Tryg A/S – Interim report Q2 and H1 2020

Tryg’s Supervisory Board has today approved the interim report for Q2 and H1 2020.

Premiums growth of 7.9% in H1, driven primarily by a positive development in the Private segment. Technical result of DKK 1,735m (DKK 1,605m), driven by the continued positive developments in the core business and delivery of the Alka synergies. The outbreak of COVID-19 had a negative H1 impact of DKK -422m including investment losses, the core business was negatively impacted by DKK -85m on a gross basis.

Investment income of DKK -439m (DKK 410m) characterized by highly positive equity markets and narrowing credit spreads in Q2, following an extremely challenging capital markets development in Q1. Profit before tax of DKK 1,167m (DKK 1,909m). Solvency ratio was 193, positively impacted by the Q2 result and by moving dividend decision for 2020 at year-end as announced on 27 March.

Financial highlights Q2 2020

• Premium growth of 7.0% (5.9% in Q2 2019 excluding Alka) in local currencies

• Technical result of DKK 1,063m (DKK 979m), positively impacted by core business and Alka synergies

• Combined ratio of 80.9% (82.1%)

• Underlying claims ratio (Private and Group) improved by 0.2 and 0.6 percentage points with the Group being helped by profitability initiatives in the Corporate segment

• Large claims at 1.3% (2.4%) and weather claims at 0.9% (0.9%)

• Expense ratio of 14.3 (14.2)

• Return on free investment portfolio DKK 519m (DKK 161m)

• Total investment return of DKK 541m (DKK 57m)

• Profit before tax of DKK 1,539m (DKK 979m)

• Solvency ratio of 193

Financial highlights H1 2020

• Premium growth of 7.9% (6.0% excluding Alka in H1 2019) in local currencies

• Technical result of DKK 1,735m (DKK 1,605m) positively impacted by Alka result

• Combined ratio of 84.4 (85.0)

• Large claims at 1.8% (2.9%) and weather claims at 1.4% (1.7%)

• Expense ratio of 14.2 (14.1)

• Return on free investment portfolio of DKK -194m (DKK 534m)

• Investment return DKK -439m (DKK 410m)

• Profit before tax of DKK 1,167m (DKK 1,909m)

Customer highlights Q2 2020

• Transactional Net Promotor Score (TNPS) at an all-time high level of 70 (67)

• Number of products per customer increased to 3.9 (3.8)

• For the fifth year running, TryghedsGruppen will pay out a member bonus of 8% to its members

Statement by Group CEO Morten Hübbe:

We deliver a satisfactory quarterly result, helped by a very positive investment income following a rebound in capital markets after the abysmal Q1. Tryg’s core insurance business continues to perform well helped by a good growth, underlying improvements and the delivery of the Alka synergies.

Looking at H1, we have been strongly impacted by the outbreak of COVID-19, which has impacted our result negatively with an investment loss of approximately DKK 440m. Our overall pre-tax result is therefore below H1 2019. The COVID-19 outbreak has cost us, before reinsurance, DKK 85m in H1 driven by the very high amount of travel claims in Q1 partly offset by lower claims frequencies in selected lines of businesses.

In H1, we have received 125,000 travel claims across Scandinavia, where approximately half of it – 65,000 – is related to COVID-19. That is an 80% increase compared to H1 2019, where Tryg received 70,000 claims relating to travel insurance.

Additionally, Tryg has launched a number of financial initiatives to help our customers in a difficult time. For example, we have encouraged customers to perform an insurance check if their needs have changed following the outbreak of COVID-19. We have encouraged our customers to lower their annual estimated kilometers if they drive less than normal. We have also encouraged our commercial customers to change to their payments to monthly premiums and offered to refund their yearly premium to strengthen their liquidity.

We have also taken on an extraordinary social responsibility and, among other things, provided cyber insurances for free to small and medium-sized businesses during COVID-19. For the third year running, we have offered our customers to make use of our free medical hotline during the summer and finally, we have been given more than 20,000 children a child insurance for the Danish Football Union’s annual football school to bring into focus the social problem that almost every fifth child does not have an accident insurance. Finally, I am very pleased, that we have already reached our CMD customer target of a TNPS (Transactional net promoter score) of 70 in Q2.

Conference call

Tryg hosts a conference call today at 10:00 CEST. CEO Morten Hübbe and CFO Barbara Plucnar Jensen will present the results in brief followed by Q&As.

The conference call will be held in English. An on-demand version will be available shortly after the conference call has ended.

Conference call details:

Danish participants:

UK participants: +44 (0) 333 300 9031

US participants:

All Q2 and H1 material can be downloaded on shortly after the time of release.

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