Tryg A/S Ord New

Good morning, everybody. My name is Gianandrea Roberti. I'm head of financial reporting at TREC. We published our Q1 figure earlier this morning, and I have here with me Johan Brammer, our Group CEO, Allan Theissen, our Group CFO, and Mikael Schersten, our Group CTO, to present the figures. I would like to remind all participants that when we open up for the Q&A, it will be one question at a time to allow everybody to ask questions. And with these words, over to you, Johan.

Thanks a lot, Gian, and good morning to everybody on the call from me as well. I'd like to start just by commenting on the revenue growth, which for Q1 is just shy of 4%. It ends up at 3.7%, primarily driven by price adjustments in the private segment in order to offset the continued inflationary pressures. The insurance service result for Q1 is 1.54 billion, which is substantially above last year's level. This is primarily driven by a mild winter resulting in lower claims costs. The combined ratio for the group is 84.2% with good performance in Denmark and Sweden and an improving trend in Norway. The group underlying claims ratio improved by 30 basis points while private improved by 10 basis points. The improvements are underpinned by our profitability initiatives across the board. The overall investment result was satisfactory at 320 million, especially in a fairly volatile period with often contradictory macroeconomic news flows. We're reporting a pre-tax result just below 1.5 billion, 1.491 million to be precise, a return on owned funds of 33.4%, and we pay a dividend per share of 2.05 DKK. The solvency ratio is 1.95 as per end of Q1. With that I move to page 5 on the customer satisfaction and customer satisfaction remains very important for TRYK and we are satisfied to achieve a Q1 level of 82 against an overall capital market day target of 83 in 2027. It is worthwhile to remind everybody that we have now fully included our Swedish business in the baseline of 81 for 2024. We see a strong link, as always, between customer satisfaction and customer retention. And this is coupled, of course, with our low distribution costs and level of profitability. And the main driver, the main driver of the improvement in Q1 is our Swedish business, where there's an intensified focus on customer satisfaction following the full integration of Trocansa. With that, I move to slide 6, and I guess the previous slide on customer satisfaction presents a fairly adequate bridge to a very recent event, namely the publication of a report on the Danish non-life insurance industry by the Danish consumer and competition authorities. I'd like to start out by saying, and this is important, that we do welcome a good public debate on our industry, recognizing the role and importance that it plays in the society. As it seems like the possible outcome of an eventual investigation has worried some of you on the call here, we deemed it important to remind you about some specific facts around this topic. So fact number one is that Private Denmark, the focus of this report, is an important part of our Danish business, but a smaller part of a much more diversified group following the acquisition of RSA Scandinavia. Fact number two is that we do run a very efficient business, characterized by a low expense ratio and lower distribution cost than in many other geographies in Europe, as we continuously work to automate our processes, streamline the business in general, as well as improve our digital setup. Fact number three is that Danish consumers understand that insurance is an important product, That is fairly well illustrated by the fact that families buy approximately four products per household. And at the same time, we at Troik have a high level of customer satisfaction compared to other markets. That being said, it is still apparent and clear that consumers remain sensitive to price increases, which is also noticed in the current figures following a prolonged period of inflationary pressure on claims costs. I'll get back to that later on. Fact number four is that in one of the key product categories in the industry, namely motor, we see relatively similar insurance prices in Scandinavia compared to other nations outside Scandinavia, despite of the fact that the price and value of cars in Denmark and Norway is highly elevated due to very high taxation levels on new cars. Fact number five, it appears from the report that indexation is one of the debated items subject to the possible market investigation. Allow me to stress that indexation is a general market practice through decades in Denmark, and should it be altered, it would be an industry move affecting all players. It is worthwhile to remember that indexation is not used in Norway and hardly used in Sweden, so we are at TRYK quite familiar with other models also. So overall, and to wrap up our position in this matter at the current stage, we do not believe this report or any possible future investigation will change our ability to run a healthy business with strong customer satisfaction in Denmark and to produce long-term attractive shareholder returns. With that, please turn to slide seven on the Group ISR. We're showing in this slide, as we always do, the split of the ISR into the two business segments, private and commercial. As a reminder, and as communicated together with the annual report last year, we run the business with only two divisions following the merger of the commercial and corporate segment. And our reporting will, of course, mirror this going forward. As for the ISI in the private segment, on the top of this slide, you can see how it was improved due to a lower amount of weather claims following a generally mild winter and also an improved underlying claims ratio. As for the ISI in the commercial segment on the bottom of the slide, you can see how it has improved thanks to a lower amount of weather and large claims, partly offset by a lower runoff result and also an improved underlying claims ratio going the other way. And with that, I turn to slide eight, where we show the insurance service results split by geography and I'd like to start on the right hand side as illustrated in the bridge there. You can see that the movement from Q1 2024 to Q1 2025 is largely explained by a mild winter, lower large claims and a slightly better underlying performance, although a lower runoff result is partly offsetting this. On the geographical splits on the left-hand side, you can see that Denmark is reporting a higher ISR driven by lower weather and large claims, as well as a higher runoff result. Norway is showing an improved performance, also helped by a mild winter. And in general, we notice progress in our Norwegian business, and we firmly believe that the profitability initiatives are bearing fruits in line with our expectations. We'll get back to that particular topic later on. And as for Sweden, we are reporting a lower ISR compared to last year, primarily driven by an abnormally high runoff in Q1 last year. And with that, we turn to the next section on the insurance revenue development and slide 10 of the presentation. Our top line grew 3.7% in Q1, primarily driven by price adjustments in the private segment to offset inflationary pressures. This is particularly true in Norway, and we'll come back to this as I mentioned earlier. The growth in the private segment was 5.1%, primarily driven by price adjustments, with the growth in Denmark and Sweden almost on par with the total private growth, whereas in Norway it was somewhat above. The growth in the commercial segment was just under 1%, with the loss of a couple of Norwegian corporate customers weighing negatively until mid this year. But also in general, a lower commercial growth as some customers are reacting to price increases, particularly in the Danish part of the business. And with that, let's move to slide 11 on the Norwegian profitability. The combined ratio in Norway was 95.3 in Q1, a much improved level from last year, also helped by a more benign winter. It is important to remember that the earnings path in Norway is even more skewed towards Q2 and Q3 than the earnings path of the group. This is obviously driven by the fact that in some years the winter weather may result in significantly higher claims costs in our Norwegian business compared to the spring and summer period. Our profitability actions for the private segment in Norway remain unchanged, including high levels of price increases for in particular motor and home insurance. We can see that the effect of that is coming through and that the impact will gradually earn through the P&L. With that, let's turn to slide 12 on customer retention. And customer retention, an important topic, remains broadly stable, especially when looking at this in longer term development series. That being said, though, it is of course evident that the different profitability initiatives needed to offset the flexionary pressures are impacting the overall retention levels more recently, especially in Denmark. This is further testament to the fact that we work within well-functioning markets, and as experienced in the past at times of significant profitability measures, we do see some customers leaving us. We believe long-term that we'll remain highly competitive and attractive for customers due to our overall low expense level and high efficiency. And with that, I guess I'll turn it over to you, Mikke.

