37 Financial statements 104 Group chart 105 Glossary 106 Product overview
New car insurance in Sweden Moderna, Tryg’s Swedish branch, launched a new car insurance product, ‘Moderna Smart’. The price of the new product is differentiated depending on the driver’s driving style, which is recorded by a mobile app.
In 2015, Tryg improved its performance on all customer-related parameters as a result of a
Tryg’s core business, which is to create peace of mind and value for our customers, employees and shareholders. This means that Corporate Social Responsibility plays a constant role in the decisions which we make, in the improvement and development of our products and services, in the optimisation of our operations and in the positive contributions which we make to society at large through our activities.
Sweden, but was somewhat lower for Commercial and Corporate. In 2015, Private saw an improved development trend, and the development in both customer numbers and sales improved in 2015 rela tive to 2014. The improvements were primarily due to a strengthened customer focus and new pricedifferen tiated products with improved coverage, which had a positive effect on the development in premium income. Premium income in Commercial was down by 2.9% (-3.0%) in local currencies. In 2015, the Commercial retention rate improved in
Denmark, but dropped in Norway. There is a general need to improve the balance between sales and retention rates in Commercial to achieve a positive development in the portfolio. Corporate posted premium growth of 0.0% (1.1%) in local currencies.
In Norway, Tryg’s child insurance was acclaimed as Best in Test by the Norwegian Family Economy
DKK9,525m. After recognition of a share buy back in 2015, Tryg’s surplus cover is DKK 3,332m, corresponding to 54%.
Private encompasses the sale of insurance products to private individuals in Denmark and Norway. Sales are effected via call centres, the Internet, Tryg’s own agents, franchisees (Norway), interest organisations, car dealers, estate agents and Nordea’s branches.
The Net Promoter Score (NPS) improved from 0 in 2014 to 12 in 2015. The development in the NPS
The development in sales improved in 2015, which can also be ascribed to the increased customer focus during the year. Sales in Denmark were 2 percentage points higher than in 2014, and in Norway sales were also at a slightly higher level, especially due to strong sales via the franchise sales channel.
(63.6). The higher level was ascribable to a combination of higher weather and large claims and a higher claims level, especially for the property lines of business. The very high level of large claims related to fires in both Denmark and Norway.
At the emergency meeting held the following day, I was still severely shaken by the experience, and so I was extremely pleased to have Tryg on board to provide a professional overview of the situation,” says Experimentarium ’s Executive Director Kim Gladstone
Adjusted for the one-off effects of the Norwegian pension and IT costs in 2014, the expense ratio was at a significantly lower level.
The expense ratio was 10.8 (11.1). Adjusted for the one-off effects of the Norwegian pension scheme and the change of IT suppliers in 2014, the expense ratio improved by 0.8 percentage points. This was achieved through a continued focus on improving expense levels, and in 2015
Competition remains more pronounced in the broker channel, in Norway another sign of the weakened Norwegian economy. In addition, the quarter was also affected by volume adjustments under a number of major agreements.
Sweden’s results have improved significantly in recent years, and a strong result of DKK 218m was posted for 2015. The combined ratio was 83.5 (92.0) and was impacted by a very high level of run-off gains of DKK 149m due to the harmonisation of the reserving models across
(72.8). The significant improvement can be ascribed to the harmonisation of the claims reserving model, which led to a high level of run-off gains in 2015.
The total market value of Tryg’s investment portfolio was DKK 38.8bn as of 31 December 2015.
The investment portfolio consists of a match portfolio of DKK 28.1bn and a free portfolio of
The return on the free portfolio was DKK 232m, and the return on the match portfolio less the amount transferred to the insurance business was DKK 1m. Deducting financial income and expenses of DKK -238m, the return on invest ment activities was DKK -5m.
At the annual general meeting to be held on 16 March 2016, Tryg’s Supervisory Board will propose a dividend per share of DKK 3.5, corresponding to the distribution of DKK 1,013m.
