Annual report 2009
Contents
Management’s report
Introduction to TrygVesta
Group chart
Group overview
Preface by Mikael Olufsen and Stine Bosse
Financial highlights and key ratios of TrygVesta
Highlights of 2009
Strategy
Strategy
Strategic themes
KPI (Key Performance Indicators) 2009
Financial outlook for 2010
Results
The Group’s financial performance in 2009
Private & Commercial Denmark
Private & Commercial Norway
Private & Commercial Sweden
Private & Commercial Finland
Corporate
Investment activities
Capitalisation and risk management
Capitalisation and profit distribution
Risk management
Corporate governance
Supervisory Board
Group Executive Management
Statutory report on corporate governance
Remuneration
Shareholder information
Accounts
Accounts – contents
Statement by the Supervisory Board and the Executive Management
Independent auditors’ report
Income statement and balance sheet – TrygVesta Group
Statement of changes in equity – TrygVesta Group
Cash flow statement – TrygVesta Group
Notes – TrygVesta Group
Income statement – TrygVesta A/S (parent company)
Balance sheet – TrygVesta A/S (parent company)
Statement of changes in equity (parent company)
Notes (parent company)
Financial highlights and key ratios by geography
Glossary
Editors: Investor Relations
Concept: Blue Business A/S
Layout: Amo design
Printers: Centertryk A/S
Paper: Munken Lynx
Photos: Mads Armgaard/gab.dk and Colourbox
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TrygVesta wants to be perceived as the leading peace-of-mind
provider in the Nordic region and is dedicated to providing peace
of mind to our customers on a daily basis. In 2009, our more than
4,300 employees ensured peace of mind for more than 2.7 million
private customers and more than 140,000 businesses.
TrygVesta is the second-largest general insurer in the Nordic region.
We are the largest player in Denmark and Norway’s third largest
player. We have operated our rapidly growing activities in Finland
and Sweden since 2001 and 2006, respectively. Our position in
Sweden was futher strengthened through the acquisition of
Moderna Försäkringar AB in 2009.
TrygVesta mainly offers insurances through own sales and service
channels and through business partners such as Nordea. We strive
for high customer and employee satisfaction, and several surveys
indicate that TrygVesta is considered to be best at claims handling.
Our insurances cover, among other things, workers’ compensation,
motor, building, contents, cargo and personal accident.
Annual report 2009 l Profile l
1 of 148
Introduction to TrygVesta
Introduktion til TrygVesta
2 of 148
l Introduction to TrygVesta l Annual report 2009
Peace of mind
– brings courage for life
Introduction to TrygVesta
Annual report 2009 l Introduction to TrygVesta l
3 of 148
Introduction to TrygVesta
Group chart
TrygVesta A/S
TrygVesta A/S
TrygVesta
Forsikring A/S
Vesta
Skadeförsäkring
(Swedish branch)
TrygVesta
Forsikring A/S
TrygVesta Forsikring
(Norwegian branch)
Vesta
Moderna
Skadeförsäkring
Försäkringar SAK AB
(Swedish branch)
(Swedish subsidiary)
TrygVesta Forsikring
Enter Forsikring AS
(Norwegian branch)
(Norwegian subsidiary)
Moderna
Netviq AB
Försäkringar SAK AB
(Swedish subsidiary)
(Swedish subsidiary)
Respons Inkasso AS
Enter Forsikring AS
(Norwegian subsidiary)
(Norwegian subsidiary)
Netviq AB
MF Bilsport & MC
(Swedish subsidiary)
Specialförsäkring AB
(Swedish subsidiary)
Other real property
Respons Inkasso AS
companies
(Norwegian subsidiary)
(Norwegian subsidiaries)
MF Bilsport & MC
Specialförsäkring AB
ModernRe S.A
(Swedish subsidiary)
(Luxembourg)
Other real property
companies
(Norwegian subsidiaries)
TrygVesta
Garantiforsikring A/S
(Dansk Kaution)
TrygVesta
Garantiforsikring A/S
(Dansk Kaution)
TrygVesta Garanti
(Norwegian branch)
TrygVesta Garanti
Vesta Garanti
(Norwegian branch)
(Swedish branch)
Vesta Garanti
TrygVesta Garanti
(Swedish branch)
(Finnish branch)
TrygVesta Garanti
(Finnish branch)
ModernRe S.A
(Luxembourg)
Group chart at 31 December 2009. Companies and branches are wholly-owned
by Danish owners and placed in Denmark unless otherwise stated.
Company
Branch
Group chart at 31 December 2009. Companies and branches are wholly-owned
by Danish owners and placed in Denmark unless otherwise stated.
Company
Branch
4 of 148
l Introduction to TrygVesta l Annual Report 2009
Nordea
Vahinkovakuutus
(Finnish branch)
Nordea
Vahinkovakuutus
(Finnish branch)
Tryg
Ejendomme A/S
Tryg
Ejendomsselskabet
Ejendomme A/S
af 8. maj 2008
Ejendomsselskabet
Vesta
af 8. maj 2008
Eiendom AS
(Norwegian subsidiary)
Vesta
Eiendom AS
(Norwegian subsidiary)
Group overview
% of total
business
Principal
activities
PrIVaT E & CO M M ErCI a L
Denmark
Norway
Sweden
Finland
Read more on
page 33
Read more on
page 37
Read more on
page 40
Read more on
page 42
COrPOraTE
Denmark, Norway
& Sweden
Read more on
page 44
37
24
6
3
30
Insurance for
private individuals
as well as small
and medium-sized
businesses.
Insurance for
private individuals
as well as small
and medium-sized
businessses.
Insurance for
private individuals
and small busi-
nesses.
Insurance for
private individuals
and small busi-
nesses.
The branch was
set up in 2006.
The branch was
set up in 2001.
Enter Forsikring,
which sells insur-
ance to private
individuals, is
included in Private
& Commercial Nor-
way.
Corporate custom-
ers are customers
paying annual
premiums of more
than DKK 900,000,
having more than
50 employees
or handled by
insurance brokers.
TrygVesta Garanti,
the leading provider
of guarantee insur-
ance, is included
in Corporate.
Employees*
1,858
1,151
421
191
715
Distribution
channels
Customer centres/
call centres
Customer centres/
call centres
Call centres
Call centres
Own sales force
Nordea’s branches
Own sales force
Insurance brokers
Own sales force
Own sales force
Real estate agents
Franchise offices
Nordea’s branches
Nordea’s branches
Affinity groups
Affinity groups
Car dealers
Car dealers
Internet
Internet
Affinity groups
Nordea’s branches
Car dealers
Car dealers
Internet
Internet
Strategic
partnership
Brands
* Staff functions are distributed proportionately among the business areas.
Annual Report 2009 l Introduction to TrygVesta l
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Introduction to TrygVesta
Preface
MIKAEL OLUFSEN – At the start of 2009, prospects for the
improved investment result and a lower technical result
global economy were extremely uncertain, but as the year
due to higher claims expenses compared with 2008. Based
progressed, low interest rates and government stimulus pack-
on our positive performance and the updated capital
ages had a positive impact on both the financial markets and
requirement, we propose that a total of DKK 1.8bn be paid
the economy. Considerable uncertainty still prevails, however.
out to our shareholders.
– TrygVesta is committed to being perceived as the leading
– Looking at the Supervisory Board’s involvement in 2009,
peace-of-mind provider in the Nordic region. In that per-
what aspects did you emphasise, and did the financial crisis
spective, what was 2009 like for TrygVesta?
make you think differently about corporate governance?
STINE BOSSE – As early as in 2008, we stepped up our prep-
MIKAEL OLUFSEN – As always, we focused on strategy,
arations for a period of economic uncertainty – we reduced
including securing the Group’s position and development.
our equity portfolio, showed restraint in recruiting new staff
On the Supervisory Board, we were aware of how the
and focused on in-house rotation, we strengthened our
recession could impact the business. In 2009, this involved
capital resources, and we explored the potential for both
paying special attention to the investment portfolio and
acquisitive and organic growth. In 2009, we had fewer
regular operational follow-up. When we experienced rising
employees than originally planned and therefore did not
expenses for claims in 2009, caused, among other things,
need to make rapid cost adjustments. Finally, we maintained
by a greater number of break-ins in Denmark and Norway,
a capital buffer, which enabled us to acquire Swedish com-
we concurred in Management’s analyses and initiatives for
pany Moderna Försäkringar in the spring of 2009.
claims prevention and premium increases. It is crucial that
we ensure a sound financial and operational development
Our premium income was up by 9.6% in local currency in
for the Group, in order to lay the foundation for a good per-
2009 and 4.7% excluding Moderna, which we consider to
formance in good times as well as bad. The financial crisis
be satisfactory in a recession period. We improved our
presented a challenge for all financial companies, and the
profit for the year, which was composed of a greatly
Supervisory Board followed developments closely. As a listed
DKKbn
Gross premiums earned
Technical result
Profit after tax
Total shareholders’ equity
company with a majority shareholder that has a member-
ship of a million Danes, we have a special obligation to be
sharp now and in the future when it comes to the compe-
tencies of senior management and the Supervisory Board.
We are committed to corporate governance, and the finan-
cial crisis underlines how important that is.
2009
18.3
1.6
2.0
9.7
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l Introduction to TrygVesta l Annual report 2009
– The day-to-day management has to identify trends within
MIKAEL OLUFSEN –The Supervisory Board is confident that
the framework defined by the Supervisory Board. Could you
the TrygVesta organisation evolved since we became a listed
point out some special aspects?
company in 2005 has a good structure with many competent
employees and managers who can take the company into
STINE BOSSE – I still believe it is important to focus on
the future. The identity which a company shows its custom-
strategy, the financial position and the company’s perform-
ers is to a large extent based on the experience customers
ance. But the agenda also includes other items, such as
have when they contact the company. Therefore, it is vital to
the Group’s climate impact and behaviour. We have already
optimise that experience, by strengthening the internal cul-
introduced reduced CO2 consumption as a bonus parameter
ture for service, innovation, development and drive. In addi-
for the management team, and in 2009 we reduced premi-
tion, we must ensure that TrygVesta’s strategy is aligned
ums for customers with electric and hybrid cars in order to
with the realities of the world in these very challenging
encourage environmentally conscious behaviour.
times. TrygVesta must also stay focused on the four strategic
performance indicators: profitable growth, peace-of-mind
Demography in society is also changing at a rapid pace.
delivery, self-service and human competencies, in order to
In 10-15 years, the structure of the labour market will
provide peace of mind to shareholders, customers and
probably be characterised by more people with an immi-
employees, and thereby be perceived as the leading peace-
grant background being active on the labour market and a
of-mind provider in the Nordic region.
much larger elderly population. This calls for us to be inno-
vative in attracting employees with an immigrant back-
– What are your plans for implementing that, and what will
ground and the right employee skills.
be the results for 2010?
In 2009, we opened the first finished parts of The Living
STINE BOSSE – In 2010, more than 50 TrygVesta managers
House, the comprehensive refurbishment of TrygVesta as a
will attend a value-based development programme that will
workplace. This work transcends the physical aspect, and like
help identify talent and competencies even more effectively
The Living Organisation, will be expressed in a corporate cul-
than before and also build an organisation of culture bearers
ture that aims to create an optimum framework for compas-
with a distinct common set of values and point of reference.
sion, drive and innovation. 2009 was also the first year of our
But in the final analysis, TrygVesta is continuously measured
Nordic organisation with clearly defined pan-Nordic responsi-
by its performance. We expect a gradual improvement of the
bilities and uniformity with respect to sales, product develop-
economy in 2010, which will improve conditions for insurance
ment, claims handling, IT systems and underwriting. The dedi-
generally. 2010 will also bring more clarity with respect to
cated Nordic organisation will strengthen the Group’s market
future capital requirements from regulators – the socalled
position, because we have now paved the way for shared
Solvency II rules – and thus the basis for long-term stable
processes and infrastructure. I would also mention that
and disciplined development of our industry.
through the strategic focus on self-service we are in the
process of establishing better internal and customer-driven
– What are your headlines for the work in 2010?
business processes, and looking ahead, our IT systems will
support the self-service business processes completely.
MIKAEL OLUFSEN – The Supervisory Board intends to dedicate
efforts to profitable growth, improvement of the technical
– What are the Supervisory Board’s key themes going
result, continuously enhanced customer service, and sustained
forward?
Premium growth in
local currency**
Combined ratio
before run-off
Technical result
Profit before tax
2009
Expected 2010*
4.7
96.2
3-4%
93-95
DKK 1.2-1.6bn
DKK 1.4-1.8bn
* Run-off 2010 is assumed to be zero
** Excluding Moderna
development of the level of competencies throughout the
Group. This will ensure TrygVesta’s continued ability to create
value for customers, employees and shareholders alike.
We hope you will enjoy reading our annual report.
Mikael Olufsen
Chairman
Stine Bosse
Group CEO
Annual report 2009 l Introduction to TrygVesta l
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Introduction to TrygVesta
Financial highlights and key ratios of TrygVesta
DKKm
2005
2006
2007
2008
2009
NOK/DKK, average rate for the period
SEK/DKK, average rate for the period
92.85
-
93.04
80.37
92.81
80.73
91.74
78.02
84.59
70.02
15,705
-11,159
-2,662
16,021
-10,564
-2,697
16,606
-11,175
-2,769
17,323
-11,766
-3,003
18,283
-13,206
-3,098
2,760
-591
343
2,512
1,228
-31
3,709
-624
3,085
126
3,211
555
3.0
25,957
1,561
9,951
42,783
65.9
3.7
69.6
16.8
86.4
68.4
17.2
85.6
84.6
16.8
41
35
45.5
33
2,662
-343
501
2,820
340
-51
3,109
-842
2,267
-1
2,266
743
3.6
26,916
1,587
10,010
43,830
67.3
2.1
69.4
16.7
86.1
68.1
17.1
85.2
83.5
16.7
31
23
33.5
17
2,554
-669
499
2,384
-988
-49
1,347
-501
846
0
846
793
4.0
25,193
1,036
8,244
38,445
67.9
3.9
71.8
17.3
89.1
70.7
17.8
88.5
86.6
16.9
15
9
12.8
6.5
1,979
-582
157
1,554
1,086
-38
2,602
-623
1,979
29
2,008
713
3.8
29,002
1,320
9,666
44,740
72.2
3.2
75.4
16.9
92.3
74.5
17.4
91.9
91.6
17.0
29
22
31.2
31.7
15.5
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
Technical result
Return on investments after technical interest
Other income and expenses
Profit/loss for the year before tax
Tax
Profit/loss for the year, continuing business
Profit/loss on discontinued and divested business after tax
Profit/loss for the period
Run-off gains/losses, net of reinsurance
Relative run-off gains/losses
1,884
-7
170
2,047
894
-28
2,913
-788
2,125
-28
2,097
283
1.8
Balance sheet
Total provisions for insurance contracts
26,757
Total reinsurers’ share of provisions for insurance contracts 2,630
8,215
Total shareholders’ equity
40,811
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
Gross expense ratio with adjustment*
Return on equity before tax (%)
Return on equity after tax (%)**
Earnings per share, continuing business (DKK)
Diluted earnings per share (DKK)***
Dividend per share (DKK)
71.1
0.1
71.2
17.0
88.2
69.7
17.6
87.3
87.1
17.0
39
28
31.3
21
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l Introduction to TrygVesta l Annual report 2009
DKKm
2005
2006
2007
2008
2009
Other data
Net asset value per share (DKK)
Share price 31.12 (DKK)
Quoted price/net asset value
Price Earnings
Average number of shares (1,000)
Diluted average number of shares (1,000)***
Number of shares, year end (1,000)
Solvency
121
319.2
2.6
10.2
68,000
68,000
72
147
431.5
2.9
9.5
67,824
67,790
58
148
388.0
2.6
11.6
67,648
67,638
81
128
328.0
2.6
25.7
66,184
64,378
100
Number of full-time employees, end of period
Continuing business
- of which Moderna Försäkringar
Discontinued and divested business
3,694
3,808
3,814
4,091
24
0
0
0
153
342.8
2.2
11.0
63,334
63.448
63,228
97
4,336
310
0
*
In the calculation of the gross expense ratio with adjustment pursuant to the order issued by the Danish FSA, costs are stated ex-
clusive of depreciation and operating costs on the owner-occupied property but including a calculated cost (rent) concerning the
owner-occupied property based on a calculated market rent. Other key ratios are calculated in accordance with ‘’Recommendations
& Financial Ratios 2005’’ issued by the Danish Society of Financial Analysts.
Including discontinued and divested businesses.
**
*** There has been no dilution of earnings or equity in the period 2005-2008.
Annual report 2009 l Introduction to TrygVesta l
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Introduction to TrygVesta
Highlights of 2009
JaNuary
M ay
PrI letter of intent
TrygVesta was among the first Nordic insurance com-
pany to sign a letter of intent on socially responsible
investment issued by the UN.
The Principles for Responsible Investment are based on
a number of principles intended to ensure that TrygVes-
ta’s investments comply with a range of environmental
and social requirements besides focusing on good cor-
porate governance.
Motor
Children’s accident
Contents
Travel
Personal accident
House
J uNE
Online self-service
TrygVesta launched two new self-service products as
part of the self-service strategy. The Motor and Contents
self-service products were launched on tryg.dk. The
insurances can be bought online every day from 7:00
to 24:00.
Joining international climate initiative
TrygVesta was the first Nordic company to join the
ClimateWise climate initiative. ClimateWise is the insur-
ance industry’s international climate initiative. Being a
part of this industry initiative allows TrygVesta to benefit
from and exchange climate competencies and experience
with some of the leading global insurance companies.
Theme packages about climate and environment
Theme packages have been a cornerstone in the Group’s
work with corporate values since the autumn of 2005.
The climate and environment theme package included,
among other things, an electronic climate school and a cli-
mate quiz which was held in all departments. By focusing
on this theme, TrygVesta intended to enable all employees
to make better and more sustainable decisions.
The Living Organisation
An extensive organisational change took effect on 1 Jan-
uary 2009. The organisation got a pan-Nordic structure
with fewer management layers and a flatter organisation
vis-à-vis customers. The Group Executive Management
was expanded from six to nine members.
aPrIL
acquisition of Moderna Försäkringar
The acquisition of Moderna Försäkringar was completed
on 2 April, making Moderna a part of TrygVesta. Mod-
erna contributed around 250 employees and a share of
2% of the Swedish market to the Group.
Partnership with the Danish
Handicap Federation
TrygVesta signed a collaboration agreement with the
Danish Handicap Sports Federation. The object of the
agreement is to give injured persons the best possible
help to pursue a full and active life after an accident.
10 of 148
l Introduction to TrygVesta l Annual report 2009
Dog Health
young Living
auGuST
OCTOB Er
Customised product to young people
TrygVesta launched YoungLiving – a new Nordic product
targeting young people between 18 and 28 years,
packaging several insurances into one product.
Climate agreement signed
Group CEO Stine Bosse signed The Copenhagen Commu-
niqué on Climate Change, a statement calling for an
ambitious, specific and binding climate agreement.
SEPTE M BEr
Capital markets day
TrygVesta held a capital markets day in London on 1
September, attended by 50 analysts and investors.
Nordic corporate party
X-party – TrygVesta held a joint corporate party for all
employees in the four Nordic countries.
Collaboration agreement on EV insurance
TrygVesta entered into a collaboration with Better Place,
the world’s leading provider of services for electric vehi-
cles. The collaboration is initially intended to help
develop a customised EV insurance product.
More self-service solutions
In October, YoungLiving products and dog health cover
were included in the self-service offering at tryg.dk.
Inauguration of The Living House
The first floors of the refurbishment project, The Living
House, which is to transform the head offices at
Ballerup and Bergen into workplaces of the future, were
completed in the autumn of 2009. This was celebrated
with a moving-in event in the new offices.
OCTOBEr
DECE M B Er
Changed distribution strategy
In October, TrygVesta changed the distribution strategy
in Denmark and Norway, aligning customers’ access
to contact with their behaviour and requirements.
The change improved customer accessibility due to
increased staffing on telephone and web services.
Focus on electric vehicles (EVs)
TrygVesta extended the collaboration with Better Place,
and intends to convert parts of the Group’s car fleet to
EVs, The intention is for around 25% of TrygVesta’s car
fleet to consist of EVs as from 2011.
Annual report 2009 l Introduction to TrygVesta l
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Strategy
TrygVesta focuses on a common
understanding of goals, strategies
and prioritised action plans
12 of 148
l Strategy l Annual report 2009
Strategy
Annual report 2009 l Strategy l
13 of 148
Strategy
Strategy
TrygVesta’s vision is supported by our strategic focus and
cost management in general. In 2009, we achieved growth
ongoing assessment, adaptation and development of the
of 9.6% in local currency, a combined ratio of 92.3 and a
strategic focus areas. The strategy is achieved through
return on equity of 22%. TrygVesta aims to expand the
activities and action plans implemented in all relevant proc-
Nordic market position through profitable growth.
esses; customer service, marketing, capital utilisation and
IT, and it is clearly embedded throughout the Group. The
In 2009, Moderna Försäkringar reported gross premium
strategy plan contains four themes:
growth of 12.2% and a pre-tax profit of DKK 117m (nine-
STraTEGIC THEMES
Profitable growth
Peace-of-mind delivery
Self-service
Human competencies
month profit), equal to around 6% of the profit for the
period. Growth and earnings exceeded expectations at
the time of acquisition, when Moderna was expected to
lift overall earnings per share by 5% in 2010.
In Denmark and Norway, where we are the number one
and number three player, respectively, we made adjust-
ments to the way we present ourselves to customers.
We changed the distribution platform to meet customers’
requirements and wishes, strengthening telephone and
internet staff levels, while in future, personal meetings
Customer requirements and expectations must be fulfilled
at customer centres have to be booked in advance. The
in all sub-targets, activities and action plans contributing
change will reduce the number of TrygVesta’s high street
to the general strategic targets and the strategic themes.
customer centres and is expected to cut costs as well as
In practice, the strategy is pursued by ongoing optimisa-
enhance overall customer satisfaction because of
tion of day-to-day operations, productivity enhancements,
improved telephone services.
higher quality in customer service with respect to sales as
well as claims handling, and simplified communication with
In Finland and Sweden, our focus in 2009 was on striking
customers. The strategic efforts are planned and managed
a better balance between sales and profitability. In Swe-
centrally, but with clearly defined ownership in the relevant
den, the acquisition of Moderna contributed greater
business areas.
breadth and strength to the sales distribution, thereby
creating a better basis for profitable growth going for-
Profitable growth
ward. In Finland, Nordea, call centres and our own sales
TrygVesta emphasises that growth should be profitable.
force continued to generate high sales volumes, although
Accordingly, we focus strongly on profitable risk pricing and
lower than in 2008 due to our focus on profitability-
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l Strategy l Annual report 2009
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 percieved as the leading peace-of-mind
provider in the Nordic region
enhancing measures such as premium increases, addi-
The peace-of-mind delivery
tional sales to existing customers and an adjustment of
The peace-of-mind delivery ensures that our customers’
sales channels. These measures are expected to have a
needs are met in the best possible way before, during
positive impact on profits in the years ahead.
and after they have a claim. Our insurance products and
The Group’s expenses in all business areas and staff func-
events from arising. Should an event nevertheless occur,
tions are regularly assessed in order to eliminate ineffec-
the customer has a sudden need for coverage and service
tive processes and costs, thereby gradually reducing rela-
such as repairs or a replacement purchase.
concepts build on advice intended to help prevent claims
tive costs over time. Lean plays a major role in that
process. Lean is a process-driven and customer-oriented
A period of economic downturn is a challenge for many
review of work processes and routines for the purpose
individuals and businesses. Therefore, our peace-of-mind
of reducing waste, freeing resources and thereby making
delivery is even more relevant in periods of reduced
room for development, innovation and more efficient
certainty because an unforeseen expense or event that
work routines. TrygVesta’s Lean efforts started in 2007,
changes everyday life for the customer may have greater
and around 1,000 employees and 90 managers have
consequences than would otherwise be the case. Our
since worked in accordance with the method. The Lean
peace-of-mind delivery aims to alleviate customer con-
projects have produced good results in the form of
cerns by offering easy access to contact, plain communi-
greater employee satisfaction, customer satisfaction and
cation, easy-to-understand coverage and, not least,
faster and more efficient processes. In 2009, for example,
remedying if a claim occurs.
case processing time was halved in several departments.
At the same time, telephone accessibility increased sig-
TrygVesta seeks to enhance claims handling on an ongo-
nificantly in customer service units working with Lean.
ing basis, aiming to expand the peace-of-mind delivery
to customers and providing high quality at a competitive
Structured and consistent use of customer data will ena-
cost. In 2009, a MATI survey by Enalyzer asked Danish
ble us to prioritise and adapt products and service efforts
insurance customers how satisfied they were with the
to individual customer needs. We have worked to refine
claims handling of their insurance company. TrygVesta
our customer segmentation since 2008. When fully
topped the survey relative to the four biggest companies
implemented, the results will provide enhanced customer
in Denmark. This performance is assumed to be connected
loyalty and satisfaction, generate good opportunities for
with the training of TrygVesta staff as peace-of-mind pro-
additional sales, and thus support profitable growth. In
viders, which teaches the Group’s claims handlers skills
2009, we focused on using segmentation to support
such as interpreting individual customer requirements and
advisory services to our customers.
work from the thesis “in order to treat all customers
Annual report 2009 l Strategy l
15 of 148
Strategy
equally, we have to treat them differently”. Likewise in
gic theme on self-service is exactly about meeting cus-
2009, insurance broker Willis made a survey among their
tomers on their preferred terms. We want to give
own employees, asking them to assess claims handling in
customers an option of electronic communication and
the companies they work with. TrygVesta also emerged
webbased self-service, allowing them to deal with their
best from this survey. One of the explanations emphasised
insurance issues around the clock in the same way most
in this respect was the extra service provided by TrygVesta
people now handle banking transactions, travels, or buy
through Proactive Claims Handling.
books, electronic appliances, etc. via the Internet.
In 2010, we will launch the most comprehensive programme
Self-service means that customers handle their own busi-
of change in TrygVesta’s history. This programme of change
ness online, and that the underlying systems automatically
is an extensive process intended to develop TrygVesta into a
generate policies with the desired content, or that simple
truly pan-Nordic company. This means that in the future, we
claims are handled automatically. Self-service options
will have shared Nordic product development and structures
include policy changes, service, advice, claims handling and
providing a better overview, faster product launches and lower
purchase of insurances. In 2009, we extended our custom-
administrative and sales cost. The insurance company of
ers’ online self-service options. In Denmark, customers got
tomorrow will significantly rely on online self-service. This form
the option to buy the most common insurances online,
of customer interaction is a key driver for the project paving
such as motor, contents, dog and house insurances. In a
the way for development and identification of synergies.
few years’ time, all our customers will have a full range of
Self-service
self-service options for changing their insurance or report-
ing and handling a claim. Since 2008 when we opened
Our customers require a closer dialogue with us and more
the e-Boks service and until 31 December 2009, 177,000
and more customers want to be able to communicate elec-
customers have signed up for this electronic service.
tronically with their insurance company. TrygVesta’s strate-
In 2010, we intend to focus even more on electronic com-
TryGVESTaS WEB BaSED S OLuTIONS
DK
NO
SE
FI
Public website
’My page’
with editable customer profile and insurance overview
’My corporation’
with insurance overview and selected services
Insurance overview in netbank
Internet sales of private insurances
Sales of insurances through netbank
Price calculation at partner sites
Claims forms on the Internet
SMS/MSS customer communication
Electronic customer communication
on ’My page’ or e-Boks (DK) or netbank (SE + FI)
= Established = Partially established = To be launched in 2010/2011
16 of 148
l Strategy l Annual report 2009
munication with our customers. At the start of the year, we
The first phase of TrygVesta’s Nordic talent development
will introduce a new procedure for obtaining customer
programme was launched in early 2009. The programme is
e-mail addresses and acceptances thereof (Denmark
intended to strengthen and develop talent for manage-
requires that customers provide acceptance for companies
ment and project management and provide an opportunity
to send them e-mails). The objective is to be better able to
for ambitious, talented employees to build a career within
tailor our communication to the wishes and requirements
the Group. The first phase of the programme takes 19
of the individual customer, thereby making for a more per-
months and focuses on identifying and developing a
sonal and relevant customer experience.
number of employees with no management experience
Human competencies
build a career as a manager or project manager. Over the
In order to be an attractive partner for customers and live
next few years, the programme will also include specialists
who have the potential, and not least the ambition, to
up to our vision of being perceived as the leading peace-
and experienced managers.
of-mind provider in the Nordic region, employees have
to develop and put themselves in the customer’s place.
The Group’s training and development efforts in 2010 will
Our strategic focus on human competencies illustrates
focus on implementing efficiency measures for all learning
that we understand and respect that people making up
activities to provide an overview of the financial benefits of
the organisation are the most important resource in a
the learning activities and to assure the quality of and im-
successful organisation.
prove the Group’s training offers. The peace-of-mind provider
training will be the largest training initiative in 2010, with
We completed a major organisational change in early 2009,
more than 2,000 employees receiving training to give cus-
expanding the Group Executive Management from six to
tomers a unique peace-of-mind experience. Likewise in 2010,
nine members, and basing the Group on a pan-Nordic
a value-based development programme will be initiated, to be
structure. The new organisation provides the framework
attended by more than 50 managers. This programme will
for shared Nordic development of products, concepts and
help identify talent and competencies more effectively and
peace-of-mind deliveries, and will greatly improve the
strengthen the Group’s value-based corporate culture.
conditions for collaboration between divisions, depart-
ments and colleagues. 2010 will be the first year in which
The first departments in the head office refurbishment in
the organisational change and our occupation of The
Denmark and Norway (The Living House) were completed
Living House begin to interact. With a view to providing
in the autumn of 2009 and were positively received. In
additional momentum, we plan to re-brand the Group
addition to a physical change of the offices, the refurbish-
based on a shared business model and supporting
ment, which was initiated in 2008, also represents a
pan-Nordic IT systems.
change of corporate culture and an organisational tool cre-
ating a workplace encouraging activity and creativity and
In 2009, we continued the intensive development of
generating energy and inspiration. In addition to café
our training and development activities. One initiative was
areas, innovation, meeting and quiet rooms, all employees
the launch of a new training programme involving much
will have two screens, laptops and wireless internet access
more dynamic training offers with courses customised to
as part of a mobile, paperless office. The total project is
individual needs to a greater extent. The new training pro-
expected to be completed in 2011. As part of the refur-
gramme is designed to ensure identical handshakes from
bishment project, we also aim to become a paperless work-
all employees, and ensure that they are all familiar with
place, handling all documents electronically. In the first half
the spirit of being a peace-of-mind provider. Corporate
of 2010, around 1,400 employees in Claims and Sales in
Learning, the Group’s training unit, which handles employee
Denmark will work in a paperless environment. This will
training and quality assurance of training offers, organised
improve the working environment for the employees,
243 different courses in 2009. On average each employee
reduce costs and speed up case processing, for the benefit
attended a course 1.7 times during the year.
of the customer experience and the company’s earnings.
Annual report 2009 l Strategy l
17 of 148
Strategy
Strategic themes
results and goals
A selection of TrygVesta’s results in 2009 within the strategic themes; profitable growth, peace-of-mind delivery,
self-service and human competencies – as well as the goals planned for 2010-11.
P rO FI TaB LE G rOWTH
SEL F- SErV ICE
We intend to secure the right balance between growth
and earnings in all our initiatives.
We intend to meet customers on their own terms.
results in 2009
> Acquisition of Moderna Försäkringar for DKK 939m.
Premium growth of 12.2% and a technical result of
SEK 107m (nine-month result)
> Premium increases in P&C Norway gradually
improving profit
> Yearly premium growth better than market growth
Goals for 2010-11
> Profitable growth in Sweden and Finland and
increased market share – 2012 goal of 6-8%
> Premium initiatives to ensure profitability of
less cost effective products
> Moderna becoming a branch of TrygVesta
results in 2009
> Self-service of the most common types of insurances
in Denmark
> Self-service of claims reporting in Norway
> 177,000 customers joined e-Boks in Denmark
Goals for 2010-11
> Handling of motor claims in Denmark
> New Group internet platform
> Start of common Nordic business models,
processes and IT systems
THE PEaCE-OF-M IND DELIVEry
Hu M a N CO M P ET ENCI ES
Our customers should be confirmed in their choice of
insurer on an ongoing basis.
We intend to focus on our employees and to be
an attractive workplace.
results in 2009
> Increased customer loyalty
> Satisfaction with claims handling
> Risk consultancy for corporate customers
Goals for 2010-11
> Common Nordic brand platform
> Increase customer loyalty, retention rate and proportion
of concept customers
> Improve distribution strategy and customer
accessibility
results in 2009
> The Living House opened in Ballerup and Bergen
> Lower rates of employee turnover and sickness absence
> Several CSR and climate initiatives
Goals for 2010-11
> To be the most attractive workplace in the financial
sector in the Nordic region
> Leading the Strategy – management training
programme with increased organisational effect
> The Living House and The Living Organisation
start to show effects
> Best in class’ at CSR initiatives within climate,
prevention, inclusion and well-being
18 of 148
l Strategy l Annual report 2009
Annual report 2009 l Strategy l
19 of 148
Strategy
KPI (Key Performance Indicators) 2009
Turning words into results
We use the balanced scorecard (BSC) to implement the Group’s strategy and retain our strategic focus areas.
Note: 2001 = 100 for indexed indicators
T
r
E
N
D
D
E
S
C
r
I
P
T
I
O
N
G
O
a
L
S
a
N
a
L
y
S
I
S
PrO FITaB LE G rOWTH
THE PEaCE-OF -M IN D DE LIVE ry
FI NaNCIaL PErSPECTIVE
CuSTO M Er PErSP ECTIVE
return on equity
Combined ratio
Expense ratio
Customer loyalty
Number of custo-
after tax (%)
(Index)
mers with concept
agreements (Index)
2009:
22
2009: 92.3
2009: 16.6*
2009: 100
2009: 109
2005 2006 2007 2008
2005 2006 2007 2008
2005 2006 2007 2008
28
35
23
9
88.2 86.4 86.1 89.1
17.0 16.8 16.7 16.7*
2005 2006 2007 2008
108 108 108 110
Profit after tax divided
The ratio of the
Administrative
The proportion of
Index showing the
by equity
technical result
expenses and sales
100 customers staying
proportion of our
exclusive of technical
costs as a percentage
on with the company
private customers
interest to earned
of earned premiums
after one year
having made a
premiums
multiple product/
concept agreement
with TrygVesta
21-23% annually
89-91 in the medium
Gradual improvement
Retain in Denmark
To gradually improve
term
of the expense ratio by
and improve in Norway
0.1 percentage points
per year
Return on equity
The combined ratio
The 2009 expense ratio
New measurement
The proportion of cus-
was 22% in 2009,
was 92.3, adversely
was impacted by costs
method (MATI - Market
tomers with concept
favourably impacted
impacted by lower
in connection with The
and satisfaction survey)
agreements fell
by higher investment
interest rates and
Living House. Adjusted
introduced in 2009.
marginally in 2009,
income and a good
higher claims expen-
for such costs, the ex-
TrygVesta emerged as
which was related to
technical performance
ses in the Danish
pense ratio was in line
the best among the
the lower customer
private business
with expectations
largest companies
retention in the
surveyed in Denmark.
