Tryg Annual Report 2020 | Quarterlytics

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FY2020 Annual Report · Tryg

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Annual report 2020

As the world changes,
we make it easier to be tryg

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Contents

Management’s review

Highlights
Tryg at a glance
Business areas
Income overview
Introduction by Chairman
and Group CEO
Events 2020
Financial outlook
Targets and strategy
Tryg’s results
Private
Commercial
Corporate
Sweden
Investment activities
Solvency and dividend
Investor information
Corporate governance
Supervisory Board
Executive Board
Corporate Responsibility in Tryg

Financial statements

Financial statements
Group chart
Glossary
Product overview

03
04
05
06

07
09
10
13
17
21
23
25
27
29
31
33
35
40
43
44

49
118
119
121

Tryg at
a glance

Tryg aims to pay a nominal, stable
and increasing ordinary dividend, while
maintaining stable results and a high
level of return on capital employed

Shareholder remuneration
(DKK per share)

3.5

3.3

1.65

6.2

6.4

6.6

6.8

7.0

2016

2017

2018

2019

2020

Ordinary dividend

Extraordinary dividend

Investor information

Introduction by
Chairman and
Group CEO

Financial
outlook

Annual report 2020 | Tryg A/S |

Highlights 2020

Financial 2020

7.0%

Premium growth
in local currencies

14.1

Expense ratio

3,495m

Technical result (DKK)

Financial Q4

7.4%

Premium growth
in local currencies

14.0

Expense ratio

780m

Technical result

2019: 6.1% excl. Alka

2019: 14.2

2019: 3,237m

2019: 5.6% excl. Alka

2019: 14.6

2019: 762m

585m 311m 3,541m

513m 513m

1,223m

Return on free
investments portfolio
(DKK)

Total investment
return (DKK)

Profit before tax
(DKK)

Return on free
investments portfolio
(DKK)

Total investment
return (DKK)

Profit before tax
(DKK)

Management’s review - Contents

Customer Q4

33%

Increase in awareness
of TryghedsGruppen’s
member bonus among
non-customers

2019: 28%

3.9

Number of products
per customer

2019: 857m

2019: 579m

2019: 3,628m

2019: 226m

2019: 198m

2019: 940m

2019: 3.8

7.00

Total annual dividend
per share (DKK)

84.5

183

Combined ratio

Solvency ratio

1.75

Q4 dividend
per share
(DKK)

86.3

Combined ratio

0.6%

Improvement of under
lying claims ratio
(Group) percentage
points

TNPS

2019: 68

2019: 6.80

2019: 85.1

2019: 162

2019: 1.70

2019: 86.1

2019: 0.5%

Tryg reported a premium growth of 7.0%. The
technical result of DKK 3,495m (DKK 3,237m)
was impacted by continued positive develop-
ments in the core business, the delivery of the

Alka synergies and lower than normal large and
weather claims. Investment income of DKK
311m (DKK 579m) driven by positive financial
market returns in a year characterised by signif-

icant volatility after the outbreak of COVID-19
in Q1 2020 and related worries regarding the
macroeconomic environment. Profit before tax
of DKK 3,541m (DKK 3,628m).

Quarterly dividend of DKK 1.75 per share,
supporting TryghedsGruppen’s member bonus.
Solvency ratio of 183.

Annual report 2020 | Tryg A/S | Tryg at a glance

As the world changes, we
make it easier to be tryg*

Strong market position

4 million customers

Tryg is one of the largest non-life insurance
companies in the Nordic region. We are the
largest player in Denmark and the fourth-
largest in Norway. In Sweden, we are the
fifth-largest company in the market.

Our 4.400 employees provide peace of mind
for 4 million customers and handle approxi-
mately 1 million claims on a yearly basis.

Attractive
dividend policy

We aim to distribute a
nominal, stable increase
in dividend and to pay out
60-90% of our profit.

Broad diversity
of products

Trygheds
Gruppen

We offer a broad range
of insurance products for
private individuals as well
as businesses.

TryghedsGruppen owns
53% of Tryg and contribu-
tes to projects that create
peace of mind via Tryg-
Fonden. In 2020, Tryg-
Fonden has contributed
with up to DKK 650m.

Read more about our history on tryg.com

* ‘Tryg’ means feeling protected and cared for.

Management’s review - Contents

Sweden

Norway

Denmark

Market position

13.1%

Market share

22.9%

Market share

3.3 %

Market share

Employees

2,8594411,100Annual report 2020 | Tryg A/S | Business areas

Management’s review - Contents

Private

Commercial

Corporate

Sweden

Private provides insurance products
to private customers in Denmark and
Norway. Private offers a range of
insurance products including motor,
contents, house, accident, travel,
motorcycles, pet and health.

Commercial provides insurance
products including motor, property,
liability, workers’ compensation, travel
and health to small and medium-sized
business in Denmark and Norway.

Corporate provides insurance products
including property, liability, workers’
compensation, transport, group life etc.
to corporate customers under the brand
Tryg in Denmark and Norway, and Mod-
erna in Sweden. Tryg is part of the global
AXA Corporate solutions network.

Sweden provides insurance products to
private individuals within car, house, pet,
child, boat and accident insurance etc.

56%

of premiums

1,344

employees a)

20%

of premiums

538

employees a)

17%

of premiums

291

employees a)

of premiums

408

employees a)

Distribution channels

Own sales agents • Call centres •
Real estate agents • Internet •
Car dealers • Franchises

Call centres • Internet •
Own sales agents • Franchise offices

Own sales agents •
Insurance brokers

Own sales agents • Call centres •
Internet

Brands

a) Employee numbers do not include shared service units such as IT, Finance etc. and claims departments

Annual report 2020 | Tryg A/S | Income overview

DKKm

Q4 2020

Q4 2019

2020

2019

2018

2017

2016

Management’s review - Contents

Gross premium income
Gross claims
Total insurance operating costs
Profit/loss on gross business
Profit/loss on ceded business
Insurance technical interest, net of reinsurance
Technical result
Investment return after insurance technical interest
Other income and costs
Profit/loss before tax
Tax
Profit/loss on continuing business
Profit/loss on discontinued and divested business after tax
Profit/loss
Run-off gains/losses, net of reinsurance

Key figures
Total equity
Return on equity after tax (%)
Number of shares 31 December (1,000)
Earnings per share (DKK)
Operating earnings per share (DKK) a)
Net asset value per share (DKK)
Ordinary dividend per share (DKK)
Extraordinary dividend per share (DKK)

Premium growth in local currencies

Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio

Run-off, net of reinsurance (%)
Large claims, net of reinsurance (%)
Weather claims, net of reinsurance (%)
Discounting (%)
COVID-19 claims, net of reinsurance (%)

Combined ratio on business areas
Private
Commercial
Corporate
Sweden
a) Adjusted for depreciation on intangible assets related to Brands and Customer relations after tax
Note: Tryg´s acquisition of Alka affects the Financial Statement from closing the 8 November 2018

5,744
-3,963
-806
975
-187
-7
780
513
-70
1,223
-185
1,038
0
1,038
314

12,264
34.2
301,750
3.44
3.53

1.75

7.4

69.0
3.3
72.3
14.0
86.3

-5.5
3.5
2.6
0.2
-0.9

83.3
86.4
100.5
75.5

5,479
-3,851
-798
829
-66
0
762
198
-20
940
-234
706
-1
705
256

12,085
23.0
301,700
2.33
2.46

1.70

10.4

70.3
1.2
71.5
14.6
86.1

-4.7
1.8
1.7
0.7
0.0

83.8
90.3
92.6
75.3

22,653
-15,437
-3,202
4,014
-499
-20
3,495
311
-265
3,541
-768
2,773
0
2,773
1,145

12,264
22.5
301,750
9.19
9.54
40.64
7.00

7.0

68.1
2.2
70.3
14.1
84.5

-5.1
2.2
1.6
0.2
-0.8

83.9
83.3
88.0
83.2

21,741
-14,857
-3,081
3,803
-566
1
3,237
579
-188
3,628
-783
2,845
-2
2,843
1,194

12,085
24.6
301,700
9.42
9.82
40.05
6.80
1.65

17.1

68.3
2.6
70.9
14.2
85.1

-5.5
2.1
1.9
0.7
0.0

83.7
86.8
87.6
84.8

18,740
-12,636
-2,704
3,400
-624
-10
2,766
-332
-172
2,262
-529
1,733
-2
1,731
1,221

11,334
14.9
301,743
5.73
5.84
37.56
6.60

6.3

67.4
3.3
70.7
14.4
85.1

-6.5
2.6
2.0
1.1
0.0

81.6
80.3
95.6
86.0

17,963
-11,865
-2,516
3,582
-779
-14
2,789
527
-77
3,239
-720
2,519
-2
2,517
972

12,616
28.8
301,945
9.12
9.12
41.78
6.40
3.31

1.7

66.1
4.3
70.4
14.0
84.4

-5.4
1.4
1.7
1.0
0.0

82.1
82.6
90.0
88.1

17,707
-11,619
-2,737
3,351
-951
-10
2,390
987
-157
3,220
-748
2,472
-1
2,471
1,239

9,437
26.2
274,595
8.84
8.84
34.37
6.20
3.54

0.1

65.6
5.4
71.0
15.7
86.7

-7.0
2.2
2.0
0.9
0.0

83.8
82.1
88.8
90.7

Annual report 2020 | Tryg A/S | Management’s review - Contents

Meeting 2020
targets and a
potential
acquisition that
will create the
biggest nonlife
insurer in
Scandinavia

Introduction by
Chairman & Group CEO

Annual report 2020 | Tryg A/S | All financial targets met
In 2020, Tryg met all the financial targets pre-
sented at the Capital markets day (CMD) in No-
vember 2017. The technical result target of DKK
3,300bn should be seen against a full-year techi-
nal result of DKK 3,495bn, the combined ratio
target of ≤ 86 should be seen against a full-year
combined ratio of 84.5, and the expense ratio
target of ~14 should be seen against a full-year
expense ratio of 14.1. In a stock exchange an-
nouncement on March 27, Tryg abandoned the
≥ 21% after tax ROE target for 2020 following
unprecedented capital market developments in
Q1. The mark to market losses in Q1 were more
than fully recovered in the following quarters,
and Tryg is reporting a FY ROE of 22.5%.

Achieving targets through strategic initiatives
Tryg has defined four strategic initiatives to
achieve its financial targets, including continu-
ous work on claims excellence through leverag-
ing of Tryg's procurement power and capitalising
Alka’s fraud capabilities.

Many customers prefer digital communication,
and Tryg aims to offer a wide range of digital
self-service solutions, including solutions that
enable customers to access exactly which
products and coverage they need, buy insurance

products, make changes to existing products and
to report claims. In 2020, more than 5 million
customers logged in to Tryg’s digital self- service
offerings.

Tryg continued to focus on distribution efficien-
cy, and in 2020 the continued use of agents
was the primary driver of benefits. Private in
Denmark and Norway as well as Commercial in
Denmark have been particularly successful in
using agents.

Tryg is constantly developing new products and
services, which has resulted in the launch of
more than 50 new products and services since
the beginning of 2018. These products and ser-
vices meet customer demand and are increasing
Tryg's share of wallet.

Strong customer focus
Tryg continues to have a strong customer focus.
In 2020, the Transaction Net Promotor Score
(TNPS) was 72, exceeding the ambitious target
of 70. The number of products per customer
was 3.9 in 2020, corresponding to growth of 7%
per customer, and therefore slightly lower than
the targeted 4.0. This is mainly due to strong
growth in the car sales channel in Norway selling
only motor insurance.

”

Tryg has a strong focus on ensuring that
shareholders receive a nominal and stable
increase in dividends. A total dividend of
DKK 7.00 per share will be paid for 2020.

High profitable growth driven by
Private segment
Tryg reported a premium growth of 7.0%, driven
by strong growth of 9.0% in the profitable Pri-
vate segment in both Denmark and Norway. The
Commercial segment also reported a positive
growth of 6.0%, supported by both Denmark
and Norway. Corporate reported a growth of
1.4%, reflecting a continued focus on improving
profitability in all countries. The development
in 2020 supports the focus to rebalance the
portfolio with more Private and Commercial
business and less Corporate business.

Stable and increasing dividend to shareholders
Tryg has a strong focus on ensuring that share-
holders receive a nominal and stable increase
in dividends. A total dividend of DKK 7.00 per
share will be paid for 2020 (DKK 6.80 in 2019).
After the significant negative impact of COVID-19
in Q1 2020, Tryg announced an annual dividend
decision instead of quarterly dividend payment.
However, despite challenging times, Tryg's
business model proved very resilient, and it was
therefore decided on 9 November 2020 to pay out
a dividend of DKK 5.25 per share for the first three
quarters of 2020. In Q4, Tryg will pay a dividend
per share of DKK 1.75.

Recommended cash offer for RSA
Insurance Group Plc
On 18 November, Tryg made a recommended
cash offer together with the Canadian insurer
Intact Financial Corporation to acquire RSA
Insurance Group Plc. As part of the transaction,
Tryg will take over RSA's Swedish and Norwegian
businesses and co-own RSA’s Danish business
on a 50/50 economic basis. The acquisition will
make Tryg the biggest non-life insurer in Scandi-
navia and create a much more balanced group
with a significantly strengthened presence in

Management’s review - Contents

Sweden. The acquisition is expected to achieve
an ROI of around 7%, result in the high teen EPS
accretion by 2023 and double the technical result
(including DKK 900m of synergies) in 2024. Tryg
takes confidence from the Alka acquisition, which
delivered synergies of DKK 176m in 2020 against
a target of DKK 150m.

A year with COVID-19
COVID-19 impacted 2020 in many ways. Pri-
marily, it led to changed ways of working for all
employees with much more working from home
and virtual meetings. Despite this big change,
Tryg managed to improve customer satisfac-
tion and maintain high sales level due to very
flexible employees and strong customer focus.
The financial impact of COVID-19 was limited in
2020 with a large loss driven by travel insurance
claims in Q1 2020 fully offset by lower claims
frequencies in the following quarters.

Thanks to all employees
2020 was a very challenging year for all the
employees in Tryg as a result of COVID-19. We are
very proud to see how the employees adapted to
a new and unprecedented situation with a contin-
ued strong customer focus. Furthermore, even in
this difficult situation we saw that job satisfaction
increased to 80 in 2020 against 78 in 2019. The
Supervisory Board and the Executive Board would
like to thank all employees for their great efforts.

JUKKA PERTOLA
Chairman

MORTEN HÜBBE
Group CEO

Annual report 2020 | Tryg A/S |
Events in 2020
Group

Norway

Management changes in Corporate
In 2020, two new directors in Corporate Norway
and Denmark as well as a new country manager
in the Swedish business, Moderna, were appoint-
ed. The recruitment of the new management
is aligned with Tryg’s ambition to increase our
focus on profitability initiatives in all Corporate
segments in the coming years.

Tryg works from home
Since March 2020, the vast majority of Tryg’s
employees in Denmark, Sweden and Norway
have been working from home as a result of COV-
ID-19. Throughout this period, it has been a key
priority to ensure strong operations and maintain
a high level of customer satisfaction. It was very
positive to see an increase in the overall TNPS
score reaching an all-time high level under these
conditions.

Recommended cash offer for RSA
Insurance Group plc
On 18 November, Tryg made a cash offer togeth-
er with the Canadian insurer Intact to acquire
RSA according to which Tryg would take over the
Swedish and Norwegian businesses and co-own
RSA’s Danish business on a 50/50 economic
basis. Following the acquisition, Tryg will be the
largest non-life insurance company in Scandina-
via with a much more balanced portfolio across
Denmark, Sweden and Norway. At the EGM on 18
December 2020, the Supervisory Board was au-
thorised to increase the company’s share capital
to finance the bid of approximately DKK 35bn.

Renewal of big partner agreements
Tryg renewed its big partner agreements with
UDF (Union of Education Norway) and NMF (Nor-
wegian Band Federation) in Q4 2020 for three
and five years, respectively. Partner agreements
are very important for the Norwegian business,
and Tryg was therefore pleased to renew these
agreements on good terms for all parties.

Tryg Smart
A number of NITO (Norwegian Engineer Organ-
isation) members were offered to test a sensor
package that will be installed in the members’
holiday homes. Through an app, members can
check temperature, leaks, smoke and electricity
consumption. The initiative is tailored to NITO's
members and supports Tryg's strong focus on
prevention and digitalisation.

