A
n
n
u
a
l
R
e
p
o
r
t
2
0
0
7
Annual Report 2007
TrygVesta A/S
Klausdalsbrovej 601
DK-2750 Ballerup
TrygVesta@trygvesta.com
www.trygvesta.com
Phone +45 70 11 20 20
CVR no. 26460212
Fax +45 44 20 67 00
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:54)(cid:36)(cid:72)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)
(cid:59)(cid:100)(cid:103)(cid:104)(cid:94)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:54)(cid:36)(cid:72)
(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)
(cid:72)(cid:96)(cid:86)(cid:89)(cid:90)(cid:91)(cid:142)(cid:103)(cid:104)(cid:126)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)
(cid:29)(cid:72)(cid:108)(cid:90)(cid:89)(cid:94)(cid:104)(cid:93)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:59)(cid:100)(cid:103)(cid:104)(cid:94)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:67)(cid:100)(cid:103)(cid:89)(cid:90)(cid:86)
(cid:75)(cid:86)(cid:93)(cid:94)(cid:99)(cid:96)(cid:100)(cid:107)(cid:86)(cid:96)(cid:106)(cid:106)(cid:105)(cid:106)(cid:104)
(cid:29)(cid:59)(cid:94)(cid:99)(cid:99)(cid:94)(cid:104)(cid:93)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:73)(cid:103)(cid:110)(cid:92)
(cid:58)(cid:95)(cid:90)(cid:99)(cid:89)(cid:100)(cid:98)(cid:98)(cid:90)(cid:21)(cid:54)(cid:36)(cid:72)
(cid:58)(cid:99)(cid:105)(cid:90)(cid:103)(cid:21)(cid:59)(cid:100)(cid:103)(cid:104)(cid:94)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:54)(cid:72)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:104)(cid:106)(cid:87)(cid:104)(cid:94)(cid:89)(cid:94)(cid:86)(cid:103)(cid:110)(cid:30)
(cid:71)(cid:90)(cid:104)(cid:101)(cid:100)(cid:99)(cid:104)(cid:21)(cid:62)(cid:99)(cid:96)(cid:86)(cid:104)(cid:104)(cid:100)(cid:21)(cid:54)(cid:72)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:104)(cid:106)(cid:87)(cid:104)(cid:94)(cid:89)(cid:94)(cid:86)(cid:103)(cid:110)(cid:30)
(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)
(cid:58)(cid:94)(cid:90)(cid:99)(cid:89)(cid:100)(cid:98)(cid:21)(cid:54)(cid:72)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:104)(cid:106)(cid:87)(cid:104)(cid:94)(cid:89)(cid:94)(cid:86)(cid:103)(cid:110)(cid:30)
(cid:68)(cid:105)(cid:93)(cid:90)(cid:103)(cid:21)(cid:103)(cid:90)(cid:86)(cid:97)(cid:21)(cid:101)(cid:103)(cid:100)(cid:101)(cid:90)(cid:103)(cid:105)(cid:110)(cid:21)
(cid:88)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:94)(cid:90)(cid:104)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:104)(cid:106)(cid:87)(cid:104)(cid:94)(cid:89)(cid:94)(cid:86)(cid:103)(cid:94)(cid:90)(cid:104)(cid:30)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)
(cid:60)(cid:86)(cid:103)(cid:86)(cid:99)(cid:105)(cid:94)(cid:91)(cid:100)(cid:103)(cid:104)(cid:94)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:54)(cid:36)(cid:72)
(cid:29)(cid:57)(cid:86)(cid:99)(cid:104)(cid:96)(cid:21)(cid:64)(cid:86)(cid:106)(cid:105)(cid:94)(cid:100)(cid:99)(cid:30)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:60)(cid:86)(cid:103)(cid:86)(cid:99)(cid:105)(cid:94)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:60)(cid:86)(cid:103)(cid:86)(cid:99)(cid:105)(cid:94)
(cid:29)(cid:72)(cid:108)(cid:90)(cid:89)(cid:94)(cid:104)(cid:93)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:60)(cid:103)(cid:100)(cid:106)(cid:101)(cid:21)(cid:88)(cid:93)(cid:86)(cid:103)(cid:105)(cid:21)(cid:86)(cid:105)(cid:21)(cid:40)(cid:38)(cid:21)(cid:57)(cid:90)(cid:88)(cid:90)(cid:98)(cid:87)(cid:90)(cid:103)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)(cid:35)(cid:21)(cid:56)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:94)(cid:90)(cid:104)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:90)(cid:104)(cid:21)(cid:86)(cid:103)(cid:90)(cid:21)(cid:108)(cid:93)(cid:100)(cid:97)(cid:97)(cid:110)(cid:34)(cid:100)(cid:108)(cid:99)(cid:90)(cid:89)(cid:21)
(cid:87)(cid:110)(cid:21)(cid:57)(cid:86)(cid:99)(cid:94)(cid:104)(cid:93)(cid:21)(cid:100)(cid:108)(cid:99)(cid:90)(cid:103)(cid:104)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:101)(cid:97)(cid:86)(cid:88)(cid:90)(cid:89)(cid:21)(cid:94)(cid:99)(cid:21)(cid:57)(cid:90)(cid:99)(cid:98)(cid:86)(cid:103)(cid:96)(cid:21)(cid:106)(cid:99)(cid:97)(cid:90)(cid:104)(cid:104)(cid:21)(cid:100)(cid:105)(cid:93)(cid:90)(cid:103)(cid:108)(cid:94)(cid:104)(cid:90)(cid:21)(cid:104)(cid:105)(cid:86)(cid:105)(cid:90)(cid:89)(cid:35)(cid:21)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:62)(cid:73)(cid:21)(cid:54)(cid:36)(cid:72)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:54)(cid:36)(cid:72)(cid:21)(cid:98)(cid:90)(cid:103)(cid:92)(cid:90)(cid:21)(cid:90)(cid:91)(cid:91)(cid:90)(cid:88)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:38)(cid:21)(cid:63)(cid:86)(cid:99)(cid:106)(cid:86)(cid:103)(cid:110)(cid:21)(cid:39)(cid:37)(cid:37)(cid:45)(cid:35)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:110)
(cid:55)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)
Disclaimer
Certain statements in this annual report are based on
TrygVesta urges readers to refer to the section on
the beliefs of our management as well as assump-
risk management for a description of some of the
tions made by and information currently available to
factors that could affect the Group’s future per-
management. Statements regarding TrygVesta’s
formance or the insurance industry.
future results of operations, financial condition, cash
flows, business strategy, plans and future objectives
Should one or more of these risks or uncertainties
other than statements of historical fact can generally
materialise or should any underlying assumptions
be identified by terminology such as “targets”,
prove to be incorrect, TrygVesta’s actual financial
“believes”, “expects”, “aims”, “intends”, “plans”,
condition or results of operations could materially
“seeks”, “will”, “may”, “anticipates”, “would”, “could”,
differ from that described herein as anticipated,
“continues” or similar expressions.
believed, estimated or expected.
A number of different factors may cause the actual
TrygVesta is not under any duty to update any of the
performance to deviate significantly from the
forward-looking statements or to conform such
forward-looking statements in this annual report,
statements to actual results, except as may be
including but not limited to general economic
required by law.
developments, changes in the competitive environ-
ment, developments in the financial markets, extra-
ordinary events such as natural disasters or terrorist
attacks, changes in legislation or case law and
reinsurance.
This is a translation of the Danish annual report 2007. In case of any discrepancy between the Danish and the
English version of the annual report 2007, the Danish version shall apply.
Editors: Investor Relations
Design: Bysted A/S
Printers: Arco Grafisk A/S
Paper: Munken Lynx
Photos: Mads Armgaard/gab.dk and Getty Images
We want to be perceived as the leading peace-of-mind provider
in the Nordic region and we aim to prevent concerns from over-
shadowing our customers’ lives. Throughout 2007, our roughly
3,900 employees and our products interacted to provide peace
of mind on a daily basis to more than 2.2 million private custom-
ers and more than 100,000 businesses.
We are the second-largest general insurer in the Nordic region
with activities in Denmark, Norway, Finland and Sweden. We are
the largest general insurer in Denmark and Norway’s third largest
general insurer. We have operated our rapidly growing activities
in Finland and Sweden since 2002 and 2006, respectively.
We sell the great majority of our products through our own
distribution channels. We also have a strong strategic partner-
ship with Nordea, the largest bank in the Nordic region.
TrygVesta Annual Report 2007 l Profile l
1 of 152
Contents
Management’s report
Foreword
Financial highlights and key ratios of TrygVesta
2007 in review
TrygVesta and the external community
Our business
Strategy 2007-2010
TrygVesta’s financial performance in 2007
Private & Commercial Denmark
Private & Commercial Norway
Corporate
Finnish general insurance
Swedish general insurance
Investment activities
Financial outlook for 2008
Capitalisation and profit distribution
Risk management
Corporate governance
Supervisory Board
Group Executive Management
Our customers
Our employees
Our shareholders
Financial calendar
Announcements in 2007
Feature: Innovation and social responsibility
Accounts
Statement by the Supervisory Board and the Executive Management
Independent auditors’ report
Income statement and balance sheet for the TrygVesta Group
Statement of changes in equity
Cash flow statement
Notes to the financial statements
Income statement and balance sheet for TrygVesta A/S (Parent company)
Statement of changes in equity (Parent company)
Notes to the financial statements (Parent company)
Financial highlights and key ratios by geography
Organisation chart
Glossary of technical terms
2 of 152
l Contents l TrygVesta Annual Report 2007
Page
3
4
6
8
10
12
16
19
22
25
28
30
32
36
40
42
48
56
60
62
68
74
78
79
80
94
95
96
97
100
102
103
140
142
143
148
150
151
Prepared to meet future challenges
Challenges and opportunities go hand in hand, and the
A decision was
changes happening around us in the market and in soci-
made in 2007 to
ety in general present a number of business opportunities
change the Group’s
for us. Indeed, the year 2007 presented several chal-
profit distribution
lenges, including a growing focus on health care systems,
policy to the effect
an awareness of climate change that has truly asserted
that TrygVesta now
itself, and unemployment falling to an all-time low leading
pays cash dividends at
to an intensified battle to attract employees. We launched
the rate of 50% of the profit for the
new initiatives in these areas in 2007 which, going for-
year after tax and also buys back treasury shares. The
ward, will benefit our Group and all our stakeholders.
amount used for share buybacks is calculated on the basis
of TrygVesta’s capital model. Accordingly, our Supervisory
The technical result we produced for 2007 was DKK 2.8bn,
Board intends to recommend to the shareholders at the
an improvement of some 12% on 2006 and DKK 770m
annual general meeting to be held on 3 April 2008 that
higher than our expectations at the beginning of 2007.
cash dividends for 2007 be paid at the rate of DKK 17 per
The improved technical result was the reward of several
share, equivalent to a total of DKK 1,156m. In addition,
years of efforts to build a strong foundation for our insur-
we intend to buy back shares for DKK 1,405 million, com-
ance operations; our prices are now set based on risk con-
prising an ordinary and an extraordinary amount attributa-
siderations, the structure of our reinsurance programme
ble to circumstances described in more detail in the sec-
reflects our risk profile, and we focus strongly on innova-
tion on capitalisation and profit distribution. The total
tion and growth. The stronger technical results of recent
amount being distributed to shareholders in 2007 is DKK
years make us less dependent on financial income, which
2,561m, equivalent to 113% of the profit for the year
was lower in 2007 relative to 2006. Furthermore, we pur-
after tax. The total amount distributed reflects TrygVesta’s
sue a conservative investment policy, refraining from invest-
strong capital position and the Group’s targeted rating of
ing in structured financial products, the alleged cause of
A- from Standard & Poor’s.
the financial turmoil prevailing since the summer of 2007.
In addition to reporting good results, we have also built a
Our good technical performance in 2007 has caused us to
solid foundation for maintaining the strong momentum of
upgrade our medium-term expectations from a combined
recent years. In 2007, we extended our Health Care area
ratio of around 92 to the 89-91 range before run-off.
to include Norway, we began selling commercial insur-
ances in Finland, and we plan to launch corporate insur-
We have supplemented our annual report this year with a
ances in Sweden in 2008.
feature section focusing on some of our challenges and
describing how at TrygVesta we have launched a range of
A structured approach to innovation is key at TrygVesta. Inno-
new initiatives to meet these challenges. Our initiatives
vation is first and foremost a matter of securing the future
include boosting the creative potential of our employees
development of our Group, creating and exploiting business
and finding new ways of working with product develop-
opportunities and achieving our vision of being perceived as
ment. You can read about these and other initiatives in the
the leading peace-of-mind provider of the Nordic region. It
feature section at the end of the Management’s report.
is about developing new ways of servicing customers, offer-
ing new products and launching new initiatives that support
We hope you will enjoy reading our annual report.
growth. The results of these efforts will materialise clearly in
the years ahead.
Mikael Olufsen
Stine Bosse
Chairman of the Supervisory Board
Group CEO
TrygVesta Annual Report 2007 l Foreword l
3 of 152
Financial highlights
Financial highlights and key ratios of TrygVesta
DKKm
IFRS
2007
2006
2005
Danish GAAP
2004
2003
2004
Income statement
Gross premiums earned
Gross claims incurred
Total insurance operating expenses
Profit/loss on gross business
Profit/loss on ceded business
Technical interest, net of reinsurance
Change in equalisation provisions
16,606
-11,175
-2,769
2,662
-343
501
0
16,021
-10,564
-2,697
2,760
-591
343
0
15,705
-11,159
-2,662
1,884
-7
170
0
15,266
-10,425
-2,611
2,230
-708
185
0
16,308
-11,020
-3,462
1,826
-814
537
-93
Technical result
2,820
2,512
2,047
1,707
1,456
Return on investment activites after
transfer to Insurance activities
Other income
Other expenses
340
121
-172
Profit/loss for the year before tax
3,109
Extraordinary items and minority interests
Tax
0
-842
1,228
118
-149
3,709
0
-624
894
126
-154
2,913
0
-788
371
121
-147
2,052
0
-556
517
121
-147
1,947
0
-485
Profit/loss for the year,
continuing business
Profit/loss on discontinued and
divested business after tax
Profit/loss for the year
Run-off gains/losses, net of reinsurance
Relative run-off gains/losses
743
3.6
2,267
3,085
2,125
1,496
1,462
-1
2,266
126
3,211
555
3.0
-28
2,097
283
1.8
-75
1,421
-71
-0.5
-55
1,407
3
-
16,702
-11,940
-3,745
1,017
-1,135
595
-101
376
685
115
-131
1,045
1
-87
959
-217
742
-516
-
Balance sheet
Total provisions for insurance contracts
Total reinsurers’ share of provisions
of insurance contracts
Total shareholders’ equity
Total assets
Key ratios
Gross claims ratio
Business ceded as a percentage
of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Claims ratio, net
Expense ratio, net
Combined ratio, net
Operating ratio
26,916
25,957
26,757
25,212
26,599
25,955
1,587
10,010
43,830
1,561
9,951
42,783
2,630
8,215
40,811
3,292
6,802
37,824
3,132
6,117
33,553
3,480
5,360
31,337
67.3
2.1
69.4
16.7
86.1
68.1
17.1
85.2
83.5
65.9
3.7
69.6
16.8
86.4
68.4
17.2
85.6
84.6
71.1
0.1
71.2
17.0
88.2
69.7
17.6
87.3
87.1
68.3
4.6
72.9
17.1
90.0
71.2
17.6
88.8
89.0
67.6
5.0
72.6
21.2
93.8
70.9
22.2
93.1
90.8
71.5
6.8
78.3
22.4
100.7
76.6
24.3
100.9
97.2
4 of 152
l Financial highlights and key ratios of TrygVesta l TrygVesta Annual Report 2007
DKKm
Other data
IFRS
2007
2006
2005
Danish GAAP
2004
2003
2004
Return on equity before tax
and discontinued and divested business
Return on equity after tax and
discontinued and divested business
Earnings per share
(continuing business)
Net asset value per share
Dividend per share
Share price 31.12
Quoted price/net asset value
Price Earnings
Average number of shares (1,000) 1)
Number of shares, year end (1,000) 1)
Solvency
31
23
33.5
148
17
388.0
2.6
11.6
67,648
67,638
81
41
35
45.5
147
33
431.5
2.9
9.5
67,824
67,790
58
39
28
31.3
121
21
319.2
2.6
10.2
68,000
68,000
72
33
23
22.0
100
10
-
-
-
68,000
68,000
78
34
25
21.5
90
10
-
-
-
68,000
68,000
79
22
15
14.1
79
1
-
-
-
68,000
68,000
86
Number of full-time employees,
end of period
Continuing business
Discontinued and divested business
3,814
0
3,808
0
3,694
24
3,728
34
3,728
34
3,750
670
1) Calculated in accordance with ‘Recommendations & Financial Ratios 2005’ issued by the Danish Society of Financial Analysts except for
per shares data, which is based on 68,000,000 shares as if such number of shares was outstanding during the periods presented. The
68,000,000 shares reflect the number of outstanding shares after giving effect to the four-to-one share split set forth in the company’s
amended articles of association.
Accounting policies
From 1 January 2005, the accounting policies of TrygVesta follow the IFRS standards.
The comparative figures for 2004 have been restated to IFRS, but in addition to IFRS restatements, the figures for 2004 are
net of divested business, which is henceforth included in ‘Profit/loss on discontinued and divested business’.
By IFRS (International Financial Reporting Standards) means that the accounting policies are based on the international accounting
standards and interpretations as adopted by the EU. By Danish GAAP means that the accounting policies are in accordance with the
Danish Financial Business Act and the executive order issued by the Danish Financial Supervisory Authority on financial reports
presented by insurance companies and profession-specific pension funds.
Comparative figures for 2004, 2005 and 2006 have been restated to the new method of unwinding.
See note 1 ‘Changes in Accounting policies’.
TrygVesta Annual Report 2007 l Financial highlights and key ratios of TrygVesta l
5 of 152
2007 in review
2007 in review
February
May
TrygVesta’s Finnish operation started selling
TrygVesta’s first-quarter pre-tax profit was DKK 683m
commercial insurance to small businesses.
compared with DKK 700m in the first quarter of 2006.
Credit rating agency Moody’s upgraded TrygVesta
to A2 from A3.
TrygVesta launched a lower-priced motor insurance
for young women below 29 years in Denmark.
TrygVesta reported profit before tax of DKK 3.7bn for
the full year 2006 compared with the forecast of DKK
3.2bn announced in the third-quarter interim report.
TrygVesta introduced a new children’s insurance
in Norway covering all children, including those who
have a disability or suffer from a serious illness.
March
June
TrygVesta began offering stress consultancy to
TrygVesta organised its first capital markets day at
employees working in Denmark. StressStop is a
the Ballerup head office, attended by 36 investors
stress prevention scheme incorporated in the
and analysts. At the same time, Tryg Vesta
general health insurance.
At the head office in Ballerup, TrygVesta opened
an innovation centre – a creative space with room
to create and stimulate the development of ideas.
TrygVesta held its second annual general meeting
as a listed company. Christian Brinch was elected
as a new member of the Supervisory Board.
upgraded its premium growth forecast from 3.0%
to 3.3% and supplemented the profit distribution
policy with share buybacks.
Vesta Forsikring in Norway became a branch of
Tryg Forsikring. At the same time Tryg Forsikring
changed its name to TrygVesta Forsikring. The
Norwegian branch also changed its name to
TrygVesta, the future brand in Norway.
April
August
TrygVesta introduced LEAN to offer enhanced quality to
TrygVesta’s first-half pre-tax profit was DKK
customers, improve employee satisfaction and make
1,745m, an improvement of DKK 394m compared
work processes better and more efficient.
with the first-half of 2006.
6 of 152
l 2007 in review l TrygVesta Annual Report 2007
September
Credit rating agency Standard & Poor’s affirmed
Vesta Skadeförsäkring in Sweden reached a
TrygVesta’s rating of A-.
milestone with 100,000 insurances sold.
TrygVesta won a major arbitration case against a
TrygVesta introduced a new annual travel insurance
number of reinsurers. The favourable outcome had
in Denmark. Coverage under the Danish public
a positive impact of DKK 41m on the third-quarter
travel and health insurance will be curtailed effec-
financial statements.
tive 1 January 2008, and TrygVesta’s new annual
travel insurance will provide coverage for the areas
TrygVesta launched a large-scale training pro-
subject to future restrictions.
gramme for sales and customer service staff under
the heading “Your role as a peace-of-mind pro-
vider”. The programme will run from September
2007 to May 2008.
November
TrygVesta extended the successful health
insurance in Denmark to the Norwegian market,
introducing the sale of treatment insurance.
October
TrygVesta entered into a Nordic collaboration with two
firms of architects to be in charge of upgrading the
offices in Ballerup and Bergen. The collaboration is
intended to create a lasting workplace layout and an
even more value-based corporate culture.
TrygVesta implemented two web-based peace-
of-mind initiatives focusing on prevention and
Dansk Kaution changed its name to TrygVesta
advice. The websites tryghedsraadgiveren.dk and
Garantiforsikring A/S. The new name makes the
trygghets raadgiveren.no offer advice to everybody
affiliation with TrygVesta clear and is connected
on how to prevent damage and injuries at home,
with the Group’s new Nordic strategy.
while tryghedsbutik.dk and trygghetsbutikk.no
offer products that improve safety at home and in
TrygVesta’s third-quarter pre-tax profit was DKK
the traffic.
726m compared with DKK 1,110m in the third
quarter of 2006.
Peter Falkenham, member of the Group Executive
Management in charge of Private & Commercial
Denmark, was appointed Chief Operating Officer
(COO).
TrygVesta Annual Report 2007 l 2007 in review l
7 of 152
TrygVesta and the external community
TrygVesta and the external community
The year 2007 was characterised by discussions about
At 31 December 2007, some 700,000 Danes were cov-
public health care systems, record-low unemployment, cli-
ered by private health care insurance, around 65% more
mate changes and topics such as financial crisis, risk
than at the beginning of 2006. Demand is rising, and we
management and stricter capital requirements were also
see great potential within this area in the years ahead.
high on the agenda during the year.
We began selling health care insurance in Norway in late
2007, and we plan to start selling health care insurance
The market shares among the largest companies in Den-
in Sweden and Norway within the next few years.
mark did not change significantly in 2007. In motor insur-
ance, where the competition is fiercest, focus is on addi-
Challenging Nordic labour markets
tional parameters such as annual mileage. In Norway,
Unemployment in the Nordic region reached record lows,
TrygVesta increased its share of the market in 2007. The
and many businesses found it difficult to recruit the
earnings profile for the market overall showed decreased
number of new employees they required. The challenge of
profitability, however, TrygVesta had the best earnings
recruiting qualified employees may lead to wage pressure,
capacity among the large companies. A new player
impacting corporate expenses negatively. The pay to skilled
entered the market in 2007, and Norway’s largest bank
craftsmen makes up a large part of the companies’ total
will also start selling insurances in 2008. TrygVesta has
claim expenses. Recession in construction in Denmark may
small, but rapidly growing market shares in Sweden and
consequently have a positive effect in the medium term.
Finland. The markets are characterised by the four top
insurers in each market holding more than 70% of the
At TrygVesta, we pay a lot of attention to labour market
market between them.
trends. Over the next few years, we intend to upgrade the
workplaces in Denmark and Norway, ensuring that the
Private health care insurance
physical facilities of our workplace make it attractive to be
The populations in the Nordic countries are aging, and
at work. We have also launched an employee branding
citizens making increasingly heavy demands on the qual-
project to ensure that we focus strongly on recruitment
ity of public services. Businesses are also taking an ever
and employee retention. As part of the project we will look
stronger interest in this area. Businesses are prepared to
at obstacles that may prevent some potential employee
pay for health care insurance to ensure that their employ-
groups from becoming part of the labour market.
ees return sooner to work if they fall ill or are hit by an
accident. Being an insurance business, it is obvious that
Climate focus
we should explore the possibilities of developing products
As an insurance group, we have an obvious interest in
and services to supplement the public systems and help
following climate developments. Our business has exten-
close the growing gap between the public’s expectations
sive records describing historic performance of storm and
to health care systems and the current situation.
other weather-related claims in the Nordic countries.
Such knowledge may be useful for charting areas with
8 of 152
l TrygVesta and the external community l TrygVesta Annual Report 2007
increased risk of, for instance, flooding and for improving
the earliest, with final implementation in the individual
building regulations or setting up early warning systems
countries being completed by 2012. Solvency II will
for areas with high risk exposure.
impact the capital structure of insurance companies and
impose stricter requirements with respect to risk manage-
The growing awareness of climate issues induced several
ment and risk control. We have for several years taken
investment funds to set up climate indices, and a number
part in the Solvency II hearings through the Danish Insur-
of pension funds began screening their portfolios to
ance Association, Forsikring & Pension, and in 2007 we
ensure environmentally responsible conduct. So far, only
were involved in drafting QIS3 (Quantitative Impact
a small proportion of Danish businesses prepare climate
Study), part of the preparatory work for the final Solvency
accounts, but we see a growing trend towards and inter-
II directive. With these efforts and the work with our
est in working systematically with and reporting about
internal models we aim to provide the best possible prep-
corporate environmental issues.
aration for the introduction of the new solvency rules.
TrygVesta established an environmental organisation in
The Danish Financial Business Act was amended to the
2007, defining climate targets for the Group, including a
effect that, as from 1 January 2008, companies are
reduction of CO2 emissions by 10% from 2008 to 2010.
required to make their own determination of their capital
requirements, the socalled Individual Solvency Require-
The sub-prime crisis
ments. The rules are intended as a first step towards the
It became increasingly clear during 2007 that the USA
implementation of Solvency II. While the Individual Sol-
had seen aggressive lending during the property market
vency Requirement rules allow companies to apply their
boom over several years. The property market began to
own methods, we expect Solvency II to impose stricter
show signs of weakness with an increasing number of
requirements. The Individual Solvency Requirement rules
non-performing mortgages, thus triggering sub-prime
aim at ensuring that Danish companies have the necessary
crisis. Spreading like ripples in water since the summer of
capital available and, in relation to the insurance industry,
2007, the financial crisis triggered the widespread expec-
to minimise the risk of customers incurring losses. Compa-
tations of an economic slowdown in several parts of the
nies must report their Individual Solvency Requirements to
Western world towards the end of 2007, causing financial
the Danish Financial Supervisory Authority at least twice a
markets to become increasingly unstable.
year. The first reporting will be in March 2008. For pur-
poses of determining the Individual Solvency Requirement
Solvency II and Individual Solvency
we use a number of calculations in the ALM model and
In recent years, a new EU Solvency II regime has been
Standard & Poor’s capital model in combination with sev-
prepared. In 2007, the EU Commission issued the first
eral other quantitative assessments. We furthermore add a
draft of the directive that will regulate the implementa-
buffer to ensure with reasonable probability that we
tion of Solvency II in the individual member states. The
remain solvent in the event of adverse fluctuations.
new rules are expected to come into effect in 2010, at
TrygVesta Annual Report 2007 l TrygVesta and the external community l
9 of 152
Our business
“In relation to peace of mind, customers
are refocusing from concerns for tangi-
ble objects to concerns for people:
concerns about what could happen
to themselves, their families
or colleagues”
10 of 152 l Our business l TrygVesta Annual Report 2007
Our business
TrygVesta Annual Report 2007 l Our business l
11 of 152
Our business
Strategy 2007-2010
In 2006, we carried out a comprehensive strategic analy-
intend to meet our ambition by focusing even more on sales
sis and review of our business during the period to 2010.
and adding new sales channels. We also consider the possi-
This has enabled us to develop a clear, shared perception
bilities for expanding our strategic focus area to the Baltics.
of our future potential, and of the ways in which we can
secure sustained high value creation for customers,
The private market for welfare services needs cutting-
shareholders and employees. In 2007, we focused on
edge peace-of-mind solutions and the development
implementing the strategy plan, and these efforts will
of these as markets mature.
continue in the years ahead.
OUR STRATEGY PLAN CONTAINS
FOUR STRATEGIC THEMES
Growth
The peace-of-mind provision
Self-service
Human competencies
“In relation to peace of mind, customers are refocusing
from concerns for tangible objects to concerns for people:
concerns about what could happen to themselves, their
families, friends or colleagues. A large part of our business
deals with human peace of mind and security. This propor-
tion will increase steeply in the years ahead and come to
represent our largest growth area. We will see growing
demand within health care, in particular. Many people
require access to treatment, prevention and rehabilitation
services beyond those financed by taxes, and they are
prepared to pay for such services. We are confident of
Tryg Vesta’s ability in all four Nordic countries to develop
strong health care and welfare solutions that are in har-
Growth
mony with and continuation of the publicly funded welfare
We intend to secure the right balance between growth
systems, and in a way that does not question the welfare
and earnings in all our initiatives.
systems or create first-rate and second-rate citizens.”
We want to strengthen our market positions in the four
Nordic countries where we have a presence. We already
rank one and three, respectively, in Denmark and Norway,
and we intend to expand our positions in these countries by
Stine Bosse
Group CEO, TrygVesta
strengthening our sales power, improving our products and
The peace-of-mind provision
focusing strongly on selected geographical areas. We are
Our customers should be confirmed in their choice of
still a relatively new player in Finland and Sweden, and we
insurer on an ongoing basis.
12 of 152 l Strategy 2007-2010 l TrygVesta Annual Report 2007
MISSION
Our mission is to secure a stable, high-quality supply of
products and services offering peace of mind to private
households and businesses
VISION
We want to be perceived as the leading peace-of-mind
provider in the Nordic region
We focus on solutions that are sustainable in the long
Self-service
term, both financially and for the people affected. Our
We intend to meet customers on their own terms.
point of departure is helping people, and our ambition
is that their contact with us will help our customers build
Our ambition is to be the best to communicate with our
peace of mind before, during and after a possible claim.
customers, in writing as well as in speech. Therefore, we
We want to eliminate concerns, rather than just send a
must express ourselves clearly and communicate to be
cheque, in order to add perceived value for customers
understood. We intend to enhance customer experience
while at the same time reducing our claims expenses.
through consistent communication that is plain, relevant
and straightforward, and which supports the position we
We acknowledge our responsibility in relation to our cus-
desire as a peace-of-mind provider.
tomers, our employees, the environment, our products
and society. Our dedication to our community and to
We focus on the experience and value to customers, and
social projects and activities confirms this commitment.
we trust our customers. Accordingly, we intend to expand
We want to be among those who set the agenda within
the personal dialogue and also communicate increasingly
Corporate Social Responsibility (CSR), and we see oppor-
with customers on the Internet. In 2007, we set up a
tunities and business potential in being socially responsi-
Nordic e-business centre to highlight our commitment to
ble and securing sustainable development of the Group.
this area. The e-business centre is intended to drive
future developments within self-service solutions and
“TrygVesta should constantly challenge our understand-
other e-business initiatives.
ing of how we retain and attract customers to ensure our
continued success going forward. We all have a growing
“IT makes sense as a vehicle for change and when it is
number of options today and this requires businesses to
of use to customers. If we do not see things from our
differentiate their products and services. In the long-term
customers’ point of view, we will not make a successful
perspective, the most competitive company may be the
sale. TrygVesta is in the process of setting up an online
company that is able to redefine what insurances are all
system for customers allowing them to communicate,
about and how insurances are perceived by customers.
buy insurance and handle claims online. This initiative will
A key driver in working with innovation is to constantly
greatly enhance openness and flexibility for customers as
offer our customers more than they expect. This is what
well as for us.”
makes going to work fun and meaningful.”
Stig Ellkier-Pedersen
Member of the Group Executive Management
in charge of New Markets
Jens Galatius
E-business Director
TrygVesta Annual Report 2007 l Strategy 2007-2010 l
13 of 152
Our business
“E-business is an integral part of TrygVesta’s business.
We have to think innovatively and be open to new ideas
Customers choose the channel that is most convenient
and ways of doing things, if we are to grow and develop
to them. Many of our customers will increasingly tend to
our business in terms of added sales, new business and
use the Internet, while others find it easier to pick up the
new areas of generating earnings. We intend to use the
phone and call customer service. In some cases, personal
creative potential of our employees by supporting and
contact would be desirable. We believe in giving our
setting up a framework for nurturing innovation and good
customers a choice to suit their preferences and the
ideas and facilitating their further development, with
specific situation.”
respect to major innovations as well as small current
Kjerstin Fyllingen,
improvements.
Member of the Group Executive Management
Measures that simplify our working processes and methods
in charge of Private & Commercial Norway
are key to our ability to provide optimum service to our cus-
tomers. We always strive for simplicity and high quality and
Human competencies
the coming years will see a continuation of our work to
We intend to focus on our employees and to be an
implement the LEAN principle throughout the Group.
attractive workplace.
“We consider our managers to be the drivers implement-
We must strengthen our capabilities in step with changes
ing our strategy. This way of thinking makes heavy
in the development of distribution, products and services.
demands on managers’ ability to communicate the strat-
We intend to ensure that skills are developed on a regular
egy in a simple and straightforward manner, to define
basis through in-house and external training courses,
frameworks and facilitate working processes, and to create
experience sharing and networking groups. We intend to
opportunities for personal and professional development.
focus on management and employee development and
In order to strengthen these skills, we intend to increase
strengthen dialogue across the organisation, including by
our focus on management development through a new
using theme packages that build on our values and by
development programme for our managers in 2008.”
continuing to use the balanced scorecard (BSC) as a tool
for benchmarking and dialogue throughout the Group.
Vered Gilboa Jacobsen,
A project to modernise the offices in Ballerup and Bergen
Head of Development, TrygVesta Management Academy
up to 2010 and the launch of a new intranet are other
initiatives intended to facilitate knowledge sharing within
the organisation.
14 of 152 l Strategy 2007-2010 l TrygVesta Annual Report 2007
Turning words into results
We use the balanced scorecard to implement our strategy and retain our strategic focus areas.
Selected BSC-benchmarks for TrygVesta
IFRS
2007
IFRS
2006
IFRS
2005
IFRS
2004
2003
2002
2001
23
35
28
86.1
16.7
86.4
16.8
88.2
17.0
110
108
139
105
112
108
131
107
109
108
133
105
23
90.0
17.1
109
106
129
104
15
-47
1
100.7
22.4
107.2
23.6
104.4
24.3
106
102
124
102
101
98
116
100
100
100
100
100
Financial perspective
Return on equity after tax
Combined ratio
- gross method
Expense ratio, gross
Customer perspective,
private customers
(index)
Customer loyalty 1)
Proportion of customers
with concept agreement
Processes perspective
(index)
Portfolio
(nominal prices)
per full-time employee
Customer satisfaction
in claims handling
Learning perspective
(index)
Employee satisfaction
100
102
N/A
105
102
101
100
1) Expected customer loyalty based on customer surveys.
Benchmarks in the Customer/Processes/Learning perspective are primarily based on the data for the activities
in Denmark and Norway.
TrygVesta Annual Report 2007 l Strategy 2007-2010 l
15 of 152
Our business
TrygVesta’s financial performance in 2007
Our technical result for 2007 was a clear improvement
ment of 3.8% in local currency (3.7% in DKK terms) and
by 12.3% over 2006. The increase was attributable to
in line with our expectations for the full year. Gross
the great efforts which our almost 3,900 employees put
earned premiums continued the upward trend during
in every day. Their efforts make a difference to our cus-
2007 and the fourth quarter 2007 recorded a growth in
tomers, and they serve to benefit all our stakeholders.
local currency of 5.1% (7.1% in DKK terms) at Group
Equity markets took a negative turn in the second half of
level. The performance in 2007was favourably affected by
2007, affecting our profit adversely. However, the insur-
an increase in the number of new customers and higher
ance business continued recent years’ positive trend.
renewal rates among existing customers in all business
Financial results in 2007
premium growth of 7.4%, or DKK 364m. In addition to
In 2007, TrygVesta’s technical result improved by 12.3%
more new customers and high renewal rates, the strong
to DKK 2,820m. The DKK 308m increase over 2006 was
growth recorded by Corporate was attributable to price
achieved despite the fact that 2007 saw the biggest
increases for workers’ compensation insurance in Den-
areas. Corporate was a major growth driver, recording
number of large claims ever, exceeding a gross amount of
mark.
DKK 1bn. Outperforming the forecast announced in our
third-quarter 2007 interim report by DKK 120m primarily
As the only major insurer in Norway we increased our
due to run-off gains from previous years’ claims, our
market share in 2007 (in terms of earned premiums), by
technical result was significantly better than expected.
0.7 percentage point, to 18.2%. The improvement was
The pre-tax profit of DKK 3,109m was in line with our
driven by our Norwegian commercial business and the
expectations for the full year. Due to a reduced return on
Norwegian part of the Corporate business.
investments, the pre-tax profit was DKK 600m lower
relative to 2006.
Finland and Sweden likewise contributed strong premium
growth totalling 68.8%, continuing to perform in line with
The profit after tax at DKK 2,266m was DKK 945m lower
our targets and growth strategies. Focused efforts within
due to the lower investment result and higher taxes.
Health Care triggered portfolio growth of more than 80%.
The high proportion of tax-free gains on shares we had
We began selling health care insurance in Norway at the
in 2006 was not repeated in 2007 due to the unstable
end of 2007, and we intend to continue to focus on
equity markets.
growth and on introducing new health care services
Premium growth driven by Corporate
and New Markets
Continuing decline in combined ratio
Gross earned premiums were DKK 16,606m, an improve-
The combined ratio fell by 0.3 percentage point to 86.1 in
over the coming year.
16 of 152 l TrygVesta’s financial performance in 2007 l TrygVesta Annual Report 2007
(cid:73)(cid:58)(cid:56)(cid:61)(cid:67)(cid:62)(cid:56)(cid:54)(cid:65)(cid:21)(cid:71)(cid:58)(cid:72)(cid:74)(cid:65)(cid:73)(cid:21)(cid:55)(cid:78)(cid:21)(cid:55)(cid:74)(cid:72)(cid:62)(cid:67)(cid:58)(cid:72)(cid:72)(cid:21)(cid:54)(cid:71)(cid:58)(cid:54)
(cid:73)(cid:58)(cid:56)(cid:61)(cid:67)(cid:62)(cid:56)(cid:54)(cid:65)(cid:21)(cid:71)(cid:58)(cid:72)(cid:74)(cid:65)(cid:73)
(cid:57)(cid:64)(cid:64)(cid:98)
(cid:38)(cid:33)(cid:42)(cid:37)(cid:37)
(cid:38)(cid:33)(cid:39)(cid:37)(cid:37)
(cid:46)(cid:37)(cid:37)
(cid:38)(cid:33)(cid:41)(cid:41)(cid:37)
(cid:46)(cid:46)(cid:41)
(cid:44)(cid:42)(cid:44)
(cid:43)(cid:37)(cid:37)
(cid:42)(cid:39)(cid:41)
(cid:40)(cid:37)(cid:37)
(cid:37)
(cid:45)(cid:40)(cid:38)
(cid:45)(cid:44)(cid:37)
(cid:44)(cid:42)(cid:44)
(cid:43)(cid:46)(cid:39)
(cid:45)(cid:41)(cid:39)
(cid:45)(cid:41)(cid:39)
(cid:41)(cid:43)(cid:38)
(cid:40)(cid:46)(cid:37)
(cid:57)(cid:64)(cid:64)(cid:98)
(cid:39)(cid:35)(cid:37)(cid:37)(cid:37)
(cid:38)(cid:35)(cid:42)(cid:37)(cid:37)
(cid:38)(cid:35)(cid:37)(cid:37)(cid:37)
(cid:42)(cid:37)(cid:37)
(cid:37)
(cid:38)(cid:33)(cid:43)(cid:40)(cid:46)
(cid:38)(cid:33)(cid:40)(cid:44)(cid:44)
(cid:38)(cid:33)(cid:39)(cid:38)(cid:41)
(cid:38)(cid:33)(cid:40)(cid:40)(cid:42)
(cid:38)(cid:33)(cid:37)(cid:40)(cid:39)
(cid:46)(cid:42)(cid:43)
(cid:38)(cid:33)(cid:38)(cid:40)(cid:38)
(cid:44)(cid:39)(cid:37)
(cid:69)(cid:27)(cid:56)(cid:21)(cid:57)(cid:64)
(cid:69)(cid:27)(cid:56)(cid:21)(cid:67)(cid:68)
(cid:56)(cid:100)(cid:103)(cid:101)(cid:100)(cid:103)(cid:86)(cid:105)(cid:90)
(cid:39)(cid:37)(cid:37)(cid:41)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:39)(cid:37)(cid:37)(cid:41)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:57)(cid:90)(cid:99)(cid:98)(cid:86)(cid:103)(cid:96)
(cid:67)(cid:100)(cid:103)(cid:108)(cid:86)(cid:110)
2007. Large claims and weather-related claims had an
Run-off gains were a gross amount of DKK 744m (DKK
negative impact of 3.8 and 2.0 percentage points, respec-
743m net) with a positive impact of 4.5 percentage
tively, on the combined ratio compared with 2.1 and 1.3
points on the claims ratio. Gross run-off gains in 2006
percentage points, respectively in 2006. Run-off gains
were DKK 618m (DKK 555m net), which had an impact of
improved the combined ratio by 4.5 percentage points
3.5 percentage points on the claims ratio. The run-off
while in 2006 run-off gains had an impact of 3.5 percent-
gains mainly related to motor, accident and liability insur-
age points on the combined ratio. Finally, a higher dis-
ance, while increased provisions were still required for
count rate had a favourable effect of 1.7 percentage points
workers’ compensation in 2007.
on the combined ratio.
Expenses
Claims experience
The gross expense ratio improved by 0.1 percentage
The overall claims ratio, net of ceded business, for 2007
point to 16.7 in 2007. We reduced the expense ratio by
was 69.4, which was an improvement relative to 2006
0.7 percentage point to 15.4 in the established markets
despite many large claims. Large claims amounted to DKK
in Denmark and Norway, while the investments in Finland
1,042m in 2007, more than double the amount of 2006.
and Sweden continued to have a negative impact of 1.3
However, the net expense for large claims was reduced to
percentage points on the expense ratio.
DKK 637m in 2007 due to the large number of Marine
claims, an area with a high proportion of reinsurance
Investment return
cover. Weather-related claims were up by DKK 130m in
The return on investment activities was DKK 1,740m
2007 to DKK 332m, which was also higher than
before transfer to technical interest, but after other
expected. In a normal year, weather-related claims are
financial income and expenses. The return was DKK 519m
expected to total DKK 225m.
lower than in 2006, mainly due to unstable equity
markets.
DKKm
2007
2006
2005
Storm and weather, gross
Storm and weather, net
Large claims, gross
Large claims, net
332
332
1042
637
202
202
501
340
911
177
416
275
Normal
year*
225
170
410
330
* Normal year is a weighed average of the last ten years.
TrygVesta Annual Report 2007 l TrygVesta’s financial performance in 2007 l
17 of 152
Our business
(cid:56)(cid:68)(cid:66)(cid:55)(cid:62)(cid:67)(cid:58)(cid:57)(cid:21)(cid:71)(cid:54)(cid:73)(cid:62)(cid:68)(cid:21)(cid:39)(cid:37)(cid:37)(cid:43)(cid:21)(cid:54)(cid:67)(cid:57)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)(cid:21)
(cid:54)(cid:67)(cid:57)(cid:21)(cid:68)(cid:74)(cid:73)(cid:65)(cid:68)(cid:68)(cid:64)(cid:21)(cid:57)(cid:74)(cid:71)(cid:62)(cid:67)(cid:60)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:60) (cid:71)(cid:68)(cid:72)(cid:72)(cid:21)(cid:58)(cid:54)(cid:71)(cid:67)(cid:58)(cid:57) (cid:21)(cid:69)(cid:71)(cid:58) (cid:66) (cid:62)(cid:74) (cid:66) (cid:72)(cid:21)
(cid:55)(cid:78)(cid:21)(cid:55)(cid:74)(cid:72) (cid:62)(cid:67)(cid:58)(cid:72)(cid:72)(cid:21) (cid:54)(cid:71)(cid:58)(cid:54)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:26)
(cid:38)(cid:37)(cid:37)
(cid:46)(cid:43)
(cid:46)(cid:39)
(cid:45)(cid:45)
(cid:45)(cid:41)
(cid:45)(cid:37)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:70)(cid:38)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:70)(cid:39)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:70)(cid:40)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:70)(cid:41)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:54)(cid:88)(cid:105)(cid:106)(cid:86)(cid:97)(cid:21)(cid:90)(cid:109)(cid:88)(cid:97)(cid:106)(cid:89)(cid:94)(cid:99)(cid:92)(cid:21)(cid:103)(cid:106)(cid:99)(cid:34)(cid:100)(cid:91)(cid:91)
(cid:54)(cid:88)(cid:105)(cid:106)(cid:86)(cid:97)(cid:21)(cid:94)(cid:99)(cid:88)(cid:97)(cid:106)(cid:89)(cid:94)(cid:99)(cid:92)(cid:21)(cid:103)(cid:106)(cid:99)(cid:34)(cid:100)(cid:91)(cid:91)
(cid:67)(cid:90)(cid:92)(cid:86)(cid:105)(cid:94)(cid:107)(cid:90)
(cid:68)(cid:106)(cid:105)(cid:97)(cid:100)(cid:100)(cid:96)
(cid:69)(cid:100)(cid:104)(cid:94)(cid:105)(cid:94)(cid:107)(cid:90)
(cid:39)(cid:26)
(cid:38)(cid:26)
(cid:40)(cid:39)(cid:26)
(cid:40)(cid:45)(cid:26)
(cid:39)(cid:44)(cid:26)
(cid:69)(cid:27)(cid:56)(cid:21)(cid:57)(cid:90)(cid:99)(cid:98)(cid:86)(cid:103)(cid:96)
(cid:56)(cid:100)(cid:103)(cid:101)(cid:100)(cid:103)(cid:86)(cid:105)(cid:90)
(cid:72)(cid:108)(cid:90)(cid:89)(cid:90)(cid:99)
(cid:69)(cid:27)(cid:67)(cid:21)(cid:67)(cid:100)(cid:103)(cid:108)(cid:86)(cid:110)
(cid:59)(cid:94)(cid:99)(cid:97)(cid:86)(cid:99)(cid:89)
The return on investment activities after transfer to tech-
Shareholders’ equity
nical interest was DKK 888m lower than in 2006. Besides
Shareholders’ equity stood at DKK 10,010m at 31
the lower return on equities, the performance was nega-
December 2007. Shareholders’ equity increased by DKK
tively affected by a larger transfer to technical interest.
59m, made up of the profit for the year less dividends
Tax
paid in respect of the 2006 financial year, and including
adjustments mainly for actuarial gains and losses on the
The tax charge was DKK 842m in 2007 against DKK 624m
pension provision under IAS 19 and other minor adjust-
in 2006. The effective tax rate was exceptionally low in
ments.
2006 due to the reversal of a provision for deferred tax.
