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Tryg A/S
Klausdalsbrovej 601
2750 Ballerup
Denmark
+45 70 11 20 20
tryg.com
CVR-no. 26460212
Annual report 2011
Content
tryg.com
Management’s report
About Tryg
Preface
Financial highlights
Outline of Tryg
Highlights of the year
Results
Tryg’s financial performance
Private Nordic
Commercial Nordic
Corporate Nordic
Investment activities
Outlook
Strategy and the insurance market
Strategy
KPI – (Key Performance Indicators)
The insurance market
Customers and products
Capital management and risk management
Capital management and risk management
Management
Supervisory Board
Group Executive Management
Employees
Corporate governance
Corporate Social Responsibility – CSR
The Tryg share
Accounts
Statement by the Supervisory Board and the Executive Management
Independent auditor’s report
Independent auditor’s report on TRYG A/S’ CSR data for 2011
Financial highlights and key ratios
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes – Tryg Group
Income statement (parent company)
Statement of financial position (parent company)
Statement of changes in equity (parent company)
Notes (parent company)
Fourth quarter of 2011 | Quarterly outline
Fourth quarter of 2011 | Geographical segments
Other key figures
Glossary
Disclaimer
Group chart
Editors
Investor Relations
Design
Layout
e-types
amo design
Printers Centertryk A/S
Munken Polar
Paper
This is a translation of the Danish annual report 2011. In case of any discrepancy between the Danish and the English version of the annual report 2011,
the Danish version shall apply.
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Our vision | is to be perceived as the leading peace-of-mind
provider in the Nordic region.
Our mission | is to secure a stable, high-quality supply
of products and services offering peace of mind to private
households and businesses.
Tryg A/S | Annual report 2011 | 1
Our values | We create peace of mind because
- we show people respect, openness and trust.
- we show initiative, share knowledge and take responsibility.
- we provide solutions characterised by quality and simplicity.
- we create sustainable results.
The peace-of-mind delivery | is anchored in our handshake
- Dynamic
- Compassionate
- Innovative
Annual report 2011 | Tryg 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. Our products include contents, house, motor,
building, workers’ compensation, transport, health and
personal accident insurances. In 2011, our 4,300 employees
ensured peace of mind for more than 2.7 million private
customers and over 140,000 businesses.
Tryg is the second-largest insurance company in the Nordic
region present in Denmark, Norway, Sweden and Finland.
We are the largest player in Denmark and the third largest
in Norway. In Sweden and Finland, however, we have
smaller market shares.
We strive for high customer and employee satisfaction,
and several surveys indicate that Tryg is considered to
be second-to-none in terms of claims handling. We offer
insurances mainly through our own sales channels, and
our business partners include Nordea and AXA Corporate
Solutions.
Preface
2011 was characterised by both change and continuity at Tryg.
In January, the Supervisory Board appointed Morten Hübbe as
CEO after Stine Bosse resigned. Morten Hübbe assumed the
leadership of Tryg following a 2010 that had been characterised
by extraordinary events and declining profitability. A major part of
Morten Hübbe’s task was therefore to improve profitability in the
insurance business during a period of difficult conditions on the
investment markets.
At the beginning of 2011, the Supervisory Board and the Execu-
tive Management set a target of achieving a medium-term return
on equity of 20%, corresponding to a combined ratio of 90. The
target underlines the Supervisory Board’s focus on profitability,
ahead of growth, as the fundamental strategy for the coming
years. The Supervisory Board is pleased to announce that, in
2011, Tryg made a significant step towards achieving this target.
The financial result for 2011 therefore supports the view that
the target is ambitious yet realistic.
The strategy for achieving the financial medium-term targets is an-
chored in focusing on profitability in the insurance business, to be
achieved via risk-appropriate prices, supported by high customer
satisfaction, efficient processes, and skilled and committed staff.
In 2011, the Supervisory Board continued focusing on maintaining
Tryg’s financial strength. In a period characterised by turbulence
on the financial markets and in many financial companies, it is
vital that Tryg retains strong capitalisation and a solid funding
At the beginning of 2011, the Supervisory
Board and the Executive Management set
a target of achieving a medium-term return
on equity of 20%, corresponding to a
combined ratio of 90. The financial result
for 2011 supports the view that this target
is ambitious yet realistic.
Mikael Olufsen
2011 was a good year for Tryg improved in the insurance
base, which will ensure that Tryg can implement its strategy. In
results in all business areas. This was extremely positive in a
view of the forthcoming regulations governing capital require-
year which, in many ways, was characterised by uncertainty. The
ments, it is also vital that Tryg retains a strong capital base.
debt situation in Southern Europe, in particular, had a negative
impact on the national economy and led to severe turbulence
In order to strengthen Tryg’s focus on profitability, in 2011 the
on the financial markets, adversely affecting economic condi-
Supervisory Board reviewed all guidelines relating to the opera-
tions in the Nordic region and Tryg’s investment results. At the
tion of the insurance business. The guidelines describe in detail
same time, it was a year when the climate once again proved
the distribution of work between the Supervisory Board and the
very significant. In 2010, the winter in particular had a negative
Executive Management, and this forms part of Tryg’s structure
impact on Tryg’s business, while 2011 was characterised
for good corporate governance. This is an important area for the
by cloudbursts and storms.
Supervisory Board and helps ensure Tryg’s continued develop-
ment and profitable operations.
In spite of these external challenges, in 2011, Tryg achieved a
profit after tax of DKK 1,140m. This result is a satisfactory im-
Overall, 2011 marked a significant step forward for Tryg, and with
provement of DKK 547m compared with 2010 and must be seen
the initiatives that have been implemented, Tryg is well equipped
in the light of the systematic efforts made to improve profitability.
to continue this good progress over the coming years.
4 | Annual report 2011 | Tryg A/S
Morten Hübbe
majority of the claims, and more than 20,000 claims in total were
Tryg is a well-run company with a strong brand, and every day
filed. Before reinsurance, claims expenses were DKK 1.2bn, but
more than 4,300 employees ensure that Tryg provides peace of
due to reinsurance, Tryg’s total expenses were DKK 196m. A claim
mind to more than 2.7 million customers in Denmark, Norway,
event of this kind puts Tryg’s claims handling under a great deal of
Sweden and Finland.
pressure, hence it was very gratifying to see the large amount of
positive feedback from our customers about their satisfaction with
The foundations for Tryg achieving the ambitious financial
the way in which claims were handled. With regard to Tryg’s cus-
objectives are thus in place. After my appointment as CEO in
tomers, it was particularly pleasing to observe that the retention
February 2011, it did, however, become clear that there was
rate remained high in 2011, a year of premium increases, and that,
a need to create more of a culture where the focus was on
during the course of the year, Tryg came out well in a number of
profitability and which had a clearly defined allocation of
areas, including the European customer satisfaction index EPSI.
responsibilities as to how the objectives should be achieved.
The evident improvement in the financial result of 2011 over
It was in this context that one of my first major decisions was to
2010 is in no small degree due to Tryg’s employees, who made
change the organisational structure at Tryg. The outcome was an
very great efforts in 2011. The implementation of premium
organisation which, with the business areas Private, Commercial,
increases, changes to processes and organisational change
Corporate and Sweden/Finland, is based on how customers are
has made many everyday tasks more challenging. When we
served. The changes meant that the responsibility for profitability
add to this the great work put in by Tryg’s claims department
in the individual business areas became clearly defined, ensuring
in connection with the handling of the many cloudburst claims
that the whole Tryg organisation focuses on profitability.
over the summer, it is clear that 2011 was a demanding year
At the same time, it was a great pleasure to welcome
me that the annual employee index survey, conducted in the
Tor Magne Lønnum as the new CFO. Tor Magne Lønnum has
autumn of 2011, generally indicated clear improvements on
vast experience in the insurance industry, and with him and my
what was already a high level of employee satisfaction. It also
other colleagues in the Group Executive Management, Tryg is
showed that Tryg was retaining a high level of satisfaction in
well equipped to ensure continued positive development.
comparison to the financial sector as a whole.
for all Tryg employees. In light of this, it was very pleasing for
During 2011, work was intensified on implementing the initia-
As stated, Tryg is focusing on profitability, and an essential pre-
tives designed to ensure realisation of Tryg’s target of a return
requisite for this is that our customers are offered products of
on equity of 20%. These involve the adjustment of premiums on
high quality at a risk-appropriate price. Tryg will therefore con-
a range of insurance types, claims reduction and a number of
tinue the work on further segmentation and appropriate pricing,
other initiatives, such as better procurement of repairs, rationali-
as well as developing products that meet our customers’ needs.
sation of work processes and general restraint in terms of costs.
For Tryg, profitability and social responsibility go hand in hand. CSR
The combined ratio for 2011 was 93.5, as against 98.8 in 2010,
is a focus area at Tryg and part of the way Tryg does business. For
representing a major step towards a combined ratio of 90 in
this reason, the reporting of Tryg’s CSR activities is incorporated
the medium term. The technical result rose from DKK 375m in
with the reporting of other results in the annual report.
2010 to DKK 1,534m in 2011, but, although the technical result
evolved along positive lines, the investment result was only DKK
66m due to the turbulence on the financial markets.
An insurance result at this level is positive in a year when the
Copenhagen area was hit by one of the greatest cloudbursts in
Mikael Olufsen
Morten Hübbe
history. As the largest company in Denmark, Tryg received the
Chairman
Group CEO
Tryg A/S | Annual report 2011 | 5
Financial highlights
DKKm
Q4 2010
Q4 2011
2010
2011
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 a)
Profit/loss for the year
Run-off gains/losses, net of reinsurance
Balance sheet
Total provisions for insurance contracts
Total reinsurers’ share of provisions for insurance contracts
Total shareholders’ equity
Total assets
Key ratios
Gross claims ratio
Business ceded as a percentage of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Gross expense ratio without adjustment
Operating ratio
Return on equity after tax (%)
Relative run-off gains/losses
Number of full-time employess, end of period
Solvency ratio
Share performance
Earnings per share – continuing business of DKK 25
Net asset value per share (DKK)
Dividend per share (DKK)
Price Earnings
Number of shares, end of period (1,000)
5,049
-3,900
-871
278
-56
39
261
266
-15
512
-144
368
1
369
286
32,031
1,588
8,458
50,591
77.2
1.1
78.3
17.2
95.5
5,100
-4,031
-877
192
19,475
-15,617
-3,304
554
44
35
271
163
13
447
-129
318
26
344
331
34,257
2,067
9,007
53,221
79.0
-0.9
78.1
17.4
95.5
-313
134
375
570
-4
941
-265
676
-83
593
824
32,031
1,588
8,458
50,591
80.2
1.6
81.8
17.0
98.8
17.0
98.1
6.6
3.9
4,291
125
10.8
139.5
4.00
23.8
60,634
20,572
-16,299
-3,430
843
507
184
1,534
66
-31
1,569
-455
1,114
26
1,140
944
34,257
2,067
9,007
53,221
79.2
-2.5
76.7
16.8
93.5
16.7
92.6
13.1
4.0
4,318
112
18.4
149.2
6.52
17.3
60,373
The gross expense ratio without adjustment is calculated as the ratio of actual gross insurance operating expenses to earned gross premiums. Other key ratios are
calculated in accordance with ’’Recommendations & Financial Ratios 2010’’ issued by the Danish Society of Financial Analysts.
The adjustment, which is made pursuant to the Danish Financial Supervisory Authority’s and the Danish Society of Financial Analysts’ definition of expense ratio
and combined ratio, involves the addition of a calculated expense (rent) concerning owner-occupied property based on a calculated market rent and the deduction
of actual depreciation and operating costs on owner-occupied property.
a) Profit/loss on discontinued and divested business after tax includes Marine Hull insurance. Comparative figures are restated to reflect Marine Hull insurance.
6 | Annual report 2011 | Tryg A/S
Outline of Tryg
Group Executive Management
CEO
Morten Hübbe
Executive Management
Private
Commercial
Corporate
Sweden/Finland
Claims
Group Finance
Lars Bonde
Executive Management
Kjerstin
Fyllingen
Truls Holm
Olsen
Per Fornander
Birgitte
Kartman
Tor Magne
Lønnum
Executive Management
The new organisation
As of 1 June 2011, Tryg was organised in four business areas, each
Sweden/Finland | sells insurance products to private individuals
in Sweden and to private individuals and corporate customers
with a clear, unambiguous responsibility for profitability, including
in Finland. The business area represents 13% of Tryg’s total
product development, sales and administration. These four areas are:
earned premiums.
Private | sells insurance products to private individuals in
These business areas are supplemented by a cross-functional
Denmark and Norway. Sales are made through call centres,
Claims organisation and shared business functions including
the Internet, tied agents, franchisees (Norway), interest groups,
Group Finance.
car dealers, real-estate agents and Nordea. The business area
represents 44% of Tryg’s total earned premiums.
Along with Morten Hübbe, the Group Executive Vice Presidents
of the six areas (Private, Commercial, Corporate, Sweden/Finland,
Commercial | sells insurance products to small and medium-
Claims and Group Finance) are members of the Group Executive
sized companies in Denmark and Norway. This business area
Management, which is responsible for general management
represents 20% of Tryg’s total earned premiums.
activities at Tryg. Morten Hübbe, Tor Magne Lønnum and
Corporate | sells insurance products to corporate customers
under the ‘Tryg’ brand in Denmark and Norway and the ‘Moderna’
Business areas in the annual report 2011
brand in Sweden. This area serves customers who pay annual
The annual report 2011 is divided according to the previous
premiums of more than DKK 900,000 or have more than 50 em-
division of Tryg’s business into Private Nordic, Commercial
Lars Bonde form Tryg’s Executive Management.
ployees. All sales through brokers are written in Corporate Nordic
Nordic and Corporate Nordic.
regardless of the customer’s size. About one quarter of Corporate’s
customers pay annual premiums of more than DKK 10m. Tryg
As from the first quarter in 2012, financial statements will reflect
Garanti is included in the financial results of Corporate Nordic. The
the new organisation within the four business areas: Private,
business area represents 23% of Tryg’s total earned premiums.
Commercial, Corporate and Sweden/Finland.
Tryg A/S | Annual report 2011 | 7
Highlights of the year
January
New CEO
On 11 January, Stine Bosse announces that she will stand
down as CEO after 24 years at Tryg, eight of them as CEO.
On 12 January, the Supervisory Board announces that CFO
Morten Hübbe will take over as CEO as from 1 February.
May
February
Tryg launches new medium-term target
Tryg launches a target of achieving a medium-term return
on equity of 20% after taxes, corresponding to a combined
ratio of 90.
April
Tryg launches new travel app
As an extension of the Help 24/7 customer promise, Tryg
launches a new travel app: Tryg on the go. This app provides
answers to a number of the most frequently asked questions
when bad luck strikes on travels. The app is available to all.
Additional cover for caravans
Tryg concludes partnership agreements with a number of se-
lected, high-quality workshops and launches a new concept
for customers with Tryg Caravan. Tryg Caravan gives customers
more benefits in the form of high quality, safety checks and
an extended waranty on repairs. Alongside these customer
Tryg concludes new, extended contract with CSC
benefits, the concept reduces the costs of claims and supports
Tryg renews and extends the IT outsourcing contract with CSC
Tryg’s CSR strategy by focusing on responsible procurement.
until the end of 2015. The partnership with CSC now covers
Tryg’s insurance activities in all four Nordic countries.
Tryg wins 2011 Customer Service Prize in Norway
Tryg wins the Customer Service Prize ’Best in Test’ 2011 in
June
Norway. The test was conducted by SeeYou, and is Norway’s
biggest, most comprehensive customer service survey. On a
scale of 0-100, Tryg scores 87.6 points.
May
Tryg changes the organisation
On 1 June, Tryg implements an organisational change that
aims to guarantee a greater focus on profitability in the
individual business areas. The new organisation has a simpler
structure, with clear allocation of roles and responsibilities
and short decision-making processes.
Read about Tryg’s business areas on page 7.
New, extended reinsurance
Tryg enters a new agreement extending the reinsurance cover
for weather claims by ac quiring lateral cover that limits Tryg’s
expenses in the event of a large number of minor insurance
Tryg around the clock – Help 24/7 customer promise
events. While traditional reinsurance cover applies to each event,
Tryg launches Help 24/7, a customer promises. The idea is to
this cover will take effect if Tryg has incurred claims costs of more
make customers aware that they can safely phone and find
than DKK 400m for weather claims distributed across a number
help any-where at any time, regardless of a claims’ urgency.
of insurance events. The agreement will be affective 1 July 2011.
8 | Annual report 2011 | Tryg A/S
July
Cloudburst hits Denmark
On 2 July, a violent cloudburst hits Denmark. This cloudburst
leads to claims of DKK 1.2bn, as a result of reinsurance,
Tryg’s expenditure totals DKK 196m.
September
New CFO
November
Tryg improves in image survey
In the annual EPSI image survey, Tryg sees the biggest increase
in customer satisfaction. Tryg improves from an index of 75.3 to
76.4. By comparison, the industry average falls by 0.3 index points.
Tor Magne Lønnum takes up the position of CFO. Tor Magne
Read about the EPSI survey on page 36.
Lønnum comes from a position of CFO and Deputy CEO of
Gjensidige Forsikring ASA.
NLS – Next Level Sourcing
Tryg launches the Next Level Sourcing project, which aims to
secure efficient procurement and thus enhance profitability by
reducing costs in Tryg. The project involves both claims costs
through Tryg’s purchases of claims handling at, for example,
car workshops and craftsmen, and Tryg’s own costs.
Peace-of-mind conference
In partnership with the Norwegian Ministry of Justice, the
Norwegian National Police Directorate, Kristiansand Municipality
and the Norwegian National Crime Prevention Council, Tryg
organises regional Peace-of-mind Conferences, which put focus
on collaboration between municipalities and the police in order
to secure a good, safe framework. The first conference focuses
on stimulating better coordination and collaboration between
the police, municipalities, trade and industry and the voluntary
sector in efforts to create secure, sustainable local environments.
Sweden’s best insurance and pensions website
Modernaforsakringar.se is voted Sweden’s best insurance and
pensions website in Internetworld’s prestigious ranking of
Swedish websites.
October
December
Tryg launches new environmental insurance policy
Climate partnership
Tryg launches a new environmental insurance policy for com-
In anticipation of more climate-related claims and increased
mercial and corporate customers, covering the liability which a
payment of claims, Tryg is a part of a Nordic insurance partner-
company assumes in connection with an environmental claim.
ship with If, Gjensidige, Trygg Hansa/Codan, and the Nord-Star
Read more about the policy on page 37.
insurance centre. Through this Nordic climate partnership, the
companies want to work actively on claims reduction – both
Tryg creates claims reduction department
individually and together. Furthermore, the companies want
Tryg creates a new unit that has as its objective to increase focus
to support climate research with a view to developing a web-
on claims reduction and to develop claims handling, and to assume
based tool that customers can use to investigate the climate
ultimate responsibility for preventive activities to reduce claims.
risks in the area where they live.
Tryg A/S | Annual report 2011 | 9
The result underlines the
fact that Tryg is on course
to achieve the target of
a return on equity of 20%.
Results
Tryg’s financial performance
Highlights
• Profit after tax for the year was DKK 1,140m, compared
to DKK 593m in 2010.
• Technical result of DKK 1,534m, compared to DKK 375m
in 2010.
• Combined ratio of 93.5, compared to 98.8 in 2010.
• The year was impacted by storm and cloudburst claims, which
amounted to DKK 1.6bn, as against DKK 291m in 2010.
• The cloudburst in the Copenhagen area on 2 July resulted
in expenses before reinsurance of DKK 1.2bn and affected
the result by DKK 196m.
combined ratio of 5 percentage points, whereas inflation in claims
expenses had an inverse effect of approximately 3 percentage points,
resulting in a net improvement of about 2 percentage points. The
level of winter claims was closer to normal in 2011 than in 2010,
but on the other hand, storms and cloudbursts costs were consid-
erably higher, primarily due to the cloudburst in the Copenhagen
area. As can be seen from the graph on page 13, the total weather
claims costs, including winter claims, were somewhat higher in 2011
than in 2010 before reinsurance, but are lower when the effects of
reinsurance are included in the calculation. Altogether, the effect of
weather claims on the combined ratio was 2.3 percentage points in
2011 compared to 1.0 percentage point in 2010. Furthermore, large
claims were at a slightly higher level than in 2010 and amounted
• Higher level of large claims than in 2010: DKK 858m,
to DKK 858m gross, as against DKK 813 in 2010. 2011 also had
as against DKK 813m.
a slightly higher level of run-off gains, amounting to DKK 944m,
• The expense ratio improved from 17.0 to 16.8.
as against DKK 824m in 2010.
• Return on equity after tax of 13.1%, as against 6.6%
in 2010.
Premiums
Gross earned Premiums rose to DKK 20,572m, as against
DKK 19,475m in 2010, corresponding to growth of 5.6% (3.7%
measured in local currency). The development is due in particular
Tryg’s profit after tax for the year was DKK 1,140m, as
to the effect of the premium increases implemented in all business
against DKK 593m in 2010. The improvement consisted
areas. Gross earned premiums increased the most in Private Nordic,
of an increase of DKK 1,159m in the technical result and
by 6.8% measured in local currency. Growth in the commercial and
a reduction in the investment result of DKK 504m. The
corporate market was 0.2% and 0.8%, respectively, measured in
result was achieved in spite of the developments on the
local currency, and was affected on the one hand by the premium
financial markets and a higher level of storm and cloud-
increases implemented, and, on the other, by the negative economic
burst claims, particularly in Denmark.
conditions prevailing on the Danish market in particular.
The combined ratio was 93.5, as against 98.8 in 2010. The
Since 2009, Tryg has initiated significant premium increases
positive development was due to profitability-enhancing
in a number of sectors and within all business areas. The premium
measures, as well as storm and cloudburst claims being
increases came after a period where the value of claims progressed
at a lower level than the winter claims of 2010. The result
at a greater rate than that of the premiums, resulting in a gap.
underlines the fact that Tryg is on course to achieve the
Because premium increases only have an effect from the annual
target of a return on equity of 20% after tax, correspond-
date of renewal of the insurance, some of the profitability-
ing to a combined ratio of 90.
enhancing effects will only occur some time after the increases
Result
are implemented. 2012 will therefore still see an impact of around
DKK 600m due to premium increases implemented in 2010 and
The result was achieved in a year impacted by major events
2011. Tryg believes that premiums are now at a level where, in
resulting in claims and difficult economic conditions, which both
future, normal premium adjustments that are in line with general
affected the insurance business and resulted in volatile financial
price trends will prevail to a greater extent.
markets. The improvement is due mainly to the effect of the
profitability-enhancing initiatives of DKK 1bn implemented in
Tryg continously monitors developments in claims costs levels, and,
recent years. In 2011, profitability initiatives had an impact on
accordingly, in 2011 decided to introduce premium increases in sec-
12 | Annual report 2011 | Tryg A/S
tors and customer segments where profitability was unsatisfactory.
December. In total, the weather claims mentioned amounted to
This includes, among other things, measures that have their basis
DKK 1.6bn before reinsurance and DKK 556m after reinsurance,
in claims arising from storm and cloudburst claims. The premium
having an impact of 2.7 percentage points on the combined ratio.
increases implemented in 2012 will have an impact of around
The development in terms of more weather claims, particularly
DKK 400m in 2012 and, when added to the impact of previous
as a result of storm and cloudburst, is expected to continue in
measures of DKK 600m, the total impact will therefore be DKK 1bn,
the future. Especially, the development in terms of cloudbursts
corresponding to approximately 5% of Tryg’s total portfolio.
has been significant in Denmark, and meteorologists anticipate in
Claims costs
future an increase in the number of extremely heavy cloudbursts
in particular. This development will increase the claims costs and
The claims ratio, which includes both the claims costs and
therefore also the expenses relating to reinsurance to cover this
the result of reinsurance as a percentage, was 76.7, as against
type of risk. To counteract this development, Tryg will continue
81.8 in 2010. The improvement in the claims ratio covers both
to work on adapting products and pricing, and actively work on
the milder winter and the higher level of weather claims and
claims reduction for the benefit of both customers and Tryg alike.
large claims costs. Weather claims amounted to DKK 1.6bn in
total, of which the cloudburst in the Copenhagen area ac-
The cloudburst in the Copenhagen area differed from previous
counted for DKK 1.2bn. The claims from the cloudburst were
cloudbursts in that commercial customers were more widely af-
covered by Tryg’s reinsurance, which limits the value of claims to
fected. Many companies experienced flooding in basements and
DKK 100m, to which is added DKK 96m from renewal premiums
storerooms, and since the concentration of value is high in the
to reinstate the cover. The cloudburst therefore had an impact
case of commercial customers, this type of claim is more expen-
of DKK 196m on the result and a negative impact on the claims
sive than for private customers. At the same time, the propor-
ratio of 0.9 percentage points. In addition to the July cloudburst,
tion of very large claims was also significantly higher, and the
Denmark also experienced a series of small cloudbursts during
50 largest claims represented around 30% of total expenses.
the summer. This was mirrored in June by flooding in Norway
as the result of heavy rain. In addition to claims due to rain, Tryg
As a result of the anticipated increase in cloudburst claims,
was affected by storms in both Denmark and Norway, as well
Tryg’s Danish business within both Private and Commercial
as the storm Dagmar, which hit Norway, Sweden and Finland in
implemented a series of initiatives to reduce future expenses
Weather claims
Large claims
DKKm
2,000
1,600
1,200
800
400
0
DKKm
1,000
800
600
400
200
0
2007
2008
2009
2010
2011
2007
2008
2009
2010
2011
Extraordinary winter claims
Reinstatement
Storm and cloudburst, gross a)
Storm and cloudburst, net b)
Expected level for 2011 (DKK 300-350m)
Large claims, gross
Large claims, net
Expected level 2011 (400-500 DKKm)
a) Claims costs before reinsurance
b) Claims costs after reinsurance
Tryg A/S | Annual report 2011 | 13
for this type of claim. These include, among other things, ad-
2011 saw a range of initiatives implemented in terms of reducing
vice in connection with reconstruction after the claim, but also
the level of future costs. In the spring, Tryg accordingly signed
requirements governing the installation of claims-reducing meas-
an agreement with Danish tied agents, resulting in a reduction
ures, such as perimeter drainage and high water sealing drains,
in salary of an average of 5% with effect from November 2011,
as well as changes in terms of the cover provided. Tryg has also
with no adjustment over the next two years. Furthermore, Tryg
introduced additional rules for underwriting new business.
established the ‘Next Level Sourcing’ project, which includes a
The general premium increases for buildings insurance already
large number of initiatives focusing on systematically reviewing
implemented also contribute to countering the anticipated
processes and leveraging Tryg’s size on the procurement side.
development in terms of cloudburst claims.
The project includes claims expenses through Tryg’s procurement
of claims handling at, for example, car workshops and craftsmen,
As additional security against weather claims, Tryg extended
as well as Tryg’s own costs. In addition, work is continuing on
its reinsurance cover in July 2011 by acquiring lateral cover that
optimising internal processes in both administration and claims
limits Tryg’s expenses in the event of a large number of minor
handling, as well as on optimising the use of a variety of sales
events resulting in claims. While traditional reinsurance cover
channels.
applies for each event, this cover comes into force if Tryg has
incurred claims expenses of more than DKK 400m for weather
Result for discontinued activities
claims distributed across a number of events. As a result of the
The result for discontinued activities was DKK 26m. The result is
many storm and cloudburst events in the second half of 2011,
due to a positive run-off on provisions for claims from the marine
the cover is close to coming into force and will therefore limit
business, which Tryg discontinued underwriting in 2010.
the risk of weather claims costs in the first half of 2012.
Investment result
At DKK 858m, the level of large claims before reinsurance was
In 2011, Tryg’s total investment portfolio of DKK 43.0bn produced
slightly higher in 2011 than in 2010, when they amounted to
a gross return of DKK 2,010m, which corresponds to a return of
DKK 813m. As can be seen from the graph on page 13, 2010
4.8% on average invested capital over the period.
and 2011 both had high levels of large claims. Tryg believes that
there is an underlying trend behind this and has increased the
Tryg’s investment portfolio is divided into a match portfolio and
expected level of large claims. As a result of reinsurance cover,
a free portfolio. The match portfolio accounted for DKK 33.2bn,
the impact of large claims on the total result for 2011 was
consisting of bonds that match the insurance provisions, so that,
DKK 546m.
Costs
as far as possible, any fluctuation as a result of interest changes
is offset. The remaining part of the assets is called the free
portfolio and is a diversified portfolio of property assets, equities
The expense ratio was 16.8 as against 17.0 in 2010. The
and bonds. The free portfolio accounted for DKK 9.8bn. Overall,
improvement has come about in spite of increased expenses
dividing the investment portfolio leads to a low financial risk and
relating to payroll tax in Denmark and redundancy costs in con-
reflects Tryg’s focus on the insurance business.
nection with organisational changes. The expense ratio was also
affected by expenses for the Tryg Transition project, the aim of
The return on the match portfolio was DKK 1,706m before trans-
which is to design and implement new processes for Tryg’s sales,
fer to technical interest and DKK 94m after transfer in 2011.
customer services and claims handling. Tryg Transition focuses on
a number of issues, including developing use of the Internet as a
The return on the free investment portfolio was DKK 304m. The
platform for serving customers and enabling customers to serve
result was affected by the negative developments on the financial
themselves to a greater extent than is currently the case. On
markets in 2011 due to the economic situation, particularly in
the one hand, this will streamline processes to the benefit of
the Eurozone, and, more specifically, the debt crisis in Southern
the customers, and, on the other, give Tryg the opportunity of
Europe. The equity portfolio, which is a globally diversified port-
focusing even more on areas that create value for customers.
folio, showed a negative return of 4.2%. Other bond investments
14 | Annual report 2011 | Tryg A/S
were affected by interest rate trends in Europe and generated a
return of 4.1%. On the whole, the make-up of the free portfolio
remained unchanged in 2011, and the portfolio continues to be
a diversified portfolio of property assets, equities and bonds.
After deduction of other financial expenses, the net investment
result for 2011 was DKK 66m.
Highlights Q4 2011
• Profit after tax of DKK 344m.
• Technical result of DKK 271m.
• Combined ratio of 95.5.
Tax
• The quarter was effected by claims costs arising from storms
Berit and Dagmar, with weather claims totalling DKK 305m.
Tax on profit for the year was DKK 455m, corresponding to 29%.
• A high level of large claims totalling DKK 398m.
The slightly higher effective tax rate was affected by the loss on
• Expense ratio of 17.4.
equitiy investments, which is not tax-deductible.
Capital position
Tryg’s equity stood at DKK 9,007m at the end of 2011, and,
Profit after tax was DKK 344m for the fourth quarter of 2011,
once subordinated loan capital of DKK 1,589m was added, Tryg’s
as against DKK 369m for the same period of 2010. The result
total capital base was DKK 10,596m. The capital base must be
was made up of a technical result of DKK 271m and an invest-
viewed from a number of angles, including in the light of Tryg’s
ment result of DKK 163m due to a good return on equities.
goal of achieving a capital level corresponding to a rating of ‘A-’
The technical result was affected by a high level of large claims
from Standard & Poor’s. In this regard, Tryg had a buffer of 9% at
in the industrial area, a comparatively high run-off level and
the end of 2011. Moreover, in accordance with Danish Financial
storms Berit and Dagmar, which hit Norway in particular.
Supervisory Authority guidelines, Tryg calculates an individual
solvency requirement. The individual solvency requirement at 31
In the course of the fourth quarter 2011, expenses relating
December 2011 was determined at DKK 6,320m. The individual
to the July cloudburst in the Copenhagen area also increased,
solvency requirement must be seen in comparison to the capital
making total expenses before reinsurance of DKK 1.2bn, and
base, which is DKK 8,190m, and so, compared to that, Tryg has
expenses after reinsurance, including reinstatement of cover,
solvency of DKK 1,870m.
DKK 196m. As a result of the lower interest rate level, the effect
of discounting on combined ratio was 0.6 percentage points
In 2011, as a result of the lower interest rate levels, an adjust-
lower than in the fourth quarter 2010.
ment of DKK 399m was made to the Norwegian pension liability.
This adjustment is not included in Tryg’s result, but is entered
In the fourth quarter, the level of premium in local currency was
directly under equity in the accounts. In the event of a return to
on a par with the same period of 2010, mainly due to a higher
a higher interest rate level, the provision will fall, with an accord-
level of bonus and premium discounts and negative growth in
ingly positive effect on Tryg’s equity. Return on equity after tax
the commercial and corporate market. Growth in the private
was 13.1% in 2011, compared to 6.6% in 2010.
market continued to be at a high level, but it was adversely
affected by profit sharing due to a good period for several
In light of Tryg’s capital level target, it is proposed that
group agreements.
DKK 400m be distributed in the form of a cash dividend.
Events after the balance sheet date
In the opinion of management, from the balance sheet date to
the present date, no other matters of major significance have
arisen that are likely to materially influence the assessment of
the company’s financial position.
Tryg A/S | Annual report 2011 | 15
Private Nordic
Highlights
• Technical result improved from DKK 446m to DKK 886m
in 2011.
• Combined ratio improved from 96.4 to 93.0 in 2011.
• Gross premiums rose 6.8%, driven by premium increases.
• Increase in customer satisfaction in both Denmark and Norway.
Result
work was undertaken during the year involving the implemen-
tation of a number of claims-reducing measures, such as high
water sealing drains and perimeter drainage, as well as changes
in terms of the cover provided, e.g. increases in policy excesses
and limitations in respect of contents cover in basement areas.
In recent years, significant premium increases have been
implemented in order to improve profitability. The need for any
further measures is assessed on an ongoing basis; the rising
expenses relating to weather claims and repair cost trends
are closely monitored. Since this affects the entire insurance
market, the premium levels in the markets have experienced an
across the board rise. Along with the clear increase in expenses
Private Nordic’s technical result of DKK 886m was almost double
relating to weather claims, Tryg’s premium increases have been
its result for 2010 and was due, in particular, to the effects of
met with relatively high acceptance among customers, which is
premium measures.
reflected in a high and stable retention rate. In 2011, customer
satisfaction surveys were conducted by EPSI, an independent
In 2011, Private Nordic focused on continuing the implementa-
organisation. The survey showed that customer satisfaction
tion of the premium increases initiated in 2009 and 2010, and
had risen in both Denmark and Norway. This is a good starting
this contributed to the improvement in the technical result. The
point, which testifies to a strong customer relationship in a year
positive development in the result was also helped by a return
where the premiums have increased.
to more normal winter conditions. The improvement in the re-
sult was achieved in spite of the heavy cloudburst in the Copen-
The development of Tryg’s new websites, launched in Denmark
hagen area in July and a number of smaller storms in Denmark
and Norway in 2011, has also focused on the relationship
and Norway. To reduce the risk of cloudburst claims, systematic
the company has with customers. A large proportion of Tryg’s
Result for Private Nordic
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
Run-off gains/losses, net of reinsurance
Key ratios
Gross claims ratio
Business ceded as percentage of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
16 | Annual report 2011 | Tryg A/S
Q4 2010
Q4 2011
2010
2011
2,654
-2,040
-448
166
-26
22
162
153
76.9
1.0
77.9
16.9
94.8
2,766
-2,130
-463
173
-8
19
184
47
77.0
0.3
77.3
16.7
94.0
10,181
-8,223
-1,627
331
11,097
-8,784
-1,786
527
38
77
446
399
80.8
-0.4
80.4
16.0
96.4
253
106
886
159
79.2
-2.3
76.9
16.1
93.0
customers use the websites to search for information about
private business implemented premium increases chiefly for
their insurance policies and insurance needs. Similarly, many use
house and contents insurance, whereas the increases in the
the websites to report smaller claims. Another initiative was the
Norwegian private business were chiefly for house and motor
launch of Tryg’s travel app, which has a number of features, in-
insurance.
cluding allowing travellers to securely store copies of travel docu-
ments, passport and credit cards, etc., on their mobile phones.
The effect of premium increases was clearly manifested in
Premiums
the average premium for Danish private customers, which rose
by 5.7% during 2011, whereas the equivalent for Norwegian
Overall, gross premiums rose by 6.8% in local currency. The
private customers rose by 2.9%.
Danish private business was a major contributor, with a growth
of 8.3%, driven by the premium increases that had been imple-
Customers’ reactions to the higher premiums can be seen in the
mented. This was further augmented by growth in the Norwegian
customer retention development, which shows how many, out
private business of 4.4% and continued growth in Sweden and
of 100 customers, opt to renew their policies. In Denmark, after
Finland, but at a lower level than in previous years. The Danish
falling slightly in 2010, the retention rate rose during 2011,
Combined ratio – Sweden and Finland
Customer retention in Denmark and Norway
150
140
130
120
110
100
90
2008
2009
2010
2011
%
94
92
90
88
86
84
82
2007
2008
2009
2010
2011
Sweden
Finland
Denmark
Norway
Average premiums – House
Average premiums – Motor
Index
150
140
130
120
110
100
90
Index
120
110
100
90
80
2006
2007
2008
2009
2010
2011
2006
2007
2008
2009
2010
2011
Denmark
Norway
Denmark
Norway
Tryg A/S | Annual report 2011 | 17
ending the year at 90.5. It was mainly single-product customers
For a number of customers, however, it was not the first time
who left Tryg after the premium increases. Tryg generally tries
they had reported claims as a result of a cloudburst. Tryg and
to attract customers who take out all their policies with Tryg.
Tryg’s customers share a common interest in reducing future
This gives Tryg the possibility of offering a better product in a
cloudburst claims, and Tryg has therefore approached these
number of ways, including via the Tryg Family concept. This type
customers with views to reduce and limit future claims. The
of customer also has a higher retention rate and is therefore
measures include installing preventive measures such as high
more profitable.
water sealing drains and perimeter drainage, as well as changes
such as increases in policy excesses and limitations on contents
In Norway, the retention rate remained relatively steady at 86
cover in basement areas. Tryg has set up a dedicated department
throughout the year. Overall, these high levels testify to a high
responsible for claims reduction, whose role is to ensure existing
degree of acceptance and customer satisfaction, which is an
claims-reducing measures are clearly defined and that new ones
important and enduring cornerstone of Tryg’s business model.
be developed.
In Sweden and Finland, the focus in 2011 was on creating
The Norwegian part of Private Nordic was also hit by several
better balance between growth and profitability. A number
large claims during 2011, mainly as a result of flooding and
of measures were implemented, including premium increases
landslides. Overall, weather claims accounted for DKK 647m
within selected segments, and the possibility of giving discounts
before reinsurance and DKK 237m after reinsurance, as against
was reduced. In the Swedish business, niche areas Bilsport
DKK 31m after reinsurance in 2010 in Private Nordic.
& MC, Product Insurance and Atlantica Yacht delivered good
results, with the combined ratio being below 90. Overall,
Claim inflation is another focus area, where, in Norway in
Sweden experienced growth of 9.0% in 2011.
particular, there is evidence of a growing tendency in the area
The Finnish part of Private Nordic is approaching profitability,
their increased frequency. This is linked to the growth in the
but is still not at a satisfactory level. Growth in Finland in 2011
Norwegian economy, where average wage increases of 4%
of house insurance due to higher repair costs for claims and
was 5.6%.
