Investment return after insurance technical interest 201 13 -5 360 588 585 61
Run-off gains/losses, net of reinsurance 241 338 1,212 1,131 970 1,015 944
Net asset value per share (DKK) 34.82 38.46 37.41 36.18 29.84
Claims ratio, net of ceded business 74.2 68.8 71.5 69.6 72.1 71.8 76.6
November 2014 to 22 in Q4 2015 and with more than 78% of our customers returning ratings of 9 or 10 in the text message surveys used to capture customer feedback after each customer contact. It is also good news for Tryg’s customers that Tryg hedsGruppen, which owns 60% of Tryg, has decided to pay out a bonus to Tryg’s Danish customers from 2016.
A profit of DKK 1,981m was returned, equivalent to a return on equity of 18.9%, together with a com bined ratio of 86.8 and an expense ratio of 14.9 before one-off costs. The return on equity was below target due to very low investment income and one-offs. Tryg met the combined ratio and expense ratio targets for 2015. Tryg aims to achieve efficiency improvements of DKK 750m in the period up until 2017, and the delivery of savings of DKK 165m in 2015 exceeded the target for the year. The efficiency programme will be key to improving results and reaching an expense ratio of 14 or below in 2017.
Risk management is also important in relation to individual products, and in 2015 a small number of products, in particular contents and property, did not develop satisfactorily. Minor price adjustments and improved claims assessment procedures will therefore be introduced. Tryg continuously assesses developments in the number and size of claims.
Tryg’s shareholders. The Supervisory Board proposes that a dividend of DKK 3.50 be paid for the second half of the year, bringing the dividend paid out for 2015 to
The delivery of an enhanced customer experience and the financial results has only been possible through the committed efforts of Tryg’s employees, and the Supervisory Board and the Executive Board would like to thank all for their hard work.
Launch of new accident insurance Tryg launched new personal accident products in Denmark and Nor- way. The products provide basic cover with the option of taking out additional cover, for example for critical illness for children and young people. Read more about the products at tryg.dk and tryg.no.
Launch of change of car ownership insurance Tryg was the first company to introduce a change of car ownership insurance product in Denmark. The product is for customers buying and selling cars privately and covers mechanical damage for the first six months. Read more about the insurance at tryg.dk.
Tryg share split 1:5 On 12 May, Tryg split its share in 1:5, meaning each share with a nominal value of DKK 25 was replaced by five shares with a nominal value of DKK 5. The Tryg share was split as the price was up to more than DKK 600 in 2014, making it the second-most expensive share in the C20 index.
Tryg’s ‘A-’ rating maintained The credit rating agency Standard & Poor’s reconfirmed Tryg and Tryg Garanti’s ‘A-/stable’ rating.
Organisational change Tryg announced an organisa tional change of its daily management structure as of 1 January 2016. The Nordic business areas are transferred to national business areas with new directors. The new structure replaces the Group Executive Management and top management com prise an Executive Board com prising CEO, CFO and COO.
Acquisition of Swedish child insurance portfolio Tryg acquired Skandia’s child and adult insurance portfolio with a premium volume of approximately SEK 250m. The portfolio will be integrated into Tryg’s Swedish branch Moderna in H1 2016.
TryghedsGruppen’s members’ bonus scheme approved Tryg’s majority shareholder TryghedsGruppen’s member bonus scheme was approved by the Danish Business Authority. The scheme allows TryghedsGruppen to pay out some of its profit to members (policyholders of Tryg Forsikring A/S in Denmark).
New car insurance product Tryg launched a new car insurance product in Denmark. The product provides basic coverage, and in addition customers can buy add-on products to cover their exact insurance needs.
New bond issue Tryg Forsikring A/S entered into an agreement on the issuance of Solvency II-compliant Tier 2 capital in the form of a bond issue in the amount of NOK 1.4bn (DKK 1.1bn) in the Norwegian market.
New health insurance in Denmark A new health insurance product was launched in Denmark, which includes a prevention app named ‘TrygHealth’. The app provides access to a medical hotline via mobile video conferencing and includes Healthcare profile Plus cover, which allows the insured to hold video conferences with a dietitian or physiotherapist.
Denmark hit by storm On 29 November, Denmark was hit by a storm, named Gorm. Tryg received approximately 9,000 claims, of which 24% were reported within the first 24 hours, and 20% were reported online.
Aiming for the highest level of employee satisfaction in the financial sector in the Nordic region,
Tryg was pleased to note a continued increase in employee satisfaction in 2015, with Tryg surpassing the general level of employee satisfaction in the financial sector in the region.
Tryg’s shareholders must see Tryg as a company with ambitious targets disbursing stable and increasing dividends. In 2015, Tryg did not meet its return on equity target due to very low investment income and one-off costs. Tryg met the combined ratio and expense ratio targets for 2015 and is on track to achieving the ambitious financial targets set for the period up until 2017.
The Nordic insurance market is characterised by consumers and businesses that have largely covered their insurance needs, combined with relatively low rates of economic growth. Profitability in the insurance industry is generally high as the vast majority of companies focus on earnings rather than growth. However, competition remained fierce in 2015 in both the Danish and Norwegian markets. In Denmark, the situation is impacted by the high profitability of car insurance combined with high sales of smaller and safer cars. Generally speaking, this development in car sales is leading to a lowering of insurance risk and a corresponding reduction in average premiums, reducing total premium income. Tryg has developed a new pricedifferentiated car product which partly mitigates this development through a slightly higher average premium. In Norway, the weakened economy affected the market somewhat, while a number of minor competitors actively gained market share. In general, the impact of aggregators was limited in both Denmark and Norway. Overall,
Norway in 2015. In Denmark, consumer optimism increased, leading to increasing real estate prices and a lower unemployment rate of around 4.6%
In 2016, as an important part of the next level pricing initiative, the portfolio will be converted to the new price-differentiated products. This will positively impact both profitability and efficiency, especially in claims handling through the standardised handling of insurance agreements with similar terms and conditions.
Denmark, Norway and Sweden. In just one year, we have sent more than 600,000 automated text messages to customers after they have been in contact with us and received more than 200,000 replies.
78% rated their experience with Tryg between 9 and 10 on a scale of 1-10. Tryg’s overall NPS score has almost doubled since the Capital Markets Day in November 2014, from 11 to 22, which means that our 2017 target of an NPS score of 22 has been achieved. Concurrently with the implementation of automated NPS data, all managers and front-line employees have received training and coaching in delivering a superior customer dialogue as close relations and the sense of genuinely being listened to are two of the factors which our custo mers rate most highly in the overall customer experience.
Tryg implemented the SuccessFactors tool in 2015, which allows corporate KPIs to be cascaded down throughout all management and employee levels.
expenses and supporting the expense ratio target of 14 or below in 2017. During 2015, the outsourcing programme continued as planned, with 46 employees being out sourced, primarily in Finance.
IT stability is extremely important for an insurance company which is very dependent on IT systems for its customer communications within both sales and claims handling. Following the switch to TCS
Tata Consultancy, Tryg has seen a continuous improvement in IT stability and is now within sight of the maximum downtime target. This is due to the joint efforts of Tryg and its partners, encompassing the transition of services, process optimisation, monitoring, upgrades and simplification of the
Digitalisation is very important and will become even more important in future. An expansion of Tryg’s digital communication with customers requires the necessary acceptance by customers that we communicate digitally. In Denmark, 80% of customers have
Tryg was the first company to introduce a change of car ownership insurance product in
Denmark. The product is for customers buying and selling cars privately and consists of a car test and a change of car ownership insurance.
agreed to all future communications with Tryg being solely digital, while the figure for Norway is 63%. The digitalisation programme has focused on creating a better customer experience in Tryg’s claims handling and services, and secondly on automation, also in the claims division. The programme is swiftly gaining momentum, having already released a number of new solutions. For 2016, the focus will be on self-service, automation, lead generation and cross sales. The target for 2017 is for 90% of our customers to be digital and for 80% of claims notifications from digital customers to be reported via Tryg’s webpages.
Markets Day in November 2014, Tryg therefore announced that the run-off level was likely to be higher than the run-off level during the pre-2015 period. Tryg expects this to be the case until the end of 2017, after which we expect a long-term run-off level of 2.5-3%.
In 2016, weather claims net of reinsurance and large claims are expected to be DKK 500m and
The interest rate used to discount Tryg’s technical provisions is historically low. An interest rate increase will have a positive effect on Tryg’s results.
The investment portfolio is divided into a match portfolio corresponding to the technical provisions and a free portfolio. The objective is for the return on the match portfolio and changes in the technical provisions due to interest rate changes to be neutral when taken together. From 2016, the curve used for discounting technical provisions will change due to the implementation of the Solvency II directive, and this might result in slightly more volatile match portfolio net results.
Adjustment – or CRA', which cannot be hedged, and the impact from this component can only be negative.
The value of the NOK fell in 2015, which had a negative impact on Tryg’s operating profit.
The share of equity held in NOK and SEK is continuously hedged in the financial markets.
Profit after tax was DKK 1,981m (DKK 2,557m), positively affected by the ongoing efficiency programme, which contributed savings of DKK 165m in 2015 against a target of DKK 150m. Profit after tax was adversely impacted by a low level of investment income and one-off costs relating to the efficiency programme. The total effect of weather claims, large claims and run-off was somewhat higher than in 2014. A slightly negative development was observed during the year, especially for the property lines across the different business areas, and this will be mitigated through price increases to the tune of 3% and new targeted claims assessment initiatives in 2016.
Capital Markets Day (CMD) in November 2014 and relate primarily to Tryg’s sourcing programme, but also to initiatives designed to achieve our firstcontact resolution targets and improve our digital solutions. As communicated at the CMD, a thorough analysis undertaken by Tryg in cooperation with its sourcing partner has identified a significant sourcing potential both in the claims and in the administration parts of the business areas.
