stine engelsk 07/03/03 13:25 Side 1
TTrryygg VVeessttaa GGrroouupp AAnnnnuuaall RReeppoorrtt 22000022
Contents
Activities of the Tryg Vesta Group
The Group
Partnership with Nordea
External environment
Securities markets
Strategy and focus areas
Customers
Earnings
Synergies, employees and knowledge sharing
Investment policy
Business areas of the Tryg Vesta Group
Tryg including Dansk Kaution and Tryg Rejse og Sundhed
Vesta
Tryg-Baltica international
Other activities
Shareholder information
Allocation of loss and shareholders’ equity
Tryg i Danmark smba
Financial highlights and key ratios
Directors’ report
Tryg including Dansk Kaution and Tryg Rejse og Sundhed
Vesta
Tryg-Baltica international
Other activities
Investment activities
Post balance sheet events
Exposure
Outlook
Management’s signatures
Auditors’ report
Accounting policies
Financial statements of the parent company and the Tryg Vesta Group
Supervisory Board and Executive Management
Heads of business organisation
Group overview
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Information Department
Tel. +45 44 20 30 71
Fax +45 44 20 66 33
Annual general meeting
will be held on 21 March 2003 at 11 a.m.
at the company’s address:
Klausdalsbrovej 601, Ballerup, Denmark
Address
Tryg Vesta Group A/S
Klausdalsbrovej 601
DK-2750 Ballerup
CVR no.: 26 46 02 12
Tel. +45 44 20 20 20
Fax +45 44 20 66 00
www.trygvesta.com
Financial statements 2002
Tryg Vesta Group
Activities of the Tryg Vesta Group
Tryg Vesta Group A/S is a financial holding company with subsidiary undertakings operating in the
general insurance area. The Tryg Vesta Group was established on 28 June 2002 through a spin-off of all
general insurance activities of the Nordea AB Group. The Group’s legal structure is illustrated below
(simplified outline). Tryg Vesta Group A/S is owned by Tryg i Danmark smba, and Group Management
is anchored in Tryg Vesta Group A/S.
*
Vahinkovakuutus
(Finland)
Tryg Forsikring
(Danmark)
(Norge)
*
Nordea Kindlustuse
(Estland)
(Danmark)
(Danmark & UK)
95,32%
Tryg Polska
(Polen)
* Name change in process
The Group
Tryg Vesta Group A/S the second-largest general insurance group in the Nordic region with
activities in a number of Nordic and Baltic countries. The Tryg Vesta Group has some 2 million
personal customers and 250,000 commercial customers. As at 31 December 2002, the Group had 4,373
employees.
Denmark and Norway are the Group’s primary markets. Tryg is Denmark’s largest general insurer with a
market share in excess of 22%, whereas Vesta is the third largest general insurer in Norway with a market
share of almost 22%.
In Finland, insurance is written to a Finnish branch of Tryg Forsikring in a close bank assurance
collaboration with Nordea AB. The Tryg Vesta Group has had a presence in Poland since 1998, and in Estonia
since 2002. Moreover, the Group carries on guarantee insurance operations in Dansk Kaution and
reinsurance operations through Tryg-Baltica internationalt forsikringsselskab.
In June 2002, Tryg and Vesta acquired the majority of Zurich’s general insurance activities in Denmark
and Norway.
Financial statements 2002
Tryg Vesta Group
1
Partnership with Nordea
In connection with the spin-off from Nordea, Nordea and the Tryg Vesta Group entered into a strategic
partnership agreement, among other things, with a view to continuing and expanding the already existing
bank assurance collaboration between Nordea’s companies and the Tryg Vesta Group to the effect that
Nordea’s banking companies are a sales channel for the Tryg Vesta Group’s general insurance products
and the Tryg Vesta Group sells Nordea’s life insurance and pension products.
The partnership is exclusive and covers Denmark, Norway, Finland, Sweden and Poland.
The agreement between Nordea and the Tryg Vesta Group furthermore covers asset management,
property management and IT production agreements.
Tryg and the IT company CSC Danmark have signed a letter of intent by which Tryg agrees to outsource
its IT operations in a partnership with CSC. The aim is to reach a final agreement by the end of March
2003. The business partnership between Tryg and Nordea will continue unchanged.
External environment
General insurance
The general insurance markets in the Nordic and Baltic countries have undergone a process of
restructuring and consolidation in recent years. Major transnational Nordic insurance groups have been
created, including the Tryg Vesta Group.
The restructuring of the Nordic financial markets has taken place, including strategic alliances between
insurance companies and banks in the form of bank assurance partnerships with a view to broadening the
range of financial products and increasing distribution power.
Prices in the reinsurance market have shown a falling trend for many years, but developments in the
capital markets and recent years’ natural disasters have resulted in substantial losses. Combined with the
fear of terrorist attacks in the wake of the 11 September 2001 catastrophe in New York this led to
significantly higher prices of reinsurance which, in turn, is reflected in insurance premiums. Furthermore,
the underlying risk inherent in industrial and large-scale commercial insurance developed adversely
during the period of low reinsurance prices merely as a consequence of globalisation and risk
concentration. Adding these events to the existing scenario caused premiums to increase to levels unseen
in the market for many years.
Recently, the attitude to welfare society maintenance models has changed to the extent that the
demarcation line between private and public providers of welfare is now under heavy discussion. New
markets for insurance and private schemes are likely to emerge.
Securities markets
The year 2002 was characterised by very bad economic news: Low consumer and business confidence,
mounting corporate losses, disappointing industrial output, low investments and high unemployment
rates. The poor economic indicators caused the Fed and the ECB, albeit to a lesser extent, to continue
their expansive monetary policies.
Financial statements 2002
Tryg Vesta Group
2
As the year progressed, the economic recovery expected for 2002 was gradually postponed. Private
investments in particular have been long in coming as a result of excess investments in the late 1990s and
weak capital markets. The lack of economic growth has led to cost savings throughout the business
sector, resulting in increased unemployment in the USA, Europe and Asia.
Indexed movements in share indices in Denmark,
Europe and the USA
Interest rate movements for 5-year government bonds in 2002
6
100
90
80
70
60
2
0
0
2
-
1
0
-
1
0
2
0
0
2
-
2
0
-
1
0
2
0
0
2
-
3
0
-
1
0
2
0
0
2
-
4
0
-
1
0
2
0
0
2
-
5
0
-
1
0
2
0
0
2
-
6
0
-
1
0
2
0
0
2
-
7
0
-
1
0
2
0
0
2
-
8
0
-
1
0
2
0
0
2
-
9
0
-
1
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2
-
0
1
-
1
0
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0
0
2
-
1
1
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2
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1
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1
0
5
4
3
2
31
-
12
31
-
01
28
-
02
Denmark, KBX
Europe, MSCI
USA, MSCI
-
-
-
31
-
03
-
30
-
04
31
-
05
30
-
06
31
-
07
31
-
08
30
-
09
-
-
Germany
-
-
Denmark
-
-
USA
31
-
10
-
30
-
11
-
31
-
12
-
The gloomy macroeconomic indicators in 2002 had a favourable impact on bond markets. Interest rates
fell steadily over the year to the current historic lows.
Despite expansive monetary and fiscal policies, share prices fell throughout the year. In the latter part of
2002, the risk of a war against Iraq was very much in focus. The likelihood of war and the reduced
solvency of institutional investors led to lower risk tolerance in the financial markets, thereby contributing
to the flight from equity investments to the safe haven of short-term bonds.
Financial statements 2002
Tryg Vesta Group
3
Strategy and focus areas
The Group’s vision is to be the Nordic region’s most profitable provider of services that offer peace of
mind in markets and business areas in which the Tryg Vesta Group chooses to compete.
Based on a mission of offering a stable and qualitative supply of services that provide peace of mind to
private individuals and companies, the Tryg Vesta Group offers attractive insurance products and related
services.
The Tryg Vesta Group is stakeholder oriented, and to this end it has defined specific goals in relation to
its shareholders, customers and employees, and the Group takes an active stand on the surrounding
community.
The Tryg Vesta Group is aware of its social responsibility as a provider of products to the Nordic
communities and as a major employer.
Based on the new ownership structure, capital base and organisational structure, the Tryg Vesta Group
has defined a number of overall strategic focus areas. The Tryg Vesta Group intends to be strongly
focused on the direct mass market and the business areas in which profitability is considered satisfactory
within an acceptable time horizon. The market segments and business areas which are not considered to
hold profit potential will be divested, or underwriting will cease. Similarly, new business areas will be
required to generate profit within predefined periods of time.
Customers
The Tryg Vesta Group reaches its customers through a wide variety of distribution channels ranging from
personal service at the customer’s home to service in connection with banking transactions at Nordea.
Always in accordance with the customer’s choice – also if it includes a mix of different channels. The
Group will be focused mainly on its existing customers, who will be served through concepts tailored to
each specific customer group.
The Tryg Vesta Group will build competences in the health area to be able to provide top quality health
schemes and hospital insurance for customers in the Nordic region. These efforts are based on Tryg Rejse
og Sundhed, which provides travel insurance to all of the Group’s Nordic customers and operates a 24
hour manned control centre.
Earnings
The Tryg Vesta Group needs to demonstrate strong growth in earnings and consolidation on its own
merits. The Group aims to further expand its expertise within underwriting, risk assessment and claims
handling.
A focus area is creating more efficient work processes, including IT work processes and implementation,
to reduce time to market and optimise investments in new technology.
With a view to creating better solutions for the customers and generating savings in the administrative
areas, web-based self-service facilities will be key to future work process developments. Schemes to
ensure good customer service and low claims expenses in connection with repair and redelivery will be
introduced.
Financial statements 2002
Tryg Vesta Group
4
Price and cost structure transparency, the right price per risk, balanced risk-taking and an optimum capital
structure will further support the value creation and maintain the Tryg Vesta Group’s ability to attract
capital and pave the way for developing the Group’s companies.
Over time, each individual business area and customer segment must demonstrate profitability and
generate break-even results.
Synergies, employees and knowledge sharing
Respecting both markets and customers, the Tryg Vesta Group plans to capitalise on a number of
synergies based on IT and procurement. In addition, reinsurance procurement will be optimised and
adapted to capital allocation optimisation.
The ability to build core competences and reapply know-how is becoming an increasingly obvious
competitive parameter, and the Tryg Vesta Group will exploit its potential in this area. The Group will
offer its employees opportunities to participate in local and Nordic training activities – naturally with a
global focus.
The Tryg Vesta Group will set up a common management training programme and management
development model for the Group’s 500 Nordic managers and executives. The Group will also ensure the
continuous training of insurance professionals. Efforts will be made to set up local and trans-Nordic
forums for experience sharing and transfer of competences.
The Tryg Vesta Group aims to be an attractive workplace. An attractive workplace is an all-encompassing
organisation leaving room for differences in age, gender, ethnic background, education/training,
nationality, religion and stage in life.
Investment policy
The investment policy aims to maximise the return, taking into account the composition and duration of
liabilities and the company’s solvency. Overall, the Tryg Vesta Group’s insurance obligations have a
duration of less than three years, which dictates an asset mix focused on a high degree of security, that is,
limited fluctuations and strong liquidity. Therefore, bonds will continue to constitute the majority of total
investments with special focus on short-term bonds and low credit risk. Investments in shares, bonds and
property consist of well-diversified portfolios offering considerable risk diversification.