Management’s review - Contents

Denmark

Sweden

Tryg Sund
In 2020, Tryg’s own app ‘Tryg Sund’ (‘Tryg Health’)
was launched. Tryg Sund provides users with
an overview of health insurance services, such
as Tryg Medical Hotline, as well as guidance on
ways to improve health, while also enabling cus-
tomers to report claims directly from the app. In
the first month following its launch, the app had
more than 4,000 downloads from AppStore and
GooglePlay.

TryghedsGruppen’s member bonus
For the fifth consecutive year, TryghedsGruppen,
Tryg’s majority shareholder, paid out a member
bonus for 2020 of DKK 985m, equivalent to 8%
of premiums paid for 2019. The bonus was paid
to Tryg and Alka customers in Denmark, or every
fourth Dane.

Tryg Bilpleje – new digitally driven
prevention product
In Q1 2020, ‘Tryg Bilpleje’ (‘Tryg Car Service’) was
launched in Denmark for private customers. For a
monthly fee, the product offers access to a num-
ber of light car services such as car wash, change
of tyres and seasonal car check-ups – all in one
package. Tryg Bilpleje is the first fully digitalised
product. This means that customers can only
buy and use the product digitally, which makes it
more convenient for them to use the services.

A good year for Bilsport & MC and Atlantica
Moderna’s enthusiast brands – Bilsport & MC (for
car and motorcycle enthusiasts) and Atlantica (for
boats) – have shown that profitability and growth
can go hand in hand. A new product offered by
Bilsport & MC was the single most important con-
tributor to delivering full-year sales targets already
in Q3 2020. Atlantica has benefitted from people
holidaying in Sweden and has met full-year sales
target with comfortable margins.

Strong development together with new
and old partners
During 2020, existing partner channels devel-
oped, and furthermore new partnerships were
launched. For example, Moderna launched Me-
konomen Bilförsäkring together with the existing
partner Mekonomen and broadened its product
offering through Akademikerförsäkring to include
the Bilsport & MC and Atlantica product ranges.

Digital seminars
During the year, Commercial and Corporate in
Moderna arranged a number of digital seminars
for brokers all around Sweden. They attracted
more than 10,000 participants in the course of
the year, and levels of engagement were high,
both internally and externally.

Annual report 2020 | Tryg A/S | Financial outlook

In 2020, the outbreak of COVID-19 across the world resulted in a lot
of human pain, devastation and uncertainties, and sharply dampened
the economic outlook. The Scandinavian economies entered the crisis
in a better position than most countries with good growth levels, bal-
anced public finances and low levels of unemployment.

Governments across Scandinavia have, to differ-
ent extents, introduced schemes to help busi-
nesses in these very challenging times. The start
of vaccination programmes towards the end of
the year is expected to gradually help improve
the macroeconomic outlook in 2021. However,
due to the enduring uncertainty, the macroeco-
nomic backdrop remains challenging.

The Nordic non-life insurance markets remain
relatively stable in terms of top-line growth and
product offerings. The Nordic countries are
characterised by a high level of non-life insur-
ance penetration – ratios of non-life insurance
premiums in % of GDP are some of the highest
in the world. This is attributable to the fact that
households are generally wealthy and tend to
cover their insurance needs relatively well.

Retention levels are very high in the Nordic re-
gion compared to nearly everywhere else in the
world. This is a key profitability driver as it helps
insurers keep their overall expenses low. Reten-
tion rates hover around 90% in the Private and
Commercial (SMEs) segments, which represent
more than 80% of Tryg’s total business. A direct
distribution model also contributes significantly

to the very efficient set-up. At the end of 2020,
Tryg reported an expense ratio of 14.1, which
is in line with the target of ~14. In comparison,
most international insurers report expense
ratios between 25 and 30.

Tryg’s reserves position remains strong. On the
CMD in November 2017, it was disclosed that
run-off gains were expected to be between
3% and 5% in 2020. Tryg’s systematic claims
reserving approach still includes a margin of
approximately 3% on best estimate.

In 2021, weather and large claims both net of re-
insurance are expected to total DKK 600m and
DKK 550m, respectively, which is unchanged
compared to previous years.

The interest rate used to discount Tryg’s tech-
nical provisions is historically low. An interest
rate increase will have a positive effect on Tryg’s
results. An interest rate increase of 1 percentage
point will increase the pre-tax result by around
DKK 300m, and vice versa. The calculation
includes the lower claims in the P&L from higher
discounting, the higher technical interest and the
higher return on the bonds in the free portfolio.

Management’s review - Contents

Annual report 2020 | Tryg A/S | Recommended offer for RSA Insurance Group plc

Establishing the biggest non-life insurer in Scandinavia and becoming
#3 insurer across all Scandinavian countries

Tryg technical result pre-acquisition,
Five-year avg., %1

Tryg technical result post-acquisition,
Pro-forma, %2

Synergies to be realised (DKKm)

67%
DK

27%
NO

6%
SE

48%
SE

42%
DK

10%
NO

~900

~650

~350

~60

2021

2022

2023

2024

Expected deal returns

Sweden

Norway

Denmark

ROI

EPS

High-teens EPS
accretion in 2023

~17% ~16%

Market share
(Pro-forma)

Remain
#1 player

Public announcement
on 18 November 2020

Shareholder vote
Tryg on 18 December 2020
RSA on 18 January 2021

Rights issue
(H1 2021)

Expected deal closing
(Q2 2021)

Separation estimated
complete (Q1 2022)

1) Five-year average, 2015-2019
2) Pro-forma technical result based on reported five-year historical average contribution by country

for Tryg and Denmark, Sweden, Norway, plus estimated transaction synergies by country

Source: Investor Presentation: Recommended Offer for RSA Insurance Group plc (available on tryg.com)

Management’s review - Contents

The investment portfolio is divided into a match
portfolio corresponding to the technical provi-
sions, and a free portfolio. The objective is for the
return on the match portfolio to be approximate-
ly zero as capital gains and losses on the assets
side should be mirrored by corresponding devel-
opments on the liabilities side. The free portfolio
is invested in different asset classes with a view
to obtaining the best risk-adjusted return.

The return on bonds in the free portfolio (slightly
above 60% of the free portfolio) will vary, but
given current interest rate levels, a very low
return is expected. For shares, the expected
return is around 7% with the MSCI World Index
as benchmark, while the expected return for
property is around 5%. The investment return
in the income statement also includes the cost
of managing investments, the cost of currency
hedges, interest expenses on subordinated
loans and other minor items.

2021 outlook
The three-year strategy period ended in 2020
with Tryg meeting all its financial targets. A new
capital markets day was initially scheduled for
29 January 2021 but it has been postponed until
the autumn following the recommended cash offer
for RSA Insurance Group plc and pending approval
by the regulatory authorities. The acquisition is
considered transformational as it will create the
largest Scandinavian non-life insurer, doubling the
pro-forma technical result. Therefore, including the
acquired asset in future financial targets is deemed
essential for Tryg’s next Capital Markets Day.

Tryg has decided to publish a detailed outlook
for 2021 together with the publication of the
annual report. It is important to note that Tryg
will not publish annual financial guidance going
forward (i.e. in future annual reports) but will

Annual report 2020 | Tryg A/S | always refer to the financial targets presented at
the next Capital Markets Day in autumn 2021 for
the next three years ending in 2024.

Tryg stand-alone
Tryg (excluding RSA’s assets) expects a techni-
cal result of between DKK 3.3bn and 3.7bn in
2021. The range is driven by the natural volatility
of large and weather claims and the more
challenging macroeconomic outlook (compared
to past years), which could impact the top line
especially in the Commercial and Corporate
segments. The low end of the range would imply
a significantly higher level of weather and large
claims compared to a normalised guidance of
large claims of DKK 550m and weather claims
of DKK 600m a year. Run-off gains are expected
to be between 3-5%.

Tryg has guided previously for a normalised
investment income between DKK 0 and DKK
200m. A newsletter explaining all the moving
parts is available on Tryg.com. The assumptions
remain valid. Additionally a link on tryg.com
provide daily updates on the return of the free
portfolio (the capital of the company), adding
more visibility to the overall investment income.

Other income and costs in the P&L are expected
to be between DKK -150m and DKK -250m.
Tryg is booking in this line the depreciation from
the Alka acquisition, some holding company
costs not related to the insurance portfolio and
the income and costs related to selling pension
products for Danske Bank.

Impact from RSA's assets
The acquisition of RSA’s Norwegian and Swedish
businesses and 50% of RSA's Danish business
is expected to be approved before the end of
Q2. Based on this assumption, RSA’s assets are

expected to be 'equity-accounted' for in H2 2021.
Tryg will book the net profit contribution (for the
relevant period) of the acquired assets under 'in-
come from associates' in the investment activities.
In the table taken from Codan’s SFCR (Solvency
& Financial Condition Report), it is possible to see
the underwriting result by geographies for the past
three years, the investment income (as sum of the
three geographies) and the total net profit. It is im-
portant to note that the subsidiaries Privatsikring
and Holmia are not consolidated in the Group and
therefore not included in these figures but they are
part of the acquisition perimeter.

Tryg has disclosed total costs of DKK 4.4bn costs
related to the RSA transaction. Some of these
costs will be booked in the P&L while some will be
on the balance sheet. During 2020, the deal-con-
tingent forward hedges (derivate contracts
entered to ensure certainty of funds at the time of
R.2.7 announcement) was booked with no impact
in P&L. During 2021, the cost of DKK1.3bn related
to the cost of the contracts will be booked in the
P&L if the acquisition is completed. It is important
to note that the cost related to the DCF hedge
is not tax-deductible. Additionally, DKK 1.6bn
pertaining to underwriting fees for the rights issue
and to financial and legal advisor costs will all be
booked in the balance sheet. Total restructuring
costs of DKK 1.5bn will also be booked in the P&L.
At the time of writing, it is expected that some
DKK 500m will be booked in 2021 and a remain-
ing DKK 1bn in 2022. However, the exact timing
remains uncertain as it is dependent from the
closing of the transaction and relative integration.

A first draft of the purchase price allocation
shows a likely annual intangible assets depreci-
ation (after tax) range between DKK 600m and
DKK 800m expected from 2022.

Management’s review - Contents

Codan Forsikring A/S performance

DKKm

Denmark

Sweden

Norway

Total

2019
Net premiums earned
Underwriting result
Investment result
Net profit

2018
Net premiums earned
Underwriting result
Investment result
Net profit

2017
Net premiums earned
Underwriting result
Investment result
Net profit

Source: Codan's SFCR

4,413
-343

8,540
2,262

1,088
-96

4,699
-28

8,414
1,946

1,062
-179

4,639
453

8,708
1,811

1,347
-54

14,041
1,823
821
2,086

14,175
1,738
36
1,232

14,692
2,209
686
1,965

Costs related to RSA
transaction

DKKbn

2021
Transaction costs
(excluding restructuring)
Restructuring costs

2022
Restructuring costs
Total

*Non-tax deductible

Balance
sheet

P&L

1.3*
0.5

1.0

1.6*

4.4

Solvency and dividends
Tryg expects to pay dividends of between 2.6 and
3.0bn for FY 2021. Tryg has previously disclosed
an expected solvency ratio above 170 at the end
of 2021. That expectation remains unchanged.

Total financing overview

• Equity raise fully underwritten by Mor-
gan Stanley and Danske Bank with firm
commitment from TryghedsGruppen

• Total financing amount will cover:
- Price of acquired assets
- Costs, including restructuring, inte-

gration, separation and other transac-
tion costs, of ~DKK 4.4bn pre-tax

- Separation costs partly relate to

de-merger of Trygg-Hansa and Codan
Norway out of RSA DK

• Financing is calibrated to maintain
strong capitalisation post-closing

Source: Investor Presentation: Recommended Offer
for RSA Insurance Group plc, page 25 (available on
tryg.com)

Annual report 2020 | Tryg A/S | Targets and strategy

At the Capital Markets Day in November 2017, Tryg announced a
set of financial and non-financial targets for 2020. The financial
targets were later updated following the acquisition of Alka. Along
with a new strategy, a new purpose was defined.

Management’s review - Contents

Our purpose

As the world changes,
we make it easier to be tryg*

Grasping opportunities to
develop rather than just
defending our business
• Digitalisation
• New products
• Analytics

Adjusting to customer
preferences and needs
• Self-service
• Straight-through

processing

• Packaging of products

Increasing customer
relevance and share
of wallet
• Product innovation
• Prevention
• Add-on services

‘As the world changes, we make it easier to be
tryg’. This purpose has been the overarching
principle guiding the realisation of the targets for
2020. Four strategic initiatives were defined to
support the financial and non-financial targets:
claims excellence, digital empowerment of cus-
tomers, product & service innovation and distri-
bution efficiency as well as Alka synergies, all of
which are described in detail on page 14-16.

The importance of customer relations
Customer satisfaction is of paramount impor-
tance. Tryg continually strives to strengthen
customer relations through advisory services,
products, concepts, claims handling procedures
and claims prevention measures. Satisfied
customers improve retention levels, which hover
around 90% for Tryg’s Private and Commercial
customers. Since 2012, customer targets have
been an integrated part of the CMD targets,
reflecting Tryg's strong focus on customer
satisfaction.

Employees are a key resource
Tryg’s employees are essential to delivering
the overarching purpose of making it easier to
be ‘tryg’ for the customers. All employees are

encouraged to understand that they play an
integral role in supporting the overall purpose.
Therefore, clear and ambitious targets are set
for each individual employee – and regular feed-
back must be provided.

Employee satisfaction
(Index)

s E m ployees

Distribution
Own sales force
and partners

e
e
y
o
p
m

g
n
i
c
i
r
P

g
n
d
r
o
c
c
a
g
n
c
i
r
P

e
fi
o
r
p
k
s
i
r
o
t

Insurance
Prevention
Claims handling

p
r
o
d
u
c
t

r
a
n
g
e

F
u

l
l

n
o
n
-
l
i
f
e

P
r
o
d
u
c
t
s

Tryg

Nordic

Nordic financial
market

2019

2020

Tryg has an employee satisfaction level above the average of
the Nordic sector.
Source: Global Employee and Leadership Index

Processes
Combination of in-
house and sourcing

Employe e s

*’Tryg’ means feeling protected and cared for

Tryg’s business model
Tryg makes it easier to be
‘tryg’ for its customers by
offering them insurance
against risk, efficient claims
handling, and advice and
services to prevent claims
from arising in the first place.
By making it easier for our
customers to feel protected
and cared for, we benefit all
of Tryg’s stakeholders. Via
TryghedsGruppen’s 53%
ownership of Tryg, part of the
company’s profit is returned
to customers, who are also
members of TryghedsGrup-
pen. Tryg’s purpose is valid
for all stakeholders – our cus-
tomers, our employees and
our shareholders.

m
p
o
y
e
e
s

Annual report 2020 | Tryg A/S |

Followup on 2020 targets

Financial targets

3,495m

Technical result (DKK)
2020 target: 3.3bn

14.1

Expense ratio
2020 target: ~14

84.5

Combined ratio
2020 target: ≤86

Customer targets

TNPS
2020 target: 70

3.9

Products per customer
2020 target: 4.0

In 2020, Tryg was very pleased to see a his-
torically high level of employee satisfaction,
surpassing the general level of employee
satisfaction in the financial sector in the Nordics.
Tryg is aiming for the highest level of employee
satisfaction in the financial sector in the Nordic
region.

Creating value for our shareholders
Tryg’s shareholders must see Tryg as a company
with a clear focus on profitability and efficiency,
which reflects the company’s core strategy and
its financial targets. Tryg’s performance can be
measured by its long-term total shareholder
return. Tryg aims to pay a nominal, stable and
increasing ordinary dividend, while maintaining
stable results and a high level of return on capital
employed.