Norwegian part of
the business
* Including costs of The
Living House, the ex-
pense ratio was 17.3 in
2008 and 16.9 in 2009
20 of 148
l Strategy l Annual report 2009
SELF-SE rVICE
Hu M aN CO M PE TENCIES
P rO CESS PErSP ECTIVE
LEarNING PErSP ECTIVE
Portfolio per full-time employee
Customer satisfaction in claims
Employee satisfaction
(Index)
handling (Index)
(Index)
2009: 139
2009: 100
2009:
103
2005 2006 2007 2008
133 131 139 134
2005 2006 2007 2008
N/A 102 100 100
Index of portfolio
size per employee
Index of customer satisfaction for
Index of employee satisfaction
customers having experienced claims
measured in an annual employee
handling
survey
To increase in line with productivity,
To gradually enhance loyalty and
To be the most attractive workplace
approximately 2% annually
satisfaction
in the financial sector in the Nordic
region
The portfolio per employee increased
New measurement method
75% of TrygVesta employees are
in 2009 due to focus on in-house
(MATI – Market and satisfaction survey)
either satisfied or very satisfied. This
recruitment and restraint with respect
introduced in 2009. TrygVesta emerged
is a good result considering the many
to new appointments
best from this survey among the
changes that are continuously being
largest companies in Denmark.
implemented
In Norway, the survey showed that
we were in line with the average
T
r
E
N
D
D
E
S
C
r
I
P
T
I
O
N
G
O
a
L
S
a
N
a
L
y
S
I
S
Annual report 2009 l Strategy l
21 of 148
Strategy
Financial outlook for 2010
Discounting rate (%)
Premium growth* (%)
Technical result ** (DKKbn)
Investment result (DKKm)
Profit before tax (DKKbn)
Tax rate
Combined ratio before run-off **
2009
2010
4.7
96.2
3.6
3-4
1.2-1.6
200-300
1.4-1.8
approx 26
93-95
* In local currency and 2009 excluding Moderna Försäkringar.
** Run-off 2010 is assumed to be zero. Run-off net in 2007, 2008 and 2009 was DKK 743m, DKK 793m and DKK 713m
respectively affecting the combined ratio by 4.5%, 4.6% and 3.9%, respectively.
Despite low interest rates and stimulus packages from
will be neutral due to a matching of insurance provisions
several governments, the speed and sustainability of an
and the investment portfolio. Compared with previous
economic recovery are still subject to uncertainty due to
years, the low interest rate level reduced the pre-tax profit
continued high levels of debt and the need for debt reduc-
by DKK 342m in 2009.
tion, factors that are expected to have an adverse effect
on private and public spending in the coming years. As
See the section Risk management for a sensitivity
part of TrygVesta’s transparent information platform, we
analysis
aim to provide accurate guidance to and assumptions for
the future developments of our company.
Fluctuations in the exchange rates of NOK and SEK to DKK
Expectations for earnings in 2010 are nonetheless subject
not include expected exchange rate developments in the
to uncertainty due to rapidly increasing claims expenses
outlook and therefore states growth rates in local curren-
recorded in 2009 for contents, house and change of own-
cies. Norway and Sweden account for 38% and 6%,
ership insurances and uncertainty with respect to the
respectively, of earned premiums in TrygVesta.
affect profits which are reported in DKK. TrygVesta does
impact of changes in interest rate levels. TrygVesta’s tecni-
cal result and investment performance are to a significant
Future reporting
degree affected by changes in interest rates. This is partly
Effective on 1 January 2009, TrygVesta changed the organ-
because the investment return is affected by interest rate
isation to a Nordic, process-oriented organisation, which
levels, and partly due to ongoing interest rate return of
will result in changes to the reporting in 2010. These
insurances. On the other hand, the balance sheet effect
changes will involve pan-Nordic reporting of the Private,
22 of 148
l Strategy l Annual report 2009
Commercial and Corporate business areas. Geographical
LARGE CLAIMS (GROSS)
reporting distributed on Denmark, Norway, Sweden and
Finland will be unchanged.
Premium growth of 3-4% in 2010
Earned premiums are expected to increase by 3-4% in local
currency, assuming a gradual economic recovery and no
major changes in competition relative to end 2009. Premium
growth is expected to originate from continued strong
organic growth in Sweden and Finland and the implementa-
tion of announced premium increases in all four countries.
The total effect of premium increases and indexation will
be around DKK 0.9bn in 2010.
Most of TrygVesta’s insurances are for private individuals. The
economic downturn did not affect the portfolio of insurances
within this customer segment. However, the rising unem-
ployment and the number of business bankruptcies in 2009
had an adverse impact on the volume of commercial insur-
ances, for which we recorded a decline within workers’ com-
pensation, vans, liability and building insurance. Assuming a
gradual economic recovery in 2010, the development in vol-
umes in the areas that are most sensitive to economic con-
ditions should stabilise. Growth within Corporate exceeded
expectations in 2009, but with a declining trend over the
year and indications of a lower premium growth in 2010.
Competition from non-Nordic insurance companies through
brokers in the Nordic market mainly targets the largest cor-
porations, thus only affecting part of the market.
DKKm
500
400
300
200
100
0
Q1 06
Q4 06
Q1 07
Q4 07
Q1 08
Q4 08
Q1 09
Q4 09
Large claims quarterly
Average large claims quarterly
Expected level quarterly 2010 (DKK 125-150m)
STORM AND WEATHER-RELATED CLAIMS
DKKm
1,000
911
800
600
400
200
0
202
332
112
121
2005
2006
2007
2008
2009
Storm and weather-related claims, gross
Expected level for 2010 (DKK 200-300m)
Combined ratio at the level of 93-95 before run-off
The combined ratio was in 2009 generally affected by inter-
est rate levels and increasing claims expenses. For 2010, the
combined ratio before run-off is expected to be in the range
RUN-OFF (NET)
of 93-95 compared with 96.2 for 2009 before run-off. Thus,
an improvement of the combined ratio is very likely, mainly
due to an increase in gross earned premiums and indexation.
The performance of claims in the second half of 2009
increased uncertainty with respect to the claims perform-
ance particularly in relation to higher claims paid for Danish
contents, house and change of ownership insurances. This
is reflected in the outlook for the combined ratio range. The
interest rate used to calculate the combined ratio is 3.6%,
which is assumed to continue unchanged in 2010. If inter-
DKKm
1,000
700
600
500
400
300
200
100
0
743
793
713
555
283
2005
2006
2007
2008
2009
Annual report 2009 l Strategy l
23 of 148
Strategy
est rates increased by 1 percentage point to 4.6%, the com-
affected by uncertainty with respect to claims inflation in
bined ratio would improve by around 1.2 percentage points.
contents, house and change of ownership insurances.
If interest rates declined further, this would have the same
proportionate effect. Run-off had a positive impact of 3.5-
See the assumptions described under combined
4.6% on the combined ratio from 2006 to 2009, for exam-
ratio above and the section Risk management for a
ple, with a combined ratio in 2009 of 92.3 after run-off and
sensitivity analysis
96.2 before run-off.
assumptions for insurance activities
rationalisation and more investments in the future
The outlook for the financial results for 2010 is based on
In 2010, focus on costs will continue. Ongoing efficiency
assumptions with respect to gross earned premiums, gross
and rationalisation measures are expected to ensure an
claims incurred, gross expenses, result of business ceded
unchanged expense ratio in Denmark and Norway. This
and technical interest. The outlook for gross earned premi-
cost reducing process is expected to create room for
ums is based on the Group’s portfolio at 31 December 2009
further investments in expansion and growth. To this
and assumptions with respect to sales and loss of policies
should be added increased costs in 2010 in connection
and price adjustments of existing policies. Assumptions for
with a multi year improvement of business processes and
sales and loss of policies are based on historical data,
supporting IT systems (see also the section Strategy) and
planned initiatives and the market situation. Assumptions
higher costs in connection with the preparation and imple-
for price adjustments are primarily based on agreements
mentation of Solvency II. Furthermore, one-off costs for
relating to adjustments of individual insurance policies.
branding and marketing will increase by DKK 80-100m in
connection with marketing of the Group as a Nordic peace-
The outlook is expressed in local currency. TrygVesta gener-
of-mind provider with a shared brand platform. Overall, the
ally bases expectations for claims incurred on assumptions
expense ratio for 2010 including investments is expected
for the various products in the individual business areas.
to be 0.5 percentage point higher than the expense ratio
Expectations regarding claims ratios are based on historical
of 16.9 recorded in 2009.
performance in the form of average claims ratios for the past
Technical result
stronger than those of prior years. Trends in the pricing of
The technical result is expected to be DKK 1.2-1.6bn before
our insurance premiums, claims frequencies and the discount
run-off for the full-year 2010 relative to DKK 1,554m in
rate applied are the most important factors that may affect
2009. The outlook for the technical result for 2010 is
overall performance. Assumptions for storm events and large
five years, with recent years’ trends generally being weighted
DANISH DISCOUNT RATE
NORWEGIAN DISCOUNT RATE
%
6
5
4
3
2
1
%
6
5
4
3
2
1
0
5
10
15
20
25
30
0
5
10
15
20
25
30
Rate at the start of 2009
Rate at the end of 2009
Rate at the start of 2009
Rate at the end of 2009
24 of 148
l Strategy l Annual report 2009
claims are based on historical experience for not less than ten
to DKK 12.5bn and is used to invest the company’s capital.
years, with recent years’ trends being weighted stronger
The investment portfolio includes equities for DKK 1.7bn,
than those of prior years. In addition, the effect of profitabil-
real estate for DKK 3.9bn and bonds for DKK 6.9bn. The
ity initiatives and the effect of any legislative measures are
return on investments for 2010 is based on the following
incorporated in the anticipated claims level.
assumptions with respect to investment assets: an assumed
return on equities of 7% including dividend, bond yields of
The outlook for 2010 assumes weather-related claims for
2.1% based on interest rates at the beginning of 2010, and
2010 of DKK 200-300m and large claims of DKK 500-600m
real estate is expected to yield a return of 6.0% excluding any
gross. The outlook assumes no run-off losses or gains in
value adjustments. The investment result after transfer of
2010 on the provisions for claims. The outlook regarding
technical interest for 2010 is expected to be DKK 200-300m
gross expenses reflects the projected number of employees
against DKK 1.1bn in 2009. The assumptions for investment
in 2010 and the related costs. The projected number of
return are subject to considerable uncertainty.
employees incorporates the effect of measures launched to
improve efficiency and in-house rotation of vacant positions.
See the section Risk management for a sensitivity
The outlook further includes other expenses such as those
analysis
relating to IT, operations and owner-occupied properties,
which are generally based on agreements and development
Currency risk
plans that are known to us. The result of business ceded is
Currency exchange rates, which have a major impact on the
based on contracts made with reinsurers to cover claims
results of the insurance operations, were volatile in 2008 and
events and events such as weather-related claims and large
2009. TrygVesta’s insurance operations are directly exposed
claims. The expected result of business ceded is calculated
to fluctuations in NOK, SEK and EUR. Based on the expecta-
on the basis of such contracts and historical data.
tion of a positive profit contribution from the Norwegian and
Swedish part of the business, a depreciation of NOK and SEK
The harsh winter in the Nordic region in 2010 increased
against DKK would adversely impact the total profit of the
claims expenses but is not expected to affect the outlook.
Group which has DKK as its reporting currency. The currency
risk on the part of equity tied up in NOK and SEK is hedged.
Investment activities
TrygVesta initiated a division of the investment portfolio into
assumptions for tax
two portfolios at the beginning of 2010. One is called the
The effective tax rate is affected by the corporate tax rate of
matching portfolio and amounts to approximately DKK 27bn.
25% in Denmark and 28% in Norway. TrygVesta expects an
The matching portfolio comprises bonds, interest rate deriva-
effective tax rate of 26 in 2010, depending, however, on
tives and money market placements that overall match the
the amount of tax-exempt or non-deductible gains or losses
technical provisions. The technical provisions including pre-
on equities in the Norwegian part of the equity portfolio.
mium provisions have an average duration of 2.4 years. The
Based on the above expectations and assumptions for 2010,
other portfolio is called the investment portfolio. It amounts
the return on equity is expected to be 18-20% after tax.
FINaNCIaL CaLENDar 2010
15 April 2010
16 April 2010
21 April 2010
21 May 2010
Annual general meeting 2010
TrygVesta shares trade ex-dividend
Payment of dividend
Interim report for Q1 2010
17 August 2010
Interim report for the first half of 2010
16 November 2010
Interim report for Q1-Q3 2010
Annual report 2009 l Strategy l
25 of 148
Results
26 of 148
l Results l Annual report 2009
results – the right balance
between premiums and risk is
the basis for results
results
Annual report 2009 l Results l
27 of 148
Results
The Group’s financial performance in 2009
TrygVesta’s pre-tax profit for 2009 increased to DKK
Financial results in 2009
2,602m from DKK 1,347m for 2008, reflecting an improved
The pre-tax profit amounted to DKK 2,602m against DKK
investment return and a lower technical result. The lower
1,347m in 2008. This was around DKK 200m higher than
technical result was attributable to lower interest rates and
the full-year forecast announced in the third quarter
rising claims expenses, in particular for house and contents
interim report 2009. The improvement relative to the fore-
insurances, making premium increases necessary on a
cast was attributable to a higher investment income and
number of insurances. This was the first time since the
run-off gains on prior-year claims.
period 2002-2004 that TrygVesta implemented premium
increases on this scale. The premium increases are
The profit after tax increased to DKK 2,008m, more than
expected to improve earnings in 2010 and 2011, and
double the 2008 figure. The performance was affected
further premium increases will be implemented in 2010.
by the positive performance of the investment activities,
TrygVesta continued to invest in expansion in Sweden and
which reversed the negative result of 2008 to a positive
Finland, which affected costs, but a focused effort with
result in 2009, as well as by a positive contribution of
respect to process enhancement measures and Lean
DKK 29m from the divestment of business.
resulted in a declining expense ratio overall.
TECHNICAL RESULT, DENMARK AND NORWAY
TECHNICAL RESULT BY BUSINESS AREA
1,639
1,695
1,377
1,214
1,335
1,131
956
815
1,191
566
DKKm
2,000
1,500
1,000
500
0
1,440
994
757
1,098
616
DKKm
1,500
1,200
900
600
300
0
1,092
842
842
889
870
757
692
461
315
258
2005
2006
2007
2008
2009
P&C Denmark
P&C Norway
Corporate
Denmark
Norway
2005
2006
2007
2008
2009
28 of 148
l Results l Annual report 2009
The technical result amounted to DKK 1,554m in 2009
erna. The increasing unemployment in Denmark and Nor-
against DKK 2,384m in 2008. In addition to the effect of
way in 2009 had an adverse impact on the development
lower interest rates of DKK 342m, the result was adversely
of premiums in workers’ compensation insurance. A simi-
affected by a fall in the contribution from prior-year claims.
lar negative trend was recorded in other lines of business
Developments within house and contents insurances,
with declining activity levels. The transport sector was
primarily in the Danish market, also had an adverse impact
among the areas affected by the slowdown, with fewer
on the result. Strong increases in the number of break-ins
goods being carried and fewer vans being insured. The
and an increase in the number and severity of cloudburst
negative effects of the recession are not expected to
claims had an adverse impact on earnings and made
terminate until there are clear indications of economic
premium increases necessary.
recovery, including lower unemployment rates.
Moderna and premium increases
Private & Commercial Denmark reported 4% growth in
lifted premium growth
gross premiums, which was significantly higher than last
TrygVesta recorded gross earned premiums of DKK
year. The large number of premium increases affected pre-
18,283m in 2009, which was an increase of DKK 960m,
mium growth in Private & Commercial Norway, which
or 9.6% in local currency (5.5% in DKK). Premium growth
recorded growth of 4% in local currency in 2009 (minus
was favourably impacted by the acquisition of Moderna
4.1% in DKK). Customer retention rates remained at a
Försäkringar (Moderna), which was included with effect for
high level. The overall market share in Norway was main-
three quarters in 2009, or DKK 768m. Excluding Moderna,
tained, reflecting growth in Corporate, but a fall in Private.
premium growth was 4.7% in local currency. Current
premium increases and sustained high customer renewal
TrygVesta continued to expand its position within health
rates also lifted growth.
care in 2009. The strong demand for health care insur-
At the start of 2009, the Group expected the economic
of new product initiatives produced portfolio growth of
slowdown to have an adverse impact on premium growth.
more than 30% to DKK 275m in Denmark.
ance combined with good market timing of the launch
This impact was smaller than expected, but tended
towards weaker growth at the end of 2009. The overall
The Swedish and Finnish activities recorded growth of 57%
growth in gross premiums for 2009 exceeded expectations
in Sweden excluding Moderna and 34% in Finland, respec-
of 4% growth excluding Moderna and 8% including Mod-
tively. Taken alone, Moderna grew by 12.2%, exceeding
PRE M IU M S BY BUSINESS AREA
PRE M IU M S BY PROD UCT S
6%
3%
37%
30%
8%
8%
32%
13%
4%
P&C Denmark
P&C Norway
24%
Corporate
Finland
Sweden
Motor
Liability
Property, private
Personal lines
Others
Property, commercial
Workers’ compensation
14%
21%
Annual report 2009 l Results l
29 of 148
Results
the 5% growth anticipated when acquired. The total port-
The Danish part of the Corporate business was impacted
folio in Sweden and Finland amounted to DKK 2.0bn at 31
by fiercer competition. This, together with the deliberate
December 2009. Sweden and Finland accounted for 6.9
phase-out of unprofitable customers, caused gross premi-
percentage points and Denmark and Norway accounted
ums to decline. In light of the economic slowdown, the
for 2.7 percentage points of the Group’s total premium
performance is considered satisfactory, underlining the
growth of 9.6% in local currency. The total Nordic bank
strength of the Group’s pan-Nordic market position.
portfolio increased 21%, with Sweden and Finland
accounting for the largest growth.
Claims development
Gross premiums in Corporate increased by 2.2% in local
2008 was adversely impacted by the lower discount rate
currency (minus 1.6% in DKK), reflecting an underlying
which, seen in isolation, had a negative effect of 1.7 per-
positive development in the Norwegian part of Corporate,
centage points on the claims ratio, while the remaining
and falling gross premiums in the Danish part of Corporate.
increase was mainly attributable to higher claims expenses
The gross claims ratio of 72.2 in 2009 against 67.9 in
CLAIMS RATIO AND INTEREST RATE EFFECT
%
80
60
40
20
0
69.6
3.7
72.7
5.4
73.3
5.4
75.9
3.7
65.9
67.3
67.9
72.2
2006
2007
2008
2009
Claims ratio, reported
Interest rate effect
Claims ratio excluding interest rate effect
in the private lines of the Danish part of the business.
Large claims, defined as claims of more than DKK 10m,
were a gross amount of DKK 534m in 2009 against DKK
586m in 2008. After reinsurer contributions, large claims
amounted to DKK 399m net against DKK 490m in 2008.
Weather-related claims, defined as high-frequency events
with claims expenses in excess of DKK 5m, amounted to
DKK 121m in 2009 against DKK 112m in 2008.
Higher claims expenses, particularly for contents and
house insurances, had an impact of DKK 456m on the
underlying claims development with DKK 293m stemming
from the private lines in the Danish part of the business.
This was attributable to an increasing number of break-
HOUSE AND CONTENTS CLAIMS IN DENMARK*
STORM AND WEATHER-RELATED CLAIMS
1,259
1,070
946
899
DKKm
1,600
1,200
800
400
0
1,552
DKKm
1,000
911
800
600
400
200
0
332
202
112
121
2005
2006
2007
2008
2009
2005
2006
2007
2008
2009
Claims expenses
Strengthening provision
*Excluding storm and claims handling expenses
Storm and weather-related claims, gross
Expected level 2009 (DKK 225m)
30 of 148
l Results l Annual report 2009
ins, more expensive average claims due to contents being
Even if the economic slowdown had a limited effect on the
more expensive after the private consumption boom from
results in 2009, it was necessary to adjust the cost struc-
2004 to 2007, a worrying development in water and piping
ture because higher unemployment and economic reces-
claims under house insurances, and rising expenses for fire
sion are expected to impact the future volume of business
claims. Positive trends included a slight decline in average
until economic recovery sets in. The ongoing improvement
claims for small house claims (less than DKK 100,000). This
of business efficiency and recruitment restraint had the
was due to the economic downturn which within a short
overall effect of reducing the expense ratio in Denmark
period of time reduced demand for craftsmen’s services.
and Norway from 16.4 in 2008 to 15.4 in 2009.
Costs affected by efficiency measures and Lean
As was expected, Sweden and Finland had a relatively
The gross expense ratio improved from 17.3 in 2008
strong impact on costs. Excluding Moderna, Sweden and
to 16.9 in 2009. Both 2009 and 2008 were adversely
Finland had a 1.7 percentage point impact on the overall
impacted by costs in connection with The Living House,
expense ratio in 2009 against 1.5 percentage points in
which amounted to DKK 64m in 2009 against DKK 133m
2008. The acquisition of Moderna in the second quarter
in 2008. The refurbishment of the head offices began
of 2009 generated a number of synergies which material-
in 2008 and accelerated during 2009.
ised over the year with a favourable impact on the
Group’s total costs. An example is cost savings with
In step with the incorporation of Lean as a natural part of
respect to IT in connection with the start-up of the Cor-
work routines and the improvement of the Group’s proc-
porate business in Sweden, where Corporate was estab-
esses, productivity will increase. This is important in order to
lished on Moderna’s IT platform following the acquisition.
make room for the expansion in Sweden and Finland, which
Furthermore, this made it possible to begin sales of cor-
requires high costs and ongoing investments.
porate insurances ahead of expectations.
TrygVesta focused on in-house recruitment in 2009 and
Read more about the acquisition of Moderna
only made a few external appointments, thereby reducing
in the section Sweden.
employee numbers over the year. This generated signifi-
cant cost savings as there were about 100 fewer employ-
Combined ratio
ees than at the beginning af the year (excluding Moderna).
The combined ratio was up from 89.1 in 2008 to 92.3 in
2009. The discount rate that is used to discount provi-
LARGE CLAIMS
EXPENSE RATIO
DKKm
1,200
1,000
800
600
400
200
0
1,042
501
340
416
275
637
586
490
534
399
%
18
17
16
15
14
13
12
17.0
16.8
16.7
17.3
0.6
16.9
0.3
0.1
16.7
16.5
2005
2006
2007
2008
2009
2005
2006
2007
2008
2009
Large claims, gross
Large claims, net
Expected level 2009 (DKK 500m)
Adjusted expense ratio
The Living House
Moderna
Annual report 2009 l Results l
31 of 148
Results
sions for claims fell in 2009 which, seen in isolation, trig-
bonds to non-callable bonds. The total investment portfolio
gered an increase of 1.7 percentage points in the com-
stood at around DKK 40bn at 31 December 2009 compared
bined ratio. Run-off gains had a favourable impact of 3.9
with DKK 34.2bn at 1 January 2009. TrygVesta recognises
percentage points on the combined ratio in 2009 as com-
all investment assets at market value, and value changes
pared with 4.6 percentage points in 2008. Run-off gains
have a direct impact on the income statement.
came from personal lines, whereas reserves for house
and contents policies were strengthened. Large claims
Tax
were a gross amount of DKK 534m in 2009 against
The tax expense of continuing business was DKK 623m in
DKK 586m in 2008.
2009 compared with DKK 501m in 2008, equalling a fall in
Investment return
the effective tax rate from 37% in 2008 to 24% in 2009.
The effective tax rate in 2008 was adversely affected by
Positive trends in the equity markets, generally falling
non-deductible equity losses. In 2009, the effective tax rate
interest rates, and a narrowing credit spread produced a
was affected by utilisation of prior-year tax loss carry-
significantly higher investment result in 2009. The gross
forwards in Sweden and tax-free gains on equities.
return on investment assets totalled DKK 1,931m in 2009
against DKK 440m in 2008, corresponding to a gross
Balance sheet and cash flow
return of 6.6% in 2009 compared with 3.5% in 2008.
Total assets increased from DKK 38,445m to DKK 44,740m
Investment activities generated a profit of DKK 1,086m
in 2009, primarily due to the consolidation of Moderna and
after transfer of technical interest compared with a loss
the appreciation of NOK against DKK.
of DKK 988m in 2008.
Liabilities mainly comprised shareholders’ equity of DKK
The bond portfolio accounted for an almost constant
9,666m and technical provisions of DKK 29,002m. Technical
proportion of 86.2% of total assets in 2009. In 2009,
provisions increased by DKK 3,809m relative to 31 December
TrygVesta invested in High Yield bonds, which accounted
2008, primarily due to the addition with respect to Moderna
for 2.2% of the Group’s total investment assets at 31
and the appreciation of NOK against DKK.
December 2009. The Investment Grade portfolio increased
by DKK 500m in the spring, but the entire portfolio was
TrygVesta generated a cash inflow from operating activities of
sold at the end of the year. Furthermore, TrygVesta com-
DKK 2.2bn in 2009 compared with DKK 1.8bn in 2008. There
pleted a major restructuring of the mortgage bond port-
was a cash outflow for investing activities of DKK 1.6bn and a
folio in the second half of 2009, switching from callable
cash outflow for financing activities of DKK 0.4bn.
INVESTMENT RESULT
DKKm
1,500
1,000
894
1,228
Equity and rOE
Equity stood at DKK 9,666m at 31 December 2009, an
increase of DKK 1,422m in the year. The increase was com-
posed of the profit for the year, dividends paid out in the
amount of DKK 410m, own shares bought back in the
1,086
amount of DKK 334m and other adjustments. The return on
equity was 22% in 2009 against 9% in 2008.
500
0
-500
-1,000
340
Events after the balance sheet date
No other material events have occurred in the period from
the balance sheet date until today which in the opinion of
2005
2006
2007
2008
2009
financial position.
-998
Management affect the assessment of the company’s
32 of 148
l Results l Annual report 2009
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
2008
2009
6,490
-4,041
-1,086
1,363
6,605
-4,443
-1,155
1,007
-87
-89
164
180
1,440
1,098
62.3
1.3
63.6
16.7
80.3
67.3
1.3
68.6
17.5
86.1
6,866
-5,136
-1,063
667
-122
71
616
74.8
1.8
76.6
15.5
92.1
Private & Commercial Denmark sells insurances to private
average house claim (less than DKK 100,000) was
individuals as well as small and medium-sized enterprises
reported, but due to an increase in expensive house
in Denmark under the Tryg brand name. Sales are han-
claims, the total claims expenses rose.
dled by call centres, own sales agents, affinity groups,
car dealers, real estate agents and Nordea’s branches.
Development in gross premiums
Overall, gross premiums rose by 4.0% to DKK 6,866m in
Performance impacted by lower interest rates
2009, which was significantly better than the year before
and higher claims expenses
and in line with expectations. The economic downturn
The technical result amounted to DKK 616m in 2009
resulted in a reduced number of workers’ compensation
compared with DKK 1,098m in 2008. The performance
insurances and reduced premiums. The ongoing restruc-
was impacted by lower technical interest, higher claims
turing of the motor portfolio, which accounted for a third
expenses for house, contents and change of ownership
of the total portfolio in Private & Commercial Denmark,
insurances and lower run-off gains. The higher claims
produced a slight drop of 1% in the average premium.
expenses were mainly due to a larger number of piping
This was due, among other things, to a number of agree-
claims, break-ins and fires. An adverse trend in the
ments with affinity groups being transferred to new tariff
Annual report 2009 l Results l
33 of 148
Results
parameters sooner than expected. At 31 December 2009,
the increased use of the insurance and the related
most of the motor portfolio had been transferred to the
increase in claims expenses. Despite the economic down-
new tariff parameters, which include the age of the car,
turn, health insurances were among the products with
the annual mileage and the age and gender of the driver,
the highest growth rate in 2009, recording premium
all of which facilitates a better risk selection. The average
growth of more than 70%. TrygVesta expanded its posi-
premium is expected to see a flat trend in 2010. Indexa-
tion further in this market, and the portfolio comprised
tion for 2010 amounts to 4.2%, but the positive impact
165,000 customers and amounted to DKK 275m at 31
will be offset by the conversion of the remaining portfolio.
December 2009 against DKK 204m at 1 January 2009.
The trend for customers to reduce annual mileage and buy
Personal accident, holiday home and travel insurance
smaller cars will also have an adverse impact on the aver-
premiums were also increased by 10-20% in 2009. The
age premium, but the risk will be reduced correspondingly.
effect of the many premium initiatives is expected to
restore balance in earnings during 2010 and 2011, and
The average premium on house insurances increased by
new measures will be introduced as required.
8% in 2009, which contributed towards restoring profitabil-
ity in the area, although it was not sufficient. Profitability
When TrygVesta, as the first Danish company, imple-
on house insurances has been under pressure in the past
mented necessary premium increases in the Danish mar-
few years due to high claims inflation, an increase in the
ket, an adverse trend in customer renewal rates had been
number of piping claims, more break-ins and more fre-
expected. In connection with the premium increases, the
quent cloudbursts during the summer period. These devel-
net outflow of customers increased slightly, but this trend
opments made it necessary to implement premium
was reversed as other companies in the market also
increases in addition to those already effected on house
increased their premiums. For 2009 as a whole, the
insurances at the beginning of the year. The contents
renewal rate for private customers was stable at around
insurance was increased by around 15% including indexa-
91, which means that on average, customers will remain
tion at 1 January 2010.
with TrygVesta for 11 years. The high renewal rate made
In addition to the premium increases on house and con-
renewal rate is important in relation to the development
tents insurances, premiums were also increased on a
of premiums, claims and costs.
a positive contribution to the performance, as a high
number of other products. The health insurance premium
was raised twice during 2009 by a total of 25% to reflect
Claims
AVERAGE PREMIUMS
DKK
5,000
4,750
4,500
4,250
4,000
3,750
3,500
3,250
3,000
2005
2006
2007
2008
2009
Lower run-off gains and the lower level of interest rates
in combination with higher claims expenses for contents
and house insurances triggered an increase in the claims
ratio from 67.3 in 2008 to 74.8 in 2009. Run-off gains
amounted to DKK 303m in 2009, which was DKK 87m
lower than in 2008 due to lower run-off gains on motor.
As TrygVesta discounts provisions for claims, the lower
interest rate level had an adverse impact on the present
value of the provisions for claims, increasing the claims
ratio by 1.2 percentage points.
Another contributory factor was the performance of con-
tents and house insurances, for which it was necessary
to strengthen reserves significantly by the end of the
Motor
House
year in order to reflect the higher claims level.
34 of 148
l Results l Annual report 2009
More break-ins, fire claims and piping claims caused
CUSTOMER RETENTION
claims expenses to increase in 2009. The higher number
of break-ins affected contents as well as house insur-
ances. Around 41% of the contents insurance claims was
related to break-ins, and the related cost increased from
2008 to 2009. This development was also seen because
customers have acquired more, new and more expensive
furniture. Inadequate police efforts and falling detection
rates have made it easier for thieves. The development
in the number of break-ins is not caused solely by the
%
93
92
91
90
89
88
recession as the upward trend has been recorded over a
2005
2006
2007
2008
2009
longer period of time. One of the reasons is that organ-
ised foreign gangs more frequently commit more serious
crimes and serial break-ins.
The higher number of fire claims under house insurances
mainly related to claims in excess of DKK 100,000 and
was caused by more large fire claims and short circuit
claims related to an increased number of lightning strikes
in 2009. Higher expenses for piping and service piping
claims impacted claims expenses adversely by around DKK
50m more in 2009 than in 2008. These claims were due
to the fact that more frequent cloudbursts put pressure
on local authorities to dimension the public sewage and
drainage systems to adequately handle the larger quanti-
ties of water. In connection with such investigations and
subsequent replacement of sewage pipes it is often
detected that some customers’ piping and service pipes
connected to the public sewage system are damaged,
and a claim is therefore reported under the insurance for
the damage to be repaired.
HOUSE AND CONTENTS CLAIMS IN DENMARK*
DKKm
1,600
1,200
800
400
0
1,552
1,259
1,070
946
899
2005
2006
2007
2008
2009
Claims expenses
Strengthening provision
*Excluding storm and claims handling expenses
Large claims had an impact of DKK 81m on the perform-
CLAIMS FREQUENCY IN DENMARK
ance in 2009, which was on a level with 2008.
The trend seen from 2006 to 2008 with a steep increase
in average claims subsided as expected during 2009,
supported by the economic downturn.
Being one of the major players in the market, Tryg Vesta’s
focus on claims procurement is also very important. Nego-
tiations with craftsmen thus reduced both wages and the
cost of materials, and a new agreement with the damage
Index
120
115
110
105
100
95
90
0
0
1
=
5
0
0
2
r
a
e
Y
:
x
e
d
n
I
2005
2006
2007
2008
2009
control companies strengthened TrygVesta’s position in
Motor
Building
the market. The positive development in average claims
Annual report 2009 l Results l
35 of 148
Results
AVERAGE CLAIMS IN DENMARK
by 1 percentage point. With respect to car repairs,
Index
140
0
0
1
=
5
0
0
2
r
a
e
Y
:
x
e
d
n
I
130
120
110
100
90
TrygVesta works closely with selected garages, which
helps keep average claims expenses down and ensure
high quality and service to customers.
Costs
Gross costs totalled DKK 1,063m, which was a decline of
DKK 92m relative to 2008, causing the expense ratio to fall
from 17.5 to 15.5. The Group’s restraint with respect to
external appointments since the second half of 2008 mate-
2005
2006
2007
2008
2009
rialised in substantial savings in 2009. Both 2008 and 2009
Motor
House
were adversely impacted by the refurbishment project relat-
ing to the head office in Denmark, in the amount of DKK
24m in 2008 and DKK 8m in 2009.
was, however, offset by an adverse trend in large house
Premium increases to improve the combined ratio
claims, which increased by DKK 121m.
The combined ratio increased from 86.1 in 2008 to 92.1
in 2009, with an increase in the underlying claims devel-
The claims frequency for house insurances increased by
opment due to the adverse trend in contents and house
around 6 percentage points, related to more break-ins,
insurance. Lower interest rates had an adverse effect of
short circuit claims and a minor increase in piping and serv-
1.2 percentage points on the combined ratio, while lower
ice piping claims.
run-off gains depressed the combined ratio by 1.1 per-
centage points. Weather-related claims lifted the com-
The claims frequency for motor increased by around 1
bined ratio by 0.4 percentage point. Finally, the expense
percentage point in 2009, favourably impacted by a drop
ratio improved by 2 percentage points. The premium
in mileage, but adversely impacted by the winter weather
increases already implemented will increase profitability
at the end of the year. The average motor claim increased
during 2010 and 2011.
