Tryg A/S Ord New

Good morning, everybody. My name is Gian Andrea Roberti. I'm head of financial reporting at TREC. We published our Q2 figures earlier this morning, and I have here with me Johan Brammer, our Group CEO, Allan Theissen, our Group CFO, and Mikael Carsten, our Group CTO, to present the figures. And with these words, over to you, Johan.

Thanks a lot, Gian Andrea, and good morning from me as well. And I will move straight to slide four in the deck and the financial highlights. And I'll start by commenting on our insurance service result that exceeded 2.3 billion in the second quarter, driven by a strong combined ratio of 77.2. I'll repeat that, a strong combined ratio of 77.2. And in that context, it is probably important to remind you all that we restated our quarterly figures for 2024 due to an accounting change for our inflation hedge, and that you can find all restated figures for 2024 published in the newsletter we sent out in March. The restatement impacts primarily the runoff result in a negative manner, and therefore the ISR, and the investment result in a positive manner. Moving on from that, our insurance revenue grew 4%, primarily driven by good growth in the private segment, which grew 4.4%. And as for our ISR in the quarter, it increased by 4.3% compared to the reported figures, which is roughly in line with the top-line development. It increased more against the restated figures, but this is, as mentioned, driven by a lower runoff in 2024 as per the accounting change and hence less relevant. Our underlying claims ratio improved by 30 bps, while the private segment improved by 20 bps, off from the 10 basis points in the previous quarter. From a geographical perspective, the quarter was strong across the board and we see improvements in line with our expectations in the Norwegian business. Motor claims costs have been a headache for a while, but we are pleased to see these stabilizing while at the same time we also notice a generally positive trend in our Norwegian business. Nevertheless, I can assure you that we remain alert and price accordingly. The overall investment result was 110 million with a good performance from our conservative covered bond portfolio. Please note that the result last year still included 7 billion of risky assets that had a good return in 2024, But as you know, the asset mix was changed during Q4 as disclosed at our CMD in December. So to sum it up, we are reporting a pre-tax result above 2 billion. We are reporting an operating EPS, which is our favorite earnings metric of 2.80 and a return on owned funds of 44.7%. And I'm also therefore pleased to announce that Troik pays a Q2 dividend per share of 2.05 in line with Q1 and a healthy solvency ratio of 199%. And with that, I move to page five on the customer satisfaction. Customer satisfaction remains very important for us at Tryggen. We are satisfied to achieve a Q2 level of 82 against an overall CMD target of 83 in 2027. And in that context, I'd like to remind everybody that we now have fully included our Swedish business in the baseline of 81 for 2024. And in fact, The main driver of the improvement is indeed our Swedish business, where there is an intensified focus on customer satisfaction following the full integration of Trocanza. In general, we see a strong link between customer satisfaction and customer retention, which remains supportive of our low distribution cost and our level of profitability. With that, let's move to slide 6, where we comment on the recent developments following the publication on April 1st from the Danish Consumer Council of a report on the Danish private insurance market. The DCCA has at the end of June announced that it is starting an investigation into the Danish private market with a particular focus on the indexation practice, exactly as expected. Price indexation is a general market practice in Denmark and it has been so for many decades. Any proposed changes to this, should that happen, will be an industry move affecting all players. And please note, and this is important, that we have experience navigating in markets without price indexation, as it is not used in Norway and only partially in Sweden. I would also like to remind you in this context that private Denmark is an important part of our Danish business, but it is in fact a smaller part of our diversified group following the acquisition of RSA Scandinavia. I also think it's important to remember that we run an efficient business characterized by a low expense ratio and a highly efficient setup. We focus a lot on procurement to keep the cost of claims under control and we have a high customer satisfaction, which is a significant differentiating factor compared to quite a lot of other geographies. Finally, just to sum it up, we are confident that our ability to continue to run a healthy business with a strong customer satisfaction and attractive shareholders return will not change. And with that, I'll move on to slide seven, where we show the developments for the insurance service result for the private and commercial segments. As mentioned at the beginning of this call, the restated figures include the accounting change related to the new inflation hedge methodology. This impacts the runoff result and therefore the overall ASR level. We're therefore showing you in this chart both the reported and the restated figures for the comparison quarter last year. Zooming in, the private segment benefited from good growth, a higher runoff result and a generally improved underlying performance, especially in our Norwegian business. We'll get back to that. And the commercial segment reported very strong figures with a headwind from almost 100 million additional large claims compared to Q2 2024, while the underlying performance actually improved. In general, we are pleased to see that the private segment is contributing more to the overall group underlying performance improvement and we expect this to remain the case also going forward. On slide 8, the next slide, we show as usual the development in our results by geography and the overall ISR bridge to the right-hand side in this chart. The figures by geographies are strong across the board, but I'd like to comment specifically on Norway, as we are reporting a Q2 combined ratio of 82.1, while the first half performance sees a combined ratio below 89.0. We need to continue our ongoing actions and we already see clear evidence that price increases and additional profitability actions are improving their financial performance. As for Sweden, we are reporting an excellent combined ratio of 69, while Denmark is reporting a healthy 80.5%. When we look at the bridge for the Group ISR, leaving aside the mentioned restatement as displayed in the chart, we would like to highlight a good growth, high alerts and weather claims taken together and a generally improved underlying performance. And with that, I will move into the next section on the insurance revenue development and go to slide 10. And in this slide, we are showing the group growth of 4% split between private and commercial. As you can see, we continue to report a growth primarily driven by price increases to offset inflationary pressures and improve the underlying performance. And the price adjustments continue to be higher in Norway, where we have more need of improving the profitability. The growth of the commercial segment is still impacted by the rebalancing exercise conducted in what was previously called the corporate segment, although the impact of this is smaller than previously and gradually tapering off. Long term, we expect a more balanced growth profile, but we have deliberately remained very disciplined in the last few years, following the sudden return and stubbornness, I might add, of high inflationary levels. With that, let's move to the next slide on the combined ratio performance with a focus only on Norway. We are pleased to report a Q2 combined ratio of 82.1, a significant improvement compared to last year. It is important to remember when looking at past performance in this chart that figures for Q2 in 2021 and 2022 were indeed impacted by the COVID outbreak, so it is quite a complicated comparison. In first half this year, the combined ratio is below 89. It is more specifically at 88.5, so it is trending clearly in the right direction. We continue to focus on improving our financial performance in Norway and expect this to further improve in 2026. It's also important to remember that especially in Norway, the performance of the quarters in the middle of the year, be it Q2 and Q3, tend to be significantly stronger than Q1 and Q4, as weather patterns, especially in Norway, can create quite a lot of noise in the figures. With that, let's turn to the next slide on the customer retention. And on page 12 here, we are showing you an updated picture of the customer retention for the two main segments. And as mentioned in many calls before, we continue to see small drops which are in line with our expectations and driven by our profitability initiatives. However, please note that in Sweden we do actually see slight improvements across both segments. It's not unusual to see customers reacting to price adjustments. This is just a proof point of the fact that we work in very well-functioning markets where there's a healthy competition between the providers in the market. We'll continue to increase our efforts and expect the situation to stabilize as we move into 2026. In this context, it's important to remember that history sometimes has a tendency to repeat itself. When we go back in time, retention rates in private Denmark actually dropped somewhat post-2029 to 2020-10, on the back of significant price increases to restore profitability. And in fact, after a couple of years, these were back at similar levels again. And with this, I'll pass the word on to you, Miki.

