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.

Thanks, Mikael. We are now moving into the investment section. Invested assets stood at 60 billion at the end of the quarter, with the matched portfolio making up 46 billion and the free portfolio 14 billion. The asset mix is largely unchanged, leaving aside 200 million of less properties. This money has been reinvested already in covered bonds. I think you heard previously that Johan was flagging that we sold additional property sale of 250 million at the beginning of Q3, and this will impact the Q3 figures and reduce capital accordingly. Our asset mix remains very conservative, in line with the strategy launch in November 2024. In the following slides, we show the specification of the investment assault in the quarter. In general, we're very pleased about the numbers, especially considering the chosen asset mix. The free portfolio benefit from falling interest rates and also a good return on properties. The match portfolio benefit from a good interest on the premium provision and slightly narrowing covered bond spreads. Other final chance was also a little bit better than normal, helping the overall results. And with this, over to you, Allan.

Thanks, Gian, and good morning from me as well. We're now moving into the solvency and expenses section. The first slide shows the development of the solvency position as per end of Q2. We report a solvency ratio of 196, which is a higher level compared to Q1. Own funds are always primarily impacted by the movement in operating earnings and dividends. The operating earnings in Q2 include a net negative impact of 202 million, which is the sum of the after-tax impact of the Danish workers' compensation case, offset by the increased future profit margin. This impact is shown separately in the slide, and as mentioned previously, the net impact of those two is 4 percentage points on our total solvency position. The SCR in the quarter includes a reduction of around 20 million from the sale of approximately 200 million of properties. We are also flagging that we have sold an additional 250 million of properties in the beginning of July, which would benefit the SCR in Q3. Turning to the next slide, where we show the historical development of the solvency ratio. We are pleased to report a robust solvency ratio of 1.96 in a quarter, where we book an extraordinary 1.2 billion charge for the Danish workers' compensation case. The outlook for future capital repatriation is largely unchanged. We expect the solvency ratio to gravitate towards a less conservative level long term, and we will continue to assess our solvency position at year end. We are now turning to the solvency sensitivities. Sensitivities are virtually unchanged from the last quarter, which should not be a surprise, as the asset mix is largely unchanged, leaving aside the 200 million properties reduction in the quarter. The biggest sensitivity remains towards covered bond spreads movements, as this is our chosen asset class and represents the vast majority of our investments. The low solvency sensitivities are a key feature of Trygg's investment case. We remain focused on running a profitable and stable insurance business, while we are arguably taking the lowest asset risk in the sector. Now let's take a look at the expenses development in the quarter. We are reporting an expense ratio of 13.3% in line with the same level reported at Q1 and fully in line with our 2027 guidance for the expense ratio to be stable to slightly improving. Investments in additional commercial activities are funded internally by improvements in operational efficiency. And with this, I will hand it over to you, Johan.