The investment policies of the Tryg Vesta Group are coordinated, but they are not identical, as
investments are exclusively or to a large extent placed in the local capital markets in accordance with the
legislation of the country in which the company is based.
The investment strategies defined in the Group are primarily carried out by way of external portfolio
management agreements with Nordea concerning bonds, shares, cash funds and to some extent property.
Based on the investment policies, the Tryg Vesta Group handles the management of asset mixes,
benchmark determination, duration limits, limits on the geographic distribution of assets, types and risk
profile of bonds, shares and property, respectively. Investments in unlisted securities are handled
exclusively by the Tryg Vesta Group.
Financial statements 2002
Tryg Vesta Group
5
Business areas of the Tryg Vesta Group
Each individual business unit is responsible for customer relationships, employees and performance,
whereas common overall strategies, policies and financial targets are defined by the Group.
Most of the Tryg Vesta Group’s business is gathered in Tryg (Denmark) and Vesta (Norway), together
accounting for almost 86% of the Group’s total earned premiums.
Gross premiums H2 2002 – Percentage breakdown
Tryg
43.2%
Vesta
42.7%
Poland, Estonia
and Finland
3.1%
Tryg-Baltica
international
11.0%
Tryg including Dansk Kaution and Tryg Rejse og Sundhed
Tryg is Denmark’s largest general insurers with a market share in excess of 22%. At year-end 2002, Tryg
had a total of 2,317 employees. In recent years, the Danish market has been characterised by
consolidation and by the withdrawal of international groups from the market. The total market share of
the seven largest general insurers has increased from 66% in 1997 to 73% in 2001 with a further
consolidation in 2002. Effective 1 June 2002, Tryg acquired Zurich’s general insurance activities in
Denmark.
Tryg’s Personal lines insurance area comprises individual insurance, group schemes and travel and health
insurance in the company Tryg Rejse og Sundhed. This business area writes all types of ordinary
insurance for private individuals and customers at the low end of the commercial market.
The personal insurance area covers around 730,000 private households and 1.1 million individuals.
Distribution of insurance to the personal customer segment is primarily effected through Tryg’s service
centres and Nordea’s Danish branches and by way of third-party distribution (group schemes, car dealers,
estate agents etc.).
Customer concepts are developed on an ongoing basis to increase the share of full-service customers
holding more than one insurance policy with the company. In addition, the range of insurance solutions
and related services is broadened through additional distribution channels, including bank assurance and
e-business. Tryg Rejse og Sundhed offers health products in a rapidly increasing market.
Financial statements 2002
Tryg Vesta Group
6
Commercial provides insurance to the agricultural and marine segments and medium-sized and large
commercial and industrial businesses. The business area, which also comprises Dansk Kaution (guarantee
insurance), offers commercial insurance to some 125,000 customers through Tryg’s customer centres and
key account managers or brokers.
Vesta
Vesta is Norway’s third-largest general insurer with a market share of almost 22%. At year-end 2002,
Vesta had approximately 1,500 employees. In 2002, the four largest general insurers in Norway wrote
93% of the total volume of general insurance premiums. Vesta Forsikring acquired Allianz Forsikring
(Norwegian branch of Forsikringsaktieselskabet Allianz Nordeuropa) in 2001 and Zurich Forsikring’s
(Norwegian branch/general agency of Zurich Insurance Company in Switzerland) Norwegian activities in
2002.
Vesta offers both personal and commercial insurance through 40 service centres and 80 franchise offices
throughout Norway and by way of third-party distribution (car dealers, estate agents, insurance brokers
etc.). Compared with Tryg, the headcount and expense ratio are affected by the use of franchising as a
means of distribution and by the increased number of captive schemes. In accordance with the Group’s
overall distribution strategy, and based on Tryg’s positive experience, distribution through banks is now
being introduced in Norway.
Tryg-Baltica international
Tryg-Baltica international (DK) and Tryg-Baltica international (UK) are responsible for the Group’s
reinsurance underwriting activities and selected niche areas in the London market. In addition, TBi
manages the run-off of discontinued lines.
The reinsurance underwriting consists mainly of treaty reinsurance written from London and
Copenhagen. The majority is proportional business in which premiums and claims are divided
proportionally between the parties to the treaty. Business is written with a substantial geographical
spread, but no reinsurance business is written from the USA.
As a consequence of the very large losses in the London market and the future capital allocation model,
an analysis of the portfolio has resulted in a consolidation focusing on the continuing lines of business.
Other activities
The Tryg Vesta Group furthermore carries on general insurance activities in Poland, Estonia and Finland.
In 2002, these activities accounted for approximately 3% of total premium earnings in the Tryg Vesta
Group.
The Group’s Polish company is the country’s seventh largest general insurer with a market share of 2%.
A sizeable share of the company’s portfolio is made up of motor insurance, but the company writes
insurance for all types of direct personal and commercial customers through service centres, insurance
agents and brokers.
The Group’s Estonian company is the country’s fifth largest general insurer with a market share of 5%.
Acquired in 2002, the company has branch offices in all major cities and collaborates with Nordea Bank
in Estonia.
Financial statements 2002
Tryg Vesta Group
7
The branch office in Finland services Nordea Bank’s customers through the bank’s branches. The bank
assurance concept is expected to expand considerably in the years ahead. Nordea Bank Finland plc serves
40% of all Finnish bank customers, thereby offering the Finnish branch significant position in the Finnish
market.
Financial statements 2002
Tryg Vesta Group
8
Shareholder information
Established on 28 January 2002, Tryg Vesta Group A/S (formerly Tryg General Insurance Holding A/S)
was dormant from the date of formation until 28 June 2002 when an Extraordinary General Meeting
resolved to provide the company, by way of a non-cash contribution, with all the shares in the following
companies:
• Tryg Forsikring A/S, Denmark
• Vesta Forsikring AS, Norway
• Nordea Kindlustuse Eesti AS, Estonia
On 1 July 2002, Tryg i Danmark smba acquired all shares in Tryg Vesta Group A/S from Nordea.
Tryg Forsikring A/S and Vesta Forsikring AS have previously carried on insurance business within
general as well as pension and life insurance lines. Prior to transferring the shares in the three above-
mentioned companies to Tryg Vesta Group A/S, the life and pension activities, operated in separate life
insurance companies, were spun off to Nordea AB or companies of the Nordea Group.
Tryg Forsikring A/S, Vesta Forsikring AS and Nordea Kindlustuse Eesti emerged from the spin-off as
pure general insurance providers.
Allocation of loss and shareholders’ equity
The Supervisory Board proposes that the year’s loss of DKK 1,679m be covered through a transfer from
Share premium account. No dividend will be paid in respect of the 2002 financial year. Shareholders’
equity stood at DKK 4,268m as at 31 December 2002.
In 2002, Tryg Vesta Group A/S signed a loan agreement in principle with a banking consortium
consisting of Nordea Bank Danmark A/S, Danske Bank A/S and Nykredit Bank A/S concerning further
capitalisation of the subsidiary undertakings.
The banks have extended a loan of DKK 1.1bn in total to be repaid by the end of September 2003. The
loan is expected to be replaced by DKK 1.1bn worth of bonds.
The capital base of Tryg Forsikring A/S is
DKK 600m and NOK 100m
in Vesta
Forsikring AS.
Operational finance for Tryg Vesta Group A/S,
including payment of interest, is provided by
subsidiary
way of dividends
undertakings.
from
the
Shareholders’ equity
Share capital upon formation
Non-cash contribution
Capital increase
Loss for the year
DKKm
1
5,646
300
-1,679
4,268
Financial statements 2002
Tryg Vesta Group
9
Tryg i Danmark smba
Tryg i Danmark smba (TiD), a limited liability company, is the sole shareholder of Tryg Vesta Group
A/S. TiD was established in connection with the conversion of the then mutual Tryg Forsikring
companies into public limited companies in 1991, on which occasion TiD became owner of the Danish
insurance activities.
According to the articles of association, the objects of the company are to carry on or support, directly or
indirectly, activities that benefit Danish policyholders, including claims prevention, prophylaxis,
provision of safety and peace of mind, as well as activities that benefit the general public and activities
that provide quality of life. In addition, the company may hold shares, directly or indirectly, in one or
more companies whose objects are to carry on financial activities in accordance with the legislative rules
in force from time to time.
The supreme authority of the company is the Board of Representatives comprising 70 members elected by
and from among the Danish policyholders.
Financial statements 2002
Tryg Vesta Group
10
Financial highlights and key ratios
DKKm
Income statement
Gross earned premiums
Earned premiums, net of reinsurance
Technical interest, net of reinsurance
Claims incurred, net of reinsurance
Insurance operating expenses, net of reinsurance
Change in equalisation provisions
Technical result
Proift/loss on investment activities after
transfer to insurance activities
Loss on ordinary activities before extraordinary expenses and tax
Extraordinary expenses
Tax
Loss for the year
Loss on business in run-off, net of reinsurance
Balance sheet
Technical provisions, net of reinsurance
Total shareholders' equity
Total assets
Key ratios
Claims ratio, net of reinsurance
Expense ratio, net of reinsurance
Combined ratio, net of reinsurance
Return on equity
Return on equity before extraordinary expenses
Solvency ratio
*) Subsidiary undertakings are consolidated as from 28 June 2002.
Parent company
Group
28.01.-31.12.2002
28.01.-31.12.2002
*)
9,231
7,069
449
-5,862
-1,811
-181
-336
93
-243
-1,482
45
-1,679
-375
22,009
4,268
30,305
82.9
25.6
108.5
-52
-52
-445
-497
-1,182
-1,679
4,268
5,393
-38.4
-11.4
61
Financial statements 2002
Tryg Vesta Group
11
Directors’ report
The initial financial year of the Tryg Vesta Group after its establishment on 28 January 2002 was
characterised by the very substantial acquisitions of subsidiary undertakings on 28 June 2002 and by the
fact that goodwill on these acquisitions was amortised in full at the time of acquisition. Furthermore,
results were impacted by the still unsatisfactory, albeit improved, operating results of the acquired
subsidiary undertakings in the second half of 2002.
The Group posted a loss of DKK 243m before
extraordinary expenses, goodwill amortisation
and tax for the period 28 January to 31
December 2002. Extraordinary
expenses
amounted to DKK 1,482m, of which DKK
1,182m related to goodwill on the parent
company’s acquisition of
the subsidiary
undertakings Tryg Forsikring A/S, Vesta
Forsikring AS and Nordea Kindlustuse AS,
partly DKK 300m in connection with the
phase-out of parts of the Group’s activities.
The total loss for the year amounted to DKK
1,679m.
Financial highlights - Tryg Vesta Group
(DKKm)
Gross earned premiums
Technical result
Investment income
Loss on ordinary activities before tax
Claims ratio, net of reinsurance
Expense ratio, net of reinsurance
Combined ratio
H2 2002
9,231
-336
93
-243
82.9
25.6
108.5
Financial highlights - Tryg Vesta Group
(DKKm)
For
the Group as a whole, premiums
performed very satisfactorily in 2002 with
good customer retention, a good inflow of new
customers and significant premium increases.
