Our insurances cover, among other things, workers’ compensation, motor, building, contents, cargo and personal accident.
STINE BOSSE – As early as in 2008, we stepped up our preparations for a period of economic uncertainty – we reduced our equity portfolio, showed restraint in recruiting new staff and focused on in-house rotation, we strengthened our capital resources, and we explored the potential for both acquisitive and organic growth. In 2009, we had fewer employees than originally planned and therefore did not need to make rapid cost adjustments. Finally, we maintained a capital buffer, which enabled us to acquire Swedish company Moderna Försäkringar in the spring of 2009.
But in the final analysis, TrygVesta is continuously measured by its performance. We expect a gradual improvement of the economy in 2010, which will improve conditions for insurance generally. 2010 will also bring more clarity with respect to future capital requirements from regulators – the socalled
requirements and wishes, strengthening telephone and internet staff levels, while in future, personal meetings at customer centres have to be booked in advance. The change will reduce the number of TrygVesta’s high street customer centres and is expected to cut costs as well as enhance overall customer satisfaction because of improved telephone services.
In 2009, we continued the intensive development of our training and development activities. One initiative was the launch of a new training programme involving much more dynamic training offers with courses customised to individual needs to a greater extent. The new training programme is designed to ensure identical handshakes from all employees, and ensure that they are all familiar with the spirit of being a peace-of-mind provider. Corporate
Goals for 2010-11 > To be the most attractive workplace in the financial sector in the Nordic region > Leading the Strategy – management training programme with increased organisational effect > The Living House and The Living Organisation start to show effects > Best in class’ at CSR initiatives within climate, prevention, inclusion and well-being results and goals
The proportion of customers with concept agreements fell marginally in 2009, which was related to the lower customer retention in the
The portfolio per employee increased in 2009 due to focus on in-house recruitment and restraint with respect to new appointments 75% of TrygVesta employees are either satisfied or very satisfied. This is a good result considering the many changes that are continuously being implemented
See the assumptions described under combined ratio above and the section Risk management for a sensitivity analysis assumptions for insurance activities
The outlook for the financial results for 2010 is based on assumptions with respect to gross earned premiums, gross claims incurred, gross expenses, result of business ceded and technical interest. The outlook for gross earned premiums is based on the Group’s portfolio at 31 December 2009 and assumptions with respect to sales and loss of policies and price adjustments of existing policies. Assumptions for sales and loss of policies are based on historical data, planned initiatives and the market situation. Assumptions for price adjustments are primarily based on agreements relating to adjustments of individual insurance policies.
1,347m in 2008. This was around DKK 200m higher than the full-year forecast announced in the third quarter interim report 2009. The improvement relative to the forecast was attributable to a higher investment income and run-off gains on prior-year claims.
Large claims, defined as claims of more than DKK 10m, were a gross amount of DKK 534m in 2009 against DKK
The gross expense ratio improved from 17.3 in 2008 to 16.9 in 2009. Both 2009 and 2008 were adversely impacted by costs in connection with The Living House, which amounted to DKK 64m in 2009 against DKK 133m in 2008. The refurbishment of the head offices began in 2008 and accelerated during 2009.
Gross claims ratio 66.0 72.7 72.5 Business ceded as % of gross premiums 1.8 1.5 1.2
Despite the competition, the overall Norwegian market share increased from 17.9 to 18.1 in 2009 (end-September 2009). The underlying trend showed a small decline in the market share in the private area, whereas the market share for commercial increased. The substantial premium increases in the middle of the year resulted in a minor decline in market share in the second half of 2009, which was not unexpected. This had an adverse impact on the renewal rate which dropped by 1.8 percentage points to 85.1%.
against a run-off loss of DKK 26m in 2008, or 0.5% of gross premiums compared with minus 0.6% in 2008. Run-off gains originated mainly from the personal accident lines.
Gross earned premiums 251 354 472 Gross claims incurred -188 -258 -402
Insurances include buildings, consequential loss, liability, cargo and motor. Workers’ compensation insurance is handled through public collective agreements and is therefore not offered as a product in Sweden. The Swedish business sector is highly internationalised, and the partnership with AXA therefore supports TrygVesta’s expansion in the Swedish market for corporate insurances. Given the current action plans and distribution strategies, this part of the portfolio is expected to grow significantly over the next few years.
In the beginning of 2010, TrygVesta initiated a division of the investment assets into a match portfolio with the same market value as the provisions, and an investment portfolio. The purpose was to ensure optimum hedging of the interest rate risk on the provisions and to achieve a better and more transparent allocation of distributable funds.
TrygVesta Forsikring A/S ‘A-’/stable A2 TrygVesta Garantiforsikring A/S ‘A-’/stable n.a. Moderna Försäkringer AB ‘A-’/stable n.a.