CMD. In 2015, we saw a significant improvement in Commercial Denmark from 86.6 at CMD to
• Expense ratio of 15.3 (14.6) and 14.9 (15.3) before one-off effects
• Proposed dividend of DKK 3.5 per share and DKK 6.0 when including H1 dividend
• Number of customers with three or more products up from 56.3% to 56.7%
Within Private, many new initiatives were introduced to improve first-contact resolution through new customer centre workflows. In Denmark, a significant improvement was achieved, with a first-contact resolution rate of 83% being realised, which is close to the target of 90%. In Private
Council recommended Tryg’s new car insurance product as being ‘Best in Test’. Tryg also launched new house insurance, travel insurance, accident insurance and pet insurance products in Norway, while in Denmark we launched a new accident insurance product along with many products for our largest affinity agreement, including house, pet and motorcycle insurance.
In 2015, Tryg further increased the number of customers we contact digitally, both in our daily dealings with customers, but also as part of preparing for the customer bonus scheme. Tryg has digitalised 80% of its Danish and more than 60%
For this business area, Tryg is prepared for more substantial fluctuations in premium income due to the competitive situation and the focus on having a profitable portfolio. The Swedish business saw a 3.1%
After the implementation of significant structural changes in recent years, the Swedish business generated higher-level sales in 2015 compared to sales levels under the distribution agreement with Nordea.
The gross claims ratio was 75.4 (67.8), with a claims ratio, net of ceded business, which covers both claims and business ceded as a percentage of gross premiums, of 71.5 (69.6). The claims level was positively impacted by the efficiency programme in the amount of DKK 105m due to combination of the improved procurement of claims services and claims administration. The net impact from weather claims, large claims and run-off impacted the claims ratio negatively by 0.1 percentage points. Apart from this, an increase was seen in the level of medium-sized claims as well as a higher claims level especially for the property lines across the different areas. The development in property insurance claims will be offset by minor price adjustments, but also through improved quality
In the event of total storm and cloudburst claims expenses in excess of DKK 300m, the agreement will cover the next DKK 600m. Only claims events in excess of DKK 20m are covered by the agreement. In H2 2015, storm and cloudburst claims totalled approximately DKK 190m, which means that after claims for another approximately
Going forward, outsourcing in the various business areas will play an important role in meeting the
In 2015, the number of employees was reduced from 3,599 to 3,359.
Tax on profit for the year totalled DKK 395m, or 17%
of the profit before tax. The relatively low tax rate was due to a lower Norwegian tax rate and a merger of
In 2015, Tryg paid DKK 765m in income tax as well as various payroll taxes totalling DKK 362m, resulting in total tax payments of DKK 1.127m in 2015.
6,193m at the end of 2015, and is measured based on the adequate capital base, which amounted to
Tier 2 capital will lead to a potential for issuing future subordinated debt of approximately DKK 1bn.
On 2 January 2015, Tryg initiated a buy back of own shares for an amount of DKK 1,000m, which was finalised on 18 December 2015.
In general, Tryg wants to acquire small portfolios which can be integrated in an effective way and support Tryg’s financial targets over a three-year horizon, supporting a return on equity of 21%.
• Weather claims impacting the combined ratio by 5.4 percentage points (2.6)
The transition to Solvency II from 1 January 2016 will have a positive impact on Tryg’s capital pos ition. Tryg has a Solvency II ratio of 176 on
In the opinion of Management, from the balance sheet date to the present date no other matters of major significance have arisen that are likely to materially influence the assessment of the company’s financial position.
DKK 522m (DKK 775m) and an investment result of DKK 201m (DKK 13m).
The net effect of weather claims, large claims and run-off was up by 3 percentage points in the quarter, with weather claims being especially high.
The claims level was also impacted by a higher claims level from the property lines across the different business areas.
The gross claims ratio was 68.0 (64.1), with a claims ratio, net of ceded business, which covers both claims and business ceded as a percentage of gross premiums, of 74.2 (68.8). The higher level of claims can be ascribed especially to a high level of weather claims of 5.4% (2.6%). Sweeping across Denmark at the end of November, the storm Gorm resulted in claims of approximately
Synne in Norway at the beginning of December led to claims of approximately NOK 215m, of which
Tryg covers approximately NOK 23m. In addition to these specific weather claims came the usual winter claims, especially in Norway. The high level of weather claims means that Tryg will be covered under a horizontal reinsurance agreement after further weather claims of DKK 110m.
In Q4, claims levels generally remained high for the property lines, which will be mitigated through minor price adjustments and claims initiatives.
Claims initiatives will include more thorough investigations, in particular of pipe-related claims.
DKK 111m (DKK 75m) or 4.5% (3.2%). The return on Investment property was DKK 71m (DKK 50m)
Profit/loss on gross business 334 444 1,438 1,611 Profit/loss on ceded business -51 -48 -148 -23 Insurance technical interest, net of reinsurance 2 4 8 24
(82.5). The development was attributable to a combination of a positive impact from the efficiency programme, a higher level of weather claims and a higher level of claims especially from the property lines of business. The development in premiums was slightly positive and improved compared to 2014. Adjusted for the one-off effects in 2014 of Norwegian pension and IT costs, the expense ratio improved by 0.6 percentage points.
The development in gross premium income improved by 0.3% in local currencies against an unchanged level in 2014 and a 2.2% drop in 2013. Premiums increased by 0.4% in Denmark, which was very satisfactory given also that the average price of the motor product fell by a further 2.6 percentage points due to higher sales of smaller and safer cars. In Norway, premium income increased by 0.3% in local currencies, which was acceptable, considering the competitive market situation and the weakened Norwegian economy.
The improved premium development can be ascribed to a strong customer focus, which has resulted in a significant improvement in the Net Promoter Score
In Denmark, the NPS improved from 25 to 29, while an improvement from 15 to 22 was seen in Norway.
The gross claims ratio amounted to 69.0 (67.7), with a claims ratio, net of ceded business, of 70.7 (68.0). The increase was ascribable to the efficiency programme and a higher level of weather claims related to the storm Gorm in Denmark but also flooding in Norway and higher claims levels for some lines of business.
House insurance saw a particularly negative development in claims, as did some minor lines of business such as travel insurance. Tryg constantly monitors developments in claims, and steps are taken to counter any consistently negative trends.
Initiatives will often be a combination of minor price adjustments and claims prevention.
The expense ratio was 14.7 (14.5). Adjusted for the one-off effects of the Norwegian pension scheme and the change of IT suppliers in 2014, the expense
The DNA marking technology consists of an invisible and synthetic liquid which can be applied to all valuables. The liquid is visible under UV light and cannot be removed.
Denmark with a particularly high incidence of break-ins, and 90 residents said yes to the
DNA kit. Police data show that the number of break-ins in the Sønderborg area in general has fallen by 26%, while Tryg’s data from the test area show a 53% decline in break-ins for the home-owners using DNA marking. Tryg extended the trial to Norway, distributing
Sandefjord, another residential area plagued by high break-in rates. In addition to reducing the number of break-ins, the initiative has attracted more than 50 new customers in the area.
Prevention creates peace of mind and increases sales Tryg is the first insurance company to actively use DNA marking in an effort to prevent break-ins.
Norwegian economy. The positive development in the NPS continued in Q4 with an improvement of 1 point to 29 in Denmark and an unchanged level of 22 in Norway. The positive development in customer numbers continued with a significant increase in
(87.0). The high level in Denmark was probably partly due to awareness of the customer bonus that will be implemented from spring 2016.
The development in the NPS also supported a positive development in the retention rate in Denmark, which improved from 87.0 to 87.9. In Norway, the retention rate fell slightly due to the above-mentioned development in the Norwegian economy and a competitive market situation.
The gross claims ratio amounted to 65.4 (63.8), with a claims ratio, net of ceded business, of 66.5
Profit/loss on gross business 199 306 697 853 Profit/loss on ceded business -53 -39 -44 8 Insurance technical interest, net of reinsurance 1 3 5 14
Key ratios Premium growth in local currencies -5.0 -1.8 -2.9 -3.0
“In connection with some construction work, the roof structure caught fire, and it quickly became clear that one of our most popular and treasured exhibitions, the
and the weakened Norwegian economy. The positive development in the NPS continued in Q4 with an improvement to 18 from 15 in Q3 in Denmark and an improvement in Norway to -1 from -4 in
The gross claims ratio was 62.3 (55.2), with a claims ratio, net of ceded business, of 67.8 (58.9).
The high level was primarily due to the weather in both Denmark and Norway. Denmark was hit by a storm, and in Norway flooding caused damage worth an estimated NOK 215m for the market as a whole, on top of which came the impact from winter claims. Q4 2015 also saw an increase in property claims levels for Commercial.
The technical result totalled DKK 147m (DKK 270m), with a combined ratio of 85.0 (74.5), and was negatively affected by a significant increase in weather claims relative to 2014. Premium growth was negative by 5.0% (-1.8%). The expense level was 17.2
Corporate by somewhat higher capital requirements. To contribute to Tryg’s overall ambition of a return of equity of 21%, Corporate must therefore realise a lower combined ratio than the Tryg Group. In that respect, the results are not satisfactory.
The moderate development in premiums seen in recent years continued in 2015 at an unchanged level
The development in gross premium income was unchanged compared to 2014 in local currencies.
The Net Promoter Score (NPS) was also implemented in Corporate in 2015 and generally with good results.
Corporate had a particular focus on international customers in 2015 and made arrangements with some large international customers in cooperation with both the AXA network and some large
European reinsurance groups. The international business accounts for around 15% of Corporate premium income.