Total gross premiums of DKK 9,231m written
in the second half of 2002 correspond to
premium growth in the acquired subsidiary
undertakings of 30% relative to the second half
of 2001. Vesta was the main contributor with
premium growth of 41%.
for
exchange rate fluctuations, the growth was
31%), while Tryg recorded 21% growth.
Premium growth was also affected favourably by portfolio acquisition.
(adjusted
Loss on ordinary activities before tax
Extraordinary expenses
• Goodwill DKK 1,182m
•
Phase out DKK 300m
Tax
Loss for the year
H2 2002
-243
-1,482
45
-1,679
The Group’s claims performance in the second half of the year was not yet at a satisfactory level with a
claims ratio, net of reinsurance, of 82.9%. The premium increases, stricter terms and higher deductibles
that have been introduced will, however, enable the Tryg Vesta Group to improve its overall gross claims
ratio significantly.
Vesta’s financial statements for 2002 are impacted by high reinsurance costs, including non-recurring
costs in connection with parts of the company’s reinsurance programme. The underlying insurance
operations are, however, showing signs of improvement for most lines. A few lines require additional
premium increases for operations to become sufficiently profitable.
Financial statements 2002
Tryg Vesta Group
12
The Group’s expense ratio of 25.6%, net of reinsurance, in the second half of 2002 was in line with that
of the same period last year. However, underlying this figure are major falls in the expense levels of both
Tryg and Vesta, while Tryg-Baltica international, the wholly-owned subsidiary of Tryg Forsikring, saw
rising costs due to strengthened provisions for costs in connection with the portfolio of business in run-
off.
In the second half of the year, the Group increased its equalisation provisions in respect of windstorm and
large losses by DKK 180m, which naturally had a significant impact on the overall result.
The Group recorded a gain of DKK 93m on investment activities after transfer to insurance activities in
the second half of 2002. The gain was impacted by a negative return on equities of DKK 489m or minus
20% and a positive return on bonds of DKK 937m or 5.8%.
The performance of the Group’s primary business areas is reviewed below.
Tryg including Dansk Kaution and Tryg Rejse og Sundhed
For the second half of 2002, the
technical result of Tryg amounted to
a loss of DKK 101m against a loss of
DKK 194m in the same period last
year.
The loss was primarily attributable to
a continuing unsatisfactory claims
performance, particularly
the
industrial segment.
in
Financial highlights -Tryg (DKKm)
Gross earned premiums
Technical result
Loss on ordinary activities before tax
Claims ratio, net of reinsurance
Expense ratio, net of reinsurance
Combined ratio
*Unaudited pro forma figures
H2 2002
3,976
-101
-137
83.2
21.5
104.7
H2 2001*
3,296
-194
-253
90.8
22.9
113.7
Premiums performed very satisfactorily in the second half of the year with 21% growth in gross
premiums and 14% growth in premiums, net of reinsurance, relative to the same period last year. The
increase was due to premium increases, a positive portfolio growth and the effect of the new Danish act
on liability in damages.
Premiums in the personal market were generally increased by from 5% to 18%. In the high end of the
commercial market, general premium increases of from 16% to 25% were effected, and premiums for
certain industrial customers were increased by up to 125%. Customers in industrial lines with a
particularly low profitability were in certain cases notified of even more significant premium increases in
order to ensure consistency between premium and risk.
Claims performed significantly better in the second half of 2002 than in the year-earlier period. The
claims ratio, net of reinsurance, was 83.2%, which was 7.6 percentage points lower than in the same
period of 2001.
Expenses performed satisfactorily. The expense ratio, net of reinsurance, of 21.5% in the second half of
2002 was 1.4 percentage points lower than in the same period of 2001, primarily because it was possible
to contain costs despite the rising volume of business by general cost constraints and a reduction in staff.
Financial statements 2002
Tryg Vesta Group
13
Equalisation provisions for windstorm and large losses were increased by DKK 93m in the second half of
the year, standing at DKK 245m at year-end 2002, while outstanding claims provisions for workers’
compensation insurance were increased by DKK 46m.
Vesta
Financial highlights - Vesta (DKKm)
For the second half of 2002, the
technical result of Vesta amounted
to a loss of DKK 58m against a
profit of DKK 129m in the same
period last year.
Gross premiums
Technical result
Profit on ordinary activities
before tax
Gross premiums increased by DKK
1,152m. Adjusted for fluctuations
in the DKK/NOK exchange rate,
growth was 31%.
Claims ratio, net of reinsurance
Expense ratio, net of reinsurance
Combined ratio
*Unaudited pro forma figures
H2 2002
3,930
-58
68
85.2
21.0
106.2
H2 2001*
2,778
129
161
77.0
23.9
100.9
Vesta recorded growth in the personal segment of 2.9 percentage points in 2002, increasing its market
share from 16.3% to 19.2%. The share of the commercial market increased from 22.5% to 25.5%. A
significant part of the increase was attributable to the acquisition of Zurich.
As a consequence of recent years’ weak profitability, Vesta introduces premium increases to enhance
profitability again in 2002. In the personal segment, premiums rose by 9.9% on average within motor
insurance and by 21.7% on average within house insurance. In the commercial segment, premiums rose
by 13.3% on average distributed on 13.8% on property insurance, 10.3% on motor insurance, 17.2% on
personal insurance and 9.0% on marine insurance. The premium increases implemented are expected to
lay the groundwork for improved profitability in 2003.
The weak results performance was due to a major run-off loss on personal accident business written in
earlier years and low investment income due to negative equity market trends. The 2002 financial
statements were also impacted by high reinsurance costs, including non-recurring costs in connection
with parts of the company’s reinsurance programme of approximately NOK 185m. The underlying
insurance operations are, however, showing signs of improvement for most lines. A few lines require
additional premium increases for operations to become sufficiently profitable.
The Personal business area performed satisfactorily in 2002, and the combined ratio fell to 99.2%.
Commercial recorded an increase in the combined ratio of 20.3 percentage points to 125.4%. A poor run-
off performance in the personal accident lines generally and health insurance, in particular, in the second
half of 2002 caused a run-off loss affecting the claims ratio, net of reinsurance, equal to 7.3 percentage
points.
A number of measures have been implemented to restore profitability in the commercial segment,
including
• Premium increases
• Stricter terms and controls for underwriting
• Individual initiatives, including measures to improve the portfolio, premium increases, stricter terms
and higher deductibles for the least profitable customers
Financial statements 2002
Tryg Vesta Group
14
These measures are expected to reduce the commercial portfolio to some extent, while the personal
segment is still believed to present a potential for profitable growth.
Vesta has refocused on the small and medium-sized company segment, while also introducing measures
to follow up regularly on profitability.
Equalisation provisions for windstorm and large losses were increased by DKK 141m in the second half
of the year, standing at DKK 907m at year-end 2002.
Tryg-Baltica international
In connection with the establishment of the Tryg Vesta Group, the individual lines were analysed with a
view to focusing on the continuing lines of business. The Energy line, where major losses have developed
during 2002 was discontinued in 2001. The reserves for this class have been strengthened to cover the
future anticipated detoriation of the account.
In the second half of 2002, the
result of Tryg-Baltica
technical
international amounted to a loss of
DKK 73m. The loss was mainly
losses and
to run-off
attributable
strengthened provisions for expenses
relating to the lines of business in
run-off.
Furthermore, amounts were set aside
to cover the closing down of the
Singapore office as the plans to set up
a branch there were abandoned.
Financial highlights - Tryg-Baltica international (DKKm)
Gross earned premiums
Technical result
Loss on ordinary activities before tax
Claims ratio, net of reinsurance
Expense ratio, net of reinsurance
Combined ratio
*Unaudited pro forma figures
H2 2002
1,015
-73
-73
78.1
44.3
122.4
H2 2001*
772
-52
-43
79.5
36.1
115.6
Gross premiums for the second half of the year amounted to DKK 1,015m, of which some 60% related to
TBi UK and 40% to TBi DK.
The claims ratio, net of reinsurance, was 78.1% for the second half of 2002. The claims ratio was
impacted by the floodings that affected Europe in the second half of the year.
The expense ratio, net of reinsurance, of 44.3% was affected by the provisions for expenses referred to
above.
Financial statements 2002
Tryg Vesta Group
15
Other activities
Financial highlights - Poland (DKKm)
In addition to the above, the Tryg Vesta
Group operates general
insurance
activities
in Poland, Estonia and
Finland with gross premiums of DKK
288m.
IT
Considerable
investments were
initiated in Poland in 2002 to improve
business and enhance customer service.
Gross premiums
Technical result
Profit/loss on ordinary activities
before tax
Claims ratio, net of reinsurance
Expense ratio, net of reinsurance
Combined ratio
*Unaudited pro forma figures
H2 2002
248
-14
7
63.7
47.3
111.0
H2 2001*
238
-9
-21
66.4
43.0
109.4
The Finnish branch did not perform in line with expectations, and measures have been launched to
reverse the trend.
The total technical result of these activities amounted to a loss of DKK 51m. The result was affected by
initial costs and IT investments.
Investment activities
For the six months, the Group recorded a gain of DKK 611m, or 2.8%, on investment activities before
transfer of technical interest. The investment return was affected by a negative return on shares of DKK
489m, equivalent to minus 20%, and a positive return on bonds (including money market placements and
similar investments) of DKK 937m, equivalent to 5.8%. The return on the property portfolio was DKK
162m or 5.2% for the six-month period. Returns are calculated inclusive of currency hedges. The Group’s
management of currency exposure is described under Exposure on page 21.
Interest etc.
Investment gains/losses etc.
Return before transfer of technical interest
Technical interest transferred
Investment return
DKKm
615
-4
611
-518
93
Asset allocation
At 31 December 2002, equities accounted for 8% of the Group’s investments compared with 13% at 30
June 2002. The equity portfolio was reduced both due to falling equity prices and to equity sales. The
proportion of bonds increased from around 70% to around 77% during the same period. The duration of
the bond portfolio, including money market placements, was 1.85 years at year-end 2002. The property
portfolio accounted for DKK 3.4bn or around 15%.
At 31 December 2002, the investment portfolio of the Tryg Vesta Group was distributed on
approximately DKK 10.4bn in the Danish companies, approximately DKK 10.6bn in the Norwegian
companies, and small amounts in the other companies of the Tryg Vesta Group. Net investments
amounted to DKK 2.7bn, of which assets added on the acquisition of Zurich accounted for DKK 1.1bn.
Financial statements 2002
Tryg Vesta Group
16
Investment assets at 31 December 2002
Bonds etc. Property
Portfolio, DKKm
Shares
Return
Other
DKKm
%
Net investments
DKKm
Tryg
Vesta
TBi
Poland
Estonia
Tryg Vesta Group A/S
6,504
9,310
1,930
430
27
18,201
-298
2,606
762
3
1,269
568
1
2
3,371
1,840
10,379
10,640
1,931
435
27
23,412
-298
Total
17,903
3,371
1,840
23,114
Percentage distribution
Return, DKKm
Return, %
Net investments, DKKm
77.4
937
5.8
2,921
14.6
163
5.2
41
8.0
-489
-20.1
-217
100.0
611
2.8
2,745
164
406
36
24
1
631
-20
611
1.7
4.4
2.0
5.7
1.7
2.9
2.8
511
2,253
306
-8
-19
3,043
-298
2,745
Bonds
The Group invests in bonds in accordance with guidelines adapted to the various countries and companies
of the Group.