Claims costs
mean that anticipated inflation in Norway is higher than in the
other Nordic countries. It is therefore important to maintain a
focus on the inflation risk. One of the activities that support
The biggest single event of 2011 was without doubt the
this is the ‘Next Level Sourcing’ project, which, as stated earlier,
cloudburst that hit the Copenhagen area on 2 July. More than
is focused on achieving better leveraging of Tryg’s procurement
20,000 claims, most of which were from private customers,
power and on streamlining processes.
were reported within a few days and put claims handlers and
claims assessor under pressure to help the many customers
In motor insurance, average claims expenses rose, including
who had reported a claim. For Tryg, it is crucial to be able
expenses resulting from glass claims. To mitigate this, Tryg
to quickly help limit the extent of the claim and provide
has taken initiatives, in respect of workshops, to increase the
dehumidification equipment. Subsequently, the focus is on
proportion of repairs offered as opposed to full replacement
repairing the damage in the most effective way.
of a damaged windscreen or window.
18 | Annual report 2011 | Tryg A/S
Total claims inflation is around 3%, with Norway higher and
Denmark lower than this. An assessment of claims inflation is
essential when determining the size of premium increases.
Highlights Q4 2011
Change of ownership policies in Denmark has been a focus
area in recent years, as the claims cost level has been exces-
sive. The premium for new change of ownership policies was
therefore increased during both 2010 and 2011, and a more
restrictive underwriting policy was introduced. In 2011, the
claims level for change of ownership was significantly improved
compared to preceding years, and profitability is expected
to gradually improve in the coming years. In Sweden, there
was an improvement in the claims ratio from 84.7 to 83.2.
In Finland, the claims ratio improved by 1.8 percentage
points to 75.8.
Overall, the claims ratio for Private Nordic was 76.9,
• Technical result improved from DKK 162m to DKK 184m
in the fourth quarter of 2011.
• Combined ratio improved from 94.8 to 94.0.
• Run-off gains DKK 106m lower than for the same quarter
of 2010.
• Storms Berit and Dagmar respectively had a negative impact
of DKK 74m on the result.
• Gross premiums rose 2.8%, driven by premium increases.
• Weather claims accounted for DKK 106m, as against
DKK 138m for the same period in 2010.
• Expense ratio improved from 16.9 to 16.7.
compared to 80.4 in 2010.
The technical result was improved in the fourth quarter, which
Costs
was mainly a result of the premium increases and higher ac-
ceptance from customers. This was manifested in the retention
Costs continued to be in focus in Private Nordic during 2011.
rate of 90.5, as against 89.5 for the same quarter of 2010
Work is currently underway to optimise the use of various dif-
in Denmark, whereas the 2011 retention rate in Norway has
ferent sales channels and thereby bring down the costs associ-
remained stable at around 86.
ated with sales. One example of this is the systematic work
undertaken to increase the sales and delivery of service via the
Gross premiums rose 2.8% in the fourth quarter, but the growth
Internet. Existing customers, in particular, who want additional
in premiums was lower than anticipated, due chiefly to profit
cover or make simple changes to their policy will be able to
sharing on a number of group agreements at the end of the
serve themselves via the Internet to an even greater extent.
year, this being a result of the improved profitability.
Higher payroll tax on Danish employees, as well as redundancy
The fourth quarter was affected by a number of weather claims.
costs, had a negative impact on costs, but if these effects are
Storms Berit and Dagmar respectively ravaged the Norwegian
disregarded, the development d in the expense ratio from
part of the business in particular, causing extensive damage,
16.0 to 16.1 in 2011 was satisfactory.
which had an overall impact on the quarter of DKK 74m, or
2.7 percentage points. Run-off gains amounted to DKK 47m in
the fourth quarter 2011, compared to DKK 153m for the same
period of 2010. The run-off from the previous year’s claims
was less in the fourth quarter of 2011 and, taken in isolation,
resulted in a rise in combined ratio of 4 percentage points.
Tryg A/S | Annual report 2011 | 19
Commercial Nordic
Highlights
• The technical result improved from a loss of DKK 474m
in 2010 to a profit of DKK 117m in 2011.
• Combined ratio improved from 112 in 2010 to 98.1 in 2011.
• Gross premiums rose 0.2%, driven by premium increases.
Result
in the long term, increasing customer retention. The Danish part of
the commercial area continues to be most adversely affected by the
recession. This was manifested in a number of ways, including the
fact that the number of bankruptcies in Denmark once again rose
in the second half of 2011. The fluctuations in the economy result
in difficult conditions for commercial customers, which influence the
companies’ insurance needs.
The result improvements indicate that the measures initiated are
having a beneficial effect on the result. However, the combination
of measures and an economic situation that remains difficult for
Commercial Nordic’s technical result of DKK 117m was an im-
many medium-sized and smaller business, in Denmark in particular,
provement on 2010 of DKK 591m, due both to profitability initia-
resulted in difficult conditions for insurance policy sales in 2011,
tives and the weather conditions, which as a whole were more
why growth was relatively limited.
favourable in 2011.
Premiums
The implemented profitability initiatives had a positive impact,
Gross premiums rose to DKK 4,237m in 2011, corresponding to a
which manifested in an improved underlying development in the
growth of 0.2% in local currency. The low growth was adversely
result. In 2010, Commercial Nordic was particularly hard hit by
affected by the recession, particularly in Denmark, and boosted by
winter claims, and the significant improvement was due mainly
the premium measures implemented, which passed off with the an-
to the absence of extraordinary winter claims in 2011. How-
ticipated minor impact on retention rate. The retention rate only fell by
ever, the Danish part of Commercial Nordic was affected by the
around one percentage point to 85.5 in the Danish part of Commercial
cloudburst that hit in the Copenhagen area in July. The expense
Nordic and, on the whole, remained unchanged in Norway at 88.4.
ratio improved from 24.2 in 2010 to 23.6 in 2011. Cost levels are
However, there are still areas where profitability is not satisfactory.
still too high, and focus is on reducing these via process improve-
For example, premiums on agricultural policies are being increased in
ments, optimising the use of different distribution channels and,
Denmark in 2012, and Tryg is also working towards further segmenta-
Result for Commercial Nordic
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
Run-off gains/losses, net of reinsurance
Key ratios
Gross claims ratio
Business ceded as percentage of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
20 | Annual report 2011 | Tryg A/S
Q4 2010
Q4 2011
2010
2011
1,066
-818
-250
-2
0
7
5
46
76.7
0.0
76.7
23.5
100.2
1,039
-711
-249
79
-19
6
66
95
68.4
1.8
70.2
24.0
94.2
4,183
-3,732
-1,014
-563
59
30
-474
99
89.2
-1.4
87.8
24.2
112.0
4,237
-3,297
-1,001
-61
141
37
117
155
77.8
-3.3
74.5
23.6
98.1
tion of commercial customers in the light of the customers’ differing
process improvements are being carried out, and use of the various
characteristics. This may result in more differentiated pricing as well
distribution channels will also be optimised. In spring 2011, Tryg
as more differentiated service for various customer groups.
entered into a new agreement with the company’s tied agents in
Claims costs
Denmark. The agreement resulted in a reduction in total salary pay-
ments of almost 5% during 2011 and with no increase during the
The claims ratio was 74.5 in 2011, as against 87.8 in 2010, which
next two years. The agreement will therefore reduce the cost level.
was a significant improvement and mainly due to the premium
As a result of transitional arrangements, the effect was limited in
measures implemented. In 2011, Commercial Nordic was hit by
2011, but will be noticeable in 2012.
higher cloudbursts claims payments, which had a negative impact
on the claims ratio of approximately 2.5 percentage points. Large
claims accounted for DKK 90m in 2011, compared to DKK 407m in
2010, and affected the claims ratio by almost 2.1 percentage points.
Highlights Q4 2011
In Commercial Nordic too, claims-reducing measures were imple-
• Technical result improved from DKK 5m to DKK 66m during
mented as a result of increasing cloudburst claims. The measures
the fourth quarter of 2011.
include instructions to customers to locate stocks and inventories
in basements at least 40 cm above floor level and requirements
on reconstruction using materials capable of withstanding water.
Premium increases and changes in terms of cover are also being
implemented, such as increases in policy excesses and adjust-
ment of cover and acceptance rules. Industries and segments
that are particularly exposed to claims will see customised
changes to their price rates and covers. Commercial Nordic was
boosted by fewer large claims, but was also severely affected by
the cloudburst in July, which mainly affected central Copenhagen,
home to many commercial customers. The cloudburst had an
impact of approximately DKK 300m before reinsurance.
Agriculture has been a challenging area in recent years, and in
2011 as well. The sector is generally under pressure from falling
• Combined ratio improved from 100.2 to 94.2.
• Run-off gains amounted to DKK 95m in the fourth quarter of
2011, compared to DKK 46m in the same quarter of 2010.
• Gross premiums fell by 3.5% in local currency, and were af-
fected by a decrease in number of customers as a result of
the premium increases and a challenging economic climate in
Denmark in particular.
• Weather claims amounted to DKK 51m, compared to DKK
39m during the same quarter of 2010.
• Large claims of DKK 40m, compared to DKK 86m during the
same quarter of 2010.
• The expense ratio rose from 23.5 to 24.0 and was under
pressure from the lower premium level.
land and property prices, creating a number of challenges, even
The improved technical result was aided by premium increases and
for strong agricultural businesses who find it difficult to secure
a higher run-off result. The mild winter also helped the financial
finance for the necessary investments and expansion projects.
result during the fourth quarter of 2011 compared to the extra-
This also has a negative knock-on effect on the insurance busi-
ordinarily tough winter at the end of 2010. On the other hand,
ness. In 2011, as mentioned, a number of measures to improve
the fourth quarter of 2011 was affected by two storms, Berit and
profitability were initiated, but further measures may prove neces-
Dagmar, which in particular hit Norway. Weather claims costs
sary, as the claims ratio for agriculture continues to be too high.
totalled DKK 51m. Gross premiums were lower during the fourth
Costs
quarter of 2011 compared to the same quarter of 2010. The many
premium measures were implemented as planned during the year,
The expense ratio was improved from 24.2 in 2010 to 23.6 in
but with a decrease in number of customers. This is reflected in
2011. The improvement is due partly to cost restraint and partly
the retention rate, which fell in both the Danish and the Norwegian
to lower sales, resulting in a reduction in sales costs. However,
part of Commercial Nordic. This negative impact was reinforced
the cost level remains too high and is to be reduced through a
by the continuing challenging economic climate in Denmark in
series of measures. In order to reduce the cost level, a number of
particular, with an increase in the number of bankruptcies.
Tryg A/S | Annual report 2011 | 21
Corporate Nordic
Highlights
• Technical result improved from DKK 403m in 2010 to
DKK 531m.
• Combined ratio improved from 92.6 in 2010 to 90.7.
• Gross premiums rose by 0.8% driven by premium increases.
Result
response and production times, among other things. Corporate Nordic
implemented premium measures during 2011 and also focused on
retaining profitable customer relations without reducing premiums in
an otherwise competitive market. This proved very successful. As in
2010, interest rates were low during 2011, which was of particular
importance for Corporate Nordic due to a high proportion of per-
sonal injury business with a long duration.
The corporate market was characterised by competition during
2011, but Tryg believes there is also a focus on profitability among
the major players on the Danish and Norwegian markets. This focus
In 2011, Corporate Nordic recorded a good result, which was
on profitability must be viewed in context with the fact that capital
achieved despite claims relating to cloudbursts and a high level
models will generally impose a more demanding requirement for
of large claims. However, the financial result was also affected by
capital for the corporate area. This is particularly due to the propor-
run-off on previous years’ provisions.
tion of personal injury lines, including workers’ compensation, as
Premium income amounted to DKK 5,275m, equivalent to growth
contents, buildings and motor insurance for example. Over time,
of 0.8%. In Denmark and Norway, growth was negative at 0.8%
this factor is expected to increase the focus on profitability rather
there is a far higher capital requirement for these areas than for
and composed of premium increases for existing customers and a
than growth for the market as a whole.
decrease within personal injury insurance in particular. Customers
served by Tryg’s own sales team in particular have a high reten-
The Swedish business is continuing to grow. The Swedish part of
tion rate, due to the use of service concepts and the ongoing risk
Corporate Nordic is divided into a smaller corporate portfolio with
advicing. These are areas which Tryg will work to develop further
premium income of SEK 150m, which is still in a development phase,
in the coming years. In relation to the agents, Corporate Nordic
and an agent-served commercial portfolio of SEK 400m. For both
will work with an improved service concept focusing on improved
portfolios, there is a strong focus on profitability compared to both
Result for Corporate Nordic
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
Run-off gains/losses, net of reinsurance
Key ratios
Gross claims ratio
Business ceded as percentage of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
22 | Annual report 2011 | Tryg A/S
Q4 2010
Q4 2011
2010
2011
1,332
-1,044
-173
115
-31
10
94
87
78.4
2.3
80.7
13.0
93.7
1,312
-1,197
-165
-50
61
10
21
189
91.2
-4.6
86.6
12.6
99.2
5,124
-3,666
-663
795
-419
27
403
326
71.5
8.2
79.7
12.9
92.6
5,275
-4,251
-643
381
109
41
531
630
80.6
-2.1
78.5
12.2
90.7
the existing portfolio and new business, which also contributed
yet been closed. Excluding run-off gains from previous years,
moderate growth in 2011.
the claims level of workers’ compensation has however remained
Claims costs
at too high a level in recent years, taking into account the capital
requirement for this type of business. Corporate Nordic will there-
The claims ratio for 2011 amounted to 80.6, and was affected
fore continue to focus on improving profitability within this area
by cloudbursts, large claims and a high level of run-off gains.
through a combination of premium measures and segmentation.
The corporate area is not normally affected by weather claims to
such an extent, but many large businesses were affected by the
Costs
cloudburst in the Copenhagen area. In addition, 2011 was a year
The cost level within Corporate Nordic was further improved in
with a relatively high level of large claims compared to an average
2011, with an expense ratio of 12.2 compared to 12.9 in 2010.
year. Large claims amounted to DKK 636m gross, compared to
A low cost level is important in the corporate market, in order
DKK 357m in 2010.
to offer a competitive price and deliver a satisfactory result for
return on capital, which must be included in this business area.
The variation in expenses for weather claims and large claims does
The lower cost level in 2011 was partly achieved through restraint
not in itself give cause to implement premium measures. Given
in the filling of job vacancies. In the future, Corporate Nordic will
the actual course of events in 2011, the assessment is however
also be affected by a reduction in salary payments to the sales
that for both weather claims and large claims, there is a nega-
team, as described under Commercial Nordic.
tive underlying trend which must be matched in the pricing within
buildings and contents insurance in particular. For this reason,
Corporate Nordic is implementing premium increases for products
and segments with an unsatisfactory trend. This applies for exam-
Highlights Q4 2011
ple to buildings insurance in the Norwegian part and within power
plant insurance, as this area has experienced particularly unsatis-
factory levels of profitability. In both the Danish and the Norwe-
gian part of the portfolio, measures are also being implemented
on the basis of the customers’ individual claims development over
time. In the Swedish part of the corporate portfolio, the selective
development of the business is continuing alongside the imple-
mentation of profitability measures within motor in surance in
the agent-served part of the portfolio in particular.
The development of workers’ compensation was also a focus
area in 2011. Tryg’s provisions for this area give particular con-
• Technical result of DKK 21m, compared to DKK 94m during
the same period of 2010.
• Combined ratio of 99.2 compared to 93.7 during the fourth
quarter of 2010.
• Very high claims level due to large claims of DKK 287m,
compared to DKK 149m during the fourth quarter of 2010.
• Weather claims amounted to DKK 148m, compared to
DKK 19m during the same period of 2010.
sideration to the long-term nature of the workers’ compensation
The result for the fourth quarter amounted to DKK 21m and was
business, and the fact that legislation and changes in practice in
particularly affected by a high level of large claims and run-off
connection with awards of workers’ compensation could result in
gains, which can especially be attributed to the personal injury
higher claims costs with retrospective effect. In 2011, this trend
business. Large claims affected the combined ratio by 17.2%,
improved and claim provisions concerning previous years could
compared to 8.7% in 2010. The higher level of weather claims
be released as a result. This also included a reduction in the ex-
during the quarter was influenced by the two storms Berit and
traordinary provision of DKK 200m, which was carried out during
Dagmar in Norway and the adjustment of cloudburst claims in the
the third quarter of 2010. The total run-off gains amounted to
Copenhagen area in July 2011. Premium growth was negative at
DKK 630m in 2011 against DKK 326m in 2010. The run-off gains
approximately 3%, primarily as a result of profit sharing between
reflect the fact that the provisions must be sufficient in order to
a number of schemes due to a good claims ratio and a reduction
take account of a negative development in claims that have not
in the net loss of customers following the premium measures.
Tryg A/S | Annual report 2011 | 23
Investment activities
Tryg’s investment activity encompasses both investment in
correspond to the company’s capital base. This is invested
investment assets such as bonds, shares and property, as well
broadly in a portfolio of bonds, shares and property, with the
as the management of Tryg’s liquidity. The investment activity is
aim of achieving the best possible return with limited risk.
regulated both by applicable legislation and by the Supervisory
The principles for subdivision are described in more detail in the
Board’s policies and guidelines.
Risk management report, which can be found at tryg.com.
The investment portfolio
Investment result in 2011
Tryg’s primary focus is to run a profitable insurance business,
In 2011, Tryg’s collective investment portfolio of DKK 43.0bn
and Tryg’s investment activities must therefore support this aim
generated a gross return of DKK 2,010m, corresponding to a
insofar as is possible. This means that the investment strategy
return of 4.8% on average invested capital during the period,
is based on low investment risk and that the majority of the
compared to 4.3% during 2010.
investment assets are secure investment assets, primarily bonds.
Within the established framework, the aim is to maximise the
The result was negatively affected by declining share prices, but
return from the investment portfolio. In accordance with Tryg’s
positively affected by price gains on bonds due to a significant
investment strategy, in 2010 Tryg split the investment portfolio
decline in interest rates and a property return which overall was
into two sub-portfolios, a match portfolio and a free portfolio.
also positively influenced by the slightly rising property market
Thus, the match portfolio is invested so that it matches the
in Norway.
insurance provisions. As the provisions are discounted, they are,
The combined investment result before other financial income
like the investment assets, influenced by changes in interest
and expenses not related to investment was DKK 340m in 2011,
rates. The aim of the match portfolio is to neutralise these fluc-
compared to DKK 722m in 2010. After the adjustment of insur-
tuations insofar as is possible, so that the impact on Tryg’s net
ance items and other financial items, the net investment return
income from interest rate changes is minimised. The free invest-
amounted to DKK 66m and was on a par with expectations
ment portfolio consists of the other investment assets, which
despite the difficult market conditions.
Result of investment activities
DKKm
Bonds, cash deposits, etc.
Equities a)
Real estate b)
Total
Value adjustment, changed discount rate
Transferred to technical interest
Return on investment activities before other financial items
Other financial income and expenses, investment
Return on investment activities
Other financial income and expenses, non-investment c)
Total return on investment activities
Return
FY 2010
Return 2011
Match
Total
Investment assets
Free 31.12.10 31.12.11
1,706
1,706
-760
-852
94
152
-87
239
34,317
2,179
3,897
37,232
1,816
3,954
304
40,393
43,002
304
1,185
261
300
1,746
-227
-752
767
-45
1,858
-87
239
2,010
-760
-852
398
-58
722
340
-152
570
-274
66
a) DKK -44m sold on futures contracts is included in the equity portfolio.
b) Return on properties includes a calculated return on owner-occupied property. 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.
c)
The item comprises interest on operating assets and bank debt, exchange rate adjustment of insurance items, costs of investment activities and offsetting of return on
owner-occupied property.
24 | Annual report 2011 | Tryg A/S
The overwhelming majority of the combined bond portfolio, 80%,
less notable fluctuations around 0. During 2011, the daily and
has been invested in bonds with an AAA rating, 10% in AA-rated
monthly fluctuations have however been larger than is normally
and 9% in A-rated. Norwegian money market instruments without
the case. The uncertainty in the Euro zone resulted in declining
any rating, but with good credit quality, amount to 1%.
interest rates in Denmark and elsewhere. The Danish Financial
Supervisory Authority made it possible for the insurance sector to
The match portfolio
use an alternative discount rate. Tryg declined this option in order
In 2011, the match portfolio, which consists exclusively of bonds
to reduce complexity, despite the possibility of a short-term gain.
and deposits, generated a return of DKK 1,706m. This return must
be compared to the DKK 1,612m that concerns transferred techni-
3.4% return in the free investment portfolio
cal interest and price adjustments resulting from a change in the
The free investment portfolio primarily consists of shares,
discount rate. The total mismatch during 2011 was DKK 94m, or
property and bonds and generated a total gross return of
0.3% of the total match holding.
DKK 304m during the period, corresponding to 3.4% of the
average invested capital. At the end of 2011, the free port -
For the discounting of provisions, Tryg uses an yield curve set by
folio amounted to approximately DKK 9.8bn.
the Danish Financial Supervisory Authority based on the interest
rate level in the Euro area. Tryg matches most risk factors that
The equity portfolio, which is globally diversified, generated
influence the yield curve, but as the costs of matching precisely in
a negative return of DKK 87m, which was satisfactory compared
Euro bonds are significantly higher than they are for Nordic bonds,
to the trend in the global equity markets, but significantly
Tryg has primarily hedged in the local interest rate markets,
below our expectations at the beginning of 2011.
particularly in Denmark and Norway. As a result of the unease in
the bond markets in 2011, there was strong demand for Nor-
The property portfolio, which consists of Danish and Norwegian
dic bonds, particularly during the third quarter of 2011, resulting
properties, generated a return of DKK 239m, or 6.3%, which was
in a positive deviation. Other than this extraordinary influence,
slightly better than anticipated and a little below the result for 2010.
Tryg largely achieved a complete matching of the insurance provi-
Although the interest rate declined considerably during 2011, it did
sions during 2011, as the other three quarters had the anticipated
not have such a major impact as in 2010 due to developments in the
Result of investment activities
DKKm
Bonds, cash deposits, etc.
Equities a)
Real estate b)
Total
Value adjustment, changed discount rate
Transferred to technical interest
Return on investment activities before other financial items
Other financial income and expenses, investment
Return on investment activities
Other financial income and expenses, non-investment c)
Total return on investment activities
Return
Q4 2010
Return Q4 2011
Match
Total
366
366
-196
-176
-6
-162
171
123
132
380
-188
324
-18
306
-40
266
432
103
68
603
-196
-176
231
-16
215
-52
163
Investment
assets
31.12.2011
37,232
1,816
3,954
43,002
Free
66
103
68
236
a) DKK -44m sold on futures contracts is included in the equity portfolio.
b) Return on properties includes a calculated return on owner-occupied property. 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.
c)
The item comprises interest on operating assets and bank debt, exchange rate adjustment of insurance items, costs of investment activities and offsetting of return on
owner-occupied property.
Tryg A/S | Annual report 2011 | 25
property market. The bond portfolio was influenced by the significant
interest rate change in 2011 and generated a return of DKK 152m,
which corresponds to a return of 4.1%. Overall, the portfolio, which
has an approximate average duration of just one year and encom-
passes holdings of global high-interest bonds, has thus performed
satisfactorily. All asset classes have contributed a positive perfor-
mance and collectively the portfolio allocation has made an impor-
tant contribution to the investment result being largely as expected.
Other financial items
The item ‘Other financial items’ consists of many elements which
are included in the investment result. Some of these elements are
relatively predictable, while other vary more. As an example, interest
expenses on Tryg’s subordinate loans, rent for domicile properties
and interest income on operating cash are predictable. Other items
Responsible investment
Tryg’s investment activity follows international guidelines
for responsible investments.
If funds are invested in a company that breaches human rights,
damages the environment or is involved in child labour, corrup-
tion or the manufacture of cluster bombs, a dialogue is initiated
with the company with the aim of altering its behaviour or
disposing of the investment concerned.
Read more at tryg.com > CSR
with greater variation include currency adjustments and mismatch
Investment activity during the fourth quarter of 2011
on the inflation hedging of workers’ compensation provisions.
Net income from investment activity before other financial
income and expenses amounted to DKK 215m, compared
In 2011, other financial items amounted to DKK -333m, of which
to DKK 306m during the fourth quarter of 2010. The match
DKK -274m does not concern investment. The currency hedging
portfolio had a mismatch of DKK 6m and thus closely corre-
in particular deviated from the norm and was approx. DKK 100m
sponded to the targets for this part of the portfolio.
higher in 2011 than in 2010. This fluctuation is particularly due to
higher interest rates in Norwegian kroner.
During the fourth quarter, the free portfolio achieved a net
income of DKK 236m, of which the net income from shares
From 2012, Tryg will no longer recognise the return on domicile
amounted to DKK 103m, primarily as a result of shares rising
property and the corresponding reversal under other financial
8% globally. Net income from bonds etc. in the free portfolio
income and expenses. Net income from inflation swaps will in
amounted to DKK 66m and was influenced by declining
future also be recognised under claims costs.
interest rates, particularly in Denmark.
The total investment portfolio
The free investment portfolio
The match portfolio
13
5
9
17
1
Percent
55
20
40
Percent
28
7
5
20
16
Percent
64
26 | Annual report 2011 | Tryg A/S
Outlook
Tryg’s target remains a return on equity of 20%, which corresponds
The expense ratio is expected to fall in 2012. This is partly
to a combined ratio of around 90 including any run-off result and
expected to be achieved through the optimisation of processes
assuming the same interest rate level as in 2010. Tryg expects to
in the commercial market, distribution and within staff areas.
have a combined ratio of around 90 in 2013 providing that the level
of large claims and weather claims is as expected.
During 2010, Tryg divided the investment portfolio into two
– a match portfolio, which is exclusively intended to match the
For 2012, further improvements in the combined ratio and technical
insurance provisions, and a free investment portfolio. In the event
result are anticipated given the significant measures that have
of interest rate changes, price fluctuations in the match portfolio are
been implemented in recent years, as well as the measures that
balanced by a corresponding interest rate effect on the discounted
are planned for 2012.
provisions, hence the immediate effect on the financial result is
The isolated effect of the premium measures is estimated at approxi-
neutral.
mately DKK 1.0bn in 2012, made up of DKK 600m relating to the
On the other hand, a rise in interest rates will give a higher, ongoing
results of previously implemented measures and DKK 400m relating
insurance result as a result of higher discounting of claims costs.
to measures to be taken in 2012. The effetct of the measures will
be counteracted by the increase in claims costs. In recent years,
The anticipated returns from the equity and property portfolio are
the claims costs were in the level of 2-3% per year.
expected to be 7% and 6% respectively. The bond portfolio is ex-
pected to generate a return of 1.4% on the free portfolio, while the
Tryg expects premium growth at a lower level than in 2011
match portfolio is expected to generate a return of approx. 2.3%.
– growth which will be particularly driven by premium measures
and influenced by the economic developments in the commercial
As in previous years, Tryg’s capital is once again in 2012 expected
and corporate market in particular.
to be considerably in excess of the capital requirements that will
be imposed on the insurance sector under the impending Solvency
Given recent experiences, the level of both weather and large
II rules. Tryg’s own capital target is based on Standard & Poor’s
claims is expected to be higher in 2012 compared to what Tryg has
‘A-‘ rating, in connection with which Tryg has established a safety
previously assumed for a normal year. More frequent and violent
margin of 5%.
cloudbursts in particular are the reason for the higher anticipated
level of weather claims.
Tryg A/S | Annual report 2011 | 27
Our vision involves developing
the correct customer deliveries,
securing an efficient organisation
and achieving ambitious
financial objectives.
Strategy and
the insurance market
Strategy
Tryg’s vision is to be perceived as the leading peace-of-
Tryg aims to achieve a high level of customer satisfaction. Customer
mind provider in the Nordic region. This vision involves
experience is key, and focus will continue to be on claims handling,
both retaining and developing the correct customer
claims reduction and high-quality products and services. Customers
deliveries, securing a skilled, efficient organisation and
must be informed about claims reducing measures and experience
achieving ambitious financial targets. To achieve this,
short response times when a claim occurs. The customer must also
the strategic initiatives must be targeted and focused.
be guaranteed the correct premium, and there will be an increased
As a peace-of-mind provider, Tryg offers a complete
focus on price differentiation and faster premium adjustments when
package of products and services, which places tough
the level of risk changes.
demands on distribution, processes, IT systems and
claims handling.
Customer communication is increasingly taking place online
and via mobile phones and social media. It is important that
Profitable insurance business
Tryg meets customers on their terms by further exploiting
Tryg has an ambitious financial target of a return on equity
digital communication channels and delivering services that
of 20%. One necessary prerequisite for delivering profitability
are accessible wherever the customers happen to be.
at this level is a strong focus on profitable operation of the
insurance business.
Tryg’s primary business is general insurance, and it is from this
business that Tryg’s financial results are achieved. The invest-
ment business is an integral part of the operations and is run
with a focus on supporting the insurance business. This is done
We are available to our customers around
the clock online and in our emergency
call centre, where we offer our customers
urgent assistance if the worst happens.
primarily by investing in assets with stable returns and low risk,
Tryg’s Corporate Social Responsibility (CSR) commitment covers
which correspond to insurance obligations.
four areas: climate, inclusion, well-being and prevention. CSR
activities at Tryg are an integral part of both the insurance
Profitable insurance products are dependent on the correct
business and investment activities.
relationship between price and risk. Tryg improves and updates
tariffs and segmentation models on an ongoing basis, and
Efficient value creation
will place special focus on improving its ability to act quickly
Tryg focuses on efficiency improvements and on reducing the ex-
in response to developments in the risk profile in 2012.
pense level. Over the next few years, the Tryg Transition programme
The relationship between price and risk is also affected by
the work on claims reducing initiatives. Claims reducing
initiatives aim to reduce Tryg’s claims expenses both by
means of preventive work so that they do not arise and by
Tryg’s focus areas
limiting the effects after the claim has happened.
Loyal customers with a preference for Tryg
Delivery of the right products is a prerequisite for Tryg to
Focus areas in Tryg’s strategy to achieve the Group’s vision
and objectives:
achieve the targets. Tryg must satisfy the needs of customers
to feel peace of mind from the very first day, and must do so
in such a way that they continue to prefer Tryg as a peace-
• Improve profitability in Commercial Nordic by means of
product development, segmenting and efficient processes.
• Improve profitability in Sweden and Finland.
• Improve Time to Market – act more quickly in response
of-mind provider. The joint Nordic brand platform that was
to developments in the risk profile.
introduced in 2010 provides Tryg with a basis on which to
develop its position in the Nordic insurance markets.
• Reduce costs by streamlining processes, IT operations
and procurement.
30 | Annual report 2011 | Tryg A/S
will be developing a new Nordic business platform, which aims to
Attractive workplace
improve efficiency and reduce product complexity. This will take
Qualified employees with a high level of commitment are an
place by such means as significantly improving self-service facilities
essential part of ensuring high customer satisfaction, and Tryg
for customers, both in a claim situation and when servicing their
wants its employees to enjoy a very high level of job satisfac-
policies. At the same time, the new platform aims to contribute to
tion. The ability to attract the best employees and new talent
improve customer experience and to increase customer retention.
is an important factor in terms of achieving ambitious targets.
Tryg therefore wants to be an attractive workplace and to be
The claims costs will be reduced by means of process improve-
able to attract qualified employees.
ments, a focus on claims reduction and procurement. The Next
Level Sourcing project initiated in 2011 is part of this effort,
and in the next few years, it will result in a number of efficiency
improvements.
Costs per sale will be reduced by focusing on partnership agree-
Tryg focuses on employees’ well-being
and development, and strives to continuously
develop as an attractive workplace.
ments, geographical representation, outsourcing and online sales.
Tryg must make sure that the management and the employees’
Distribution costs must be reduced through the introduction of
qualifications are developed in line with the changing necessary
additional self-service solutions in Private Nordic and Commercial
skill requirements. Tryg also considers diversity in the workforce
Nordic, including partnership agreements. Tryg will improve the
to be a competitive advantage.
annual expense ratio by means of a more intensive focus on
efficiency improvements and by continuously increasing the
portfolio per employee.
Tryg A/S | Annual report 2011 | 31
KPI – (Key Performance Indicators)
Retention
rate
Expense
ratio
Combined
ratio
Customer
satisfaction
Employee
satisfaction
Return on
equity
(index)
2007: 16.8
2007: 101.4
2008: 17.1
2008: 101.5
2009: 17.2
2009: 100,9
2010: 17.0
2010: 100.4
2007: 84.4
2008: 88.2
2009: 92.2
2010: 98.8
(index)
2009: 100
2010: 102
2007: 100
2008: 100
2009: 103
2010: 102
2007: 22.8
2008: 9.3
2009: 22.5
2010: 6.6
2011: 100.3
2011: 16.8
2011: 93.5
2011: 104
2011: 103
2011: 13.1
Number of
Administrative
Calculated as
Index of custom-
Index of employee
Profit for the
customers that
expenses and
the sum of the
ers satisfaction
satisfaction
year of the
renew their in-
selling costs as
gross claims ratio,
for customers
measured in an
average equity
surance policies
a percentage
the net result of
having experi-
annual survey.
in percentage.
annually.
of earned
premiums.
business ceded
enced claims
as a percentage
handling.
T
r
e
n
d
D
e
s
c
r
i
p
t
i
o
n
of gross earned
premiums and the
gross expense
ratio.
Tryg has established a number of targets concerning perfor-
are clear and easy to communicate to the organisation. The
mance and results known as KPIs (Key Performance Indicators),
choice of KPIs is an ongoing process and they can be replaced
which give an indication of the direction and speed of fulfilment
or revised. In connection with the change in management
of the strategic objectives, whilst at the same time ensuring
during 2011, the strategy was revised, and this is reflected in
an appropriate balance between short- and long-term targets
the selected KPIs. The primary focus is placed on the profitable
and between performance and results. Compared to 2010, the
operation of Tryg, while the ambition of top line growth has
number of KPIs has been reduced, so that the targets for Tryg
diminished.
32 | Annual report 2011 | Tryg A/S
Tryg A/S | Annual report 2011 | 33
The insurance market
The Nordic insurance market is characterised by a high
will be extended. At the same time, workers’ compensation is
level of concentration. The sector is dominated by a
being levied a duty of 13.5%. This duty will presumably mean
small number of companies with relatively high market
that insurance companies will have to increase premiums and
shares and a presence in a number of Nordic countries.
at the same time strengthen their reserves for future claims
The four largest companies have a joint Nordic market
payments. Finally, the proposal to remove the right to deduct
share of 47%, while the four largest companies in each
health insurance premiums will make it more difficult for
of the Nordic countries cover between 62% and 79%
companies to sell health insurance policies in the future.
of the respective markets. In 2011, total premium
income for the entire Nordic market was approximately
In Norway, established insurance companies have in recent
DKK 170bn.
years experienced competition from smaller, newly-established
companies. Companies such as Frende, DnBNOR and Storebrand
2011 was affected by the ongoing debt crisis in the Eurozone
have applied comprehensive marketing and pricing strategies
and the general economic recession. International investors
and have contributed to an increased competition and pressure
are increasingly looking towards the Nordic markets, resulting
on prices, especially in the private market.
in declining interest rate levels. This has not, however, made
it any easier for companies to obtain financing for operations
Tryg in the market
and investments. 2011 was characterised by a growing num-
As the second largest general insurance company in the Nordic
ber of bankruptcies, which had a particular effect on insur-
region, Tryg is obviously affected by developments in the Nordic
ance companies in the commercial, agricultural and industrial
insurance market, but at the same time also contributes to
segments.
impact these developments.
Many of the Nordic countries, especially Denmark and Norway,
The current trend towards better pricing compared to risk will
were hit by extreme weather in 2011, including major cloud-
continue, and Tryg will, like many other companies, investigate
bursts and floods, resulting in large numbers of claims. Most
opportunities more fully in order to take into account more spe-
insurance companies, especially Danish ones, have already
cific risk factors in price setting, including, for example, changes
implemented premium increases, but the high number of
in the weather. The work to improve the balance between price
weather claims has contributed to continuing reflections about
and risk will take place while continuing to offer customers the
the price to risk relationship – especially in relation to possible
best products covering their needs and ensuring that customers
future climate changes.
experience peace of mind and service in their contact with Tryg
– both in day-to-day counselling and in a claims situation.
The Nordic market continued to have a pronounced focus on
profitability in the underlying business. This behaviour will
In 2011, the financial crisis hit Europe particularly hard, and had
presumably continue for the next few years.
a negative impact on the general economic situation. However,
the insurance industry – and in particular the very mature Nordic
In Denmark, a number of proposed changes to legislation
market – was not very vulnerable to economic fluctuations.
might affect the conditions for insurance companies. A couple
Especially in the private segment, the needs of customers for
of these relate to the latest Danish Finance Act. In the area
insurance and peace of mind in everyday life were not notably
of workers’ compensation, the proposal for an increase in the
affected by economic fluctuations; quite the opposite in fact.
retirement age means that insurance companies will have to
Thus, Tryg did not suffer to any great extent from the economic
strengthen their reserves, as the duration of ongoing services
trend in 2011.
34 | Annual report 2011 | Tryg A/S
Market shares in Denmark
Market shares in Norway
26.8
20.8
Percent
5.9
10
5.3
18
13.2
Tryg
Alm. Brand
IF
Codan
Topdanmark
Gjensidige
Other
20.7
16.5
Percent
26.5
25.1
11.2
Market shares in Sweden
Market shares in Finland
3.8
17.4
15.5
15.8
Percent
28.8
18.7
Moderna
Folksam
Länsforsäkringar
IF
Codan
Other
2.4
17.8
18.5
Percent
9.5
27.6
24.2
Tryg
Gjensidige
Sparbank 1
IF
Other
Tryg a)
Tapiola
Fennia
IF
Pohjola
Other
Source: The official market statistics from the countries concerned.
a) Estimated market share of the private market is above 5%.
In addition to the work in pricing compared to risk, there was
Tryg enjoys a strong position in the Nordic market and will con-
also a focus on efficiency improvements of internal processes,
tinue to improve and develop existing sales channels so that a
especially in connection with claims handling. In this context,
high level of service and effective access to Tryg’s products are
it is expected that the Tryg Transition and Next Level Sourcing
guaranteed. Despite increased competition in certain markets,
projects will contribute to efficiency and process improvements,
it is therefore expected that Tryg will be able to retain its market
which will in turn contribute to improved earnings in the under-
share in the four Nordic countries.
lying business and ensure that Tryg can continue to run an
efficient insurance business in a changing market.
Tryg A/S | Annual report 2011 | 35
Customers and products
Being one of the largest insurance companies in the Nordic region,
•
Product benefits (for example free travel companion
Tryg offers a broad range of insurance products to both private
insurance policy)
individuals and businesses. Tryg develops new products on a
•
Discount on various products offering peace of mind
regular basis and continuously adapts existing peace-of-mind
(for example burglar alarm, antivirus programme)
solutions to customer requirements and developments in society.
