TrygVesta has launched a number of new projects requiring fresh thinking, development and innovation, and preparing us and our customers for a changeable future. That’s why we say ‘the future is now’ with this year’s theme.”
TrygVesta used to send several hundred thousands of cheques to Danish customers each year. Using the NemKonto saves customers a trip to the bank, and TrygVesta disposes of the manual work of writing and sending cheques.
Norway in 2008 was dominated by rising claims expenses and a need to increase prices in order to sustain profitability. The years 2003-2006 saw unusually low claims expenses, triggering a fall in the prices of a number of main products. However, the underlying claims inflation continued to rise, and since mid-2007 average prices have gone up. Price competition in the form of bundling discounts is used extensively in the Norwegian mass market because it enhances loyalty, while the use of introductory discounts offering lower prices to new customers than to existing customers has declined. TrygVesta operates a principle of price transparency for all customers and accordingly does not use introductory discounts.
By international standards, customers in the Finnish market are among the most loyal insurance customers with average relations to their insurer of more than ten years.
The corporate market is characterised by medium-sized and large businesses served directly by the insurer or through an insurance broker. Large customers in particular see international insurance groups as an alternative to the Nordic insurance companies. In a historical perspective, however, international groups have only to a small extent been able to win market shares.
TrygVesta’s share of the overall Nordic market is expected to rise in the years ahead simply as a result of the rapidly growing market shares in Finland and Sweden. In addition to the Nordea partnership, TrygVesta is establishing own sales channels and other partnerships, for example with affinity groups, thereby gaining a broader foothold in the
Motor insurance accounts for 32% of total premiums earned by the Group. A motor insurance policy consists of mandatory third party liability comprehensive cover and cover for the motorist’s own vehicle. The mandatory third party liability insurance provides cover against liability for injuries to a third party and damage to a third party’s property. The comprehensive vehicle insurance, which is voluntary, provides cover for the motorist’s own vehicle, for example in connection with collisions, fire damage and theft. Motor insurance is written for passenger cars, motorcycles, mopeds, caravans, lorries, buses and trailers. Motor policies taken out by TrygVesta’s concept customers in Denmark include roadside assistance, including services such as towing and battery jump-start, at no additional charge.
Transport and marine insurance accounts for 4% of total premiums earned by the Group. A marine insurance policy covers damage to the policyholder’s vessel caused by factors including fire, collision, sinking and third-party liability.
We are in the process of simplifying our written communications, including letters, brochures and policy texts to the mass market, targeting them to customer segments and bringing them closer to customers. The intention is for customers to perceive our communications as relevant and understandable. Enhanced customer communication is also part of the strategic theme – self-service.
The management academy was set up in 2008, aiming to induce all TrygVesta managers to work in line with the
Costs in 2008 were affected by rising wage inflation and substantial investments in “The Living House”. When adjusted for these factors the expense ratio was 16.7 equal to 2007. The expense ratio for 2009 is expected to be on a level with 2007. This expectation includes continued expansion in Finland and Sweden. The expense ratio would be just over 15 for the Danish and Norwegien activities.
Group’s financial results, TrygVesta has already launched a number of initiatives and additional measures have been scheduled to maintain and improve the earnings level.
Gross claims ratio 66.0 62.3 67.3 Business ceded as % of gross premiums 3.1 1.3 1.3
Gross earned premiums rose by 1.8% to DKK 6,605m in 2008, which was lower than anticipated. In 2008, growth in gross premiums was affected by lower premiums on motor insurance and competition from small insurers in particular. Going forward, price competition from small insurers is expected to tail off as a result of changed market conditions under which losses on investments and higher combined ratios are likely to lead to a stronger focus on striking the balance between earned premiums/
In 2008, the retention rate for private customers stabilised at a high level of around 91, which means that 91 out of 100 private customers chose to renew their policies with us. The high retention rate made a positive contribution to the performance, as a high retention rate is important in relation to the development of premiums, claims and costs.
The combined ratio was 86.1, an increase relative to the exceptionally low level of 80.3 recorded in 2007.
The financial turmoil started in 2007, deepening into a financial crisis in 2008. The crisis grew to dramatic proportions in the autumn with mounting problems in the liquidity markets, peaking so far with the collapse of
Our customers in Finland are some of the most loyal and satisfied customers in the market. Compared with the previous survey, we also improved our ratings significantly in a number of other areas, such as customer loyalty which at 80.6 points rated significantly above the market average of 75.6.
2) Satisfaction and loyalty is measured on a scale from 1-100.
The latest version of the Solvency II draft standard model was tested in QIS4 (quantitative studies that measure the impact of the new Solvency rules) in the first half of 2008.