Thanks, Johan. And we now turn to slide 14. In this slide, we show the development of the underlying claims ratio, where we clean the reported claims ratio from large and weather claims, runoff, as well as interest impacts. The group underlying claims ratio improved by 30 basis points, and the improvement was also supported by an improvement of 10 basis points in private, our largest business unit. Profitability initiatives within in particular motor and the Norwegian private segment contributed to the development. We continue to see that ongoing profitability actions are earning through and continue to expect a broadly stable to slightly improving claims ratio going forward as stated at the capital markets day in December. and I now turn to slide 15, where we deep dive into motor. The development for motor has been an important focus area for Trygg in the last 18 months. And we now see that all the profitability initiatives we have pushed through are positively impacting the financial performance. We are in good control over the claims frequency development and notice a stabilizing development over the past quarters in line with our expectations. Q1 2024 had an abnormal high claims frequency due to the harsh weather conditions. When normalizing for this, we estimate the underlying claims frequency to have increased by a modest 1% from Q1 2024 to Q1 2025. At the same time, we see high average claims development driven by newer cars with added technologies which are more complex to repair. It's important to note that the development of claims severity is a combination of older cars having lower than average claims inflation and new cars pushing the average significantly up. We estimate the average claims development to be an increase of 6% in Q1 2025 versus Q1 2024. In this number, we have normalized for the high number of weather-related low-cost claims that happened in Q1 2024. If we had included these, the increase would have been an increase of 9%, but we would then also have seen a clearly falling claims frequency. This development in motor claims frequency and severity is in line with our expectations and we are pricing accordingly. In particular pricing of new cars is an important focus area as it needs to reflect this development and also the fact that claims history can be reduced for new car brands and models. And we now turn to slide 16. In this slide, as usual, we show the overall level of large and weather claims, the runoff result and our overall discount rates. Large claims were slightly below normal in Q1, while weather claims were much below normal, reflecting a milder than normal winter and a much milder winter than in 2024. Interest rates in general have been rising in Q1 on the back of a muted macroeconomic environment, and the discount rate was 2.3% in Q1. Finally, the runoff result was 2.0% in the quarter, in line with our Capital Markets Day guidance, where we stated a runoff result of around 2% going forward towards 2027. And with that, I hand it over to you, Gian.