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 Q4 and full year results earlier this morning and I have here with me Johan Brammer, our Group CEO, Allan Theisen, our Group CFO and Michele Shersten, our Group CTO, to present the figures. I would just like to remind all participants that in the Q&A, it would be one question at a time to allow everybody to ask questions. And with these words, over to you, Johan.

Thanks a lot. And I will go directly to the financial highlights on slide three. Trygve is today reporting an insurance revenue growth of 3.6% in the last quarter of the year and just above 4% for the full year. The growth both in Q4 and for the full year has been primarily driven by price increases in the private and commercial segments in order to fight off the inflationary pressures. Importantly, the growth of the group has been achieved in a period where our corporate segment has been reduced as a result of our very deliberate strategy of running a smaller and more controllable corporate book closer to home where we are more familiar with the risks we underwrite. The insurance service result landed at 1.708 billion for the last quarter of the year, bringing us to a total of 7.324 billion for the full year. Please note that when normalizing for better than normal large and weather experience, the number for the full year is just above 7.2 billion, completely in line with what was disclosed very clearly at the CMD in December last year. The ISI in Q4 has been primarily driven by a positive top-line development, an improved underlying performance, and lower than normal last claims. Again, this was partly offset by a generally lower level of interest rates, impacting the discounting of our claims reserves, and a lower runoff result. We are very pleased to end the reporting of the RSA Scandinavia synergies at 930 million for the full year of 2024 against our initial target of 900 million. I guess it has been visible for some quarters that we were ahead of the plan, so this is unlikely to be a major surprise. It is important to remember also that the overall level of synergies would have been higher with a more favorable currency development for the SEC and the NOC. The overall combined ratio for Q4 2024 was very similar to Q4 last year, with the group underlying claims ratio improving by 20 basis points and the private underlying deteriorating at a similar level in line with Q3, but less than previous quarters in 2024. Motor remains an area of focus as we continue to see slightly higher frequencies and a slightly higher average cost of claims. We'll get back to that. My main comment on the investment result relates to the fact that we've been de-risking the free portfolio and sold more than 7 billion of risky assets in October, swapping these with highly rated and liquid covered in government bonds. As a result, we do expect a lower but more stable investment result going forward. We'll come back to a couple of the technicalities dragging down the investment result in this particular quarter later on today. Finally, we reported a Q4 pre-tax result just above 1 billion, a quarterly operating EPS of 1.54 and a roof of just below 22 in Q4 and 34 for the full year. The roof would have been around 32% for the full year, excluding the 2 billion buyback that followed the asset de-risking. We're paying a quarterly dividend per share of 1.95 in line with previous quarters in 2024. And I'd like to remind you that we launched a buyback of 2 billion on December 4th, of which we have currently bought back around 546 million as per January 17th. With that, we turn to the next slide on customer highlights. We are showing on this slide the overall level of customer satisfaction. And as you may remember, we did have a target of 88, but we are closing the year and the strategy period at a customer satisfaction on 87. This shortfall to the 88 target is obviously disappointing, but in a period of very high inflationary pressures, we've had to raise prices accordingly, which has impacted the overall customer satisfaction. And we do indeed take some pride in having increased the customer satisfaction from 84 to 87 during the last strategy period. In fact, we have achieved the highest score ever in Trygg. During the period, we've seen a higher customer satisfaction, in particular within claims handling, thanks to more automation and faster processing times. This has actually been enabled by the implementation of a new claim system in Norway and Denmark, and as a consequence, we are now also migrating Claim Sweden into the same system to achieve similar benefits. We've set a new target for customer satisfaction of 83 when we go into 2027, And please note that the reporting in the last strategy period did not include Sweden, where the customer satisfaction level is somewhat lower and hence the baseline for 2024 incorporating Sweden would have been 81. In the next slide, as usual, we show the insurance service result by the different business segments. It's important to remember that the headline ISR is as always impacted by a number of different factors, such as large and weather claims, run-offs and the level of interest rates. As for the private segment on top, we report an increase of the ISR of more than 10%, held by lower weather claims and a higher run-off result. As for the commercial segment, we are reporting a low ISR driven by higher large claims and a lower runoff result. And finally, as for the corporate segment, we are showing an unchanged ISR with a lower level of large claims offset by a lower level of runoff result. It's important to remember that the corporate segment has around 20% lower premiums in the quarter or approximately 180 million. Also, please note that the corporate segment reported a combined ratio of 83.8 for the full year. With that, I turn to slide six, where we also show the ISR by geography. And in this quarter, Denmark and Norway are reporting higher earnings than last year, while Sweden is slightly lower due to lower runoffs and a higher large claims. In general, we'd like to stress that although Norway is improving, Norway is still not where we want it to be. And we'll deep dive on this topic when we discuss the price increases later on in this presentation. When you look at the financial bridge for the group in Q4 on the top of the right-hand side of this slide, I would point to the following key positives. Growth in the business, improved underlying performance and lower large and weather claims taken together. These positives have been partly offset, only partly offset by a lower level of interest rates and a lower runoff result. When we look at the financial bridge for the full year on the bottom of the right hand side, I'd like to repeat as mentioned already at the CMD that while we are ending the year close to the middle of our ISR target range of 7.2 to 7.6 billion, adjusting for the better than normal lights and weather claims experience, we're actually