Thanks a lot, Allan. And we are now entering the final part of this presentation. This final part will focus on strategy and financial targets. And as a reminder, we aim to grow the insurance service result by one billion during the strategy period from 2024 to 2027. This strategy is, as you all know, based on the three strategic pillars, scale and simplicity that should add 500 million, technical excellence that should add 300 million, and customer and commercial excellence that should add 200 million. And a number of strategic initiatives are being implemented as we speak, and we remain confident and pleased with the progress being made. As per custom and commercial elections, I'd like to highlight a few new partnerships, one being with SAS Eurobonus and another being with the organization in Denmark called Lederne. And I'd like to, in the next slide, just to elaborate a little bit further on these two partnerships. So these two new partnerships that we have recently signed are commercially very important for us. The first one is with SAS Eurobonus, the Scandinavian Airlines loyalty program, which has a member base of more than 6 million members in our markets. While the second one is with Lidderne, Denmark's largest professional organization with around 130,000 members. Partnerships are in general very important for us as they provide us high quality leads and the possibility to penetrate certain attractive customer segments. and both of these two particular partnerships are targeting middle to high income segments where customers are loyal and are likely to cover all their insurance needs with one single provider. We are keen to build on these partnerships to further develop our business. With that, let's turn to the next slide because in addition to the new partnerships I've just mentioned, I'd like to stress that we are in parallel also increasing our efforts and focus on our direct channels. We have previously mentioned how we've launched more than 20 commercial initiatives across the business to reignite the organic growth engines across Trygg. Amongst other things, we are seeing good developments in Alka, where a number of specific initiatives have already been launched and executed. In Alka to be specific, the focus has been on accelerating new sales, expanding our outbound sales teams, as well as increasing the focus on retention, adding selected employees dedicated to this particular effort. We believe these efforts in ALCA will result in premiums in excess of 100 million in 2028 and they are just a few of the initiatives in our commercial initiative catalogue across the group. So all together, and this is very important, we are very pleased with the commercial progress across all geographies and this links back to my optimism earlier on this call that we should be able to exceed market expectations on revenue development in 2027. With that, let's turn to the next slide, recapping our well-known financial and strategic targets towards 2027. I'll just briefly repeat that we target an ISR between 8 and 8.4, driven by a combined ratio around 81 and a roof between 35 and 40. All targets are completely unchanged and we work relentlessly to deliver on these, of course. That brings me to the final slide. with the Rockefeller chest on the slide and his words reiterating our commitment to being a healthy dividend stock underpinned by strong and stable earnings and a healthy solvency position. And with this, over to you operator.

Thank you. We will now start the question and answer session. If you do wish to ask a question, you will need to press five star on your telephone keypad. To withdraw questions, press five star again. In the interest of time, we ask that you please limit yourself to one question. If you have additional questions, you may rejoin the queue. Our first question comes from the line of Ashby and Mark from Danske Bank. Please go ahead. Your line will be unmuted.

Good morning. Thanks for taking my question and congratulations on the solid underlying Q2 result. So my question basically goes to the underlying improvements we're seeing here in Q2. 60 basis points for private, 50 for the group. I guess that's quite a sustainable improvement. We should continue, at least if I heard you correctly, Mikael, we should continue to see improvement also going into next year. And then your guidance on the growth of, I guess, Jens Galsgaard

Good morning, Asbjörn. I'll start on the first part of that question with your query into the underlying. And I mean, very rightly, as you mentioned, we are very happy about the improvement in the underlying. Like we said, the 50 basis points and then a little bit higher in private, somewhat lower in the commercial segment, but still improving. As we said before, we see that to continue to be on the stable side to slightly improving. And that's very much underpinned by the rate increases and other actions that we're doing where we are pricing on inflation or slightly ahead of inflation. So we see very strong momentum on the underlying improvement.

And then I guess, Asbjørn, to your growth comment, right? I don't recall saying a number, but I do recall coming across, I hope, very confident that all the conventional momentum we are seeing is going to show up in the financials next year. So we do see an output where we will exceed the current consensus expectations on the top line. and you're rightly saying also that it is of course linked somewhat to the underlying. There's no doubt that as we start growing it will have an impact also on the underlying improvement of course. I don't think necessarily something has to give in that sense. I can do math where it all holds together with a continued underlying improvement, with a growth that is speeding and exceeding market expectations and still being exactly where we told the market we would be in 2027. I think just it's very important for me to clearly state that with all the conventional momentum we are seeing, it will show up in the top line next year.

But on the growth side, Johan, I guess you also mentioned somewhat higher growth rates going into 26 than what you're printing right now. And I guess the January renewal has been softer than you expected. I guess it's a little bit the same here. You might be confident for next year, but we haven't seen the January renewal for 27 for all these reasons. So what makes you so confident that we won't have another January renewal that will set you back in six months?

