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Tryg A/S – Q1 report 2021

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Tryg A/S
·4-min read
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Tryg’s Supervisory Board has today approved the interim report for Q1 2021.

Premium growth of 6.2% (8.9% in Q1 2020), a technical result of DKK 751m (DKK 672m) positively impacted by good development in the core business, the delivery of Alka synergies partly offset by higher weather claims compared to the prior-year period. Investment income of DKK 343m primarily driven by good returns on equities, positive returns on free and match portfolios. Profit before tax of DKK 1,022m (DKK -372m). Quarterly dividend of DKK 700m or DKK 1.07 per share, demonstrating a strong dividend commitment even in a transformational year as 2021, which also supports TryghedsGruppen’s member bonus. Solvency ratio (adjusted for the rights issue) of 180.

Financial highlights Q1 2021

• Premium growth of 6.2% (8.9%) in local currencies
• Technical result of DKK 751m (DKK 672m)
• Combined ratio of 87.1 (88.0)
• Underlying claims ratio (Group) improved by 0.8
• Expense ratio of 14.1 (14.1)
• Investment return on free portfolio DKK 193m (DKK -713m)
• Total Investment return of DKK 343m (DKK -980m)
• Profit before tax of DKK m 1,022 (DKK -372m)
• Quarterly dividend of DKK 700m or DKK 1.07 per share
• Solvency ratio (adjusted for the equity raise) of 180

Customer highlights Q1 2021

• Introduction of new Customer satisfaction score of 84 (83 in Q1 2020)
• For the sixth year in a row, TryghedsGruppen decided to pay member bonus. For 2020, this amounts to 5% of premiums paid

RSA transaction highlights Q1 2021

• Rights issue of approximately DKK 37bn completed
• Tier 1 issue of SEK 1bn rated Baa3 by Moody’s
• Intact has obtained approval from the Danish Competition and Consumer Authority to acquire sole control of RSA's business outside Norway and Sweden, including the acquisition of sole control of RSA’s Danish business placed in Codan A/S. The Tryg Group will co-own RSA’s business in Denmark ("Codan Denmark") with the Intact Group on a 50/50 economic basis. Codan Denmark will remain completely separate and independent of Tryg
• Norwegian and Swedish competition authorities approvals received previously by Tryg
• Tryg, Intact, including certain subsidiaries thereof, as well as TryghedsGruppen smba have received clearances from the Danish Financial Supervisory Authority for the acquisition of a qualifying holding in Codan A/S, Codan Forsikring A/S and Forsikringsselskabet Privatsikring A/S.

Statement by Group CEO Morten Hübbe:

The COVID-19 outbreak continues to impact Tryg’s financial results. The overall pre-tax result was DKK 1,022m (DKK -372m). The main difference compared to Q1 last year is primarily due to the difference in the investment result of more than DKK 1bn but also significantly more travel claims in Q1 2020 when different countries around the world introduced their first lockdowns.

We are pleased to see the positive development for our core business characterised by very high customer satisfaction and a continued attractive growth of 6.2 percent for the group, which all business units contribute to. We see an increased interest amongst customers for buying personal insurance, where insecurity is higher. We particularly experienced solid growth with health-related products and pet insurances. The sale of our health products has grown by 75 percent in the last three years. Cat insurance, part of our broad offering in the pet insurance space, has grown by almost 50 percent in the first quarter of 2021.

The RSA acquisition is progressing as expected. The end of March marked the completion of a successful equity raise through means of a rights issue, where we sold approximately 353 million new shares to raise the necessary capital of DKK 37bn for the acquisition of RSA’s Nordic assets. The rights issue will go down in history as Denmark’s largest equity capital raise ever – as well as one of the largest European equity capital market transactions in the recent ten years.

At the same time, we and Intact are pleased that we now have the approvals in Denmark, Norway and Sweden by all the competition authorities. Now we await the remaining approvals from a line of financial supervisory authorities before the RSA acquisition can compete. This is still expected to happen in Q2.

Conference call

Tryg hosts a conference call today at 10:00 CET. CEO Morten Hübbe, CFO Barbara Plucnar Jensen and CCO Johan Kirstein Brammer 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 07
UK participants: +44 333 300 9261
US participants: +1 833 5268 382

All Q1 material can be downloaded on investor shortly after the time of release.