The tax charge in 2007 was adversely affected by lower
Events after the balance sheet date
tax-free gains on shares, and favourably affected by the
On 21 January 2008 we announced that TrygVesta had
reduction of the Danish corporate tax rate from 28%
reduced the proportion of equities in its investment port-
to 25% with effect from 1 January 2007. In 2007,
folio to around 4% or some DKK 1.8bn. The proportion of
TrygVesta’s effective tax rate was 27.
equities was DKK 5.0bn at 30 September 2007 and DKK
4.4bn at 31 December 2007. During 2007, we sold equi-
Balance sheet and cash flow
ties worth some DKK 0.7bn as a result of Management’s
Total assets increased by DKK 1,047m to DKK 43,830m in
assessment of the size of the equity portfolio and its
2007. Liabilities comprised mainly shareholders’ equity of
impact on the Group’s overall performance. Management
DKK 10,010m and technical provisions of DKK 26,916m.
assessed that an equity proportion of 8-10% of the
investment portfolio would provide a good long-term bal-
Provisions for insurance contracts were increased by a total
ance between return and volatility in our overall perform-
of DKK 959m relative to 2006. The ratio of provisions for
ance. The equity proportion was reduced to around 4%
claims, net of reinsurance to earned premiums, net of
giving equities a lower weighting than is normal. The
reinsurance was unchanged at 124 from with 2006, which
decision to have a lower proportion of equities was based
equals an increase in provisions for insurance contracts of
on expected continued strong instability, uncertainty and
3.7%.
high equity risk premiums in the first six months of 2008.
The very unstable equity market in January and until
TrygVesta generated a cash inflow from operating activi-
18 February 2008 resulted in a loss of around DKK 400m
ties of DKK 2.7bn in 2007 compared with DKK 3.2bn in
less equity return than expected.
2006. Investments amounted to DKK 0.4bn in 2007, and
there was a cash outflow from financing activities of DKK
2.4bn mainly relating to dividends.
18 of 152 l TrygVesta’s financial performance in 2007 l TrygVesta Annual Report 2007
Private & Commercial Denmark
DKKm
Gross earned premiums
Gross claims incurred
Gross expenses
Profit/loss on gross business
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
2007
2006
2005
6,490
-4,041
-1,086
1,363
-87
164
1,440
62.3
1.3
63.6
16.7
80.3
6,390
-4,215
-1,109
1,066
-200
128
994
66.0
3.1
69.1
17.4
86.5
6,276
-4,927
-1,113
236
467
54
757
78.5
-7.4
71.1
17.7
88.8
Private & Commercial Denmark sells insurances to private
The renewal rate was 1 percentage point higher at 91,
households and small and medium-sized enterprises in
meaning that out of every 100 private customers, 91
Denmark under the Tryg brand name. Sales are handled
elected to renew their policies with us in 2007. The high
by five customer centres, 16 local service centres, affinity
renewal rate also contributed to the positive results
groups, car dealers, real estate agents and Nordea’s
because it is important with respect to the performance
branches. Private & Commercial Denmark has around
of premiums and expenses: selling and administrative
1,400 employees, and contributes some 40% of total
expenses are relatively lower when more customers
earned premiums.
renew their policies.
Performance improvement in 2007
Earned premiums
Private & Commercial Denmark continued the positive
Gross earned premiums at DKK 6,490m were 1.6% higher
performance in 2007, lifting the technical result by DKK
in 2007. Premium growth picked up in the fourth quarter
446m to DKK 1,440m. The improvement was attributable
of 2007, increasing at a rate of 2.4. Various premium
to a low level of claims, cost reductions and higher inter-
reductions on motor insurance in the summer of 2006
est rates.
continued to have an adverse effect on growth. Among
TrygVesta Annual Report 2007 l Private & Commercial Denmark l
19 of 152
Our business
(cid:54)(cid:75)(cid:58)(cid:71)(cid:54)(cid:60)(cid:58)(cid:21)(cid:69)(cid:71)(cid:58)(cid:66)(cid:62)(cid:74)(cid:66)(cid:72)(cid:21)(cid:62)(cid:67)(cid:21)(cid:57)(cid:58)(cid:67)(cid:66)(cid:54)(cid:71)(cid:64)
(cid:57)(cid:64)(cid:64)
(cid:42)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:41)(cid:33)(cid:44)(cid:42)(cid:37)
(cid:41)(cid:33)(cid:42)(cid:37)(cid:37)
(cid:41)(cid:33)(cid:39)(cid:42)(cid:37)
(cid:41)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:40)(cid:33)(cid:44)(cid:42)(cid:37)
(cid:40)(cid:33)(cid:42)(cid:37)(cid:37)
(cid:40)(cid:33)(cid:39)(cid:42)(cid:37)
(cid:40)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:63)(cid:86)(cid:99)(cid:36)(cid:37) (cid:42)
(cid:66) (cid:86)(cid:103)(cid:36)(cid:37) (cid:42)
(cid:66) (cid:86)(cid:110)(cid:36)(cid:37) (cid:42)
(cid:63)(cid:106)(cid:97)(cid:36)(cid:37) (cid:42)
(cid:72)(cid:90)(cid:101)(cid:36)(cid:37) (cid:42)
(cid:67) (cid:100)(cid:107)(cid:36)(cid:37) (cid:42)
(cid:63)(cid:86)(cid:99)(cid:36)(cid:37) (cid:43)
(cid:66) (cid:86)(cid:103)(cid:36)(cid:37) (cid:43)
(cid:66) (cid:86)(cid:110)(cid:36)(cid:37) (cid:43)
(cid:63)(cid:106)(cid:97)(cid:36)(cid:37) (cid:43)
(cid:72)(cid:90)(cid:101)(cid:36)(cid:37) (cid:43)
(cid:67) (cid:100)(cid:107)(cid:36)(cid:37) (cid:43)
(cid:63)(cid:86)(cid:99)(cid:36)(cid:37) (cid:44)
(cid:66) (cid:86)(cid:103)(cid:36)(cid:37) (cid:44)
(cid:66) (cid:86)(cid:110)(cid:36)(cid:37) (cid:44)
(cid:63)(cid:106)(cid:97)(cid:36)(cid:37) (cid:44)
(cid:72)(cid:90)(cid:101)(cid:36)(cid:37) (cid:44)
(cid:67) (cid:100)(cid:107)(cid:36)(cid:37) (cid:44)
(cid:66)(cid:100)(cid:105)(cid:100)(cid:103)
(cid:55)(cid:106)(cid:94)(cid:97)(cid:89)(cid:94)(cid:99)(cid:92)
other things, we reduced premiums for new cars by up to
points and large claims had a negative impact of 1.2 per-
15% because the improved safety equipment of new cars
centage points compared with 1.7 and 1.4 percentage
provides for a better risk profile. We also reduced motor
points in 2006. Weather-related claims were, among
premiums for women under 29 years, while we increased
other factors, adversely affected by some 2,200 hailstorm
premiums for young men considerably. Implementing the
claims reported on one single day in Denmark. Hailstorm
reductions in our motor portfolio, which accounts for
claims cost a total of some DKK 42m or an average of
around 30% of the total portfolio of Private & Commercial
some DKK 19,000 per claim.
Denmark, lasted a year and caused the average premium
in motor insurance to drop by around 4%.
Run-off gains from prior-year losses were a gross amount
of DKK 551m and had a positive impact of 8.5 percent-
Industry agreements and workers’ compensation policies
age points on the claims ratio. Run-off gains were mainly
lifted premium growth. Sales of industry agreements,
attributable to our motor and accident lines in 2007,
which are sold in the business-to-business market,
while workers’ compensation continued to require higher
increased by 16,8% in 2007. Our portfolio of workers’
provisions for claims. In 2006, gross run-off gains
compensation policies increased by more than 20%,
amounted to DKK 206m with a positive impact of 3.2
mainly due to an extraordinary premium increase of
percentage points on the claims ratio.
12.5% which took effect on 1 July 2007 as a result of
new Danish workers’ compensation legislation. Workers’
In order to secure the right balance between price and
compensation insurance increased by around 7% net of
earnings we closely follow developments in average
this extraordinary increase.
claims and claims frequencies in our large business areas
such as building and motor. The average building claim in
The number of private policies sold performed favourably
2007 was largely unchanged from 2006. The average
in 2007. There was a net inflow of 38,000 new policies,
motor claim, on the other hand, increased by around 4%,
10,000 more than in 2006. The inflow was very much
among other things because more advanced cars with
attributable to existing customers buying more policies.
more expensive spare parts now form a greater part of
Each customer had an average of 2.3 policies in 2007.
the Danish car fleet. The hailstorm claims in the summer
Claims expenses
of 2007 also had a negative impact on the average motor
claim. In order to counter the increasing average claim on
Total claims expenses fell by a nominal amount of DKK
motor policies, we arrange for as many repairs as possi-
174m to DKK 4,041m in 2007, improving the claims ratio
ble to be performed by garages we cooperate with. Our
by 3.7 percentage points to 62.3 in 2007. Weather-
size in the market allows us to provide a stable inflow of
related claims had a negative impact of 3.7 percentage
assignments to such garages, giving us advantages with
20 of 152 l Private & Commercial Denmark l TrygVesta Annual Report 2007
(cid:54)(cid:75)(cid:58)(cid:71)(cid:54)(cid:60)(cid:58)(cid:21)(cid:56)(cid:65)(cid:54)(cid:62)(cid:66)(cid:72)(cid:21)(cid:62)(cid:67)(cid:21)(cid:57)(cid:58)(cid:67)(cid:66)(cid:54)(cid:71)(cid:64)
(cid:56)(cid:65)(cid:54)(cid:62)(cid:66)(cid:72)(cid:21)(cid:59)(cid:71)(cid:58)(cid:70)(cid:74)(cid:58)(cid:67)(cid:56)(cid:62)(cid:58)(cid:72)(cid:21)(cid:62)(cid:67)(cid:21)(cid:57)(cid:58)(cid:67)(cid:66)(cid:54)(cid:71)(cid:64)
(cid:62)(cid:99)(cid:89)(cid:90)(cid:109)
(cid:38)(cid:38)(cid:37)
(cid:37)
(cid:37)
(cid:38)
(cid:21)
(cid:50)
(cid:21)
(cid:42)
(cid:37)
(cid:37)
(cid:39)
(cid:21)
(cid:47)
(cid:109)
(cid:90)
(cid:89)
(cid:99)
(cid:62)
(cid:38)(cid:37)(cid:42)
(cid:38)(cid:37)(cid:37)
(cid:46)(cid:42)
(cid:46)(cid:37)
(cid:62)(cid:99)(cid:89)(cid:90)(cid:109)
(cid:38)(cid:39)(cid:37)
(cid:38)(cid:38)(cid:42)
(cid:38)(cid:38)(cid:37)
(cid:38)(cid:37)(cid:42)
(cid:38)(cid:37)(cid:37)
(cid:46)(cid:42)
(cid:46)(cid:37)
(cid:37)
(cid:37)
(cid:38)
(cid:21)
(cid:50)
(cid:21)
(cid:42)
(cid:37)
(cid:37)
(cid:39)
(cid:21)
(cid:47)
(cid:109)
(cid:90)
(cid:89)
(cid:99)
(cid:62)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:66)(cid:100)(cid:105)(cid:100)(cid:103)
(cid:55)(cid:106)(cid:94)(cid:97)(cid:89)(cid:94)(cid:99)(cid:92)
(cid:66)(cid:100)(cid:105)(cid:100)(cid:103)
(cid:55)(cid:106)(cid:94)(cid:97)(cid:89)(cid:94)(cid:99)(cid:92)
DKKm
Storm and weather, gross
Large claims, gross
2007
2006
2005
242
78
109
25
739
23
respect to repairs which benefit both customers and
We have defined ambitious growth targets, and we will
Tryg Vesta.
focus strongly on sales in 2008. We intend to implement
a range of sales activities in 2008, introduce customer
The claims frequency on building policies was higher in
benefits and relaunch several products in more attractive
2007, mainly due to weather-related claims. Motor poli-
versions. Our focus in 2008 also includes sustaining the
cies also recorded a higher claims frequency, primarily
significant growth in Health Care, including launching
attributable to vandalism and a greater number of thefts
new products.
of GPS and other equipment.
Historically low combined ratio
The combined ratio improved by 6.2 percentage points to
80.3 in 2007. Run-off gains had a favourable impact of
8.5 percentage points and the combined ratio was also
favourably impacted by the expense ratio, which improved
by 0.7 percentage point to 16.7 in 2007. The large
number of water-damage claims had a negative impact of
3.7% on the combined ratio.
Focus areas in 2008
We began implementing the LEAN principle in parts of
our organisation in 2007 with a view to making our pro-
cesses even more efficient and create added value for
customers and employees alike. We will continue to
implement LEAN over the next few years.
TrygVesta Annual Report 2007 l Private & Commercial Denmark l
21 of 152
Our business
Private & Commercial Norway
DKKm
2007
2006
2005
NOK/DKK, average rate for the period
92.81
93.04
92.85
Gross earned premiums
Gross claims incurred
Gross expenses
Profit/loss on gross business
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
4,490
-2,962
-936
4,509
-2,866
-922
4,632
-2,823
-945
592
-82
182
692
66.0
1.8
67.8
20.8
88.6
721
-75
111
757
63.6
1.7
65.3
20.4
85.7
864
-61
67
870
60.9
1.3
62.2
20.4
82.6
Private & Commercial Norway sells insurances to private
ness performed favourably in Q4 2007, generating
households and small and medium-sized enterprises in
premium growth of 1.0% in local currency (6.0% in DKK)
Norway under the TrygVesta and Enter brand names.
and a technical result that was DKK 2m higher than in
Sales are handled by 85 franchise offices, our own sales
2006. However, the technical result for the full year was
agents, three regional customer centres, 35 local sales
reduced by DKK 65m to DKK 692m in 2007, mainly due
centres, car dealers and Nordea’s branches. Private &
to more claims and falling average premiums at the
Commercial Norway has around 1,100 employees exclud-
beginning of the year.
ing some 300 franchise office staff. The business area
contributes around 30% of the Group’s total gross earned
The renewal rate was up from 84.4 at the beginning of
premiums.
2007 to 85.8 at the end of the year. The improvement
was driven, in particular, by a customer benefit pro-
Financial results in 2007
gramme we launched in the summer of 2006. Imple-
Private & Commercial Norway reported results during
mented over a year, the benefit programme now helps
2007 that were among the best in the market. The busi-
retain customers by offering additional benefits.
22 of 152 l Private & Commercial Norway l TrygVesta Annual Report 2007
(cid:54)(cid:75)(cid:58)(cid:71)(cid:54)(cid:60)(cid:58)(cid:21)(cid:69)(cid:71)(cid:58)(cid:66)(cid:62)(cid:74)(cid:66)(cid:72)(cid:21)(cid:62)(cid:67)(cid:21)(cid:67)(cid:68)(cid:71)(cid:76)(cid:54)(cid:78)
(cid:57)(cid:64)(cid:64)
(cid:42)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:41)(cid:33)(cid:44)(cid:42)(cid:37)
(cid:41)(cid:33)(cid:42)(cid:37)(cid:37)
(cid:41)(cid:33)(cid:39)(cid:42)(cid:37)
(cid:41)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:40)(cid:33)(cid:44)(cid:42)(cid:37)
(cid:40)(cid:33)(cid:42)(cid:37)(cid:37)
(cid:40)(cid:33)(cid:39)(cid:42)(cid:37)
(cid:40)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:63)(cid:86)(cid:99)(cid:36)(cid:37) (cid:42)
(cid:66) (cid:86)(cid:103)(cid:36)(cid:37) (cid:42)
(cid:66) (cid:86)(cid:110)(cid:36)(cid:37) (cid:42)
(cid:63)(cid:106)(cid:97)(cid:36)(cid:37) (cid:42)
(cid:72)(cid:90)(cid:101)(cid:36)(cid:37) (cid:42)
(cid:67) (cid:100)(cid:107)(cid:36)(cid:37) (cid:42)
(cid:63)(cid:86)(cid:99)(cid:36)(cid:37) (cid:43)
(cid:66) (cid:86)(cid:103)(cid:36)(cid:37) (cid:43)
(cid:66) (cid:86)(cid:110)(cid:36)(cid:37) (cid:43)
(cid:63)(cid:106)(cid:97)(cid:36)(cid:37) (cid:43)
(cid:72)(cid:90)(cid:101)(cid:36)(cid:37) (cid:43)
(cid:67) (cid:100)(cid:107)(cid:36)(cid:37) (cid:43)
(cid:63)(cid:86)(cid:99)(cid:36)(cid:37) (cid:44)
(cid:66) (cid:86)(cid:103)(cid:36)(cid:37) (cid:44)
(cid:66) (cid:86)(cid:110)(cid:36)(cid:37) (cid:44)
(cid:63)(cid:106)(cid:97)(cid:36)(cid:37) (cid:44)
(cid:72)(cid:90)(cid:101)(cid:36)(cid:37) (cid:44)
(cid:67) (cid:100)(cid:107)(cid:36)(cid:37) (cid:44)
(cid:66)(cid:100)(cid:105)(cid:100)(cid:103)
(cid:55)(cid:106)(cid:94)(cid:97)(cid:89)(cid:94)(cid:99)(cid:92)
Average premiums affect premium growth
Claims expenses
Gross earned premiums fell by 0.2% in local currency
Total claims expenses were up by DKK 96m in 2007 to
(0.4% in DKK) in 2007. Premium growth in H1 2007 was
DKK 2,962m. The claims ratio continued at a low level but
adversely affected by declining average premiums while
increased by 2.4 percentage points to 66.0. The increase
Q4, saw positive premium growth driven, among other
was mainly attributable to expenses relating to large
things, by the effect of recent years’ sales initiatives and
claims, which were DKK 121m in 2007 compared with
premium increases from 1 July 2007. This was the first
DKK 20m in 2006. Thus, large claims had an adverse
time since 2004 we increased premiums in Norway, and
impact of 2.7 percentage points on the claims ratio
we will continue this trend in 2008, increasing premiums
in 2007 compared to 0.4 percentage point in 2006.
in selected building segments with effect from 1 January
Weather-related claims had a negative impact of 0.8
2008.
percentage point against 0.9 percentage point in 2006.
Premium growth in 2007 was mainly driven by our com-
Run-off gains from prior-year losses amounted to DKK
mercial business which recorded premium growth of 3.3%
91m with a positive effect of 2.0 percentage points on
and a high growth in sales through Nordea. The negative
the claims ratio compared to 2.2 percentage points in
growth of 1.4% in the private business was still affected
2006. Run-off gains mainly related to motor and accident
by the abolition in late 2005 of introductory discounts to
insurance, while increased provisions were still required
new customers. We subsequently recorded higher
for workers’ compensation. We discounted the provisions
renewal rates, an indication that customers prefer to have
for claims during 2007, resulting in a positive impact from
a better overview of what they pay for. As from 1 January
higher interest rates and improving the claims ratio by
2008 insurers are required to inform customers of pre-
around 0.6 percentage point relative to 2006.
mium changes from year to year. We expect that the new
rules will make the market more transparent, which we
The average building claim increased by some 9% in 2007
believe will benefit TrygVesta’s transparent pricing system.
due to general pressure in the building sector, pushing up
prices of building materials and skilled craftsmen. The
The number of policies sold performed favourably in 2007
average motor claim rose by only a few percentage points
with a net inflow of 39,500 new private policies, includ-
in 2007, which was in line with inflation in the industry.
ing a large affinity group which left us in early 2007. The
Building insurance saw a flat development in the claims
inflow of new policies was attributable to new customers,
frequency, while it was slightly lower for motor.
focus on selected geographical areas, and existing cus-
tomers buying more policies. On average, each customer
Continued low combined ratio
has 3.4 policies.
The combined ratio was lower than expected in 2007 at
88.6, but increased 2.9 percentage points on 2006 due
TrygVesta Annual Report 2007 l Private & Commercial Norway l
23 of 152
Our business
(cid:54)(cid:75)(cid:58)(cid:71)(cid:54)(cid:60)(cid:58)(cid:21)(cid:56)(cid:65)(cid:54)(cid:62)(cid:66)(cid:72)(cid:21)(cid:62)(cid:67)(cid:21)(cid:67)(cid:68)(cid:71)(cid:76)(cid:54)(cid:78)
(cid:56)(cid:65)(cid:54)(cid:62)(cid:66)(cid:72)(cid:21)(cid:59)(cid:71)(cid:58)(cid:70)(cid:74)(cid:58)(cid:67)(cid:56)(cid:62)(cid:58)(cid:72)(cid:21)(cid:62)(cid:67)(cid:21)(cid:67)(cid:68)(cid:71)(cid:76)(cid:54)(cid:78)
(cid:62)(cid:99)(cid:89)(cid:90)(cid:96)(cid:104)
(cid:38)(cid:39)(cid:37)
(cid:38)(cid:38)(cid:42)
(cid:38)(cid:38)(cid:37)
(cid:38)(cid:37)(cid:42)
(cid:38)(cid:37)(cid:37)
(cid:46)(cid:42)
(cid:46)(cid:37)
(cid:62)(cid:99)(cid:89)(cid:90)(cid:96)(cid:104)
(cid:38)(cid:38)(cid:37)
(cid:38)(cid:37)(cid:42)
(cid:38)(cid:37)(cid:37)
(cid:46)(cid:42)
(cid:46)(cid:37)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:66)(cid:100)(cid:105)(cid:100)(cid:103)
(cid:55)(cid:106)(cid:94)(cid:97)(cid:89)(cid:94)(cid:99)(cid:92)(cid:21)
(cid:66)(cid:100)(cid:105)(cid:100)(cid:103)
(cid:55)(cid:106)(cid:94)(cid:97)(cid:89)(cid:94)(cid:99)(cid:92)
DKKm
Storm and weather, gross
Large claims, gross
2007
2006
2005
34
121
42
20
35
37
to an increased number of claims. Weather-related and
Focus areas in 2008
large claims had a negative impact of 3.2 percentage
In line with Private & Commercial Denmark, Private &
points on the combined ratio, while run-off gains had a
Commercial Norway also began implementing the LEAN
positive impact of 2 percentage points. The correspond-
principle in parts of the organisation in 2007. We will
ing impact from large claims and run-off gains was 0.4
continue to implement LEAN over the next few years.
and 2.1 percentage points, respectively, in 2006.
Expenses
In order to achieve the ambition of increasing our market
share in 2008 we intend to focus on Health Care, on
The gross expense ratio was 20.8 in 2007, which was
developing our sales channels further and introduce
0.4 percentage point higher, mainly due to the relatively
several targeted sales efforts to new as well as existing
high wage inflation of 5.6%. A new IT supported process
customers. In this context, we intend to focus on specific
will be implemented in early 2008 to make our sales
geographical areas, including in particular the Oslo area.
processes more efficient and enable us to finalise 90% of
all sales at the customer’s premises. The process will
entail cost reductions of around DKK 60m over the next
two years.
24 of 152 l Private & Commercial Norway l TrygVesta Annual Report 2007
Corporate
DKKm
2007
2006
2005
NOK/DKK, average rate for the period
92.81
93.04
92.85
Gross earned premiums
Gross claims incurred
Gross expenses
Profit/loss on gross business
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
5,285
-3,904
-504
877
-172
137
842
73.9
3.3
77.2
9.5
86.7
4,921
-3,322
-539
1,060
-316
98
842
67.5
6.4
73.9
11.0
84.9
4,666
-3,296
-534
836
-421
46
461
70.6
9.0
79.6
11.4
91.0
Corporate is a Nordic business area which provides insur-
Performance in 2007 at sustained high level
ances to corporate customers under the TrygVesta brand.
The Corporate business area recorded a technical result
The Corporate business area serves customers with our
of DKK 842m in 2007, which was in line with the 2006
own sales force and through brokers. We define corporate
level despite a significantly higher level of large claims.
customers as customers paying annual premiums of more
We also continued the positive trend in gross earned
than DKK 500,000 or having more than 50 employees.
premiums.
The Corporate business area has some 10,000 customers.
The number would be around 50 customers by inter-
Premium growth
national standards, which define corporate customers as
Gross earned premiums in Corporate were 7.4% higher
customers paying annual premiums of more than DKK
than in 2006, and the portfolio passed the DKK 5bn mark
10m. Corporate has around 500 employees, and contri-
in 2007. The Norwegian part of the Corporate business
butes some 30% of the Group’s total earned premiums.
was a major growth driver, contributing 9.3% in local cur-
TrygVesta Garantiforsikring, the leading provider of
rency. The Danish business also generated strong growth
guarantee insurance in the Nordic region, is included in
of 6.1% over 2006.
the Corporate business area.
TrygVesta Annual Report 2007 l Corporate l
25 of 152
Our business
Corporate outperformed the market substantially in terms
in 2007, we increased prices by about 15% at the begin-
of growth, driven by dedicated risk consultancy efforts
ning of 2008, causing a few marine customers to leave
with corporate customers being served by cross-discipli-
the Group. However, the marine business continued to be
nary customer teams. In 2007, more than 250 employees
slightly unsatisfactory.
completed our pan-Nordic risk consultancy training, a
major contributor to the improvement of our service and
Combined ratio of 86.7 despite many large claims
consultancy standards.
Combined ratio for 2007 was 86.7 compared to 84.9 in
2006. Large claims had a negative impact of 8.3 percent-
As far as our insurance lines are concerned, the personal
age points in 2007 compared to 6.0 percentage points
lines in particular recorded strong growth, supported by
the year before. Weather-related claims also rose but to
the new act on workers’ compensation insurance in Den-
a lesser extent, which had a negative impact of 1.1 per-
mark which took effect on 1 July 2007. The new act trig-
centage points compared to 1.0 percentage points in
gered extraordinary premium increases of 12.5%, equiva-
2006. Large losses amounted to DKK 843m and had a
lent to premiums of around DKK 60m in 2007 and a
significant negative impact on the financial results.
similar amount in 2008. After a few years with a deliber-
ate reduction of market shares in unprofitable segments
The higher level of large claims resulted in a gross claims
of workers’ compensation insurance in Norway, we once
ratio of 73.9 in 2007 against 67.5 in 2006. There were
again increased our market share in 2007 within the per-
seven marine claims with a gross expense of DKK 453m
sonal lines of the Norwegian part of the Corporate busi-
and a net expense of DKK 133m, the difference being
ness. We did this as recent years’ price increases in the
that reinsurers contribute a much greater proportion of
Norwegian market made it attractive to increase the mar-
large marine claims. This is also reflected in the net rein-
ket share again in selected segments.
surance ratio of 3.3, which was much lower than the
ratio of 6.4 recorded in 2006. Thus, the overall claims
ratio, net of ceded business was 77.2 in 2007 against
73.9 in 2006.
Large inflow of customers
and high renewal rates
Corporate recorded a large inflow of new customers in
2007, while also continuing to record high renewal rates.
Nine out of 10 corporate customers renewed their poli-
cies in 2007. Generally, customer renewals at 1 January
2008 were satisfactory. As marine had negative earnings
26 of 152 l Corporate l TrygVesta Annual Report 2007
DKKm
2007
2006
2005
Storm and weather, gross
Large claims, gross
Large claims, net
57
843
439
51
456
294
136
356
224
The result was favourably impacted by gross run-off gains
In order to ensure sustained growth, we also intend to
of DKK 102m with motor and liability insurance being the
specialise further in relation to international customers,
major contributors, while we continued to strengthen
and we intend to develop our products further to create
provisions for prior-year claims in workers’ compensation
an even better match to customer requirements.
during 2007.
Continued fall in expenses
The Corporate business was able to reduce expenses
despite strong premium growth in 2007. Expenses were
some DKK 35m lower, equivalent to a 1.5 percentage
points reduction of the gross expense ratio to 9.5.
The positive performance was partly attributable to our
continued focus on making the business more efficient,
and partly to a greater proportion of insurances being
sold through brokers in 2007. We do not incur costs to
any considerable extent from sales through brokers because
brokers charge their fees directly to the customers.
Focus areas in 2008
Setting up a Swedish corporate business is a focus area
for 2008, and we expect to start sales to Swedish corpo-
rate customers in late 2008.
TrygVesta Annual Report 2007 l Corporate l
27 of 152
Our business
Finnish general insurance
DKKm
2007
2006
2005
EUR/DKK, average rate for the period
745.11
745.94
745.07
Gross earned premiums
Gross claims incurred
Gross expenses
Profit/loss on gross business
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
251
-188
-125
-62
-1
14
-49
74.9
0.4
75.3
49.8
198
-155
-83
-40
0
6
-34
78.1
0.2
78.3
41.7
140
-113
-70
-43
-1
3
-41
80.9
0.2
81.1
50.2
125.1
120.0
131.3
Our Finnish branch provides insurances to private house-
late 2007. More than 100,000 policies were sold, equiva-
hold customers and small enterprises under the brand
lent to an average of around 2,000 policies sold every
name of Nordea Vahinkovakuutus. Insurances are sold by
week. By comparison, we sold some 80,000 policies in
Nordea’s branches, our own sales people, own sales
2006. The higher sales were very much attributable to
centre, car dealers and via the Internet. The Finnish
our good ongoing collaboration with Nordea’s branches
business has some 127 employees, and together with
and a new concept which Nordea’s customer advisers
the Swedish branch, it contributes around 1% of total
began applying in 2007, and which helps advisers provide
gross earned premium growth. The Finnish business was
broader consultancy services, thereby strengthening
set up in 2002 and is still being developed. Our ambition
motivation and insurance sales. We increased the number
is to hold 8% of the private market by 2010.
of employees from 93 to 127 in 2007 to maintain the
high level of sales activity.
Another sales record
Gross earned premiums at DKK 251m were 26.8% higher
In early 2007 we began selling commercial insurances to
in 2007. The portfolio amounted to some DKK 300m in
small commercial customers. Setting up a commercial
28 of 152 l Private & Commercial Finland l TrygVesta Annual Report 2007
(cid:55) (cid:71)(cid:58)(cid:54)(cid:64)(cid:57) (cid:68)(cid:76)(cid:67)(cid:21)(cid:68)(cid:59)(cid:21) (cid:57)(cid:62)(cid:72)(cid:73)(cid:71)(cid:62)(cid:55)(cid:74)(cid:73)(cid:62)(cid:68) (cid:67)(cid:21)
(cid:62)(cid:67)(cid:21) (cid:59)(cid:62)(cid:67)(cid:65)(cid:54)(cid:67)(cid:57)
(cid:39)(cid:40)(cid:26)
(cid:40)(cid:26)
(cid:42)(cid:37)(cid:26)
(cid:39)(cid:41)(cid:26)
(cid:67)(cid:100)(cid:103)(cid:89)(cid:90)(cid:86)
(cid:62)(cid:99)(cid:105)(cid:90)(cid:103)(cid:99)(cid:90)(cid:105)
(cid:68)(cid:108)(cid:99)(cid:21)(cid:104)(cid:86)(cid:97)(cid:90)(cid:104)
(cid:56)(cid:86)(cid:103)(cid:21)(cid:89)(cid:90)(cid:86)(cid:97)(cid:90)(cid:103)(cid:104)
sales organisation and effecting commercial sales through
(cid:54)(cid:56)(cid:56)(cid:74)(cid:66)(cid:74)(cid:65)(cid:54)(cid:73)(cid:58)(cid:57)(cid:21)(cid:76)(cid:58)(cid:58)(cid:64)(cid:65)(cid:78)(cid:21)(cid:72)(cid:54)(cid:65)(cid:58)(cid:72)(cid:21)(cid:62)(cid:67)(cid:21)(cid:59)(cid:62)(cid:67)(cid:65)(cid:54)(cid:67)(cid:57)(cid:21)
Nordea took longer than expected, limiting sales of com-
mercial insurance in 2007. We expect sales to become
stronger going forward in step with the implementation
of Nordea’s commercial sales and thanks to Nordea’s
large share of the commercial market.
Financial results in 2007
The private business improved the technical result for
2007 by DKK 32m and recorded a loss of DKK 2m. The
(cid:69)(cid:100)(cid:97)(cid:94)(cid:88)(cid:94)(cid:90)(cid:104)
(cid:38)(cid:37)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:45)(cid:37)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:43)(cid:37)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:41)(cid:37)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:39)(cid:37)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:37)
improvement was primarily attributable to positive pre-
(cid:38)(cid:37)
(cid:39)(cid:37)
(cid:40)(cid:37)
(cid:41)(cid:37)
(cid:42)(cid:37)
(cid:74)(cid:92)(cid:90)(cid:103)
mium growth. The commercial business recorded a loss
on the technical account of DKK 47m due to significant
costs of launching commercial sales. For the total busi-
ness the technical result was thus a loss of DKK 49m.
(cid:39)(cid:37)(cid:37)(cid:39)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:40)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:41)
(cid:39)(cid:37)(cid:37)(cid:44)
Expenses
(cid:69)(cid:71)(cid:161)(cid:66)(cid:62)(cid:58)(cid:74)(cid:57)(cid:75)(cid:62)(cid:64)(cid:65)(cid:62)(cid:67)(cid:60)(cid:21)(cid:62)(cid:21)(cid:59)(cid:62)(cid:67)(cid:65)(cid:54)(cid:67)(cid:57)
The expense ratio for the private business fell by 12.7
percentage points to 29 in 2007. The overall business
(cid:66)(cid:94)(cid:100)(cid:35)(cid:21)(cid:57)(cid:64)(cid:64)
(Private & Commercial) reported an expense ratio of 49.8.
The expense ratio was adversely impacted by the costs of
the launch of the commercial business.
Focus areas in 2008
We had a 3% share of the Finnish private market at the
end of 2007. In 2008, we will continue to focus on
growth, aiming to achieve our ambition of holding an 8%
share of the private market by 2010. We intend to expand
our sales channels while also focusing on sales through
Nordea. Continued strong growth requires us to continue
to give high priority to new recruitment and retention of
current employees in 2008.
(cid:40)(cid:37)(cid:37)
(cid:39)(cid:42)(cid:37)
(cid:39)(cid:37)(cid:37)
(cid:38)(cid:42)(cid:37)
(cid:38)(cid:37)(cid:37)
(cid:42)(cid:37)
(cid:37)
(cid:39)(cid:37)(cid:37)(cid:39)
(cid:39)(cid:37)(cid:37)(cid:40)
(cid:39)(cid:37)(cid:37)(cid:41)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
TrygVesta Annual Report 2007 Private & Commercial Finland
29 of 152
Our business
Swedish general insurance
DKKm
2007
2006
2005
SEK/DKK, average rate for the period
80.73
80.37
Gross earned premiums
Gross claims incurred
Gross expenses
Profit/loss on gross business
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
90
-80
-95
-85
0
3
4
-6
-39
-41
0
0
-82
-41
88.9
0.0
88.9
105.6
194.5
144.9
0.4
145.3
1,003.8
1,149.1
-
-
-
-
-
-
-
-
-
-
-
-
-
Our Swedish branch provides insurances to private house-
Large inflow of new customers
hold customers under the brand name of Vesta Skade-
Sales by the Swedish business grew at a rapid rate,
försäkring. Insurances are primarily sold through Nordea’s
enabling us to welcome customer number 50,000 in late
branches, our own call centre and via the Internet. The
2007. We have sold close to 115,000 policies since start-
Swedish business has 58 employees, and together with
ing up the business in 2006, equivalent to an average of
the Finnish branch, it contributes around 1% of the
around 1,700 policies each week. In Q4 2007 we saw
Group’s total earned premiums. The branch was set up in
premium growth of 2,500 new insurances each week.
July 2006, and our ambition is to hold 8% of the private
Overall, we sold a total of almost 87,000 insurances in
market by 2012.
2007 compared with some 26,500 insurances in H2
In 2007, gross earned premiums for the Swedish
2006.
business were DKK 90m, and the total portfolio passed
Nordea sold two thirds of the policies in 2007, while our
SEK 200m.
own staff sold the last third. The chart on the next page
30 of 152 l Swedish general insurance l TrygVesta Annual Report 2007
compares the level of sales from the start-up in Sweden
with the start-up in Finland. Sweden has significantly
higher sales because we were able to use our experience
from the start-up in Finland and set up our own sales
centre in Sweden immediately. We increased the number
of employees from 42 to 58 in 2007 in order to retain the
high growth rate. Sales continued to be in line with our
targets and strategy for the Swedish market.
Focus areas in 2008
In 2008, the Swedish business will focus on sustained
growth and on developing the rapidly growing branch fur-
ther. Due to our high ambitions a special key area in
2008 will be to increase the number of qualified and
motivated employees in order to keep up with the strong
development in sales.
(cid:55) (cid:71)(cid:58)(cid:54)(cid:64)(cid:57) (cid:68)(cid:76)(cid:67)(cid:21)(cid:68)(cid:59)(cid:21) (cid:57)(cid:62)(cid:72)(cid:73)(cid:71)(cid:62)(cid:55)(cid:74)(cid:73)(cid:62)(cid:68) (cid:67)(cid:21)
(cid:62)(cid:67)(cid:21) (cid:72)(cid:76)(cid:58)(cid:57) (cid:58)(cid:67)(cid:21)
(cid:39)(cid:26)
(cid:40)(cid:40)(cid:26)
(cid:43)(cid:42)(cid:26)
(cid:67)(cid:100)(cid:103)(cid:89)(cid:90)(cid:86)
(cid:56)(cid:86)(cid:97)(cid:97)(cid:88)(cid:90)(cid:99)(cid:105)(cid:103)(cid:90)
(cid:62)(cid:99)(cid:105)(cid:90)(cid:103)(cid:99)(cid:90)(cid:105)
(cid:72)(cid:73)(cid:54)(cid:71)(cid:73)(cid:34)(cid:74)(cid:69)(cid:21)(cid:62)(cid:67)(cid:21)(cid:72)(cid:76)(cid:58)(cid:57)(cid:58)(cid:67)(cid:21)(cid:75)(cid:72)(cid:35)(cid:21)(cid:59)(cid:62)(cid:67)(cid:65)(cid:54)(cid:67)(cid:57)(cid:21)
(cid:54)(cid:107)(cid:90)(cid:103)(cid:86)(cid:92)(cid:90)(cid:21)
(cid:98)(cid:100)(cid:99)(cid:105)(cid:93)(cid:97)(cid:110)(cid:21)(cid:104)(cid:86)(cid:97)(cid:90)(cid:104)(cid:21)
(cid:94)(cid:99)(cid:21)(cid:59)(cid:94)(cid:99)(cid:97)(cid:86)(cid:99)(cid:89)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:69)(cid:100)(cid:97)(cid:94)(cid:88)(cid:94)(cid:90)(cid:104)
(cid:38)(cid:37)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:45)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:43)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:41)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:39)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:37)
(cid:39)
(cid:41)
(cid:43)
(cid:45)
(cid:38)(cid:37)
(cid:38)(cid:39)
(cid:38)(cid:41)
(cid:38)(cid:43)
(cid:38)(cid:45)
(cid:39)(cid:37)
(cid:39)(cid:39)
(cid:39)(cid:41)
(cid:66)(cid:100)(cid:99)(cid:105)(cid:93)(cid:104)
(cid:72)(cid:108)(cid:90)(cid:89)(cid:90)(cid:99)
(cid:59)(cid:94)(cid:99)(cid:97)(cid:86)(cid:99)(cid:89)
TrygVesta Annual Report 2007 Swedish general insurance
31 of 152
Our business
Investment activities
DKKm
Bonds etc.
Equities
Real estate
Total
Other financial income and expenses *)
2007
2006
Investment assets
2005 31.12.2007 31.12.2006
1,103
180
240
1,523
217
788
966
317
687
819
175
30,294
4,445
2,569
28,663
5,384
2,453
2,071
1,681
37,308
36,500
188
-80
Total return on investment activities
1,740
2,259
1,601
Transferred to technical interest
Return on investment activities
-1,400
340
-1,031
1,228
-707
894
*) The item comprises gains and losses as a result of a changed discount rate, interest on operating assets, bank debt and reinsur-
ance deposits, exchange rate adjustment of insurance items and costs of investment activities.
TrygVesta’s investment activities comprise any placement
Investment result in 2007
of the Group’s funds in investment assets, bonds, equity
In 2007 the return on TrygVesta’s investment activities
investments, land and buildings or cash. Funds are placed
before transfer to technical interest, but after other finan-
pursuant to guidelines defined by legislation, regulators
cial income and expenses totalled DKK 1,740m. This was
and the Supervisory Board. The overall allocation of assets
DKK 519m less than in 2006, mainly due to lower returns
is made by us based on risk and cash management con-
on the equity portfolio. The return on investment activities
siderations, while specific securities are mainly selected
after transfer to technical interest was DKK 888m lower
by external asset managers within the defined framework.
than in 2006 due to lower equity returns and higher
transfer to technical interest. Higher bond yields of 3.7%
Financial markets became increasingly unstable during
against 2.8% in 2006 lifted the investment performance.
2007 as a result of the sub-prime crisis, becoming more
and more impacted by developments in the US housing
Other financial income and expenses were DKK 29m
market and borrowers’ inability to service and repay their
higher. The improvement was attributable to an increase
mortgages towards the end of 2007. Equities were reas-
in other items including interest income on operating
sessed in 2007 with increasing risk premiums relative to
assets. This was, however, partly offset by capital gains
the risk-free interest. TrygVesta reduced the Group’s
being reduced from DKK 368m in 2006 to DKK 298m in
equity portfolio in June as well as in December 2007.
2007 as a result of a changed discount rate because
The equity portfolio was further reduced in January 2008.
interest rates increased less in 2007. The return on
32 of 152 l Investment activities l TrygVesta Annual Report 2007
investment activities before other financial income and
The return was impacted by an increase in the general
expenses was DKK 1,523m, equal to a return of 4.1%.
level of interest rates of 0.3-0.5 percentage point and a
The return was 4.9% including changes in provisions for
widening yield spread between swap and government
claims due to higher interest rates. This performance was
yields of around 0.1-0.3 percentage point during the
better than had been expected at the beginning of 2007
year, causing an adverse impact on value adjustments,
despite the unstable financial markets but lower than the
but higher current returns.
guidance provided in our Q3 2007 interim report.
About 75% of the bonds, or DKK 23bn, are issued by
Asset allocation
banks or mortgage credit institutions, and 23% are issued
Our bond portfolio increased during 2007 to account for
by Western European and North American governments
81.2% of total assets against 78.5% at 1 January 2007.
or regional authorities. 82% of the portfolio is rated AAA
The higher proportion of bonds was a result of new
or AA. The unrated 15% of the portfolio comprises mainly
investments and a switch-over from equities to bonds.
short-term Norwegian money market certificates issued
The proportion of equities fell from 14.8% to 11.9%, or
by banks. We have diversified exposure to banks, mainly
by DKK 939m. The value of the portfolio of real property
Nordic banks with little or no involvement in the financial
increased by some DKK 116m in 2007, lifting its propor-
products that triggered the sub-prime crisis. We currently
tion to 6.9% from 6.7%.
monitor the performance of credits with the banks to
which our bonds portfolio is exposed.
Net investments amounted to about DKK 613m in 2007,
of which DKK 1,461m was invested in bonds, while equi-
Interest rate sensitivity measures changes in the value of
ties and real property were reduced by DKK 839m and
the bond portfolio and the provisions for claims, respec-
DKK 9m, respectively.
tively, at a parallel yield increase, of 1 percentage point.
The sensitivity gap was DKK 21m at 31 December 2007.
For security and rating considerations, our investment port-
We monitor interest rate sensitivity on an ongoing basis
folio has a high proportion of highly liquid securities carry-
to match asset and liabilities as far as possible in order to
ing low interest rate and credit risk. We do not invest in
minimise the impact of changing interest rates on our
structured fixed income products such as CDOs, CLOs and
income statement. The duration including cash of the
hedge funds, nor does our portfolio include US mortgages.
Group’s total bond portfolio was 1.9 years at 31 Decem-
Bonds
ber 2007 compared to 1.3 years at 31 December 2006.
The duration increase occurred because TrygVesta’s Dan-
The overall bond portfolio including cash yielded a return
ish business has begun using a variable rate for discount-
of DKK 1,103m in 2007, equal to 3.7% for the full year.
ing provisions for workers’ compensation insurance,
TrygVesta Annual Report 2007 l Investment activities l
33 of 152
Our business
thereby increasing the opposing interest rate risk on lia-
Real property
bilities to maintain the Group’s net interest rate risk at a
The investment return on real property was DKK 240m,
fairly unchanged level.
including revaluation of DKK 103m and 6.1% from opera-
tions. The occupancy rate was 97.5 at 31 December 2007
Equities
compared with 94.9 at 1 January 2007.
The total return on the equity portfolio was DKK 180m,
or 2.0%, for the financial year. The return level for 2007
The portfolio is well-diversified and consists of quality
was lower than in previous years with reported returns of
property, typically in prime locations in major cities in
more than 20%. Equity markets were impacted by the
Denmark and Norway. The portfolio mainly comprises
sub-prime crisis referred to earlier and indications of
office premises, but also includes a small proportion of
declining economic activity in the Western world.
other commercial property and residential property.
Danish equities generated a negative return of 4.5%,
while Norwegian equities generated a return of 13%
compared with 8.0% for OMXC Capped and 11.5% for
OSBX. The return on international equities was 1.0%,
which was 0.5% below the benchmark return. Currency
risks relating to international equities were hedged during
the year. Unlisted shares accounted for DKK 237m at 31
December 2007. Royal Dutch Shell was the largest stake,
accounting for 2.8% of the portfolio of listed equities and
0.3% of total investment assets. The 25 largest equities
in our portfolio accounted for 31% of the total listed
equity portfolio.
We reduced our equity exposure during 2007, cutting
back the equity portfolio by around DKK 0.6bn in June
2007 and by 0.2bn in December. The Group’s equity port-
folio had a total value of DKK 4,445m at 31 December
2007 compared with DKK 5,384m at 31 December 2006.
We reduced our equity exposure further in January 2008
to stand at DKK 1.7bn at 31 January 2008.