36 of 148
l Results l Annual report 2009
Private & Commercial Norway
DKKm
2007
2008
2009
NOK/DKK, average rate for the period
92.81
91.74
84.59
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
4,636
-3,371
-1,004
4,445
-3,224
-942
592
-82
182
692
66.0
1.8
67.8
20.8
88.6
261
-68
122
315
72.7
1.5
74.2
21.7
95.9
279
-53
32
258
72.5
1.2
73.7
21.2
94.9
Private & Commercial Norway sells insurances to private
122m in 2008 to DKK 32m in 2009 was the main reason
individuals as well as small and medium-sized enterprises
for the lower result. Furthermore, the claims expenses
in Norway under the TrygVesta and Enter brand names.
were higher, primarily due to heavy snowfalls in eastern
Sales are handled by some 80 franchise offices with 300
Norway at the beginning of the year, which increased the
employees, own sales agents, call centres, car dealers
number of motor claims and claims relating to holiday
and Nordea’s branches.
houses. However, the high claims level early in 2009
improved during the year and both the third and fourth
Performance impacted by lower interest
quarters were better than the year before.
rates and winter weather
On the basis of 4% gross premium increases in local cur-
Claims inflation decreased in 2009 after increasing claims
rency the combined ratio was improved through the year.
inflation in 2007 and 2008, which saw rising prices for
The technical result was DKK 258m in 2009 against DKK
craftsmen and materials. Unlike in Denmark, where the ini-
315m in 2008. The decline in technical interest from DKK
tial premium increases were implemented from 1 January
Annual report 2009 l Results l
37 of 148
Results
CUSTOMER RETENTION IN NORWAY
gross premiums was achieved despite fiercer competition, in
%
87
86
85
84
83
82
particular from new competitors in the private market.
Despite the competition, the overall Norwegian market
share increased from 17.9 to 18.1 in 2009 (end-September
2009). The underlying trend showed a small decline in the
market share in the private area, whereas the market share
for commercial increased. The substantial premium increases
in the middle of the year resulted in a minor decline in
market share in the second half of 2009, which was not
unexpected. This had an adverse impact on the renewal
2005
2006
2007
2008
2009
rate which dropped by 1.8 percentage points to 85.1%.
AVERAGE PREMIUMS IN NORWAY
the national average.
TrygVesta introduced a number of changes to the distribu-
tion platform in 2009, including a strengthening of sales
via call centres. Furthermore, focus remained on strength-
ening the market share in areas with a market share below
NOK
5,000
4,750
4,500
4,250
4,000
3,750
3,500
3,250
3,000
2005
2006
2007
2008
2009
The average premium for motor insurances increased by
4.9%, and house insurances increased by 8.1% in 2009.
In line with the other large insurance companies in the
Norwegian market, TrygVesta has since mid-2007 increas-
ed premiums in order to improve profitability. The premium
increases implemented during 2009 are expected to
improve earnings when fully incorporated in the portfolio.
This trend is further intensified by an increase in premiums
for house insurances of 6.7% and for passenger cars of
Motor
House
3.3% from 1 January 2010.
Claims
Claims expenses increased by 3.4%, or NOK 126m, to NOK
3,811m. Considering the growth in gross premiums of 4.0%
2009, the premium increases in Norway have been imple-
in local currency, the performance was well balanced. The
mented since mid-2007. The effect of the semi-annual
claims ratio, net of ceded business improved from 74.2 to
premium initiatives began to materialise in 2009 and will
73.7 relative to 2008. In light of the adverse impact of the
improve the performance going forward.
lower discount rate which, seen in isolation, lifted the claims
ratio by 1.1 percentage points in 2009 compared with 2008,
Growth maintained despite competition
the performance was in line with expectations.
Gross premiums in Private & Commercial Norway increased
by 4.0% in local currency (minus 4.1% in DKK) and stood
The claims frequency for houses increased by 11.0 per-
at DKK 4,445m in 2009. Growth was slightly lower than in
centage points relative to 2008 and was impacted by more
2008, but still at a high level. The increase in gross premi-
fire, water and piping claims as well as more thefts, which
ums of NOK 203m was favourably impacted by the pre-
stabilised at a level almost double that of 18 months ago.
mium increases that had been implemented, while the
The average house claim fell by around 2 percentage
number of insurances sold declined slightly. The growth in
points, supported by the economic downturn causing
lower repair expenses.
38 of 148
l Results l Annual report 2009
The claims frequency for motor policies rose by 3.8 percent-
CLAIMS RATIO IN NORWAY (GROSS)
age points in 2009 relative to 2008, and the average motor
claim was up by 2.7 percentage points. The higher claims
frequency mainly related to many accidents due to icy road
conditions in eastern Norway, and especially around Oslo,
at the beginning of the year. There were 1,800 more motor
claims in the first quarter of 2009 compared with first quar-
ter of 2008. Expenses for larger fire claims (more than NOK
1m) under house insurances in Private & Commercial Nor-
way developed favourably in 2009, accounting for NOK
%
90
80
70
60
50
185m against NOK 264m in 2008, and impacting the claims
2005
2006
2007
2008
2009
ratio by 3.5 percentage points in 2009 against 5.2 percent-
age points in 2008. Compared with Denmark, the number
of house fires is significantly higher in Norway, due to the
large number of houses and cabins made from wood and
heated by wood burning stoves or fireplaces.
Large claims, defined as claims in excess of DKK 10m,
totalled DKK 35m in 2009, as against an unusually high
level of DKK 131m in 2008. As a percentage of gross pre-
miums, large claims thus accounted for 0.8 percentage
point compared with 2.8 percentage points in 2008.
Run-off gains were a gross amount of DKK 24m in DKK
against a run-off loss of DKK 26m in 2008, or 0.5% of gross
premiums compared with minus 0.6% in 2008. Run-off
gains originated mainly from the personal accident lines.
Costs
Costs rose by 1.4%, or NOK 15m, to stand at NOK 1,114m,
and the overall expense ratio fell from 21.7 to 21.2. The
improvement was attributable to restraint in new appoint-
AVERAGE CLAIMS IN NORWAY
Index
140
0
0
1
=
5
0
0
2
r
a
e
Y
:
x
e
d
n
I
130
120
110
100
90
2005
2006
2007
2008
2009
Motor
House
ments, and the effect of the process and efficiency meas-
CLAIMS FREQUENCY IN NORWAY
ures introduced which began to materialise during the year.
Combined ratio improved
Private & Commercial Norway reported an overall combined
ratio for 2009 of 94.9 against 95.9 in 2008. The year
started out at a high level due to the winter effect, but
there was improvement over the year. The combined ratio
was higher than expected and impacted by the low interest
rate level. The premium increases already implemented and
additional planned premium measures are expected to
Index
115
0
0
1
=
5
0
0
2
r
e
a
Y
:
x
e
d
n
I
111
107
103
99
95
2005
2006
2007
2008
2009
improve profitability further in the years ahead.
Motor
House
Annual report 2009 l Results l
39 of 148
Results
Private & Commercial Sweden
DKKm
2007
2008
2009
SEK/DKK, average rate for the period
80.73
78.02
70.02
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
221
-214
-104
-97
0
7
-82
-90
88.9
0.0
88.9
105.6
194.5
96.8
0.0
96.8
47.1
143.9
105.5
1,081
-875
-251
-45
-15
8
-52
80.9
1.4
82.3
23.2
TrygVesta sells insurances to private individuals and
profit in the second to fourth quarters of 2009. The per-
businesses under the Moderna brand and the Vesta
formance was satisfactory and better than expected. At the
Skadeförsäkring brand. Moderna has several sub-brands;
time of acquisition, Moderna was expected to raise the total
the best known are Atlantica and Bilsport&MC. Insurances
earnings per share by 5% in 2010. The acquisition strength-
are sold through Nordea’s branches, own sales agents,
ened TrygVesta’s position and distribution power signifi-
call centre, the Internet and car and boat dealers.
cantly in the Swedish private market, adding call centres,
Moderna – a good match
an online solution for all customers in Sweden. The acquisi-
TrygVesta acquired Swedish company Moderna in April
tion is a good match to TrygVesta’s strategy of increasing
group insurance schemes, sales agents, a car channel and
2009 for a total acquisition price of DKK 939m, including
the market share in Sweden.
goodwill on acquisition of DKK 310m. Moderna reported
a pre-tax profit of DKK 117m (nine-months profit) corre-
Moderna was consolidated in the financial statements of
sponding to approximately 6% of the Group’s total pre-tax
TrygVesta as from the second quarter of 2009. The consol-
40 of 148
l Results l Annual report 2009
idation of Moderna was thus a major contributor to the
which improved the performance significantly. In addition
high premium growth in 2009. Gross premiums increased
to critical mass, the acquisition of Moderna also contrib-
from DKK 221m to DKK 1,081m, with Moderna account-
uted strong underwriting competences to the Swedish
ing for DKK 768m of the increase. Growth in premiums
business, which are expected to strengthen the overall
was 12.2% in Moderna in 2009, which was considerably
Swedish business going forward.
higher than the 5% expected on the acquisition of Mod-
erna. Vesta Skadeförsäkring reported growth in gross
Costs
premiums of 57% in 2009 (41.6% in DKK).
Nominal costs increased from DKK 104m to DKK 251m,
with the consolidation of Moderna being the principal
In 2009, 109,000 insurances were sold in Vesta Skade-
reason. The distribution mix was changed in 2009, which
försäkring – a sustained high level, although slightly
was another reason for the improved expense ratio. The
below 2008. The main reason for this was the economic
expense ratio fell from 47.1 to 23.2. The rapid growth
downturn. Excluding Moderna, the portfolio amounted to
entailed a need to strengthen human resources. The
SEK 517m at 31 December 2009 against SEK 370m at 1
number of full-time employees was 429 at 31 December
January 2009, and the number of customers was 136,000
2009, and 310 of them came from Moderna.
at 31 December 2009 against 107,000 at the beginning
of the year. Moderna’s portfolio amounted to SEK 1,460m
Combined ratio
at 31 December 2009. The premium increases of 10-20%
The combined ratio for 2009 was 105.5 as against 143.9
which were implemented in Vesta Skadeförsäkring in
for 2008. Moderna had a combined ratio of 90.8 for
2009 will improve profitability in 2010 and 2011. How-
2009. The remaining Swedish portfolio had a combined
ever, these measures also had a negative impact on
ratio of 141.9, which was adversely impacted by the
customer renewal rates as premium increases for un-
strengthening of reserves. The technical result for 2009
profitable customer segments caused a number of such
was a loss of DKK 52m against a loss of DKK 90m in
customers to leave the company.
2008. This was the best performance to date of the
Claims
Group’s Swedish activities and mainly attributable to
the consolidation of Moderna’s profit of DKK 75m.
The claims ratio was 80.9 in 2009 compared with 96.8 in
Moderna reported a total profit before tax of DKK 117m
2008. Claims incurred included a strengthening of IBNR
(nine-months profit), which was satisfactory considering
reserves of SEK 50m. The improved claims ratio was
the acquisition price for Moderna.
mainly attributable to the consolidation of Moderna,
PORTFOLIO DEVELOPMENT IN SWEDEN
CLAIMS RATIO IN SWEDEN (GROSS)
DKKm
1,500
1,200
900
600
300
0
%
160
140
120
100
80
60
2005
2006
2007
2008
2009
2006
2007
2008
2009
Vesta Skadeförsäkring
Moderna
Annual report 2009 l Results l
41 of 148
Results
Private & Commercial Finland
DKKm
2007
2008
2009
EUR/DKK, average rate for the period
745.11
745.63
744.68
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
354
-258
-154
-58
-1
17
-42
72.9
0.3
73.2
43.5
472
-402
-194
-124
-1
12
-113
85.2
0.2
85.4
41.1
125.1
116.7
126.5
In Finland, TrygVesta sells insurances to private individuals
2009 against around 160,000 in 2008. Gross earned pre-
and small enterprises under the brand names of TrygVesta
miums from sales to small and medium-sized enterprises
Finland and Nordea Vahinkovakuutus. Insurances are sold
rose from DKK 41m in 2008 to DKK 73m in 2009.
by Nordea’s branches, own sales agents, call centres, car
dealers and via the Internet.
In 2009, TrygVesta increased premiums by around 10%,
From growth to focus on profitability
forward. As the largest competitors also increased their
Gross premiums in Finland increased by 33.3%. Sales
premiums, TrygVesta is believed to have retained its
which will have a positive impact on profitability going
were intentionally held back due to increased focus on
strong competitiveness.
profitable growth. In that connection, earnings in Finland
were affected by non-recurring expenses of approximately
In 2009, sales made through own sales agents and own
DKK 20m. Gross premiums rose by DKK 118m, to DKK
call centre were strengthened. Nordea accounted for 18%
472m, and a total of 150,000 insurance were sold in
of direct sales in Finland in 2009 through Nordea’s branch
42 of 148
l Results l Annual report 2009
network and netbank, while 31% of sales were made
SALES D ISTRIBUTION IN FINLAND
through TrygVesta’s affiliated sales force based on,
among other things, referrals from Nordea.
The Finnish portfolio totalled DKK 554m at 31 December
31%
2009 and grew by 28% in 2009.
16%
35%
Claims ratio
The claims ratio, which was 85.2 in 2009 against 72.9 in
2008, was impacted by higher claims handling costs,
among other factors.
Costs
Costs, which amounted to DKK 194m in 2009 against DKK
154m in 2008, were impacted by the higher number of
employees. Costs were futhermore impacted by non-
recurring costs of around DKK 20m in relation to The
Living House as well as in relation to writedowns of a
commerial insurance system. Higher Group costs also
impacted costs.
The growth in the Finnish business gives rise to an ongo-
ing requirement for attracting qualified employees. The
number of employees increased from 147 to 191
in 2009, to which should be added 53 independent
insurance agents.
The streamlining of distribution channels and own
resources combined with sound costs restrained will
gradually reduce the expense ratio going foreward.
Combined ratio
The combined ratio was 126.5 relative to 116.7 in 2008.
In the private business, the combined ratio was 107.1
against 101.5 in 2008. The targeted combined ratio of
around 95 will be achieved through focus on profitable
growth and changes in the sales channels.
Private & Commercial Finland reported an overall loss of
DKK 113m for 2009 against a loss of DKK 42m in 2008.
14%
4%
Call centres
Nordea
Car dealers
Netbank
Affiliated sales agents
PORTFOLIO DEVELOPMENT IN FINLAND
DKKm
600
500
400
300
200
100
0
2002
2003
2004
2005
2006
2007
2008
2009
ACCUMULATED WEEKLY SALES IN FINLAND
Policies
200,000
150,000
100,000
50,000
0
10
20
30
40
50
Weeks
2002
2004
2006
2008
2009
Annual report 2009 l Results l
43 of 148
Results
Corporate
DKKm
NOK/DKK, average rate for the period
SEK/DKK, average rate for the period
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
2008
2009
92.81
80.73
5,285
-3,904
-504
877
91.74
78.02
5,512
-3,489
-588
1,435
84.59
70.02
5,423
-3,583
-604
1,236
-172
-516
-381
137
842
173
1,092
73.9
3.3
77.2
9.5
86.7
63.3
9.4
72.7
10.7
83.4
34
889
66.1
7.0
73.1
11.1
84.2
Corporate is a Nordic business area which sells insurances
whose principal activity is to guarantee, in relation to third
to corporate customers under the TrygVesta brand. Cor-
parties, its customers’ performance under agreements
porate’s products are sold through its own sales force
made, such as construction contracts where guarantee is
and through insurance brokers. Corporate has more than
provided in respect of risks during the construction period
12,000 customers each paying annual premiums of more
and remedying of defects after the project has been
than DKK 900,000 or having more than 50 employees,
handed over.
and around 70 customers each paying annual premiums
of more than DKK 10m. Corporate has around 400
Financial results
employees. TrygVesta Garanti is included in the financial
The technical result for 2009 was DKK 889m against DKK
results of Corporate. TrygVesta Garanti is a subsidiary
1,092m in 2008, which was an unusually profitable year
44 of 148
l Results l Annual report 2009
with the combined ratio as low as 83.4. The combined
insurance requirements in the Nordic region and TrygVesta
ratio was 84.2 in 2009, which is considered a very satis-
customers’ insurance requirements outside the Nordic
factory level. The performance was impacted by lower
region. Globalisation, relocation of production facilities,
technical interest, which reduced the result by DKK 139m.
and sales offices, etc. in all parts of the world require that
The Norwegian part of the Corporate business was able
TrygVesta is able to follow existing customers in their glo-
to implement premium increases, while the Danish part
balisation efforts. The partnership with AXA provides both
experienced fiercer competition and pressure on prices.
companies with a respectable and sound collaboration
Run-off gains amounted to DKK 387m in 2009, which
this part of the portfolio. In 2010, TrygVesta intends to
was on a level with the 2008 figure. Large claims
focus on further expansion of this part of the Corporate
amounted to DKK 419m, DKK 89m more than in 2008.
portfolio, thereby supporting growth.
platform and thus a good basis for further expansion of
As in previous years, TrygVesta Garanti was particularly
aware of the sensitivity of the construction industry and
LARGE CLAIMS IN CORPORATE
the consequences of the economic crisis. TrygVesta Garanti
pursues a restrictive underwriting and reinsurance policy,
and the number and size of claims were therefore satisfac-
tory in 2009. The company recorded a combined ratio of
75.3 in 2009, which was in line with 2008, and contributed
DKKm
1,000
800
600
843
DKK 45m to the overall performance of Corporate.
456
439
Favourable market conditions in Norway,
competition in Denmark
400
356
224
294
200
0
330
255
419
284
Gross earned premiums rose by 2.2% in local currency,
2005
2006
2007
2008
2009
but fell by 1.6% in terms of DKK to stand at DKK 5,423m
due to the fall of NOK against DKK. Gross premiums fell
in the Danish part of the business, while they increased
in the Norwegian part. This performance was attributable
to a good customer inflow in Norway, whereas the Danish
market was characterised by price competition and declin-
ing volumes within workers’ compensation insurances
due to rising unemployment.
Large claims, gross
Large claims, net
PREMIUM DISTRIBUTION BY PRODUCT IN CORPORATE
3%
10%
16%
On 1 January 2010, TrygVesta implemented general pre-
mium increases of 5-8% in the Norwegian part of the
Corporate business. This was not possible in Denmark
18%
due to the competitive environment. Competition and the
price/risk relationship in Denmark intensified during 2009,
and, focusing on profitability, TrygVesta refrained from
submitting quotations on a number of contracts.
21%
9%
23%
TrygVesta has since 2009 had a partnership with AXA, a
large international insurer, relating to AXA customers’
Motor
Personal lines
Property, commercial
Liability
Workers’ compensation
Transport and marine
Others
Annual report 2009 l Results l
45 of 148
Results
The Swedish part of the Corporate business, which
In 2009, the run-off result amounted to DKK 387m net
started up in September 2008, gained momentum in
and was mainly attributable to the personal lines. By way
2009 and made a positive contribution to growth. The
of comparison, the run-off result was DKK 394m in 2008.
portfolio amounted to SEK 64m at 31 December 2009.
Insurances include buildings, consequential loss, liability,
When the claims ratio is adjusted for the interest rate
cargo and motor. Workers’ compensation insurance is
effect, run-off, large claims and storm, the underlying
handled through public collective agreements and is
claims development was unchanged from 2008.
therefore not offered as a product in Sweden. The Swed-
ish business sector is highly internationalised, and the
Costs
partnership with AXA therefore supports TrygVesta’s
Costs rose by 2.7% to DKK 604m, corresponding to
expansion in the Swedish market for corporate insur-
an expense ratio of 11.1, as against 10.7 in 2008.
ances. Given the current action plans and distribution
The increase was related to investments for expansion
strategies, this part of the portfolio is expected to grow
in Sweden.
significantly over the next few years.
Combined ratio
Claims
The combined ratio was 84.2 in 2009 against 83.4 in
Gross claims expenses rose by 2.7%, or DKK 94m, to DKK
2008. Run-off gains impacted the combined ratio favour-
3,583m, and the claims ratio, net of ceded business was
ably by 7.1 percentage points in 2009 - the same as in
73.1 in 2009 against 72.7 in 2008. The claims ratio was
2008. Large claims impacted the combined ratio adversely
adversely impacted by the lower discount rate which,
by 5.2 percentage points in 2009 against 4.6 percentage
seen in isolation, added 2.2 percentage points to the
points in 2008
claims ratio. Gross claims were furthermore adversely
affected by several large claims, which amounted to DKK
419m (DKK 284m net) in 2009 compared with DKK 330m
(DKK 255m net) in 2008. After contributions from rein-
surers, net expenses for large claims were lower in 2009
than in 2008.
46 of 148
l Results l Annual report 2009
Investment activities
DKKm
Bonds etc.
Equities*
Real estate**
Total
Value adjustment, changed discount rate
Other financial income and expenses***
Total return on investment activities
2007
1,103
180
240
1,523
298
-81
1,740
result
2008
1,882
-887
263
Investment assets
2009
End-2008
End-2009
1,850
405
258
29,417
1,172
3,561
34,248
1,589
3,893
1,258
2,513
34,150
39,730
-478
-340
440
-294
-288
1,931
Transferred to technical interest
return on investment activities
-1,400
340
-1,428
-988
-845
1,086
*
**
DKK 125m sold on futures contracts has been deducted from the equity portfolio.
Return on properties includes a calculated return on owner-occupied property (excluding cost concerning The Living House).
The balancing item is recognised in “Other financial income and expenses” to the effect that the total return shown corresponds
to the investment return according to the income statement which does not include return on owner-occupied property.
*** The item comprises interest on operating assets, bank debt and reinsurance deposits, exchange rate adjustment of insur-
ance items, costs of investment activities and offsetting of return on owner-occupied property.
TrygVesta’s investment activities comprise any placement
return on investment activities before other financial
of the Group’s funds in investment assets, such as
income and expenses was DKK 2,513m, equal to a return
bonds, equity investments, land and buildings or cash.
of 6.6%. The return was 5.9% including changes in provi-
Funds are placed pursuant to guidelines defined by legis-
sions for claims due to lower interest rates.
lation, regulators and the Supervisory Board.
asset allocation
Investment result in 2009
Net investments in the year amounted to DKK 644m. The
Generally falling interest rates, a narrowing credit spread
bond portfolio made up an almost unchanged proportion
and positive equity markets produced a good investment
of total assets of 86.2% in 2009 compared with 86.1% in
performance in 2009. The return on TrygVesta’s invest-
2008. The proportion of High Yield bonds increased by
ment activities totalled DKK 1,931m before transfer to
DKK 686m to stand at 2.2% of total investment assets
technical interest, but after other financial income and
at 31 December 2009. The Investment Grade portfolio
expenses. This was DKK 1,491m more than in 2008. The
was increased by around DKK 500m in the spring,
Annual report 2009 l Results l
47 of 148
Results
but the entire portfolio was sold at the end of the year.
The slightly lower proportion relative to 2008 was primarily
TrygVesta placed DKK 3.2bn with Danish banks under the
due to the overall growth in investment assets.
First Bank Package at the start of the year. Furthermore,
TrygVesta completed a major restructuring of the mort-
Bonds
gage bond portfolio in the second half of 2009, switching
The bond portfolio including cash yielded a return of DKK
from callable bonds to non-callable bonds. TrygVesta
1,850m in 2009, equal to 5.6% for the full year. The return
made no new equity investments in 2009. The increase in
was affected by declining interest rates and the narrowing
the equity proportion from 3.4% at 31 December 2008 to
credit spread. A large part of TrygVesta’s bond portfolio is
4.0% at 31 December 2009 was therefore solely attribut-
invested in Danish mortgage bonds, which benefited from
able to higher equity prices. The real estate portfolio was
the general credit spread narrowing. The smaller portfolio
unchanged, accounting for 9.8% at 31 December 2009.
of company corporate bonds also contributed strong
investment return with High Yield bonds yielding 57.5%.
LISTED EQUITIES BY GEOGRAPHY
RETURN BY ASSET CLASS
16%
25%
25%
10%
%
35
25
15
5
-5
-15
-25
-35
31.5
6.1 5.6
3.7
2.0
10.4
8.4 7.2
6.6
4.1 3.5
-32.8
24%
Bonds etc.
Equities
Real estate
Total
Nordic region
UK
Rest of Europe
USA
Asia and others
2007
2008
2009
BON DS BY G EO G RAP HY
BONDS BY RATING
12%
30%
5%
2%
14%
58%
79%
Danish bonds
Others
Norwegian bonds and money market
AAA
Not rated/other
AA
A
48 of 148
l Results l Annual report 2009
Equities
payables and because of different calculation methods
The equity portfolio yielded a return of DKK 405m in 2009,
for assets and liabilities.
equal to 31.5%. The portfolio had an overweight in Nordic
equities in 2009. TrygVesta therefore profited from the fact
The investment portfolio consists of the investment assets
that the Nordic markets outperformed the global equity
not included in the match portfolio. The assets in the
markets in 2009.
real estate
investment portfolio comprise equities, real estate, bonds,
money market products and various derivatives.
The investment return on real estate was DKK 258m includ-
Going forward, the total investment return will be com-
ing revaluation. The portfolio comprises the head office
puted as the net yield on the match portfolio and the yield
properties at Ballerup and Bergen, amounting to around
on the investment portfolio. The net yield on the match
DKK 1.5bn at 31 December 2009, and a well-diversified
portfolio will be calculated as the gross yield on the match
portfolio of investment properties of some DKK 2.4bn,
portfolio less the sum of technical interest and capital
consisting of quality buildings, typically office property in
gains from discounting of provisions.
prime locations in major cities in Denmark and Norway.
Division of investment assets
In the beginning of 2010, TrygVesta initiated a division of
the investment assets into a match portfolio with the same
market value as the provisions, and an investment port-
folio. The purpose was to ensure optimum hedging of the
interest rate risk on the provisions and to achieve a better
and more transparent allocation of distributable funds.
The match portfolio is composed so as to create an
optimum match with cash flows from the portfolio and
expected insurance payables within the legislative frame-
work. The market value of the provisions for claims is
measured by discounting them with an official interest rate
curve defined by the Danish Financial Supervisory Author-
ity. The match portfolio will comprise bonds, fixed-income
derivatives and money market investments correlating to
the development in the official interest rate curve. The pro-
portion of fixed-income derivatives will be increased to
reduce risk. The components of the match portfolio will
change if the official interest rate changes in the future.
The portfolio will reduce TrygVesta’s exposure to general
interest rate changes significantly and, in particular, its
exposure to non-parallel interest rate shifts. However, it
is not possible to eliminate risk completely. There will still
be unhedged risks due to uncertainty with respect to esti-
mated insurance payables because it will not be possible
to create a perfect match to the expected insurance
Annual report 2009 l Results l
49 of 148
Capitalisation and risk management
50 of 148
l Capitalisation and risk management l Annual report 2009
at TrygVesta we focus on
strong capitalisation and risk management
to ensure we can always pay our debts
Capitalisation and risk management
Annual report 2009 l Capitalisation and risk management l
51 of 148
Capitalisation and risk management
Capitalisation and profit distribution
TryGVESTa’S CrEDIT raTINGS
at 31 December 2009
Standard & Poor’s
Moody’s
TrygVesta Forsikring A/S
TrygVesta Garantiforsikring A/S
Moderna Försäkringer AB
‘A-’/stable
‘A-’/stable
‘A-’/stable
A2
n.a.
n.a.
TrygVesta relies on its capital base and financial strength
All three models present an estimate of the capital need
to assume risks from customers and for customers to be
that matches TrygVesta’s risk profile.
confident that the company is able to meet its obliga-
tions if and when they report a claim. The aim is for the
TrygVesta has rating agencies Standard & Poor’s and
capital base to match the Group’s risk profile and support
Moody’s perform external credit ratings, and both agencies
natural growth. Basically, TrygVesta’s capital base is the
perform annual interactive credit assessments. TrygVesta
result of risk assessments and risk management because
targets financial strength corresponding to an ‘A-’ rating
TrygVesta aims to have the necessary capital available,
from Standard & Poor’s, which is equivalent to a security
but no more than that. This basic approach thus deter-
level of 99.5% on a one-year horizon according to Stand-
mines the company’s dividend policy.
ard & Poor’s own global analyses. The model assessments
risk based capital management
Solvency II rules are based on an identical security level.
TrygVesta aims for its capital management to optimise
the company’s financial strength and ensure financial
In connection with the acquisition of Swedish company
flexibility. Capital management is based on
Moderna Försäkringer, Moderna was upgraded from
in TrygVesta’s internal capital model and the future
> TrygVesta’s internal capital model
> A standard model under development within the EU
in connection with the implementation of Solvency II
in 2012
> A standard model developed by Standard & Poor’s.
Capital requirement
Given TrygVesta’s rating of ‘A-’, the capital requirement
currently amounts to around 50% of net premiums.
52 of 148
l Capitalisation and risk management l Annual report 2009
‘BBB’ to ‘A-’ by Standard and Poor’s based on TrygVesta’s
tion carried out in 2008, suggested a weighted average
financial strength.
capital requirement for Danish insurance companies of
around 50% of net premiums, with small companies gen-
In addition to requirements by the rating agencies, the
erally being subject to higher capital requirements and
Danish authorities call for active capital management
large companies to requirements lower than 50%.
in that they require an individual solvency need to be
assessed. These requirements are the precursor of the
The global financial markets saw a turbulent period from
Solvency II rules which will apply as from 2012.
2008 to 2009 when the market values of investment
assets decreased significantly. This gave rise to a previ-
TrygVesta assesses its individual solvency need on
sion of the parameters used under OIS 4, which was
the basis of the Group’s internal capital model, which
carried out during 2009 in connection with the Consulta-
estimates the necessary capital taking into account the
tion Papers (CP), which allowed insurance companies to
actual business composition, profitability, reserving
comment on a draft standard model. As a consequence
profile, reinsurance protection and the investment mix
of the revision, several risk weights and correlation fac-
chosen. The assessment takes into account the geographic
tors will be increased, and geographic diversification will
diversification effect and the effect of the defined invest-
no longer be explicitly acknowledged. In consequence of
ment policy, under which interest rate risk on the bond
this, the capital requirements are expected to increase
portfolio matches the corresponding interest rate risk on
by around 45% relative to QIS 4, and will for TrygVesta be
the discounted provisions, thereby ensuring that, for
just under 50% of net premiums. The weighted average
practical purposes, TrygVesta’s net interest rate risk is
of the Danish market is expected to be around 50% or
negligible.
more of net premiums. If the current draft is maintained,
it is expected that several companies will need to
See also the section Risk management.
strengthen their capital in order to comply with the
new capital requirements.
The individual solvency need is assessed on a quarterly
basis and reported to the Danish Financial Supervisory
TrygVesta currently determines its targeted capital with
Authority. The assessment is based on a 99.5% security
a view to supporting the company’s rating of ‘A-’ from
level on a one-year horizon, equivalent to the security
Standard & Poor’s plus a buffer of 5%. The capital
level required under the future Solvency II rules.
requirement supporting a rating of ‘A-’ currently amounts
to around 50% of net premiums (excluding buffer), while
Implementation of Solvency II
the actual capital at the end of 2009 was 66% before
In 2009, the European Parliament and the Commission
dividend. The capital requirement for TrygVesta relative
adopted the directive setting out future solvency rules for
to Standard & Poor’s capital model has been reduced by
insurance companies. The directive is expected to be
about 5% of net premiums in the past few years due to
implemented in the individual member states by the end
measures to reduce risk and a lower equity proportion.
of 2012. The directive, which defines quantitative as well
as qualitative requirements for insurance companies, will
TrygVesta has applied an internal capital model since
require an extensive review of existing legislation. This
2002 as the basis for assessing the individual solvency
will impact the capital structure of insurance companies
need, supplemented by qualitative assessments of
and make greater demands on the companies’ skills with
selected risk scenarios. The internal model describes the
respect to risk management, control, capital planning and
statistical uncertainty estimated on assets and liabilities,
follow-up. In quantitative terms, TrygVesta has taken part
but also includes an element representing the additional
in the test calculations for a standard model under Sol-
risk that may apply in particularly stressed situations.
vency II since 2005. QIS 4, the latest official test calcula-
Conversely, the internal model also accounts for the
Annual report 2009 l Capitalisation and risk management l
53 of 148
Capitalisation and risk management
effect of risk-reducing measures such as hedging of infla-
by the EU Commission in 2009. TrygVesta follows
tion risk, matching of interest rate risk on assets and lia-
developments closely, taking account thereof when
bilities, diversification etc. Based on the internal capital
determining dividends for the year.
model, the capital requirement for TrygVesta would be
somewhat lower than the latest estimate of a Solvency II
In 2005, TrygVesta raised a 20-year EUR 150m subordi-
requirement. In future under Solvency II, TrygVesta
nated bond loan, listed on the London Stock Exchange.
intends to use the internal capital model for capital plan-
In connection with the acquisition of Moderna in 2009,
ning rather than the standard model referred to above.
TrygVesta also raised a 20-year EUR 65m bond loan with
Capital structure
TryghedsGruppen, which owns 60% of TrygVesta. This
brought TrygVesta’s total subordinated debt to approxi-
TrygVesta’s capital structure comprises equity and sub-
mately EUR 215m. Furthermore, approximately DKK 600m
ordinated loan capital. The relationship between the two
of short-term senior debt was raised, but this debt is not
components is assessed on a regular basis in order to
included in the capital calculation made by Standard &
maintain the optimum structure that takes into account
Poor’s. The total debt ratio was around 16% at 31 Decem-
return on equity, cost of capital and flexibility. Regulators
ber 2009, and the cost of debt in 2009 was DKK 90m.
and rating agencies assess the actual capital differently.
Regulators require companies to calculate a capital base
Financial flexibility
comprising mainly equity less intangible assets and other
The financial flexibility must take into account considera-
statutory adjustments plus subordinated loan capital of
tions about strategic acquisitions and ensure the possi-
up to 25% of the Solvency I requirement. Standard &
bility of additional contributions of capital as part of the
Poor’s applies the term Total Available Capital (TAC),
capital resources. TrygVesta’s capital contingency plan
under which intangible assets are also deducted from the
describes measures that can be applied in the short term
capital base, and subordinated loan capital generally may
to improve the Group’s solvency, if required. As a result
not exceed 25% of the total capital. The future Solvency II
of the strategy chosen for the future and distribution for
rules will change regulatory capital structure requirements,
2009, restructuring of investment assets and additional
and the first indications of such requirements were issued
hedging of insurance obligations could substitute for
PAYOUT PER SHARE
CAPITALISATION
33
38
21
21
17
6.5
28
12.5
15.5
DKK
40
35
30
25
20
15
10
5
0
DKK
12,000
11,000
10,000
9,000
8,000
7,000
6,000
2005
2006
2007
2008
2009
Q1 08
Q2 08
Q3 08
2008
before
distrib.
2008
after
distrib.
Q1 09
Q2 09
Q3 09
2009
before
distrib.
2009
after
distrib.