Financial targets
In November 2017 at a CMD, Tryg communicat-
ed a set of financial targets for 2020. Tryg’s main
target for 2020 was a technical result of DKK
3.3bn, which has been met with Tryg reporting
a technical result of DKK 3,495m for 2020. The
financial target of an expense ratio ~14 and a
combined ratio at or below 86 were also met.
The ROE target at or above 21% was suspended,
as communicated in the stock exchange an-
nouncement on 27 March 2020, considering the
mark-to-market investment losses in Q1 2020.
However, following the rebound of the financial
markets in the last three quarters of the year,
Tryg reported an ROE of 22.5% for the FY, and
therefore realised the initial target.

for 2020. This was reflected in an increased fo-
cus on customer satisfaction measured through
the TNPS score. In 2020, Tryg reached a TNPS
level of 72, and the target was therefore met.

There is a strong correlation between cus-
tomer loyalty and the number of products per
customer, and therefore a target of increasing
the number of products per customer by 10%
was defined. In the strategy period, the number
of products per customer was 3.9, an increase
of 7%. Tryg's efforts in partnering with car deal-
erships have resulted in a higher-than-expected
amount of one-product customers. As growth
in this particular segment has been higher than
expected, the 10% increase in products per
customer has not been achieved. However, Tryg
considers the increase in products per custom-
er as being satisfactory, and the potential for
enhancing the coverage for new customers from
our car channels will be explored going forward.

Strategic initiatives
Tryg defined four strategic initiatives to support
both its financial targets and customer targets
for 2020. KPIs have been defined for each initi-
ative. Furthermore, synergies related to Alka will
also be part of the initiatives.

Claims excellence is the most important strate-
gic initiative for improving the technical result.
The target was to reduce claims costs by DKK
600m in 2020, and during the three-year period
accumulated savings of DKK 640m has been
realised.

Customer targets
In Tryg, customer satisfaction is of paramount
importance, and Tryg has therefore worked
intensively to continually improve the customer
experience and reaching the customer targets

One of the main initiatives has been to further
leverage Tryg’s procurement power, and cost
savings of more than DKK 350m were realised.
Initiatives in the strategy period include the
renewal of a contract for windscreen services, a

Management’s review - Contents

600

Claims excellence
(DKKm)

640

290

200

150

Realised

Target

2018

2019

2020

new five-year contract with Recover Nordic (the
largest Nordic claims service group) and a claims
agreement for electronic products (such as tab-
lets, laptops and mobile phones) in Denmark.

Fraud detection has been another important
driver of the claims excellence initiative in
the strategy period. Following the successful
integration of Alka, a more sophisticated fraud
detection methodology has been implemented
across Tryg's claims-handling units. Initially,
the methodology was implemented in Tryg
Denmark in 2019, followed in 2020 by Norway
and Sweden. The methodology is based both
on automated fraud detection algorithms in the
claims-handling systems, and enhanced training
of employees. Additional cost savings of DKK
70m compared to 2017 have been realised.

Finally, improving the claims-handling process
has also been an important driver to success-
fully meet the target, with realised accumulated

Annual report 2020 | Tryg A/S | cost savings at DKK 220m in the strategy period.
The benefits have been realised through more
accurate claims assessments, better recourse
management, data and speech analytics and the
ongoing implementation of a new claims-han-
dling system in Denmark and Norway. The
previously mentioned focus areas all aim at
improving the claims process for the custom-
er, providing a far more efficient and relevant
experience.

Digital empowerment of customers is another
important initiative in Tryg. Digital services, sim-
plification and efficient customer interaction are
becoming increasingly important for customers.
Customers in general prefer speedy processes,
and therefore digital solutions also support
Tryg’s focus on customer satisfaction. The target
for 2020 was 50% straight-through processing
(STP) of claims and a self-service level of 70%
for all contacts with Tryg. The focus on digital

Digital empowerment of customers
(DKKm)

100

120

Realised

Target

2018

2019

2020

services in Tryg contributed DKK 120m to the
financial targets as well as improving customer
satisfaction.

In the past three years, Tryg has experienced
a general increase in the number of customer
contacts. Approximately 5 million logins to
the digital universe were registered in 2020,
corresponding to a 182% increase compared to
2017. In the same period, phone calls increased
approximately 7%. This indicates that many
customers acknowledge and use the new
digital solutions, but at the same time still value
personal contact. Tryg believes that the general
increase in customer contact is positive and
supports both sales and customer interaction
and loyalty.

The increase in log-ins is generated by a number
of new digital self-service solutions such as
digital invoicing, online insurance check-ups and
various ways for customers to order and change
products and register claims. The self-service
target at 70% has been exceeded with the level
of 72%, this has been achieved despite a surge
of phone calls related to the COVID-19 outbreak
in the first part of the year.

In the strategy period, the level of STP of claims
increased due to the use of robotic automa-
tion processes (RPAs) in the claims-handling
process, and due to the implementation of the
new claims-handling system. Even though the
STP target was challenged by the high number
of phoned-in COVID-19-related claims, the new
claims-handling system handled many of the
simple travel claims, and the total STP level of
51% therefore exceeded the target of 50% STP.
In the coming years, the new claims-handling
system is expected to further boost STP levels in
both Denmark and Norway.

Product & service innovation is important for
Tryg to remain relevant to customers in the
future. The target was to increase premiums by
DKK 1,000m from new products and services by
2020+. In the strategy period, premiums from
new products and services increased by DKK
1,060m, meeting the target.

A key initiative is innovation of new products
and services such as cyber insurance, preg-
nancy insurance (in Sweden) offering access to
specialist care after giving birth, and Senior Care
(in Denmark) offering additional care for elderly
people. Premiums from new products in the
strategy period totalled DKK 640m.

Bundling of products has been another impor-
tant focus for Tryg in order to reach the 2020+
target. The aim of bundling products has been
to make insurance products more accessible for
our customers by removing complexity. Based
on Private's positive experience with, e.g., Health

Product & service innovation
(DKKm)

1,000

1,060

410

375

275

Realised

Target

2018

2019

2020

Management’s review - Contents

and Child insurance during the strategy period,
the Commercial business also began to bundle
products. Bundled products generated premi-
ums of DKK 340m in the strategy period.

Prevention is key for the well-being of customers
and a key element in Tryg’s purpose. Products
such as Tryg Drive/Side Kick, a digital device that
rewards good driving behavior, Tryg Alarm, and a
rat blocker to prevent rats from entering drains
following a few mild winters, are all part of Tryg’s
prevention strategy.

Finally, entering new markets and increasing
the profitable credit and surety business, Tryg
Garanti, has also been an important initiative for
realising Tryg’s 2020 targets. In 2019, Tryg Garan-
ti expanded to Germany, Austria and the Nether-
lands, and further expansion is considered.

Increasing distribution efficiency is a strategic
priority for Tryg. The target has been to improve
distribution with an impact of DKK 150m in
2020. The initiative has generated a total impact
of approximately DKK 175m, exceeding the
target.

The improvement has primarily been driven
by improving the distribution channel mix in
the Private and Commercial businesses. The
optimisation has supported an improvement in
the customer experience and lowered the cost
of sales in the strategy period. An important
element in the optimisation of the channel mix
has been the introduction of independent sales
agents during the strategy period in Private Den-
mark and Commercial Denmark, inspired by the
franchise channel in Norway, selling exclusively
on behalf of Tryg.

Annual report 2020 | Tryg A/S | Finally, an important component for improving
distribution efficiency involves partner agree-
ments. In Norway, the partner agreement with
NITO has generated very good leads, increased
sales and retention levels. The agreement with
Danske Bank also got off to a good start in 2019,
generating good leads and sales both for Private
and Commercial customers in Denmark and
Norway. Finally, Tryg’s Norwegian branch, Enter
Forsikring, has in the strategy period launched
‘Enter Proff’, selling car insurance to commercial
customers.

Alka synergies
In connection with the acquisition of Alka, Tryg
communicated a guidance of DKK 300m of
synergies which are expected to be achieved in
2021. At the same time, Tryg announced syner-
gies targets of DKK 75m in 2019, DKK 150m in
2020 and DKK 300m in 2021. Synergies of DKK
90m were realised in 2019 (DKK 75m target).
In 2020, Tryg realised synergies of DKK 176m
(DKK 150m target) demonstrating that it is
slightly ahead of the plan for delivering syner-
gies. Approximately half of the achieved syner-
gies relate to costs, while the inclusion of the
Alka business in Tryg's extensive procurement
network has also been an important driver.

In Q4, Tryg realised synergies of DKK 46m,
comprising DKK 19m from claims, DKK 16m
from costs and DKK 11m from revenue.

Corporate Responsibility
Corporate Responsibility (CR) is an integrated
part of Tryg’s core business and is closely linked
to the purpose ‘as the world changes, we make it
easier to be tryg’. Tryg focuses on activities relat-
ed to human and labour rights, climate and the
environment as well as anti-corruption, and is
actively working to integrate CR into insurance,
claims-handling and prevention activities. CR
plays a role in Tryg's decision making, risk mit-
igation, the improvement and development of
Tryg's products and services, the optimisation of
the operations and business partners, employee
development, and the contributions made to the
societies which Tryg/Moderna is a part of.

Strategy 2021
In 2021, Tryg will continue to build on the strong
foundation within customer and sales excel-
lence that has been established during the past
three years. This will entail the enhancement of
some of the strategic focus areas from the 2020
strategy, as well as additions to these. Further-
more, in 2021 there will be a strong focus on the
B2B segment, and initiatives will be introduced
aimed at growing the Commercial segment, and
at increasing profitability in the Corporate seg-
ment. As regards the acquisition of Trygg-Hansa
in Sweden and Codan in Norway, planning the
integration is a priority in order to ensure that
Tryg will be on track with ambitious synergy
targets as soon as the transaction closes.

Tryg expects to present CMD targets based on
the new strategy in autumn 2021 following the
closing of the acquisition.

Management’s review - Contents

Distribution efficiency
(DKKm)

150

175

Realised

Target

2018

2019

2020

Alka synergies
(DKKm)

135

300

176

150

73 68
19

62
16

41 38
11
30

130

Claims

Cost

Revenue

Total
synergies

Realised synergies Q4 2020
Realised synergies Q1-Q3 2020
Targeted synergies 2020
Targeted synergies 2021

Annual report 2020 | Tryg A/S | Tryg’s results

Premium growth of 7.0% in local currencies was primarily
driven by strong growth in the Private and Commercial segments.
Technical result of DKK 3,495m (DKK 3,237m) was impacted
positively by the underlying claims development, delivery of the
Alka synergies, and lower-than-normal large and weather claims,
which offset a negative currency development and a further drop
in interest rates. Investment income of DKK 311m characterised
by volatility in all quarters driven by the COVID-19 outbreak and
following capital market turbulence. Pre-tax profit of DKK 3,541m.
Quarterly dividend of 1.75 per share, supporting Trygheds-
Gruppen’s member bonus. Solvency ratio of 183.

Results 2020
Premium growth was 7.0%, driven primarily by
strong growth in the Private and Commercial
segments. The Private segment was up 9.0%,
while the Commercial segment was up 6.0%.
Corporate reported a virtually flat top-line devel-
opment. Tryg reported a technical result of DKK
3,495m (DKK 3,237m) impacted positively by
the underlying claims development, delivery of
the Alka synergies, lower-than-normal large and
weather claims and lower claims frequencies
driven by the COVID-19 outbreak. The technical
result was impacted negatively by currency
developments and by even lower levels of
interest rates. The gross impact of the COVID-19
outbreak on the technical result was close to

nil, while the net impact was DKK 141m due
to reinsurance cover of travel insurance. Tryg
reported a combined ratio of 84.5 (85.1), driven
by a claims ratio of 70.3 (70.9) and an expense
ratio of 14.1 (14.2).

The Private segment reported an increased
technical result, driven by the positive top-line
development, an improved underlying claims ra-
tio and lower claims frequencies in selected lines
of business following the outbreak of COVID-19.
The Commercial segment reported an increased
technical result driven by the positive top-line
development, an improved underlying claims
ratio, lower claims frequencies in selected lines
of business following the outbreak of COVID-19

and tight cost control reducing the expense ratio.
The Corporate segment reported a stable tech-
nical result, virtually flat top-line development
as price increases (across all geographies) offset
the loss of some customers. The underlying
claims ratio is moving in the right direction but
more efforts are needed to produce long-term
sustainable returns. Further profitability actions
have been put in place in 2021. Private Sweden
reported a somewhat higher technical result,
top-line development was positive, and a mod-
est improvement in the underlying claims ratio
was recorded.

Synergies from the Alka transaction amounted
to DKK 176m in 2020 with DKK 73m from
claims, DKK 62m from costs and DKK 41m from
revenue synergies. Targeted synergies for 2020
were DKK 150m.

The investment result was DKK 311m (DKK
579m), characterised by high volatility between
quarters. The COVID-19 outbreak caused
wide-spread selling in capital markets in March,
which was followed by a robust recovery in the
following quarters. The macroeconomic picture
looked very bleak in March/April, improved
slightly afterwards, and the start of COVID-19
vaccination programmes towards the end of
2020 and beginning of 2021 is renewing hopes
of stabilisation of the world economy. Equities
closed the year up 13.5%, while corporate
bonds also saw strong returns. In general, all
asset classes in the free portfolio contributed
positively to the strong performance.

Other income and expenses were DKK -265m
(DKK -188m), the increase on 2019 being
explained by a VAT refund in the last quarter
of 2019, by lower income from the pensions
products.

Management’s review - Contents

Financial highlights 2020

3,495m

Technical result (DKK)
2019: 3,237m

3,541m

Profit before tax
2019: 3,628m

70.3

Claims ratio, net
of reinsurance
2019: 70.9

14.1

Gross expense ratio
2019: 14.2

84.5

Combined ratio
2019: 85.1

Annual report 2020 | Tryg A/S | The pre-tax result was DKK 3,541m (DKK 3,628m),
while the net profit was DKK 2,773m (DKK
2,843m), resulting in an ROE of 22.5% (24.6%).

In 2020, Danish customers received the fifth
member bonus from TryghedsGruppen (Tryg’s
53% majority shareholder). The 8% bonus is ap-
preciated by customers and seen as an impor-
tant competitive advantage, boosting customer
loyalty and supporting customer targets.

Premiums
Premium income totalled DKK 22,653m (DKK
21,741m), representing growth in 2020 in local
currencies of 7.0%.

The Private segment posted strong growth of
9.0% (7.8% in 2019 excluding Alka) with positive
impact from both Denmark and Norway. In
Denmark, Tryg continued to see strong sales
through partner agreements such as FDM and
Danske Bank, and at the same time upselling to
existing customers of new products supported
the growth. In Norway, strong growth was driven
by partner agreements with NITO and OBOS,
but also by very strong sales from the car sales
channel (Enter).

The Commercial segment posted growth of
6.0% in 2020 (8.3% in 2019 impacted by Alka),
supported by an increase in the number of cus-
tomers in Denmark, helped by continued strong
sales by Tryg's independent sales agents and
improved sales from the broker sales channel.
In Norway, growth primarily related to price
adjustments to improve profitability, which were
generally accepted by customers.

The Corporate segment posted modest growth
of 1.4% (2.0%) with a loss of premium in-
come in Norway as a result of significant price

adjustments for the third year in a row, while
in Denmark and Sweden some growth was
observed, primarily driven by price hikes, which
did not impact churn much as they were the first
significant price adjustments for many years.

The segment Sweden posted growth of 4.9%
(6.1%), helped by price adjustments, especially
for motor to improve profitability, but also by
strong sales in the boat sales channel Atlantica,
helped by many people holidaying in Sweden
(as opposed to travelling abroad) through the
COVID-19 period.

Claims
The claims ratio, net of ceded business, was
70.3 (70.9), while the underlying claims ratio
saw an improvement of 0.6 percentage points
for the Group and 0.2 percentage points for the
Private segment, driven by price adjustments
and 'claims excellence' initiatives. It is worth re-
membering that 'new' business is normally less
profitable than 'old' business, due to structurally
higher claims frequencies of approximately 3%
and higher distribution costs. The underlying
claims ratio for Private is currently impacted by
the initial adverse effect on profitability of the
robust growth. However, in the longer term the
initial drag will be offset by higher profitability.
At the same time, profitability initiatives in the
Corporate segment should also help sustain the
improvement in the underlying claims develop-
ment. The underlying claims ratio is therefore
expected to improve in 2021.

