Q2 2016 results - Trygtryg.com/.../q2_2016_investor_presentation_12-42439.pdfQ2 2016 results...

Q2 2016 results

Investor presentation Follow us on Twitter: @TrygIR

Contents

2

Highlights Q2 2016 3

Premiums and portfolio 6

Claims and expenses 11

Investment, capital and targets 17

Background material 25

Appendix 41

Disclaimer

Certain statements in this presentation are based on the beliefs of our management as well as assumptions made by and information currently available to the management. Forward-

looking statements (other than statements of historical fact) regarding our future results of operations, financial condition, cash flows, business strategy, plans and future objectives can

generally be identified by terminology such as “targets”, “believes”, “expects”, “aims”, “intends”, “plans”, “seeks”, “will”, “may”, ”anticipates”, “continues” or similar expressions.

A number of different factors may cause the actual performance to deviate significantly from the forward-looking statements in this presentation including but not limited to general

economic developments, changes in the competitive environment, developments in the financial markets, extraordinary events such as natural disasters or terrorist attacks, changes in

legislation or case law and reinsurance.

We urge you to read our annual report available on tryg.com for a discussion of some of the factors that could affect our future performance and the industry in which we operate.

Should one or more of these risks or uncertainties materialise or should any underlying assumptions prove to be incorrect, our actual financial condition or results of operations could

materially differ from that described herein as anticipated, believed, estimated or expected.

We are not under any duty to update any of the forward-looking statements or to conform such statements to actual results, except as may be required by law.

Financial highlights Q2 2016- Lower technical result and substantially higher investment return

3

934

714

Q2 2016 Q2 2015

Pre-tax profit (DKKm)

15.0 15.2

Q2 2016 Q2 2015

Combined ratio

Expense ratio

• H1 DPS of DKK 2.60 and solvency ratio of 206 or 193 adjusted for Skandia child insurance portfolio

• Dividend growth in line with stated policy

• Solvency ratio includes H1 dividends and FY buy backs

• Pre-tax profit of DKK 934m (DKK 714m) impacted by:

• Lower technical result of DKK 770m (DKK 825m)

• High investment result of DKK 181m (DKK -84m)

• Technical result of DKK 770m (DKK 825m)

• NOK/DKK adverse move, low weather claims but also a higher underlying claims ratio

• Price increases started but it will take few quarters to see meaningful P&L impact

• Expense ratio of 15.0 (15.2) and combined ratio of 82.6

(82.2)

• Investment income of DKK 181m (DKK -84m)

• Substantially above expectations, driven both by the free portfolio and the match portfolio

• Equities were flat but strong returns on high-yield bonds, emerging-markets debt and index-linked bonds

82.6 82.2

Q2 2016 Q2 2015

Customer highlights Q2 2016- Many new digital self-service and claims solutions launched

4

2320

22

Q2 2016 Q2 2015 Target 2017

NPS

56.9 56.661.3

Q2 2016 Q2 2015 Target 2017

Customers with ≥3 products (%)

88.1 88.0 88.9

Q2 2016 Q2 2015 Target 2017

Retention rate

• TryghedsGruppen paid its member bonus to Tryg’s Danish customers, corresponding to 8% of the premium paid in 2015.

• Digital self-service solutions for house, accident, pet and leisure house launched in Denmark.

• Moderna, Tryg’s Swedish branch, was named Best Insurance Company of the year for the fourth year running.

• New Commercial property insurance product in Denmark and Norway.

• 200,000 customers upgraded to new motor, accident and house products.