Tryg views work on innovation as an important strategic tool for
At tryg.dk users can compile their insurance needs, calculate
growth and enhancement of its position as the Nordic region’s
prices, take advantage of special offers and submit claims. At
leading peace-of-mind provider. Results achieved through innova-
tryghedsraadgiveren.dk, visitors can test their knowledge of
tive measures renew and develop Tryg. Tryg wants to be perceived
burglary, fire and water claims, as well as find good advice about
as a forward-looking company. Customers must feel that their
how to secure their home, their family and their valuables.
basic need for peace of mind are covered – also in future society.
‘Help 24/7’ customer promise
Tryg sells insurance products through its own sales channels
In recent years, Tryg has been working to highlight the peace-
and through partners such as Nordea. It is an important element
of-mind deliveries with a view to clearly positioning Tryg as a
of Tryg’s distribution strategy to be available in places where
provider of peace of mind. In 2011, Tryg launched the Help 24/7
customers want it and that most distribution takes place via the
customer promise, under which customers can phone Tryg’s
company’s own sales channels.
emergency centre and receive assistance 24 hours a day. Initially,
Customer segmentation
the customer who performs the judgement, and customers now
It is important for Tryg that customers are offered high-quality
have the opportunity to contact Tryg whenever they want, which
products at a price that matches the risk and customer require-
is an important parameter in good customer service.
urgent claims will be processed by the emergency centre, but it is
ments. This is an area where there has been greater focus in the
past year. Tryg wants to use several relevant parameters in pric-
Customer satisfaction
ing, so that price better reflects risk.
It is important to follow up continuously on customers’ percep-
As a peace-of-mind provider, Tryg also aims to deliver total solutions
EPSI, an independent non-profit organisation. Customer loyalty
to customers. The need for insurance policies changes throughout
is measured on a scale of 1-100, and both customer loyalty and
life, which is why private customers, for example, are treated differ-
customer satisfaction in the area of insurance are generally high
ently according to the phase of life they happen to be in.
in the Nordic countries compared with other countries in Europe.
tions of the overall service provided by Tryg. This is conducted by
The phases of life are characterised by differences in the level of
In 2011, customer satisfaction and customer loyalty surveys in
activity, form of cohabitation, work, finances and need for peace
the Nordic region revealed that the industry as a whole rose from
of mind. Segmentation enables Tryg to the greatest extent to
73.0 in 2010 to 73.6 in 2011, with Finland and Denmark having
offer advice and solutions that match customers’ actual needs,
the highest level of customer satisfaction.
tailored to the various phases and situations in life. At the same
time, this targeted advice and individual service creates even
In Denmark, Tryg had the highest level of customer satisfaction
more satisfied customers and improves sales opportunities. It
among the four largest companies, seeing customer satisfac-
must also be clear to the customer that it can be worthwhile
tion rise from 75.3 in 2010 to 76.4 in 2011. By comparison, the
to have all their insurance policies with us.
industry average fell by 0.3 percentage points to 75. In terms of
The customer benefit programme consists of the following:
to 74.8, compared with the industry average of 73.4. In Norway,
•
•
Discount on insurance policies
customer satisfaction rose from 68.0 in 2010 to 72.0 in 2011,
Benefits (for example Tryg Roadside Assistance, psychological
which is above the industry average of 71.0, which rose 3 per-
crisis assistance, underinsurance guarantee)
centage points compared with the 2010 survey.
image, Tryg also recorded a significant score increase from 70.7
36 | Annual report 2011 | Tryg A/S
Product overview
Motor insurance
Workers’ compensation insurance
Motor insurance accounts for 33% of total premium income, and
comprises mandatory third party liability insurance providing cover
for injuries to a third party or damage to a third party’s property,
and a voluntary comprehensive insurance policy that provides
cover for damage to the customer’s own vehicle from collision,
fire or theft. In Denmark, motor insurance taken out by concept
customers includes Tryg’s roadside assistance, such as towing
and battery jump-start.
Fire & contents – Private
Fire & contents insurance represents 23% of total premium
income and includes for exsamble house and contents insurance.
House insurance covers damage to houses caused by, among
others, fire, storm or water claims, legal assistance and the custom-
er’s liability as owner of the house. Contents insurance, however,
covers loss of or damage to private contents and contains a num-
ber of additional features such as cover for valuables that are
temporarily outside the home, legal assistance and the custom-
er’s liability as user of the house.
Personal accident insurance
Personal accident insurance accounts for 9% of total premium in-
come and covers accidental bodily injury or death. Compensation
is in the form of a lump sum intended to help the policyholder
cope with the financial consequences of an accident, thereby
easing the strain of a change to everyday life.
Fire & contents – Commercial
Commercial fire & content insurance, which includes building in-
surance, represents 14% of total premium income and covers the
loss of or damage to the buildings, stock or equipment of com-
mercial customers. Tryg also provides cover for business interrup-
tion in connection with covered claims.
Workers’ compensation insurance accounts for 6% of total premium
income and covers employees against bodily injury sustained at
work (in Norway, also occupational deseases). Workers’ compen-
sation insurance is mandatory and covers a com pany’s employees
(except for public sector employees and persons working as sole
traders). Tryg works with the concept of proactive claims handling,
pursuing a close dialogue with the claimant to op timise claims
handling. Our proactive claims handling team consists of claims
handlers, social counsellors, legal experts, occupational health pract-
itioners, orthopaedic surgeons and a network of psy chologists.
Proactive claims handling has three winners: the company, the
claimant and Tryg in the form of shorter periods of sick leave, en-
hanced self-esteem for the injured person and reduced expenses.
Professional liability insurance
Professional liability insurance represents 4% of total premium
income and covers various types of liability, including claims in-
curred by a company arising from the conduct of its business or in
connection with its products and professional liability incurred by
professionals.
Transport insurance
Transport insurance represents 2% of total premium income and
covers damage to goods in transit due to collision, capsizing or
crash of the means of transport.
Health insurance
Health insurance represents 2% of total premium income. This pol-
icy covers the costs of examinations, treatment, medicine, opera-
tions and rehabilitation at a private health facility. In recent years,
increasing health costs and waiting times in the public system have
generated a significant demand for health insurance. The growth in
health insurance is expected to decline, as the new government has
removed the tax deduction from schemes funded by employers.
Examples of new products
ship satisfies the needs of large corporate customers to be able to
In 2011, Tryg was the first company to launch a European insurance
issue insurance policies locally and thus comply with local legisla-
policy, which is offered primarily to businesses who have their main
tion, as well as local rules on taxes and duties. Environmental
activities in Scandinavia, but with small subsidiaries abroad. This in-
Impairment insurance was another initiative launched for commer-
surance meet the needs of small and medium-sized companies and
cial and corporate customers in 2011 that covers any liability that
is adapted according to local insurance conditions in each country.
a company incurs in connection with environmental Impairment
The insurance is characterised by simplicity ensuring the customer
claims. Companies can be held liable for emissions of pollutants,
a good overview. For large industrial companies that operate on a
regardless of whether the company is guilty. This Impairment insur-
global scale, Tryg has an exclusive partnership with AXA Corporate
ance provides the customer with extra peace of mind and covers,
Solutions, which is represented in about 90 countries. This partner-
among others, the costs of restoring the natural environment.
Tryg A/S | Annual report 2011 | 37
Tryg relies on its capital
base and financial strength
for the Group to assume
risks from customers.
Capital management and
risk management
Capital management and risk management
Credit ratings
At 31 December 2011
Tryg Forsikring A/S
Tryg Garantiforsikring A/S
Standard & Poor’s
Moody’s
‘A-’/stable
‘A-’/stable
A2
n.a.
Tryg’s capital base and financial strength are essential for
rating institution within insurance, Tryg has decided solely to
Tryg’s ability to take over and spread risks from its customers.
use Standard & Poor’s from 2012.
The basis for this is that the capital planning is adapted to
Tryg’s risk profile taking into account natural growth. Tryg aims
In addition to the requirements imposed by the credit rating
to have the necessary capital, but no more. This fundamental
agencies, the Danish authorities impose requirements concerning
view therefore also determines the dividend policy.
active capital management through the determination of an
Risk-based capital management
precursor to the future Solvency II rules. Tryg’s determination
Through capital and risk management, Tryg aims to secure
of the individual Solvency requirement is based on Tryg’s inter-
financial strength and flexibility. The capital management is
nal capital model, which calculates the required capital, taking
individual Solvency requirement. These requirements are a
based on:
into consideration the actual composition of the business,
profitability, provision profile, reinsurance protection, investment
• Tryg’s internal capital model
composition and scenarios for the additional risk that could be
• The impending Solvency II standard model
experienced in particularly stressful situations. The determina-
• Standard & Poor’s standard model (‘A-’ level)
tion takes into account the geographic diversification effect and
the effect of the chosen investment policy, where interest rate
All three models determine the capital requirement based on
risk on the bond holdings matches the corresponding interest
Tryg’s current risk profile. The capital requirement is determined
rate risk on the discounted provisions, so that Tryg’s net interest
with a 99.5% level of certainty, which corresponds to the
rate risk is for practical purposes insignificant. The individual
chosen capital level statistically being insufficient once in a
solvency requirement is determined quarterly and reported to the
200-year period.
Danish Financial Supervisory Authority. The individual solvency
requirement was DKK 6,320m at the end of 2011, compared
Tryg has decided to commission an external credit rating by
to DKK 6,077m at the end of 2010. With a capital base of DKK
credit rating agency Standard & Poor’s, which conducts an
8,190m, Tryg has excess cover compared to this of DKK 1,870m.
annual interactive credit rating.
The introduction of Solvency II will impose stricter requirements
Tryg’s capital target is currently determined in relation to the ca-
on the way in which insurance companies work with and control
pital that is necessary to support the company’s ‘A-’ credit rating
risks, including the Supervisory Board’s involvement in risk and
by Standard & Poor’s. Tryg also currently adds a target buffer of
capital management. Tryg has been working for many years to
5% as a minimum. At the end of 2011, Tryg had an actual buffer
adapt the company to these requirements. This means that the
of 9% compared to the requirement for an ‘A-’ credit rating, and
Supervisory Board actively determines the risk aversion and the
after the recommended dividend, the buffer will amount to 5%.
framework for risk management, and continually assesses the
combined risk within Tryg and the derived capital requirement,
Tryg has also commissioned a credit rating by credit rating
through follow-up and reporting. In the autumn of 2011,
agency Moody’s. As Standard & Poor’s is the leading credit
the Supervisory Board also commissioned a so-called ORSA
40 | Annual report 2011 | Tryg A/S
Download the Risk
management report
Subordinated loans
Amount
EUR 150m
EUR 65m
a) Untill 30 June 2012.
For further details see note 1 on page 89.
Maturity
Repayment profile
Interest rate
2025
2032
Interest-only
4.50%
Interest-only
5.13% above EURIBOR 3 M a)
(Own Risk and Solvency Assessment), which is a systematic and
215m. In total, debt amounted to 18% of equity at the end of
comprehensive self-assessment of Tryg’s risk and solvency. Such
2011, and interest expenses during 2011 amounted to DKK 83m.
an assessment will be a requirement under Solvency II.
Reinsurance
The Executive Management’s responsibility for the total risk and
Reinsurance is an important tool for protecting Tryg’s capital base.
capital management is managed on a daily basis through a risk
The requirement for reinsurance is assessed on an ongoing basis
management environment where the areas of underwriting and
based on Tryg’s internal capital model, where the reinsurance pre-
reinsurance, provisions, investment risk and operational risk are
mium is compared to the reduction in the capital requirement that
managed by separate sub-committees.
could be achieved, and the price of capital.
See also the Risk management report,
An example of such an assessment is the establishment of side-
which can be found at tryg.com > Download
ways reinsurance cover in 2011. This cover covers the coincidence
of nature claim events, such as winter claims and cloudbursts,
Capital structure
with aggregated retention of DKK 400m and aggregated cover of
Tryg’s capital base consists of equity and subordinated loan
DKK 500m.
capital. The relationship between these is evaluated on an
ongoing basis in order to maintain an optimal structure which
Nature disasters, large claims and, for example, terrorist incidents
takes into account the return on equity, the capital cost and
represent the primary threat to the capital base as a result of
flexibility. The actual capital is assessed differently by authorities
insurance events. As a result of this, catastrophe reinsurance
and credit rating agencies. The authorities impose a require-
has been taken out with a capacity of DKK 5.5bn. In the event
ment that companies must determine the base capital, which
of claims in the range DKK 100-175m, retention increases from
primarily consists of equity minus intangible assets, discount ef-
DKK 100m to DKK 141m. In the event of claims in excess of
fect and other statutory corrections plus subordinated loan capi-
DKK 175m, the maximum retention is DKK 141m.
tal in the amount of up to 25% of the Solvency I requirement.
Standard & Poor’s uses the term ‘Total Adjusted Capital’ (TAC),
where intangible assets are also deducted from the capital base,
and where the subordinated loan capital must generally not
Capital relief
exceed 25% of the total capital.
DKKm
Retention
Capacity
Capital relief
In 2005, Tryg took out a 20-year subordinated bond loan of
EUR 150m listed on the London Stock Exchange. In 2009, in
connection with the acquisition of Moderna, Tryg took out
a subordinated loan with expiry in 2032 of EUR 65m from
TryghedsGruppen, which owns 60% of Tryg. Tryg’s total holding
Catastrophe
Sideways
cover
Building/contents
(Per risk)
141
400
5,500
1,212 a)
500 agg.
50
Unlimited
193
a) Including sideways cover.
of subordinated debt subsequently amounted to approx. EUR
The table shows capital relief for selected reinsurance programmes.
Tryg A/S | Annual report 2011 | 41
The capacity is determined through modelling so that it statisti-
pricing in the reinsurance market. Additional cover corres-
cally would prove insufficient in less than one occasion every
ponding to the programme in 2010 would largely have
250 years. In addition, catastrophe hedging has been purchased
the same price as the additional cover.
for personal injury claims originating from the same event,
including terrorism. The capacity amounts DKK 1.5bn with
Financial flexibility
retention of DKK 50m. Terrorist incidents are also covered
The financial flexibility must take into account strategic assess-
by a national guarantee scheme on the Danish market.
ments and safeguard the scope for additional capital invest-
Reinsurance is also purchased for individual risks, so that
capital plan, as part of which a test is performed to determine
retention does not exceed DKK 125m for the first claim and
the extent to which the capital can support Tryg’s strategy. The
DKK 50m for subsequent claims.
scope for additional capital investment is described in Tryg’s
ment. Every year, the strategic assessments are considered in a
contingency capital plan, which describes measures which can
The increases in Tryg’s own holdings within catastrophe
be implemented in the short term in order to improve Tryg’s
rein surance and individual risks from DKK 100m to DKK 140m
solvency if it should prove necessary.
and DKK 125m respectively was approved on the basis of the
42 | Annual report 2011 | Tryg A/S
There is also scope to increase the capital base through the
Solvency II, the aim is for Tryg to use a partial internal model
further take out of subordinated loan capital. Compared to the
in its capital planning, rather than the standard model re-
local Danish solvency rules, the full potential for subordinated
ferred to above. The partial internal model will thus be based
loan capital has already been utilised by DKK 848m. Compared
on the insurance module in Tryg’s current model supplement-
to Standard & Poor’s capital model, the subordinated loan capi-
ed by the other modules (investment, operational risk, etc.)
tal at the end of 2011 can be increased by approximately DKK
from the standard model.
879m after dividends. In addition, there is scope to increase
the actual capital through capital increases.
In addition to the way in which capital is determined, the
impending Solvency II rules will alter the authorities’ require-
Solvency II implementation
ments concerning capital structure. Under Solvency II, the
During 2011, uncertainty has arisen concerning the implemen-
capital will be subdivided into Tiers (1-3), which indicate the
tation date for Solvency II, which determines the future solvency
quality of the company’s capital. It is Tryg’s belief that 73% of
rules within the insurance area. In many quarters, there is now
the capital will be approved as Tier 1, 22% as Tier 2, while the
a belief that early 2014 is the most likely implementation date
remainder will be classified as Tier 3. Tryg is closely monitoring
for the Solvency II Directive, which imposes both quantitative
developments and will include this factor in its deliberations
and qualitative requirements on insurance companies and will
when the dividend for the year is determined.
require extensive revision of existing legislation.
Since 2005, Tryg has been participating in the trial calcula-
Read more about Tryg’s dividend policy in the
tions for a standard model under Solvency II. Compared to the
section The Tryg share on page 65.
current specification of the capital requirement in the stand-
ard model, Tryg had excess cover of DKK 1,865m as of 31
December 2011. If this calibration of the capital requirements
is maintained through to Solvency II, it is considered that many
companies will need to strengthen their capital base in order
to comply with the new capital requirements. Based on the
internal capital model, the capital requirement for Tryg will be
somewhat lower than that according to the standard model.
Solvency II gives scope to use internal models either fully or
partially. Tryg’s approach is to use the existing internal model
for areas where the risk is different from that determined
using the standard model. Within the area of insurance risk,
the belief is that Tryg will be able to model its own risk more
accurately. For example, the standard model does not take
into account geographic diversification between the Nordic
countries, which is a significant aspect of Tryg’s Nordic expo-
sure. On the other hand, the existing internal model’s treat-
ment of investment risks is very similar to that of the standard
Composition of partial capital model
Standard model
Partial model
Internal model
model, which must be viewed in the light of the homogenous
Insurance risk
Operational risk
Credit risk
investment risk, which is generally secured across national
borders by effective financial markets. In the future under
TAC
Market risk
Tryg A/S | Annual report 2011 | 43
Tryg focuses on employee well-being
and development, and continuously
strives to develop as an attractive
workplace. At the same time, job
satisfaction is reflected in customer
satisfaction and retention.
Management
Supervisory Board
Mikael Olufsen a)
Chairman
Born 1943. Joined: 2002. Nationality: Danish.
Professional board member. Former CEO of
Toms Chokoladefabrikker A/S.
Educational background: M.Sc. (Forestry),
PMD Harvard Business School.
Chairman: TryghedsGruppen smba, Tryg A/S, Tryg
Forsikring A/S, Egmont Fonden, Egmont International
Holding A/S, Ejendomsselskabet Gothersgade 55 ApS,
Ejendomsselskabet Vognmagersgade 11 ApS, Mala-
plast Co. Ltd and the Danish Rheumatism Association.
Board member: WWF in Denmark and The
Denmark-America Foundation.
Committee memberships: Remuneration
Committee of Tryg A/S (Chairman).
Number of shares held: 3,018
Change in portfolio in 2011: 0
Mr Olufsen has experience from managing interna-
tional companies, including strategic development,
and experience as a board member of Danish and
international companies.
Committee memberships: Audit Committee
Educational background: Economist, engineer.
of Tryg A/S (Chairman) and Risk Committee of
Chairman: Sverige Bryggerier AB, East Capital
Tryg A/S (Chairman).
Explorer AB, HTC Group AB, Pieno Zvaigzdes AB,
Number of shares held: 1.500
Svenska Returpack AB, Norrköpings Segelsällskap
Change in portfolio in 2011: +1.500
and Östkinds Häradsallmänning.
Mr Nielsen has special skills within the areas of
Board member: Tryg A/S, Tryg Forsikring A/S
management, governance, treasury, financial
and Björk Eklund Group AB.
business and risk management from his former
Committee memberships: Remuneration
role as Governor of Danmarks Nationalbank as
Committee of Tryg A/S, Audit Committee of East
well as several board positions.
Capital Explorer AB (Spokesman) and Nomination
Committee of East Capital Explorer AB (Chairman).
Number of shares held: 100
Change in portfolio in 2011: 0
Mr Bergqvist has international management and
board experience in M&A, strategic development,
marketing, branding and financial management.
Being a Swedish citizen, Mr Bergqvist has special
insight into Swedish market conditions.
Jørn Wendel Andersen a)
Born 1951. Joined: 2002. Nationality: Danish.
Professional board member. Acting CEO of Trygheds-
Gruppen smba. Former CEO/CFO, Arla Foods amba.
Educational background: M.Sc. (Business Eco-
nomics), IMD Executive Development Programme
and Strategy in Action Programme, Leadership
Assessment – Heidrick & Struggles.
Chairman: PreviaSundhed A/S and Sahva A/S.
Christian Brinch b)
Board member: Tryg A/S, Tryg Forsikring A/S,
Born 1946. Joined: 2007. Nationality: Norwegian.
Nordea Liv & Pension, livsforsikringsselskab A/S,
Senior Advisor at HitecVision and professional board
Kærkommen Holding ApS, Kærkommen Hovedstaden
member. Former President and CEO of Helicopter
A/S, Kærkommen København ApS, Kærkommen
Services Group ASA and Executive Vice President
Vest ApS, KærkommenUdvikling ApS, Health &
of ABB Norge.
Fitness Nordic AB, AB Previa and Quick Care A/S.
Educational background: Norway’s naval
Committee memberships: Audit Committee of
academy; PMD Harvard Business School.
Tryg A/S and Risk Committee of Tryg A/S.
Chairman: Apply Group AS, Tampnet AS, Align AS,
Number of shares held: 1,078
Change in portfolio in 2011: 0
HV IV Invest Alfa AS, Helicopter Network AS,
Fortissimo AS, Line Consult AS, Gluteus AS and
Mr Wendel Andersen has experience in inter-
Røa Invest AS.
national management, insurance business, finance,
Deputy Chairman: Prosafe SE.
Torben Nielsen b)
Deputy Chairman
Born 1947. Joined: 2011. Nationality: Danish.
Professional board member. Assistant Professor,
Copenhagen Business School. Former Governor,
Danmarks Nationalbank (Danish Central Bank).
Educational background: Savings bank training,
Graduate Diplomas in organisation and work
sociology as well as credit and finance.
Chairman: Investeringsforeningen Sparinvest,
Eik bank p/f, Plass Data A/S, VP Lux S.á.r.l.,
Investe ringsforeningen Sparinvest SICAV,
Luxembourg and Museerne, Vordingborg.
Deputy Chairman: Tryg A/S, Tryg Forsikring A/S,
treasury and risk management.
Paul Bergqvist b)
VP Securities A/S and Bankernes Kontantservice A/S.
Born 1946. Joined: 2006. Nationality: Swedish.
Board member: Nets Holding A/S (formerly PBS),
Professional board member. Former CEO of
member of Executive Management at Bombebøssen.
Carlsberg A/S.
46 | Annual report 2011 | Tryg A/S
Board member: Tryg A/S, Tryg Forsikring A/S,
Kjell A. Østnes AS, Thor Dahl Management AS
and Thor Dahl Shipping AS.
Committee memberships: Election Committee
of Prosafe SE.
Number of shares held: 500
Change in portfolio in 2011: 0
Mr Brinch has experience in the areas of M&A,
treasury, communication and business development.
Being a Norwegian citizen, Mr Brinch has special
insight into Norwegian market conditions.
Ms Skole has experience from international corpo-
rations, including her work with Coloplast and The
Maersk Company Ltd., UK. Ms Skole has skills in the
fields of strategy, financing and communication.
Jesper Hjulmand a)
Born 1963. Joined: 2010. Nationality: Danish.
CEO of SEAS-NVE A.m.b.a. Former CFO and CEO
of NVE A.m.b.a. and Budget Manager and Chief
Accountant of Rockwool A/S.
Educational background: M.Sc. (Economic and
Business Administration) and Lieutenant-Colonel
of the Danish Air Force Reserve.
Chairman: Danske Energi- og Forsyningsselskabers
Arbejdsgiverforening (DEA), Energi Danmark A/S,
ChoosEV A/S and CAT Invest A/S.
Board member: TryghedsGruppen smba, Tryg A/S,
Tryg Forsikring A/S, DI General Council, Waoo! A/S
and Forskerparken CAT A/S.
Committee memberships: Remuneration
Committee of Tryg A/S, Chairman of Dansk Energi
Direktørudvalg and Member of Dansk Energi
Fælles Forum.
Number of shares held: 1,750
Change in portfolio in 2011: +1,750
From his positions with SEAS-NVE and his former
work with the Danish Air Force, Mr Hjulmand has
experience within M&A, strategy, organisational
development, communication and business
development.
Jens Bjerg Sørensen a)
Born 1957. Joined: 2011. Nationality: Danish.
CEO of Aktieselskabet Schouw & Co and Dutch
Consul. Former CEO of BioMar A/S.
Educational background: Academy economist
from Niels Brock Copenhagen Business College,
Graduate Diplomas in Marketing Management from
Copenhagen Business School and IEP – Insead
Executive Programme, from Insead in France.
Chairman: Dovista A/S. Chairman or Deputy
Chairman of all Schouw & Co’s own companies.
Board member: Tryg A/S, Tryg Forsikring A/S, Tryg-
hedsGruppen smba, VKR Holding A/S and Aida A/S
Number of shares held: 118
Change in portfolio in 2011: 0
Mr Sørensen has experience of international
management and skills in the fields of strategic
development, finance, M&A and branding.
a) Dependent board member.
b) Independent board member,
see the definition in the corporate
governance recommendations.
Bill-Owe Johansson
Elected by the employees
Born 1959. Joined: 2010. Nationality: Swedish.
Claims Handler at Atlantica/Moderna (Swedish
branch). Employed in 2002.
Educational background: Insur. training courses.
Board member: Tryg A/S and Tryg Forsikring A/S.
Number of shares held: 200
Change in portfolio in 2011: +60
Tina Snejbjerg
Elected by the employees
Born 1962. Joined: 2010. Nationality: Danish.
Administrative Officer. Employed since 1987.
Educational background: Insurance training.
Board member: Tryg A/S and Tryg Forsikring A/S.
Committee memberships: DFL’s general council.
Number of shares held: 86
Change in portfolio in 2011: 0
Lene Skole b)
Rune Torgeir Joensen
Born 1959. Joined: 2010. Nationality: Danish.
Elected by the employees
Executive Vice President, Coloplast A/S.
Born 1956. Joined: 2008. Nationality: Norwegian.
Former CFO of The Maersk Company Ltd., UK.
Project worker with Tryg. Employed since 1984.
Educational background: The A.P. Møller Group
Educational background: Printer, market
Berit Torm
international shipping education, B.Sc. (Finance) and
economist and HMS advisor.
Elected by the employees
various international management programmes.
Board member: Tryg A/S and Tryg Forsikring A/S.
Born 1959. Joined: 2008. Nationality: Danish. Quality
Board member: Tryg A/S, Tryg Forsikring A/S
Committee memberships: Audit Committee of
Insurance Manager with Tryg. Employed since 1985.
and DFDS A/S.
Tryg A/S, Risk Committee of Tryg A/S and Advisory
Educational background: LL.M.
Committee memberships: Audit Committee
Board of Tryg Norge.
Board member: Tryg A/S and Tryg Forsikring A/S.
of Tryg A/S, Risk Committee of Tryg A/S and
Number of shares held: 45
Committee memberships: Remuneration Commit-
Audit Committee of DFDS A/S.
Number of shares held: 410
Change in portfolio in 2011: 0
Change in portfolio in 2011: 0
tee of Tryg A/S and Member of Furesø Local Council.
Number of shares held: 86
Change in portfolio in 2011: 0
Tryg A/S | Annual report 2011 | 47
Group Executive Management
From left to right: Per Fornander, Birgitte Kartman, Lars Bonde, Morten Hübbe, Tor Magne Lønnum, Kjerstin Fyllingen, Truls Holm Olsen
The Group Executive Management handles the day-
to-day management of Tryg and in addition to the CEO
consists of the VPs of the business areas, Claims and
Group Finance. Morten Hübbe, Tor Magne Lønnum and
Lars Bonde form the Executive Management.
48 | Annual report 2011 | Tryg A/S
COO
CEO
CFO
Lars Bonde
Group Executive Vice President,
Private, Country Manager
in Denmark and COO
Morten Hübbe
CEO/Group CEO
Tor Magne Lønnum
CFO/Group CFO
Born 1972. Employed in 2002. Joined the
Born 1967. Employed in 2011. Joined the
Group Executive Management in 2003.
Group Executive Management in 2011.
Born 1965. Employed in 1998. Joined the
Member of the Executive Management
Member of the Executive Management
Group Executive Management in 2006.
and the Group Executive Management.
and the Group Executive Management.
Member of the Executive Management
and the Group Executive Management.
Educational background:
Insurance training, LL.M.
Board member:
Educational background:
B.Sc. (International Business
Educational background:
State authorised accountant, Executive
Administration and Modern Languages),
Master of Business and Administration,
M.Sc. (Finance and Accounting) and
University of Bristol and Ecole Nationale
management training at Wharton.
des Ponts et Chaussées.
The Danish Employers’ Association for the
Board member:
Board member:
Financial Sector and Tjenestemændenes
Forsikring & Pension (The Danish
Tryg Garantiforsikring A/S (Chairman)
Forsikring.
Insurance Association).
and Thermopylae AS (Chairman).
Number of shares held: 2,954
Number of shares held: 7,090
Number of shares held: 1,700
Change in portfolio in 2011: +1,311
Change in portfolio in 2011: +2,289
Change in portfolio in 2011: +1,700
Other Group Executive Management members
Per Fornander
Group Executive Vice
Birgitte Kartman
Group Executive Vice
Kjerstin Fyllingen
Group Executive Vice President,
Truls Holm Olsen
Group Executive Vice
President of Sweden
President, Claims
Commercial and Country
President, Corporate
and Finland and Country
Manager Sweden
Born 1960. Employed in 1996.
Manager Norway
Born 1964. Employed in 1998.
Joined the Group Executive
Born 1958. Employed in 2006.
Joined the Group Executive
Born 1963. Employed in 2011.
Management in 2009.
Joined the Group Executive
Management in 2009.
Joined the Group Executive
Management in 2011.
Educational background:
Management in 2006.
Educational background:
LL.M.
Educational background:
LL.M.
Educational background:
Master of Management and
Marketing DIHM IHM Business
Board member:
Bachelor in Business Administration
School in Stockholm.
Forsikringsakademiet
at Handelshøyskolen BI.
Board member:
Tryg Garantiforsikring A/S.
Number of shares held: 1,607
Change in portfolio in 2011: +988
Number of shares held: 1,100
Change in portfolio in 2011:
+1,100
Board member: Tryg Almen-
nyttige Stiftelse (Chairman). Finans-
næringens Hovedorganisation and
TSS Marine ASA.
Committee memberships:
Audit Committee of TTS Marine ASA.
Number of shares held: 3,428
Change in portfolio in 2011: +966
Board member: Tryg Garanti-
forsikring A/S, Energon AS and
Norsk Naturskadepool.
Number of shares held: 1,017
Change in portfolio in 2011:
+1,000
Tryg A/S | Annual report 2011 | 49
Employees
Tryg focuses on employees’ well-being and development, and
Performance management
strives to continuously develop as an attractive workplace. The
Tryg places considerable emphasis on customer experience. It
ambition is to be the most attractive workplace in the Nordic
is therefore crucial that employees have the right skills, attitudes
financial sector.
and framework to enable them to perform their jobs in the
best way possible. To this end, we have implemented a new
Employee survey
employee appraisal discussion concept. During the discussion,
The employees are Tryg’s most important asset in the com-
manager and employee review and evaluate the most important
pany’s efforts to achieve and adhere to the ultimate vision of
deliveries from the past year. This evaluation is conducted with
being the Nordic region’s leading peace-of-mind provider. A
reference to the results that have been achieved and the way in
high level of job satisfaction and a perception of well-being help
which they have been achieved. The right values, attitudes and
to develop and maintain qualified employees. At the same time,
conduct are crucial for Tryg to be a peace-of-mind provider.
employees’ job satisfaction is reflected in customer satisfaction
and customer retention.
The discussion also includes a confirmation of targets for the
Every year, Tryg conducts an employee satisfaction survey in
the ability of employees to achieve the defined targets and
next year as well as a development plan, which will support
order to monitor on an ongoing basis our employees’ evaluation
to develop skills for future needs.
of Tryg as a workplace. The status survey for 2011 revealed a
rise in job satisfaction by one index point compared with 2010
Since 2007, Tryg has worked with Lean, the key elements of
and two index points higher than other financial companies in
which are optimisation of processes, increased customer value
the Nordic region. The parameter ’The physical working environ-
and quality. Work with Lean involves keeping a close eye on
ment’ saw a significant improvement in all points in the survey.
defined targets and guaranteeing continuous improvements
‘The Living House’ project appears to have borne fruit. This
with the aid of numerous good suggestions received from
project was launched in 2008, and by 2011 the head offices in
employees. A new feature developed by Tryg in 2011 is an
Denmark and Norway had undergone not only a physical change,
electronic notice board to help the high number of employees
but also a cultural change. Tryg is a workplace that encourages
who drive out every day on customer visits.
activity and creativity, and that generates energy and inspiration.
In addition to cafe areas, innovation rooms, meeting rooms and
In 2011, Tryg developed a method of evaluating the effect of
quiet rooms, all employees have two PC monitors, laptops and
training activities. Using a goal-oriented questionnaire, the
wireless Internet, as an element of a mobile, paperless office.
employee’s knowledge is measured several months after the
At Tryg, we consider it important that all employees have a
completion of the training course. This gives us an opportunity
development plan to continuously develop qualifications and set
to guarantee the optimal use of our training resources, to
professional and personal targets. In 2011, 84% had an updated
conduct follow-ups and to make sure that training is targeted
development plan compared with 81% in 2010. The results are
and is only offered to those employees who need it.
satisfactory, not least in the light of the fact that 2011 was
characterised by a wide-ranging organisational change at Tryg.
Manager development – The Journey 2011
Tryg is reliant on having good managers. The company’s Journey
Qualification development
(Rejsen) programme seeks to challenge and develop managers
Qualified motivated employees are Tryg’s most important asset
and employees as they interact with people from totally differ-
and a prerequisite for achieving our long-term targets. Training,
ent backgrounds and from cultures other than their own. It is
development and the sharing of knowledge aim to contribute
important that our organisation reflects the diversity in society
to the creation of job satisfaction, well-being and peace of
around us. We believe that greater diversity is fundamental to
mind for our employees. Tryg’s employees are therefore offered
ensuring innovation, more business and the development of
continuous qualification development.
good solutions.
50 | Annual report 2011 | Tryg A/S
In 2011, the programme took five managers and four young
The reflection room is a measure within the CSR initiative of
Danes with a non-Danish ethnic background to the Norwegian
inclusion and diversity at Tryg. Tryg has a targeted approach
mountains. This interaction with people from a totally different
to employee diversity work, offering a spacious workplace in
background in terms of their early years, education, experiences
which diversity actively contributes to the creation of value.
and religion forced the managers to work hard to listen, notice,
At Tryg, we want to make room for faith and religion in every-
reflect, question, challenge, and be open and inclusive. This is
day life, and to immerse oneself or recharge one’s batteries
exactly the sort of thing expected of Tryg’s managers, especially
in meditation and relaxation.
when employees’ skills and resources have to be brought into
play. Managers develop their abilities to inspire and maintain
Read more about the inclusivity in CSR
a presence.
Diversity
on page 61 and at tryg.com > CSR
Nordic Graduate Programme
Tryg values diversity in the workforce. Tryg sees the benefits of
Tryg’s Nordic Graduate Programme is designed for recent
having a workforce that stretches beyond the established limits
graduates from a university or a business school. The pro-
of ethnicity, gender, age, disability, sexual orientation, faith and
gramme was launched in 2006, with new graduates being
religion, but at the same time one that is in line with the usual
recruited every other year.
requirements of high quality when employing people.
The Graduate Programme runs over 19 months and consists of
Women in management
an introductory course and three practical placement periods,
Tryg is committed to bringing women into managerial posi-
each lasting six months. The placements take place in various
tions. This commitment serves to increase the potential pool
departments throughout the company, with one period being
of talented women at all levels by focusing on the recruitment
spent in administration and one in another Nordic country. This
process, working with women at the ’pre-manager’ level as
gives graduates a broad experience and insight into the work-
well as current female managers at all levels within Tryg. To this
ings of Tryg, and provides a solid foundation for a subsequent
end, 2011 saw the company’s Supervisory Board set a concrete
career in the company. During the process, there is an oppor-
target to increase the total number of women in management
tunity to take part in various courses in areas such as insurance
by 2% by 2013.
studies, negotiation and presentation techniques, and project
In January 2012, Tryg signed the ‘Charter for more women
management.
in management’. We support the charter, one of the aims of
Tryg’s graduates have different educational backgrounds and
which is to guarantee men and women equal managerial career
nationalities. This diversity creates an interesting discussion
opportunities and to launch concrete, measurable initiatives in
forum with opportunities to highlight problems from different
companies to increase the proportion of women in managerial
perspectives.
roles at all levels.
Find out more about diversity at Tryg
Programme at tryg.com > Careers >
in Corporate Governance on page 53.
Nordic Graduate Programme
Read more about our Nordic Graduate
Reflection room
Tryg places great emphasis on the well-being of employees,
and during a hectic day there may be a need to reflect on the
events of the day, to pray, to meditate or to have a little peace
and quiet. The reflection rooms in Ballerup and Bergen provide
an opportunity for this.
Tryg A/S | Annual report 2011 | 51
Corporate governance
The Corporate Governance Committee published new
Every year, the Supervisory Board proposes a dividend payment
recommendations for corporate governance in 2010. In 2011,
and a possible share buy back. In 2010, the Annual General
the Committee added another recommendation on diversity.
Meeting mandated the Supervisory Board to allow Tryg to acquire
The Supervisory Board believes that Tryg is complying with all
its own shares within 10% of the share capital up to 14 April
recommendations, except point 5.10.2, as most members of
2015. In the light of the financial result for 2010, no share
the board committees cannot be considered to be independent.
buy back programme was executed in 2011.
See page 59 for an explanation of this deviation.
Annual general meeting
A complete copy of the Statutory report on
Tryg holds its annual general meeting each year before the end of
corporate governance with respect to each
April. The Supervisory Board convenes the annual general meeting
individual recommendation can be downloaded
in accordance with the Danish Companies Act and the company’s
from tryg.com > Download
Articles of Association, giving not less than three weeks’ notice,
by way of a company announcement and at tryg.com. Share-
Dialogue between Tryg and its shareholders
holders also have the opportunity to receive the notice by post,
Tryg issues regular press releases and company announce-
electronically or to download it from tryg.com. The notice contains
ments, and publishes annual and interim reports, which are
relevant information about the time and venue, as well as an
available on tryg.com. Tryg issues regular IR newsletters about
agenda, which as a minimum includes the following items:
current topics to shareholders and other stakeholders, and
every quarter updates Tryg’s expectations for the future. This
•
Report of the Supervisory Board on the activities of the
material enables all stakeholders to get a reasonable impression
company during the past financial year
of Tryg’s position and performance. The financial Group state-
•
Presentation of the annual report for approval, including
ments are prepared in accordance with IFRS, and all company
determination of the Supervisory Board’s remuneration
announcements and financial statements are published in
and discharge from liability of the Supervisory Board and
Danish and English. At tryg.com, stakeholders have the option
the Executive Management
to order printed annual reports and to subscribe to news via
•
Decision on the use of any surplus or coverage of any
e-mail and RSS feeds. Tryg has a number of in-house guidelines
loss in accordance with the approved annual report
to ensure that disclosures of price-sensitive information are
made in accordance with the stock exchange rules of ethics.