Cash dividend
Share buy back
Capital requirement
Buffer (5%)
Surplus capital
54 of 148
l Capitalisation and risk management l Annual report 2009
CaPITaL aND DIVIDEND
DKKm
Profit for the year, DKKm
Cash dividends, DKKm
Cash dividend per share (DKK)
Cash payout ratio
Total buy back, DKKm
Buy back per share (DKK)
Total distribution per share (DKK)
Total distribution, DKKm
Total payout ratio
Buffer to ‘A-’ level
2005
2,097
1,428
21
68%
21
1,428
68%
2.8%
2006
3,211
2,244
33
70%
33
2,244
70%
2.4%
2007
2,266
1,156
17
51%
1,405*
21
38
2,561
113%
5%
2008
846
442
6.5
50%
0
0
6.50
442
50%
16%
2009
2,008
991
15.50
49%
799
12.50
28
1,790
89%
7.7%
* The share buy back programme was based on the profit for 2007, amounted to DKK 1,405m and was initiated on 4 April 2008. On 2
February 2009, the programme was extended up to and including 22 April 2009 due to low trading volumes. The programme had been
scheduled for completion by 2 March 2009.
around DKK 1.4bn in 2010. Furthermore, there would be
distribution. At 31 December, a capital requirement is
room for increasing the capital base by raising additional
determined based on the Standard & Poor’s model corre-
subordinated loan capital. In relation to the Danish sol-
sponding to the level of an ‘A-’ rating plus a buffer of
vency rules the full potential for including subordinated
5%. Any capital in excess thereof will be distributed as
loan capital has already been utilised (around DKK
dividend. Dividend is determined once a year while profit
700m). The capital base can be increased with around
is generated on an ongoing basis, and this means that
DKK 600m (after dividend) in relation to Standard &
the buffer will grow over the year in excess of the 5%
Poor’s capital model based on 31 December 2009.
originally determined.
Dividend policy
Dividend for the 2009 financial year
Dividend is determined on the basis of the Group’s profit
Based on a capital requirement of DKK 8,959m, profits of
distribution policy. TrygVesta distributes 50% of the profit
DKK 2,008m and TAC (before dividend) of DKK 11,443m,
for the year as ordinary cash dividends.
TrygVesta distributes DKK 991m by way of cash dividend
and DKK 799m by way of a share buy back.
Any excess capital after distribution of ordinary dividends
and taking into consideration the minimum capital
TrygVesta’s investment policy allows for an equity
requirement, strategy and growth, will be returned to
proportion of up to 6.5% as defined in the Supervisory
shareholders in the form of a share buy back programme.
Board’s instructions to the Executive Management. The
The dividend policy reflects TrygVesta’s long-term earn-
a capital base that accommodates the investment policy
ings and cash flow potential, while maintaining an appro-
limits, DKK 1,790m may be distributed at 31 December
priate level of capitalisation.
2009 in the form of share buy backs and the cash
equity proportion at 31 December 2009 was 4.0%. Given
TrygVesta intends to pursue a risk-based transparent policy
for capital management, and thus also for dividend
dividend.
Annual report 2009 l Capitalisation and risk management l
55 of 148
Capitalisation and risk management
risk management
THE MOST IMPOrTaNT rISK TyPES
Risk management is an integral part of TrygVesta’s business
underwriting risk
The risk related to entering into insurance contracts.
The risk that claims at the end of an insurance contract
deviate significantly from our assumptions when pricing
at inception of the contract.
Handled by the Underwriting reinsurance committee
Provisioning risk
We make technical provisions at the end of a financial
period to cover expected future payments for claims
already incurred. Reserving risk is the risk that future
payments deviate significantly from our assumptions
when making the provisions.
Handled by the Provisions committee
Investment risk
The risk that volatility of financial markets impacts our
results. Interest rate risk constitutes a major part of
investment risk. Interest rate risk is the risk of fluctuat-
ing market interest rates.
operations. We continuously seek to minimise the risk of
unnecessary losses in order to optimise returns relative to
the capital available in the company from time to time.
risk management environment and identification
The introduction of Solvency II in 2012 will introduce
stricter requirements with respect to the way in which
insurance companies work with and control risk, including
the Supervisory Board’s involvement in risk and capital
management.
See the section Capitalisation and profit distribution
TrygVesta has for a number of years worked to align the
company to such requirements. This involves that the
Supervisory Board actively defines risk appetite and risk
management limits and regularly assesses the overall risk
in the company and the resulting capital requirement. This
Handled by the Investment risk committee
is handled in a risk management environment, in which the
Strategic risk
The risk of changes to the conditions under which we
operate, including changed legislation, competition,
partnerships or market conditions.
Handled by the Risk management committee
Operational risk
The risk of errors, fraud or failures in internal
procedures, systems and processes.
risk management committee, including representation from
the Group Executive Management, is responsible for the
overall risk and capital management. The areas of
> underwriting and reinsurance
> provision
> investment risk
> operational risk and security
Handled by the Operational risk committee
are managed by corresponding sub-committees. Risk man-
agement is supported by Trygvesta’s internal capital model,
which has been developed on an ongoing basis over the
56 of 148
l Capitalisation and risk management l Annual report 2009
TryGVESTa’S rISK MaNaGEMENT ENVIrONMENT
Supervisory
Board
Executive
Management
risk management environment
Organisation
Risk appetite
Instructions
Risk management committee
Policies
Risk managers
Capital
Strategy
Crisis management
Risk identification
Risk management
Risk reporting
Recommen-
dations
Underwriting
Reinsurance
committee
Provisions
committee
Investment
risk
committee
Operational
risk
committee
Systematic
risk
evaluation
past ten years. In addition, we make an annual mapping
provides target premium levels for the respective parts of
of risk to identify new risks that cannot currently be
the insurance business. Risk is furthermore managed on an
assessed using statistical analyses. Such data is compiled
ongoing basis by monitoring of profitability, business pro-
in TrygVesta’s risk data base, forming the basis for an
cedures, acceptance policies, authorities and reinsurance.
annual risk report to the Executive Management and
the Supervisory Board. The assessment of selected risk
reinsurance
scenarios based on this work is incorporated directly in
Reinsurance is used to reduce underwriting risk in areas
the Group’s calculation of the necessary solvency need
where this is particularly required. The need for reinsur-
(Individual Solvency Need).
ance is assessed on the basis of TrygVesta’s internal capi-
underwriting risk and reinsurance
underwriting
Underwriting risk is the risk related to entering into insur-
ance contracts and thus the risk that premiums charged
do not adequately cover the claims TrygVesta has to pay.
This risk is assessed and managed based on statistical
analyses of historical experience for the various lines of
business. The insurance premium must be adequate to
cover expected claims, but must also comprise a risk pre-
mium equal to the return on the part of the company’s
capital that is used to protect against random fluctua-
tions. All other things being equal, this means that insur-
ance lines or areas which, from experience, are subject to
major fluctuations, must comprise a larger risk premium.
The figure Norwegian property and motor liability shows
how the fluctuations observed in different lines may vary
considerably in practice, affecting the underwriting risk.
Underwriting risk is continuously assessed based on
tal model, which compares the price of buying reinsurance
with the reduced capital need that could be achieved.
NORWEGIAN PROPERTY AND MOTOR LIABILITY
%
175
150
125
100
75
50
25
0
1988
1992
1996
2000
2004
2008
Motor Liability
Property
Example of fluctuations in historical claims experience for lines
subject to a large degree and a minor degree, respectively,
analyses in TrygVesta’a internal capital model which thus
of random fluctuations (risk).
Annual report 2009 l Capitalisation and risk management l
57 of 148
Capitalisation and risk management
For property risks, major events in 2010 are protected by
general insurance area. The act provides for the govern-
catastrophe reinsurance of DKK 5bn with a retention up to
ment to provide a guarantee of up to DKK 15bn for the
a maximum of DKK 100m. The primary risk of single events
total Danish market to cover such losses in excess of the
is storm, and the level of cover has been defined using
level that can be protected in the reinsurance market. In
simulation models to the effect that protection would statis-
January 2010, the EU Commission finally approved the act
tically be inadequate less than once every 250 years. The
which may thus become effective in the first half of 2010.
catastrophe reinsurance programme also covers other catas-
No similar arrangement has as yet been set up in Norway,
trophe events, including terrorist events up to DKK 4.15bn.
Sweden and Finland.
TrygVesta has bought catastrophe reinsurance up to DKK
1.5bn for personal accident and workers’ compensation pol-
In case of a major insurance event comprised by the
icies with a retention of DKK 50m, covering the risk of mul-
reinsurance programme, TrygVesta may have major receiv-
tiple injuries from the same cause, including terror.
ables with reinsurers and thus be exposed to credit risk.
In addition, TrygVesta buys reinsurance for certain lines for
ings and by spreading reinsurance on several reinsurers.
which experience has shown that claims vary considerably.
TrygVesta has also set up a security committee focusing
The largest single risks in the corporate portfolio with
specifically on managing credit risk in connection with
This risk is managed by requirements to reinsurers’ rat-
respect to property risks are protected by reinsurance cover
reinsurance receivables.
of DKK 1.7bn with a retention of DKK 100m for the first
claim and DKK 50m for subsequent claims. Property risks
exceeding the upper level are protected by facultative rein-
Provisioning risk
surance. Other lines covered by reinsurance include liabil-
After the period of the policy’s cover expires, insurance risk
ity, motor, marine, fish farms and guarantee insurance.
relates to the provisions for claims made to cover future
payments on claims already incurred. Customers report
Exposure to terrorist losses of a biological, chemical or
claims with a certain delay. Depending on the complexity
radioactive character can be covered only partly by reinsur-
of the claim, a shorter or longer period of time may pass
ance today. However, Denmark established a national solu-
until the amount of the claim has been finally calculated.
tion to this issue in June 2008 when the Danish Folketing
This may be a prolonged process particularly for personal
passed the act on a terrorist insurance arrangement in the
injuries. Even when the claim has been settled there is a
RISK OVERVIEW
Effect
Provisions
Equities
Legislation
Under reinsurance
IT operations
Fraud
risk that it will be resumed at a later date, triggering fur-
ther payments.
The size of the provisions for claims is determined both
through individual assessments and actuarial calculations.
At 31 December 2009, the provisions for claims amounted
Adverse claims development
to DKK 22,430m. The duration of the provisions, that is,
the average period until such amounts are paid out to the
Adverse risk selection
customer, was 3.3 years at 31 December 2009.
Interest rate and spread risk
Most of the provisions for claims relate to personal injury
claims. They are exposed to changes in inflation, the dis-
count rate, disbursement patterns, economic trends, legis-
Insurance risk
Investment risk
Probability
lation and court decisions.
See also the section Investment and interest rate risk
58 of 148
l Capitalisation and risk management l Annual report 2009
PrOVISIONS FOr CLaIMS (GrOSS)
Investment and interest rate risk
Expected cash flow
0-1 year
1-2 years
2-3 years
> 3 years
Total
DKK
6,972
3,421
2,256
9,178
22,827
* Provisions for claims are excluding Finland, Sverige (Vesta Skade-
försäkring) og TrygVesta Garanti.
Investment risk is the risk that volatility in the financial mar-
kets will impact the results of operations and thus the
financial position. Investment assets as well as provisions
for claims are exposed to interest rate changes. If interest
rates fall, the value of the bond portfolio would rise, but at
the same time it would cause the provisions for claims to
rise, thereby reducing net interest rate exposure.
The investment assets are partly made up of assets match-
The calculation of provisions for claims will always be sub-
ing the technical provisions and partly of the company’s
ject to considerable uncertainty. Historically, many insurers
equity. At the beginning of 2010, TrygVesta explicitly initi-
have experienced substantial positive as well as negative
ated a division of the investment assets into two invest-
impacts on profit (run-off) resulting from reserving risk,
ment portfolios. The part of the portfolio matching the
and that may also be expected to happen in future. TrygVesta
technical provisions will be placed exclusively in interest-
manages reserving risk by pursuing a reserving policy
related assets, and the sole purpose is to hedge interest
ensuring that the process for determining provisions for
rate sensitivity with respect to discounted provisions. The
claims is updated and aligned at all times. This includes
part of the portfolio that matches equity will be a free
that it is based on an underlying model analysis, and that
investment portfolio intended to generate an optimum
internal control calculations and evaluations are made.
return relative to the risk involved. The figure on the next
page illustrates how interest rate risk on assets and liabili-
Provisions for claims relating to annuities in Danish work-
ties varies before and after the division of the portfolio.
ers’ compensation insurance are discounted using the
current market rate and are also revalued by the wage
After the division, fluctuations in the hedging portfolio will in
inflation rate each year. This exposes TrygVesta to explicit
principle perfectly match fluctuations in liabilities. In practice,
inflation risk in case of changes in Danish wage inflation.
it would not be expedient to target a perfect match simply
TrygVesta hedges such risk using an inflation swap.
because of the management expenses involved. We expect
PROVISIONS FOR CL AI M S
4%
9%
18%
19%
8%
6%
that, in practice, the net interest rate risk after division of
the portfolio can be kept within a limit of DKK 100m.
The division of the portfolio is described in more detail
in the section Investment activities
Equity and real estate risk
The equity and real estate portfolios are exposed to
changes in equity markets and real estate markets, respec-
tively. At 31 December 2009, the equity portfolio accounted
for 4.0% of the total investment assets. The proportion is
expected to be between 2%-6.5% in 2010.
36%
Motor
Liability
Personal
Workers’ compensation
Property
Accident
In 2008, TrygVesta bought the head office in Ballerup,
Others
thereby increasing the proportion of real estate signifi-
cantly. This proportion is expected to be reduced over
Annual report 2009 l Capitalisation and risk management l
59 of 148
Capitalisation and risk management
DIVISION OF THE INVESTMENT aSSETS
BEFOrE DIVISION
PORTEFØLGE
POrTFOLIO
Assets
2000
Liabilities
1500
1000
500
-2000
-1500 -1000
-500
500
1000
1500
2000
-500
-1000
-1500
-2000
Perfect match
aFTEr DIVISION
AFDELINGSPORTEFØLGE
MaTCH POrTFOLIO
2000
Liabilities
1500
1000
500
Assets
-2000
-1500 -1000
-500
500
1000
1500
2000
-500
-1000
-1500
-2000
FRIPORTEFØLGE
INVESTMENT POrTFOLIO
2000
Liabilities
1500
1000
500
Assets
-2000
-1500 -1000
-500
500
1000
1500
2000
-500
-1000
-1500
-2000
Perfekt match
Before the division of the portfolio, fluctuations in liabilities would to some extent be offset by opposite fluctuations in assets (left figure).
After the division, fluctuations in the hedging portfolio will in principle perfectly match fluctuations in liabilities. The investment portfolio will
(solely) be exposed to interest rate risk to the extent of active investments in interest-bearing assets. In such case, fluctuations would not be
offset by fluctuations on liabilities. To achieve best possible match derivatives will be used.
time. Besides the owner-occupied properties, TrygVesta’s
of the net book value of the Norwegian entity. Exchange
real estate port-folio consists of office and rental proper-
rate adjustments of foreign entities and hedging thereof
ties comprising 3.8% and 5.9% respectively of the total
are taken directly to equity.
investment activities.
Credit risk
Currency risk
Credit risk is the risk of incurring a loss if counterparties
Currency risk is kept at a very low level. The Group’s pre-
fail to meet their obligations. In connection with the
mium income in foreign currency is mostly matched by
investment activities, the primary counterparties are bond
claims and expenses in the same currencies, and thus,
issuers and counterparties in other financial instruments.
only the profit for the period is exposed to currency risk.
TrygVesta manages credit risk and concentration risk
TrygVesta uses currency derivatives to hedge the risk of a
loss of value of balance sheet items due to exchange rate
See the section Investment activities for an overview
fluctuations in accordance with a general hedge ratio of
of the bond portfolio distributed on ratings
90-100 for each currency. The aim is to hedge 98-100%
through limits and rating requirements.
60 of 148
l Capitalisation and risk management l Annual report 2009
TrygVesta’s receivables in Danish banks are covered by a
market, business partners and reputation as well as
government guarantee under the Act on Financial Stability
changed market conditions. The management of strategic
(Bank Package 1) until 30 September 2010.
risk closely involves the Supervisory Board.
The financial crisis and economic downturn prevailing since
The overall risk exposure
mid-2008 emphasised the importance of managing risk,
TrygVesta considers strategic risk and insurance risk
including credit risk. TrygVesta has no investments in sub-
(underwriting and provisions) to be the most important
prime loans, CDOs or similar products, and accordingly has
types of risk TrygVesta is exposed to. Both types of risk
not incurred financial losses in this respect in connection
are closely related to the operations as a general insurer.
with the financial crisis.
Investment risk is at a satisfactory level due to the current
Liquidity risk
Many businesses, in particular financial businesses, have
had their access to liquidity significantly impaired during
the financial crisis. TrygVesta is not exposed to the same
risk of a lack of liquidity since premiums are due for pay-
ment before claims have to be paid out. Most of the pay-
ments received are placed in cash accounts or liquid securi-
ties ensuring that TrygVesta will be able to procure the
necessary liquidity at all times.
Operational risk
Operational risk relates to errors or failures in internal pro-
cedures, fraud, breakdown of infrastructure, IT security and
similar factors. As operational risks are mainly internal,
TrygVesta focuses on establishing an adequate controlling
environment for the Group’s operations. In practice, this
work is organised through a structure of procedures, con-
trols and guidelines that cover the various aspects of the
Group’s operations, including the IT security policy.
TrygVesta has also set up a security and investigation
unit to handle matters such as fraud, IT security, physical
security and contingency plans.
TrygVesta has prepared contingency plans to handle the most
important areas, such as the contingency plans in the individ-
ual parts of the business to handle an event of a prolonged
IT breakdown. The Group has also set up a crisis manage-
ment structure should TrygVesta be hit by a major crisis.
Strategic risk
Strategic risk relates to TrygVesta’s choice of strategic
position, including IT strategy, flexibility relative to the
investment strategy. TrygVesta considers the operational
risk to be less important than the other risk types.
SENSITIVITy IN CaSE OF SELECTED CHaNGES IN
uNDErWrITING, rESErVING aND MarKET CONDITIONS
INSuraNCE rISK
underwriting risk
Increase in claims expenses of 1%
Decrease in premium rates of 1%
Weather-related claim of DKK 5.5bn
(reinsurance coverage DKK 5bn)
Provisioning risk
Increase in social inflation of 1%
Error estimation of e.g. 10%
on workers’ compensation and motor
DKKm
-132
-183
-260
-557
-1,158
MarKET rISK
Investment risk
Interest rate market – increase in interest rates of 1%:
-694
Impact on fixed interest securities
624
Higher discounting of provisions for claims
142
Impact on Norwegian pension obligation
Equity market
Decrease of equity markets of 15%
Effect arising from derivatives
real estate market
Decrease of real estate markets of 15%
Currency market
Decrease of 15% of exposed
currencies relative to DKK
Impact derivatives
-257
19
-584
-378
327
Annual report 2009 l Capitalisation and risk management l
61 of 148
Corporate governance
62 of 148
l Corporate governance l Annual report 2009
TrygVestas managers must create strong results
by communicating clearly, sharing knowledge
and having a passion for positive changes
Corporate governance
Annual report 2009 l Corporate governance l
63 of 148
Corporate governance
Supervisory Board
Mikael Olufsen
Bodil Nyboe Andersen
Jørn Wendel Andersen
Paul Bergqvist
Christian Brinch
Ms Nyboe andersen has competencies within
Mr Bergqvist has international management ex-
the areas of management, strategy, treasury
perience in strategic development, complex trans-
and financial business from her former posi-
actions, development of new markets,
tions as Chairman of the Board of Governors of
marketing, sales and financial management. Being
Danmarks Nationalbank and Managing Director
a Swedish citizen, Mr Berggvist has special insight
of Andelsbanken.
into Swedish market conditions.
Number of shares held: 100.
Number of shares held: 100.
Jørn Wendel andersen
Born 1951. Joined the Supervisory Board in 2002.
Christian Brinch
Born 1946. Norwegian citizen.
Mikael Olufsen
Chairman of the Supervisory Board
Born 1943. Joined the Supervisory Board in 2002.
Professional board member. Former CEO of Toms
Chokoladefabrikker A/S.
Educational background: MSc (Forestry); PMD
Harvard Business School.
Chairman: TryghedsGruppen smba, TrygVesta
A/S, TrygVesta Forsikring A/S, Egmont Foundation,
Egmont International Holding A/S, Ejendomssel-
skabet Gothersgade 55 ApS, Ejendomsselskabet
Vognmagergade 11 ApS, Malaplast Co. Ltd.
Bangkok, the Advisory Board of CareWorks Africa
Ltd. and the Danish Rheumatism Association
Board member: WWF in Denmark and
Danmark-Amerika Fondet.
Committee memberships: Chairman of the
remuneration committee of TrygVesta A/S.
Mr Olufsen has experience in managing large
international companies, including strategic
development, and experience as a board member
of Danish and international companies.
Professional board member and interim manage-
ment projects. Former CFO, Arla Foods amba.
Educational background: MSc (Business
Economics), IMD Executive Development Pro-
gramme, IMD ‘Strategy in Action’ Programme, and
Leadership Assessment – Heidrick & Struggles.
Board member: TryghedsGruppen smba,
TrygVesta A/S and TrygVesta Forsikring A/S.
Mr Wendel andersen has experience in
international management, strategy, finance,
treasury, IT and project management from his
former position as CFO of Arla Foods and
from Tulip International and Foss.
Number of shares held: 3,018.
Number of shares held: 1,078.
Bodil Nyboe andersen
Deputy Chairman of
the Supervisory Board
Born 1940. Joined the Supervisory Board in 2006.
Paul Bergqvist
Born 1946. Swedish citizen.
Joined the Supervisory Board in 2006.
Former Chairman of the Board of Governors,
Carlsberg A/S.
Professional board member. Former CEO of
Danmarks Nationalbank (Danish Central Bank).
Educational background: MSc (Economics).
Chairman: Sverige Bryggerier AB, East Capital
Chairman: The Laurids Andersen Foundation.
Explorer AB, HTC Group AB, Pieno Zvaigzdes AB,
Deputy chairman: TrygVesta A/S and TrygVesta
Forsikring A/S.
Board member: TV2, The Villum Kann Rasmus-
sen Foundation and The Energy Technological
Development and Demonstration Programme
Returpack Svenska AB, Norrkipings Segelsäll-
skap and Östkinds Häradsallmänning.
Board member: TrygVesta A/S, TrygVesta
Forsikring A/S, Lantmännen and Björk Eklund
Group AB.
(‘Energiteknologisk udviklings- og Demonstrations
Committee memberships: Member of the
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 of ABB Norge.
Educational background: Norway’s naval
academy, PMD Harvard Business School.
Chairman: Hafslund AS, Apply Group AS, Subsea
Technology Group AS, HV IV Invest Alfa AS, Heli-
copter Network AS, Fortissimo AS, Line Consult AS,
Gluteus AS and Røa Invest AS.
Deputy chairman: Norges Statsbaner AS, Prosafe
SE and Prosafe Production Plc.
Board member: TrygVesta A/S, TrygVesta
Forsikring A/S, Kjell A. Østnes AS, Thor Dahl
Management AS and Thor Dahl Shipping AS.
Committee memberships: Chairman of the
remuneration committee of Hafslund ASA and
member of the election committee of Prosafe SE.
Mr Brinch runs his own business providing stra-
tegic consulting and board services. Mr Brinch has
strategic development, branding, distribution and
consulting services with respect to board work.
Being a Norwegian citizen, Mr Brinch has special
insight into Norwegian market conditions.
Number of shares held: 500.
Niels Bjørn Christiansen
Born 1966. Joined the Supervisory Board in 2006.
Educational background: Economist, engineer.
experience and knowledge within the areas of
Program’).
remuneration committee of TrygVesta A/S,
spokesman of the audit committee of East
CEO, Danfoss A/S. Former Executive Vice President
and COO, GN Store Nord A/S.
Committee memberships: Chairman of the
Capital Explorer AB and chairman of the nomi-
audit committee of TrygVesta A/S. Advisory
nation committee of East Capital Exlorer AB.
Board of the Nordic Investment Bank and the
Committee of Corporate Governance.
Educational background: B.Sc., E.E., MSc
(Engineering), MBA INSEAD.
Chairman: Danfoss Compressors Holding A/S
and Danfoss International A/S.
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l Corporate governance l Annual report 2009
Niels Bjørn Christiansen
John R. Frederiksen
Rune Torgeir Joensen
Peter Wagner Mollerup
Birthe Petersen
Per Skov
Berit Torm
Deputy chairman: Danfoss (Tianjin) Limited,
Committee memberships: Member of the
Board member: TrygVesta A/S and TrygVesta
China and Sauer-Danfoss Inc.
remuneration committee of TrygVesta A/S, mem-
Forsikring A/S.
Board member: TrygVesta A/S, TrygVesta
Forsikring A/S, Bang & Olufsen A/S, Axcel A/S,
William Demant Holding A/S, Danfoss Drives A/S,
Danfoss Ejendomsselskab A/S, Danfoss Ventures
A/S, Danfoss-Murman Holding A/S, Provinsindus-
ber of the audit committee of Invista Foundation
Property Trust Ltd. and Invista European Real Es-
tate Trust Sicaf, member of the audit committee
Committee memberships: Member of the
remuneration committee.
and the investment committee of Sjælsø
Number of shares held: 88.
Gruppen A/S.
triens Arbejdsgiverforening and DI Hovedbestyrelse.
Mr Frederiksen has experience within manage-
Mr Christiansen has experience with international
businesses, including from his work at Danfoss
and GN Store Nord A/S. He has competencies
ment, strategy and finance from serving as a CEO
and most recently as a board member of a number
of companies, including property companies.
within management, strategy, IT, processes,
Number of shares held: 280.
distribution, innovation, production, finance and
private and listed companies.
Number of shares held: 100.
John r. Frederiksen
Born 1948. Joined the Supervisory Board in 2002.
rune Torgeir Joensen
Elected by the employees
Born 1956. Norwegian citizen.
Joined the Supervisory Board in 2008.
Department manager with TrygVesta Forsikring A/S.
CEO, Fortunen A/S, Oak Property Invest Aps and
Educational background: Printer, market
Berco ApS. Former chief executive of Jacob Holm
economist, HMS adviser.
& Sønner A/S and Bastionen A/S.
Board member: TrygVesta A/S and TrygVesta
Educational background: Business training.
Forsikring A/S.
Chairman: Hellebo Park A/S, RenHold A/S,
Renoflex-Gruppen A/S, Renholdningsselskabet af
Committee memberships: Member of the
audit committee of TrygVesta A/S, member of
1898, Rådgivningsselskabet af 1. september 2009
the Advisory Board TrygVesta Norge.
A/S, SBS Byfornyelse Smba, Sjælsø Danmark A/S,
Sjælsø Gruppen A/S, Ejendomsforeningen Dan-
mark, Komplementarselskabet Uglen ApS and
Grundejernes Investeringsfond.
Board member: TryghedsGruppen 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
Number of shares held: 45.
Peter Wagner Mollerup
Elected by the employees
Born 1966. Joined the Supervisory Board in 2002.
Per Skov
Born 1941. Joined the Supervisory Board in 2002.
Professional board member. Former CEO of FDB.
Educational background: MSc (Economics),
management training programme at MIT.
Chairman: Utility Development A/S and NX
Holding A/S.
Deputy chairman: TryghedsGruppen smba.
Board member: TrygVesta A/S, TrygVesta For-
sikring A/S, Dagrofa A/S, DSV A/S, Kemp & Lau-
ritzen A/S, Nordea Liv og Pension Livsforsikrings-
selskab A/S.
Committee memberships: Member of the
audit committee of TrygVesta A/S.
From his board work and former positions,
including as CEO of FDB, Mr Skov has experi-
ence within management, strategy and finance.
Number of shares held: 2,468.
Berit Torm
Elected by the employees
Born 1959. Joined the Supervisory Board in 2008.
Lead negotiator with TrygVesta Forsikring A/S.
Forsikring A/S.
Quality assurance manager with TrygVesta
Aps, C.W. Obel A/S, C.W. Obel Ejendomme A/S,
Educational background: Certified insurer,
C.W. Obel Projekt A/S, Obel-LFI Ejendomme A/S,
travel agency guide, psychotherapist.
Ejendomsaktieselskabet Knud Højgaards Hus, SSG
A/S, BERCO Deutschland GmbH, Invista Foundation
Holding Company Limited, SIPA (Scandinavian
Board member: TrygVesta A/S and TrygVesta
Forsikring A/S.
Forsikring A/S.
Educational background: LL.M.
Board member: TrygVesta A/S and TrygVesta
Inter national Property Association), Invista
Number of shares held: 236.
Foundation Property Trust Limited, Invista Foun-
dation Property Limited, Invista Foundation
Property No. 2 Limited and Invista European
Real Estate Trust SICAF.
President: the European Property Federation,
Birthe Petersen
Elected by the employees
Born 1949. Joined the Supervisory Board in 2002.
Brussels.
Consulting negotiator with TrygVesta Forsikring A/S.
Committee memberships: Member of
Furesø local council.
Number of shares held: 86.
Educational background: Diploma in business
studies, management training programme of The
Unless otherwise stated, the Board
Organisation of Danish Insurance Employees.
Members are Danish citizens.
Annual report 2009 l Corporate governance l
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Corporate governance
Group Executive Management
Birgitte Kartman
Morten Hübbe
Kjerstin Fyllingen
Truls Holm Olsen
Stine Bosse
Martin Bøge Mikkelsen
Jens Stener
Peter
Falkenham
Lars Bonde
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l Corporate governance l Annual report 2009
Christine (Stine) Bosse
CEO/ Group CEO
Peter Falkenham
COO/Group Executive Vice President,
Birgitte Kartman
Group Executive Vice President, Claims
Process & IT
Born 1960. Joined TrygVesta in 1987.
Born 1960. Joined TrygVesta in 1996.
Joined the Group Executive Management in 1999.
Born 1958. Joined TrygVesta in 2000.
Joined the Group Executive Management in 2009.
Member of the Executive Management
Joined the Group Executive Management in 2000.
Member of the Executive Management
of TrygVesta A/S.
Member of the Executive Management
of TrygVesta Forsikring A/S.
Member of the Executive Management
of TrygVesta A/S.
of TrygVesta Forsikring A/S.
Member of the Executive Management
Educational background: LL.M.
Educational background: LL.M, management
of TrygVesta Forsikring A/S.
Number of shares held: 619.
training programmes at INSEAD and Wharton.
Educational background: BCom (International
Chairman: The Danish Insurance Association
and BØRNEfonden.
Trade), MSc (Engineering) and management
training programmes at Wharton and Stanford.
Martin Bøge Mikkelsen
Group Executive Vice President, Strategy &
Board member: Nordea Bank and Amlin Plc.
Deputy chairman of Solar A/S.
Human Competencies
Joined the Group Executive Management in 2006.
Number of shares held: 1,911.
Member of the Executive Management of Try-
gVesta Forsikring A/S.
Committee memberships: member of the
Committee memberships: member of the au-
risk committee of Nordea Bank and the
dit committee of Solar A/S.
remuneration committee of Amlin Plc.
Number of shares held: 6,264.
Morten Hübbe
CFO/Group Executive Vice President, CFO
Born 1972. Joined TrygVesta in 2002.
Joined the Group Executive Management in 2003.
Member of the Executive Management
of TrygVesta A/S.
Member of the Executive Management
Number of shares held: 1,594.
Lars Bonde
Group Executive Vice President,
Customer Service & Sales – Direct,
and Country Manager Denmark
Born 1965. Joined TrygVesta in 1998.
of TrygVesta Forsikring A/S.
Educational background: Insurance training,
Educational background: BSc (International
LL.M.
Business Administration and Modern Languages),
Board member: The Danish Employers’
MSc (Finance and Accounting), management
Association for the Financial Sector.
training at Wharton.
Board member: Høyteknologisenteret AS.
Number of shares held: 4,801.
Number of shares held: 1,643.
Kjerstin Fyllingen
Group Executive Vice President, Customer
Service & Sales – Partners, and Country
Manager Norway
Born 1958. Joined TrygVesta in 2006.
Joined the Group Executive Management in 2006.
Member of the Executive Management
of TrygVesta Forsikring A/S.
Born 1962. Joined TrygVesta in 1989.
Joined the Group Executive Management in 2009.
Member of the Executive Management
of TrygVesta Forsikring A/S.
Educational background: Graduate Diplomas
from CBS in Organisation, in Marketing Manage-
ment and in Accounting, and management
training programmes, including Wharton and
Ashridge.
Truls Holm Olsen
Group Executive Vice President, Corporate
Born 1964. Joined TrygVesta in 1998.
Joined the Group Executive Management in 2009.
Member of the Executive Management
of TrygVesta Forsikring A/S.
Educational background: LL.M.
Board member: Energon A/S.
Number of shares held: 17.
Jens Stener
Group Executive Vice President, Corporate
Branding & Business Centres
Born 1966. Joined TrygVesta in 2006.
Joined the Group Executive Management in 2009.
Educational background: Bachelor of Business
Member of the Executive Management
Administration and Master of Management,
of TrygVesta Forsikring A/S.
Handelshøyskolen BI.
Board member: Finansnæringens Hoved-
organisation og TSS Marine ASA.
Committee memberships: member of
the audit committee of TTS Marine ASA.
Number of shares held: 2,462.
Educational background: BSc Business
Economics, INSEAD and IMD.
Board member: Leroy Design A/S.
Number of shares held: 17.
Annual report 2009 l Corporate governance l
67 of 148
Corporate governance
Statutory report on corporate governance
In 2009, TrygVesta’s Supervisory Board focused on organ-
Danish and English. Furthermore, the Group has a
ising the Group’s further strategic development with a
number of in-house guidelines to ensure that disclosures
healthy balance between short-term and long-term activi-
of price-sensitive information are made in accordance
ties and action plans. Profitable growth was very much in
with the stock exchange rules of ethics. Investor Rela-
focus during the year, and TrygVesta benefited from the
tions have regular contacts to equity analysts and major
economic slowdown to acquire Moderna Försäkringar
investors and organise investor presentations, teleconfer-
after following the company for some years.
ences and webcasts together with the Executive Manage-
ment. The Supervisory Board is regularly informed of the
Revised corporate governance recommendations are to
dialogue with investors and other stakeholders. All mate-
be introduced in 2010. TrygVesta takes a positive view of
rial is available at trygvesta.com, which also offers stake-
this, and the Supervisory Board believes that TrygVesta
holders to receive the latest news as RSS feeds or to
complies with the recommendations in all essentials. The
download webcasts and teleconferences as podcasts. The
sections Corporate governance and Remuneration are
Group has a number of policies that describe the compa-
based on Nasdaq OMX Copenhagen’s corporate govern-
ny’s relationship with its stakeholders.
ance recommendations, and the individual headings make
reference to the specific recommendations. Any devia-
See TrygVesta’s press policy on trygvesta.com > Press
tions from the recommendations are disclosed below.