Key figures Q2/FY

5

DKKm Q2 2016 Q2 2015 FY 2015

Gross premium income 4,379 4,550 17,977

Gross claims -2,823 -3,858 -13,562

Gross expenses -649 -681 -2,720

Technical result 770 825 2,423

Return on investment after technicalinterest

181 -84 -22

Profit/loss before tax 934 714 2,310

Profit/loss 734 580 1,969

Claims ratio, net of reinsurance 67.6 67.0 71.5

Gross expense ratio 15.0 15.2 15.3

Combined ratio 82.6 82.2 86.8

Premiums and portfolio

-0.6

-1.4

Q2 2016 Q2 2015

Positive topline development in Private

7

Gross earned premiums development

(Local currencies) DKKm Q2 2016 Q2 2015Local currencies

Q2 2016Local currencies

Q2 2015

Private 2,148 2,226 0.3% -0.3%

Commercial 977 997 0.4% -4.3%

Corporate 921 993 -3.7% -1.4%

Sweden 338 342 -1.8% -1.8%

Group 4,379 4,550 -0.6% -1.4%

Gross premiums down by 0.6% (-1.4%) in local currencies, Private & Commercial lines up, Corporate down

Positive Private lines trend especially considering that avg. motor price in Denmark was down 2.1%

Danish premiums up 1.7%, Norwegian premiums down 3.5% (in local currencies) primarily impacted by the

Corporate segment

156

99

Q2 2016 Q2 2015

770

825

Q2 2016 Q2 2015

Lower technical result significantly impacted by currencies

8

Commercial, DK & NO (DKKm)

Sweden (DKKm)

393434

Q2 2016 Q2 2015

Group (DKKm)

Corporate (DKKm)

Private, DK & NO (DKKm)

49

72

Q2 2016 Q2 2015

172

220

Q2 2016 Q2 2015

90

95

100

105

110

115

DK

NO

90

95

100

105

110

115

DK

NO

9

Private - average prices

Average price

4,200 5,700

• DK: changed selection reducesaverage price, price increasesstarting 2016 to offset highclaims inflation

• NO: small positive development reflect underlyingprice increases

• DK –2.1% decrease y/y driven by:

• smaller cars• safer cars

• Competition remains strong in Motor DKK but also profitabilityvery high

• NO: small positive developmentreflects underlying price increases

Average price:

4,800 5,500

Motor insurance – average price (index 2011 = 100)

House insurance – average price (index 2011 = 100)

Average price development Y/Y

-2.1% 0.9%

(Q1 -2.5%) (Q1 1.0%)

Average price development Y/Y

-0.7% 0.1%

(Q1 -0.9%) (Q1 0.3%)

Customer retention

10

82%

84%

86%

88%

90%

92%

DK

NO

Commercial

82%

84%

86%

88%

90%

92%DK

NO

Private

• Customer retention at 90.0 in Denmark, highest level sinceQ3 2013

• Stable development in Norway

• Modest fall in Denmark mostlydriven by price increases

• Retention broadly stable in Norway

Front page slide

Claims and expenses

79.976.5

Q2 2016 Q2 2015

71.4

69.5

Q2 2016 Q2 2015

Increase in underlying claims ratio, net

12

65.463.6

Q2 2016 Q2 2015

Commercial (DK & NO)

82.5

75.6

Q2 2016 Q2 2015

Sweden

69.0 68.3

Q2 2016 Q2 2015

Group

Corporate

Private (DK & NO)

Underlying development is adjusted for large claims, weather claims, run-off and interest.

23%

15%

0%

5%

10%

15%

20%

25%

Ford Focus Nissan Qashqai

Motor insurance, not all claims are coming down

13

Bumpers

Wind shields (Glass)• Wind shields price increases are mostly

driven by the calibration of connected equipment and in general by different type of wind shields installed (2016 vs 2011)

• Prices show the cost of wind shields today, i.e. today’s price of a 2011 wind shield model vs today’s price of a 2016 wind shield model*

• Some manufactures have started offering more advanced technologies also on smaller cars, this means that the cost on replacing wind shields is increasing

Wind shields, price increases in % from 2011-2016

• Bumpers prices increases are seen across manufacturers and model ranges

• Price increases are driven by extra add ons such as radars*

• We expect this trend to continue as the extra equipment become more complex

Bumpers, price increases in % from 2011-2016

Sources:*FORSI/Autotakst, (Forsikring & Pension’s system for claims management and list prices)**Source: Statistics Denmark, Net price index - 07.2.1.2 Spare parts for personal transport equipment

0

2000

4000

6000

8000

10000

12000

2011 2016

Nissan Qashqai

Bumper Bumper incl. Radar (4043 ex. VAT)