I think that's a fair push, Asbjorn. But I think first of all, if you look at the private lines in Q2, we're up from 4.4 to 5. So something is actually moving. And I can see now that the commercial momentum is changing across all the initiatives we've launched. As if you look at the retention chart I went through earlier, you can also see that retention rates are stabilizing and slightly improving. So there's a lot of components that we're now seeing. And you're rightly saying, you know, 1st of Jan next year, anything can happen, right? But with all we are seeing right now, we are very confident that we'll have a better journey in 2027. And I think right now what you're seeing in Q2 is simple math and something we're dragging along from the 1st of January this year. That we will drag with us the rest of the year. That's also why we are highlighting a growth for the year of around 3%. All right.

Thanks a lot. Looking forward to aligning calculators later today.

Next up is Vash Vosalia from Goldman Sachs. Your line is open.

Hi. Thank you for taking my questions. So, I have one on the commercial segment. Just trying to understand a little bit more over there, you've printed a decline of 0.5%. Obviously, you've explained it's little to do with the January renewals. But could you give us a sense of what the market environment is like? I mean, what I'm trying to understand is, The fact that you have declined a little bit in the commercial segment, is that driven by the usual trig conservatism wherein you prefer profitability over volume? Or is there sort of, are you seeing increased competition in the market, which is sort of driving different behavior at your competitors as well? That will be my only question for now. Thank you.

I think that's a very good question and let us try to unfold that a bit and I'll take the first step at this. So I think first of all what you're asking me is the market conditions changed significantly? The answer is no. So the market conditions and the level of competitiveness stays fairly stable across the Nordics. I think what we're seeing is sort of the fumes of a few years of price increases coming off a double-digit inflation in the market. I think we're seeing the last fumes of that when we did the first of January renewal. Coming into 2026, we've seen a significantly less need to do repricing in the commercial segment. We are seeing now retention rates stabilizing and even slightly improving. So I think what we're seeing is just the fumes of a highly inflationary environment where we've been very disciplined and protective of margins. So in that sense, you are right in saying it could be linked somewhat to our conservatism, but we are also seeing a different need for repricing. We're seeing retention impacted positively. And when I say for next year, we see good commercial traction, It goes for both private lines and commercial lines. So we are looking into something better. But you know, just from the pure math of this, we're tracking along first of January renewal throughout the rest of the year.

That's really helpful. And now if I can ask my second question, just so is it fair to then assume in 2027, we'll go back to your original sort of I don't know if guidance is the right word, but essentially one-third volume, one-third price, and one-third upselling. Do you think we'll now shift to that sort of environment in 2027?

Also a good point, and you're right, we've normally said that's the kind of growth profile we'd like to have. It was pretty much the growth profile we used to have before inflation kicked in. We are now seeing that our growth profile is changing and prices taking up a smaller amount of the growth. And with prices tapering off this year and most likely also next year, yes, we're going to see us coming closer to that exact balance. Got it. Thank you.

Next question will be from the line of Nadia Clarissa from JP Morgan. Please go ahead. Your line will now be unmuted.

Hi, hi, everyone. Good morning. My first question is just, I guess, looking ahead to 2027, maybe hear you loud and clear on the expectation for growth to accelerate. But can you just help us frame this kind of growth pickup a little bit? You know, should this be more H2 rated than H1? I think I'm just trying to understand how that will develop from the two-ish percent implied exit rate for 2026. And then secondly, just a quick kind of, I guess, follow up on the earlier comments made on the, you know, growth into 2027 and the mix. I understand that commercial remains cautious for the remainder of 26, but that should pick up into 27. So how should we expect, I guess, the relative contribution of growth within the private and commercial mix to be in 2027 as it will have an implication on the underlying claims ratio? Thank you.

Okay, so let's try to answer those questions as I understand them. The first one is related to our expectations for growth next year. Another one is how the growth in commercial lines will contribute to that growth profile. So I think you should assume that our growth Jens Galsgaard, Jens Galsgaard As for the commercial lines, I think there is some math here that the 1st of January renewal will of course be washed out as we come into next year. That being said, don't expect any of our business lines to dramatically change their growth profile overnight. So I think with the current growth profile of private and commercial, expect Thank you for your time today.