> Press policy
Find information in relation to the recommendations on
Se TrygVesta’s Investor Relations policy on trygvesta.com
trygvesta.com > Our Business > Corporate Governance
> Investor > Contact IR
Stakeholders
Capital and share structures
Recommendation I.1, Recommendation II.1-2,
Recommendation I.2
Recommendation III. 1-4
The Supervisory Board monitors that TrygVesta’s capital
TrygVesta issues press releases and company announce-
structure is in line with the needs of the Group and its
ments on a regular basis and publishes interim reports
shareholders, and that the capital structure is in compli-
and annual reports in order to enable stakeholders to
ance with the requirements applicable to TrygVesta as a
form an adequate impression of the Group’s position and
financial undertaking. The Supervisory Board optimises
performance. The financial statements have been pre-
capitalisation on an ongoing basis while duly safeguarding
pared in accordance with IFRS. TrygVesta updates its out-
the interests of policyholders and shareholders and leaving
look for the Group’s performance each quarter. All finan-
the Group sufficient scope for development and growth.
cial announcements are released simultaneously in
68 of 148
l Corporate governance l Annual report 2009
In 2009, the shareholders at the annual general meeting
> Adoption of a resolution as to the distribution of profit
authorised the Supervisory Board to let TrygVesta acquire
or covering of loss, as the case may be, according to
own shares within 10% of the share capital in the period
the annual report as approved, including proposed
up to the next annual general meeting. Based on the
payment of dividend for the past financial year
Group’s 2009 performance, the Supervisory Board
> Any proposals from the Supervisory Board or from
proposes that TrygVesta implements a share buy back
shareholders
programme in 2010/11 totalling DKK 799m.
> Election of members to the Supervisory Board
The annual general meeting held on 22 April 2009 passed a
> Any other business
resolution to cancel the 4,068,427 shares bought back in
> Appointment of auditors
connection with the share buy back programme imple-
All shareholders are urged to attend the annual general
mented from 4 April 2008 to 26 March 2009. Effective as at
meeting, and shareholders may vote in person at the
28 August 2009, the company’s share capital was reduced
general meeting, by postal ballot or appoint the Supervi-
by DKK 101,710,675 nominal value to DKK 1,598,289,325
sory Board or a third party as their proxy. The proxy form
nominal value, corresponding to 63,931,573 shares.
and postal ballot form will be available at trygvesta.com
on or before 25 March 2010.
Recommendation I.4
The Supervisory Board intends to consider any public
The composition of the Supervisory Board
takeover bid that may be made as prescribed by legisla-
Recommendation V.1-2
tion and, depending on the nature of such bid, to con-
The Supervisory Board makes an annual assessment of
vene an extraordinary general meeting of shareholders in
the competencies required for the Supervisory Board to
accordance with applicable requirements and rules.
perform its duties in the best possible way. Focus is on
annual general meeting
Recommendation I.3
competencies within financial business, marketing, IT and
management. In connection with an evaluation of the
Supervisory Board’s work and its members’ competen-
TrygVesta holds its annual general meeting of sharehold-
cies, it is assessed whether the Supervisory Board has
ers each year before the end of April. The Supervisory
the required competencies, or whether the competencies
Board convenes the annual general meeting in accord-
and expertise of its members need to be updated in
ance with the Danish Companies Act and the company’s
some respects. A balanced distribution with respect to
articles of association, giving not less than three weeks’
age, gender and nationality, among other factors, is
notice, by a company announcement, at the company’s
sought in the composition of the Supervisory Board.
website and in at least one national newspaper. Share-
The Board members are aged between 44 and 69 years,
holders may elect to receive the notice by mail or as an
and there are three female members. Looking forward,
electronic notice of the general meeting, or they may
TrygVesta intends to increase the number of female
download the notice at trygvesta.com. The notice
Supervisory Board members elected by the shareholders.
includes relevant information about the time and place
of the meeting and sets out the agenda, which as
See also the CVs of the Board members in the section
a minimum comprises the following items:
The Supervisory Board
> Report of the Supervisory Board on the activities
Recommendation V.3-4, V.9
of the company during the past financial year
The Supervisory Board has 12 members, including eight
> Presentation of the annual report for approval and
members elected by the shareholders for a term of one
discharge of the Supervisory Board and the Executive
year. Four of the eight members are non-affiliated. The
Management, including determination of the
Supervisory Board deems that the number of members is
Supervisory Board’s remuneration
adequate to ensure a constructive debate and an efficient
decision-making process.
Annual report 2009 l Corporate governance l
69 of 148
Corporate governance
Recommendation V.10
auDIT COMMITTEE
rEMuNEraTION COM MITTEE
The remuneration committee has four members elected
by the Supervisory Board. The remuneration committee
is chaired by the Chairman of the Supervisory Board.
In addition, the committee must include at least one
member of the Supervisory Board of TryghedsGruppen
and at least one non-affiliated member of the Supervi-
sory Board. The committee held four meetings in 2009.
The work of the remuneration committee is based on
TrygVesta’s remuneration policy and guidelines for
incentive pay adopted by the shareholders at the
annual general meeting held on 3 April 2008.
Members
- Mikael Olufsen, chairman
- John R. Frederiksen
- Paul Bergqvist
- Birthe Petersen
responsibilities
> To support the Supervisory Board in considerations and
decisions with respect to issues of remuneration to the
Supervisory Board, Board committees and the Executive
Management, and to discuss the framework for
the Group Executive Management’s remuneration in
consultation with the Group CEO.
> To ensure compliance with the Group’s guidelines for
incentive pay.
> To prepare recommendations to the Supervisory Board
about elements that should be included in the remu-
neration of the Supervisory Board and the Executive
Management.
> To keep the Supervisory Board informed of the market
level and forms of remuneration paid to members of
the supervisory boards and executive managements
of the company’s peers.
activities in 2009
> Discussed and adopted the remuneration structure for
2009.
> Prepared a recommendation to the Supervisory Board
concerning variable salary for 2008 and remuneration
for 2009.
> Prepared a recommendation to the Supervisory Board
concerning salaries for 2009.
> Planned the work for 2010.
The framework for the audit committee’s work is defined
in terms of reference, and the committee is solely a pre-
paratory body supporting the Supervisory Board in its
work. The committee has three members and is chaired
by a non-affiliated member of the Supervisory Board. The
Supervisory Board deems that Bodil Nyboe Andersen who
does not represent the majority shareholder Trygheds-
Gruppen, meets the independency and qualification
requirements. Bodil Nyboe Andersen has chaired the
audit committee of TrygVesta A/S since 2006.
Four meetings of the committee were held in 2009, and
it reported to the Supervisory Board on a regular basis.
The audit committee made an assessment of the preced-
ing year’s work in August 2009, evaluating the need for
changes to its terms of reference. The audit committee
works with historical data, and it is not involved in for-
ward-looking events such as outlook and budgets.
Members
- Bodil Nyboe Andersen, chairman
- Per Skov
- Rune Joensen
responsibilities
> To ensure the accuracy of financial information
disclosed in the Group’s financial reports, including
the application of accounting policies.
> To review and assess, at least once a year, manage-
ment’s guidelines for identifying, monitoring and
managing the most important risks, including internal
control and risk management systems.
> To review and discuss the results of the work of the
internal and external auditors and to supervise manage-
ment’s follow-up on the recommendations reported by
the internal and external auditors.
> To ensure that the Group is being monitored by
independent auditors.
activities in 2009
> Reviewed the Group’s technical provisions.
> Reviewed the methodology for and assesment of
the Group’s Individual Solvency Need.
> Reviewed the efficiency of the Group’s contingency
plans.
> Assessed the Group’s internal control procedures
to prevent fraud.
> Supervised annual and interim financial statements.
> Supervised the audit work performed by the
external auditors.
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l Corporate governance l Annual report 2009
THE COMPOSITION OF THE SuPErVISOry BOarD
A few Supervisory Board members hold more than the rec-
4 affiliated
4 non-affiliated 4 members elected
members
members
by the employees*
candidates
elected according
elected among elected among
to agreement
the members
between the Danish
of the Super- without any
and Norwegian
visory Board
of Trygheds-
employee associations
Gruppen smba. Gruppen smba. distributed on three
affiliation with
Trygheds-
of the Group’s Danish
employees and one
Norwegian employee.
* Following the annual general meeting of 2010, the mem-
bers elected by the employees will comprise two Danish,
one Norwegian and one Swedish employee.
ommended number of directorships. However, the Supervi-
sory Board considers that each member has adequate time
and resources to serve as a member of the Supervisory
Board of TrygVesta in a satisfactory manner.
The tasks and responsibilities of the Supervisory Board
Recommendation IV.1
The Supervisory Board is responsible for the overall manage-
ment and financial control of TrygVesta. In this work, the Super-
visory Board uses targets and framework management based
on regular and systematic consideration of strategies and risks.
Recommendation IV.4
The Executive Management reports to the Supervisory
Board on strategies and action plans, market developments
Recommendation V.5
and the Group’s performance, funding issues, capital
Read more about the employee representatives
resources and special risks. The Supervisory Board cooper-
on TrygVesta’s Supervisory Board at trygvesta.com
ates with the Executive Management to ensure follow-up
> Our business > Corporate governance
on and development of the Group’s strategies.
> Governance principals > Composistion of the Board
Recommendation V.6
The Chairman and the Deputy Chairman of the Supervi-
The Supervisory Board holds at least six annual meetings
sory Board perform the duties otherwise handled by a
and an annual strategy seminar to discuss and define strat-
Nomination committee.
egies and goals for the years ahead. The Supervisory Board
discusses the Supervisory Board’s tasks on a regular basis,
Recommendation V.8
and at the last meeting in the year, it determines a meeting
To ensure replacement on the Supervisory Board, mem-
plan for the coming year.
bers elected by the shareholders may hold office for a
maximum of nine years. Furthermore, members of the
Recommendation V.11
Supervisory Board must retire at the first general meeting
The Supervisory Board carries out an annual evaluation of
following their 70th birthday.
the work and results of the Executive Management and of
the cooperation between the Supervisory Board and the
Recommendation V.1-2, V.7
Executive Management. In addition, the Supervisory Board
Prior to the election of new Board members, the Supervi-
reviews and approves the rules of procedure of the Super-
sory Board prepares a description of the candidates’ back-
visory Board and the Executive Management each year to
ground, professional qualifications and experience, and the
ensure they are aligned with TrygVesta’s requirements. The
notice convening the general meeting makes reference to
Supervisory Board has defined an evaluation procedure for
this description. When taking up office, new Supervisory
assessing the composition of the Supervisory Board and
Board members are given an introduction to the Group.
the work and results of the Supervisory Board and its indi-
Read more about the Supervisory Board members’
assessment interviews with each member of the Supervi-
profiles and holdings of TrygVesta shares in the sec-
sory Board at the beginning of the year, which are dis-
tion Supervisory Board
cussed at the first Board meeting of the year.
vidual members. In addition, the Chairman has individual
Annual report 2009 l Corporate governance l
71 of 148
Corporate governance
Recommendation IV.2-3
planning, performing and reporting the audit work to the
The Supervisory Board is headed by the Chairman and the
Supervisory Board. The internal and external auditors’ long-
Deputy Chairman. The duties of the Chairman and the Dep-
form reports are reviewed by the Supervisory Board.
uty Chairman of the Supervisory Board are defined in the
rules of procedure of the Supervisory Board and include
In connection with the Supervisory Board’s review of the annual
preparing meetings of the Supervisory Board and evaluat-
report, it discusses the accounting policies, among other
ing the work of the Supervisory Board and the cooperation
issues. The results of the audit are discussed with the audit
with the Executive Management. The Chairman and the
committee and in Supervisory Board meetings for the purpose
Deputy Chairman furthermore plan the future composition
of assessing the auditors’ observations and conclusions.
of the Supervisory Board. The Chairman acts as spokesman
for the Supervisory Board for external purposes.
Internal control and risk management systems
risk management
Recommendation VII.1-3
The responsibility for the Group’s internal controls and risk
management systems in connection with the financial
reporting process rests with the Supervisory Board and the
Being an insurance business, TrygVesta is subject to the
Executive Management.
requirements of the Danish Financial Business Act on risk
management. In capital and risk management instructions,
The Supervisory Board and the Executive Management
the Supervisory Board defines the framework for risk man-
approve and monitor the Group’s general policies, procedures
agement in TrygVesta with respect to insurance risk/reinsur-
and controls in key areas in relation to the financial reporting
ance, investment risk and operational risk, including IT secu-
process, including compliance with relevant legislation and
rity. This framework is then implemented in risk policies that
regulations, internal business procedures and segregation of
define detailed guidelines for the Group’s risk management.
duties, continuous monitoring of significant risks, etc.
A risk management committee comprising the Group CEO,
Group CFO and Group CRO monitors the risk management
In connection with major acquisitions, a general risk analysis
environment. The Executive Management reports to the
is performed, and the significant business procedures and
Supervisory Board on the Group’s risk management work.
internal controls are reviewed.
Read more in the section Risk management and at
The Executive Management has established a formal Group
trygvesta.com > Our business > Risk management.
reporting process which comprises monthly reporting, includ-
audit
Recommendation VIII
ing budget reporting and deviation reporting. TrygVesta pub-
lishes quarterly interim reports.
The Supervisory Board ensures that the Group is monitored
See also the section Stakeholders on page 68
by competent and independent auditors. Each year, the
annual general meeting appoints external auditors recom-
The Group’s internal control systems are based, among other
mended by the Supervisory Board. The audit agreement
things, on clear organisational structures and guidelines,
with the external auditors, including the auditors’ fees, is
general IT controls and segregation of duties, which are
concluded between the Supervisory Board and the audi-
supervised by the internal auditors.
tors. The Supervisory Board adopts the framework for the
auditors’ performance of non-audit services each year.
Statutory report on corporate social responsibility
TrygVesta’s internal audit department regularly reviews
See TrygVesta’s statutory report on corporate social
the quality of the Group’s internal control systems and
responsibility at trygvesta.com > CSR > CSR
business procedures. The department is responsible for
72 of 148
l Corporate governance l Annual report 2009
remuneration
remuneration policy for the Supervisory Board and
rEMuNEraTION OF THE SuPErVISOry BOarD IN 2009
the Executive Management
Recommendation VI. 1-5
TrygVesta has adopted a policy for remuneration of the
Supervisory Board and the Executive Management and
has defined overall guidelines for incentive pay.
DKK
Chairman
Deputy Chairman
Members, each
Total remuneration of
the Supervisory Board
Fee
750,000
500,000
250,000
3,750,000
The remuneration policy and the guidelines for incen-
tive pay are posted at trygvesta.com > Our business >
Governance > Remuneration
remuneration of the Supervisory Board
Members of the Supervisory Board receive a fixed fee and
are not covered by incentive programmes or severance
schemes. Their remuneration is fixed on the basis of
trends in the company’s peer group, taking into account
competencies and efforts as well as the scope of the
Board work. The Chairman of the Supervisory Board
rEMuNEraTION OF THE auDIT COMMITTEE IN 2009
DKK
Fee
150,000
Chairman
Two other members, each
100,000
Total remuneration of the audit committee 350,000
rEMuNEraTION OF THE rEMuNEraTION COMMITTEE
IN 2009
receives triple the fee of the other members, and the
DKK
Deputy Chairman receives double the amount.
In addition, members of the Supervisory Board who sit on
the audit committee and the remuneration committee
receive remuneration for these duties. The committee
Chairman
Two other members, each
Total remuneration of
the remuneration committee
Fee
75,000
50,000
225,000
chairmen receive one and a half times the fee of the
remuneration of the Executive Management
other members.
TrygVesta’s Executive Management comprises three
members. The remuneration of the Executive Manage-
The shareholders approve the remuneration of the Super-
ment reflects a wish to secure a balanced earnings
visory Board for the current financial year. The remunera-
performance for the Group in the short term as well
tion paid to the Supervisory Board was unchanged from
as the longer term.
2008 to 2009.
Annual report 2009 l Corporate governance l
73 of 148
Corporate governance
The remuneration of the Executive Management members
of variable remuneration may not exceed 50% of the fixed
includes an incentive plan, comprising a bonus plan of up
annual salary inclusive of pension in any finacial year.
to three months’ additional salary including pension (four
months for the Group CEO). The bonus plan is directly
Members of the Executive Management are entitled to
linked to the achievement of pre-defined benchmarks. The
company cars, and a contribution equal to 25% of the
assessment of the individual members’ target achievement
basic salary is paid into a pension scheme. Each member
includes the Group’s overall performance as well as that of
of the Executive Management is entitled to 12 months’
the individual members within their areas of responsibility.
notice of termination and to 12 months’ severance pay.
Specific benchmarks are defined within all four perspec-
However, the Group CEO is entitled to 12 months’ notice
tives of the balanced scorecard (financial, customer, proc-
and to 18 months’ severance pay plus pension contribu-
esses and learning), reflecting the strategic focus areas of
tions during such period.
the Group and the individual business areas or organisa-
tional units, including growth, profitability, cost reduction,
Incentive pay
customer satisfaction, customer loyalty, image, processes,
Like the Executive Management, the Group Executive
communication, employee satisfaction and development,
Management and senior employees are offered a per-
and innovation. The bonus is paid out in cash. Part of the
formance-related bonus of up to three months’ salary.
Executive Management’s remuneration consists of stock
The bonus is linked to the achievement of pre-defined
options in order to build loyalty and motivation. The value
benchmarks and paid out in cash.
rEMuNEraTION OF THE ExECuTIVE MaNaGEMENT IN 2009
DKK
Stine Bosse
Morten Hübbe
Peter Falkenham
Basic salary
Bonus
Pension
Car
Total
5,838,000
3,675,000
3,150,000
1,459,500
612,500
525,000
1,459,500
918,750
787,500
252,372
156,000
217,656
9,009,372
5,362,250
4,680,156
rEMuNEraTION OF THE ExECuTIVE MaNaGEMENT IN 2008
DKK
Stine Bosse
Morten Hübbe
Peter Falkenham
Basic salary
Bonus
Pension
Car
Total
5,560,000
3,500,000
3,000,000
1,390,000
584,000
250,000
1,390,000
875,000
750,000
247,100
156,000
106,000
8,587,100
5,115,000
4,106,000
rEMuNEraTION OF THE ExECuTIVE MaNaGEMENT IN 2007
DKK
Stine Bosse
Morten Hübbe
Peter Falkenham
Basic salary
Bonus
Pension
Car
Total
5,200,000
3,000,000
2,575,000
1,734,000
750,000
644,000
1,300,00
750,000
644,000
113,000
156,000
106,000
8,347,000
4,656,000
3,969,000
74 of 148
l Corporate governance l Annual report 2009
Furthermore, TrygVesta has a stock option programme for
with profit announcements. Own shares are bought to
the Executive Management, the Group Executive Manage-
cover the stock option programme.
ment, senior executives and employees to reward out-
standing performance. The options, which entitle the
In 2009, the stock options entitled the holders to
holders to buy one share per option, cannot be exercised
acquire shares at the average price of TrygVesta shares
earlier than three years and later than five years after the
(all trades) on OMX The Nordic Exchange Copenhagen on
grant. The strike price is the market price on grant plus
3 March 2009 plus a 10% supplement, equal to a strike
10%. The exercise price is the strike price less dividend
price of DKK 344.86. TrygVesta expects to grant a stock
payouts in the period. Stock options can only be exer-
option programme of a similar value and on similar terms
cised during the open trading windows in connection
in 2010.
STOCK OPTION PrOGraMME IN 2009
Stine Bosse
Morten Hübbe
Peter Falkenham
Other Group Executive Management and senior executives
Granted to reward outstanding performance
Total granted in 2009
Number
18,066
11,690
8,502
124,076
21,200
183,534
Value
on grant (DKK)
1,700,000
1,100,000
800,000
11,700,000
2,000,000
17,400,000
TOTaL NuMBEr OF STOCK OPTIONS OuTSTaNDING aT THE END OF 2009
Options
2006
2007
2008
2009
Total
Stine Bosse
Morten Hübbe
Peter Falkenham
Other option programme participants
Total number of outstanding stock options
20,960
7,860
0
85,530
114,350
13,527
7,101
5,072
116,896
142,596
24,597
15,916
11,575
190,883
242,971
18,066
11,690
8,502
143,686
181,944
77,150
42,567
25,149
536,995
681,861
Annual report 2009 l Corporate governance l
75 of 148
Corporate governance
Shareholder information
FINaNCIaL CaLENDar 2010
15 April 2010 at 14:00
Annual general meeting 2010
16 April 2010
21 April 2010
TrygVesta shares trade ex-dividend
Payment of dividend
21 May 2010 at 7:30
Interim report for Q1 2010
17 August 2010 at 7:30
Interim report for H1 2010
16 November 2010 at 7:30
Interim report for Q1-Q3 2010
TrygVesta emphasises openness, transparency and
trygvesta.com, is updated simultaneously with the
accommodation of stakeholder information requirements,
announcement of new information. In addition, information
thereby providing investors, equity analysts and advisers
is distributed directly to the London Stock Exchange, the
with a good basis for forming a correct picture of the
press, equity analysts, investors and other stakeholders.
Group’s market and financial position, its performance
and its opportunities and risks.
In accordance with the recommendations issued by Nas-
The Group’s Investor Relations strive to maintain a high
ing on matters relating to financial performance or fore-
level of information by
casts during a period of three weeks prior to the release
daq OMX Copenhagen, TrygVesta refrains from comment-
> being available and proactive, and answering queries
of financial reports.
from investors and other stakeholders as promptly as
Share price performance in 2009
possible
TrygVesta shares opened 2009 at DKK 328 and closed at
> having in-depth insight into and knowledge of the
DKK 342.75, thus generating a total return for 2009 of
Group as well as relevant external trends
7% including dividends of DKK 6.50. The return was
> preparing plain and relevant written communication and
below the return of the market in general in 2009, with
presentation material
the OMX C20 index increasing by 28% and slightly below
> having a website that is of relevance to professional
the DJ Euro Insurance Index, which increased by 11%.
and private investors alike
Information that may influence the pricing of TrygVesta
period of the financial crises, TrygVesta shares fell 6%
shares is published in accordance with the rules applicable
including dividends. By way of comparison, the OMX C20
to distribution of news in the EU. The Group’s website,
fell by 25% and the DJ Euro Insurance Index by 34%.
From the beginning of 2008 to the end of 2009, the
76 of 148
l Corporate governance l Annual report 2009
Turnover of TrygVesta shares and share buy back
Denmark, holds 60% of the issued shares and is the only
TrygVesta shares had an average daily turnover of DKK
shareholder with a holding of more than 5%. Trygheds-
27m in 2009 compared with DKK 44m in 2008. The total
Gruppen invests in Nordic businesses that promote peace
volume of TrygVesta shares traded on Nasdaq OMX
of mind and health, and supports benevolent activities.
Copenhagen was 6.7bn in 2009 compared with 11.1bn
in 2008. New trading platforms such as Chi-X, Turquise
Read more about TryghedsGruppen at
and Burgundy accounted for around 8% of all trades in
tryghedsgruppen.dk
TrygVesta shares in the second half of 2009.
In the period from 1 January 2009 to 24 March 2009,
among approximately 27,900 registered shareholders.
TrygVesta implemented and completed a share buy back
The 200 largest shareholders held 67% of the free float.
programme of DKK 352m out of a total programme of
At 31 December 2009, TrygVesta held own shares corre-
DKK 1,405m set up in April 2008.
sponding to 1.1% of the share capital.
At 31 December 2009, the 40% free float was distributed
The shares that had been bought back were cancelled in
Dialogue with investors
August 2009, reducing the number of outstanding shares
The Executive Management and Investor Relations meet
from 68.0m to 63.9m including own shares.
with institutional investors and equity analysts after publi-
MOST aCTIVE STOCKBrOKErS*
1. Danske Bank
2. Nordea
3. SEB Enskilda
4. Carnegie
5. Svenska Handelsbanken
* in terms of percentage of turnover on Nasdaq OMX
19%
9%
8%
7%
5%
cation of all financial statements. In 2009, TrygVesta held
around 270 investor meetings and participated in 15 inves-
tor conferences. TrygVesta also participated in five events
for private shareholders in both Denmark and Sweden. The
Group’s performance is followed by 18 equity analysts,
eight of whom are based in London. The equity analysts’
recommendations with respect to TrygVesta shares are
available at trygvesta.com. The website, which is available
Share capital and ownership
in a Danish and an English version, is being updated and
TrygVesta has a total share capital of DKK 1,598,289,325
developed on an ongoing basis, making it an important
comprised of a single class of shares (63.2m shares of DKK
source for providing information about the Group’s per-
25 nominal value each), and all shares rank pari passu. The
formance to interested investors.
principal shareholder, TryghedsGruppen smba, Kgs. Lyngby,
FREE FLOAT AT 31 DECEMBER 2009
SHAREHOLDERS AT 31 DECEMBER 2009
10%
3%
17%
13%
57%
13%
13%
14%
60%
Denmark
Nordic
UK
Others
USA
TryghedsGruppen smba
Small shareholders
Large Danish shareholders*
Large international shareholders
* Shareholders holding more than 10,000 shares
Annual report 2009 l Corporate governance l
77 of 148
Corporate governance
COMPaNy aNNOuNCEMENTS PuBLISHED IN 2009
26.01.2009 No. 04
TrygVesta comments on market rumours about acquisition of Moderna Försäkringar
02.02.2009 No. 06
TrygVesta extends length of share buy back programme
17.02.2009 No. 10
TrygVesta ends negotiations with Moderna without result
02.03.2009 No. 13
TrygVesta acquires Moderna Försäkringar Sak in Sweden
03.03.2009 No. 14
Fourth quarter 2008 report
03.03.2009 No. 15
Annual report 2008
27.03.2009 No. 19
TrygVesta ends share buy back programme
31.03.2009 No. 20
Notice of the annual general meeting of TrygVesta A/S
02.04.2009 No. 21
TrygVesta closes acquisition of Moderna
22.04.2009 No. 22
Resolutions from annual general meeting
12.05.2009 No. 23
First quarter 2009 results
18.08.2009 No. 24
Half-year 2009 report
28.08.2009 No. 25
Cancellation of TrygVesta shares
28.08.2009 No. 26
TrygVesta issues guarantee for Moderna Försäkringar Sak AB
01.09.2009 No. 27
TrygVesta – Capital markets day 2009
10.11.2009 No. 28
Third quarter 2009 report
10.11.2009 No. 29
Financial calendar 2010
After implementing the share buy back programme on 4 April 2008, TrygVesta issued a company announcement on the weekly share buy
backs each Monday in 2009 until 23 March 2009.
As a new feature in 2009, TrygVesta’s Investor Relations
be advertised in the daily press and will be sent to share-
issued IR newsletters. The newsletters deal with topical
holders who so request. Notice of the meeting will also
issues in order to create a better understanding of factors
be posted at trygvesta.com.
of importance to TrygVesta’s performance.
Read about dividends for 2009 in the section Capital
annual general meeting
management and profit distribution
TrygVesta’s annual general meeting will be held on 15 April
2010 at Falconer Center, Falkoner Alle 9, 2000 Frederiks-
berg, Denmark. The invitation to attend the meeting will
a Ny q uErI ES rEL aT IN G TO T HE
a NN ua L G EN Era L M EE TI NG M ay
BE aDD rESSED TO
Bjarne Lau Pedersen, Chief Legal Adviser
Tel.: +45 44 20 30 65.
bjarne.lau@tryg.dk
Ole Søeberg, IR Director
Tel.: +45 44 20 45 20.
ole.soeberg@tryg.dk.
78 of 148
l Corporate governance l Annual report 2009
Annual report 2009 l Corporate governance l
79 of 148
Regnskab
accounts – contents
Notes
Statement by the Supervisory Board and the Executive Management
Independent auditors’ report
Income statement – TrygVesta Group
Total comprehensive income
Balance sheet – TrygVesta Group
Statement of change in equity
Statement of cashflows - TrygVesta Group
Notes – TrygVesta koncernen
accounting policies
Earned premiums, net of reinsurance
Technical interest, net of reinsurance
Claims incurred, net of reinsurance
Insurance operating expenses, net of reinsurance
Segments
Technical result, net of reinsurance, by line of business
Interest and dividends
Value adjustment
Tax
Profit/loss on discontinued and divested business
Intangible assets
Property, plant and equipment
Investment property
Investments in associates
Fair value hierarchy for financial instruments measured at fair value in the balance sheet
Reinsurers’ share
Current tax
Shareholders’ equity
Capital adequacy
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
Acquisition of subsidiary
Related parties
Financial highlights and key ratios of TrygVesta
1
2
3
4
5
6
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Income statement – TrygVesta A/S (parent company)
Balance sheet – TrygVesta A/S (parent company)
Statement of changes in equity (parent company)
Notes (parent company)
Financial highlights and key ratios by geography
Glossary
page
82
83
84
85
86
88
90
91
101
101
101
101
106
108
110
110
110
111
111
113
114
115
116
120
120
121
121
122
123
126
128
129
129
129
129
130
131
132
133
134
135
136
137
142
144
Annual report 2009 l Accounts – contents l
81 of 148
Regnskab
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 2009 of
TrygVesta A/S and the TrygVesta Group.
the Group’s and the parent company’s operations and the
cash flows of the Group for the financial year 1 January - 31
December 2009.
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 2009 and of the results of
Furthermore, in our opinion the Management’s report gives a
true and fair view of developments in the activities and finan-
cial position of the Group and the parent company, the re-
sults for the year and of the Group’s and the parent compa-
ny’s financial position in general and describes significant risk
and uncertainty factors that may affect the Group and the
parent company.
We recommend that the annual report be adopted by the
shareholders at the annual general meeting.
Ballerup, 25 February 2010.
Executive Management
Christine Bosse
Group CEO
Morten Hübbe
Group CFO
Peter Falkenham
Group COO
Supervisory board
Mikael Olufsen
Chairman
Bodil Nyboe Andersen
Deputy Chairman
Jørn Wendel Andersen
Paul Bergqvist
Christian Brinch
Niels Bjørn Christiansen
Peter Mollerup
John R. Frederiksen
Rune Torgeir Joensen
Birthe Petersen
Per Skov
Berit Torm
82 of 148 l Statement by the Supervisory Board and the Executive Management l Annual report 2009
Independent auditors’ report
To the shareholders of TrygVesta a/S
We have audited the consolidated and parent company finan-
cial statements of TrygVesta A/S for the financial year starting
on January 1 and ending on December 31, 2009, which com-
prise income statement, the statement of comprehensive
income, balance sheet, statement of changes in equity and
notes to the financial statements, including accounting poli-
cies, and the management’s report, for the Group as well
as the parent company, and the cash flow statement for the
Group. The consolidated financial statements have been pre-
pared in accordance with International Financial Reporting
Standards as adopted by the EU, and the parent company
financial statements have been prepared in accordance with
the Danish Financial Business Act. In addition, the consoli-
dated and parent company financial statements have been
prepared in accordance with additional Danish disclosure
requirements for listed companies. The management’s report
has been prepared in accordance with the Danish Financial
Business Act.
Management’s responsibility for the consolidated and
parent company financial statements and the manage-
ment’s report
Management is responsible for preparing and presenting con-
solidated and parent company financial statements that give
a true and fair view in accordance with the International Fi-
nancial Reporting Standards as adopted by the EU in respect
of the consolidated financial statements, in accordance with
the Danish Financial Business Act in respect of the parent
company financial statements and in accordance with addi-
tional Danish disclosure requirements for listed companies,
and a management’s report including a fair review in accord-
ance with the Danish Financial Business Act. This responsibil-
ity includes designing, implementing and maintaining internal
control relevant to the preparation and fair presentation of
consolidated and parent company financial statements and
a management’s report that are free from material misstate-
ment, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting
estimates that are reasonable in the circumstances.
Basis of opinion
Our responsibility is to express an opinion on the consoli-
dated and parent company financial statements and the
management’s report based on our audit. We conducted our
audit in accordance with Danish and international auditing
standards. Those standards require that we comply with
ethical requirements and plan and perform the audit to
obtain reasonable assurance that the consolidated and
parent company financial statements and the management’s
report are free from materiel misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consoli-
dated and parent company financial statements and the
management’s report. The procedures selected depend on
the auditor’s judgment, including the assessment of the
risks of material misstatement of the consolidated and
parent company financial statements and the management’s
report, whether due to fraud or error.
In making those risk assessments, the auditor considers in-
ternal controls relevant to the preparation and fair presenta-
tion of consolidated and parent company financial statements
and to the preparation of a management’s report that in-
cludes a fair review in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of internal con-
trol. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of account-
ing estimates made by management, as well as evaluating
the overall presentation of the consolidated and parent com-
pany financial statements and the management’s 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 consolidated financial statements give
a true and fair view of the Group’s assets, liabilities and
financial position at December 31, 2009, 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, 2009 in accordance with International Financial Reporting
Standards as adopted by the EU and in accordance with addi-
tional Danish disclosure requirements for listed companies.
Furthermore in our opinion, the parent company financial
statements give a true and fair view of the parent company’s
assets, liabilities and financial position at December 31, 2009,
and of the results of the parent company’s operations for the
financial year starting on January 1 and ending on December 31,
2009 in accordance with the Danish Financial Business Act
and in accordance with additional Danish disclosure require-
ments for listed companies.
Furthermore, in our opinion, the management’s report in-
cludes a fair review in accordance with the Danish Financial
Business Act.
Ballerup, 25 February 2010.