0

5000

10000

15000

20000

2011 2016

Ford Focus

Bumper Bumper incl. Radar (10157 ex. VAT)

6,682DKK

5,668DKK

19,378DKK

116%

17%

242%

15%

11,426DKK

6,372DKK

5,296DKK

2011: 5,383 DKK

2016: 6,618 DKK 2011:

5,310 DKK

2016: 6,086 DKK

Large claims, weather claims and run-off

14

4.9

6.4

5.0 5.0

6.16.7

2012 2013 2014 2015 Q2 2015 Q2 2016

Run-off net, effect on combined ratio (%)

23 36

323

542

447

614

2012 2013 2014 2015 Q2 2015 Q2 2016

Weather claims, net DKKm

127 111

471407

574 615

2012 2013 2014 2015 Q2 2015 Q2 2016

Large claims, net DKKm Expected annual

level 2016: DKK 500m

Expected annual

level 2016: DKK 550m

Claims reserves discounting rate (%)

2.01.5

1.2Q2 2015

0.9Q2 2016

0.7

2012 2013 2014 2015 2016

Efficiency programme, DKK 51m achieved in Q2

15

• Programme proceeds as planned, target to

achieve savings of DKK 750m over 3 years.

• Higher savings in 2016 compared to 2015.

• Claims initiatives of DKK 36m in Q2:

• Focus on helping injured policyholders to get back to work quickly

• Cash settlements through In4mo system

• Total crash repair to reduce damage and re-sale cars as opposed to send it to car breakers

• Expense initiatives of DKK 15m in Q2:

• Outsourcing Accounting

• Reorganisation of Agriculture & Small Commercial division

• Digital communication

Efficiency programme up until 2017 (DKKm)

100 105150

66

250

175

388395

5060

75

30

125

2012 2013 2014 Target2015

2015 Target2016

H1 2016 Target2017

Expense Claims

Old programme New programme

Expense ratio continues to improve

16

• Expense ratio improved 0.2 pp. to 15.0 in Q2 16 (15.2)

• Efficiency programme lowered costs by DKK 15m for Q2 mainly related to:

• Outsourcing within Finance and IT• Commercial reorganisation• Digital communication

• Further reduction in employees since year-end• Important reduction in number of jobs in Norway (approx. 60 positions) which will mostly impact 2017 P&L

FTE - Development

15.215.0

16.4

15.6

14.6

15.315.3

14.9

2012 2013 2014 2015 Q2 2015 Q2 2016

Expense ratio

Adjusted for one-off effects

Nominal costs in business areas

312

172

10065

340

171109

61

Private Commercial Corporate Sweden

Q2 2016 Q2 2015

4,077

3,914

3,703

3,599

3,3593,299

2011 2012 2013 2014 2015 Q2 2016

Front page slide

Investment, capital and targets

0.3 (1.1)

2.8 (0.0)4.3 (-1.2)

1.1 (1.1) 0.84 (-0.1) 1.1 (0.3)

Cov. Bonds66.0% (67,5)Bonds/Deposits (match)

5.2% (3,1)

Equities 5.9% (6,3)

HY 1.7% (2,5)

EM* 1.0% (1,0)

IG 0.5% (0)

Inv. Property 5.2% (5,1)

Bonds/deposits (free) 14.5%

(14,5)

Investment return – low risk remains key

18

Free portfolio return Q2 2016 (%)

High-yield corporate bonds (DKK 0.7bn) H1 2016

Portfolio (DKK 40.6bn) H1 2016

Free11.7bn 29%

Match28.9bn 71%

Industrials77%

Energy (mostly oil)7%

Utilities3%

Other3%

Finance10%

* EM = Emerging markets (Sovereign bonds USD denominated)

99

7

100

1

21

2

57 61

15

37

Bonds Equity HY & EM Inv. Property

Nordics EU ex Nordics North America EM/Other

Geographical exposure (%)

93

61 0

74

50

21

89

61 4

AAA AA-A BBB-B Lower

Match Free Total

Rating (%)

Solvency position Q2 2016

19

• Solvency ratio based on the Partial Internal Model is 206 (Q1 2016: 212).