Yes, so with the growth accelerating in 2027, a natural consequence of that is that it will have a slight impact on the underlying. And that comes not least from the fact that we are expecting growth to pick up in Sweden. And Sweden is, as you know, a heavy book on the personal accident part, where now growth will come from different sources across the board. So it's a very natural consequence that short term, that will have an impact, slight impact, slight impact, I need to add, on the underlying, but it's with the same discipline as we always have in how we mix growth and profitability.

Thank you.

The next question will be from the line of Mathias Nielsen from Nordea. Please go ahead, Johan, and I'll be unmuted.

Thanks a lot. Thanks a lot for taking my questions as well, given that it's a pretty undramatic result. I think it's not because there's many questions to ask, but you just touched upon a bit upon Sweden and also noted that growth is now about 5% in Sweden. Maybe you could add a bit of flavor of what categories in Sweden are driving the growth at the moment and how should we think about that going forward?

Yes, good morning, Mattias. So I would say the growth in Sweden is actually coming from across the board. We're seeing good commercial momentum in personal, in commercial, and also across the different products. So I would just say that it's nothing new and it's our traditional products and our traditional go-to-market strategy. But as Johan mentioned before, we have launched a number of commercial initiatives and that goes not least for Sweden. So it's very much sort of business as usual, but the growth picking up.

And I guess just to add to that, just one thing, Mathias, just to add to that, we are also seeing, you remember last year we talked about our 13 motor partnerships that we have signed. They are now implemented and we are seeing that also reaping in business from motor and enhancing our exposure. Spot on, as we told the market back when we had the CMD in 2024, that we would like to increase our motor exposure in Sweden. We're seeing that happening right now. So that's a specific category.

So we should expect the growth in Sweden to be 5% plus in the coming quarters as well. That would be a fair assumption.

I couldn't hear you. Come again.

So it would be a fair assumption to assume that growth in Sweden would be 5% plus in the coming quarters as well, given that growth has been picking up. Or is there anything exceptionally good this quarter in Sweden?

There's nothing exceptional in this quarter in Sweden. I don't want to guide on a number in a specific business unit or a specific country. If the market is not there, we are not going to grow. But there's nothing specific in this quarter. Actually, you are seeing the impact now of a lot of structural work that has been done commercially in Sweden in the last few years. So you're not wrong in assuming that. Thanks a lot.

Next up is Judith Chigury from Autonomous Research. Please go ahead, you are now unmuted.

Good morning everyone, thank you for taking my question. I was wondering if you could provide an update on the Danish workers' compensation situation case. More specifically, you know, how claims received, if any, were tracking versus your expectations, and also the status of discussions with the AES in terms of Coordinated response on how to deal with claims and I'm guessing if your claims experience has been very benign over what timeframe do you think you will start to release the provisions you have booked? Thank you.

Thank you, Judith, for your questions around the update on the Danish workers' comp. Different questions included in the question here, starting with the number of claims. You should expect it will take time until we see any sort of numbers on claims related to this case. So it will take time until we have any new information to add on the math that we have done on our research. The other one is around the next steps from here. The situation in Denmark is that a new Danish government has only recently been formed. And we will, of course, as said, will continue to pursue the track of an indemnity model through our industry association. And we are waiting for further steps to be taken in this case. So you should not, again, back to the reservation estimates. We are very conservative on this one, as we have said. It is also, as said, extremely unlikely that the estimates will become higher. But realistically, as where I started, it will take years before we see actual decisions on the resumptions coming out of the AES. and as a result, any potential future development will be part of the normal runoff. Unless an indemnity model is implemented, of course, we will come back on that part.

All right, thank you very much.

The next question will be from the line of Martin Bjerk from SEV. Your line is open.