34 of 152
l Investment activities l TrygVesta Annual Report 2007
(cid:65)(cid:62)(cid:72)(cid:73) (cid:58)(cid:57)(cid:21)(cid:58)(cid:70) (cid:74) (cid:62)(cid:73)(cid:62)(cid:58) (cid:72)(cid:21) (cid:55)(cid:78)(cid:21)(cid:60) (cid:58)(cid:68)(cid:60) (cid:71)(cid:54) (cid:69)(cid:61)(cid:78)
(cid:71)(cid:58)(cid:73)(cid:74)(cid:71)(cid:67)(cid:21)(cid:55)(cid:78)(cid:21)(cid:54)(cid:72)(cid:72)(cid:58)(cid:73)(cid:21)(cid:56)(cid:65)(cid:54)(cid:72)(cid:72)
(cid:38)(cid:38)(cid:35)(cid:44)(cid:21)(cid:26)
(cid:39)(cid:39)(cid:35)(cid:43)(cid:21)(cid:26)
(cid:38)(cid:46)(cid:35)(cid:45)(cid:21)(cid:26)
(cid:38)(cid:44)(cid:35)(cid:39)(cid:21)(cid:26)
(cid:39)(cid:45)(cid:35)(cid:44)(cid:21)(cid:26)
(cid:26)
(cid:39)(cid:42)
(cid:39)(cid:37)
(cid:38)(cid:42)
(cid:38)(cid:37)
(cid:42)
(cid:37)
(cid:39)(cid:39)(cid:35)(cid:40)
(cid:39)(cid:37)(cid:35)(cid:40)
(cid:38)(cid:42)(cid:35)(cid:37)
(cid:38)(cid:37)(cid:35)(cid:41)
(cid:46)(cid:35)(cid:41)
(cid:40)(cid:35)(cid:44)
(cid:39)(cid:35)(cid:44) (cid:39)(cid:35)(cid:45)
(cid:39)(cid:35)(cid:37)
(cid:42)(cid:35)(cid:42) (cid:42)(cid:35)(cid:45)
(cid:41)(cid:35)(cid:38)
(cid:55)(cid:100)(cid:99)(cid:89)(cid:104)(cid:21)(cid:90)(cid:105)(cid:88)
(cid:58)(cid:102)(cid:106)(cid:94)(cid:105)(cid:94)(cid:90)(cid:104)
(cid:71)(cid:90)(cid:86)(cid:97)(cid:21)(cid:101)(cid:103)(cid:100)(cid:101)(cid:90)(cid:103)(cid:105)(cid:110)
(cid:73)(cid:100)(cid:105)(cid:86)(cid:97)
(cid:67)(cid:100)(cid:103)(cid:89)(cid:94)(cid:88)(cid:21)(cid:103)(cid:90)(cid:92)(cid:94)(cid:100)(cid:99)
(cid:74)(cid:64)
(cid:71)(cid:90)(cid:104)(cid:105)(cid:21)(cid:100)(cid:91)(cid:21)(cid:58)(cid:106)(cid:103)(cid:100)(cid:101)(cid:90)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:74)(cid:72)(cid:54)
(cid:54)(cid:104)(cid:94)(cid:86)(cid:21)(cid:90)(cid:105)(cid:88)(cid:35)
(cid:55)(cid:68)(cid:67)(cid:57)(cid:72)(cid:21)(cid:55)(cid:78)(cid:21)(cid:60) (cid:58)(cid:68)(cid:60) (cid:71)(cid:54)(cid:69)(cid:61)(cid:78)
(cid:55)(cid:68)(cid:67)(cid:57)(cid:72)(cid:21)(cid:55)(cid:78)(cid:21)(cid:71)(cid:54)(cid:73)(cid:62)(cid:67)(cid:60)
(cid:38)(cid:38)(cid:35)(cid:39)(cid:21)(cid:26)
(cid:38)(cid:42)(cid:35)(cid:40)(cid:21)(cid:26)
(cid:37)(cid:35)(cid:41)(cid:21)(cid:26)
(cid:37)(cid:35)(cid:41)(cid:21)(cid:26)
(cid:39)(cid:35)(cid:40)(cid:21)(cid:26)
(cid:39)(cid:44)(cid:35)(cid:43)(cid:21)(cid:26)
(cid:43)(cid:38)(cid:35)(cid:21)(cid:39)(cid:21)(cid:26)
(cid:38)(cid:44)(cid:35)(cid:44)(cid:21)(cid:26)
(cid:43)(cid:40)(cid:33)(cid:46)(cid:21)(cid:26)
(cid:57)(cid:86)(cid:99)(cid:94)(cid:104)(cid:93)(cid:21)(cid:87)(cid:100)(cid:99)(cid:89)(cid:104)
(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:87)(cid:100)(cid:99)(cid:89)(cid:104)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:98)(cid:100)(cid:99)(cid:90)(cid:110)(cid:21)(cid:98)(cid:86)(cid:103)(cid:96)(cid:90)(cid:105)
(cid:68)(cid:105)(cid:93)(cid:90)(cid:103)
(cid:54)(cid:54)(cid:54)
(cid:55)(cid:55)(cid:55)
(cid:54)(cid:54)
(cid:49)(cid:55)(cid:55)(cid:55)
(cid:54)
(cid:67)(cid:100)(cid:105)(cid:21)(cid:103)(cid:86)(cid:105)(cid:90)(cid:89)
TrygVesta Annual Report 2007 l Investment activities l
35 of 152
Our business
Outlook for 2008
DKKm
Premium growth *
Technical result
Technical result before run-off
Investment result
Profit before tax
Profit after tax
Combined ratio
*In local currency
Actual Outlook Favourable
scenario
2008
2007
Negative
scenario
4%
2,820
2,077
340
3,109
2,266
86.1
5%
2,200
2,200
400
2,500
1,900
90
2,350
2,050
2,000
89
1,800
91
TrygVesta is committed to providing the market with pre-
proportion of equities of around 4%. TrygVesta has no
cise profit guidance. We attach great importance to using
exposure to structured debt securities (CDOs/subprime).
the very extensive records of previous performance which
are very important when making financial forecasts.
Higher premium growth expected for 2008
Earned premiums are expected to increase by some 5% in
Our outlook for 2008 is based on a normal performance
local currency terms, assuming no major changes in com-
for the year, but circumstances in the financial markets
petitive conditions relative to 31 December 2007. We will
and, in particular, the equity markets at the beginning of
continue our strategy of generating profitable growth.
2008 have caused us to take the extraordinary step of
Earned premium growth of 5% will originate from organic
expanding our comments on our outlook for the full-year
growth in Finland and Sweden, which together are
2008, see page 38. The table shows our outlook for 2008
expected to contribute 1.5%, while Denmark and Norway
based on developments up to 31 December 2007 and a
contribute 3.5% equal to about 0.5% real growth.
Outlook at the begining of January 2008
At the begining of January 2008, assuming an equity pro-
portion of around 4% of our investment portfolio, we
TrygVesta’s outlook for 2008 is composed of
expected profit before tax of DKK 2,500m compared with
the areas insurance activities, investment activities
DKK 3,109m in 2007. This expectation corresponded to a
and tax.
return on equity of just over 26% before tax and around
20% after tax.
36 of 152 l Outlook for 2008 l TrygVesta Annual Report 2007
(cid:65)(cid:54)(cid:71)(cid:60)(cid:58)(cid:21)(cid:56)(cid:65)(cid:54)(cid:62)(cid:66)(cid:72)
(cid:72)(cid:73)(cid:68)(cid:71)(cid:66)(cid:21)(cid:54)(cid:67)(cid:57)(cid:21)(cid:76)(cid:58)(cid:54)(cid:73)(cid:61)(cid:58)(cid:71)(cid:21)(cid:71)(cid:58)(cid:65)(cid:54)(cid:73)(cid:58)(cid:57)(cid:21)(cid:56)(cid:65)(cid:54)(cid:62)(cid:66)(cid:72)
(cid:57)(cid:64)(cid:64)(cid:98)
(cid:38)(cid:33)(cid:39)(cid:37)(cid:37)
(cid:38)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:45)(cid:37)(cid:37)
(cid:43)(cid:37)(cid:37)
(cid:41)(cid:37)(cid:37)
(cid:39)(cid:37)(cid:37)
(cid:37)
(cid:41)(cid:43)(cid:38)
(cid:40)(cid:37)(cid:37)
(cid:41)(cid:38)(cid:43)
(cid:39)(cid:44)(cid:42)
(cid:42)(cid:37)(cid:38)
(cid:40)(cid:41)(cid:37)
(cid:39)(cid:40)(cid:43)
(cid:38)(cid:44)(cid:43)
(cid:38)(cid:33)(cid:37)(cid:41)(cid:39)
(cid:43)(cid:40)(cid:44)
(cid:57)(cid:64)(cid:64)(cid:98)
(cid:38)(cid:33)(cid:37)(cid:37)(cid:37)
(cid:45)(cid:37)(cid:37)
(cid:43)(cid:37)(cid:37)
(cid:41)(cid:37)(cid:37)
(cid:39)(cid:37)(cid:37)
(cid:37)
(cid:46)(cid:38)(cid:38)
(cid:38)(cid:45)(cid:41)
(cid:44)(cid:40)
(cid:38)(cid:38)(cid:38)
(cid:40)(cid:40)(cid:39)
(cid:39)(cid:37)(cid:39)
(cid:39)(cid:37)(cid:37)(cid:39)
(cid:39)(cid:37)(cid:37)(cid:40)
(cid:39)(cid:37)(cid:37)(cid:41)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:39)(cid:37)(cid:37)(cid:39)
(cid:39)(cid:37)(cid:37)(cid:40)
(cid:39)(cid:37)(cid:37)(cid:41)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:65)(cid:86)(cid:103)(cid:92)(cid:90)(cid:21)(cid:88)(cid:97)(cid:86)(cid:94)(cid:98)(cid:104)(cid:33)(cid:21)(cid:99)(cid:90)(cid:105)
(cid:65)(cid:86)(cid:103)(cid:92)(cid:90)(cid:21)(cid:88)(cid:97)(cid:86)(cid:94)(cid:98)(cid:104)(cid:33)(cid:21)(cid:92)(cid:103)(cid:100)(cid:104)(cid:104)
(cid:58)(cid:109)(cid:101)(cid:90)(cid:88)(cid:105)(cid:90)(cid:89)(cid:21)(cid:97)(cid:90)(cid:107)(cid:90)(cid:97)(cid:21)(cid:29)(cid:57)(cid:64)(cid:64)(cid:21)(cid:39)(cid:39)(cid:42)(cid:98)(cid:30)
(cid:58)(cid:109)(cid:101)(cid:90)(cid:88)(cid:105)(cid:90)(cid:89)(cid:21)(cid:97)(cid:90)(cid:107)(cid:90)(cid:97)(cid:21)(cid:29)(cid:57)(cid:64)(cid:64)(cid:21)(cid:42)(cid:37)(cid:37)(cid:98)(cid:30)
Combined ratio of 90 before run-off
We generally base our expectations with respect to claims
The combined ratio for 2008 is estimated to be at the
incurred on assumptions for the various products in the
level of 89-91 with an expectation of 90 before run-off.
individual business areas. Expectations regarding claims
The past three years have recorded run-off of 2.3-4.5%
ratios are based on historical performance in the form of
of gross earned premiums, for example, with a combined
average claims ratios for the past five years, with recent
ratio in 2007 of 86.1 and 90.6 before run-off.
years’ trends generally being weighted stronger than
those of prior years. Trends in the pricing of our insur-
Continued decline in expense ratio
ance premiums, claims frequencies and the discount rate
We expect to reduce the expense ratio slightly in 2008
applied are the most important factors that may affect
relative to the expense ratio of 16.7 achieved for 2007,
our overall performance. Assumptions for storm events
despite expansion in Finland and Sweden that is expected
and large claims are based on historical experience for
to have an adverse impact on the expense ratio in 2008
not less than ten years, with recent years’ trends being
and the next few years. The Finnish and Swedish activi-
weighted stronger than those of prior years. In addition,
ties affected the expense ratio with around 1.5 % in
we incorporate the effect of profitability initiatives and
2008, we expect an impact of 1 percentage point.
the effect of any legislative measures in the anticipated
Assumptions for insurance activities
related claims for 2008 of around DKK 225m and large
The outlook for the result for 2008 is based on assump-
claims of around DKK 500m gross.
claims level. The outlook for 2008 assumes weather-
tions with respect to gross earned premiums, gross
claims incurred, gross expenses, result of business ceded
The outlook assumes no run-off gains or losses in 2008
and technical interest.
on the provisions for claims established.
Our outlook for gross earned premiums is based on the
The outlook regarding gross expenses reflects the pro-
Group’s portfolio at 31 December 2007 and assumptions
jected number of employees during 2008 and the related
with respect to sales and loss of policies and price adjust-
costs. The projected number of employees incorporates
ments of existing policies. Assumptions for sales and loss
the effect of measures launched to improve efficiency and
of policies are based on historical levels, planned initia-
recruitment of new employees in Finland and Sweden.
tives and the market situation. Assumptions for price
The outlook further includes other expenses such as
adjustments are primarily based on agreements relating
those relating to IT, operations and our corporate head-
to adjustments of individual insurance policies. The out-
quarters, which are predominantly based on agreements
look is expressed in local currency.
that are known to us.
TrygVesta Annual Report 2007 l Outlook for 2008 l
37 of 152
Our business
(cid:71)(cid:74)(cid:67)(cid:34)(cid:68)(cid:59)(cid:59)
(cid:57)(cid:64)(cid:64)(cid:98)
(cid:38)(cid:35)(cid:37)(cid:37)(cid:37)
(cid:45)(cid:37)(cid:37)
(cid:43)(cid:37)(cid:37)
(cid:41)(cid:37)(cid:37)
(cid:39)(cid:37)(cid:37)
(cid:37)
(cid:34)(cid:39)(cid:37)(cid:37)
(cid:34)(cid:41)(cid:37)(cid:37)
(cid:34)(cid:43)(cid:37)(cid:37)
(cid:34)(cid:45)(cid:37)(cid:37)
(cid:34)(cid:41)(cid:38)(cid:37)(cid:34)(cid:41)(cid:42)(cid:45)
(cid:34)(cid:42)(cid:38)(cid:43)
(cid:34)(cid:42)(cid:45)(cid:45)
(cid:44)(cid:41)(cid:41) (cid:44)(cid:41)(cid:40)
(cid:43)(cid:38)(cid:45)
(cid:42)(cid:42)(cid:42)
(cid:40)(cid:43)(cid:38)
(cid:39)(cid:45)(cid:40)
(cid:43)(cid:45)
(cid:34)(cid:44)(cid:38)
(cid:39)(cid:37)(cid:37)(cid:39)
(cid:39)(cid:37)(cid:37)(cid:40)
(cid:39)(cid:37)(cid:37)(cid:41)
(cid:39)(cid:37)(cid:37)(cid:42)
(cid:39)(cid:37)(cid:37)(cid:43)
(cid:39)(cid:37)(cid:37)(cid:44)
(cid:71)(cid:106)(cid:99)(cid:34)(cid:100)(cid:91)(cid:91)(cid:33)(cid:21)(cid:99)(cid:90)(cid:105)
(cid:71)(cid:106)(cid:99)(cid:34)(cid:100)(cid:91)(cid:91)(cid:33)(cid:21)(cid:92)(cid:103)(cid:100)(cid:104)(cid:104)
The result of business ceded is based on contracts made
equities and real property yielded returns of 3.7%, 2.0%
with reinsurers to cover claims events and events such as
and 6.1% (10.4% including value changes), respectively.
storms and large claims. The expected result of business
ceded is calculated on the basis of such contracts and
Assumptions for tax
historical data.
The corporate tax rate is 25% in Denmark and 28% in
Norway. The effective tax rate is to some extent attributa-
Technical interest is based on interest rate assumptions
ble to gains or losses on equities which are tax-exempt or
applicable at 31 January 2008.
non-deductible. Previously, we expected a tax rate of 24%
going forward. We have changed this to 25% based on
Assumptions for investment activities
the composition of our business.
The outlook for the return on investment activities for
2008 is based on the following assumptions with respect
Equity market performance in 2008 impacts the
to investment assets. The return outlook for 2008 is
full-year 2008 outlook
based on an assumed proportion of equities of 4%
The volatile equity markets and the equity losses have
against previously 12-14% as TrygVesta cut back the pro-
caused us to change our outlook for 2008 to profit
portion of equities to around 4% in January 2008. The
before tax of DKK 2,100m compared with DKK 3,109m in
proportion of bonds was increased correspondingly from
2007. The profit outlook comprises a stronger technical
around 82% to 90%. The outlook for 2008 is based on
result before run-off and a lower investment result,
the level of interest rates prevailing at 31 January 2008.
emphasising the importance of maintaining good and
stable insurance operations as the foundation for our
Bonds are thus expected to account for around 90% of
earnings in periods of adverse financial markets.
total investment assets and to yield a return of 4.7%
based on interest rates at 31 January 2008. Equities are
The very unstable equity market in January and until
expected to account for around 4% of total assets and to
18 February 2008 resulted in a loss of around DKK 400m
yield a return of 7.0% including dividends, but this may
less equity return than expected. This loss on equities will
vary considerably between periods. Finally, the portfolio
have an adverse impact on our effective tax rate, which is
of real property is expected to account for 6% of assets
attributable to the amount of gains or losses on equities
and to yield a return of 6.1%. Real property returns corre-
which are tax-exempt or non-deductible. We assume an
spond to annual rental income less administrative
effective tax rate for 2008 of 32% based on the assump-
expenses and do not incorporate any appreciation or
tions described and the realised loss on equities.
depreciation of real property values. In 2007, bonds,
38 of 152 l Outlook for 2008 l TrygVesta Annual Report 2007
The equity market performance alone results in an outlook
for 2008 at 18 February that provides a return on equity
of around 23% before tax and around 16% after tax.
Outlook for the medium term
The composition of our business and an assessment of
market conditions cause us to upgrade our medium-term
expectations from a combined ratio of around 92 to the
89-91 range. About half of the improvement is attributa-
ble to a change in our accounting policies on unwinding.
A combined ratio of 89-91 results in a targeted improved
return on equity from the earlier outlook of 19-21% after
tax to 21-23%. Our outlook for the medium-term assumes
that we return to having an equity share of 8-10% of total
assets, assuming a return on equities of 7%.
TrygVesta Annual Report 2007 l Outlook for 2008 l
39 of 152
Our business
Capitalisation and profit distribution
TrygVesta had the following ratings at 31 December 2007:
TrygVesta Forsikring A/S
TrygVesta Garantiforsikring A/S
Standard
& Poor’s
A-/stable
A-/stable
Moody’s
A2
n.a.
TrygVesta has the capital resources necessary to operate
Subordinate loan capital
and develop the Group. We refer to this as our capital
In 2005, the Group raised a 20-year bond loan in the
requirement.
amount of EUR 150m, which was listed on the London
Stock Exchange. The loan, which carries a coupon of
Two rating agencies, Standard & Poor’s and Moody’s, fol-
4.5%, is included in the capital base for rating purposes
low TrygVesta’s performance and financial position closely
and to a limited extent in the regulatory capital base.
for rating purposes. Our management reviews the
Subordinate loan capital accounted for 10% of the capital
Group’s strategies, plans and performance at annual rat-
calculated according to Standard & Poor’s capital model for
ing meetings. The rating agencies use these meetings as
credit purposes in 2007, with the present limit being 25%.
a basis for their assessment of the Group, and subse-
quently announce the rating. In 2007, Moody’s upgraded
Credit facility
us from A3 to A2, which signifies excellent financial
The Group raised a five-year revolving credit facility of DKK
strength, while Standard & Poor’s affirmed their rating of
2,000m subscribed with 10 Danish and international banks
A- based on the Group’s strong financial position.
in 2005. At 31 December 2007, DKK 600m had been uti-
We determine the Group’s capital requirements based on
loan capital were DKK 88m in 2007, which means that our
Standard & Poor’s capital model, aiming to maintain our
interest expenses were covered 36 times by earnings. Our
current rating of A-. This rating reflects strong creditwor-
total debt ratio was 14.5 at 31 December 2007.
lised under the facility. Total interest expenses incurred on
thiness and excellent financial strength and is a preferred
rating among large corporate customers requiring that
Profit distribution policy
their insurer is rated.
Dividends in respect of the 2007 financial year are deter-
mined on the basis of the Group’s capitalisation strategy
Standard & Poor’s implemented a new capital model in the
and profit distribution policy:
autumn of 2007. Redefining the measurement of capital,
Standard & Poor’s new model measures available capital
• TrygVesta distributes 50% of the profit for the year as
relative to a minimum requirement for each rating cate-
ordinary cash dividends.
gory. Going forward, we intend to apply the new calcula-
tion method, targeting the level of an A rating and a small
• Any excess capital after distribution of ordinary
buffer. Standard & Poor’s new model calculates the buffer
dividends and taking into consideration the minimum
at 4-5% of the capital requirement, equivalent to the pre-
capital requirement, strategy and growth, will be
vious practice of a CAR of 130. Given the current structure
returned to shareholders in the form of a share buy-
of our business and our investment profile, a rating of A-
back programme.
reflects a ratio of capital to net premiums of 52-56.
40 of 152 l Capitalisation and profit distribution l TrygVesta Annual Report 2007
Share buyback
2007
2006
2005
Profit for the year, DKKm
Cash dividends, DKKm
Cash dividends per share, DKK
Cash pay-out ratio
Ordinary share buyback
Extraordinary share buyback
Total buyback, DKKm
Buyback per share
Total distribution per share, DKK
Total distribution, DKKm
Total pay-out ratio
CAR
Buffer to A level
Solvency
2,266
1,156
17
51%
660
745
1,405
21
38
3,211
2,244
33
70%
2,097
1,428
21
68%
33
21
2,561
2,244
1,428
113%
N/A
5%
318%
70%
128%
2.4%
383%
68%
128.5%
2.8%
362%
• The dividend policy reflects our long-term earnings and
method results in capital being released while at the same
cash flow potential, while maintaining an appropriate
time allowing TrygVesta to maintain its strong capital posi-
level of capitalisation.
tion and rating of A-. Read more about the capital model
in Risk management and view a quarterly updated version
In practice, we determine dividends by comparing the
of a simplified capital model at www.trygvesta.com
capital requirement of Standard & Poor’s capital model
with our goal of a rating of A-. Any capital in excess of
Dividends for the 2007 financial year
this amount will be distributed to shareholders in the
Profit after tax amounted to DKK 2,266m in 2007. Pursu-
form of cash dividends and share buybacks.
ant to the profit distribution policy, this entails a cash dis-
tribution of dividends of DKK 17 per share, for a total
The proposed share buyback programme after ordinary
amount of DKK 1,156m.
dividends for 2007 will thus be determined by the earn-
ings level and, extraordinarily, by two one-off effects
Share buybacks
relating to a new capital model and discounting method.
After the annual calibration of our capital requirement
after payment of cash dividends we will return an addi-
Standard & Poor’s implemented a new capital model in the
tional DKK 660m to shareholders in the form of a share
autumn of 2007, redefining the measurement of capital.
buyback. To this should be added the two one-off effects
The main change is that investment risk is now included in
relating to Standard & Poor’s new capital model and
the capital requirement rather than deducted in the calcu-
changed discounting method, which increase the share
lation of capital. A number of other elements were also
buyback programme by DKK 745m.
updated, including that the individual rating requirements
are now based on risk allocation.
The total share buyback thus amounts to DKK 1,405m.
A cornerstone for TrygVesta’s risk management is to match
Tryg Vesta will thus return a total amount of DKK 2,561m
the duration of the bond portfolio with that of the dis-
to shareholders. The overall distribution corresponds to a
count on technical provisions in order to minimise net
buffer at the minimum level for an A rating, that is, 5%.
interest rate risk. Standard & Poor’s applies a model-based
This is more than the previous buffer which was around
Together with ordinary dividends of DKK 1,156m,
discount approach, causing fluctuations relative to TrygVes-
2.5-3% of the minimum level.
ta’s discounting model. During 2007, TrygVesta had con-
tacts with Standard & Poor’s in this respect and has now
The share buyback will be implemented pursuant to the
adapted the capital model in accordance with the dis-
safe harbour rules when approved by the shareholders at
counting method regulated and approved by the Danish
TrygVesta’s annual general meeting on 3 April 2008 and
Financial Supervisory Authority. The changed discounting
is expected to run over four quarters.
TrygVesta Annual Report 2007 l Capitalisation and profit distribution l
41 of 152
Our business
Risk management
FINANCIAL RISK
Market risk
Being an insurance business, our concept is to create
peace of mind for our customers by helping them manage
and handle risk. Risk management is at the core of our
business, and it is therefore only natural that we also
The risk that volatility of financial markets impacts
focus in-house on managing the risks our operations
our results. Interest rate risk constitutes a major
expose us to. Structured and competent risk management
part of market risk. Interest rate risk is the risk of
is fundamental to maintaining our customers’ confidence
fluctuating market interest rates.
and living up to our vision of being perceived as the
leading peace-of-mind provider in the Nordic region.
Credit risk
The risk that we incur a loss due to failure by
our counterparties to meet their obligations
Insurance risk
Strategic risk
The risk of changes to the conditions under
which we operate, including changed legislation
Insurance risk is the financial risk we assume
when we sell insurance contracts. Insurance
or market conditions.
risk comprises:
Underwriting risk
The risk that claims at the end of an
insurance contract deviate significantly
from our assumptions when pricing at
inception of the contract.
Operational risk
The risk of errors or failures in internal procedures,
systems and processes, and risks that are not
covered by the financial risks and strategic risks.
Provisioning risk
We make technical provisions at the end of a
Capital and risk
period to cover expected future payments for
We rely on our capital base and financial strength to
losses already incurred. Provisioning risk is
assume risks from our customers and for our customers
the risk that future payments deviate signifi-
to be confident that we are able to meet our obligations
cantly from our assumptions when making
if and when they report a claim. Our aim is for our capital
the provisions.
base to match our risk profile and support natural growth.
42 of 152 l Risk management l TrygVesta Annual Report 2007
Risk management committee
Market and
credit risk
Investment risk
committee
Insurance and credit risk
Operational risk
Underwriting/
reinsurance
risk committee
Provisioning risk
committee
Operational risk
committee
We base our capital resources on relevant regulatory
• underwriting and reinsurance
requirements and our wish to maintain a rating of
• provisioning
A- from Standard & Poor’s. We regularly assess our
• investments, and
capital resources, including calculate our capital require-
• operational risk and security.
ment based on a model used by Standard & Poor’s. The
results of these calculations are posted quarterly at
The special committees report to the risk management
www.trygvesta.com. We also regurlarly assess capital and
committee, and their chairmen are also members of the
risk in our internal model, which simulates results of
risk management committee.
investments, insurance operations and reinsurance. We
use the model as the basis to evaluate investment strate-
The investment risk committee primarily handles areas of
gies and purchases of reinsurance and to determine risk-
risk related to the portfolio on the asset side, mainly mar-
based return requirements for the individual business
ket and credit risk. The underwriting and reinsurance com-
areas based on their specific risk profile.
mittee handles risk management in connection with deter-
mination of tariffs and reinsurance, mainly of an insurance
Risk management and control
and credit nature. The provisioning risk committee handles
Our Supervisory Board has overall responsibility for the
issues related to the determination of provisions, and the
Group’s risk management (see also the section on Corpo-
operational risk committee handles issues within fields such
rate governance). In 2007, our Supervisory Board revised
as errors or breakdowns of internal systems and processes.
the structure of its instructions in which it defines our risk
All committees focus on risk management and have no
management framework with the purpose of optimising
commercial responsibility.
the control, monitoring and handling of our present and
future risk exposure. The supreme body of this structure
Solvency II and Individual Solvency
is the risk management committee which, in addition to
The new EU solvency rules, Solvency II, which are
the Group CEO and Group CFO, consists of the persons
expected to come into force in 2012, will make it possible
responsible for the various risk management areas:
for companies such as TrygVesta with operations in sev-
insurance risk, investment risk and operational risk.
eral countries to benefit from the risk diversification that
In addition to the risk management committee we have
when determining their solvency requirements. We have
set up a number of special committees to handle the risk
for several years taken part in the Solvency II hearings
management process within the areas of
through the Danish Insurance Association, Forsikring &
Pension, and in 2007 we were involved in drafting QIS3
typically exists between different geographical areas
TrygVesta Annual Report 2007 l Risk management l
43 of 152
Our business
(cid:62)(cid:66)(cid:69)(cid:54)(cid:56)(cid:73)(cid:21)(cid:68)(cid:67)(cid:21)(cid:59)(cid:62)(cid:77)(cid:58)(cid:57)(cid:34)(cid:62)(cid:67)(cid:73)(cid:58)(cid:71)(cid:58)(cid:72)(cid:73)(cid:21)(cid:72)(cid:58)(cid:56)(cid:74)(cid:71)(cid:62)(cid:73)(cid:62)(cid:58)(cid:72)
(cid:39)(cid:37)(cid:37)(cid:37)
(cid:38)(cid:42)(cid:37)(cid:37)
(cid:38)(cid:37)(cid:37)(cid:37)
(cid:42)(cid:37)(cid:37)
(cid:37)
(cid:37)
(cid:34)(cid:42)(cid:37)(cid:37)
(cid:34)(cid:39)(cid:37)(cid:37)(cid:37) (cid:34)(cid:38)(cid:42)(cid:37)(cid:37) (cid:34)(cid:38)(cid:37)(cid:37)(cid:37) (cid:34)(cid:42)(cid:37)(cid:37)
(cid:34)(cid:38)(cid:37)(cid:37)(cid:37)
(cid:34)(cid:38)(cid:42)(cid:37)(cid:37)
(cid:34)(cid:39)(cid:37)(cid:37)(cid:37)
(cid:42)(cid:37)(cid:37)
(cid:38)(cid:37)(cid:37)(cid:37)
(cid:38)(cid:42)(cid:37)(cid:37)
(cid:39)(cid:37)(cid:37)(cid:37)
The figure illustrates the impact on the fixed-rate securities and discounted provisions
for claims based on simulated interest rate scenarios in TrygVesta’s ALM model with
the portfolios of bonds and provisions at 31 December 2007.
The calculation of the impact on our liabilities does not include provisions for claims
for TrygVesta Garanti, the Finnish and Swedish business and the provision for the
Norwegian pension liability.
The figure is based on simulation of 5,000 scenarios with a one-year horizon, with
90% of scenarios being within the light-blue frame.
The red line illustrates scenarios in which the impacts of interest rate changes on
assets and liabilities are mutually offsetting. The figure shows that 90% of all scenari-
os fall within a band corresponding to interest rate risk of less than DKK 140m. The
scenarios are scattered around a line sloping slightly less than that indicated. This is
because the portfolio of fixed-interest assets exceeds our provisions, and that the
provisions referred to above are excluded. The Norwegian pension provision is
discounted using a fixed rate, and interest rate changes therefore have no direct
(cid:69)(cid:90)(cid:103)(cid:91)(cid:90)(cid:88)(cid:105)(cid:21)(cid:98)(cid:86)(cid:105)(cid:88)(cid:93)
(cid:42)(cid:42)(cid:21)(cid:100)(cid:106)(cid:105)(cid:21)(cid:100)(cid:91)(cid:21)(cid:38)(cid:37)(cid:37)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:104)
impact on profits.
(cid:46)(cid:37)(cid:21)(cid:100)(cid:106)(cid:105)(cid:21)(cid:100)(cid:91)(cid:21)(cid:38)(cid:37)(cid:37)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:104)
(cid:46)(cid:37)(cid:21)(cid:100)(cid:106)(cid:105)(cid:21)(cid:100)(cid:91)(cid:21)(cid:38)(cid:37)(cid:37)(cid:21)(cid:110)(cid:90)(cid:86)(cid:103)(cid:104)
(Quantitative Impact Study), part of the preparatory work
cause us to incur losses on our insurance operations. An
for the final Solvency II directive. With these efforts and
excessive premium relative to the risk may cause us to
the work with our internal models we aim to provide the
lose competitive advantages and have an adverse effect
best possible preparation for the introduction of the new
on our business platform. Accordingly, we strive to strike
solvency rules.
the correct balance between risk and premium, and we
regularly follow up on our tariffs and pricing methods.
In preparation for the introduction on Solvency II, compa-
nies are required as from 1 January 2008 to make their
Provisioning risk
own determination of the necessary capital, the Individ-
After the period of the policy’s cover has expired, insur-
ual Solvency Requirement, and report it to the Danish
ance risk relates to the provisions for claims made to
Financial Supervisory Authority. For purposes of deter-
cover future payments on claims already incurred. The
mining the Individual Solvency Requirement we use our
size of the provisions for claims is determined both
internal model and Standard & Poor’s capital model in
through individual assessments and actuarial calculations.
combination with several other quantitative assessments.
We manage the risk that provisions for claims are incor-
Read more about Solvency II and Individual Solvency in
rectly determined by sophisticated models, controls and
the section TrygVesta and the external community.
follow-up in order to create the most exact match possi-
RISK TYPES
Insurance risk
ble between provisions and claims expenses and to
reduce unforeseen liabilities.
Up to December 2007, provisions for claims relating to
Insurance risk is the risk relating to our insurance opera-
annuities in Danish workers’ compensation insurance
tions. It is the most important risk that we are exposed
were calculated using the fixed-rate method, corres-
to. The risk comprises underwriting risk, that is, the risk
ponding to a real interest rate of 1%. As from December
related to the determination of premiums, and provision-
2007, the provisions for claims are discounted using the
ing risk, that is, the risk related to the assessment of
current market rate. This change exposes TrygVesta and
future payments to be covered by premiums received.
TrygVesta’s financial statements to explicit inflation risk in
case of changes in Danish wage inflation. We hedge such
Underwriting risk
risk using an inflation swap.
To manage underwriting risk we use tariffs as well as
business procedures and authorities for risks not covered
Our provisions for claims amounted to DKK 21,104m at
by a tariff. We use reinsurance to hedge large fluctuations
31 December 2007.
resulting from single events. Inadequate premiums may
44 of 152 l Risk management l TrygVesta Annual Report 2007
(cid:69)(cid:58)(cid:71)(cid:59)(cid:68)(cid:71)(cid:66)(cid:54)(cid:67)(cid:56)(cid:58)(cid:21)(cid:68)(cid:59)(cid:21)(cid:73)(cid:71)(cid:78)(cid:60)(cid:75)(cid:58)(cid:72)(cid:73)(cid:54)(cid:28)(cid:72)(cid:21)(cid:72)(cid:61)(cid:54)(cid:71)(cid:58)(cid:21)
(cid:69)(cid:68)(cid:71)(cid:73)(cid:59)(cid:68)(cid:65)(cid:62)(cid:68)(cid:21)(cid:71)(cid:58)(cid:65)(cid:54)(cid:73)(cid:62)(cid:75)(cid:75)(cid:58)(cid:21)(cid:73)(cid:68)(cid:21)(cid:76)(cid:58)(cid:62)(cid:60)(cid:61)(cid:73)(cid:58)(cid:57)(cid:21)(cid:62)(cid:67)(cid:57)(cid:58)(cid:77)
(cid:38)(cid:46)(cid:42)
(cid:38)(cid:45)(cid:42)
(cid:38)(cid:44)(cid:42)
(cid:38)(cid:43)(cid:42)
(cid:38)(cid:42)(cid:42)
(cid:38)(cid:41)(cid:42)
(cid:38)(cid:40)(cid:42)
(cid:38)(cid:39)(cid:42)
(cid:38)(cid:38)(cid:42)
(cid:38)(cid:37)(cid:42)
(cid:46)(cid:42)
(cid:40) (cid:38)(cid:35)(cid:37) (cid:45)(cid:35)(cid:39) (cid:37) (cid:37) (cid:43)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:43)
(cid:39) (cid:45)(cid:35)(cid:37) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:44)
(cid:40) (cid:38)(cid:35)(cid:37) (cid:45)(cid:35)(cid:39) (cid:37) (cid:37) (cid:44)
(cid:40) (cid:38)(cid:35)(cid:37) (cid:45)(cid:35)(cid:39) (cid:37) (cid:37) (cid:42)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:42)
(cid:39) (cid:45)(cid:35)(cid:37) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:43)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:44)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:41)
(cid:39) (cid:45)(cid:35)(cid:37) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:42)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:40)
(cid:39) (cid:46)(cid:35)(cid:37) (cid:39)(cid:35)(cid:39) (cid:37) (cid:37) (cid:41)
(cid:40) (cid:38)(cid:35)(cid:37) (cid:45)(cid:35)(cid:39) (cid:37) (cid:37) (cid:41)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:37)(cid:35)(cid:39) (cid:37) (cid:37) (cid:43)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:37)(cid:35)(cid:39) (cid:37) (cid:37) (cid:42)
(cid:40) (cid:37)(cid:35)(cid:37) (cid:41)(cid:35)(cid:39) (cid:37) (cid:37) (cid:43)
(cid:40) (cid:37)(cid:35)(cid:37) (cid:43)(cid:35)(cid:39) (cid:37) (cid:37) (cid:43)
(cid:40) (cid:37)(cid:35)(cid:37) (cid:41)(cid:35)(cid:39) (cid:37) (cid:37) (cid:44)
(cid:40) (cid:37)(cid:35)(cid:37) (cid:43)(cid:35)(cid:39) (cid:37) (cid:37) (cid:44)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:37)(cid:35)(cid:39) (cid:37) (cid:37) (cid:44)
(cid:40) (cid:37)(cid:35)(cid:37) (cid:41)(cid:35)(cid:39) (cid:37) (cid:37) (cid:42)
(cid:40) (cid:37)(cid:35)(cid:37) (cid:43)(cid:35)(cid:39) (cid:37) (cid:37) (cid:42)
(cid:40) (cid:38)(cid:35)(cid:38) (cid:37)(cid:35)(cid:39) (cid:37) (cid:37) (cid:41)
(cid:40) (cid:37)(cid:35)(cid:37) (cid:41)(cid:35)(cid:39) (cid:37) (cid:37) (cid:41)
(cid:40) (cid:37)(cid:35)(cid:37) (cid:43)(cid:35)(cid:39) (cid:37) (cid:37) (cid:41)
Weighted index (incl. dividend) in local currency
TrygVesta's share portfolio
Reinsurance
retention on a single claim of DKK/NOK 50m and with
We use reinsurance as an important element of our day-
cover up to a maximum of DKK1.4 bn/NOK 1.6bn. For
to-day risk management supported by the internal model,
property risks exceeding the upper level, we buy individ-
which we use for assessing the impact of different rein-
ual reinsurance. Other lines covered by reinsurance
surance alternatives.
include liability and motor, marine, fish farms and guaran-
In order to have protection against natural disaster risks, we
tee insurance.
maintain cover in 2008 of up to DKK 4.5bn with retentions
Although we have systematically used reinsurance to elim-
of DKK 100m in Denmark and NOK 100m in Norway. The
inate unwanted insurance risk, one single area remains.
level of cover was determined based on the risk exposure
Exposure to terrorist losses of a biological, chemical or
of the Group’s portfolio, using simulation models. These
radioactive character can only be covered partly by reinsur-
models suggest that a loss in excess of DKK 4.5bn occurs
ance today. Although we deem the occurrence of this
less often than once every 250 years. Our exposure to nat-
type of losses with a catastrophic scope very unlikely, we
ural disasters in Norway is furthermore limited through our
are working actively within the Danish Insurance Associa-
participation in the Norwegian Pool of Natural Perils.
tion with a view to establishing a national arrangement
for such losses. We expect a solution during 2008.
Our catastrophe reinsurance programme also covers other
catastrophe events, including terrorist-related events, for
Market risk
up to DKK 3.75bn, with terrorist events being covered for
Market risk is the risk that volatility in the financial markets
buildings, building contents and consequential loss for
will impact our results of operations and thus our financial
risks with a total insured value of up to DKK 500m. We
position. We define the asset mix based on the instruc-
have bought catastrophe reinsurance up to DKK 1.5bn for
tions approved by the Supervisory Board, including limits
our personal accident and workers’ compensation policies
on types of assets and the geographic distribution and risk
with a retention of DKK 50m, covering the risk of multiple
profile of bonds, equities and real property for each com-
injuries from the same cause, including terror.
pany in the Group. Our asset mix and investment activities
focus mainly on interest rate risk, security and liquidity.
In addition to reinsuring catastrophe events, we also buy
protection for certain lines for which experience has
Interest rate risk
shown that claims vary considerably. The Group’s Corpo-
Fluctuating interest rate levels is a very important market
rate portfolio includes very large property risks in Den-
risk to which we are exposed. Interest rate changes affect
mark and Norway. We have bought reinsurance in the
our investment assets as well as our provisions for claims,
Danish and Norwegian markets for these policies with a
both of which are stated at market values. If interest rates
TrygVesta Annual Report 2007 l Risk management l
45 of 152
Our business
(cid:55)(cid:71)(cid:58)(cid:54)(cid:64)(cid:57)(cid:68)(cid:76)(cid:67)(cid:21)(cid:68)(cid:59)(cid:21)(cid:69)(cid:71)(cid:58)(cid:66)(cid:62)(cid:74)(cid:66)(cid:72)(cid:21)
(cid:56)(cid:58)(cid:57)(cid:58)(cid:57)(cid:21)(cid:55)(cid:78)(cid:21)(cid:71)(cid:58)(cid:62)(cid:67)(cid:72)(cid:74)(cid:71)(cid:58)(cid:71)(cid:188)(cid:72)(cid:21)(cid:71)(cid:54)(cid:73)(cid:62)(cid:67)(cid:60)
(cid:55)(cid:71)(cid:58)(cid:54)(cid:64)(cid:57)(cid:68)(cid:76)(cid:67)(cid:21)(cid:68)(cid:59)(cid:21)(cid:55)(cid:54)(cid:65)(cid:54)(cid:67)(cid:56)(cid:58)(cid:72)(cid:21)(cid:76)(cid:62)(cid:73)(cid:61)(cid:21)
(cid:71)(cid:58)(cid:62)(cid:67)(cid:72)(cid:74)(cid:71)(cid:58)(cid:71)(cid:72)(cid:21)(cid:55)(cid:78)(cid:21)(cid:71)(cid:58)(cid:62)(cid:67)(cid:72)(cid:74)(cid:71)(cid:58)(cid:71)(cid:188)(cid:72)(cid:21)(cid:71)(cid:54)(cid:73)(cid:62)(cid:67)(cid:60)
(cid:55)(cid:55)(cid:55)
(cid:44)(cid:26)
(cid:54)(cid:54)(cid:54)
(cid:39)(cid:26)
(cid:54)
(cid:41)(cid:41)(cid:26)
(cid:54)(cid:54)
(cid:41)(cid:44)(cid:26)
(cid:55)(cid:55)(cid:55)
(cid:40)(cid:26)
(cid:55)(cid:55)
(cid:37)(cid:26) (cid:67)(cid:100)(cid:105)(cid:21)(cid:103)(cid:86)(cid:105)(cid:90)(cid:89)
(cid:45)(cid:26)
(cid:54)(cid:54)(cid:54)
(cid:43)(cid:26)
(cid:54)
(cid:40)(cid:39)(cid:26)
(cid:54)(cid:54)
(cid:42)(cid:38)(cid:26)
The figure shows the distribution on ratings of premiums ceded
The figure shows the distribution of receivables including
under the reinsurance programmes in 2007. We primarily cede
receivables from reinsurers, in aggregate DKK 1,189m. Of these,
premiums to reinsurers rated A or above.
89% are held by companies rated A or above.
fall, the value of the Group’s bond portfolio would rise,
The equity portfolio primarily focuses on the large, liquid
while a lower interest rate would at the same time cause
equity markets in Europe, the USA and Japan. We have
the provisions for claims to rise. Fluctuating interest rates
defined a strategy with relatively little exposure in the
thus impact the financial results in two opposite directions,
Nordic region (around 23% at 31 December 2007) in
and the risk of profit variations depends on the degree to
order to reduce company risk, because a few companies
which these two movements offset each other.
account for large parts of the markets in the two coun-
tries. Furthermore, we have tied each equity mandate to
Our portfolio of fixed-interest securities stood at DKK
a recognised benchmark, which we monitor closely. As
30.3bn at 31 December 2007, while the provisions for
shown in the graph on the previous page, the Group’s
claims discounted using a market rate amounted to DKK
portfolio tracks the benchmark, even outperforming it
19.7bn, net of reinsurance. The respective durations were
over time. The 25 largest equities in our portfolio account
1.9 and 3.0 years. The variation in duration is attributable
for some 31% of the total listed equity portfolio.
to our bond portfolio being significantly larger than the
discounted provisions. A parallel shift of interest rates of
Currency risk
1% would reduce the market value of our securities by
We are not subject to any significant currency risk. The
DKK 568m, while the opposite impact on provisions would
Group’s premium income in foreign currency is mostly
be DKK 547m, triggering a net impact of DKK 21m.
matched by claims and expenses in the same currencies,
primarily NOK, EUR, SEK and USD. We do not hedge the
In connection with the switch to discounting annuities in
remaining, limited currency risk in connection with future
Danish workers’ compensation using a market rate, the
cash flows in foreign currencies.
average duration of provisions discounted using a market
rate increased by 0.7 years to 3.0 years per 31 December
We use currency derivatives to hedge the risk of loss of
2007 with a corresponding increase in the duration of the
value of balance sheet items due to exchange rate fluctu-
bond portfolio to ensure continued matching interest rate
ations in accordance with a general hedge ratio of
sensitivity for assets and liabilities.
90-100 for each currency. We aim to hedge 98-100% of
the net book value of the Norwegian entity.
Other market risk
The equity and real property portfolios are exposed to
Based on the actual amount of balance sheet items in
changes in equity markets and real property markets,
foreign currencies and hedging as at 31 December 2007,
respectively. We manage such risk through investment lim-
15% depreciation in the exchange rate of an exposed
its for various asset classes. In certain circumstances, we
currency relative to DKK would result in a net loss of DKK
also use interest rate and equity derivatives in our invest-
39m because the loss on the balance sheet items of DKK
ment activities.
46 of 152 l Risk management l TrygVesta Annual Report 2007
Effect on equity of market changes at 31 December 2007
DKKm
Interest rate market – increase in interest rates of 1%
Impact on fixed interest securities 1)
Higher discounting of provisions for claims
Impact on Norwegian pension obligation
Equity market
Decrease of equity markets of 15% 2)
Impact arising from derivatives
Real property market
Decrease of real property markets of 15%
Currency market
Decrease of exposed currencies versus Danish kroner of 15%
Impact arising from derivatives
-568
547
193
-667
0
-385
-728
690
1) The impact is calculated on the basis of the option adjusted duration without correction for convexity.
2) See the section on Outlook regarding exposive to equity markets since mid January 2008.
729m would be offset by a gain of DKK 690m on the cur-
We have set up a data base for systematic registration of
rency hedging.
Credit risk
the major risks in the Group. Based on the data base, we
chart risks and draft contingency plans to handle key
areas each year such as the contingency plans in the
We are exposed to credit risk in connection with the col-
individual parts of the business to handle an event of
lection of receivables. In the case of the insurance opera-
prolonged IT breakdown.
tions, counterparties may be customers, suppliers or rein-
surers, while in connection with the investment activities,
Strategic risk
our primary counterparties are issuers of bonds and
Strategic risk is managed through a strategic planning
counterparties in other financial instruments.
process. The Supervisory Board defines the overall strat-
egy in the middle of the year within the framework of
Receivables from policyholders arise on an ongoing basis
the Group’s corporate vision, and the Group Executive
and amounted to DKK 901m or 5.3% of gross premiums
Management uses this as the basis for further strategy
at 31 December 2007. The risk related to receivables from
work. The balanced scorecard is used as a tool in this
customers is limited because the insurance cover lapses if
work to ensure current follow-up on the strategy and the
they fail to pay.
initiatives launched in the business areas. During the
year, the strategy is managed in Executive Management
The sub-prime crisis in 2007 emphasised the importance
meetings and meetings to follow up on the balanced
of managing risk, including credit risk. The crisis affected
scorecard performance by business areas and staff func-
the financial markets, but TrygVesta has no investments
tions. We also continuously monitor the market to ensure
in sub-prime loans, CDOs and similar products. Read more
that we have an up-to-date basis for our assessment of
in the section on Investment activities.
external conditions, be it our competitors’ market initia-
tives, new legislation or other external factors that may
Operational risk
impact the Group.
As operational risks are mainly internal, we focus on
establishing a satisfactory controlling environment in the
Group’s operations. In practice, we organise this work
through a structure of procedures and guidelines that
cover different aspects of the Group’s operations.