• Own Funds (OF) is primarily impacted by

• Result Q2 2016 of DKK 734m

• Proposed cash dividend based on H1 2016 results

• Upfront deduction of 2016 share buy back after decision by the Danish FSA

• Inclusion of SEK subordinated debt

• Based on Solvency II Standard Formula the solvency ratio is 169 (Q1 2016: 173).

Own funds walk

Solvency capital requirement walk

10,449

-753

-1,000

734

660

14

10,794

8,600

9,100

9,600

10,100

10,600

11,100

11,600

Ow

n F

unds

Q1 '16

Results

Q2 '16

Pro

posed

cash d

ivid

end

H1 2

016

2016

share

buy

back

SEK

subord

inate

ddebt

Mis

cellaneous

Ow

n F

unds

Q2 '16

5,080

-19-4

-2720 5 7

5,098

4,900

4,950

5,000

5,050

5,100

5,150

5,200

SCR

Q1 '16

Mark

et

Defa

ult

Health

Non-L

ife

Opera

tional

Div

ers

i-fication

SCR

Q2 '16

Capital and solvency ratio development

20

• Tier 2 capacity fully utilised after issue of SEK 1bn subordinated debt 19 May 2016.

• Decrease in core equity Tier 1 (CETier1) due to proposed cash dividend H1 2016 and upfront deduction of DKK 1bn 2016 share buy back.

• On January 1, 2016 went live, the jump from a solvency ratio of 154 to 212 is primarily driven by two items:

• Expected future profits of approximately DKK 750m included in Own funds

• The loss absorbency of deferred tax reduces the Solvency Capital Requirement by some DKK 1.2bn

• The Danish FSA has explained that a ratio lower than 125 would result in increased surveillance.

Capital Tiers as % of SCR

Solvency ratio development

163%143%

12%

13%

37%50%

13%

Q1 '16 Q2 '16*

CETier 1 ATier 1 Tier 2 Tier 2 potential

155% 151%159% 154%

212%206%

Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16

S2 regimeOld regime

Solvency ratio sensitivities

21

• The Solvency II ratio shows the highest sensitivity to spread risk• Assumption is for a 100bps widening/narrowing of our entire fixed income book (Danish government bonds, Danish

mortgage bonds, Norwegian government bonds, high yield etc.)

• The Solvency II ratio is not highly sensitive to equity markets movements as most of the ‘Own funds’ hit from a sharp fall in equity markets would be offset by a lower capital requirement (lower market values combined with the effect of a reduced charge due to equity-dampener)

• Interest rate risk is very low as function of our matching strategy

• A change in the UFR (Ultimate Forward Curve) from 4.2% to 3.2% would reduce the solvency ratio from 206 to 205

206%

210%

202%

215%

197%

204%

207%

194%

217%

205%

180%

185%

190%

195%

200%

205%

210%

215%

220%

Q2 '16 +20% -20% +20% -20% +100 bps -100 bps +100 bps -100 bps -100 bps

2016 Equity Property Interest Spread UFR

Targets and outlook

22

Efficiency programme proceeds as

planned.

Members’ bonus of 8% on 1 June 2016

Price increases to offset claims inflation

2016 topline at the ‘lower end’ of 0%-2% including

Skandia child insurance portfolio

2016 expected tax rate 21

Markets remain very competitive

High focus on capital repatriation

Customer targets

Financial targets

Net Promoter Score (NPS) + 100%

Retention rate + 1 pp

Customers ≥ 3 products** + 5 pp

** Private (DK & NO)

2017

ROE after tax ≥ 21%

Combined ratio ≤ 87

Expense ratio ≤ 14

* Excl. One-off effects

0

10

20

30

40

ROE after tax (%)

It is important to know your investment case

23

”Do you know the only thing that gives me pleasure?

It’s to see my dividends coming in.”