Gruppen, has decided to pay out some of its profit to members, policyholders of Tryg
H1 2016 results 11 October 2016 Interim report for Q1-Q3 2016
Board values personal contact with the Group’s shareholders. Shareholders may propose items to be included on the agenda for the annual general meeting, and may ask questions before and at the meeting. Shareholders may vote in person at the annual general meeting, by post or appoint the Supervisory
Tryg has published its statutory corporate governance report based on the ‘complyor -explain’ principle for each individual recommendation. Download the report at tryg.com > Investor > Download.
Reporting takes place in confidence to the Chairman of the Audit Committee and the Head of Compliance.
Education: Master of Economics and Business Administration, Financial Analyst (CFA) and executive programmes, London Business School and Harvard Business School. Chairman: Seilsport Maritimt Forlag AS. Board member: Tryg A/S, Tryg Forsikring A/S, Argentum Fondsinvesteringer as, Nordic Mining ASA, Forskningskonsernet Sintef, E-CO Energi, Scatec Solar ASA, Avinor, Sevan Marine ASA. Committee memberships: Audit Committee and Risk Committee Member of Audit Committee in Sevan Marine ASA and E-CO (Chairman), Scatec Solar ASA and Remuneration Committee in Argentum. Number of shares held: 1,800 Change in portfolio 2015: +300
The tax policy includes guidelines ensuring that Tryg pays all relevant taxes.
Denmark. In 2015, Tryg distributed 280 marking kits in Sandefjord, Norway. In October 2015, preliminary results from Sønderborg showed a 50% decline in the number of break-ins for the 90 properties using
Sweden. Since 1952, more than 39,000 life buoys have been installed in Norway alone, and every year they help prevent drownings. In 2015, the demand for more lifebuoys increased as Tryg distributed over 2,000 compared to around 1,000 in 2014. In 2016,
Capital management Tryg’s capital management is based on the key business objectives: • A solid capital base, supporting both the statutory requirements and a ‘A-’ rating from Standard & Poor’s.
Viewed in isolation, in order to fulfil the first two objectives, the company’s capital buffer must be as large as possible, while the third objective is best achieved by keeping the capital buffer to a minimum or by ensuring that the capital base is mainly made up of subordinate loan capital. The balance between the different objectives and the resulting capital requirement is assessed in the company’s capital plan.
The model calculates Tryg’s capital requirement with 99.5% solvency level with a 1-year horizon, which means that Tryg will be able to fulfil its obligations in 199 out of 200 years. The partial internal model has been used for a number of years, and was approved by the Danish Financial Supervisory Authority in 2015 which means that the present solvency requirement will be maintained as Solvency II has come into force as of 1 January 2016.
Company’s own risk assessment ‘ORSA’ (Own Risk and Solvency Assessment) ORSA is the company’s own risk assessment based on the Solvency II principles, which implies that Tryg must assess all material risks that the company is or may be exposed to. The ORSA report also contains an assessment of whether the calculation of solvency capital requirement is reasonable and is reflecting Tryg’s actual risk profile. Moreover, the projected capital requirement is also assessed over the company’s strategic planning period. Tryg’s risk activities are implemented via continuous risk management processes, where the main results are reported to the Supervisory Board and the risk committee during the year, while the ORSA report is an annual summary document assessing all these processes and presenting the total risk picture to Tryg’s Supervisory Board.
Long-tailed reserves in particular are subject to interest rate and inflation risk. Interest rate risk is hedged by means of Tryg’s match portfolio which corresponds to the discounted claims reserves. In order to manage the inflation risk of Danish workers’ compensation claims reserves, Tryg has bought zero coupon inflation swaps. Tryg determines the claims reserves via statistical methods as well as individual assessments. At the end of 2015, Tryg’s claims reserves totalled DKK 25,427m with an average duration of 4,0 years.
