Alka synergies and lower than normal large and weather claims. Investment income of DKK 311m (DKK 579m) driven by positive financial market returns in a year characterised by significant volatility after the outbreak of COVID-19 in Q1 2020 and related worries regarding the macroeconomic environment. Profit before tax of DKK 3,541m (DKK 3,628m).
Tryg is constantly developing new products and services, which has resulted in the launch of more than 50 new products and services since the beginning of 2018. These products and services meet customer demand and are increasing Tryg's share of wallet.
Recommended cash offer for RSA Insurance Group Plc On 18 November, Tryg made a recommended cash offer together with the Canadian insurer Intact Financial Corporation to acquire RSA Insurance Group Plc. As part of the transaction, Tryg will take over RSA's Swedish and Norwegian businesses and co-own RSA’s Danish business on a 50/50 economic basis. The acquisition will make Tryg the biggest non-life insurer in Scandinavia and create a much more balanced group with a significantly strengthened presence in
Tryg Sund In 2020, Tryg’s own app ‘Tryg Sund’ (‘Tryg Health’) was launched. Tryg Sund provides users with an overview of health insurance services, such as Tryg Medical Hotline, as well as guidance on ways to improve health, while also enabling customers to report claims directly from the app. In the first month following its launch, the app had more than 4,000 downloads from AppStore and GooglePlay.
Tryg Bilpleje – new digitally driven prevention product In Q1 2020, ‘Tryg Bilpleje’ (‘Tryg Car Service’) was launched in Denmark for private customers. For a monthly fee, the product offers access to a number of light car services such as car wash, change of tyres and seasonal car check-ups – all in one package. Tryg Bilpleje is the first fully digitalised product. This means that customers can only buy and use the product digitally, which makes it more convenient for them to use the services.
Tryg has decided to publish a detailed outlook for 2021 together with the publication of the annual report. It is important to note that Tryg will not publish annual financial guidance going forward (i.e. in future annual reports) but will 1) Five-year average, 2015-2019 2) Pro-forma technical result based on reported five-year historical average contribution by country for Tryg and Denmark, Sweden, Norway, plus estimated transaction synergies by country
Tryg has guided previously for a normalised investment income between DKK 0 and DKK 200m. A newsletter explaining all the moving parts is available on Tryg.com. The assumptions remain valid. Additionally a link on tryg.com provide daily updates on the return of the free portfolio (the capital of the company), adding more visibility to the overall investment income.
Source: Investor Presentation: Recommended Offer for RSA Insurance Group plc, page 25 (available on tryg.com)
The importance of customer relations Customer satisfaction is of paramount importance. Tryg continually strives to strengthen customer relations through advisory services, products, concepts, claims handling procedures and claims prevention measures. Satisfied customers improve retention levels, which hover around 90% for Tryg’s Private and Commercial customers. Since 2012, customer targets have been an integrated part of the CMD targets, reflecting Tryg's strong focus on customer satisfaction.
In the past three years, Tryg has experienced a general increase in the number of customer contacts. Approximately 5 million logins to the digital universe were registered in 2020, corresponding to a 182% increase compared to 2017. In the same period, phone calls increased approximately 7%. This indicates that many customers acknowledge and use the new digital solutions, but at the same time still value personal contact. Tryg believes that the general increase in customer contact is positive and supports both sales and customer interaction and loyalty.
Tryg’s results Premium growth of 7.0% in local currencies was primarily driven by strong growth in the Private and Commercial segments. Technical result of DKK 3,495m (DKK 3,237m) was impacted positively by the underlying claims development, delivery of the Alka synergies, and lower-than-normal large and weather claims, which offset a negative currency development and a further drop in interest rates. Investment income of DKK 311m characterised by volatility in all quarters driven by the COVID-19 outbreak and following capital market turbulence. Pre-tax profit of DKK 3,541m. Quarterly dividend of 1.75 per share, supporting TryghedsGruppen ’s member bonus. Solvency ratio of 183.