Claims inflation is monitored constantly using
internal and external parameters in all lines
of business. Motor insurance and property insur-
ances accounts for almost 70% of total premi-
ums and a similar share of the technical result,
and claims patterns are therefore carefully

Management’s review - Contents

Customer targets

DKKm

Q4 2020

Q4 2019

Target 2020

Transactional Net Promoter Score (TNPS)
Number of products per customer

72
3.9

68
3.8

70
4 (+10%)

scrutinised. New trends such as sales of electric
cars and general developments in property mar-
kets are followed closely to anticipate pockets of
claims inflation and try to adjust prices accord-
ingly.

In 2020, large claims totalled DKK 500m (DKK
455m), while weather claims totalled DKK 368m
(DKK 416m). In Q4, weather claims were im-
pacted by a landslide in Norway on 30 Decem-
ber with an impact of approximate DKK 100m
for Tryg. Levels of large and weather claims were
below normalised expectations of DKK 550m
and DKK 600m a year. The overall run-off result
was DKK 1,145m (DKK 1,194m) or 5.1% (5.5%)
on the combined ratio. The run-off result was
driven mainly by run-off gains in the long-tail
segments.

COVID-19 outbreak had a significant negative
impact in the first quarter of 2020 due to high
gross losses on travel insurance somewhat
mitigated by lower claims frequencies in lines
such as motor, property and accident resulting
in a total negative gross impact of DKK -180m
or DKK -40m after reinsurance. In the following
quarters, a positive impact was recorded due
to lower activity in the society leading to lower
claims frequency primarily mentioned lines of
business. The total impact from COVID-19 for
FY 2020 was DKK 39m on a gross basis (before
reinsurance) and DKK 179m on a net basis (after
reinsurance).

Expenses
The expense ratio was 14.1 (14.2). At the CMD
in 2017, Tryg announced an expense ratio target
of around 14 in 2020. A number of initiatives to
lower distribution costs are being implemented,
and some of the savings from these initiatives
are being invested in new digital solutions. The
expense ratio was impacted by satifactory
growth in the Private segment, especially in
Norway, where commissions are paid upfront
in many distribution channels. This higher level
was also supported by distribution initiatives, for
example the implementation and increased use
of more efficient independent sales channels,
especially in Denmark in both Private and Com-
mercial. The expenses were negatively impacted
by DKK 38m related to COVID-19 initiatives
such as IT and increased cleaning and disinfec-
tion of offices.

Investment activities
The investment return totalled DKK 311m (DKK
579m), with capital market developments being
very volatile in 2020. During March, following
the outbreak of COVID-19, an extreme sell-off
in virtually all assets classes was recorded, with
equities dropping an unprecedented 25-30% in
just a few weeks. A recovery gradually built up in
Q2 and continued gathering strength, with a very
robust performance in the last quarter of the
year. All asset classes in the free portfolio pro-
duced good returns for the full year with equities
(up 13.5%) and corporate bonds (returning 6%)

Annual report 2020 | Tryg A/S | leading the way. The start of COVID-19 vacci-
nation programmes towards the end of 2020 is
also helping the outlook, together with a clear
outcome of the US presidential elections. The
match portfolio also experienced a volatile pat-
tern during the year, with a loss in Q1 followed
by a recovery in the following quarters. Other
financial income and expenses totalled DKK
-255m (DKK -236m).

Oher income and costs
Other income and costs were DKK -265m (DKK
-188m). Approximately half of 'other income
and costs' is represented by the amortisation
of customer relations stemming from the Alka
acquisition. Additionally, bancassurance fees and
some other minor items are also booked in this
line.

Tax
Tryg paid a total tax bill of DKK 768m (DKK
783m) or 21.7% of profit before tax

Capital position
The solvency ratio (based on Tryg’s partial inter-
nal model) was 183 at year-end. Back in March,
Tryg moved the dividend decision to year-end
as opposed to quarterly in 2020 due to consid-
erable capital market volatility and heightened
regulatory pressure on the financial sector in
general. However, as the business model proved
sufficiently robust, this decision was revisited,
and in November dividend for the first nine
months of 2020 was paid. Tryg will pay a Q4
dividend of DKK 1.75 per share on 29 January
2021 in connection with the publication of the
FY 2020 results. The Q4 dividend is proportion-
ate to the dividend for the first nine month paid
in November, and also in line with the policy of
paying a stable quarterly dividend.

Own funds totalled DKK 8,884m (DKK 8,119m)
at the end of 2020. Own funds were primarily
positively impacted by the net profit, and nega-
tively impacted by the ordinary dividend.

Tryg’s own funds mainly consist of shareholders’
equity, intangibles (fully deducted), Tier 2 instru-
ments (subordinated debt and the Norwegian
natural perils pool), Tier 1 instruments and
future profits. Most of Tryg’s own funds consist
of shareholders’ equity. Tier 2 capacity has been
fully utilised, while Tier 2 bonds in the amount
of DKK 147m are currently not included in own
funds, as they exceed the 50% solvency capital
requirement (SCR). Tier 1 capacity has also been
almost fully utilised, with DKK 261m remaining
at year-end 2020.

Tryg’s solvency ratio displays low sensitivity to
capital market movements. The area with the
highest level of sensitivity is spread risk, where a
widening/tightening of 100 basis points would
impact the solvency ratio by approximately 20
percentage points. Sensitivities towards falling
equity market and interest rate movements are
low.

Tryg calculates its SCR based on a partial
internal model in accordance with the Danish
Financial Supervisory Authority’s Executive
Order on Solvency and Operating Plans for
Insurance Companies. The model is based on
the structure of the standard model. Tryg uses
an internal model to assess insurance risks,
while other risks are calculated using standard
model components. Tryg’s SCR, calculated using
the partial internal model, was DKK 4,855m at
the end of 2020 compared to DKK 5,021m at
the end of 2019. The lower SCR in 2020 has
primarily been driven by the FSA approval of the
company’s revised partial internal model in April

Management’s review - Contents

Annual report 2020 | Tryg A/S | 2020, which reduced the SCR by approximately
DKK 400m. The reduction in the SCR was driven
by the inclusion of Sweden in the model, thereby
increasing the diversification benefit, while some
marginally lower capital charges for the non-life
risks were also included as part of a general
review and update of the model. Based on the
standard formula, Tryg’s SCR was DKK 6,608m
compared to DKK 6,293m at the end of 2019.

Dividend policy
Tryg’s dividend policy targets a nominal, stable
increase in dividend payments on a full-year
basis. A total dividend of DKK 7.00 per share will
be paid out for 2020 (DKK 6.80 in 2019). After
the significant negative impact of COVID-19 in
Q1 2020, Tryg announced an annual dividend
decision instead of quarterly dividend payment.
However, despite challenging times, Tryg's
business model proved very resilient, and it was
decided to pay out a dividend of DKK 5.25 per
share for the first three quarters of 2020. Tryg
will pay a Q4 dividend per share of 1.75. The
full-year dividend will amount to DKK 2,115m,
or 76% of the profit for the year.

Results Q4 2020
The technical result was DKK 780m (DKK 762m),
driven by a positive development in the underly-
ing claims ratio, the delivery of Alka synergies and
lower claims frequencies driven by COVID-19.
These have broadly offset a significantly higher
level of large and weather claims in Q4 2020
compared to Q4 2019. Investment income was
DKK 513m (DKK 198m), primarily driven by very
robust equity markets, but also by strong returns
from corporate bonds. In general, all assets class-
es in the free portfolio posted good returns.

The claims ratio (net) was 72.3, the expense
ratio was 14.0, and the combined ratio was

86.3. The underlying claims ratio improved
0.6 percentage points for the Group and 0.2
percentage points for Private. The pre-tax result
was DKK 1,223m, and the after-tax result was
DKK 1,038m. Tryg pays a quarterly dividend of
DKK 1.75 per share (DKK 529m) and reports a
solvency ratio of 183.

Premiums
Premium growth was 7.4%, driven by positive
organic growth, higher retention levels and sat-
isfactory sale of new products. Premium growth
mostly stemmed from the Private segment, es-
pecially in Norway, but the Commercial business
also experienced a positive development. Cor-
porate reported a broadly flat top-line develop-
ment, with price increases being pushed through
across all geographies to improve profitability.

Claims
The claims ratio (net) was 72.3. Large claims
of DKK 201m (DKK 98m) were higher than last
year and higher compared to a normal quarter
(DKK 137m), while weather claims of DKK
148m (DKK 94m) were also higher than last
year, but below a normal Q4, which ordinarily
would be characterised by relatively harsh Scan-
dinavian weather conditions. The run-off result
was DKK 314m (DKK 256m). The underlying
claims ratio improved 0.6 percentage points
for the Group and 0.2 percentage points for the
Private segment. In the last quarter of the year,
further restrictions were introduced due to a
new outbreak of COVID-19, which has resulted
in lower economic activity, impacting claims
frequencies in selected lines of business. The
overall impact has been quantified to DKK 52m.
In Q4, weather claims were impacted by a land-
slide in Norway on 30 December with an impact
of approximate DKK 100m for Tryg.

Expenses
The reported expense ratio was 14.0 (14.6).
Various initiatives aimed at lowering distribution
costs are being implemented, and some of the
savings from these initiatives are being invested
in new digital solutions and partnerships. By
reporting an expense ratio of 14,1 for FY 2020,
Tryg delivers its FY 2020 expense ratio target.

Investments
The investment return totalled DKK 513m (DKK
198m) for Q4 2020, driven by a return of DKK
513m (DKK 226m) on the free portfolio, a return
of DKK 17m (DKK 19m) on the match portfolio,
and other financial income and expenses of DKK
-17m (DKK -47m). The primary driver of the
strong investment return in Q4 is the performance
of equities, which were up 14% (7.5%), while cor-
porate bonds also generated very good returns.

Other income and costs
Other income and costs totalled DKK -70m
(DKK -20m). In Q4 2019, a positive VAT compen-
sation of DKK 45m was booked.

Taxes
Tryg paid taxes of DKK 185m (DKK 234m) in
Q4, resulting in a tax rate of 15.1%. The low-
er-than-normal tax rate is attributable to strong
capital markets returns in the quarter as well as
expected repayment of losses related to Tryg’s
Finnish business of just over DKK 50m.

Events after Q4 2020 accounting period
On 18 January 2021, RSA Insurance Group Plc
held a general meeting with shareholders set
to vote on the GBP 7.2bn takeover by Regent
Bidco (consortium between Tryg and Intact).
RSA shareholders voted in favour of the special
resolution relating to the acquisition proposed at
the general meeting.

Management’s review - Contents

Q4 Financial highlights 2020

780m

Technical result (DKK)
2019: 762m

1,223m

Profit before tax
2019: 940m

72.3

Claims ratio, net
of reinsurance
2019: 71.5

14.0

Gross expense ratio
2019: 14.6

86.3

Combined ratio
2019: 86.1

Annual report 2020 | Tryg A/S | Private

Private sells insurance products to private individuals in Den-
mark and Norway. Sales are effected via call centres, the internet,
Tryg’s own agents, Alka (Denmark), franchisees (Norway), inter-
est organisations, car dealers, estate agents and Danske Bank
branches.

Results 2020
The technical result for 2020 was DKK 2,045m
(DKK 1,951m), with a combined ratio of 83.9
(83.7). The result was attributable to a combina-
tion of higher premium growth in both Denmark
and Norway and slightly improved underlying
claims ratio development and net positive im-
pact from COVID-19.

level. Excluding Nordea churn, the retention rate
was 91.3. The higher level of churn was more than
mitigated by new sales from the Danske Bank
agreement. The sales to Danske Bank customers
do not impact the retention rate as they are new
sales, and will only impact the rentetion rate in the
second year and onwards. In Norway, the retention
rate increased from 87.1 to an all-time high of 88.4.

Premiums
Gross premium income was up 9.0% (7.8% in
2019 excluding Alka) in local currencies, which
was attributable to growth in both Denmark and
Norway. The growth was mainly driven by con-
tinued high retention levels in the Danish and
Norwegian Private segments, strong develop-
ments in partner agreements and cross-selling
to existing customers primarily in Denmark. The
partner agreements driving growth in Norway
were primarily OBOS, Norwegian Society of En-
gineers and Technologists (NITO) and a car sales
channel (Enter). Growth was achieved through
the development of innovative solutions and
products tailored especially to the members of
the various partner organisations.

The retention rate in Denmark decreased from
91.6 to 90.1 due to the termination of the Nordea
agreement, which naturally led to a higher churn

Claims
The gross claims ratio totalled 69.7 (68.1), while
the claims ratio, net of ceded business was 70.3
(70.0). The underlying claims level improved by
0.2 percentage points, which was attributable
to the claims excellence programme and price
adjustments aimed at mitigating increased
claims inflation. The underlying claims ratio im-
provement was somewhat lower than last year
due to the high organic premium growth and
the fact that new customers have an approxi-
mately 3% higher claims frequency than existing
customers. Weather claims were on par with
2019 levels and primarily related to Norway.
COVID-19 had a limited positive impact of 1.0%,
with travel insurance impacting negatively and
motor, content and accident insurance impacting
positively. In Q4, weather claims were impacted
by a landslide in Norway on 30 December with
an impact of approximate DKK 60m for Tryg.

Key figures – Private

DKKm

Q4 2020

Q4 2019

2020

2019

Management’s review - Contents

Gross premium income
Gross claims
Gross expenses
Profit/loss on gross business
Profit/loss on ceded business
Insurance technical interest, net of
reinsurance
Technical result
Run-off gains/losses, net of reinsurance

Key ratios
Premium growth in local currencies

Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Combined ratio exclusive of run-off
Run-off, net of reinsurance (%)
Large claims, net of reinsurance (%)
Weather claims, net of reinsurance (%)

3,245
-2,209
-414
622
-80

-4
537
12

9.0

68.1
2.5
70.5
12.8
83.3
83.7
-0.4
0.0
3.1

3,059
-2,075
-411
572
-77

-1
494
33

16.2

67.9
2.5
70.4
13.4
83.8
84.9
-1.1
0.0
2.4

12,743
-8,883
-1,727
2,133
-76

-12
2,045
120

9.0

69.7
0.6
70.3
13.6
83.9
84.8
-0.9
0.2
2.1

12,021
-8,185
-1,650
2,185
-231

-3
1,951
238

28.0

68.1
1.9
70.0
13.7
83.7
85.7
-2.0
0.1
2.0

56%

The business area accounts for 56% of
the Group’s total premium income.

Financial highlights 2020

2,045m 83.9 9.0% 13.6

Technical result
(DKK)

Combined ratio

Premium growth
(local currencies)

Expense ratio

2019: 1,951m

2019: 83.7

2019: 7.8% excluding
Alka

2019:13.7

Annual report 2020 | Tryg A/S | Management’s review - Contents

Expenses
The expense ratio for Private was 13.6 (13.7),
which was in line with the previous year. The
expenses were impacted by commissions due
to high premium growth that were mitigated
through initiatives to reduce distribution costs.
A key initiative was an increase in the number
of very efficient private sales agents and gener-
ally increased efficiency for the sales channels.
Total employee numbers increased from 1,317
at the end of 2019 to 1,344 in 2020, reflecting
a continued focus on efficiency, but also an
increase especially in distribution.

Results Q4 2020
The technical result totalled DKK 537m (DKK
494m), with a combined ratio of 83.3 (83.8).
The higher technical result was due primarily to
a higher level of premium income and positive
impacts from COVID-19. The underlying claims
ratio improved by 0.2 percentage points in line
with developments in the previous quarters.

Premiums
Gross premiums increased by 9.0% (16.2% in
Q4 2019 including Alka, and 7.6% excluding
Alka). In Q4, Tryg reported continued high

growth levels in Denmark and Norway for the
reasons as described for the full-year develop-
ment. The retention rate in Denmark de-
creased from 91.6 to 90.1 due to churn from
the Nordea agreement, which was more than
off-set by sales to Danske Bank customers. In
Norway, the retention rate increased from 87.1
to 88.4.

Claims
The gross claims ratio was 68.1 (67.9), and the
claims ratio, net of ceded business, was 70.5
(70.4). The underlying claims ratio improved
by 0.2 percentage points and was positively
impacted by the claims excellence programme
and Alka synergies, but also a slightly negative
impact from the high growth due to higher
claims frequencies for new customers. In Q4,
weather claims were impacted by a landslide
in Norway on 30 December with an impact of
approximate DKK 60m.

