Tryg (Hold, TP: DKK205.00) - Underwriting gradually improving
Tryg’s solid Q2 results included an 80.9% combined ratio (CoR), fuelled by the benefits of lower activity and the investment results beating our estimate. Underlying profitability continued to improve, reinforced by initial signs of upturns in profitability across the more challenging business segments outside Denmark. We reiterate our HOLD and DKK205 target price, despite a demanding 2021e P/E of ~22x, as we struggle to see any near-term negative share-price catalysts. We have raised our 2021–2022e EPS by ~2%, mainly due to FX.Tryg is an insurance company, engaged in providing insurance services. Co.'s private segment encompasses the sale of insurance products to private individuals in Denmark and Norway. Co.'s commercial segment encompasses the sale of insurance products to small and medium-sized businesses in Denmark and Norway. Co.'s corporate segment sells insurance products to corporate customers under the brand Tryg in Denmark and Norway, Moderna in Sweden and Tryg Garanti. Co.'s Sweden segment comprises the sale of insurance products to private customers under the Moderna brand. Moreover, insurance is sold under the brands Atlantica, Bilsport & MC, Securator and Moderna Djurforsakringar.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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