TrygVesta Annual Report 2007 l Risk management l
47 of 152
Corporate governance
“We emphasise open and honest communication
with all stakeholders, and we reply to all enquiries
in a accommodating manner”
48 of 152 l Corporate governance l TrygVesta Annual Report 2007
Corporate governance
TrygVesta Annual Report 2007 l Corporate governance l
49 of 152
Corporate governance
Corporate governance
In 2007, TrygVesta’s Supervisory Board focused on creating
at www.trygvesta.com, which also offers stakeholders
more room for forward-looking activities at Board meet-
to receive the latest news as RSS feeds or to download
ings and at the annual Board seminar. This was done
webcasts and teleconferences as Podcasts. TrygVesta
without neglecting the Board’s follow-up and supervisory
continuously seeks to make the website more user-
duties. In its work, the Group Executive Management
friendly and improve its contents.
focused on involving the Group’s other management staff
in the strategic efforts to ensure quality and ownership
TrygVesta has adopted a number of guidelines and policies
and to facilitate implementation of the strategy at an
in order to ensure that we provide correct and adequate
even faster pace.
information to all the Group’s stakeholders. In 2007,
Tryg Vesta worked on defining a CSR (Corporate Social
The Supervisory Board believes that TrygVesta complies
Responsibility) policy and set up a CSR organisation with
with the corporate governance recommendations pub-
a CSR board chaired by our Group CEO. The CSR board will
lished by OMX Nordic Exchange Copenhagen. The Super-
report to the Supervisory Board once a year.
visory Board considers that each Board member has ade-
quate time and resources to serve as a Board member of
The Supervisory Board regularly considers the adequacy
TrygVesta in a satisfactory manner.
of TrygVesta’s capital structure to align it with the inter-
Stakeholders
ests of the Group and of our shareholders and to ensure
compliance with the requirements applicable to TrygVesta
TrygVesta strives to develop and maintain strong relations
as a financial undertaking. The Supervisory Board opti-
to all relevant stakeholders as they are key to the Group’s
mises our capitalisation on an ongoing basis while duly
future performance and potential. This includes that we
safeguarding the interests of our policyholders and
emphasise open and honest communication, and that we
shareholders and leaving the Group sufficient scope in
reply to all enquiries in an accommodating manner.
which to develop and grow.
TrygVesta issues press releases and company announce-
The Supervisory Board intends to consider any public
ments on a regular basis and publishes quarterly and
takeover bid that may be made as prescribed by legisla-
half-year interim reports and annual reports in order
tion and, depending on the nature of such bid, to con-
to best enable stakeholders to form an adequate impres-
vene an extraordinary general meeting of shareholders in
sion of the Group and its performance. All financial
accordance with applicable requirements and rules.
announcements are released simultaneously in Danish
TrygVesta’s annual general meeting is held every year
and English. Management organises regular investor
before the end of April. The Supervisory Board convenes
presentations, live teleconferences and webcasts in a
the annual general meeting giving not less than eight
partnership with Investor Relations. All material is available
days’ notice. Shareholders may register to receive an elec-
50 of 152 l Corporate governance l TrygVesta Annual Report 2007
tronic notice of the general meeting. The notice includes
the time and place of the meeting and sets out the agenda,
The composition of the Supervisory Board
which as a minimum comprises the following items:
The Supervisory Board has 12 members, including eight
members elected by the shareholders for a term of one
• Report of the Supervisory Board on the activities
year. Four of the eight members are non-affiliated. The
of the company during the past financial year
Supervisory Board is composed as follows:
• Presentation of the annual report for approval,
including determination of the Supervisory Board’s
• four members are elected among the members
remuneration
of the Supervisory Board of Tryg i Danmark smba
• Adoption of a resolution as to the distribution of
• four members are elected among candidates without
profit or covering of loss, as the case may be,
any affiliation with Tryg i Danmark smba, and
according to the annual report
• four representatives are elected among the employees,
• Any proposals from the Supervisory Board or
who according to agreement in 2007 between the
from shareholders
Danish and Norwegian employee associations include
• Election of members to the Supervisory Board
two representatives of the Group’s Danish employees
• Appointment of auditors
• Any other business
and two representativeS of the Norwegian employees.
The chairman and the deputy chairman are in charge of
Further details to the notice of the meeting can be found
the Supervisory Board’s work.
in the complete proposals, which are available for down-
load at www.trygvesta.com and to all shareholders on
To ensure replacement on the Supervisory Board, mem-
request. The complete proposals also include the Supervi-
bers elected by the shareholders may hold office for a
sory Board’s proposed dividend payment with respect to
maximum of nine years. Furthermore, members of the
the past financial year.
Supervisory Board must retire at the first general meeting
following their 70th birthday.
All shareholders are urged to attend the annual general
meeting. Shareholders may vote in person at the general
Prior to the election of new members, the Supervisory
meeting or appoint the Supervisory Board or a third party
Board prepares a description of the candidates’ background
as their proxy. TrygVesta makes a proxy form to the Super-
as part of the final proposals to be submitted to sharehold-
visory Board available, which allows shareholders to decide
ers at the annual general meeting. The description outlines
on the individual items of the agenda. The proxy form will
the recruitment criteria established, including requirements
be available at www.trygvesta.com from 14 March 2008.
with respect to the candidates’ professional qualifications
and international experience. When taking up office, new
TrygVesta Annual Report 2007 l Corporate governance l
51 of 152
Corporate governance
Board members are given an introduction to the Group.
The audit committee works with historical data, and it is
Information about Board members’ profiles and sharehold-
not involved in forward-looking events such as outlook and
ings is set out in the section on Members of the Supervisory
budgets. The audit committee shall to a reasonable extent
Board and is also available at www.trygvesta.com.
discuss and review with management significant financial
information in the Group’s financial statements.
Board committees
The Supervisory Board has set up an audit committee.
The audit committee meets at least four times a year and
The three-member committee is chaired by an independ-
reports to the Supervisory Board on a regular basis. The
ent member of the Supervisory Board. In 2007, members
committee makes an annual assessment of the preceding
of the audit committee were Bodil Nyboe Andersen
year’s work to assess if any changes should be made to its
(chairman), Per Skov and Håkon J. Huseklepp.
areas of responsibility.
The audit committee supports the Supervisory Board in
The Supervisory Board does not have a nomination committee,
its work with and supervision of:
but in 2007 the chairman and deputy chairman functioned as
the nomination committee without receiving any fees.
• the annual report, including checking the accuracy
of financial information disclosed in the annual report,
Tasks and responsibilities of the Board
and ensuring that accounting policies are relevant
The Supervisory Board is responsible for the overall man-
and applied consistently
agement and financial control of TrygVesta. In this work,
• internal control and risk management. In this context
the Supervisory Board uses targets and framework man-
the audit committee reviews and assesses manage-
agement based on regular and systematic consideration of
ment’s guidelines for identifying, monitoring and
strategies and risks.
managing the most important risks at least once a
year, including an assessment and review of internal
The Executive Management reports regularly to the Supervisory
control and risk management systems
Board on strategies and action plans, market developments
• internal and external audit, including a review and dis-
and the Group’s performance, funding issues, capital resources
cussion of the results of the work of the internal and
and special risks. The Supervisory Board cooperates with the
external auditors and the auditors’ observations and
Executive Management on a regular basis to ensure develop-
conclusions. The committee supervises management’s
ment of and follow-up on the Group’s strategies.
follow-up on the recommendations to management
reported by the internal and external auditors
The Supervisory Board holds at least six annual meetings
• the Group being monitored by independent auditors.
and an annual strategy seminar to discuss and define strat-
egies and goals for the years ahead.
52 of 152 l Corporate governance l TrygVesta Annual Report 2007
The Supervisory Board carries out an annual evaluation of
Risk management
the work and results of the Executive Management and
TrygVesta is an insurance group subject to the require-
of the cooperation between the Supervisory Board and
ments of the Danish Financial Business Act on risk man-
the Executive Management. The Supervisory Board also
agement and the involvement of the Supervisory Board
reviews and approves the rules of procedure of the
and the Executive Management. The Supervisory Board
Supervisory Board and the Executive Management each
defines the framework for risk management in TrygVesta
year to ensure they are consistent with TrygVesta’s
with respect to insurance risk/reinsurance, investment risk
requirements. In the rules of procedure, the Supervisory
and operational risk, including IT security. This framework
Board has defined an evaluation procedure providing for
is then implemented in risk policies that define detailed
the work and results of the Supervisory Board, the chair-
guidelines for the Group’s risk management. The risk
man of the Supervisory Board and the individual members
management committee comprising the Group CEO,
and for the composition of the Supervisory Board to be
Group CFO and selected senior executives monitors the
assessed for the purpose of optimising the Board’s work.
risk management environment. The Executive Manage-
The evaluation procedure includes individual interviews to
ment reports to the Supervisory Board on how the frame-
be held in January between the chairman of the Supervi-
work for the Group’s risk management is implemented.
sory Board and the individual members and a discussion
A more detailed review of the Group’s risk management
of the overall results of these interviews at the first
principles is set out in the section on Risk management
subsequent Board meeting.
and at www.trygvesta.com.
The duties of the chairman and the deputy chairman of
Audit
the Supervisory Board are defined in the rules of procedure
The Supervisory Board ensures that the Group is moni-
of the Supervisory Board, and include preparing Board
tored by competent and independent auditors. Each year,
meetings and performing evaluations of the Supervisory
the annual general meeting appoints external auditors
Board’s work and the cooperation with the Executive Man-
recommended by the Supervisory Board. The Supervisory
agement. The chairman acts as spokesman for the Super-
Board, the audit committee and the Executive Manage-
visory Board for external purposes.
ment make a critical assessment of the auditors’ inde-
pendence and competence.
In 2007 the shareholders at the annual general meeting
authorised the Supervisory Board to buy own shares within
TrygVesta also has an internal audit department which
10% of the share capital up to the next annual general
reviews the quality of the Group’s internal control sys-
meeting. The Supervisory Board is also authorised to dis-
tems and business procedures on a regular basis and is
tribute extraordinary dividends pursuant to the rules of
responsible for planning, performing and reporting the
the Danish Public Companies Act.
audit work to the Supervisory Board. The internal and
TrygVesta Annual Report 2007 l Corporate governance l
53 of 152
Corporate governance
ExEcUTIVE MANAgEMENT AND gROUP ExE cUTIVE MANAgEMENT
References to the Executive Management are to the
tive Management of TrygVesta and the Executive Man-
Executive Management of TrygVesta, consisting of Stine
agement of TrygVesta Forsikring. In addition to Stine
Bosse, Morten Hübbe and Peter Falkenham. The guide-
Bosse, Morten Hübbe and Peter Falkenham, the Execu-
lines for incentive pay comprise only these persons.
tive Management of TrygVesta Forsikring consists of
The Group Executive Management comprises the Execu-
Lars Bonde, Kjerstin Fyllingen and Stig Ellkier-Pedersen.
external auditors’ long-form reports are reviewed by the
The remuneration includes an element of performance-
Supervisory Board.
related bonus and comprises a bonus plan providing for
up to three months’ additional salary (four months’ for
Remuneration policy for the Supervisory Board and
the Group CEO). The bonus is directly linked to achieve-
the Executive Management
ment of pre-defined benchmarks. The assessment of the
TrygVesta has adopted a policy with respect to remunera-
individual member’s target achievement includes the
tion of the members of the Supervisory Board and the Exec-
TrygVesta Group’s overall performance as well the indivi-
utive Management of TrygVesta A/S and has also prepared
dual member’s performance within the business area he
overall guidelines for an incentive structure, which will be
or she is responsible for. Specific benchmarks are defined
submitted for shareholder approval at the annual general
within all four perspectives of the balanced scorecard
meeting to be held on 3 April 2008. The complete text of
(financial, customer, processes and learning). These
the remuneration policy is posted at www.trygvesta.com.
benchmarks reflect the strategic focus areas of the Group
REMUNERATION OF THE SUPERVISORY BOARD 2007
Chairman
Deputy Chairman
Board member each
Total renumeration in total*
DKK 750,000
DKK 500,000
DKK 250,000
DKK 3,687,500
* Christian Brinch joined the Supervisory Board in March, and his
remuneration therefore only covers the last three quarters of 2007.
and the individual business areas, including growth, prof-
itability, cost reduction, customer satisfaction, customer
loyalty, image, processes, communication, employee sat-
isfaction and development, and innovation. Members of
the Executive Management may chosse to receive their
bonus by acquiring TrygVesta shares at a discount to the
market price or they may elect to receive a cash payment.
Members of the Executive Management who elect to
Members of the audit committee received a fee of DKK
receive their bonus by acquiring shares at a discount to
100,000 in 2007, and the chairman of the audit commit-
the market price can buy the shares at par with a total
tee received DKK 150,000.
discount equal to the bonus for which the individual
member is eligible. TrygVesta believes it is appropriate
Remuneration of the Executive Management
that part of the Executive Management’s remuneration
The Executive Management comprises three members.
consists of stock option based payment in order to
The remuneration paid to the Executive Management
ensure focus on share price performance and build loyalty
reflects a wish to secure a profitable and stable perform-
and motivation.
ance for the Group in the short term as well as in the
longer term, including to induce the Executive Manage-
Any grant of stock options is based on the principle that
ment to focus on increasing value creation for shareholders.
the exercise price may not be lower than the market price.
The most recent grant was based on the market price plus
10%. The annual dividends are deducted from the exercise
54 of 152 l Corporate governance l TrygVesta Annual Report 2007
REMUNERATION TO THE ExE cUTIVE MANAgEMENT FOR 2007
DKK
Basic salary
Bonus
Pension
car
Total
Stine Bosse
Morten Hübbe
Peter Falkenham
5,200,000
3,000,000
2,575,000
1,734,000
750,000
644,000
1,300,000
750,000
644,000
113,000
156,000
106,000
8,347,000
4,656,000
3,969,000
Share
options
13,527
7,101
5,072
price. Options cannot be exercised earlier than three years
TrygVesta are offered a performance-related bonus of up to
after the date of grant and not later than five years after
three months’ salary. Executives may elect to receive the
the date of grant. Exercise must take place during the
bonus as shares at a discount to the market price or in cash.
open trading windows in connection with the full-year and
Furthermore, TrygVesta has set up a stock option pro-
half-year profit announcements. On exercise, the value of
gramme for certain senior executives and employees to
the options calculated as the difference between the exer-
reward outstanding performance.
cise price and the market price must not exceed 200% of
the recipient’s fixed annual salary.
In 2007, TrygVesta granted 91,039 stock options to the
Group Executive Management and senior executives and
The Supervisory Board granted 25,700 stock options to
18,000 stock options to employees to reward outstand-
the Executive Management in 2007, entitling the holders
ing performance. Options granted in 2007 entitle the
to acquire shares at the average price of TrygVesta shares
holders to acquire shares at the average price of
(“all trades”) on OMX Nordic Exchange Copenhagen on
TrygVesta shares (“all trades”) on OMX Nordic Exchange
27 February 2007 which was DKK 456.76 plus a 10%
Copenhagen on 27 February 2007 plus a supplement of
supplement. The options were granted on 28 February
10%, and each option entitles the holder to acquire one
2007, and each option entitles the holder to acquire one
share at the exercise price. Options cannot be exercised
share at the exercise price. We buy treasury shares to
earlier than three years after the date of grant and not
cover our stock option programmes.
later than five years after the date of grant. TrygVesta
expects to grant a stock option programme of a similar
Members of the Executive Management are also entitled to
value in 2008.
company cars. A contribution of 25% of the fixed salary of
the Executive Management is paid into a pension scheme.
Employee bonus
It is important to TrygVesta that all employees see their
Members of the Executive Management are entitled to 12
own efforts relative to the Group’s overall targets, and for
months’ notice of termination and to 12 months’ sever-
this purpose we have an employee bonus programme for
ance pay. However, the Group CEO is entitled to 12
all employees. Employee bonus benchmarks were com-
months’ notice of termination and to 18 months’ sever-
bined ratio and growth in 2007, and our performance
ance pay plus pension contributions during such period.
triggered shares at a discount to the market price with a
discount element equal to DKK 10,000 to each employee.
Incentive pay to the group Executive Management
A similar programme will be offered in 2008.
and senior executives
Like the Executive Management, the remaining members of
the Group Executive Management and senior executives of
TrygVesta Annual Report 2007 l Corporate governance l
55 of 152
Corporate governance
Supervisory Board
Peter Wagner Mollerup
Mikael Olufsen
Chairman
Niels Bjørn Christiansen
John R. Frederiksen
Håkon J. Huseklepp
Bodil Nyboe Andersen
Deputy Chairman
Birthe Petersen
56 of 152 l Supervisory Board l TrygVesta Annual Report 2007
Christian Brinch
Paul Bergqvist
Per Skov
Trond Christiansen
Jørn Wendel Andersen
TrygVesta Annual Report 2007 l Supervisory Board l
57 of 152
Corporate governance
Supervisory Board
Mikael Olufsen
Chairman
Born 1943
Joined the Supervisory Board
in 2002
Ms Nyboe Andersen has competencies within
Mr Bergqvist has international and Nordic
the areas of management, strategy, treasury
management experience in strategic develop-
and financial business from her former positions
ment, complex transactions, development of
as Chairman of The Board of Governors of
new markets, marketing, sales and financial
Danmarks Nationalbank and Managing Director
management.
of Andelsbanken in the 1980s.
Number of shares held in TrygVesta: 100
Professional board member. Former CEO
of Toms Chokoladefabrikker A/S.
Educational background: MSc (Forestry);
PMD Harvard Business School.
Chairman of Tryg i Danmark smba,
TrygVesta A/S, TrygVesta Forsikring A/S, Mala
Plast Co. Ltd. Bangkok, Advisory Board of Care-
Works Africa Ltd. and The Danish Rheumatism
Association.
Number of shares held in TrygVesta: 100
Jørn Wendel Andersen
CFO, Arla Foods amba
Born 1951
Joined the Supervisory Board
in 2002
Deputy chairman of the Board of Trustees
Educational background: MSc (Business Eco-
of the Egmont Foundation. Deputy chairman of
nomics), IMD Executive Development Programme,
Christian Brinch
Born 1946, Norwegian citizen
Joined the Supervisory Board
in 2007
Chief executive of his own business.
Professional board member. Former
President and CEO of Helicopter Services
Group ASA and Executive Vice President
Egmont International Holding A/S, Ejendoms-
IMD “Strategy in Action” Programme, and
of ABB Norge.
selskabet Gothersgade 55 ApS and Ejendoms-
Leader ship Assessment – Heidrick & Struggles.
selskabet Vognmagergade 11 ApS.
Chairman of Arla Insurance Company
Board member of WWF in Denmark, British
(Guernsey) Ltd. (Captive), Arla Foods Finance
Import Union and Danmark-Amerika Fondet.
A/S and Fidan A/S.
Mr Olufsen has experience in managing large
Board member of Tryg i Danmark smba,
Educational background: Norway’s naval
academy, PMD Harvard Business School.
Chairman of Hafslund ASA and Scandinavian
Property Development ASA.
Deputy chairman of Prosafe ASA, Technor
international companies, including in strategic
Tryg Vesta A/S, TrygVesta Forsikring A/S,
ASA and NSB AS.
development. In addition, Mr Olufsen has
Arla Foods AB, AF A/S, Tholstrup Cheese A/S,
experience as a board member of Danish and
Tholstrup Cheese Holding A/S, Tholstrup
international companies.
Taulov A/S and Medipharm AB.
Number of shares held in TrygVesta: 1,918
Mr Wendel Andersen has experience in inter-
Bodil Nyboe Andersen
Deputy Chairman
Born 1940
Joined the Supervisory Board
in 2006
Former Chairman of the Board of
Governors, Danmarks Nationalbank
(Danish Central Bank)
Educational background: MSc (Economics).
Chairman of The University of Copenhagen,
The Danish Red Cross and The Laurids Ander-
sens Foundation.
national management, strategy, finance, treasury,
IT and project management from his current
position as CFO of Arla Foods.
Number of shares held in TrygVesta: 1,078
Paul Bergqvist
Born 1946, Swedish citizen
Joined the Supervisory Board
in 2006
Professional board member.
Former CEO of Carlsberg A/S.
Educational background: Economist, engineer.
Chairman of Carlsberg, Sweden, and Svenska
Deputy chairman of TrygVesta A/S, TrygVesta
Byggareföreningen, East Capital Explorer AB
Forsikring A/S and The Danish Film Institute.
and HTC AB.
Board member of The Villum Kann Rasmussen
Board member of TrygVesta A/S, TrygVesta
Foundation, The Danish-Norwegian Collaboration
Foundation and Energiteknologisk udviklings-
og Demonstrations Program.
Chairman of the audit committee of
TrygVesta A/S.
Forsikring A/S, Baltica Beverages Holding (BBH),
Telenor ASA, City mail AB, Amber Fund, Lantmän-
nen, Pieno Zyaigzdios, Nova Linija and Unibake.
Board member of TrygVesta A/S, TrygVesta
Forsikring A/S, Steen & Strøm ASA, Sørco
Gruppen ASA and Thor Dahl Shipping AS.
Mr Brinch runs his own business providing
strategic consulting and board services.
Mr Brinch has experience and knowledge within
the areas of strategic development, branding,
distribution and consulting services, including
with respect to board work.
Number of shares held in TrygVesta: 500
Trond Christiansen
Born 1945, Norwegian citizen
Joined the Supervisory Board
in 2003
Senior corporate adviser and shop
steward of TrygVesta Forsikring A/S.
Educational background: Certified insurer.
Board member of TrygVesta A/S and
Tryg Vesta Forsikring A/S.
Number of shares held in TrygVesta: 0
58 of 152 l Supervisory Board l TrygVesta Annual Report 2007
Niels Bjørn Christiansen
Born 1966
Joined the Supervisory Board
in 2006
Executive Vice President and COO,
Danfoss A/S. Former Executive Vice
President and COO, GN Store Nord A/S.
Educational background: B.Sc., E.E.,
MSc (Engineering), MBA Insead.
Chairman of Danfoss Compressors Holding A/S
and Danfoss Industries Private Limited, India.
Deputy chairman of Danfoss (Tianjin)
Limited, China.
Board member of TrygVesta A/S, TrygVesta
Forsikring A/S, Bang & Olufsen A/S, Axcel A/S,
The Danish Management Society, Danfoss Uni-
verse, Foss A/S, Business Minds, Danfoss Distri-
bution Services A/S, Danfoss Drives A/S, Dan-
foss Ejendomsselskab A/S, Danfoss innovation
A/S, Danfoss International A/S, Danfoss Com-
mercial Compressors S.A., France, Danfoss Bau-
er GmbH, Germany, Thermia Värme AB, Sweden.
Mr Christiansen has experience with interna-
tional businesses, including from his work at
Danfoss and GN Store Nord A/S. This experi-
ence has provided him with competencies with-
in management, strategy, IT, processes, distri-
bution, innovation, production, finance and
private and listed companies.
Number of shares held in TrygVesta: 100
John R. Frederiksen
Born 1948
Joined the Supervisory Board
in 2002
CEO, Fortunen A/S, Oak Property Invest A/S
and Berco ApS. Former chief executive of
Jacob Holm & Sønner A/S and Bastionen A/S.
Educational background: Business training.
Chairman of Hellebo Park A/S, Ejendomssel-
skabet Storken A/S and Uglen A/S, Renoflex-
Gruppen A/S, Renholdningsselskabet af 1898,
SBS Rådgivning A/S, SBS Byfornyelse Smba,
Sjælsø Enterprise A/S, Sjælsø Gruppen A/S, Ejen-
domsforeningen Danmark and Komplementar-
selskabet Uglen ApS.
Board member of Tryg i Danmark smba,
TrygVesta A/S, TrygVesta Forsikring A/S,
Fortunen A/S, Freja Ejendomme A/S (Statens
Ejendomssalg A/S), Højgård Ejendomme A/S,
Oak Property Invest A/S, Renoflex-Gruppen A/S,
Chairman of The Association of Insurance
C.W. Obel Ejendomme A/S, C.W. Obel Projekt
Agents and Account Managers in TrygVesta
A/S, Ejendomsaktieselskabet Knud Højgaards
Forsikring A/S and The Association of Danish
Hus, Ejendomsaktieselskabet Helleholm, BERCO
Certified Insurers.
Deutschland GmbH, Invista Foundation Holding
Board member of TrygVesta A/S, TrygVesta For-
Company Limited SIPA (Scandinavian Interna-
sikring A/S and The Danish Financial Services Union.
tional Property Association) and Invista Founda-
Number of shares held in TrygVesta: 191
tion Property Trust Limited, Invista Foundation
Property Limited, Invista Foundation Property
No. 2 Limited, Invista European Real Estate
Trust SICAF, Grundejernes Investeringsfond and
Grundejernes Ejendomsselskab af 1972 ApS.
Member of the advisory board for Sparinvest
Property Fund K/S and the advisory board of
Ejendomsselskabet Norden 1 K/S.
Mr Frederiksen has experience within man-
Birthe Petersen
Elected by the employees
Born 1949
Joined the Supervisory Board
in 1996
agement, strategy and finance from serving as
Principal administrative officer of
chairman of a number of companies and other
TrygVesta Forsikring A/S.
positions, including with property companies.
Educational background: Diploma in business
Number of shares held in TrygVesta: 280
studies, management training programme of
Håkon J. Huseklepp
Elected by the employees
Born 1955, Norwegian citizen
Joined the Supervisory Board
in 2003
Senior corporate adviser of TrygVesta
Forsikring A/S.
Educational background: Five-year public
training with the Norwegian postal services,
certified insurer.
Board member of TrygVesta A/S, TrygVesta
Forsikring A/S, The Finance Sector Union of
TrygVesta, The Finance Sector Union of Norway
and Sogn og Fjordane Bustadbyggelag.
Member of the audit committee of
TrygVesta A/S.
Number of shares held in TrygVesta: 100
Peter Wagner Mollerup
Elected by the employees
Born 1966
Joined the Supervisory Board
in 2002
Commercial insurance agent with
TrygVesta Forsikring A/S
Educational background: Certified insurer,
travel agency guide, psychotherapist.
The Organisation of Danish Insurance Employees.
Board member of TrygVesta A/S, TrygVesta
Forsikring A/S and The Organisation of Danish
Insurance Employees.
Number of shares held in TrygVesta: 43
Per Skov
Born 1941
Joined the Supervisory Board
in 2002
Professional board member.
Former CEO of FDB.
Educational background: MSc (Economics),
management training at MIT.
Chairman of Utility Development A/S,
Nordlux A/S and Nordlux Holding A/S.
Deputy Chairman of Tryg i Danmark smba.
Board member of TrygVesta A/S, TrygVesta
Forsikring A/S, Dagrofa A/S, DSV A/S, Kemp &
Lauritzen A/S, Nordea Liv og Pension Livsfor-
sikringsselskab A/S.
Member of the audit committee of
TrygVesta A/S.
From his board work and former positions,
including as CEO of FDB, Mr Skov’s experience
emphasises management, strategy and finance.
Number of shares held in TrygVesta: 2,468
Unless otherwise stated, the Board Members are
Danish citizens.
TrygVesta Annual Report 2007 l Supervisory Board l
59 of 152
Corporate governance
Group Executive Management
Morten Hübbe
Lars Bonde
Peter Falkenham
Stine Bosse
Stig Ellkier-Pedersen
Kjerstin Fyllingen
60 of 152 l Group Executive Management l TrygVesta Annual Report 2007
Stine Bosse
Group CEO
Born 1960
Joined TrygVesta in 1987
Joined the Group Executive
Management in 1999
Educational background: LL.M., several
management training programmes, including
Insead and Wharton
Board seats: The Danish Insurance Associa-
tion (chairman), Hjertebarnsfonden (chairman),
TrygVesta IT A/S (chairman), TrygVesta Ejen-
domme A/S, Grundfos Management A/S, Poul
Due Jensens Fond
Number of shares held in TrygVesta: 2,244
Morten Hübbe
Group CFO
Born: 1972
Joined TrygVesta in 2002
Joined the Group Executive
Management in 2003
Educational background: BSc (International
Business Administration and Modern
Languages), MSc (Finance and Accounting),
management training at Wharton
Board seats: TrygVesta Garantiforsikring A/S
(chairman), Enter Forsikring AS (chairman), Try-
gVesta IT A/S (deputy chairman), Tryg Ejendom-
me A/S, Høyteknologisentret AS.
Number of shares held in TrygVesta: 1,896
Peter Falkenham
Member of the Group Executive
Management in charge of
Private & Commercial Denmark
Born 1958
Joined TrygVesta in 2000
Joined the Group Executive
Management in 2000
Kjerstin Fyllingen
Member of the Group Executive
Management in charge of
Private & Commercial Norway
Born 1958
Joined TrygVesta in 2006
Joined the Group Executive
Management in 2006
Educational background: BCom (Internation-
Educational background: Bachelor of
al Trade), MSc (Engineering), management
Business Administration and Master of
training programmes, including St. Gallen and
Management, Handelshøyskolen BI
Wharton.
Board seats: Enter Forsikring AS,
Board seats: Glunz & Jensen (chairman),
Finansnæringens Hovedorganisation,
Solar A/S (deputy chairman), Tryg Ejendomme
TrygVesta Almennyttige Stiftelse.
A/S, TrygVesta Garantiforsikring A/S,
Number of shares held in TrygVesta: 377
Danmarks Skibskredit A/S.
Number of shares held in TrygVesta: 224
Lars Bonde
Member of the Group Executive
Management in charge of
Corporate
Born 1965
Joined TrygVesta in 1998
Joined the Group Executive
Management in 2006
Educational background:
Insurance training, LL.M.
Stig Ellkier-Pedersen
Member of the Group Executive
Management in charge of New
Markets
Born 1947
Joined TrygVesta in 1999
Joined the Group Executive
Management in 2001
Educational background: Mechanical
engineer, several management training
programmes at Insead
Board seats: Forsikringsakademiet A/S
Number of shares held in TrygVesta: 483
(chairman), Fonden Forsikringsakademiet af
26/2 2003 (chairman), Enter Forsikring A/S,
The Danish Employers’ Association for the
Financial Sector, SOS International A/S.
Number of shares held in TrygVesta: 805
TrygVesta Annual Report 2007 l Group Executive Management l
61 of 152
Our customers
“We want our customers to feel well-informed and
confident in their communication with us. We have
launched a Nordic communication project with the
aim of improving and systematising written customer
communication throughout our Group”
62 of 152 l Our customers l TrygVesta Annual Report 2007
Our customers
TrygVesta Annual Report 2007 l Our customers l
63 of 152
Our customers
Our customers
We want our customers to perceive our peace-of-mind
Peace-of-mind provider – on a daily basis
provision every time they are in contact with us. To
In addition to setting written communication on the
achieve this, we need to have insight into and be con-
agenda in 2007, we also made an effort to enhance the
scious of our customers’ need for peace of mind and to
way we deal with customers on the telephone. All sales
give a high priority to loss prevention. We want to help
and customer service staff will attend in-house training
eliminate concerns and promote peace of mind for our
during 2007 and 2008 under the heading “Your role as a
customers. Focusing on this ambition, we launched a
peace-of-mind provider”. This training programme builds
number of initiatives in 2007 aimed at improving dialogue
on the success of our risk consultants training pro-
with our customers and helping them take action to pre-
gramme in the Corporate business area. The training pro-
vent damage and injury.
gramme is intended to provide all employees with a capa-
Nordic project to improve
customer communication
bility to act as a peace-of-mind provider that feeds
through to customers in day-to-day communications.
Customer perception of the advice and service provided is
The insurance industry is notorious for writing complex
an important element of the training process, and a
sentences and using fine print. We want to change that.
number of customers are therefore invited to evaluate
We want our customers to feel well-informed and confi-
their adviser after each call.
dent in their communication with us. Many customers
know us from our written communication only, and it is
Broadened range of customer concepts
therefore important for us that our customers understand
Our customer concepts are an important tool in enhan-
what we write.
cing customer loyalty. We develop our customer concepts
In the autumn of 2007 we launched a Nordic communica-
special insurance cover, additional benefits and discounts
tion project with the aim of improving and systematising
for customers who take out more than one product with
written customer communication throughout our Group.
TrygVesta. Surveys indicate that concept customers are
We intend for the project to lead to the formulation of
characterised by greater loyalty.
on an ongoing basis and add new benefits such as
corporate language guidelines which will be reflected in
all our future written communication. As part of the
project, we intend to establish a language organisation
and train a number of local language ambassadors who
will be able to support local communication projects in
the Group. The project will ensure that all customer docu-
ments have been systematically reviewed by 2010.
64 of 152 l Our customers l TrygVesta Annual Report 2007
We launched a number of new customer concepts in 2007:
EPSI surveys in 2007
Our ratings in the 2007 EPSI customer satisfaction surveys
• We launched the Peace-of-Mind Adviser in Denmark
improved for the entire Group.
and Norway at www.tryghedsraadgiveren.dk and www.
trygghetsraadgiveren.no, respectively. This is an inter-
In Denmark, we came in at the top half among our peers.
active advisory service offering good advice to every-
Our customer satisfaction ratings improved greatly from
one on how to prevent damage and injuries at home
2006. Our loyalty ratings were largely unchanged from
and how to protect your family. You can print check
last year’s ratings.
lists from the Peace-of-Mind Adviser and ask to receive
an SMS when the battery in your smoke alarm needs
In Norway, we scored second highest among our peers,
replacing. The website is also a good learning experi-
and we were the only large company that improved cus-
ence for children who may test themselves as fire
tomer satisfaction significantly from 2006. In particular,
chiefs or challenge others on their knowledge of fires
customers rated us better in the ‘value for money’ cate-
in the home.
gory. Our actual loyalty as measured in terms of renewal
rates increased steeply, while loyalty in the EPSI survey
• The Peace-of-Mind Shop is a service offered in
decreased slightly compared with 2006.
Denmark and Norway at www.tryghedsbutik.dk and
www.trygghetsbutikk.no, respectively. The site sells
Our customers in Finland remained some of the most
high-quality security products selected and tested
loyal and satisfied customers in the market. Compared
by our experts.
with the previous survey, we also improved our ratings
significantly in a number of other areas, such as satisfac-
• In October 2007 we launched an enhanced travel
tion which rated above the market average.
insurance to cover events that become excluded with
the reduced Danish public travel and health coverage.
2007 was the first time we participated in the EPSI rating
We also extend our annual travel insurance to cover
in Sweden. Our customer satisfaction rating in the Swedish
family members not living in the household who travel
market was very close to the market average. Our ‘value
together with the customer. Furthermore, it will
for money’ and loyalty ratings were higher than those
improve the possibilities for concept customers to
recorded by other players in the market.
cover travel companions.
Only three companies have a presence in more than one
market of the Nordic region: TrygVesta, Codan/Trygg-
Hansa and If. TrygVesta continued to record the highest
TrygVesta Annual Report 2007 l Our customers l
65 of 152
Our customers
overall customer satisfaction and loyalty score among the
In 2007, our websites www.tryg.dk and www.trygvesta.
Nordic companies.
no had 2.6m visitors against 3m in 2006, consisting of
1.7m at tryg.dk against 1.9m in 2006 and some 1m at
Major e-communication and self-service initiatives
trygvesta.no against 900,000 in 2006.
We want to offer our customers a much wider range of
self-service solutions and possibilities of communicating
Our Swedish website www.vesta.se, which was launched
electronically with us in the future. To drive this develop-
in June 2006, had some 182,000 visitors in 2007 against
ment we set up a Nordic e-business centre in 2007. In
some 23,000 in 2006. In Finland, we had a total of
addition to driving the Group’s self-service and electronic
88,532 visitors to Nordea’s TrygVesta pages against
communication projects, our e-business centre is in the
101,978 visitors in 2006.
process of creating a new common design for all our cor-
porate websites.
In order to further promote its profile, TrygVesta’s guaran-
tee business in Denmark, Norway and Sweden launched
We measure trends in the number of visitors to our
new websites in 2007. The guarantee business in Denmark
websites in all markets. A total of some 64,000 visitors
also changed its legal name from Dansk Kaution to
accessed www.trygvesta.com in 2007 compared with
TrygVesta Garantiforsikring to emphasise its affiliation with
some 51,000 in 2006. We will be relaunching
the rest of the Group. A website for the Finnish business
www.trygvesta.com in early 2008. This site primarily
will be launched in connection with the start-up of activi-
targets the financial community, the press, Nordic job
ties within guarantee business in Finland as from 2008.
seekers and others requiring information about the
Group. Features of the new website include more detailed
information about the Group’s performance, strategy and
business areas and make it easier for users to stay
updated.
66 of 152 l Our customers l TrygVesta Annual Report 2007
(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:21)(cid:72)(cid:74)(cid:71)(cid:75)(cid:58)(cid:78)(cid:21)(cid:183)(cid:21)(cid:57)(cid:58)(cid:67)(cid:66)(cid:54)(cid:71)(cid:64)(cid:21)
(cid:183)(cid:21)(cid:69)(cid:71)(cid:62)(cid:75)(cid:54)(cid:73)(cid:58)(cid:21)(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:72)(cid:21)(cid:38)(cid:30)
(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:21)(cid:72)(cid:74)(cid:71)(cid:75)(cid:54)(cid:78)(cid:21)(cid:183)(cid:21)(cid:67)(cid:68)(cid:71)(cid:76)(cid:54)(cid:78)
(cid:183)(cid:21)(cid:69)(cid:71)(cid:62)(cid:75)(cid:54)(cid:73)(cid:58)(cid:21)(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:72)(cid:21)(cid:38)(cid:30)
(cid:110)
(cid:105)
(cid:97)
(cid:86)
(cid:110)
(cid:100)
(cid:65)
(cid:46)(cid:37)
(cid:45)(cid:42)
(cid:45)(cid:37)
(cid:44)(cid:42)
(cid:44)(cid:37)
(cid:43)(cid:42)
(cid:43)(cid:37)
(cid:42)(cid:42)
(cid:42)(cid:37)
(cid:110)
(cid:105)
(cid:97)
(cid:86)
(cid:110)
(cid:100)
(cid:65)
(cid:45)(cid:42)
(cid:45)(cid:37)
(cid:44)(cid:42)
(cid:44)(cid:37)
(cid:43)(cid:42)
(cid:43)(cid:37)
(cid:42)(cid:42)
(cid:42)(cid:37)
(cid:41)(cid:42)
(cid:41)(cid:37)
(cid:44)(cid:37)
(cid:44)(cid:39)
(cid:44)(cid:41)
(cid:44)(cid:43)
(cid:44)(cid:45)
(cid:45)(cid:37)
(cid:45)(cid:39)
(cid:45)(cid:41)
(cid:45)(cid:43)
(cid:43)(cid:43)
(cid:43)(cid:44)
(cid:43)(cid:45)
(cid:43)(cid:46)
(cid:44)(cid:37)
(cid:44)(cid:38)
(cid:44)(cid:39)
(cid:44)(cid:40)
(cid:44)(cid:41)
(cid:72)(cid:86)(cid:105)(cid:94)(cid:104)(cid:91)(cid:86)(cid:88)(cid:105)(cid:94)(cid:100)(cid:99)
Satisfaction
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:43)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:38)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:39)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:43)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:38)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:39)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:40)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:41)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:42)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:40)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:62)(cid:99)(cid:89)(cid:106)(cid:104)(cid:105)(cid:103)(cid:110)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:43)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:62)(cid:99)(cid:89)(cid:106)(cid:104)(cid:105)(cid:103)(cid:110)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:21)(cid:72)(cid:74)(cid:71)(cid:75)(cid:58)(cid:78)(cid:21)(cid:183)(cid:21)(cid:59)(cid:62)(cid:67)(cid:65)(cid:54)(cid:67)(cid:57)
(cid:183)(cid:21)(cid:69)(cid:71)(cid:62)(cid:75)(cid:54)(cid:73)(cid:58)(cid:21)(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:72)(cid:21)(cid:38)(cid:30)
(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:21)(cid:72)(cid:74)(cid:71)(cid:75)(cid:58)(cid:78)(cid:21)(cid:183)(cid:21)(cid:72)(cid:76)(cid:58)(cid:57)(cid:58)(cid:67)
(cid:183)(cid:21)(cid:69)(cid:71)(cid:62)(cid:75)(cid:54)(cid:73)(cid:58)(cid:21)(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:72)(cid:21)(cid:38)(cid:30)
(cid:110)
(cid:105)
(cid:97)
(cid:86)
(cid:110)
(cid:100)
(cid:65)
(cid:44)(cid:46)
(cid:44)(cid:45)
(cid:44)(cid:44)
(cid:44)(cid:43)
(cid:44)(cid:42)
(cid:44)(cid:41)
(cid:44)(cid:40)
(cid:44)(cid:39)
(cid:44)(cid:38)
(cid:44)(cid:37)
(cid:43)(cid:46)
(cid:110)
(cid:105)
(cid:97)
(cid:86)
(cid:110)
(cid:100)
(cid:65)
(cid:45)(cid:39)
(cid:45)(cid:37)
(cid:44)(cid:45)
(cid:44)(cid:43)
(cid:44)(cid:41)
(cid:44)(cid:39)
(cid:44)(cid:37)
(cid:43)(cid:45)
(cid:43)(cid:43)
(cid:43)(cid:41)
(cid:43)(cid:39)
(cid:43)(cid:43)
(cid:43)(cid:45)
(cid:44)(cid:37)
(cid:44)(cid:39)
(cid:44)(cid:41)
(cid:44)(cid:43)
(cid:44)(cid:45)
(cid:43)(cid:39)
(cid:43)(cid:41)
(cid:43)(cid:43)
(cid:72)(cid:86)(cid:105)(cid:94)(cid:104)(cid:91)(cid:86)(cid:88)(cid:105)(cid:94)(cid:100)(cid:99)
(cid:43)(cid:45)
(cid:72)(cid:86)(cid:105)(cid:94)(cid:104)(cid:91)(cid:86)(cid:88)(cid:105)(cid:94)(cid:100)(cid:99)
(cid:44)(cid:37)
(cid:44)(cid:39)
(cid:44)(cid:41)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:43)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:38)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:39)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:40)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:41)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:62)(cid:99)(cid:89)(cid:106)(cid:104)(cid:105)(cid:103)(cid:110)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:38)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:39)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:40)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:41)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:42)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:43)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:44)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:62)(cid:99)(cid:89)(cid:106)(cid:104)(cid:105)(cid:103)(cid:110)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:74)(cid:72)(cid:73)(cid:68)(cid:66)(cid:58)(cid:71)(cid:21)(cid:72)(cid:74)(cid:71)(cid:75)(cid:58)(cid:78)(cid:21)(cid:183)(cid:21)(cid:72)(cid:56)(cid:54)(cid:67)(cid:57)(cid:62)(cid:67)(cid:54)(cid:75)(cid:62)(cid:54)(cid:21)(cid:39)(cid:30)
(cid:105)
(cid:90)
(cid:105)
(cid:94)
(cid:97)
(cid:86)
(cid:110)
(cid:100)
(cid:65)
(cid:44)(cid:45)
(cid:44)(cid:43)
(cid:44)(cid:41)
(cid:44)(cid:39)
(cid:44)(cid:37)
(cid:43)(cid:45)
(cid:43)(cid:43)
(cid:43)(cid:43)
(cid:43)(cid:45)
(cid:44)(cid:37)
(cid:44)(cid:39)
(cid:44)(cid:41)
(cid:44)(cid:43)
(cid:44)(cid:45)
(cid:72)(cid:86)(cid:105)(cid:94)(cid:104)(cid:91)(cid:86)(cid:88)(cid:105)(cid:94)(cid:100)(cid:99)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:43)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:38)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:90)(cid:105)(cid:94)(cid:105)(cid:100)(cid:103)(cid:21)(cid:39)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
1) Satisfaction and loyalty is reassured on a scale from 1-100.
Industry = average for all companies surveyed.
Source: EPSI Rating (EPSI is an independent non-profit
organisation for measuring customer satisfaction in
the Nordic region).
2) The benchmarks in the Nordic comparison are simple
averages of official EPSI country results for companies
with a presence in more than one Nordic market.
TrygVesta Annual Report 2007 l Our customers l
67 of 152
Our employees
“The need to work with employee
well-being and competency
development and to make these
efforts an integral part of our
business strategy has never
been greater”
68 of 152 l Our employees l TrygVesta Annual Report 2007
Our employees
TrygVesta Annual Report 2007 l Our employees l
69 of 152
Our employees
Our employees
Our employees are TrygVesta’s most important asset
Optimising the physical working environment
because they are our face to the customers in their eve-
TrygVesta wants to be a modern workplace that promotes
ryday experience of our provision of products and serv-
innovation, collaboration and our corporate values. Over
ices that offer peace of mind. The labour market contin-
the next two years, Danish and Norwegian firms of archi-
ued to tighten in 2007, and employers intensified their
tects and designers will work with TrygVesta to transform
efforts to retain and recruit the best employees. We
the physical office framework in Ballerup and Bergen into
launched a range of activities in 2007 designed to pre-
modern workplaces. Key words for the project are trust,
pare ourselves to meet the employees of the future and
security and transparency, which translate our values into
strengthen the Group as an attractive workplace.
a design framework. The modernisation efforts aim to
forge closer relations between employees and improve
TrygVesta’s HR efforts in the future
the work situation of individual employees. These aims
The need to work with employee well-being and compe-
will be reflected in open-plan office environments, quiet
tency development and to make these efforts an integral
rooms and café environments. The project is scheduled
part of our business strategy has never been greater. We
for completion by the end of 2010.
restructured the Group’s HR efforts in early 2007 with a
view to strengthening the HR area, creating a framework
Working with values and theme packages
for the classic HR disciplines that ensure management
We continued to work with our corporate values in 2007.
focus on employees and their skills. The new structure
The entire Group worked with theme packages of topical
enhances focus on management, competency and organ-
interest, the 2007 focus being on dilemmas, well-being
isational development, making HR work and the Group’s
and stress. The theme package dealing with dilemmas in
strategy and action plans more coherent.
everyday life aimed to make visible the relationship
between the Group’s values and actions using a dilemma
The new structure links TrygVesta’s Management Academy
game that was played locally in all departments. The
closely with our management secretariat, which is respon-
theme package dealing with well-being during a busy
sible for ensuring that developing our management
working day comprised an e-learning module about stress
resources ties in with our business strategy. Employee
and stress management as well as a game on well-being.
training has been moved to Corporate Branding to ensure
Both theme packages comprised a board game, which
a direct connection between branding and employee devel-
has proved to be an efficient tool to promote important
opment. HR administration, whose tasks include salary and
dialogue in the departments. The theme package dealing
negotiations, has been moved to Group Finance, which is
with well-being and stress also enhanced knowledge
already in charge of budgets and financial matters.
about how to handle busy periods and stress in the
Group and increased awareness of the risk of negative
70 of 152 l Our employees l TrygVesta Annual Report 2007
Group Finance
Corporate
branding
Group staff
Salary &
negotiations
DK
Salary &
negotiations
NO
TrygVesta
Academy
Organisational
Development
TrygVesta
Management
Academy
stress, enabling colleagues to help each other before
• In the autumn of 2007 we launched a large-scale
stress develops further. A theme package in 2008 will
training programme under the heading “Your role as a
deal with environmental issues.
peace-of-mind provider”, which will initially be attended
Status survey 2007
by customer service and sales staff. Subjects taught
include showing empathy and being attentive when
TrygVesta’s ambition is to be a development workplace
talking to customers. After the new peace-of-mind
where everybody is open to learning and improving on a
providers have completed the programme, we will
continuous basis. We conduct a status survey every two
follow up on their competencies with initiatives such as
years to stay focused on the activities launched in the
status talks and role plays. The programme will run
Group, determine employee satisfaction and follow up on
from September 2007 to May 2008.
our employees’ knowledge about the Group’s strategy,
values and balanced scorecard benchmarks. The status
• In the autumn of 2007 we also introduced a new
survey is also used as a tool in the follow up on results
training programme that is intended to contribute to
from the full-scale employee survey made in the intermedi-
promoting innovation competencies throughout the
ate years. The 2007 status survey indicated, among other
Group. The Innovation Driver programme was com-
things, that 90% of the Group’s employees were very
pleted by 16 employees in 2007. Our Innovation
satisfied or satisfied with working at TrygVesta. Further-
Drivers are intended to support innovation processes
more, employee knowledge of the Group’s strategy and
throughout the Group. Read more about Innovation
use of the balanced scorecard had increased significantly
Driver training in the feature articles.
compared with the 2006 employee survey. A full-scale
employee survey will be conducted in September 2008.
