Topdanmark’s Board of Directors has chosen not to stand for re-election at the AGM on 15 April 2015. Søren Thorup Sørensen, present Deputy Chairman, is expected to take over the role as Chairman, while Torbjörn Magnusson is expected to be appointed as Deputy Chairman.
Shareholders' equity of parent company at 1 January 4,465 4,900 4,915 5,716 5,490 5,543 5,516 Profit 1,168 1,023 1,823 1,468 1,558 251 304 Share buy-back (892) (1,159) (1,200) (1,836) (1,716) (331) (407) Share-based payments 159 150 177 142 110 28 26 Other movements in shareholders' equity 1 1 2 0 (1) (1) 2 Shareholders' equity of parent company
Provisions for insurance and investment contracts: Non-life insurance 15,139 16,228 16,251 16,721 16,485 16,721 16,485 Life insurance 31,166 30,618 32,553 33,640 36,375 33,640 36,375
Run-off profits, net of reinsurance, were DKK 351m (2013: DKK 306m), representing a 0.4pp improvement of the claims trend. Illness / accident, workers’ compensation, motor liability, commercial liability and house insurance generated run-off profits.
It is Topdanmark's policy to accept a certain level of financial risk, given its strong liquid position and stable, high earnings from insurance operations. Topdanmark has invested in, among other things, equities, properties and CDOs in order to improve the average investment return. The return in Q4 and the full year 2014 on the most significant classes of assets is disclosed in the following table: The investment return after the transfer to the technical result was DKK 556m, which was higher than the expected return given Topdanmark’s current risk profile. This higher return should be viewed primarily in the light of the return achieved on government and mortgage bonds including a revaluation of provisions and discounting, the return on Danish equities and the return on CDOs.
Taxation The tax charge was DKK 452m of the pre-tax profit of DKK 2,010m, corresponding to an effective tax rate of 22.5% (2013: 21.7%). The deviation from the nominal tax rate of 24.5% was particularly due to Topdanmark's utilisation of an uncapitalised equity loss carried forward. At the end of Q3 2014, the uncapitalised equity loss carried forward had been fully utilised.
This profit forecast model is based on assumption of an annual 7.0% return on equities and unchanged foreign exchange rates from the level on 5 February 2015. Furthermore, it is assumed that the return on interestbearing assets hedging the discounted provisions is just sufficient to cover discounting and revaluation of the provisions, while the return on the remaining interestbearing assets is assumed to be 1.73% (risk-free interest rate plus 2.0pp).
The share buy-back programme represents a buy-back yield of 7.8% (calculated on the basis of the price of Topdanmark's shares on 5 February 2015).
Generally, operational risks are to be reduced to an acceptable level
In the calculation of the effect on the results it is assumed that the bonus reserves and the individual bonus potential in life insurance could offset adverse fluctuations at the levels described as the overall collective bonus potential was DKK 1,677m at 31 December 2014 (2013: DKK 1,472m), and the bonus potential on paid-up benefits DKK 746m (2013: 2,364m).
Topdanmark works to maintain and develop openness in our company culture to counter any form of discrimination due to gender, race, colour, nationality, social and ethnic origin, religion, beliefs, political opinion, disability, age and sexual orientation. Topdanmark believes that diversity provides business value and that it is important that all employees have access to executive positions at all levels. Topdanmark's Board of Directors has adopted a policy for diversity. Detailed information on diversity including “Women in management” is available in the CSR Report.
CSR Topdanmark's "Statutory report on Corporate Social Responsibility, see Section 132 of Executive Order on Financial Reports for insurance Companies and Lateral Pension Funds", is available on www.topdanmark.com → Investor Relations → Reports and presentations → CSR reports (
Topdanmark's shares • Topdanmark’s shares are not traded at a discount due to lack of liquidity • There is a high level of confidence in Topdanmark's shares • The provision of uniform and consistent information helps ensure low volatility in Topdanmark's shares.
Shares Topdanmark's shares are listed on NASDAQ OMX Copenhagen and included in OMXC large Cap.
