11 November 2008
TrygVesta saw sustained growth in the third quarter of the year, and the Group maintains it target of full-year growth of 5%.
The number of policies increased by 244,000 in the first nine months of the year with Sweden and Finland accounting for 157,000. The expense ratio was unchanged at 16.7 despite the strong growth in Sweden and Finland and general payroll increases in all four Nordic countries.
However, increasing building and health care claims and an above-normal number of large claims impacted the nine-month performance adversely, causing TrygVesta’s combined ratio for the first three quarters of the year to climb to 88.7 from 86 in the year-earlier period. Against this background, TrygVesta downgrades its forecast for the core business (technical result) from DKK 2.6bn to DKK 2.2bn.
The turmoil in the financial markets had a negative impact of DKK 1bn on profit, causing TrygVesta to reduce the forecast pre-tax profit from DKK 2.3bn to DKK 1.2bn.
TrygVesta reduced its portfolio of equities already in the autumn of 2007 and in January 2008, thereby curtailing the Group’s year-to-date loss on equities by DKK 1.15bn.
TrygVesta’s preliminary forecast for 2009 includes a growth rate in line with 2008 and a combined ratio at the level prevailing in 2008.
TrygVesta generated a pre-tax profit of DKK 999m in the first nine months of 2008 against DKK 2,471m in the same period of last year. The profit for the period after tax was DKK 766m compared with DKK 1,847m in 2007.
Partnership with Nordea extended
TrygVesta extended its partnership agreement Nordea from 1999, under which Nordea sells TrygVesta’s general insurance products and TrygVesta sells Nordea’s life insurances. The agreement also involves Nordea’s management of most of TrygVesta’s investment assets. The new agreement will expire in 2013, which is the maximum term allowed for such agreements.
Last week, TrygVesta announced price increases for Danish building policies, and price hikes are scheduled for motor policies in Sweden.
Necessary price increases
- We are pleased with the growth recorded in all four markets, not least in Sweden and Finland, said Group CEO Stine Bosse.
- We pointed out already when we announced our half-year results that rising claims expenses particularly under building policies could put us under pressure. This has now materialised, and in response we have taken the initiative to raise prices in all four markets.
Our financial performance was impacted by the global financial crisis, and fortunately we reduced our exposure to equities at an early stage. However, our investment performance also emphasises the importance of concentrating on our core business.
We have seen some competitors being rather offhand about this performance in an attempt to buy growth, but I think this is now a trend of the past because all players have to realise that no one can expect to be saved by a good investment performance – not in the very near future, at any rate.
It is also very positive that we were able to maintain a low expense ratio despite a labour market with strong wage inflation by developing new products and new cost-saving IT solutions and generating strong growth ourselves, Stine Bosse concluded.
Detailed information about the performance in the first nine months of 2008 appears from the announcement issued today.
Further information:
Please contact Ole Søeberg, Chief Investor Relations Officer, tel. +45 44 20 45 20
or Troels Rasmussen, Chief Communications Officer, tel. +45 44 20 30 70
About TrygVesta
TrygVesta wants to be perceived as the leading peace-of–mind provider of the Nordic region. We aim to prevent concerns from overshadowing the everyday lives of our customers. Throughout 2007, our more than 3,900 employees and our service and product provision interacted to provide peace of mind on a daily basis to more than 2.2 million private customers and more than 100,000 businesses. Generating gross earned premiums of DKK 16.6bn in 2007, we are the second-largest general insurer in the Nordic region. We are the largest player in Denmark and Norway’s third largest player. We have operated our rapidly growing activities in Finland and Sweden since 2002 and 2006, respectively. For more information, go to www.tryg.dk