• In 2008, we intend to launch a Nordic talent develop-
ment programme for qualified and ambitious employees
Competency building
with good potential for building a career in our Group.
Today, nurturing employees is very much about creating
We will use a systematised process to identify, develop
the right basis for facilitating the development of the
and incentivise employees with management and project
competencies of each individual employee. At the same
management potential. The programme targets young
time, competency building helps us achieve our strategic
talented employees with management potential. The
goals and remain competitive. At TrygVesta, we want
programme is intended to build a Nordic talent pool of
human competencies to be on the agenda of all manag-
highly qualified candidates with potential to perform key
ers, and we want all employees to have a development
functions in the Group.
plan. We created several new employee training pro-
grammes in 2007, and we intend to continue this devel-
opment in the years ahead:
TrygVesta Annual Report 2007 l Our employees l
71 of 152
Our employees
New attractive employee initiatives and
We intend to perform an in-depth review of our recruit-
employee bonus
ment processes in all four Nordic countries in 2008. This
We want to be a healthy workplace where employees
will include charting the requirement for present and
thrive and enjoy working. We intend to launch a number
future skills and employee profiles. The project is carried
of initiatives in 2008 to enhance employee health and
out in a collaboration between a number of departments
well-being. These initiatives include making fruit available
in the Group.
for employees in all departments, an agreement with a
Nordic fitness chain, an extended health care plan and
The project is intended
organising family days and a corporate party in 2009.
• to simplify the process of recruiting the right employ-
ees and make it more efficient
As was the case in 2006, the 2007 employee bonus
• to reduce the number of employees who leave the
benchmarks were combined ratio and growth. For 2007
Group to join other companies
the bonus per employee will be DKK 10,000, which will
• to enhance the profiling of the Group’s values and
primarily be paid in the form of shares in Denmark. Read
communicate them better
more about TrygVesta’s bonus and incentive programme
• to enhance awareness of the Group as an attractive
in the section on Corporate governance.
workplace among students and other job seekers.
Recruitment and employee branding in the future
Initiatives designed to achieve these goals include
We want to improve our ability to retain and attract
restructuring our recruitment process, working with the
employees because this is vital in the present competitive
content and layout of job advertisements and being a
labour markets in the Nordic countries.
more pro-active participant at career fairs organised by
universities and business schools.
Key data
2007
2006
2005
2004
Number of employees (full-time)
Seniority (years)
Employee turnover (%)
Sickness absence (%)
3,814
12.0
9.99
4.38
3,808
12.8
7.15
4.31
3,694
13.1
6.14
4.24
3,728
13.1
4.15
4.18
72 of 152 l Our employees l TrygVesta Annual Report 2007
(cid:57)(cid:62)(cid:72)(cid:73)(cid:71)(cid:62)(cid:55)(cid:74)(cid:73)(cid:62)(cid:68)(cid:67)(cid:21)(cid:68)(cid:59)(cid:21)(cid:66)(cid:54)(cid:67)(cid:54)(cid:60)(cid:58)(cid:71)(cid:72)(cid:21)(cid:62)(cid:67)(cid:21)(cid:57)(cid:58)(cid:67)(cid:66)(cid:54)(cid:71)(cid:64)
(cid:57)(cid:62)(cid:72)(cid:73)(cid:71)(cid:62)(cid:55)(cid:74)(cid:73)(cid:62)(cid:68)(cid:67)(cid:21)(cid:68)(cid:59)(cid:21) (cid:66) (cid:54)(cid:67)(cid:54)(cid:60) (cid:58)(cid:71)(cid:72)(cid:21) (cid:62)(cid:67)(cid:21) (cid:67)(cid:68) (cid:71)(cid:76)(cid:54)(cid:78)
(cid:41)(cid:38)(cid:35)(cid:39)(cid:21)(cid:26)
(cid:40)(cid:40)(cid:35)(cid:40)(cid:21)(cid:26)
(cid:42)(cid:45)(cid:35)(cid:45)(cid:21)(cid:26)
(cid:43)(cid:43)(cid:35)(cid:44)(cid:21)(cid:26)
(cid:66)(cid:86)(cid:97)(cid:90)
(cid:59)(cid:90)(cid:98)(cid:86)(cid:97)(cid:90)
(cid:66)(cid:86)(cid:97)(cid:90)
(cid:59)(cid:90)(cid:98)(cid:86)(cid:97)(cid:90)
(cid:66) (cid:54)(cid:65) (cid:58)(cid:21)(cid:54)(cid:67) (cid:57)(cid:21)(cid:59)(cid:58) (cid:66) (cid:54) (cid:65)(cid:58)(cid:21)
(cid:58) (cid:66) (cid:69)(cid:65)(cid:68)(cid:78)(cid:58) (cid:58)(cid:72)(cid:21)(cid:62)(cid:67) (cid:21)(cid:57)(cid:58) (cid:67)(cid:66) (cid:54)(cid:71)(cid:64)
(cid:66) (cid:54)(cid:65)(cid:58)(cid:21) (cid:54)(cid:67)(cid:57)(cid:21)(cid:59)(cid:58) (cid:66) (cid:54)(cid:65)(cid:58)(cid:21)(cid:58) (cid:66) (cid:69)(cid:65)(cid:68)(cid:78)(cid:58)(cid:58)(cid:72) (cid:21)
(cid:62)(cid:67)(cid:21) (cid:67)(cid:68) (cid:71)(cid:76)(cid:54)(cid:78)
(cid:42)(cid:37)(cid:35)(cid:40)(cid:21)(cid:26)
(cid:41)(cid:46)(cid:35)(cid:44)(cid:21)(cid:26)
(cid:42)(cid:37)(cid:35)(cid:45)(cid:21)(cid:26)
(cid:41)(cid:46)(cid:35)(cid:39)(cid:21)(cid:26)
(cid:66)(cid:86)(cid:97)(cid:90)
(cid:59)(cid:90)(cid:98)(cid:86)(cid:97)(cid:90)
(cid:66)(cid:86)(cid:97)(cid:90)
(cid:59)(cid:90)(cid:98)(cid:86)(cid:97)(cid:90)
TrygVesta Annual Report 2007 l Our employees l
73 of 152
Our shareholders
“TrygVesta shares closed the year at DKK 388,
equivalent to a market capitalisation of DKK
26.4bn. The shares provided a negative return
including dividends of 2.9% for 2007”
74 of 154
l Our shareholders l TrygVesta Annual Report 2007
Our shareholders
TrygVesta Annual Report 2007 l Our shareholders l
75 of 152
Our shareholders
Our shareholders
TrygVesta builds and maintains good relations with share-
between DKK 440 and DKK 480 until mid-June. The
holders and other financial stakeholders by emphasising
announcement of a new profit distribution policy on the
openness, transparency and a fundamental understand-
Group’s first capital markets day held on 22 June 2007
ing of stakeholder information requirements. We strive to
triggered a 2% increase in the share price.
maintain a high level of information by:
Over the summer of 2007 financial markets became
• being available and answering queries as promptly
increasingly jittery due to a liquidity and loan crisis trig-
as possible
gered by non-performing US sub-prime loans. The period
• preparing plain and relevant written communication
from mid-July to end-August 2007 saw equity markets
• being proactive in our dealings with investors
drop by some 12%, with financial equities being hit par-
ticularly hard. The financial unrest continued during the
We publish information that may influence the pricing of
remainder of the year with TrygVesta shares trading at
our shares pursuant to the rules applicable to distribution
DKK 375 in November, the lowest price recorded in 2007.
of information in the EU and also update the Group’s
However, equity markets began to pick up towards the
website www.trygvesta.com. In addition, we distribute
end of 2007.
information directly to the London Stock Exchange, the
press, equity analysts, investors and other stakeholders.
TrygVesta shares closed the year at DKK 388, equivalent
In accordance with the recommendations issued by OMX
vided a negative return including dividends 2.9% for 2007.
to a market capitalisation of DKK 26.4bn. The shares pro-
The Nordic Exchange Copenhagen, we refrain from com-
menting on matters relating to our financial performance
Competing insurance shares performed as follows in
or outlook during a period of three weeks prior to the
2007: Alm. Brand minus 28.5%, Sampo minus 4.9% and
release of financial reports.
Topdanmark minus 21.4%. Codan was delisted on 31 Juli
2007. The share increased by 11.4% up to the delisting.
TrygVesta shares
TrygVesta shares opened 2007 at DKK 431.5. On 9 January
The European insurance share index, DJ Euro Insurance
2007 we announced that the Group expected to report a
Index, fell by 11.9% in 2007.
preliminary pre-tax profit for 2006 of DKK 3.7bn against
the previous forecast of DKK 3.2bn provided in the
TrygVesta shares had average daily turnover of DKK 117m
announcement of our financial results for the nine
in 2007. The total volume traded on OMX The Nordic
months ended 30 September 2006. Subsequently, the
Exchange Copenhagen was DKK 47.9bn. The ten most
price increased to DKK 480 during the spring, ranging
active traders in 2007 in terms of turnover were:
76 of 152 l Our shareholders l TrygVesta Annual Report 2007
(cid:59)(cid:71)(cid:58)(cid:58)(cid:21)(cid:59)(cid:65)(cid:68)(cid:54)(cid:73)(cid:21)(cid:40)(cid:38)(cid:21)(cid:57)(cid:58)(cid:56)(cid:58)(cid:66)(cid:55)(cid:58)(cid:71)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:72)(cid:61)(cid:54)(cid:71)(cid:58)(cid:61)(cid:68)(cid:65)(cid:57)(cid:58)(cid:71)(cid:72)(cid:21)(cid:40)(cid:38)(cid:21)(cid:57)(cid:58)(cid:56)(cid:58)(cid:66)(cid:55)(cid:58)(cid:71)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)
(cid:38)(cid:33)(cid:45)(cid:21)(cid:26)
(cid:41)(cid:33)(cid:40)(cid:21)(cid:26)
(cid:45)(cid:33)(cid:39)(cid:21)(cid:26)
(cid:46)(cid:33)(cid:44)(cid:21)(cid:26)
(cid:43)(cid:37)(cid:21)(cid:26)
(cid:44)(cid:43)(cid:21)(cid:26)
(cid:38)(cid:45)(cid:21)(cid:26)
(cid:44)(cid:21)(cid:26)
(cid:38)(cid:42)(cid:21)(cid:26)
(cid:57)(cid:90)(cid:99)(cid:98)(cid:86)(cid:103)(cid:96)
(cid:74)(cid:64)
(cid:74)(cid:72)(cid:54)
(cid:72)(cid:88)(cid:86)(cid:99)(cid:89)(cid:94)(cid:99)(cid:86)(cid:107)(cid:94)(cid:86)
(cid:68)(cid:105)(cid:93)(cid:90)(cid:103)(cid:104)
(cid:72)(cid:98)(cid:86)(cid:97)(cid:97)(cid:21)(cid:104)(cid:93)(cid:86)(cid:103)(cid:90)(cid:93)(cid:100)(cid:97)(cid:89)(cid:90)(cid:103)(cid:104)
(cid:66)(cid:86)(cid:95)(cid:100)(cid:103)(cid:21)(cid:94)(cid:99)(cid:105)(cid:90)(cid:103)(cid:99)(cid:86)(cid:105)(cid:94)(cid:100)(cid:99)(cid:86)(cid:97)(cid:21)(cid:104)(cid:93)(cid:86)(cid:103)(cid:90)(cid:93)(cid:100)(cid:97)(cid:89)(cid:90)(cid:103)(cid:104)
(cid:66)(cid:86)(cid:95)(cid:100)(cid:103)(cid:21)(cid:57)(cid:86)(cid:99)(cid:94)(cid:104)(cid:93)(cid:21)(cid:104)(cid:93)(cid:86)(cid:103)(cid:90)(cid:93)(cid:100)(cid:97)(cid:89)(cid:90)(cid:103)(cid:104)(cid:31)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:21)(cid:94)(cid:21)(cid:57)(cid:86)(cid:99)(cid:98)(cid:86)(cid:103)(cid:96)(cid:21)(cid:104)(cid:98)(cid:87)(cid:86)
* Holding more than 10,000 shares.
Danske Bank
SEB Enskilda
Morgan Stanley
Nordea Bank
Carnegie Bank
Merril Lynch International
Glitnir AB
Lehman Brothers International
Svenska Handelsbanken
Jyske Bank
21%
10%
10%
8%
5%
4%
4%
3%
3%
2%
basis. The target is to hold 250-300 investor meetings
each year. Our aim is for 10-15 equity analysts to actively
follow TrygVesta’s performance, and that three to five of
these analysts should be based in London.
In 2007, we held 250 meetings with investors and equity
analysts and took part in 15 investor conferences. We
organised our first capital markets day on 22 June 2007
at the Ballerup head office, an opportunity for Manage-
ment to present the Group’s performance, opportunities,
Shareholder structure
challenges and targets to 36 analysts and investors.
TrygVesta has a single class of shares, and all shares rank
pari passu. Our principal shareholder, Tryg i Danmark
The Group’s website at www.trygvesta.com is an impor-
smba (Kgs. Lyngby, Denmark), holds 60% of the issued
tant vehicle for providing information about the Group’s
shares and is the only shareholder with a holding of more
performance to prospective investors. The website will be
than 5%. Tryg i Danmark smba is a company with limited
relaunched in early 2008 in a more user-friendly version
liability investing in businesses that promote peace of
and with improved content. Teleconferences and web-
mind, health and security in the Nordic region and a sup-
casts can be downloaded as podcasts from the new web-
porter of benevolent activities.
site, and interested parties can stay updated on the latest
At 31 December 2007, the remaining 40% of the
ment focuses strongly on making updated and relevant
TrygVesta shares (free float) was held by 28,420 regis-
information easily accessible to investors, and urges all
tered shareholders. Of the 40% free float shares, the 200
interested parties to use the website.
news through RSS feeds. Our Investor Relations depart-
largest shareholders held 66%. Some 24% of the free
float shares was held by international investors, and 76%
by Danish investors. TrygVesta holds treasury shares
corresponding to 0.53% of the share capital.
Dialogue with investors
The Group Executive Management and our Investor Rela-
tions department hold meetings with investors and
equity analysts in Europe and the USA on a quarterly
TrygVesta Annual Report 2007 l Our shareholders l
77 of 152
Our shareholders
FINANCIAL CALENDAR 2008
25 February
Annual report 2007
3 April at 14:00
Annual general meeting 2008
5 May
Interim report for the first quarter of 2008
18 August
Interim report for the first half of 2008
10 November
Interim report for the third quarter of 2008
Annual general meeting
Any queries relating to the annual general meeting may
TrygVesta’s annual general meeting will be held on 3 April
be addressed to:
2008 at Øksnehallen, Halmtorvet 11, DK-1700 Copenha-
gen V, Denmark. The invitation to attend the meeting will
Bjarne Lau Pedersen, Chief Group Legal Adviser
be advertised in the press and will be sent to all share-
Telephone +45 4420 3065
holders who so request. Notice of the annual general
E-mail bjarne.lau@tryg.dk
meeting will also be posted on www.trygvesta.com.
Ole Søeberg, IRO
Telephone +45 4420 4520
E-mail ole.soeberg@tryg.dk.
78 of 152 l Our shareholders l TrygVesta Annual Report 2007
ANNOUNCEMENTS IN 2007
04.01.2007 No. 01 Financial calendar 2007
09.01.2007 No. 02 TrygVesta introduces share-based payment
05.02.2007 No. 03 TrygVesta starts selling commercial insurance in Finland
28.02.2007 No. 04 Annual report 2006
28.02.2007 No. 05 TrygVesta’s fourth quarter 2006 report
09.03.2007 No. 06 Notice of the Annual General Meeting of TrygVesta A/S
27.03.2007 No. 07 Articles of association of TrygVesta A/S
28.03.2007 No. 08 Resolutions from the annual meeting of shareholders (AGM)
09.05.2007 No. 09 TrygVesta’s Q1 2007 results
09.05.2007 No. 10 Change of name
01.06.2007 No. 11 Change in share capital and votes
21.06.2007 No. 12 TrygVesta – Higher premium growth in 2007, revised return policy and Capital Markets Day
09.11.2007 No. 13 TrygVesta’s interim report for the first half of 2007
04.09.2007 No. 14 TrygVesta receives DKK 85m in an arbitration case regarding reinsurance
23.11.2007 No. 15 Third quarter 2007 report
23.11.2007 No. 16 Financial calendar 2008
23.11.2007 No. 17 Peter Falkenham promoted to COO
19.12.2007 No. 18 TrygVesta launches Corporate in Sweden
TrygVesta Annual Report 2007 l Our shareholders l
79 of 152
Feature: Innovation and social responsibility
“Insurance is based on the idea that everyone
accepts their responsibility and contributes to the
shared burdens. CSR is therefore a very natural topic
of conversation. We’re very serious when we say
we provide peace of mind”
80 of 154
l Feature l TrygVesta Annual Report 2007
Innovation and social responsibility
TrygVesta Annual Report 2007 l Feature l
81 of 152
Feature: Innovation and social responsibility
Providing peace of mind
TrygVesta’s vision is to be perceived as the leading peace of mind
provider in the Nordic region. This year’s annual report features
a themed section with four articles that describe four areas
where we will launch new initiatives - for customers, employees,
the environment, and society. As the basis for the other articles,
Stine Bosse, Group CEO, talks about the current challenges
and recent developments in the Group.
How has the past year measured up to the expectations
The focus on our customers and employees has increased
you had 12 months ago?
and is on the rise. In all four Nordic countries where we
provide peace of mind, the labour market has changed in
The past year went according to plan and expectations,
recent years. The competition for the available workforce
though with some positive surprises. Growth rates in our
is intense. Fortunately, we still attract and retain the best
Corporate business and Swedish business exceeded my
employees, so we can provide the highest level of cus-
expectations. I was also positively surprised by our ability
tomer service. We need to find new talent groups with
to innovate: While creating solutions for our own needs,
new ideas and competencies. And we must always main-
we have developed solutions for our customers. To illus-
tain and develop TrygVesta as an attractive workplace.
trate, like many workplaces, we’ve felt the need to
This also involves employee participation in work proc-
address the issue of stress, and have put this topic on
esses, our physical work environment and our scope for
the agenda throughout the organisation. One initiative
enjoying a good social atmosphere at work and a good
was to develop an e-learning programme that provides
work-life balance.
employees with more information on stress, relaxation
techniques to help alleviate the problem, and the chance
Many companies are talking a lot about Corporate Social
to communicate with colleagues on the subject via games
Responsibility (CSR). How do you see TrygVesta’s position
and other initiatives. Originally, we wanted to find a solu-
in this field?
tion for our own use, but have actually developed a new
product that will also benefit our customers. The product
CSR has always existed in TrygVesta. It’s intrinsic to our
StressStop is a telephone line with stress consultants
way of thinking. We provide peace of mind. Our product
ready to give advice and guidance on stress. We have
is a direct provision to society and we’re an integral part
so far launched the product for employees on Danish
of the Nordic welfare system. Insurance is based on the
workplaces.
idea that everyone accepts their responsibility and con-
tributes to the shared burdens. CSR is therefore a very
What would you say is special about the current period?
natural topic of conver sation. We’re very serious when we
What does TrygVesta do in order to be abreast of the
say we provide peace of mind.
development?
82 of 152 l Feature l TrygVesta Annual Report 2007
TrygVesta Annual Report 2007 l Feature l
83 of 152
Feature: Innovation and social responsibility
How does TrygVesta differentiate from other players in
Another point is that in a company with an innovative
the market?
mindset, you have to accept that mistakes can be made.
There could be occasions when, with hindsight, we may
That question brings us back to our employees. The point
say we probably shouldn’t have done that. But innovation
of difference is our employees because they decide how
requires courage and learning from mistakes. We can’t
we meet the customers. By that I mean the way they
have a “no mistakes” culture and also be an innovative
talk, write and communicate with customers. We need
company at the same time.
the most skilled and friendly employees and that is
exactly what we have.
Many of TrygVesta’s customers need increasingly individu-
alised health and peace-of-mind services that are not
BusinessLab is the name of TrygVesta’s centre for innova-
covered by the public sector. What do you think of the
tion and product development. Although a lot of the
relationship between public-sector and private services?
innovative work takes place online, in physical terms Busi-
nessLab is based in Ballerup, Denmark. And “the labora-
We’re already a part of the welfare structure. We’re used
tory” certainly doesn’t look like the other offices in the
to providing welfare services and will be doing so even
Group. What do you think about BusinessLab?
more. We’re well aware that this responsibility is based
I enjoy BusinessLab. I like slightly off-the-wall scenarios.
provide are increasing, but taxes probably won’t. This
With its own special colour scheme and interior design it
development opens up new opportunities. Over the past
probably looks more like a theatre stage or a studio than
few years, I’ve seen unique opportunities to develop new
anything, but as the name suggests, we use it to explore
models that expand the solid public foundation of the
on trust. Expectations about what the welfare system can
business opportunities. I think BusinessLab stimulates
Nordic welfare society.
good ideas. You’re confronted with the fact that you can
think outside the box. In a way, the setting cleverly sym-
As well as social welfare, the environment and climate
bolises that off-the-wall thinking is allowed. The manage-
change are issues that seriously concern TrygVesta’s cus-
ment wants to encourage lateral thinking and creativity in
tomers. What impact do you think the climate and envi-
its employees. Innovation is a leadership style. We must
ronment will have for TrygVesta in the years ahead?
also embrace diversity. I believe diversity is exactly what
we need to integrate tradition and renewal. Both are vital
I believe the environment and climate change will mean a
for continued growth.
great deal - in a number of areas. Naturally, we should
make sure we remain a sustainable company that cares
BusinessLab is also the physical setting for the new Inno-
about the environment. But climate change also has a
vation Driver training programme. A programme that
serious effect on our customers. In recent years, we’ve
teaches employees to use the creative side of their brains
experienced violent storms, and high levels of rainfall that
as much as the logical side. How seriously do you take
have caused extensive damage. First and foremost, we
the Innovation Driver principles? Is it an isolated experi-
want to help our customers prevent damage by advising
ment or is the idea that this should spread?
customers on what precautions to take and focusing
attention on sub-standard building, bad drainage and
We definitely want this idea to spread. I’m convinced that
other factors that can contribute to wind and water dam-
this way of facilitating other dimensions is crucial for
age. We specialise in this field and it would be irresponsi-
future success. We must use feelings and intellect in
ble not to share this knowledge with the general public
every development process. This area contains great
and our customers in particular. We also make sure that
scope for innovation.
our own emergency systems are constantly upgraded so
that we can deal with a wider and more extensive range
of damages.
84 of 154
l Feature l TrygVesta Annual Report 2007
What do you consider the major challenges facing
ers, new products and new initiatives that reinforce prof-
TrygVesta in the coming year?
itable growth. Providing – that is clearly my focus for the
year ahead. TrygVesta’s vision to provide peace of mind
Challenges and opportunities go hand in hand. We must
applies to our customers, shareholders, employees and
do a lot to maintain the momentum we already have. As I
society at large – all four perspectives are included. A
mentioned, innovation will be a larger and larger part of
totally solid financial foundation is vital if we are to pro-
our mindset. We develop new ways of servicing custom-
vide peace of mind.
TrygVesta Annual Report 2007 l Feature l
85 of 152
Feature: Innovation and social responsibility
When employees change
cerebral hemispheres
Innovation Driver is the name of TrygVesta’s new in-house training
programme, which aims to develop employees’ ability to think along new
lines. Monica Rydland Anundsen was one of the first employees to take
part in the programme. An experience that has raised activity levels in
the creative side of her brain.
Monica Rydland Anundsen works with strategic develop-
Growth and new beginnings
ment of Corporate at the divisional management group in
Fear anxiety insecurity
Norway. Today, for the very first time she will be taking
Poetry romance love
part in the new Innovation Driver programme at TrygVes-
ta’s BusinessLab in Ballerup, Denmark.
The menu has more than 10 different core moods.
Monica Rydland Anundsen imagines that she will be pre-
become poetic and romantic – not exactly the traditional
Choose Poetry romance love, and the lighting and music
sented with a tightly structured programme. That she will
mood in a business lab:
be given some methodical tools and instructions on how
and when to use them.
“I’d expected some more structured methods and tools,
Monica Rydland Anundsen can think again.
something else. If you want new ideas, you have to be
but with hindsight, I can see that innovation requires
jogged out of your traditional setting, methods and proc-
In Ballerup, she’s welcomed to a meeting room that is
esses. The programme has developed my mindset in
nothing like the meeting rooms she normally sees at
terms of how ideas are developed, managed and real-
work. The ceiling has disco lighting. Soft warm colours
ised,” explains Monica Rydland Anundsen.
add to the atmosphere created by the tea lights on the
small round coffee tables. The walls are not straight, but
New mindset and world view
curved in round, female forms. Like a surrealistic picture.
It’s all about simultaneously acknowledging what factors
There are no windows. She is underground. The music is
make the organisation a success and what factors pre-
emotive. Romantic.
vent the organisation moving ahead. According to the
head of the new programme, the answers to the two
Welcome to TrygVesta’s BusinessLab. Welcome to the
questions are often the same. What creates success can
new Innovation Driver training programme. Welcome to a
also create difficulties. We must therefore think along
new way to think and work.
new lines. Malene Bendtsen is a coach for the Innovation
From the logical to the creative side of the brain
Driver programme:
At BusinessLab in Ballerup, the music and lighting system
“The idea is to come up with something that none of us
menu offers a choice of different moods:
has thought of before and that we can only think
together. The course participants are trained in making
new discoveries. And coming up with new ideas is very
86 of 152 l Feature l TrygVesta Annual Report 2007
difficult if you are anchored in an “old” mindset. That’s
backgrounds in economics, philosophy, theology, infor-
why we put Monica and the other participants in a com-
mation sciences, datalogy, management and design. But
pletely new setting. We challenge traditional knowledge.
first and foremost they are experienced in and under-
We present something that doesn’t match the organisa-
stand learning processes. They use experiences from the
tion’s world view. We develop employees’ horizons by
world of performing arts:
encouraging them to take a lateral perspective, explore
peripheral opportunities. ”
“In the world of business, we’re used to devising plans
first and then realising them. But if you’ve sealed the
As the participants begin to relax and use their creative
envelope before you start, then you can’t push yourselves
grey matter, they begin to notice the opportunities pro-
outside these limits. Dramaturges and performers are
vided by unconventional work processes. So, the pro-
good at thinking and creating at the same time. Our own
gramme also includes a form of personal development:
dramaturge on the programme involves the body’s way
of thinking by building insurance products out of card-
“For me, development, increased interaction, and security
board, for example. Is the new insurance product blue or
are what drive my work. Both in relation to teamwork
red, triangular or square? Considerations like these lead
with my colleagues and the products we can develop for
to more than just spreadsheets and wordy documents. A
our customers. The Innovation Driver programme proved
cardboard insurance product is a tangible prototype. We
to be right for me. This new way of working gives me
transform ideas into words and make them tangible. This
more strings to by bow,” explains Monica Rydland
is what theatrical and artistic processes can do,” explains
Anundsen.
Malene Bendtsen, who has a background in economy,
marketing, innovation management and adult education
Pushing the envelope
theory.
Working with statistics, focus groups and risk assess-
ments is one thing. Working with emotions and your
Two and a half months of cerebral gymnastics
imagination is quite another:
The programme for the first team of course participants
lasted two and a half months. After the programme is
“We tell employees to trust their intuition. They join the
completed, the “Drivers” allocate time for solving tasks
project without knowing what they’ll get out of it. That
that take the equivalent of two days every six weeks.
takes courage. Employees may not appreciate the link
Altogether they spend seven days in the BusinessLab.
between what they’re doing today and what it will lead to
in three months’ time. Accepting insecurity is a challenge.
After challenging their creative hemisphere, the Drivers
It pushes the envelope,” explains Malene Bendtsen.
are ready to take the driving seat and steer the Group’s
product development.
Business development through theatre
The coaches on the Innovation Driver programme have
TrygVesta Annual Report 2007 l Feature l
87 of 152
Feature: Innovation and social responsibility
The customer is always right
The customer is always right. An old saying, but it’s part of the formula
for future user-driven and customer-oriented innovation. Constant
product development on customers’ terms is vital if TrygVesta is to
maintain and expand its position as the leading peace-of-mind provider
in the Nordic Region.
“We know that in five years’ time, some of our business
New investigative methods
will come from something we’re not doing today. And
As well as recruiting employees with new skills, TrygVesta
what might that be?” is the rhetorical question posed by
is also using new methods for developing products. When
Stig Ellkier-Pedersen, who is responsible for New Markets.
you take a different approach, you get results that are
He quickly gets to the point:
different to those reached using traditional investigative
“We believe it will have more to do with people and less
methods:
to do with possessions. It’s about personal peace of
“We normally use focus groups, surveys, and statistics,
mind and security more than insuring things. It’s about
but we’ve invited youngsters in from various fields, includ-
insuring yourself, your closest relatives, and your family,
ing the theatre. We have not asked them what they want
against claims from third parties. It’s about your right to
from us, but have discovered how they view themselves.”
the good life,” explains Stig Ellkier-Pedersen. In his view,
this is a new tendency among customers and therefore
For Stig Ellkier-Pedersen, the new investigative methods
an obvious business opportunity.
represent a new level of user-driven innovation. They are
less direct. The target group is not confronted with ques-
People in the Nordic region are interested in new kinds of
tions about what they want, but instead the methods
insurance products. This is evident from the enormous
give a realistic picture of the psychological universe that
growth in health insurance, for example, and in the gen-
young people inhabit.
eral demand for healthcare. The health sector is con-
stantly developing new treatments and new training
“In the insurance business there is a belief that young
methods that probably cannot be financed through taxes.
people are bad customers. However, we have looked into
Individual citizens can rely on insurance to make sure they
the matter and have found out that this is not generally
get the newest and best treatment on offer. This develop-
the case. On the contrary. In general, young people are a
ment has been under way for the past five to ten years:
very interesting customer group with needs such as
accident insurance and other personal insurances. Young
“It’s not something that happens overnight. It’s a gradual
customers want to be met in a new way where they are
accumulation of many small changes over time and we
experts on their own lives, and where they are respon-
need help to spot these trends. So we’ve hired people
sible for their own lives. We shouldn’t play the role of
with backgrounds outside the insurance industry. People
parent. In the future, we will adapt our communication
who are used to working with design and theatre, for
and service patterns to match young people’s wishes and
instance. These new kinds of employees ask new kinds of
needs,” says the head of New Markets.
questions. And we need help answering uncomfortable
questions. We must therefore bring in people and new
references that challenge us,” says Stig Ellkier-Pedersen.
88 of 152 l Feature l TrygVesta Annual Report 2007
User-driven insurance trends
Blazing new trails with TrygVesta
At TrygVesta’s BusinessLab, a variety of employees are
The new product development and user-driven innovation
working on innovation. The alternative style of working at
initiatives are not earmarked for specific products or tar-
BusinessLab often results in very specific products being
get groups. Target groups might be young, middle-aged
developed. Participants in various workshops are often
or senior citizens. Women and men. Customers with
real customers. Instead of writing reports on what steps
flooded basements or water on the knee:
TrygVesta can take long term, the customers are encour-
aged to get to grips with tangible solutions and models.
“Just implementing what is safe isn’t good enough. We
For example, one group of youngsters came up with the
must stimulate our urge to experiment. We mustn’t take
idea of texting your insurance company if your bike was
chances – not the kind that could backfire – but we must
stolen. And with that idea in mind, they immediately
have the courage to launch products that may not be
began developing a system that could be used in real life.
best sellers,” says Stig Ellkier-Pedersen.
This was done by drawing an “I’m-reporting-my-bike-sto-
len-via-an-text-message” system. This puts the customer
At the end of the day, it’s the customer who determines
in focus from the very start of the development process.
the success achieved by a product. After all, the customer
is always right.
“There is a lot of potential to explore here. It generates a
whole new energy. Instead of asking, we get customers
to show us, so that product development is on their
terms as much as possible,” says Stig Ellkier-Pedersen.
TrygVesta Annual Report 2007 l Feature l
89 of 152
Feature: Innovation and social responsibility
Everyone is talking
about the weather
For years, the subject of “global warming” has caused a cold war between
experts in the area, but there is an increasing consensus that climate
change is a reality that we all have to deal with. TrygVesta is hard at work
finding solutions to the new challenges that climate change involves.
In 1728, the city of Copenhagen burned down. This
“If the number of claims continues to rise, insurance pre-
prompted a number of citizens to establish “the fire
miums will follow suit, but we’re not there yet. We’ve
fund” to counteract the consequences of the fire. Now, at
now reached a point where we must face certain ques-
the beginning of the 21st century, alarm bells are ringing
tions: Should we involve ourselves in how houses are
again. This time due to global warming:
built? What houses should we insure? What demands
should we make? Can we develop products that encour-
“It’s not just a hypothetical question about what will hap-
age customers to reduce pollution, or can we assess the
pen in the future. It’s a question of what has already
damage in a particular way that inspires environmental
happened: In recent years, we’ve had warmer weather,
awareness?” says Lars Bonde, before adding: “We must
more rainfall, more wind – and more claims. TrygVesta
also ask ourselves what we can do to be more environ-
has already faced considerable additional expenses in
mentally friendly. We want sustainability to be a key word
both Denmark and Norway,” explains Lars Bonde, Chief
at all levels of our company – from product development
Executive of Corporate. He glances at his watch and
through transport.”
notices that it’s 3 December:
Focus on climate initiatives – policy, science and
“Exactly eight years ago today, on 3 December 1999, a
the business community
terrible storm hit Denmark. The storm of the century, as it
For some years, environmental and climate changes have
was called, resulted in 94,000 claims and cost TrygVesta
been a controversial political topic in Denmark and inter-
DKK 2.5 billion. And although it was a storm of the cen-
nationally, but the subject is being given increasing prior-
tury, in January 2005 a new storm whipped up another
ity on political and scientific agendas. After the general
53,000 claims and cost DKK 733 million. Weather dam-
election in November 2007, Denmark now has a new Cli-
age has brought considerable costs both for our custom-
mate Ministry, and in December 2009, Denmark will host
ers and for us. And we will do everything we can to
the UN Climate Summit.
ensure our customers are as well prepared as possible for
the new weather conditions,” explains Lars Bonde.
TrygVesta always strives to make a positive contribution
to society. Naturally, this also applies to the environment
New weather conditions raise new questions
and climate. TrygVesta is a member of the Council for
During the wet summer of 2007, many basements were
Sustainable Business Development, along with about 20
flooded, and it became clear at TrygVesta that weather
other major companies such as Danfoss, Grundfos and
damage is a challenge for the entire logistics system. The
Novo Nordisk. The council is currently working on a char-
Group has therefore allocated reinforcements to this area,
ter of eco-guidelines that will be finalised and passed in
including extra backup from claims experts and additional
spring 2008.
suppliers who can help repair the damage. New initia-
tives, however, lead to higher costs:
90 of 152 l Feature l TrygVesta Annual Report 2007
Concerns and expectations among
“Our job is to provide peace of mind, and when so many
the general public
people are concerned about the climate it has a major
Climate change has been the subject of intense media
impact on us. We’ve found that concerns in this field have
interest in recent years. And many insurance customers
risen significantly in recent years. We’ve also realised that
already have an opinion on this issue. A survey conducted
people expect us to solve the problems. The Norwegian
by TrygVesta in Norway showed that three out of four
survey shows that customers expect a great deal from
Norwegians are concerned about how climate change will
their insurance company. They expect us to have the
ultimately affect life on Earth:
skills required to find solutions. That’s why we’re working
hard to adapt to the new situation – and find new
solutions,” says Lars Bonde.
Intensified environmental focus
In 2007, TrygVesta devised a system for its environmental work and established an interdepartmental corporate
steering committee to drive the Group’s climate and environmental commitments.
The Supervisory Board approved an environmental and climate policy that came into force on 1 January 2008.
This policy defines a number of specific climate goals for the Group in 2008, including a 10% reduction in the
Group’s CO2 emissions in 2008-2010. TrygVesta will also screen environmental and climate issues throughout
the entire Group in 2008 as the basis for an annual measurement and reporting in the future.
TrygVesta Annual Report 2007 l Feature l
91 of 152
Feature: Innovation and social responsibility
When companies
take responsibility
CSR, Corporate Social Responsibility, will come to mean even
more at TrygVesta in the next few years. TrygVesta has joined an
extensive Nordic cooperation on CSR-driven innovation – a project
that is set to last for some years.
TrygVesta has joined a new Nordic project to support and
with intellectual and financial capacity are obliged to con-
develop the business potential of small and medium sized
duct business with consideration. And show social respon-
businesses.
sibility. Out of the ruins of the great fire of Copenhagen in
1728 grew the desire to take care of each other. To show
Helle Kjærgaard works with strategy and management at
consideration. A group of citizens decided to establish
the TrygVesta Management Secretariat. She is also the
“the fire fund”. Some 300 years later, the same mindset
company’s contact person for the new project with the
formed the basis of TrygVesta’s Corporate Social Responsi-
Danish Commerce and Companies Agency, Nordic Innova-
bility policy.
tions Centre, Region Zealand and TrygVesta:
CSR creates value for the company
“CSR, which stands for Corporate Social Responsibility the
Within its three CSR areas, TrygVesta has set up various
term covers the company’s social responsibility and
steering groups. One environment group is investigating
involves how a company cares for the environment we live
what action TrygVesta can take in relation to purchasing,
in, cares for its people and plays an active role in society.
air-conditioning systems, employee cars, environmentally-
It’s a matter of maintaining a long-term and sustainable
friendly products, green products and insurance products.
approach,” explains Helle Kjærgaard:
Another group is focusing on employees, in terms of
diversity, for example. The goal is to define some guide-
“We work with a CSR umbrella concept that covers three
lines for the company’s employment policy:
areas: The environment. Employees. And society. We’ve
always worked with CSR at TrygVesta. What’s new is that
“Like many other companies, we’re facing the challenge of
we now have one specific concept and work towards sys-
attracting employees, especially in IT, where we’d like to
tematising our activities in this field. We want to make
make work easier for employees with reduced working
sure that our experiences are collected and outlined to
capacity, for example. Employees with impaired hearing
benefit the whole organisation. We used to do this but
and vision should also be welcome at TrygVesta,” says
without really considering why. We put our thoughts into
Helle Kjærgaard.
action but not into words.”
Stine Bosse receives an invitation
Tryg – still providing peace of mind
The invitation to take part in a long-term Nordic project on
Corporate Social Responsibility fits in well with TrygVesta’s
CSR-driven innovation came from the Danish Commerce
history and values. A history that’s about determination,
and Companies Agency. The project is being financed by
initiative and solidarity. And about a responsible company
TrygVesta, the Nordic Innovation Centre and Region Zea-
that focuses on human potential – and its employees. Try-
land. The aim is to support and develop the business
gVesta believes that large, well-consolidated companies
potential of Nordic small and mediumsized businesses.
92 of 152 l Feature l TrygVesta Annual Report 2007
A panel of business executives is also being set up to
“Citizens and consumers, banks and suppliers are so sensi-
make recommendations, compare practical experience with
ble and responsible that companies who actually take on
theory in the area, and map new trends:
responsibility and invest in projects that might not appear
to benefit the company initially, actually make good
“The next two years will be a long learning process. The
returns on their investments or the costs of social respon-
entire project depends a great deal on the companies that
sibility activities,” says Steen Hildebrandt, Professor at the
will actually form the basis for the research. We will proba-
Institute for Management, Århus School of Business, Århus
bly invest in a combination of various kinds of companies
University (From a book entitled Company Karma, 2007).
and people. There will be entrepreneurs, individuals with
good ideas, more traditional thinkers and others,” says
TrygVesta bases its business on core elements anchored in
Helle Kjærgaard, adding: “TrygVesta would like to have
the company’s history and in conscious choices. It’s been
someone to play with. We know from the Danish Com-
that way for several hundred years. A long time before it
merce and Companies Agency that small and mediumsized
became “trendy”:
businesses are very effective in this area. Possibly because
they keep the path from idea to practice reasonably short.
“Today, nearly 300 years after the great fire of Copenha-
Naturally, we would also like to find out why they’re so
gen, we’re all citizens of the global village. TrygVesta
good at CSR-driven innovation in particular. And we want
belongs to a global eco-system where everything is linked
to learn the techniques and tools they use.”
and intertwined. In this globalised world, CSR will be a
CSR in a global era
competitive parameter because consumers, employees
and society in general will choose companies that take
Research from the Copenhagen Business School show that
their responsibility seriously,” says Helle Kjærgaard.
social responsibility makes sound business sense:
TrygVesta Annual Report 2007 l Feature l
93 of 152
Contents
Contents
Notes
Statement by the Supervisory Board and the Executive Management
Independent auditors’ report
1
2
3
4
5
6
6
7
8
9
10
11
12
13
14
15
16
17
18
19
19
20
21
22
23
24
25
26
27
28
29
Income statement and Balance Sheet for TrygVesta Group
Statement of changes in equity
Cash flow statement - TrygVesta Group
Accounting policies
Earned premiums, net of reinsurance
Technical interest, net of reinsurance
Claims incurred, net of insurance
Insurance operating expenses, net of reinsurance
Segments
Technical result, net of reinsurance, by line of business
Interest and dividens, etc.
Market value adjustment
Reconciliation of tax expenses
Profit/loss on discontinued and divested business
Intangible assets
Operating equipment
Owner-occupied property
Investment property
Investments in associates
Financial investment assets
Reinsurer’s share
Current tax
Share capital
Capital adequacy, etc.
Subordinated loan capital
Provisions for claims
Pensions and similar obligations
Deferred tax
Other provisions
Debt to credit institutions
Other debt
Earnings per share
Contractual obligations, contingent liabilities and collateral
Related parties
Income statement for TrygVesta A/S (parent company)
Statement of changes in equity (parent)
Notes (parent company)
Financial highlights and key ratios by geography
Organisation chart
Glossary
94 of 152 l Contents l TrygVesta Annual Report 2007
Page
95
96
97
100
102
103
113
113
113
113
116
118
120
120
120
121
121
122
122
123
124
125
128
128
128
129
129
130
133
135
136
136
136
136
137
138
140
142
143
148
150
151
Statement by the Supervisory Board
and the Executive Management
The Supervisory Board and the Executive Management have
today considered and adopted the annual report for 2007 of
TrygVesta A/S and the TrygVesta Group.
The consolidated financial statements have been prepared in
accordance with the International Financial Reporting Stand-
ards as adopted by the EU, and the financial statements of
the parent company have been prepared in accordance with
the Danish Financial Business Act. In addition, the annual re-
port has been presented in accordance with additional Danish
disclosure requirements for the annual reports of listed finan-
cial enterprises.
In our opinion, the accounting policies applied are appropri-
ate, and the annual report gives a true and fair view of the
Group’s and the parent company’s assets, liabilities, and fi-
nancial position at 31 December 2007 and of the results of
the Group’s and the parent company’s operations and the
cash flow of the Group for the financial year ended 31 De-
cember 2007.
The management’s report gives a true and fair view of devel-
opments in the activities and financial position of the com-
pany and describes significant risk and uncertainty factors
that may affect the company.
We recommend that the annual report be adopted by the
shareholders at the annual general meeting.
Ballerup, 25 February 2008
Executive Management
Christine Bosse
Group CEO
Supervisory board
Mikael Olufsen
Chairman
Morten Hübbe
Group CFO
Peter Falkenham
Group COO
Bodil Nyboe Andersen
Deputy Chairman
Jørn Wendel Andersen
Paul Bergqvist
Christian Brinch
Niels Bjørn Christiansen
John R. Frederiksen
Per Skov
Trond Christiansen
Peter Wagner Mollerup
Birthe Petersen
Håkon J. Huseklepp
TrygVesta Annual Report 2007 l Statement by the Supervisory Board and the Executive Management l
95 of 152
Accounts
Independent auditors’ report
To the shareholder of TrygVesta A/S
We have audited the annual report of TrygVesta A/S for the
financial year starting on January 1 and ending on December
31, 2007, which comprises the management’s report, the
statement by management, accounting policies, income
statement, balance sheet, capital and notes for the Group
as well as the parent company and the cash flow statement
for the Group. The consolidated financial statements have
been prepared in accordance with International Financial Re-
porting Standards as adopted by the EU, and the parents fi-
nancial statements have been prepared in accordance with
the Danish Financial Business Act. In addition, the annual
report has been presented in accordance with additional
Danish disclosure requirements for the annual reports of
listed financial enterprises.
Management’s responsibility for the annual report
Management is responsible for preparing and presenting an
annual report that gives a true and fair view in accordance
with the International Financial Reporting Standards as
adopted by the EU in respect of the consolidated financial
statements and in accordance with the Danish Financial Busi-
ness Act in respect of the parent company’s financial state-
ments and in accordance with additional Danish disclosure
requirements for annual reports of listed financial enterprises.
This responsibility includes; designing, implementing and
maintaining internal control relevant to the preparation and
fair presentation of an annual report that is free from mate-
rial misstatement, whether due to fraud or error; selecting
and applying appropriate accounting policies; and making ac-
counting estimates that are reasonable in the circumstances.
Basis of opinion
Our responsibility is to express an opinion on the annual report
based on our audit. 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 annual report is free from materiel misstatement.
An audit involves performing procedures to obtain audit evi-
dence about the amounts and disclosures in the annual re-
port. The procedures selected depend on the auditor’s judg-
ment, including the assessment of the risks of material
misstatement of the annual report, whether due to fraud or
error. In making those risk assessments, the auditor consid-
ers internal controls relevant to the preparation and fair pres-
entation of the annual report in order to design audit proce-
dures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of
internal control. An audit also includes evaluating the appro-
priateness of accounting policies used and the reasonable-
ness of accounting estimates made by management, as well
as evaluating the overall presentation of the annual report.
We believe that the audit evidence we have obtained is suffi-
cient and appropriate to provide a basis for our audit opinion.
Our audit did not result in any qualification.