Corporate sells insurance products to corporate customers under the brands ‘Tryg’ in Denmark and
Group. The business area accounts for 22% of the Group’s total premium income.
Key ratios Premium growth in local currencies -2.1 1.5 0.0 1.1
Customers are automatically granted elite status once they reach the age of 30 and after three years of no claims. In addition to good basic cover, our new car insurance product also offers a number of new types of optional covers, allowing customers to tailor their insurance to their exact needs.
Council TÆNK carried out a review of car insurance policies from 11 different companies, which resulted inTryg coming out
Best in Test. Tryg’s car insurance product was named the best in the market based on a combined value-for-money rating of price and cover. Read more about the car insurance at tryg.dk.
New and more flexible car insurance In March 2015, Tryg launched a brand new car product.
Gross premiums dropped by 2.1% (1.5%) in local currencies based on an increase in Denmark of 2.0% and an 8.1% drop in local currencies in
Norway, still reflecting a competitive market situation and the weakened Norwegian economy.
The quarter was, as always, impacted by the preparations for the renewals process starting on 1 January 2016, where approximately 48%
The gross claims ratio was 69.2 (67.2), with a claims ratio, net of ceded business, of 89.7 (79.8).
The technical result totalled DKK 5m (DKK 98m), with a combined ratio of 99.4 (90.4), and was negatively affected by a high level of large claims
Sweden comprises the sale of insurance products to private customers under the ‘Moderna’ brand.
Djurförsäkringar. Sales are effected via Tryg’s own salespeople, call centres and online. The business area accounts for 7% of the Group’s total premium income.
Smart, which from the start has received much attention from customers and generated very high sales.
The gross claims ratio amounted to 64.7 (71.3), with a claims ratio, net of ceded business, of 64.8
Weather claims were at a slightly higher level. In general, the claims ratio improved due to the termination of the agreements with both Nordea and
The expense ratio was 18.7 (19.2) or 18.8 in 2014 excluding one-off effects. The lower expense level can be ascribed to a more efficient sales set-up and the restructuring of the business to include one call centre as well as a generally strong focus on efficiency.
The number of employees was 333 at the end of 2015, down 49 from 382 at the end of 2014.
Profit/loss on gross business 85 11 219 133 Profit/loss on ceded business -1 -5 -1 -21 Insurance technical interest, net of reinsurance 1 1 0 6
Run-off, net of reinsurance (%) -21.1 -0.9 -11.3 -3.1 Weather claims, net of reinsurance (%) 1.6 1.5 1.7 1.5
Gross premiums dropped by 6.1% (1.6%), in local currencies which was partly due to the termination of the ICA agreement from Q4 2015. The premium development was also affected by a very low level of activity in the niche areas – yacht insurance and
Smart car insurance product, the price of which is based on how safely the customer is driving. Since the launch, more than 1,000 customers a day have taken out an insurance policy, and on average with a higher insurance premium.
The gross claims ratio was 51.8 (74.6), with a claims ratio, net of ceded business, of 52.1 (76.1).
Tryg’s common reserving models and applies the same methods, a run-off gain of around
Free portfolio, gross return 201 154 232 548 Match portfolio, regulatory deviation and performance 44 39 1 181 Other financial income and expenses -44 -180 -238 -369
From a Scandinavian point of view, 2015 was also an eventful year. The Danish, Swedish and
Norwegian central banks lowered their lending rates by 0.15 percentage points, 0.35 percentage points and 0.50 percentage points, respectively.
The reduction in the Danish lending rate took place concurrently with a reduction in the deposit rate of 0.75 percentage points, which still has not been normalised, even though the foreign reserve has been brought down to the normal level. While short interest rates decreased during 2015, longer interest rates in Denmark and Euroland went up.
Furthermore, the FSA yields increased more than local swap rates in Denmark. The Danish 10-year
FSA yield increased by 0.33 percentage points, while the 10-year swap rate increased by 0.19 percentage points. The reduction of the Nor wegian lending rate followed significant drops in the oil price, which has led to bleaker expectations for the Norwegian economy. Despite the falling lending rate, Norwegian covered bonds experienced significant yield increases.
Tryg uses external portfolio managers and observes rules not to invest in controversial activities. Together with our external managers, we constantly seek to comply with international regulations. In 2015, we have screened for new UN and EU regulation on certain financial sanctions against countries and individuals.
Interest rate and credit exposure 19 0.3 29 0.4 -10 -0.1 168 2.1 6,312 7,872 a) Bank deposits and derivative financial instruments hedging interest rate risk and credit risk. b) In addition to the equity portfolio exposure is futures contracts of DKK 47m.
Tryg’s equity, consisting of DKK -60m in 2015, and expenses regarding Tryg’s subordinated loans of
DKK 9m from match performance. The positive regulatory deviation stemmed from Norway as well as Denmark. In Norway, our local hedge benefitted from decreasing interest rates coinciding with increasing FSA discounting rates.
In Denmark, the FSA rates just increased less than the swap rates. The positive performance was due to a positive Danish covered bonds environment.
The main purpose of insurance is the spreading of risk. By pooling risks from large numbers of customers, an insurance company’s risks are spread more evenly, and its results should become more predictable. The assessment and management of Tryg’s aggregated risk and the associated capital requirements therefore constitute a central element in the management of the company.
combined with management of the total interest risk via Tryg’s match strategy. This prescribes that
Tryg’s investment assets corresponding to the technical provisions must be invested in interestbearing assets, the interest rate sensitivity of which matches and thereby hedges the interest rate sensitivity of the discounted provisions as closely as possible.
Ravens’ 25th anniversary in March 2015 and donated NOK 1m to the project, which creates peace of mind for young people in the streets at night and prevents violence and vandalism. Read more about the
ORSA (Own Risk and Solvency Assessment) reports, acted in a set-up comprising three lines of defence and appointed a special Risk Committee under the
Supervisory Board which focuses on capital and risk management. Read more about Tryg’s risk management in Note 1 on page 46.
Requirement/Solvency capital requirement going forward) with a certainty of 99.5%, such that Tryg would statistically be able to honour its obligations in 199 out of 200 years.
Requirement totalled DKK 6,193m (DKK 6,560m in 2014). For 2015, this is measured against the adequate capital base. At the end of 2015, this totalled DKK 9,525m after dividend, corresponding to a surplus cover of DKK 3,332m or 54%.
The introduction of Solvency II will have a major influence on Tryg’s capital position in various areas and is taken into account as of 1 January 2016.
DKK 400m due to the inclusion of expected future profits (DKK 600m) and the transition to a new discounting curve (DKK -200m). The net effect from these new elements will result in a relative large increase in the capital buffer, but at the same time the core equity will constitute a smaller part of the capital base. Read more about Tryg’s capitalisation after the introduction of Solvency II
principles, Tryg has ensured that the loan will be eligible as a Tier II capital element. The NOK 800m subordinate loan which was issued in 2013 will be grandfathered according to Solvency II and treated as Tier 1. At the end of 2015, Tryg’s total subordinate loan capital amounted to 17% of equity, with total interest expenses of DKK 86m. Read more about Tryg’s subordinated loans in Note 1 on page 46.
In 2015, Tryg paid out its first semi-annual dividend of DKK 2.5 per share. Thus, the aggregated annual dividend pay-out for 2015 will be DKK 6.00 per share, equivalent to the total distribution of DKK 1,759m.
Tryg’s Supervisory Board has approved both the capital plan and the contingency plan. Read more about Tryg’s risk management and Solvency II
Tryg’s management and IR team hold meetings to discuss the company’s financial development with investors and analysts. Tryg also participates in a number of financial conferences. In 2015, we held investor meetings in Europe, the USA, Canada and
The Tryg share started the year at a price of 137.8 and ended 2015 at 137.4. Including a combined
similar trend was seen for the European insurance sector as a whole, which was up 23% between 1 January and 14 April 2015, and 30% between 1 September 2014 and 14 April 2015. The OMX
NASDAQ Copenhagen is still the primary exchange for trading the Tryg share. In 2015, NASDAQ
TrygFonden works actively to create peace of mind in Denmark, supporting around 800 activities that contribute to this, such as coastal lifeguards to prevent drowning accidents on Danish beaches. Behind TrygFonden is
TryghedsGruppen, which owns 60% of the shares in Tryg and contributes approximately
• An aspiration to distribute a dividend which is steadily increasing in nominal terms on a full-year basis.
Based on Tryg’s dividend policy and the satisfactory 2015 results, at the 2016 annual general meeting the Supervisory Board will propose that a dividend of DKK 3.50 be paid per share, corresponding to DKK 1,013m.
The full-year dividend corresponds to a payout of 89% of the profit after tax. Furthermore, it has been decided to initiate an extraordinary share buy back of DKK 1bn awaiting approval by the Danish
Tryg’s annual general meeting will be held on 16 March 2016 at 14:00 at Falkoner Centret,
The company announcements issued in 2015 can be seen at tryg.com > Investor > News.
Corporate Governance and most recently updated in 2014. The Recommendations on Corporate Governance are available at corporate governance.dk.
At tryg.com, Tryg has published its statutory corporate governance report based on the ‘comply-orexplain ’ principle for each individual recommendation. This section on corporate governance is an excerpt of the corporate governance report.
Together with the Executive Board, IR organises investor meetings and conference calls and participates in conferences in Denmark and abroad. IR
also communicates with stakeholders in the social media via Twitter@TrygIR. The Supervisory Board is informed about the dialogue with investors and other stakeholders on a regular basis.