Thanks, Johan. And I now turn to slide 14 and comment on the development in the underlying claims ratio. This has improved 30 basis points for the group, which is unchanged versus last quarter. For personal lines, the improvement is 20 basis points, up from 10 basis points in Q1. Profitability initiatives, especially in Norway, are contributing primarily to the improvements in the private segment. We also note that the development within motor, both in terms of claims frequency and claim severity, is in line with our expectations. As Johan stated previously, motor will always be a key focus area for us with nearly one third of our premium income and the motor market that has changed in recent years. But all this is business as usual for us. As a reminder, we have guided for an underlying claims ratio to be broadly stable to slightly improving towards 2027. Turning to slide 15, here we, as usual, show the level of large and weather claims in the quarter, the runoff result, and the discounting level. Q2 was a relatively benign quarter in terms of large and weather claims experience, as both were somewhat below the normalized expectations for the quarter. The runoff result was broadly in line with recent quarters and the guidance for 2027. Importantly, when you look at the Q2 24 level, you ought to remember that this is impacted by the accounting change related to hedging inflation, which has lowered the runoff result by approximately 200 basis points, improving the investment results equally. Finally, our discount rate is unchanged compared to Q1. And remember that discounting is a function of both the level of interest rates and claims mix, meaning that small discrepancies can be observed from time to time. And with this, I hand it over to you, Gian.