Opinion
In our opinion, the annual report gives a true and fair view of
the Group’s assets, liabilities and financial position at Decem-
ber 31, 2007, and of the results of the Group’s operations
and the Group’s cash flows for the financial year starting on
January 1 and ending on December 31, 2007 in accordance
with International Financial Reporting Standards as adopted
by the EU and in accordance with additional Danish disclosure
requirements for annual reports of listed financial enterprises.
Furthermore in our opinion, the annual report gives a true
and fair view of the parent company’s assets, liabilities and
financial position at December 31, 2007, and of the results
of the parent company’s operations for the financial year
starting on January 1 and ending on December 31, 2007 in
accordance with the Danish Financial Business Act and in ac-
cordance with additional Danish disclosure requirements for
annual reports of listed financial enterprises.
Ballerup, 25 February 2008
Deloitte
Statsautoriseret Revisionsaktieselskab
Lone Møller Olsen
State Authorised
Public Accountant
Leif Zilmer
State Authorised
Public Accountant
96 of 152 l Independent auditors’ report l TrygVesta Annual Report 2007
Income statement
DKKm
Notes General insurance
Gross premiums written
Ceded insurance premiums
Change in provisions for unearned premiums
Change in reinsurers’ share of provisions for unearned premiums
2 Earned premiums, net of reinsurance
3 Technical interest, net of reinsurance
Claims paid
Reinsurance recoveries
Change in provisions for claims
Change in the reinsurers’ share of provisions for claims
4 Claims incurred, net of reinsurance
Bonus and premium rebates
Acquisition costs
Administrative expenses
Acquisition costs and administrative expenses
Commission and profit commission from the reinsurers
5 Total insurance operating expenses, net of reinsurance
6 Technical result
15
Investment activities
Income from associates
Income from investment properties
Interest income and dividends, etc.
7
8 Value adjustment
Interest expenses
7
Investment management charges
Total return on investment activities
3
Interest on insurance provisions
Total return on investment activities after technical interest
Other income
Other expenses
Profit/loss before tax
9 Tax
Profit/loss on continuing business
10 Profit/loss on discontinued and divested business
Profit/loss for the year
27 Earnings per share – continuing business
Earnings per share
2007
2006
16,959
-893
-130
-46
15,890
501
-11,336
495
161
6
-10,674
-223
-1,821
-948
-2,769
95
-2,674
2,820
1
116
1,382
415
-88
-86
1,740
-1,400
340
121
-172
3,109
-842
2,267
-1
2,266
33.5
33.5
16,296
-945
-61
3
15,293
343
-10,064
550
-500
-301
-10,315
-214
-1,719
-978
-2,697
102
-2,595
2,512
6
101
1,105
1,226
-94
-85
2,259
-1,031
1,228
118
-149
3,709
-624
3,085
126
3,211
45.5
47.3
TrygVesta Annual Report 2007 l Income statement l
97 of 152
Accounts
Balance sheet
DKKm
Notes Assets
11
Intangible assets
12 Operating equipment
13 Owner-occupied property
Total property, plant and equipment
2007
2006
335
80
306
386
220
98
326
424
14
Investment property
2,263
2,127
15
Investments in associates
Total investments in associates
Equity investments
Unit trust units
Bonds
Deposits in credit institutions
16 Total other financial investment assets
Deposits with ceding undertakings, receivable
19
19
2,961
1,629
30,654
302
35,546
19
18
18
5,308
306
30,100
0
35,714
18
Total investment assets
37,847
37,877
Reinsurers’ share of provisions for unearned premiums
21 Reinsurers’ share of provisions for claims
17 Total reinsurers’ share of provisions for insurance contracts
Receivables from policyholders
Total receivables in relation to direct insurance contracts
Receivables from insurance enterprises
Receivables from subsidiaries
Other receivables
16 Total receivables
Temporarily acquired assets
18 Current tax assets
Cash in hand and at bank
Other
Total other assets
Accrued interest and rent earned
Other prepayments and accrued income
Total prepayments and accrued income
159
1,428
1,587
901
901
509
0
1,145
2,555
0
93
298
4
395
666
59
725
185
1,376
1,561
840
840
647
27
262
1,776
6
43
338
7
394
474
57
531
Total assets
43,830
42,783
98 of 152 l Balance sheet l TrygVesta Annual Report 2007
DKKm
Notes Liabilities
19 Shareholders’ equity
20 Subordinated loan capital
21 Provisions for unearned premiums
21 Provisions for claims
Provisions for bonuses and premium rebates
Total provisions for insurance contracts
22 Pensions and similar obligations
23 Deferred tax liability
24 Other provisions
Total provisions
Debt related to direct insurance
Debt related to reinsurance
25 Debt to credit institutions
Current tax liabilities
26 Other debt
Total debt
Accruals and deferred income
2007
10,010
1,101
5,403
21,104
409
26,916
403
1,109
57
1,569
358
253
599
336
2,597
4,143
91
2006
9,951
1,099
5,173
20,410
374
25,957
503
959
50
1,512
358
214
665
229
2,689
4,155
109
Total liabilities and equity
43,830
42,783
19 Capital adequacy
27 Earnings per share
28 Contractual obligations, contingent liabilities and collateral
29 Related parties
TrygVesta Annual Report 2007 l Balance sheet l
99 of 152
Accounts
Statement of changes in equity
DKKm
Reserve
for
tion exchange
capital reserves rate adj.
Revalua-
Share
Equali-
sation
Other Retained Proposed
reserve reserves earnings dividends
Total
Shareholders’ equity at 1 January 2006 1,700
5
46
63
800
4,173
1,428
8,215
Equity entries in 2006
Profit for the year
Change in equalisation provision
Revaluation of owner-occupied properties
Exchange rate adjustment of
foreign entities
Hedge of foreign currency risk in
foreign entities
Actuarial gains and losses on
pension obligation
Tax on equity entries
Total comprehensive income
Dividend paid
Dividend own shares
Purchase of own shares
Issue of employee shares
Issue of share options
Total equity entries in 2006
Shareholders’ equity at
31 December 2006
Shareholders’ equity at
1 January 2007
Equity entries in 2007
Profit for the year
Change in equalisation provision
Revaluation of owner-occupied properties
Exchange rate adjustment of
foreign entities
Hedge of foreign currency risk
in foreign entities
Actuarial gains and losses on
pension obligation
Tax on equity entries
Total comprehensive income
Dividend paid
Dividend own shares
Purchase of own shares
Issue of employee shares
Issue of share options
Total equity entries in 2007
0
0
1,700
1,700
0
0
Shareholders’ equity at
31 December 2007
1,700
-143
107
-30
-66
-5
967
5
2,244
116
-32
3,211
0
3
-143
107
116
-63
-5
0
1,056
2,244
3,231
-1,428
-1,428
5
-88
13
3
5
-88
13
3
-66
-5
0
989
816
1,736
-20
58
800
5,162
2,244
9,951
-20
58
800
5,162
2,244
9,951
49
-40
10
19
75
1,035
1,156
35
-58
94
-11
2,266
0
-3
84
-98
94
2
0
75
1,095
1,156
2,345
-2,244
-2,244
14
-96
32
8
14
-96
32
8
19
0
75
1,053
-1,088
59
-1
58
875
6,215
1,156
10,010
3
-1
2
2
7
7
-3
3
0
0
7
100 of 152 l Statement of changes in equity l TrygVesta Annual Report 2007
Dividend paid per share DKK 17 (total for 2006 DKK 33 DKK)
Dividend per share is calculated as the total dividend proposed by the Supervisory Board after the end of the financial year divided
by the average number of shares 67,648,000. The dividend is not paid until approved by the shareholders at the annual general
meeting of the subsequent year.
TrygVesta Forsikring, the Norwegian branch of TrygVesta Forsikring A/S, has in its branch financial statements included provisions for
contingency funds in the amount of NOK 2,564m (2006: NOK 2,251m) under provisions for insurance contracts. In TrygVesta Forsikring
A/S, these provisions, due to their nature as additional provisions, are included in shareholders’ equity, net of deferred tax. TrygVesta For-
sikring A/S’ option to pay dividend to TrygVesta A/S is influenced by this amount. The dividend payment is also affected by a contingency
fund provision of DKK 670m, which is included in shareholders’ equity in TrygVesta Forsikring A/S. TrygVesta Garantiforsikring A/S has a
similar contingency amounting to DKK 139m, which is also included in the company’s shareholders’ equity.
STATEMENT OF RECOGNISED INCOME AND EXPENSES
DKKm
Revaluation of owner-occupied properties for the year
Tax on owner-occupied properties for the year
Exchange rate adjustment of foreign entities for the year
Hedging of currency exposure in foreign entities for the year
Tax on hedging of currency exposure in foreign entities for the year
Actuarial gains/losses on defined benefit pension plans
Tax on actuarial gains/losses on defined benefit pension plans
Net income/expense taken directly to equity
Profit for the year
Total recognised income and expenses
2007
-3
3
84
-98
24
94
-25
79
2,266
2,345
2006
3
-1
-143
107
-30
116
-32
20
3,211
3,231
TrygVesta Annual Report 2007 l Statement of change in equity l
101 of 152
Accounts
Cash flow statement – TrygVesta Group
DKKm
2007
2006
Cash generated from operations
Premiums
Claims paid
Ceded business
Expenses
Change in other payables and other amounts receivable
Cash flow from insurance operations
Interest income
Interest expenses
Dividend received
Taxes
Other items
Cash generated from operations, continuing business
Cash generated from operations, discontinued and divested business
Total cash generated from operations
Investments
Acquisition of real property
Sale of real property
Acquisition of equity investments and unit trust units (net)
Purchase/Sale of bonds (net)
Deposits in Credit institutions
Purchase of operation equipment
Sale of operation equipment
Sale of subsidiares
Sale of associated
Foreign currence hedging
Investments, continuing business
Investments, discontinued and divested business
Total investments
Funding
Purchase of own shares
Share options
Dividend paid
Change in debt to credit institutions
Funding, continuing business
Funding, discontinuied and divested business
Total funding
Change in cash an cash equivalents, net
Price adjustment of cash and cash equivalents, beginning of period
Additions relating to purchase of associate
Change in cash and cash equivalents, gross
Cash and cash equivalents, begining of period
Cash and cash equivalents, end of period
102 of 152 l Cash flow statement – TrygVesta Group l TrygVesta Annual Report 2007
16,800
-11,376
-122
-2,705
-316
2,281
1,164
-186
169
-693
-55
2,680
0
2,680
-16
17
1,062
-856
-303
-187
5
0
0
-98
-376
0
-376
-50
8
-2,244
-65
-2,351
0
-2,351
-47
7
0
-40
338
298
15,935
-9,902
-153
-2,698
13
3,195
886
-207
261
-718
-31
3,386
-139
3,247
-240
10
163
-1,925
0
-188
82
142
14
107
-1,835
0
-1,835
-83
16
-1,428
-121
-1,616
0
-1,616
-204
-2
1
-205
543
338
Notes
Note 1 ACCOUNTING POLICIES
The consolidated financial statements are prepared in accordance with
the International Financial Reporting Standards (IFRS) as adopted by
the EU on 31 December 2007 and in accordance with the Danish Stat-
utory Order on Adoption of IFRS.
The financial statements of the parent company are prepared in ac-
cordance with executive order no. 1467 dated 13 December 2006 is-
sued by the Danish FSA on the presentation of financial reports by in-
surance companies and profession-specific pension funds, which is
largely identical to IFRS. The deviations from the recognition and
measurement requirements of IFRS are:
• Investments in subsidiaries and associates are valued according to
the equity method, whereas under IFRS valuation is made at cost or
fair value. Furthermore the requirements regarding presentation and
disclosure are less comprehensive than under IFRS.
• Unlike IAS 19, the Danish FSA’s executive order does not allow for
actuarial gains and losses arising from experience adjustments and
changes in actuarial assumptions to be taken to equity. Actuarial
gains and losses will therefore be recognised in the parent compa-
ny’s income statement.
• The Danish FSA’s executive order does not allow provisions for de-
ferred tax of contingency reserves allocated from untaxed funds. De-
ferred tax and the equity of the parent company have been adjusted
accordingly on the transition to IFRS.
The executive order on application of international financial reporting
standards for companies subject to the Danish Financial Business Act is-
sued by the Danish FSA requires disclosure of differences between the
format of the annual report under international financial reporting stand-
ards and the rules issued by the Danish FSA. The following is a reconcilia-
tion of differences in the profit for the year and shareholders’ equity.
DKKm
2007 2006
Profit reconciliation
Profit for the year ended 31 December - IFRS
Current-year effect of actuarial gains and losses
on pension obligation after tax
Change in deferred tax relating to contingency funds
2,266 3,211
69
-2
84
-4
Profit for the year ended 31 December
- Danish FSA executive order
2,333 3,291
Equity reconciliation
Shareholders’ equity at 31 December - IFRS
Deferred tax provisions for contingency funds
Change in deferred tax relating to
contingency funds
10,010 9,951
27
23
-2
-4
Equity at 31 December
- Danish FSA executive order
10,031 9,974
Changes in accounting policies
TrygVesta introduced a simpler model for unwinding effective on 1 Jan-
uary 2007. Unwinding means that the discount on the provision is un-
wound as the settlement date gets closer and the amount is trans-
ferred from claims to technical interest in the income statement.
The new method relies solely on market interest rates and provisions
at the beginning of the relevant period, thus providing a more stable
and predictable outcome. For 2006, the change involved a reduction of
the combined ratio of 1.4% (a total of 0.9% for 2005). In connection
with the discounting, a larger share of claims incurred is thus trans-
ferred to technical interest. The change has no effect on the profit for
the year, the balance sheet or on shareholders’ equity.
All comparative figures are restated and the effect is shown in the ta-
ble next page.
In 2007, the Group implemented:
• IFRS 8 ’Segment information’. Replacing IAS 14, the standard will en-
ter into force on 1 January 2009. Implementation of the standard will
entail a change in the identification of segments from primary and
secondary segments to operating segments. The standard has no ef-
fect on recognition and measurement in the annual report.
• IFRIC 8 concerning ‘Scope of IFRS 2’ comes into force for financial
years commencing on or after 1 May 2007. The group already treats
group transactions concerning share-based payment in accordance
with these principles. The interpretation has not changed the ac-
counting treatment currently applied.
• IFRIC 10 concerning ‘Interim Financial Reporting and Impairment’.
The interpretation prohibits the reversal of impairment losses in in-
terim financial statements on goodwill and financial assets carried at
cost. The implementation has not had any financial effect.
• IFRIC 11 concerning ‘Group and Treasury Share Transactions’. The in-
terpretation specifies that the accounting treatment of share-based
payment does not rely on the way in which the shares are acquired
by the company at the exercise date. The interpretation has not
changed the accounting treatment currently applied.
Apart from the changes described above, the accounting policies are
unchanged from the annual report 2006.
TrygVesta Annual Report 2007 l Notes l 103 of 152
Accounts
DKKm
Gross premiums earned
Gross claims incurred
Gross expenses
FY 2006
FY 2005
Former unwind.
ajust-
New
acc.
policies ments policies policies ments policies policies ments policies
New Former unwind.
ajust-
acc.
acc.
acc.
FY 2004
New Former unwind.
ajust-
acc.
acc.
16,021
-10,796
-2,697
232
16,021
-10,564
-2,697
15,705
-11,304
-2,662
145
15,705
-11,159
-2,662
15,266
-10,572
-2,611
147
15,266
-10,425
-2,611
Profit/loss on gross business
2,528
232
2,760
1,739
145
1,884
2,083
147
2,230
Profit/loss on ceded business
-578
-13
-591
-9
2
-7
-718
10
-708
Interest on insurance provisions
Transferred from provisions for claims
concerning discounting
Technical interest, net of reinsurance
1,040
-457
583
1,040
701
701
636
-240
-240
-697
-378
343
323
-153
-153
-531
-301
170
335
-150
-150
636
-451
185
Technical result
Return on investment activites
after transfer to Insurance activities
Other income and expenses
Tax
Profit/loss on discontinued
and divested business after tax
2,533
-21
2,512
2,053
-6
2,047
1,700
7
1,707
1,207
-31
-624
126
21
1,228
-31
-624
888
-28
-788
6
894
-28
-788
378
-26
-556
-7
126
-28
-28
-75
371
-26
-556
-75
Profit/loss
3,211
0
3,211
2,097
0
2,097
1,421
0
1,421
Run-off gains/losses, net of reinsurance
372
67.4
Gross claims ratio
Business ceded as a percentage of gross premiums 3.6
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Claims ratio, net
Expense ratio, net
Combined ratio, net
71.0
16.8
87.8
69.9
17.2
87.1
183
-1.5
0.1
-1.4
0.0
-1.4
-1.5
0.0
-1.5
555
181
65.9
3.7
69.6
16.8
86.4
68.4
17.2
85.6
72.0
0.1
72.1
17.0
89.1
70.7
17.6
88.3
102
-0.9
0.0
-0.9
0.0
-0.9
-1.0
0.0
-1.0
283
-161
71.1
0.1
71.2
17.0
88.2
69.7
17.6
87.3
69.3
4.7
74.0
17.1
91.1
72.4
17.6
90.0
90
-1.0
-0.1
-1.1
0.0
-1.1
-1.2
0.0
-1.2
-71
68.3
4.6
72.9
17.1
90.0
71.2
17.6
88.8
Executive orders, standards and interpretations not yet in force
The International Accounting Standards Board (IASB) has issued a
number of revised international accounting standards and the Interna-
tional Financial Reporting Interpretations Committee (IFRIC) has issued
a number of interpretations that have not yet come into force.
Other interpretations, including IFRIC 12 ’Service Concession Arrange-
ments’, IFRIC 13 ’Customer Loyalty Programmes’ and IFRIC 14 ’The limit
on a Defined Benefit Asset’ are not expected to have any financial re-
porting impact.
• IAS 1 concerning ’Presentation of Financial Statements – Capital Dis-
closures’, which is effective for financial years commencing on or after
1 January 2009. The amendment contains an adjustment to the type
of information disclosed about the capital base. The implementation is
not expected to give rise to any material changes to information in Try-
gVesta’s annual report (IAS 1 remains to be adopted by the EU).
• IAS 23 (updated 2007) concerning ‘Borrowing costs, which is effec-
tive for financial years commencing on or after 1 January 2009. IAS
23 (updated 2007) requires the recognition of borrowing costs in
the cost of a qualifying asset (intangible assets, property, plant and
equipment and inventories). The standard is not expected to have fi-
nancial reporting impact (IAS 23 remains to be adopted by the EU).
104 of 152
l Notes l TrygVesta Annual Report 2007
Changes in accounting estimates
• The TrygVesta Group’s defined benefit plan in Norway is impacted
by DKK 99m due to a change in discount rate assumptions from
4.7% to 5.2%.
Accounting estimates and judgments
The preparation of financial statements under IFRS requires the use of
certain critical accounting estimates and requires management to exer-
cise its judgment in the process of applying the company’s accounting
policies. The areas involving a higher degree of judgment or complex-
ity, or areas where assumptions and estimates are significant to the
consolidated financial statements, are:
• Liabilities under insurance contracts
• Valuation of defined benefit plans
A more detailed description of primary assumptions about the future
and other primary sources of estimation uncertainty is given in the risk
management section in the management’s report.
Liabilities under insurance contracts
Estimates of provisions for insurance contracts represent the group’s
most critical accounting estimates, as these provisions involve a
number of uncertainty factors.
Liabilities for unpaid claims are estimates that involve actuarial and
statistical projections of the claims and the administration of the
claims. The projections are based on the TrygVesta Group’s knowledge
of historical developments, payment patterns, reporting delays, dura-
tion of the claims settlement process and other effects that might in-
fluence the future development of the liabilities.
The TrygVesta Group establishes claims reserves covering both case re-
serves and estimated claims that have been incurred by its policyhold-
ers but not yet reported to the company (known as “IBNR” reserves)
and future developments on claims which are known to the TrygVesta
Group but have not been finally settled (IBNER-provisions). The group
also includes in its claims reserves direct and indirect claims settlement
costs or loss adjustment expenses that arise from events that have
occurred up to the balance sheet date even if they have not yet been
reported to the TrygVesta Group.
The projection for claims reserves is therefore inherently uncertain and,
by necessity, relies upon the making of certain assumptions as to fac-
tors such as court decisions, changes in law, social inflation and other
economic trends, including inflation. The TrygVesta Group’s actual lia-
bility for losses may therefore be subject to material positive or nega-
tive deviations relative to the initially estimated provisions for claims.
Provisions for claims are discounted. As a result, initial changes in dis-
count rates or changes in duration of the claims provisions could have
positive or negative effects on earnings. Discounting affects the motor
liability, professional liability, workers’ compensation and personal acci-
dent classes, in particular.
Several assumptions and estimates underlying the calculation of the
provisions for claims are mutually dependent. Most importantly, this can
be expected to be the case for interest rate and inflation assumptions.
Defined benefit pension schemes
The company operates a defined benefit plan in Norway. A “defined
benefit” plan is a pension plan that defines an amount of pension
benefit that an employee will receive on retirement, depending on age,
years of service and compensation. The liability recognised in the bal-
ance sheet in respect of defined benefit pension plans is the present
value of the defined benefit obligation at the balance sheet date less
the fair value of plan assets, together with adjustments for unrecog-
nised actuarial gains or losses and past service costs. The projected
unit credit method is a cash-flow calculation, which calculates the obli-
gation as the present value of benefit attributed to current and prior
years. The defined benefit obligation is calculated periodically by actu-
aries using the projected unit credit method. The present value of the
defined benefit obligation is determined by discounting estimated fu-
ture cash outflows.
Changes in the present value are primarily made due to changes in as-
sumptions about discount rate, expenses, return on plan assets, future
salary increases and future pension increases. Since the provision for
pension funds is based on actuarial calculations involving statistics and
cash flow from such factors as investments, changes in interest rates,
inflation and expectation of life, it may mean that the TrygVesta
Group’s provision may be inadequate to cover its actual liability to-
wards employees and current pensioners.
BASIS OF PRESENTATION
Recognition and measurement
The annual report has been prepared under the historical cost conven-
tion, as modified by the revaluation of owner-occupied properties,
where increases are credited to equity and revaluation of investment
property, financial assets held for trading and financial assets and fi-
nancial liabilities (including derivative instruments) at fair value
through the income statement.
Assets are recognised in the balance sheet when it is probable that fu-
ture economic benefits will flow to the group and the value of the asset
can be reliably measured. Liabilities are recognised in the balance sheet
when the group has a legal or constructive obligation as a result of a
prior event, and it is probable that future economic benefits will flow out
of the group, and the value of the liabilities can be measured reliably.
On initial recognition assets and liabilities are measured at cost, with
the exception of financial assets, which are recognised at fair value.
Measurement subsequent to initial recognition is effected as described
below for each financial statement item. Anticipated risks and losses
that arise before the time of presentation of the annual report and
that confirm or invalidate affairs and conditions existing at the balance
sheet date are considered at recognition and measurement.
Income is recognised in the income statement as earned, whereas
costs are recognised by the amounts attributable to this financial year.
Value adjustments of financial assets and liabilities are recorded in the
income statement unless otherwise described below.
All amounts in the notes are shown in millions of DKK, unless other-
wise stated.
Consolidation
The consolidated financial statements comprise the financial state-
ments of TrygVesta A/S (the parent company) and enterprises (subsidi-
aries) controlled by the parent company. Control is achieved where the
parent company directly or indirectly holds more than 50% of the vot-
ing rights or is otherwise able to exercise or actually exercises a con-
trolling influence.
The consolidated financial statements are prepared on the basis of the
financial statements of the parent company and its subsidiaries by
TrygVesta Annual Report 2007 l Notes l 105 of 152
Accounts
adding items of a uniform nature. The financial statements of subsidi-
aries that present financial statements under other legislative rules are
restated to the accounting policies applied by the group.
Segment reporting
Segment information is based on the group’s management and inter-
nal financial reporting system and is prepared in accordance with the
group’s accounting policies.
Enterprises in which the group exercises significant influence but not
control are classified as associates. Significant influence is typically
achieved through direct or indirect ownership or disposal of more than
20% but less than 50% of the votes.
Investments in joint ventures are recognised using the pro rata consoli-
dation method. Using pro rata consolidation, the group’s share of joint
venture assets and liabilities is recognised in the balance sheet. The
share of income and expenses and assets and liabilities are presented
on a line by line basis in the consolidated financial statements.
On consolidation, intra-group income and expenses, shareholdings, in-
tra-group accounts and dividends, and gains and losses arising on
transactions between the consolidated enterprises are eliminated.
The operational business segments in the TrygVesta Group are the Per-
sonal & Commercial (Denmark) segment, the Personal & Commercial
(Norway) segment, the Corporate segment and the General Insurance
(Finland and Sweden) segment.
Geographical information is presented on the basis of the economic
environment in which the TrygVesta Group operates. The geographical
areas are Denmark, Norway, Finland and Sweden.
Segment income and segment costs as well as segment assets and lia-
bilities comprise those items that can be directly attributed to each in-
dividual segment and those items that can be allocated to the individ-
ual segments on a reliable basis. Unallocated items primarily comprise
assets and liabilities concerning investment activity.
Newly acquired or divested subsidiaries are consolidated at the results
for the period subsequent to achieving or surrendering control, respec-
tively. Profit and loss in divested subsidiaries and profit and loss on dis-
continued activities are included under discontinued and divested busi-
ness in the income statement.
Ratios
Earnings per share (EPS) are calculated according to IAS 33. Other key
ratios are calculated in accordance with “Recommendations and Ratios
2005” issued by the Danish Society of Financial Analysts.
Unrealised gains on transactions between the group and its subsidiar-
ies and associates are eliminated to the extent of the group’s interest
in the companies. Unrealised losses are eliminated in the same way as
unrealised gains unless impairment has occurred.
In accordance with IFRS 1 TrygVesta Group has elected not to apply
IFRS 3 retrospectively to past business combinations (business combi-
nations that occurred before the date of transition to IFRS).
Currency translation
A functional currency is determined for each of the reporting entities
in the group. The functional currency is the currency in the primary
economic environment in which the reporting entity operates. Transac-
tions in currencies other than the functional currency are transactions
in foreign currencies.
INCOME STATEMENT
Premiums
Earned premiums represent gross premiums earned during the year,
net of outward reinsurance premiums and adjusted for changes in the
provision for unearned premiums, corresponding to an accrual of pre-
miums to the risk period of the policies, and in the reinsurers’ share of
the provision for unearned premiums.
Premiums are recognised as earned premiums according to the expo-
sure of risk over the period of coverage, computed separately for each
insurance contract using the pro rata method, and adjusted if neces-
sary to reflect any variation in the incidence of risk during the period
covered by the contract.
On initial recognition, transactions in foreign currencies are translated
into the functional currency at the exchange rate ruling at the trans-
action date. Assets and liabilities denominated in foreign currency are
trans lated at the exchange rates at the balance sheet date. Translation
differences are recognised in the income statement under value
adjustments.
The portion of premiums received on contracts that relates to unex-
pired risks at the balance sheet date is reported under provisions for
unearned premiums.
The portion of premiums paid to reinsurers that relate to unexpired
risks at the balance sheet date is reported as the reinsurers’ share of
provisions for unearned premiums.
On consolidation, the assets and liabilities of the group’s foreign oper-
ations are translated at exchange rates of the balance sheet date. In-
come and expense items are translated at the average exchange rates
for the period. Exchange differences arising on translation are classi-
fied as equity and transferred to the group’s translation reserve.
Such translation differences are recognised as income or as expenses
in the period in which the operation is disposed of. All other currency
translation gains and losses are recognised in the income statement.
Technical interest
According to the Danish FSA’s executive order, technical interest is pre-
sented as a calculated return on the year’s average insurance liability
provisions, net of reinsurance. The calculated interest return for
grouped classes of risks is calculated as the monthly average provision
plus a co-weighted interest from the present yield curve for each indi-
vidual group of risks. The interest is weighted according to the ex-
pected run-off pattern of the provisions.
106 of 152
l Notes l TrygVesta Annual Report 2007
Technical interest is reduced by the portion of the increase in net pro-
visions that relates to unwinding.
Claims incurred
Claims incurred represent claims paid during the year and adjusted for
changes in provisions for unpaid claims less the reinsurers’ share. In
addition, the item includes run-off results regarding previous years.
The portion of the increase in provisions which can be ascribed to un-
winding is transferred to technical interest.
Claims are shown inclusive of direct and indirect claims handling costs,
including costs of inspecting and assessing claims, costs to combat
and contain claims incurred and other direct and indirect costs associ-
ated with the handling of claims incurred.
Changes in claims incurred due to changes in the yield curve and
exchange rates are recognised as a market value adjustment.
TrygVesta Group hedges the risk of changes in future wage and price
figures for provisions for workers’ compensation and annuities for
accident and health insurance. For 90-100% of this risk, TrygVesta
Group uses swaps specifically acquired with a view to hedging the
inflation risk. Value adjustment of these swaps are included in claims
incurred, thereby reducing the effect of changes to inflation expecta-
tions under claims incurred.
Bonus and premium rebates
Bonus and premium rebates represent anticipated and reimbursed
premiums where the amount reimbursed depends on the claims
record, and for which the criteria for payment have been defined
prior to the financial year or when the business was written.
Insurance operating expenses
Insurance operating expenses represent acquisition costs and adminis-
trative expenses less reinsurance commissions received. Expenses re-
lating to acquiring and renewing the insurance portfolio are recognised
at the time of writing the business. Administrative expenses are ac-
crued to match the financial year.
The share option agreement entitles the employee to the options un-
less the employee resigns his position or is dismissed due to breach of
the employment relationship. In case of termination due to restructur-
ing or retirement, the employee is still entitled to the options.
The share options are exercisable exclusively during a two-week period
following the publication of full-year or half-year reports and in ac-
cordance with TrygVesta Group’s in-house rules on trading in the com-
pany’s shares. The options are settled in shares. A part of the compa-
ny’s holding of treasury shares is reserved for settlement of the
options allocated.
On initial recognition of the share options, the number of options
expected to vest is estimated. Subsequently, adjustment is made for
changes in the estimated number of vested options to the effect that
the total amount recognised is based on the actual number of vested
options.
The fair value of the options granted is estimated using the Black &
Scholes option model. The calculation takes into account the terms
and conditions of the share options granted.
Employee shares
When employees are given the opportunity to subscribe shares at a
price below the market price, the discount is recognised as an expense
in staff costs. The balancing item is recognised directly in equity. The
discount is calculated at the grant date as the difference between fair
value and the subscription price of the subscribed shares.
In accordance with Danish law, the shares are held in restricted ac-
counts until expiry of the seventh calendar year after they were sub-
scribed. Employees cannot sell or otherwise dispose of the shares dur-
ing the period they are subject to selling restrictions, but the shares will
be released in case of the employee shareholder’s death or disability.
Investment activities
Income from associates includes the group’s share of the associates’
net profit.
Share-based payment
The TrygVesta Group’s incentive programmes comprise a share option
programme and employee shares.
Income from investment properties before fair value adjustment repre-
sents the profit from property operations less property management
expenses.
Share option programme
The value of services received as consideration for options granted is
measured at the fair value of the options.
Equity-settled share options are measured at the fair value at the
grant date and recognised under staff costs over the period from the
grant date until vesting. The balancing item is recognised directly in
equity.
Interest, dividends, etc. represent interest earned, dividends received,
etc. during the financial year. In addition, the item includes gains and
losses on bonds drawn for redemption.
Realised and unrealised investment gains and losses, including gains
and losses on derivative financial instruments, value adjustment of
land and buildings, exchange rate adjustments and the effect of move-
ments in the yield curve used for discounting, are recognised as value
adjustments.
The options are issued at an exercise price that corresponds to the
market price of the company’s shares at the time of allocation plus
10 %. No other vesting conditions apply. Special provisions are in place
concerning sickness and death and in case of change to the compa-
ny’s capital position, etc.
Investment management charges represent expenses relating to the
management of investments.
TrygVesta Annual Report 2007 l Notes l 107 of 152
Accounts
Other income and expenses
Other income and expenses includes income and expenses which can-
not be ascribed to TrygVesta Group’s insurance portfolio or investment
assets, including the sale of products for Nordea Liv og Pension.
Increases in the revalued carrying amount of owner-occupied proper-
ties are credited to the properties’ revaluation reserve in equity. De-
creases that offset previous increases of the same asset are charged
against the properties’ revaluation reserves directly in equity; all other
decreases are charged to the income statement.
Discontinued and divested business
Discontinued and divested activities are consolidated in one line item
in the income statement and supplemented with disclosure of the dis-
continued and divested activities in a note to the financial statements.
Recognition of the balance sheet items in respect of the discontinued
activities remains unchanged in the respective items whereas assets
and liabilities from divested activities are consolidated in one line as
“assets concerning divested business” and “liabilities concerning di-
vested business”, respectively.
The comparative figures, including financial highlights and key ratios,
have been restated to reflect discontinued business. Discontinued and
divested activities in the income statement include the post-tax profit of
TrygVesta Group’s business in run-off as well as divested enterprises.
Business in run-off comprises the results of the business in run-off in
TrygVesta Forsikring A/S. Divested subsidiaries comprise the activities in
Chevanstell Ltd. UK, Poland, Estonia and Tryg Baltica International A/S.
BALANCE SHEET
Intangible assets - software
Acquired computer software licences are capitalised on the basis of the
costs incurred to acquire and bring to use the specific software. These
costs are amortised on the basis of the expected useful life (four years).
Costs that are directly associated with the production of identifiable
and unique software products, for which there is sufficient certainty
that future earnings will exceed costs for more than one year, are rec-
ognised as intangible assets. Direct costs include the software devel-
opment team’s employee costs and an appropriate portion of relevant
overheads. All other costs associated with developing or maintaining
software are recognised as an expense as incurred.
After completion of the development the asset is depreciated on a
straight-line basis over the expected useful life, however with a maxi-
mum period of 4 years. The basis of amortisation is reduced by any
impairment writedowns.
Owner-occupied property and operating equipment
Owner-occupied properties are measured in the balance sheet at their
revalued amounts, being the fair value at the date of revaluation, less
any subsequent accumulated depreciation and subsequent accumu-
lated impairment writedowns. Revaluations are performed regularly to
avoid the carrying amount differing materially from the owner-occu-
pied property’s fair value at the balance sheet date. The fair value is
calculated on the basis of market-specific rental income per property
and typical operating expenses for the upcoming year. The resulting
operating income is divided by the percentage return requirement of
the property, which has been adjusted to reflect market interest rates
and property characteristics, corresponding to the present value of a
perpetual annuity.
108 of 152
l Notes l TrygVesta Annual Report 2007
Subsequent costs are included in the asset’s carrying amount or rec-
ognised as a separate asset, as appropriate, when it is probable that
future economic benefits associated with the item will flow to the
group, and the cost of the item can be reliably measured. Ordinary re-
pair and maintenance costs are charged to the income statement dur-
ing the financial period in which they are incurred.
Fixtures and operating equipment are measured at cost less accumu-
lated depreciation and any accumulated impairment losses. Cost en-
compasses the purchase price and costs directly attributable to the ac-
quisition of the relevant assets until the time when the asset is ready
to be brought into use.
Depreciation on property, plant and equipment is calculated using the
straight-line method over their estimated useful lives, as follows:
• Owner-occupied properties, 50 years
• Vehicles, 3-5 years
• Furniture, fittings and equipment, 3-5 years
Land is not depreciated.
The assets’ residual values and useful lives are reviewed at each bal-
ance sheet date and adjusted if appropriate.
Gains and losses on disposals and retirements are determined by com-
paring proceeds with carrying amount. Gains and losses are recog-
nised in the income statement. When revalued assets are sold, the
amounts included in the revaluation reserves are transferred to re-
tained earnings.
Investment property
Properties held for renting yields that are not occupied by the group
are classified as investment properties.
Investment property is carried at fair value. Fair value is based on mar-
ket prices, adjusted for any difference in the nature, location or condi-
tion of the specific asset. If this information is not available, the group
uses alternative valuation methods such as discounted cash flow pro-
jections and recent prices on less active markets.
The fair value is calculated on the basis of market-specific rental in-
come per property and typical operating expenses for the upcoming
year. The resulting operating income is divided by the percentage re-
turn requirement of the property, which has been adjusted to reflect
market interest rates and property characteristics, corresponding to the
present value of a perpetual annuity. The value is subsequently ad-
justed with the value in use of the return on prepayments and depos-
its and adjustment for specific property issues such as vacant premises
or special tenant terms and conditions.
Changes in fair values are recorded in the income statement.
Impairment of intangible assets, equipment, owner-occupied
property and investment property
The carrying amount of intangible assets, operating equipment,
owner-occupied property and investment property are tested at least
once a year for impairment in the cash-generating unit to which the
asset belongs, and the asset is written down to the recoverable
amount through the income statement if the carrying amount is
higher. The recoverable amount is generally calculated as the present
value of the future cash flows expected to be derived from the activity
to which the asset belongs.
Investments in subsidiaries
The parent company’s investments in subsidiaries are recognised and
measured under the equity method. The parent company’s share of
the enterprises’ profits or losses after elimination of unrealised intra-
group profits and losses is recognised in the income statement. In the
balance sheet, investments are measured at the pro rata share of the
enterprises’ equity.
Subsidiaries with a negative net asset value are measured at zero
value. Any receivables from these enterprises are written down by the
parent company’s share of such negative net asset value where the re-
ceivables are deemed irrecoverable. If the negative net asset value ex-
ceeds the amount receivable, the remaining amount is recognised un-
der provisions if the parent company has a legal or constructive
obligation to cover the liabilities of the relevant enterprise.
Net revaluation of investments in subsidiaries is taken to reserve for net
revaluation under the equity method if the carrying amount exceeds cost.
The results of foreign subsidiaries are based on translation of the
items in the income statement at average exchange rates for the pe-
riod. Income and expenses in domestic enterprises denominated in for-
eign currency are translated at the exchange rate ruling on the date of
the transaction.
Investments in associates
Associates are enterprises over which the group has significant influ-
ence but not control, generally accompanying a shareholding of be-
tween 20% and 50% of the voting rights. Investments in associates
are measured according to the equity method of accounting so that
the carrying amount of the investment represents the group’s propor-
tionate share of the enterprises’ net assets.
Income after taxes from investments in associates is included as a sep-
arate line in the income statement.
Associates with a negative net asset value are measured at zero value.
If the group has a legal or constructive obligation to cover the associ-
ate’s negative balance, such obligation is recognised under liabilities.
Financial assets measured at fair value with recognition of value
changes in the income statement comprise assets that form part of a
trading portfolio and financial assets designated at fair value with
value adjustment through profit and loss.
Financial assets at fair value through income
Financial assets are classified as financial assets available for sale at in-
ception if acquired principally for the purpose of selling in the short
term, or if they form part of a portfolio of financial assets in which
there is evidence of short-term profit-taking. Derivatives are also clas-
sified as financial assets available for trading unless they are desig-
nated as hedges.
Financial assets are derecognised when the rights to receive cash flows
from the financial asset have expired, or if they have been transferred,
and the group has also transferred substantially all risks and rewards of
ownership. Financial assets are recognised and derecognised on a trade
date basis – the date on which the group commits to purchase or sell the
asset. Financial assets are recognised at fair value at the transaction date.
Realised and unrealised gains and losses arising from changes in the
fair value of the financial assets at fair value through income are in-
cluded in the income statement in the period in which they arise.
The fair values of quoted investments are based on stock exchange
prices at the balance sheet date. For securities that are not listed on a
stock exchange, or for which no stock exchange price is quoted that
reflects the fair value of the instrument, the fair value is determined
using valuation techniques. These include the use of similar recent
arm’s length transactions, reference to other instruments that are sub-
stantially the same and a discounted cash flow analysis.
Derivative financial instruments and hedge accounting
The group’s activities expose it to financial risks, including changes in
share prices, foreign currency exchange rates, interest rates and infla-
tion. Forward exchange contracts and currency swaps are used for cur-
rency hedging of portfolios of shares, bonds, hedging of foreign enti-
ties and insurance balance sheet items. Interest rate derivatives in the
form of futures, forward contracts, repos, swaps and FRAs are used to
manage cash flows and interest rate risks related to the portfolio of
bonds and technical provisions. Equity derivates are used from time to
time to adjust equity exposures.
Derivatives are initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently measured at
their fair value. The valuation is performed in securities systems with
data usually provided by Nordea, and the valuation is verified using
own valuation methods. Derivatives which include expected future
cash flows are discounted on the basis of market interest rates.
Investments
Investments include financial assets at fair value through the income
statement. The classification depends on the purpose for which the in-
vestments were acquired. Management determines the classification of
its investments on initial recognition and re-evaluates this at every re-
porting date.
Derivatives are recognised from the trade date and measured at fair
value in the balance sheet. Positive fair values of derivatives are recog-
nised as bonds and shares or other receivables if they cannot unam-
biguously be attributed to the former. Negative fair values of deriva-
tives are recognised under other payables. Positive and negative
values are only offset when the company is entitled or intends to make
net settlement of more financial instruments.
TrygVesta Annual Report 2007 l Notes l 109 of 152
Accounts
Recognition of the resulting gain or loss depends on whether the de-
rivative is designated as a hedging instrument and, if so, the nature of
the item being hedged. The group designates certain derivatives as
hedges of investments in foreign operations. Changes in the fair value
of derivatives that are designated and qualify as net investment
hedges in foreign entities and which provide effective currency hedg-
ing of the net investment are recognised directly in equity. The net as-
set value of the foreign entities is estimated in an ongoing process
and is hedged 90-100% by entering into short-term forward exchange
contracts. Changes in the fair value relating to the ineffective portion
are recognised in the income statement. Gains and losses accumulated
in equity are included in the income statement on disposal of the for-
eign operation.
Reinsurers’ share of provisions for insurance contracts
Contracts entered into by the group with reinsurers under which the
group is compensated for losses on one or more contracts issued by
the group and that meet the classification requirements for insurance
contracts are classified as reinsurers’ share of provisions for insurance
contracts. Contracts that do not meet these classification requirements
are classified as financial assets.
The benefits to which the group is entitled under its reinsurance con-
tracts held are recognised as assets and reported as reinsurers’ share
of provisions for insurance contracts.
Amounts recoverable from reinsurers are measured consistently with
the amounts associated with the reinsured insurance contracts and in
accordance with the terms of each reinsurance contract.
Changes due to unwinding are recognised in technical interest.
Changes due to changes in the yield curve or foreign currency ex-
change rates are recognised as value adjustments.
The group assesses continuously its reinsurance assets for impairment.
If there is objective evidence that the reinsurance asset is impaired,
the group reduces the carrying amount of the reinsurance asset to its
recoverable amount and recognises that impairment loss in the income
statement. Impairment write-downs are recognised in the income
statement.
Receivables
Receivables are non-derivative financial instruments with fixed or de-
terminable payments that are not quoted in an active market other
than receivables that the group intends to sell in the short term. Re-
ceivables arising from insurance contracts are classified in this category
and are reviewed for impairment as part of the impairment review of
receivables.
On initial recognition, receivables are measured at fair value, and they
are subsequently measured at amortised cost. Appropriate allowances
for estimated irrecoverable amounts are recognised in the income
statement when there is objective evidence that the asset is impaired.
The allowance recognised is measured at the difference between the
asset’s carrying amount and the present value of estimated future
cash flows.
110 of 152
l Notes l TrygVesta Annual Report 2007
Prepayments and accrued income
Prepayments include expenses paid in respect of subsequent financial
years and interest receivable.
Share capital
Shares are classified as equity when there is no obligation to transfer
cash or other assets. Incremental costs directly attributable to the is-
sue of equity instruments are shown in equity as a deduction from the
proceeds, net of tax.
Exchange adjustment reserve
Assets and liabilities of foreign entities are recognised at the exchange
rate at the balance sheet date. Income and expense items are recog-
nised at the average exchange rates for the period. Any resulting ex-
change rate differences are taken to equity. When an entity is wound
up, the balance is transferred to the income statement.
Contingency fund reserves
Contingency fund reserves are recognised as part of retained earnings
under equity. The funds may only be used when so permitted by the
Danish FSA and when it is to the benefit of the policyholders.
Dividend distribution
Proposed dividend is recognised as a liability at the time of adoption
by the shareholders at the annual general meeting (the date of decla-
ration). Dividends expected to be paid in respect of the year are stated
as a separate line item under equity.
Treasury shares
The purchase and sale sums of treasury shares and dividends thereon
are taken directly to retained earnings under equity.
Proceeds from the sale of treasury shares in connection with the exer-
cise of share options or employee shares are taken directly to equity.
Subordinated loan capital
Subordinated loan capital is recognised initially at fair value, net of
transaction costs incurred. Subordinated loan capital is subsequently
stated at amortised cost; any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in the in-
come statement over the period of the borrowings using the effective
interest method.
Provisions for insurance contracts
Premiums are recognised in the income statement (premium income)
proportionally over the period of coverage and, where necessary, ad-
justed to reflect any time variation of the risk. The portion of premium
received on in-force contracts that relates to unexpired risks at the bal-
ance sheet date is reported as unearned premium provisions. Un-
earned premium provisions are generally calculated according to a best
estimate of expected payments throughout the agreed risk period.
However, as a minimum to the part of the premium calculated using
the pro rata temporis principle until the next payment date. Adjust-
ments are made to reflect any variations in the risk. This applies to
gross as well as ceded business.
Claims and claims handling costs are charged to income as incurred
based on the estimated liability for compensation owed to contract
holders or third parties damaged by the contract holders. They include
direct and indirect claims handling costs and arise from events that
have occurred up to the balance sheet date even if they have not yet
been reported to the group. Provisions for claims are estimated using
the input of assessments for individual cases reported to the group
and statistical analyses for the claims incurred but not reported and
the expected ultimate cost of more complex claims that may be af-
fected by external factors (such as court decisions). The provisions in-
clude claims handling costs.
Provisions for claims are discounted. Discounting is based on a yield
curve reflecting duration applied to the expected future payments from
the provision. Discounting affects the motor liability, professional liabil-
ity, workers’ compensation and personal accident classes, in particular.
Provisions for bonus and premium rebates represent amounts expected
to be paid to policyholders in view of the claims experience during the
financial year.
Provisions for claims are determined for each product line based on ac-
tuarial methods. In cases where product lines encompass more than
one business unit, the claims provisions are distributed, as a main rule,
based on reported number of claims in Denmark and individual claims
in Norway. The models currently used are Chain-Ladder, Bornhuetter-
Ferguson, the Loss Ratio method, De Vylder’s credibility method and a
proprietary collective reserve model for use in private business lines in
Denmark. Chain-Ladder techniques are used for business lines with a
stable run-off pattern. The Bornhuetter-Ferguson method, and some-
times the Loss Ratio method, are used for claims years in which the
previous run-off provides insufficient information about the future run-
off performance. De Vylder’s credibility method is used for areas that
are somewhere in between the Chain-Ladder and Bornhuetter-Fergu-
son/Loss Ratio methods, and may also be used in situations that call
for the use of exposure targets other than premium volume, for exam-
ple the number of insured.