Tryg. The annual profile is published on 28 January 2016. Moreover, Tryg prepares quarterly investor presentations, which are used in the dialogue with investors and analysts. All announcements, financial reports, presentations and newsletters are available at tryg.com. This material provides all stakeholders with a comprehensive picture of Tryg’s position and performance. The consolidated financial reports are presented in accordance with IFRS. At tryg.com, stakeholders are able to subscribe to press releases, company announcements as well as insider trading announcements. A number of internal guidelines ensure that the disclosure of price-sensitive information complies with legislation and the stock exchange’s codes of conduct. Tryg has adopted a number of policies describing the relationship between different stakeholders.
Articles of Association, the annual general meeting is convened via a company announcement and at tryg.com subject to at least three weeks’ notice.
All shareholders are encouraged to attend the annual general meeting. The annual general meeting is held by personal attendance as the Supervisory
Board or a third party as their proxy. Shareholders may consider each item on the agenda. The proxy form and form for voting by post are available at tryg.com prior to the annual general meeting.
Tryg’s share capital comprises a single share class, and all shares rank pari passu. The majority shareholder, TryghedsGruppen smba, owns 60% of the shares and is the only shareholder owning more than 5% of the company’s shares. The Supervisory
Board ensures that Tryg’s capital structure is aligned with the needs of the Group and the interests of its shareholders and that it complies with the requirements applicable to Tryg as a financial undertaking.
From H2 2015, Tryg introduced a semi-annual dividend. At the annual general meeting in 2015, the shareholders authorised the Supervisory Board to allow Tryg to acquire own shares amounting to up to 10% of the share capital during the period up until 25 March 2020. On 2 January 2015, Tryg initiated a share buy back programme, which ran until 18 December 2015. Tryg acquired own shares for an amount of DKK 1bn. Once approved by the
Danish Financial Supervisory Authority, Tryg will initiate a new share buy back programme totalling
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.
Eight members of the Supervisory Board are elected by the annual general meeting for a term of one year. Of the eight members elected at the annual general meeting, four are independent persons as stated in recommendation 3.2.1 in Recommendations on Corporate Governance, while the other four members are dependent persons as they are appointed by the majority shareholder Trygheds-
Board, were re-elected and when their current election period ends. To ensure the integration of new talent on the Supervisory Board, members elected by the annual general meeting may hold office for a maximum of nine years. Furthermore, members of the Supervisory Board must retire at the first annual general meeting following their 70th birthday. The
Supervisory Board has 12 members, five men and seven women (including one male and three female employee representatives). Women are thus not underrepresented on Tryg’s Supervisory Board. The
Each year, the Supervisory Board reviews and adopts the rules of procedure of the Supervisory
Each year, the Supervisory Board discusses Tryg’s activities to guarantee diversity at management levels. Tryg attaches importance to diversity at all management levels. Tryg has prepared an action plan, which sets out specific targets to ensure diversity and equal opportunities and access to management positions for qualified men and women. In 2015, the proportion of women at management level was 35.4%
against 36.4% in 2014. The target for 2015 of 38% or more women at management level was therefore not met. Tryg maintains the target to increase the total proportion of women at management level to 38% or more in 2016. See the action plan at tryg.com >
Three out of four members of the Audit Committee and three out of five members of the Risk Committee, including the chairman of the committees, are independent persons. Of the four members of the
Remuneration Committee, one member is an independent person, while one out of two members of the Nomination Committee is independent. Board committee members are elected primarily based on special skills that are considered important by the Supervisory Board. Involvement of the a) Joined the Supervisory Board in March 2015 b) Resigned from the Supervisory Board in March 2015
Value of Car/ Total fixed matching Total DKK Basic salary Pension car allowance salary shares a) fee employee representatives in the committees is also considered important. The committees ex clusively prepare matters for decision by the entire Supervisory Board. The special skills of all members are also described at tryg.com.
Members of Tryg’s Supervisory Board receive a fixed fee and are not comprised by any form of incentive or severance programme or pension scheme. Their remuneration is based on trends in peer companies, taking into account the required skills, efforts and the scope of the Supervisory
Board’s work, including the number of meetings held. The remuneration received by the Chairman of the Board is triple that received by ordinary members, while the Deputy Chairman’s remuneration is double that received by ordinary members of the Supervisory Board.
The variable pay element consists of a matching shares programme. Four years after the purchase by a member of the Executive Board of a specified number of shares, such member is granted a corresponding number of free shares in Tryg.
is entitled to 12 months’ notice of termination and 18 months’ severance pay. Each member of the
Executive Board has 25% of the basic salary paid into a pension scheme.
Financial Business Act and Solvency II. In its policies, the Supervisory Board defines Tryg’s risk management framework as regards insurance risk, investment risk and operational risk, as well as IT
Material legal and tax-related issues and the financial reporting of such issues are assessed on an ongoing basis. Other risks associated with the financial reporting are described in the section
The Board receives reports on non-compliance with the frameworks and guidelines established by
the Supervisory Board. The Risk Committee monitors the risk management on an ongoing basis and reports quarterly to the Supervisory Board.
Risk Committee. Tryg has a decentralised set-up whereby risk managers in the business areas carry out controlling tasks for the risk management environment and Tryg’s compliance function.
The Executive Board has established a formal process for the Group comprising monthly reporting, including for example budget and deviation reports.
Super visory Board. The internal and independent auditors attend the Audit Committee meetings and at least once a year, the auditors meet with the Audit
Board. The Chairman of the Audit Committee deals with any matters that need to be reported to the
Corporate Governance with the exception of the recommendation concerning the number of independent members of the board committees, with which Tryg complies partially; see item 3.4.2 of the Recom mendations on Corporate Governance.
Education: Savings bank training, Graduate Diplomas in Organisation, Work Sociology, Credit and Financing.
Chairman: Sydbank A/S, Investeringsforeningen Sparinvest, Investeringsforeningen Sparinvest Sicav, Luxembourg, EIK banki p/f, Capital Market Partners and Museum South East Denmark. Deputy Chairman: Tryg A/S and Tryg Forsikring A/S. Board member: Sampension KP Livsforsikring A/S, Dansk Landbrugs Realkredit and a member of the Executive Management of Bombebøssen. Committee memberships: Audit Committee (Chairman), Risk Committee (Chairman) and Remuneration Committee. Number of shares held: 19,000 Change in portfolio 2015: +1,500
Born 1968. Joined: 2013. Danish citizen. CEO at Niels Brock Copenhagen Business College
Education: Certified commercial insurance agent. Various insurance and sales courses and negotiation training. Chairman: The Association for Tied Agents and Key Account Managers in Tryg. Board member: Tryg A/S and Tryg Forsikring A/S. Member of the Tied Agents’ District Board of the Financial Services Union Denmark. Number of shares held: 695 Change in portfolio 2015: +165
Employee representative Born in 1959. Joined: 2010. Swedish citizen. Claims handler in Moderna (Swedish branch). Employed since 2002.
Education: Insurance training. Board member: Tryg A/S and Tryg Forsikring A/S. Number of shares held: 1,265 Change in portfolio 2015: +165
Education: Insurance training. Board member: Tryg A/S and Tryg Forsikring A/S. Committee memberships: Audit Committee and Central Board of DFL. Number of shares held: 695 Change in portfolio 2015: +165
Education: The A.P. Møller Group’s international shipping education, Graduate Diploma in Financing and various international management programmes. Deputy Chairman: Dong Energy A/S, H. Lundbeck A/S, ALK-Abelló A/S and Falck A/S (Falck Holding A/S, Falck Danmark A/S). Board member: Tryg A/S and Tryg Forsikring A/S. Committee memberships: Audit Committee and Risk Committee, the Audit Committee in ALKAbelló A/S and H. Lundbeck A/S.
Board member: Tryg A/S, Tryg Forsikring A/S, DI General Council and Dansk Energi. Committee memberships: Audit Committee and Risk Committee, Executive Director Committee of Dansk Energi (Chairman), Green Committee in Region Zeland (Chairman) and member of the Board of Representatives of TryghedsGruppen. Number of shares held: 8,750 Change in portfolio 2015: 0
Born in 1958. Joined: 2013. Danish citizen. Director General of Lif (Danish Assosiation of the Pharmaceutical Industry) and the subsidiary DLI A/S Dansk Lægemiddel Information A/S.
Number of shares held: 36,845 Change in portfolio in 2015: +9.790
Born in 1967. Joined Tryg in 2011. Joined the Executive Board in 2011.
Number of shares held: 34,150 Change in portfolio in 2015: +4.150
Group Executive Management, and the top management is constituted by an Executive
The former Group Executive Vice Presidents either continue as directors of one of the newly established business areas or in other positions within the organisation. Trond Bøe
Tryg’s ambition is to be the world’s best insurance company. Realising this ambition means operating in a responsible manner and taking care of society. For this purpose steps have been taken to link Corporate
Our efforts focus on climate, people, business ethics and peace of mind. We comply with all aspects of
Global Reporting Initiative. The Supervisory Board approves Tryg’s CSR policy annually. Download the policyat tryg.com > CSR > CSR strategy > CSR
The global climate is changing, and we are seeing an increase in climate-related claims. In 2014-2015, an increase of 103.2% was seen in the number of weather property insurance claims compared to 2012-2013 (excluding storm claims). Because of the more extreme weather, we want to devise solutions which prevent damage in the first place.
Our carbon emissions are mainly associated with heating and electricity use at our offices, as well as car and air travel. We have already introduced a variety of climate-friendly initiatives. These include the installation of 82 video conference rooms in order to minimise travel between offices as well as re placing traditional light bulbs with LED light. We also work to minimise other greenhouse gas emissions. In 2015, we replaced our old Freon 22-based cooling system with a new and more effective system running on ammonia. In 2016, our ambition is to introduce even more climate-friendly solutions in our daily operations.
compared to 2007. Thus, we did not achieve our goal of a 50% reduction. This was to be expected as an increased level of travel activity was necessary to ensure the smooth transition of tasks to our offshoring partners in Asia. However, emissions were reduced by 0.48% compared to 2014. Our target for 2016 is a 1% reduction compared to 2015. Read more at tryg.com > CSR > Thematic areas > Climate.
