Tryg A/S Ord New

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

Thanks a lot, Gian, and a good morning from me as well. Today, we report our Q2 earnings, and I will, as usual, begin with the financial highlights. So, revenue grew by 3.3%, with a good solid growth of 5% in the private segment, partly offset by a small revenue drop in the commercial segment, which I'll come back to later in this presentation. The insurance service result totaled 2.39 billion, when adjusting for the well-known one-off charge of 1.2 billion disclosed on April 28, linked to the workers' comp. Including this charge, the reported insurance service result is 1.19 billion for the quarter. The combined ratio, based on the adjusted insurance service result, was an excellent 77.4, boosted by a very strong rock-solid Norwegian performance. Please note that this quarter recorded last claims significantly above quarterly guidance. We're pleased, very pleased to see the underlying claims ratio developing positively, improving 50 bps, thanks to the profitability actions taken the last few years to fight off the inflationary pressures. The private segment improved 60 bps. The overall investment result was a robust 262 million with both the match and the free portfolio contributing strongly. And our property exposure was reduced by approximately 200 million in the quarter. And on top of that, we're also flagging today an additional 250 million reduction that materialized at the beginning of Q3. In total, that gives us a reduction of 450 million, which pro forma brings our property exposure down to around 1.9 billion at the beginning of Q3, in line with our intended strategy. As you all know, the property reduction is freeing up solvency capital and helps us fully refocus our investment activities on low-risk Scandinavian covered and government bonds. Both adjusted for the workers' compensation charge. And we are of course paying a DPS of 2.15 in line with the first quarter and we report a very robust solvency ratio of 196. All in all, a strong quarter we are reporting today. With that, we are now turning to the next slide on customer satisfaction. The customer satisfaction score for Q2 was at 83, up from 81 at the end of 2024, the beginning of our strategy period. That essentially means that we are already reaching the targeted level for 2027. And to achieve this improvement, we have indeed launched a number of new initiatives towards our customers. For instance, our new contact center platform Puzzle has now been deployed in large parts of our business, positively impacting the customer experience as process and handling time has improved by 6%. Additionally, the Storm Day in April allowed us the opportunity to assist more than 5,000 customers in Denmark and Sweden with immediate support. And obviously, relatively large events like this and the support that we can swiftly offer to our customers remind them about who we are and what we stand for. And that also supports our strong customer satisfaction for this quarter. With that, let's move to the next slide where I'll comment on the insurance service results split between our two segments, private and commercial. So the insurance service result in the private segment was just shy of 1.6 billion driven by a combined ratio of 78.2, good top line growth and improved underlying performance as well as higher runoff which also helped the numbers. If we take a country overflight, Norway produced a very strong performance, Sweden continues to show a positive commercial development and the Danish business posted a strong performance considering that a not insignificant part of the last claims in this quarter were in fact Danish. As for the insurance service result in the commercial segment, it was impacted fully by the 1.2 billion charge linked to workers' comp. Adjusting for this one-off, the insurance service result was at 795 million, which is still a tad below the corresponding quarter in 2025, primarily driven by a higher last claims experience, but also a top-line reduction, primarily driven by a somewhat weak first-of-gen renewal on the corporate customer side. On the positive side, we are seeing retention stabilizing, which I'll come back to later on. In addition to that, and on a more general note, I'll come back to our expectations for the revenue development for the remainder of 2026, as well as 2027 later on in this presentation. With that, let's turn to the next slide where I'll comment on the insurance services revenue by geography and also the normalized ISR walk on the right-hand side. As always, please remember that the reported ISR and combined ratio can be impacted by different factors such as large and weather claims, runoff results, and also the overall level of interest rates. In Q2, we note a strong performance across the board. I'm particularly pleased to see the best reported combined ratio in the last 10 years in Norway and a Swedish performance that remains stellar, while the Danish combined ratio is impacted by a less favorable large and weather claims experience compared to last year. The ISR walk of the adjusted Q2 level versus last year, the chart on the right hand side, shows a lot of positives and only one single negative, which is the large in weather claims experience with an emphasis on the large claims as mentioned previously. I'd like to stress that we deem the large claims experience in Q2 and half one taken as a whole as entirely stochastic. We've had a thorough review of the commercial and corporate exposures and remain very comfortable with our exposures. Very comfortable indeed. With that, I'm turning to the next slide on the financial performance of our Norwegian business, a topic for the last few years that is coming through in a very good way now. We're reporting a combined ratio of 77.3 in Norway, the best reported figure of the last 10 years. And from the chart on the left-hand side, the improvement is very visible, also when you look at the first half of the year illustrated on the bottom left. As a reminder, we put in place significant profitability initiatives in the last two years and these are now paying off as expected. And also, I guess this is important, it's important to remember that price increases are tapering off and therefore the pace of improvement will slow down going forward. In general, our Norwegian business has reached a very satisfactory profitability level and our key focus now and onwards is to avoid some of the large swings we've seen in the past. With that, I guess it's time to turn to the revenue growth section. On the first slide in this section, we show that revenue grew 3.3% in Q2, with the growth at a satisfactory level of 5% in the private segment, up from 4.4% last year. The commercial segment developed negatively following the losses during the first of January renewal of selected corporate customers, as well as general retention pressure in that segment. We do expect the revenue growth to be lower in the second half of the year and have updated the outlook to a revenue growth of around 3% for the full year. At the same time, this is important, at the same time, we do expect a pickup in 2027 and we should be able to exceed current market expectations. With all I'm seeing on commercial traction across the board, I'm confident we will. We have a very strong focus currently on both retention and on commercial development, and many internal indicators are pointing in that direction. That makes us very positive for what's ahead of us, very positive indeed. And at the same time, it is important to remember that staying disciplined is key to continue to run a profitable and stable business. With that, let's turn to the next slide on customer retention. In general, the overall picture is improving. Retention is moving up primarily in private Norway and private Sweden, while it remains stable in private Denmark. We also see signs of stabilization and slight improvements in the commercial segment, which is very important. As mentioned previously, past experience tells us, and we've looked through all the books, that it takes a little while for retention to stabilize and improve again after a prolonged period of price increases to offset inflation. This will come back. And with this, I'll turn it over to you, Mikael.