The proprietary collective model is based exclusively on actual pay-
ments and is therefore only used for provisions for small claims, below
DKK 200,000 for motor, or DKK 100,000 for other. The model is so dy-
namic that, to the greatest extent possible, it captures changes in the
run-off pattern. It consists of two modules, with the first module esti-
mating on a daily basis with due consideration to days off and special
high-frequency days such as New Year’s Eve or days with slippery
roads. The model also takes the season into consideration, both in
terms of claims performance and in claims handling intensity. In the
second module, estimates are on a more aggregate level, and the cal-
culations are based on a generalised hierarchic De Vylder model.
The provision for annuities in workers’ compensation insurance is cal-
culated on the basis of a mortality corresponding to the G82 calcula-
tion basis (official mortality table).
In some instances, the historic data used in the actuarial models is not
necessarily predictive of the future development of claims. Specifically,
this is the case with legislative changes where in each specific case an
estimate used for premium increases related to the relevant risk in-
crease is derived. For legislative changes this estimate is used also in
determining the level of claims – and hence reserves. Subsequently,
this estimate is updated when new loss history materialises.
Several assumptions and estimates underlying the calculation of the
provisions for claims are mutually dependent. Most importantly, this
can be expected to be the case for interest rate and inflation assump-
tions.
Workers’ compensation is an area in which explicit inflation assump-
tions are used, with annuities for the insured being indexed with the
workers’ compensation index. An inflation curve that reflects the mar-
ket’s inflation expectations plus a real wage spread is used as an ap-
proximation to the workers’ compensation index.
For other lines of business, the inflation assumptions, because present
only implicitly in the actuarial models, will cause a certain lag in pre-
dicting the level of future losses when a shift in inflation occurs. On
the other hand, the effect of discounting will show immediately as a
consequence of inflation changes to the extent that this change af-
fects the interest rate.
Other correlations are not significant.
Liability adequacy test
Tests are continuously performed to ensure the adequacy of the tech-
nical provisions. In performing these tests, current best estimates of
future cash flows of claims, gains and direct and indirect claims han-
dling costs are used. Any deficiency is charged to the income state-
ment by raising the relevant provision. Any positive deviations are also
recognised in the income statement.
Employee benefits
Pension obligations
The group operates various pension schemes. The schemes are funded
through payments to insurance companies or trustee-administered
funds. In Norway, the group operates a defined benefit plan. A defined
benefit plan is a pension plan that defines an amount of pension ben-
efit that an employee will receive on retirement, dependent on age,
years of service and compensation. In Denmark, the group operates a
defined contribution plan. A defined contribution plan is a pension plan
under which the group pays fixed contributions into a separate entity
(a fund) and will have no legal or constructive obligation to pay further
contributions.
The liability recognised in the balance sheet in respect of defined ben-
efit pension plans is the present value of the defined benefit obligation
at the balance sheet date less the fair value of plan assets, together
with adjustments for unrecognised actuarial gains or losses and past
service costs. The defined benefit obligation is calculated annually by
actuaries using the projected unit credit method. The present value of
the defined benefit obligation is determined by discounting the esti-
mated future cash outflows by a duration that matches the conditions
of the underlying pension obligation.
TrygVesta Annual Report 2007 l Notes l 111 of 152
Accounts
Notes
The actuarial gains and losses arising from experience adjustments and
changes in actuarial estimates is charged or credited to equity.
Other employee benefits
Employees of the group are entitled to a fixed payment when they
reach retirement and when they have been employed with the group
for 25 and for 40 years. The group recognises this liability as soon as
the employment begins.
In special instances the employee can enter a contract with the group
to receive compensation for loss in pension benefits caused by re-
duced working hours. The group recognises this liability based on sta-
tistical models.
Income tax and deferred tax
The group provides current tax expense according to the tax law of
each jurisdiction in which it operates. Current tax liabilities and current
tax receivables are recognised in the balance sheet as estimated tax
on the taxable income for the year, adjusted for change in tax on prior
years’ taxable income and for tax paid under the on-account tax
scheme.
Deferred tax is measured according to the balance sheet liability
method on all timing differences between the tax and accounting
value of assets and liabilities. Deferred income tax is measured using
tax rules and tax rates that apply in the relevant countries by the bal-
ance sheet date when the deferred tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets, including the tax value of tax losses car-
ried forward, are recognised to the extent that it is probable that fu-
ture taxable profit will be available against which the temporary differ-
ences can be utilised.
Deferred income tax is provided on temporary differences concerning
investments, except where TrygVesta Group controls when the tempo-
rary difference will be realised, and it is probable that the temporary
difference will not be realised in the foreseeable future.
Provisions
Provisions are recognised when, as a consequence of an event that
has occurred before or on the balance sheet date, the group has a le-
gal or constructive obligation, and it is likely that an outflow of re-
sources will be required to settle the obligation. Provisions are meas-
ured as the management’s best estimate of the amount with which
the liability is expected to be settled.
Financial liabilities
Bond loans, debt to credit institutions, etc. are recognised at the rais-
ing of the loan as the proceeds received less transaction costs. In the
subsequent periods, financial liabilities are measured at amortised
cost, applying the ‘effective interest rate method’, to the effect that
the difference between the proceeds and the nominal value is recog-
nised in the income statement under financial expenses over the term
of the loan. Transaction costs in connection with floating-rate loans or
floating-rate credit facilities are amortised over the loan period using
straight-line amortisation.
Other liabilities are measured at net realisable value.
Cash flow statement
The cash flow statement of the group is presented using the direct
method and shows cash flows from operating, investing and financing
activities as well as the group’s cash and cash equivalents at the be-
ginning and the end of the financial year. No separate cash flow state-
ment has been prepared for the parent company because it is included
in the consolidated cash flow statement.
Cash flows from acquisition and divestment of enterprises are shown
separately under cash flows from investing activities. Cash flows from
acquired enterprises are recognised in the cash flow statement from
the time of their acquisition, and cash flows from divested enterprises
are recognised up to the time of sale.
Cash flows from operating activities are calculated whereby major
classes of gross cash receipts and gross cash payments are disclosed.
Cash flows from investing activities comprise payments in connection
with acquisition and divestment of enterprises and activities as well as
purchase and sale of intangible assets, property, plant and equipment
as well as fixed asset investments.
Cash flows from financing activities comprise changes in the size or
composition of TrygVesta’s share capital and related costs as well as
the raising of loans, instalments on interest-bearing debt, and pay-
ment of dividends.
Cash and cash equivalents comprise cash and demand deposits.
112 of 152
l Notes l TrygVesta Annual Report 2007
DKK m
2007
2006
2 Earned premiums, net of reinsurance
Direct insurance
Indirect insurance
Unexpired risk provision
Ceded direct insurance
Ceded indirect insurance
16,764
78
16,842
-13
16,829
-891
-48
15,890
Direct insurance, by location of risk
2007
2006
Gross
9,334
469
6,961
16,764
Ceded
-521
-29
-350
-891
Gross
9,115
269
6,718
16,102
Denmark
Other EU countries
Other countries
3 Technical interest, net of reinsurance
Interest on insurance provisions
Transferred from provisions for claims concerning discounting
Return on discontinued business
4 Claims incurred, net of insurance
Claims incurred
Run-off previous years, gross
Reinsurance recoveries
Run-off previous years, reinsurers’ share
Under claims incurred, the value adjustment of inflation swaps to hedge the inflation risk
concerning annuities on workers’ compensation insurance totals DKK 22m (in 2006 DKK 0m).
5
Insurance operating expenses, net of reinsurance
Commission regarding direct business
Other acquisition costs
Total acquisition costs
Administrative expenses
Insurance operating expenses, gross
Commission, etc. from reinsurers
Administative expenses include fee to the auditors appointed by the Annual General Meeting:
Deloitte
Of which services other than audit:
Deloitte
In adddition, expenses have been incurred for the Group´s Internal Audit Department.
TrygVesta Annual Report 2007 l Notes l 113 of 152
16,102
88
16,190
45
16,235
-890
-52
15,293
Ceded
-480
-15
-395
-890
1,031
-697
9
343
-11,182
618
-10,564
312
-63
-10,315
-339
-1,380
-1,719
-978
-2,697
102
-2,595
-8
-8
-2
-2
1,400
-896
-3
501
-11,919
744
-11,175
502
-1
-10,674
-406
-1,415
-1,821
-948
-2,769
95
-2,674
-8
-8
-2
-2
Accounts
Notes
DKKm
2007
2006
5
Insurance operating expenses, gross, classified by type
Commision
Staff expenses
Other staff expenses
Office expenses and fees, headquarter expenses
Operating and maintenance costs IT, software expenses etc.
Depreciation, amortisation and impairment writedowns
Other income
Total expenses for lease amounts to 106 DKKm (2006 101 DKKm).
Insurance operating expenses and claims include the following staff expenditure:
Salaries and wages
Commision
Allocated share options
Pensions
Other social security costs
Payroll tax, etc.
-406
-1,594
-198
-462
-198
-102
191
-2,769
-1,832
-21
-8
-257
-5
-249
-2,372
-341
-1,581
-174
-402
-271
-76
148
-2,697
-1,890
-25
-3
-208
-24
-217
-2,367
Remuneration for Supervisory Board and Group Executive Management appears in the note 29 ‘Related parties’.
Average number of full-time employees during the year (continuing business)
3,813
3,740
Share option programmes
In 2007, TrygVesta awarded share options to the Executive Management (6 persons) and other senior employees (88 persons).
At 31 December 2007, the share option plan comprised 329,902 share options (at 31 December 2006 186,020 share options).
Each share option entitles the holder to acquire one existing share of DKK 25 nominal value in the company. The share option plan enti-
tles the holders to buy 0.49 % of the share capital if all share options are exercised. Specification of outstanding options:
Share options
Total Numbers
Fair Value
Total fair
Group
Executive
Management
Other
senior
em-
ployees
Other
em-
ployees
option
at grant
Per value per Per option Total fair
at 31 value at 31
at grant December December
DKK
option
DKK
Total date DKK date DKK
2006
Outstanding options
1 January 2006
Allocated concerning 2005
Exercised
Cancelled
Expired
Outstanding options from
allocation 2006 1 Dec 2006
Number of options exercisable
end of 2006
2007
Allocated concerning 2005
Exercised
Cancelled 2006
Expired
Outstanding options from
allocation 2006 31 Dec 2007
Number of options exercisable
end of 2007
0
44,540
0
0
0
0
141,480
0
0
0
0
0
0
0
0
0
186,020
0
0
0
44,540
141,480
0
186,020
0
0
44,540
0
0
0
141,480
0
-2,620
0
0
0
0
0
0
0
186,020
0
-2,620
0
44,540
138,860
0
183,400
0
0
0
0
114 of 152
l Notes l TrygVesta Annual Report 2007
0
64
0
0
0
-
0
64
0
64
0
-
0
0
12
0
0
0
12
0
12
0
0
0
12
0
0
150
0
0
0
-
0
119
0
119
0
-
0
0
28
0
0
0
28
0
22
0
0
0
22
0
Group
Executive
Management
Other
senior
em-
ployees
Other
em-
ployees
option
at grant
Per value per Per option Total fair
at 31 value at 31
at grant December December
DKK
option
DKK
Total date DKK date DKK
Total fair
Allocated concerning 2006
Exercised
Cancelled 2007
Expired
40,916
0
0
91,039
0
-1,453
0
18,000
0
-2,000
0
149,955
0
-3,453
0
Outstanding options from
allocation 2007 31 Dec 2007
Number of options exercisable
end of 2007
40,916
89,586
16,000
146,502
0
0
0
0
99
0
99
0
-
0
15
0
-1
0
14
0
49
0
49
0
-
0
7
0
0
0
7
0
Total Numbers
allocated Exercised Cancelled
Expired
Total share
options
Out-
standing
Period of exercise
Outstanding share options
at exercise date
Allocated in 2006 concerning 2005 186,020
Allocated in 2007 concerning 2006 149,955
0
0
-2,620
-3,453
0
0
183,400
146,502
February 2009 - February 2011
February 2010 - February 2012
Total outstanding options
31 December 2007
335,975
0
-6,073
0
329,902
In 2007, the fair value of share options for the Group amounted to DKK 8m. The fair value in 2007 for the programme allocated in 2006
are DKK 7m and for the programme allocated in 2007 the fair value are DKK 4m.
Fair values at the time of allocation are based on the Black & Scholes option pricing formula.
The following assumptions were applied in calculating the market value of outstanding share options at the time of allocation:
DKKm
Average share price (DKK) at the time of allocation
Exercise price (DKK)
Expected volatility
Expected maturity
Risk-free interest rate
2007
456.76
0
24.10%
4 years
3.90%
2006
355.83
0
17.90%
4 years
3.30%
The expected volatility is based on the average volatility of TrygVesta shares in 2007.
The expected maturity is 4 years, corresponding to the average of the exercise period of 3 to 5 years. The risk-free interest rate is based
on a bullet loan with the same maturity as the expected maturity for the options at the time of allocation. The calculation is based on the
strike price as set out in the option agreement and the average share price at the time of grant. The dividend payout ratio is not included
in the calculation as the strike price is reduced by dividends paid in order to prevent recipients of option payments from being penalised
for the company’s dividend payments. The assumptions for calculating the market value at the end of the period are based on the same
principles as for the market value at the time of allocation.
For outstanding options at 31 December 2007, the average term to maturity is 2.2 years and 3.2 years.
Employee shares
In 2007, TrygVesta granted employee shares at a discount to the market price to employees at all levels in the parent company and Dan-
ish subsidiaries. Employees of non-Danish branches were offered employee shares or alternatively a cash consideration. Each employee
was offered 23 shares at a discount to the market price equal to DKK 25 DKK per share, equivalent to a total of 49,338 shares or around
DKK 23m being granted to the employees. Senior executives received part of their bonus in the form of shares at a discount to the mar-
ket price. In 2007, a total of 20,321 shares were granted at discount to the market price of DKK 25 per share or DKK 9m.
The grant of shares equalled 0.1% of the share capital.
The amount was provided in 2006 and did not affect the profit for 2007.
In 2007, TrygVesta offered its employees employee shares at a discount to the market price equal to DKK 25 per share subject to achieve-
ment of specific financial benchmarks for 2007. Employees of non-Danish branches were offered employee shares or an alternative cash
consideration. Senior executives of TrygVesta may elect to receive part of their bonus for 2007 in the form of shares at a discount to the-
market price. Bonus will be granted in early 2008. Provisions have been made for the above obligations in 2007.
TrygVesta Annual Report 2007 l Notes l 115 of 152
Accounts
Notes
DKKm
SEGMENTS
6 Operating segments
Private and
Commercial
Denmark
Private and
Commercial
Norway
Corporate
Finnish
general
insurance
Swedish
general
insurance
Other
Total
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on business ceded
Technical interest, net of insurance
Technical result
6,490
-4,041
-1,086
-87
164
1,440
6,390
-4,215
-1,109
-200
128
994
4,490
-2,962
-936
-82
182
692
4,509
-2,866
-922
-75
111
757
5,285
-3,904
-504
-172
137
842
4,921
-3,322
-539
-316
98
842
251
-188
-125
-1
14
-49
198
-155
-83
0
6
-34
90
-80
-95
0
3
-82
4
-6
-39
0
0
-41
0
0
-23
-1
1
-23
-1
0
-5
0
0
-6
Total return on investment activities
after technical interest
Other income and expenses
Profit before tax
Tax
Profit on continued business
Loss on discontinued and divested business
Profit for the year
Private and
Commercial
Denmark
Private and
Commercial
Norway
Corporate
Finnish
general
insurance
Swedish
general
insurance
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
Investments in associates
Reinsurers’ share of provision for
unearned premiums
Reinsurers’ share of provision for claims
Other assets
0
13
62
Total assets
0
0
-35
0
0
139
0
0
238
0
0
146
1,227
185
1,173
Provisions for unearned premiums
Provisions for claims
2,485
7,092
2,416
7,354
1,505
3,417
1,520
3,287
1,317
10,292
1,182
9,507
Provisions for bonuses and
premium rebates
Provisions
Debt
Accruals and deferred income
Total liabilities
268
256
0
0
141
118
Description of segments
Please refer to ‘Our business areas’ for a description of our Operating segments.
Depreciation/amortisation is included in gross operating expenses. The group has decided not to present depreciation/amortisation separately,
because they are managed at grouplevel and are therefore not allocated to the individual segments.
Other assets and liabilities are managed at group level and are therefore not allocated to the individual segments.
These amounts are thus included under ‘Other’.
Costs are allocated according to specific keys, which are believed to provide the best estimate of assessed resource consumption.
A presentation of segments broken down by geography is provided in ‘Financial highlights and key ratios by geography’.
116 of 152
l Notes l TrygVesta Annual Report 2007
16,606
-11,175
-2,769
-343
501
2,820
340
-51
3,109
-842
2,267
-1
2,266
159
1,428
42,224
43,830
5,403
21,104
409
1,569
4,143
91
16,021
-10,564
-2,697
-591
343
2,512
1,228
-31
3,709
-624
3,085
126
3,211
185
1,376
41,204
42,783
5,173
20,410
374
1,512
4,155
109
32,719
31,733
Other
Total
19
18
0
0
0
64
172
0
0
0
0
43
132
0
0
0
0
32
33
0
0
0
0
12
4
0
42,224
41,204
19
0
0
0
98
0
1,569
4,143
91
18
0
0
0
126
0
1,512
4,155
109
DKKm
SEGMENTS
6 Operating segments
Total return on investment activities
after technical interest
Other income and expenses
Profit before tax
Tax
Profit on continued business
Loss on discontinued and divested business
Profit for the year
Other assets
Total assets
Provisions for unearned premiums
Provisions for claims
Provisions for bonuses and
premium rebates
Provisions
Debt
Accruals and deferred income
Total liabilities
Description of segments
Private and
Commercial
Denmark
Private and
Commercial
Norway
Corporate
Finnish
general
insurance
Swedish
general
insurance
Other
Total
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on business ceded
Technical interest, net of insurance
Technical result
6,490
-4,041
-1,086
-87
164
1,440
6,390
-4,215
-1,109
-200
128
994
4,490
-2,962
-936
-82
182
692
4,509
-2,866
-922
-75
111
757
5,285
-3,904
-504
-172
137
842
4,921
-3,322
-539
-316
98
842
251
-188
-125
-1
14
-49
198
-155
-83
0
6
-34
90
-80
-95
0
3
-82
4
-6
-39
0
0
-41
0
0
-23
-1
1
-23
-1
0
-5
0
0
-6
16,606
-11,175
-2,769
-343
501
2,820
340
-51
3,109
-842
2,267
-1
2,266
16,021
-10,564
-2,697
-591
343
2,512
1,228
-31
3,709
-624
3,085
126
3,211
Private and
Commercial
Denmark
Private and
Commercial
Norway
Corporate
Finnish
general
insurance
Swedish
general
insurance
Other
Total
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
Investments in associates
Reinsurers’ share of provision for
unearned premiums
Reinsurers’ share of provision for claims
0
13
62
0
0
-35
0
0
139
0
0
238
0
0
146
1,227
185
1,173
2,485
7,092
2,416
7,354
1,505
3,417
1,520
3,287
1,317
10,292
1,182
9,507
268
256
0
0
141
118
Please refer to ‘Our business areas’ for a description of our Operating segments.
Depreciation/amortisation is included in gross operating expenses. The group has decided not to present depreciation/amortisation separately,
because they are managed at grouplevel and are therefore not allocated to the individual segments.
Other assets and liabilities are managed at group level and are therefore not allocated to the individual segments.
These amounts are thus included under ‘Other’.
Costs are allocated according to specific keys, which are believed to provide the best estimate of assessed resource consumption.
A presentation of segments broken down by geography is provided in ‘Financial highlights and key ratios by geography’.
0
0
0
64
172
0
0
0
0
43
132
0
0
0
0
32
33
0
0
0
0
12
4
0
19
18
19
18
0
0
42,224
0
0
41,204
0
98
0
1,569
4,143
91
0
126
0
1,512
4,155
109
159
1,428
42,224
43,830
5,403
21,104
409
1,569
4,143
91
185
1,376
41,204
42,783
5,173
20,410
374
1,512
4,155
109
32,719
31,733
TrygVesta Annual Report 2007 l Notes l 117 of 152
Accounts
Notes
6 Technical result, net of reinsurance, by line of business
Accident and
health
Workmen’s
compensation
Healthcare
Motor
TPL
Motor
comprehensive
Marine aviation,
and cargo
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
Gross premiums written
1,615
1,401
Gross premiums earned
Gross claims
Bonuses and premium rebates
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
1,551
- 841
- 16
- 249
12
53
510
1,379
- 983
- 11
- 234
- 13
38
176
1,487
1,424
- 1,514
0
- 150
13
58
- 169
1,207
1,181
- 1,071
0
- 133
- 1
39
15
112
74
- 108
0
- 23
0
4
- 53
60
54
- 50
0
- 18
0
1
- 13
2,416
2,402
- 757
- 13
- 386
- 13
76
1,309
2,380
2,419
- 1,668
- 14
- 366
- 23
48
396
3,094
3,100
- 1,982
- 93
- 461
0
71
635
3,070
3,084
- 1,816
- 133
- 423
- 2
46
756
Frequency
Average
Total
8.0%
22,582
74,723
7.2%
26,010
66,339
24.2%
70,177
15,688
21.0%
72,056
13,492
23.0%
20,942
5,294
8.8%
9,319
5,201
5.9%
20,817
75,637
6.5%
24,291
78,586
20.7%
10,759
186,909
20.8%
10,120
176,489
10.0%
81,703
6,781
11.6%
61,779
7,393
Fire & contests
(Private)
Fire and contests
(commercial)
Change
of ownership
Liability
insurance
insurance
Credit & guarantee
Tourist assistance
2007
2006
2007
2006
2007
2006
2007
2006
2007
Gross premiums written
Gross premiums earned
Gross claims
Bonuses and premium rebates
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
3,195
3,189
- 2,331
- 40
- 704
- 102
113
125
3,135
3,112
- 2,005
- 31
- 695
- 134
80
327
2,451
2,471
- 1,760
0
- 398
- 280
61
94
2,428
2,422
- 1,288
- 1
- 426
- 311
38
434
98
86
- 72
-1
- 11
0
9
11
96
81
- 86
0
- 11
0
6
- 10
699
699
- 586
- 11
- 92
156
1
167
2007
261
268
- 214
0
- 54
- 1
7
6
2006
634
628
- 454
- 14
- 92
- 63
9
14
2006
287
282
- 219
0
- 39
- 2
6
28
724
712
- 271
- 48
- 126
- 88
21
200
701
709
- 451
- 9
- 140
- 3
14
120
146
146
1
0
- 41
- 32
4
78
2006
138
140
24
0
- 42
- 36
4
90
Frequency
Average
Total
12.8%
11,239
199,579
11.5%
10,839
180,385
20.7%
49,224
36,529
19.6%
44,212
33,882
14.8%
8,193
7,702
14.3%
9,621
6,533
10.6%
46,661
8,589
11.1%
50,958
8,787
0.7%
1.1%
48,061
925,145
19
26
7.1%
7,192
10,435
11.7%
3,949
16,567
Other
insurance
Total
Norwegian Group Life 1)
One-year policies
2007
2006
2007
2006
2007
2006
Gross premiums written
Gross premiums earned
Gross claims
Bonuses and premium rebates
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
147
147
- 327
- 1
- 8
- 5
0
- 194
154
152
- 27
- 1
- 8
0
- 1
115
16,445
15,691
16,269
- 10,762
- 223
- 2,703
- 340
478
2,719
15,643
- 10,094
- 214
- 2,627
- 588
328
2,448
514
560
- 413
0
- 66
- 3
23
101
605
592
- 470
0
- 70
- 3
15
64
Average
Total
377,446
834
43,397
824
118 of 152
l Notes l TrygVesta Annual Report 2007
6 Technical result, net of reinsurance, by line of business
Accident and
health
Workmen’s
compensation
Healthcare
Motor
TPL
Motor
comprehensive
Marine aviation,
and cargo
2007
2006
2007
2006
2007
2006
2007
2006
2007
2006
2007
Gross premiums written
Gross premiums earned
Gross claims
Bonuses and premium rebates
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
1,615
1,551
- 841
- 16
- 249
12
53
510
1,401
1,379
- 983
- 11
- 234
- 13
38
176
1,487
1,424
- 1,514
0
- 150
13
58
- 169
1,207
1,181
- 1,071
0
- 133
- 1
39
15
2,416
2,402
- 757
- 13
- 386
- 13
76
1,309
2,380
2,419
- 1,668
- 14
- 366
- 23
48
396
3,094
3,100
- 1,982
- 93
- 461
0
71
635
3,070
3,084
- 1,816
- 133
- 423
- 2
46
756
699
699
- 586
- 11
- 92
156
1
167
2006
634
628
- 454
- 14
- 92
- 63
9
14
Frequency
Average
Total
8.0%
22,582
74,723
7.2%
26,010
66,339
24.2%
70,177
15,688
21.0%
72,056
13,492
23.0%
20,942
5,294
8.8%
9,319
5,201
5.9%
20,817
75,637
6.5%
24,291
78,586
20.7%
10,759
186,909
20.8%
10,120
176,489
10.0%
81,703
6,781
11.6%
61,779
7,393
Fire & contests
Fire and contests
(Private)
(commercial)
Change
of ownership
Liability
Credit & guarantee
insurance
Tourist assistance
insurance
2007
2006
2007
2006
2007
2006
2007
2006
2007
Gross premiums written
Gross premiums earned
Gross claims
Bonuses and premium rebates
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
3,195
3,189
- 2,331
- 40
- 704
- 102
113
125
3,135
3,112
- 2,005
- 31
- 695
- 134
80
327
2,451
2,471
- 1,760
0
- 398
- 280
61
94
2,428
2,422
- 1,288
- 1
- 426
- 311
38
434
724
712
- 271
- 48
- 126
- 88
21
200
701
709
- 451
- 9
- 140
- 3
14
120
146
146
1
0
- 41
- 32
4
78
2006
138
140
24
0
- 42
- 36
4
90
2007
261
268
- 214
0
- 54
- 1
7
6
2006
287
282
- 219
0
- 39
- 2
6
28
Frequency
Average
Total
12.8%
11,239
199,579
11.5%
10,839
180,385
20.7%
49,224
36,529
19.6%
44,212
33,882
14.8%
8,193
7,702
14.3%
9,621
6,533
10.6%
46,661
8,589
11.1%
50,958
8,787
0.7%
48,061
19
1.1%
925,145
26
7.1%
7,192
10,435
11.7%
3,949
16,567
Other
insurance
Total
Norwegian Group Life 1)
One-year policies
2007
2006
2007
2006
2007
2006
Gross premiums written
Gross premiums earned
Gross claims
Bonuses and premium rebates
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
147
147
- 327
- 1
- 8
- 5
0
154
152
- 27
- 1
- 8
0
- 1
16,445
15,691
16,269
- 10,762
- 223
- 2,703
- 340
478
15,643
- 10,094
- 214
- 2,627
- 588
328
Technical result
- 194
115
2,719
2,448
Average
Total
377,446
834
43,397
824
112
74
- 108
0
- 23
0
4
- 53
98
86
- 72
-1
- 11
0
9
11
514
560
- 413
0
- 66
- 3
23
101
60
54
- 50
0
- 18
0
1
- 13
96
81
- 86
0
- 11
0
6
- 10
605
592
- 470
0
- 70
- 3
15
64
TrygVesta Annual Report 2007 l Notes l 119 of 152
Accounts
Notes
DKKm
2007
2006
7
Interest and dividends, etc.
Dividends
Interest expenses
Interest income
8 Market value adjustment
Equity investments
Unit trust units
Bonds
Interest derivatives
Investment property
Owner-occupied property
Discounting
Other balance sheet items
Market value gains
Market value losses
Market value adjustment, net
168
-88
1,214
1,294
99
-80
25
-56
107
14
298
8
427
415
1,861
-1,446
415
Exchange rate adjustments concerning financial assets or liabilities at fair value with value adjustment
in the income statement amounts to DKK 73m (2006 DKK 1m).
9 Reconciliation of tax expenses
Tax on profit for the year
Difference between Danish and foreign tax rate
Prior-year tax adjustment
Change in tax rate in Denmark
Tax on non-taxable income and expenses
Change in valuation of tax assets
Other taxes
Tax on ledger account
Effective tax rate
Tax on profit for the year
Difference between Danish and foreign tax rate
Prior-year tax adjustment
Change in tax rate in Denmark
Tax on non-taxable income and expenses
Change in valuation of tax assets
Other taxes
Tax on ledger account
-777
-39
13
20
-2
-42
-15
0
-842
%
25
1
0
-1
0
1
1
0
27
cf ‘TrygVestas Financial performance 2007’ in ’Management’s report’ for further information regarding the tax expense.
120 of 152
l Notes l TrygVesta Annual Report 2007
183
-94
922
1,011
764
26
-115
5
190
0
368
-12
546
1,226
1,757
-531
1,226
-1,037
0
28
0
226
-22
0
181
-624
%
28
0
-1
0
-6
1
0
-5
17
DKKm
2007
2006
10 Profit/loss on discontinued and divested business
Earned premiums, net of reinsurance
Technical interest, net of reinsurance
Claims incurred, net of reinsurance
Insurance operating expenses, net of reinsurance
Technical result
Return on investment activities after technical interest
Profit/loss before tax
Tax
0
3
-1
-3
-1
0
-1
0
-1
4
-1
119
-25
97
63
160
-34
126
Claims incurred includes in 2006 a DKK 139m gain in connection with
the commutation of the reinsurance agreement with Chevanstell Limited.
The technical result of discontinued and divested business is specified by lines of business as follows:
Accident and
health
Marine, aviation
and cargo
Other
insurance 1)
Total
2007
2006
2007
2006
2007
2006
2007
2006
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
0
0
0
0
0
0
-
0
0
7
-1
-7
0
-1
0
0
0
0
0
0
-
1
1
15
-2
-14
3
3
0
0
-1
-3
0
3
-1
2
2
232
-21
-113
-5
95
0
0
-1
-3
0
3
-1
3
3
254
-24
-134
-2
97
1) The line of business ‘Other insurance’ includes indirect insurance.
DKKm
11
Intangible assets
Cost
Balance 1 January
Exchange rate adjustment
Transferred to operating equipment
Additions during the year
Disposals during the year
Balance 31 December
Amortisation and writedowns
Balance 1 January
Exchange rate adjustment
Amortisation for the year
Reversed amortisation
Balance 31 December
Carrying amount 31 December
2007
2006
373
4
-1
175
-23
528
-153
-3
-56
19
-193
335
238
-4
0
139
0
373
-103
3
-53
0
-153
220
Intangible assets under development amounts to total DKK 220m (DKK 125m in 2006). Additions for internally developed expenses
amount to DKK 22m (DKK 5m in 2006). Amortisation is recognised in the income statement under insurance operating expenses and
claims incurred.
TrygVesta Annual Report 2007 l Notes l 121 of 152
Accounts
Notes
DKKm
2007
2006
12 Operating equipment
Cost
Balance 1 January
Exchange rate adjustment
Transferred from intangible assets
Additions during the year
Disposals during the year
Balance 31 December
Depreciation and impairment writedowns
Balance 1 January
Exchange rate adjustment
Depreciation for the year
Reversed depreciation
Balance 31 December
Carrying amount 31 December
243
1
1
43
-59
229
-145
-1
-31
28
-149
80
Amortisation is recognised in the income statement under insurance operating expenses and claims incurred.
13 Owner-occupied property
Cost
Balance 1 January
Exchange rate adjustment
Additions during the year
Disposals during the year
Balance 31 December
Accumulated value adjustments
Balance 1 January
Value adjustment for the year at revalued amount in profit and loss
Value adjustment for the year at revalued amount in equity
Balance 31 December
Accumulated depreciation
Balance 1 January
Depreciation for the year
Balance 31 December
Balance at revalued amount at 31 December
317
10
0
-9
318
12
-17
-3
-8
-3
-1
-4
306
Amortisation is recognised in the income statement under insurance operating expenses and claims incurred.
External experts were not involved in valuing owner-occupied property.
303
-1
0
49
-108
243
-194
1
-43
91
-145
98
322
-9
4
0
317
8
0
4
12
-1
-2
-3
326
122 of 152
l Notes l TrygVesta Annual Report 2007
In establishing the market value of the properties, the following
return percentages were used for each property category:
Office property
7.00
7.83
7.90
Lowest
percentage
2007
Average
percentage
2007
Highest
percentage
2007
Office property
DKKm
14
Investment property
Fair value 1 January
Exchange rate adjustment
Additions during the year
Disposals during the year
Value adjustment for the year
Fair value 31 December
Lowest
percentage
2006
7.00
Average
percentage
2006
Highest
percentage
2006
7.20
2007
2,127
13
23
-5
105
2,263
7.20
2006
1,726
-13
235
-5
184
2,127
Total rental income for 2007 was DKK 160m (DKK 145m in 2006).
Total expenses for 2007 were DKK 43m (DKK 44m in 2006). Of this amount, unlet property represented DKK 1m (DKK 2m in 2006),
so the total expenses for investment property generating rental income were DKK 42m (DKK 42m in 2006).
External experts were not involved in valuing investment property.
In establishing the market value of the properties, the following return percentages were used for each property category.
Business property
Office property
Residential property
Business property
Office property
Residential property
Lowest
percentage
2007
7.00
3.75
4.00
Lowest
percentage
2006
7.00
3.80
3.50
Average
percentage
2007
7.27
6.57
5.30
Average
percentage
2006
7.30
6.50
4.80
Highest
percentage
2007
7.50
7.50
6.00
Highest
percentage
2006
7.50
7.50
6.00
TrygVesta Annual Report 2007 l Notes l 123 of 152
Accounts
Notes
DKKm
2007
2006
15
Investments in associates
Cost
Balance 1 January
Additions during the year
Balance 31 December
Revaluations at net asset value
Balance 1 January
Revaluations during the year
Balance 31 December
Carrying amount 31 December
0
0
0
18
1
19
19
14
-14
0
16
2
18
18
Shares in associates according to the lastest financial statements:
2007
Name and registered office
Assets
Liabilities
Shareholders’
Equity
Revenue
Profit/Loss
of the year
Ownership
share in %
Komplementarselskabet
af 1. marts 2006 ApS, DK
Bilskadeinstituttet AS, Norway
Edsvåg Fabrikker AS, Norway
0
4
40
0
0
5
0
4
35
0
1
17
0
0
5
50
30
28
2006
Name and registered office
Assets
Liabilities
Shareholders’
Equity
Revenue
Profit/Loss
of the year
Ownership
share in %
Komplementarselskabet
af 1. marts 2006 ApS, DK
Bilskadeinstituttet AS, Norway
Edsvåg Fabrikker AS, Norway
0
5
34
0
0
3
0
4
31
0
1
14
0
0
3
50
30
28
A individual estimate of the degree of influence referring to the agreed contracts are made.
124 of 152
l Notes l TrygVesta Annual Report 2007
DKKm
2007
2006
16 Financial investment assets
Financial assets at fair value with value adjustment in the income statement, cf. IAS 39
Receivables at amortized costs
Financial assets at fair value with value adjustment in the income statement
Trading porfolio:
Bonds
Contains of:
Cash allocated to portfolio management
Unsettled securities trading
Deposits, derivatives etc.
Shares
Cash in hand, Deposits and other investment assets
35,844
2,555
38,399
30,294
-246
1,063
-302
30,809
4,445
609
36,052
1,776
37,828
28,663
-228
1,158
749
30,342
5,384
344
Total other financial investment assets, cash and investments in associates
in accordance with the balance sheet
35,863
36,070
The Bond and share portfolio includes unit trusts in which the underlying assets are bonds and shares.
In addition, the amounts include liquid assets allocated to the portfolio manager, money
market deposits and debt and receivables from unsettled investment transactions.
Bond portfolio
Due in 1 year or less
Due after 1 years through 5 years
Due after 5 years through 10 years
Due after more than 10 years
Total
The Bond portfolio includes unit trusts in which the underlying assets are bonds.
The option adjusted duration is used to measure duration. The option adjustment relates primarily
to Danish mortgage bonds and reflects the expected duration-shortening effect of the borrower’s
option to cause the bond to be redeemed through the mortgage institution at any point in time.
Adjusted duration of
bond portfolio
2006
19,220
9,698
1,291
133
30,342
2007
12,112
15,293
3,386
18
30,809
TrygVesta Annual Report 2007 l Notes l 125 of 152
Accounts
Notes
DKKm
16 Maturity of the group’s interest-bearing financial assets and debt
2007
Total
0-1 year
1-5 years
> 5 years
Bonds
Cash in hand and at bank
Debt
Receivables
30,809
601
-1,700
2,555
32,265
5,257
601
-2
2,555
8,411
18,326
0
-597
0
17,729
7,226
0
-1,101
0
6,125
Maturity of the group’s interest-bearing financial assets and debt
2006
Total
0-1 year
1-5 years
> 5 years
Bonds
Cash in hand and at bank
Debt
Receivables
30,342
338
-1,764
1,776
9,321
338
-65
1,776
13,882
0
-600
0
30,692
11,370
13,282
7,139
0
-1,099
0
6,040
Effective
interest rate
Adjusted
duration
5.3
4.2
5.6
-
1.9
0
0
-
Effective
interest rate
Adjusted
duration
4.2
3.7
5.1
-
1.3
0
0
-
The duration of interest-bearing debt is stated at zero as such debt is measured at amortised cost and is not subject to value adjustment.
The note should be seen in conjunction with the expected cash flow from the Group’s provisions for unearned premiums and provisions
for claims, see note 21. Please refer to the part ‘Interest risk’ in ‘Risk management’ in the ‘Management report’.
Listed shares
Scandinavia
United Kingdom
Rest of Europe
United States
Asien etc.
Total
The portfolio of unlisted shares totals
Unlisted Equity investments is measured on estimated fair value, cf ‘Accounting policies’
Exposure to exchange
rate risk 2007
Properties
Bonds
Shares
USD
EUR
GBP
NOK
Other
Total
0
0
0
786
0
786
1,116
2,018
472
8,352
4
11,962
688
1,308
570
1,007
642
4,215
Exposure to exchange
rate risk 2006
Properties
Bonds
Shares
USD
EUR
GBP
NOK
Other
Total
0
0
0
724
0
724
1,217
1,987
537
8,947
0
12,688
1,245
1,443
873
432
611
4,604
2007
975
718
1,160
828
527
4,208
237
2006
1,161
874
1,477
1,245
418
5,175
209
Insurance,
etc.
-251
-1,136
-1
-5,756
-9
-7,153
Insurance,
etc.
-184
-913
103
-5,230
53
Hedge
Exposure
-1,535
-2,101
-983
-4,256
-619
-9,494
18
89
58
133
18
316
Hedge
Exposure
-2,080
-2,214
-1,432
-4,449
-595
198
303
81
424
69
-6,171
-10,770
1,075
Please refer to Market risk in the section headed Risk management in the Management’s report.
126 of 152
l Notes l TrygVesta Annual Report 2007
DKKm
16 Sensitivity information
Impact on shareholders’ equity from the following changes.
Interest rate increase of 0.7-1.0 pct. point
Interest rate fall of 0.7-1.0 pct. point
Equity price fall of 12%
Fall in property prices of 8%
Exchange rate risk (VaR 99.5)
Loss on counterparties of 8%
2007
2006
-2
27
533
214
8
220
The impact on the income statement is similar to the impact on shareholders’ equity.
The calculation is made in accordance with the disclosure requirements of the executive order issued by the Danish FSA
on the presentation of financial reports by insurance companies and profession-specific pension funds.
Please refer to the part ‘Risk management’ for an elaboration of risk management and risk exposure
Derivative financial instruments
2007
2006
Derivatives with value adjustment in
the income statement according to IAS 39:
Fair value:
Interest derivatives
inflation derivatives
Exchange rate derivatives
Derivative financial instruments used
in connection with hedging of foreign subsidiaries:
Gains and losses on hedges charged to equity at 1 January
Reversed hedges in profit and loss
Gains and losses on hedges charged to equity in the period
Gains and losses on hedges charged to equity at 31 December
Gross
3,659
681
9,494
Net
-7
26
205
Gains
107
37
0
144
Gross
15,903
0
11,201
Losses
-119
0
-135
-254
Receivables
Receivables from insurance enterprises
Receivables from subsidiaries
Exchange and inflation rate derivatives
Unsettled transactions
Other receivables
Specification of writedowns on receivables
Balance at 1 January
Writedowns and reversed writedowns for the year
Balance at 31 December
2007
1,410
0
190
794
161
2,555
129
-23
106
Reversed impairment losses are estimated at around DKK 20-30m annually, but may vary due to major cases/disputes.
Please refer to the part ‘Credit risk’ in ‘Risk management’ in the ‘Management report’.
68
-56
646
201
17
220
Net
0
0
114
Net
-12
37
-135
-110
2006
1,487
27
73
0
189
1,776
148
-19
129
TrygVesta Annual Report 2007 l Notes l 127 of 152
Accounts
Notes
DKKm
2007
2006
17 Reinsurer’s share
Reinsurer’s share
Writedowns after impairment test
Writedowns during the year include reversed writedowns totalling DKK 12m (2006: DKK 6m).
18 Current tax
Current tax, beginning of year
Exchange rate adjustment
Current tax for the year
Tax booked on equity
Tax paid during the year
Net current tax, end of year
Current tax is recognised in the balance sheet as follows:
Under assets, current tax
Under liabilities, current tax
Net current tax, end of year
19 Shareholders’ equity
1,609
-22
1,587
186
8
746
-24
-673
243
93
336
243
1,592
-31
1,561
277
-6
649
30
-764
186
43
229
186
Share capital
2007
2006
Issued shares
Balance at 1 January
Bought during the year
Sold during the year
Balance at 31 December
Treasury shares
Balance at 1 January
Bought during the year
Used in connection with
issue of employee shares
Balance at 31 December
No. of
shares
67,790,001
-221,200
69,677
Nominal
value
(DKK’000)
No. of
shares
Nominal
value
(DKK’000)
1,694,750
-5,530
1,742
68,000,000
-247,440
37,441
1,700,000
-6,186
936
67,638,478
1,690,962
67,790,001
1,694,750
2007
Nominal
value
(DKK’000)
5,250
5,530
-1,742
9,038
No. of
shares
209,999
221,200
-69,677
361,522
% of share
capital
0.30
0.33
-0.10
0.53
No. of
shares
0
247,440
-37,441
209,999
2006
Nominal
value % of share
capital
(DKK’000)
0
6,186
-936
5,250
0
0.36
-0.06
0.30
Pursuant to the authorisation granted by the shareholders in general meeting, TrygVesta A/S may acquire up to a maximum
of nom. DKK 170m worth of treasury shares, corresponding to 10.0% of the share capital in the period until the next
annual general meeting in 2008.
In 2007, Tryg Vesta acquired treasury shares worth nom. DKK 5,530k, corresponding to 221,200 shares at a total cost of DKK 96,533k.
Treasury shares are acquired for use in the Group’s incentive programme.
128 of 152
l Notes l TrygVesta Annual Report 2007
DKKm
19 Capital adequacy
Shareholders’ equity according to annual report
Subordinate loan capital
Proposed dividend
Solvency requirements to subsidiary undertakings
Own shares
Capital base
Weighted assets
Solvency pct.
2007
2006
10,010
637
-1,156
-3,681
-143
5,667
7,030
81
9,951
365
-2,244
-4,557
0
3,515
6,064
58
The capital base and the solvency ratio are calculated in accordance with the Danish Financial Business Act.
TrygVesta manages its capital requirement as described in “Capitalisation” in the management’s report.
20 Subordinated loan capital
In december 2005, TrygVesta Forsikring A/S raised a subordinate bond loan for EUR 150m at the price of 99,017.
The loan carries a fixed rate og interst at 4,5 % p.a. untill 2015, where it can be repaid. After that time, it will carry
interest at 2.1% above EURIBOR untill it expires in 2025. The loan is measured at amortised cost, and when the loan
was raised capital losses and costs were deducted with DKK 18m at the balance sheet date. The fair value of the loan
at the balance sheet date is DKK 1,041m (in 2006 DKK 1,071m) based on a price of 93,12 (in 2006 a price of 95.79).
The price is sourced from Bloomberg, which applies a group of market players as its data sources.
The loan is an interest-only loan, and the lender has no option to call the loan or otherwise terminate the loan agreement
with TrygVesta Forsikring A/S. The loan is automatically accelerated upon the liquidation or bankruptcy of TrygVesta Forsikring A/S.
TrygVesta Annual Report 2007 l Notes l 129 of 152
Accounts
Notes
DKKm
21 Provisions for claims
Gross
2007
2006
2005
2004
2003
2002
2001
2000
Estimated accumulated claims 0
1
2
3
4
5
6
7
Cumulative payments to date
Discounting
Reserves from 1999 and prior years
Other reserves
12,585
11,533
11,789
11,736 11,001
11,635 11,008
11,464 10,865
10,751
10,663 11,234
10,769 11,587
10,434 11,589
10,431 11,644
10,459 11,636
11,544
9,168
9,403
9,598
9,709
9,640
9,631
9,843
8,537
8,863
9,072
9,277
9,364
9,494
9,246
9,366
12,585
-5,787
-770
11,789
-7,695
-591
11,464
-8,554
-463
10,751
-8,389
-380
10,459 11,544
-9,976
-8,643
-296
-329
9,843
-8,746
-225
9,366
-8,598
-169
Gross provisions for claims, end of year
Ceded business
2007
2006
2005
2004
2003
2002
2001
2000
Estimated accumulated claims 0
1
2
3
4
5
6
7
Cumulative payments to date
Discounting
Reserves from 1999 and prior years
Other reserves
Provisions for claims, end of year
513
294
293
944
838
843
861
874
915
914
938
898
895
955
872
2,035
2,142
2,025
2,019
2,017
2,031
1,446
1,460
1,466
1,481
1,455
1,441
1,449
1,435
1,550
1,514
1,539
1,573
1,568
1,564
1,572
513
-139
-7
293
-147
-7
843
-721
-16
914
-736
-36
872
-769
-20
2,031
-1,768
-34
1,449
-1,371
-17
1,572
-1,506
-7
Net of reinsurance
2007
2006
2005
2004
2003
2002
2001
2000
Estimated accumulated claims 0
1
2
3
4
5
6
7
Cumulative payments to date
Discounting
Reserves from 1999 and prior years
12,072
11,239
11,496
10,792 10,140
10,797 10,134
9,950
10,621
9,837
9,725
9,871
9,539
9,476
9,587
9,199
9,445
9,564
9,625
9,619
9,514
7,722
7,943
8,132
8,228
8,185
8,190
8,394
7,102
7,313
7,558
7,738
7,791
7,926
7,682
7,794
12,071
-5,647
-764
11,496
-7,548
-585
10,621
-7,833
-446
9,837
-7,653
-344
9,587
-7,875
-309
9,514
-8,208
-262
8,394
-7,375
-208
7,794
-7,092
-161
Other reserves
Provisions for claims, net of reinsurance, end of the year
87,801
-66,388
-3,223
2,571
343
21,104
8,487
-7,157
-144
180
62
1,428
79,314
-59,231
-3,079
2,391
281
19,676
The table consists of figures for TrygVesta Forsikring A/S and TrygVesta Forsikring, norwegian branch of TrygVesta Forsikring A/S.