John D. Rockefeller

Date Place Participants from Tryg Arranged by

12/07/2016 Copenhagen

Morten Hübbe, CEO

Christian Baltzer, CFO

Investor Relations

Nordea Markets

13/07/2016 London

Morten Hübbe, CEO

Christian Baltzer, CFO

Gianandrea Roberti, IR Officer

Peter Brondt, IR Manager

Autonomous

11/08/2016 OsloChristian Baltzer, CFO

Peter Brondt, IR ManagerDnBNOR

01/09/2016 ZürichLars Bonde, COO

Peter Brondt, IR ManagerBerenberg

01/09/2016 Dublin Gianandrea Roberti, IR Officer Mediobanca

02/09/2016 GenevaLars Bonde, COO

Peter Brondt, IR ManagerNordea Markets

08/09/2016 ParisChristian Baltzer, CFO

Gianandrea Roberti, IR OfficerDanske

18/08/2016 BergenEspen Opedal, Director Private NO

Peter Brondt, IR Manager

Hordaland on stock

exchange

13/09/2016 London Peter Brondt, IR Manager KBW Conference

13-14/09/2016 New YorkChristian Baltzer, CFO

Gianandrea Roberti, IR OfficerBarclays Conference

Upcoming roadshows

24

Background material

9.2%8.3%

6.6% 6.9%

5.25.4

5.86.0

3

4

5

6

7

8

0%

2%

4%

6%

8%

10%

2012 2013 2014 2015

Total yield DPS (right axis)

1,722 1,7161,617

1,3501,185

746

0

1,000

2,000

60%

70%

80%

90%

100%

110%

120%

2010 2011 2012 2013 2014

UK Germany Italy Denmark Norway

-100%

-50%

0%

50%

100%

150%

200%

Non-life Life Banking Other

Why invest in Tryg?

26

Pre-tax result by division (YE 2015 data) High insurance penetration in the Nordics

Tryg is a dividend stockMotor combined ratios Nordics vs international

Premiums per capita (USD), 2014

Total yield (dividend and buy backs / market cap) at year end

DKK

IBM study from 2007, probably little has changed

27

52%

57%

63%

64%

67%

72%

62%

62%

53%

62%

49%

50%

40%

36%

37%

39%

20%

33%

53%

46%

45%

42%

43%

43%

0% 10% 20% 30% 40% 50% 60% 70% 80%

F UK DE DK

• Overall I am very satisfied with the

services of my insurance company

• My insurance agent only sold me

insurance coverage that I really needed

• My present insurance coverage offers

me enough flexibility

• Claims: my insurance company in

uncomplicated and helpful way

• I have full confidence in my personal

insurance agent

• My insurance is more cost effective than

most other insurances

Danish customers completely and strongly agree

Source: IBM Institute for Business Value and I.VW University of St. Gallen 2007 Insurance Study

Tryg – at a glance I

28

• Tryg goes back to 18th century.

• Very strong brand position especially in Denmark.

• Non-life insurance in Denmark, Norway and Sweden.

• Approx. 80% retail business.

82%

84%

86%

88%

90%

92%

Retention rate - Private

DK

NO

82%

84%

86%

88%

90%

92%

Retention rate - Commercial

DK

NO

NorwayMarket position: #3

Market share: 13.4%CR in 2015: 87.9

SwedenMarket position: #5Market share: 2.9%CR in 2015: 82.7

DenmarkMarket position: #1

Market share: 18.1%CR in 2015: 85.2

56

22

22

Private

Commercial

Corporate

Business split 2015

31

5

115

24

14

10

Motor

Workers' comp

Health & accident

Liability

Fire & property - private

Fire & property - comm.