Deloitte
Statsautoriseret Revisionsaktieselskab
Lars Kronow
State Authorised
Public Accountant
Kasper Bruhn Udam
State Authorised
Public Accountant
Annual report 2009 l Independent auditors’ report l
83 of 148
Regnskab
Income statement – TrygVesta Group
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
14
Investment activities
Income from associates
Income from investment properties
Interest income and dividends
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 of DKK 25
Earnings per share of DKK 25
Diluted earnings per share of DKK 25
84 of 148 l Income statement – TrygVesta Group l Annual report 2009
2008
2009
17,629
-926
-134
66
16,635
499
-12,880
605
1,114
-486
-11,647
-172
-2,247
-756
-3,003
72
-2,931
2,384
-2
128
1,523
-1,008
-100
-101
440
-1,428
-988
124
-173
1,347
-501
846
0
846
12.8
12.8
-
18,315
-914
85
-60
17,426
157
-13,479
264
273
42
-12,900
-117
-2,244
-854
-3,098
86
-3,012
1,554
0
136
1,287
734
-116
-110
1,931
-845
1,086
123
-161
2,602
-623
1,979
29
2,008
31.2
31.7
31.7
Total comprehensive income
DKKm
2008
2009
Notes 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 recognised in equity
Profit for the year
Total comprehensive income
0
0
-640
615
-154
-196
53
-322
846
524
9
-2
505
-474
119
28
-7
178
2,008
2,186
Annual report 2009 l Total comprehensive income l
85 of 148
Regnskab
Balance sheet – TrygVesta Group
DKKm
Note s assets
11
Intangible assets
Operating equipment
Owner-occupied property
Assets under construction
12 Total property, plant and equipment
13
Investment property
14
Investments in associates
Total investments in associates
Equity investments
Unit trust units
Bonds
Deposits in credit institutions
Total other financial investment assets
Deposits with ceding undertakings, receivable
2008
2009
450
46
1,315
0
1,361
2,246
14
14
422
940
28,721
389
30,472
13
934
83
1,358
172
1,613
2,364
17
17
381
2,143
29,410
2,938
34,872
15
15
Total investment assets
32,745
37,268
Reinsurers’ share of provisions for unearned premiums
21 Reinsurers’ share of provisions for claims
16 Total reinsurers’ share of provisions for insurance contracts
Receivables from policyholders
Total receivables in relation to direct insurance contracts
Receivables from insurance enterprises
Other receivables
15 Total receivables
17 Current tax assets
23 Deferred tax assets
15 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
176
860
1,036
838
838
250
601
1,689
111
0
282
3
396
626
142
768
195
1,125
1,320
967
967
271
1,190
2,428
0
86
512
4
602
417
158
575
Total assets
38,445
44,740
86 of 148
l Balance sheet – TrygVesta Group l Annual report 2009
DKKm
Notes Liabilities
18 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
17 Current tax liabilities
26 Other debt
Total debt
accruals and deferred income
2008
2009
8,244
1,102
5,100
19,715
378
25,193
523
949
36
1,508
311
172
709
248
871
2,311
87
9,666
1,586
6,208
22,430
364
29,002
496
1,330
46
1,872
383
168
611
303
954
2,419
195
Total liabilities and equity
38,445
44,740
1 accounting policies
19 Capital adequacy
27 Earnings per share
28 Contractual obligations, contingent liabilities and collateral
29 acquisition of subsidiary
30 related parties
31 Financial highlights and key ratios of TrygVesta
Annual report 2009 l Balance sheet – TrygVesta Group l
87 of 148
Regnskab
Statement of change in equity
DKK m
Shareholders’ equity at 31 December 2007
1,700
7
-10
58
875
6,224
1,156
10,010
revalua-
reserve
for
tion exchange
rate adj.
reserves
Share
capital
Equali-
sation
reserve
Other retained Proposed
reserves earnings dividends
Total
2008
Profit for the year
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
0
0
-585
615
-154
-124
-126
0
-126
Dividend paid
Dividend own shares
Purchase of own shares
Issue of employee shares
Issue of share options
Total equity entries in 2008
0
Shareholders’ equity at 31 December 2008
1,700
2009
Profit for the year
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
Nullification of own shares
Dividend paid
Dividend own shares
Purchase of own shares
Exercise of share options
Issue of employee shares
Issue of share options
0
-102
0
7
9
-2
7
-124
0
-126
-802
-714
-1,766
-134
58
749
5,422
442
8,244
201
816
991
18
28
-7
2,008
9
505
-474
28
110
0
201
855
991
2,186
487
-474
119
132
442
442
-1,156
530
-55
-196
53
332
12
-1,197
37
14
846
-640
615
-196
-101
524
-1,156
12
-1,197
37
14
102
32
-418
19
30
15
635
-442
0
-442
32
-418
19
30
15
549
1,422
Total equity entries in 2009
-102
7
132
0
201
Shareholders’ equity at 31 December 2009
1,598
14
-2
58
950
6,057
991
9,666
88 of 148 l Statement of change in equity l Annual report 2009
DKK m
Proposed dividend per share DKK 15.5 (in 2008 DKK 6.50)
Dividend per share is calculated as the total dividend proposed by the Supervisory Board after the end of the financial year divided by the
number of shares, year end (63,931,573). The dividend is not paid until approved by the shareholders at the annual general meeting of
the subsequent year.
TrygVesta Forsikring A/S’ Norwegian branch, has in its branch financial statements included provisions for contingency funds in the
amount of NOK 2,906m (in 2008 NOK 2,743m) In TrygVesta Forsikring A/S, these provisions, due to their nature as additional provisions,
are included in shareholders’ equity (retained earnings), net of deferred tax. TrygVesta Forsikring 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 insurance has a similar contingency amounting to DKK 139m, which
is also included in the company’s shareholders’ equity.
Annual report 2009 l Statement of change in equity l
89 of 148
Regnskab
Statement of cashflows - TrygVesta Group
DKKm
2008
2009
17,412
-12,934
-22
-2,890
-591
975
1,573
-135
40
-628
-53
1,772
0
1,772
-1,098
26
2,080
-1,180
-87
110
0
0
615
466
0
466
-1,160
0
-1,156
110
-2,206
0
-2,206
32
-48
-16
298
282
18,438
-13,501
-603
-2,988
-191
1,155
1,573
-173
14
-349
-42
2,178
18
2,196
-203
1
14
1,411
-1,850
-166
-939
605
-474
-1,601
0
-1,601
-334
485
-442
-98
-389
0
-389
206
24
230
282
512
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/sale of operating equipment (net)
29 Acquisition of subsidiares
29 Acquisition of subsidiares, cash and cash equivalents
Foreign currency hedging
Investments, continuing business
Investments, discontinued and divested business
Total investments
Funding
Purchase of own shares
Subordinated loan capital
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
Change in cash and cash equivalents, gross
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
90 af 152
90 of 148
l Statement of cashflows – TrygVesta Group l Annual report 2009
Notes
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 2009 and in accordance with the Danish
Statutory Order on Adoption of IFRS.
The financial statement of the parent company is prepared in accord-
ance with the executive order on financial reports presented by insur-
ance companies and lateral pension funds issued by the Danish FSA.
The deviations from the recognition and measurement requirements
of IFRS are:
> Investments in subsidiaries 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 implementation of the new standards and interpretations has not
affected recognition and measurement in 2009, but solely affected the
disclosures to be included in the annual report.
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.
> IAS 1 ‘Presentation of Financial Statements’
> IFRS 2 ‘Share-based Payments’
> IAS 17 ‘Leases’
> IAS 36 ‘Impairment of Assets’
> Amendments to IFRS 5 ‘Non-current Assets Held for Sale and Dis-
continued Operations’
> Amendments to IAS 7 ‘Statement of Cash Flows’.
The changes will be implemented from 2010.
accounting estimates and judgements
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 Group’s accounting
policies. The areas involving a higher degree of judgement or complex-
ity, or areas where assumptions and estimates are significant to the
consolidated financial statements, are:
Changes in accounting policies
Accounting policies are unchanged from the annual report 2008.
> Liabilities under insurance contracts
> Valuation of defined benefit plans
> Fair value of financial assets
Implementation of accounting standards in 2009
In 2009, the Group implemented the following standards and interpre-
tations:
> IAS 23 ‘Borrowing Costs’
> IAS 27 ‘Consolidated and Separate Financial Statements’
> IAS 28 ‘Investments in Associates’
> IFRS 3 ‘Business Combinations’, revised 2008. Not implemented earlier
> Amendments to IFRS 7 ‘Improving disclosures about Financial Instru-
ments’
> Amendments to IFRS 2 ‘Share-based Payments: Vesting Conditions
and Cancellation’
> Amendments to IFRS 1 and IAS 27 ‘Cost of an Investment in a Sub-
sidiary, Jointly Controlled Entity or Associate’
> Amendments to IAS 32 and IAS 1 ‘Puttable Financial Instruments and
Obligations Arising on Liquidation’
> Amendments to IAS 38 ‘Intangible Assets’
> Amendments to IAS 40 ‘Investment Property’
> Amendments to IAS 39 ‘Financial Instruments: Recognition and
Measurement – Eligible Hedged Items’
> Amendments to IAS 39 and IFRIC 9 ‘Embedded Derivatives’
> IFRIC 9 ‘Reassessment of Embedded Derivatives’, IFRIC 12 ‘Service
Concession Arrangements’, IFRIC 13 ‘Customer Loyalty Programmes’,
IFRIC 14 ‘The Limit on a Defined Benefit Asset’, IFRIC 15 ‘Agreements
for the Construction of Real Estate’, IFRIC 16 ‘Hedges of Net Invest-
ment in a Foreign Operation’, IFRIC 17 ‘Transfers of Assets from Cus-
tomers’.
A more detailed description of primary assumptions about the future
and other primary sources of estimation uncertainty is given in the
Capitalisation and profit distribution section in the management’s re-
port.
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 provisions covering both
known case reserves and estimated claims that have been incurred by
its policyholders 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. The Group
also includes in its claims reserves direct and indirect claims settlement
costs or loss adjustment expenses that arise from events that have oc-
curred up to the balance sheet date even if they have not yet been re-
ported to the TrygVesta Group.
Annual report 2009 l Notes – TrygVesta Group l
91 of 148
Regnskab
Notes
The projection for claims provisions is therefore inherently uncertain
and, by necessity, relies upon the making of certain assumptions as
to factors such as court decisions, changes in law, social inflation and
other economic trends, including inflation. The TrygVesta Group’s actual
liability 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.
For discounting of provisions for claims, the Group generally applies a
risk-free market rate composed of a risk-free euro-denominated inter-
est rate and a country-specific spread to the German government bond
yield. As a result of the adoption of the temporary ‘Package to ensure
financial stability’, from the end of October 2008 the Group has applied
a synthetic interest rate that includes a certain mortgage yield spread,
for liabilities denominated in Danish kroner. Liabilities in Norwegian
kroner are still discounted using a Norwegian risk-free interest rate
composed as described above. Liabilities in Swedish kroner with a
swedish risk-free interest rate and euro are discounted using a Danish
risk-free interest rate.
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 Group 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 net obligation with respect to the defined benefit plan is based on
actuarial calculations involving a number of assumptions. These as-
sumptions include discount rate, salary adjustment and mortality.
Fair value of financial assets
Measurements of financial assets for which prices are quoted in an
active market or which are based on generally accepted models with
observable market data are not subject to material estimates. 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 a current OTC price of a similar financial
instrument or using a model calculation. The valuation models include
the discounting of the instrument cash flow using an appropriate market
interest rate with due consideration to credit and liquidity premiums.
BaSIS OF PrESENTaTION
recognition and measurement
The annual report has been prepared under the historical cost con-
vention, 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
future economic benefits will flow to the Group and the value of the
asset can be reliably measured. Liabilities are recognised in the bal-
ance 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 subsidiaries
controlled by the parent company. Control is achieved where the
parent company directly or indirectly holds more than 50% of the
voting rights or is otherwise able to exercise or actually exercises
a controlling influence.
The consolidated financial statements are prepared on the basis of
the financial statements of the parent company and its subsidiaries
by adding items of a uniform nature. The financial statements of
subsidiaries that present financial statements under other legislative
rules are restated to the accounting policies applied by the Group.
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,
intra-group accounts and dividends, and gains and losses arising on
transactions between the consolidated enterprises are eliminated.
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
discontinued activities are included under discontinued and divested
business in the income statement.
92 of 148
l Notes – TrygVesta Group l Annual report 2009
Unrealised gains on transactions between consolidated companies (in-
cluding 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.
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.
Business combinations
Newly acquired companies are recognised in the consolidated financial
statements from the date of acquisition. Comparative figures are not
restated to reflect acquisitions.
The operational business segments in the TrygVesta Group are Private
& Commercial Denmark, Private & Commercial Norway, Private & Com-
mercial Sweden, Private & Commercial Finland and Corporate.
The purchase method is applied on acquisitions if the TrygVesta Group
gains control of the company acquired. Identifiable assets, liabilities
and contingent liabilities in companies acquired are measured at the
fair value at the date of acquisition. The tax effect of revaluations is
taken into account.
The date of acquisition is the date on which control of the acquired
company actually passes to the TrygVesta Group.
The cost of a company is the fair value of the agreed consideration paid
plus costs directly attributable to the acquisition. If the final amount of
the consideration is conditional on one or more future events, these ad-
justments are only recognised in cost if the event in question is likely to
occur and its effect on cost can be reliably measured.
Any excess of the cost of acquisition of the enterprise over the fair
value of the acquired identifiable assets, liabilities and contingent
liabilities is recognised as goodwill under intangible assets. Goodwill is
tested for impairment at least once a year. If the carrying amount of
an asset exceeds its recoverable amount, the asset is written down to
the lower recoverable amount.
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.
On initial recognition, transactions in foreign currencies are translated into
the functional currency at the exchange rate ruling at the transaction
date. Assets and liabilities denominated in foreign currency are translated
at the exchange rates at the balance sheet date. Translation differences
are recognised in the income statement under value adjustments.
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 transla-
tion gains and losses are recognised in the income statement.
The presentation currency in the annual report is DKK.
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 liabil-
ities comprise those items that can be directly attributed to each individ-
ual segment and those items that can be allocated to the individual seg-
ments on a reliable basis. Unallocated items primarily comprise assets
and liabilities concerning investment activity managed at Group level.
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 and the exec-
utive order on financial reports presented by insurance companies and
lateral pension funds issued by the Danish FSA.
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.
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 relates to unexpired
risks at the balance sheet date is reported as the reinsurers’ share of
provisions for unearned premiums.
Technical interest
According to the Danish FSA’s executive order, technical interest is
presented as a calculated return on the year’s average insurance liabil-
ity 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
individual group of risks. The interest is weighted according to the
expected run-off pattern of the provisions.
Annual report 2009 l Notes – TrygVesta Group l 93 of 148
Regnskab
Notes
Technical interest is reduced by the portion of the increase in net
provisions that relates to unwinding.
Share option programme
The value of services received as consideration for options granted is
measured at the fair value of the options.
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
unwinding 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 provisions due to changes in the yield curve and
exchange rates are recognised as a market value adjustment.
TrygVesta hedges the risk of changes in future wage and price figures
for provisions for workers’ compensation. For 90-100% of this risk,
TrygVesta uses swaps specifically acquired with a view to hedging the
inflation risk. Value adjustment of these swaps is included in claims in-
curred, 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 pre-
miums 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. Underwriting commission is recog-
nised when a legal obligation occurs and is accrued over the term of
the policy. Administrative expenses are all other expenses attributable
to the administration of the insurance portfolio. Administrative
expenses are accrued to match the financial year.
Leasing
Leases are classified either as operating or finance leases. The assess-
ment of the lease is made on the basis of criteria such as ownership,
right of purchase when the lease term expires, considerations as to
whether the asset is custom-made, the lease term and the present
value of the lease payments.
Assets held under operating leases are not recognised in the balance
sheet, but the lease payments are recognised in the income statement
over the term of the lease, corresponding to the economic life of the
asset, while assets held under finance leases are recognised at fair
value and depreciated according to the same accounting policy as the
Group applies for similar owned assets. For assets held under finance
leases, a lease liability is recognised at amortised cost.
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.
The options are issued at an exercise price that corresponds to the
market price of the Group’s shares at the time of allocation. No other
vesting conditions apply. Special provisions are in place concerning
sickness and death and in case of change to the Group’s capital posi-
tion, etc.
The share option agreement entitles the employee to the options
unless the employee resigns his position or is dismissed due to breach
of the employment relationship. In case of termination due to restruc-
turing 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, half-year and quarterly reports
and in accordance with TrygVesta’s in-house rules on trading in the
Group’s shares. The options are settled in shares. A part of the Group’s
holding of treasury shares is reserved for settlement of the options
allocated.
On initial recognition of the share options, the number of options ex-
pected to vest for employees and members of the Executive Manage-
ment 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 accounts
until expiry of the seventh calendar year after they were subscribed.
Employees cannot sell or otherwise dispose of the shares during 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.
Income from investment properties before fair value adjustment repre-
sents the profit from property operations less property management
expenses.
Share-based payment
The TrygVesta Group’s incentive programmes comprise share option
programmes and employee shares.
Interest and dividends represent interest earned and dividends received
during the financial year.
94 of 148
l Notes – TrygVesta Group l Annual report 2009
Realised and unrealised investment gains and losses, including gains
and losses on derivative financial instruments, value adjustment of
investment properties, exchange rate adjustments and the effect of
movements in the yield curve used for discounting, are recognised as
value adjustments.
Investment management charges represent expenses relating to the
management of investments.
Other income and expenses
Other income and expenses include income and expenses which
cannot be ascribed to TrygVesta’s insurance portfolio or investment
assets, including the sale of products for Nordea Liv og Pension.
Discontinued and divested business
Discontinued and divested business is consolidated in one line item in
the income statement and supplemented with disclosure of the dis-
continued and divested business in a note to the financial statements.
Recognition of the balance sheet items in respect of the discontinued
business 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
divested business”, respectively.
The comparative figures, including five-year financial highlights and
key ratios, have been restated to reflect discontinued business. Discon-
tinued and divested business in the income statement includes the
post-tax profit of TrygVesta’s business in run-off as well as divested
enterprises. Business in run-off comprises the results of the business
in run-off in Tryg Forsikring A/S. No enterprises were divested in the
year. The subsidiary Chevanstell Ltd. UK was divested in 2006.
BaLaNCE SHEET
Intangible assets
Goodwill
Goodwill was acquired in connection with acquisition of business.
Goodwill is calculated as the difference between the cost of the under-
taking and the fair value of acquired identifiable assets, liabilities and
contingent liabilities at the time of acquisition. Goodwill is allocated to
the cash-generating units under which management manages the in-
vestment and is recognised under intangible assets.
Trademarks and customer relations
Trademarks and customer relations have been identified as intangible
assets on acquisition. The intangible assets are recognised at fair value
at the time of acquisition and amortised on a straight-line basis over
the expected useful lives of 5-12 years.
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 amortised on a
straight-line basis over the expected useful life, however with a maxi-
mum period of four years. The basis of amortisation is reduced by any
impairment writedowns.
Fixed assets
Operating equipment
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 of plant and equipment is calculated using the straight-
line method over their estimated useful lives, as follows:
> IT, 4 years
> Vehicles, 5 years
> Furniture, fittings and equipment, 5-10 years
Leasehold improvements are depreciated over the expected useful life,
however with a maximum of the term of the lease.
Gains and losses on disposals and retirements are determined by
comparing proceeds with carrying amount. Gains and losses are
recognised in the income statement. When revalued assets are sold,
the amounts included in the revaluation reserves are transferred to
retained earnings.
Land and buildings
Land and buildings are divided into owner-occupied property and in-
vestment property. The TrygVesta Group’s owner-occupied properties
consist of the head office buildings at Ballerup and Bergen and a few
summer houses. The remaining properties are classified as investment
properties.
Owner-occupied property
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.
Annual report 2009 l Notes – TrygVesta Group l 95 of 148
Regnskab
Notes
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.
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
repair and maintenance costs are charged to the income statement
when incurred.
Depreciation on owner-occupied property is calculated using straight-
line method using the estimated useful lives up to 50 years. Land is
not depreciated.
assets under construction
In connection with the refurbishment of the owner-occupied proper-
ties, costs to be capitalised are recognised at cost under owner-occu-
pied property. On completion of the project, depreciation will be made
on a straight-line basis over the expected useful life, up to the number
of years stated under the individual categories.
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
market prices, adjusted for any difference in the nature, location or
condition of the specific asset. If this information is not available, the
Group uses alternative valuation methods such as discounted cash
flow projections 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 test for intangible assets and property, plant and
equipment
The carrying amounts of intangible assets and property, plant and
equipment are tested at least once a year for impairment for each
cash-generating unit to which the asset belongs. The asset is written
down to the recoverable amount if the carrying amount of the asset is
higher than the recoverable amount.
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
period. Income and expenses in domestic enterprises denominated in
foreign 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 an ownership interest of
between 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
separate line in the income statement. Income is made up after
elimination of unrealised intra-group profits and losses.
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.
Investments
Investments include financial assets at fair value through the income
statement. The classification depends on the purpose for which the
investments were acquired. Management determines the classification
of its investments on initial recognition and re-evaluates this at every
reporting date.
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 income.
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.
Financial assets at fair value through income
Financial assets are classified as financial assets available for trading at
inception 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
96 of 148
l Notes – TrygVesta Group l Annual report 2009
there is evidence of short-term profit-taking. Derivatives are also
classified as financial assets available for trading unless they are
designated 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.
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 or using OTC prices. These include the use
of similar recent arm’s length transactions, reference to other instru-
ments that are substantially 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. Share derivates in the form of futures
and options are used from time to time to adjust share exposures.
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.
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.
Recognition of the resulting gain or loss depends on whether the
derivative 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
asset value of the foreign entities estimated at the beginning of the
financial year is hedged 90-100% by entering into short-term forward
exchange contracts according to the requirements of hedge account-
ing. 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 foreign
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
exchange rates are recognised as value adjustments.
The Group assesses continuously its reinsurance assets for impair-
ment. 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. Impairment write-downs are recog-
nised in the income statement.
receivables
Receivables are non-derivative financial instruments with fixed or
determinable payments that are not quoted in an active market other
than receivables that the Group intends to sell in the short term.
Receivables 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.
Other assets
Other assets include current tax assets and cash in hand and at bank.
Current tax assets are receivables concerning tax for the year adjusted
for on-account payments and any prior-year adjustments. Cash in hand
and at bank is recognised at nominal value at the balance sheet date.
Prepayments and accrued income
Prepayments include expenses paid in respect of subsequent financial
years and interest receivable. Accrued underwriting commission relat-
ing to the sale of insurance is also included.
Annual report 2009 l Notes – TrygVesta Group l 97 of 148
Regnskab
Notes
Equity
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.
revaluation reserves
Revaluation of owner-occupied properties is recognised in equity
unless the revaluation offsets a previous impairment loss, and relates
primarily to owner-occupied properties.
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 recognised in equity. When an entity is
wound up, the balance is transferred to the income statement. The
hedging of the exchange rate risk concerning foreign entities is also
offset in shareholders’ equity in respect of the part that concerns the
hedge.
period. However, as a minimum to the part of the premium calculated
using the pro rata temporis principle until the next payment date. Ad-
justments 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 that 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
include 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.
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.
Provisions for bonus and premium rebates represent amounts expected
to be paid to policyholders in view of the claims experience during the
financial year.
Dividends
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. Treasury shares
include shares acquired for employee shares and the share option pro-
grammes.
Proceeds from the sale of treasury shares in connection with the exer-
cise of share options or employee shares are taken directly to equity.
Provisions for claims are determined for each line of business based on
actuarial methods. Where such business lines encompass more than
one business area, short-tail provisions for claims are distributed based
on number of claims reported while long-tail provisions for claims are
distributed based on premiums earned. The models currently used are
Chain-Ladder, Bornhuetter-Ferguson, the Loss Ratio method and De
Vylder’s credibility method. Chain-Ladder techniques are used for busi-
ness lines with a stable run-off pattern. The Bornhuetter-Ferguson
method, and sometimes 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-Ferguson/Loss Ratio methods, and may also be used in
situations that call for the use of exposure targets other than premium
volume, for example the number of insured.
Subordinate loan capital
Subordinate loan capital is recognised initially at fair value, net of
transaction costs incurred. Subordinate 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
income statement over the period of the borrowings using the
effective interest method.
Provisions for insurance contracts
Premiums are recognised in the income statement (earned premiums)
proportionally over the period of coverage and, where necessary,
adjusted to reflect any time variation of the risk. The portion of premi-
ums received on in-force contracts that relates to unexpired risks at
the balance sheet date is reported as unearned premium provisions.
Unearned premium provisions are generally calculated according to
a best estimate of expected payments throughout the agreed risk
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 expected future development of claims.
For example, this is the case with legislative changes where an a priori
estimate is used for premium increases related to the expected in-
crease in claims. For legislative changes this estimate is used also in
determining the level of claims. Subsequently, this estimate is main-
tained until new loss history materialises for re-estimation.
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.
98 of 148
l Notes – TrygVesta Group l Annual report 2009
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.
The plan was closed for new business as at 1 January 2009.
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
reduced working hours. The Group recognises this liability based on
statistical models.
Other correlations are not deemed to be 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 and the adjustment is recog-
nised 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. In Sweden, the Group complies with the industry pen-
sion agreement, FTP-Planen. 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.
The plan is therefore accounted for as a defined contribution plan.
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.
Expectations of returns on plan assets are based on the return within
each asset class and the current allocation thereof. Market expecta-
tions of future returns are taken into consideration.
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 estimated future
cash outflows by a duration that matches the conditions of the under-
lying pension obligation.
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 controls when the temporary dif-
ference will be realised, and it is probable that the temporary differ-
ence 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.
The actuarial gains and losses arising from experience adjustments and
changes in actuarial estimates is recognised in equity.
Other liabilities are measured at net realisable value.
Annual report 2009 l Notes – TrygVesta Group l 99 of 148
Regnskab
Notes
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.
100 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
100 of 148
DKKm
2008
2009
2 Earned premiums, net of reinsurance
Direct insurance
Indirect insurance
Unexpired risk provision
Ceded direct insurance
Ceded indirect insurance
17,465
47
17,512
-17
17,495
-819
-41
16,635
Direct insurance, by location of risk
2008
2009
Denmark
Other EU countries
Other countries
Gross
9,538
742
7,168
17,448
Ceded
-489
-16
-314
-819
Gross
9,607
1,736
6,999
18,342
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 reinsurance
Claims incurred
Run-off previous years, gross
Reinsurance recoveries
Run-off previous years, reinsurers’ share
1,428
-926
-3
499
-12,634
868
-11,766
194
-75
-11,647
Under claims incurred, the value adjustment of inflation swaps to hedge the inflation risk concerning annuities on workers’
compensation insurance totals DKK -62m (in 2008 DKK 8m.)
5
Insurance operating expenses, net of reinsurance
Commission regarding direct business
Other acquisition costs
Total acquisition costs
Administrative expenses
Insurance operating expenses, gross
Commission 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.
-429
-1,818
-2,247
-756
-3,003
72
-2,931
-8
-8
-1
-1
18,324
58
18,382
18
18,400
-940
-34
17,426
Ceded
-509
-86
-345
-940
844
-686
-1
157
-13,883
677
-13,206
270
36
-12,900
-445
-1,799
-2,244
-854
-3,098
86
-3,012
-8
-8
-1
-1
Annual report 2009 l Notes – TrygVesta Group l 101 of 148
TrygVesta Årsrapport 2009 l Noter l 101 af 152
Regnskab
Notes
DKKm
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
Depreciation, amortisation and impairment writedowns
Other income
Total lease expenses amount to DKK 35m (in 2008 DKK 66m).
Insurance operating expenses and claims include the following staff expenditure:
Salaries and wages
Commision
Allocated share options
Pensions
Other social security costs
Payroll tax
2008
2009
-429
-1,658
-232
-557
-208
-111
192
-3,003
-1,972
-17
-14
-282
-5
-256
-2,546
-448
-1,786
-278
-454
-228
-140
236
-3,098
-2,064
-33
-15
-324
-9
-278
-2,723
Remuneration for the Supervisory Board and Executive Management is disclosed in note 30 ‘Related parties’.
average number of full-time employees during the year
3,985
4,390
Share option programmes
In 2009, TrygVesta awarded share options to the Executive Management (3 persons) and other senior employees (98 persons) and other
employees (40 persons). At 31 December 2009, the share option plan comprised 681,861 share options (at 31 December 2008 572,367
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 entitles the holders to buy 1.1% of the share capital if all share options are exercised.
In 2009, the fair value of share options recognised in the consolidated income statement amounted to DKK 15.1m (in 2008 DKK 13.5m).
As at 31 December 2009, a total amount of DKK 39m was recognised for share option programmes issued in 2006, 2007, 2008 and
2009.Fair values at the time of allocation are based on the Black & Scholes option pricing formula.
102 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
102 of 148
DKKm
5 Share option programmes
Specification of outstanding options:
TOTaL NuMBErS
Group
Executive
Management
Other
senior
em-
ployees
Other
em-
ployees
FaIr VaLuE
Total fair
option option at
Per value per Per option Total fair
at 31 value at 31
at grant grant date December December
DKKm
DKKm
DKK
Total date DKK
2009
Allocation 2006-2007
Allocated in 2006-2007
beginning of year
Exercised
Cancelled
Expired
Outstanding options
from 2006-2007 allocation
61,070
-6,550
0
0
247,306
-52,020
-4,287
0
16,000
-2,620
-1,953
0
324,376
-61,190
-6,240
0
64/99
64/99
64/99
0
26
-4
0
0
73/15
73/15
73/15
0
15
-4
0
0
31 Dec 2009
54,520
190,999
11,427
256,946
-
22
-
11
Allocation 2008
Allocated in 2008, beginning of year 52,088
0
Exercised
0
Cancelled
0
Expired
167,203
0
-4,320
0
28,700
0
-700
0
247,991
0
-5,020
0
69
0
69
0
17
0
0
0
45
0
45
0
11
0
0
0
Outstanding options
from 2008 allocation
31 Dec 2009
52,088
162,883
28,000
242,971
-
17
-
11
Allocation 2009
Allocated in 2009, beginning of year 38,258
0
Exercised
0
Cancelled
0
Expired
124,076
0
-1,060
0
21,200
0
-530
0
183,534
0
-1,590
0
Outstanding options
from 2009 allocation
31 Dec 2009
Number of options exercisable
end of 2009
38,258
123,016
20,670
181,944
28,820
82,910
2,620
114,350
94
0
94
0
-
64
17
0
0
0
17
7
82
0
82
0
-
73
15
0
0
0
15
8
Annual report 2009 l Notes – TrygVesta Group l 103 of 148
TrygVesta Årsrapport 2009 l Noter l 103 af 152
Regnskab
Notes
DKK m
5 Share option programmes
Specification of outstanding options:
TOTaL NuMBErS
Group
Executive
Management
Other
senior
em-
ployees
Other
em-
ployees
FaIr VaLuE
Total fair
option option at
Per value per Per option Total fair
at 31 value at 31
at grant grant date December December
DKKm
DKKm
DKK
Total date DKK
2008
Allocation 2006
Allocated in 2006, beginning of year 35,370
0
Exercised
0
Cancelled
0
Expired
148,030
0
-2,620
0
0
0
0
0
183,400
0
-2,620
0
64
0
64
0
12
0
0
0
83
0
83
0
15
0
0
0
Outstanding options
from 2006 allocation
31 Dec 2008
35,370
145,410
0
180,780
-
12
-
15
Allocation 2007
Allocated in 2007, beginning of year 25,700
0
Exercised
0
Cancelled
0
Expired
104,802
0
-2,906
0
16,000
0
0
0
146,502
0
-2,906
0
99
0
99
0
14
0
0
0
45
0
45
0
Outstanding options
from 2007 allocation
31 Dec 2008
25,700
101,896
16,000
143,596
-
14
-
Allocation 2008
Allocated in 2008, beginning of year 52,088
0
Exercised
0
Cancelled
0
Expired
167,203
0
0
0
28,700
0
0
0
247,991
0
0
0
Outstanding options
from 2008 allocation
31 Dec 2008
Number of options
exercisable end of 2008
52,088
167,203
28,700
247,991
0
0
0
0
69
0
0
0
-
0
17
0
0
0
17
0
79
0
0
0
-
0
7
0
0
0
7
20
0
0
0
20
0
104 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
104 of 148
DKKm
5 Share option programmes
year of
allocation years of exercise
1 Jan. 2009
Exercised
Cancelled
Expired 31 Dec. 2009
2006
2007
2008
2009
2009-2011
2010-2012
2011-2013
2012-2014
180,780
143,596
247,991
183,534
-61,190
0
0
0
-5,240
-1,000
-5,020
-1,590
Outstanding options
31 December 2009
755,901
-61,190
-12,850
0
0
0
0
0
114,350
142,596
242,971
181,944
681,861
The assumptions by calculating the marketvalue at time of allocation
year of
allocation
year of exercise
Expected
Volatility
Expected
Volatility
Expected
maturity
average
exercise
average term
share price
to maturity
interest rate 31 Dec. 2009 31 Dec. 2009
risk-free
2006
2007
2008
2009
2009-2011
2010-2012
2011-2013
2012-2014
355.85
456.76
378.24
313.51
17.90%
24.10%
20.30%
37.70%
4 år
4 år
4 år
4 år
3.30%
3.90%
3.60%
2.80%
0.58
1.16
2.15
3.17
342.78
-
-
-
The following assumptions were applied in calculating the market value of outstanding share options at the time of allocation:
The expected volatility is based on the average volatility of TrygVesta shares. The expected maturity is 4 years, corresponding to the aver-
age of the exercise period of 3 to 5 years. The risk-free interest rate is based on a bullet loan with the same term as the expected term
of 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 allocation. The dividend payout ratio is not included in the calculation as the strike price is reduced by dividends
paid in order to prevent option holders from being placed at a disadvantage in connection with the company’s dividend payments. The as-
sumptions 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.
Employee shares
In 2009, TrygVesta granted employee shares at a discount to the market price to employees at all levels in the Group. Employees of non-
Danish branches were offered employee shares or alternatively a cash consideration. Each employee was offered 17 shares at a discount
to the market price equal to DKK 25 DKK per share, equivalent to a total of 38,829 shares or around DKK 11.2m being granted to the
employees. Senior executives received part of their bonus in the form of shares at a discount to the market price. In 2009, a total of
31,713 shares were granted at discount to the market price of DKK 25 per share or DKK 9.9m. The grant of shares equalled 0.1% of the
share capital.
The amount was provided in 2008 and did not affect the profit for 2009.
Annual report 2009 l Notes – TrygVesta Group l 105 of 148
TrygVesta Årsrapport 2009 l Noter l 105 af 152
Regnskab
Notes
DKK m
SEGMENTS
6 Operating segments
2009
P&E
Denmark
P&E
Norway
P&E
Finland
P&E
Sweden
Corporate
Other
Group
Gross premiums earned
6,866
Gross claims
Gross operating expenses
Profit/loss on business ceded
Technical interest,
net of reinsurance
Technical result
-5,136
-1,063
-122
71
616
4,445
-3,224
-942
-53
32
258
Total return on investment activities after technical interest
Other income and expenses
Profit before tax
Tax
Profit on continuing business
Profit/loss on discontinued and divested business
Profit
Investments in associates
Reinsurers’ share of provision
for unearned premiums
Reinsurers’ share of
provision for claims
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
0
0
44
0
0
83
2,619
6,972
228
1,381
3,588
0
472
-402
-194
-1
12
-113
0
0
0
116
298
0
1,081
-875
-251
-15
8
-52
5,423
-3,583
-604
-381
34
889
-4
14
-44
-10
0
-44
0
48
84
779
904
0
0
147
914
1,313
10,658
136
17
0
0
43,403
0
10
0
1,872
2,419
195
18,283
-13,206
-3,098
-582
157
1,554
1,086
-38
2,602
-623
1,979
29
2,008
17
195
1,125
43,403
44,740
6,208
22,430
364
1,872
2,419
195
33,488
106 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
106 of 148
DKK m
SEGMENTS
6 Operating segments
2008
P&E
Denmark
P&E
Norway
P&E
Finland
P&E
Sweden
Corporate
Other
Group
Gross premiums earned
6,605
Gross claims
Gross operating expenses
Profit/loss on business ceded
Technical interest,
net of reinsurance
Technical result
-4,443
-1,155
-89
180
1,098
4,636
-3,371
-1,004
-68
122
315
Total return on investment activities after technical interest
Other income and expenses
Profit before tax
Tax
Profit on continuing business
Profit/loss on discontinued and divested business
0
0
49
0
0
99
2,528
6,780
250
1,202
3,088
0
Profit
Investments in associates
Reinsurers’ share of provision
for unearned premiums
Reinsurers’ share of
provision for claims
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
354
-258
-154
-1
17
-42
0
0
0
90
207
0
221
-214
-104
0
7
-90
5,512
-3,489
-588
-516
173
1,092
-5
9
2
5
0
11
0
0
0
58
84
0
0
176
712
1,222
9,489
128
14
0
0
37,395
0
67
0
1,508
2,311
87
17,323
-11,766
-3,003
-669
499
2,384
-988
-49
1,347
-501
846
0
846
14
176
860
37,395
38,445
5,100
19,715
378
1,508
2,311
87
29,099
Please refer to ‘Our business areas’ in the Annual Report 2009 for a description of our operating segments. Amounts relating to Moderna
Försäkringar are included in ‘P&E Sweden’ from 2 April 2009. Amounts relating to TrygVesta A/S, Tryg Ejendomme A/S, Ejendomsselskabet
af 8. maj and eliminations are included in ‘Other’. Depreciation/amortisation is included in gross operating expenses. Other assets and lia-
bilities are managed at Group level and allocation to the individual segments would therefore not provide a true and fair view. 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.’