In the financial year, all companies in the
Group had bond portfolios with a shorter-
than-benchmark duration, and the total
bond portfolio, including cash at bank and
in hand, generated a return of 5.8% for the
six months. The return on
the bond
portfolio in Tryg was 5.7%, and 5.8% in
Vesta. By way of comparison, a Danish
government bond index with a term to
maturity of 1-5 years yielded 5.3% in the
same period.
Bonds, DKKm
Norwegian money market, cash etc.
Danish mortgage bonds
Other corporate bonds
Government bonds, excl. eastern Europe
Eastern Europe
Total
Total
%
26.0%
33.9%
10.6%
25.9%
3.7%
4,650
6,066
1,897
4,633
657
17,903
The proportion of money market placements increased during the financial year as Vesta increased its
proportion of such investments. The Norwegian money market was attractive throughout the financial
year, providing high interest rates. The key rate of the Norwegian central bank was 6.5% at 31 December
2002.
87% of the Tryg Vesta Group’s bond portfolio, equivalent to DKK 15.5bn, comprises Danish mortgage
bonds, placements in the Norwegian money market, and government bonds, excluding eastern Europe.
The remainder is invested in other corporate bonds and eastern European bonds, primarily government
bonds.
The option-adjusted duration, including cash at bank and in hand, of the entire Group’s bond portfolio
was 1.85 years at 31 December 2002, due to, among other things, Vesta’s strong focus on the money
market.
Financial statements 2002
Tryg Vesta Group
17
Property
The investment return on the property portfolio was DKK 162m, of which upward revaluations accounted
for DKK 51m. This corresponds to an overall return of 5.2% for the six months. The property portfolio
accounted for 14.6% of total investments.
The Group’s new investments in property amounted to DKK 45m in 2002. The occupancy rate was
95.6% in Vesta and 94.7% in Tryg at 31 December 2002. The other foreign companies have no
appreciable property portfolios.
The portfolio is well-diversified and consists of high-quality buildings, typically in prime locations in
major cities in Denmark and Norway. The portfolio mainly comprises office premises, but also a small
proportion of other commercial property and residential property.
Shares
Most of the equities are in the Danish and Norwegian portfolios, while the Polish, Estonian and TBi
portfolios contain almost no shares.
Both Tryg and Vesta have relatively large proportions of domestic equities in their portfolios. At 31
December 2002, Danish and Norwegian equities accounted for 45% of the Tryg Vesta Group’s total
equity portfolio, while other European equities accounted for just under 40% and US equities for
approximately 15%.
The financial year was characterised by plunging prices in the
international equity markets. For the financial year, the return
on investments was a negative DKK 489m, equivalent to
minus 20.1%.
Shares, geographical spread, DKKm
Total
%
Danish
Norwegian
Other European
North American
Other
601
236
696
271
37
32%
13%
38%
15%
2%
The return on Danish shares was minus 20.0%, while
Norwegian shares generated a return of minus 23.7%
compared with minus 19.7% for the Danish KBX index and
minus 22.4% for the Norwegian OSEBX index in the same
period. The return on international shares was minus 19.5%
compared with minus 20.0% and minus 10.9% for MSCI Europe and MSCI USA, respectively.
Total
1,840
The proportion of equities was reduced from 13% to 8% of the total investment portfolio in the six-month
period.
Post balance sheet events
The meeting of the Supervisory Board of Tryg Vesta Group A/S on 11 March 2003 resolved to transfer
Vesta Forsikring AS in Norway to Tryg Forsikring A/S. The transfer will take the form of a non-cash
contribution against a capital increase in Tryg Forsikring A/S.
Apart from the events mentioned above, Management believes that no material events have occurred in
the period from the balance sheet date until the date of these financial statements which affect the
assessment of the company’s financial position.
Financial statements 2002
Tryg Vesta Group
18
Exposure
Insurance risk
The Tryg Vesta Group primarily focuses on profitability when assuming customers’ insurance risks.
Important elements are risk analyses in order to ensure that prices are set correctly through tariffs and
individual assessments.
In addition, the profitability of the portfolio at product, segment and customer level is monitored on an
ongoing basis.
Furthermore, in managing insurance operations, the Group uses acceptance rules that define limits for the
risks the Group is prepared to assume and in connection with reinsurance.
The Group intends to leverage its high diversification both in terms of risk and geography as much as
possible, and to optimise the relationship between the Tryg Vesta Group’s capital base and reinsurance.
This will be done by analysing the Group’s exposure and as far as possible optimising the Group’s
reinsurance programme.
Such analyses for 2003 have caused a change of the previous proportional cover of property damage
insurance in Denmark to a non-proportional cover with a retention of DKK 50m (DKK 100m in respect
of the first event). However, risks with an EML (Estimated Maximum Loss) exceeding DKK 800m are
primarily covered on a proportional facultative basis.
Natural disasters
The reinsurance contract for natural disasters covers accumulated losses up to DKK 3.5bn with a
retention in Denmark of DKK 100m, in Norway of NOK 60m and in Poland of DKK 75m per event. In
addition, the 2003 catastrophe programme covers Vesta’s commitment with Norsk Naturskadepool in an
amount of some NOK 1.0bn with a DKK 100m retention for the Group.
The maximum cover under the catastrophe programme has been determined based on analyses of the
portfolio risk exposure and on the assumption that a loss of this size occurs less often than once every one
hundred years.
Terrorism
Prior to 2002, terrorism cover was included in the reinsurance cover. However, the terrorist attacks in the
USA on 11 September 2001 changed market conditions, and terrorism cover is now to a higher degree
subject to negotiation.
Generally, terrorism as a single event is covered by the Tryg Vesta Group’s reinsurance contracts for
2003. However, the retention for personal lines (personal accident and workers’ compensation) is DKK
43m in respect of biological and chemical losses resulting from a terrorist attack. Motor losses resulting
from terrorist attacks are only covered if insurance cover is provided within the compulsory liability sums
for personal injury and property damage.
The catastrophe programme only covers losses resulting from terrorism in respect of detached houses,
holiday homes and residential property, and only up to DKK 1.5bn with the exception of losses caused by
the use of biological and chemical weapons.
Financial statements 2002
Tryg Vesta Group
19
Equalisation provisions
Several companies of the Tryg Vesta Group have equalisation provisions to equalise claims, net of
reinsurance.
Tryg has equalisation provisions of DKK 245m to equalise the retention on windstorm, workers’
compensation and other large losses. The DKK 907m equalisation provisions in Vesta comprise
accumulated funds to cover the commitment in relation to Norsk Naturskadepool and to equalise large
losses. Furthermore, Dansk Kaution has equalisation provisions of DKK 270m in accordance with the
guidelines issued by the Danish Financial Supervisory Authority for credit and guarantee insurance, while
Tryg-Baltica international DK and UK have equalisation provisions totalling DKK 15m.
Reinsurers
The Group pursues a policy of cooperating with a broad range of international reinsurers in order to
control and diversify the credit risk involved in the reinsurance programme and to avoid becoming
dependent on individual reinsurers. This is ensured through regular monitoring of and follow-up on
developments in the international reinsurance market.
Market risk
The results and shareholders’ equity of the Tryg Vesta Group are impacted by developments in the
financial markets as assets are marked-to-market on an ongoing basis. Market risk includes changes in
interest rates, equity prices, exchange rates and property prices and the credit risk on bonds, money
market investments, mortgage deeds and similar instruments. The provisions are not subject to any
appreciable interest-rate sensitivity.
The table shows the total market risk exposure of the Tryg Vesta Group as at 31 December 2002.
Parameter
Change
Result impact
DKKm
Property
Shares
Bonds
Currency, euro
Currency, non-euro
Credit risk, mortgage bonds, cash
Credit risk, other
Price fall
Price fall
Int. rate increase
Exch. rate fall
Exch. rate fall
Average loss
Average loss
8%
12%
0.7%
1%
3%
0.7%
3%
270
221
242
1
97
76
58
As developments in the financial markets are beyond the control of the Tryg Vesta Group, such risks are
managed for each company in the Group and for the entire Group in accordance with an investment
policy, which defines the risk limits the companies and the Group have to comply with. The investment
policies define, among other things, limits for duration, asset mix, including the proportion of shares,
currency exposure, single risk limits and limits for net investments.
Financial statements 2002
Tryg Vesta Group
20
Credit risk
The Tryg Vesta Group is exposed to credit risk on bonds and money market placements. The bond
portfolio primarily comprises mortgage bonds and government bonds (investment grade). A smaller
proportion is made up of corporate bonds.
Bonds as well as money market placements are spread on a large number of issuers in order to minimise
credit risk.
Currency risk
Basically, the Group hedges all currency risks relating to investments in shares and bonds denominated in
foreign currency. However, Tryg’s investments in eastern European bonds are unhedged in order to gain
the full benefit on convergence to the euro economy. Investments in foreign subsidiary undertakings have
been partly hedged. The currency exposure relating to Vesta’s shareholders’ equity was unhedged at 31
December 2002, but has been hedged early in 2003.
Operational risk
Operational risk is the risk of loss due to the failure of internal routines, procedures and IT systems or due
to other internal or external causes, such as negative press coverage.
The Tryg Vesta Group pursues a policy of seeking to limit operational risk by such means as internal
controlling and efficient IT security systems, and by continuing to develop employee know-how, for
example, by using the intranet as a knowledge data base for processes, routines and techniques.
Furthermore, the Group seeks to strengthen its operational risk management through experience sharing
between the Tryg Vesta Group companies.
Financial statements 2002
Tryg Vesta Group
21
Outlook
With due consideration for earnings, markets and employees, the Tryg Vesta Group’s vision is to be
transformed from a conglomerate of companies to be perceived as a single Group, both within the Group
and externally.
Tryg Vesta Group A/S
Tryg Forsikring A/S
Tryg
Nordea
Vahinkovakuutus
Vesta
TBi (DK)
Tryg Polska
Dansk Kaution
Nordea
Kindlustuse
TBi (UK)
The future Group Executive Management of the Tryg Vesta Group will comprise:
Group CEO:
Member of the Group Executive Management Erik Gjellestad
Group CFO
Stine Bosse
The future Group Executive Management of Tryg Forsikring will comprise:
Stine Bosse
Group CEO
Member of the Group Executive Management Erik Gjellestad
Group CFO
Member of the Group Executive Management Peter Falkenham
Member of the Group Executive Management Stig Ellkier-Petersen
Member of the Group Executive Management Bjørn Thømt
The new structure1 and management composition will ensure:
• Optimisation of capital employed
• Efficient decision-making processes
• Focus on business
• Relevant sharing of knowledge and know-how
• Ability to capitalise on synergy opportunities
1 Subject to final approval by the Financial Supervisory Authorities in Denmark, Norway and Estonia
Financial statements 2002
Tryg Vesta Group
22
Specific focus areas for the Tryg Vesta Group in 2003 comprise:
• Outsourcing of IT production
• Cost savings
• Procurement in relation to claims
• A new Nordic partnership outside banking and finance
• Underwriting guidelines and control environment
The term procurement in relation to claims covers claims payment systems that provide savings for
customers as well as the Group. For example, Tryg has developed a new service offering customers a
replacement car and an additional repair guarantee if they have their car repaired at one of a number of
selected garages.