Investor Relations maintains regular contact with equity analysts
and investors. The Executive Management and Investor Relations
•
•
•
•
Any proposals from the Supervisory Board or from shareholders
Election of members to the Supervisory Board
Appointment of auditor
Any other business
also organise investor meetings, teleconferences and webcasts,
All shareholders are urged to attend the annual general meeting.
and participate in conferences in Denmark and abroad. The
The annual general meeting is also webcasted, enabling stake-
Supervisory Board is regularly informed of the dialogue with
holders to view the annual general meeting at tryg.com both
investors and other stakeholders.
during and after the meeting. Shareholders may propose items
to be included in the agenda of the annual general meeting, and
Capital and share structure
may ask questions at the actual meeting. Shareholders may vote
The Supervisory Board ensures that Tryg’s capital structure is in
in person at the annual general meeting, vote by post, or appoint
line with the needs of Tryg and its shareholders, and that the
the Supervisory Board or a third party as their proxy. The proxy
capital structure is compliant with the requirements applicable
form and form for voting by post will be available at tryg.com on
to Tryg as a financial undertaking. Tryg has adopted a capital
28 March 2012.
plan and a contingency capital plan that are reviewed each year
by the Supervisory Board.
The Supervisory Board has resolved that annual general meet-
ings will be held by physical attendance, as the Supervisory Board
52 | Annual report 2011 | Tryg A/S
Download
Statutory report on
corporate governance
emphasises the oral dialogue with shareholders. The Supervisory
ensures that the required skills and financial resources are avail-
Board and the Group Executive Management will participate in an-
able for Tryg to achieve the strategic targets. The framework is
nual general meetings where possible, and this has a high priority.
discussed at the Supervisory Board’s annual strategy seminar
Takeover bids
The Supervisory Board intends to consider any public takeover
and budget meeting. The Supervisory Board specifies its activi-
ties in the company’s rules of procedure and annual cycle.
bid as prescribed by legislation and, depending on the nature of
Diversity at management levels
such bid, to convene an extraordinary general meeting of share-
Every year, the Supervisory Board discusses the company’s
holders in accordance with applicable rules.
activities to guarantee diversity at management levels. Tryg
places great emphasis on diversity at management levels, and in
Stakeholders and Tryg’s corporate social responsibility
January 2012 the company signed the ‘Charter for more women
Identification of stakeholders is an integral part of the strategy
in management’. Tryg supports the charter, the aims of which
review at the Supervisory Board’s annual strategy seminar, which
include guaranteeing that men and women have equal career
always focuses on investors, customers, society and employees.
opportunities. Tryg launches concrete, measurable initiatives in
Furthermore, the Supervisory Board receives regular reports about
the business to increase the proportion of women in manage-
Tryg’s largest investors and employee and customer satisfaction.
ment at all levels. Tryg has produced an action plan for this, the
aim of which is to guarantee equal opportunities for qualified
The Supervisory Board has adopted a number of policies for
men and women in access to managerial positions. The number
Tryg, which describe Tryg’s relationships with various stakehold-
of women at management level in 2011 was 37.5%. The Super-
ers. Tryg places an emphasis on social responsibility, and Tryg’s
visory Board sets concrete targets to secure diversity. In 2011,
CSR strategy is described in the CSR policy. Tryg also has an
the Supervisory Board confirmed an objective to increase the
Investor Relations policy and a Communication policy.
total number of women in management by 2% by 2013.
See the Investor Relations policy at tryg.com >
The action plan is available at
Investor > IR contacts > IR policy
tryg.com > CSR
See the Communication policy at tryg.com >
Press > Communication policy
Rules of procedure
See the CSR policy at tryg.com > CSR >
CSR strategy > CSR policy
The Supervisory Board performs an annual review of and if nec-
essary updates the rules of procedure for the Supervisory Board
and the Executive Management with guidelines and instructions
describing reporting requirements and requirements for com-
Tasks and responsibilities of the Supervisory Board
munication with the Executive Management.
The Supervisory Board performs overall strategic management
and makes sure that there is a sound organisation of the com-
The financial legislation governing Tryg also defines require-
pany, and also performs financial control of Tryg. In this work,
ments with respect to reporting by the Executive Management
the Supervisory Board uses targets and limit management based
to the Supervisory Board on developments in the most impor-
on regular and systematic consideration of strategies and risks.
tant areas of activity.
The Executive Management reports to the Supervisory Board on
strategies and action plans, market developments and Tryg’s
The Chairman and Deputy Chairman of
performance, funding issues, capital resources and special risks.
the Supervisory Board
The Supervisory Board holds an annual strategy seminar to
The Supervisory Board is headed by its Chairman and Deputy
define and/or adjust the Group’s strategy. The Supervisory Board
Chairman. The Deputy Chairman will act in the Chairman’s absence
cooperates with the Executive Management to ensure follow-up
and in general serves as a discussion partner for the Chairman.
on and development of Tryg’s strategy. The Supervisory Board
Tryg A/S | Annual report 2011 | 53
The tasks of the Chairman and the Deputy Chairman are defined
Prior to the election of new members, the Supervisory Board
in the rules of procedure for the Supervisory Board. The tasks of
prepares a description of the candidates’ background, director-
the Chairman of the Supervisory Board include chairing and as-
ships, professional qualifications and experience. A balanced
sessing the work of the Supervisory Board, organising, conven-
distribution with respect to, among other things, age, gender
ing and chairing Board meetings and being in charge of collabo-
and nationality is sought in the composition of the Supervisory
ration with the Executive Management. The Chairman also acts
Board, and the need for integrating new talent is considered.
as spokesman for the Supervisory Board for external purposes.
When taking up office, new Supervisory Board members are
The Chairman holds preparatory meetings with the Executive
given an introduction to Tryg.
Management before all meetings of the Supervisory Board. The
Chairman and the Deputy Chairman also plan the future compo-
The CVs and descriptions of skills of the Super-
sition of the Supervisory Board.
visory Board are available in the section Super-
visory Board on pages 46-47 and at tryg.com>
According to the rules of procedure for the Supervisory Board,
Governance > Management > Supervisory board
no Board member may perform work for Tryg without a prior
decision to that effect by the Supervisory Board. Furthermore,
Skills of the Supervisory Board members
such tasks must be of a one-off nature.
The Supervisory Board performs an annual self-assessment
of the Supervisory Board’s work and its members’ skills to
Composition and organisation of the Supervisory Board
assess whether the Supervisory Board has the required skills,
The Supervisory Board performs an annual assessment of the
or whether the skills and expertise of its members need to be
skills required for the Supervisory Board to perform its duties
updated in any respects.
in the best possible way. Tryg focuses on skills in the fields of
financial operations, IT, marketing and management. The de-
Number of Supervisory Board members
scription of skills is available at tryg.com and is included in the
The Supervisory Board comprises 12 members, and the Supervi-
notice of the annual general meeting.
sory Board deems the number of members adequate to ensure
a constructive debate, sufficient diversification and an efficient
The Articles of Association provide that the Chairman of the
decision-making process.
Supervisory Board of TryghedsGruppen smba should also act as
Chairman of the Supervisory Board of Tryg A/S. Furthermore,
The Supervisory Board discusses the number of Supervisory Board
the Supervisory Board of TryghedsGruppen smba elects three
members each year when preparing the annual general meeting.
members to the Supervisory Board of Tryg A/S from among the
members of TryghedsGruppen smba’s Supervisory Board. The
Independence of the Supervisory Board
Supervisory Board includes members from Denmark, Sweden
Eight members of the Supervisory Board are elected by the
and Norway and has three female members, including two
shareholders at the annual general meeting for a term of one
female employee representatives.
year. Of the eight members elected at the annual general meet-
ing, four are independent, cf. recommendation 5.4.1 in Recom-
New Supervisory Board members
mendations for Corporate Governance.
The process of selecting new Supervisory Board members is
formal, comprehensive and transparent for the Board members.
The section Supervisory Board on page 46 and at tryg.com
The Nomination Committee selects new candidates for the four
describes which Supervisory Board members are considered to
Board posts, which are not selected from members of Trygheds-
be independent members. This is also described in the notice of
Gruppen’s Supervisory Board, and presents a recommendation
the annual general meeting.
of the selection of candidates for the Supervisory Board.
54 | Annual report 2011 | Tryg A/S
Supervisory Board members elected by employees
Term of office
Under the Danish Companies Act, employees are entitled to
Board members elected by the shareholders at the annual general
elect a number of representatives to the Supervisory Board,
meeting are elected for terms of one year. See page 46 for when
equal to half the number of other members at the time em-
the Supervisory Board members joined the Board, were re-elected
ployee elections are held. Tryg has agreed with the Tryg’s staff
and when their term expires in the section Supervisory Board.
organisations that two Supervisory Board members are elected
from employees in Denmark, one member from employees in
Board committees
Norway, and one member from employees in Sweden/Finland.
Tryg’s Supervisory Board has set up an Audit Committee, a Remu-
The next regular election of the four employee representatives
neration Committee, a Risk committee and a Nomination Committee.
will be held in 2012. Pursuant to legislation, employee repre-
sentatives have the same rights, obligations and responsibilities
Tryg publishes the terms of reference for the Board committees
as the other Supervisory Board members.
at tryg.com. Information about the Board committees includes
descriptions of members, meeting frequency, responsibilities and
Meeting frequency
the activities of the committee during the year. Furthermore,
The Supervisory Board holds at least seven annual meetings and
the special qualifications of each Supervisory Board member are
an annual strategy seminar to discuss and define strategies and
described separately at tryg.com.
goals for the years ahead. In 2011, the Supervisory Board held
seven Board meetings and the annual strategy seminar. The
Two out of four members of the Audit Committee and the
Supervisory Board discusses the Supervisory Board’s tasks on a
Risk Committee, including the chairman of the committees, are
regular basis, and no later than at the last meeting of the year,
independent. One out of four members of the Remuneration
it schedules the meetings and work for the coming year.
Committee is independent, and one out of two members of
the Nomination Committee is independent.
Number of other directorships
The Supervisory Board and the individual Board members deem
Board committee members are elected primarily on the basis of
that each member has adequate time and resources to perform
their special skills that are considered by the Supervisory Board
their office as a Supervisory Board member of Tryg in a satisfac-
to be most important. It is also considered important to involve
tory manner. The Board members’ position, directorships and
the employee representatives in the committees. The committees
holding of Tryg shares and changes in portfolios can be found
work exclusively on the preparation of matters for decisions by
in the Board members’ CVs.
the full Supervisory Board.
The CVs can be found in the section Supervisory
Audit Committee
Board and at tryg.com > Governance > Manage-
In 2006, Tryg set up an Audit Committee for Tryg A/S. The framework
ment > Supervisory Board
of the Audit Committee’s work is defined in its terms of reference.
Retirement age
The committee consists of four members and is led by an inde-
To ensure replacement on the Supervisory Board, members
pendent Board member, who is at the same time the Deputy
elected by the shareholders may hold office for a maximum
Chairman of the Supervisory Board. Torben Nielsen was appointed
of nine years. Furthermore, members of the Supervisory Board
Chairman of the Audit Committee of Tryg A/S in 2011. The mem-
must retire at the first annual general meeting in the year
bers of the Audit Committee have knowledge and experience of
following their 70th birthday.
financial conditions as well as accounting and audit experience in
The ages of the individual Supervisory Board
Committee consists of Lene Skole (independent), Jørn Wendel
members are described in the section Super-
Andersen and Rune Joensen (employee representative). The Audit
visory Board and at tryg.com > Governance >
Committee held four meetings in 2011, reporting to the Supervi-
publicly listed companies. In addition to Torben Nielsen, the Audit
Management > Supervisory Board
Tryg A/S | Annual report 2011 | 55
sory Board on a regular basis. The Audit Committee performed an
Remuneration Committee
evaluation of the previous year’s work in August 2011.
The Remuneration Committee carries out preparatory work on
The Audit Committee’s work in 2011 is described
Supervisory Board, the Group Executive Management and signifi-
behalf of the Supervisory Board relating to remuneration for the
in the terms of reference, which can be down-
cant risk takers.
loaded at tryg.com > Governance > Management >
Supervisory board > Board committees
The Remuneration Committee’s work is described
Risk Committee
in the terms of reference at tryg.com >
Governance > Management > Supervisory board >
Tryg set up a Risk Committee in 2010 in accordance with the
Board committees
Supervisory Board’s rules of procedure. The purpose of the Risk
Committee is to support the Supervisory Board in its work and
The Remuneration Committee consists of four members. The
supervision of asset management and risk management. The
Chairman of the Supervisory Board is Chairman of the Remunera-
ultimate responsibility rests with the Supervisory Board, while
tion Committee. Furthermore, the committee must be represented
the Risk Committee monitors the risk management environment
by at least one member of TryghedsGruppen’s Supervisory Board
as well as associated processes.
and at least one independent Board member. The committee has
The committee consists of four members and is led by an independ-
members are elected primarily on the basis of their special skills
ent Board member, who is at the same time the Deputy Chairman
that are considered by the Supervisory Board to be most impor-
of the Supervisory Board. In addition to Torben Nielsen (Chairman,
tant. It is also considered important that an employee representa-
independent), the Risk Committee consists of Lene Skole (independ-
tive is included in the Remuneration Committee.
one independent member at the present time. Board committee
ent), Jørn Wendel Andersen (dependent) and Rune Joensen (em-
ployee representative). The committee held four meetings in 2011.
The Remuneration Committee held four meetings in 2011. The
The committee’s work is described in the terms
policy. The members of the Remuneration Committee are Mikael
of reference at tryg.com > Governance > Manage-
Olufsen (Chairman), Jesper Hjulmand, Paul Bergqvist (independ-
ment > Supervisory board > Board committees
ent) and Berit Torm (employee representative).
Remuneration Committee’s work is based on Tryg’s remuneration
Nomination Committee
Evaluation of the work of the Supervisory Board
In accordance with the Supervisory Board’s rules of procedure,
and the Executive Management
Tryg has set up a Nomination Committee. The purpose of the
The Supervisory Board has defined an evaluation procedure for
Nomination Committee is primarily tasked with ensuring the
assessing the composition of the Supervisory Board and the work
correct composition and size of the Executive Management and
and results of the Supervisory Board and its individual members.
the Supervisory Board. The committee consists of the Chairman,
Mikael Olufsen (Chairman) and Deputy Chairman Torben Nielsen
The Chairman is in charge of the evaluation and holds assessment
(independent). The committee holds meetings as needed,
interviews with each member of the Supervisory Board at the be-
however, at least two meetings each year.
ginning of the year, according to an agenda agreed in advance by
the Supervisory Board. The outcome is discussed at the first Board
The Nomination Committee’s work is described in
meeting of the year.
the terms of reference at tryg.com > Governance
> Management > Supervisory board > Board com-
The Supervisory Board carries out an annual evaluation of the
mittees
work and results of the Executive Management in accordance with
clearly defined criteria determined in advance and of cooperation
between the Supervisory Board and the Executive Management.
56 | Annual report 2011 | Tryg A/S
The Supervisory Board also reviews and approves the rules
Remuneration of the Supervisory Board
of procedure of the Supervisory Board and the Executive
Members of Tryg’s Supervisory Board receive a fixed fee and are not
Management each year to ensure they are aligned with
part of any form of incentive or severance programme. The Board
Tryg’s requirements.
members’ remuneration (basic fee) is fixed on the basis of trends
in a peer group, taking into account Board members’ required skills,
Management’s remuneration
efforts and the scope of the Board’s work, including the number of
Tryg has adopted a policy for remuneration of the Supervisory
meetings. The Chairman of the Supervisory Board receives a triple
Board and the Executive Management, including general guide-
basic fee and the Deputy Chairman receives a double basic fee. The
lines for incentive pay. The remuneration policy was adopted by
Supervisory Board is not part of any pension scheme.
the Supervisory Board in February 2011 and approved by the
annual general meeting on 14 April 2011.
Remuneration of the Executive Management
Members of the Executive Management are employed under
The Chairman of the Supervisory Board reports on Tryg’s remu-
service contracts, and all terms of their remuneration are fixed by
neration policy each year in connection with the presentation of
the Supervisory Board. The Supervisory Board defines the remu-
the annual report at the annual general meeting. The Superviso-
neration of the Executive Management on an annual basis. There
ry Board’s proposal for remuneration to the Supervisory Board of
is an annual review based on the requirements for attracting and
Tryg for the current financial year is also submitted for approval
retaining the best qualified Executive Management members.
by the shareholders at the annual general meeting of each year.
The fixed salary must be competitive and appropriate for the
market in order to provide correct, sufficient motivation for the
The remuneration policy also covers employees of Tryg whose
Director to do his or her best in order to achieve the company’s
activities have a significant influence on Tryg’s risk profile,
defined targets. The Excutive Management’s remuneration con-
known as risk takers, as well as employees in control functions
sists of fixed salary, pension and a variable salary. Variable salary
such as compliance and internal audit.
constitutes only a limited part of overall remuneration. The Su-
See the remuneration policy at tryg.com >
ed with a variable salary of up to 10% of the fixed basic salary
Governance > Remuneration
including pension at the time of allocation at a corresponding
current value. The Supervisory Board has decided that the vari-
pervisory Board can decide that the fixed salary be supplement-
Total remuneration of the Supervisory Board in 2011
DKK
Mikael Olufsen
Torben Nielsen a)
Jørn Wendel Andersen
Christian Brinch
Jens Bjerg Sørensen a)
Paul Bergqvist
Jesper Hjulmand
Lene Skole
Tina Snejbjerg
Bill-Owe Johansson
Rune Torgeir Joensen
Berit Torm
Bodil Nyboe Andersen b)
John R. Frederiksen b)
Audit Remuneration
Committee
Committee
Fee
900,000
428,958
300,000
300,000
213,308
300,000
300,000
300,000
300,000
300,000
300,000
300,000
172,638
86,662
160,000
150,000
150,000
150,000
65,000
103,125
68,750
53,334
68,750
15,417
Total
1,003,125
588,958
450,000
300,000
213,308
368,750
353,334
450,000
300,000
300,000
450,000
368,750
237,638
102,079
a) Elected on the annual general meeting on 14 April 2011.
b)
Withdrew from the Supervisory Board on the annual general meeting on 14 April 2011.
Tryg A/S | Annual report 2011 | 57
Total remuneration of the Executive Management in 2011
DKK
Basic salary
Pension
Car
Total salary
Matching
shares
value
Total
Morten Hübbe
Tor Magne Lønnum (Employed 1 Sep. 2011)
Lars Bonde
7,203,342
1,557,868
3,853,286
1,800,835
222,863
963,322
255,000
51,095
255,000
9,259,178
1,831,826
5,071,608
700,000
400,000
400,000
9,959,178
2,231,826
5,471,608
Stine Bosse (Resigned 31 January 2011)
7,586,572
1,547,070
148,750
9,282,392
0
9,282,392
Furthermore, the members of the Executive Management received a bonus from 2010: Morten Hübbe DKK 637,000, Lars Bonde DKK 463,834 and Stine Bosse DKK 1,031,380.
a) On the time of allocation.
able salary consists of a matching shares programme. Four years
The going concern assumption
after a Director’s purchase of a subsequently defined number
When discussing and adopting the annual report for 2011, the
of shares, the Director is allocated a corresponding number of
Supervisory Board considers whether the financial statements have
free shares in Tryg. The allocation of matching shares at the
been prepared on the assumption that the business is a going
time of allocation is not dependent on results. The purpose of
concern, including assumptions and uncertainties.
the matching shares programme is partly to make sure that the
Director is retained, and partly to secure a joint financial interest
Risk management and internal control
between the Director and the company’s shareholders.
Being an insurance business, Tryg is subject to the risk manage-
ment requirements of the Danish Financial Business Act. The
Read more about the matching shares pro-
Supervisory Board uses policies to define the framework for risk
gramme in the remuneration policy at tryg.com >
management in Tryg in the areas of insurance risk, investment
Governance > Remuneration
risk and operational risk, as well as IT security. These frameworks
then result in guidelines for Tryg’s risk management. A Risk Man-
Some members of the Executive Management still have
agement Committee comprising the Group CEO, Group CFO and
unexercised stock options, which were allocated under a
Group CRO monitors the risk management environment.
previously adopted stock option programme. Please refer to
note 6 on page 98 for further details.
Tryg performs an annual risk identification process, mapping
insurance risk and other risks related to the achievement of
Retention and severance schemes
Tryg’s strategy or which may have a potential substantial impact
Each member of the Executive Management is entitled to 12
on Tryg’s financial position. In this process, identified risks are re-
months’ notice of termination and to 12 months’ severance pay.
corded and quantified. Risk identification is included in the annual
However, the Group CEO is entitled to 12 months’ notice and to
risk report to the Supervisory Board. Quantification of the risks
18 months’ severance pay plus pension contributions during the
identified is included in the statement of the individual solvency
same period.
requirement that the Supervisory Board considers every quarter.
Each member of the Executive Management has 25% of basic
In 2011, Tryg performed an assessment of the company’s risk
salary paid into a pension scheme. Group CFO Tor Magne Løn-
and solvency (Own Risk and Solvency Assessment, also known as
num, however, receives a defined benefit pension, which was
‘ORSA’) as a preparation for future requirements for insurance com-
calculated at DKK 222,863 in 2011. The calculation is based on
panies under EU law. The purpose of the ORSA is to prepare the risk
an actuarial assumption of the current value of the expected
management process by means ensuring that insurance companies
pension benefits. The current value is calculated on the basis of,
are proactive in managing risk and solvency.
among other things, expectations of future salary and interest
trends, date of retirement and mortality.
58 | Annual report 2011 | Tryg A/S
The Executive Management reports to the Supervisory Board on
Audit
the Group’s risk management work. The overall responsibility for
The Supervisory Board ensures that the Group is monitored
the Group’s internal controls and risk management systems rests
by competent and independent auditors. The Group’s internal
with the Supervisory Board and the Executive Management. The
auditor participates in all Board meetings. The external auditors
Supervisory Board and the Executive Management approve and
participate in the annual Board meeting at which the annual
monitor Tryg’s general policies and guidelines, procedures and
report is presented.
controls of significant risk areas, and receive reports on trends in
these areas as well as on application of the defined frameworks.
Each year, the annual general meeting appoints external auditors
The status of compliance with this is reported to the Supervisory
recommended by the Supervisory Board. In connection with the
Board on an annual basis. Any non-compliance with limits and
Supervisory Board’s review of the annual report, it discusses the
guidelines are reported to the Supervisory Board if they occur.
accounting policies and other issues. The results of the audit
The Supervisory Board’s Risk Committee monitors the company’s
are discussed at the Audit Committee and at Supervisory Board
work on risk management and control on an ongoing basis and
meetings for the purpose of assessing the auditors’ observations
reports on this quarterly to the Supervisory Board.
and conclusions. The internal and external auditors’ long-form
In connection with major acquisitions, a general risk analysis is
performed, and the significant business procedures and internal
The audit agreement and associated auditors’ fee are agreed
controls are reviewed. The Executive Management has estab-
between the Supervisory Board and the auditors on the basis of
lished a formal Group reporting process, which comprises monthly
a recommendation from the Audit Committee. The Audit Commit-
reporting, including budget reporting and deviation reporting.
tee reviews the limits for the external auditors’ performance of
reports are reviewed by the Supervisory Board.
Tryg publishes interim accounts on a quarterly basis. Tryg’s inter-
non-audit services each year.
nal control systems are based on clear organisational structures
and guidelines, general IT controls and segregation of functions,
In at least one Audit Committee meeting each year, the internal
which are supervised by the internal auditors.
and external auditors have a discussion without the presence of
Whistleblowing scheme
any matters that need to be reported to the Supervisory Board.
the Executive Management. The Audit Committee will deal with
In October 2011, Tryg set up an Ethical Hotline, which is managed
by an external partner, Global Compliance. This allows employees,
Internal audit
customers or business partners to report any serious breaches or
Tryg has set up an internal audit department in compliance with
suspicions of such. Reporting takes place in confidence to the Chair-
the Danish Financial Business Act. The internal audit department
man of the Audit Committee and Tryg’s internal Audit Manager.
regularly reviews the quality of Tryg’s internal control systems and
Read more about Tryg’s Ethical Hotline
performing and reporting the audit work to the Supervisory Board.
business procedures. The department is responsible for planning,
at tryg.com > Governance > Ethical Hotline
Deviations and explanations
Openness about risk management
The Supervisory Board considers that Tryg is following the
Risk management is an integral part of Tryg’s business opera-
recommendations for corporate governance apart from point
tions. Tryg continuously seeks to minimise the risk of unnecessary
5.10.2, as most members of the Board committees cannot be
losses in order to optimise returns relative to the Tryg’s capital.
considered to be independent. Board committee members are
Read more about Tryg’s risk management in the
considered by the Supervisory Board to be most important.
section Capital management and risk management
It is also considered important to involve employee representa-
and in the Risk Management Report at tryg.com >
tives in the committees.
elected primarily on the basis of their special skills that are
Downloads
Tryg A/S | Annual report 2011 | 59
Corporate Social Responsibility – CSR
At Tryg, CSR is integrated into the business. This means that in
A new initiative involves our measuring the volume of our waste
all of our activities, we strive to unite sound business activities
with the role of a good coporate citizen. It is quite natural for us
to assume responsibility for our stakeholders. Through our CSR
initiatives, we focus on socially responsible solutions for customers,
suppliers, employees, investors and society in general.
We formulate our responsibility with reference to the Global
Compact principles in four general areas: Climate, Prevention,
as well as the CO2 emissions associated with disposal, including
incineration and recycling of our sorted waste.
Tryg saved DKK 11m in air transport in 2011
and achieved a 20% CO2 reduction from 2007
to 2011.
Inclusion and Well-being.
Objective
Read Tryg’s CSR policy at
tryg.com > CSR
Our target for 2012 is to achieve a total CO2 reduction of 18%
compared with 2007.
Prevention
Climate
Claims reduction has a positive effect, not only for our customers and
It is decisive for Tryg to create and promote sustainable solutions
investors, but also for society as a whole. Prevention must simultane-
that deal with climate-related challenges that our customers
ously enhance customers’ perceived peace of mind and reduce costs
continue to experience. As a peace-of-mind provider, we offer
by means of avoiding and limiting claims. Prevention must not only
products and advice that help to prevent climate- and environment-
enhance customer loyalty, but also contribute to making Tryg a more
related claims and reduce vulnerability when claims have occurred.
attractive peace-of-mind provider for potential customers.
It is also important for us that we reduce our own CO2 emissions.
In 2011, Tryg’s total CO2 emissions were 6,036 tonnes. This is a
reduction of 1.101 tonnes from 2010, corresponding to 15%.
As a peace-of-mind provider, we therefore offer advice on effec-
tive claims reduction in connection with: climate-related challenges
Our biggest reduction was in air travel, 417 tonnes.
such as snow, rain and storms, and also the prevention of claims
Read more about our climate accounts and
in cases involving personal injury we also work actively to limit the
initiatives in the climate area at tryg.com > CSR
course of illness by means of treating injuries quickly and effec-
after fires, in association with building projects and in traffic, and
Sold environmental insurances and reports
CO2 Emissions
Pcs.
1,400
1,200
1,000
800
600
400
200
0
Environmental
insurance
Environmental
reports
Electric car
insurance
Tonnes
3,000
2,500
2,000
1,500
1,000
500
0
Electricity
Natural gasa)
Heating oil
Air travel
Car
2010
2011
2010
2011
60 | Annual report 2011 | Tryg A/S
a) Tryg went from natural gas to district heating in 2011.
tively. Our work includes practical advice to private, commercial
dialogue with customers on prevention, including such means as
and corporate customers in the form of general information,
a number of seminars and more advice in 2012, and Tryg also
personal contact and in seminars and presentations.
wants to work more on the implementation of a conceptualisa-
We use the insight that we gain from contact with customers in
new kinds of risks to develop our business. We are also happy
Inclusion
tion of peace of mind.
to share the knowledge we gain with authorities and research
We work in a targeted way to create an inclusive society that
institutions. In 2011, we participated as a partner in a number of
is open to diversity. This is an approach that is commonplace
conferences and dialogues on the handling of cloudbursts, and
in the Nordic countries, and likewise in Tryg. Tryg is therefore
contributed DKK 1.1m to research into a new visualisation tech-
constantly launching new initiatives that ensure diversity among
nology that can help home owners to avoid climate-related claims.
our employees and promote equal opportunity for all, regardless
Read more about our preventive work at
religion. This contributes to innovation and development of
tryg.com > CSR
products and solutions that are attractive to our customers.
of gender, age, ethnicity, disability, sexual orientation, faith or
Night Owls and lifebuoys
As of 31 December 2011, there were 373 active groups of ’Night
Owls’ in Norway. With about 50 people in each group, this cor-
responds to just under 19,000 volunteers in 2011. The red and
3.7% of Tryg’s emloyees have
a non-western background.
white lifebuoy has become a symbol of reassurance in the Nordic
Objectives
countries. In addition to the more than 33,000 lifebuoys that cur-
In 2012, Tryg’s new action plan for women in management
rently hang along the Norwegian coast, a further 300 lifebuoys
was implemented, including mentoring programmes for female
were set up along the coast of south west Finland during 2011.
managerial talents and a target of 2% more women in man-
Objectives
agement. Tryg wants to continue to maintain a focus on the
recruitment of employees with a non-western background, and
In 2012, Tryg will extend its preventive initiative at both the
is making special efforts to make Tryg accessible for employees
strategic and the practical level. Tryg aims to maintain a closer
with disabilities.
Waste
Kg.
200,000
160,000
120,000
80,000
40,000
0
Paper waste
Corrugated
cardboard
Biowastea)
Other
Denmark
Norway
Composition of employees
Number
2,000
1,600
1,200
800
400
0
Men
Women
Age
17-39
year
Age
40-54
year
Age
55-70
year
Non-
western
background a)
Flexible
job
a) Only calculated in Norway.
a) Non-western background estimated by Statistics Denmark.
Tryg A/S | Annual report 2011 | 61
Well-being
with our suppliers, we make sure that compliance with Tryg’s CSR
Tryg wants to contribute to greater well-being for our employees,
standards is maintained. Tryg has been including a CSR clause in
and we actively work to promote quality of life and create a healthy,
our contracts for many years, requiring compliance with Global
safe working environment. This results in improved well-being and
Compact and environmental standards. In 2011, this initiative was
reduces levels of sick leave. It is crucial that our products help im-
extended to include a programme that requires suppliers to draw
prove the welfare of our customers in the Nordic countries. For ex-
up an action plan and produce an annual report on their CSR work.
ample, we have instituted a programme of initiatives aimed at young
people, seeking to create an understanding that insurance is a key
This requirement includes targets and reporting on CO2 reductions,
protection of human rights and employees’ rights, as well as anti-
element of a responsible life. This is part of our social responsibility
corruption and supplier management.
and supports Tryg’s position as a leading peace-of-mind provider.
Read more about our measures to promote
connection with new contracts in the area of cars. A new partnership
well-being at tryg.com > CSR
agreement with the caravan workshops that repair claims for Tryg’s
The CSR in procurement programme was introduced in 2011 in
Objectives
customers was thus extended to incorporate CSR requirements. Cor-
responding CSR requirements were introduced into indirect purchases
In 2012, we will continue to focus on our employees’ health and
and IT procurement. Tryg organised 22 workshops during the year, at
access to sporting activities. In 2011, Tryg extended the partner-
which the CSR programme was introduced to suppliers.
ship with the Youth Town in Rødovre. This means that in 2011
we held 75 ‘Get to Grips with Finances’ courses, 30 more than
Objectives
in 2010. The target is that 82 classes will complete the course
The target for 2012 is to cover all new contracts under market-
before the end of 2012.
ing, consultancy services and cleaning, and to convert earlier CSR
clauses of the car area on an ongoing basis to a requirement of
CSR in procurement
suppliers to participate in CSR in the procurement programme.
At Tryg, we make demands of ourselves and our business part-
ners when it comes to responsible, sustainable solutions for our
The annual report and tryg.com/csr comprise Tryg’s
customers. Through CSR in procurement, Tryg contributes to the
COP report in compliance with UN Global Compact
development of healthy, robust companies that benefit society in
and comprise Tryg’s CSR reporting in compliance
financial, social and environmental terms. By engaging in dialogue
with the Danish Financial Statement Act, section 99a.
Motor procurement
IT procurement
24
2
1
Percent
73
Car, covered by
CSR clause
Mobile home DK,
covered by
CSR programme
Roadside assistance NO,
covered by CSR
programme
Others, not covered
by CSR clause
20
Percent
80
IT consultants,
covered by
CSR clause
IT license, not
covered by
CSR clause
62 | Annual report 2011 | Tryg A/S
The Tryg share
Financial calendar 2012
19 April 2012 at 14:00 CET
20 April 2012
25 April 2012
14 Maj 2012 after 17:00 CET
14 August 2012 after 17:00 CET
Annual general meeting 2012
Tryg shares trade ex-dividend
Payment of dividend
Interim report for Q1 2012
Interim report for H1 2012
7 November 2012 after 17:00 CET
Interim report for Q1-Q3 2012
Tryg emphasises openness, transparency and accommodation
Share price performance in 2011
of stakeholder information requirements, thereby providing
The Tryg share closed at a price of DKK 257.5 in 2010 and DKK 319
investors, equity analysts and other stakeholders with a good
in 2011. Including a dividend of DKK 4, the share rose by 25% during
basis for forming an accurate picture of the Group’s financial
2011. Measured excluding dividends, the share performance in 2011
position, its performance and its opportunities and risks.
was the best of the twenty shares in the OMX C20 index that had
The Group’s Investor Relations department strives to maintain
an average yield of -15% in 2011. The index of insurance shares in
a high level of information by
Europe, the STOXX Euro Insurance Index, fell by 14% in 2011. The
•
being available and proactive, and answering queries from
lence in the financial markets, which generated increased demand
investors and other stakeholders as promptly as possible,
for insurance shares, which are regarded as stable investments.
Tryg share’s performance in 2011 was characterised by the turbu-
•
having in-depth insight into and knowledge of Tryg as well
as relevant external trends,
Trading in the Tryg share
•
preparing plain and relevant written communication and
Nasdaq OMX Copenhagen continues to be the primary exchange for
presentation material,
trading in the Tryg share. The share is, however, increasingly being
•
having a website that is relevant to professional and
traded on alternative exchanges and trading platforms (known as
private investors alike.
MTFs) and OTC (over-the-counter). The total annual turnover at
Nasdaq OMX Copenhagen fell from 44 million in 2010 to 33 million
Information that may influence the pricing of Tryg shares is
in 2011. But at the same time there was an increase in trading of
published in accordance with the rules applicable to the distribu-
the Tryg share on the alternative trading platforms, which now ac-
tion of news in the EU. As the Tryg share is listed at Nasdaq OMX
counts for a notable proportion of trading in the Tryg share.
Copenhagen, new information is published there in accordance
with the current rules. Tryg.com is updated simultaneously with
the publication of new information. Information is also distributed
directly to the London Stock Exchange, the press, equity analysts,
investors and other stakeholders. All financial information may be
downloaded at tryg.com/ Investor, where stakeholders may also
order annual reports and subscribe to news and RSS feeds.
In accordance with the recommendations issued by Nasdaq
OMX Copenhagen, Tryg does not comment on financial results
or expectations four weeks before the publication of financial
reports.
Turnover in the Tryg share
2011
(’000 shares)
Market
share 2011
Market
share 2010
Nasdaq OMX
Chi-X
BATS
Turqoise
Burgundy
Other
Total
33,074
3,278
1,467
875
30
8,979
47,704
68%
7%
3%
2%
0%
20%
72%
4%
1%
1%
0%
22%
Tryg A/S | Annual report 2011 | 63
Capital and dividend
DKKm
Profit for the year
Cash dividends
Cash dividend per share (DKK)
Cash payout ratio
Total buy back
Buy back per share (DKK)
Total distribution per share (DKK)
Total distribution
Total payout ratio
Buffer to ’A-’ level (%)
2007
2,266
1,156
17
5%
1,405
21
38
2,561
113%
5.0%
2008
2009
2010
2011a)
846
442
6.5
52%
0
0
6.5
442
52%
16.0%
2,008
991
15.5
49%
799b)
12.5
28
1,790
89%
7.7%
593
256
4
43%
0
0
4
256
43%
5.2%
1,140
400
6.52
35%
0
0
6.52
400
35%
5.1%
a) Dividend proposed by the Supervisory Board for approval on the annual general meeting.
b) The share buy back programme was based on the profit for 2009, amounted to DKK 799m and was initiated on 16 April 2010 with completion on 7 February 2011.
Share capital and ownership
Dividend policy
Tryg has a total share capital of DKK 1,532,902,575, comprising a
The dividend is determined on the basis of Tryg’s profit distribu-
single class of share (61,316,103 shares of DKK 25 nominal value
tion policy. Tryg intends to pursue a risk-based, transparent
each), and all shares rank pari passu. The principal shareholder,
policy for asset management, and thus also for dividend distri-
TryghedsGruppen smba, Kgs. Lyngby, Denmark, holds 60% of
bution. At 31 December, a capital requirement was determined
the issued shares. TryghedsGruppen is the only shareholder with
based on Standard & Poor’s model, corresponding to the level
ownership of more than 5%. TryghedsGruppen invests in Nordic
of an ’A-’ rating plus a buffer of 5% as a minimum. Surplus
companies in the field of peace of mind and healthcare, and
capital is distributed as a combination of cash dividend and
provides support to charitable activities. As of 31 December 2011,
share buyback. The relationship between cash dividend and
there was a free float of 40% of the shares, divided among 27,194
share buy back is determined by the Supervisory Board.
registered shareholders. The 200 largest shareholders held 71% of
the free float. At 31 December 2011, Tryg held 942,834 of its own
shares, corresponding to 1.54% of the share capital.
Equities by geography
At 31 December 2011
1
6
8
12
Percent
73
Denmark
UK
USA
Nordic
Other
Shareholders
At 31 December 2011
12
Percent
17
11
60
TryghedsGruppen
Large Danish
shareholders a)
Large international
shareholders a)
Small shareholders
64 | Annual report 2011 | Tryg A/S
a) Shareholders with more than 10,000 shares.
Dividend for the 2011 financial year
The company’s website is available in Danish and English,
In accordance with Standard & Poor’s capital model, the capital
and is continuously updated and developed, making it an
requirement is DKK 10,097m, while TAC (before dividend) is DKK
important means of keeping interested investors informed
11,012m. With earnings in 2011 of DKK 1,140m, The Supervi-
about Tryg’s performance. In 2011, Tryg’s Investor Relations
sory Board proposes to distribute DKK 400m in the form of a
department issued an IR newsletter about the Norwegian pool
cash dividend, equivalent to DKK 6.52 per share.
scheme for natural claims. The newsletter was issued when
On the basis of the annual results 2011, Tryg has decided not
to create a better understanding of factors of importance to
to initiate a share buy back programme in 2012.
Tryg’s performance.
deemed appropriate and deals with topical issues in order
Dialogue with investors
Annual general meeting
The Executive Management and Investor Relations meet with
Tryg holds the annual general meeting on 19 April 2012 at
institutional investors and equity analysts each quarter after the
14:00 at Falkoner Centret, Falkoner Allé 9, 2000 Frederiksberg,
publication of financial statements. In 2011, Tryg held around 250
Denmark. The notice will be advertised in the daily press in
investor meetings and participated in nine investor conferences.