Other

Gross premium split by products 2015

Percentage

Percentage

4.2

6.6

3.4

1.3

3.1

0.8 1.3

5.2 5.4 5.8 6.0

2.5 2.6

4.2

2.6

2.63.2

3.4 3.5

0

1

2

3

4

5

6

7

8

9

10

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1

2015

H1

2016

Cash dividend Ordinary buy back Extraordinary buy back

60

11

12

16

Danishinstitutional

Non-Danishinstitutional

Smallershareholders

Tryg – at a glance II

29

Shareholder breakdown 2015

Strengthening of brand value

Shareholder performance since IPO

New dividend policy

Shareholder remuneration since IPODKK

Percentage

Tryg – at a glance III

30

14

23

192

22

13

7

Motor

Workers' comp

Health & accident

Liability



Other

Run-off net by products Q2 2015

Percentage

31

75

3

10

0

-33

15

Motor

Workers' comp

Health & accident

Liability



Other

Run-off net by products Q2 2016

Percentage

16

33

14

8

8

14

7

Motor

Workers' comp

Health & accident

Liability



Other

Gross claims reserve by products 2015

Percentage

31

5

11

5

24

14

10

Motor

Workers' comp

Health & accident

Liability



Other

Gross premium split by products 2015

Percentage

Gross premium split by geography

31

14.5

20.1

4.2

6.7

38.6

13.7

0.3 2.0 Motor TPL

Motor Casco

Health & accident

Liability



Tourist assistance

Other

SE: Gross premium split by products 2015

Percentage

11.5

12.6

64.4

13.8

-4.0

-5.4

0.45.4

1.4 Motor TPL

Motor Casco

Workers' comp

Health & accident

Liability



Tourist assistance

Other

Net run-off split by products 2015

Percentage

6.8

18.8

6.5

11.2

6.4

24.3

16

3.36.8 Motor TPL

Motor Casco

Workers' comp

Health & accident

Liability



Tourist assistance

Other

DK: Gross premium split by products 2015

Percentage

15.6

21.3

4.2

7.53.5

20.1

10.7

4.4

12.5 Motor TPL

Motor Casco

Workers' comp

Health & accident

Liability



Tourist assistance

Other

NO: Gross premium split by products 2015

Percentage

Tryg’s equity story

32

Long term profitable growth and attractive shareholder value creation

Financial targets 2017

• ROE: ≥21%

• Combined ratio: ≤87%

• Expense ratio: ≤14%

Customer targets 2017

• NPS +100%

• Retention rate +1 pp

• ≥ 3 products +5 pp

Dividend policy

• Aiming for a nominal stable increasing dividend

• Pay-out ratio of 60% to 90% (secondary)

• Extraordinary buybacks to further adjust the capital structure

• 90% first contact resolution

• Annual coverage check

• 25% of tariffs better than peers in 2017

• Differentiated product offering

• Efficiency programme of DKK 750m

• Claims procurement

• Reducing expense level

• Matching assets and liabilities

• Low risk investment portfolio

Low risk and high returns

Leading in efficiency

Leading Scandinavian insurer with strong

track record

Customer care worth recommending

Next level pricing

Things that you may not know

33

• Motor insurance prices relatively similar in DK and the UK but cost of the insured good

(the car) substantially higher in DK driven by the registration tax for passenger cars

(100%-150% of taxable value on new vehicles approx.).

• Motor insurance remains a highly attractive business in Scandinavia unlike many

European countries.

• In Oslo, it costs approx. NOK 5,000 per month to hire a dog walker for 5 weekly walks,

each walk is minimum 60 minutes.

• In Sweden it is illegal to leave a dog home alone more than six hours, the dog has to be

out at least every six hours during the day.

• Pet insurance premiums totalled SEK 3.3bn at the end of September 2015 in Sweden

but that includes horses as well.

• Tryg believes that Pet insurance remains an attractive growth segment.

• Child insurance is an important product in Sweden with total market premiums above

SEK 2.5bn, the same product is virtually non-existent in Denmark and Norway. We

believe this will gradually change and plan to leverage on our recent Skandia child

insurance acquisition.

• In 2014, Tryg bought Securator reinforcing its leading position in the Nordic market for

product and extended warranty insurance, a market which is estimated at more than

DKK 2bn and expected to continue the growth in coming years.

Things that you may not remember

• Our maximum annual net exposure to a single large Property claim is

DKK 100m which falls to DKK 75m in case of a second event and

DKK 50m in case of a third/fourth event, maximum exposure is DKK

25m thereafter. This is based on our general reinsurance programme.

• Our maximum net exposure for weather claims is DKK 150m per

event. The upper limit of the programme is DKK 5.75bn, which is

statistically sufficient to cover at least a 250-year event.

• We have bought an additional ‘horizontal’ reinsurance programme

which will cover any weather claims in excess of DKK 300m up to DKK

600m. Weather claims have to be at least DKK 20m to end in the

‘horizontal’ agreement.