The Group expects to implement the planned cost savings without massive layoffs and quality
impairments.
Tryg including Dansk Kaution and Tryg Rejse og Sundhed
For 2003, Tryg projects a net combined ratio of 102, equivalent to a marked improvement on 2002. The
projection is primarily based on the premium increases introduced and measures implemented to improve
the portfolio, and on the full effect of the initiatives taken in 2002 feeding through to the financial
statements. Furthermore, the continued focus on expenses and the acquisition of the Zurich portfolio will
contribute to reducing the expense ratio in 2003.
The enhanced quality of the portfolio underlies the switch to non-proportional reinsurance, which is
expected to make a positive contribution to earnings.
Vesta
For 2003, Vesta projects an improvement of its net combined ratio to 105. The projected improvement is
based on the substantial increase in the company’s share of both the personal and the commercial market.
In the years ahead, the company expects to consolidate its market share while focusing strongly on
profitability. This implies, among other things, premium increases, measures to improve the portfolio, and
a reduced commercial portfolio. Furthermore, the introduction of bank assurance through Nordea’s
branch network in Norway is expected to make a positive contribution.
TBi
As a consequence of the very large losses in the London market and the going forward capital allocation
model, Tryg-Baltica international has initiated an analysis of the individual lines in order to focus on
forward-looking activities. Tryg-Baltica international have therefore decided consolidate the business and
consequently the premium income in 2003 will be reduced compared to 2002.
The claims ratio is expected to normalise in 2003, as the provisions made in 2002 in respect of the Energy
business and other lines in run-off are considered adequate to cover losses in future years.
Other activities
The Group’s other activities (Poland, Estonia and Finland) are projected to post results that are impacted
by large IT investments. The Group expects positive technical results within a two-year horizon.
Financial statements 2002
Tryg Vesta Group
23
In addition to the above, results for 2003 are dependent on developments in the financial markets. As the
Group has a low proportion of equities, a bond portfolio with a short duration, and a high degree of
currency hedging, its exposure to developments in the financial markets is, however, relatively low.
Exposure describes the Group’s sensitivity to various scenarios in the financial markets.
The Group thus expects a technical result in the region of DKK 300m in 2003.
Key ratio projections for 2004
• We want to make money:
• Combined ratio of 102 for the Group
• Return on shareholders’ equity of 17% for the Group
• We want to provide peace of mind to our customers
• >90% of our customers return to buy insurance products from the Tryg Vesta Group
• Customer satisfaction >80%
• We want to be an attractive place to work
• HR development costs to increase by 5% per employee
•
• All managers to be assessed and remunerated based on BSC
In-house recruitment for management positions possible for 70% of specific vacancies
The targets are reflected in the Tryg Vesta Group’s application of the balanced scorecard and are
operationalised through this management tool.
In terms of combined ratio, which expresses the sum of claims and expenses relative to premiums, the
Group’s target is a combined ratio, net of reinsurance, of just under 100. The Group expects to meet this
target within the next three years.
Financial statements 2002
Tryg Vesta Group
24
Management’s signatures
The Supervisory Board and the Executive Management have today considered and adopted the
consolidated and parent company financial statements and directors’ report.
The consolidated and parent company financial statements have been prepared in accordance with the
accounting provisions in force. We consider the accounting policies adopted appropriate to the effect that
the consolidated and parent company financial statements give a true and fair view.
We propose to the Annual General Meeting that the consolidated and parent company financial
statements be adopted.
Ballerup, 11 March 2003
Executive Management
Stine Bosse
Erik Gjellestad
Supervisory Board
/Morten Hübbe
Mikael Olufsen
Chairman
Per Skov
Deputy Chairman
Jørn Wendel Andersen
John Frederiksen
Mogens Jakobsen
Niels Erik Schultz-Petersen
Adopted by the Annual General Meeting of the company on 21 March 2003.
Chairman of the Annual General Meeting:
Financial statements 2002
Tryg Vesta Group
25
Auditors’ report
Internal Audit
We have audited the consolidated annual report and the annual report of Tryg Vesta Group for 2002.
The consolidated annual report and the annual report is the responsibility of the Company's Board of
Directors and Board of Executives. Our responsibility is to express an opinion on the consolidated annual
report and the annual report based on our audit.
Basis of Opinion
We conducted our audit on the basis of the Statutory Order from the Danish Financial Supervisory
Authority on Auditing Financial Enterprises and Financial Groups and in accordance with Danish
Auditing Standards. Based on materiality and risk we have evaluated the business procedures, the
accounting policies used and the significant estimates made and verified the basis for amounts and
disclosures in the consolidated annual report and the annual report. We believe that our audit provides a
reasonable basis for our opinion.
Our audit has not resulted in any qualification.
Opinion
In our opinion, the consolidated annual report and the annual report gives a true and fair view of the
Group´s and the Company's financial position at 31 December 2002 and of the results of the Group´s and
the Company's operations and the Group´s cash flows for 2002 in accordance with Danish Accounting
Standards.
Ballerup, 11 March 2003
Gert Stubkjær
Chief Auditor
Financial statements 2002
Tryg Vesta Group
26
Auditors’ report
To the shareholders of Tryg Vesta Group A/S
We have audited the consolidates accounts and annual report of Tryg Vesta Group A/S for the financial
year 2002.
The consolidates accounts and annual report is the responsibility of the Company’s Management. Our
responsibility is to express an opinion on the annual report based on our audit.
Basis of opinion
We conducted our audit in accordance with Danish Auditing Standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance that the consolidates accounts and annual report
is free of material misstatement. An audit included examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidates accounts and annual report. An audit also included assessing
the accounting policies used and significant estimates made by the Management, as well as evaluating the
overall consolidates accounts and annual report representation. We believe that our audit provides a
reasonable basis for our opinion.
Our audit has not resulted in any qualifications.
Opinion
In our opinion, the consolidates accounts and annual report gives a true and fair view of the Group’s and
the Parent Company’s financial position at 31.12.2002 as well as of the results of the Group’s and the
Parent Company’s operations for the financial year 2002 in accordance with the Danish legal
requirements to the financial reporting.
Ballerup, 11 March 2003
Deloitte & Touche
Statsautoriseret Revisionsaktieselskab
KPMG C. Jespersen
Bent Hansen
State-Authorised
Public Accountant
Lone Møller Olsen
State-Authorised
Public Accountant
Finn L. Meyer
State-Authorised
Public Accountant
Mona Blønd
State-Authorised
Public Accountant
Financial statements 2002
Tryg Vesta Group
27
Accounting policies
Basis of preparation
The consolidated financial statements and financial statements of Tryg Vesta Group A/S have been
prepared in accordance with the Danish Consolidated Insurance Business Act and the Danish Financial
Supervisory Authority’s executive orders on the presentation of consolidated financial statements by
insurance companies.
In principle, the parent company, Tryg Vesta Group A/S, is subject to the provisions of the Danish
Financial Statements Act. As the object of the parent company is to own subsidiary undertakings whose
activities are primarily focused on insurance business, the parent company financial statements have been
presented in accordance with the Danish Consolidated Insurance Business Act which contains the
provisions to which the consolidated financial statements are subject.
Consolidation principles
The consolidated financial statements comprise the financial statements of Tryg Vesta Group A/S (the
parent company) and undertakings (group undertakings) controlled by the parent company. See the Group
overview on page 51. Control is achieved where the parent company directly or indirectly holds more
than 50% of the voting rights or is otherwise able to exercise or actually exercises a controlling influence.
Basis of consolidation
The consolidated financial statements are prepared on the basis of the financial statements of the parent
company and its subsidiary undertakings by adding items of a uniform nature.
The financial statements of undertakings that present financial statements under other legislative rules are
restated to the accounting policies applied by the Group unless the result of such restatement is
immaterial to the true and fair view.
On consolidation, intragroup income and expenses, intragroup accounts and dividends, and gains and
losses arising on transactions between the consolidated undertakings are eliminated.
Shares in subsidiary undertakings are set off against the proportionate share of the shareholders’ equity of
the subsidiary undertakings.
Goodwill arising on acquisitions represents the difference at the time of acquisition between the
acquisition price and the proportionate share of the shareholders’ equity of the acquired undertaking made
up in accordance with the accounting policies applied by Tryg Vesta Group A/S. The full amount of
goodwill is amortised through the income statement in the year of acquisition. Newly acquired
undertakings are included in the consolidated financial statements as from the date of acquisition.
Currency translation
The results of foreign subsidiary undertakings are based on translation of the items in the income
statement at average exchange rates. For domestic undertakings, income and expenses denominated in
foreign currency are translated at the exchange rate ruling on the date of the transaction as are other
income and expenses denominated in foreign currency. Assets and liabilities are translated at the
exchange rate ruling at year-end.
Financial statements 2002
Tryg Vesta Group
28
All currency translation gains and losses are included in the income statement under the item “Currency
translation adjustment”.
Intragroup transactions
Intragroup services are settled on a cost-covering basis or on market terms.
Intragroup transactions in securities and other investment assets are settled at market value.
Financial statements 2002
Tryg Vesta Group
29
Income statement
Premiums
Earned premiums, net of reinsurance, represent gross premiums during the year, net of outward
reinsurance premiums and changes in unearned premiums provisions, corresponding to an accrual of
premiums to the period of coverage of the policy.
Technical interest, net of reinsurance
Technical interest, net of reinsurance, represents a calculated return on the average technical provisions,
net of reinsurance. The interest rate applied is the year’s average yield to maturity on bonds with a term to
maturity of less than three years.
Claims incurred
Claims incurred, net of reinsurance, represent claims paid during the year adjusted for changes in
outstanding claims provisions and provisions for annuities less reinsurers’ share. Amounts to cover
expenses incurred to combat and contain losses and to survey and assess claims are included in the item.
In addition, the item includes run-off results regarding previous years. The part of the increase in
technical provisions which can be ascribed to discounting is transferred to technical interest, net of
reinsurance.
Bonus and premium rebates
Bonus and premium rebates represent reimbursements where the amount reimbursed depends on the
claims record, and for which the criteria for payment have been laid down prior to the financial year or
when the business was written.
Insurance operating expenses
Insurance operating expenses, net of reinsurance, represent acquisition costs and administrative expenses
less reinsurance commissions received. Expenses relating to acquiring and renewing the insurance
portfolio are charged to the income statement at the time of writing the business. Administrative
expenses, including salaries, wages, taxes etc. are accounted for on an accruals basis to match the
financial year. Group undertakings pay shares of joint expenses according to their consumption of
resources, which are settled on cost-covering terms.
Depreciation is charged on a straight-line basis over four to five years. Furniture and equipment etc.
costing less than DKK 100,000 are written off fully in the year of acquisition, except for assets acquired
as part of a specific project. Computer equipment held under finance leases is capitalised and depreciated
as if purchased by the company.
