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Tryg A/S – Interim report Q2 and H1 2021

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Tryg's Supervisory Board has today approved the interim report for Q2 and H1 2021.

Premium growth of 4.7% in Q2, primarily driven by positive developments in the Private and Commercial segments. Technical result of DKK 1,144m (DKK 1,063m), supported by the continued positive developments in the core business and delivery of the Alka synergies. The underlying claims ratio improved by 0.8% for the Group, while it was flat for the Private segment, both figures exclude the impact of COVID-19.

Tryg's stand-alone investment result for Q2 was DKK 253m (DKK 541m), driven primarily by positive financial markets providing support to especially Tryg’s equity, property and credit portfolios.

As disclosed on 5 July, Tryg has increased its stand-alone technical result guidance from DKK 3.3-3.7bn to 3.5-3.8bn following a positive H1 financial performance.


RSA transaction impacting the result for the current quarter significantly

Tryg’s key focus remains on its stand-alone financial performance but the current quarter includes items related to the RSA Scandinavia acquisition which are noteworthy. Tables summarising the main components of Tryg’s Q2 P&L, including the RSA acquisition currency hedge and RSA contribution, is shown below.

Tryg stand-alone financial result (1)

DKKm

Q2 2021

H1 2021

Technical result

1,144

1,895

Investment result (excluding currency hedge and RSA contribution)

253

440

Pre-tax (excluding currency hedge and RSA contribution)

1,284

2,150


RSA related currency hedge and one month RSA contribution1 (2)

DKKm

Q2 2021

H1 2021

RSA Currency hedge (non-tax deductible)

-1,191

-1,035

RSA contribution for June (net profit after tax)

181

181


Tryg as reported (1 + 2)

DKKm

Q2 2021

H1 2021

Technical result

1,144

1,895

Investment result

-757

-414

Pre-tax

274

1,296

The investment result as reported for Q2, including the RSA related currency hedge and the relevant RSA contribution for June, was DKK -757m (DKK 541m).

Profit before tax of DKK 274m (DKK 1,539m). Solvency ratio was 175, taking into consideration the Q2 result, a dividend per share of DKK 1.07 (DKK 700m) and the higher capital requirement following the inclusion of Codan Norway, Trygg-Hansa and 50% of Codan Denmark.

Financial highlights Q2 2021
• Premium growth of 4.7% (7.0% in Q2 2020) in local currencies
• Technical result of DKK 1,144m (DKK 1,063m), impacted by positive developments of the core business and Alka synergies
• Combined ratio of 81.0 (80.9)
• Underlying claims ratio (Group and Private) improved by 0.8 and 0.0 percentage points, with the Group being helped by profitability initiatives in the Commercial and Corporate segment
• Large claims at 1.7% (1.3%) and weather claims at 0.9% (0.9%)
• Expense ratio of 14.1 (14.3)
• Return on Free investment portfolio DKK 312m (DKK 519m)
• Total investment return of DKK -757m (DKK 541m)
• Profit before tax of DKK 274m (DKK 1,539m)
• Dividend per share of DKK 1.07 and a solvency ratio of 175

Financial highlights H1 2021
• Premium growth of 5.5% (7.9% in H1 2020) in local currencies
• Technical result of DKK 1,895m (DKK 1,735m) impacted by positive developments of the core business and Alka synergies
• Combined ratio of 84.0 (84.4)
• Large claims at 1.9% (1.8%) and weather claims at 1.6% (1.4%)
• Expense ratio of 14.1 (14.2)
• Return on free investment portfolio of DKK 505m (DKK -194m)
• Total Investment return DKK -414m (DKK -439m)
• Profit before tax of DKK 1,296m (DKK 1,167m)
• Dividend per share of DKK 2.14 (DKK 1.07 paid in April and DKK 1.07 to be paid on 14 July)

Customer highlights Q2 2021
• Customer satisfaction score of 84 (83 in Q2 2020)
• For the sixth year in a row, TryghedsGruppen decided to pay a member bonus. For 2020, this amounts to 5% of premiums paid


Statement by Group CEO Morten Hübbe:

Tryg reported a solid Q2 premium growth of 7.1% for the Group and 8.6% for the Private segment, both excluding bonus and premiums rebates (4.7% for the Group and 5.0% for Private including bonus and premium rebates), and a technical result of DKK 1,144m, which was positively impacted by solid development in Tryg's core business and the continuous delivery of the Alka synergies. Group underlying claims ratio improved by 0.8 percentage points, helped primarily by profitability initiatives in the Commercial and Corporate segments.

On 1 June, the acquisition of RSA's Scandinavia assets was completed. The acquisition will go down in Tryg history and fulfil a long time wish to strengthen Tryg's position in Sweden and Norway. We firmly believe that Trygg-Hansa in Sweden and Codan in Norway will be a unique fit for Tryg.

On 11 June, Tryg announced the sale of Codan Denmark to Alm. Brand after a very efficient process. The agreed cash purchase price is approximately DKK 12.6bn, and Tryg will receive 50% of the sale proceeds. Closing is expected to take place in Q1 2022 following regulatory approvals and the de-merger of Codan Forsikring A/S. After closing, Tryg intends to carry out a share buyback programme of approximately DKK 5bn.

2021 is shaping up as a very eventful year, enhancing the foundation for Tryg to become the largest Scandinavian non-life insurance company.

Conference call

Tryg hosts a conference call today at 10:00 CET. CEO Morten Hübbe and CFO Barbara Plucnar Jensen will present the results in brief followed by Q&As.

The conference call will be held in English. An on-demand version will be available shortly after the conference call has ended.

Conference call details:
Danish participants: +45 78 15 01 09
UK participants: +44 (0) 333 300 9267
US participants: +1 646 722 4902

All Q2 and H1 material can be downloaded on https://tryg.com/en/downloads-2021 shortly after the time of release.

Contact information:

Gianandrea Roberti, Investor Relations Officer +45 20 18 82 67, gianandrea.roberti@tryg.dk

Peter Brondt, Investor Relations Manager +45 22 75 89 04, peter.brondt@tryg.dk

Tanja Frederiksen, Head of Communications +45 51 95 77 78, tanja.frederiksen@tryg.dk

Visit tryg.com and follow us on twitter.com/TrygIR



1 To be equity accounted for under “income from associates” in the investment income until demerger


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