Q4 2012 • Post-tax profit increased to DKK 453m (Q4 2011: DKK 350m) • Combined ratio improved to 88.2% (Q4 2011: 89.6%) • Combined ratio excluding run-off profits was 91.7%
Profit of DKK 453m in Q4 2012 Post-tax profit increased to DKK 453m in Q4 2012 (Q4 2011: DKK 350m) which was somewhat better than assumed in the profit forecast model for 2012 in the Q1Q3 2012 interim report (Q4 2012: DKK 180-280m). As described above, the improvement was due to a combination of a better investment return and a better than assumed technical result.
Profit of the parent company etc. increased DKK 5m to DKK 18m.
Premiums earned benefitted from automatic price indexation of 1.9pp with an effect of around 1.4pp on total premiums. On the other hand, premiums earned were only marginally impacted by extraordinary price increases.
As a consequence of this policy the Company has for a number of years identified and reduced or eliminated those risks which could potentially cause losses exceeding what Topdanmark considers to be acceptable. For example, major strategic shareholdings have been sold, the catastrophe cover for storm or terror has been increased significantly and the financial risk reduced.
Normal fluctuations in investment return and risk results are provided for by the bonus potential per contribution group
Storm claims up to DKK 5,100m (75) (75) (Plus reinstatement premium)
The age limit for Board members is 70 and the term of office for members elected by shareholders at the general meeting is one year, while in accordance with legislation, it is four years for members elected by employees.
Severance pay In order to ensure full loyalty, focus and performance for Topdanmark during the period until a potential take-over is finalised, Topdanmark has agreed with the Executive Board and four other members of the top management team that under certain circumstances they will receive compensation in the form of an extended period of notice and an increased severance pay if they resign or are dismissed, or if their position is made redundant because Topdanmark is taken over by or merges with a company outside of the Group or if one or more owners take control of Topdanmark. The maximum amount of compensation will represent two years' salary.
Remuneration structure Topdanmark's remuneration policy is intended to optimise long-term value creation at a group level. In accordance with Section 77(d) of the Danish Financial Business Act and Section 139 of the Danish Companies Act, the AGM has adopted "Remuneration policy of the Topdanmark Group including general guidelines for performancerelated pay."
Besides options, which in accordance with the revolving option scheme are paid to the Executive Board, significant risk takers and the Friday Team as part of their fixed salaries, the Executive Board may grant a total of up to 20,000 options to employees who are expected to make a special effort or otherwise contribute extraordinarily to value creation in the Company in that year of granting.
Trading reports 2013 02 Jan 01/2013: Trading in Topdanmark's shares by insiders 2012 26 Nov 05/2012: Trading in Topdanmark's shares by insiders 21 Nov 04/2012: Trading in Topdanmark's shares by insiders 29 Aug 03/2012: Trading in Topdanmark's shares by insiders 14 Mar 02/2012: Trading in Topdanmark's shares by insiders 02 Jan 01/2012: Trading in Topdanmark's shares by insiders
Education: MSc Offices held: Member of the Boards of Directors of: • Monberg & Thorsen A/S (Chairman) • Dagrofa (Chairman)
Trine Zappe** DOB: 5 April 1977 Joined Topdanmark’s Board of Directors: 2011 Current position held: Claims handler * Elected by shareholders in general meeting ** Elected by employees *** Member of Topdanmark’s Audit Committee **** Member of Topdanmark's Remuneration Committee
Managerial responsibilities: • Asset Management • Finance • Accounting • Statistical Services • Reinsurance • Tax • Credits
TECHNICAL PROFIT ON NON-LIFE INSURANCE 1,824 905 660 945 1,092 LIFE INSURANCE
Allocated investment return, net of reinsurance (2,143) 2,443 2,233 579 2,364
Income from associated companies 29 26 Income from investment properties 11 209 200 Interest income and dividends etc. 1,970 1,877
Notes to the financial statements • Group Risk factors 1 x 26 Subordinated loan capital 27 Provisions for unearned premiums 28 Life insurance provisions 29 Provisions for claims 30 Collective bonus potential 31 Provisions for unit-linked contracts 32 Pensions and similar commitments 33 Profit on life insurance 34 Expenses 35 Auditors' fee 36 Staff costs 37 Related parties 38 Financial assets 39 Financial liabilities 40 Settlement of assets and liabilities 41 Analysis of assets and their return - life insurance 42 Exposure information 43 Shares analysed by industry and region (%) - life insurance 44 Leasing 45 Core capital and capital base 46 Number of shares 47 Own shares 48 Provision of security 49 Contingent liabilities 50 Comparatives 51 Companies 52 Other disclosures 53 Accountin olicies 54g p
An expected higher future inflation rate would generally be included in the provisions with a certain time delay while at the same time the result would be impacted by higher future indexation of premiums
At the end of 2012 Topdanmark received cash margin payments of DKK 1,234m securing unrealised gains on derivatives (2011: DKK 937m).
