carnegie nordic small & mid cap seminar...

Carnegie Small & Mid Cap Seminar1

For further information: www.trygvesta.com

Carnegie Nordic Small & Mid Cap Seminar Stockholm, 8 September 2009 Ole Søeberg, IR Director


Facts about TrygVesta

Gross premium income2008 Other

14%

Accident10%

Workers' comp9%

Prop, comm15%

Prop, private19%

Motor32%

Smaller16%

Non-Danish institutions

6%

Danish institutions

18%

TryghedsGruppen smba

60%

• Expanding Nordic platform

• Prudent underwriting and risk selection

• Exceed customer expectation

• Vision: To be perceived as the leading

“peace of mind” provider in the Nordic

region

Price performance since IPO (incl. dividends)

0

25

50

75

100

125

150

175

200

225

250

Oct/2005 Mar/2006 Aug/2006 Jan/2007 Jun/2007 Nov/2007 Apr/2008 Sep/2008 Feb/2009 Jul/2009

TrygVesta Euro Insurance index


The Nordic region- structure of the insurance market

NorwayEUR 4.4bn

TrygVesta, 18.0%

If, 28.9%

Other, 13.9%

Sparebank1, 9.9%

Gjensidige,29.3%

FinlandEUR 3.4bn

TrygVesta, 1.5%Pohjola,

23.4%

If, 25.3%Other, 20.6%

Fennia, 10.6%

Tapiola, 18.6%

DenmarkEUR 6.1bn

TrygVesta, 20.8%

If, 5.0%

Alm. Brand, 10.5%

Topdanmark, 19.6%

Other, 26.8%

Codan, 13.8%

Alka, 3.5%

Sweden EUR 5.5bn

Vesta (incl. Moderna),

2.6%

Länsforsk., 29.2%

If, 19.7%

Other, 17.2%

Codan, 17.1%

Folksam, 14.2%

Top 4

86%

Top 4

65%

Top 4

80%

Top 4

78%

Source: FNH.no

Source: F&P and company figures Source: forsakringsforbundet.com

Source: FKL.fi


Competitive landscape characteristics

2005 2008 2011

Danish price competition

in motor

Norwegian bundling

competition

Price increases

due to claims inflation in all

countries

Need for capital after financial crisis

Solvency II impact

Disciplined large players

Dominated by direct insurance. Brokers only in corporate area


Key figures in first half 2009

Claims ratio

71.370.5 70.1

70.6

74.7

64

68

72

76

H1 05 H1 06 H1 07 H1 08 H1 09

Gross premium incomeDKKm

7,769

7,9658,106

8,571

8,820

7,000

7,500

8,000

8,500

9,000

H1 05 H1 06 H1 07 H1 08 H1 09

Combined ratio

88.587.4 87.1

87.6

91.9

83

87

91

95

H1 05 H1 06 H1 07 H1 08 H1 09

Gross expense ratio

16.7 16.4 15.8 15.3 15.0

0.5 0.5 1.2 1.7 2.2

10

12

14

16

H1 05 H1 06 H1 07 H1 08 H1 09

17.2 16.9 17.0 17.0 17.2

Denmark & Norway Finland & Sweden


TrygVesta and Nordic competitors

Premium growth in %

if…

Codan

TrygVesta

GjensidigeTrygVesta in

local currency

-4

0

4

8

12

2004 2005 2006 2007 2008 H1 09

Combined ratio

if…

Codan Operating

ratio

TrygVesta

Gjensidige

Codan "CR"

84

88

92

96

2004 2005 2006 2007 2008 H1 09

Overall growth in line with

GDP growth


Challenges and opportunities for the insurance industry

Climate

RegulationCompetition

Demography

04.09.2009

The route to improving profitability

http://www.hafnor.com/artikler_htm/nyheter.htm


Behind the curve but catching up

Houses Denmark

90

100

110

120

130

140

150

Q105

Q205

Q305

Q405

Q106

Q206

Q306

Q406

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

Average premium Average risk

Private cars Norway

90

95

100

105

110

Q105

Q205

Q305

Q405

Q106

Q206

Q306

Q406

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

2005 2006 2007 2008 2009

Premium increases:

Houses Denmark:

New product Q4 2008

up 11 %

Private cars

Norway:

