Tryg A/S Ord New

Good morning, everybody. My name is Gian Andrea Roberti. I'm Head of Investor Relations at TREC. We published our Q1 results earlier this morning, and I have here with me Johan Brammer, Group CEO, Alan Tyson, Group CFO, Michael Karsten, Group CTO, to present the figures. Before that, I just would like to remind everybody to ask one question at a time to allow the highest number of questions from participants. With these words, over to you, Johan.

Thanks a lot, Andrea. And I will go straight to slide three with the financial highlights. Trygg is today reporting a solid insurance service result of 1.275 billion in Q1, despite a harsh Scandinavian winter and adverse last claims experience weighing negatively on the result. the sum of weather and large claims was more than 180 million higher than a normalized Q1. And as for comparison, the sum of weather and large claims was very favorable in Q1 last year, being more than 200 million below a normalized level for the first quarter of the year. Insurance revenues grew 4.8% in Q1, with the entire growth coming from the private and commercial segment and driven fully by price increases to continue to offset the inflationary pressures. The corporate segment saw a drop in topline driven by an intense focus on profitability. Trygg is reporting a combined ratio of 86.6, with the group underlying claims ratio improving by 50 bps, while the private underlying claims ratio deteriorates by 50 bps, primarily driven by increased motor frequencies. It is evident that profitability improvements in commercial and corporate have been noteworthy considering the private developments. The investment result was 117 million, driven primarily by good equities performance and narrowing covered bond spreads in the quarter. Asset mix has remained virtually unchanged for the quarter. We report a return on owned funds, the so-called roof, of 21% in the most seasonally challenging quarter, and I'm very pleased that Troik pays a Q1 dividend per share of 1.95, which is an increase of more than 5% compared to last year. The solvency ratio was 191 at the end of the quarter, supportive of future capital returns. Turning to the next page on customer highlights, we continue to have a strong focus on customer satisfaction, as we do see a clear link to retention and thereby our distribution cost and overall profitability. In Q1 2024, we reported a customer satisfaction score of 85 against 86 in the same quarter last year. Price adjustments and a more challenging claims mix with many water damages to assess have dragged down the customer satisfaction slightly. This is not exactly unexpected as firstly price adjustments for natural reasons have some impact and secondly also because claims related to water and buildings have a much more complicated claims process which inevitably has a negative impact on the customer satisfaction for the group. We continue to be very focused on customer satisfaction and I'm confident it will improve going forward. Turning to the next slide on the insurance service result, we unfold the performance for each of our three segments. In the private segment, we report an insurance service result almost 100 million lower than last year due to a higher level of weather claims in combination with an increase in motor claims frequency, which was also observed in the quarter. In the commercial segment, performance for Q1 was flat against last year with a higher level of large and weather claims virtually offset by higher runoffs. An underlying improvement was clearly visible and driven by price adjustments. Finally, in the corporate segment, we report an insurance service result almost 100 million lower than last year, driven by a higher level of last claims. An underlying improvement was clearly visible and driven by both pricing and rebalancing of the portfolios. Turning to the next slide, we have split the insurance service result by geography. From this chart it is very evident that the headline figures show a very strong result in Sweden, a fairly weak result in Norway, with Denmark being somewhere in the middle. Run-over results, especially on a qualitative basis, can complicate the headline reading slightly, and in general I would like to flag that the Norwegian results, while unsatisfactory, are not very far from an average Q1 looking at the last six to seven years. Additionally, we would flag that our Swedish book is somewhat different from most of our peers, with the PEA segment clearly not sensitive to weather events. Taking a step back, I started this presentation highlighting the very different large and weather claims experience in Q1 2024 versus Q1 last year. If you take a look at the chart in the upper right corner, it is shown how we report an ISR which is approximately 200 million lower than reported same quarter last year, But if we exclude all large and weather claims for both quarters, our Q1 this year would have been some 200 million higher than Q1 last year. That gives me comfort. The ISR walk shows the different building blocks as usual, and for Q1 2024, the main moving parts are the higher large and weather claims experience, partly offset by a higher runoff result. It should also be noted that currency impact in this quarter was not material compared to same quarter last year. Turning to the next slide, we illustrate the progress on the RSA synergies as we always do and in general most of the initiatives are not new but still producing ongoing synergies and hence I'll only comment on a few of the more relevant ones. Procurement in this quarter contributes with 16 million and is primarily driven by our stronger consolidated purchasing power which allows us to get improved rates and conditions. We also saw benefits from repairing wooden floors instead of changing these entirely, which both creates savings and supports our focus on ESG as a group. Claims synergies were 12 million and were primarily driven by optimization for fraud and recourse in Norway. And commercial synergies were 10 million and was driven by the cross-selling of niche products in both private and commercial. In private, we saw strong traction for pet and boat insurance. And additionally, it's worth mentioning our large scale and full Scandinavian presence gave us the benefit of being able to win three new car partnerships. And with that, I turn to the next section on insurance revenue and portfolio, and I go to slide nine. Troik is reporting a premiums growth of 4.8% in Q1, which is clearly driven by the private and commercial segments, while the corporate segment is reporting a declining revenue due to profitability actions and rebalancing of the portfolios. The growth in private and commercial is clearly driven by price increases to continue to offset the general inflationary pressures and some increasing claims frequencies in motor. We'll get back to that topic quite soon. The corporate segment is reporting a noticeable revenue decline driven by profitability measures and the rebalancing initiative to achieve a smaller, more local and more controllable book of business. Longer term, of course, we prefer to see a more balanced growth, but currently we remain very firm to fight off inflationary pressures and we are satisfied and content with our measures to protect margins. Turning to the next slide, we are today showing a new slide with an updated view on price developments compared to what we have traditionally used in these calls. In the past, we have shown average prices based on earned premiums. This method has an inbuilt blind spot for potential mix changes as, for instance, the move from fuel to electrical cars was not captured. We are therefore today showing the portfolio rate increases for the quarter and we repeat that we are pricing according to inflation for both property and motor across all countries. In Norway, we are actually pricing slightly higher than inflation as we are not satisfied with the performance of our Norwegian private business. On the next slide on customer retention, we are pleased to continue to report broadly stable customer retention levels, even in a period with elevated price increases following the stubbornly high inflation levels. The sub-segments in which we do notice a slight drop in retention remain the customers with short tender in the private segments, which typically display the lowest profitability levels. In general, looking at longer time series, it's evident how our business continues to show a relatively low price sensitivity across different economic conditions. And with that, I turn it over to you, Mikael.