Expenses
The expense ratio was 12.8 (13.4), somewhat
lower than Q4 prior year period, impacted by
high commissions due to high level of sales
and improved distribution efficiency in general.

Q4 Financial highlights 2020

537m 83.3

Technical result
(DKK)

Combined ratio

70.5

Claims ratio,
net of ceded business

12.8

Expense ratio

2019: 494m

2019: 83.8

2019: 70.4

2019:13.4

Annual report 2020 | Tryg A/S | Commercial

Commercial sells insurance products to small and medium-sized
businesses in Denmark and Norway. Sales are effected via Tryg’s
own sales force, brokers, Alka (Denmark), franchisees (Norway),
customer centres as well as group agreements.

Results 2020
The technical result for 2020 was DKK 735m
(DKK 566m), with a combined ratio of 83.3
(86.8). The combined ratio was positively
affected by an improved underlying claims
ratio, a lower level of large and weather claims
and lower frequency for some lines of business
because of COVID-19. The development in pre-
miums improved significantly in both Denmark
and Norway, driven by improved sales levels in
Denmark and price adjustments in Norway to
improve profitability.

Premiums
The development in gross premium income
was a positive 6.0% (8.3% in 2019, impacted by
Alka) in local currencies with an improvement
in both the Danish and Norwegian Commercial
business areas. Commercial Denmark reported
a positive development in customer numbers,
driven by both own sales agents and improved
sales from the broker sales channel. Commer-
cial Denmark has a strong focus on rebalancing
its portfolio with a higher proportion of small
commercial customers and a lower proportion
of large commercial customers as this supports
the focus on profitability. In Norway, premium

development was positively impacted by price
adjustments, particularly for large commercial
customers, which were widely accepted by the
customers.

The retention rate for Commercial Denmark was
unchanged at 88.6 compared to the prior-year
period, while in Norway the retention rate in-
creased from 89.0 to 89.2. The positive develop-
ments in Denmark and Norway are attributable
to a strong customer focus, while the customer
bonus model also supported the development
in Denmark.

Claims
The gross claims ratio was 62.9 (67.1), with
a claims ratio, net of ceded business of 66.2
(69.3). The lower claims level was helped by an
improvement in the underlying clams ratio, a
lower level of large and weather claims and a
positive impact from COVID-19 due to lower
claims frequencies for business lines such as
motor, accident and workers' compensation. In
Q4, weather claims were impacted by a land-
slide in Norway on 30 December with an impact
of approximate DKK 20m for Tryg.

Key figures – Commercial

DKKm

Q4 2020

Q4 2019

2020

2019

Management’s review - Contents

Key ratios
Premium growth in local currencies

1,132
-735
-206
191
-37

-2
153
134

7.2

64.9
3.3
68.2
18.2
86.4
98.2
-11.9
4.9
3.2

1,079
-746
-188
145
-41

1
105
36

4.8

69.1
3.8
72.8
17.4
90.3
93.6
-3.3
0.3
1.0

4,430
-2,786
-758
886
-147

-5
735
336

6.0

62.9
3.3
66.2
17.1
83.3
90.9
-7.6
2.0
1.8

4,274
-2,867
-749
658
-94

1
566
310

8.3

67.1
2.2
69.3
17.5
86.8
94.0
-7.2
3.3
2.2

20%

The business area accounts for 20% of
the Group’s total premium income.

Financial highlights 2020

735m 83.3 6.0% 17.1

Technical result
(DKK)

Combined ratio

2019: 566m

2019: 86.8

Premium growth
(local currencies)

2019: 8.3%
impacted by Alka

Expense ratio

2019:17.5

Annual report 2020 | Tryg A/S | Management’s review - Contents

Expenses
The expense ratio for Commercial was 17.1
(17.5). The lower level was helped by improved
distribution efficiency, especially in Denmark
through the use of independent sales agents
with much lower costs per sale. In Norway, the
improved retention rate and high acceptance
of price adjustments supported a positive
development in the expense ratio. Total em-
ployee numbers were up from 495 at the end
of 2019 to 538 in 2020.

Results Q4 2020
The technical result was DKK 153m (DKK
105m), with a combined ratio of 86.4 (90.3).
The result was negatively affected by a sub-
stantial increase in the level of large claims,
but also positively impacted by a much higher
level of run-off. Premium growth increased by
7.2% (4.8%).

Premiums
Gross premiums increased by 7.2% (4.8%) in
local currencies, primarily due to increased

customer numbers in Denmark and price
adjustments in Norway. The retention rate in
Denmark was stable at 88.6 (88.6), while the
retention rate in Norway increased signifi-
cantly to 89.2 (89.0) due to a strong focus on
customer loyalty.

Claims
The gross claims ratio was 64.9 (69.1), with
a claims ratio, net of ceded business, of 68.2
(72.8). The claims ratio was impacted by a
higher level of large claims mainly related to
fires and also a substantially higher level of
run-offs compared to prior-year period. In Q4,
weather claims were impacted by a landslide
in Norway on 30 December with an impact of
approximate DKK 20m for Tryg.

Expenses
The expense ratio was somewhat higher at
18.2 (17.4), which did not represent a trend
but reflected volatile expense pattern.

Q4 Financial highlights 2020

153m 86.4

Technical result
(DKK)

Combined ratio

68.2

Claims ratio, net
of ceded business

18.2

Expense ratio

2019: 105m

2019: 90.3

2019: 72.8

2019: 17.4

Annual report 2020 | Tryg A/S | Corporate

Corporate sells insurance products to corporate customers
under the brands ‘Tryg’ in Denmark and Norway, ‘Moderna’ in
Sweden and ‘Tryg Garanti’. Sales are effected both via Tryg’s own
sales force and via insurance brokers. Moreover, customers with
international insurance needs are served by Corporate through
its cooperation with the AXA Group.

Results 2020
The technical result was DKK 464m (DKK
496m), with a combined ratio of 88.0 (87.6). The
result was positively affected by an under-
lying improvement, a slightly higher level of
large claims and a slightly higher run-off level.
Premiums were up 1.4% (2.0%), impacted by
price hikes in Norway, Denmark and Sweden
to improve profitability, and a high retention
level in Denmark, driven by the member bonus
model. Even though the underlying profitability
is increasing, Tryg will still have to improve profit-
ability in all countries and will therefore continue
to implement profitability actions in all countries
in 2021, which might reduce premium income,
depending on market conditions.

Premiums
Gross premium income was up 1.4% (2.0%)
in local currencies. An increase of around
3.6% was seen in Denmark, impacted by
price adjustments of approximately 10% and
continued positive developments for the credit
and surety business (Tryg Garanti) and a high
retention level. In Corporate Norway, premiums

decreased by 3.6%, primarily due to price hikes
of approximately 14% (excluding fronting and
captive agreements). In Sweden, which accounts
for only 20% of the total Corporate business,
premium growth was 5.1% and was also impact-
ed by profitability initiatives of approximately 8%
resulting in a loss of customers.

Claims
The gross claims ratio totalled 69.5 (70.8), and
the claims ratio, net of ceded business, was 76.6
(77.2). The claims ratio was impacted by price
initiatives improving the underlying claims ratio
in all countries, a higher level of large claims and
a larger level of run-off gains. The claims ratio
was slightly negatively impacted by COVID-19
with some positive impact for certain lines of
business, e.g. travel insurance and workers' com-
pensation. The claims ratio was also impacted by
a few claims in Tryg Garanti related to COVID-19.
As mentioned, Tryg will continue to focus on
improving profitability in all countries as prof-
itability remains challenging in the Corporate
segment, considering a combined ratio of 109.1
excluding run-offs. Tryg plans further important

Key figures – Corporate

DKKm

Q4 2020

Q4 2019

2020

2019

Management’s review - Contents

Key ratios
Premium growth in local currencies

973
-778
-132
64
-69

-1
-6
84

2.0

79.9
7.1
87.0
13.5
100.5
109.1
-8.6
15.0
1.2

987
-850
-120
17
56

0
73
81

1.1

86.1
-5.7
80.4
12.1
92.6
100.7
-8.2
9.6
0.9

3,876
-2,692
-440
743
-277

-2
464
448

1.4

69.5
7.1
76.6
11.4
88.0
99.5
-11.6
10.0
0.6

3,979
-2,816
-415
748
-255

2
496
407

2.0

70.8
6.4
77.2
10.4
87.6
97.8
-10.2
7.7
1.8

17%

The business area accounts for 17% of
the Group’s total premium income.

Financial highlights 2020

464m 88.0 1.4% 11.4

Technical result
(DKK)

Combined ratio

Premium growth
(local currencies)

Expense ratio

2019: 496m

2019: 87.6

2019: 2.0%

2019: 10.4

Annual report 2020 | Tryg A/S | Management’s review - Contents

Premiums
Gross premiums were up 2.0% (1.1%) in local
currencies due to a combination of price
adjustments and churn because of these
initiatives. Tryg continues to see a positive pre-
mium development in Tryg Garanti, primarily
because of the expansion in Germany, Austria
and the Netherlands.

Claims
The gross claims ratio was 79.9 (86.1), and the
claims ratio, net of ceded business, was 87.0
(80.4). The higher claims ratio was primar-
ily caused by a higher level of large claims,
negative COVID-19 impact and a lower level of
run-off. The underlying claims ratio improved
based on the above initiatives in Norway, Den-
mark and Sweden.

Expenses
The expense ratio was 13.5 (12.1) and some-
what higher than Q4 2019 and higher than the
full year, which however did not represent a
trend but rather reflected volatility in costs.

profitability initiatives to be implemented in
2021. In Q4, weather claims were impacted by
a lanslide in Norway on 30 December with an
impact of approximate DKK 15m for Tryg.

Expenses
The expense ratio for Corporate was 11.4
(10.4) and was quite stable throughout the
year. The low expense ratio is driven by high
average premiums in the Corporate segment,
leading to relatively low administration costs
in per cent of premiums, and by the fact that
brokers are paid by customers. Employee
numbers were almost unchanged from 290 at
the end of 2019 to 291 in 2020.

Results Q4 2020
The technical result was DKK -6m (DKK 73m),
with a combined ratio of 100.5 (92.6). The
results were positively impacted by an improved
underlying claims ratio, but negatively impacted
by a higher level of large and weather claims, a
slightly lower level of run-off and a negative net
impact from COVID-19 claims due to a single
claim in Tryg Garanti. Premium growth was a
slightly positive 2.0% (1.1%) and was impacted
by price adjustments and growth in Tryg Garanti.

Q4 Financial highlights 2020

6m 100.5 87.0

Technical result
(DKK)

Combined ratio

Claims ratio, net
of ceded business

13.5

Expense ratio

2019: 73m

2019: 92.6

2019: 80.4

2019: 12.1

Annual report 2020 | Tryg A/S | Sweden

Sweden sells insurance products to private customers under the
‘Moderna’ brand. Moreover, insurance is sold under the brands
Atlantica, Bilsport & MC and Moderna Djurförsäkringar. Sales
take place through its own sales force, call centres, partners and
online.

Results 2020
Sweden reported a technical result of DKK
268m (DKK 231m) and a combined ratio of
83.2 (84.8). The lower combined ratio was
driven by a lower expense ratio, and as planned
there was also an improved underlying claims
ratio due to price adjustments, especially for
motor insurance. The high level of run-off gains
reflects a strong reserving position in the motor
third-party liability segment. The underlying
profitability for the current underwriting year
with a normalised run-off level is still not satis-
factory. Premium growth in 2020 was primarily
due to acceptance of price adjustments and
organic growth for Atlantica, the niche area for
boat insurance.

Premiums
Gross premium income totalled DKK 1,604m
(DKK 1,521m), equating to growth of 4.9%
(6.1%) in local currencies. Growth was especially
attributable to motor insurance as a result of
widespread acceptance of price adjustments
to improve the claims ratio for this product.
During the COVID-19 pandemic, Tryg has seen
a big increase in the demand for boat insurance
as many people were ‘staycationing’ in Sweden

instead of travelling abroad. Atlantica, which is a
niche brand in Private Sweden for boat insur-
ance, is a very profitable segment.

Claims
The gross claims ratio was 66.5 (66.6), and the
claims ratio, net of ceded business was 66.4
(67.3). In 2020, prices for motor insurance were
adjusted to improve profitability, and this led to
an improved underlying claims ratio for Private
Sweden. Profitability, assuming a normalised
run-off level, remains challenging, and initiatives
to improve profitability will therefore continue
in 2021. The strong run-off result reflects a very
solid reserves position in the long-tail motor
segment.

Expenses
The expense ratio was 16.8 (17.5), which is a
somewhat lower level than the previous year.
Expenses were impacted by one-off costs
related to organisational restructuring in 2020.
Employee numbers in Sweden were up by 23
compared to the prior-year period, totalling
323 at the end of 2020, primarily because of an
increase in Inbound Sales.

Key figures – Sweden

DKKm

Q4 2020

Q4 2019

2020

2019

Management’s review - Contents

Gross premium income
Gross claims
Gross expenses
Profit/loss on gross business
Profit/loss on ceded business
Insurance technical interest. net of
reinsurance
Technical result
Run-off gains/losses. net of reinsurance

Key ratios
Premium growth in local currencies

Gross claims ratio
Net reinsurance ratio
Claims ratio. net of ceded business
Gross expense ratio
Combined ratio
Combined ratio exclusive of run-off
Run-off. net of reinsurance (%)
Weather claims. net of reinsurance (%)

393
-241
-55
98
-1

-1
96
84

5.6

61.3
0.3
61.6
13.9
75.5
96.8
-21.4
0.0

364
-193
-78
93
-3

0
90
107

3.3

53.1
0.8
53.8
21.5
75.3
104.8
-29.5
0.1

1,604
-1,067
-269
268
1

-1
268
249

4.9

66.5
-0.1
66.4
16.8
83.2
98.8
-15.5
0.1

1,521
-1,014
-267
241
-10

0
231
246

6.1

66.6
0.7
67.3
17.5
84.8
101.0
-16.2
0.7

The business area accounts for 7% of
the Group’s total premium income.

Financial highlights 2020

268m 83.2 4.9% 16.8

Technical result
(DKK)

Combined ratio

Premium growth
(local currencies)

Expense ratio

2019: 231m

2019: 84.8

2019: 6.1%

2019:17.5

Annual report 2020 | Tryg A/S | Management’s review - Contents

Results Q4 2020
Gross premium income for Q4 2020 was DKK
393m (DKK 364m). The technical result was
DKK 96m (DKK 90m), with an expense ratio
of 13.9 (21.5) and a combined ratio of 75.7
(75.3).

Claims
The gross claims ratio was 61.3 (53.1) and
net of ceded business 61.6 (53.8). The higher
claims level was primarily due to a lower level
of run-off gains at 21.4% compared to 29.5%
for the prior-year period.

Premiums
Gross premium income was DKK 393m (DKK
364m), or 5.6% (3.3%) in local currencies. The
primary growth driver was the price adjust-
ments implemented for motor insurance to
improve profitability, but also strong sales
from the inbound channel and improved distri-
bution from Danske Bank.

Expenses
The expense ratio was 13.9 (21.5) and was
impacted by adjustments relating to previous
quarters and therefore did not represent the
actual expense level.

Q4 Financial highlights 2020

96m 75.5

Technical result
(DKK)

Combined ratio

61.6

Claims ratio, net
of ceded business

13.9

Expense ratio

2019: 90m

2019: 75.3

2019: 53.8

2019: 21.5

Annual report 2020 | Tryg A/S | Investment activities

The investment return totalled DKK 311m (DKK
579m) for the FY 2020, driven by a return of
DKK 585m (DKK 857m) on the free portfolio, a
return of DKK -19m (DKK -42m) on the match
portfolio, and other financial income and ex-
penses of DKK -255m (DKK -236m).

The total market value of Tryg’s investment
portfolio was DKK 40.5bn (DKK 40bn) at year-
end 2020. The investment portfolio consists of a
match portfolio of DKK 28.1bn (DKK 29bn) and
a free portfolio of DKK 12.4bn (DKK 11bn). The
match portfolio is composed of low-risk fixed-in-
come assets that match the Group’s insurance
liabilities, so that fluctuations resulting from
interest rate changes are offset to the greatest
possible extent. The free portfolio reflects the
Group’s capital, which is predominantly invested
in fixed-income securities with a short duration,
but also in equities and properties.