• The dividend policy reflects our long-term earnings and cash flow potential, while maintaining and appropriate level of capitalisation.
Poor’s model increases to 16%, 11% or some DKK 850m more than the 5% buffer target.
The Group buys reinsurance for the aggregate Nordic business, thereby generating substantial price synergies.
Depending on the complexity of the claim, a fairly long period of time may pass until the claim has been finally calculated. This may be a prolonged process particularly for personal injuries. Even when the claim has been settled there is a risk that it will be resumed at a later date, triggering further payments.
Mr Christiansen has experience with international businesses, including from his work at
Invest Aps and Berco ApS. Former chief executive of Jacob Holm & Sønner A/S
Lars Bonde Member of the Group Executive Management in charge of Corporate. Born 1965. Joined TrygVesta in 1998. Joined the Group Executive Management in 2006
Effective on 1 January 2009, TrygVesta changed its organisation so that the entire Group will be based on a pan-Nordic structure with a business management comprising nine members, all of whom will be responsible for the Nordic region.
CSR is a focus area for TrygVesta; it supports the company ’s business and peace-of-mind delivery. TrygVesta has drawn up a CSR declaration of intent, defining our commitment and describing our responsibility in relation to employees, customers and the external community.
In connection with the Supervisory Board’s review of the annual report, it discusses the accounting policies, among other issues, and the results of the audit are discussed with the audit committee and in Supervisory
Other listed insurance companies in the Nordic region generated returns including dividends as follows in 2008: Alm. Brand -76%, Sampo -22% and Topdanmark -6%.
We recommend the annual report to be adopted by the shareholders at the annual general meeting.
The consolidated financial statements are prepared on the basis of the financial statements of the parent company and its subsidiaries by adding items of a uniform nature. The financial statements of subsidiaries that present financial statements under other legislative rules are restated to the accounting policies applied by the group.
Ratios Earnings per share (EPS) are calculated according to IAS 33. Other key ratios are calculated in accordance with “Recommendations and Ratios 2005” issued by the Danish Society of Financial Analysts and the executive order no. 1266 dated 26 October 2007 issued by the Danish FSA.
The share option agreement entitles the employee to the options unless the employee resigns his position or is dismissed due to breach of the employment relationship. In case of termination due to restructuring or retirement, the employee is still entitled to the options. Special provisions are in place concerning sickness and death and in case of change to the company’s capital position. No other vesting conditions apply.
Allocated Total numbers share options Exercised Cancelled Expired Outstanding Period of exercise
Danish branches were offered employee shares or alternatively a cash consideration. Each employee was offered 28 shares at a discount to the market price equal to DKK 25 per share, equivalent to a total of 59,492 shares or around DKK 23m being granted to the employees.
Average claims DKK ** 11,239 11,876 49,224 46,185 8,193 12,448 46,661 48,025 48,061 1,220,934 7,192 7,303 Total claims 199,579 202,314 36,529 35,651 7,702 6,732 8,589 8,489 19 28 10,435 14,987
Value adjustments for the year relate to costs associated with refurbishment and improvement of owner-occupied property. It has been assessed that the costs cannot be contained in the future value of the owner-occupied property, which is the reason why the property has been written down.
Reversed impairment losses are estimated at around DKK 20-30m annually, but may vary due to major cases/disputes. Please refer to the section on ‘Credit risk’ in ‘Risk management’ in the ‘Management’s report.’
The table consists of figures for TrygVesta Forsikring A/S and TrygVesta Forsikring, Norwegian branch of TrygVesta Forsikring A/S. Other Group units are included in the item “Other reserves”, which comprises the provisions for claims for TrygVesta Garantiforsikring A/S and the Finnish and Swedish business units.
Actuarial gains/losses associated with the pension obligation -136 90 104 -23 Actuarial gains/losses associated with pension assets 18 26 -10 -173
Notes 25 Other provisions Other provisions, beginning of year 50 57 Exchange rate adjustment 0 -10 Change in provisions 7 -11
In connection with the sale of Chevanstell Limited, TrygVesta Forsikring A/S issued a few specific guarantees to the buyer.
Rental income 45.9 Profit/loss after tax 8.6 Impact on equity 8.6
TrygVesta Forsikring A/S, Ballerup 100 10,732 7 Current tax assets Tax payable, beginning of year 3 21 Current tax for the year 21 18 Tax paid during the year -3 -21 8 Deferred tax assets Non-capitalised tax loss TrygVesta A/S 72 72
Sales of insurances and claims payments - Parent company (TryghedsGruppen smba) 0.2 0.3 - Other related parties 17.3 115.3