Thanks Johan and good morning from me as well. We are pleased to report an improvement in the group underlying claims ratio of 50 basis points, up 10 basis points from the Q1 level. Looking at the segments, one can notice that private improves 60 basis points while commercial improves 30 basis points. The uptick in personal lines is driven by continued improvements in Norway, while commercial continued to see improvements, although slightly lower as earnings effects of previous actions decrease. As mentioned multiple times before, the underlying loss ratio is expected to be stable to slightly improving during this strategy period, and Q2 is yet another confirmation of that. It's also important to repeat that going into 2027, as Johan mentioned, we are likely to see a revenue acceleration and this will likely slightly dampen the improvement in the underlying. This is a natural consequence of the business dynamics and our way to achieve a balanced earnings growth. Turning to slide 14. In this slide, I will as usual comment on the large and weather claims experience, the general level of discounting and the run of development. Weather claims were more or less in line with our Q2 guidance at 91 million, primarily impacted by Storm Dave. Large claims were significantly above the quarterly expectations with large commercial claims seen in Sweden and Denmark. Large and weather claims are stochastic by nature and it's important to note that although higher than last year, the large and weather claims combined for the first half year are broadly in line with our expectations. The level of rates used to discount the claims reserves have moved upwards by 30 basis points, primarily as a function of short-term rate movements. And finally, the runoff result. Excluding the one-off related to workers' compensation ruling, it was 3.5% in a quarter with high large claims and many moving parts. The result in Q2 is above our capital market state guidance, which remains unchanged at around 2%. And with this, I hand it over to you, Gian.