Vesta is an attractive place to work. We invest in education and training and help each individual develop their full potential in our large, Nordic organisation.
• TrygVesta proposes that a dividend of DKK 650m be declared.
• The partnership with CSC on IT operations was extended to comprise TrygVesta in Norway.
TrygVesta’s strategy for 2004-2006, which was defined in 2003, remains unchanged in all respects. No events in 2004 in the external environment or internally gave rise to strategy changes.
The strategic focus areas will be discussed briefly below and in detail in the four subsequent sections: Customers, Processes,
We also intend to improve our claims handling procedures with a view to increasingly provide solutions rather than just provide financial compensation.
We intend to implement further cost savings in 2005, primarily in our staff functions, but also in our three business areas, with a view to providing scope for substantial investments in employee training, IT and increased selling power. These cost savings and investments will safeguard and consolidate our position in terms of combined ratio and contribute to achieving substantial competitive strength.
Developments in TrygVesta’s corporate business contributed to significantly improved profitability in that area in 2004. In 2005, we intend to take a number of steps to consolidate profitability.
Tryg Firma is a special offer to small businesses based on their special insurance, advice and service requirements. In addition to financial benefits on insurance of passenger cars, vans and lorries, the offer to businesses includes a special favourably priced security package ensuring service and salvage in a number of important areas.
Generating 11% growth in 2004 relative to 2003, Nordea’s sales of our general insurance products continued to generate fair growth. Bank distribution accounted for 11% of TrygVesta’s total sales of new policies to personal customers in 2004.
TrygVesta’s partnership with Nordea has reached its most mature stage in Denmark. After many years, bank distribution still generates strong and satisfactory new sales, standing at almost 50,000 policies or almost 18% of TrygVesta’s total sales of new policies in 2004 and contributing to continued growth in the total portfolio in 2004.
While the welfare debate is raging in the Nordic and other
TrygVesta intends to expand health policies in Norway in 2005 and the Norwegian trade has introduced unemployment policies.
As TrygVesta’s business is the customer’s peace of mind, we wish to help customers prevent damage and therefore paid the cost of the smoke alarm as well as the postage.
A 1,500 kilo sowing machine landed on his foot Mogens Povlsen and Kaj Brødsgaard, Ørbæk Customers with TrygVesta, Denmark
TrygVesta’s ambition is to improve productivity and enhance quality by automating and centralising on an ongoing basis.
In Norway, TrygVesta has worked with procurement in connection with motor claims since 2001. The concept is based on agreements with selected authorised garages, which charge lower prices to TrygVesta for repairing the customers’ cars than other garages.
In order to make the area balance, TrygVesta has raised premiums for workmen’s compensation insurance considerably in both
We are now reaping the benefits of the second wave of Nordic synergies in the form of efficiency enhancements and savings, in particular in the staff functions. The savings should be seen as a means of strengthening and maintaining TrygVesta’s good business and financial performance. At the same time, we are advancing the third wave of Nordic synergies, which we are about to ride by investing part of the savings in increased selling power, as well as in employee development and IT.
preferred supplier of products and services that offer peace of mind. At the same time, the risk management efforts help prepare TrygVesta for the new and stricter requirements from our external environment as to how an insurance business should be run. Supervisory authorities and international rating agencies, in particular, focus increasingly on risk management.
(Solvency 2) and partly due to the insurance markets becoming increasingly internationalised. Operating a successful insurance business in the future will undoubtedly be even more dependent on the companies’ ability to plan, monitor and manage their risk.
Nordic organisation was to harmonise the different elements of the Group’s risk management.
Relative to the yellow-light scenario, TrygVesta uses 38% of its risk capacity. This means that the company can more than double its investment risk without moving out of the greenlight scenario.
The chart shows the excess core capital relative to the Danish Financial Supervisory Authority’s traffic light system. The amount of excess core capital increased throughout 2004 thanks to much of TrygVesta’s earnings being invested in low-risk investment assets.
TrygVesta has established a sound balance in Group earnings, generating a technical result of DKK 790m from its Danish operations and DKK 722m from its Norwegian operations.
DKK 172m during the period 2002-2004. The combined effect of the divestments was recognised as profit on insurance activities totalling DKK 63m in 2004, while the restructuring and run-off provision of DKK 179m remaining at 31 December 2003 was applied in full.