Free portfolio
Financial markets experienced a highly volatile
year due to the outbreak of COVID-19 in March
and the resulting macroeconomic worries
followed by a strong recovery in the following
quarters. Equity markets were down 25-30%
during the second half of March, but finished
the year up 13%, an unprecedented rollercoast-
er. Macroeconomic worries were dominant in
February and March, while large Government
spending programmes across the globe have
mitigated the impact on employment levels but
obviously increased public borrowing levels,
which in some cases were already very high.
The start of COVID-19 vaccination programmes
just after Christmas has given hope for a rapidly
improved outlook for 2021 although the winter
months are likely to remain very challenging.

Tryg’s equity portfolio reported a return of DKK
277m (13.5%) in 2020 against DKK 403m
(21.4%) in 2019. The considerable difference in

the return on equities explains around half the
difference between investment returns in 2019
and 2020. The credit bonds portfolio also
produced a good return of DKK 136m (6.3%)
even though it was lower than in 2019 (10.8%),
primarily due by falling rates throughout most
of the year and tightening credit spreads. The
return on the investment property portfolio
was DKK 64m (DKK 159m in 2019 driven by
revaluations of DKK 68m in Q4), or 2.7%.

Equity and property investments totalled DKK
5.4bn, while approximately DKK 2.3bn were
invested in corporate bonds. Some DKK 3.8bn
were primarily invested in Nordic covered
bonds and government bonds, including infla-
tion-linked bonds, where current yields remain
negative, putting downward pressure on the
return on the free portfolio and the overall
investment income. Finally, an amount corre-
sponding to just under DKK 1bn was invested
in diversifying alterative assets.

Management’s review - Contents

Financial highlights 2020

585m

Free portfolio result
(DKK)

19m

Match portfolio
(DKK)

255m

Other financial income
and expenses
(DKK)

311m

Total investment return
(DKK)

Key figures investments

Return match portfolio

DKKm

Q4 2020

Q4 2019

2020

2019

DKKm

Q4 2020

Q4 2019

2020

2019

Free portfolio, gross return
Match portfolio, regulatory deviation and
performance
Other financial income and expenses
Total investment return

513

17
-17
513

226

19
-47
198

585

-19
-255
311

857

-42
-236
579

Return, match portfolio
Value adjustments, changed discount rate
Transferred to insurance technical interest
Match, regulatory deviation and performance
Hereof:
Match, regulatory deviation
Match, performance

-33
48
2
17

4
13

-268
322
-35
19

23
-4

548
-530
-37
-19

-48
29

475
-351
-166
-42

-73
31

Annual report 2020 | Tryg A/S | Match portfolio
The result of the match portfolio is the differ-
ence between the return on the match portfolio
and the amount transferred to the technical
result. The result can be split into a 'regulato-
ry deviation' and a ’performance result’. The
regulatory deviation was DKK -48m (DKK -73m)
for FY 2020, driven primarily by the increased
yield spread between the FSA/EIOPA discount-
ing curve (in EUR) and the assets side invested
in Danish kroner. The performance result was
DKK 29m (DKK 31m) as Nordic covered-bond
spreads narrowed slightly.

Other financial income and expenses
Other financial income and expenses is primarily
characterised by interest expenses related to
outstanding subordinated debt, the cost of
currency hedges to protect shareholders’ equity
and the cost of running investment operations.
Other financial income and expenses totalled
DKK -255m (DKK -236m). Tryg has previously
announced that this line should report a result

of approximately DKK -60m per quarter after
which the overall amount for 2020 is broadly in
line with expectations.

of DKK 72m (DKK 93m) or 2.9% for the quarter.
The overall result of the free portfolio was a very
robust DKK 513m (DKK 198m) or 4.5%.

Investment result in Q4 2020
The last quarter of 2020 was characterised by
positive developments, especially in the equity
markets. Tryg’s equity portfolio returned DKK
307m or 14.0%. The last three months of 2020
were characterised by the US Presidential
Elections and by increased hope for vaccination
programmes related to COVID-19 that finally
started towards the end of December. Mac-
roeconomic worries abated slightly although
the first months of 2021 are still likely to be
problematic.

The credit bonds portfolio returned a very
positive result of DKK 113m (DKK 27m) or 5.0%,
with most fixed-income asset classes posting
very strong returns driven by a risk-on rally,
primarily on the back of better COVID-19 news.
Finally, the property portfolio booked a return

The match portfolio reported an overall result of
DKK 17m (DKK 19m), driven primarily by a small
narrowing of Nordic covered bonds explaining
the DKK 13m (DKK -4m) performance, while the
regulatory deviation contributed a result of DKK
4m (DKK 23m).

Other financial income and expenses were DKK
-17m (DKK -47m), the lower-than-normal level
being attributable to the accrual of costs, while
the overall guidance for this line remains un-
changed at approximately DKK -60m a quarter.

The overall investment result in Q4 was DKK
513m (DKK 198m) with approximately 50%
of the performance swing being explained by
changes in equity market performance, 14.0%
in Q4 2020 against 7.5% in Q4 2019.

Management’s review - Contents

Q4 Financial highlights 2020

513m

Free portfolio result
(DKK)

17m

Match portfolio
(DKK)

17m

Other financial income
and expenses
(DKK)

513m

Total investment return
(DKK)

Return free portfolio

DKKm

Bonds

Credit bonds
Investment-grade credit
Emerging-market bonds
High-yield bonds

Diversifying alternatives a)
Equity b)
Real estate
Total

Q4 2020

Q4 2020 (%)

Q4 2019

Q4 2019 (%)

2020

2020 (%)

2019

2019 (%)

31.12.2020

31.12.2019

Investment assets

113
12
44
57

6
307
72
513

0.4

5.0
1.3
7.6
7.8

0.6
14.0
2.9
4.5

-43

27
-4
17
14

-4
152
93
226

-1.0

1.3
-0.3
3.2
2.2

-0.6
7.5
4.4
2.0

136
70
25
41

20
277
64
585

2.3

6.3
7.2
4.6
6.2

2.1
13.5
2.7
5.3

228
106
48
74

1
403
159
857

1.6

10.8
11.9
8.6
12.0

0.1
21.4
7.7
8.0

3,839

2,261
908
654
699

935
2,588
2.806
12,429

4,314

2,173
1,016
545
612

645
2,164
2.141
11,436

a) Diversifying Alternatives consists of CAT Bonds and a tactical mandate including both bonds, interest based investment funds and equity based investment funds.
b) In addition to the equity portfolio exposure is derivatives contracts of DKK 69m.

Annual report 2020 | Tryg A/S | Solvency and dividend

Risk management is a key function in Tryg. The
assessment and management of Tryg’s aggre-
gated risk and associated capital requirement
constitutes a core element in the management
of the company.

Risk management is based on Tryg’s targets and
strategies and the risk exposure limits decided
by the Supervisory Board. Tryg’s supervisory
Board defines the framework for the compa-
ny’s target risk appetite and thereby the capital
which must be available to cover any losses.

Solvency II
The Solvency II regime (introduced at the begin-
ning of 2016) emphasises the need for sound
risk management and has introduced additional
requirements concerning risk governance, con-
sistency across the Group and top management
reporting and involvement. Tryg has implement-
ed a risk governance structure in full compliance
with Solvency II. In addition to the Solvency II
requirements, Tryg has chosen to appoint a
special Risk Committee consisting of members
from the Supervisory Board. Tryg has chosen to
implement a partial internal model, approved
by the Danish FSA, which models insurance
risk while all other modules are based on the
standard formula.

Insurance risk
The insurance risk is controlled by limiting the
size of single exposures and through the use of
reinsurance, thereby capping the cost of large
and weather-related claims. Additionally, the

insurance risk is managed through geograph-
ical limitations and by refraining from offering
certain types of insurance such as aviation and
marine hull insurance. Operating within these
boundaries, Tryg’s risk depends on the com-
pany’s choice of exposure within different seg-
ments and industries in the insurance market.
Tryg operates in relatively stable markets, while
slightly more than 80% of premiums are in the
Private and Commercial (SMEs) segments. Quar-
terly fluctuations are driven mainly by large and
weather-related events, and reinsurance is used
extensively to stabilise the overall earnings level.

Investment risk
Invested assets are split into a match portfolio
(DKK 28.1bn) and a free portfolio (DKK 12.4bn).
The objective is for the return on the match port-
folio to be as close as possible to zero as capital
gains and losses on the assets side should be
mirrored by corresponding developments on the
liabilities side. The free portfolio is intended to
produce the maximum risk-adjusted return. The
investment risk associated with the free portfolio
is managed through limits on exposure within
single asset classes.

Capital management
Capital management and capital modelling
are key functions in Tryg. Capital management
covers broadly the company’s current and future
capital requirements, capital allocation to the
different lines of business and required returns,
dividends outlook, and the ability of the compa-
ny to meet its own return on equity target.

Tryg’s solvency ratio is a function of develop-
ments in own funds and the solvency capital
requirement (based on the approved partial
internal model). As mentioned previously, Tryg
has modelled the insurance risk internally, while
all other modules are based on the standard for-
mula. The capital model is based on Tryg’s risk
profile and takes into consideration the compo-
sition of Tryg’s insurance portfolio, geograph-
ical diversification, its claims reserves profile,
reinsurance programme, investments mix and
overall level of profitability. The solvency ratio
was 183 as per year-end 2020, up from 162 at
the end of 2019.

The key components of Tryg’s own funds are
shareholders’ equity, qualifying debt instru-
ments (both Tier 1 and Tier 2 debt) and future
profit, while all intangibles are deducted in the
calculation. The debt capacity has been virtually
fully utilised, and at the end of 2020 some DKK
147m of Tier 2 instruments are not included in
own funds as they exceed the 50% SCR limit.
Own funds totalled 8,884m at the end of 2020
against DKK 8,119m at the end of 2019, the pri-
mary drivers of the change in own funds having
been profits and dividends.

The solvency capital requirement (SCR) is
calculated in a way that Tryg should be able to
honour its obligations in 199 out of 200 years,
and is regularly stress-tested. In other words, at
the end of 2020, Tryg’s SCR was DKK 4,855m,
down slightly less than DKK 200m since the end
of 2019. The lower SCR is primarily driven by the

Management’s review - Contents

Solvency Capital Requirement
(DKKm)

5,021

4,855

Q4 2019

Q4 2020

2019

2020

Own funds
(DKKm)

8,119

8,884

Q4 2019

Q4 2020

2019

2020

Annual report 2020 | Tryg A/S | Danish FSA’s approval of Tryg’s updated internal
model in April, which included the Swedish
business, thereby increasing the diversification
benefit, while some marginally lower capital
charges for non-life risks were also included.

Tryg’s solvency ratio continues to display low
sensitivity towards capital market movements.
Fixed-income securities represent some 90% of
Tryg’s invested assets, and the highest solven-
cy sensitivity is therefore towards spread risk,
where a widening/tightening of 100 basis points
will impact the solvency ratio by 20 percentage
points. Lower sensitivity is displayed towards
equity market falls and interest rate fluctua-
tions. Additional changes in the UFR (Ultimate
Forward Rate) will have a negligible impact due
to the relatively short duration of Tryg’s liabilities
(approximately four years on average).

Ordinary and extraordinary dividend
The Supervisory Board regularly assesses capital
structure in light of future internal earnings fore-
casts and balance sheet needs. The projections
include initiatives set out in the company’s strat-
egy for the coming years and are based also on
the most significant risks identified by the com-
pany. Adequacy is measured in relation to Tryg’s
strategic targets, including return on equity and
dividend policy. Tryg will pay a Q4 dividend of
DKK 1.75 per share on 29 January 2021, after
having paid a dividend for the first nine month of
5.25 per share immediately after the Q3 results.
The full-year dividend amounts to DKK 7.00 per
share, equivalent to the total distribution of just
above DKK 2.1bn.

Moody’s rating
Tryg has an ‘A1’ (stable outlook) insurance finan-
cial strength (IFSR) rating from Moody’s. The
rating agency highlights Tryg’s strong position in

Management’s review - Contents

Shareholder remuneration
(DKK per share)

3.5

3.3

1.65

6.2

6.4

6.6

6.8

7.0

2016

2017

2018

2019

2020

Ordinary dividend

Extraordinary dividend

the Nordic P&C market, robust profitability, very
good asset quality and relatively low financial
leverage. Moody’s also assigned an ‘A3’ rating to
Tryg’s subordinated debt and a ‘Baa3’ rating to
Tryg’s Tier 1 debt. The ratings were re-affirmed
in autumn 2020 following the offer made by
Tryg and Intact Financial Corporation (Intact) to
acquire RSA Insurance Group Pls (RSA), whereby
Tryg would acquire RSA’s Swedish and Norwe-
gian operations, and Tryg and Intact would co-
own RSA’s Danish business on a 50/50 econom-
ic participation. Moody’s expects the acquisition
to further increase and broaden Tryg’s earnings
base in the long term. Furthermore, Tryg’s lever-
age will reduce meaningfully in the short term.

Annual report 2020 | Tryg A/S | Investor information

Investor Relations (IR) is responsible for Tryg’s
communication with the capital markets. It is
important that investors, analysts and other
stakeholders can form a true and fair view of
developments, including Tryg’s financial results.
For this reason, Tryg’s IR team strives to be as
open and transparent as possible to ensure that
stakeholders’ information requirements are met
at the highest possible level. IR is in charge of the
communication with equity investors, fixed-in-
come investors and rating agencies.

After the publication of quarterly and annual re-
ports, Tryg’s management and IR team ordinarily
travel extensively to meet with shareholders and
potential investors. Quarterly analyst presenta-
tions are held in Copenhagen and London. Tryg
also attends investor meetings and various
financial conferences on a local and global basis.
As a result of COVID-19, the majority of the
analyst and investor meetings and financial con-
ferences were held virtually in 2020. The Tryg
share is currently covered by 20 analysts, who
continuously update their recommendations
and earnings forecasts. Tryg hosts an annual
Analyst Day, while more in-depth Capital Market
Days are hosted every three years. As a result of
the recommended acquisition of RSA’s Scandi-
navian business, Tryg has decided to postpone
the Capital Markets Day originally planned for
28 January 2021 to the autumn. A new date will
be published in due course.

The Tryg share
The Tryg share is listed on NASDAQ Copenha-
gen. Company announcements and trading
announcements are published in both Danish
and English, whereas interim reports and annual
reports are published in English.

The Tryg share started the year at a price of
DKK 196.4 and ended 2020 at DKK 192.1. The
total return (price and dividends) of the share
was a positive 1.4% (for comparison purposes
the European insurance index (SXIP) had a
reported total return of -10.9% in 2020). The
insurance sector’s key attraction is its dividend
yield. Earnings and solvency are always carefully
scrutinised by investors. In the world of Solvency
ll, changes in solvency levels can be more diffi-
cult to predict and often difficult to understand.
Tryg has a relatively simple business model and
a transparent capital position, which is highly
appreciated by analysts and investors.

Share capital and ownership
Tryg’s share capital totalled DKK 1,510,739,955
on 31 December 2020. It comprises one share
class (302,147,991 shares with a nominal value
of DKK 5), and all shares rank pari passu. The
majority shareholder, TryghedsGruppen smba,
owns 53% of the shares and is the only share-
holder holding more than 5% of the share capital.
TryghedsGruppen invests in peace of mind and
healthcare providers in the Nordic region and
supports non-profit-making activities.

Quarterly dividends
Tryg started paying quarterly dividends in 2017.
The Tryg share has a distinct income profile in
that the business generally grows in line with
GDP, producing high margins, which are mostly
returned to shareholders. The prolonged period
of very low interest rates in the wake of the
financial crisis means that investors, all else
being equal, attach even greater importance to
dividends than in a more normal environment.

This is particularly true for insurance investors
as insurance is one of the sectors offering the
highest dividend yield. From an investment per-
spective, a quarterly dividend is a clear reminder
of the high profitability of Tryg’s business and
the company’s focus on returning capital to
shareholders. Tryg’s dividend policy is based on
the following assumptions:

• An aspiration to distribute a steadily increasing
dividend in nominal terms on a full-year basis.
• A general objective of creating long-term value

for the company’s shareholders.

• A competitive dividend policy in comparison
with the policies of our Nordic competitors.

• Annual distribution of 60-90% of our profit

after tax.