February 2009, the programme was extended up to and including 22 April 2009 due to low trading volumes. The programme had been scheduled for completion by 2 March 2009.
This risk is managed by requirements to reinsurers’ ratings and by spreading reinsurance on several reinsurers.
TrygVesta manages credit risk and concentration risk through limits and rating requirements.
TrygVesta has also set up a security and investigation unit to handle matters such as fraud, IT security, physical security and contingency plans.
Mr Brinch runs his own business providing strategic consulting and board services. Mr Brinch has experience and knowledge within the areas of strategic development, branding, distribution and consulting services with respect to board work.
Birthe Petersen Elected by the employees Born 1949. Joined the Supervisory Board in 2002.
Educational background: Graduate Diplomas from CBS in Organisation, in Marketing Management and in Accounting, and management training programmes, including Wharton and
Group has a number of policies that describe the company ’s relationship with its stakeholders.
See also the CVs of the Board members in the section
Group CFO and Group CRO monitors the risk management environment. The Executive Management reports to the
See TrygVesta’s statutory report on corporate social responsibility at trygvesta.com > CSR > CSR
Ole Søeberg, IR Director Tel.: +45 44 20 45 20. ole.soeberg@tryg.dk.
Funding Purchase of own shares -1,160 -334 Subordinated loan capital 0 485 Dividend paid -1,156 -442 Change in debt to credit institutions 110 -98
accounting estimates and judgements The preparation of financial statements under IFRS requires the use of certain critical accounting estimates and requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are: > Liabilities under insurance contracts > Valuation of defined benefit plans > Fair value of financial assets
Insurance operating expenses Insurance operating expenses represent acquisition costs and administrative expenses less reinsurance commissions received. Expenses relating to acquiring and renewing the insurance portfolio are recognised at the time of writing the business. Underwriting commission is recognised when a legal obligation occurs and is accrued over the term of the policy. Administrative expenses are all other expenses attributable to the administration of the insurance portfolio. Administrative expenses are accrued to match the financial year.
The share options are exercisable exclusively during a two-week period following the publication of full-year, half-year and quarterly reports and in accordance with TrygVesta’s in-house rules on trading in the Group’s shares. The options are settled in shares. A part of the Group’s holding of treasury shares is reserved for settlement of the options allocated.
Number of options exercisable end of 2009 28,820 82,910 2,620 114,350 64 7 73 8
Description of segments Please refer to ‘Our business areas’ in the Annual Report 2009 for a description of our operating segments. Amounts relating to Moderna
DKK m 11 Impairment test Goodwill As at 31 December 2009, management performed an impairment test of the carrying amount of goodwill based on the allocation of the cost of goodwill to the cash-generating units.
Software The impairment charges are recognised in the income statement in depreciation, amortisation and impairment writedowns of software.
DKK m 12 Property, plant and equipment Owner- assets Operating occupied under equipment property construction Total
An individual estimate of the degree of influence under the contracts is made.
l Noter l TrygVesta Årsrapport 2009116 af 152 l Notes – TrygVesta Group l Annual report 2009116 of 148
Derivatives with value adjustment in the income statement 2008 2009 according to IAS 39. Fair value: Gross Net Gross Net
Due within one year 8,444 297 11,024 34 Due after more than five years 3,618 0 3,623 0
Enter Forsikring AS and Moderna Försäkringar. Other units in the Group are included in ‘Other’ 1) Comprises provisions for claims for TrygVesta Garantiforsikring A/S and the Finnish and Swedish branches. 3) Discounting also includes exchange rate adjustments.
Change in carrying amount of plan assets: Carrying amount of plan assets, beginning of year 932 628 Exchange rate adjustment -177 118 Investments in the year 31 149 Estimated return on pension funds 44 40 Actuarial gains/losses -173 -42 Paid during the period -29 -37
Payment due by period 2008 0-1 year 1-3 years 3-5 years > 5 years Total
Moderna Försäkringar Sak AB 100% Non-life insurance 2 April 2009 Modern Re S.A. 100% Intra-group reinsurance 2 April 2009 Netviq AB 100% Agency for Moderna 2 April 2009 MF Bilsport & MC Specialförsäkring AB 100% Agency for Moderna 2 April 2009
Gross premiums 184 768 Technical result 10 75 Profit/loss for the period 8 93
Danish general insurance Comprises the legal entities in TrygVesta Forsikring A/S (excluding the Norwegian, Finnish and Swedish branches) and TrygVesta Garantiforsikring A/S.
Certain statements in this annual report are based on the beliefs of our management as well as assumptions made by and information currently available to management. Statements regarding TrygVesta ’s future results of operations, financial condition, cash flows, business strategy, plans and future objectives other than statements of historical fact can generally be identified by terminology such as ”targets”, ”believes”, ”expects”, ”aims”, ”intends”,