March 2012 and will be sent to shareholders who so request.
Tryg also participated in events for private shareholders in Den-
The annual general meeting will also be announced at tryg.
mark. The Group’s performance is followed by 24 equity analysts,
com. Shareholders who are unable to attend the annual gener-
nine of whom are based in London. At tryg.com it is possible to
al meeting can follow it live via a webcast at tryg.com.
monitor the equity analysts’ recommendations of the Tryg share.
Company announcements published in 2011
Date
No. a)
Company announcement
11.01.2011
12.01.2011
27.01.2011
08.02.2011
09.02.2011
09.02.2011
14.02.2011
01.03.2011
17.03.2011
24.03.2011
14.04.2011
11.05.2011
16.05.2011
14.06.2011
11.08.2011
17.08.2011
09.11.2011
3
4
7
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Stine Bosse resigns
Tryg appoints new Group CEO
Bodil Nyboe Andersen leaves Tryg’s Supervisory Board
Tryg ends share buy back programme
Annual report 2010
Fourth quarter 2010 report
Tryg AGM
New IR Director at Tryg
Notice of the annual general meeting
TryghedsGruppen’s candidates for Tryg’s Supervisory Board
Resolutions from Tryg’s AGM
First quarter 2011 report
Tryg employs new CFO and changes the organisation
Tryg capital reduction
Tryg financial calendar 2012
Q2 and H1 report 2011
Q1-Q3 report 2011
a) After implementing the share buy back programme on 16 April 2010, Tryg issued a company announcement on the weekly share buy backs each week
until 8 February 2011.
Tryg A/S | Annual report 2011 | 65
Tryg’s Group financial statements
are prepared in accordance with
IFRS and published in Danish
and English.
Contents – Accounts
Accounts 2011
Note Tryg Group
Statement by the Supervisory Board and the Executive Management
Independent auditor’s reports
CSR report
Financial highlights and key ratios
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
1 Risk management
2 Operating segments
2 Geographical segments
2 Technical result, net of reinsurance, by line of business
3 Earned premiums, net of reinsurance
4 Technical interest, net of reinsurance
5 Claims incurred, net of reinsurance
6
7 Interest and dividends
8 Value adjustment
9 Tax
Insurance operating expenses, net of reinsurance
Intangible assets
Investment property
Investments in associates
10 Profit/loss on discontinued and divested business
11
12 Property, plant and equipment
13
14
15 Total financial assets
16 Reinsurer’s share
17 Current tax
18 Shareholders’ equity
19 Capital adequacy
20 Subordinate loan capital
21 Provisions for claims
22 Pensions and similar obligations
23 Deferred tax
24 Other provisions
25 Debt to credit institutions
26 Debt relating to unsettled fund trading and repos
27 Earnings per share
28 Contractual obligations, contingent liabilities and collateral
29 Related parties
30 Financial highlights
31 Accounting policies
Tryg A/S (Parent company)
Income statement (parent company)
Statement of financial position (parent company)
Statement of changes in equity (parent company)
Notes (parent company)
Fourth quarter of 2011
Fourth quarter of 2011 | Quarterly outline
Fourth quarter of 2011 | Geographical segments
Other key figures
Glossary
Disclaimer
Group chart
Page
68
69
70
71
72
73
74
76
77
78
90
92
94
96
96
96
96
102
102
103
103
104
106
108
109
110
114
115
115
116
116
117
118
120
121
121
121
121
122
123
124
125
136
137
138
139
144
146
148
149
151
152
Statement by the Supervisory Board
and the Executive Management
The Supervisory Board and the Executive Management have to-
and the parent company’s assets, liabilities and financial posi-
day considered and adopted the annual report for 2011 of Tryg
tion at 31 December 2011 and of the results of the Group’s
A/S and the Tryg Group.
and the parent company’s operations and the cash flows of the
Group for the financial year 1 January – 31 December 2011.
The consolidated financial statements have been prepared in
accordance with the International Financial Reporting Standards
Furthermore, in our opinion the Management’s report gives a
as adopted by the EU, and the financial statements of the par-
true and fair view of developments in the activities and financial
ent company have been prepared in accordance with the Danish
position of the Group and the parent company, the results for
Financial Business Act. In addition, the annual report has been
the year and of the Group’s and the parent company’s financial
presented in accordance with additional Danish disclosure re-
position in general and describes significant risk and uncertainty
quirements for the annual reports of listed financial enterprises.
factors that may affect the Group and the parent company.
In our opinion, the accounting policies applied are appropriate,
We recommend that the annual report be adopted by the share-
and the annual report gives a true and fair view of the Group’s
holders at the annual general meeting
Ballerup, 8 February 2012
Executive Management
Morten Hübbe
Group CEO
Supervisory Board
Tor Magne Lønnum
Group CFO
Lars Bonde
Group Executive Vice President
Mikael Olufsen
Chairman
Torben Nielsen
Deputy Chairman
Jørn Wendel Andersen
Paul Bergqvist
Christian Brinch
Jesper Hjulmand
Lene Skole
Jens Bjerg Sørensen
Rune Torgeir Joensen
Bill-Owe Johansson
Tina Snejbjerg
Berit Torm
68 | Annual report 2011 | Tryg A/S
Independent auditor’s reports
To the shareholders of Tryg A/S
financial statements, whether due to fraud or error. In making those
Report on the consolidated financial statements and parent
risk assessments, the auditor considers internal control relevant
financial statements. We have audited the consolidated and parent
to the entity’s preparation of consolidated and parent financial
financial statements of Tryg A/S for the financial year 1 January
statements that give a true and fair view in order to design audit
to 31 December 2011, page 71-143, which comprise the income
procedures that are appropriate in the circumstances, but not for the
statement, statement of comprehensive income, balance sheet,
purpose of expressing an opinion on the effectiveness of the entity’s
statement ‘of changes in equity and notes, including the ac-
internal control. An audit also includes evaluating the appropriateness
counting policies, for the Group as well as for the Parent, and
of accounting policies used and the reasonableness of accounting
the consolidated cash flow statement. The consolidated financial
estimates made by Management, as well as the overall presentation
statements are prepared in accordance with International Financial
of the consolidated and parent financial statements. We believe that
Reporting Standards as adopted by the EU and the parent financial
the audit evidence is sufficient and appropriate to provide a basis for
statements are prepared in accordance with the Danish Financial
our audit opinion. Our audit has not resulted in any qualification.
Business Act. In addition, the consolidated and parent financial
statements are prepared in accordance with Danish disclosure
Opinion
requirements for listed financial services companies.
In our opinion, the consolidated financial statements give a true and
fair view of the Group’s financial position at 31 December 2011,
Management’s responsibility for the consolidated
and of the results of its operations and cash flows for the financial
financial statements and parent financial statements
year 1 January to 31 December 2011 in accordance with Interna-
Management is responsible for the preparation of consolidated
tional Financial Reporting Standards as adopted by the EU and Dan-
financial statements that give a true and fair view in accordance
ish disclosure requirements for listed financial services companies.
with International Financial Reporting Standards as adopted by the
Moreover, in our opinion, the parent financial statements give a
EU and Danish disclosure requirements for listed financial services
true and fair view of the Parent’s financial position at 31 December
companies as well as for the preparation of parent financial state-
2011, and of the results of its operations for the financial year
ments that give a true and fair view in accordance with the Danish
1 January to 31 December 2011 in accordance with the Danish
Financial Business Act and Danish disclosure requirements for listed
Financial Business Act and Danish disclosure requirements for
financial services companies, and for such internal control as Man-
listed financial services companies.
agement determines is necessary to enable the preparation and fair
presentation of consolidated and parent financial statements that
Statement on the management commentary
are free from material misstatement, whether due to fraud or error.
Pursuant to the Danish Financial Business Act, we have read the
management commentary. We have not performed any further
Auditor’s responsibility
procedures in addition to the audit of the consolidated and parent
Our responsibility is to express an opinion on the consolidated and
financial statements. On this basis, it is our opinion that the in-
parent financial statements based on our audit. We conducted our
formation provided in the management commentary is consistent
audit in accordance with International Standards on Auditing and
with the consolidated and parent financial statements.
additional requirements under Danish audit regulation. This requires
that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the con-
Ballerup, 8 February 2012
Deloitte
solidated and parent financial statements are free from material
Statsautoriseret Revisionsaktieselskab
misstatement. An audit involves performing procedures to obtain
audit evidence about the amounts and disclosures in the consoli-
dated and parent financial statements. The procedures selected
depend on the auditor’s judgement, including the assessment of
Lars Kronow
Lone Møller Olsen
the risks of material misstatements of the consolidated and parent
State Authorised Public Accountant
State Authorised Public Accountant
Tryg A/S | Annual report 2011 | 69
CSR report
To the Management of TRYG A/S
We believe that our work provides an appropriate basis
We have reviewed TRYG A/S’ CSR data for 2011 which are
for us to conclude with a limited level of assurance on the
evident from the annual report, pages 60-62. The CSR data
subject matter. Such an assurance engagement provides
for 2011 are the responsibility of and have been approved by
less assurance than an audit.
Management. Our responsibility is to draw a conclusion based
on our review.
Conclusion
We have based our review on best practice and applicable
causes us to conclude that TRYG’s CSR data for 2011 do not
standards for issuing an independent auditor’s report on CSR
comply with the reporting practice stated and have not been
data, including ISAE 3000, ”Assurance Engage-ments other than
appropriately presented.
Based on our work, nothing has come to our attention which
Audits or Reviews of Historical Financial Information”, issued
by the International Auditing and Assurance Standards Board.
The objective and scope of the engagement were agreed with
Ballerup, 8 February 2012
Management.
Based on an assessment of materiality and risks, our work in-
Statsautoriseret Revisionsaktieselskab
Deloitte
cluded analytical pro-cedures and interviews as well as a review
on a sample basis of evidence supporting the subject matter.
We have compared the CSR data with the Company’s reporting
practice as can be seen on tryg.com/CSR/xxx. Additionally, we
Lars Kronow
Preben Johan Sørensen
have made a general comparison with the presentation of the
State Authorised
State Authorised
CSR data in the annual report.
Public Accountant
Public Accountant (CSR)
70 | Annual report 2011 | Tryg A/S
Financial highlights and key ratios
DKKm
2007
2008
2009
2010
2011
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 a)
Profit/loss for the period
Run-off gains/losses, net of reinsurance
Balance sheet
Total provisions for insurance contracts
Total reinsurers’ share of provisions for insurance contracts
Total shareholders’ equity
Total assets
Key ratios
Gross claims ratio
Business ceded as a percentage of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Gross expense ratio without adjustment
Operating ratio
Return on equity after tax (%)
Relative run-off gains/losses
Number of full-time employees, end of period
Solvency ratio
Share performance
Earnings per share – continuing business of DKK 25
Net asset value per share (DKK)
Dividend per share (DKK)
Price Earnings
Number of shares, end of period (1,000)
16,262
-10,448
-2,730
3,084
-553
494
3,025
340
-51
3,314
-893
2,421
-155
2,266
792
26,969
1,587
9,975
43,830
64.2
3.4
67.6
16.8
84.4
16.8
81.9
22.8
4.2
3,788
81
35.8
147.5
17.00
10.8
67,638
16,976
-11,473
-2,964
2,539
-598
491
2,432
-988
-49
1,395
-513
882
-36
846
800
25,228
1,036
8,209
38,445
67.6
3.5
71.1
17.1
88.2
17.5
86.1
9.3
4.1
4,065
100
13.3
127.5
6.50
24.7
64,378
17,862
-12,882
-3,056
1,924
-520
158
1,562
1,086
-38
2,610
-625
1,985
23
2,008
683
29,042
1,320
9,631
44,740
72.1
2.9
75.0
17.2
92.2
17.1
91.3
22.5
3.6
4,310
97
31.3
152.3
15.50
11.0
63,228
19,475
-15,617
-3,304
554
-313
134
375
570
-4
941
-265
676
-83
593
824
32,031
1,588
8,458
50,591
80.2
1.6
81.8
17.0
98.8
17.0
98.1
6.6
3.9
4,291
125
10.8
139.5
4.00
23.8
60,634
20,572
-16,299
-3,430
843
507
184
1,534
66
-31
1,569
-455
1,114
26
1,140
944
34,257
2,067
9,007
53,221
79.2
-2.5
76.7
16.8
93.5
16.7
92.6
13.1
4.0
4,318
112
18.4
149.2
6.52
17.3
60,373
The gross expense ratio without adjustment is calculated as the ratio of actual gross insurance operating expenses to earned gross premiums. Other key ratios are
calculated in accordance with ‘’Recommendations & Financial Ratios 2010’’ issued by the Danish Society of Financial Analysts. The adjustment, which is made pursuant
to the Danish Financial Supervisory Authority’s and the Danish Society of Financial Analysts’ definition of expense ratio and combined ratio, involves the addition of
a calculated expense (rent) concerning owner-occupied property based on a calculated market rent and the deduction of actual depreciation and operating costs
on owner-occupied property.
a) Profit/loss on discontinued and divested business after tax includes Marine Hull insurance. Comparative figures are restated to reflect Marine Hull insurance.
Tryg A/S | Annual report 2011 | 71
Income statement
DKKm
Notes General insurance
Gross premiums written
Ceded insurance premiums
Change in provisions for unearned premiums
Change in reinsurers’ share of provisions for unearned premiums
3 Earned premiums, net of reinsurance
4 Technical interest, net of reinsurance
Claims paid
Reinsurance recoveries
Change in provisions for claims
Change in the reinsurers’ share of provisions for claims
5 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
6
Insurance operating expenses, net of reinsurance
2 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
4
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
72 | Annual report 2011 | Tryg A/S
2010
2011
19,939
-1,054
-382
47
20,822
-1,124
-102
45
18,550
19,641
134
184
-14,809
391
-808
211
-15,693
1,142
-606
355
-15,015
-14,802
-82
-148
-2,406
-898
-3,304
92
-2,461
-969
-3,430
89
-3,212
-3,341
375
1,534
-5
128
1,133
238
-96
-76
1,322
-752
570
162
-166
941
-265
676
-83
593
10.8
9.5
9.5
1
117
1,260
-255
-113
-92
918
-852
66
136
-167
1,569
-455
1,114
26
1,140
18.4
18.9
18.9
Statement of comprehensive income
DKKm
Profit for the year
Other comprehensive income
Change in equalisation provision
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
Deferred tax on provision for contingency funds
Actuarial gains/losses on defined benefit pension plans
Tax on actuarial gains/losses on defined benefit pension plans
Other comprehensive income
2010
2011
593
1,140
1
19
-5
330
-328
82
68
-228
63
2
0
20
-6
29
-27
7
-22
-399
111
-287
Total comprehensive income
595
853
Tryg A/S | Annual report 2011 | 73
Statement of financial position
DKKm
Notes 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
Derivative financial instruments
Total other financial investment assets
15 Total investment assets
16 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
Receivables from subsidiaries
Other receivables
15 Total receivables
17 Current tax assets
23 Deferred tax assets
15 Cash in hand and at bank
Total other assets
Accrued interest and rent earned
Other prepayments and accrued income
Total prepayments and accrued income
2010
2011
968
952
118
1,385
353
1,856
102
1,745
10
1,857
2,158
2,199
13
13
184
2,268
34,621
2,755
298
14
14
187
2,378
38,400
1,635
651
40,126
43,251
42,297
45,464
154
1,434
1,588
1,110
1,110
211
0
601
192
1,875
2,067
1,158
1,158
317
1
189
1,922
1,665
196
104
857
1,157
609
194
803
93
0
402
495
497
224
721
Total assets
50,591
53,221
74 | Annual report 2011 | Tryg A/S
Statement of financial position
DKKm
Notes Liabilities
18 Shareholders’ equity
20 Subordinated loan capital
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
26 Debt relating to unsettled fund trading and repos
15 Derivative financial instruments
17 Current tax liabilities
Other debt
Total debt
Accruals and deferred income
Total liabilities and equity
1 Risk management
19 Capital adequacy
27 Earnings per share
28 Contractual obligations, contingent liabilities and collateral
29 Related parties
30 Financial highlights
31 Accounting policies
2010
2011
8,458
9,007
1,591
1,589
6,819
24,883
329
6,932
26,941
384
32,031
34,257
671
1,387
1
2,059
419
187
30
3,947
376
106
1,030
1,026
1,191
11
2,228
410
191
11
4,161
35
260
740
6,095
5,808
357
332
50,591
53,221
Tryg A/S | Annual report 2011 | 75
Statement of changes in equity
DKKm
Share
capital
Revalua-
Reserve
for
tion- exchange
rate adj.
reserves
Equali-
sation-
reserve
Other Retained Proposed
reserves earnings dividents
Total
Shareholders’ equity at 31 Dec. 2009
1,598
14
-2
58
950
6,022
991
9,631
2010
Profit for the year
Change in equalisation provision
Revaluation of owner-occupied properties
Exchange rate adjustment
of foreign entities
Hedge of foreign currency risk
in foreign entities
Actuarial gains and losses
on pension obligation
Tax on equity entries
Total comprehensive income
Dividend paid
Dividend own shares
Purchase of own shares
Exercise of share options
Issue of share options
Total equity entries in 2010
0
0
Shareholders’ equity at 31 Dec. 2010
1,598
2011
Profit for the period
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 share options
0
-65
19
-5
14
14
28
20
-6
14
128
209
256
1
330
-328
82
84
1
128
256
-991
-228
131
112
14
-816
9
16
593
1
19
330
-328
-228
208
595
-991
14
-816
9
16
84
82
1
59
128
-665
-735
-1,173
1,078
5,357
256
8,458
76
664
400
30
-27
7
10
0
76
-1
-399
89
353
65
14
-91
15
14
400
-256
1,140
20
29
-27
-399
90
853
0
-256
14
-91
15
14
549
9,007
Total equity entries in 2011
-65
Shareholders’ equity at 31 Dec. 2011
1,533
14
42
10
92
0
59
76
370
1,154
5,727
144
400
Proposed dividend per share DKK 6.52 (in 2010 DKK 4.00).
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 61,316,103. The dividend is not paid until approved by the shareholders at the annual general meeting. Tryg
Forsikring A/S’ Norwegian branch, has in its branch financial statements included provisions for contingency funds in the amount of DKK 2,430m
(in 2010 DKK 2,887m). Tryg Forsikring A/S’ Swedish branch, has in its branch financial statements included provisions for contingency funds
in the amount of DKK 144m (in 2010 DKK 143m) . In Tryg Forsikring A/S, these provisions, due to their nature as additional provisions, are
included in shareholders’ equity (retained earnings), net of deferred tax. Tryg Forsikring A/S’ option to pay dividend to Tryg 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 Tryg Forsikring A/S. Tryg Garantiforsikring A/S has a similar contingency amounting to DKK 139m, which is also included in the company’s
shareholders’ equity.
76 | Annual report 2011 | Tryg A/S
Statement of cash flows
DKKm
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 and refurbishment 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)
Foreign currency hedging
Investments, continuing business
Total investments
Funding
Purchase of own shares
Dividend paid
Change in debt to credit institutions
Funding, continuing business
Total funding
Change in cash and cash equivalents, net
Exchangerate adjustment of cash and cash equivalents, beginning of year
Change in cash and cash equivalents, gross
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
2010
2011
19,911
-14,801
-552
-3,172
-314
20,619
-15,565
-26
-3,410
92
1,072
1,710
1,132
-96
10
-482
-5
1,631
-20
1,611
-210
339
441
593
265
-31
-328
1,069
1,069
-807
-991
-581
-2,379
-2,379
301
44
345
512
857
1,386
-109
10
-210
-31
2,756
-179
2,577
-50
2
-191
-3,523
1,125
-18
-27
-2,682
-2,682
-76
-256
-19
-351
-351
-456
1
-455
857
402
Tryg A/S | Annual report 2011 | 77
Notes
1 Risk management
Risk management principles
Risk management is an integral part of Tryg’s business operations.
Tryg continuously seeks to minimise the risk of unnecessary losses
in order to optimise returns relative to the capital available in the
company at any time. This requires the proactive identification and
control of all significant risks.
The Supervisory Board defines the acceptable level of risk. Tryg
wishes to take risks associated with business activities on the con-
dition that they can be managed and can contribute an acceptable
return on equity. Risk management at Tryg is organised on the ba-
sis of three lines of defence:
1. Business managers are responsible for the management and
control of all risks associated with their own activities.
2. A central risk management function, the actuarial function and
a compliance function take care of coordinated risk manage-
ment and guarantee the balance between Tryg’s overall risk
and the capital available.
3. Internal audit performs an independent assessment of the risk
environment, etc. for the Supervisory Board.
Risk management environment
For several years, Tryg has worked with risk management and
modelling of the company’s risks by means of a risk management
environment. The introduction of Solvency II will make stricter de-
mands on the way in which insurance companies work with and
control risks, including the Supervisory Board’s involvement in risk
and asset management.
The Supervisory Board has overall responsibility for the company’s
risk management and proactively defines risk inclination and the
limits for risk management, assessing the total risk and capital re-
quirement within Tryg on an ongoing basis. This is achieved by
means of policies and guidelines drawn up in accordance with Sec-
tion 71 of the Danish Financial Business Act and by continuously
taking a view on the calculation of the company’s capital require-
ment. In order to be able to monitor the organisation’s risk man-
agement work closely, the Supervisory Board has appointed a Risk
Committee with representatives from the Supervisory Board, which
reviews Tryg’s capital and risk status on a quarterly basis.
Tryg’s risk management is administered through a risk management
environment, in which the Risk Management Committee, with repre-
sentatives from the Executive Management, monitors the whole risk
and asset management process. The areas of underwriting and rein-
surance, provisioning, investment risk as well as operational risk and
security are administered by corresponding sub-committees. Risk
management is underpinned by Tryg’s internal capital model.
The control environment consists of a series of business processes
that define controls of areas of activity and authorisation levels. To
support the organisation’s work, a new structure was established
in 2011, in which risk management activities in the business areas
are coordinated by decentralised risk managers. Each business
area will thus have its own risk manager with responsibility for
matters including risk identification, risk control, event registration,
contingency plans and compliance. The decentralised risk manag-
ers are there to guarantee close interaction between the business
and the risk management environment.
Risk management
Every year, Tryg carries out a risk mapping process, which aims to
identify new risks that cannot be assessed using statistical analy-
ses. These assessments are compiled in Tryg’s risk database and
form the basis of ongoing risk reporting. Selected risk scenarios
based on this work are incorporated directly into Tryg’s calculation
of the necessary capital requirement (Individual Solvency Require-
Lines of defence
Supervisory Board
1st line of defence
2nd line of defence
3rd line of defence
External audit
• Operational control
• Risk management
• Internal audit
• Business controls
• Actuarial function
• Compliance
Executive Management
78 | Annual report 2011 | Tryg A/S
Trygs lines of defense
Bestyrelse
Direktion
1st line of defense
2nd line of defense
3rd line of defense
Ekstern revision
• Operationelle styring
• Risikostyring
• Intern revision
• Forretning kontroller
• Aktuarfunktion
• Compliance
Notes
ment) and in Tryg’s ’Own Risk and Solvency Assessment’ (ORSA).
ORSA is one of the most important elements of compliance with
the Solvency II regime. The ORSA is a top-down process, owned by
the Supervisory Board, connecting strategy, risk management and
capital planning. The most important purpose of the ORSA is that
the business commits to assessing all risks in the business and de-
cides its associated capital requirement. The result of the ORSA
should guarantee that over a planning period of three to five years
there is a reasonable balance between the company’s risk adop-
tion strategy and the capital available to support the strategy.
Description of risk types
Underwriting risk
Underwriting risk is the risk relating to entering into insurance con-
tracts and thus the risk that premiums charged do not adequately
cover the claims that Tryg is obliged to pay when a claim has oc-
curred. This risk can be assessed and managed based on statistical
analyses of historical experience within various business sectors.
The insurance premium must be adequate to cover expected
claims, but must also comprise a risk premium equal to the return
on the part of Tryg’s capital that is used to protect against random
fluctuations. All other things being equal, this means that insur-
ance sectors or areas which, from experience, are subject to major
fluctuations, must comprise a larger risk premium.
The figures for Norwegian buildings/contents and liability insur-
ance policies show how there can be major differences in practice
in the fluctuations observed in different sectors and thus in the
underwriting risk for the sectors in question. The ongoing assess-
ment of the underwriting risk is based on Tryg’s internal capital
model, which defines the target premium levels for each part of
the insurance business. This applies partly when defining and up-
dating tariffs, and partly when individually pricing major agree-
ments for the corporate and partner areas. The underwriting risk is
also managed by means of ongoing profitability monitoring, busi-
ness processes, acceptance policy, proxies and reinsurance.
Reinsurance is used to reduce the risk in areas where a special
need for this exists. The need for reinsurance is assessed on an
ongoing basis using Tryg’s internal capital model, in which the
price of purchasing reinsurance is compared with the reduction in
the capital requirement that can be achieved. In the light of the
major cloudburst claims in Denmark in 2010 and 2011 and corre-
sponding cloudburst claims in the rest of Europe, Tryg adjusted its
risk assessment associated with weather-related events upwards
in 2011. As a consequence of this, in 2011 Tryg purchased what is
known as lateral cover for combinations of small or medium-sized
events generating nature-related claims. This covers a total of
DKK 500m, with an aggregated retention of DKK 400m.
In the field of buildings and contents insurance, major events in
2011 were covered by catastrophe reinsurance cover of DKK 5.5bn.
For gross claims in the range of DKK 100-175m, retention increases
from DKK 100m to DKK 141m. For gross claims above DKK 175m,
retention is a maximum of DKK 141m. The primary risk for individual
events is storms, and the scope of the cover is defined using
simulation models such that this cover will prove insufficient in
statistical terms less than once every 250 years. The reinsurance
programme for catastrophes also covers other disastrous events,
including terrorist incidents, up to a maximum of DKK 4bn.
For accident and workers’ compensation policies, Tryg has bought
reinsurance with retention of DKK 50m and with coverage of up to
DKK 1.5bn for claims that originate from the same event, including
terrorism.
Tryg’s risk mangement environment
Supervisory
Board
• Risk appetite
• Capital
• Strategy
• Crisis
management
Executive
Manage-
ment
Policies and
guidelines
Risk management environment
Organisation
Risk Management Committee
Business
proceedures
Risk reporting
Recommen-
dations
Underwriting
Reinsurance
Committee
Provisions
Committee
Investment
Risk
Committee
Operational
Risk
Committee
Systematic risk
evaluation
• Risk managers
• Risk
identification
• Risk
management
Tryg A/S | Annual report 2011 | 79
Notes
Major risk types
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
Reserving 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 signifi-
cantly from our assumptions when making the provisions.
Handled by the Claims reserving committee
Investment risk
The risk that volatility of financial markets impacts the Group’s
results. Investment risk includes elements such as interest rate
risk, equity risk, foreign exchange risk and liquidity risk.
Handled by the Investment risk committee
Operational risk
The risk of errors, fraud or failures in internal procedures,
systems and processes.
Handled by the Operational risk committee
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
Sensitivity analyse
Insurance risk
DKKm
Underwriting risk
Effect of 1% change in:
Combined ratio
(1 percentage point)
Claim frequency
(1 percentage point)
Average claim
Premium rates
Provisioning risk
Effect of 1% change in:
Social inflation
Annual provision for
long-tailed sectors
(workers’ compensation,
motor liability, liability, accident)
Investment risk
Interest rate market
Effect of 1% increase in interest curve:
Impact of interest-bearing securities
Discounting of provisions for claims
Net effect of interest rate rise
Impact of Norwegian pension liability
Equity market
15% decline in equity market
Effect of derivatives
2010
2011
+/- 191
+/- 202
+/- 1,761
+/- 151
+/- 189
+/- 1,706
+/- 158
+/- 200
-614
+/- 706
+/- 36
+/- 35
-795
706
-89
225
-290
37
-850
889
39
296
-279
7
Real estate market
15% decline in real estate markets
-584
-593
Currency market
15% decline in exposed currency
relative to DKK
Impact of derivatives
-655
647
-659
629
80 | Annual report 2011 | Tryg A/S
Notes
A national guarantee scheme was established in Denmark in 2010
to cover NBCR (Nuclear Biological Chemical Radioactive) terrorist
attacks. This scheme involves the State providing a guarantee of
up to DKK 15bn for the entire Danish market to cover the total
claim expense over DKK 5bn with reinsurance cover of DKK 4.5bn
after retention of DKK 500m. Tryg’s share of this will be approxi-
mately DKK 100m, which will be the maximum claim as a conse-
quence of NBCR events.
Reinsurance is also bought for a number of sectors in which experi-
ence has shown that claims vary considerably. The largest single
risks in our corporate portfolio are in the area of buildings and con-
tents insurance, protected by reinsurance cover of DKK 1.7bn and
with retention of DKK 50m, but with additional annual retention of
DKK 75m. Tryg buys facultative reinsurance for buildings and con-
tents risks above this limit. Other sectors covered by reinsurance
include liability, motor, fish farming and guarantee insurance.
In the event of a major insurance event covered by the reinsurance
programme, there may be major receivables from reinsurers and
thus also a credit risk. This risk is managed through requirements
to assess the reinsurers’ credit ratings and to spread reinsurance
across several reinsurers.
process, particularly for personal injuries. Even once the claim has
been settled, there is a risk that it will be resumed at a later date,
triggering further payments.
The size of the provisions for claims is determined both through
individual assessments and statistical calculations. As of
31 December 2011, provisions for claims totalled DKK 26.9bn.
The duration of these provisions, i.e. the average time until these
amounts are paid out to customers, was 3.5 years as of 31 De-
cember 2011. Most of the provisions for claims relate to personal
injury claims. These provisions are exposed to changes in wage
developments, the discount rate, disbursement patterns,
economic trends, legislation and court decisions.
The calculation of provisions for claims will always be subject
to uncertainty. Historically, many insurers have experienced sub-
stantial positive as well as negative impacts on profit (run-off)
resulting from provisioning risk, and this may also be expected to
happen in future. Tryg manages the provisioning risk by pursuing a
provisioning policy that guarantees an updated, uniform process
for determining provisions at all times. This implies that it is based
on an underlying model analysis, and that internal control calcula-
tions and evaluations are performed.
Provisioning risk
When the term of insurance expires, insurance risk relates to the
provisions for claims made to cover future payments of claims al-
ready incurred. When a claim has occurred, there is a certain delay
before the customer submits a claim. Depending on the complexity
of the claim, a longer or shorter period of time may pass before
the size of the claim is finally agreed. This may be a prolonged
Provisions for claims relating to annuities in Danish workers’
compensation insurance are discounted using the current market
rate and simultaneously revalued by the wage inflation rate each
year. This exposes Tryg to an explicit inflation risk. To hedge this,
Tryg uses a number of zero coupon inflation swaps in Danish
kroner, in which Tryg receives a fixed amount in return for payment
of an amount based on the trend in Danish consumer prices.
Tryg A/S | Annual report 2011 | 81
Notes
DKKm
Provisions for claims – Estimated accumulated claims
Gross
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
End of year
1 year later
2 years later
3 years later
4 years later
5 years later
6 years later
7 years later
8 years later
9 years later
10 years later
Cumulative pay-
ments to date
Provisions before
discounting,
end of year
Discounting
Reserves 2000
and prior years
Other reserves
Gross provisions
for claims,
end of year
9,277 11,365 10,785 11,119 11,856 11,655 12,600 13,282 14,733 17,081 17,391
9,516 11,728 10,891 11,122 11,755 11,910 13,226 14,669 15,408 17,181
9,715 11,728 10,550 10,977 11,580 11,417 13,803 14,536 15,437
9,828 11,783 10,549 10,863 11,183 11,644 13,784 14,544
9,757 11,774 10,574 10,596 11,323 11,576 13,774
9,746 11,683 10,546 10,672 11,258 11,564
9,961 11,669 10,469 10,452 11,158
9,935 11,536 10,337 10,339
9,987 11,524 10,253
9,917 11,417
9,762
9,762 11,417 10,253 10,339 11,158 11,564 13,774 14,544 15,437 17,181 17,391 142,818
-9,321 -10,856
-9,573
-9,565 -10,209 -10,172 -11,829 -11,796 -12,055 -12,430
-8,413 -116,219
441
-60
561
-77
680
-97
774
-117
949
-137
1,391
-189
1,944
-227
2,748
-282
3,382
-299
4,751
-340
8,977
-436
26,599
-2,261
1,858
745
26,941
Ceded business
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Estimated
acc. claims
End of year
1 year later
2 years later
3 years later
4 years later
5 years later
6 years later
7 years later
8 years later
9 years later
10 years later
Cumulative pay-
ments to date
Provisions before
discounting,
end of year
Discounting
Reserves 2000
and prior years
Other reserves
Prov. for claims,
end of year
1,473
1,486
1,494
1,509
1,482
1,469
1,476
1,456
1,482
1,576
1,536
1,536
2,066
2,177
2,057
2,050
2,048
2,063
2,070
1,998
1,997
1,955
957
917
913
974
890
885
895
892
954
879
892
934
932
917
924
924
912
949
842
847
840
864
859
843
297
295
281
313
313
308
515
479
493
498
519
183
251
212
200
305
380
358
1,499
714
793
1,955
954
912
843
308
519
200
358
793
1,499
9,878
-1,463
-1,880
-853
-838
-810
-296
-481
-172
-259
-410
-750
-8,214
73
-4
75
-6
101
-10
74
-9
32
-2
12
0
38
-1
28
-1
99
-1
383
-7
749
-12
1,664
-56
147
120
1,875
82 | Annual report 2011 | Tryg A/S
Notes
DKKm
Provisions for claims – Estimated accumulated claims
Net of reinsurance 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Estimated
acc. claims
End of year
1 year later
2 years later
3 years later
4 years later
5 years later
6 years later
7 years later
8 years later
9 years later
10 years later
Cumulative pay-
ments to date
Provisions before
discounting,
end of year
Discounting
Reserves 2000
and prior years
Other reserves
Provisions for
claims, net of
reinsurance,
end of the year
7,804
8,030
8,222
8,319
8,275
8,278
8,484
8,479
8,505
8,341
8,226
8,226
9,299
9,552
9,671
9,733
9,726
9,620
9,600
9,538
9,527
9,461
9,828 10,240 10,907 11,358 12,085 13,099 14,428 16,367 15,892
9,974 10,230 10,913 11,615 12,747 14,417 15,027 16,388
9,638 10,043 10,733 11,136 13,310 14,324 15,079
9,931 10,343 11,331 13,286 14,343
9,574
9,679 10,459 11,263 13,255
9,684
9,748 10,399 11,255
9,660
9,528 10,315
9,574
9,446
9,427
9,299
9,461
9,299
9,427 10,315 11,255 13,255 14,343 15,079 16,388 15,892 132,940
-7,858
-8,976
-8,719
-8,726
-9,399
-9,876 -11,349 -11,623 -11,796 -12,020
-7,663 -108,005
368
-56
486
-71
580
-87
701
-108
916
-135
1,379
-189
1,906
-226
2,720
-281
3,283
-297
4,368
-333
8,229
-423
24,935
-2,205
1,711
625
25,066
Estimated accumulated claims regarding Moderna Försäkringar
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
End of year
1 year later
2 years later
3 years later
4 years later
5 years later
6 years later
7 years later
8 years later
9 years later
10 years later
245
243
245
134
132
133
118
118
119
100
98
98
766
1.112
1.116
652
856
859
1.456
1.461
1.783
524
596
596
430
414
414
351
346
347
The acquisition of Moderna in April 2009 affects the diagonals with its share of the claims, net of reinsurance. As a consequence of the merger
of Moderna and Tryg’s Swedish branch in Malmö in 2010 the diagonal is changed corresponding to its share of the claims, net of reinsurance.
’Other reserves’ comprises the provisions for claims for Tryg Garantiforsikring A/S and the Finnish branch of Tryg Forsikring A/S.
The amounts in foreign currency in the table are translated to Danish kroner using the exchange rate at 31 December 2011 to prevent
the impact of exchange rate fluctuation.
Tryg A/S | Annual report 2011 | 83
Notes
DKK m
0-1 year
1-2 years
2-3 years
> 3 years
Other
Expected cash flow
Provisions for claims (continued)
2011
Provisions for unearned premiums, gross
Provisions for unearned premiums, ceded
Provisions for claims, gross
Provisions for claims, ceded
6,175
-180
10,172
-995
204
0
4,452
-258
199
0
2,796
-176
192
0
8,776
-326
15,172
4,398
2,819
8,642
2010
Provisions for unearned premiums, gross
Provisions for unearned premiums, ceded
Provisions for claims, gross
Provisions for claims, ceded
6,111
-138
8,044
-495
196
0
3,866
-201
177
0
2,439
-106
174
0
9,906
-531
13,522
3,861
2,510
9,549
Other comprises Tryg Garantiforsikring A/S, the Finnish branch of Tryg Forsikring A/S.
Maturity of the Group’s financial assets and debt
2010
Bonds
Cash in hand and at bank
Receivables
Debt
2010
Bonds
Cash in hand and at bank
Receivables
Debt
0-1 year
1-5 years
> 5 years
13,074
369
1,665
-1,612
19,520
0
0
0
13,496
19,520
3,920
777
2,183
-1,772
5,108
22,947
0
0
0
22,947
4,638
0
0
-1,589
3,049
7,450
0
0
-1,591
5,859
162
-12
745
-120
775
161
-16
628
-101
672
Total
37,232
369
1,665
-3,201
36,065
34,317
777
2,183
-3,363
33,914
Carrying
amount
Total
6,932
-192
26,941
-1,875
31,806
6,819
-154
24,883
-1,434
30,114
Effective
interest rate
2.1
0.9
-
-
2.2
0.8
-
-
84 | Annual report 2011 | Tryg A/S
Notes
Investment risk
Investment risk is the risk that volatility in financial markets im-
pacts on results and thus on the company’s financial position.
Interest rate risk
Both investment assets and provisions for claims are exposed to
interest rate changes. Tryg aims to match the disbursement profile
for discounted provisions for claims with corresponding interest-
bearing assets as closely as possible. If interest rates fall, this
structure would cause a similar increase in the provisions for claims
and the value of the bond portfolio, thereby considerably reducing
Tryg’s overall exposure to changes in interest rates.
Investment assets comprise not only assets corresponding to the
technical provisions, but also Tryg’s equity. Tryg has divided invest-
ment activities into two investment portfolios, the free investment
portfolio and a match portfolio. The element that corresponds to
technical provisions is invested exclusively in interest-related assets
and serves solely to cover interest rate sensitivity in the discounted
provisions. The remaining element, which corresponds to equity, is
a free investment portfolio, the purpose of which is to generate
the best possible return compared to the risk.
Following this division, fluctuations in the match portfolio will in
principle correspond in full to fluctuations in liabilities. In practice
it will not be appropriate to strive to achieve a complete match,
purely because of the administrative expenses that this would
generate. In practice, Tryg expects that it will, as a general rule,
be possible to keep the net interest rate in the match portfolio
within a limit of DKK +/- 50m per quarter.
Tryg is also exposed to interest rate changes in relation to
obligations concerning the Norwegian pension scheme, which
covers approximately 800 current employees. This scheme was
closed to new employees in 2008, and the total provision was DKK
978m as of 31 December 2011. Changes in the pension provision
are not included in the income statement, but are charged directly
to changes in equity.