• Local accounting rules driven by Danish FSA means that all assets are

marked to market. This is different from Nordic/International peers

where many fixed income portfolios are hold to maturity and/or the

marked to market hits the NAV and not the P&L. The unrealised gains

and losses item does not show up in the P&L of some of our Nordic

peers (as most bonds are hold to maturity) or hits the NAV as

opposed to the P&L.

2013 2014 2015

Other Unrealised gains and losses

Realised gains and losses Interest income and dividends

Gross investment return

774237

1,071

34

The run-off cycle

35

-18,000

-2,000

+2,000

Run-off development

3 years

Claims buffer:

Run-off:

Claims estimate:

We assessed the claim at DKK 18,000 but reserve for DKK 20,000

• Initial assessment of the claims was DKK 18,000 but Tryg reserved for

DKK 20,000 adding some conservatism to best estimate.

• At the time of setting up the claims reserves and booking the claims in the P&L the

Loss ratio (hence the combined ratio) is worse than what should be if our initial

assessment is correct.

• After three years (approx. and using average for Tryg group) the DKK 2,000 added

for conservatism comes back in the P&L as a positive run-off gain or reserves

releases. All the above assumes that initial assessment was correct and nothing

has changed in the three years period.

• Figures in the example above are purely illustrative.

5,000

5,200

5,400

5,600

5,800

6,000

Population growth (2000-2016)

4,000

4,400

4,800

5,200

5,600

DK 7%

NO 16% Growth 2000-2016:

0-17 years 7.1%

18+ years 19.3%

Total 16.4%

Growth 2000-2016:

0-17 years 1.9%

18+ years 8.5%

Total 7.1%

Population development in Norway in ‘1,000

Population development in Denmark in ‘1,000

36

Structure of the Nordic insurance market

37

Denmark

DKK 52.0bn/EUR 7.0bn (as at Q1-2015)

Sweden

SEK 73.0bn/EUR 7.9bn (as at Q4-2015)

Norway

NOK 55.8bn/EUR 6.2bn (as at Q4-2015)

Nordic

EUR 25.7bn (as at Q4-2014)

13.4

21.9

25.3

10.0

29.4 Tryg

If

Gjensidige

Sparebank1

Other

9.3

4.8

17.2

8.7

8.79.1

42.2

Tryg

Topdanmark

If

Codan

Gjensidige

Länsforsikringar

Other

18.1

17.4

5.8

11.36.5

9.7

31.2Tryg

Topdanmark

If

Codan

Gjensidige

Alm. Brand

Other

2.9

18.2

15.4

1.6

29.8

16.3

15.8

Moderna (Tryg)

If

Trygg-Hansa (Codan)

Gjensidige

Länsforsikringar

Folksam

Other

Percentage

PercentagePercentage

Percentage

51

3

31

15

Own sales

External partners

Online & others

Atlantica/Bilsport MC

57

29

14

Own sales

Affinity

Nordea

44

12

38

6

Own sales

Car dealers

Affinity

Nordea

4555

Own sales

Brokers

Distribution of new sales 2015

38

Norway

Corporate Sweden

Denmark

Percentage

PercentagePercentage

Percentage

80

85

90

95

100

105

110

Combined ratio development

39

Premium hikes

Premium hikes

Smaller adjustments

Efficiencyprogramme

Customer andefficiency focus

2002-2004 price increases of DKK 2.1bn implemented. Reduced combined ratio from 107 to 94.

2011-2012 price increases will improve underlying combined ratio.

2012-2015 operational focus with target to cut expenses and claims costs by DKK 1bn in total.

2015-2017 New efficiency programme of DKK 750m launched.

*IFRS from 2004. Previous years are Danish GAAP.

Data before 2009 is not corrected for the sale of Marine Hull business, and Finland before 2008.