• The capital level must at all times reflect our

return-on-equity targets and statutory capital
requirements.

• The capital level may be adjusted via extraordi-

nary dividends.

Management’s review - Contents

TrygFonden
TrygFonden is the leading and
most well-known peace-of-
mind supporter in Denmark,
supporting around 800 activi-
ties that contribute to creating
peace of mind, such as coastal
lifeguards, cuddle bears for
children at hospitals and defi-
brillators. Behind TrygFonden is
TryghedsGruppen, which owns
53% of the shares in Tryg and
annually contributes around
DKK 650m to projects that cre-
ate peace of mind in all parts of
Denmark.

TryghedsGruppen
In 2020 and for the fifth year
running, Tryg’s majority share-
holder, TryghedsGruppen, paid
out a member bonus to Tryg
and Alka customers in Denmark
corresponding to 8% of the an-
nual premiums paid for 2019.

Annual report 2020 | Tryg A/S | In March 2020, Tryg announced that it was
moving to a full-year dividend decision for 2020
due to market volatility and the general macro-
economic backdrop. Tryg’s business model has
proved resilient even in very challenging times,
and the company’s balance sheet and solvency
position have remained very healthy throughout
this period. In November 2020, the Supervisory
Board approved the payment of the Q1-Q3 2020
ordinary dividend.

Annual general meeting
Tryg’s annual general meeting will be held virtual
on 26 March 2021 at 15:00 CET.

The notice will be advertised in the daily press in
February 2021 and will be sent to shareholders
upon request.

Shareholders
at 31 December 2020

Free float - geographical distribution
at 31 December 2020

25%

13%

53%

TryghedsGruppen

Large Danish
shareholders*

Large international
shareholders*

Small shareholders

Denmark

USA

Others

*Shareholders holding more than 10.000 sares.

Free float is exclusive of TryghedsGruppen.

Shareholder distribution

DKKm

2020

2019

2018

2017

2016

Dividend
Dividend per share (DKK)
Payout ratio
Extraordinary share buy back
Extraordinary dividend
Extraordinary dividend per share (DKK)

2,115
7.0
76%

1,994
6.6
115%

2,056
6.8
72%

500
1.65

1,827
6.4
73%

1,000
3.31

1,770
6.2
72%

1,000
3.54

Management’s review - Contents

Financial calendar 2021

27 Jan. 2021 Tryg shares are traded ex-dividend

29 Jan. 2021 Payment of Q4 dividend

26 Mar. 2021 Annual general meeting

16 Apr. 2021 Interim report Q1

19 Apr. 2021 Tryg shares are traded ex-dividend

21 Apr. 2021 Payment of Q1 dividend

09 July 2021 Interim report Q2 and H1

12 July 2021 Tryg shares are traded ex-dividend

14 July 2021 Payment of Q2 dividend

12 Oct. 2021 Interim report Q1-Q3

13 Oct. 2021 Tryg shares are traded ex-dividend

15 Oct. 2021 Payment of Q3 dividend

Annual report 2020 | Tryg A/S | Corporate governance

Tryg focuses on managing the company in
accordance with the principles of good corpo-
rate governance and generally complies with
the Danish recommendations prepared by the
Committee on Corporate Governance. The Rec-
ommendations on Corporate Governance are
available at corporate-governance.dk. At tryg.
com, Tryg has published its statutory corporate
governance report based on the ‘comply-or-ex-
plain’ principle for each individual recommenda-
tion. This section on corporate governance is an
excerpt of the corporate governance report.

Download Tryg’s Statutory Corporate
Governance Report

Dialogue between Tryg, shareholders and other
stakeholders
Tryg’s Investor Relations (IR) department main-
tains regular contact with analysts and investors.

Together with the Executive Board, IR organ-
ises investor meetings, conference calls and
participates in conferences in Denmark and
abroad. Due to the outbreak of COVID-19, most
meetings were held virtually in 2020. IR also
communicates with stakeholders on social
media via Twitter@TrygIR.

The Supervisory Board is informed about the
dialogue with investors and other stakeholders
on a regular basis. Tryg has an IR policy, which
states that all company announcements are
published in Danish and English. Tryg publishes

quarterly interim reports in English. Further-
more, Tryg publishes an annual profile in Danish,
English and Norwegian. The profile is addressed
to Tryg’s private shareholders, customers,
employees and other stakeholders and will be
published on 9 February 2021.

AGM is convened via a company announcement
and at tryg.com subject to at least three weeks’
notice. Shareholders may also opt to receive
the notice by post or email. The notice contains
information about time and venue as well as an
agenda for the meeting.

Moreover, Tryg prepares quarterly investor
presentations, which are used in our dialogue
with investors and analysts. Tryg also publishes
IR newsletters on relevant topics on a regular
basis. All announcements, financial reports,
presentations and newsletters are available at
tryg.com. This material provides all stakeholders
with a comprehensive picture of Tryg’s position
and performance.

The consolidated financial statements are
presented in accordance with IFRS. At tryg.com,
stakeholders are invited to subscribe to press
releases, company announcements as well as
trading announcements by insiders. A number of
internal guidelines ensure that the disclosure of
price-sensitive information complies with legis-
lation and stock exchange codes of conduct. Tryg
has adopted a number of policies describing the
relationship between different stakeholders.

Download Investor Relations policy

Annual general meeting
Tryg holds an annual general meeting (AGM)
every year. As required by the Danish Compa-
nies Act and Tryg’s Articles of Association, the

All shareholders are encouraged to attend the
AGM. The AGM is normally held by personal
attendance as the Supervisory Board values
personal contact with the Group’s shareholders.
Shareholders may propose items to be includ-
ed on the agenda for the AGM and may ask
questions before and at the meeting. Sharehold-
ers may vote in person at the AGM, by post or
appoint the Supervisory Board or a third party
as their proxy. Shareholders may consider each
item on the agenda. The proxy form and form for
voting by post are available at tryg.com prior to
the AGM.

In 2020, the general meeting differed from
prior years due to COVID-19. In light of Tryg’s
responsibility for the safety of shareholders,
employees and management and the Danish
authorities’ measures to control the risk of infec-
tion with COVID-19, Tryg decided to livestream
the general meeting and recommended that
neither shareholders nor their advisors attended
the AGM in person, thus enabling the AGM to
be held with a minimum of physical attendance.
Instead, Tryg encouraged all shareholders to
submit questions, make use of written votes or
issue a proxy and to follow the general meeting
via livestream rather than by physical attend-
ance. Information on how to exercise sharehold-

Management’s review - Contents

ers’ rights at the AGM were communicated to
shareholders and published at tryg.com.

Due to the recommended acquisition, an
Extraordinary General Meeting (EGM) was held
on 18 December 2020. Again, due to COVID-19,
Tryg encouraged all shareholders to submit
questions, make use of written votes or issue
a proxy and to follow the general meeting via
livestream rather than by physical attendance.

Share and capital structure
Tryg’s share capital comprises a single share
class, and all shares rank pari passu. The major-
ity shareholder, TryghedsGruppen smba, owns
53% of the shares and is the only shareholder
owning more than 5% of the company’s shares.
The Supervisory Board ensures that Tryg’s
capital structure is aligned with the needs of the
Group and the interests of its shareholders and
that it complies with the requirements appli-
cable to Tryg as a financial undertaking. Tryg
has adopted a capital plan and a contingency
capital plan, which are reviewed annually by the
Supervisory Board.

Depending on the development in results,
each year the Supervisory Board proposes the
distribution of quarterly dividends, and possi-
bly an extraordinary annual dividend if further
adjustment of the capital structure is required. In
March 2020, Tryg’s Supervisory Board decided
to move to full-year dividends due to market
volatility and the general macroeconomic
backdrop. Tryg’s business model has proved
resilient even in very challenging times, and the

Annual report 2020 | Tryg A/S | company’s balance sheet and solvency position
have remained very healthy throughout this peri-
od. In November 2020, the Supervisory Board
therefore approved the payment of the Q1-Q3
2020 ordinary dividend.

Duties, responsibilities and composition of the
Supervisory Board
The Supervisory Board is responsible for the
central strategic management and financial
control of Tryg and for ensuring that Tryg’s
business is organised in a robust way. This is
achieved by monitoring targets and frameworks
on the basis of regular and systematic reviews of
strategy and risks. The Executive Board reports
to the Supervisory Board on strategies and
action plans, market developments and Group
performance, funding issues, capital resources
and special risks.

The Supervisory Board holds one annual
strategy seminar to decide on and/or adjust the
Group’s strategy with a view to sustaining value
creation in the company. The Executive Board
works with the Supervisory Board to ensure
that the Group’s strategy is developed and
monitored. The Supervisory Board ensures that
the necessary skills and financial resources are
available for Tryg to achieve its strategic targets.
The Supervisory Board specifies its activities in
a set of rules of procedure and an annual cycle
for its work.

The current eight members of the Supervisory
Board were elected by the annual general meet-
ing for a term of one year. Of the eight members
elected at the annual general meeting, five, and
thus the majority, are independent persons, thus
complying with recommendation 3.2.1. in the
Recommendations on Corporate Governance,
while the other three members are dependent

persons as they are appointed by Tryg’s majority
shareholder, TryghedsGruppen. See page 40 for
information on when the individual members
joined the Supervisory Board, were re-elected
and when their current election period ends. To
ensure the integration of new talent on the Su-
pervisory Board, members elected by the annual
general meeting may hold office for a maximum
of twelve years. The Supervisory Board has 12
members in all, with an equal representation of
men and women (currently including two male
and two female employee representatives).

Women are thus not underrepresented on Tryg’s
Supervisory Board, which is in compliance with
legislation as well as Tryg’s policy. The Super-
visory Board has members from Denmark,
Sweden and Norway.

See details about the independent board mem-
bers in the section Supervisory Board on pages
40-42 and at tryg.com > Governance

The Supervisory Board performs an annual
evaluation of its work and skills to ensure that
it possesses the expertise required to perform
its duties in the best possible way. In addition
to the annual self-evaluation, an assessment is
facilitated with external assistance as a mini-
mum every three years to ensure objectivity in
the evaluation process. The Supervisory Board
focuses primarily on the following qualifications
and skills: business judgement, problem solving,
networking, risk management, succession
management, general management, CFO/audit,
people and organisation, business development,
financial services, risk and regulatory matters,
insurance – commercial and product, insurance
– technical/financial modelling, digitalisation,

value chain optimisation and customer journey.

As part of the evaluation, the Supervisory Board
also focuses on other executive positions and
board memberships held by the members of the
Supervisory Board, including the level of com-
mitment and workload associated with each
position in order to prevent potential overboard-
ing. The evaluation is based on the individual
board members’ ability to devote the neces-
sary time for preparation, their performance,
attendance and participation at committee and
board meetings in Tryg. In 2020, the Chair held
five board seats in publicly listed companies. As
a professional board member with more than 25
years of relevant international experience com-
bined with a unique set of competencies, the
Chair, with his role as an independent chair at
Tryg, is a very valuable presence at Supervisory
Board and committee meetings. The Chair has
been very dedicated to all board and committee
meetings with a 100% attendance rate since he
was elected as Chair of the Supervisory Board
in 2018. The Chair has reduced the amounts of
obligations in listed and non-listed companies in
2020 and is continuously assessing his capabili-
ty to allocate the required time and energy to his
actual Board posts.

In early 2020, an evaluation with external assis-
tance was conducted, involving individual inter-
views with all board members and members of
the Executive management based on a ques-
tionnaire focusing on board competencies and
performance. The overall conclusion was that
Tryg has a very good, value-adding and profes-
sional Supervisory Board that works efficiently
and in accordance with sound governance
principles. The evaluation resulted in a contin-
ued focus on securing succession on the board,
proactively trimming the reporting process on

Management’s review - Contents

Tryg’s financial position, risk management and
compliance in order to optimise meeting prepa-
rations as well as continued focus on the roles of
the board committees and their output. Further,
the Supervisory Board decided to arrange a
board education day on relevant matters.

See CVs and descriptions of skills in the section
Supervisory Board on pages 41-42
and at tryg.com > Governance

Duties and composition of the Executive Board
Each year, the Supervisory Board reviews and
adopts the rules of procedure of the Superviso-
ry Board and the Executive Board, comprising
relevant policies, guidelines and instructions
describing reporting requirements and require-
ments for communication with the Executive
Board. Financial legislation also requires the
Executive Board to disclose all relevant infor-
mation to the Supervisory Board and report on
compliance with limits defined by the Superviso-
ry Board and in legislation.

The Supervisory Board considers the compo-
sition, development, risk and succession plans
of the Executive Board in connection with the
annual evaluation of the Executive Board, and
regularly in connection with board meetings.
Each year, the Supervisory Board discusses
Tryg’s activities to guarantee diversity at man-
agement levels. Tryg attaches great importance
to diversity at all management levels. Tryg has
prepared an action plan, which sets out specific
targets to ensure diversity and equal opportu-
nities and access to management positions for
qualified men and women. While Tryg has made
progress in recent years, the target for 2020 of
41% women at management level was not met.

Annual report 2020 | Tryg A/S | for the Supervisory Board, the Executive Board
and other employees in Tryg, whose activities
have a material impact on the risk profile of the
company, risk takers. The remuneration policy
for 2020 was adopted by the Supervisory Board
in January 2020 and approved by the annual
general meeting on 30 March 2020.

Management’s review - Contents

for the current financial year is also submitted
for approval by the shareholders at the annual
general meeting.

Download Remuneration policy

However, 50% of new appointments in manage-
ment positions were women in 2020.

Involvement of the employee representatives in
the committees is also considered important.
The committees exclusively prepare matters for
decision by the entire Supervisory Board.

Download General action plan for diversity
including women in management

Board committees
Tryg has an Audit Committee, a Risk Commit-
tee, a Nomination Committee, a Remuneration
Committee and an IT-Data Committee. The
frameworks for the committees’ work are de-
fined in their terms of reference.

The board committees’ terms of reference can
be found at tryg.com > Governance > Manage-
ment > Supervisory Board > Board committees,
including descriptions of members, meeting
frequency, responsibilities and activities during
the year.

See the tasks of the board committees in 2020
at tryg.com > Governance > Management >
Supervisory Board > Board committees

All members of the Audit Committee and three
out of four members of the Risk Committee,
including the committee chair, are independent
persons. Three out of the five members of the
Remuneration Committee are independent
persons, including the committee chair. Two out
of three members of the Nomination Committee
are independent, including the committee chair.
Two out of four members of the IT-Data Com-
mittee are independent persons, including the
committee chair. Board committee members are
elected primarily based on special skills that are
considered important by the Supervisory Board.

