A structured approach to innovation is key at TrygVesta. Innovation is first and foremost a matter of securing the future development of our Group, creating and exploiting business opportunities and achieving our vision of being perceived as the leading peace-of-mind provider of the Nordic region. It is about developing new ways of servicing customers, offering new products and launching new initiatives that support growth. The results of these efforts will materialise clearly in the years ahead.
TrygVesta increased its share of the market in 2007. The earnings profile for the market overall showed decreased profitability, however, TrygVesta had the best earnings capacity among the large companies. A new player entered the market in 2007, and Norway’s largest bank will also start selling insurances in 2008. TrygVesta has small, but rapidly growing market shares in Sweden and
The private market for welfare services needs cuttingedge peace-of-mind solutions and the development of these as markets mature.
We acknowledge our responsibility in relation to our customers, our employees, the environment, our products and society. Our dedication to our community and to social projects and activities confirms this commitment.
Equity markets took a negative turn in the second half of 2007, affecting our profit adversely. However, the insurance business continued recent years’ positive trend.
The gross expense ratio improved by 0.1 percentage point to 16.7 in 2007. We reduced the expense ratio by 0.7 percentage point to 15.4 in the established markets in Denmark and Norway, while the investments in Finland and Sweden continued to have a negative impact of 1.3 percentage points on the expense ratio.
On 21 January 2008 we announced that TrygVesta had reduced the proportion of equities in its investment portfolio to around 4% or some DKK 1.8bn. The proportion of equities was DKK 5.0bn at 30 September 2007 and DKK
The number of private policies sold performed favourably in 2007. There was a net inflow of 38,000 new policies, 10,000 more than in 2006. The inflow was very much attributable to existing customers buying more policies.
Weather-related claims had a negative impact of 0.8 percentage point against 0.9 percentage point in 2006.
Building insurance saw a flat development in the claims frequency, while it was slightly lower for motor.
The positive performance was partly attributable to our continued focus on making the business more efficient, and partly to a greater proportion of insurances being sold through brokers in 2007. We do not incur costs to any considerable extent from sales through brokers because brokers charge their fees directly to the customers.
Gross claims ratio 74.9 78.1 80.9 Business ceded as % of gross premiums 0.4 0.2 0.2
July 2006, and our ambition is to hold 8% of the private market by 2012.
Other financial income and expenses were DKK 29m higher. The improvement was attributable to an increase in other items including interest income on operating assets. This was, however, partly offset by capital gains being reduced from DKK 368m in 2006 to DKK 298m in 2007 as a result of a changed discount rate because interest rates increased less in 2007. The return on
We reduced our equity exposure during 2007, cutting back the equity portfolio by around DKK 0.6bn in June 2007 and by 0.2bn in December. The Group’s equity portfolio had a total value of DKK 4,445m at 31 December 2007 compared with DKK 5,384m at 31 December 2006.
Technical interest is based on interest rate assumptions applicable at 31 January 2008.
Group’s strategies, plans and performance at annual rating meetings. The rating agencies use these meetings as a basis for their assessment of the Group, and subsequently announce the rating. In 2007, Moody’s upgraded us from A3 to A2, which signifies excellent financial strength, while Standard & Poor’s affirmed their rating of
Dividends in respect of the 2007 financial year are determined on the basis of the Group’s capitalisation strategy and profit distribution policy: • TrygVesta distributes 50% of the profit for the year as ordinary cash dividends.
We base our capital resources on relevant regulatory requirements and our wish to maintain a rating of
19.7bn, net of reinsurance. The respective durations were 1.9 and 3.0 years. The variation in duration is attributable to our bond portfolio being significantly larger than the discounted provisions. A parallel shift of interest rates of 1% would reduce the market value of our securities by
TrygVesta issues press releases and company announcements on a regular basis and publishes quarterly and half-year interim reports and annual reports in order to best enable stakeholders to form an adequate impression of the Group and its performance. All financial announcements are released simultaneously in Danish and English. Management organises regular investor presentations, live teleconferences and webcasts in a partnership with Investor Relations. All material is available at www.trygvesta.com, which also offers stakeholders to receive the latest news as RSS feeds or to download webcasts and teleconferences as Podcasts. TrygVesta continuously seeks to make the website more userfriendly and improve its contents.
Responsibility) policy and set up a CSR organisation with a CSR board chaired by our Group CEO. The CSR board will report to the Supervisory Board once a year.
The Supervisory Board intends to consider any public takeover bid that may be made as prescribed by legislation and, depending on the nature of such bid, to convene an extraordinary general meeting of shareholders in accordance with applicable requirements and rules.
Further details to the notice of the meeting can be found in the complete proposals, which are available for download at www.trygvesta.com and to all shareholders on request. The complete proposals also include the Supervisory Board’s proposed dividend payment with respect to the past financial year.
Information about Board members’ profiles and shareholdings is set out in the section on Members of the Supervisory
Mr Wendel Andersen has experience in international management, strategy, finance, treasury,
IT and project management from his current position as CFO of Arla Foods.