The Private segment posted strong growth of 9.0% (7.8% in 2019 excluding Alka) with positive impact from both Denmark and Norway. In Denmark, Tryg continued to see strong sales through partner agreements such as FDM and Danske Bank, and at the same time upselling to existing customers of new products supported the growth. In Norway, strong growth was driven by partner agreements with NITO and OBOS, but also by very strong sales from the car sales channel (Enter).
Premiums Premium growth was 7.4%, driven by positive organic growth, higher retention levels and satisfactory sale of new products. Premium growth mostly stemmed from the Private segment, especially in Norway, but the Commercial business also experienced a positive development. Corporate reported a broadly flat top-line development, with price increases being pushed through across all geographies to improve profitability.
Claims The gross claims ratio was 68.1 (67.9), and the claims ratio, net of ceded business, was 70.5 (70.4). The underlying claims ratio improved by 0.2 percentage points and was positively impacted by the claims excellence programme and Alka synergies, but also a slightly negative impact from the high growth due to higher claims frequencies for new customers. In Q4, weather claims were impacted by a landslide in Norway on 30 December with an impact of approximate DKK 60m.
Expenses The expense ratio was 12.8 (13.4), somewhat lower than Q4 prior year period, impacted by high commissions due to high level of sales and improved distribution efficiency in general.
Tryg’s equity portfolio reported a return of DKK 277m (13.5%) in 2020 against DKK 403m (21.4%) in 2019. The considerable difference in
The solvency capital requirement (SCR) is calculated in a way that Tryg should be able to honour its obligations in 199 out of 200 years, and is regularly stress-tested. In other words, at the end of 2020, Tryg’s SCR was DKK 4,855m, down slightly less than DKK 200m since the end of 2019. The lower SCR is primarily driven by the
Investor information Investor Relations (IR) is responsible for Tryg’s communication with the capital markets. It is important that investors, analysts and other stakeholders can form a true and fair view of developments, including Tryg’s financial results. For this reason, Tryg’s IR team strives to be as open and transparent as possible to ensure that stakeholders’ information requirements are met at the highest possible level. IR is in charge of the communication with equity investors, fixed-income investors and rating agencies.
The evaluation is based on the individual board members’ ability to devote the necessary time for preparation, their performance, attendance and participation at committee and board meetings in Tryg. In 2020, the Chair held five board seats in publicly listed companies. As a professional board member with more than 25 years of relevant international experience combined with a unique set of competencies, the Chair, with his role as an independent chair at Tryg, is a very valuable presence at Supervisory Board and committee meetings. The Chair has been very dedicated to all board and committee meetings with a 100% attendance rate since he was elected as Chair of the Supervisory Board in 2018. The Chair has reduced the amounts of obligations in listed and non-listed companies in 2020 and is continuously assessing his capability to allocate the required time and energy to his actual Board posts.
However, 50% of new appointments in management positions were women in 2020.
See the tasks of the board committees in 2020 at tryg.com > Governance > Management > Supervisory Board > Board committees
For the performance year 2020, the variable pay element was in January 2021 allotted as conditional shares. The cap for the incentive programme was 32% of the fixed salary including pension in 2020.
Whistleblower line Tryg has a whistleblower line, which allows employees, customers and business partners to report any serious wrongdoings or suspected irregularities. Reporting takes place in confidence to the Audit Committee chair and the Head of Legal & Compliance.
Born in 1962. Joined the Supervisory Board in 2012. Norwegian citizen.
Career CEO of Allert Östlund AB, professional board member and investor. Former CEO of Swedish banks SBAB and Nordnet and the insurance company SalusAnsvar Education BSc in International Business and Finance & Accounting Board seats, Chair FCG Fonder AB, Fondo Solutions AB,
Download Corporate Responsibility report See ESG data on pages 35-37 in our Corporate Responsibility report
Data ethics The use of data, including personal data, is essential for Tryg’s business model. Hence, using data in a responsible and ethical way is a key issue for us.
With the implementation of a new external platform for the evaluation of suppliers on sustainability performance in 2020, we initiated an enhanced systematic ESG risk-screening and supplier performance evaluation process of our suppliers.