Annual report 2009 l Notes – TrygVesta Group l 107 of 148
TrygVesta Årsrapport 2009 l Noter l 107 af 152
Regnskab
Notes
DKKm
LINE OF BuSINESS
6 Technical result, net of reinsurance, by line of business
accident
and health
Health care
Worker’s
compensation
Motor
TPL
Motor
comprehensive
Marine aviation
and cargo
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
787
739
- 487
- 98
- 104
25
75
327
323
- 255
- 55
- 1
7
19
725
703
- 488
- 74
- 95
5
51
431
455
- 400
- 70
- 1
4
- 12
Gross premiums written
1,691
1,665
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
Claims frequency *
Average claims DKK **
Total claims
1,679
- 1,033
- 278
2
58
428
4.1%
34,662
33,218
1,644
- 863
- 250
- 13
5
523
195
152
- 215
- 25
0
5
- 83
258
263
- 220
- 26
0
3
20
1,525
1,402
2,375
2,413
3,240
3,372
1,536
- 933
- 176
- 47
63
443
1,432
- 702
- 169
- 47
23
537
2,412
- 994
- 415
- 16
65
1,052
2,405
- 1,365
- 449
- 36
11
566
3,092
- 2,327
- 498
0
72
339
3,317
- 2,673
- 554
- 12
32
110
3.7%
39,044
31,112
69.0%
10,359
20,972
80.1%
7,409
33,700
26.3%
68,748
17,109
19.6%
78,086
13,800
6.3%
16,290
83,569
6.1%
18,421
91,489
22.3%
10,623
212,185
19.7%
10,428
241,946
35.3%
79,923
5,561
23.5%
114,691
4,480
Fire & contents
(Private)
Fire and contents
(Commercial)
Change
of ownership
Liability
Credit & guarantee
Tourist assistance
insurance
insurance
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
Gross premiums written 3,351
3,351
3,919
2,480
2,587
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
3,258
- 2,734
- 739
- 102
78
- 239
3,876
- 3,328
- 698
- 70
36
- 184
Claims frequency *
Average claims DKK **
Total claims
12.1%
12,065
203,858
7.6%
9,973
319,222
2,471
- 1,672
- 449
- 321
61
90
19.9%
46,185
35,651
2,570
- 1,868
- 476
- 255
16
- 13
22.2%
45,981
40,925
88
89
- 94
- 12
0
10
- 7
90
86
- 234
- 8
0
4
- 152
749
732
- 428
- 140
- 50
25
139
757
745
- 518
- 153
31
5
110
164
159
- 34
- 50
- 31
4
48
187
181
- 38
- 54
- 39
2
52
11.8%
12,448
6,732
9.8%
18,193
6,186
10.3%
48,025
8,489
10.3%
0.9%
1.4%
51,511
1,228,333
843,571
9,422
28
45
17.9%
4,608
61,021
13.3%
6,876
50,274
Other
insurance
Total
Norwegian Group Life
One-year policies
2008
2009
2008
2009
2008
2009
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
114
121
- 26
4
3
- 1
101
65
74
- 59
- 48
- 43
7
- 69
17,086
17,821
16,763
- 11,232
- 2,931
- 667
472
2,405
17,751
- 12,756
- 3,029
- 580
153
1,539
543
560
- 534
- 72
- 2
27
- 21
494
532
- 450
- 69
- 2
4
15
Average claims DKK **
Total claims
15,660
919
17,897
1,306
* The claims frequency is calculated as the number of claims incurred in proportion to the average number of insurance contracts.
**Average claims are total claims before run-off relative to the number of claims incurred.
108 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
108 of 148
DKKm
LINE OF BuSINESS
6 Technical result, net of reinsurance, by line of business
accident
and health
Health care
Worker’s
compensation
Motor
TPL
Motor
comprehensive
Marine aviation
and cargo
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
Gross premiums written
1,691
1,665
1,525
1,402
2,375
2,413
3,240
3,372
2,412
- 994
- 415
- 16
65
1,052
2,405
- 1,365
- 449
- 36
11
566
3,092
- 2,327
- 498
0
72
339
3,317
- 2,673
- 554
- 12
32
110
787
739
- 487
- 98
- 104
25
75
725
703
- 488
- 74
- 95
5
51
Claims frequency *
Average claims DKK **
Total claims
3.7%
39,044
31,112
69.0%
10,359
20,972
80.1%
7,409
33,700
26.3%
68,748
17,109
19.6%
78,086
13,800
6.3%
16,290
83,569
6.1%
18,421
91,489
22.3%
10,623
212,185
19.7%
10,428
241,946
35.3%
79,923
5,561
23.5%
114,691
4,480
Fire & contents
(Private)
Fire and contents
(Commercial)
Change
of ownership
Liability
Credit & guarantee
insurance
Tourist assistance
insurance
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
Claims frequency *
Average claims DKK **
Total claims
12.1%
12,065
203,858
7.6%
9,973
319,222
11.8%
12,448
6,732
9.8%
18,193
6,186
10.3%
48,025
8,489
10.3%
51,511
9,422
0.9%
1,228,333
28
1.4%
843,571
45
17.9%
4,608
61,021
13.3%
6,876
50,274
749
732
- 428
- 140
- 50
25
139
757
745
- 518
- 153
31
5
110
164
159
- 34
- 50
- 31
4
48
187
181
- 38
- 54
- 39
2
52
327
323
- 255
- 55
- 1
7
19
431
455
- 400
- 70
- 1
4
- 12
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
1,679
- 1,033
- 278
2
58
428
4.1%
34,662
33,218
1,644
- 863
- 250
- 13
5
523
195
152
- 215
- 25
0
5
- 83
258
263
- 220
- 26
0
3
20
1,536
1,432
- 933
- 176
- 47
63
443
- 702
- 169
- 47
23
537
Gross premiums written 3,351
3,351
3,919
2,480
2,587
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
3,258
- 2,734
- 739
- 102
78
- 239
3,876
- 3,328
- 698
- 70
36
- 184
2,471
- 1,672
- 449
- 321
61
90
19.9%
46,185
35,651
2,570
- 1,868
- 476
- 255
16
- 13
22.2%
45,981
40,925
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Technical interest, net of reinsurance
Technical result
114
121
- 26
4
3
- 1
101
65
74
- 59
- 48
- 43
7
- 69
17,086
17,821
16,763
- 11,232
- 2,931
- 667
472
17,751
- 12,756
- 3,029
- 580
153
2,405
1,539
Average claims DKK **
Total claims
15,660
919
17,897
1,306
88
89
- 94
- 12
0
10
- 7
543
560
- 534
- 72
- 2
27
- 21
90
86
- 234
- 8
0
4
- 152
494
532
- 450
- 69
- 2
4
15
Other
insurance
Total
Norwegian Group Life
One-year policies
2008
2009
2008
2009
2008
2009
* The claims frequency is calculated as the number of claims incurred in proportion to the average number of insurance contracts.
**Average claims are total claims before run-off relative to the number of claims incurred.
Annual report 2009 l Notes – TrygVesta Group l 109 of 148
TrygVesta Årsrapport 2009 l Noter l 109 af 152
Regnskab
Notes
DKKm
2008
2009
Interest and dividends
7
Dividends
Interest income cash in hand and at bank
Interest income bonds
Interest income other
Interest expenses
Interest expenses subordinated loan capital and credit institutions
Interest expenses other
8 Value adjustment
39
49
1,404
31
1,523
-83
-17
-100
1,423
Value adjustments concerning financial assets or liabilities at fair value with value adjustment in the income statement:
Equity investments
Unit trust units
Share derivatives
Bonds
Interest derivatives
Value adjustments concerning assets and liabilities that cannot be attributed to IAS 39:
Investment property
Owner-occupied property
Discounting
Other balance sheet items
Market value gains
Market value losses
Market value adjustment, net
Exchange rate adjustments concerning financial assets or liabilities which cannot be valuated
to market value is in total DKK 1.4m (in 2008 DKK 129m) Under market value adjustment
the adjustment of inflation swaps totals DKK 13m (in 2008 DKK -46m).
9 Tax
Tax on profit for the year
Diffrence between Danish and foreign tax rate
Prior-year tax adjustment
Adjustment non-taxable income and expenses
Change in valuation of tax assets
Change in valuation of tax loss carried forward
Other taxes
Effective tax rate
Tax on profit for the year
Diffrence between Danish and foreign tax rate
Prior-year tax adjustment
Adjustment non-taxable income and expenses
Change in valuation of tax assets
Change in valuation of tax loss carried forward
-521
-549
98
456
17
-499
70
8
-478
-109
-509
-1,008
1,656
-2,664
-1,008
-337
1
72
-203
-26
0
-8
-501
%
25
0
-5
15
2
0
37
14
67
1,197
9
1,287
-90
-26
-116
1,171
62
485
-38
532
-23
1,018
19
1
-294
-10
-284
734
1,606
-872
734
-651
-43
-4
58
55
-37
-1
-623
%
25
2
0
-2
-2
1
24
See ‘TrygVestas ‘Financial performance 2009’ in the Management report for further information regarding the tax expense.
110 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
110 of 148
DKKm
2008
2009
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
Profit/loss before tax
Tax
Profit/loss on discontinued and divested business
0
3
-1
-2
0
0
0
0
0
1
38
0
39
39
-10
29
Profit/loss on discontinued and divested business is included in ‘Other insurance’ in the accounts broken down by line of business.
Claims incurred in 2009 include DKK 18m received in connection with the sale of business in run-off.
11
Intangible assets
Trademarks
and customer
relations
Goodwill
Software
Total
2009
Cost
Balance 1 January
Exchange rate adjustment
Addition on acquisition of subsidiary*
Additions during the year
Disposals during the year
Balance 31 December
amortisation and writedowns
Balance 1 January
Exchange rate adjustment
Amortisation for the year
Impairment writedowns for the year
Reversed amortisation
Balance 31 December
0
19
310
0
0
329
0
0
0
0
0
0
0
9
139
0
0
148
0
0
-12
0
0
-12
Carrying amount 31 December
329
136
2008
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
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
645
18
17
143
-19
804
-195
-18
-121
-10
9
-335
469
528
-21
-1
154
-15
645
-193
22
-31
7
-195
450
645
46
466
143
-19
1,281
-195
-18
-133
-10
9
-347
934
528
-21
-1
154
-15
645
-193
22
-31
7
-195
450
* Addition on acquisition of subsidiary relates to the acquisition of Moderna Försäkringar, see note 29. Intangible assets under development
amount to a total of DKK 114m in the total software (in 2008 DKK 198m). Additions for internally generated software expenses amount to
DKK 28m (in 2008 DKK 21m). Amortisation is recognised in the income statement under insurance operating expenses and claims incurred.
Annual report 2009 l Notes – TrygVesta Group l 111 of 148
TrygVesta Årsrapport 2009 l Noter l 111 af 152
Regnskab
Notes
DKK m
11
Impairment test
Goodwill
As at 31 December 2009, management performed an impairment test of the carrying amount of goodwill based on the allocation of the
cost of goodwill to the cash-generating units.
Assumptions for impairment test:
The value-in-use method is used
2009
Moderna Försäkringar Sak AB
MF Bilsport & MC Specialförsäkring AB
assumed annual growth
> 5 years
return requirement
before tax
2.5%
2.5%
15.4%
15.4%
Insurance activities in Sweden
In 2009, TrygVesta acquired Moderna Försäkringar Sak AB, Moderna Re S.A., Netviq AB and MF Bilsport & MC specialfösäkringar.
The insurance activities were incorporated into the TrygVesta Group’s business structure in 2009 and are reported under Sweden.
The acquisition is expected to enhance efficiency in the distribution of insurances in the Swedish market and to contribute to growth,
in particular in the Swedish market.
The assumed growth during the terminal period has been estimated based on expectations for general economic growth. The return re-
quirement is based on an assessment of the risk profile for the tested business activities. Higher return requirements or lower growth
would entail a lower value of the activities, whereas lower return requirements or higher growth expectations would entail a higher value.
2009
Moderna Försäkringar Sak AB
Moderna Re S.A.
Netviq AB
MF Bilsport & MC Specialförsäkring AB
Total
Total after impairment
Software
Goodwill
Trademarks and
customer relations
320
0
0
9
329
329
136
0
0
0
136
136
Total
456
0
0
9
465
465
The impairment charges are recognised in the income statement in depreciation, amortisation and impairment writedowns of software.
In the impairment test, the carrying amount is compared with the estimated present value of future cash flows.
Trademarks and customer relations
The impairment test performed for trademarks and customer relations did not indicate any impairment.
112 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
112 of 148
DKK m
12 Property, plant and equipment
2009
Cost
Balance 1 January
Exchange rate adjustment
Addition on acquisition of subsidiary*
Additions during the year
Disposals during the year
Balance 31 December
accumulated value adjustments
Balance 1 January
Exchange rate adjustment
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
Exchange rate adjustment
Depreciation for the year
Reversed depreciation
Balance 31 December
Carrying amount 31 December
Operating
equipment
assets
Owner-
occupied
under
property construction
185
6
11
45
-22
225
0
0
0
0
0
-139
-6
-18
21
-142
83
1,333
44
1
0
0
1,378
-9
-2
-2
11
-2
-9
-1
-8
0
-18
54
5
0
199
0
258
-54
-5
-27
0
-86
0
0
0
0
0
Total
1,572
55
12
244
-22
1,861
-63
-7
-29
11
-88
-148
-7
-26
21
-160
1,358
172
1,613
* Addition on acquisition of subsidiary relates to the acquisition of Moderna Försäkringar, see note 29
2008
Cost
Balance 1 January
Exchange rate adjustment
Transferred from intangible assets
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
Exchange rate adjustment
Depreciation for the year
Reversed depreciation
Balance 31 December
Carrying amount 31 December
229
-9
1
3
-39
185
0
0
0
0
-149
8
-20
22
-139
46
318
-57
0
1,085
-13
1,333
-8
-1
0
-9
-4
1
-6
0
-9
1,315
0
0
0
54
0
54
0
-54
0
-54
0
0
0
0
0
0
547
-66
1
1,142
-52
1,572
-8
-55
0
-63
-153
9
-26
22
-148
1,361
Amortisation is recognised in the income statement under insurance operating expenses and claims incurred.
External experts were involved in valuing part of the owner-occupied properties.
Annual report 2009 l Notes – TrygVesta Group l 113 of 148
TrygVesta Årsrapport 2009 l Noter l 113 af 152
Regnskab
Notes
DKKm
12
Impairment test
Property, plant and equipment
The value of the owner-occupied properties was assessed in connection with The Living House and the improvements made to those
properties. The impairment charges on assets under construction are recognised in the income statement in total insurance oprating
expenses. The impairment test performed for operating equipment and assets under construction did not indicate any impairment.
In establishing the market value of the owner-occupied properties, the following return percentages were used for each property category.
return percentages
2009
Office property
2008
Office property
13
Investment property
Fair value 1 January
Exchange rate adjustment
Additions during the year
Disposals during the year
Value adjustment for the year
Reversed on sale
Fair value 31 December
Lowest
percentage
average
percentage
Highest
percentage
6.00
6,80
7.80
Lowest
percentage
average
percentage
Highest
percentage
6.80
7.00
7.90
2008
2,263
-96
80
-66
65
0
2,246
2009
2,246
76
32
-2
17
-5
2,364
Total rental income for 2009 was DKK 173m (in 2008 DKK 168m).
Total expenses for 2009 amount to DKK 37.3m (in 2008 DKK 40m). Of this amount, unlet property represented DKK 0.8m (in 2008 DKK
0.5m). Total expenses for investment property generating rental income amount to DKK 38.1m (DKK 39.5m in 2008).
External experts were involved in valuing investment property.
In establishing the market value of the properties, the following return percentages were used for each property category.
return percentages
2009
Business property
Office property
Residential property
2008
Business property
Office property
Residential property
Lowest
percentage
average
percentage
Highest
percentage
7.00
6.00
3.80
7.30
6.80
5.30
7.50
7.80
6.00
Lowest
percentage
average
percentage
Highest
percentage
7,00
3.80
4.00
7.30
6.70
5.30
7.50
7.80
6.00
114 of 148
l Notes – TrygVesta Group l Annual report 2009
DKKm
2008
2009
14
Investments in associates
Cost
Balance 1 January
Balance 31 December
revaluations at net asset value
Balance 1 January
Exchange rate adjustment
Revaluations during the year
Reversed depreciation
Balance 31 December
Carrying amount 31 December
0
0
19
-3
0
-2
14
14
0
0
14
3
0
0
17
17
Shares in associates according to the lastest financial statements:
2009
Name and registered office
assets
Liabilities
Shareholders’
equity
revenue
Profit/loss
for the year
Ownership
share in %
Komplementarselskabet
af 1. marts 2006 ApS, DK
Bilskadeinstituttet AS, Norway
AS Eidsvåg Fabrikker AS, Norway
0
5
39
0
1
3
0
4
36
0
1
14
0
0
2
50
30
28
2008
Name and registered office
assets
Liabilities
Shareholders’
equity
revenue
Profit/loss
for the year
Ownership
share in %
Komplementarselskabet
af 1. marts 2006 ApS, DK
Bilskadeinstituttet AS, Norway
AS Eidsvåg Fabrikker AS, Norway
0
4
32
0
0
3
0
4
29
0
1
12
0
0
3
50
30
28
An individual estimate of the degree of influence under the contracts is made.
Annual report 2009 l Notes – TrygVesta Group l 115 of 148
Regnskab
Notes
DKK m
15 Fair value hierarchy for financial instruments
measured at fair value in the balance sheet
2009
quoted market Observable unobservable
input
prices
input
Financial assets at fair value with value adjustment in the income statement
Bonds
Shares
Unit trust units
Derivatives
Cash in hands and deposits in credit institutions
16,337
200
2,143
0
3,450
22,130
12,947
0
0
6
0
12,953
126
181
0
31
0
338
Financial instruments measured at fair value in the balance sheet
on the basis of non-observable input
Carrying amount 1 January 2009
Exchange rate adjustment
Gains/losses in the income statement
Purchases
Sales
Transfers to/from the group ‘non-observable input’
Carrying amount 31 December 2009
Gains/losses in the income statement for assets held
at the balance sheet date recognised in value adjustments
Total
29,410
381
2,143
37
3,450
35,421
121
10
90
117
0
0
338
96
Bond mesured on the basis of observable inputs mainly consist of Norwegian bonds issued by banks and to some extent Danish semi
liquid bonds, where no quoted prices within the last 5 days exist. Unobservable input, total result DKK 96m, mainly comprises inflation
derivatives of DKK 75m, hedging inflation risk on technical provisions which recorded a 2009 accounting loss of DKK 62m. The risk of
the unobservable input group is moderate since the inflation derivatives aim at hedging the inflation risk of the technical provisions
100 percent, while the unquoted shares and bonds, which are influenced by market conditions such as the development in interest
rates and expected earnings, is limited amount,
Financial assets at fair value with value adjustment
in the income statement
2009
Investment assets as per the section
‘Investment activities’ in the Management’s report
Consisting of:
Cash in hands allocated to portefolio management
Unsettled securities trading
Unit trust units
Futures
Deposits, Derivatives etc.
Owner-occupied property
Equity investments
Investment assets according to balance sheet
Unit trust units
Deposits, Derivatives etc.
Bonds
Shares
Property
Total
34,248
1,589
3,893
39,730
-50
-1,022
-827
0
-2,939
0
0
29,410
0
0
-1,316
125
0
0
-17
381
0
0
0
0
0
-1,530
0
2,363
-50
-1,022
-2,143
125
-2,939
-1,530
-17
32,154
2,143
2,939
37,236
17
15
37,268
Investment assets at fair value according to balance sheet recognised through profit and loss
Associated shares
Deposits with ceding undertakings, receivable
Total investment assets according to balance sheet
116 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
116 of 148
DKKm
15 Financial assets at fair value with value adjustment
in the income statement
2008
Investment assets as per the section ‘Investment activities’
in the Management’s report
Consisting of:
Cash in hands allocated to portefolio management
Unsettled securities trading
Unit trust units
Futures
Deposits, Derivatives etc.
Owner-occupied property
Equity investments
Bonds
Shares
Property
Total
29,417
1,172
3,561
34,150
-71
-101
-137
0
-387
0
0
0
0
-803
67
0
0
-14
422
0
0
0
0
0
-1,315
0
2,246
-71
-101
-940
67
-387
-1,315
-14
31,389
940
389
32,718
14
13
32,745
Investment assets according to balance sheet
28,721
Unit trust units
Deposits, Derivatives etc.
Investment assets at fair value according to balance sheet recognised through profit and loss
Associated shares
Deposits with ceding undertakings, receivable
Total investment assets according to balance sheet
adjusted duration of bond portfolio
Bond portfolio
Duration 1 year or less
Duration 1 year through 5 years
Duration 5 years through 10 years
Duration more than 10 years
Total
2008
2009
18,550
8,535
2,316
16
29,417
19,198
11,875
2,869
306
34,248
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.
Annual report 2009 l Notes – TrygVesta Group l 117 of 148
TrygVesta Årsrapport 2009 l Noter l 117 af 152
Regnskab
Notes
DKKm
15
Maturity of the Group’s interest-bearing financial assets and debt
2009
0-1 year
1-5 years
> 5 years
Bonds
Cash in hand and at bank
Debt
Receivables
10,084
462
-611
2,428
13,004
0
0
0
12,363
13,004
11,160
0
-1,586
0
9,574
2008
0-1 year
1-5 years
> 5 years
Total
34,248
462
-2,197
2,428
34,941
Total
29,417
211
-1,811
1,689
Effective
interest rate
adjusted
duration
3.3
0.9
4.1
-
2.0
0
0
-
Effective
interest rate
adjusted
duration
4.4
4.4
4.6
-
1.7
0
0
-
Bonds
Cash in hand and at bank
Debt
Receivables
6,549
211
-111
1,689
8,338
11,473
0
-598
0
11,395
0
-1,102
0
10,875
10,293
29,506
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 connection with the expected cash flow from the Group’s provisions for unearned premiums and provisions for
claims, see note 21. Please refer to the section on ‘Investment and interest rate risk’ in ‘Risk management’ in the ‘Management’s report’.
Listed shares
Scandinavia
United Kingdom
Rest of Europe
United States
Asien etc.
Total
The portfolio of unlisted shares totals
Unlisted equity investments are measured at estimated fair value, see ‘Accounting policies’
2008
2009
195
103
298
244
152
992
180
348
134
336
354
219
1,391
198
Exposure to exchange rate risk
2009
Properties
Bonds
Shares
Insurance
Hedge
Exposure
USD
EUR
GBP
NOK
SEK
Other
Total
2008
USD
EUR
GBP
NOK
Other
Total
0
0
0
852
1
0
0
128
0
11,952
1,673
361
479
418
126
359
72
231
-162
-1,610
4
-10,457
-578
-18
-261
1,210
-122
-2,678
-1,241
-565
56
146
8
28
-73
9
320
Properties
Bonds
Shares
Insurance
Hedge
Exposure
0
0
0
649
0
21
723
1
10,113
0
270
337
94
170
294
-232
-1,117
3
-8,616
-13
-73
73
-93
-2,396
-269
14
15
4
81
52
166
Please refer to the section on ‘Currency risk’ in ‘Risk management’ in the ‘Management’s report’.
118 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
118 of 148
DKK m
2008
2009
15 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%
23
-57
-141
-315
-4
-219
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 section on ‘Risk management’ for an elaboration of risk management and risk exposure.
Derivative financial instruments
Derivatives with value adjustment in the income statement
according to IAS 39. Fair value:
Interest derivatives
Share derivatives
Inflation derivatives
Exchange rate derivatives
Due within one year
Due after more than five years
Derivative financial instruments used in connection with
hedging of foreign entities for accounting purposes:
Gains and losses on hedges charged to equity at 1 January
Gains and losses on hedges charged to equity in the period
Gains and losses on hedges charged to equity at 31 December
2008
2009
Gross
3,124
67
3,618
5,253
8,444
3,618
Net
27
0
-41
311
297
0
Gross
3,659
125
3,623
7,240
11,024
3,623
Gains
Losses
759
91
850
-254
-565
-819
Exchange rate adjustment
Exchange rate adjustments of foreign entities recognised in equity in the amount of:
Balance at 1 January
Exchange rate adjustment during the year
Balance at 31 December
15 receivables
Receivables from insurance enterprises
Exchangerate and inflation derivatives
Unsettled transactions
Other receivables
Specification of writedowns on receivables from insurance contracts
Balance at 1 January
Exchange rate adjustment
Writedowns and reversed writedowns for the year
Balance at 31 December
2008
75
-585
-510
1,088
383
136
82
1,689
106
-8
22
120
Reversed impairment losses are estimated at around DKK 45m annually, but may vary due to major cases/disputes.
Please refer to the section on ‘Credit risk’ in ‘Risk management’ in the ‘Management’s report’.
26
-42
-191
-336
-12
-218
Net
7
0
31
-4
34
0
Net
505
-474
31
2009
-510
487
-23
1,238
27
1,051
112
2,428
120
6
-2
124
Annual report 2009 l Notes – TrygVesta Group l 119 of 148
TrygVesta Årsrapport 2009 l Noter l 119 af 152
Regnskab
Notes
DKKm
15 receivables
Receivables in connection with insurance contracts include overdue recievables totalling:
Falling due:
Within 90 days
After 90 days
Including writedowns of due amounts
16 reinsurers’ share
Reinsurers’ share
Writedowns after impairment test
Balance at 31 December
Impairment test
As at 31 December 2009, management performed a test of the carrying amount of total re-
insurers’ share of provisions for insurance contracts. The impairment test resulted in impairment
charges totalling DKK 17 (in 2008 DKK 15m) Writedowns during the year include reversed write-
downs totalling DKK 3m (in 2008 DKK 7m). Please refer to the section on ’Reinsurance’ in ’Risk
management’ in the ’Management´s report’.
17 Current tax
Current tax, beginning of year
Exchange rate adjustment
Addition on acquisition of subsidiary*
Current tax for the year
Current tax on equity entries
Adjustment of prior-year current tax
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
2008
2009
259
117
376
120
1,051
-15
1,036
243
-66
0
434
154
0
-628
137
111
248
137
271
110
381
124
1,337
-17
1,320
137
25
24
576
-118
8
-349
303
0
303
303
* Addition on acquisition of subsidiary relates to the acquisition of Moderna Försäkringar, see note 29
120 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
120 of 148
DKKm
18 Shareholders’ equity
Share capital
Numbers of shares
Balance at 1 January
Bought during the year
Sold during the year
2008
2009
No. of Nominal value
(DKK’000)
shares
No. of Nominal value
(DKK’000)
shares
67,638,478
-3,346,610
85,815
1,690,962
-83,665
2,145
64,377,683
-1,286,817
136,784
1,609,442
-32,170
3,420
Balance at 31 December
64,377,683
1,609,442
63,227,650
1,580,692
Treasury shares
Balance at 1 January
Bought during the year
Cancellation in connection with
buyback programme.
Used in connection with issue
of employee shares
Used in connection with exercise
of stock options
2008
2009
No. of Nominal value
(DKK’000)
shares
% of share
capital
No. of Nominal value
(DKK’000)
shares
% of share
capital
361,522
3,346,610
9,038
83,665
0.53
4.92
3,622,317
1,286,817
90,558
32,170
5.32
2.01
0
0
0
-4,068,427
-101,711
-6.02
-85,815
-2,145
-0.13
-70,354
-1,759
-1,661
17,597
-0.11
-0.1
1.10
Balance at 31 December
3,622,317
90,558
5.32
703,923
0
0
0
-66,430
Pursuant to the authorisation granted by the shareholders, TrygVesta may acquire up to 10.0% of the share capital until the next annual
general meeting in 2010. Treasury shares are acquired for use in the Group’s incentive programme and as part of the share buy back
programme.
19 Capital adequacy
Shareholders’ equity according to annual report
Subordinate loan capital
Proposed dividend
Solvency requirements to subsidiary undertakings
Capital base
Weighted assets
Solvency ratio
2008
8,244
685
-423
-4,601
3,905
3,924
100
2009
9,666
732
-991
-4,579
4,828
5,001
97
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 and profitdistribution’ in the Management’s report’
Annual report 2009 l Notes – TrygVesta Group l 121 of 148
TrygVesta Årsrapport 2009 l Noter l 121 af 152
Regnskab
Notes
DKK m
20 Subordinated loan capital
Loan terms:
Lender
Principal
Issue price
Issue date
Maturity year
Loan may be called by lender as from
Repayment profile
Interest structure
Subordinated bond loan*
Subordinated loan capital
Listed bonds
EUR 150m
99.017
December 2005
2025
2015
Interest-only
4.5% (until 2015)
2.1% above EURIBOR 3M (from 2015)
TryghedsGruppen
EUR 65m
100
April 2009
2032
30 June 2012
Interest-only
5.13% above EURIBOR 3M (interest until 30 June 2012)
7.63%–6.63% (max. and min. until 30 June 2012)
5% above EURIBOR 3M (interest from 1 July 2012 to 30 June
6% above EURIBOR (interest from 1 July 2019)
* In December 2005, TrygVesta Forsikring A/S raised a subordinated bond loan with no option for the creditor to call the loan before matu-
rity 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 Forsikring A/S has subscribed the subordinated loan capital in connection with acquisitions made in April 2009, see note 29.
Prices used for determination of fair value in respect of both loans are based on an assessment of the credit spread of the loans provided
by Nordea.
**
The fair value of the loan at the balance sheet date
The fair value of the loan at the balance sheet date is based on a price of
Total capital losses and costs the balance sheet date
Interest expenses of the year
Bond loan
Tryghedsgruppen smba
2008
908
81.23
16
50
2009
2008
2009
893
80
14
51
-
-
-
-
485
103
0
24
The share of subordinated capital included in the calculation of the capital base total DKK 732m
The loans are initially recognised at fair value on the date on which a loan is entered and subsequently measured at amortised cost.
122 of 148
l Notes – TrygVesta Group l Annual report 2009
DKK m
21 Provisions for claims – Estimated accumulated claims
Gross
End of year
1 year later
2 year later
3 year later
4 year later
5 year later
6 year later
7 year later
8 year later
9 year later
Cumulative payments
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
8,373
8,695
8,902
9,104
9,191
9,318
9,070
9,189
9,175
9,242
9,242
8,977 11,010
9,208 11,343
9,397 11,348
9,506 11,404
9,440 11,398
9,432 11,305
9,642 11,289
9,618 11,155
9,656
10,452
10,558
10,234
10,229
10,261
10,235
10,144
10,797
10,810
10,671
10,559
10,294
10,341
11,530
11,426
11,264
10,876
10,970
11,321
11,579
11,098
11,273
12,257
12,863
13,377
12,886
14,179
14,217
9,656 11,155
10,144
10,341
10,970
11,273
13,377
14,179
14,217 114,554
to date
Discounting
Reserves from 1999 and prior years
Other reserves
Gross provisions for claims, end of year
-8,679
-106
-8,879 -10,313
-152
-145
-9,057
-188
-8,996
-221
-9,477
-243
-9,292
-287
-10,452
-375
-9,813
-507
-586
-6,960 -91,918
-2,810
1,947
657
22,430
Ceded business
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
End of year
1 year later
2 year later
3 year later
4 year later
5 year later
6 year later
7 year later
8 year later
9 year later
1,394
1,504
1,471
1,496
1,528
1,524
1,519
1,527
1,530
1,599
1,599
Cumulative payments
to date
Discounting
Reserves from 1999 and prior years
Other reserves
Provisions for claims, end of year
-1,510
-12
1,398
1,413
1,419
1,433
1,408
1,395
1,403
1,383
1,408
1,982
2,083
1,970
1,964
1,962
1,975
1,981
1,915
904
867
864
921
842
837
847
829
843
884
882
867
872
937
831
836
830
849
288
287
273
302
509
474
485
173
235
291
1,408
1,915
847
872
849
302
485
235
291
8,803
-1,365
-9
-1,776
-17
-787
-10
-788
-16
-789
-6
-279
-1
-454
-2
-119
-4
-73
-6
-7,940
-83
270
75
1,125
Net of reinsurance
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
End of year
1 year later
2 year later
3 year later
4 year later
5 year later
6 year later
7 year later
8 year later
9 year later
Cumulative payments
6,979
7,191
7,431
7,608
7,663
7,794
7,551
7,662
7,645
7,643
7,643
7,579
7,795
7,978
8,073
8,032
8,037
8,239
8,235
8,248
9,028
9,260
9,378
9,440
9,436
9,330
9,308
9,240
9,548
9,691
9,370
9,308
9,419
9,398
9,297
9,968
9,967
9,787
9,677
9,427
9,469
10,593
10,595
10,428
10,046
10,121
11,033
11,292
10,825
10,971
11,748
12,389
12,892
12,713
13,944
13,926
8,248
9,240
9,297
9,469
10,121
10,971
12,892
13,944
13,926 105,751
-7,169
-94
to date
Discounting
Reserves from 1999 and prior years
Other reserves
Provisions for claims, net of reinsurance, end of the year
Estimated accumulated
-8,537
-135
-7,514
-136
-8,270
-178
-8,208
-205
-8,688
-237
-9,013
-286
-9,998
-373
-9,694
-503
-580
-6,887 -83,978
-2,727
1,677
582
21,305
claims regarding
Moderna Försäkringar
39
86
102
116
214
307
378
461
574
673
2,952
Annual report 2009 l Notes – TrygVesta Group l 123 of 148
Regnskab
Notes
DKKm
21 Provisions for claims
The table consists of figures for TrygVesta Forsikring A/S, TrygVesta Forsikring, Norwegian branch of TrygVesta Forsikring A/S, Enter For-
sikring AS and Moderna Försäkringar. Other group units are included in the item “Other reserves”, which comprises the provisions for
claims for TrygVesta Garantiforsikring A/S and the Finnish and Swedish business units.
The amounts in foreign currency in the table are translated to Danish kroner using the exchange rate at 31 December 2009 to prevent the
impact of exchange rate fluctuation.
The inclusion of the Moderna Försakringar acquired in 2009 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 acquisitions amounts to DKK 737m gross and DKK 657m net of reinsurance.
