2010 characterised by major increase in claims costs

Tryg’s 2010 result was affected both by a generally high level of claims and one-off events. These increased by DKK 1.4bn compared to a normal year.

- We are not satisfied with 2010 which was a challenging year characterised by many expensive weather-related claims and rising provisions for Workers’ Compensation due to a Supreme Court decision in Denmark. In addition, we must acknowledge that we should have been faster to meet the challenges facing our core business, particularly in the commercial markets. During 2010, we made decisions that will improve our results in 2011 and 2012, says Morten Hübbe, CEO.

- Based on loss prevention, cost reductions and premium increases, we already see significantly improved profitability in Norway and Finland, and we are also moving in the right direction on the Danish private market. We know that the initiatives work, and particularly the development in the last part of the year illustrates this. During a challenging year, we managed to reduce our expense ratio from 17.2 to 17.0 even though we invested significantly in increased growth in Finland and Sweden, common Nordic branding and common Nordic development in processes and systems, Morten Hübbe emphasises.

Earned premiums of DKK 19.5bn
Gross earned premiums increased by 4.5% (9% in DKK) in 2010 amounting to DKK 19.5bn. The growth was attributable to high premium growth of 43.8% in Sweden and 23.4% in Finland as well as the impact of premium increases implemented in all four countries.

The technical result was DKK 375m against DKK 1,562m in 2009. The investment return after transfer of technical interest was DKK 570m. Particularly, investments in shares contributed positively to the return on investments. The proportion of shares was increased slightly in 2010 while the proportion of bonds was reduced accordingly.

The key figure, combined ratio (equals expenses and losses divided by revenue from premiums) increased from 98.8 against 92.2 in 2009. The impact of extraordinary events corresponds to 7 percentage points.

Q4 shows positive effect of initiatives
The premium growth in the fourth quarter was 5.5% in local currency and 9.5% in DKK. The pre-tax profit for the fourth quarter was DKK 512m and this confirms that the underlying development is improving.

Before extraordinary winter-related claims, the combined ratio was 91.7 against 94.1 in Q4, 2009. The expense ratio ended at 17.2 against 18 resulting from efficiency and process improvements.

- The improved financial performance in the fourth quarter shows that the decisions we made from 2009 and during entire 2010 have had an impact, and this is the reason why we look forward to 2011 which will be a year in which we will improve our performance, Morten Hübbe says.

High customer loyalty
- In the medium term, our aim will still be a combined ratio at a level of 90, including any run-off result, which corresponds to a return on equity after tax at the level of 20%. We are planning a number of initiatives for 2011 which - along with the measures we implemented in 2010 – will improve profitability. Our customers will receive advice on loss prevention, and we will carry out pruning measures, changes to the scope of cover and selected premium increases, for example within change-of-ownership insurance, Morten Hübbe says.

- We must support our customers by giving them good advice before the loss occurs, and we must be there for them when it occurs. By doing so, we will maintain high customer loyalty. It is a sign of customer satisfaction that we - during a year with premium increases - have been able to maintain high retention rates – 90 in Denmark and 86 in Norway, Morten Hübbe adds.

Dividend of DKK 4 per share
Based on the financial performance for the year and in accordance with Tryg’s dividend policy, the Supervisory Board suggests that Tryg pays cash dividends of DKK 256m corresponding to DKK 4 per share.

Outlook for 2011
Tryg expects that the combined ratio for 2011 will improve due to the major initiatives implemented in 2009 and 2010 and the planned initiatives for 2011. Tryg will still pay close attention to any claims inflation to prevent an additional rise in the high level of claims costs.

It will require further, significant improvements in 2012 and 2013 to reach the target of a return on equity of more than 20% corresponding to a combined ratio at a level of 90.

Tryg expects a premium growth at the level of 2010. We will maintain sustained organic growth primarily in Sweden and Finland.

Detailed information about the 2010 result appears from the Annual Report published on 9 February 2011.

For further information, please contact:
CCO Troels Rasmussen, phone +45 30 35 30 70, email: troels.rasmussen@tryg.dk or
IR Director Ole Søeberg, phone +45 40 30 00 04, ole.soeberg@tryg.dk

Suomessa:
maajohtaja Siina Saksi, puh. 050 550 3912, siina.saksi@tryg.fi
viestintäjohtaja Linda Strömsten, puh. 040 520 6080, linda.stromsten@tryg.fi