Net reinsurance 1 1 Technical profit on life insurance 33 5 38
Average value of claim (DKK '000) 38 39 7 7 60 63
Individual policies 148 144 Policies which are part of a tenure 843 860 Single premiums 991 1,004 Gross premiums 3,303 3,161 Gross premiums written, direct business, by the policyholders' location: Other EU-countries 25 24 Other countries 5 3
Total designated at fair value (363) 449 Revaluations of financial assets and liabilities at fair value through income statement 125 2,679 Of which revaluation of inflation swaps transferred to claims incurred (103) 32 Investment properties 31 (52) Provisions for unearned premiums (2) (4) Provisions for claims and benefits (654) (343) Reinsurers' share 12 6 Liquid funds 1 (23)
Note 14. Other income Gain on sale of workers' compensation portfolio 32 0
Subordinated loan capital of Topdanmark Forsikring A/S has been included in the Company's capital base at up to 25% of the solvency margin 252 252
Guaranteed benefits 20,233 21,402 Bonus potential on future premiums 3,718 3,689 Bonus potential on paid-up benefits 2,306 1,849 Life insurance provisions 26,257 26,941
Retrospective provisions at 31 December 3,335 402 3,737 Provisions for unit-linked contracts 2011 3,335 402 3,737
Profit on policies outside of contribution etc. 6 11 17 6 4 10 Investment return Life Holding 6 14 Group eliminations 2 1 Profit on life insurance 187 210
Knud J. Vest 300 108 Ole Døssing Christensen 83 Per Krogsgaard Mathiesen 83 Total fee paid to nine Board members 4,275 4,631 The Board of Directors receive only a fixed remuneration.
(DKKbn) Inputs based 2011 Quoted on observable Financial assets recorded at fair value prices market data Total Held for trading: Loans guaranteed by mortgages and other loans 0.0 0.0
The Group's insurance companies have registered the following assets as security for technical provisions: Shares in associated companies 200 681 Loans to associated companies 707 158
There have been no other changes in accounting policies from those adopted in the 2011 Annual Report.
On the date of change, 30 June 2012, this change in the discount curve reduced the provisions for outstanding claims by DKK 76m and life insurance provisions by DKK 102m.
The unconditional profit elements comprise the return on assets allocated to shareholders' equity including subsidiaries with unit-linked activities, acquisition cost result and the profit on policies outside of contribution.
Finance leases for machinery and equipment are those leases where the Company substantially bears all the risks and benefits of ownership: the relevant assets are shown in the balance sheet at the lower value of their fair value and the present value of future lease payments. Once recognised as a finance lease, the assets are treated as any other type of machinery and equipment. IT equipment, other equipment and cars as well as improvements of rental properties are depreciated over their expected useful life of up to five years. Solar cell plants are depreciated over their expected useful life of 25 years.
December. If there is no closing price, another public price is used which is believed to be the most appropriate. Valuation methods or other publicly available information are used to value listed securities where the closing price does not reflect the fair value.
Bonus potential on paid-up benefits comprises the difference between on the one hand a policy's savings (retrospective provision) less the present value of the expected future expense result and on the other hand the present value of the guaranteed future benefits originating from already paid premiums.
Amounts due from affiliated companies 114 172 TOTAL DEBTORS 114 172
Cancellation of own shares (11) 11 0 Share buy-back (1,200) (1,200) Sale of employee shares 43 43 Issue of share options 7 7 Exercise of share options 123 123
Board of Directors: Michael Pram Rasmussen Anders Knutsen Anders Colding Friis (Chairman) (Deputy Chairman)