1 July 07: 4.8%

1 Jan 08: 1.6%

1 July 08: 1.0%

1 Jan 09: 5.0%

1 July 09: 6.6%

Development since 2005…… …… and more recently

2005 2006 2007 2008 2009

Private cars Norway

90

100

110

2008 2009

Houses Denmark

90

100

110

2008 2009


Recently implemented price increases

DenmarkJan 09 Apr 09 Jul 09

House building New product

Health Care 15%

10%

Accident 15%

Travel

20%

Agriculture

10%

Norway Jul 07 Jan 08 Jul 08 Jan 09

House building 2% 6% 1.8%

7.4%

Motor

4.8% 1.6%

1%

5.0%

SwedenApr 09 Jun 09

Motor 15%

House building

8%

House content

5%

Accident

5%

Finland Apr 09

Motor 9%

House content

11%

Accident

11%

Holiday house 10%

Travel 10%

Motorcycle

13%

TrygVestaTotal effect of price increases*

2009 2010

DKK 245m DKK 360m

*Including effect of price increases from 2008


Underlying2008

Underlying2009

Underlying2010

Underlying2011

Underlying2012

Combined ratio development

Index/price

increases in 2009

Index/price

increases in 2010

Price increases

prior years

Lower

interest

rate level

Price increases prior year



Index/price

increases in 2011

Index/price

increases in 2012

Claims ratio Claims inflation


Impact from other external factors

1% increase

in interest

level

≈

DKK 300m higher

pre-tax

result

Sensitivity of interest rate changes

Discounting interest rate - 2006-2009

2%

3%

4%

5%

6%

Q32006

Q42006

Q12007

Q22007

Q32007

Q42007

Q12008

Q22008

Q32008

Q42008

Q12009

Q22009

"Fla

t in

tere

st

rate

"-844

-673

-334

329

971

1,286

-3.0%

-1.0%

-4.0%

2.7%

2.1%

1.1%

-1,000

-500

0

500

1,000

1,500

1.0% 1.5% 2.5% 4.5% 6.5% 7.5%

Interest rate level

Claims Pre-tax

result

Change in combined ratio

DKKm


New Markets – Sweden & Finland

322543

1568

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2007 2008 outlook2009

E 2010 E 2011 E 2012

New plan – profitability focus

•

Changed

focus

is expected to improve

result

by DKK 350m from 2007–E 2012

•

Corresponding

to +15% of 2008 tecnical

result

of TrygVesta Group

•

ROE is expected to be

positive impacted

by approx. 3%

-200

-100

0

100

200

300

2007 2008 outlook2009

E 2010 E 2011 E 2012

CR approaching

95

78.6% 82.1%

0.2%

64.5%44.9%

0.3%

127%

143%

0%

25%

50%

75%

100%

125%

150%

2007 2008 outlook

2009 E-2010 E-2011 E-2012

Claims ratio Ceded business Expense ratio Combined ratio

Gross premiums ResultDKKm DKKm


Investments, outlook, capital and ROE


Investment portfolio structure

Conservative approach to the investment portfolio of DKK 38.3bn

•

3.3% gross return in H1 2009 and 6.7% annualised and boosted by strong equity markets

•

The equity portfolio is primarily indexed and tracking leading MSCI indices

Geo split of equitiesOther Europe

25%

Asia12%

Scandinavia23%

UK9%

America31%

Bonds are 87% of portfolio…

…and equities are 3.5%

0%

20%

40%

60%

80%

100%

Q306

Q406

Q107

Q207

Q307

4Q07

1Q08

Q208

Q308

Q408

Q109

Q209

Bonds Equities Real estate


Conservative approach and new split by portfolio purpose

Current:

Total

DKK 38bn

Matching:

DKK 28bn

Free:

DKK 10bn

v

v

Today:

Tomorrow:

Real estate

Bonds

Equities

-1.0-0.50.00.51.01.52.02.53.03.5

Jan

06

Mar May Jul

Sep

Nov

Jan

07

Mar May Jul

Sep

Nov

Jan

08

Mar May Jul

Sep

Nov

Jan

09

pct.

-1-0.5

00.5

11.5

22.5

33.5

Jan

06

Mar May Jul

Sep

Nov

Jan

07

Mar

May Ju

l

Sep

Nov

Jan

08

Mar

May Jul

Sep

Nov

Jan

09

pct.

-2.0-1.00.01.02.03.04.0

Jan

06

Mar May Jul

Sep

Nov

Jan

07

Mar

May Jul

Sep

Nov

Jan

08

Mar May Jul

Sep

Nov

Jan

09

pct.