Thank you, Johan. And we now turn to slide 13. The group underlying claims ratio continued to improve by 50 basis points, also in Q1 2024. We continue to see significant improvements in the commercial and corporate segments following rate and other profitability actions, while personal lines experienced a 50 basis points deterioration. The private segment was affected by an adverse development primarily driven by increased motor frequencies across Scandinavia. The underlying claims ratio is expected to improve for the full year 2024 in line with previous communication. Over time, we expect the improvement composition to change and be more driven by personal lines. Turning to slide 14. In the Q4 reporting, we stated motor frequencies to be in the high end of our expectations, and as mentioned, we continue to see this development in Q1. In this slide, we try to give some more insight to the development we experience. Starting on the left-hand side, during Q1, motor frequencies increased by 4 to 10 percentage points, most notably in Denmark, compared to Q1 2023. And if we move to the right hand side, we decompose this frequency increase. Roughly half of the increase is attributable to extraordinary harsh winter weather during January and February. Approximately one third is driven by changes in risk mix. For instance, mixed changes over time from older cars to more modern vehicles. These are changes that we expect and that are part of our tariff pricing. Finally, the remaining 15% is driven by frequencies being at the higher end of our expectations. We are actively taking actions towards this development through pricing and deductibles mainly. As a result of the observed frequency increase in the second half of 2023 and now in the beginning of 2024, we are recalibrating our frequency expectations. Turning to slide 15. In this slide we show, as always, the volatile items of our income statement, large and weather claims, the runoff result and the discount rate levels. We mentioned previously in this presentation that large and weather claims were significantly above normal levels in Q1, weather claims some 58 million above normal and large claims 124 million above normal. Our normalized guidance on large and weather claims remain unchanged at 800 million, but we obviously continue to monitor and analyze the development closely. The runoff result in the quarter was 3.9%, virtually in the middle of our 3-5% guided range. The Q1 level was a bit higher than recent experience, also helped by a favorable Swedish development in this specific quarter. Finally, the discount rate at the end of the quarter was 2.7%, reflecting a generally lower level of interest rates. And with that, I hand over to you, Gian.