Gruppen A/S and CEO, Schulstad Brød A/S 1999-2006: Group Managing Director, Skandinavisk
Offices held: Member of the Boards of Directors of: • DSB • DSV A/S • Ratos AB(Sweden) • Blue Square Re (Netherlands) • Skodsborg Kurhotel & Spa A/S • KNI A/S • Østre Gasværk Teater • Ny Carlsberg Glypotek
Net reinsurance 1 1 Technical profit on life insurance 27 5 32
Total provisions for insurance and investment contracts 16,721 33,640 0 50,361 Amounts due to affiliated companies 19 2,301 204 (2,524) 0
Run-off profits, net of reinsurance 306 351 Claims provisions, net of reinsurance 12,494 12,989 Number of claims incurred ('000) 462 418 Average value of claim (DKK '000) 16 16 Annual frequency of claims 123 109
Note 14. Taxation Current tax 436 460 Change in deferred tax (24) (9) Change in deferred tax on security funds (42) 0 Prior year adjustment (1) (6) Tax in foreign companies (2) (3) Tax for the year 367 441 Tax taken to other comprehensive income 42 3 Tax taken to shareholders' equity (1) 8
Fair value revaluation for the year taken to to revaluations (68) (6) Investment properties 3,951 3,829
Reinsurers' share at 1 January 75 87 Reinsurance ceded 726 661 Reinsurance earned (714) (659) Reinsurers' share of the provisions for unearned premiums at 31 December 87 89
Per granting: Average strike price exercised options 2013 77 77 76 77 Average strike price exercised options 2014 78 79 78 78 Average current price on date of exercise 2013 133 Average current price on date of exercise 2014 171 Fair value of granting 2013 2 7 9 Fair value of granting 2014 2 8 10
Number of options which could be exercised on 31 December ('000) 1,079 308
Remuneration of the Executive Board Salaries etc. 18 19 Share options 2 2 Total remuneration to three members of the Executive Board 20 20
Loans and receivables at amortised cost Loans to associated companies 416 488 Amounts due from policyholders 346 304 Amounts due from insurance companies 65 195 Other debtors 121 114 Liquid funds 420 323
Allowance account (policyholders and insurance companies): Group companies have agreed to lend equities against security: Book value of equities lent 1,022 1,323 Fair value of bonds received as security for the loan 1,160 1,604
Note 40. Analysis of assets and their return - life insurance Net Return 1 January 31 December investment (%)* Land and buildings, directly owned 3,396 3,309 (94) 3.6
Max. effect on before change bonus potential collective in bonus poten- used for 2013 Min. effect on bonus tial used for benefits of Event capital base potential such benefits paid-up policies 0.7-1.0 pp increase in interest rates (167) (52) 714 0 0.7-1.0 pp decline in interest rates 167 (72) (1,160) (22)
Deposits with credit institutions 811 1,543 Investment assets related to unit-linked contracts 6,673 10,375 Liquid funds 18 21 Accrued interest 350 0 Shares in and amounts due from affiliated companies eliminated in the consolidated accounts 7,087 6,959
Emergency plan Topdanmark has an emergency plan to ensure that prompt, correct and targeted action is taken on a major weather event such as storm, hurricane, rainstorm or flood. The emergency programme consists of several levels, and this enables a proportional response depending on the size of the event. Topdanmark has appointed emergency helpers throughout the company whose claims handling knowledge is regularly kept up-todate. Furthermore, alert drills are held twice a year in order to prepare the employees and improve the emergency programme.
Other creditors 15 11 TOTAL CREDITORS 588 294 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 6,485 6,143
Dividends received from subsidiaries (1,887) 1,887 0 Other movements in capital of subsidiaries 8 0 8 Cancellation of own shares (10) 10 0 Share buy-back (1,716) (1,716) Sale of own shares 38 38 Reclassification of share options (30) (30) Issue of share options 10 10 Exercise of share options 93 93
Note 1. Income from affiliated companies Topdanmark Forsikring A/S 1,416 1,552 Topdanmark Invest A/S 7 (10) Topdanmark Kapitalforvaltning A/S 88 57 Income from affiliated companies 1,511 1,599