Partner agreement with NITO Tryg Norway entered into a partner agreement with the Norwegian Society of Engineers and Technologists (NITO). It is the largest partner agreement concluded by Tryg Norge for 17 years. NITO has almost 90,000 members.
Sidekick Tryg launched a new motor insurance solution in Norway, ‘Sidekick’. A similar product in Denmark, ’Tryg Drive’, was extended from young drivers to include all ages. Moderna in Sweden offers two similar products: ’Moderna Smart’ and ’Moderna Smart Flex’. Tryg now offers motor insurance products where pricing is affected by driving behaviour in all the Nordic countries.
The return on bonds in the free portfolio (approximately 65% of the free portfolio) will vary, but given current interest rate levels, a very low return is expected. For shares, the expected return is around 7% with the MSCI World Index as benchmark, while the expected return for property is around 5%. The investment return in the income statement also includes the cost of managing investments, the cost of currency hedges, interest expenses on subordinated loans and other minor items.
Dividend policy Tryg’s dividend policy targets a nominal, stable increase in the dividend on a full-year basis. Tryg introduced quarterly dividends in 2017. The quarterly payment was DKK 1.65 per share, or a total of DKK 6.60 (DKK 6.40) for 2018. This equates to total dividend payments of DKK 1,994m, or 115% of the profit for the year.
In Q1 2018, Private Denmark launched a claims track-and-trace feature, which means that customers will be able to follow the processing of claims online.
Expense ratio 25Contents – Management’s review Annual report 2018 | Tryg A/S |
The investment return totalled DKK -332m (DKK 527m) for FY 2018, driven by a return of DKK -33m (DKK 598m) on the free portfolio, a return of DKK -2m (DKK 227m) on the match portfolio, and other financial income and expenses of DKK -297m (DKK -298m).
strategy with a view to sustaining value creation in the company. The Executive Board works with the Supervisory Board to ensure that the Group’s strategy is developed and monitored. The Supervisory Board ensures that the necessary skills and financial resources are available for Tryg to achieve its strategic targets. The Supervisory Board specifies its activities in a set of rules of procedure and an annual cycle for its work.
The variable pay element consists of a Matching Shares Programme. The Executive Board may buy shares (so-called investment shares) in Tryg A/S
Tom Eileng Born in 1954. Employee representative. Joined the Supervisory Board in 2016. Norwegian citizen. Employed since 1986. Career: Deputy chairman of Finansforbundet Tryg and Senior Commercial Adviser. Education: Business Economist. Authorised adviser in life and non-life insurance. Board member: Tryg A/S, Tryg Forsikring A/S and Vesta Støttefond. Committee memberships: Remuneration Committee in Tryg A/S. Number of shares held: 468 Change in portfolio 2018: +148
Education: MSc in Economics and Business Administration, Chartered Financial Analyst (CFA) as well as Senior Executive Programme from London Business School and Effective Board Management from Harvard Business School. Board seats, Chairman: Seilsport Maritimt Forlag AS, TF Bank AB and ThjømøeKranen AS. Board seats, Deputy Chairman: Norconsult A/S and Norconsult Holding. Board member: Tryg A/S, Tryg Forsikring A/S, Norconsult as, Nordic Mining ASA, Forskningskonsernet Sintef, Sintef AS, Scatec Solar ASA, Hafslund E-CO AS and Ice ASA. Committee memberships: Chairman of the Audit Committee in Norconsult and the Remuneration Committee in TF Bank AB. Member of Tryg's Audit Committee and Risk Committee, the Audit Committees in Scatec Solar ASA, TF Bank AB, Hafslund E-CO and Ice ASA. Number of shares held: 3,900 Change in portfolio 2018: +600
Education: Insurance training, LL.M. Board seats, Chairman: P/F Betri Trygging, Tryg Livsforsikringsselskab A/S. Board seats, Deputy Chairman: Alka. Board member: Danish Employers’ Association for the Financial Sector, TJM, Forsikringsakademiet, the Danish Insurance Association and cphbusiness (Copenhagen Business Academy).
48Contents – Financial statements Annual report 2018 | Tryg A/S |
Morten Hübbe Lars Bonde Johan Kirstein Brammer Group CEO Group COO Group CCO
• Expectations for future inflation. • Determination of the margin included in Management ’s estimate of the claims provisions to address the uncertainty related to the actuarial estimates.
Operating equipment 145 67 Owner-occupied property 790 0 12 Total property, plant and equipment 935 67 14 Equity investments in associates 242 225
Total receivables in connection with direct insurance contracts 1,476 1,471 Receivables from insurance enterprises 144 300 Other receivables 803 957
The share of capital included in the calculation of the capital base totals DKK 2,739m (DKK 2,164m in 2017).
Claims ratio, net of ceded business 66.7 67.9 69.7 71.3 69.0
Amortisation and write-downs Amortisation and write-downs at 1 January -104 -147 -1,252 -92 -1,595
13 Investment property Fair value at 1 January 1,324 2,323 Exchange rate adjustments -5 -27 Additions for the year 19 10 Disposals for the year -148 -1,015 Value adjustments for the year 141 33 Reversed on sale 14 0
Sensitivity Tryg’s property valuations are based on the market-based rental income and operating expenses of the individual property, relative to the required rate of return. The most important factors impacting the valuations are the applied rates of return, annual net rental income and occupancy rates. The average rates of return applied are stated above.
Number of shares at 1 January 301,945 274,595 203 7,946 Bought during the year -382 -211 382 211 Sold during the year 0 27,400 0 0 Cancellation in connection with buyback programme 0 0 0 -7,793 Used in connection with exercise of incentive programme 180 161 -180 -161
Change in claims in the financial year in respect of the current year 13,678 -664 13,014 Change in claims in the financial year in respect of prior years -1,105 18 -1,087
Defined-benefit pension plans: Present value of pension obligations funded through operations 40 65 Present value of pension obligations funded through establishment of funds 1,065 1,068
Specification of change in recognised pension obligations: Recognised pension obligation at 1 January 1,133 1,268 Exchange rate adjustments -16 -95 Present value of pensions earned during the year 30 33 Capital cost of previously earned pensions 19 16 Actuarial gains/losses -4 -39 Paid during the period -57 -50
Contingent liabilities Companies in the Tryg Group are party to a number of disputes.
Management believes that the outcome of these disputes will not affect the Group's financial position significantly beyond the obligations recognized in the statement of financial position at 31 December 2018.
27 Acquisition of subsidiaries The Group has incurred transaction and advisory costs of DKK 76m in connection with the acquisition.
Purchase price in cash 8,332 13 8,345 155 95Contents – Financial statements Annual report 2018 | Tryg A/S |
Equity and liabilities Total debt 789 Total equity and liabilities 789 In addition please see note 24.
Assets under construction Group-developed intangibles are recorded under the entry ’Assets under construction’ until they are put into use, whereupon they are reclassified as software and are amortized in accordance with the amortization periods stated above.
Companies in the Tryg Group are party to a number of disputes in Denmark, Norway and Sweden. Management believes that the outcome of these disputes will not affect the Group's financial position over and above the receivables and liabilities recognised in the statement of financial position at 31 December 2018.
10 Parent company TryghedsGruppen smba TryghedsGruppen smba controls 60% of the shares in Tryg A/S.
Group chart at 1 January 2019. Companies and branches are wholly owned by Danish owners and domiciled in Denmark, unless otherwise stated.