Reinsurance accepted
Premiums, claims and commissions relating to reinsurance accepted are generally included in the income
statement on an estimated and assessed basis. Commissions relating to unearned premium provisions are
included under “Prepayments and accrued income”.
Investment activities
Profit from group undertakings includes a part of the total profit and revaluation of shares in subsidiary
and associated undertakings. Exchange differences arising on the translation of the net asset value of
foreign subsidiary undertakings at the beginning of the year are included under the item “Currency
translation adjustment”.
Financial statements 2002
Tryg Vesta Group
30
Income from land and buildings before value adjustment represents the profit from property operations
less property management expenses.
Interest, dividends etc. represent interest earned, dividends received etc. during the financial year. In
addition, the item includes realised gains on bonds drawn for redemption and repayments of loans as well
as realised gains on the sale of bonds drawn for redemption.
Realised investment gains/losses represent realised net gains/losses on the sale of investments, including
financial instruments, calculated in proportion to the value at the beginning of the financial year or the
cost of acquisition during the year.
Unrealised investment gains/losses represent unrealised net gains/losses on investments when marked to
market at the end of the financial year, calculated in proportion to the value at the beginning of the
financial year or the acquisition value during the year.
Investment administrative expenses represent all expenses relating to the management of investments.
Brokerage and commission are included in the purchase and sales prices of investments.
Extraordinary items
Extraordinary items include amounts which by their nature are unusual for the company and which are
clearly different from the ordinary operations.
Tax
Tryg Forsikring A/S is jointly taxed with the majority of the company’s subsidiary undertakings. The
item “Tax” represents estimated Danish and foreign corporation taxes for the year and movements in
deferred tax or tax asset. Tax relating to the jointly taxed income is charged proportionately to the jointly
taxed companies generating a profit. Changes in deferred taxes or deferred tax assets are posted in the
companies having the liability or the claim.
Balance sheet
Investments
Land and buildings
Land and buildings are stated at estimated market value in accordance with the guidelines issued by the
Danish Financial Supervisory Authority. The market value is determined based on a capitalisation of the
future operating return of the property. The capitalisation factor depends on the type and location of the
property. New developments and property under construction are stated at the cost of acquisition or the
cost of production.
Shares in group undertakings
Shares in group undertakings are stated at the proportionate interest in the shareholders’ equity of the
undertakings.
Listed shares and bonds etc.
Listed shares and bonds are stated at officially quoted year-end prices. Unlisted shares and fixed-interest
loans etc. are stated at a conservatively estimated market value based on the net asset value of the
companies as stated in the most recent financial statements available.
Financial statements 2002
Tryg Vesta Group
31
Derivative financial instruments
Derivative financial instruments, including forward contracts and open securities transactions, are stated
at the market value on the balance sheet date. The gross amounts are disclosed in a note to the financial
statements.
Deposits received from reinsurers
Deposits with ceding undertakings comprise amounts owed to the company in respect of reinsurance
business accepted, and retained by the ceding undertaking pursuant to the reinsurance contract.
Debtors
Debtors are stated at nominal value less a provision to cover anticipated losses.
Other assets
Furniture and equipment, computer hardware and software, cars etc. are valued at historic cost less
accumulated depreciation.
Computer equipment held under finance leases is treated as if purchased by the company.
Tax asset comprises deferred net tax assets calculated as 30% of the present value of net positive timing
differences between accounting and taxable profits, plus tax losses to the extent they are expected to be
offset against future taxable income.
Prepayments and accrued income
Prepaid acquisition costs comprise the part of commission expenses to other insurance companies etc.
relating to unearned premiums provisions.
Other prepayments and accrued income comprise prepaid expenses and claims expenses paid in respect of
future settlements with cedants.
Technical provisions
Unearned premiums provisions, net of reinsurance, represent the proportion of premiums and reinsurance
premiums collected which relates to subsequent financial years.
Outstanding claims provisions, net of reinsurance, represent amounts to cover claims incurred but not
settled at the end of the year, less reinsurers’ share. Outstanding claims provisions are calculated on the
basis of information available concerning the extent of the losses plus an amount based on past
experience to cover claims incurred but not reported. The provisions include amounts to combat and
contain losses and to survey and assess claims.
Provisions for annuities, net of reinsurance, relate to compulsory workers’ compensation insurance in
Denmark, which is settled by payment of annuities. The provisions are calculated using actuarial
principles at the present value by discounting expected future payments. Other long-tail provisions
calculated using statistical methods are discounted.
Provisions for bonus and premium rebates represent amounts expected to be repaid to policyholders in
view of the claims experience during the financial year.
Financial statements 2002
Tryg Vesta Group
32
Equalisation provisions represent amounts provided to equalise future claims in areas where experience
has shown that claims vary from year to year. Equalisation provisions in credit and guarantee insurance
are calculated in accordance with rules laid down by the Danish Financial Supervisory Authority. For
workers’ compensation insurance in Denmark, equalisation provisions are calculated as the difference
between the technical provisions made up at basic interest rates of 2.00% and 2.75%, respectively. In
addition, equalisation provisions comprise the compulsory natural disaster fund in Vesta, Norway, which
is calculated and adjusted in accordance with rules laid down by Norwegian law.
Other technical provisions, net of reinsurance, represent provisions for risk not yet run off. The provisions
represent the amounts deemed necessary, in addition to unearned premiums provisions and future
premium rates, to cover claims and expenses in later accounting periods for policies in force on the
balance sheet date.
Provisions for other risks and expenses
Provisions for other risks and expenses comprise amounts intended to cover liabilities or expenses
attributable to the past financial year or prior financial years, and which on the balance sheet date are
likely or certain, but uncertain in respect of size or time of payment.
Provisions for tax comprise deferred net tax amounts calculated as 30% of the present value of net
positive timing differences between accounting and taxable profits less tax losses to the extent that they
are expected to be offset against future positive taxable income.
Deferred tax is not provided on the untaxed part of the Danish contingency reserve. It is not expected that
future movements in technical provisions will result in a crystallisation of tax on the contingency reserve.
The untaxed contingency reserves are disclosed in the notes to the financial statements under
shareholders’ equity.
Deposits received from reinsurers
Deposits received from reinsurers comprise amounts due in respect of reinsurance business accepted and
retained pursuant to the reinsurance contract.
Liabilities
Liabilities are generally stated at nominal value.
Financial statements 2002
Tryg Vesta Group
33
Financial statements of the parent company and the
Tryg Vesta Group
Income statement
DKKm
Note
General insurance
Earned premiums
Gross premiums written
Outward reinsurance premiums
Change in gross unearned premiums provisions
Change in unearned premiums provisions, reinsurers' share
1
2
Earned premiums, net of reinsurance
Technical interest, net of reinsurance
Claims incurred
Gross claims paid
Reinsurers' share
Change in gross outstanding claims provisions
Change in outstanding claims provisions, reinsurers' share
3
Claims incurred, net of reinsurance
Change in other technical provisions, net of reinsurance
Bonus and premium rebates
Insurance operating expenses
Acquisition costs
Administrative expenses
Reinsurance commissions and profit participation
4
Total insurance operating expenses, net of reinsurance
Change in equalisation provisions
5
Technical result
Parent company
28.01.-31.12.2002
Group
28.01.-31.12.2002*)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-52
0
-52
0
-52
7,230
-1,771
2,001
-357
7,103
449
-5,769
1,194
-1,029
-269
-5,874
12
-34
-1,037
-1,096
322
-1,811
-181
-336
*) Subsidiary undertakings are consolidated as from 28 June 2002.
Financial statements 2002
Tryg Vesta Group
34
Income statement
DKKm
Note
6
7
8
8
2
Investment activities
Investment income
Loss from group undertakings
Income from land and buildings
Interest, dividends etc.
Realised investment gains
Total investment income
Investment expenses
Investment administrative expenses
Interest expenses
Total investment expenses
Unrealised investment losses
Currency translation adjustment
Profit/loss on investment activities before
transfer to insurance activities
Technical interest transferred to
insurance activities
Total profit/loss on investment activities
Loss on ordinary activities before tax
9
Extraordinary expenses
Loss before tax
10
Tax
Loss for the year
Parent company
28.01.-31.12.2002
Group
28.01.-31.12.2002*)
-425
0
4
0
-421
-3
-4
-7
0
-16
-445
0
-445
-497
-1,182
-1,679
0
-1,679
0
111
541
60
713
-18
-19
-37
-3
-62
611
-518
93
-243
-1,482
-1,725
45
-1,679
*) Subsidiary undertakings are consolidated as from 28 June 2002.
Financial statements 2002
Tryg Vesta Group
35
Balance sheet at 31 December
DKKm
Note
Assets
11
12
12
13
Investments
Land and buildings
Investments in group and associated undertakings
Shares in group undertakings
Loans to group undertakings
Total investments in
group undertakings
Other financial investments
Shares
Units in unit trusts
Bonds
Loans secured by mortgages
Other loans
Deposits with credit institutions
14
Total other financial investments
Deposits with ceding undertakings
Total investments
Debtors
Debtors arising out of direct insurance operations
Policyholders
Insurance brokers
Total debtors arising out of
direct insurance operations
Amounts owed by insurance companies
Amounts owed by group undertakings
Other debtors
Total debtors
Other assets
Furniture, computers, other equipment, motor cars etc.
Cash at bank and in hand
Tax asset
Other
15
Total other assets
Prepayments and accrued income
Accrued interest and rent
Prepaid acquisition costs
Other prepayments and accrued income
Total prepayments and accrued income
Parent company
2002
0
4,584
702
5,286
0
0
0
0
0
0
0
0
5,286
0
0
0
0
92
1
93
0
14
0
0
14
0
0
0
0
Group
2002
3,371
0
0
0
1,825
14
17,784
200
73
291
20,188
146
23,706
1,655
679
2,334
1,357
0
484
4,176
468
735
495
3
1,701
282
86
355
723
Total assets
5,393
30,305
Financial statements 2002
Tryg Vesta Group
36
Balance sheet at 31 December
DKKm
Note
16
Liabilities
Shareholders' equity
Share capital
Share premium account
Retained earnings
Total shareholders' equity
Minority interests
Technical provisions
Unearned premiums provisions
Gross provisions
Reinsurers' share
Unearned premiums provisions, net of reinsurance
Outstanding claims provisions
17 Gross provisions
Reinsurers' share
Outstanding claims provisions, net of reinsurance
Provisions for annuities for workers' compensation insurance
Gross provisions
Provisions for annuities, net of reinsurance
18
Provisions for bonus and premium rebates
Equalisation provisions
19
20 Other technical provisions, net of reinsurance
Total technical provisions, net of reinsurance
Provisions for other risks and expenses
Provisions for pensions and similar obligations
21 Other provisions
Total provisions for other risks and expenses
Deposits received from reinsurers
Creditors
Creditors arising out of direct insurance operations
Creditors arising out of reinsurance operations
Amounts owed to credit institutions
Amounts owed to group undertakings
Corporation tax
Other creditors
22
Total creditors
Accruals and deferred income
Total liabilities
Parent company
2002
1,300
2,968
0
4,268
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1,100
0
0
25
1,125
0
5,393
Group
2002
1,300
2,968
0
4,268
10
6,114
-667
5,447
17,837
-3,965
13,871
1,139
1,139
64
1,438
50
22,009
185
352
537
6
495
580
1,249
3
3
950
3,280
196
30,305
Forward transactions etc.
