension Topdanmark Liv SEB Pension AP Pension Skandia Alm. Brand
Trend in combined ratio 90.3 95.0 89.8 91.1 90.4 85.8 88.5 88-89 2012 2013 2014 2015 2016 2017 H1 2018 2018 E 1) Incl. additional expenses representing 0.5-1pp due to investment in increased digitalisation and automation 14
Trend in combined ratio 8.0 CR 100 Effect of decline in interest rate level in pp of CR 5.0pp 6.0 4.0 2.0 0.0 91.1 1.3 93.3 1.1 90.3 88.0 1.6 91.5 86.0 0.5 0.4 86.8 0.7 85.1 85.5 82.0 0.1 0.1 0.2 95 90 85 80 75 (1.0) (2.0) 2009 2010 2011 2012 2013 2014 2015 2016 2017 H1 2018 70
Claims trend excl. run-off, weather and large-scale claims moving average Q1 2016-Q2 2018 Claims trend excl. run-off, weather and large-scale claims 73 72 71 71.1 71.7 70.8 71.4 71.3 Improvement in claims trend excl. run-off, weather and large-scale claims 70 70.0 70.0 69.5 1.6pp 69.1 69 68.7 68 67 Q1 2016 Q2 2018
Reasons for the improved claims trend Change in business mix Improved underwriting Risk assessment part of sales agents success Loss preventing initiatives Filtering out unprofitable customers Customer scoring system Digitalisation Robotics Machine Learning Outsourcing Improved purchasing power Improved churn rate
Premium classification Premiums classified by products 2008 Premiums classified by products H1 2018 6.2% 7.5% 13.8% 27.1% 7.2% 35.3% 16.1% 16.2% 9.2% 27.5% 10.9% 23.0% Personal Motor Agricultural SME Workers' compensation Illness/accident and unemployment Personal Motor Agricultural SME Workers' compensation Illness/accident and unemployment
Digitalisation Self-service Online purchase Efficiency Process optimisation and automation Transformation Culture Digital readiness 17,6% af new sales are initiated digitally and processed digitally in full or partly 63,9% of claims are reported digitally via Topdanmark s website or glass portal and 18,4% are automated in full or partly Topdanmark has reduced the number of FTEs by 12% since 2016 38 processes are executed via RPA (Robot Process Automation) Experimenting with ML (Machine Learning) for two processes Outsourcing of business processes and IT development Since 2016, Topdanmark has established Innovation Lab in order to ensure digital readiness Topdanmark has signed agreements with SingularityU in Denmark Local and central initiatives 19
Trend in retention ratio Personal segment 101.8 100 100.2 100.6 101.1 100.8 99.9 100.3 101.1 H1 2010 H1 2011 H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 H1 2018
Any questions? 17. august 2018