The match portfolio and the free portfolio
Denmark is one of the only countries in the world that requires
insurance companies to discount their technical provisions using
a discount (rate) curve specified by the Danish Financial Super-
visory Authority.
The introduction of Solvency II would mean that all European com-
panies would have to discount provisions in relation to a solvency
calculation, and would thus control the interest rate risk for both
assets and liabilities. Tryg adjusts the bond portfolio on an ongoing
basis, in order to minimise the net interest rate risk (price changes
caused by interest rate changes) as far as possible. The Danish
Financial Supervisory Authority’s interest curve for the relevant
Nordic countries is designed in such a way that it is not possible in
practice to invest precisely in accordance with it. Tryg has therefore
designed a model portfolio that matches the individual countries’
regulatory interest curve as closely as possible. In the model port-
folio, future interest payments match the disbursement profile of
the insurance provisions as perfectly as possible in both economic
and cost terms. This structure removes most of the market risks
that impact the match portfolio, but the difference between the
regulatory curve’s return and Tryg’s model portfolio’s return may
still vary. There may also be deviations due to restructuring and
investment costs, as well as ongoing changes in the size, time
and hedging of provisions.
A perfect match means that the match portfolio’s return
(coupon and market value adjustment) is identical to the return
on provisions (market value adjustment of provisions, taken from
interest rate changes plus technical interest). On page 6 there
is an illustration of the perfect match, the match achievable in
practice (scenario 3), A strategy in which only the duration of
assets and liabilities is matched and finally a situation in which
no match is made at all.
Equity and real estate risk
The equity and real estate portfolios are exposed risks as a
consequence of changes in equity markets and real estate
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
Duration
2010
2011
15,143
16,645
1,904
625
19,132
10,187
4,213
3,700
34,317
37,232
1.9
1.5
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.
Tryg A/S | Annual report 2011 | 85
Notes
Scenario 1 | Unmatched
Scenario 2 | Duration match
DKKm
400
200
0
-200
-400
DKKm
400
200
0
-200
-400
Expected acceptable level
Expected acceptable level
Time
Time
Scenario 3 | Fully matched
Scenario 4 | Theoretically perfect match
DKKm
400
200
0
-200
-400
DKKm
400
200
0
-200
-400
Expected acceptable level
Expected acceptable level
Time
Time
A perfect match means that the match portfolio’s return (coupon and market value adjustment) is identical to the return on provisions (market value adjustment of
provisions originating from interest rate changes plus technical interest). In practice, the perfect match cannot be achieved. The above illustrations show the differences
in fluctuations in the deviation between the value of an interest rate portfolio and the value of a discounted provision portfolio: 1) A scenario in which no attempt is
made to match the interst sensitivity of the provisions; 2) A scenario in which the durations of assets and liabilities are matched, providing protection against parallel
changes in the interest curve; 3) A scenario in which the sensitivity of assets and liabilities to changes in specific interestpoints is matched; 4) Finally, a scenario in
which all payments from the asset portfolio are matched with payments made from the provisions and are ‘invested’ in the regulatory interest curve. Tryg’s matching
corresponds to scenario number 3.
86 | Annual report 2011 | Tryg A/S
Notes
DKKm
Listed shares
Scandinavia
United Kingdom
Rest of Europe
United States
Asia etc.
Total
The portfolio of unlisted shares totals
Unlisted equity investments are measured at estimated fair value, see ‘Accounting policies’
2010
2011
350
83
579
647
336
1,995
184
395
82
331
565
242
1,615
187
markets respectively. As of 31 December 2011, the equity portfolio
accounted for 4.5% of the total investment assets. This proportion
is expected to be in the range 2.3%-6.0% in 2012. In 2008, Tryg
bought the head office in Ballerup, significantly increasing the pro-
portion of real estate. This proportion is expected to be reduced
over time. In addition to owner-occupied properties, Tryg’s real
estate portfolio consists of office and rental properties, which ac-
count for 17.8% and 22.3% respectively of total investment assets.
Currency risk
Currency risk is kept at a low level. Tryg’s premium income in
foreign currency is mostly matched by claims and expenses in the
same currencies, and it is therefore only the profit for the period
that is exposed to currency risk. The risk of a loss of value in bal-
ance sheet items as a consequence of exchange rate fluctuations
is hedged by means of currency derivatives in accordance with
a general hedging rate of 90-100% per currency. The aim is for
the net carrying amount of the Norwegian entity to be hedged
98-100% over time.
Exchange rate adjustments and hedging of foreign entities are
charged directly to equity. The profit from currency derivatives is
included in tax, while adjustments of equity are not included in the
taxable amount. In years when there is a value increase in deriva-
tives and a loss in the adjustment of equity, tax must be paid on
the value increase without a deduction for the loss on the adjust-
ment of equity. By the same token, in years where there is a loss
on derivatives and a positive adjustment of equity, a tax deduction
arises. Over time, it is expected that years when tax is paid and
years when tax is deducted will balance one another.
Exposure to exchange rate risk
Properties
Bonds incl.
Share incl.
derivatives derivatives
Insurance
Hedge
Exposure
2011
USD
EUR
GBP
NOK
SEK
Other
Total
2010
USD
EUR
GBP
NOK
SEK
Other
Total
0
0
0
873
1
0
0
0
0
823
1
0
-7
1,845
-3
14,112
3,107
0
0
50
1
11,773
2,056
0
640
222
78
391
88
305
799
513
74
0
113
229
-74
-2,174
5
-12,470
-1,683
-16
-159
-1,551
0
-9,270
-944
-21
-566
1,450
-83
-3,013
-1,208
-186
-518
1,139
-76
-3,266
-1,197
-196
-7
1,343
-3
-107
305
103
1,866
122
151
1
60
29
16
379
Tryg A/S | Annual report 2011 | 87
Notes
To manage currency risk, Tryg uses currency spots as well as for-
ward exchanges and currency swaps (a spot and opposite term
transaction) with a typical duration of one to three months.
Credit risk
Credit risk is the risk of incurring a loss if counterparties fail to
meet their obligations. In connection with investment activities,
the primary counterparties are bond issuers and counterparties in
other financial instruments. Tryg uses limits and rating require-
ments to manage credit risk and concentration risk.
Tryg matches provisions, hence naturally has a high level of expo-
sure to various forms of mortgages, including mortgage bonds in
the Nordic region, not least in Demark, where the regulatory curve
explicitly contains mortgage elements that must be hedged. In
particular, we have exposure of this kind at the short end of the
interest curve, partly because the use of derivatives here increases
the investment requirement. The risk is primarily AAA, with an AA
rated risk in exceptional circumstances, and is diversified with a
broad range of issuers, ensuring that Tryg can comply comfortably
with the rules of Solvency II for limited concentration risk.
Credit risks from reinsurance counterparties are managed according
to framework conditions, such as minimum rating requirements
and through the Credit Committee, which monitors the quality
of reinsurance counterparties on an ongoing basis. The minimum
requirements include a BBB rating from Standard & Poor’s for
short-tailed business and an ‘A-‘ rating from Standard & Poor’s
for long-tailed business.
Liquidity risk
A general insurance company such as Tryg naturally has extremely
good liquidity, as premium payments fall due before claims are paid.
Payments received are largely invested in securities that can easily
be realised and/or mortgaged (repos). Tryg also has access to fund-
ing and liquidity from cash accounts and the bond market. Tryg con-
tinuously monitors the liquidity requirement and adapts its contin-
gency plans so that it can at all times obtain the necessary liquidity.
Operational risk.
Operational risk relates to errors or failures in internal procedures,
fraud, breakdown of infrastructure, IT security and similar factors.
As operational risks are mainly internal, Tryg focuses on establish-
ing an adequate control environment for its operations. In practice,
this work is organised by means of procedures, controls and
guidelines that cover the various aspects of Tryg’s operations,
including the IT security policy. Tryg has also set up a security
and investigation unit to handle internal fraud, IT security,
physical security and contingency plans.
Tryg has prepared contingency plans to handle the most important
areas, such as the contingency plans in the individual parts of the
business to handle an event of a prolonged IT breakdown. We
have also set up a crisis management structure to deal with the
eventuality that Tryg is hit by a major crisis.
Strategic risk
Strategic risk relates to Tryg’s choice of strategic position, including
IT strategy, flexibility relative to the market, business partners and
reputation, as well as changed market conditions. The Supervisory
Board is closely involved in the management of strategic risk
88 | Annual report 2011 | Tryg A/S
Notes
Capital management
Risk-based capital management
Through capital and risk management, Tryg aims to secure finan-
cial strength and flexibility. The capital management is based on:
• Tryg’s internal capital model
• The impending Solvency II standard model
• Standard & Poor’s standard model (‘A-’ level)
All three models determine the capital requirement based on
Tryg’s current risk profile. The capital requirement is determined
with a 99.5% level of certainty, which corresponds to the
chosen capital level being insufficient once in a 200-year
period on a statistical basis.
Tryg has decided to commission an external credit rating by credit
rating agency Standard & Poor’s, which conducts an
annual interactive credit rating.
Capital structure
Tryg’s capital base consists of equity and subordinated loan
capital. The relationship between these is evaluated on an on -
going basis in order to maintain an optimal structure which takes
into account the return on equity, the capital cost and flexibility.
The actual capital is assessed differently by authorities and credit
rating agencies. The authorities impose a requirement that compa-
nies must determine the base capital, which primarily consists of
equity minus intangible assets, discount effect and other statutory
corrections plus subordinated loan capital in the amount of up to
25% of the Solvency I requirement. Standard & Poor’s uses the
term ‘Total Adjusted Capital’ (TAC), where intangible assets are
also deducted from the capital base, and where the subordinated
loan capital must generally not exceed 25% of the total capital.
In 2005, Tryg took out a 20-year subordinated bond loan of EUR
150m listed on the London Stock Exchange. In 2009, in connection
with the acquisition of Moderna, Tryg took out a subordinated
loan with expiry in 2032 of EUR 65m from TryghedsGruppen, which
owns 60% of Tryg. Tryg’s total holding of subordinated debt sub-
sequently amounted to approx. EUR 215m. In total, debt amounted
to 18% of equity at the end of 2011, and interest expenses during
2011 amounted to DKK 83m.
Subordinated loan capital
Loan terms:
Subordinated bond loan a)
Subordinated loan capital b)
Lender
Principal
Issue price
Issue date
Maturity year
Loan may be called by lender as from
Repayment profile
Interest structure
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. og min. until 30 June 2012)
5% above EURIBOR 3M (interest from 1 July 2012-30 June 2019)
6% above EURIBOR 3 M (interest from 1 July 2019)
a) In December 2005, Tryg Forsikring A/S raised a subordinated bond loan with no option for the creditor to call the loan before maturity or otherwise
terminate the loan agreement with Tryg Forsikring A/S. The loan is automatically accelerated upon the liquidation or bankruptcy of Tryg Forsikring A/S.
b) Tryg Forsikring A/S has subscribed the subordinated loan capital in connection with acquisitions made in April 2009,
Prices used for determination of fair value in respect of both loans are based on an assesment of the credit spread of the loans provided by Nordea.
Tryg A/S | Annual report 2011 | 89
Notes
DKKm
2 Operating segments
2011
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on business ceded
Technical interest, net of reinsurance
Technical result
Total return on investment activities
after technical interest
Other income and expenses
Profit before tax
Tax
Private
Nordic
Commercial
Nordic
Corporate
Nordic
Other
Group
11,097
-8,784
-1,786
253
106
886
4,237
-3,297
-1,001
141
37
117
5,275
-4,251
-643
109
41
531
-37
33
0
4
0
0
20,572
-16,299
-3,430
507
184
1,534
66
-31
1,569
-455
1,114
26
1,140
944
14
192
1,875
51,140
53,221
6,932
26,941
384
9,957
44,214
Profit on continuing business
Profit/loss on discontinued and divested business
Profit
Run-off gains/losses, net of reinsurance
159
155
630
Investments in associates
Reinsurers’ share of provision
for unearned premiums
Reinsurers’ share of provision for claims
Other assets
Total assets
1
319
2
374
189
1,182
Provisions for unearned premiums
Provisions for claims
Provisions for bonuses and premium rebates
3,971
7,383
238
1,487
6,742
23
1,474
12,816
123
Other liabilities
Total liabilities
0
14
0
0
51,140
0
0
0
9,957
90 | Annual report 2011 | Tryg A/S
Notes
DKKm
2 Operating segments
2010
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on business ceded
Technical interest, net of reinsurance
Technical result
Total return on investment activities
after technical interest
Other income and expenses
Profit before tax
Tax
Private
Nordic
Commercial
Nordic
Corporate
Nordic
Other
Group
10,181
-8,223
-1,627
38
77
446
4,183
-3,732
-1,014
59
30
-474
5,124
-3,666
-663
-419
27
403
-13
4
0
9
0
0
19,475
-15,617
-3,304
-313
134
375
570
-4
941
-265
676
-83
593
824
13
154
1,434
48,990
50,591
6,819
24,883
329
10,102
42,133
Profit on continuing business
Profit/loss on discontinued and divested business
Profit
Run-off gains/losses, net of reinsurance
399
99
326
Investments in associates
Reinsurers’ share of provision
for unearned premiums
Reinsurers’ share of provision for claims
Other assets
Total assets
14
232
0
289
140
913
Provisions for unearned premiums
Provisions for claims
Provisions for bonuses and premium rebates
3,883
6,824
196
1,477
6,231
20
1,459
11,828
113
Other liabilities
Total liabilities
Description of segments
0
13
0
0
48,990
0
0
0
10,102
Please refer to accounting principles for a description of operating segments Amounts relating to eliminations are included in
‘Other’. Other assets and liabilities are managed at Group level and are therefore not allocated to the individual segments. These
amounts are thus included under ‘Other’. Costs are allocated according to specific keys, which are believed to provide the best es-
timate of assessed resource consumption. A presentation of segments broken down by geography is provided in ‘Notes 2 Geo-
graphical segments.’
Tryg A/S | Annual report 2011 | 91
Notes
DKKm
2007
2008
2009
2010
2011
2 Geographical segments
Danish general insurance
Gross premiums earned
Technical result
Run-off gains/losses, net of reinsurance
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 employees, end of period
Norwegian general insurance
Gross premiums earned
Technical result
Run-off gains/losses, net of reinsurance
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 employees, end of period
Swedish general insurance a)
Gross premiums earned
Technical result
Run-off gains/losses, net of reinsurance
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
9,105
1,805
579
64.6
2.4
67.0
15.4
82.4
2,221
6,816
1,374
213
63.0
4.9
67.9
15.9
83.8
1,379
90
-82
0
88.9
0.0
88.9
105.6
9,393
1,727
674
64.5
3.7
68.2
16.1
84.3
2,356
9,525
1,178
421
71.6
2.5
74.1
14.5
88.6
2,293
9,636
166
615
82.0
0.7
82.7
16.1
98.8
2,342
9,999
1,023
770
83.5
-8.1
75.4
15.0
90.4
2,308
7,009
6,750
7,490
7,916
831
109
70.6
3.6
74.2
16.9
91.1
1,450
225
-93
0
95.1
0.9
96.0
48.4
618
277
70.8
3.7
74.5
17.0
91.5
1,398
389
177
76.7
3.1
79.8
15.7
95.5
1,338
598
181
73.2
3.2
76.4
17.0
93.4
1,338
1,111
1,769
2,050
-75
-8
80.6
1.8
82.4
25.1
-124
32
84.6
0.8
85.4
22.4
-59
-7
82.0
2.6
84.6
20.3
104.9
423
194.5
144.4
107.5
107.8
Number of full-time employees, end of period
61
105
425
414
92 | Annual report 2011 | Tryg A/S
Notes
DKKm
2007
2008
2009
2010
2011
2 Geographical segments
Finnish general insurance
Gross premiums earned
Technical result
Run-off gains/losses, net of reinsurance
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
251
-49
0
74.9
0.4
75.3
49.8
354
-44
17
72.9
0.3
73.2
44.1
480
-115
-7
84.2
0.6
84.8
41.7
593
-56
0
80.9
0.8
81.7
29.3
125.1
117.3
126.5
111.0
Number of full-time employees, end of period
127
154
194
197
644
-28
0
79.8
0.8
80.6
25.6
106.2
249
Other a)
Gross premiums earned
Technical result
Tryg
0
-23
-5
11
-4
-44
-13
0
-37
0
Gross premiums earned
16,262
16,976
17,862
19,475
20,572
Technical result
Return on investment activities
Other income and expenses
Profit/loss before tax
Run-off gains/losses, net of reinsurance
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio c)
Combined ratio
Number of full-time employees, end of period
3,025
340
-51
3,314
792
64.2
3.4
67.6
16.8
84.4
3,788
2,432
-988
-49
1,395
800
67.6
3.5
71.1
17.1
88.2
4,065
1,562
1,086
-38
2,610
683
72.1
2.9
75.0
17.2
92.2
4,310
375
570
-4
941
824
80.2
1.6
81.8
17.0
98.8
4,291
1,534
66
-31
1,569
944
79.2
-2.5
76.7
16.8
93.5
4,318
a) Moderna Försäkringar is included in ‘Swedish general insurance’ from 2 april 2009.
b) Amounts relating to eliminations are included in ‘Other’.
c) Adjustment to Gross expense ratio included only in the calculation of ‘Tryg’. Explanation of adjustment as a footnote to Financial Highlights.
Tryg A/S | Annual report 2011 | 93
Notes
DKKm
2 Technical result, net of reinsurance, by line of business
Accident
and health
Health care
Worker’s
compensation
2010
2011
2010
2011
2010
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Techn. interest net of reinsurance
Technical result
Gross claims ratio
Combined ratio
Claims Frequency a)
Average claims DKK b)
Total claims
1,830
1,820
-1,136
-245
-20
11
430
62.4
77.0
3.4%
43,342
31,833
1,863
1,848
-1,220
-272
-16
12
352
66.0
81.6
4.4%
34,325
39,929
325
311
-206
-33
0
2
74
66.2
76.8
361
360
-279
-32
0
4
53
77.5
86.4
72.6%
7,567
32,987
109.0%
5,765
51,597
1,317
1,352
-1,220
-178
-23
1
-68
90.2
105.1
18.9%
83,801
14,395
2011
1,247
1,276
-476
-181
-89
1
531
37.3
58.5
18.4%
84,602
12,630
Fire & contents
(Private)
Fire and contents
(Commercial)
Change of
ownership
Liability
Credit & guarantee
insurance
Tourist assistance
insurance
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Techn. interest net of reinsurance
Technical result
Gross claims ratio
Combined ratio
Claims Frequency a)
Average claims DKK b)
Total claims
4,599
4,435
-4,026
-845
65
33
-338
90.8
108.4
4,905
4,808
-4,315
-882
308
39
-42
89.7
101.7
7.3%
13,150
310,832
8.3%
12,391
352,479
2,768
2,751
-2,437
-502
-114
18
-284
88.6
111.0
21.9%
62,951
40,462
2,859
2,802
-3,113
-493
506
28
-270
111.1
110.6
23.6%
70,694
44,923
86
-21
-196
-8
0
3
-222
-
-
9.3%
22,919
6,141
50
112
-178
-8
0
4
-70
158.9
166.1
9.5%
26,050
6,236
Other
insurance
Total
Norwegian Group Life
One-year policies
2010
2011
2010
2011
2010
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Techn. interest net of reinsurance
Technical result
Gross claims ratio
Combined ratio
Claims Frequency a)
Average claims DKK b)
Total claims
68
69
-19
-69
-44
5
-58
80
79
-6
-45
-58
1
-29
27.5
191.3
7.6
138.0
11,315
1,329
12,399
1,129
19,391
20,277
18,915
-15,133
-3,251
-309
124
346
80.0
98.8
20,016
-15,794
-3,366
509
173
1,538
78.9
93.2
548
560
-484
-53
-4
10
29
86.4
96.6
2011
545
556
-505
-64
-2
11
-4
90.8
102.7
94 | Annual report 2011 | Tryg A/S
Motor TPL
Motor
comprehensive
Marine, aviation
and cargo
2010
2011
2010
2011
2010
19.6%
10,892
277,035
20.8%
83,551
3,122
23.2%
60,838
3,320
2,650
2,646
-1,624
-434
-27
16
577
61.4
78.8
5.1%
25,374
80,073
827
815
-449
-147
-56
3
166
55.1
80.0
2,608
2,638
-1,681
-458
-35
35
499
63.7
82.4
5.0%
24,871
78,499
921
859
-647
-150
-4
7
65
75.3
93.2
3,830
3,679
-3,098
-616
-11
24
-22
84.2
101.3
20.5%
11,554
264,675
225
211
-64
-52
-31
2
66
30.3
69.7
1.5%
4,195
4,060
-2,988
-653
-6
32
445
73.6
89.8
258
260
-169
-65
-21
2
7
65.0
98.1
1.1%
10.1%
55,335
9,252
6.6%
55,074
10,545
1,567,033
3,387,982
58
50
378
367
-251
-50
-47
2
21
68.4
94.8
488
480
-407
-72
-1
4
4
84.8
100.0
10.8%
8,059
49,862
2011
408
403
-205
-44
-75
3
82
50.9
80.4
2011
522
511
-517
-83
-1
5
-85
101.2
117.6
11.9%
8,379
55,938
Notes
Accident
and health
Health care
Worker’s
compensation
Motor TPL
Motor
comprehensive
Marine, aviation
and cargo
2010
2011
2010
2011
2010
2010
2011
2010
2011
2010
2011
2,650
2,646
-1,624
-434
-27
16
577
61.4
78.8
5.1%
25,374
80,073
2,608
2,638
-1,681
-458
-35
35
499
63.7
82.4
5.0%
24,871
78,499
3,830
3,679
-3,098
-616
-11
24
-22
84.2
101.3
4,195
4,060
-2,988
-653
-6
32
445
73.6
89.8
378
367
-251
-50
-47
2
21
68.4
94.8
408
403
-205
-44
-75
3
82
50.9
80.4
20.5%
11,554
264,675
19.6%
10,892
277,035
20.8%
83,551
3,122
23.2%
60,838
3,320
Fire & contents
(Private)
Fire and contents
(Commercial)
Change of
ownership
Liability
Credit & guarantee
insurance
Tourist assistance
insurance
2010
2011
2010
2011
2010
2010
2011
2010
2011
2010
827
815
-449
-147
-56
3
166
55.1
80.0
921
859
-647
-150
-4
7
65
75.3
93.2
225
211
-64
-52
-31
2
66
30.3
69.7
258
260
-169
-65
-21
2
7
65.0
98.1
10.1%
55,335
9,252
6.6%
55,074
10,545
1.5%
1,567,033
58
1.1%
3,387,982
50
488
480
-407
-72
-1
4
4
84.8
100.0
10.8%
8,059
49,862
2011
522
511
-517
-83
-1
5
-85
101.2
117.6
11.9%
8,379
55,938
a) The claims frequency is calculated as the number of claims incurred in the year in proportion to the average number of insurance contracts in the year.
b) Average claims are total claims before run-off in the year relative to the number of claims incurred in the year.
Tryg A/S | Annual report 2011 | 95
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Techn. interest net of reinsurance
Technical result
Gross claims ratio
Combined ratio
Claims Frequency a)
Average claims DKK b)
Total claims
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Techn. interest net of reinsurance
Technical result
Gross claims ratio
Combined ratio
Claims Frequency a)
Average claims DKK b)
Total claims
1,830
1,820
-1,136
-245
-20
11
430
62.4
77.0
3.4%
43,342
31,833
4,599
4,435
-4,026
-845
65
33
-338
90.8
108.4
1,863
1,848
-1,220
-272
-16
12
352
66.0
81.6
4.4%
34,325
39,929
4,905
4,808
-4,315
-882
308
39
-42
89.7
101.7
7.3%
13,150
310,832
8.3%
12,391
352,479
Gross premiums written
Gross premiums earned
Gross claims
Gross operating expenses
Profit/loss on ceded business
Techn. interest net of reinsurance
Technical result
Gross claims ratio
Combined ratio
Claims Frequency a)
Average claims DKK b)
Total claims
68
69
-19
-69
-44
5
-58
80
79
-6
-45
-58
1
-29
27.5
191.3
7.6
138.0
11,315
1,329
12,399
1,129
72.6%
7,567
32,987
109.0%
5,765
51,597
325
311
-206
-33
0
2
74
66.2
76.8
2,768
2,751
-2,437
-502
-114
18
-284
88.6
111.0
21.9%
62,951
40,462
18,915
-15,133
-3,251
-309
124
346
80.0
98.8
361
360
-279
-32
0
4
53
77.5
86.4
2,859
2,802
-3,113
-493
506
28
-270
111.1
110.6
23.6%
70,694
44,923
20,016
-15,794
-3,366
509
173
1,538
78.9
93.2
1,317
1,352
-1,220
-178
-23
1
-68
90.2
105.1
18.9%
83,801
14,395
86
-21
-196
-8
0
3
-222
-
-
9.3%
22,919
6,141
548
560
-484
-53
-4
10
29
86.4
96.6
2011
1,247
1,276
-476
-181
-89
1
531
37.3
58.5
18.4%
84,602
12,630
2011
50
112
-178
-8
0
4
-70
158.9
166.1
9.5%
26,050
6,236
2011
545
556
-505
-64
-2
11
-4
90.8
102.7
Other
insurance
Total
Norwegian Group Life
One-year policies
2010
2011
2010
2011
2010
19,391
20,277
Notes
DKKm
3 Earned premiums, net of reinsurance
Direct insurance
Indirect insurance
Unexpired risk provision
Ceded direct insurance
Ceded indirect insurance
2010
2011
19,627
36
19,663
-106
19,557
-941
-66
20,646
36
20,682
38
20,720
-1,009
-70
18,550
19,641
Direct insurance, by location of risk
2010
2011
Denmark
Other EU countries
Other countries
Gross
9,610
2,918
6,993
19,521
Ceded
Gross
Ceded
-501
-104
-336
-941
10,022
2,664
7,998
-573
-101
-335
20,684
-1,009
4 Technical interest, net of reinsurance
Interest on insurance provisions
Discounting transferred from provisions for claims
5 Claims incurred, net of reinsurance
Claims incurred
Run-off previous years, gross
Reinsurance recoveries
Run-off previous years, reinsurers’ share
Under claims incurred, the value adjustment of inflation swaps to hedge the inflation risk
concerning annuities on workers’ compensation insurance totals DKK 58m (in 2010 DKK -83m).
6
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
96 | Annual report 2011 | Tryg A/S
2010
2011
752
-618
134
852
-668
184
-16,500
883
-15,617
661
-59
-17,338
1,039
-16,299
1,592
-95
-15,015
-14,802
-492
-1,914
-2,406
-898
-3,304
92
-460
-2,001
-2,461
-969
-3,430
89
-3,212
-3,341
Notes
DKKm
2010
2011
6
Insurance operating expenses, net of reinsurance (continued)
Administative expenses include fee to the auditors appointed by the annual general meeting:
Deloitte
The fee is divided into:
Statutory audit
Other audit assignments
Tax advice
Other services
In adddition, expenses have been incurred for the Group´s Internal Audit Department.
In the calculation of the expense ratio costs are stated exclusive of depreciation and operating
costs on the owner-occupied property but including a calculated rent concerning the owner-occupied
property based on a calculated market rent of DKK 33m. (in 2010 DKK 11m)
Insurance operating expenses, gross, classified by type
Commissions
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 expenses for leases amounts to DKK 39m (2010 DKK 37m)
Insurance operating expenses and claims include the following
staff expenditure:
Salaries and wages
Commision
Allocated share options and matching shares
Pensions
Other social security costs
Payroll tax
-9
-9
-7
0
-1
-1
-9
-7
-7
-6
0
-1
0
-7
-492
-1,827
-269
-682
-255
-163
384
-460
-1,974
-218
-562
-246
-151
181
-3,304
-3,430
-2,211
-19
-16
-288
-40
-258
-2,335
-16
-14
-340
-39
-316
-2,832
-3,060
Remuneration for the Supervisory Board and Executive Management is disclosed
in note 29 ‘Related parties’.
Average number of full-time employees during the year
4,301
4,314
Tryg A/S | Annual report 2011 | 97
Notes
TOTAL NUMBERS
FAIR VALUE
Group
Executive
Other
senior
Other
Management employees employees
Total
fair value
Per Total fair
Per option per option option at value at
31 Dec. 31 Dec.
DKKm
at grant
date DKK date DKKm
at grant
DKK
Total
6 Share option programmes
Spec. of outstanding options:
2011
Allocation 2006-2009
Allocated in 2006-2009,
beginning of year
Change between category
Exercised
Cancelled
Expired
Outstanding options
from 2006-2009
allocation 31 Dec 2011
Allocation 2010
Allocated in 2010,
beginning of year
Change between category
Exercised
Cancelled
Expired
Outstanding options
from 2010
allocation 31 Dec 2011
Allocation 2011
Allocated in 2011
Change between category
Exercised
Cancelled
Expired
Outstanding options
from 2011
allocation 31 Dec 2011
Number of options
144,866
22,749
-10,480
-56,190
-20,960
434,852
-22,749
-45,850
-20,246
-5,240
52,427
0
0
-5,220
0
632,145 64/99/69/94
0 64/99/69/94
-56,330 64/99/69/94
-81,656 64/99/69/94
-26,200 64/99/69/94
52
0
-3
-7
-2
0/12/43
0/12/43
0/12/43
0/12/43
0/12/43
10
0
0
-2
0
79,985
340,767
47,207 467,959
-
40
-
8
48,050
8,008
0
-22,690
0
153,503
-8,008
0
-6,341
0
25,346
0
0
-667
0
226,899
0
0
-29,698
0
75
0
0
75
0
17
0
0
-2
0
53
0
0
53
0
12
0
0
-2
0
33,368
139,154
24,679 197,201
-
15
-
10
8,285
0
0
0
0
104,967
0
0
-3,798
0
27,600
0
0
-1,380
0
140,852
0
0
-5,178
0
72
0
0
72
0
10
0
0
0
0
70
0
0
70
0
10
0
0
0
0
8,285
101,169
26,220 135,674
-
10
-
10
exercisable end of 2011
53,417
236,068
28,666
318,151
Share option programmes
In 2011, Tryg awarded share options to the Executive Management (1 person), senior employees (86 persons) and other employees
(40 persons). At 31 December 2011, the share option plan comprised 800,834 share options (at 31 December 2010 859,044
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 1.3 % of the share capital in Tryg A/S if all share options are exercised.
In 2011, the fair value of share options recognised in the consolidated income statement amounted to DKK 13m (2010: DKK
16m). As at 31 December 2011, a total amount of DKK 69m was recognised for share option programmes issued in 2006-2011.
Fair values at the time of allocation are based on the Black & Scholes option pricing formula.
98 | Annual report 2011 | Tryg A/S
Notes
TOTAL NUMBERS
FAIR VALUE
Group
Executive
Other
senior
Other
Management employees employees
Total
fair value
Per Total fair
Per option per option option at value at
31 Dec. 31 Dec.
DKKm
at grant
date DKK date DKKm
at grant
DKK
Total
6 Share option programmes
Spec. of outstanding options:
2010
Allocation 2006-2008
Allocated in 2006-2008,
beginning of year
Exercised
Cancelled
Expired
Outstanding options
from 2006-2008
allocation 31 Dec 2010
Allocation 2009
Allocated in 2009,
beginning of year
Exercised
Cancelled
Expired
Outstanding options
from 2009 allocation
106,608
0
0
0
353,882
-31,820
-4,646
0
39,427
-5,240
-1,900
0
499,917
-37,060
-6,546
0
64/99/69
64/99/69
64/99/69
0
39
-3
0
0
5/0/3
5/0/3
5/0/3
0
106,608
317,416
32,287 456,311
-
36
-
38,258
0
0
0
123,016
0
-5,580
0
20,670
0
-530
0
181,944
0
-6,110
0
94
0
94
0
17
0
-1
0
17
0
17
0
31 Dec 2010
38,258
117,436
20,140 175,834
-
16
-
Allocation 2010
Allocated in 2010
Exercised
Cancelled
Expired
Outstanding options
from 2010 allocation
48,050
0
0
0
154,838
0
-1,335
0
25,346
0
0
0
228,234
0
-1,335
0
75
0
75
0
17
0
0
0
17
0
17
0
31 Dec 2010
48,050
153,503
25,346 226,899
-
17
-
Number of options
exercisable end of 2010
54,520
166,700
0
221,220
1
0
0
0
1
3
0
0
0
3
4
0
0
0
4
Tryg A/S | Annual report 2011 | 99
Notes
6 Share option programmes
Year of allocation
of exercise 1. jan. 2011
Years
2006
2007
2008
2009
2010
2011
Outstanding
options
31 Dec. 2011
2009-2011
2010-2012
2011-2013
2012-2014
2013-2015
2014-2016
82,530
138,690
235,091
175,834
226,899
0
Allocated
in 2011
0
0
0
0
0
140,852
Exercised
Cancelled
Expired 31 Dec. 2011
-56,330
0
0
0
0
0
0
-17,433
-38,197
-26,026
-29,698
-5,178
-26,200
0
0
0
0
0
0
121,257
196,894
149,808
197,201
135,674
859,044
140,852
-56,330
-116,532
-26,200
800,834
The assumptions by calculating the marketvalue at time of allocation
Year of allocation
Average share
price (DKK)
at time of
allocation
Years
of exercise
Expected
volatility
Expected
maturity
Average
exercise
Share price
interest rate 31 dec. 2011 31 dec. 2011
Average
term to
maturity
Risk-free
2006
2007
2008
2009
2010
2011
2009-2011
2010-2012
2011-2013
2012-2014
2013-2015
2014-2016
355.85
456.76
378.24
313.51
320.04
295.83
17.90%
24.10%
20.30%
37.70%
29.20%
30.00%
4 år
4 år
4 år
4 år
4 år
4 år
3.30%
3.90%
3.60%
2.80%
2.70%
3.00%
0.00
0.08
0.58
1.17
2.16
3.11
0.00
426.44
373.06
318.86
332.54
321.42
Group Executive management includes retired managers with a total of 44,112 units at a value of DKK 4mill. upon allocation. Risk
takers are included under ’Senior employees’.
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 Tryg shares. The expected maturity is 4 years, corresponding to the
average of the exercise period of 3 to 5 years.
The risk-free interest rate is based on a bullet loan with the same 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 assumptions for
calculating the market value at the end of the period are based on the same principles as for the market value at the time of
allocation.
100 | Annual report 2011 | Tryg A/S
Notes
6 Matching shares
2011
TOTAL NUMBERS
FAIR VALUE
Group
Excecutive
Management
Risk-
takers
Average per
matching
share at
grant date
DKK
Total
Total fair Average per
matching
value per
share at
option at
31 Dec.
grant date
DKK
DKKm
Total fair
Value at
31 Dec.
DKKm
Allocated in 2011
Total Allocated
4,979
5,996
10,975
4,979
5,996
10,975
302
302
4
4
319
319
4
4
In 2011 Tryg entered into an agreement on matching shares for the executive management and selected risk takers as a
consequence of the Group’s wage policy. The executive management and selected risk takers are allocated one share in Tryg A/S
for each share that the executive management member or risk taker acquires in Tryg A/S at market rate for liquid cash at a
contractually agreed sum. The shares are reported at market value and are accrued over the four year maturation period. In 2011,
the reported fair value of matching shares for the Group amounted to DKK 1m.
Tryg A/S | Annual report 2011 | 101
Notes
DKKm
2010
2011
7
Interest and dividends
Interest income and dividends
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 others
8 Value adjustment
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
Other loans
Value adjustments concerning assets or liabilities that cannot be attributed to IAS 39:
Investment property
Owner-occupied property
Discounting
Other balance sheet items
Value gains
Value losses
Value adjustment, net
10
43
1,054
26
1,133
-88
-8
-96
10
59
1,173
18
1,260
-83
-30
-113
1,037
1,147
61
233
5
78
3
0
380
74
0
-227
11
-142
238
907
-669
238
13
-100
16
160
465
1
555
15
-10
-760
-55
-810
-255
755
-1,010
-255
Exchange rate adjustments concerning financial assets or liabilities which cannot be valuated to market value is in total DKK 31m
(2010 DKK 52m)
Under value adjustment the adjustment of inflation swaps totals DKK 12m (in 2010 DKK 27m).
102 | Annual report 2011 | Tryg A/S
Notes
DKKm
9 Tax
Tax on profit for the year
Difference between Danish and foreign tax rate
Prior-year tax adjustment
Adjustment non-taxable income and expenses
Change in valuation of tax assets
Other taxes
Effective tax rate
Tax on profit for the year
Difference between Danish and foreign tax rate
Prior-year tax adjustment
Adjustment non-taxable income and expenses
Change in valuation of tax assets
10 Profit/loss on discontinued and divested business
Earned premiums, 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
2010
2011
-235
-28
9
18
-26
-3
-265
%
25
3
-1
-2
3
28
224
-291
-44
-111
-111
28
-83
-392
-22
32
-64
-7
-2
-455
%
25
1
-2
4
1
29
4
30
0
34
34
-8
26
Average claims DKK
Total claims
310,702
954
114,733
15
Profit/loss on discontinued and divested business is excluded in ‘Marine, aviation and cargo’
in the accounts broken down by line of business.
Tryg A/S | Annual report 2011 | 103
Notes
DKKm
11
Intangible assets
2011
Cost
Balance 1 January
Exchange rate adjustment
Transferred from asset under construction
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
Balance 31 December
Trademarks
and customer
relations
Goodwill
Software
Assets under
construction
Total
377
3
0
0
0
380
0
0
0
0
0
168
2
0
0
0
170
-32
0
-19
0
-51
786
1
74
22
-1
882
-446
-1
-172
-13
-632
115
0
-74
216
0
257
0
0
0
-54
-54
1,446
6
0
238
-1
1,689
-478
-1
-191
-67
-737
Carrying amount 31 December
380
119
250
203
952
2010
Cost
Balance 1 January
Exchange rate adjustment
Transferred from asset under construction
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
329
48
0
0
0
377
0
0
0
0
0
0
148
20
0
0
0
168
-12
-2
-18
0
0
-32
685
10
92
48
-49
786
-335
-8
-144
-3
44
-446
119
2
-92
86
0
115
0
0
0
0
0
0
1,281
80
0
134
-49
1,446
-347
-10
-162
-3
44
-478
Carrying amount 31 December
377
136
340
115
968
104 | Annual report 2011 | Tryg A/S
Notes
DKKm
11
Intangible assets (continued)
Impairment test
Goodwill
As at 31 December 2011, management performed an impairment test of the carrying amount of goodwill
based on the allocation of the cost of goodwill to the cash-generating unit. Assumptions for impairment test:
The Value-in-use method is used
2011
Moderna Försäkringar
MF Bilsport & MC Specialförsäkringar
2010
Moderna Försäkringar
MF Bilsport & MC Specialförsäkringar
Assumed
annual growth
> 5 years
2.0%
2.0%
2.5%
2.5%
Return
require-
ment
before tax
12.7%
12.7%
14.9%
14.9%
Insurance activities in Sweden
In 2009, Tryg acquired Moderna Försäkringar Sak AB, Modern Re S.A., Netviq AB and MF Bilsport & MC specialfösäkringar. The
insurance activities were incorporated into the Tryg Group’s business structure in 2009 and are reported under Sweden. In 2010,
the companies, excluding Modern Re S.A., were merged into Tryg Forsikring A/S as a branch of Moderna Försäkringar, branch of
Tryg Forsikring A/S. Modern Re S.A. was discontinued in 2011. The activities in Modern Re have not affected the statement of the
original goodwill, which is why the discontinuation of the company does not affect remaining goodwill.