23 Capital adequacy
24
25 Contingent liabilities
26
Intragroup transactions
Financial statements 2002
Tryg Vesta Group
37
Notes
DKKm
1
Earned premiums, net of reinsurance
Direct insurance
Reinsurance
Outward reinsurance premiums
Direct insurance by location of risk
Denmark
Other EU countries
Other countries
2
3
Technical interest, net of reinsurance
Transferred from investment activities
Discounting
Claims incurred, net of reinsurance
Direct insurance
Reinsurance
Reinsurers' share
Run-off result regarding previous years, net of reinsurance
Gross run-off result regarding previous years
Run-off result regarding previous years, reinsurers' share
Parent company
28.01.-31.12.2002
Group
28.01.-31.12.2002*)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
8,671
561
9,231
-2,129
7,103
3,920
155
4,596
8,671
518
-69
449
-6,382
-417
-6,799
925
-5,874
-270
-105
-375
*) Subsidiary undertakings are consolidated as from 28 June 2002.
Financial statements 2002
Tryg Vesta Group
38
Notes
DKKm
4
Insurance operating expenses, net of reinsurance
Commissions relating to direct insurance
Other acquisition costs
Total acquisition costs
Administrative expenses
Gross insurance operating expenses
Reinsurance commissions etc.
Gross insurance operating expenses
include the following staff costs:
Salaries
Commissions
Pension costs
Other social security costs
Payroll taxes etc.
Average number of employees (full-time equivalents) during the year
Remuneration to the Executive Management has been paid and disclosed in
Tryg Forsikring A/S and Vesta Forsikring A/S and is charged to
Tryg Vesta Group A/S through cost allocation.
Administrative expenses include fees to the auditors
appointed by the General Meeting:
Deloitte & Touche
KPMG
Of which remuneration for non-audit services:
Deloitte & Touche
KPMG
In addition, costs were incurred in the Group's internal audit.
Parent company
28.01.-31.12.2002
Group
28.01.-31.12.2002*)
0
0
0
-52
-52
0
-52
0
0
0
0
0
0
0
-1.2
-0.6
-1.8
-0.9
-0.5
-1.3
-219
-818
-1,037
-1,096
-2,133
322
-1,811
-940
-3
-37
-97
-55
-1,131
4,437
-3.6
-0.6
-4.2
-2.8
-0.4
-3.2
*) Subsidiary undertakings are consolidated as from 28 June 2002.
Financial statements 2002
Tryg Vesta Group
39
DKKm
5
Technical result, net of reinsurance, by line of insurance
Personal accident
and health
insurance
Workers'
compensation
insurance
Motor, third-
party liability
Motor,
comprehensive
2002
684
1,062
-1,072
0
0
-222
44
0
71
-117
100.9
20.9
2002
258
437
-529
0
0
-65
-58
-6
23
-198
121.3
14.8
2002
1,259
1,373
-1,099
7
0
-316
-36
-13
97
13
79.5
23.0
2002
1,423
1,573
-1,086
0
-27
-310
-46
1
45
151
70.2
20.0
Fire and
contents
(personal)
Fire and
contents
(commercial)
2002
1,322
1,374
-1,016
0
-1
-294
-115
-38
71
-19
74.0
21.4
2002
1,162
1,401
-993
0
-2
-292
-116
-197
71
-129
71.0
20.9
Liability
insurance
Other
insurance
2002
2002
298
429
-214
0
0
-99
-144
1
33
7
49.8
23.1
257
873
-507
5
0
-322
-138
-3
11
-82
57.6
37.0
Marine,
aviation and
cargo
2002
567
710
-283
0
-4
-213
-273
74
27
38
40.0
30.2
Total
2002
7,230
9,231
-6,798
12
-34
-2,133
-882
-181
449
-336
73.8
23.2
Gross premiums written
Gross earned premiums
Gross claims incurred
Change in other
technical provisions
Bonus and premium rebates
Gross operating expenses
Profit/loss on business ceded
Change in equalisation provisions
Technical interest, net of reinsurance
Technical result
Gross claims ratio
Gross expense ratio
Gross premiums written
Gross earned premiums
Gross claims incurred
Change in other
technical provisions
Bonus and premium rebates
Gross operating expenses
Profit/loss on business ceded
Change in equalisation provisions
Technical interest, net of reinsurance
Technical result
Gross claims ratio
Gross expense ratio
Financial statements 2002
Tryg Vesta Group
40
Notes
DKKm
6
7
8
Profit from group undertakings
Tryg Forsikring A/S
Vesta Forsikring AS
Nordea Kindlustuse Eesti AS
Interest, dividends etc.
Dividend on shares
Interest on securities etc.
Capital gains on drawing of and
repayments on securities etc.
Realised and unrealised investment
gains and losses
Land and buildings
Other shares
Listed bonds, excluding index-linked bonds
Other loans
Which have been allocated to the following items in the accounts:
Net realised investment gains/losses
Net unrealised investment gains/losses
9 Net extraordinary expenses
Goodwill arising on the acquisition of subsidiary undertakings
Restructuring and phase-out costs
10 Tax
Tax relating to previous years
Tax on the year's income
Withholding tax, foreign shares
Change in deferred tax asset
Parent company
28.01.-31.12.2002
Group
28.01.-31.12.2002*)
-524
101
-2
-425
0
4
0
4
0
0
0
0
0
0
0
0
-1,182
0
-1,182
0
0
0
0
0
9
542
-10
541
51
-447
455
-2
57
60
-3
57
-1,182
-300
-1,482
9
57
-1
-21
45
*) Subsidiary undertakings are consolidated as from 28 June 2002.
Financial statements 2002
Tryg Vesta Group
41
Notes
DKKm
11
Land and buildings
Cost of acquisition
Addition on acquisition of subsidiary undertakings
Currency translation adjustment during the year
Addition during the year
Balance at 31 December
Upward revaluation
Addition on acquisition of subsidiary undertakings
Upward revaluation during the year
Reversed upward revaluation
Balance at 31 December
Downward revaluation
Addition on acquisition of subsidiary undertakings
Downward revaluation during the year
Reversed downward revaluation
Balance at 31 December
Book value by type of property
Retail property
Office property
Production and warehouse property
Residential property
Of which properties held for the companies' own use
Most recent property value (property valuation)
Property not subject to public valuation
Mortgage debt amounts to DKK 67m
on land and buildings with a book value of DKK 206m
In the determination of the market value of properties
the following rates of return have been used:
Retail property
Office property
Production and warehouse property
Residential property
Parent company
2002
Group
2002
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3,085
13
45
3,144
320
50
-7
363
143
1
-9
135
3,371
314
2,798
44
215
3,371
409
2,276
94
Lowest
(%)
2002
Average
(%)
2002
Highest
(%)
2002
Tryg/Vesta
7,5/ -
6,5/ 2,2
9,0/ -
5,5/ -
Tryg/Vesta
7,7/ -
7,4/ 8,4
9,0/ -
6,1/ -
Tryg/Vesta
8,0/ -
8,5/ 10,5
9,0/ -
6,8/ -
All property
5,5/ 2,2
7,3/ 8,4
9,0/ 10,5
Financial statements 2002
Tryg Vesta Group
42
Parent company
2002
Group
2002
Notes
DKKm
12
Shares in group undertakings
Cost of acquisition
Addition on non-cash contributions
Currency translation adjustment during the year
Capital increase during the year
Balance at 31 December
Downward revaluation
Downward revaluation on non-cash contributions
Downward revaluation during the year
Balance at 31 December
Book value at 31 December
5,647
44
500
6,190
-1,182
-425
-1,606
4,584
0
0
0
0
0
0
0
0
Share-
holders'
equity at 31
December 2002
2,037
2,539
8
1,825
2,113
0
0
Shareholding
Profit/loss
for
Name and registered office
(%)
the year
Tryg Forsikring A/S, Ballerup
Vesta Forsikring AS, Bergen
Nordea Kindlustuse Eesti AS, Tallinn
100
100
100
-1,059
-202
-30
The company has extended subordinated loan capital of DKK 600m to
Tryg Forsikring A/S and of NOK 100m to Vesta Forsikring A/S
13
Shares
Book value
Cost of acquisition
Shareholdings exceeding 5% of the companies' share
capital according to the latest annual accounts:
Account Data A/S, Copenhagen
A/S Forsikringens hus, Copenhagen
Rungstedgaard A/S, Rungsted Kyst
14 Other financial investments
Book value
Shares
Units in unit trusts
Ordinary bonds
International bonds
Loans secured by mortgages
Other loans
Deposits with credit institutions
Cost of acquisition
Shares
Units in unit trusts
Bonds
Loans secured by mortgages
Other loans
Deposits with credit institutions
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Shareholders'
equity
Shareholding
(%)
2002
2002
1
44
29
14
12
13
1,825
14
6,935
10,849
200
73
291
20,188
2,113
27
17,584
199
73
291
20,285
Financial statements 2002
Tryg Vesta Group
43
Notes
DKKm
15
Tax asset
Land and buildings
Bonds and loans secured by mortgages
Operating equipment and provisions etc.
Other assets
Debt
Tax loss carryforwards
Parent company
2002
0
0
0
0
0
0
0
1
1,000
300
1,300
4,647
-1,679
2,968
-1,679
1,679
0
4,268
16
Shareholders' equity
Share capital
Share capital on incorporation
Capital contribution by way of non-cash contributions
Capital increase
Balance at 31 December
The share capital is divided into shares of DKK 100 each or multiples thereof.
Share premium account
Share premium account on non-cash contributions
Transferred to Retained earnings
Balance at 31 December
Retained earnings
Transferred loss for the year
Transferred from share premium account
Balance at 31 December
Total shareholders' equity
The shareholders' equity of Vesta Forsikring AS and Dansk Kautionsforsikrings-Aktieselskab includes untaxed
contingency reserves of NOK 1,920m and and DKK 139m, respectively.
17 Gross provisions
(outstanding claims provisions)
Of which provisions calculated in view of
discounting:
Workers' compensation insurance (Denmark)
Reduction due to discounting
Running-off period
Discount rate
Inflation
Workers' compensation insurance (Norway)
Reduction due to discounting
Running-off period
Discount rate
Inflation
18
Provisions for annuities
Workers' compensation insurance
Running-off period
Discount rate
Inflation
0
0
Group
2002
69
-2
240
24
15
149
495
1
1,000
300
1,300
4,647
-1,679
2,968
-1,679
1,679
0
4,268
17,837
575
46
4,3 år
3.5%
3.5%
2,355
407
4,8 år
3.5%
3.5%
1,139
12 år
2,75%
0%
Financial statements 2002
Tryg Vesta Group
44
Notes
DKKm
19
Equalisation provisions
Guarantee insurance
Workers' compensation insurance
Windstorm and large risks
Equalisation provisions concerning Norwegian general insurance
Other insurance
20 Other technical provisions, net of reinsurance
Life insurance provisions concerning reinsurance
Provisions for open financial year
Provisions for risk not yet run off
21 Other provisions
Restructuring and phase-out costs
22 Creditors
Of which amounts falling due after 5 years
23 Capital adequacy
Shareholders' equity
Solvency requirement in group undertakings
Weighted assets
Solvency ratio
24
Forward transactions etc.