Tryg helps prepare refugees for entering the Danish labour market. In 2016, we hope to be able to offer an introductory course for refugees.
The carbon emissions chart covers both Norway and Denmark; air travel also includes Sweden.
In Tryg, we want to help create peace of mind in society. This is our reason for engaging in a number of activities to prevent claims. One initiative is to offer synthetic DNA marking as a way of preventing breakins. The initiative started in 2014 in Sønderborg,
Hübbe donated NOK 1m to enable the Night Ravens to continue their valuable work. At the end of 2015, there were approximately 370 active groups of Night
The red-and-white lifebuoy has become a symbol of safety along the coastlines in Denmark, Norway and
Tryg will continue to donate lifebuoys to enhance safety at the seaside. Read more at tryg.com >
The target for 2016 is 38% or more women in management position. Read more at tryg.com >
Cash flow statement 45 1 Risk and capital management 46 2 Operating segments 56 2 Geographical segments 58 2 Technical result, net of reinsurance, by line of business 60 3 Premium income, net of reinsurance 62 4 Insurance technical interest, net of reinsurance 62 5 Claims, net of reinsurance 62 6 Insurance operating costs, net of reinsurance 62 6 Share option programme 64 6 Matching shares 66 7 Interest income and dividends etc. 67 8 Value adjustments 67 10 Profit/loss on discontinued and divested business 67 11 Intangible assets 68 12 Property, plant and equipment 71 13 Investment property 72 14 Equity investments in associates 72 15 Financial assets 74 16 Reinsurers’ share 76 17 Current tax 76 19 Premium provisions 77 19 Claims provisions 77 20 Pensions and similar liabilities 78 21 Deferred tax 80 22 Other provisions 80 23 Amounts owed to credit institutions 80 24 Debt relating to unsettled funds transactions and repos 80 25 Earnings per share 80 26 Contractual obligations, collateral and contingent liabilities 81 27 Acquisition of subsidiaries 83 28 Related parties 83 29 Financial highlights 84 30 Accounting policies 85
Jørgen Huno Rasmussen Torben Nielsen Anya Eskildsen Vigdis Fossehagen Lone Hansen Jesper Hjulmand Chairman Deputy Chairman
The Supervisory Board and the Executive Management have today considered and adopted the annual report for 2015 of Tryg A/S and the Tryg
December 2015 and of the results of the Group’s and the parent company’s operations and the cash flows of the Group for the financial year
We have audited the consolidated and parent financial statements of Tryg A/S for the financial year 1 January to 31 December 2015, page 40-99, which comprise the income statement, statement of comprehensive income, statement of financial position, statement of changes in equity and notes, including the accounting policies, for the Group as well as for the parent company, and the consolidated cash flow statement. The consolidated financial statements are prepared in accordance with International Financial Reporting Standards as adopted by the EU and the parent financial statements are prepared in accordance with the Danish Financial
In our opinion, the consolidated financial statements give a true and fair view of the Group’s financial position at 31 December 2015, and of the results of its operations and cash flows for the financial year 1 January to 31 December 2015 in accordance with International Financial Reporting
Standards as adopted by the EU and Danish disclosure requirements for listed financial services companies. Moreover, in our opinion, the parent financial statements give a true and fair view of the parent company’s financial position at 31 December 2015, and of the results of its operations for the financial year 1 January to 31 December 2015 in accordance with the Danish Financial Business
Investment return after insurance technical interest -5 360 588 585 61
Statement of financial position Total provisions for insurance contracts 31,571 31,692 32,939 34,355 34,220 Total reinsurers' share of provisions for insurance contracts 3,176 1,938 2,620 2,317 2,067
Total investment return 254 774 4 Return on insurance provisions -259 -414
Profit/loss on continuing business 1,932 2,547 10 Profit/loss on discontinued and divested business 49 10
Profit/loss for the year 1,981 2,557 25 Earnings per share – continuing business 6.77 8.70 Diluted earnings per share – continuing business 6.77 8.70 Earnings per share 6.95 8.74 Diluted earnings per share 6.95 8.73
Claims paid -13,095 -13,695 Reinsurance cover received 471 1,361 Change in claims provisions -467 1,045 Change in the reinsurers' share of claims provisions 1,301 -688 5 Claims, net of reinsurance -11,790 -11,977
Note Equity and liabilities 18 Equity 9,831 11,119 1 Subordinate loan capital 1,698 1,768
Debt relating to direct insurance 603 565 Debt relating to reinsurance 330 188 23 Amounts owed to credit institutions 64 116 24 Debt relating to unsettled funds transactions and repos 4,074 2,902 15 Derivative financial instruments 612 799 17 Current tax liabilities 357 429 Other debt 1,001 1,153
Total equity and liabilities 51,281 52,224 1 Risk and capital management 26 Contractual obligations, collateral and contingent liabilities 27 Acquisition of subsidiaries 28 Related parties 29 Financial highlights 30 Accounting policies
Dividend per share in 2015 includes dividend paid out in July of DKK 2.5 and proposed dividend of DKK 3.5, totalling DKK 6.0 (DKK 5.8 in 2014 ). Proposed dividend per share of DKK 3.50 is calculated as the total dividend proposed by the Supervisory Board after the end of the financial year divided by the total number of shares at the end of the year (289,559,550 shares). The dividend is not paid until approved by the shareholders at the annual general meeting.
Total changes in equity in 2015 -44 6 -24 21 -82 -447 -718 -1,288
Interest income 807 995 Interest expenses -95 -115 Dividend received 47 39
Risk management in Tryg The Supervisory Board defines the company’s risk appetite through its business model and strategy, and this is operationalised through the company’s policies. The company’s risk management forms the basis for the risk profile being in line with the specified risk appetite at all times.
Tryg’s risk profile is continuously measured, quantified and reported to the management and the Supervisory Board. Given the extensive requirements for the Super visory Board’s involvement in capital and risk management, Tryg’s Supervisory Board has decided to set up a special Risk Committee to address these topics separately during the year. The Committee meets five times a year for a detailed review of various risk management topics and regularly keeps the entire Supervisory Board up-to-date on the status.
Tryg has two subordinated loans that amount to DKK 1,707m. The first is a NOK 1,400m loan that was issued in November 2015 and is classified as a Tier 2 element under Solvency II. The second is a NOK 800m loan that was issued in March 2013 and is accordingly to the grandfathering rules treated as a Tier 1 element under Solvency II.
The free portfolio is subject to the framework defined by the Supervisory Board through the investment policy. The purpose of the free portfolio is to achieve the highest possible return relative to risk. Tryg’s equity portfolio constitutes the company’s largest investment risk. At the end of 2015, the equity portfolio accounted for 5.9% of the total investment assets. This share is expected to be at a similar level in 2016. Tryg’s property portfolio mainly comprises owner-occupied and investment properties, the value of which is adjusted based on the conditions on the property market through internal valuations backed by external valuations. At the end of 2015, investment properties accounted for 5.1%, while owner-occupied properties accounted for 3.0% of the total investment assets.
Effect of 1 percentage point change in: Combined ratio (1 percentage point) +/- 177 + / -184 Claim frequency (1 percentage point) +/- 1,450 +/- 1,369 Average claim +/- 132 +/-122 Premium rates +/-175 +/- 190
Investment risk Interest rate market Effect of 1 % increase in interest curve: Impact of interest-bearing securities -940 -880 Higher discounting of claims provisions 947 793 Net effect of interest rate rise 7 -87 Impact of Norwegian pension obligation b) 153 87
Equity market 15 % decline in equity market -341 -393 Impact of derivatives -7 -72
Real estate market 15 % decline in real estate markets -480 -488
b) Additional sensitivity information in note 20 'Pensions and similar obligations'.
Other risks Strategic risk The strategic risk is the risk of loss as a result of Tryg’s chosen strategic position. The strategic position covers both business transactions, IT strategy, choice of business partners and changed market conditions. Tryg’s strategic position is determined by Tryg’s Super - visory Board in close collaboration with the Executive Board. Before determining the strategic position, the strategic decisions are subjected to a risk assessment, explaining the risk of the chosen strategy to Tryg’s Supervisory Board and Executive Board.
Compliance risk Compliance risk is the risk of loss as a result of lack of compliance with rules and regulations. The handling of compliance risk is coordinated centrally via the Group’s legal department, which, among other things, sits on industry committees in connection with legislative monitoring, ensures implementation in Tryg through business procedures and participates in the ongoing training of the organisation.
Provisions before discounting, end of year 273 589 851 1,185 1,384 1,600 1,921 2,245 2,634 3,685 8,139 24,506
Estimated accumulated claims End of year 915 272 498 155 284 668 1,449 228 550 250 2,068 1 year later 811 272 465 220 354 748 2,145 259 961 302 2 year later 816 259 480 189 332 738 2,267 297 942 3 year later 811 292 485 179 289 714 2,307 304 4 year later 840 293 505 179 292 723 2,271 5 year later 836 288 476 166 297 744 6 year later 822 287 505 171 292 7 year later 822 288 496 165 8 year later 814 286 496 9 year later 826 286 10 year later 823 823 286 496 165 292 744 2,271 304 942 302 2,068 8,695
Reserves from 2004 and prior years 210 Other reserves 151 Provisions for claims, end of year 3,003
Reserves from 2004 and prior years 1,917 Other reserves 204 Provisions for claims, net of reinsurance, end of the year 22,424
Bond portfolio including interest derivatives Duration 1 year or less 14,856 16,622 Duration 1 year-5 years 13,011 13,925
The fair value of the loan at the statement of financial position date - 1,106 671 714 1,086 The fair value of the loan at the statement of financial position date is based on a price of - 99 108 108 100 Total capital losses and costs at the statement of the financial position date - 3 4 4 6 Interest expenses for the year 49 50 34 40 3 Effective interest rate - 4.5% 3.6% 3.6% 3.9%
Repayment profile Interest-only Interest-only Interest-only Interest structure 4.5% (until 2015) 3.75 % above NIBOR 3M (until 2023) 2.75 % above NIBOR 3M (until 2025) 2.1% above EURIBOR 3M (from 2015) 4.75 % above NIBOR 3M (from 2023) 3.75 % above NIBOR 3M (from 2025)
The share of capital included in the calculation of the capital base total DKK 1,707m (DKK 1,496m in 2014) The loans are initially recognised at fair value on the date on which a loan is entered and subsequently measured at amortised cost.