Effect of change to yield curve
In October 2008 the Danish FSA changed the discount curve for discounting of provisions. Previously composed of a risk-free euro-
denominated interst rate and a contry-specific spread to the German government bond yield as a result of the change, the discount rate
is determined based on a risk-free interest and the mortage bond yield, which creates a better match between assets and liabilities.
2008
2009
Effect of change to yield curve
Gross claims incurred
Interest on insurance provisions
Technical result
Return on investment activities after technical interest
Profit/loss before tax
Provisions for claims
Profit/loss, shareholders´equity and capital base are impacted by DKK 68m after tax.
Statement of financial position
Total, beginning of period
Market value adjustment of provisions, beginning of period
Addition on acquisition of subsidiary*
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)
0
-8
-8
78
70
-78
Gross
19,271
1,325
648
21,244
-6,975
-6,225
-13,200
13,359
-683
12,676
1,107
21,827
603
22,430
2009
Ceded
794
113
69
976
-152
-204
-356
355
35
390
40
1,050
75
1,125
2
-2
0
-91
-91
-18
Net
18,477
1,212
579
20,268
-6,823
-6,021
-12,844
13,004
-718
12,286
1,067
20,777
528
21,305
124 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
124 of 148
DKKm
21 Erstatningshensættelser
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
20,761
-1,619
19,142
-5,745
-5,904
-11,649
11,178
-787
10,391
1,387
19,271
444
19,715
2008
Ceded
1,366
-171
1,195
-44
-515
-559
145
-55
90
68
794
66
860
Net
19,395
-1,448
17,947
-5,701
-5,389
-11,090
11,033
-732
10,301
1,319
18,477
378
18,855
* Addition on acquisition of subsidiary relates to the acquisition of Moderna Försäkringar, see note 29
1) The table consists of figures for TrygVesta Forsikring A/S, TrygVesta Forsikring, Norwegian branch of TrygVesta Forsikring A/S,
Enter Forsikring AS and Moderna Försäkringar. Other units in the Group are included in ‘Other’
1) Comprises provisions for claims for TrygVesta Garantiforsikring A/S and the Finnish and Swedish branches.
3) Discounting also includes exchange rate adjustments.
2009
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
5,531
-153
6,972
-292
12,058
158
-12
3,421
-134
3,433
152
-15
2,256
-99
2,294
156
-10
9,178
-525
8,799
Expected cash flow
2008
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
4,763
-172
7,182
-244
11,529
66
0
3,397
-126
3,337
39
0
2,202
-88
2,153
78
0
6,490
-336
6,232
Expected cash flow
Carrying
amount
Total
5,997
-190
21,827
-1,050
26,584
Carrying
amount
Total
4,946
-172
19,271
-794
23,251
The table consists of figures for TrygVesta Forsikring A/S, TrygVesta Forsikring, Norwegian branch of TrygVesta Forsikring A/S,
Enter Forsikring AS and Moderna Försäkringar.
The note should be seen in connection with the maturity of the Group’s interest-bearing financial assets and liabilities, see note 15.
Please refer to the section on ‘Risk management’ for an elaboration of risk management and risk exposure.
Annual report 2009 l Notes – TrygVesta Group l 125 of 148
TrygVesta Årsrapport 2009 l Noter l 125 af 152
Regnskab
Notes
DKKm
22 Pensions and similar obligations
Jubiless, schemes for older employees etc.
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
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 the year
Estimated return on pension funds
Actuarial gains/losses
Paid during the period
Carrying amount of plan assets, end of year
Total pensions and similar obligations, end of year
Total recognised obligation, end of year
Specification of pension costs for the year:
Present value of amounts accumulated during the year
Interest expense on accrued pensions obligation
Expected return on plan assets
Accrued employers´nat.insurance contribution
Total year´s cost of defined benefit plans
The premium for the following financial year is estimated at:
Estimated distribution of plan assets:
Shares
Bonds
Real property
Average return on plan assets
126 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
126 of 148
2008
2009
28
28
120
1,003
1,123
628
495
1,292
-246
56
49
23
-51
1,123
932
-177
31
44
-173
-29
628
495
523
58
62
-56
9
73
53
%
13
64
23
-1.7
48
48
144
1,160
1,304
856
448
1,123
206
55
47
-70
-57
1,304
628
118
149
40
-42
-37
856
448
496
45
47
-40
8
60
55
%
10
70
20
5.1
DKKm
2008
2009
22 Pensions and similar obligations
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
%
4.0
6.0
4.0
3.8
3.8
7.0
14.1
20.0
Adjusted K2005
%
4.6
5.8
4.0
4.0
4.0
7.0
14.1
20.0
Adjusted K2005
Pension obligation
Plan assets
Surplus/deficit
Actuarial gains/losses associated with the pension obligation
Actuarial gains/losses associated with pension assets
2006
1,298
825
473
90
26
2007
1,292
932
360
104
-10
2008
1,123
628
495
-23
-173
2009
1,304
856
448
70
-42
Moderna Försäkringar and Swedish branch of TrygVesta Forsikring A/S 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 under-
taken, along with the other businesses in the collaboration, to pay the pensions of the individual employees in accordance with the appli-
cable 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 2009 amounted to DKK 9m, which is about 1.5 % of the annual premium in FPK (2008). FPK writes in its half-
year report for 2009 that it had a collective consolidation ratio of 113 at 30 June 2009 (DKK119m at 30 June 2008). The collective consol-
idation ratio is defined as the market value of the plan assets relative to the total collective pension obligations.
Annual report 2009 l Notes – TrygVesta Group l 127 of 148
TrygVesta Årsrapport 2009 l Noter l 127 af 152
Regnskab
Notes
DKK m
23 Deferred tax
Tax asset
Operating equipment
Debt and provisions
Capitalised tax loss
Tax liability
Intangible rights
Land and buildings
Bonds and loans secured by mortgages
Contingency funds
Deferred tax, end of year
Unaccrued timing difference of shares
Unaccrued timing difference of balance sheets items
reconciliation of deferred tax
Deferred tax, beginning of year
Exchange rate adjustment
Addition on acquisition of subsidiary*
Change in deferred tax previous years
Change in capitalised tax loss
Change in deferred tax taken to the income statement
Change in deferred tax taken to equity
Non-capitalised tax loss
Denmark
Sweden
Finland
Luxembourg
2008
2009
65
133
0
198
100
157
0
890
1,147
949
126
1
1,109
-164
0
-51
0
122
-67
949
72
188
189
0
56
161
91
308
134
176
46
1,196
1,552
1,244
134
68
949
133
97
-3
-80
138
10
1,244
72
0
313
142
* Addition on acquisition of subsidiary relates to the acquisition of Moderna Försäkringar, see note 29
The loss in TrygVesta A/S cannot be utilised in the Danish joint taxation scheme.
The loss can be carried forward indefinitely in Denmark and Luxembourg.
Under Finnish rules, losses may be carried forward for ten years and under Swedish rules, losses may be carried forward indefinitely.
Losses are not recognised as tax assets until it is likely that there will be sufficient future taxable income for the loss to be utilised.
The total current and deferred tax relating to items recognised in equity is recognised in the balance sheet in the amount of DKK 110m
(in 2008 DKK -101m).
No deferred tax is associated with investments in subsidiaries (in 2008 DKK 0m).
128 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
128 of 148
DKK m
2008
2009
24 Other provisions
Other provisions, beginning of year
Exchange rate adjustment
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 2009. In 2009, the loan carried interest at CIBOR
plus a margin, totalling approximately 2.5 % p.a. The unutilised part of the loan facility is meas-
ured 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
Exchange and inflation rate derivatives
Other debt
Debt falling due within one year
Debt falling due after more than five years
27 Earnings per share
Profit/loss for the period from continuing business
Profit/loss on discontinued and divested business
Profit/loss for the period
Average number of shares (1,000 shares)
Diluted average number of shares (1,000)
Diluted average number of shares (1,000)
Earnings per share - continuing business of DKK 25
Basic earnings per share of DKK 25
Diluted earnings per share (DKK)
The company has not issued warrants, convertible debt instruments or the like.
57
-10
-11
36
598
111
709
111
0
66
0
31
774
871
871
0
846
0
846
66,184
0
66,184
12.8
12.8
-
36
6
4
46
600
11
611
611
0
27
3
0
924
954
954
0
1,979
29
2,008
63,334
114
63,448
31.2
31.7
31.7
Annual report 2009 l Notes – TrygVesta Group l 129 of 148
TrygVesta Årsrapport 2009 l Noter l 129 af 152
Regnskab
Notes
DKK m
28 Contractual obligations, contingent liabilities and collateral
2009
Operating leases
Other contractual obligations
2008
Operating leases
Other contractual obligations
0-1 year
231
429
660
0-1 year
65
375
440
Payment due by period
3-5 years
1-3 years
> 5 years
99
143
242
49
16
65
67
0
67
Payment due by period
3-5 years
1-3 years
> 5 years
68
55
123
10
45
55
9
0
9
Total
446
588
1,034
Total
152
475
627
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 1bn for a period of 5 years, which cannot be cancelled within 12 month. The contract expires in 2012.
TrygVesta Forsikring A/S has signed a portfolio management contract for DKK 100m. The contract expires in 2013.
TrygVesta Forsikring A/S has signed a telephony service contract with Telenor for DKK 93m. The contract expires in 2012.
TrygVesta Forsikring A/S has signed a car leasing contrakt with NF Fleet for DKK 30m. The contract expires in 2013.
TrygVesta Forsikring A/S has signed a it leasing contrakt with IBM for DKK 18m. The contract expires in 2011.
Ejendomsselskabet af 8. Maj 2008 A/S has signed agreements for refurbishment of the property at Klausdalsbrovej 601, Ballerup.
The remaining contract sum amounts to DKK 105.6m. The work is expected to be finalised in 2010/11.
Vesta Eiendom A/S has signed agreements for refurbishment of the property at Folke Bernadottesvei 50, Bergen.
The remaining contract sum amounts to DKK 45.6m. The work is expected to be finalised in 2010/11.
The Danish companies in TrygVesta group are jointly taxed with TryghedsGruppen smba.
Assets to cover the technical provisions have been registered in the total amount of
2008
29,690
2009
32,498
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 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
at 31 December 2009.
130 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
130 of 148
DKK m
29 acquisition of subsidiary
2009
In 2009 TrygVesta Forsikring A/S acquired Moderna Försäkringar Sak AB, Modern Re S.A., Netviq AB og MF Bilsport & MC Specialförsäkring
AB in Sweden.
acquired businesses
acquired interest
Principal activity
acquisition date
Moderna Försäkringar Sak AB
Modern Re S.A.
Netviq AB
MF Bilsport & MC Specialförsäkring AB
100%
100%
100%
100%
Non-life insurance
Intra-group reinsurance
Agency for Moderna
Agency for Moderna
2 April 2009
2 April 2009
2 April 2009
2 April 2009
Intangible assets
Property, plant and equipment
Investment assets
Reinsurers´share of provisions for insurance contracts
Receivalbles, other assets and prepayments
Provisions for insurance contracts
Provisions
Debt, accruals and deferred income
Shareholders¨equity
Goodwill on acquisitions
Cost
Adjustment of cash and cash equivalents
Cash acquisition cost
Elements of cash acquisition cost
Cash
Direct acquisition costs
Cash acquisition cost
Gross premiums
Technical result
Profit/loss for the period
Carrying amount
before takeover*
Market value
at takeover
16
12
955
140
1,082
-1,345
-75
-259
526
155
12
955
140
1,082
-1,345
-111
-259
629
310
939
-605
334
350
-16
334
1 January -
1 april
2 april -
31 December
184
10
8
768
75
93
In a pro forma calculation of the consolidated profit for 2009 as if Moderna Försäkringar SAK AB, Modern Re S.A., Netviq AB and MF Bil-
sport & MC had been acquired as at 1 January 2009, gross earned premiums are estimated at a total of DKK 18,467m and the profit for
the year at DKK 2,016m relative to the actual figures for 2009.
*The carrying amount prior to acquisition has been made up in accordance with the TrygVesta Group’s accounting policies.
Annual report 2009 l Notes – TrygVesta Group l 131 of 148
TrygVesta Årsrapport 2009 l Noter l 131 af 152
Regnskab
Notes
DKK m
2008
2009
29 acquisition of subsidiary
2008
On 8 May 2008, TrygVesta Forsikring A/S acquired all the voting shares (nominally DKK 1m) of Ejendomsselskabet af 8. maj 2008 A/S
through a cash payment of DKK 1,085.5m to Danica Pension. The sole activity of Ejendomsselskabet af 8. maj 2008 A/S is the ownership
of TrygVesta’s Ballerup headquarters.
Costs for advisors in connection with the preparation, conclusion and performance of the agreement was DKK 0.2m.
The carrying amount prior to acquisition amounts to DKK 1.085,5m. Fair value at the date of acquisition amounts to DKK 1.085,5m.
A pro forma statement of TrygVesta Group’s profit/loss for 2008 as if Ejendomsselskabet af 8. maj 2008 had been acquried as per 1 janu-
ary 2008 is not significant different compared to the Group’s realised profit/loss for 2008.
The Group’s gross premiums earned will not be affected.
Management estimates that the fair value at 1 January 2008 would have been the same as the fair value at the date of acquisition.
30 related parties
Supervisory Board and Executive Management
Premium income
- Parent company (TryghedsGruppen smba)
- Key management
- Other related parties
Claims paid
- Parent company (TryghedsGruppen smba)
- Key management
- Other related parties
Guarantee agreements with related parties
- Account
- Exercised, end of year
- Premium
0.3
0.4
115.3
0.0
0.2
9.6
1,200
726
3
0.3
0.6
115.8
0.7
0.2
6.2
1,470
538
7
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 mem-
ber of the supervisory board on market terms.
132 af 152 l Notes – TrygVesta Group l Annual report 2009
l Noter l TrygVesta Årsrapport 2009
132 of 148
DKK m
2008
2009
30 related parties
Specification of remuneration
Supervisory Board
Executive Management
Remuneration includes pension contributions
Supervisory Board
Executive Management
-4
-19
-23
0
-3
-3
-4
-19
-23
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 Executive
Management has a bonus scheme for up to 3 months’ salary (Group CEO 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 Executive
Management.
If a member of the 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 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 Executive
Management can raise no further claims in this respect, including claims for compensation pursuant to sections 2a and/or 2b Salaried Em-
ployees Act, as such claims are included in the severance pay.
Parent company
Tryghedsgruppen smba
TryghedsGruppen smba controls 60% of the shares in TrygVesta A/S.
Intra-group trading involved
- Providing and receiving services
- Subordinated loancapital
- Interest expenses
Transactions between TryghedsGruppen smba and TrygVesta A/S are on market terms.
Intra-group trading involved
Administration fee, etc. is fixed on a cost-recovery basis.
Intra-group accounts are offset and carry interest on market terms.
The companies in TrygVesta Group have entered into reinsurance contracts on market terms.
1
0
0
0
485
-24
Transactions with subsidiaries have been eliminated in the consolidated financial statements in accordance with the accounting policies.
31 Financial highlights and key ratios of TrygVesta
cf ‘Introduction to TrygVesta’
Annual report 2009 l Notes – TrygVesta Group l 133 of 148
TrygVesta Årsrapport 2009 l Noter l 133 af 152
Regnskab
Income statement – TrygVesta a/S (parent company)
DKK m
2008
2009
Notes
2
Investment activities
Income from subsidiaries
Interest income
Value adjustment
Interest expenses
Investment management charges
Total return on investment activities
3 Other expenses
Profit before tax
4 Tax
Profit for the year
Proposed distribution for the year:
Dividend
Transferred to Net revaluation as per equity method
Transferred to Retained profits
757
22
0
-32
-6
741
-56
685
18
703
423
-2,007
2,287
703
2,079
2
-2
-14
-7
2,058
-46
2,012
17
2,029
991
1,470
-432
2,029
134 af 152
134 of 148
l Income statement – TrygVesta A/S (parent company) l Annual report 2009
Balance sheet – TrygVesta a/S (parent company)
DKK m
2008
2009
Notes assets
5
Investments in subsidiaries
Total investments in subsidiaries
Total investment assets
Receivables from subsidiaries
Total receivables
Current tax assets
6
7 Deferred tax assets
Cash in hand and at bank
Total other assets
Total prepayments and accrued income
8,546
8,546
8,546
293
293
18
0
1
19
24
10,173
10,173
10,173
65
65
17
1
0
18
39
Total assets
8,882
10,295
Liabilities
Shareholders’ equity
8 Debt to credit institutions
Debt to subsidiaries
Other debt
Total debt
8,265
9,687
602
0
15
617
600
8
0
608
Total liabilities and equity
8,882
10,295
1 accounting policies
9 Capital adequacy
10 Contractual obligations, contingent liabilities and collateral
11 related parties
Annual report 2009 l Balance sheet – TrygVesta A/S (parent company) l
135 of 148
135 af 152
Regnskab
Statement of changes in equity (parent company)
DKKm
Shareholders’ equity at 31 December 2007
1,700
3,745
3,430
1,156
10,031
Share
capital
revaluation
equity
method
retained
earnings
Proposed
dividends
Total
2008
Profit for the year
Exchange rate adjustment of foreign entities
Hedge of foreign currency risk in foreign entities
Tax on equity entries
Total comprehensive income
0
-2,007
-640
615
-154
-2,186
Dividend paid
Dividend own shares
Purchase of own shares
Issue of employee shares
Issue of share options
Total equity entries in 2008
0
-2,186
2,268
442
2,268
442
12
-1,197
37
14
1,134
-1,156
-714
703
-640
615
-154
524
-1,156
12
-1,197
37
14
-1,766
Shareholders’ equity at 31 December 2008
1,700
1,559
4,564
442
8,265
2009
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
Nullification of own shares
Dividend paid
Dividend own shares
Purchase of own shares
Exercise of shareoptions
Issue of employee shares
Issue of share options
1,470
9
505
-474
117
1,627
0
-102
Total equity entries in 2009
-102
1,627
-432
991
991
-442
-432
102
32
-418
19
30
15
-652
2,029
9
505
-474
117
2,186
0
-442
32
-418
19
30
15
549
1,422
Shareholders’ equity at 31 December 2009
1,598
3,186
3,912
991
9,687
Proposed dividend per share DKK 15.5 (in 2008 DKK 6.50).
Dividend per share is calculated as the total dividend proposed by the Supervisory Board after the end of the financial year divided by the
number of shares year end (63,931,573). The dividend is not paid until approved by the shareholders at the annual general meeting of
the subsequent year.
Tryg Vesta Forsikring A/S’ Norwegian branch, has in its branch financial statements included provisions for contingency funds in the
amount of NOK 2,906m (in 2008 NOK 2,743m) In TrygVesta Forsikring A/S, these provisions, due to their nature as additional provisions,
are included in shareholders’ equity (retained earnings), net of deferred tax. TrygVesta Forsikring 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 insurance has a similar contingency amounting to DKK 139m, which
is also included in the company’s shareholders’ equity.
136 af 152
136 of 148
l Statement of changes in equity (parent company) l Annual report 2009
Notes (parent company)
DKK m
2008
2009
1 accounting policies
Please refer to TrygVesta Groups ‘Accounting police.’
2
Income from subsidiaries
TrygVesta Forsikring A/S
3 Other expenses
Administrative expenses
757
757
-56
-56
2,079
2,079
-46
-46
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 note 11 ‘Related parties’.
Average number of full-time employees during the year
0
0
Administrative expenses include fee to the auditors appointed
by the Annual General meeting:
Deloitte
Of which services other than audit:
Deloitte
In addition, expenses have been incurred for the Group’s Internal Audit Department.
4 Tax
reconciliation of tax expenses
Tax on financial loss before profit/loss in subsidiaries and tax
Effective tax rate
Tax on financial loss
-0.9
-0.9
0.0
0.0
18
18
%
25
25
-0.7
-0.7
0.0
0.0
17
17
%
25
25
Refer to the section ‘The Groups Financial performance 2009’ in the management report for further mention of the tax.
Annual report 2009 l Notes (parent company) l
137 of 148
137 af 152
Regnskab
Notes (parent company)
DKK m
2008
2009
5
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
Carrying amount 31 December
Name and registered office
2009
TrygVesta Forsikring A/S, Ballerup
2008
TrygVesta Forsikring A/S, Ballerup
6 Current tax assets
Current tax, beginning of year
Current tax for the year
Tax paid durring the year
7 Deferred tax assets
Capitalised tax loss
TrygVesta A/S
Non-capitalised tax loss
TrygVesta A/S
6,987
6,987
3,745
575
-2,761
1,559
8,546
Ownership shares in %
100
100
21
18
-21
18
0
72
6,987
6,987
1,559
2,238
-611
3,186
10,173
Equity
100
100
18
17
-18
17
1
72
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.
138 af 152
138 of 148
l Notes (parent company) l Annual report 2009
DKK m
2008
2009
8 Debt to credit institutions
Bank loans
Overdraft facility
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 2009. In 2008, the loan carried interest at CIBOR
plus a margin, totalling approximately 5.3 % 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.
9 Capital adequacy, etc.
Shareholders’ equity according to annual report
Subordinate loan capital
Proposed dividend
Solvency requirements to subsidiary undertakings
Capital base
Weighted items
Solvencypct.
598
4
602
600
0
600
8,265
685
-423
-4,601
3,926
3,945
100
9,687
732
-991
-4,579
4,849
5,022
97
10 Contractual obligations, contingent liabilities and collateral
The Danish companies in TrygVesta group are jointly taxed with TryghedsGruppen smba.
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 the outcome of which is not
estimated to affect the financial position of the Group. 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.
Annual report 2009 l Notes (parent company) l
139 of 148
139 af 152
2008
2009
0.3
0.4
115.3
0.2
9.6
1,200
726
3
-4
-19
-23
0
-3
-3
0.3
0.6
115.8
0.2
6.2
1,470
538
7
-4
-19
-23
0
-3
-3
Regnskab
Notes (parent company)
DKK m
11 related parties
Supervisory Board and Executive Management
Premium income
Parent company (TryghedsGruppen smba)
- Key management
- Other related parties
Claims payments
- 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 supervisory board on market terms.
Specification of remuneration
Supervisory Board
Executive Management
Remuneration includes pension contributions
Supervisory Board
Executive Management
Members of the Supervisory Board of TrygVesta A/S do not receive bonuses and are not partici-
pants in any severance plans.
The Executive Management has a bonus scheme for up to 3 months’ salary (Group CEO up to 4
months’ salary) and participate in the share option programme as mentioned in Corporate gov-
ernance.
Other than that, there are no incentive plans for the Supervisory Board and Executive Management.
140 af 152
140 of 148
l Notes (parent company) l Annual report 2009
DKK m
2008
2009
Parent company
TryghedsGruppen smba
TryghedsGruppen smba controls 60% of the shares in TrygVesta A/S.
Intra-group trading involved
- Providing and receiving services
- Sale of unlisted shares
- Subordinated loan capital
- Interest expenses
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
Administration fee, etc. is fixed on a cost-recovery basis.
Intra-group accounts are offset and carry interest on market terms.
1
0
0
0
-59
297
-21
0
0
485
-24
-49
65
-1
The executive order on application of international financial reporting standards for companies subject to the Danish Financial Business
Act issued by the Danish FSA requires disclosure of differences between the format of the annual report under international financial
reporting standards and the rules issued by the Danish FSA. The following is a reconciliation af differences in the profit and equity.
reconciliation of differences in the profit and the shareholders equity
Profit reconciliation
Profit – IFRS
Current priods effect of actuarial gains and losses on pension obligation after tax
Profit – Danish FSa executive order
Equity reconciliation
Shareholders’ equity – IFRS
Deferred tax provisions for contingency funds
Equity – Danish FSa executive order
846
-143
703
8,244
21
8,265
2,008
21
2,029
9,666
21
9,687
Annual report 2009 l Notes (parent company) l
141 of 148
141 af 152
Regnskab
Financial highlights and key ratios by geography
DKKm
2005
2006
2007
2008
2009
Danish general insurance
Gross premiums earned
Technical result
Return on investment activities
Other income and expenses
Profit/loss before tax
Fixed assets
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 and expenses
Profit/loss before tax
Fixed assets
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
Fixed assets
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
8,764
956
567
7
1,530
1,011
77.1
-3.9
73.2
16.6
89.8
2,215
6,810
1,131
361
2
1,494
721
63.0
5.2
68.2
16.7
84.9
1,431
140
-41
-2
-43
0
80.9
0.2
81.1
50.2
131.3
48
9,084
1,377
723
2
2,102
1,135
66.8
3.9
70.7
16.1
86.8
2,231
6,738
1,214
483
3
1,700
737
64.3
3.6
67.9
16.5
84.4
1,460
198
-34
-4
-38
0
78.1
0.2
78.3
41.7
120.0
77
9,346
1,639
225
2
1,866
1,171
69.3
0.0
69.3
15.3
84.6
2,242
6,919
1,335
118
-7
1,446
799
64.0
4.9
68.9
15.8
84.7
1,384
251
-49
-10
-59
0
74.9
0.4
75.3
49.8
125.1
127
9,620
1,695
-435
4
1,264
1,616
64.9
4.2
69.1
16.0
85.1
2,377
7,129
815
-597
3
221
659
71.0
3.8
74.8
16.8
91.6
1,455
354
-44
-4
-48
5
72.9
0.3
73.2
44.1
117.3
154
9,736
1,191
463
3
1,657
1,673
71.4
2.9
74.3
14.5
88.8
2,311
6,905
566
528
5
1,099
896
71.7
3.9
75.6
16.8
92.4
1,403
480
-115
-11
-126
8
84.2
0.6
84.8
41.7
126.5
194
142 af 152
142 of 148
l Financial highlights and key ratios by geography l Annual report 2009
DKKm
2005
2006
2007
2008
2009
Swedish general insurance**
Gross premiums earned
Technical result
Return on investment activities
Profit/loss before tax
Fixed assets
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
Other *
Gross premiums earned
Technical result
Return on investment activities
Other income and expenses
Profit/loss before tax
Fixed assets
Number of full-time employess, end of period
TrygVesta
Gross premiums earned
Technical result
Return on investment activities
Other income and expenses
Profit/loss before tax
Fixed assets
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
-
-
-
-
-
-
-
-
-
-
-
-9
1
-32
-37
-68
432
24
4
-41
0
-41
2
144.9
0.4
145.3
1,003.8
1,149.1
40
-3
-4
26
-36
-14
677
0
90
-82
-1
-83
3
88.9
0.0
88.9
105.6
194.5
61
0
-23
8
-46
-61
676
0
225
-93
-2
-95
2
95.1
0.9
96.0
48.4
144.4
105
-5
11
50
-56
5
1,775
0
1,166
-44
42
-2
500
78.1
1.7
79.8
24.6
104.4
428
-4
-44
64
-46
-26
1,832
0
15,705
16,021
16,606
17,323
18,283
2,047
894
-28
2,913
2,164
71.1
0.1
71.2
17.0
88.2
3,718
2,512
1,228
-31
3,709
2,551
65.9
3.7
69.6
16.8
86.4
3,808
2,820
340
-51
3,109
2,649
67.3
2.1
69.4
16.7
86.1
3,814
2,384
-988
-49
1,347
4,057
67.9
3.9
71.8
17.3
89.1
4,091
1,554
1,086
-38
2,602
4,909
72.2
3.2
75.4
16.9
92.3
4,336
* Amounts relating to TrygVesta A/S, Tryg Ejendomme A/S, Ejendomsselskabet af 8. maj and eliminations are included in ‘Other’.
** Moderna Försäkringar is included in ‘Swedish general insurance’ from 2 April 2009.
Annual report 2009 l Financial highlights and key ratios by geography l
143 of 148
143 af 152
Glossary
The financial highlights and key ratios of TrygVesta have been prepared
in accordance with the executive order issued by the Danish Financial
Supervisory Authority on the presentation of financial reports by insu-
rance companies and profession-specific pension funds and also com-
ply with “Recommendations & Financial Ratios 2005” issued by the
Danish Society of Financial Analysts.
adjusted gross expense ratio
Calculated as the ratio of gross insurance operating expenses including
adjustment to gross earned premiums. The adjustment involves the de-
duction of depreciation and operating costs on the owner-occupied
property and the addition of a calculated cost (rent) concerning the
owner-occupied property based on a calculated market rent.
Gross claims ratio
Calculated as the ratio of gross claims incurred to gross earned premiums.
Gross claims incurred x 100
Gross earned premiums
Gross earned premiums
Calculated as gross premiums written adjusted for change in gross pro-
visions for unearned premiums, less bonuses and premium rebates.
Gross expense ratio
Calculated as the ratio of gross insurance operating expenses to gross
earned premiums.
Gross insurance operating expenses incl. adjustment x 100
Gross earned premiums
Gross insurance operating expenses 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 ear-
ned premiums.
Net result of business ceded x 100
Gross earned premiums
Individual Solvency
New Danish solvency requirements for insurance companies. With
effect from 1 January 2008, companies are required to make
their own determination of their capital requirements applied with
own methods. The Individual Solvency shall be reported to the Danish
FSA four times a year.
Combined ratio
Calculated as the sum of the gross claims ratio, the net result of busi-
ness ceded as a percentage of gross earned premiums and the gross
expense ratio.
Net asset value per share
Calculated as year-end shareholders’ equity divided by the
average number of shares.
Danish general insurance
Comprises the legal entities in TrygVesta Forsikring A/S
(excluding the Norwegian, Finnish and Swedish branches)
and TrygVesta Garantiforsikring A/S.
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.
Dividends per share
Calculated as the total dividend proposed divided by the
average number of shares.
Proposed dividend
Number of shares year end
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
Finnish general insurance
Comprises TrygVesta Forsikring A/S, Finnish branch and the Finnish
branch of TrygVesta Garantiforsikring A/S.
Year-end equity
Average number of shares
Norwegian general insurance
Comprises TrygVesta Forsikring A/S, Norwegian branch, the Norwegian
subsidiaries and the Norwegian branch of TrygVesta Garantiforsikring A/S.
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
Price/earnings
Calculated as the ratio of the price per share to earnings per share.
Quoted price
Earnings per share
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
Provisions for claims to earned premiums
Calculated as the ratio of provisions for claims relative to earned
premiums.
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l Glossary l Annual report 2009
relative run-off gains/losses
Run-off result relative to provisions insurance contract, beginning of year.
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
run-off result
The difference between provisions for claims at the beginning of the fi-
nancial year (adjusted for currency translation differences and dis-
counting effects) and the sum of claims paid in the financial year plus
the part of the provisions for claims at the end of the financial year
that relates to claims incurred in prior financial years.
Solvency II
New solvency requirements for insurance companies issued by the EU
Commisison. The new rules are expected to com into effect in 2012 at
the earliest.
Swedish general insurance
Comprises TrygVesta Forsikring A/S, Swedish branch and the Swedish
branch of TrygVesta Garantiforsikring A/S.
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 increase of the provision is not re-
cognised under claims, but in technical interest in the income statement.
Annual report 2009 l Glossary l
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Regnskab
Disclaimer
Noter
Mio. DKK
Certain statements in this annual report are based on the beliefs
TrygVesta urges readers to refer to the section on risk manage-
2008
2007
of our management as well as assumptions made by and informa-
ment for a description of some of the factors that could affect
tion currently available to management. Statements regarding Try-
the Group’s future performance or the insurance industri.
gVesta’s future results of operations, financial condition, cash
flows, business strategy, plans and future objectives other than
Should one or more of these risks or uncertainties materialise
statements of historical fact can generally be identified by termi-
or should any underlying assumptions prove to be incorrect,
nology such as ”targets”, ”believes”, ”expects”, ”aims”, ”intends”,
TrygVesta’s actual financial condition or results of operations
”plans”, ”seeks”, ”will”, ”may”, ”anticipates”, ”would”, ”could”,
could materially differ from that described herein as anticiparted,
”continues” or similar expressions.
believed, estimated or expected.
A number of different factors may cause the actual performance
TrygVesta is not under any duty to update any of the forward-
to deviate significantly from the forward-looking statements in
looking statements or to conform such statements to actual
this annual report, including but not limited to general economic
results, except as may be required by law.
developments, changes in the competitive envrironment, develop-
ments in the financial markets, extra ordinary events such as
natural disasters or terrorist atttacks, changes in legislation or
case law and reinsurance.
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l Noter l TrygVesta Årsrapport 2009
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The living organisation
Market / external community
CAR CHANNEL
& ENTER
CIVIL SERVANTS
SALES DK
PARTNER CONTRACTS
COM MERCIAL
PARTNER CONTRACTS
PRIVATE
FINLAND
BANCASSURANCE
SALES NO
NORDIC UW
SWEDEN
SWEDEN
ADVISORY SERVICE &
SALES SUPPORT
SALES
COM MERCIAL
SALES
PRIVATE
SALES
OUTBOUND
CUSTOMER
SERVICE
TRAVEL CLAI MS
& ALARM
CLAI MS SECRETARIAT
t
& FACT-FINDING
CUSTOM ER SERVICE
& SALES PARTNERS
CORPORATE
PRODUCT & CLAIMS
PROCESSES
CUSTOMER SERVICE
& SALES DIRECT
CLAIMS
CEO
CFO
COO
PROCESS & IT
IT OPERATIONS
SALES, CUSTOMER &
E-BUSINESS PROCESSES
SUPPORT PROCESSES
TRYG TRANSITION
COM MUNICATION
CLAIMS
LIABILITY/ATTORNEYS
CLAIMS
PURCHASE
CORPORATE BRANDING
& BUSINESS CENTRES
CORPORATE
FINANCE
STRATEGY
& PLANNING
LEAGAL & QUALITY
INVESTOR RELATIONS
BUILDING/
PROPERTY CLAIMS
CAR CLAIMS
PERSONAL CLAI MS
BC – CAR
MARKETING
GROUP FINANCE
STRATEGY &
HUMAN COM PETENCE
RECRUITMENT
& BENEFITS
CONTROLLING
& REPORTING
INVESTM ENTS
ORG. & LEADERSHIP
DEVELOPMENT
LEAN
GROUP RISK
BUSINESS
INTELLIGENCE
THE LIVING HOUSE
BC – COM MERCIAL/
CORPORATE
SEGM ENTATION/
CONCEPTS
FINANCE & SALARY
BC – HEALTH CARE
& PERSON
NORDEA + PARTNERS
TRYGVESTA GARANTI
BUSINESSLAB
BC – PRIVATE
CORPORATE
LEARNING
TrygVesta’s organisational structure, which became effective on 1 Jan-
tion across the Group. At the same time, the organisation supports
uary 2010, creates a distinct Nordic organisation with well-defined
the implementation of the Group’s strategy. The organisation chart
roles and responsibilities. The organisational structure is designed to
symbolises the Group’s evolution and should be viewed as a heart
ensure that we meet the market with the best solutions within our
which is the origin of all activities springing to the market/the
products and services and establish the best conditions for collabora-
external community.
TrygVesta A/S
Klausdalsbrovej 601
DK-2750 Ballerup
+45 70 11 20 20
trygvesta.com
CVR-no. 26460212