Thanks a lot. Two questions from my side. First of all, on growth and the 4% growth component into next year. Could you please specify that out in relation to the partnerships that you have this quarter and also please elaborate what does it mean when you get Potentially six million leads into a company and what kind of penetration rate do you expect in these partnerships? And then second of all, maybe just a broader question in the light of sort of the rapid improvement that we've seen over the past couple of years in Norwegian business and also the stellar combined ratios that you're printing in Sweden. What do you think about your Danish franchise and the profitability levels that you are reporting in Denmark? Thanks.

Thanks for those two, three, four questions. I will start by going into the growth component and sort of also making a link back to the partnerships. Just to be very clear, so we have launched a number of commercial initiatives across the group, across private, across commercial, across Denmark, Sweden and Norway. So when I am talking to my growth Jens Galsgaard Sashio Bonus members. We will welcome all of them, but don't expect them to come in at once. This is not how it works, so don't expect them to make a meaningful contribution in itself. So I think you need to see it in general with a lot of 13 other motor partnerships last year on motor in Sweden. Now there's a Scandinavian partnership on Sashio Bonus. There is a union in Denmark. And then you need to also put it together with all the other initiatives. I mentioned some of them in Elche. We are doing similar things in Sweden and Norway. So it's a broad catalogue of initiatives for us to move the needle on top line, and I'm confident we will. And as for your point specifically on Denmark, maybe, Mikael, you will talk to that.

Maybe I'll start with giving some comments on the Norwegian part, as you asked about, Martin, and I'll let Johan broaden out sort of from a Scandinavian basis. But if we start with Norway, we are very pleased around the development, very pleased. And I think we talked about this, I don't know how many quarters or years, but quite a number. And we have continuously said that We should get Norway to a mid 80s combined. And we can actually now also see that if we look at things from a rolling 12 basis the last 12 months, Norway is actually on very much a mid 80s combined with just over 85. So it's a tenth or two in between. That of course is with a little bit of luck on large and weather claims, but on the other side we are seeing continued earnings impact of all the actions that we have put through historically and are continuously for Norway pricing ahead of inflation. So very satisfied around the Norwegian development.

And then as for your last more strategic question as to the growth profile across our Scandinavian markets, I think what we are seeing now this particular quarter and maybe the first half of this year, we're seeing Denmark trailing slightly to Sweden and Norway. Expect us to find a different level, but I think going forward, you should expect a higher growth profile in Sweden and Norway than you will in Denmark, being where we have the highest Our next question comes from the line of Alex Amandi from Barclays. Please go ahead, you are now unmuted.

Hi, good morning. Quick question on commercial. To what extent is the pressure that you see in revenues related to the global reinsurance environment that we see elsewhere? And also, if you can go back to the moving parts of what are the drivers for the commercial expectation, commercial momentum improving into 2027. I didn't get that. Thank you.

All right, so if I start with the more sort of international outlook of the commercial business, I mean, you're right that the market is softening a little bit on the very high end. But then remember that our exposure at the very high end is very, very limited. We run an SME-focused business, which has a little bit of corporate exposure as well, 7-8% of our total book. So it's very limited, the impact that we see. But we do see that on the very high part, there is a bit of softening on the rates. That also comes when you look at things from a more reinsurance perspective so we see when we look at the reinsurance market a bit of softening when we look at the geographical markets that have their renewal this year and of course we expect to be having some benefits of that when we move into the one-one renewals from our side as well.

I think then for your latter question which was more around what are the drivers behind the The slide drop we're seeing in commercial lines revenue and I think just to reiterate some of them and maybe I can also add a few. So first of all, we're seeing the first of January renewal of 2026 being slightly to the weak side. We also communicated that last quarter. I think we're seeing sort of the fumes of significant repricing due to inflation that's coming down. We are seeing that translating into renewal rates that have been under pressure but are now stabilizing and slightly improving. That's a positive that gives us confidence for next year. We are also now seeing as part of the 20 initiatives, more than 20 initiatives of commercial traction we have launched, A few of them are also, quite a few of them is actually linked also to the commercial segment. We are now seeing growth initiatives around agriculture. In Denmark, for instance, cyber insurance across the board is taking up quite a lot. We are seeing cyber insurance sales being up more than 20% compared to last year. So there are a number of initiatives that we are waiting to see the impact of. But now we need to see the 1st of Jan 2026 renewal sort of being evaporated and give us a clean slate for next year. And we are confident that growth will come up next year.