closer to the 7.2 billion, once again showing that it has been a complicated period for our business with the sudden return of very high levels of inflation. Turning to slide seven, we are for the last time updating this slide with a full RSA Scandinavia synergies. We're ending the integration with 930 million of synergies, slightly above the initial target of 900 million. And in this regard, it's important to remember that during this period, currency movements did indeed develop unfavorable. We show in this slide also that we are disciplined and committed to deliver on our promises when we do M&A. Both in the case of Elka and most recently RSA Scandinavia, we delivered synergies slightly above the initial ambitious targets communicated to the market. Moving into the new strategy period, we will now achieve a second wave of synergies from the RSA Scandinavia acquisition by leveraging scale across a number of areas ranging from systems and infrastructure, technical as well as customer and commercial excellence. Moving on to the next slide, I'll briefly comment on the fact that we have indeed achieved all financial targets for 2024. We stand therefore on very solid grounds ready to move into the 2027 strategy period where we aim to lift the ISR by 1 billion as communicated at our CMD in December. We've also met our strategic targets leaving aside the customer satisfaction shortfall that I discussed previously. With that, we turn to the next section on insurance revenue and portfolio and move to slide 10. Here we show a revenue growth in local currencies of 3.6%, while the equivalent number for the full year ends at 4.1%. The growth during this period has come primarily from the private and commercial segment, while the corporate business has been reduced due to our strategy of rebalancing the corporate segment, including strategic exits of non-Scandinavian property and US liabilities. The growth during the quarter in the full year in private and commercial has been clearly driven by price increases needed to offset inflationary pressures and improve profitability, especially in Norway. We remain very focused on protecting margins and improving the parts of our business which are still not where we want them to be. And please note that due to the internal reorganization that we announced more than a year ago, we've merged the segments commercial and corporate. This means that for reporting purposes from Q1 2025 and onwards, we will only show two segments, namely private and commercial, whereas the corporate segments no longer will exist as a separate business unit. We will, however, still make sure to publish selected financial highlights related to the corporate business, which, by the way, is expected to report a modest growth for the full year of 2025, most likely more in the second half than the first half. With that, I turn to slide 11 on rate increases. In this slide, we're showing you the rate increases in our main private segment split between motor and property in the different countries. As mentioned for several quarters already, we see a need for improved profitability in our Norwegian private lines business and therefore it should not come as a surprise that rate increases are the highest in property and motor regarding Norway and this will continue to be the case going into 2025. Mikael will come back to that. It is our impression that all listed players are very focused on improving profitability in Norway and this is very supportive. Additionally, we have noticed recently strong financial targets from one of the large not listed players, which is also supportive. On the next slide, we are showing the customer retention levels, which remain broadly stable after a period with high inflationary pressures matched by similar price increases. It is important to be aware that in Norway we lost a selected partner agreement that weighs modestly on the overall retention rate. And I guess in general, despite the loss of selected customers across the different lines of business, it is our very clear impression that customers do continue to value their insurance protection, especially in a more volatile macro economic environment as we're experiencing today. And with that, I hand it over to you, Mikko, to go through the claims development.

Thanks Johan and we now move to slide 14. We are reporting a group underlying claims ratio improvement of 20 basis points for the quarter and 30 basis points for the full year driven primarily by profitability initiatives in the commercial and corporate segments. The private segment is still reporting a 20 basis points deterioration in the underlying claims ratio driven by the motor segment. We remind everyone that 10 basis points for the quarter is equivalent to approximately 9 million Danish kronor. Although this is a relatively small amount, we are somewhat disappointed that we haven't seen more improvement in private lines underlying driven by Norway. As Johan mentioned, we continue to drive rates in Norway and going into 2025 rate increases for the Norwegian personal lines motor as well as house and content books are in the high teens. We have been mentioning at the capital markets day and we reiterate today that we for the group expect a broadly stable to slightly improving underlying performance going forward towards 2027. And by that, I move to slide 15. In this slide, as usual, we show the different levels of large and weather claims, as well as interest rates and the runoff result. Large claims experience was more favorable than normal in Q4, while weather claims were slightly worse. As an example, snow arrived early in Denmark in November, storm Jacob hit Norway in the first part of Q4, while at the end of December, bad weather hit Denmark. In general, Q4 and Q1 always see a higher amount of weather-related car accidents and higher amount of pipe burns just due to general winter conditions. And hence, we seasonally expect more weather claims in these quarters versus the average. Large and weather elements are tightly connected to our reinsurance. From a more forward-looking perspective, we are happy to conclude that we have renewed our reinsurance program virtually on an as-is basis, both in terms of coverage and premiums. This is better than what we had planned for and from a coverage perspective the only notable change is that we for our property per risk program have a more clean deductible of 200 million Danish kronor whereas we before bought some coverage to decrease the deductible from a second large claimant onwards. Interest rates fell in the quarter and we now have a discount rate of 2.1%. This has an impact, all else being equal, on our reported claims ratio as lower discounting of claims reserves implies higher claims in the P&L. Finally, the runoff result was 2.4%, close to recent quarters. We have been guiding already for a runoff result around 2% in the new strategy period. And by that, I hand it over to you, Gian. Thanks, Miche.