Total earned premiums were furthermore affected by the divestment of TrygVesta’s reinsurance operations and the activities in Poland and Estonia in 2004, since earned premiums from the divested activities were only included until the time of sale. Overall, gross premiums were adversely affected by the divestment of other activities in the amount of DKK 190m.
Group remaining at 31 December 2003 was applied in accordance with the intentions, and the investment income was only affected by a net gain of DKK 63m from the divestment.
This significant improvement was due to a generally good claims performance in the individual areas and a particularly positive claims performance in motor and house insurance.
of the Finnish market for banking services. Accordingly, there is still a large sales potential in this area.
It should be borne in mind that competition in the market has diminished because several foreign competitors have withdrawn from the Nordic market. And we have seen a couple of years with unusually favourable weather.
Standards. Based on an evaluation of materiality and risk, we examined the business procedures, the accounting policies applied and the estimates made and verified the basis for the amounts and other disclosures in the annual report. We believe that our audit provides a reasonable basis for our opinion.
In principle, the parent company, TrygVesta A/S, is subject to the provisions of the Danish Financial Statements Act. As the object of the parent company is to own subsidiary undertakings whose activities are primarily focused on insurance business, the parent company financial statements have been presented in accordance with the Danish Insurance Business
Newly acquired or divested subsidiary undertakings are consolidated at the results for the period subsequent to acquisition or prior to divestment, respectively.
Any gains or losses arising on divestment of subsidiary undertakings are included in the income statement under
Earned premiums represent gross premiums during the year, net of outward reinsurance premiums and changes in unearned premium provisions, corresponding to an accrual of premiums to the risk period of the policies.
Bonus and premium rebates represent anticipated and reimbursed premiums where the amount reimbursed depends on the claims record, and for which the criteria for payment have been laid down prior to the financial year or when the business was written.
IFRS prohibits recognition as a liability of equalisation provisions, and the existing equalisation provisions will therefore be dissolved. Equalisation provisions relating to the difference between differences in the basic rate will be transferred to provisions for claims, while equalisation provisions in respect of the Pool of Natural Perils, credit and guarantee, and storm and large loss equalisation will be transferred to equity after deduction of deferred tax.
Gross claims ratio, net of ceded business 65.1 78.2 69.6 80.7 85.0 79.2 82.5
Acquisition costs and administrative expenses -3,462 -3,745 Commission and profit commission from the reinsurers 245 303 4 Total insurance operating expenses, net of reinsurance -3,217 -3,442
Note Investment activities Income from investment assets 12 Income from associated undertakings 0 0 Income from land and buildings 115 193 6 Interest and dividends, etc. 828 822 7 Realised gains on investment assets 143 176
Beyond this, other ordinary expenses are defrayed to the Group’s Internal Audit Department.
Profit/loss on business ceded 5 -2 13 -30 -22 -35 -6 -8 -53 -118
Fire & Fire & contents contents Credit & Other pers. lines commercial Liability guarantee insurance insurance 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003
Profit/loss on business ceded -53 -71 -425 -579 -82 -97 -26 -36 -165 -159
Tryg Forsikring A/S has an annual obligation to Danica Pension with respect to the lease of the head office in Ballerup. The annual rent, taxes etc. currently amount to DKK 79m. The remaining lease period is 21 years.
Remuneration for the Executive Management is paid by Tryg Forsikring AS and Vesta Group AS and is charged to TrygVesta A/S via the cost allocation.
Remuneration for the Executive Management 8 5 Remuneration for the Supervisory Board 3 2
Companies divested in 2004 Tryg-Baltica Forsikring, internationalt forsikringsselskab A/S (divested as at 30 September 2004) Ballerup Denmark 17 100 0 0 Tryg Polska Towarzystno Ubezpieczenia S.A. (divested as at 1 December 2004) Radom Poland -28 100 0 0 Nordicum Kindlustuse Eesti AS (divested as at 17 December 2004) Tallinn Estonia 0 100 0 0
Dansk Kaution, which was established in 1895, became a part of Tryg in 1998. In that same year, Tryg entered the Polish insurance market, acquiring a strategic stake in the company
TrygVesta A/S and thus the TrygVesta Group is owned by Tryg i
Deputy Chairman of the Supervisory Board of - Tryg i Danmark smba - Tryg Forsikring A/S
Board member of - Tryg i Danmark smba - Tryg Forsikring A/S
Claims ratio, net of reinsurance expresses the ratio of claims incurred, net of reinsurance, to earned premiums, net of reinsurance.