Thanks. And as a reminder, press 5-star to ask a question. Next up is a follow-up from the line of Avash Vosalia. Your line is open.

Hi, thank you for the opportunity again. This is more of a follow-up on something you replied to Nadia's question. So your exit rate, you're seeing 3.3% growth for 2026, and you have presumably, let's say, about 3.4% in 1H. So I would assume that your exit rate for 2H would be lower than 3, maybe somewhere around 2.8, just to get to the 3 number. And then you're telling us that obviously you are quite confident that you will beat the 2027 consensus, which would in my mind imply a much higher growth rate than 4% or not much higher, but a higher growth rate than 4%. And then it just feels like it's a big uplift from going from slightly less than three to then slightly up more than four. So can you just help me understand the trajectory of that growth that you expect to deliver?

Thanks for that question and let me try to be more clear because I understand the confusion. So you're absolutely right. In your assumptions for H1 versus H2, you're absolutely right. We're expecting H2 to be worse than H1 to get us to an average for the year around 3%. That being said, and maybe that's where I need to be more clear. For next year, we're expecting, I'm confident that we'll exceed market consensus. But bearing in mind, there's a little bit of math going on that we are washing out the 1st of January renewal that we saw this year that will not carry us into next year. So when you do the Q&Q, it'll be slightly different. Do expect us, and I want to be very clear, we do expect a stronger commercial momentum. We're seeing that picking up right now. But as you know, in insurance, it's a slow moving Financial Ledger in the sense that before we do the sales, before people are migrated into our books and before we earn the premiums, there is a delayed factor. That's why I have commercial indicators from the machine room that gives us strong confidence for next year.

Okay, that's helpful. Thank you.

and our next question will be from the line of Vinny Velotsov from Mediobanker. Please go ahead. John, I'll be unmuted.

Yes, good morning. Thank you. I just managed to get in the Q&A. For me, I mean, quick two follow-ups, please. Just sorry again on the revenue growth. I mean, I understand you're probably guiding to the growth rate being much stronger next year or better than market expectations, even while The actual nominal Danish amount of revenues may or may not be exceeding expectations of the market. Is that something you would completely disagree with? I just wanted to follow up or clarify that. And if I can also clarify the comment on underlying, just my understanding, as these initiatives pick up, say for example Sweden, Some of the underlying loss ratio improvement should tail off from the current 40-50s. Is that what you're trying to suggest for next year? Thank you.

So maybe I'll start with your first fishing expedition. So on the growth profile, right, we don't normally comment on our top line outlook. So we're doing it now. We want to be a little bit precise on our 2026 assumption. Also, we want to be clear that we are confident with what we're seeing on 2027. I don't want to share more details on that. I'm very confident with what I'm seeing. We will exceed the market consensus. That's all I have to say on that topic. I understand your question and maybe, Mikael, on the underlying

On the underlying, I think your assumption is correct. The new business growth that we will see will likely be at a slightly higher combined ratio than the average core to start with, and then it improves from there as we move along. So it has a short-term impact on the underlying, but again, I repeat, a slight short-term impact on that. And it's a very natural consequence of the business dynamics.

Great, thank you very much.

As no one else has lined up for questions in this call, I'll now hand it back to Johan for closing remarks.

And I'll hand it on to Gianandrea to do that.

Thank you everybody for all the questions. As always, just to remind you that the Investor Relations team here at TREG is available for any follow-up. Otherwise, we would all like to wish you to have a good summer and thanks a lot again.