Outlook 2009

Expected 2009

DKKmRealised

2008

Mid February

2009

May

2009August 2009 Positive

scenarioNegative scenario

Interest rate level 3.93% 3.5% 3.4 %

Exchange rate DKK/NOK 0.85 0.84 0.83

Premium growth in local currency 4.9% 4% 8% 8%

Technical result before run-off 1,591 1,500 1,700 1,300

Technical result after run-off 2,384 1,500 1,800 1,600 1,750 1,450

Investment result, net -988 300 300 700

Pre-tax result 1,347 1,800 2,100 2,200

Net income 846 1,300 1,400 1,700 1,800 1,600

Combined ratio 89.1 92 91 92 91 93

Outlook for remaining 2009 assumes: zero run-off, large claims of DKK 250m and weather related claims of DKK 125m

Return assumptions p.a.

Equity

7.0%Bonds

3.0%Real estate

6.0%


Capitalisation

6,000

7,000

8,000

9,000

10,000

11,000

12,000

2006

Q1 07

Q2 07

Q3 07

2007

bef

ore

payo

ut

2007

afte

r pay

out

Q1 08

Q2 08

Q3 08

2008

bef

ore

payo

ut

2008

afte

r pay

out

Q1 09

Q2 09

Target capital (A- level) Buffer (5%) Surplus capital

DKKm

Dividend policy:

50% of net income as cash dividend

Surplus capital to be used for share buy backs


Return on equity 2010-2012

Interest 5.5%-

7%

Interest 1%-3%

24%25% 25% 26%

27%

19% 19%

11%

17%18%

4%

8%

12%

2%

5%

1% 1% 1%

23%22%

9%

24%

36%

28%

21% 23%24%

17%

18%16%

11%

-7%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2004 2005 2006 2007 2008 Outlook 2009

E-2010 E-2011 E-2012

ROE after

tax

and including

run-off ROE after

tax

including

run-off at 2007 interest

rateROE (insurance) ROE (investments)

74


Summary

No. 2 insurance company in the Nordic region

Strong take on improving profitability in all markets

Changing investment portfolio into matching section and active section

Focus on improving combined ratio and ROE

Peace of mind for investors


Questions please


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 our website at www.trygvesta.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.


Key financial figures 2004-2008 and consensus

In DKKm 2004 2005 2006 2007 2008 2009E 2010E 2011E

Gross premium income 15,266 15,705 16,021 16,606 17,323 18,112 19,047 19,808

Gross claims incurred -10,425 -11,159 -10,564 -11,175 -11,766

Operating expenses -2,611 -2,662 -2,697 -2,769 -3,003

Ceeded business -708 -7 -591 -343 -669

Technical interest, net 185 170 343 501 499

Technical result 1,707 2,047 2,512 2,820 2,384 2,198 2,330 2,416

Investment income, net 371 894 1,228 340 -988 382 377 410

Pre-tax profit 2,052 2,913 3,709 3,109 1,347 2,495 2,640 2,679

Tax -556 -788 -624 -842 -501

Net income 1,421 2,097 3,211 2,266 846 1,891 2,021 2,159

Total insurance provision 25,212 26,757 25,957 26,916 25,193

Shareholders equity 6,802 8,215 9,951 10,010 8,244

Consensus. Aug 2009


Moderna acquisition strengthens distribution platform

Distribution channel Denmark Norway Finland Sweden

Customer centre

Call centre

Bancassurance

Car dealers

Insurance brokers

Affinity groups

Real estate agents

Nordea online bank

E-business/Self-service

Franchise

Vahinkovakuutus


The Danish non-life insurance market since 1996

-10,000

0

10,000

20,000

30,000

40,000

50,000

60,000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Net premiums Insurance result

DKKm

5.4% CAGR

0

10

20

30

40

50

1995 1997 1999 2001 2003 2005 2007

TrygVesta Topdanmark CodanAlm Brand Other

%

Market sharesMarket size and profitability


The Norwegian non-life insurance market since 1996

0

10,000

20,000

30,000

40,000

50,000

1996 1998 2000 2002 2004 2006 200850

60

70

80

90

100

110

120

130

Premiums (left) Combined ratio (right)

NOKm7.2% CAGR

Market sharesMarket size and profitability

0

10

20

30

40

1994 1996 1998 2000 2002 2004 2006 2008

If… Gjensidige Sparebank1 TrygVesta Other

%

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