• Share buy-back of DKK 1,524m in 2016, representing a buy-back yield of 9.6%.
Pre-tax profit for Q4 2016 increased DKK 94m to DKK 533m.
Combined ratio Combined ratio was 85.1 in 2016 (2015: 86.8). Excluding run-off profits, the combined ratio was 90.4 in 2016 (2015: 91.1).
Segment reporting Personal The Personal segment offers policies to individual households in Denmark.
In 2016, the investment return in the with-profits environment was sufficient to recognise as income the full risk return to shareholders’ equity from all interest rate groups. The risk return increased to DKK 147m (2015: DKK 137m).
Investment activities Topdanmark Group excl. life insurance The investment return in the Topdanmark Group excluding life insurance was DKK 910m in 2016 (2015: DKK 79m).
The investment return after return and revaluation of nonlife insurance provisions was DKK 487m, which was DKK 235m higher than the assumed return for the year, calculated using Topdanmark's forecast model at the beginning of 2016. The higher return was primarily due to a high return on Danish mortgage bonds as compared to the comparable revaluation of provisions and a very high return on structured credits.
Overall, the assumed pre-tax profit on life insurance is DKK 180-210m.
Since 1998, when Topdanmark started buying back own shares, it has been decided to cancel DKK 16.8bn of own shares, representing a 77.0% write-down of the share capital. The average price of the shares written down is DKK 53 per share.
Solvency capital requirements Solvency II took effect on 1 January 2016.
Risk scenarios (DKKm) after taxation and pension return tax 2015 2016 Non-life insurance Underw riting risk Combined ratio − 1pp increase (69) (69)
*35% increase f irst year, subsequently 25%, coincident w ith 20% decline in reactivation rates
Most active brokers at NASDAQ Copenhagen A/S in 2016 % Danske Bank 16
The announcements are available on www.topdanmark.com → Investor Relations → Company announcements.
Previous positions held: 1987-2006: KPMG Denmark and UK 2006-2009: Group CFO and member of Group Executive
Deferred tax on security funds 306 306 306 TOTAL LIABILITIES PROVIDED 409 407 394 DEPOSITS RECEIVED FROM REINSURERS 154 62 64
Number of policyholders at 31 December ('000): Individual policies 45 46 Policies which are part of a tenure 83 84 Group life 190 181
Loans guaranteed by mortgages (1) 0 Derivatives (1,155) 230 Total held for trading (1,130) 1,385
Note 13. Taxation Current tax 359 437 Change in deferred tax 5 (11) Prior year adjustment (1) (18) Tax for the year 364 409 Tax taken to shareholders' equity (4) (2)
Social security costs 41 41 Payroll tax 218 247 Share options 8 8 Employee shares - 8
Fair value of granting 2015 2 8 10 Fair value of granting 2016 2 8 10
Number of options which could be exercised on 31 December ('000) 330 543
Remuneration of the Board of Directors Directors' fees adopted by the AGM were DKK 5,075,000 (2015: DKK 5,075,000) of which DKK 263,000 (2015: 263,000) related to Topdanmark Forsikring A/S.
Total financial assets at fair value where the revaluation is taken to the income statement 59,100 63,962
Digitalisation/automation Topdanmark is working continuously on digitalisation and automation to ensure efficient business and a good customer experience. Focus is on automation of a number of processes, which will help to reduce the risk of human error.
Effect of adjustments, post-tax 38 (71) (33) Result and equity, new accounting policy 1,170 5,064 4,640
Employee shares Topdanmark has established an employee share scheme implying a pay cut. The value of the shares is continuously included as staff expenses in the income statement with a set-off on shareholders’ equity.
Shares held are regularly tested for depreciation and devalued to the recovery value if this is lower than the financial value.
Other liabilities Provisions for pensions and similar liabilities Provisions for anniversary bonuses and retirement benefits are built up on an on-going basis over the period of employment. The liability is calculated taking into account the expected level of staff reduction based on the Company's experience. The liability is measured at present value by discounting the expected future payments using the interest rate structure.
Other Generally, all the amounts in the report are disclosed in whole numbers of DKKm. The amounts have been rounded, and, consequently, the sum of the rounded amounts and totals may differ slightly.
Changes in comparative figures for 2015 due to new Executive Order on Financial Report The subsequent tables disclose the changes in the financial statement for 2015 due to the transition to new accounting policies for the income statement in key items, technical result, non-life insurance and effect on combined ratio, technical result for life insurance and the balance sheet at 31 December 2015.
Technical Technical Invest- Trans- revaresult result ment ferred luation Other Pre-tax
Other reserves 1,362 1,894 Total reserves 1,362 1,894 Profit carried forward 3,479 3,019 TOTAL SHAREHOLDERS' EQUITY 4,946 5,009
Expenses are charged to cover costs incurred. Average effective interest rate on balances is 0.03% (2015: 0.02%). Shares are disclosed in the balance sheet and specified in the note on Shares in affiliated companies. Balances are disclosed in the balance sheet.
Solvency ratio Management is responsible for the key ratio “Solvency ratio” evident from the five-year summary in the annual report.
Management’s responsibility for the consolidated financial statements and the parent financial statements Management is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the EU and Danish disclosure requirements for listed financial companies as well as the preparation of parent financial statements that give a true and fair view in accordance with the Danish Financial Business Act, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements and parent financial statements that are free from material misstatement, whether due to fraud or error.