The assumed growth during the terminal period has been estimated based on expectations for general economic growth. The
return requirement 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.
Trademarks and customer relations
The impairment test performed for trademarks and customer relations did not indicate any impairment.
Software
The impairment charges are recognised in the income statement in total insurance operating expenses In the impairment test,
the carrying amount is compared with the estimated present value of future cash flows.
Tryg A/S | Annual report 2011 | 105
Notes
DKKm
12 Property, plant and equipment
2011
Cost
Balance 1 January
Exchange rate adjustment
Transferred from assets under construction
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
other comprehensive income
Balance 31 December
Accumulated depreciation
Balance 1 January
Exchange rate adjustment
Reversed depreciation
Depreciation for the year
Balance 31 December
Operating Owner-occup- Assets under
construction
ied property
equipment
Total
228
0
0
18
-59
187
0
0
0
0
0
-110
0
48
-23
-85
1,397
2
340
21
0
1,760
17
0
-10
20
27
-29
0
0
-13
-42
441
0
0
-3
-340
98
-88
0
0
0
-88
0
0
0
0
0
2,066
2
340
36
-399
2,045
-71
0
-10
20
-61
-139
0
48
-36
-127
Carrying amount 31 December
102
1,745
10
1,857
106 | Annual report 2011 | Tryg A/S
Notes
DKKm
12 Property, plant and equipment (continued)
Operating Owner-occup- Assets under
construction
ied property
equipment
Total
2010
Cost
Balance 1 January
Exchange rate adjustment
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 other comprehensive income
Balance 31 December
Accumulated depreciation
Balance 1 January
Exchange rate adjustment
Reversed depreciation
Depreciation for the year
Balance 31 December
225
7
62
-66
228
0
0
0
0
-142
-3
55
-20
-110
1,378
19
0
0
1,397
-2
0
19
17
-18
0
0
-11
-29
258
7
176
0
441
-86
-2
0
-88
0
0
0
0
0
1,861
33
238
-66
2,066
-88
-2
19
-71
-160
-3
55
-31
-139
Carrying amount 31 December
118
1,385
353
1,856
External experts were involved in valuing some of the owner-occupied properties.
Impairment test
Property, plant and equipment
A valuation of owner-occupied property has been performed, including the improvements carried out, after which DKK 20m
has been recognised in revaluation in other comprehensive income af DKK 10m in depreciation in the income statement.
The impairment charges on assets under construction are recognised in the income statement in total insurance operating
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:
Return percentages
Office property
2010
6.4
2011
6.3
Tryg A/S | Annual report 2011 | 107
Notes
DKKm
13
Investment property
Fair value at the end of the previous financial year
Exchange rate adjustment
Additions during the year
Disposals during the year
Value adjustment for the year
Reversed on sale
Fair value at 31 december
2010
2011
2,364
33
23
-261
68
-69
2,158
2
29
-1
12
-1
2,158
2,199
Total rental income for 2011 is DKK 156m (DKK 166m in 2010).
Total expenses for 2011 are DKK 39m (DKK 38m in 2010). Of this amount, not-hired property
is DKK 2m. (DKK 1m in 2010) why the total expenses at the income leading investment property
are DKK 37m (DKK 37m in 2010).
External experts were involved in valuing the majority of the investment property.
In establishing the market value of the properties, the following return percentages were used for each property category:
Return percentages
Business property
Office property
Residential property
Total
2010
2011
7.3
6.6
4.6
6.4
7.3
6.3
4.8
6.3
108 | Annual report 2011 | Tryg A/S
Notes
DKKm
14
Investments in associates
Cost
Balance 1 January
Balance 31 December
Revaluations at net asset value
Balance 1 January
Exchange rate adjustment
Value adjustment for the year
Balance 31 December
Carrying amount 31 December
2010
2011
0
0
17
1
-5
13
13
0
0
13
0
1
14
14
Shares in associates according to the latest financial statements:
Name and registered office
Assets
Liabilities
Equity
Revenue
Profit/Loss
of the year
Ownership
share in %
2011
Komplementarselskabet
af 1. marts 2006 ApS, DK
Bilskadeinstituttet AS, Norway
AS Eidsvåg Fabrikker, Norway
2010
Komplementarselskabet
af 1. marts 2006 ApS, DK
Bilskadeinstituttet AS, Norway
AS Eidsvåg Fabrikker, Norway
0
5
49
0
5
47
0
0
5
0
0
6
0
5
44
0
5
41
0
1
19
0
2
18
0
0
4
0
0
6
50
30
28
50
30
28
A individual estimate of the degree of influence referring to the agreed contracts are made.
Tryg A/S | Annual report 2011 | 109
Notes
DKKm
15 Total financial assets
Financial assets at fair value with value adjustment
in the income statement
Equity investments
Unit trust units
Bonds
Deposits in credit institutions
Derivative financial instruments
Financial assets at fair value with value adjustment in the income statement
Loans and receivables measured at amortised cost
Total receivables in relation to direct insurance contracts
Receivables from insurance enterprises
Receivables from subsidiaries
Other receivables
Current tax assets
Cash in hand and at bank
Total loans and receivables measured at amortised cost
2010
2011
2010
184
2,268
34,621
2,755
298
40,126
1,110
211
0
601
196
857
2,975
2011
187
2,378
38,400
1,635
651
43,251
1,158
317
1
189
93
402
2,160
Total financial assets
43,101
45,411
Financial assets at amortized cost prices only deviate to a minor extent from fair value.
Financial liabilities
Financial liabilities at fair value with value adjustment in the income statement
Derivative financial instruments
Total financial liabilities at fair value with value adjustment in the income statement
376
376
35
35
Financial liabilities measured at amortised cost
Subordinated loan capital
Debt related to direct insurance
Debt related to reinsurance
Debt to credit institutions
Debt to credit institutions
Current tax liabilities
Other debt
Total financial liabilities measured at amortised cost
1,591
419
187
30
3,947
106
1,030
7,310
1,589
410
191
11
4,161
260
740
7,362
Total financial liabilities
7,686
7,397
Information on valuation of subordinated loan capital at fair value is stated in note 20.
Other financial liabilities at amortized cost price only deviate to a minor extent from fair value.
110 | Annual report 2011 | Tryg A/S
Notes
DKKm
15 Total financial assets (continued)
Fair value hierarchy for financial instruments
measured at fair value in the balance sheet
2011
Equity investments
Unit trust units
Bonds
Cash in hand and deposits in credit institutions
Derivative financial instruments
2010
Equity investments
Unit trust units
Bonds
Cash in hand and deposits in credit institutions
Derivative financial instruments
Quoted
market
prices
Observable Unobservable
input
input
Total
0
2,378
26,713
1,635
0
30,726
0
2,268
20,808
2,755
0
25,831
0
0
11,657
0
579
12,236
0
0
13,770
0
-49
13,721
187
0
30
0
37
254
184
0
43
0
-29
198
187
2,378
38,400
1,635
616
43,216
184
2,268
34,621
2,755
-78
39,750
2010
2011
338
4
-47
0
-100
3
198
-54
198
0
77
8
-29
0
254
77
Financial instruments measured at fair value in the balance sheet on the basis of non-observable input:
Carrying amount 1 January
Exchange rate adjustment
Gains/losses in the income statement
Purchases
Sales
Transfers to/from the Group ‘non-observable input’
Carrying amount 31 December
Gains/losses in the income statement for assets held
at the balance sheet date recognised in value adjustments
Bonds measured 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 based on actual trades are available.
Unobservable input, total result DKK 75m (DKK -47m in 2010), mainly comprises inflation derivatives of DKK 70m hedging
(DKK -56m in 2010) inflation risk on technical provisions which recorded an accounting result of DKK -58m (DKK 83m in 2010).
The risk of the unobservable input group is moderate since the inflation derivatives aim at hedging the by market conditions
such as inflation risk of the technical provisions 100 percent, while the unquoted shares and bonds, which are influenced
the development in interest rates and expected earnings, is a limited amount.
Tryg A/S | Annual report 2011 | 111
Notes
DKKm
Bonds
Shares
Property
Total
15 Total financial assets (continued)
Reconciliation between investment assets as per
’Investment Activity’ in the Management’s report and
the Statement of financial position
2011
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 and derivatives
Repo debt
Owner-occupied property
Equity investments
Investment assets according to balance sheet
Unit trust units
Deposits in credit institutions
Derivative financial instruments
Associated shares
Total investment assets according to balance sheet
2010
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 and derivatives
Repo debt
Owner-occupied property
Equity investments
Investment assets according to balance sheet
Unit trust units
Deposits in credit institutions
Derivative financial instruments
Associated shares
Total investment assets according to balance sheet
112 | Annual report 2011 | Tryg A/S
37,232
1,816
3,954
43,002
-33
779
-719
0
-2,241
3,382
0
0
38,400
0
0
-1,659
44
0
0
0
-14
187
0
0
0
0
0
0
-1,755
0
2,199
-33
779
-2,378
44
-2,241
3,382
-1,755
-14
40,786
2,378
1,635
651
14
45,464
34,317
2,179
3,897
40,393
-80
1,795
-532
0
-2,775
1,896
0
0
34,621
0
0
-1,736
-246
0
0
0
-13
184
0
0
0
0
0
0
-1,739
0
2,158
-80
1,795
-2,268
-246
-2,775
1,896
-1,739
-13
36,963
2,268
2,755
298
13
42,297
Notes
DKKm
2010
2011
15 Total financial assets (continued)
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%
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.
Derivative financial instruments
Derivatives with value adjustment in the income statement at fair value:
-75
13
-262
-334
-12
-315
-24
87
-223
-330
-23
-500
Interest derivatives
Share derivatives
Inflation derivatives
Exchange rate derivatives
Due within one year
Due within one to five years
Due after more than five years
2010
2011
Fair value in
the balance
sheet
13
0
-29
-62
-78
-19
-8
-51
Nominal
23,477
246
3,248
11,972
38,943
28,855
3,709
6,379
Fair value in
the balance
sheet
606
0
37
-27
616
-57
-21
694
Nominal
16,971
44
2,931
8,131
28,077
10,288
3,656
14,133
Derivative financial instruments used in connection with hedging of foreign entities for accounting purposes:
Gains and losses on hedges
charged to other comprehensive
income at 1 January
Gains and losses on hedges
charged to other comprehensive
income during the year
Gains and losses on hedges
charged to other comprehensive
income at 31 December
2010
2011
Gains
Losses
Net
Gains
Losses
Net
850
-819
31
983
-1,280
-297
133
-461
-328
273
-300
-27
983
-1,280
-297
1,256
-1,580
-324
Tryg A/S | Annual report 2011 | 113
Notes
DKKm
2010
2011
15 Total financial assets (continued)
Exchange rate adjustment
Exchange rate adjustments of foreign entities recognised
in other comprehensive income in the amount of:
Balance at 1 January
Exchange rate adjustment during the year
Balance at 31 December
Receivables
Receivables from insurance enterprises
Receivables from subsidiaries
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
Reversed impairment losses are estimated at DKK 52m (2010 DKK 45m) annually,
but may vary due to major cases/disputes.
Receivables in connection with insurance contracts include overdue recievables totalling:
Falling due:
Within 90 days
After 90 days
Including writedowns of due amounts
16 Reinsurer’s share
Reinsurers’ share
Writedowns after impairment test
Balance at 31 December
-23
330
307
1,321
0
601
1,922
124
3
8
135
307
30
337
1,475
1
189
1,665
135
0
8
143
197
161
358
135
170
151
321
143
1,605
-17
1,588
2,086
-19
2,067
Impairment test
As at 31 December 2011, management performed a test of the carrying amount of total reinsurers’ share of provisions
for insurance contracts. The impairment test resulted in impairment charges totalling DKK 19m (2010: DKK 17m)
Writedowns during the year include reversed writedowns totalling DKK 1m (2010: DKK 1m).’
114 | Annual report 2011 | Tryg A/S
Notes
DKKm
17 Current tax
Current tax, beginning of year
Exchange rate adjustment
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
18 Shareholders’ equity
2010
2011
-303
-15
-170
82
14
482
90
196
-106
90
90
0
-500
7
26
210
-167
93
-260
-167
Share capital
2010
2011
Numbers of shares
Balance at 1 January
Bought during the year
Sold during the year
No. of
shares
63,227,650
-2,625,786
31,837
Nominal
value
(DKK’000)
1,580,692
-65,645
796
No. of
shares
60,633,701
-316,792
56,360
Nominal
value
(DKK’000)
1,515,843
-7,920
1,409
Balance at 31 December
60,633,701
1,515,843 60,373,269
1,509,332
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
2010
Nominal
value
(DKK’ 000)
17,598
65,645
0
0
No. of
shares
703,923
2,625,786
0
-17
-31,820
-796
Balance at 31 December
3,297,872
82,447
% of share
capital
No. of
shares
2011
Nominal
value
(DKK’ 000)
% of share
capital
1.10
4.11
3,297,872
316,792
82,447
7,920
5.16
0.50
0
-2,615,470
-65,387
-4.03
0.00
-0.05
5.16
0
0
-56,360
-1,409
942,834
23,571
0.00
-0.09
1.54
Pursuant to the authorisation granted by the shareholders, Tryg may acquire up to 10.0% of the share capital until the next
annual general meeting in 2012. Treasury shares are acquired for use in the Group’s incentive programme and as part of
the share buy back programme.
Tryg A/S | Annual report 2011 | 115
Notes
DKKm
19 Capital adequacy
Shareholders’ equity according to annual report
Proposed dividend
Solvency requirements to subsidiary undertakings – 50%
Tier 1 Capital
Subordinate loan capital
Solvency requirements to subsidiary undertakings – 50%
Capital base
Weighted assets
Solvency ratio
2010
8,458
-256
-2,516
5,686
804
-2,515
3,975
2011
9,007
-399
-2,508
6,100
848
-2,507
4,441
3,188
3,953
125
112
The capital base and the solvency ratio are calculated in accordance with the Danish Financial Business Act.
20 Subordinate loan capital
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
2010
950
85
12
50
2011
962
86
10
50
Tryghedsgruppen smba
2011
2010
499
103
0
33
464
96
0
33
The share of subordinated capital included in the calculation of the capital base total DKK 848 (in 2010 DKK 804m )
The loans are initially recognised at fair value on the date on which a loan is entered and subsequently measured at amortised
cost. Please refer to note 1 Risk management, which include the terms of the loans.
116 | Annual report 2011 | Tryg A/S
Notes
DKKm
21 Provisions for claims
2011
Total, beginning of year
Market value adjustment of provisions, beginning of year
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
Gross
Ceded
Net
24,255
69
24,324
-8,413
-6,921
1,333
5
1,338
-750
-341
22,922
64
22,986
-7,663
-6,580
-15,334
-1,091
-14,243
16,660
-1,005
15,655
1,483
-34
1,449
15,177
-971
14,206
Discounting and exchange rate adjustment
1,551
59
1,492
Provisions for claims, end of year
Other 1)
2010
Total, beginning of year
Market value adjustment of provisions, beginning of year
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 and exchange rate adjustment
Provisions for claims, end of year
Other a)
a) Comprises provisions for claims for Tryg Garantiforsikring A/S, the Finnish branch of Tryg Forsikring A/S.
26,196
745
1,755
120
24,441
625
26,941
1,875
25,066
22,017
703
22,720
-8,273
-6,663
-14,936
16,502
-857
15,645
826
24,255
628
1,050
62
1,112
-195
-327
-522
757
-52
705
38
1,333
101
20,967
641
21,608
-8,078
-6,336
-14,414
15,745
-805
14,940
788
22,922
527
24,883
1,434
23,449
Tryg A/S | Annual report 2011 | 117
Notes
DKKm
2010
2011
22 Pensions and similar obligations
Jubilees, schemes for elderly employees etc.
Recognised obligation, end of year
Defined benefit persion 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
Adjusted prior years regarding expected estimate change
Exchange rate adjustment
Present value of amounts accumulated during the year
Capital costs of previously accumulated pensions
Acturial gains/losses
Paid during the period
Change in recognised employers’ nat. ins. contribution
50
50
108
1,464
1,572
951
621
1,304
0
81
52
58
181
-62
-42
49
49
122
1,868
1,990
1,013
977
1,572
57
13
49
58
310
-69
0
Recognised pension obligation, end of year
1,572
1,990
Change in carrying amount of plan assets:
Carrying amount of plan assets, beginning of year
Adjusted prior years regarding expected estimate change
Exchange rate adjustment
Investments in the year
Estimated return on pension funds
Acturial gains/losses
Paid during the period
Carrying amount of plan assets, end of year
Total pensions and similar abligations, end of year
Total recognised obligation, end of year
Specification of pension cost 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 years is estimated at:
Estimated distribution of plan assets:
Shares
Bonds
Property
Average return on plan assets
118 | Annual report 2011 | Tryg A/S
856
0
57
73
53
-47
-41
951
621
671
44
58
-53
6
55
66
%
12
69
19
4.5
951
-17
9
88
41
-15
-44
1,013
977
1,026
40
57
-41
10
66
80
%
5
77
18
4.0
Notes
DKKm
22 Pensions and similar obligations (continued)
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
Sensitivity information
Impact on shareholders’ equity from the following changes:
Interest rate increase of 0.3 pct. point
Interest rate decrease of 0.3 pct. point
Pension obligation
Plan assets
Surplus/deficit
Actuarial gains/losses associated with
the pension obligation
Actuarial gains/losses associated
with pension assets
Actuarial gains/losses in other comprehensive
income end of year
2007
1,292
932
360
104
-10
94
2008
1,123
628
495
-23
-173
-196
2009
1,304
856
448
70
-42
28
2010
2011
%
%
3.8
4.5
4.0
3.8
3.8
6.0
14.1
0.0
Adj. K2005
2.7
4.0
4.0
3.8
3.8
6.0
14.1
0.0
Adj. K2005
68
-77
2010
1,572
951
621
-181
-47
-228
96
-89
2011
1,990
1,013
977
-367
-32
-399
Moderna Försäkringar, branch of Tryg Forsikring A/S complies with the Swedish industry pension agreement, the FTP plan, which
is insured with Försäkringsbranschens Pensionskassa – FPK. Under the terms of the agreement, the Group’s Swedish branch has
undertaken, along with the other businesses in the collaboration, to pay the pensions of the individual employees in accordance
with the applicable rules.
The FTP plan is primarily a defined benefit plan in terms of the future pension benefits. FPK is unable to provide sufficient informa-
tion 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.
This years premium paid to FPK amounted to DKK xm, which is about 2 % of the annual premium in FPK (2010). FPK writes in its
half-year report for 2011 that it had a collective consolidation ratio of 134 at 30 June 2011 (consolidation ration 112 at 30 June
2010). The collective consolidation ratio is defined as the market value of the plan assets relative to the total collective pension
obligations.
Tryg A/S | Annual report 2011 | 119
Notes
DKKm
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 differences of shares
Unaccrued timing differences of balance sheet items
Reconcillation of deferred tax
Deferred tax, beginning of year
Exchange rate adjustment
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
Tax value of non-capitalised tax loss
Denmark
Sweden
Finland
Luxembourg
2010
2011
37
213
70
320
121
206
14
1,261
1,602
1,282
0
25
1,244
70
0
34
53
-119
31
284
81
396
136
228
49
1,174
1,587
1,191
0
30
1,282
9
-10
0
-6
-84
1,282
1,191
18
4
89
32
18
4
96
0
The loss in Tryg A/S cannot be utilised in the Danish joint taxation scheme. The loss can be carried forward indefinitely
in Denmark. Under Finnish rules, losses may be carried forward for ten years and according to the rules in Sweden,
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 thebalance sheet in the amount of DKK
90m. (2010 DKK 208m).
120 | Annual report 2011 | Tryg A/S
Notes
DKKm
2010
2011
24 Other provisions
Other provisions, beginning of year
Change in provisions
Other provisions, end of year
Other provisions relate to provisions for the Group’s own insurance claims
25 Debt to credit institutions
Bank overdrafts
Debt falling due within one year
Debt falling due after more than five years
Tryg A/S has established committed credit facilities totalling DKK 800m with af number
of Danish banks. These credit facilities expire on 31 December 2012. In addition, Tryg Forsikring A/S
has established committed repo facilities DKK 1 mia. with at number of Danish banks. These repo
facilities expire on 31 December 2012.
26 Debt relating to unsettled fund trading and repos
Unsettled fund trading
Repo debt
Unsettled fund trading is debt for bonds purchased in 2010 and 2011, however with settlement
in 2011 and 2012 respectively
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 number of shares (1,000)
Diluted average number of shares (1,000)
Earnings per share – continuing business
Earnings per share – discontinuing business
Diluted earnings per share – discontinuing business (DKK)
Basic earnings per share
Diluted basic earnings per share
6
-5
1
30
30
30
0
1
10
11
11
11
11
0
2,051
1,896
3,947
779
3,382
4,161
3,947
0
4,161
0
676
-83
593
62,362
82
62,444
10.8
-1.3
-1.3
9.5
9.5
1,114
26
1,140
60,401
0
60,401
18.4
0.4
0.4
18.9
18.9
Tryg A/S | Annual report 2011 | 121
Notes
DKKm
<1 year
1-3 years
3-5 years
> 5 years
Total
Obligations due by period
28 Contractual obligations, collateral and
contingent liabilities
Contractual obligations
2011
Operating leases
Other contractual obligations
2010
Operating leases
Other contractual obligations
130
479
609
149
811
960
230
183
413
215
43
258
106
0
106
106
36
142
84
0
84
112
38
150
550
662
1,212
582
928
1,510
The amounts include the following:
Tryg Forsikring A/S and Tryg Forsikring, norwegian branch of Tryg Forsikring A/S have signed an operating agreement with CSC for
an amount of DKK 531m for a period of 5 years which cannot be cancelled within a year. The contract expires in 2015.
Tryg Forsikring A/S has signed the following contracts with amounts above DKK 50m:
Portfolio management contract for DKK 52m, which expires in 2015.
Telephony service contract with Telenor for DKK 116m, which expires after 2015.
Lease contracts on premises for DKK 347m. The contracts expire after 5 years.
Collateral
The Danish companies in Tryg Group are jointly taxed with TryghedsGruppen smba.
Assets to cover the technical provisions in Tryg Forsikring A/S
have been registered in the total amount of
Assets to cover the technical provisions in Tryg Garantiforsikring A/S
have been registered in the total amount of
2010
2011
36,923
41,382
311
332
DKK 66m (2010: DKK 51m) of the Group’s cash in hand and at bank is placed as collateral for futures contracts.
DKK 3.382m (2010: DKK 1.896m) of the Group’s bond portfolio was sold in repo transactions and must be repurchased. The value
of the bond portfolio remains recognised in the balance sheet and has been provided as security for financial liabilities concerning
repo transactions.
Contingent liabilities
Companies of the Tryg 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 statement of financial position
at 31 December 2011.
122 | Annual report 2011 | Tryg A/S
Notes
DKKm
29 Related parties
The Group has no other closely related parties with a decisive influence other than
the parent company, TryghedsGruppen Smba. Closely related parties with significant influence
include the Supervisory Board, the Executive Management, and these persons’ related family.
Supervisory Board and Group Executive Management
Premium income
- Parent company (TryghedsGruppen smba)
- Key management
- Other related parties
Claims paid
- Parent company (TryghedsGruppen smba)
- Key management
- Other related parties
2010
2011
0.3
0.5
1.3
0.2
0.5
0.1
0.3
0.6
2.9
0.1
0.0
1.4
No provisions have been made for non-performing guarantees and no expenses were incurred during the financial year.
Specification of remuneration
2011
Supervisory Board
Executive Management
Risk takers
2010
Supervisory Board
Executive Management
Basic wage Variable wage
Pension
Total
5
25
31
61
5
18
23
0
0
1
1
0
2
2
0
4
7
11
0
3
3
5
29
39
73
5
23
28
Tryg A/S | Annual report 2011 | 123
Notes
DKKm
29 Related parties
Fees are charges incurred during the financial year. Variable salary includes the charges for matching shares, which are
recognised over three years. The Board and Risk Takers are included in incentive programmes. Please refer to note 6 for
information concerning this
The number of persons in the categories are as follows; the Supervisory Board 14 persons, the Executive Management 5 persons,
Risk Takers 14 persons.
The Supervisory Board in Tryg A/S are paid with a fixed fee and are not included in the benefit schemes. The Management is paid
with a fixed wage and pension. The variable wage is awarded in the form of a matching share programme; see the reference under
‘Management’. The Management’s compensation includes wages and pension to retired managers for a total of DKK 14m.
Each member of the Executive Management is entitled to 12 months notice and cash severance pay equal to 12 months’.
(Group CEO is entitled to cash severance pay equal to 18 months’).
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 Employees Act, as such claims are included in the severance pay.
Risk Takers are defined as employees, whose activities have a significant influence on the business’s risk profile. The Supervisory
Board decides which employees shall be considered risk takers.
Parent company
TryghedsGruppen smba
TryghedsGruppen smba controls 60% of the shares in Tryg A/S.
Intra-group trading involved:
- Subordinated loan capital
- Interest expenses
2010
499
33
2011
464
33
Transactions between TryghedsGruppen smba and Tryg 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 Tryg Group have entered into reinsurance contracts on market terms. Transactions with subsidiaries have been
eliminated in the consolidated financial statements in accordance with the accounting policies.
30 Financial highlights
cf page 71.
124 | Annual report 2011 | Tryg A/S
Notes
31 Accounting policies
The consolidated financial statements are prepared in accordance
with the International Financial Reporting Standards (IFRS) as per
adopted by the EU on 31 December 2011 and in accordance with
the Danish Statutory Order on Adoption of IFRS.
The annual report of the parent company is prepared in accord-
ance with the executive order on financial reports presented by in-
surance companies and lateral pension funds issued by the Danish
FSA. The deviations from the recognition and measurement re-
quirements 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 adjust-
ments and changes in actuarial assumptions to be taken to other
comprehensive income. Actuarial gains and losses will therefore
be recognised in the parent company’s income statement.
• The Danish FSA’s executive order does not allow provisions for
deferred tax of contingency reserves allocated from untaxed
funds. Deferred tax and the other comprehensive income of the
parent company have been adjusted accordingly on the transi-
tion to IFRS.
Accounting policies are unchanged from the annual report 2010.
• Amendments to IAS 27 ‘Consolidated and separate financial
statements’
• Amendments to IAS 34 ‘Interim Financial Reporting’
• Amendments to IFRIC 13 ‘Customer Loyalty Programmes’,
IFRIC 14 ‘The Limit on a Defined Benefit Asset’
• IFRIC 19 ‘Extinguishing Financial Liabilities with Equity
Instruments’
The Group has not applied the following new and revised
executive orders, standards and interpretations that have
been issued but not yet effective:
• Amendments to IFRS 7 ’Disclosures – Transfers of Financial
Assets’ a)
• IFRS 9 ‘Financial Instruments’ b)
• IFRS 10 ‘ Consolidated Financial Statements’ b)
• IFRS 11 ‘Joint Arrangements’ b)
• IFRS 12 ‘Disclosure of interests in Other Entities’ b)
• IFRS 13 ‘Fair Value Measurement’ b)
• Amendments to IAS 1 ‘Presentation of items of other
Comprehensive Income’ c)
• Amendments to IAS 12 ‘ Deferred Tax – Recovery
of underlying Assets’ d)
• IAS 19 (as revised in 2011) ‘Employee Benefits’ b)
• IAS 27 (as revised in 2011) ‘Separate Financial Statements’ b)
• IAS 28 (as revised in 2011) ‘Investments in Associates
and Joint Ventures’ b)
a) Effective for annual periods beginning on or after 1 July 2011.
b) Effective for annual periods beginning on or after 1 January 2013.
c) Effective for annual periods beginning on or after 1 July 2012.
d) Effective for annual periods beginning on or after 1 January 2012.
Accounting regulation
Implementation of changes to accounting standards and
interpretation in 2011
The International Accounting Standards Board (ISAB) has issued a
number of changes to the international accounting standards, and
the International Financial Reporting Interpretations Committee
(IFRIC) has also issued a number of interpretations.
The changes will be implemented going foreward from 2012.
Significant accounting estimates and assessments
The preparation of financial statements under IFRS requires the
use of certain critical accounting estimates and requires manage-
ment to exercise its judgment in the process of applying the
Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and esti-
mates are significant to the consolidated financial statements are:
No standards or interpretations have been implemented for the
first time for the accounting year that began on 1st January 2011
that will have a significant impact on the Group.
New or amended standards and interpretations that have been im-
plemented but have not significantly affected the Group:
• Liabilities under insurance contracts
• Valuation of defined benefit plans
• Fair value of financial assets and liabilities
• Valuation of property
• Measurement of goodwill
• Amendments to IFRS 7 ’Financial Instruments: Disclosure’
• Amendments to IAS 1 ’Presentation of Financial Statements’
• Amendments to IAS 24 ‘Related Party Disclosures: Revised defi-
nition of related parties’
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.
Tryg A/S | Annual report 2011 | 125
Notes
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 Tryg Group’s knowledge
of historical developments, payment patterns, reporting delays, du-
ration of the claims settlement process and other effects that
might influence the future development of the liabilities.
The Group establishes claims provisions covering both known case
reserves and estimated claims that have been incurred by its poli-
cyholders but not yet reported to the company (known as ’IBNR
reserves) and future developments on claims which are known to
the Tryg 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
occurred up to the balance sheet date even if they have not yet
been reported to the Tryg Group.
The projection for claims provisions is therefore inherently uncer-
tain and, by necessity, relies upon the making of certain assump-
tions as to factors such as court decisions, changes in law, social
inflation and other economic trends, including inflation. The
Group’s actual liability for losses may therefore be subject to mate-
rial positive or negative deviations relative to the initially estimated
provisions for claims.
Provisions for claims are discounted. As a result, initial changes in
discount 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’ compensa-
tion and personal accident classes, in particular.
The Financial Supervisory Authority’s adjusted discount curve,
which includes both euro swap rates, national differentials and
Danish swap rates, and also an option adjusted real credit interest
rate differential, is used to discount Danish provisions for out-
standing claims.
The Norwegian and Swedish provisions are discounted with euro
swap rates, to which a country specific interest differential is
added that reflects the difference between Norwegian and
Swedish government bonds and the German government bond
interest rate respectively. Finnish provisions are discounted
using the Danish discount curve.
The net obligation with respect to the defined benefit plan is
based on actuarial calculations involving a number of assumptions.
The preconditions are discounting interest rate, expected future
wage and pension adjustment, turnover, mortality and expected
future yield on pension funds.
Fair value of financial assets and liabilities
Measurements of financial assets and liabilities for which prices are
quoted in an active market or which are based on generally ac-
cepted models with observable market data are not subject to ma-
terial estimates. For securities that are not listed on a stock ex-
change, 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.
Valuation of property
Property is divided into owner-occupied property and investment
property. Owner-occupied property is assessed at the reassessed
value that is equivalent to the fair value at the time of reassess-
ment, with a deduction for depreciations and write-downs. The fair
value is calculated based on a market-determined rental income,
as well as operating expenses in proportion to the property’s re-
quired rate of return percent. Investment property is calculated at
fair value. The calculation of fair value is based on market prices,
taking into consideration the property’s type, location and mainte-
nance standards, and calculated based on a market determined
rental income as well as operating expenses in proportion to the
property’s required rate of return.
Measurement of goodwill
Goodwill was acquired in connection with acquisition of businesses.
Goodwill is allocated to the cash-generating units under which
management manages the investment. The carrying amount is
tested for impairment at least annually. Impairment testing involves
estimates of future cash flows and is affected by a number of fac-
tors, including discount rates and other circumstances dependent
on economic trends, such as customer behaviour and competition.
Basis of presentation
Several assumptions and estimates underlying the calculation of
the provisions for claims are mutually dependent. This has the
greatest impact on assumptions with respect to interest rates and
inflation.
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.
Recognition and measurement
The annual report has been prepared under the historical cost con-
vention, as modified by the revaluation of owner-occupied proper-
ties, where increases are credited to other comprehensive income
and revaluation of investment property, financial assets held for
trading and financial assets and financial liabilities (including deriv-
ative instruments) at fair value through the income statement.
Assets are recognised in the statement of financial position when
it is probable that future economic benefits will flow to the Group
126 | Annual report 2011 | Tryg A/S
Notes
and the value of the asset can be reliably measured. Liabilities are
recognised in the statement of financial position 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 de-
scribed 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 re-
corded in the income statement unless otherwise described below.
All amounts in the notes are shown in millions of DKK, unless
otherwise stated.
Consolidation
The consolidated financial statements comprise the financial state-
ments of Tryg A/S (the parent company) and subsidiaries con-
trolled 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 typi-
cally 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
consolidation method. Using pro rata consolidation, the Group’s
share of joint venture assets and liabilities is recognised in the
statement of financial position. 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.
trol, respectively. Profit and loss in divested subsidiaries and profit
and loss on discontinued activities are included under discontinued
and divested business in the income statement.
Unrealised gains on transactions between consolidated companies
(including 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.
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 purchase method is applied on acquisitions if the Tryg Group
gains control of the company acquired. Identifiable assets, liabili-
ties and contingent liabilities in companies acquired are measured
at the fair value at the date of acquisition. The tax effect of revalu-
ations is taken into account.
The date of acquisition is the date on which control of the ac-
quired company actually passes to the Tryg 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 adjustments 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. Good-
will 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. Transactions in currencies other than the functional
currency are transactions in foreign currencies.
On initial recognition, transactions in foreign currencies are trans-
lated 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 state-
ment under value adjustments.
Newly acquired or divested subsidiaries are consolidated at the re-
sults for the period subsequent to achieving or surrendering con-
On consolidation, the assets and liabilities of the Group’s foreign
operations are translated at exchange rates of the balance sheet
date. Income and expense items are translated at the average ex-
Tryg A/S | Annual report 2011 | 127
Notes
change rates for the period. Exchange differences arising on transla-
tion are classified as other comprehensive income and transferred
to the Group’s translation reserve. Such translation differences are
recognised as income or as expenses in the period in which the
operation is disposed of. All other currency translation gains and
losses are recognised in the income statement.
The presentation currency in the annual report is DKK.
each individual insurance contract. As a starting point, the calcula-
tion uses the pro-rata method, although this is adjusted for an un-
evenly divided risk between lines of business with strong seasonal
variations or for policies lasting many years.
The portion of premiums received on contracts that relates to un-
expired risks at the balance sheet date is reported under provisions
for unearned premiums.
Segment reporting
Segment information is based on the Group’s management and in-
ternal financial reporting system supports the management’s deci-
sions on allocation of resources and assessment of the Group’s re-
sults divided into segments.
The operational business segments in the Tryg Group are Private
Nordic, Commercial Nordic and Corporate Nordic. Private Nordic en-
compasses the sale of insurances to private individuals in Denmark,
Norway, Sweden and Finland. Commercial Nordic encompasses the
sale of insurances to small and medium sized businesses, primarily
in Denmark and Norway. Corporate Nordic sells insurances to indus-
trial clients primarily in Denmark, Norway and Sweden. In addition,
Industri handles all business involving brokers.
Geographical information is presented on the basis of the eco-
nomic environment in which the Tryg Group operates. The geo-
graphical areas are Denmark, Norway, Finland and Sweden.
Segment income and segment costs as well as segment assets
and liabilities comprise those items that can be directly attributed
to each individual segment and those items that can be allocated
to the individual segments on a reliable basis. Unallocated items
primarily comprise assets and liabilities concerning investment ac-
tivity managed at Group level.
Ratios
Earnings per share (EPS) are calculated according to IAS 33. This and
other key ratios are calculated in accordance with ’Recommendations
and Ratios 2010’ issued by the Danish Society of Financial Analysts
and the executive 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 premiums to the risk period of the policies, and in
the reinsurers’ share of the provision for unearned premiums.
Premiums are calculated as premium incomes in accordance with
the risk exposure over the cover period, calculated separately for
The portion of premiums paid to reinsurers that relates to unex-
pired 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
liability provisions, net of reinsurance. The calculated interest
return for grouped classes of risks is calculated as the monthly
average provision plus a co-weighted interest from the present yield
curve for each individual group of risks. The interest is weighted
according to the expected run-off pattern of the provisions.
Technical interest is reduced by the portion of the increase in net
provisions that relates to unwinding.
Claims incurred
Claims incurred represent claims paid during the year and adjusted
for changes in provisions for unpaid claims less the reinsurers’
share. In addition, the item includes run-off results regarding pre-
vious 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 associated 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.
Tryg hedges the risk of changes in future wage and price figures
for provisions for workers’ compensation. Tryg uses zero coupon
inflation swaps acquired with a view to hedging the inflation risk.
Value adjustment of these swaps is included in claims incurred,
thereby reducing the effect of changes to inflation expectations
under claims incurred.
Bonus and premium rebates
Bonus and premium rebates represent anticipated and reimbursed
premiums to policy holders, where the amount reimbursed de-
pends 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.
128 | Annual report 2011 | Tryg A/S
Notes
Insurance operating expenses
Insurance operating expenses represent acquisition costs and
admini strative expenses less reinsurance commissions received.
Expenses relating to acquiring and renewing the insurance portfolio
are recognised at the time of writing the business. Underwriting com-
mission is recognised 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.
On initial recognition of the share options, the number of options
expected to vest for employees and members of the Executive
Management 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 value for retired employees who hold the right
to options is reported for the remaining period in the accounting
year in which the employee retires.
Leasing
Leases are classified either as operating or finance leases. The
assessment 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
statement of financial position, but the lease payments are recog-
nised in the income statement over the term of the lease, corre-
sponding to the economic life of the asset. The Group has no
assets held under finance leases.
Share-based payment
The Tryg Group’s incentive programmes comprise share option
programmes, employee shares and matching shares.
Share option programme
The value of services received as consideration for options granted
is measured at the fair value of the options.
Equity-settled share options are measured at the fair value at the
grant date and recognised under staff costs over the period from
the grant date until vesting. The balancing item is recognised di-
rectly in other comprehensive income.
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 con-
cerning sickness and death and in case of change to the Group’s
capital position, 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 restructuring or retirement, the employee is still entitled to the
options.
The share options are exercisable exclusively during a 15 days pe-
riod following the publication of full-year, half-year and quarterly
reports and in accordance with Tryg’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.
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.
Matching shares
In 2011, members of Executive Management and risk takers have
been allocated shares in accordance with the ’Matching shares’
scheme. Under Matching shares, the individual management mem-
ber is allocated one share in Tryg A/S for each share the Executive
management member or risk taker acquires in Tryg A/S at the mar-
ket rate for certain liquid cash at a contractually agreed sum in
connection with the Matching share programme.
The shares are provided free of charge, four years after the time
of purchase. The holder must acquire the shares in the open win-
dow following publication of the annual report for the previous
year. In 2011, however, the shares were traded in the first ’open
window’ after the Tryg A/S annual general meeting. The holder
may not sell the shares until six months after the matching time.