Key figures 2011-15 and consensus 2016-18

40

Consensus

DKKm 2011 2012 2013 2014 2015 2016 2017 2018

Gross premium income 19,948 20,314 19,504 18,652 17,977 17,736 17,941 18,177

Technical result 1,572 2,492 2,496 3,032 2,423 2,613 2,751 2,767

Investment income, net 61 585 588 360 -22 143 182 189

Pre-tax profit 1,603 3,017 2,993 3,302 2,310 2,696 2,877 2,900

Net income 1,140 2,208 2,369 2,557 1,969 2,118 2,259 2,277

Combined ratio 93.2 88.2 87.7 84.2 86.8 85.3 84.7 84.8

Expense ratio 16.6 16.4 15.6 14.6(*) 15.3(**) 14.5 14.1 14.0

Earnings per share 3.8 7.3 7.9 8.7 6.9 7.6 8.3 8.6

Dividend per share 1.3 5.2 5.4 5.8 6.0 6.2 6.5 6.7

Share buy back 0 800 1,000 1,000 1,000 957 767 623

Based on 16 estimates ahead of Q2 2016 * 15.3 excluding one-off, ** 14.9 excluding one-off

AppendixFollow us on Twitter: @TrygIR

Group

42

12

13

14

15

16

17

18

Expense ratio

75

80

85

90

95

100

Combined ratio

60

65

70

75

80

Claims ratio, net of reinsurance

-4

-3

-2

-1

0

1

2

3

4

15,000

16,000

17,000

18,000

19,000

20,000

21,000

Gross premiums

%DKKm

GEP (LHS) Local currency (RHS)

Private

43

12

13

14

15

16

17

18

Expense ratio

75

80

85

90

95

100

Combined ratio

60

65

70

75

80


-3-2-101234567

7,000

7,500

8,000

8,500

9,000

9,500

10,000

10,500

Gross premiums

%DKKm


Commercial*

44

14

15

16

17

18

19

20

Expense ratio

75

80

85

90

95

100

Combined ratio

55

60

65

70

75


-4

-3

-2

-1

0

1

2

3

4

2,500

3,000

3,500

4,000

4,500

5,000

Gross premiums

%DKKm


* Less than 100 employees and less than DKK 100m turnover

Corporate*

45

10

11

12

13

14

15

Expense ratio

75

80

85

90

95

100

Combined ratio

65

70

75

80

85


-4

-3

-2

-1

0

1

2

3

4

2,500

3,000

3,500

4,000

4,500

5,000

Gross premiums

%DKKm


* More than 100 employees or more than DKK 100m turnover

Sweden

46

15

16

17

18

19

20

Expense ratio

75

80

85

90

95

100

105

Combined ratio

60

65

70

75

80

85


-8

-6

-4

-2

0

2

4

6

8

10

500

1,000

1,500

2,000

2,500

Gross premiums

%DKKm


Geographical segments

Norway

DKKmQ2 2016 Q2 2015 FY 2015

Gross premiums earned1,569 1,777 6,766

Technical result356 403 844

Key ratios:

Gross claims ratio58.8 62.3 70.9

Result of ceded business3.8 0.3 2.1

Gross expense ratio14.9 15.0 14.9

Combined ratio77.5 77.6 87.9

Sweden

DKKmQ2 2016 Q2 2015 FY 2015

Gross premiums earned478 482 1,894

Technical result21 93 328

Key ratios:


Result of ceded business2.9 2.1 1.7



Denmark

DKKmQ2 2016 Q2 2015 FY 2015

Gross premiums earned2,337 2,299 9,346

Technical result393 329 1,371

Key ratios:


Result of ceded business2.9 -35.8 -9.2



47

Norway

% 2016 2017

GDP Growth (mainland) 1.0 1.6

Inflation 2.6 1.5

Unemployment 4.8 4.9

Current account balance in % of GDP

7.0 7.6

Budget balance in % of GDP 5.7 6.3

Public debt in % of GDP 0.0 0.0

Sweden

% 2016 2017

GDP Growth 3.8 2.2

Inflation 1.3 1.6



6.4 5.9

Budget balance in % of GDP -0.9 -1.1


Economic key figures

48

Source: Economic Outlook, Nordea Markets, February 2016

Denmark

% 2016 2017

GDP Growth 1.3 1.8

Inflation 0.6 1.2



7.3 6.8

Budget balance in % of GDP -2.7 -2.2


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