TrygVesta’s interim report for the first quarter of 2008 showed stronger growth in gross earned premiums, a significant improvement of the technical result and an improved combined ratio. The pre-tax profit was, however, adversely affected by a loss on investment activities. TrygVesta purchases its Ballerup head office for DKK 1,085m
The TrygVesta insurance group recorded gross earned premiums of DKK 4,233m in the first quarter of 2008, which was DKK 234m, or 4.9% in local currency terms, more than in the same period of 2007. By way of comparison, growth amounted to 1.7% in the first quarter of 2007.
TrygVesta’s technical result was up 20% to DKK 637m. The improved performance was attributable to strong premium growth and a favourable trend in the claims ratio. The combined ratio, that is, claims incurred plus the gross expense ratio, improved by 1.7 percentage points to 87.9 against 89.6 in the same period of last year.
The Group posted a profit before tax of DKK 261m against DKK 683m in the first quarter of 2007. The performance was composed of the strong technical result and a loss of DKK 20m on investment activities, which was DKK 489m lower than in the same period of last year.
More loyal customers
- Our insurance operations performed satisfactorily in the first quarter of the year. The improvement in gross earned premiums was mainly attributable to the Private & Commercial Norway business area, to our new markets in Finland and Sweden, and to our Corporate business area, said Group CEO Stine Bosse.
- Private & Commercial Norway is beginning to benefit from measures to promote sales and enhance customer loyalty launched in prior years. We are pleased to note that both Norway and Denmark recorded a fair increase in their already high customer loyalty rates. The large majority of customers appreciate that we prefer to enhance our service and quality offering rather than competing solely on price. The launch of our Tryg Vejhjælp roadside assistance product and other initiatives targeting our motor insurance customers is intended to strengthen this trend in Denmark.
At DKK 123m, earned premiums in Finland and Sweden were almost double the figure recorded in the first quarter of 2007, and growth in our new markets accounted for 1.4 percentage points of the Group’s total growth of 4.9%. The Finnish and Swedish businesses had a total insurance portfolio of DKK 530m at 31 March 2008. Both Finland and Sweden sell around 3,000 new policies each week, and we expect continued strong growth.
The improvement in Corporate reflected a large influx of new corporate customers in both Norway and Denmark in 2007, said Group CEO Stine Bosse.
Outlook for the full year 2008
TrygVesta upgrades its expectations for the technical result for 2008 by 9% to DKK 2.4bn and improves the combined ratio guidance from 90 to 89. Premium growth expectations are maintained, and profit before and after tax is downgraded due to equity price falls as indicated in the 2007 annual report. TrygVesta thus expects pre-tax profit of DKK 2.3bn against the most recent guidance of DKK 2.5bn provided in February 2008.
Purchase of head office in Ballerup
TrygVesta takes over its Ballerup head office for DKK 1,085m. The acquisition replaces the existing lease with Danica from 1995, which would expire in 2025. The purchase provides TrygVesta with certain immediate financial benefits and enhances the framework for modernising and refurbishing workplaces scheduled for completion in 2010.
TrygVesta
Details of the first quarter 2008 performance are available in the interim report published 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