Chairman of Hellebo Park A/S, Ejendomsselskabet Storken A/S and Uglen A/S, Renoflex-
TrygVesta IT A/S (chairman), TrygVesta Ejendomme A/S, Grundfos Management A/S, Poul
In the autumn of 2007 we launched a Nordic communication project with the aim of improving and systematising written customer communication throughout our Group.
Nordic fitness chain, an extended health care plan and organising family days and a corporate party in 2009.
We want to improve our ability to retain and attract employees because this is vital in the present competitive labour markets in the Nordic countries.
Group’s first capital markets day held on 22 June 2007 triggered a 2% increase in the share price.
In 2007, we held 250 meetings with investors and equity analysts and took part in 15 investor conferences. We organised our first capital markets day on 22 June 2007 at the Ballerup head office, an opportunity for Management to present the Group’s performance, opportunities, challenges and targets to 36 analysts and investors.
This was done by drawing an “I’m-reporting-my-bike-stolen -via-an-text-message” system. This puts the customer in focus from the very start of the development process.
Everyone is talking about the weather For years, the subject of “global warming” has caused a cold war between experts in the area, but there is an increasing consensus that climate change is a reality that we all have to deal with. TrygVesta is hard at work finding solutions to the new challenges that climate change involves.
The Supervisory Board approved an environmental and climate policy that came into force on 1 January 2008.
“the fire fund”. Some 300 years later, the same mindset formed the basis of TrygVesta’s Corporate Social Responsibility policy.
Income statement and Balance Sheet for TrygVesta Group 97 Statement of changes in equity 100 Cash flow statement - TrygVesta Group 102 1 Accounting policies 103 2 Earned premiums, net of reinsurance 113 3 Technical interest, net of reinsurance 113 4 Claims incurred, net of insurance 113 5 Insurance operating expenses, net of reinsurance 113 6 Technical result, net of reinsurance, by line of business 118 7 Interest and dividens, etc. 120 8 Market value adjustment 120 9 Reconciliation of tax expenses 120 10 Profit/loss on discontinued and divested business 121 11 Intangible assets 121 12 Operating equipment 122 13 Owner-occupied property 122 14 Investment property 123 15 Investments in associates 124 16 Financial investment assets 125 17 Reinsurer’s share 128 18 Current tax 128 19 Share capital 128 19 Capital adequacy, etc. 129 20 Subordinated loan capital 129 21 Provisions for claims 130 22 Pensions and similar obligations 133 23 Deferred tax 135 24 Other provisions 136 25 Debt to credit institutions 136 26 Other debt 136 27 Earnings per share 136 28 Contractual obligations, contingent liabilities and collateral 137 29 Related parties 138
Reinsurers’ share of provisions for unearned premiums 159 185 21 Reinsurers’ share of provisions for claims 1,428 1,376 17 Total reinsurers’ share of provisions for insurance contracts 1,587 1,561
Debt related to direct insurance 358 358 Debt related to reinsurance 253 214 25 Debt to credit institutions 599 665 Current tax liabilities 336 229
Cash generated from operations Premiums 16,800 15,935 Claims paid -11,376 -9,902 Ceded business -122 -153
Profit for the year ended 31 December - Danish FSA executive order 2,333 3,291
Shareholders’ equity at 31 December - IFRS 10,010 9,951 Deferred tax provisions for contingency funds 23 27 Change in deferred tax relating to contingency funds -2 -4
Other interpretations, including IFRIC 12 ’Service Concession Arrangements ’, IFRIC 13 ’Customer Loyalty Programmes’ and IFRIC 14 ’The limit on a Defined Benefit Asset’ are not expected to have any financial reporting impact.
Profit/loss on ceded business -578 -13 -591 -9 2 -7 -718 10 -708
Technical interest, net of reinsurance 583 -240 343 323 -153 170 335 -150 185
Insurance operating expenses Insurance operating expenses represent acquisition costs and administrative expenses less reinsurance commissions received. Expenses relating to acquiring and renewing the insurance portfolio are recognised at the time of writing the business. Administrative expenses are accrued to match the financial year.
On initial recognition of the share options, the number of options expected to vest is estimated. Subsequently, adjustment is made for changes in the estimated number of vested options to the effect that the total amount recognised is based on the actual number of vested options.
Employee shares When employees are given the opportunity to subscribe shares at a price below the market price, the discount is recognised as an expense in staff costs. The balancing item is recognised directly in equity. The discount is calculated at the grant date as the difference between fair value and the subscription price of the subscribed shares.
Profit/loss on ceded business 0 -7 0 -14 0 -113 0 -134 Technical interest, net of reinsurance 0 0 0 3 3 -5 3 -2 1) The line of business ‘Other insurance’ includes indirect insurance.
Other provisions primarily includes own insurance contracts 25 Debt to credit institutions Bank loans 597 596 Bank overdrafts 2 69
Remuneration for Supervisory Board and Group Executive Management appears in th note 12 ‘Related parties’.
Revaluations and impairment writedowns at net asset value Balance 1 January 3,656 1,938 Revaluations during the year 2,407 3,282 Dividend paid -2,318 -1,564