Other group units are included in the item “Other”, which comprises the provisions for claims for TrygVesta Garantiforsikring A/S,
travel and health insurance and the Finnish and Swedish business units.
130 of 152
l Notes l TrygVesta Annual Report 2007
21
The amounts in foreign currency in the table are converted to Danish kroner according to the exchange rate at 31 December to prevent
the impact of exchange rate fluctuation.
The accident-year 2000 is influenced by Chevanstell, which at that time operated under the name TBi UK in the London market.
The impact derives from the stop-loss agreement between Tryg Forsikring A/S and Chevanstell Ltd. in 2000 to cover business
written before 2000, and which was terminated after the divestment of Chevanstell. Until 2005, there was an increase in claims
incurred, and in 2006 the divestment had a positive impact.
The inclusion of the Zurich portfolio acquired in 2002 and, to a minor extent, the Allianz portfolio acquired in 2001, has an impact
on the figures. When the liabilities of these portfolios appear in the triangulation the ultimate liability for the preceding accident
years is increased with effect from the financial year in question, whereas already existing liabilities concerning previous financial
years remain unchanged. The combined impact of the two acquisitions amounts to DKK 210m gross and DKK 200m net of reinsurance.
After the introduction of variable interest rate discounting of danish Workers Compensation annuities, inflatoin explicitly influence
claim ultimates from 2007 onwards. In previous calender years the inflation element is partially offset by the use of discounting with
a real rate of interest. Hence undiscounted claim ultimates are adversely affected in 2007 by totally DKK 1,271m.
DKKm
Provisions for claims
Total, beginning of period
Market value adjustment of provisions, beginning of period
Paid in the financial year in respect of the current year
Paid in the financial year in respect of prior years
Change in claims in the financial year in respect of the current year
Change in claims in the financial year in respect of prior years
Discounting 3)
Provisions for claims, end of year 1)
Other 2)
Total, beginning of period
Market value adjustment of provisions, beginning of period
Paid in the financial year in respect of the current year
Paid in the financial year in respect of prior years
Change in claims in the financial year in respect of the current year
Change in claims in the financial year in respect of prior years
Discounting 3)
Provisions for claims, end of year 1)
Other 2)
Gross
20,068
276
20,344
-5,786
-5,343
-11,129
11,680
-740
10,940
606
20,761
343
21,104
2007
Ceded
1,312
38
1,350
-139
-348
-487
504
-11
493
10
1,366
62
1,428
2006
Ceded
Gross
19,788
-266
19,522
-5,030
-4,895
-9,925
10,834
-453
10,381
90
20,068
342
20,410
1,644
-42
1,602
-107
-421
-528
283
-41
242
-4
1,312
64
1,376
Net
18,756
238
18,994
-5,647
-4,995
-10,642
11,176
-729
10,447
596
19,395
281
19,676
Net
18,144
-224
17,920
-4,923
-4,474
-9,397
10,551
-412
10,139
94
18,756
278
19,034
1 ) The table consists of figures for TrygVesta Forsikring A/S and TrygVesta Forsikring, norwegian branch of TrygVesta Forsikring A/S.
2) Comprises provisions for claims for TrygVesta Garantiforsikring A/S, travel and health, and our Finnish and Swedish business units.
3) Discounting also includes exchange rate adjustments.
Comparative figures for 2006 have been restated to method of new unwinding. See note 1 ‘Changes in Accounting policies’.
TrygVesta Annual Report 2007 l Notes l 131 of 152
Accounts
Notes
DKKm
21
2007
Carrying amount
Expected cash flow
Total
0-1 year
1-2 years
2-3 years
> 3 years
Provisions for unearned premiums, gross
Provisions for unearned premiums, ceded
Provisions for claims, gross
Provisions for claims, ceded
5,303
-158
20,761
-1,366
5,100
-158
7,906
-534
68
0
3,644
-196
41
0
2,380
-137
94
0
6,831
-499
2006
Total
0-1 year
1-2 years
2-3 years
> 3 years
Carrying amount
Expected cash flow
Provisions for unearned premiums, gross
Provisions for unearned premiums, ceded
Provisions for claims, gross
Provisions for claims, ceded
5,116
-184
20,068
-1,312
4,879
-184
7,422
-525
54
0
3,948
-167
36
0
2,507
-125
147
0
6,191
-495
The table consists of figures for TrygVesta Forsikring A/S and TrygVesta Forsikring, norwegian branch of TrygVesta Forsikring A/S,
The note should be seen in conjunction with the maturity of the group’s interest-bearing financial assets and liabilities, see note 16.
Please refer to the part ‘Risk management’ for an elaboration of risk management and risk exposure.
132 of 152
l Notes l TrygVesta Annual Report 2007
DKKm
2007
2006
22 Pensions and similar obligations
Other benefits
Recognised obligation, end of year
Defined benefit pension plans
Present value of pension obligations funded through operations
Present value of pension obligations funded through establishment of funds
Gross pension obligation
Fair value of plan assets
Net pension obligation
Specification of change in recognised pension obligations:
Recognised pension obligation, beginning of year.
Exchange rate adjustment
Present value of amounts accumulated during the year
Capital costs of previously accumulated pensions
Actuarial gains/losses
Paid during the period
Change in recognised employers’ nat. ins. contribution
Effect associated with optional shift to contribution pension plan
Recognised pension obligation, end of year
Change in carrying amount of plan assets:
Carrying amount of plan assets, beginning of year
Exchange rate adjustment
Investments in 2006
Estimated return on pension funds
Actuarial gains/losses
Paid during the period
Effect associated with optional shift to contribution pension plan
Carrying amount of plan assets, end of year
Total pensions and similar obligations, end of year
Total recognised obligation, end of year
Pension cost recognised in the income statement:
Pension costs concerning current financial year
Calculated interest concerning obligation
Expected return on plan assets
Pension costs concerning previous financial years
Effect associated with optional shift to contribution pension plan
Total amount recognised
The premium for the following financial year is estimated at:
Estimated distribution of plan assets:
Shares
Bonds
Property
Average return on plan assets
43
43
129
1,163
1,292
932
360
1,298
43
60
56
-105
-46
2
-16
1,292
825
27
87
43
-9
-32
-9
932
360
403
60
56
-43
10
-7
76
103
%
18
66
16
8.2
30
30
123
1,175
1,298
825
473
1,362
-41
65
49
-91
-44
-2
0
1,298
727
-22
92
33
26
-31
0
825
473
503
67
51
-34
11
0
95
103
%
20
64
16
7.6
TrygVesta Annual Report 2007 l Notes l 133 of 152
Accounts
Notes
22
Assumptions used
Discount rate
Estimated return on pension funds
Salary adjustment
Pension adjustment
G Adjustment
Turnover
Employers’ nat. ins. contribution
Take up of the AFP Early Retirement Plan
Mortality table
DKKm
Pension obligation
Plan assets
Surplus/deficit
Actuarial gains/losses associated with the pension obligation
Actuarial gains/losses associated with pension assets
2007
2006
%
%
4.7
5.8
4.5
4.3
4.3
8.0
14.1
20.0
Adjusted K1963 Adjusted K1963
5.2
6.2
4.5
4.3
4.3
7.0
14.1
20.0
2007
2006
2005
1,292
932
360
104
-10
1,298
825
473
90
26
1,362
727
635
-136
18
The pension liability related to participation by the Norwegian member of the Group Executive Management in the Norwegian defined
benefit pension plan is DKK 1.7m, 31.12. 2007.
“The Group’s Swedish branch complies with the industry pension agreement, the FTP plan, which is insured with Försäkringsbranschens
Pensionskassa - FPK.
Under the terms of the agreement, the Group’s Swedish branch has undertaken, along with the other businesses in the collaboration, to
pay the pensions of the individual employees in accordance with the applicable rules.
The FTP plan is primarily a defined benefit plan in terms of the future pension benefits. FPK is unable to provide sufficient information for
the Group to use defined benefit accounting. For this reason, the Group has accounted for the plan as if it were a defined contribution
plan in accordance with IAS 19.30.
The premium paid to FPK in 2007 amounted to DKK 1.0m, which is less than 1 % of the annual premium in FPK (2006). FPK writes in its
half-year report for 2007 that it had a collective consolidation ratio of 131 at 30 June 2007 (118 at 30 June 2006). The collective consoli-
dation ratio is defined as the market value of the plan assets relative to the total collective pension obligations.
134 of 152
l Notes l TrygVesta Annual Report 2007
DKKm
2007
2006
23 Deferred tax
Tax asset
Operating equipment
Debt and provisions
Bonds and loans secured by mortgages
Tax liability
Land and buildings
Contingency funds
Debt and provosions
Shares etc.
Intellectual property rights
Deferred tax, end of year
Unaccrued deferred tax assets of liability of shares ect.
Unaccrued deferred tax assets of liabiliaty of balancesheets items
Reconciliation of deferred tax, beginning of year
Deferred tax, beginning of year
Exchange rate adjustment
Change in tax rate in Denmark
Change in deferred tax taken to the income statement
Change in deferred tax taken to equity
Non-capitalised tax loss
Denmark
Sweden
Finland
The loss in TrygVesta A/S cannot be utilised in the Danish joint taxation scheme.
The loss can be carried forward indefinitely.
Under Finnish rules, losses may be carried forward for ten years and under Swedish rules,
losses may be carried forward indefinitely.
The total current and deferred tax relating to items recognised in equity is recognised
in the balance sheet in the amount of DKK -4m (2006 DKK 35m).
No deferred tax is associated with investments in subsidiaries (2006 DKK 0m).
84
0
84
168
157
1,021
35
0
64
1,277
1,109
102
6
959
27
-20
119
24
1,109
72
105
142
104
122
9
235
111
945
0
99
39
1,194
959
-102
0
939
-20
73
0
-33
959
72
41
84
TrygVesta Annual Report 2007 l Notes l 135 of 152
Accounts
Notes
DKKm
2007
2006
24 Other provisions
Other provisions, beginning of year
Change in provisions
Other provisions, end of year
Other provisions primarily includes own insurance contracts
25 Debt to credit institutions
Bank loans
Bank overdrafts
Debt falling due within one year
Debt falling due after more than five years
In 2005, a consortium of banks granted TrygVesta A/S a loan facility for DKK 2,000m,
of which DKK 600m had been utilised at 31 December 2007.
In 2007, the loan carried interest at CIBOR plus a margin, totalling approximately 4,4% p.a.
The unutilised part of the loan facility is measured at amortised cost, and an amount of
DKK 5m was deducted from the loan proceeds upon signing the loan agreement.
The cost are depreciated linear until the loan facility expires in July 2010.
The fair value of the loan is considered to be the utilised part of the facility of DKK 600m.
26 Other debt
Unsettled transactions
Interest derivatives
Repo debt
Other debt
Debt falling due after more than five years
27 Earnings per share
Basic earnings per share is calculated by dividing the profit for the year and the profit/loss
from discontinued and divested business by the total average number of shares.
The company has not issued warrants, convertible debt instruments or the like.
The issued share options will not be exercised before at least in 2009, therefore,
there is no difference between basic EPS and diluted EPS.
Profit/loss for the period from continuing business
Average number of shares
Basic earnings per share of DKK 25
Profit/loss for the period from discontinued and divested business
Average number of shares
Basic earnings per share of DKK 25
50
7
57
597
2
599
2
0
1,857
8
0
732
2,597
0
2,267
67,648
34
-1
67,648
0
41
9
50
596
69
665
69
0
1,160
5
750
774
2,689
0
3,085
67,824
45
126
67,824
2
136 of 152
l Notes l TrygVesta Annual Report 2007
DKKm
28 Contractual obligations, contingent liabilities and collateral
Payment due by period
< 1 year
1-3 years
3-5 years
More than
5 years
Operating leases
Other contractual obligations
108
348
456
213
314
527
187
0
187
1,260
0
1,260
The amounts include the following.
TrygVesta Forsikring A/S and TrygVesta Forsikring, norwegian branch of TrygVesta Forsikring A/S
have signed an operating agreement with CSC for an amount of DKK 558m for a period of 5 years.
Total
1,768
662
2,430
TrygVesta Forsikring A/S has an annual obligation to Danica Pension with respect to the lease of the head office in Ballerup.
The annual rent and taxes currently amount to DKK 80m. The remaining lease period is 18 years.
The leasing contract contains the right to completely or partly rent out or completely or partly disposal by providing guarantee.
TrygVesta Forsikring A/S has signed a portfolio management contract for DKK 60m. The contract expires in 2010.
TrygVesta Forsikring A/S has signed a car leasing contrakt with NF Fleet for DKK 30m. The contract expires in 2012.
The Danish companies in TrygVesta group are jointly taxed with Tryg i Danmark smba. Until 2004, the companies were jointly and severally
liable for the entire amount. From 2005, the companies are only liable for their own part of the tax amount.
Most of the Danish companies in TrygVesta group are commonly registered for VAT and payroll tax and are jointly and severally liable for
payment of all such direct and indirect taxes.
In connection with the sale of Chevanstell Limited, TrygVesta Forsikring A/S issued few specific guarantees towards the buyer.
Management believes that it is unlikely that these guarantees will result in a financial loss for TrygVesta Forsikring A/S.
Companies of the TrygVesta group are part of some disputes. Management believes that the outcome of these legal proceedings
will not affect the Group’s financial position beyond those receivables and obligations recognised in the balance sheet.
TrygVesta Annual Report 2007 l Notes l 137 of 152
Accounts
Notes
DKK m
29 Related parties
Supervisory Board and Group Executive Management
2007
2006
Premium income
- Parent company (Tryg i Danmark smba)
- Key management
- Other related parties
Claims paid
- Parent company (Tryg i Danmark smba)
- Key management
- Other related parties
Guarantee agreements with related parties
- Account
- Exercised, end of year
- Premium
Outstanding guarantees cover the policyholders’ financial obligations pursuant
to the contract. Following an individual assessment, all guarantees are issued without
additional security. The company has full recourse against the individual companies.
No provisions have been made for non-performing guarantees and no expenses were
incurred during the financial year.
Guarantee agreements are made on market terms.
Leases with related parties
Transactions with related parties also comprise rental income as premises are being
let to a member of the board on market terms.
Specification of remuneration, etc.
Supervisory Board
Group Executive Management
Remuneration, etc. includes pension contributions
Supervisory Board
Group Executive Management
0.2
0.4
17.3
0.2
0.3
43.6
1,950
885
3
-4
-25
-29
0
-5
-5
0.1
0.4
6.2
0.1
0.0
0.5
1,645
1,265
3
-4
-26
-30
0
-3
-3
138 of 152
l Notes l TrygVesta Annual Report 2007
DKK m
29
Members of the Supervisory Board of TrygVesta A/S do not receive bonuses and are not participants in any severance plans.
The Group Executive Management has a bonus scheme for up to 3 months’ salary, however, the CEO has up to 4 months’ salary, and
participate ind the share option programme as mentioned in Corporate governance. Other than that, there are no incentive plans for the
Supervisory Board and Group Executive Management.
If a member of the Group Executive Management is given notice of termination by TrygVesta and such termination is not due to breach on
the part of the member of the Group Executive Management, such member is entitled to cash severance pay equal to 12 to 18 months’
fixed salary inclusive of pension contribution and taxed benefits. Severance pay is paid at expiry of the period of notice.
Members of the Group Executive Management can raise no further claims in this respect, including claims for compensation pursuant to
sections 2a and/or 2b Salaried Employees Act, as such claims are included in the severance pay.
Parent company
Tryg i Danmark smba
Tryg i Danmark smba controls 60% of the shares in TrygVesta A/S.
Intra-group trading involved
- Providing and receiving services
- Intra-group account
- Interest
- Sale of unlisted shares
Insurance products are purchased and sold on market terms
Assets are transferred on market terms
Administration fee, etc. is fixed on a cost-recovery basis.
Intra-group accounts are offset and carry interest on market terms.
The TrygVesta companies have entered into reinsurance contracts on market terms.
0
0
0
15
4
27
1
0
Transactions with subsidiaries have been eliminated in the consolidated financial statements in accordance with the accounting policies.
TrygVesta Annual Report 2007 l Notes l 139 of 152
Accounts
Income statement for TrygVesta A/S (parent company)
DKKm
Notes
2
Investment activities
Income from subsidiaries
Income from associates
Interest income, etc.
Value adjustment
Interest expenses
Investment management charges
Total return on investment activities
3 Other expenses
Profit before tax
4 Tax
Profit on continuing business
5 Profit/loss on discontinued and divested business
Profit for the year
Proposed distribution for the year:
Dividend
Transferred to Net revaluation as per equity method
Transferred to Retained profits
2007
2,396
0
0
-1
-30
-4
2,361
-48
2,313
21
2,334
-1
2,333
1,156
79
1,098
2,333
2006
3,219
5
1
-1
-35
-5
3,184
-36
3,148
17
3,165
126
3,291
2,244
1,782
-735
3,291
140 of 152 l Income statement for TrygVesta A/S (parent company) l TrygVesta Annual Report 2007
Balance sheet for TrygVesta A/S (parent company)
DKKm
Notes Assets
6
7
Investments in subsidiaries
Investments in associates
Total investments in subsidiaries
Total investment assets
8 Current tax assets
Cash in hand and at bank
9 Deferred tax assets
Total other assets
Total prepayments and accrued income
Total assets
Liabilities
Shareholders’ equity
10 Debt to credit institutions
Debt to subsidiaries
Other debt
Total debt
2007
2006
10,732
0
10,732
10,732
21
1
0
22
7
10,643
0
10,643
10,643
3
3
0
6
0
10,761
10,649
10,031
9,974
599
131
0
730
596
74
5
675
Total liabilities and equity
10,761
10,649
11 Capital adequacy, etc.
12 Contractual obligations, contingent liabilities and collateral
13 Related parties
TrygVesta Annual Report 2007 l Balance sheet for TrygVesta A/S (parent company) l
141 of 152
Accounts
Statement of changes in equity (parent company)
DKKm
Revaluation
equity
method
capital
Share
capital
Retained
earnings
Proposed
dividends
Shareholders’ equity at 1 January 2006
1,700
1,938
3,176
1,428
Equity entries in 2006
Profit for the year
Revaluation of owner-occupied properties
Exchange rate adjustment of foreign entities
Hedge of foreign currency risk in foreign entities
Tax on equity entries
Total comprehensive income
0
1,782
3
-143
107
-31
1,718
Dividend paid
Dividend own shares
Purchase of own shares
Issue of employee shares
Issue of share options
-735
2,244
-735
2,244
-1,428
5
-88
13
3
Total equity entries in 2006
0
1,718
-802
816
Total
8,242
3,291
3
-143
107
-31
3,227
-1,428
5
-88
13
3
1,732
Shareholders’ equity at 31 December 2006
1,700
3,656
2,374
2,244
9,974
Shareholders’ equity at 1 January 2007
1,700
3,656
2,374
2,244
9,974
Equity entries in 2007
Profit for the year
Revaluation of owner-occupied properties
Exchange rate adjustment of foreign entities
Hedge of foreign currency risk in foreign entities
Tax on equity entries
Total comprehensive income
0
79
-3
84
-98
27
89
Dividend paid
Dividend own shares
Purchase of own shares
Issue of employee shares
Issue of share options
1,098
1,156
1,098
1,156
-2,244
14
-96
32
8
Total equity entries in 2007
0
89
1,056
-1,088
2,333
-3
84
-98
27
2,343
-2,244
14
-96
32
8
57
Shareholders’ equity at 31 December 2007
1,700
3,745
3,430
1,156
10,031
Dividend paid per share DKK 17 (total for 2006 DKK 33 DKK).
Dividend per share is calculated as the total dividend proposed by the Supervisory Board after the end of the financial year divided by
the average number of shares (67,648,000). The dividend is not paid until approved by the shareholders at the annual general meeting
of the subsequent year.
TrygVesta Forsikring, the Norwegian branch of TrygVesta Forsikring A/S, has in its branch financial statements included provisions for con-
tingency funds in the amount of NOK 2,564m (2006: NOK 2,251m) under provisions for insurance contracts. In TrygVesta Forsikring A/S,
these provisions, due to their nature as additional provisions, are included in shareholders’ equity, net of deferred tax. TrygVesta For-
sikring A/S’ option to pay dividend to TrygVesta A/S is influenced by this amount. The dividend payment is also affected by a contingency
fund provision of DKK 670m, which is included in shareholders’ equity in TrygVesta Forsikring A/S. TrygVesta Garanti forsikring A/S has a
similar contingency amounting to DKK 139m, which is also included in the company’s shareholders’ equity.
142 of 152 l Statement of changes in equity (parent) l TrygVesta Annual Report 2007
Notes (parent company)
DKKm
2007
2006
1 Accounting policies
Please refer to TrygVesta Groups ‘Accounting police’
2
Income from subsidiaries
TrygVesta Forsikring A/S
Profit on continuing business
Profit/loss on discontinued business after tax
3 Other expenses
Administrative expenses
2,396
2,396
-1
2,395
-48
-48
Remuneration of the Executive Management is paid by TrygVesta Forsikring A/S and TrygVesta Forsikring,
norwegian branch of TrygVesta Forsikring A/S and is charged to TrygVesta A/S by the cost allocation.
Remuneration for Supervisory Board and Group Executive Management appears in th note 12 ‘Related parties’.
Average number of full-time employees during the year
Administrative expenses include fee to the auditors appointed by the Annual General meeting:
Deloitte
In addition, expenses have been incurred for the Group’s Internal Audit Department.
4 Reconciliation of tax expenses
Tax on financial loss before profit/loss in subsidiaries and tax
Changes to previous year
Tax on non-taxable income and expenses
Effective tax rate
Tax on financial loss
Changes to previous year
Tax on non-taxable income and expenses
0
-0.9
-0.9
-21
0
0
-21
%
25
0
0
25
cf ‘TrygVestas Financial performance 2007‘ in ’Management’s report’ for futher information regarding the tax.
3,219
3,219
126
3,345
-36
-36
0
-0.9
-0.9
-21
3
1
-17
%
28
-4
-2
22
TrygVesta Annual Report 2007 l Notes (parent company) l
143 of 152
Accounts
Notes (parent company)
DKKm
2007
2006
5 Profit/loss on discontinued and divested business
Earned premiums, net of reinsurance
Technical interest, net of reinsurance
Claims incurred, net of reinsurance
Insurance operating expenses, net of reinsurance
Technical result
Return on investment activities after technical interest
Loss before tax
Tax
0
3
-1
-3
-1
0
-1
0
-1
Claims incurred includes a DKK 139m gain in 2006 in connection with the commutation
of the reinsurance agreement with Chevanstell Limited.
The technical result of discontinued and divested business is specified by lines of business as follows:
Accident
and health
Marine, aviation Other
and cargo insurance insurance 1) Total
2007
2006
2006
2007
2007
2006
2007
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Technical interest,
net of reinsurance
Technical result
0
0
0
0
0
-
0
0
7
-1
-7
0
-1
0
0
0
0
0
-
1
1
15
-2
-14
3
3
0
0
-1
-3
0
3
-1
2
2
232
-21
-113
-5
95
0
0
-1
-3
0
3
-1
4
-1
119
-25
97
63
160
-34
126
2006
3
3
254
-24
-134
-2
97
1) The line of business ‘Other insurance’ includes indirect insurance.
6
Investments in subsidiaries
Cost
Balance 1 January
Balance 31 December
Revaluations and impairment writedowns at net asset value
Balance 1 January
Revaluations during the year
Dividend paid
Balance 31 December
6,987
6,987
3,656
2,407
-2,318
3,745
6,987
6,987
1,938
3,282
-1,564
3,656
Carrying amount 31 December
10,732
10,643
Name and registered office
2007
TrygVesta Forsikring A/S, Ballerup
2006
TrygVesta Forsikring A/S, Ballerup
144 of 152 l Notes (parent company) l TrygVesta Annual Report 2007
Ownership
shares in %
100
Equity
10,732
100
10,643
DKKm
2007
2006
7
Investments in associates
Cost
Balance 1 January
Additions during the year
Balance 31 December
Revaluations and impairment writedowns at net asset value
Balance 1 January
Balance 31 December
Carrying amount 31 December
TrygVesta held a ownership of 28% of the company Nordisk Flyforsikring A/S.
In 2006 the ownership share was disposed.
8 Current tax
Current tax, beginning of year
Current tax for the year
Tax paid durring the year
9 Deferred tax
Non-capitalised tax loss
TrygVesta A/S
The loss in TrygVesta A/S can only be utilised in TrygVesta A/S.
The loss can be carried forward indefinitely.
The losses are not recognised as tax assets until it has been substantiated that the company
can generate sufficient future taxable income to utilise the tax loss.
10 Debt to credit institutions
Bank loans
Overdraft facility
0
0
0
0
0
0
3
20
-3
20
72
597
2
599
In 2005, a consortium of banks granted TrygVesta A/S a loan facility for DKK 2,000m, of which DKK 600m
had been utilised at 31 December 2007. In 2007, the loan carried interest at CIBOR plus a margin, totalling
approximately 4.4 % p.a. The unutilised part of the loan facility is measured at amortised cost, and an amount
of DKK 5m was deducted from the loan proceeds upon signing the loan agreement. The cost are depreciated
linear until the loan facility expires in July 2010. The fair value of the loan is considered to be the utilised
part of the facility of DKK 600m.
14
-14
0
0
0
0
21
20
-38
3
72
596
0
596
TrygVesta Annual Report 2007 l Notes (parent company) l
145 of 152
Accounts
Notes (parent company)
DKKm
11 Capital adequacy
Shareholders’ equity according to annual report
Subordinate loan capital
Proposed dividend
Solvency requirements to subsidiary undertakings
Own shares
Capital base
Weighted assets
Solvency pct.
2007
2006
10,031
637
-1,156
-3,681
-143
5,688
7,051
81
9,974
365
-2,244
-4,557
0
3,538
6,087
58
12 Contractual obligations, contingent liabilities and collateral
The Danish companies in TrygVesta group are jointly taxed with Tryg i Danmark smba. Until 2004, the companies were jointly and severally
liable for payment of imposed corporation tax. From 2005, the companies are liable for the company’s own share of the imposed corpora-
tion tax.
Most of the Danish companies in Tryg Forsikring group are commonly registered for VAT and payroll tax and are jointly and severally liable
for payment of all such direct and indirect taxes.
Companies of the Tryg Forsikring Group are part of some disputes. Management believes that the outcome of these legal proceedings will
not affect the Group’s financial position beyond those receivables and obligations recognised in the balance sheet.
13 Related parties
Supervisory Board and Group Executive Management
Premium income
- Parent company (Tryg i Danmark smba)
- Key management
- Other related parties
Claims payments
- Key management
- Other related parties
Guarantee agreements with related parties
- Account
- Exercised, end of year
- Premium
0.2
0.4
17.3
0.3
43.6
1,950
885
3
0.1
0.4
6.2
0.1
0.5
1,645
1,265
3
Outstanding guarantees cover the policyholders’ financial obligations pursuant to the contract.
Following an individual assessment, all guarantees are issued without additional security.
The company has full recourse against the individual companies.
No provisions have been made for non-performing guarantees and no expenses were incurred during the financial year.
Guarantee agreements are made on market terms.
146 of 152 l Notes (parent company) l TrygVesta Annual Report 2007
DKKm
2007
2006
Leases with related parties
Transactions with related parties also comprise rental income as premises are being let to a member of the board on market terms.
Specification of remuneration, etc.
Supervisory Board
Executive Management
Remuneration, etc. includes pension contributions
Supervisory Board
Executive Management
-4
-16
-20
0
-3
-3
Members of the Supervisory Board of TrygVesta A/S do not receive bonuses and are not participants in any severance plans.
The Group Executive Management has a bonus scheme for up to 3 months’ salary and participate ind the share option programme
as mentioned in Corporate governance.
Other than that, there are no incentive plans for the Supervisory Board and Group Executive Management.
Parent company
Tryg i Danmark smba
Tryg i Danmark smba controls 60% of the shares in TrygVesta A/S.
Intra-group trading involved
- Providing and receiving services
- Intra-group account
- Interest
- Sale of unlisted shares
Administration fee, etc. is fixed on a cost-recovery basis.
Intra-group accounts are offset and carry interest on market terms.
Subsidiaries and associates
TrygVesta A/S controls TrygVesta Forsikring A/S 100%.
Intra-group trading involved
- Providing and receiving services
- Intra-group account
- Interest
Assets are transferred on market terms
Administration fee, etc. is fixed on a cost-recovery basis.
Intra-group accounts are offset and carry interest on market terms.
0
0
0
15
49
131
4
-4
-11
-15
0
-2
-2
4
27
1
0
38
74
3
TrygVesta Annual Report 2007 l Notes (parent company) l
147 of 152
Accounts
Financial highlights and key ratios by geography
DKKm
IFRS
2007
2006
2005
Danish GAAP
2004
2003
2004
Danish general insurance
Gross premiums earned
Technical result
Return on investment activities
Other income
Other expenses
Profit/loss before tax
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Number of full-time employess,
end of period
Norwegian general insurance
Gross premiums earned
Technical result
Return on investment activities
Other income
Other expenses
Profit/loss before tax
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Number of full-time employess,
end of period
Finnish general insurance
Gross premiums earned
Technical result
Return on investment activities
Profit/loss before tax
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
9,346
1,639
225
68
-66
1,866
69.3
0.0
69.3
15.3
84.6
9,084
1,377
723
65
-63
2,102
66.8
3.9
70.7
16.1
86.8
8,764
956
567
77
-70
1,530
77.1
-3.9
73.2
16.6
89.8
8,525
720
378
76
-72
1,102
73.0
3.5
76.5
16.3
92.8
8,570
790
450
76
-71
1,245
71.6
3.5
75.1
19.0
94.1
8,242
443
393
71
-68
839
70.4
6.1
76.5
20.4
96.9
2,242
2,231
2,215
2,223
2,223
2,248
6,919
1,335
118
52
-59
1,446
64.0
4.9
68.9
15.8
84.7
6,738
1,214
483
53
-50
1,700
64.3
3.6
67.9
16.5
84.4
6,810
1,131
361
49
-47
1,494
63.0
5.2
68.2
16.7
84.9
6,653
1,032
24
45
-43
1,058
62.1
6.2
68.3
17.2
85.5
6,614
722
94
45
-44
817
62.7
6.9
69.6
21.2
90.8
7,161
41
316
44
-42
359
72.9
7.8
80.7
22.4
103.1
1,384
1,460
1,431
1,454
1,454
1,460
251
-49
-10
-59
74.9
0.4
75.3
49.8
198
-34
-4
-38
78.1
0.2
78.3
41.7
140
-41
-2
-43
80.9
0.2
81.1
50.2
97
-45
-2
-47
75.3
0.2
75.5
73.0
97
-45
-2
-47
68.5
0.2
68.7
79.8
61
-48
-1
-49
77.5
1.0
78.5
102.8
181.3
Combined ratio
125.1
120.0
131.3
148.5
148.5
Number of full-time employess,
end of period
127
77
48
51
51
42
148 of 152 l Financial highlight and key ratios by geography l TrygVesta Annual Report 2007
Number of full-time employess,
end of period
61
40
DKKm
Swedish general insurance
Gross premiums earned
Technical result
Return on investment activities
Profit/loss before tax
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Other
Gross premiums earned
Technical result
Return on investment activities
Other income
Other expenses
Profit/loss before tax
Number of full-time employess,
end of period
TrygVesta
Gross premiums earned
Technical result
Return on investment activities
Other income
Other expenses
Profit/loss before tax
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Number of full-time employess,
end of period
IFRS
2007
2006
2005
Danish GAAP
2004
2003
2004
90
-82
-1
-83
88.9
0.0
88.9
105.6
194.5
4
-41
0
-41
144.9
0.4
145.3
1,003.8
1,149.1
0
-23
8
1
-47
-61
-3
-4
26
0
-36
-14
-
-
-
-
-
-
-
-
-
0
-9
1
-32
0
-37
-68
-
-
-
-
-
-
-
-
-
0
-9
0
-29
0
-32
-61
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,027
-11
-25
0
-32
-68
1,238
-60
-23
0
-21
-104
0
0
24
34
34
670
16,606
2,820
340
121
-172
3,109
67.3
2.1
69.4
16.7
86.1
16,021
2,512
1,228
118
-149
3,709
65.9
3.7
69.6
16.8
86.4
15,705
2,047
894
126
-154
2,913
71.1
0.1
71.2
17.0
88.2
15,266
1,707
371
121
-147
2,052
68.3
4.6
72.9
17.1
90.0
16,308
1,456
517
121
-147
1,947
67.6
5.0
72.6
21.2
93.8
16,702
376
685
115
-131
1,045
71.5
6.8
78.3
22.4
100.7
3,814
3,808
3,718
3,762
3,762
4,420
The comparative figures for Danish general insurance have been restated, and the activities of TrygVesta IT A/S
and Tryg Ejendomme A/S are included under ‘’Other’’ together with the parent company TrygVesta A/S.
TrygVesta Annual Report 2007 l Financial highlight and key rations by geography l
149 of 152
Accounts
Organisation chart
GROUP CEO
Stine Bosse
PRIVATE &
COMMERCIAL
Peter Falkenham
GROUP FINANCE
Morten Hübbe
PRIVATE &
COMMERCIAL
CORPORATE
NEW MARKETS
Kjerstin Fyllingen
Lars Bonde
Stig Ellkier-Pedersen
Sales & Customer
Service Manager
Martin Nielsen
Sales & Customer
Service Manager
Martin Nielsen
Sales & Customer
Service Manager
Roger Slinning
Sales & Customer
Service Manager
Truls Holm Olsen
Martin Hay Schmidt
Finland
Ville-V. Laukkanen
Corporate Finance
& Planning
Peter Brondt
Pedersen
Product
development,
Production
& Underwriting
Bente Arnesen
Product
development
& Production
Birgitte Kartman
Produktudvikling
& Produktion
Bente Arnesen
Underwriting
Kevin Carlson
Trond Thorsen
Sweden
Peter Appelros
Group Controlling
Corporate
& Reporting
Ulrik Andersson
Claims-handling
& purchase
Jesper Joensen
Claims
Jesper Joensen
Claims
Karsten Kristiansen
Claims
Anne Stine
Mollestad
BusinessLab
Yngvar Skar
Group Accounting
and Administration
Fatiha Benali
Affinity Groups
& Civil Servants
Keld Holm
Chain Stores
& Associations
Trond Tepstad
UW International
Programme
business and
corporate Sweden
Kevin Carlson
Group Risk
Ole Hesselager
Bancassurance
Flemming Steen
Pedersen
Bancassurance
Sture Bø
Bancassurance
Flemming Steen
Pedersen
Group Investments
Torben Jørgensen
Health Care
& Pensions
Health Care &
Pensions
Health Care
& Pensions
Health Care
& Pensions
Jens Stener
Domicile & Building
Kim Styltsvig
Even Berge
Document
handling
Alice Meulengracht
E-business
Jens Galatius
Dec. Pol. Handl. (DOP)
Kjetil Johan Ølmheim
Salary &
Negotiations
Ane Jægersborg
Bjørn Smørås
Group Staff
Management
Secretariat
TV Management
Academy
Organisation
development
IT & Process
development
Martin Bøge Mikkelsen
Investor Relations
Ole Søeberg
Communications
Troels Rasmussen
Corporate Branding
Jens Stener
Group Legal Dept.
Bjarne Lau Pedersen
TrygVesta Garanti
Mads Løgstrup
Enter
Roy Erik Landehagen
Business responsible
Process responsible
Subsidiary
Nordic Competence Centre
150 of 152 l Organisation chart l TrygVesta Annual Report 2007
Glossary
The financial highlights and key ratios of TrygVesta have been pre-
pared in accordance with the executive order issued by the Danish
Financial Supervisory Authority on the presentation of financial re-
ports by insurance companies and profession-specific pension
funds and also comply with “Recommendations & Financial Ratios
2005” issued by the Danish Society of Financial Analysts.
Unwinding
Unwinding of discounting takes place with the passage of time
as the expected time to payment is reduced. The closer the
time of payment, the smaller the discount. This gradual in-
crease of the provision is not recognised under claims, but in
technical interest in the income statement.
Gross earned premiums
Calculated as gross premiums written adjusted for change in
gross provisions for unearned premiums, less bonuses and
premium rebates.
Gross claims ratio
Calculated as the ratio of gross claims incurred to gross earned
premiums.
Gross claims incurred x 100
Gross earned premiums
Business ceded as a percentage of gross premiums
Calculated as the ratio of the net result of business ceded to
gross earned premiums.
Net result of business ceded x 100
Gross earned premiums
Gross expense ratio
Calculated as the ratio of gross insurance operating expenses
to gross earned premiums.
Gross insurance operating expenses x 100
Gross earned premiums
Combined ratio
Calculated as the sum of the gross claims ratio, the net result
of business ceded as a percentage of gross earned premiums
and the gross expense ratio.
Operating ratio
Calculated like the combined ratio but adding technical interest
in the denominator.
Claims incurred + insurance
Operating expenses + result of reinsurance x 100
Gross earned premiums + technical interest
Provisions for claims to earned premiums
Calculated as the ratio of provisions for claims relative to
earned premiums.
Relative run-off gains/losses
Run-off result relative to provisions insurance contract,
beginning of year.
Discounting
Expresses recognition in the financial statements of expected
future payments at a value below the nominal amount, as the
recognised amount carries interest until payment. The size
of the discount depends on the market based discount rate
applied and the expected time to payment.
Return on equity
Calculated as the profit for the year as a percentage of the
average shareholders’ equity.
Profit for the year x 100
Average equity
Net asset value per share
Calculated as year-end shareholders’ equity divided by the
average number of shares.
Year-end equity
Average number of shares
Earnings per share
Calculated as the profit for the year divided by the average
number of shares.
Profit for the year x 100
Average number of shares
Dividends per share
Calculated as the total dividend proposed divided by the
average number of shares.
Proposed dividend
Average number of shares
Price/net asset value
Calculated as the quoted price of the share divided by the net
asset value per share.
Quoted price
Net asset value per share
Price/earnings
Calculated as the ratio of the price per share to earnings per share.
Quoted price
Earnings per share
Danish GAAP
Danish GAAP means that the annual report has been prepared
in accordance with the Danish Financial Services Act and the
executive order issued by the Danish Financial Supervisory Au-
thority on the presentation of financial reports by insurance
companies and profession-specific pension funds.
Danish general insurance
Comprises the legal entities in TrygVesta Forsikring A/S
(excluding the Norwegian, Finnish and Swedish branches)
and TrygVesta Garantiforsikring A/S.
Norwegian general insurance
Comprises TrygVesta Forsikring A/S, Norwegian branche and
the Norwegian subsidiaries.
TrygVesta Annual Report 2007 l Notes l 151 of 152
Accounts
152 of 152 l Glossary l TrygVesta Annual Report 2007
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:54)(cid:36)(cid:72)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)
(cid:59)(cid:100)(cid:103)(cid:104)(cid:94)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:54)(cid:36)(cid:72)
(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)
(cid:72)(cid:96)(cid:86)(cid:89)(cid:90)(cid:91)(cid:142)(cid:103)(cid:104)(cid:126)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)
(cid:29)(cid:72)(cid:108)(cid:90)(cid:89)(cid:94)(cid:104)(cid:93)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:59)(cid:100)(cid:103)(cid:104)(cid:94)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:67)(cid:100)(cid:103)(cid:89)(cid:90)(cid:86)
(cid:75)(cid:86)(cid:93)(cid:94)(cid:99)(cid:96)(cid:100)(cid:107)(cid:86)(cid:96)(cid:106)(cid:106)(cid:105)(cid:106)(cid:104)
(cid:29)(cid:59)(cid:94)(cid:99)(cid:99)(cid:94)(cid:104)(cid:93)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:73)(cid:103)(cid:110)(cid:92)
(cid:58)(cid:95)(cid:90)(cid:99)(cid:89)(cid:100)(cid:98)(cid:98)(cid:90)(cid:21)(cid:54)(cid:36)(cid:72)
(cid:58)(cid:99)(cid:105)(cid:90)(cid:103)(cid:21)(cid:59)(cid:100)(cid:103)(cid:104)(cid:94)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:54)(cid:72)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:104)(cid:106)(cid:87)(cid:104)(cid:94)(cid:89)(cid:94)(cid:86)(cid:103)(cid:110)(cid:30)
(cid:71)(cid:90)(cid:104)(cid:101)(cid:100)(cid:99)(cid:104)(cid:21)(cid:62)(cid:99)(cid:96)(cid:86)(cid:104)(cid:104)(cid:100)(cid:21)(cid:54)(cid:72)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:104)(cid:106)(cid:87)(cid:104)(cid:94)(cid:89)(cid:94)(cid:86)(cid:103)(cid:110)(cid:30)
(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)
(cid:58)(cid:94)(cid:90)(cid:99)(cid:89)(cid:100)(cid:98)(cid:21)(cid:54)(cid:72)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:104)(cid:106)(cid:87)(cid:104)(cid:94)(cid:89)(cid:94)(cid:86)(cid:103)(cid:110)(cid:30)
(cid:68)(cid:105)(cid:93)(cid:90)(cid:103)(cid:21)(cid:103)(cid:90)(cid:86)(cid:97)(cid:21)(cid:101)(cid:103)(cid:100)(cid:101)(cid:90)(cid:103)(cid:105)(cid:110)(cid:21)
(cid:88)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:94)(cid:90)(cid:104)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:104)(cid:106)(cid:87)(cid:104)(cid:94)(cid:89)(cid:94)(cid:86)(cid:103)(cid:94)(cid:90)(cid:104)(cid:30)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)
(cid:60)(cid:86)(cid:103)(cid:86)(cid:99)(cid:105)(cid:94)(cid:91)(cid:100)(cid:103)(cid:104)(cid:94)(cid:96)(cid:103)(cid:94)(cid:99)(cid:92)(cid:21)(cid:54)(cid:36)(cid:72)
(cid:29)(cid:57)(cid:86)(cid:99)(cid:104)(cid:96)(cid:21)(cid:64)(cid:86)(cid:106)(cid:105)(cid:94)(cid:100)(cid:99)(cid:30)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:60)(cid:86)(cid:103)(cid:86)(cid:99)(cid:105)(cid:94)
(cid:29)(cid:67)(cid:100)(cid:103)(cid:108)(cid:90)(cid:92)(cid:94)(cid:86)(cid:99)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:60)(cid:86)(cid:103)(cid:86)(cid:99)(cid:105)(cid:94)
(cid:29)(cid:72)(cid:108)(cid:90)(cid:89)(cid:94)(cid:104)(cid:93)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:30)
(cid:60)(cid:103)(cid:100)(cid:106)(cid:101)(cid:21)(cid:88)(cid:93)(cid:86)(cid:103)(cid:105)(cid:21)(cid:86)(cid:105)(cid:21)(cid:40)(cid:38)(cid:21)(cid:57)(cid:90)(cid:88)(cid:90)(cid:98)(cid:87)(cid:90)(cid:103)(cid:21)(cid:39)(cid:37)(cid:37)(cid:44)(cid:35)(cid:21)(cid:56)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:94)(cid:90)(cid:104)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:87)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)(cid:90)(cid:104)(cid:21)(cid:86)(cid:103)(cid:90)(cid:21)(cid:108)(cid:93)(cid:100)(cid:97)(cid:97)(cid:110)(cid:34)(cid:100)(cid:108)(cid:99)(cid:90)(cid:89)(cid:21)
(cid:87)(cid:110)(cid:21)(cid:57)(cid:86)(cid:99)(cid:94)(cid:104)(cid:93)(cid:21)(cid:100)(cid:108)(cid:99)(cid:90)(cid:103)(cid:104)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:101)(cid:97)(cid:86)(cid:88)(cid:90)(cid:89)(cid:21)(cid:94)(cid:99)(cid:21)(cid:57)(cid:90)(cid:99)(cid:98)(cid:86)(cid:103)(cid:96)(cid:21)(cid:106)(cid:99)(cid:97)(cid:90)(cid:104)(cid:104)(cid:21)(cid:100)(cid:105)(cid:93)(cid:90)(cid:103)(cid:108)(cid:94)(cid:104)(cid:90)(cid:21)(cid:104)(cid:105)(cid:86)(cid:105)(cid:90)(cid:89)(cid:35)(cid:21)
(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:62)(cid:73)(cid:21)(cid:54)(cid:36)(cid:72)(cid:21)(cid:86)(cid:99)(cid:89)(cid:21)(cid:73)(cid:103)(cid:110)(cid:92)(cid:75)(cid:90)(cid:104)(cid:105)(cid:86)(cid:21)(cid:54)(cid:36)(cid:72)(cid:21)(cid:98)(cid:90)(cid:103)(cid:92)(cid:90)(cid:21)(cid:90)(cid:91)(cid:91)(cid:90)(cid:88)(cid:105)(cid:94)(cid:107)(cid:90)(cid:21)(cid:38)(cid:21)(cid:63)(cid:86)(cid:99)(cid:106)(cid:86)(cid:103)(cid:110)(cid:21)(cid:39)(cid:37)(cid:37)(cid:45)(cid:35)
(cid:56)(cid:100)(cid:98)(cid:101)(cid:86)(cid:99)(cid:110)
(cid:55)(cid:103)(cid:86)(cid:99)(cid:88)(cid:93)
Disclaimer
Certain statements in this annual report are based on
TrygVesta urges readers to refer to the section on
the beliefs of our management as well as assump-
risk management for a description of some of the
tions made by and information currently available to
factors that could affect the Group’s future per-
management. Statements regarding TrygVesta’s
formance or the insurance industry.
future results of operations, financial condition, cash
flows, business strategy, plans and future objectives
Should one or more of these risks or uncertainties
other than statements of historical fact can generally
materialise or should any underlying assumptions
be identified by terminology such as “targets”,
prove to be incorrect, TrygVesta’s actual financial
“believes”, “expects”, “aims”, “intends”, “plans”,
condition or results of operations could materially
“seeks”, “will”, “may”, “anticipates”, “would”, “could”,
differ from that described herein as anticipated,
“continues” or similar expressions.
believed, estimated or expected.
A number of different factors may cause the actual
TrygVesta is not under any duty to update any of the
performance to deviate significantly from the
forward-looking statements or to conform such
forward-looking statements in this annual report,
statements to actual results, except as may be
including but not limited to general economic
required by law.
developments, changes in the competitive environ-
ment, developments in the financial markets, extra-
ordinary events such as natural disasters or terrorist
attacks, changes in legislation or case law and
reinsurance.
This is a translation of the Danish annual report 2007. In case of any discrepancy between the Danish and the
English version of the annual report 2007, the Danish version shall apply.
Editors: Investor Relations
Design: Bysted A/S
Printers: Arco Grafisk A/S
Paper: Munken Lynx
Photos: Mads Armgaard/gab.dk and Getty Images
A
n
n
u
a
l
R
e
p
o
r
t
2
0
0
7
Annual Report 2007
TrygVesta A/S
Klausdalsbrovej 601
DK-2750 Ballerup
TrygVesta@trygvesta.com
www.trygvesta.com
Phone +45 70 11 20 20
CVR no. 26460212
Fax +45 44 20 67 00