Financial statements - Contents 49Annual report 2020 | Tryg A/S |
The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and the additional Danish disclosure requirements of the Danish Financial Business Act on annual reports prepared by listed financial services companies and the requirements of NASDAQ Copenhagen for the presentation of the financial statements of listed companies. The annual report of the parent company is prepared in accordance with the executive order on financial reports presented by insurance companies and lateral pension funds issued by the Danish FSA.
The corresponding development in Denmark/Norway has justed started for instance Cibor is supposed to change to DESTR, but this will happen later since the preliminary study of this will starts in the beginning of 2021.
Technical result per year: Impact of 15% change in NOK and SEK exchange rates relative to DKK +/- 121 +/- 95 a) Including the effect of the zero coupon inflation swap b) Part of the pension obligation has been terminated as of 1 January 2020. Additional sensitivity information in note 20 ’Pensions and similar obligations’.
Provisions for claims, end of year 1,087 a) The diagonal for 2018 to 2020 is affected by the Alka acquisition.
Notes The impact of the outbreak of COVID-19 Following the outbreak of COVID-19, a period of high uncertainty and volatility has characterised financial markets developments. For that reason it has been relevant to update the valuation of level 3 investments assets in the Fair Value Hierarchy. At the same time, it has also been deemed relevant to reconfirm assumptions in the valuation of claims provisions and also how exchange rate fluctuations will affect Tryg.
Conditional shares In 2018, 2019 and 2020, Tryg allocated conditional shares in accordance with the Group’s remuneration policy. The beneficiaries will receive shares in Tryg A/S if certain conditions are fulfilled over a period of up to 4 years.
Amortisation and write-downs at 31 December -104 -376 -1,490 0 -1,969
Trademarks and customer relations As at 31 December 2020 management performed a test of the carrying amounts of customer relations as an integral part of the Moderna, Obos and Alka portfolio goodwill test.
The recoverable amount is the higher of fair value less sales costs and value in use.
Accumulated depreciation and value adjustments at 1 January -235 -46 0 -182 -463
Derivatives according to statement of financial position 42,052 943 24,861 328
Claims provisions at 31 December 24,859 -1,285 23,574 20 Pensions and similar obligations
Adjustment regarding the terminated part of the plan termination recognised in the income statement* -1,059 0
Tryg has signed the following contracts with amounts above DKK 50m: Tryg is comitted to invest in some investment funds. The commitment amounts to DKK 934m. DKK 265m are expected called during 2021 and additionally DKK 535m within 5 years. Tryg has signed IT infrastructure agreements with commitments amounting to DKK 357m within 5 years.
The DCFs are measured at fair value and have a fair value of nil at initial recognition. The basis for the estimate of the fair value is the change in the marked based forward rates, assessment of the probability of the acquisition being concluded and the cost of the contracts. Tryg has assessed that as at 31 December 2020 the fair values were immaterial.
In 2020 Tryg Forsikring A/S paid Tryg A/S DKK 2,599m and Tryg A/S paid TryghedsGruppen smba DKK 1,559m in dividends.
Segment reporting Segment information is based on the Group’s management and internal financial reporting system and supports the management decisions on allocation of resources and assessment of the Group’s results divided into segments.
Other incentive program participants who are not risk takers have also bought investment shares as part of their incentive program.
Software Acquired computer software licences are capitalised on the basis of the costs incidental to acquiring and bringing to use the specific software. The costs are amortised based on an estimated economic lifetime of up to 8 years.
TryghedsGruppen smba has provided an irrevocable subscibtion undertaking to Tryg A/S, to subscribe for new shares in the coming Tryg Rights Issue for an amount totalling DKK 6.0bn.
Combined ratio exclusive of run-off 91.8 87.4 84.6 94.4 90.7 89.4 87.4 95.1 92.3 a) In 2020 Amounts primarily relates to one-off items. In 2019 - 2018 amounts primarily relates to eliminations and one-off items.
Key ratios are calculated in accordance with ‘’Recommendations & Financial Ratios’’ issued by the Danish Society of Financial Analysts.