Profit/loss on ceded business -148 -44 877 -1 26 710 Insurance technical interest, net of reinsurance 8 5 5 0 0 18
Equity investments in associates 229 229 Reinsurers' share of premium provisions 17 16 140 0 0 173 Reinsurers' share of claims provisions 141 408 2,422 32 0 3,003 Other assets 46,838 46,838
a) Amounts relating to eliminations and in 2015 also restructuring expenses are included under 'Other'. Details of amounts in note 2 Geographical segments. Other assets and liabilities are managed at Group level and are therefore not allocated to the individual segments but are included under 'Other'.
Profit/loss on ceded business -23 8 -304 -21 -1 -341 Insurance technical interest, net of reinsurance 24 14 16 6 0 60
Number of full-time employees 31 December 1,113 1,167 1,199 1,282 1,338 a) Includes Danish general insurance and Finnish guarantee insurance.
Claims ratio, net of ceded business 65.2 79.8 81.3 76.8 84.6
Number of full-time employees, continuing business at 31 Dec. 3,359 3,599 3,703 3,913 4,076 Number of full-time employees, discontinued and divested business at 31 Dec. 0 0 0 189 242 b) Amounts relating to eliminations. In 2012 discontinued business and restructuring expenses were included under 'Other'. In 2014 the costs were positively affected by a one-time effect regarding changed pension terms in Norway and they were negatively affected by a provision in connection with the transfer to the new it-supplier. The joint effect was approx DKK 135m. In 2015 costs and claims were negatively effected by DKK 80m and DKK 40m respectively due to provisioning for the efficiency programme.
Profit/loss on ceded business - 4 - 7 - 1 - 1 - 10 - 8 - 33 - 51 - 2 16 - 53 21 Insurance tech. interest, net of reinsurance 2 5 0 1 1 3 2 7 3 11 1 1
Gross claims ratio 72.3 69.9 153.6 77.2 184.4 96.9 63.9 93.7 -71.2 -4.9 95.6 79.2 Combined ratio 90.0 84.3 109.5 96.5 200.0 115.4 86.8 109.8 54.8 66.4 109.2 93.5
Profit/loss on ceded business - 46 - 20 711 - 341 - 1 0 710 - 341 Insurance tech. interest, net of reinsurance 1 1 16 54 2 6 18 60
Gross claims ratio 76.7 16.7 75.3 67.3 82.4 88.3 75.4 67.8 Combined ratio 311.7 58.3 86.4 83.7 93.5 97.1 86.8 84.2
Reinsurance cover received 2,061 268 Run-off previous years, reinsurers' share -288 405 6 Insurance operating costs, net of reinsurance Commissions regarding direct insurance contracts -368 -395 Other acquisition costs -1,674 -1,560
Insurance operating costs, gross -2,720 -2,689 Commission from reinsurers 102 102
Administrative expenses include fee to the auditors appointed by the annual general meeting: Deloitte -7 -11
In 2015, the fair value of share options recognised in the consolidated income statement amounted to DKK 0m (DKK 0m in 2014). At 31 December 2015, a total amount of DKK 78m was recognised for share option programmes issued in 2006-2011. Fair values at the time of allocation are based on the Black & Scholes option pricing formula.
Outstanding options from 2010-2011 allocation 31 Dec. 2015 0 12,085 3,685 15,770 0 1
Number of options exercisable 31 Dec. 2015 0 12,085 3,685 15,770
Number of options exercisable 31 Dec. 2014 113,450 132,860 20,590 266,900 a) In May 2015 each share with a nominal value of DKK 25 was replaced by five new shares with a nominal value of DKK 5. The share split does not change the Group's share capital. Comparative figures have been restated to reflect the change in trading unit.
DKKm 6 Share option programmes (continued) Spec. of outstanding options: Year of allocation Years of exercise 1 Jan. 2015 Allocation Exercised Cancelled Expired 31 Dec. 2015
The assumptions by calculating the market value at time of allocation
Average share price at time Average term Average exercise of allocation Expected Expected Risk-free to maturity share price Year of allocation Years of exercise DKK Volatility maturity interest rate 31 Dec. 2015 31 Dec. 2015
Average per Total value Average per matching share at time of matching share Total fair value Group Executive Other senior at grant date allocation at 31 Dec. at 31 Dec. Management employees Total DKK DKKm DKK DKKm
Matching shares allocated in 2015 at 31.12.15 14,415 33,740 48,155 88 4 137 7
Matching shares allocated in 2011-2014 at 31.12.15 73,630 53,355 126,985 77 10 137 17
Number of Matching shares exercisable 31 Dec. 2015 6,895 5,500 12,395
Matching shares allocated in 2011-2013 at 31.12.14 74,275 48,620 122,895 9 138 17
In 2011-2015, Tryg entered into an agreement on matching shares for the Executive Management and selected other senior employees as a consequence of the Group’s remuneration policy. The Executive Management and selected risk-takers are allocated one share in Tryg A/S for each share that the Executive Management member or risk-taker acquires in Tryg A/S at market rate for liquid cash at a contractually agreed sum. The shares are reported at market value and are accrued over the 4-year maturation period. In 2015, the reported fair value of matching shares for the Group amounted to DKK 5m (DKK 3m in 2014). At 31 December 2015, a total amount of DKK 12m was recognised for matching shares.
Exchange rate adjustments concerning financial assets or liabilities which cannot be stated at fair value total DKK 58m (DKK -179m in 2014)
Amortisation and write-downs Amortisation and write-downs at 1 January -4 -104 -880 -92 -1,080
Amortisation and write-downs at 31 December -4 -104 -880 -92 -1,080 a) Hereof proprietary software DKK 317m (DKK 245m at 31 December 2014)
Moderna Comprises the sale of insurance products to private customers under the ‘Moderna’ brand. Moreover, insurance is sold under the brands Atlantica, Bilsport & MC and Moderna Djurförsäkringar. Sales take place through its own sales force, call centres and online.
- Earned premium assumed CAGR 0-10 years 2% 2% - Earned premium assumed CAGR >10 years 1% 1% - Required return before tax 13% 12% - Expected level of Combined ratio 93% 93%
Sensitivity information Impact on equity from the following changes: CAGR +1.0 percentage point (0-10 years) 6 9 CAGR -1.0 percentage point (0-10 years) -5 -9 Required return +1.0 percentage point -35 -49 Required return -1.0 percentage point 48 70 Combined ratio +1.0 percentage point -16 -18 Combined ratio -1.0 percentage point 17 18
Correction During a partial supervisory review the Danish Financial Supervisory Authority (DFSA) has found that the consolidated financial statements for 2014 for Tryg A/S were insufficient as these statements do not provide sufficient information on goodwill and the impairment test made for this purpose. It has no effect on profit for the year, total assets, liabilities or shareholders' equity in the 2014 Annual Report nor in the 2015 interim and annual reports. The lack of information required in accordance with IAS 36, Impairment of assets, covers all primary assumptions to which the calculation of the future cash flow is most sensitive, the method used to set these assumptions and information on the growth rate used in the terminal period. On the basis of the DFSA's partial supervisory review, Tryg has chosen to include the required information for 2015 and 2014 in the note on intangible asset, including goodwill, in the 2015 Annual Report.
Accumulated depreciation and value adjustments at 31 December -144 -558 -83 -785
The following return percentages have been applied: Return percentages 2015 2014
Impairment test Property, plant and equipment A valuation of the owner-occupied property has been carried out, including the improvements made, and a revaluation of DKK 4m relating to the domicile in Bergen was subsequently included in other comprehensive income (DKK 2m in 2014). The value of the domicile in Ballerup was not changed in 2015 (DKK -106m in 2014). The impairment test performed for operating equipment did not indicate any impairment.
Revaluations at net asset value Revaluations at net asset value Revaluations at 1 January 24 14 Exchange rate adjustments -2 -1 Dividend received, this year -32 0 Reversed on sale -4 -1 Value adjustments for the year 42 12
Derivative financial instruments, assets 0 843 0 843 Derivative financial instruments, debt 0 -612 0 -612
Financial instruments measured at fair value in the statement of financial position on the basis of non-observable input: 2015 2014
Gains/losses in the income statement for assets held at the statement of financial position date recognised in value adjustments 2 -18
Bonds measured on the basis of observable inputs consist of Norwegian bonds issued by banks and to some extent Danish semi-liquid bonds, where no quoted prices based on actual trades are available. No significant reclassifications have been made between the categories 'Quoted prices' and 'Observable input' in 2015. Inflation derivatives are measured at fair value on the basis of non-observable input and are included under claims provisions at a fair value of DKK -417m (DKK -438m in 2014).
