The TrygVesta insurance group reported continued strong growth for the third quarter of 2009. Growth in earned premiums of 11.4% in local currency terms (7.3% in DKK terms) was driven partly by strong growth in the number of insurances in Sweden and Finland, partly by an influx of new customers in Denmark and Norway.
TrygVesta recorded gross earned premiums of DKK 4,747m in the third quarter of 2009. The Group’s pre-tax profit increased from DKK 198m to DKK 717m, mainly attributable to an improvement of the investment return. The insurance operations reported a profit of DKK 397m, which was DKK 149m less than in the year-earlier period.
The Group’s pre-tax profit the first nine months of the year increased from DKK 999m to DKK 2,038m. Profit for the period after tax increased 128% to stand at DKK 530m.
TrygVesta upgrades its full-year post-tax profit forecast from DKK 1.7bn to DKK 1.8bn based on the improved investment return. The profit forecast before tax is upgraded from DKK 2.2bn to DKK 2.4bn.
Improvement in the Nordic region
“Our third quarter performance clearly demonstrates the advantages of being a Nordic insurance group,” said Group CEO Stine Bosse.
“We reported our best performance in Norway since Q4 2007, thanks to measures such as price adjustments and cost restraint. At the same time, we managed to increase our market share and maintain our high customer loyalty rates.”
“We can apply this experience in the Danish market, where the profitability of our house and contents insurances is not quite good enough. This is a problem prevailing in the entire industry, and we are going to see price adjustments in the upcoming period. Furthermore, the price adjustments we have already implemented will improve profitability going forward.”
“We passed a milestone in Sweden which produced its first quarterly profit since we began operations there in 2006. Moderna, which we acquired in April 2009, contributed excellent growth and good profitability. Premium increases effective from 1 April will gradually improve profitability in the remaining part of our Swedish business.”
“Finland continued to report strong growth, and the Finnish branch is seeking to strike a better balance between growth and profitability in order to become profitable,” said Stine Bosse.
Strong influx of customers
TrygVesta recorded premium growth of 3.9% in the Danish Private & Commercial market in the third quarter, primarily driven by premium increases and a strong influx of motor and house insurances. Gross earned premiums increased to DKK 1,716m.
Gross earned premiums in the Norwegian Private & Commercial market were up by 4.1% in local currency terms, but due to currency translation this item fell by 5.5% in DKK terms to DKK 1,138m. Market statistics for Q2 indicate that TrygVesta increased its market share by 0.2 percentage point to 18.2% in a very competitive market.
In Sweden, the newly acquired Moderna contributed DKK 320m to the quarter’s gross earned premiums of DKK 402m. Excluding Moderna, the Swedish business reported 40% growth in local currency terms, and Moderna produced growth of 14%.
Gross earned premiums in Finland were up by 32% to stand at DKK 128m. The branch thus continued the favourable performance from previous quarters.
The Corporate business improved gross earned premiums by 0.7% in local currency terms (minus 3.7% in DKK terms) to stand at DKK 1,356m. The performance was composed of a good influx of new customers in Norway, while the Danish part of the Corporate business recorded declining volumes within workers’ compensation insurance due to higher unemployment rates. Furthermore, price competition in certain areas has reached a level which TrygVesta does not wish to match. The Swedish corporate business made a positive contribution to growth.
Investment return of 2.0%
TrygVesta’s investment portfolio of DKK 39.8bn produced a gross return of DKK 770m in the third quarter, equal to a return of 2.0% or around 8% annualised on average invested capital during the period. After transfer of technical interest, the net investment result was DKK 332m compared with a loss of DKK 331m in the third quarter of 2008, when TrygVesta recorded a loss of DKK 192m on equities.
The investment portfolio mainly consists of bonds with the highest ratings. TrygVesta’s investments comprise 87% bonds, 9.5% real estate and 3.5% equities.
TrygVesta
Detailed information relating to the third quarter 2009 performance is set out in the interim report released earlier today on http://www.trygvesta.com
For further information please contact Ville-Veikko Laukkanen, Head of Business, ville-veikko.laukkanen@nordea.com, tel. 050 543 5921.