Liquidity risk Maturity of the Group’s financial obligations including interest 2015 0-1 years 1-5 years > 5 years Total
Average claims DKK b) 29,968 33,560 3,905 4,334 65,254 79,102 17,846 22,248 10,110 10,376 75,653 111,361 Total claims 40,135 37,228 56,697 50,173 10,469 9,463 77,164 72,195 241,311 224,791 2,871 2,470
Average claims DKK b) 8,742 9,615 116,003 62,035 26,008 20,263 68,006 81,763 790,685 1,068,663 5,893 5,673 Total claims 370,685 333,943 32,331 29,686 4,275 4,255 10,454 10,454 111 83 96,774 79,007 a) The claims frequency is calculated as the number of claims incurred in the year in proportion to the average number of insurance contracts in the year. b) Average claims are total claims before run-off in the year relative to the number of claims in the year.
The risk-free interest rate is based on a bullet loan with the same term as the expected term of the options at the time of allocation. The calculation is based on the strike price as set out in the option agreement and the average share price at the time of allocation.
Primary assumptions for impairment test: When assessing the cash flow management has based its estimates of premiums earned on the insurance portfolio adjusted to reflect the expected effect of business decisions and market development from past experiences. The portfolio is indexed with the wage and salary index. Claims incurred are based on expected claims ratios, which corresponds to current levels. Moderna is adjusted for weather and large-scale claims as well. Reinsurance is taken into account when looking at the overall technical result together with the expected cost ratio. Required returns are based on management's own requirements for returns of the individual cash generation units and are not expected to change significantly in the near future.
The cash flows appearing from the latest prognosis approved by management for the next 6 quarters are used when calculating the value in use of Securator. The cash flows in the latest budget period have been extrapolated for financial years after the budget periods (terminal period) and adjusted for expected growth rates determined on the basis of expectations for the general economic growth. The required return is based on an assessment of the risk profile of the tested business activities compared with the market's expectations for the Group.
The impairment test shows a calculated value in use of approximately DKK 184m (238m)relative to a recognised Goodwill of DKK 184m (184m) and equity of DKK 174m (174m) and does not indicate any impairment in 2015.
A decline in the growth rate of more than 1% per cent will result in a write-down of the goodwill associated with Securator. We do not expect a decline in the growth rate due to an expected expansion of the Securator business to Norway and Sweden.
Total expenses for 2015 are DKK 31m (DKK 30m in 2014). Of this amount, expenses for non-let property total DKK 0m (DKK 4m in 2014), total expenses for the income-generating investment property are DKK 31m (DKK 26m in 2014).
Value adjustments at 31 December -66 23 15 Financial assets (continued) Sensitivity information Impact on equity from the following changes: Interest rate increase of 0.7-1.0 percentage point -153 34 Interest rate fall of 0.7-1.0 percentage point -161 -95 Equity price fall of 12 % -297 -371 Fall in property prices of 8 % -239 -239 Exchange rate risk (VaR 99) -14 -11 Loss on counterparties of 8 % -372 -399
Deposits with credit institutions 0 667 Receivables relating to reinsurance 0 439 Interest and rent receivable 281 337 Equity investments in and receivables from Group undertakings which have been eliminated in the consolidated financial statements 2,706 1,730
Obligations due by period 2015 <1 year 1-3 years 3-5 years > 5 years Total
Number of Basis Variable 2015 persons salary salary Pension Total a)
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.
Försäkringsbranschens Pensionskassa (FPK) is unable to provide sufficient information for the Group to use defined-benefit accounting. The plan is therefore accounted for as a defined-contribution plan.
Nullification of own shares -44 44 0 Dividend paid -2,477 -2,477 Dividend own shares 97 97 Purchase and sale of own shares -1,044 -1,044 Exercise of share options 13 13 Issue of employee shares 2 2 Issue of share options and matching shares 5 5
6 Deferred tax assets Capitalised tax losses Tryg A/S 0 0