Gains and losses at 1 January 2,152 -2,162 -10 Value adjustments for the year 344 -258 86
Gains and losses at 1 January 1,787 -1,988 -201 Value adjustments for the year 365 -174 191
Value adjustments Value adjustments of foreign entities recognised in other comprehensive income in the amount of: Value adjustments at 1 January 23 201 Value adjustment for the year -89 -178
Derivatives according to statement of financial position 27,470 231 34,149 519 Inflation derivatives, recognised in claims provisions 5,366 -417 3,221 -438
Pursuant to the authorisation granted by the shareholders, Tryg may acquire up to 10.0% of the share capital in the period up until 25 March 2020. Own shares are acquired for use in the Group's incentive programme and as part of the share buyback programme.
15 Financial assets (continued) Receivables Total receivables in connection with direct insurance contracts 1,261 1,232 Receivables from insurance enterprises 199 208 Unsettled transactions 120 0 Reverse repos 370 0 Other receivables 381 222
Receivables in connection with insurance contracts include overdue receivables totalling: Falling due: Within 90 days 116 164
Other receivables do not contain overdue receivables 16 Reinsurer's share Reinsurers' share 3,179 1,958 Write-downs after impairment test -3 -20
DKKm Gross Ceded Net of reinsurance 19 Claims provisions 2015 Claims provisions at 1 January 24,601 -1,272 23,329 Adjustment regarding Norwegian Group life beginning of year 124 0 124 Value adjustments of provisions, beginning of year -464 32 -432
Discounting and exchange rate adjustments 124 -57 67 Claims provisions at 31 December 25,072 -2,852 22,220
Discounting and exchange rate adjustment 1,104 -51 1,053 Claims provisions at 31 December 24,601 -1,272 23,329 a) Comprises claims provisions for Tryg Garantiforsikring A/S.
18 Equity (continued) Capital adequacy Equity according to annual report 9,831 11,119 Proposed dividend -1,013 -1,731 Solvency requirements of subsidiaries – 50% -3,868 -2,353
Subordinate loan capital 1,707 1,496 Solvency requirements of subsidiaries – 50% -3,868 -2,353
Solvency ratio (Solvency I – ratio between capital base and weighted assets) 108 87
Premium provisions at 31 December 5,429 5,724 a) Comprises premium provisions for Tryg Garantiforsikring A/S and Securator A/S.
Average return on plan assets 2.6 2.7 Weighted average duration of the defined benefit obligation 18 18
Assumptions used Discount rate 1.9 2.1 Estimated return on pension funds 1.9 2.1 Salary adjustments 2.5 3.3 Pension adjustments 0.0 0.1
Employer contributions 14.1 14.1 Mortality table K2013 K2013 20 Pensions and similar obligations Jubilees 50 62
Defined-benefit pension plans: Present value of pension obligations funded through operations 62 63 Present value of pension obligations funded through establishment of funds 1,130 1,227
Change in carrying amount of plan assets: Carrying amount of plan assets at 1 January 1,010 1,033 Exchange rate adjustments -58 -72 Investments in the year 91 57 Estimated return on pension funds 25 32 Acturial gains/losses -49 4 Paid during the period -41 -44
DKKm 20 Pensions and similar obligations (continued) Description of the Swedish plan Moderna Försäkringar, a branch of Tryg Forsikring A/S, complies with the Swedish industry pension agreement, the FTP plan, which is insured with Försäkringsbranschens Pensionskassa – FPK.
This years premium paid to FPK amounted to DKK 18m, which is about 4 % of the annual premium in FPK (2014). FPK writes in its interim report for 2015 that it had a collective consolidation ratio of 114 at 30 June 2015 (consolidation ratio of 110 at 30 June 2014). The collective consolidation ratio is defined as the fair value of the plan assets relative to the total collective pension obligations.
Under the present defined-benefit plan, members earn a free policy entitlement comprising disability cover, spouse and cohabitant cover and children's pension.
Annual report 2015 | Tryg A/S | | Contents – Financial statements 22 Other provisions Other provisions at 1 January 83 73 Change in provisions 49 10
Other provisions relate to provisions for the Group’s own insurance claims and restructuring costs. Additions to the provision for restructuring costs during the year amounts to DKK 120m and reassessment of the beginning of year balance amounts to DKK -69m. The balance as at 31 December 2015 amounts to DKK 130m (DKK79m at 31 December 2014).
25 Earnings per share Profit/loss from continuing business 1,932 2,547 Profit/loss on discontinued and divested business 49 10
Unaccrued timing differences of statement of financial position items 20 146
Development in deferred tax Deferred tax at 1 January 1,022 1,057 Exchange rate adjustments -116 -62 Change in deferred tax relating to change in tax rate 13 -6 Change in deferred tax previous years 0 -16 Change in capitalised tax loss 0 6 Change in deferred tax taken to the income statement -58 22 Change in valuation of tax asset -128 24 Change in deferred tax taken to equity -32 -3
Annual report 2015 | Tryg A/S | | Contents – Financial statements 26 Contractual obligations, collateral and contingent liabilities (continued) Collateral The Danish companies in the Tryg Group are jointly taxed with TryghedsGruppen smba. The companies and the other jointly taxed companies are liable for any obligations to withhold taxes at source on interest, royalties, dividends and income taxes etc. in respect of the jointly taxed companies.
DKKm 26 Contractual obligations, collateral and contingent liabilities (continued) Offsetting and collateral in relation to financial assets and obligations Collateral which is not offset in the statement of financial position
D Contingent liabilities 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 significantly beyond the obligations recognized in the statement of financial position at 31 December 2015.
28 Related parties The group has no related parties with a decisive influence other than the parent company, Trygheds-
2014 In 2014 the Tryg Group has taken control of Securator A/S and of Optimal Djurförsäkring i Norr AB by acquiring all shares in the companies. Securator A/S is a Danish market leader within the sale and brokering of multi-annual product insurance via dealers in the electronics and telecommunications sector and supermarket chains. The acquisition is expected to increase Tryg's market share within product insurance by providing access to Securator A/S's customer portfolio and distribution channels. Optimal Djurförsäkring i Norr AB is a Swedish market leader within the sale of pet insurance. Tryg also expects to realise cost savings through synergies.
The enterprises are included in premium income and in the results for the year with an insignificant amount due to the short ownership period and the Management believes that these pro forma figures reflect the Group’s earnings level after the acquisition of the enterprises and that the amounts may therefore form the basis for comparisons in subsequent financial years.
The Executive Management is paid a fixed remuneration and pension. The variable salary is awarded in the form of a matching share programme, see 'Corporate governance'. Besides this, the directors have free car appropriate to their position as well as other market conformal employee benefits
Each member of the Executive Management is entitled to 12 months' notice and severance pay equal to 12 months’ salary plus pension contribution (Group CEO is entitled to severance pay equal to 18 months' salary). Members of the Executive Management can assert no further claims in this respect, for example claims for compensation pursuant to Sections 2a and/or 2b of the Danish Salaried Employees Act, as such claims are regarded as being included in the severance pay.
Risk-takers are defined as employees whose activities have a significant influence on the company’s risk profile.
The Supervisory Board decides which employees should be considered to be risk-takers. . Parent company Tryghedsgruppen smba TryghedsGruppen smba controls 60% of the shares in Tryg A/S.
Intra-group trading involved:: 2015 2014 - Providing and receiving services 0 1
Fees are charges incurred during the financial year. Variable salary includes the charges for matching shares, which are recognised over 4 years and share options, which are recognised over 3 years. Reference is made to section 'Corporate governance' of the management's review on the corresponding disbursements. The Executive Management and risk-takers are included in incentive programmes. Please refer to note 6 for information concerning this. .
Annual report 2015 | Tryg A/S | | Contents – Financial statements 30 Accounting policies
It has no effect on profit for the year, total assets, liabilities or shareholders' equity in the 2014 Annual Report nor in the 2015 interim and annual reports.
The lack of information required in accordance with IAS 36, Impairment of assets, covers all primary assumptions to which the calculation of the future cash flow is most sensitive, the method used to set these assumptions and information on the growth rate used in the terminal period.
Implementation of changes to accounting standards and interpretation in 2015 The International Accounting Standards Board (IASB) has issued a number of changes to the international accounting standards, and the International Financial Reporting Interpretations Committee (IFRIC) has also issued a number of interpretations. No standards or interpretations have been implemented for the first time for the accounting year that began on 1st January 2015 that will have a significant impact on the group.
2) enters into force for the accounting year commencing 1 January 2018 or later.
It is Tryg’s assessment that the amendments to the Executive Order from 2016 can be accommodated within IFRS, therefore it is not expected that there are any major differences between the Parent Company and the consolidated financial statements as a result of the new accounting regulation.
Changes to accounting estimates There have been no changes to the accounting estimates in 2015.
Claims provisions are discounted. As a result, initial changes in discount rates or changes in the duration of the claims provisions could have positive or negative effects on earnings. Discounting affects the motor third-party liability, general third-party liability, workers’ compensation classes, including sickness and personal accident, in particular.
Valuation of property Property is divided into owner-occupied property and investment property. Owner-occupied property is assessed at the reassessed value that is equivalent to the fair value at the time of reassessment, with a deduction for depreciation and write-downs. The fair value is calculated based on a market-determined rental income, as well as operating expenses in proportion to the property’s required rate of return in per cent. Investment property is recognised at fair value. The calculation of fair value is based on market prices, taking into consideration the type of property, location and maintenance standard, and based on a market - determined rental income as well as operating expenses in proportion to the property’s required rate of return. Cf. note 12 and 13.
Measurement of goodwill, Trademarks and Customer relations Goodwill, Trademarks and customer relations was acquired in connection with acquisition of businesses. Goodwill is allocated to the cash-generating units under which management manages the investment. The carrying amount is tested for impairment at least annually. Impairment testing involves estimates of future cash flows and is affected by a number of factors, including discount rates and other circumstances dependent on economic trends, such as customer behaviour and competition. Cf. note 11.