Forward transactions
Market values
Purchase of interest rate derivatives
Sale of interest rate derivatives
Forward currency purchased
Forward currency sold
Unsettled transactions
Cost of acquisition
Purchase of interest rate derivatives
Sale of interest rate derivatives
Forward currency purchased
Forward currency sold
Unsettled transactions
25 Contingent liabilities
Non-insurance guarantee and lease commitments etc.
do not exceed
Parent company
2002
0
0
0
0
0
0
0
0
0
0
0
0
1,125
0
4,268
-2,561
1,707
2,818
61
0
0
0
0
0
0
0
0
0
0
0
Tryg Forsikring A/S has an annual liability towards Danica Pension to pay rent for the head
office at Ballerup. The annual rent and taxes etc. currently amount to DKK 72m.
The remaining term of the lease is 23 years.
The majority of the companies of the Tryg Vesta Group are jointly taxed
and jointly and severally liable for payment of corporation tax.
In terms of payroll tax and VAT, the Company is jointly registered with the majority of
the companies of the Tryg Vesta Group, and is jointly and severally liable with these
companies for the payment of such taxes.
The Group is party to a number of lawsuits, the outcomes of which
Group
2002
270
79
166
907
16
1,438
1
7
41
50
352
352
3,280
67
3,307
715
110
3,455
130
3,309
713
109
3,400
130
375
Financial statements 2002
Tryg Vesta Group
45
Supervisory Board and Executive Management
Supervisory Board
Mikael Olufsen
Deputy chairman of the Supervisory Board of Tryg i Danmark smba, member of the Board of
Representatives of Tryg i Danmark smba, chairman of the Supervisory Board of Tryg Vesta Group A/S,
deputy chairman of the Supervisory Board of Egmont Fonden, deputy chairman of the Supervisory Board
of Egmont International Holding A/S, deputy chairman of the Supervisory Board of Gigtforeningen i
Danmark, member of the Supervisory Board of Britisk Import Union, member of the Supervisory Board
of Danish Cereal Holding A/S, member of the Supervisory Board of Danmark-Amerika Fondet, member
of the Supervisory Board of Toptex PLC Borino, chairman of the Supervisory Board of Malaplast Co.
Ltd. Samutprakarn.
Per Skov
Member of the Supervisory Board of Tryg i Danmark smba, member of the Board of Representatives of
Tryg i Danmark smba, deputy chairman of the Supervisory Board of Tryg Vesta Group A/S, chairman of
the Supervisory Board of Tryg Forsikring A/S, member of the Supervisory Board of Vesta Forsikring AS,
chairman of the Supervisory Board of VT-Holding A/S, member of the Supervisory Board of A/S De
Smithske, member of the Supervisory Board of DAC Smba, member of the Supervisory Board of Dagrofa
A/S, member of the Supervisory Board of Denerco Oil A/S, member of the Supervisory Board of DSV,
De Sammensluttede Vognmænd af 13.7.1976 A/S, member of the Supervisory Board of Kemp &
Lauritzen A/S, member of the Supervisory Board of Privathospitalet Hamlet A/S, member of the
Supervisory Board of Superfos A/S, member of the Supervisory Board of Norlex A/S.
Jørn Wendel Andersen
Member of the Supervisory Board of Tryg i Danmark smba, member of the Board of Representatives of
Tryg i Danmark smba, member of the Supervisory Board of Tryg Vesta Group A/S, managing director of
Arla Foods amba, member of the Supervisory Board of Arla Foods AB, member of the Supervisory
Board of Neoplex A/S.
John Frederiksen
Member of the Supervisory Board of Tryg i Danmark smba, member of the Board of Representatives of
Tryg i Danmark smba, member of the Supervisory Board of Tryg Vesta Group A/S, chairman of the
Supervisory Board of A/S Kollektivhuset Hellebo, chairman of the Supervisory Board of Dandrit Biotech
A/S, chairman of the Supervisory Board of Ejendomsselskabet Norden A/S, chairman of the Supervisory
Board of Ejendomsselskabet Uglen A/S, chairman of the Supervisory Board of Jacob Holm & Sønner
A/S, chairman of the Supervisory Board of Tema Kapital I K/S, chairman of the Supervisory Board of
Tema Kapital Management A/S, member of the Supervisory Board of Danarota Technic A/S, member of
the Supervisory Board of Dønnerup A/S, member of the Supervisory Board of Fortunen A/S, member of
the Supervisory Board of Freja Ejendomme A/S (Statens Ejendomssalg A/S), member of the Supervisory
Board of Oak Property A/S, member of the Supervisory Board of Renholdingsselskabet af 1898, member
of the Supervisory Board of Råstof og Genanvendelse Selskabet af 1990 A/S, member of the Supervisory
Board of Sjælsø Gruppen A/S, member of the Executive Management of Fortunen A/S, member of the
Executive Management of Oak Property A/S.
Financial statements 2002
Tryg Vesta Group
46
Mogens Jacobsen
Chairman of the Supervisory Board of Tryg i Danmark smba, member of the Board of Representatives of
Tryg i Danmark smba, member of the Supervisory Board of Tryg Vesta Group A/S, deputy chairman of
the Supervisory Board of Tryg Forsikring A/S, deputy chairman of the Supervisory Board of Vesta
Forsikring AS, member of the Supervisory Board of Nordea Pension Danmark, livsforsikringsselskab
A/S, chairman of the Supervisory Board of Rodskovgård Aps, member of the Executive Management of
Rodskov Svineproduktion Aps.
Niels Erik Schultz-Petersen
Member of the Supervisory Board of Tryg i Danmark smba, member of the Board of Representatives of
Tryg i Danmark smba, member of the Supervisory Board of Tryg Vesta Group A/S, deputy chairman of
the Supervisory Board of H.A.G. A/S.
Executive Management
Stine Bosse
Group CEO of Tryg Vesta Group A/S, CEO of Tryg Forsikring A/S, CEO of Tryg Forsikring II A/S,
member of the Supervisory Board of Vesta Forsikring AS, chairman of the Supervisory Board of Tryg
Forsikring, Rejse og Forsikring A/S, member of the Supervisory Board of ApS KBIL 9 NR. 2032,
chairman of the Supervisory Board of Dansk Kautionsforsikrings-Aktieselskab, member of the
Supervisory Board of Tryg Ejendomme I A/S, chairman of the Supervisory Board of Tryg-Baltica
Forsikring, internationalt forsikringsselskab A/S, member of the Supervisory Board of Aktiv 24
Forsikring AS, member of the Supervisory Board of Enter Forsikring AS, member of the Supervisory
Board of Forsikring og Pension, member of the Supervisory Board of Flügger A/S, member of the
Supervisory Board of Dansk Management Forum.
Erik Gjellestad
Member of the Group Executive Management of Tryg Vesta Group A/S, CEO of Vesta Forsikring AS,
member of the Supervisory Board of Tryg Forsikring A/S, alternate member of the Supervisory Board of
Bergen Nordhordaland Rutelag ASA.
Financial statements 2002
Tryg Vesta Group
47
Changes to the Supervisory Board and the Executive Management
The Tryg Vesta Group was established on 28 January 2002 under the name “Tryg General Insurance
Holding A/S”. Its Supervisory Board consisted of Thorleif Krarup (Chairman), Lars-Göran Nordström
and Erik Arne Liljedahl. The Executive Management consisted of Hugo Andersen. The composition of
the Supervisory Board was changed on 30 September 2002 to comprise the members listed in these
financial statements.
On 1 September 2002, the Executive Management was enlarged to comprise Hugo Andersen (Group
CEO), Stine Bosse (CEO of Tryg) and Erik Gjellestad (CEO of Vesta). On 10 January 2003, Mr
Andersen resigned and was replaced by Ms Bosse as Group CEO.
Heads of business organisation
Tryg Forsikring A/S
Dansk Kaution
Vesta Forsikring AS
Nordea Ubezpieczenia, Poland
Tryg-Baltica international
Nordea Vahinkovakuutus, Finland
Nordea Kindlustus, Estonia
Stine Bosse (CEO)
Flemming Christiansen (CEO)
Erik Gjellestad (CEO)
Otto Groegler (CEO)
Flemming Christiansen (CEO)
Kimmo Kilpinen (branch manager)
Mikko Saario (CEO)
Financial statements 2002
Tryg Vesta Group
48
Group overview
Tryg Vesta Group A/S has the following subsidiary undertakings:
Tryg Forsikring A/S, CVR-No. 24260666 (100%)
- Tryg Forsikring II A/S, CVR-No. 24260569 (100%)
(with Tryg Forsikring II A/S Filial Finland, Suomen sivuliike,
Branch name; Nordea Vahinkovakuutus)
- Tryg Polska Towarzystwo Ubezpieczen S.A. (95.32%)
- Dansk Kautionsforsikrings-Aktieselskab, CVR-No. 10163714 (100%)
- ApS SMBK nr. 98, CVR-NR 66326810 (100%) (dormant)
- Tryg-Baltica Forsikring, Internationalt Forsikringsselskab A/S, CVR-No. 10430615 (100%)
- Tryg-Baltica International (UK) Ltd (100%)
- Tryg Forsikring, Rejse og Sundhed A/S, CVR-No. 19998916 (100%)
- Tryg Ejendomme I A/S, CVR-No. 12601840 (100%)
- Aps KBIL 9 nr. 2032, CVR-No. 18251728
Vesta Forsikring AS, org. No. 9178128790 (100%)
- Enter Forsikring AS, 913 782 453 (100%)
- Aktiv Forsikring AS, 913 713 265 (100%)
- Forsikringsselsk. Vesta Garanti AS, 929 248 767 (100%)
- Respons Inkasso AS, 956 331 013 (100%)
- Salgssenter I Forsikring, 980 078 124 (100%)
- Thunesvei 2 AS, 946 919 845 (100%)
- AS Slettebakksvei nr. 80, 933 088 413 (100%)
- ANS Grensen 3, 848 383 082 (99%, 1% owned by AS Slettebakksvei nr. 80)
- ANS Nesøyveien 4, 951 130 532 (99%, 1% owned by AS Slettebakksvei nr. 80)
- ANS Nesøyveien 6, 957 929 532 (99%, 1% owned by AS Slettebakksvei nr. 80)
- ANS Nye Vakåsvei 80, 948 011 220 (99%, 1% owned by AS Slettebakksvei nr. 80)
- Vesta Multifond AS, 982 489 465 ("discontinuing") (100%)
- Investeringstorget AS, 981 525 582 ("discontinuing") (100%)
- Fondstorget AS, 981 525 620 ("discontinuing") (100%)
- Aktiv 24 Forsikring AS ("discontinuing") (100%)
Nordea Kindlustuse Eesti AS, reg. no. 10811194 (100%)
Financial statements 2002
Tryg Vesta Group
49