The shares are recognised at market value and are accrued over
the four-year maturation period, based on the market price at the
time of acquisition. Recognition occurs from the end of the acqui-
sition month and is recognised under personnel expenses with a
contra entry directly in other comprehensive income. If a Executive
management member or risk taker retires during the maturation
period but is entitled to shares, the remaining expense is recog-
nised in the current accounting year.
Investment activities
Income from associates includes the Group’s share of the associ-
ates’ net profit.
Income from investment properties before fair value adjustment
represents the profit from property operations less property
management expenses.
Interest and dividends represent interest earned and dividends
received during the financial year.
Realised and unrealised investment gains and losses, including
gains and losses on derivative financial instruments, value adjust-
ment of investment properties, exchange rate adjustments and the
effect of movements in the yield curve used for discounting, are
recognised as value adjustments.
Tryg A/S | Annual report 2011 | 129
Notes
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 the Group´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 discontin-
ued 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 balance sheet
items concerning discontinued activities are reported unchanged in
the respective entries.
The comparative figures, including five-year financial highlights and
key ratios, have been restated to reflect discontinued business.
Discontinued and divested business in the income statement in-
cludes the profit/loss after tax of the sale of the right to renew the
marine hull business in 2010. Discontinued business also com-
prises the Tryg Forsikring A/S run-off business and.
Statement of financial position
Intangible assets
Goodwill
Goodwill was acquired in connection with acquisition of business.
Goodwill is calculated as the difference between the cost of the
undertaking and the fair value of acquired identifiable assets, lia-
bilities and contingent liabilities at the time of acquisition. Good-
will is allocated to the cash-generating units under which manage-
ment manages the investment and is recognised under intangible
assets. Goodwill is not amortised but is tested for depreciation at
least once per year.
sition programme, they are amortised over eight years.
The Group’s transition programme is an internal IT project that will
create a common infrastructure across the Nordic countries and
thereby create significant efficiency savings. The project is ex-
pected to run for the next six to eight years.
Costs for group developed software that are directly connected
with the production of identifiable and unique software products,
where there is sufficient certainty that future earnings will exceed
the costs in more than one year, are reported as intangible assets.
Direct costs include personnel costs for software development and
directly attributable relevant fixed costs. All other costs connected
with the development or maintenance of software are continu-
ously charged as expenses.
After completion of the development work, the asset is amortized
linearly over the assessed economic lifetime, though over a maxi-
mum of eight years if the costs concern the Group’s transition pro-
gramme. Other development projects are amortized over a maximum
of four years. The amortization basis is reduced by any write downs.
Assets under construction
Group-developed intangibles are recorded under the entry ’Assets
under construction’ until they are put into use, whereupon they
are reclassified as software and are amortized in accordance with
the amortization periods stated above.
Fixed assets
Operating equipment
Fixtures and operating equipment are measured at cost less accu-
mulated depreciation and any accumulated impairment losses. Cost
encompasses the purchase price and costs directly attributable to
the acquisition of the relevant assets until the time when the as-
set is ready to be brought into use.
Depreciation of plant and equipment is calculated using the straight-
line method over their estimated economic lifetime, as follows:
• IT, 4 years
• Vehicles, 5 years
• Furniture, fittings and equipment, 5-10 years
Trademarks and customer relations
Trademarks and customer relations have been identified as intangi-
ble 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 economic lifetime 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 soft-
ware. These costs are amortised on the basis of the expected eco-
nomic lifetime of up to four years. However, if these are included
as a part of group developed software relating to the Group’s tran-
Leasehold improvements are depreciated over the expected eco-
nomic lifetime, 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 trans-
ferred to retained earnings.
Land and buildings
Land and buildings are divided into owner-occupied property and
investment property. The Tryg Group’s owner-occupied properties
130 | Annual report 2011 | Tryg A/S
Notes
consist of the head office buildings at Ballerup and Bergen and a
few summer houses. The remaining properties are classified as in-
vestment properties.
Owner-occupied property
Owner-occupied property is property that is used in the Group’s
operations. 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 de-
preciation and subsequent accumulated impairment writedowns.
Revaluations are performed regularly to avoid the carrying amount
differing materially from the owner-occupied 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.
Increases in the revalued carrying amount of owner-occupied
properties are credited to the properties’ revaluation reserve in
equity. Decreases 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
recognised 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. Or-
dinary 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 economic lifetime up to
50 years. Land is not depreciated.
Assets under construction
In connection with the refurbishment of the owner-occupied
properties, costs to be capitalised are recognised at cost under
owner-occupied property. On completion of the project it is
reclassified to owner-occupied property and depreciation will be
made on a straight-line basis over the expected economic lifetime,
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.
The fair value is calculated on the basis of market-specific rental in-
come per property and typical operating expenses for the upcom-
ing year. The resulting operating income is divided by the percent-
age return requirement of the property, which has been adjusted to
reflect market interest rates and property characteristics, corre-
sponding to the present value of a perpetual annuity. The value is
subsequently adjusted with the value in use of the return on pre-
payments and deposits 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, property and oper-
ating equipment
Operating equipment and intangible assets are assessed at least
once per year to ensure that the depreciation method and the de-
preciation period that is used are connected to the expected eco-
nomic lifetime. This also applies to the salvage value. Write-down
is performed if depreciation has been demonstrated. A continuous
assessment of owner-occupied property is performed using the
same method as investment property.
Goodwill is tested annually for depreciation, or more often if there
are indications of depreciation, and is performed for each cash-
generating unit to which the asset belongs. The present value is
normally established using budgeted cash flow based on business
plans. The business plans are based on previous experiences and
expected market development.
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 un-
realised intra-group profits and losses is recognised in the income
statement. In the statement of financial position, 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 receivables are deemed irrecoverable. If the negative net asset
value exceeds the amount receivable, the remaining amount is re-
cognised under provisions if the parent company has a legal or con-
structive 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.
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 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
Tryg A/S | Annual report 2011 | 131
Notes
the date of the transaction. Balance sheet items of foreign subsid-
iaries are translated at the exchange rate ruling at the balance
sheet date.
Investments in associates
Associates are enterprises over which the Group has significant in-
fluence but not control, generally accompanying an ownership in-
terest of between 20% and 50% of the voting rights. Investments
in associates are measured according to the equity method of ac-
counting so that the carrying amount of the investment represents
the Group’s proportionate 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 associate’s negative balance, such obligation is recognised un-
der liabilities.
Investments
Investments include financial assets at fair value through the in-
come 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.
Financial assets at fair value through income
Financial assets are recognised at fair value when first reported, if
they are entered in a portfolio that is managed in accordance with
fair value. Derivative financial instruments are similarly classed as
financial assets for commercial purposes, unless they are classified
as security.
Realized and unrealized profits and losses that may arise as a re-
sult of changes in the fair value for the category financial assets at
fair value are recognised in the income statement in the period in
which they arise.
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.
included in the income statement in the period in which they arise.
The fair values of quoted investments are based on stock ex-
change 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 trans-
actions, reference to other instruments 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
inflation. Forward exchange contracts and currency swaps are used
for currency hedging of portfolios of shares, bonds, hedging of
foreign entities 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 re-
lated to the portfolio of bonds and technical provisions. Share de-
rivates 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 statement of financial position. Positive fair values
of derivatives are recognised as bonds and shares or derivatives if
they cannot unambiguously be attributed to the former. Negative
fair values of derivatives are recognised under derivatives. Positive
and negative values are only offset when the company is entitled
or intends to make net settlement of more financial instruments.
Calculation of value is generally performed on the basis of rates sup-
plied by Nordea with relevant information contractors and is checked
by the Group’s valuation technicians. Discounting on the basis of
market interest rates is applied in the case of derivative financial in-
struments, where an expected future payment flow is included.
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 de-
rivatives 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 effec-
tive currency hedging 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 re-
quirements of hedge accounting. 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.
Realised and unrealised gains and losses arising from changes in
the fair value of the financial assets at fair value through income are
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 is-
132 | Annual report 2011 | Tryg A/S
Notes
sued by the Group and that meet the classification requirements
for insurance contracts are classified as reinsurers’ share of provi-
sions 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
contracts held are recognised as assets and reported as reinsurers’
share of provisions for insurance contracts.
Amounts receivables 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
impairment. If there is objective evidence that the reinsurance
asset is impaired, the Group reduces the carrying amount of the
reinsurance asset to its recoverable amount. Impairment write-
downs are recognised in the income statement.
Receivables
Total receivables comprise accounts receivable from policyholders
and insurance companies as well as other accounts receivable.
Other receivables primarily contain accounts receivable in connec-
tion with property.
Derivative financial instruments are reported from the trading date
and are assessed in the balance at fair value. Receivables that
arise as a result of insurance contracts are classified in this cate-
gory and are reviewed for depreciation as a part of the write-down
test of accounts receivable.
Receivable that are not derivative financial instruments are recog-
nised for the first time at fair value and are subsequently assessed
at amortized cost price. The income statement includes an esti-
mated reservation for an expected unobtainable sum when there is
a clear indication that the asset has depreciated. The reservation
entered is assessed as the difference between the asset’s balance
sheet value and the present value of expected future cash flow.
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 fi-
nancial years and interest receivable. Accrued underwriting com-
mission relating to the sale of insurance is also included.
Equity
Share capital
Shares are classified as equity when there is no obligation to
transfer cash or other assets. Incremental costs directly attributa-
ble to the issue of equity instruments are shown in equity as a de-
duction from the proceeds, net of tax.
Revaluation reserves
Revaluation of owner-occupied properties is recognised in other
comprehensive income unless the revaluation offsets a previous im-
pairment loss, and relates primarily to owner-occupied properties.
Exchange adjustment reserve
Assets and liabilities of foreign entities are recognised at the ex-
change rate at the balance sheet date. Income and expense items
are recognised at the monthly average exchange rates for the pe-
riod. Any resulting exchange rate differences are recognised in other
comprehensive income. 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.
Contingency fund reserves
Contingency fund reserves are recognised as part of retained earn-
ings under equity. The funds may only be used when so permitted
by the Danish FSA and when it is to the benefit of the policyhold-
ers. The Norwegian security fund provisions include provisions for
the Norwegian Natural Perils Pool, security reserve, administration
reserve and guarantee reserve. The Danish and Swedish provisions
comprise security fund provisions. Deferred tax from the Norwe-
gian and Swedish security fund provisions is earmarked.
Dividends
Proposed dividend is recognised as a liability at the time of adop-
tion by the shareholders at the annual general meeting the date
of declaration.
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 incentive programmes
and share buyback programme.
Proceeds from the sale of treasury shares in connection with the
exercise of share options or employee shares are taken directly to
equity.
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 ef-
fective interest method.
Tryg A/S | Annual report 2011 | 133
Notes
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 pre-
miums received on in-force contracts that relates to unexpired risks
at the balance sheet date is reported as unearned premium provi-
sions. Unearned premium provisions are generally calculated ac-
cording to a best estimate of expected payments throughout the
agreed risk period. However, as a minimum to the part of the pre-
mium calculated using the pro rata temporis principle until the next
payment date. Adjustments 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 in-
curred 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 affected 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 pay-
ments from the provision. Discounting affects the motor liability,
professional liability, workers’ compensation and personal accident
classes, in particular.
Provisions for bonus and premium rebates represent amounts ex-
pected to be paid to policyholders in view of the claims experience
during the financial year.
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-Fergu-
son, the Loss Ratio method and De Vylder’s credibility method.
Chain-Ladder techniques are used for business lines with a stable
run-off pattern. The Bornhuetter-Ferguson method, and some-
times the Loss Ratio method, are used for claims years in which
the previous run-off provides insufficient information about the fu-
ture 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.
The provision for annuities in workers’ compensation insurance is
calculated on the basis of a mortality corresponding to the G82
calculation 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 ex-
pected increase in claims. For legislative changes this estimate is used
also in determining the level of claims. Subsequently, this estimate is
maintained until new loss history materialises for re-estimation.
Several assumptions and estimates underlying the calculation of
the provisions for claims are mutually dependent. Most impor-
tantly, this can be expected to be the case for interest rate and
inflation assumptions.
Workers’ compensation is an area in which explicit inflation as-
sumptions are used, with annuities for the insured being indexed
with the workers’ compensation index. An inflation curve that re-
flects the market’s inflation expectations plus a real wage spread
is used as an approximation 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 predicting 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 affects the interest rate.
Other correlations are not deemed to be significant.
Liability adequacy test
Tests are continuously performed to ensure the adequacy of the
technical provisions. In performing these tests, current best esti-
mates of future cash flows of claims, gains and direct and indirect
claims handling costs are used. Any deficiency is charged to the
income statement by raising the relevant provision and the adjust-
ment is recognised in the income statement.
Employee benefits
Pension obligations
The Group operates various pension schemes. The schemes are
funded through payments to insurance companies or trustee-
administered funds. In Norway, the Group operates a defined
benefit plan. A defined benefit plan is a pension plan that defines
an amount of pension benefit 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 contribu-
tions. In Sweden, the Group complies with the industry pension
134 | Annual report 2011 | Tryg A/S
Notes
agreement, FTP-Planen. The FTP plan is primarily a defined benefit
plan in terms of the future pension benefits. Försäkringsbran-
schens Pensionskassa (FPK) is unable to provide sufficient informa-
tion for the Group to use defined benefit accounting. The plan is
therefore accounted for as a defined contribution plan.
Deferred income tax assets, including the tax value of tax losses
carried forward, are recognised to the extent that it is probable
that future taxable profit will be available against which the
temporary differences can be utilised.
The liability recognised in the statement of financial position in re-
spect of defined benefit pension plans is the present value of the
defined benefit obligation at the balance sheet date less the fair
value of plan assets, together with adjustments for 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
expectations 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 esti-
mated future cash outflows by a duration that matches the condi-
tions of the underlying pension obligation.
The actuarial gains and losses arising from experience adjustments
and changes in actuarial estimates is recognised in other compre-
hensive income. The plan is closed for new business.
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.
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 statement of financial
position as estimated tax on the taxable income for the year, ad-
justed 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 balance sheet date when the deferred tax asset is realised or
the deferred income tax liability is settled.
Deferred income tax is provided on temporary differences concern-
ing investments, except where Tryg controls when the temporary
difference will be realised, and it is probable that the temporary
difference will not be realised in the foreseeable future.
Other provisions
Own insurances are included under other provisions. The provi-
sions apply to the Group’s own insurance claims and are reported
when the damages occur, and are reported according to the same
principle as the Group’s other claim provisions.
Debt
Debt comprises debt in connection with direct insurance and re-
insurance, debt to credit institutions, current tax obligations and
other debt.
Derivative financial instruments are assessed at fair value accord-
ing to the same practice that applies to financial assets. Other
obligations are assessed at amortized cost price with application
of ’the effective interest method’.
Cash flow statement
The statement of cashflows 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 equiva-
lents at the beginning and the end of the financial year. No sepa-
rate statement of cashflows has been prepared for the parent
company because it is included in the consolidated statement of
cashflows.
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 connec-
tion with purchase and sale of intangible assets, property, plant
and equipment as well as fixed asset investments and deposits in
Credit institutions.
Cash flows from financing activities comprise changes in the size
or composition of Tryg’s share capital and related costs as well
as the raising of loans, instalments on interest-bearing debt,
and payment of dividends.
Cash and cash equivalents comprise cash and demand deposits.
Tryg A/S | Annual report 2011 | 135
Income statement (parent company)
DKKm
2010
2011
Notes
1
Investment activities
Income from subsidiaries
Interest income
Value adjustment
Interest expenses
Investment management charges
Total return on investment activities
2 Other expenses
Profit before tax
3 Tax
Profit on continuing business
Profit for the year
Proposed distribution for the year:
Dividend
Transferred to Net revaluation as per equity method
Transferred to Retained profits
475
2
-1
-2
-8
466
-58
408
17
425
425
256
-1,965
2,134
425
901
0
1
0
-8
894
-57
837
15
852
852
400
623
-171
852
136 | Annual report 2011 | Tryg A/S
Statement of financial position (parent company)
DKKm
Notes Assets
4
Investments in subsidiaries
Total investments in subsidiaries
Total investment assets
Receivables from subsidiaries
Other receivables
Total receivables
Current tax assets
5
6 Deferred tax assets
Total other assets
Total prepayments and accrued income
2010
2011
8,339
8,339
8,985
8,985
8,339
8,985
59
4
63
17
1
18
55
23
0
23
17
0
17
0
Total assets
8,475
9,025
Liabilities
Shareholders’ equity
Debt to subsidiaries
Other debt
Total debt
8,475
9,024
0
0
0
1
1
1
Total liabilities and equity
8,475
9,025
7 Debt to credit institutions
8 Capital adequacy
9 Contractual obligations, contingent liabilities and collateral
10 Related parties
11 Reconciliation of differences in the profit and the shareholders’ equity
12 Accounting policies
Tryg A/S | Annual report 2011 | 137
Statement of changes in equity (parent company)
DKKm
Share
capital
Revalua-
tion
reserves
Retained
earnings
Proposed
dividends
Total
Shareholders’ equity at 31 December 2009
1,598
3,151
3,912
991
9,652
2010
Profit for the year
Change in equalisation provision
Revaluation of owner-occupied properties
Exchange rate adjustment of foreign entities
Hedge of foreign currency risk in foreign entities
Tax on equity entries
Total comprehensive income
0
Dividend paid
Dividend own shares
Purchase of own shares
Exercise of shareoptions
Issue of share options
-1,965
1
19
330
-328
144
-1,799
2,134
256
256
-991
2,134
14
-816
9
16
425
1
19
330
-328
144
591
-991
14
-816
9
16
Total equity entries in 2010
0
-1,799
1,357
-735
-1,177
Shareholders’ equity at 31 December 2010
1,598
1,352
5,269
256
8,475
2011
Profit for the year
Change in equalisation provision
Change in revaluation reserves previous years
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 share options
Issue of share options
623
-171
400
20
29
-27
1
646
0
-65
400
-256
-22
-193
65
14
-91
15
14
Total equity entries in 2011
-65
646
-176
144
852
0
0
20
29
-27
-21
853
0
-256
14
-91
15
14
549
Shareholders’ equity at 31 December 2011
1,533
1,998
5,093
400
9,024
Proposed dividend per share DKK 6.52 (in 2010 DKK 4.00).
Dividend per share is calculated as the total dividend proposed by the Super visory Board after the end of the financial year divided by the
number of shares, year end 61,316,103. The dividend is not paid until approved by the shareholders at the annual general meeting. Tryg
Forsikring A/S’ Norwegian branch, has in its branch financial statements included provisions for contingency funds in the amount of DKK
2,430m (in 2010 DKK 2,887m) Tryg Forsikring A/S’ Swedish branch, has in its branch financial statements included provisions for contin-
gency funds in the amount of DKK 144m (in 2010 DKK 143m). In Tryg Forsikring A/S, these provisions, due to their nature as additional
provisions, are included in shareholders’ equity (retained earnings), net of deferred tax. Tryg Forsikring A/S’ option to pay dividend to Tryg
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 Tryg Forsikring A/S. Tryg Garantiforsikring A/S has a similar contingency amounting to DKK 139m, which is also
included in the company’s shareholders’ equity.
138 | Annual report 2011 | Tryg A/S
Notes (parent company)
DKKm
1
Income from subsidiaries
Tryg Forsikring A/S
2 Other expenses
Administrative expenses
2010
2011
475
475
-58
-58
901
901
-57
-57
Remuneration of the Executive Management is paid by Tryg Forsikring A/S and Tryg Forsikring,
norwegian branch of Tryg Forsikring A/S and is charged to Tryg A/S by the cost allocation.
Remuneration for Supervisory Board, Group Executive Management and risk-takers appears
in note 10 ‘Related parties’. Refer to note 6 in the Tryg Group for a specification of the audit fee.
Average number of full-time employees during the year
0
0
3 Tax
Reconciliation of tax expenses
Tax on financial loss before profit/loss in subsidiaries and tax
Effective tax rate
Tax on financial loss
17
17
%
25
25
15
15
%
23
23
Tryg A/S | Annual report 2011 | 139
Notes (parent company)
DKKm
4
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
2010
2011
6,987
6,987
3,151
641
-2,440
1,352
6,987
6,987
1,352
902
-256
1,998
Carrying amount 31 December
8,339
8,985
Name and registered office
2011
Tryg Forsikring A/S, Ballerup
2010
Tryg Forsikring A/S, Ballerup
5 Current tax assets
Current tax, beginning of year
Current tax for the year
Tax paid durring the year
6 Deferred tax assets
Capitalised tax loss
Tryg A/S
Non-capitalised tax loss
Tryg A/S
Ownership
shares in %
Equity
100
100
100
100
17
17
-17
17
1
18
17
16
-16
17
0
18
The loss in Tryg A/S can only be utilised in Tryg 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.
140 | Annual report 2011 | Tryg A/S
Notes (parent company)
DKKm
7 Debt to credit institutions
Tryg A/S has established committed credit facilites totalling DKK 800m with a number
of Danish banks. These credit facilities expire on 31 December 2012.
8 Capital adequacy
Shareholders’ equity according to annual report
Proposed dividend
Solvency requirements to subsidiary undertakings – 50%
Tier 1 Capital
Subordinate loan capital
Solvency requirements to subsidiary undertakings – 50%
Capital base
Weighted items
Solvency pct.
2010
2011
8,475
-256
-2,516
5,703
804
-2,515
3,992
9,024
-400
-2,508
6,116
848
-2,507
4,457
3,309
3,970
121
112
9 Contractual obligations, contingent liabilities and collateral
The Danish companies in Tryg Group are jointly taxed with TryghedsGruppen smba.
Companies of the Tryg 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.
Tryg A/S | Annual report 2011 | 141
Notes (parent company)
10 Related parties
The Group has no other closely related parties with a decisive influence other than
the parent company, TryghedsGruppen Smba. Closely related parties with significant influence
include the Supervisory Board, the Executive Management, and these persons’ related family.
Related parties are the same as in Tryg Group, please refer to note 29 (in the Group)
Parent company
Tryghedsgruppen smba
TryghedsGruppen smba controls 60% of the shares in Tryg A/S.
Subsidiaries and associates
Tryg A/S controls Tryg 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.
2010
2011
-61
76
2
-61
23
0
142 | Annual report 2011 | Tryg A/S
Notes (parent company)
DKKm
2010
2011
11 Reconciliation of differences in the profit and the shareholders’ equity
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 of differences
in the profit and equity.
Profit reconciliation
Profit – IFRS
Current years effect of actuarial gains and losses on pension obligation after tax
Change in the year in deferred tax provisions for contingency funds
Profit – Danish FSA executive order
Equity reconciliation
Shareholders’ equity – IFRS
Deferred tax provisions for contingency funds
Change in the year in deferred tax provisions for contingency funds
Equity – Danish FSA executive order
593
-164
-4
425
8,458
21
-4
8,475
1,140
-288
0
852
9,007
17
0
9,024
12 Accounting policies
Please refer to Tryg Groups’ Accounting policy.
Tryg A/S | Annual report 2011 | 143
Fourth quarter of 2011 | Quarterly outline
DKKm
Private Nordic
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Gross premiums earned
2,338
2,391
2,562
2,574
2,654
2,698
2,774
2,859
2,766
Technical result
99
-167
240
211
162
166
273
263
184
Key ratios
Gross claims ratio
Business ceded as a percentage
of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
78.7
92.2
74.0
80.9
76.9
77.2
74.1
87.9
77.0
1.1
79.8
17.2
-0.7
91.5
16.3
1.7
75.7
15.5
-3.5
77.4
15.2
1.0
77.9
16.9
1.7
78.9
16.2
1.3
75.4
16.0
-11.9
76.0
15.5
0.3
77.3
16.7
Combined ratio
97.0
107.8
91.2
92.6
94.8
95.1
91.4
91.5
94.0
Commercial Nordic
Gross premiums earned
947
1,019
1,046
1,052
1,066
1,063
1,060
1,075
1,039
Technical result
29
-376
-47
-57
5
-41
48
44
66
Key ratios
Gross claims ratio
Business ceded as a percentage
of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
70.9
117.2
83.3
80.7
76.7
81.2
65.7
95.5
68.4
2.1
73.0
24.6
-2.5
114.7
23.0
-4.0
79.3
25.9
0.9
81.6
24.6
0.0
76.7
23.5
2.0
83.2
22.1
6.3
72.0
24.5
-23.1
72.4
23.9
1.8
70.2
24.0
Combined ratio
97.6
137.7
105.2
106.2
100.2
105.3
96.5
96.3
94.2
Corporate Nordic
Gross premiums earned
1,335
1,240
1,286
1,266
1,332
1,286
1,317
1,360
1,312
Technical result
205
188
204
-82
94
151
175
184
21
Key ratios
Gross claims ratio
Business ceded as percentage
of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
70.3
59.4
62.6
85.3
78.4
67.8
77.6
85.3
91.2
1.9
72.2
13.0
12.7
72.1
13.2
7.9
70.5
14.1
10.1
95.4
11.5
2.3
80.7
13.0
9.3
77.1
12.2
-2.9
74.7
12.7
-9.6
75.7
11.3
-4.6
86.6
12.6
Combined ratio
85.2
85.3
84.6
106.9
93.7
89.3
87.4
87.0
99.2
144 | Annual report 2011 | Tryg A/S
DKKm
Other a)
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Gross premiums earned
Technical result
-11
-16
0
1
-4
-3
-6
2
-3
0
-9
0
-6
0
-5
0
-17
0
Tryg
Gross premiums earned
4,609
4,650
4,890
4,886
5,049
5,038
5,145
5,289
5,100
Technical result
Return on investment activities
Profit/loss before tax
Profit/loss
317
210
527
448
-354
204
-113
-102
394
-208
173
128
74
308
369
198
261
266
512
369
276
105
361
271
496
3
487
362
491
-205
274
163
271
163
447
344
Key ratios
Gross claims ratio
Business ceded as percentage
of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
74.5
88.9
73.1
82.1
77.2
75.7
72.9
88.9
79.0
1.6
76.1
18.0
2.5
91.4
17.2
2.1
75.2
17.3
0.8
82.9
16.3
1.1
78.3
17.2
3.6
79.3
16.6
1.6
74.5
17.0
-13.7
75.2
16.3
-0.9
78.1
17.4
Combined ratio
94.1
108.6
92.5
99.2
95.5
95.9
91.5
91.5
95.5
a) Amounts relating to eliminations are included in ‘Other’
Tryg A/S | Annual report 2011 | 145
Fourth quarter of 2011 | Geographical segments
DKKm
Danish general insurance
Gross premiums earned
Technical result
Run-off gains/losses, net of reinsurance
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 employees, end of period
Norwegian general insurance
Gross premiums earned
Technical result
Run-off gains/losses, net of reinsurance
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 employees, end of period
Swedish general insurance a)
Gross premiums earned
Technical result
Run-off gains/losses, net of reinsurance
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Q4
2010
Q4
2011
2010
2011
2,522
2,480
9,636
112
196
77.4
2.1
79.5
16.6
96.1
257
266
82.7
-6.1
76.6
13.1
89.7
166
615
82.0
0.7
82.7
16.1
98.8
2,342
9,999
1,023
770
83.5
-8.1
75.4
15.0
90.4
2,308
1,914
1,991
7,490
7,916
191
84
75.1
-0.3
74.8
16.1
90.9
463
-30
6
83.8
2.2
86.0
22.0
84
49
72.6
5.2
77.8
18.9
96.7
488
-47
16
83.4
2.9
86.3
25.8
389
177
76.7
3.1
79.8
15.7
95.5
1,338
598
181
73.2
3.2
76.4
17.0
93.4
1,338
1,769
2,050
-124
32
84.6
0.8
85.4
22.4
-59
-7
82.0
2.6
84.6
20.3
104.9
423
108.0
112.1
107.8
Number of full-time employees, end of period
414
146 | Annual report 2011 | Tryg A/S
DKKm
Finnish general insurance
Gross premiums earned
Technical result
Run-off gains/losses, net of reinsurance
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 employees, end of period
Other b)
Gross premiums earned
Technical result
Tryg
Gross premiums earned
Technical result
Return on investment activities
Other income and expenses
Profit/loss before tax
Run-off gains/losses, net of reinsurance
Key ratios
Gross claims ratio
Business ceded as % of gross premiums
Claims ratio, net of ceded business
Gross expense ratio c)
Combined ratio
Number of full-time employees, end of period
Q4
2010
Q4
2011
2010
2011
153
-12
0
81.0
0.0
81.0
28.1
158
-23
0
84.2
0.0
84.2
31.0
593
-56
0
80.9
0.8
81.7
29.3
109.1
115.2
111.0
197
-13
0
-3
0
-17
0
644
-28
0
79.8
0.8
80.6
25.6
106.2
249
-37
0
5,049
5,100
19,475
20,572
261
266
-15
512
286
77.2
1.1
78.3
17.2
95.5
271
163
13
447
331
79.0
-0.9
78.1
17.4
95.5
375
570
-4
941
824
80.2
1.6
81.8
17.0
98.8
4,291
1,534
66
-31
1.569
944
79.2
-2.5
76.7
16.8
93.5
4,318
a) Moderna Försäkringar is included in ‘Swedish general insurance’ from 2 april 2009.
b) Amounts relating to eliminations are included in ‘Other’.
c) Adjustment to Gross expense ratio included only in the calculation of ‘Tryg’. Explanation of adjustment as a footnote to Financial Highlights
Tryg A/S | Annual report 2011 | 147
Other key figures
Claims ratio, net
Expense ratio, net
Combined ratio, net
Expense ratio, net without adjustment
Gross profit ratio
Profit ratio, net of reinsurance
Gross technical interest ratio
Technical interest ratio, net of reinsurance
Return on equity before tax on continuing business (%)
Return on equity after tax on continuing business (%)
Average provisions for unearned premiums
Average provisions for claims
Average reinsurers’ share of provisions
for insurance contracts
Reserve ratio, provisions for unearned premiums (%)
Reserve ratio, provisions for claims (%)
Reserve ratio, total
Number of full-time employess, end of period,
discontinued and divested business
Share performance
Earnings per share (DKK)
Diluted earnings per share (DKK) a)
Average number of shares (1,000)
Diluted average number of shares (1,000) a)
Share price 31.12 (DKK)
Quoted price/net asset value
2007
2008
2009
2010
2011
66.5
17.1
83.6
17.1
18.6
19.6
3.0
3.2
33.3
24.3
5,288
20,808
1,574
33.2
130.1
163.3
70.1
17.5
87.6
17.9
14.3
15.0
2.9
3.0
15.3
9.7
5,252
20,454
1,312
30.0
116.3
146.3
74.2
17.6
91.8
17.5
8.7
9.2
0.9
0.9
29.3
22.3
5,654
21,110
1,178
34.8
125.8
160.6
81.3
17.4
98.7
17.4
1.9
2.0
0.7
0.7
10.4
7.5
6,514
23,677
1,454
35.0
127.8
162.8
75.9
17.8
93.7
17.9
7.5
7.9
0.9
0.9
18.0
12.8
6,876
25,912
1,828
33.7
131.0
164.7
26
26
26
1
0
33.5
12.8
67,648
66,184
388.0
2.6
328.0
2.6
31.7
31.7
63,334
63,448
342.8
2.3
9.5
9.5
62,362
62,444
257.5
1.8
18.9
18.9
60,401
60,401
319.0
2.1
a) There has been no dilution of earnings or equity in the period 2006-2008
The expense ratio, net without adjustment is calculated as the ratio of actual insurance operating expenses, net of reinsurance to earned
premiums, net of reinsurance.
Other key ratios are calculated in accordance with ‘’Recommendations & Financial Ratios 2010’’
issued by the Danish Society of Financial Analysts.
The adjustment, which is made pursuant to the Danish Financial Supervisory Authority’s and the Danish Society of Financial Analysts’
definition of expense ratio and combined ratio, involves the addition of a calculated expense (rent) concerning owner-occupied property
based on a calculated market rent and the deduction of actual depreciation and operating costs on owner-occupied property.
148 | Annual report 2011 | Tryg A/S
Glossary
The financial highlights and key ratios of Tryg have been prepared in
accordance with the executive order issued by the Danish Financial
Supervisory Authority on the presentation of financial reports by in-
surance companies and profession-specific pension funds and also
comply with ’Recommendations & Financial Ratios 2010’ issued by
the Danish Society of Financial Analysts.
Business ceded as a percentage of gross premiums
Dividends per share
Proposed dividend
Number of shares year end
Earnings per share
Profit for the year x 100
Average number of shares
Net result of business ceded x 100
Gross earned premiums
Equity margin
Capital base
Shareholders’ equity plus subordinated debt/subordinated loan capi-
tal less intangible assets/goodwill and tax asset.
Premiums earned, net of reinsurance x 100
Tier 1 capital
Claims ratio, net of ceded business
Gross claims ratio + business ceded as % of gross premiums.
Finnish general insurance
Comprises Tryg Forsikring A/S, Finnish branch and the Finnish branch
of Tryg Garantiforsikring A/S.
Combined ratio
Calculated as the sum of the gross claims ratio, the net result of
business ceded as a percentage of gross earned premiums and the
gross expense ratio.
Gross claims ratio
Gross claims incurred x 100
Gross earned premiums
Danish general insurance
Comprises the legal entities Tryg Forsikring A/S
(excluding the Norwegian, Finnish and Swedish branches)
and Tryg Garantiforsikring A/S.
Diluted earnings per share (continuing business)
Diluted earnings from continuing business after tax
Diluted average number of shares
Diluted number of shares
Average number of shares adjusted for number of share options
which may potentially dilute.
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 de-
pends on the market based discount rate applied and the expected
time to payment.
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 with
adjustment to gross earned premiums. The adjustment involves the
deduction of depreciation and operating costs on the owner-occu-
pied property and the addition of a calculated cost (rent) concerning
the owner-occupied property based on a calculated market rent.
Gross insurance operating expenses w. adjustment x 100
Gross earned premiums
Gross expense ratio without adjustment
Gross insurance operating expenses x 100
Gross earned premiums
Gross insurance interest ratio
Technical interest, net of reinsurance x 100
Gross premiums earned
Tryg A/S | Annual report 2011 | 149
Glossary
Gross profit margin
Reserve ratio, provisions for unearned premiums
Technical result x 100
Gross premiums earned
Provisions for unearned premiums x 100
Gross premiums earned
Individual Solvency
New Danish solvency requirements for insurance companies. With ef-
fect from the 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 four times a year.
Return on equity
Profit for the year x 100
Average equity
Net asset value per share
Year-end equity
number of shares year end
Norwegian general insurance
Comprises Tryg Forsikring A/S, Norwegian branch and the Norwegian
branch of Tryg 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
Quoted price
Earnings per share
Quoted price/net asset value
Run-off result
The difference between provisions for claims at the beginning of the
financial 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 EU
Commission. The new rules are expected to come into effect in
2013/2014.
Solvency margin
Premiums earned, net of reinsurance x 100
Capital base
Solvency ratio
Ratio of capital base to capital requirement
Swedish general insurance
Comprises Tryg Forsikring A/S, Swedish branch and the Swedish
branch of Tryg Garantiforsikring A/S.
Quoted price
Net asset value per share
Tier 1 capital
Shareholders’ equity less intangible assets/goodwill and tax asset
Relative run-off gains/losses
Run-off result relative to provisions for claims,
beginning of year.
Reserve ratio, provisions for claims
Provisions for claims x 100
Gross premiums earned
Total reserve ratio
Reserve ratio, provisions for claims + provisions for unearned
premiums
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 pro-
vision is not recognised under claims, but in technical interest in the
income statement.
150 | Annual report 2011 | Tryg A/S
Disclaimer
Certain statements in this annual report are based on the
Tryg urges readers to refer to the section on risk management
beliefs of our management as well as assumptions made by
for a description of some of the factors that could affect
and information currently available to management. Statements
the Group’s future performance or the insurance industri.
regarding Tryg’s future results of operations, financial condition,
cash flows, business strategy, plans and future objectives other
Should one or more of these risks or uncertainties materialise
than statements of historical fact can generally be identified by
or should any underlying assumptions prove to be incorrect,
terminology such as ’targets’, ’believes’, ’expects’, ’aims’, ’in-
Tryg’s actual financial condition or results of operations
tends’, ’plans’, ’seeks’, ’will’, ’may’, ’anticipates’, ’would’, ’could’,
could materially differ from that described herein as anticipart-
’continues’ or similar expressions.
ed, believed, estimated or expected.
A number of different factors may cause the actual performance
Tryg 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, devel-
opments in the financial markets, extra ordinary events such as
natural disasters or terrorist atttacks, changes in legislation or
case law and reinsurance.
Tryg A/S | Annual report 2011 | 151
Group chart
Tryg A/S
Tryg Forsikring A/S
Tryg Garanti-
forsikring A/S
(Dansk Kaution)
Moderna
Forsäkringar
(Swedish branch)
Tryg Forsikring
Inclusive Enter
(Norwegian branch)
Respons
Inkasso AS
(Norway)
Tryg
(Finnish branch)
Tryg Garanti
(Norwegian branch)
Moderna
Garanti
(Swedish branch)
Tryg Garanti
(Finnish branch)
Ejendoms-
selskabet
af 8. maj 2008
A/S
Tryg
Ejendomme A/S
Vesta
Eiendom AS
(Norway)
Komplementar-
selskabet
af 1. marts
2006 ApS (50 %)
Thunesvei 2 AS
946 919 845
(Norway)
Ejendoms-
selskabet af
1. marts
2006 P/S (50 %)
ANS Grensen 3
848 383 082
(99 %)
(Norway)
Group chart at 1 January 2012. Companies and branches are wholly-owned
by Danish owners and placed in Denmark unless otherwise stated.
Company
Branch
152 | Annual report 2011 | Tryg A/S
Content
tryg.com
Management’s report
About Tryg
Preface
Financial highlights
Outline of Tryg
Highlights of the year
Results
Tryg’s financial performance
Private Nordic
Commercial Nordic
Corporate Nordic
Investment activities
Outlook
Strategy and the insurance market
Strategy
KPI – (Key Performance Indicators)
The insurance market
Customers and products
Capital management and risk management
Capital management and risk management
Management
Supervisory Board
Group Executive Management
Employees
Corporate governance
Corporate Social Responsibility – CSR
The Tryg share
Accounts
Statement by the Supervisory Board and the Executive Management
Independent auditor’s report
Independent auditor’s report on TRYG A/S’ CSR data for 2011
Financial highlights and key ratios
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes – Tryg Group
Income statement (parent company)
Statement of financial position (parent company)
Statement of changes in equity (parent company)
Notes (parent company)
Fourth quarter of 2011 | Quarterly outline
Fourth quarter of 2011 | Geographical segments
Other key figures
Glossary
Disclaimer
Group chart
Editors
Investor Relations
Design
Layout
e-types
amo design
Printers Centertryk A/S
Munken Polar
Paper
This is a translation of the Danish annual report 2011. In case of any discrepancy between the Danish and the English version of the annual report 2011,
the Danish version shall apply.
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Tryg A/S
Klausdalsbrovej 601
2750 Ballerup
Denmark
+45 70 11 20 20
tryg.com
CVR-no. 26460212
Annual report 2011