Basis of consolidation The consolidated financial statements are prepared on the basis of the financial statements of Tryg A/S and its subsidiaries. The consolidated financial statements are prepared by combining items of a uniform nature.
The financial statements used for the consolidation are prepared in accordance with the Group’s accounting policies.
The operational business segments in the Tryg are Private, Commercial, Corporate and Sweden. Private encompasses the sale of insurances to private individuals in Denmark and Norway. Commercial encompasses the sale of insurances to small and medium sized businesses, in Denmark and Norway. Corporate sells insurances to industrial clients primarily in Denmark, Norway and Sweden. In addition, Corporate handles all business involving brokers. Sweden encompasses the sale of insurance products to private individuals in Sweden as well as sale of Product insurances in the nordic region.
Key ratios Earnings per share (EPS) are calculated according to IAS 33. This and other key ratios are calculated in accordance with Recommendations and Ratios 2015 issued by the Danish Society of Financial Analysts and the Executive Order on Financial Reports for Insurance Companies and Multi-Employer Occupational Pension Funds issued by the Danish Financial Supervisory Authority.
Claims Claims are claims paid during the year and adjusted for changes in claims provisions less the reinsurers’ share. In addition, the item includes run-off gains/ losses in respect of previous years. The portion of the increase in provisions which can be ascribed to unwinding is transferred to insurance technical interest.
The share option agreement entitles the employee to the options unless the employee resigns his position or is dismissed due to breach of the contract of employment. In case of termination due to restructuring or retirement, the employee is still entitled to the options.
Other income and expenses Other income and expenses include income and expenses which cannot be ascribed to the Group´s insurance portfolio or investment assets, including the sale of products for Nordea Liv & Pension.
The comparative figures, including five-year financial highlights and key ratios, have been restated to reflect discontinued business. Discontinued and divested business in the income statement includes the profit/ loss after tax of the run-off for the marine hull business and the divested activities in the Finnish branch. Discontinued business also comprises the Tryg Forsikring A/S run-off business.
Owner-occupied property Owner-occupied property is property that is used in the Group’s operations. Owner-occupied properties are measured in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and impairment losses. Revaluations are performed regularly to avoid material differences between the carrying amounts and fair values of owneroccupied property at the statement of financial position date. The fair value is calculated on the basis of market-specific rental income per property and typical operating expenses for the coming year. The resulting operating income is divided by the required return on the property in per cent, which is adjusted to reflect market interest rates and property characteristics, corresponding to the present value of a perpetual annuity.
Assets under construction In connection with the refurbishment of owner-occupied property, costs to be capitalised are recognised at cost under owner-occupied property. On completion of the project, it is reclassified as owner-occupied property, and depreciation is made on a straight-line basis over the expected economic lifetime, up to the number of years stated under the individual categories.
Equity investments in associates Associates are enterprises in which the Group has significant influence but not control, generally in the form of an ownership interest of between 20% and 50% of the voting rights. Equity investments in associates are measured using the equity method so that the carrying amount of the investment represents the Group’s proportionate share of the enterprises’ net assets.
Investments Investments include financial assets at fair value which are recognised in the income statement. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments on initial recognition and re-evaluates this at every reporting date.
Contracts entered into by the Group with reinsurers under which the Group is compensated for losses on one or more contracts issued by the Group and that meet the classification requirements for insurance contracts are classified as reinsurers’ share of provisions for insurance contracts. Contracts that do not meet these classification requirements are classified as financial assets.
Receivables are recognised initially at fair value and are subsequently assessed at amortised cost. The income statement includes an estimated reservation for expected unobtainable sums when there is a clear indication of asset impairment. The reservation entered is assessed as the difference between the carrying amount of an asset and the present value of expected future cash flows.
Contingency fund reserves Contingency fund reserves are recognised as part of retained earnings under equity. The reserves may only be used when so permitted by the Danish Financial Supervisory Authority and when it is for the benefit of the policyholders.
De Vylder’s credibility method is used for areas that are somewhere in between the Chain-Ladder and Bornhuetter-Ferguson/Loss Ratio methods, and may also be used in situations that call for the use of exposure targets other than premium volume, for example the number of insured.
Liability adequacy test Tests are continuously performed to ensure the adequacy of the insurance provisions. In performing these tests, current best estimates of future cash flows of claims, gains and direct and indirect claims handling costs are used. Any deficiency results in an increase in the relevant provision, and the adjustment is recognised in the income statement.
Income tax and deferred tax The Group expenses current tax according to the tax laws of the jurisdictions in which it operates. Current tax liabilities and current tax receivables are recognised in the statement of financial position as esti-
Proposed distribution for the year: Dividend 1,759 1,731 Transferred to reserve for net revaluation according to the equity method -1,656 143 Transferred to retained earnings 1,878 683
Total investment assets 10,322 11,843 5 Current tax assets 18 14 Cash at bank and in hand 1 0
Total changes in equity in 2015 -44 -1,521 995 -718 -1,288 2014 Profit/loss for the year 143 683 1,731 2,557 Other comprehensive income -40 -40
Nullification of own shares -41 41 0 Dividend paid -1,656 -1,656 Dividend, own shares 59 59 Purchase and sale of own shares -1,005 -1,005 Exercise of share options 49 49 Issue of employee shares 45 45 Issue of share options and matching shares 3 3
Total changes in equity in 2014 -41 103 -125 75 12
Dividend per share in 2015 includes dividend paid out in July of DKK 2.50 and proposed dividend of DKK 3.50, totalling DKK 6.00 (DKK 5.80 in 2014 ). Proposed dividend per share of DKK 3.50 is calculated as the total dividend proposed by the Supervisory Board after the end of the financial year divided by the total number of shares at the end of the year (289,559,550 shares). The dividend is not paid until approved by the shareholders at the annual general meeting.
1 Income from Group undertakings Tryg Forsikring A/S 2,044 2,600 2 Other expenses Administration expenses -75 -51
Remuneration for the Executive Management is paid partly by Tryg A/S and partly by Tryg Forsikring
A/S and Tryg Forsikring, a Norwegian branch of Tryg Forsikring A/S and is charged to Tryg A/S via the cost allocation.
Solvency ratio (Solvency I – ratio between capital base and weighted assets) 108 87 8 C ontractual obligations, contingent liabilities and collateral The Danish companies in the Tryg Group are jointly taxed with TryghedsGruppen smba. The companies and the other jointly taxed companies are liable for any obligations to withhold taxes at source on interest, royalties, dividends and income taxes etc. in respect of the jointly taxed companies.
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 2015.
Equity – Danish FSA executive order 9,846 11,134 11 Accounting policies Please refer to Tryg Group's accounting policies.
Key ratios Gross claims ratio 71.3 65.1 63.3 76.5 65.3 64.6 69.0 72.1 75.6
Claims ratio, net of reinsurance 73.6 67.4 65.4 76.5 67.4 65.7 66.4 72.5 73.1
A further detailed version of the presentation can be downloaded from tryg.com/uk > investor > Downloads > tables
Key ratios Gross claims ratio 51.8 73.2 61.1 72.0 74.6 76.2 69.3 64.4 71.8
Claims ratio, net of reinsurance 74.2 69.8 67.0 75.1 68.8 68.6 68.1 73.3 73.7
Combined ratio exclusive of run-off 93.9 94.9 87.1 98.5 91.0 90.0 84.1 96.5 94.3
The distribution on segments between Commercial an Corporate as to medium sized enterprise has been altered during Q1 2014.
Number of full-time employees, continuing business at 31 Dec. 3,359 3,599 Number of full-time employees, discontinued and divested business at 31 Dec. 0 0 a) Includes Danish general insurance and Finnish guarantee insurance. b) Amounts relating to eliminations. In 2015 also restructuring expenses are included under 'Other'.
In 2014 the costs were positively affected by a one-time effect regarding changed pension terms in Norway and they were negatively affected by a provision in connection with the transfer to the new it-supplier. The joint effect was approx DKK 135m. In 2015 costs and claims were negatively effected by DKK 80m and DKK 40m respectively due to provisioning for the efficiency programme.
Expense ratio, net with adjustment 15.8 15.0 16.1 16.9 17.0 Combined ratio, net with adjustment 85.9 83.3 86.9 87.6 92.7 Expense ratio, net without adjustment 15.6 14.8 15.9 16.6 16.9
Average reinsurers' share of provisions for insurance contracts 2,557 2,279 2,469 2,192 1,828
Number of full-time employess, continued business, at 31 December 3,359 3,599 3,703 3,913 4,076 Number of full-time employess, discontinued and divested business, at 31 December 0 0 0 189 242
Share performance Earnings per share (DKK) 6.95 8.74 7.88 7.30 3.77 Diluted earnings per share (DKK) 6.95 8.73 7.86 7.27 3.77 Earnings per share of continuing business (DKK) 6.77 8.70 7.89 7.21 3.80
The expense ratio, net without adjustment, is calculated as the ratio of actual insurance operating costs, net of reinsurance to premium income, net of reinsurance. Other key ratios are calculated in accordance with ''Recommendations & Financial Ratios 2015'' issued by the Danish Society of Financial Analysts.
Group chart at 1 January 2016. Companies and branches are wholly owned by Danish owners and domiciled in Denmark, unless otherwise stated.
Danish general insurance Comprises the legal entities Tryg Forsikring A/S (excluding the Norwegian and Swedish branches), Tryg Garantiforsikring A/S (including Finnish branch) and Securator A/S.
Solvency II New solvency requirements for insurance companies issued by the EU Commission. The new rules comes into force at 1 January 2016.
Solvency ratio (Solvency I) Ratio between capital base and weighted assets.