The special skills of all members are also
described at tryg.com

Remuneration of management
Tryg has adopted a remuneration policy for Tryg
in general, which contains specific schemes

The Chair of the Supervisory Board reports on
Tryg’s remuneration policy each year in connec-
tion with the review of the annual report at the
annual general meeting. The Board’s proposal
for the remuneration of the Supervisory Board

Remuneration of the Supervisory Board
Members of Tryg’s Supervisory Board receive a
fixed fee and are not comprised by any form of
incentive or severance programme or pension
scheme. Their remuneration is based on trends

Total remuneration of the Supervisory Board in 2020

DKK

Basic fee Audit Committee

Risk Committee

Remuneration
Committee

ITData
Committee

"Nomination
Committee"

Social
contributions
(NO/SE)*

Jukka Pertola, Chair
Torben Nielsen, Dep. Chair1)
Lene Skole
Mari Thjømøe
Carl-Viggo Östlund
Ida Sofie Jensen
Tina Snejbjerg 2)
Lone Hansen 3)
Tom Eileng 3)
Elias Bakk 4)
Karen Bladt
Claus Wistoft
Gert Ove Mikkelsen 5)
Charlotte Dietzer 5)
Total

1,170,000
780,000
390,000
390,000
390,000
390,000
390,000
97,500
97,500
390,000
390,000
390,000
292,500
292,500

240,000
160,000
160,000

160,000

165,000
82,500

110,000
110,000
82,500

27,500

140,000

150,000
100,000

100,000

210,000
140,000

35,000

105,000

135,610
140,580

23,875
98,010

55,868

Total

1,625,000
1,442,500
710,000
845,610
850,580
740,000
632,500
132,500
148,875
593,010
390,000
390,000
348,368
292,500
9,141,443

1) Joined the Remuneration Committee as additional member in March 2020; In 2020 Torben Nielsen also received a fee as Chair of the Board of the subsidiaries Tryg Invest A/S (DKK 125,000) and

Kapitalforeningen Tryg Invest Funds (DKK 200,000),

2) Joined as a member of the Remuneration Committee in March 2020,
3) Resigned from the Supervisory Board in March 2020,
4) Joined as a member of the IT-Data Committee in March 2020
5) Joined the Supervisory Board in March 20200
* Employer contributions to social security relating to board members from Sweden and Norway

Annual report 2020 | Tryg A/S | Total remuneration of the Executive Board in 2020

DKK
Name

Basic salary

Pension

Morten Hübbe
Lars Bonde
Johan Kirstein Brammer
Barbara Plucnar Jensen

11,783,200
5,600,458
5,692,500
5,200,000

2,945,800
1,400,115
1,423,125
1,300,000

Car
allowance

255,000
255,000
255,000
255,000

Other
benefits

27,000
27,000
27,000
27,000

Total fixed
salary

Conditional
Shares1)

Special
allowance2)

Total
salary

15,011,000
7,282,573
7,397,625
6,782,000

4,603,373
2,233,322
2,367,240
2,079,813

1,200,000
1,200,000
1,200,000
1,200,000

20,814,373
10,715,895
10,964,865
10,061,813

1) The value of Conditional Shares at the time of allotment in January 2021 for the 2020 performance year.
2) One-off award in Conditional Shares, cf. below

in peer companies, taking into account the
required skills, efforts and the scope of the Su-
pervisory Board’s work, including the number of
meetings held. The remuneration received by the
Chair of the Supervisory Board is three times that
received by ordinary members, while the Deputy
Chair’s remuneration is twice that received by
ordinary members of the Supervisory Board.

Remuneration of the Executive Board
Members of the Executive Board are employed
on a contractual basis, and all terms of their
remuneration are established by the Supervisory
Board within the framework of the approved
remuneration policy.

Tryg wants to strike an appropriate balance
between management remuneration, predict-
able risk and value creation for the company’s
shareholders in the short and long term.

The Executive Board’s remuneration consists
of a fixed basic salary, a pension contribution of
25% of the base salary and other benefits. The
base salary must be competitive and appro-
priate for the market and provide sufficient

motivation for all members of the Executive
Board to do their best to realise the company’s
defined targets.

The Supervisory Board can decide that the basic
salary should be supplemented with a variable
pay element of up to 50% of the fixed salary
including pension.

The variable pay is set out in an incentive pro-
gramme for the Executive Board. The allocation
of the variable salary components under the
incentive programme is based on a result and
performance assessment of each participant’s
work in the performance year (financial year),
based on specific weighted financial and non-fi-
nancial targets decided at the beginning of the
performance year.

The principal purpose of the incentive pro-
gramme is to ensure the congruence of the fi-
nancial interest of the participants and the com-
pany’s shareholders and to create a correlation
between remuneration and performance results.
Secondly, the programme should contribute to
retaining the participants in Tryg.

For the performance year 2020, the variable
pay element was in January 2021 allotted as
conditional shares. The cap for the incentive
programme was 32% of the fixed salary including
pension in 2020.

The targets for 2020 were based on Tryg’s tech-
nical result, Transactional Net Promoter Score,
employee satisfaction levels, the incorporation
of Alka and the implementation of the strategy.

The allotted conditional shares are deferred for
four years from the time of allotment. After the
end of the deferral period, the participant will
receive free shares in Tryg A/S corresponding
to the numbers of conditional shares allotted.
The granting of free shares is conditional upon
the fulfilment of additional conditions such as
continued employment and back-testing (testing
prior to granting, to ensure that the criteria on
which the variable salary is based are still met at
the time of granting of free shares).

Furthermore, all members of the Executive
Board received a discretionary one-off bonus in
December 2020 in recognition of their strategic

Management’s review - Contents

efforts to ensure that Tryg, together with Cana-
dian Intact, was able to submit a binding offer to
purchase RSA. The one-off bonus took the form
of conditional shares, which are deferred for
four years.

Read more about the incentive programme in
the Remuneration policy and in the Remunera-
tion Report at tryg.com

Financial reporting, risk management and
auditing
As an insurance business, Tryg is subject to the
risk management requirements of the Danish
Financial Business Act and Solvency II. The Su-
pervisory Board defines Tryg’s risk management
framework as regards insurance risk, investment
risk, compliance risk and operational risk, as
well as IT security, in policies and guidelines for
the Executive Board. Risks associated with new
financial reporting rules and accounting policies
are monitored and considered by the Audit
Committee, the finance management and the
internal auditors. Material legal and tax-related
issues and the financial reporting of such issues
are assessed on an ongoing basis.

Other risks associated with the financial report-
ing are described in the section Solvency and
dividend on pages 31-32 and in Note 1 Risk
management on page 60

Tryg engages in ongoing risk identification, map-
ping insurance risks and other risks which may
endanger the realisation of Tryg’s strategy, or
which may potentially have a substantial impact
on Tryg’s financial position. The process involves

Annual report 2020 | Tryg A/S | identifying and continually monitoring the risks
identified. As in previous years, Tryg undertook
an Own Risk and Solvency Assessment (ORSA)
in 2020. The purpose of the ORSA is to ensure
and demonstrate a link between strategy, risk
management, risk appetite, solvency and capital
planning over the planning period. Giving the
outbreak of COVID-19, specific attention has
been given to identifying, assessing and manag-
ing the risks stemming from this new situation.

The Supervisory Board and the Executive Board
approve and monitor the Group’s overall policies
and guidelines, procedures and controls in
important risk areas. They receive reports about
developments in these areas and about the ways
in which the frameworks are applied. The Su-
pervisory Board checks that the company’s risk
management and internal controls are effective.
The Board receives reports on non-compliance
with the frameworks and guidelines established
by the Supervisory Board. The Risk Committee
monitors the risk management on an ongoing
basis and reports quarterly to the Supervisory
Board.

The Group’s internal control systems are based
on clear organisational structures and guidelines,
general IT controls and segregation of functions,
which are supervised by the internal auditors.

As part of the internal control system, Tryg has
established independent risk management,
compliance and actuarial functions. The func-
tions are reporting to the Executive Board and
the Supervisory Board’s Risk Committee. Tryg
has a decentralised set-up whereby risk manag-
ers in the business areas carry out monitoring
and reporting of second line internal controls for
the risk management and compliance functions.

Risk management is an integral part of Tryg’s
business operations. The Group seeks at all times
to minimise the risk of unnecessary losses in or-
der to optimise returns on the company’s capital.

Read more about Tryg’s Risk management in the
section Solvency and dividend on pages 31-32
and in Note 1 on page 60

Whistleblower line
Tryg has a whistleblower line, which allows
employees, customers and business partners to
report any serious wrongdoings or suspected ir-
regularities. Reporting takes place in confidence
to the Audit Committee chair and the Head of
Legal & Compliance.

Tryg’s internal audit department regularly re-
views the quality of the Group’s internal control
systems and business procedures. It is respon-
sible for planning, performing and reporting on
the audit work to the Supervisory Board.

Deviations and explanations
Tryg complies with the Recommendations on
Corporate Governance except as regards the
number of independent members of board
committees, with which Tryg complies partially;
see recommendation 3.4.2. of the Recommen-
dations on Corporate Governance.

The deviations are explained in Tryg’s Statutory
Corporate Governance report, which is available
at tryg.com

Read more about Tryg’s whistleblower hotline at
tryg.com

Independent and internal audit
The Supervisory Board ensures monitoring
by competent and independent auditors. The
Group’s internal auditor attends all board
meetings. The independent auditor attends
the annual board meeting at which the annual
report is presented.

The annual general meeting annually appoints
an independent auditor recommended by the
Supervisory Board. At least once a year, the
auditors meet with the Audit Committee without
the presence of the Executive Board. The Audit
Committee chair deals with any matters that
need to be reported to the Supervisory Board.

Management’s review - Contents

Annual report 2020 | Tryg A/S | Supervisory Board

Management’s review - Contents

10.

11.

12.

1.
Lene Skole
Board member (2010)

7.
CarlViggo Östlund
Board member (2019)

2.
Claus Wistoft
Board member (2019)

8.
Karen Bladt
Board member (2019)

3.
Mari Thjømøe
Board member (2012)

4.
Elias Bakk
Employee representative (2017)

5.
Charlotte Dietzer
Employee representative (2020)

6.
Jukka Pertola
Chair (2017)

9.
Tina Snejbjerg
Employee representative (2010)

10.
Gert Ove Mikkelsen
Employee representative (2020)

11.
Ida Sofie Jensen
Board Member (2013)

12.
Torben Nielsen
Deputy Chair (2011)

Annual report 2020 | Tryg A/S | Supervisory Board

Management’s review - Contents

Jukka Pertolab)
Born in 1960. Joined the Supervisory Board in 2017.
Finnish citizen.

Career Professional board member. Former CEO of Sie-
mens Denmark
Education MSc in Electrical Engineering
Board seats, Chair Tryg A/S and Tryg Forsikring A/S, Mon-
senso A/S (until 14.4.2021), Siemens Gamesa Renewable
Energy A/S and Asetek A/S
Board seats, Deputy Chair Cowi Holding A/S, Gomspace
Group AB incl. GomSpace A/S, GN Store
Nord A/S incl. GN Audio A/S and GN Hearing A/S
Commitee memberships Remuneration Committee
(Chair), Nomination Committee (Chair) and IT-Data
Committee in Tryg A/S, Nomination Committee in COWI
Holding A/S, Nomination Committee in Gomspace Group
AB, Remuneration Committee (Chair) in Asetek A/S and
Remuneration Committee, Nomination Committee and
Strategy Committee in GN Store Nord A/S
Experience More than 25 years of top management ex-
perience in the IT and telecommunication industry and
electrical engineering. The latest position being CEO of
Siemens Denmark from 2002 to 2017. Broad international
experience with global and regional business responsibili-
ties in both BtC and BtB.
Competencies Solid technological background in tel-
ecommunication, IT, digitalisation, business models,
strategy and business development. Understanding of risk
management, M&A, business know-how and judgement
as well as insurance.
Number of shares 6,000
Change in portfolio since 2019 2,000

Torben Nielsenb)
Born in 1947. Joined the Supervisory Board in 2011.
Danish citizen.

Career Professional board member, Adjunct Professor at
the Copenhagen Business School. Former Governor of
Danmarks Nationalbank (Danish Central Bank)
Education Savings bank training, Graduate Diplomas in
Organisation, Work Sociology, Credit and Financing.
Board seats, Chair Ny Holmegaard Værk Fund, Inves-
teringsforeningen Sparinvest, Vordingborg Borg Fund,
Museum of South East Denmark, Tryg Invest A/S and KTIF
(Kapitalforeningen Tryg Invest Funds)

Board seats, Deputy Chair Tryg A/S and Tryg Forsikring A/S
Board member Sampension KP Livsforsikring A/S and a
member of the Executive Management of Bombebøssen
Commitee memberships Audit Committee (Chair), Risk
Committee (Chair) and Nomination Committee in Tryg
A/S and Audit Committee (Chair) and Risk Committee
(Chair) in Sampension
Experience General experience from executive level in
banking. Micro and macro knowledge from membership
of the Board of Governors in the Danish Central Bank.
Knowledge of chairmanship from non-executive boards.
Competencies General top management experience from
the financial sector as well as experience with risk man-
agement and regulatory requirements business know-how
and judgement.
Number of shares 28,000
Change in portfolio since 2019 0

Elias Bakka)
Born in 1975. Joined the Supervisory Board in 2017.
Swedish citizen.

Employed since 2006
Career Business Coordinator in Moderna SE
Education Norra Real Gymnasium, financial services &
insurance at Företagsekonomiska Institut Stockholm. Edu-
cation at Forsikringsakademiet for new board members
Board member Tryg A/S and Tryg Forsikring A/S
Commitee memberships IT-Data Committee in Tryg A/S
Experience Team Manager in Moderna Affinity for 12
years, Business developer in Moderna and Affinity for 2
years
Competencies Solid insurance knowledge from his years
in industry, business know-how and judgement, experi-
ence with organisation development, business develop-
ment, customer handling and interaction.
Number of shares 956
Change in portfolio since 2019 138

Charlotte Dietzera+c)
Born in 1974. Joined the Supervisory Board in 2020.
Danish citizen.

Employed since 1998
Career Manager advisor in Claims Denmark, Tryg A/S

Education Insurance education at Forsikringsakademiet
(level 5) as well as various management and communica-
tion programmes
Board member Tryg A/S and Tryg Forsikring A/S
Experience Division partner in Tryg A/S and examiner at
Forsikringsakademiet.
Competencies Solid knowledge and experience within
the insurance industry. Excellent interpersonal and verbal
communication skills.
Number of shares 138
Change in portfolio since 2019 138

Gert Ove Mikkelsena+c)
Born in 1979. Joined the Supervisory Board in 2020.
Norwegian citizen.

Employed since 2011
Career Senior investigator in Tryg A/S
Education The Norwegian Police University College (BA)
and Queensland University of Technology (Master of Jus-
tice). Norwegian School of Economics (Business Econom-
ics and Management Accounting). Numerous courses in
insurance-related matters.
Board member Tryg A/S and Tryg Forsikring A/S
Experience Police Officer/Detective for 10 years, including
Leading Investigator at Organized Crime Unit in Oslo, Nor-
way. Joined the Special Investigation Unit at Tryg in 2011.
Competencies Broad experience with insurance-related
matters from most parts of the Tryg organisation. Solid
knowledge and experience with compliance/audits,
impact analyses and responsive strategies. Excellent inter-
personal and verbal communication skills
Number of shares 745
Change in portfolio since 2019 138

Tina Snejbjerga)
Born in 1962. Joined the Supervisory Board in 2010.
Danish citizen.

Employed since 1987
Career Officer of Tryg’s Personnel Department
Education Insurance training
Board member The Central Board of Forsikringsforbundet,
Tryg A/S and Tryg Forsikring A/S
Commitee memberships Risk Committee and Remunera-
tion Committee in Tryg A/S

Experience From 1987 to 2001, Tina Snejbjerg worked
with sale of insurance to both private and commercial
customers as well as providing insurance advice to cus-
tomers. From 2001-2009, Tina Snejbjerg was the deputy
chair of the local department of Forsikringsforbundet and
since 2009, she has been the chair working with opera-
tions, strategy, negotiation agreements and engaged in
recruiting and retaining members.
Competencies From many years of experience, Tina Sne-
jbjerg has acquired solid business know-how and judge-
ment, problem-solving abilities working with management
and HR-related issues in the financial sector, specifically
the insurance industry.
Number of shares 1,175
Change in portfolio since 2019 138

Ida Sofie Jensena)
Born in 1958. Joined the Supervisory Board in 2013.
Danish citizen.

Career Group Managing Director of Lif (Medicine and
Healthcare Industry), CEO of the subsidiary DLI A/S (Dan-
ish Medicine Information) and the subsidiary ENLI ApS
(Ethical Board for the Pharmaceutical Industry)
Education MSc in Political Science (cand.scient.pol.), Eu-
ropean Health Leadership Programme INSEAD, Executive
Management Programme INSEAD, Executive Program
Columbia Business School, Executive Program Singularity
University
Board seats, Chair TryghedsGruppen smba
Board member Tryg A/S and Tryg Forsikring A/S
Commitee memberships Remuneration Committee,
Nomination Committee and IT-Data Committee in Tryg
A/S
Experience General top management experience as CEO
of Lif since 2004 and former CEO of Herlev University
Hospital. Representive in TryghedsGruppen since 2010.
Deputy Chair 2014-2019 and Chair since 2019.
Competencies Solid business know-how and judgement,
analytical approach to problem-solving and strategy,
networking, skills and the ability to evaluate succession
scenarios as well as understanding of digitalisation.
Number of shares 2,905
Change in portfolio since 2019 0

Annual report 2020 | Tryg A/S | Management’s review - Contents

Gladheim Fastigheter AB, Hypoteket Bolån, Sverige AB
and Ponture AB
Board member Tryg A/S and Tryg Forsikring A/S, Allert
Östlund, DBT Capital AB, Havsgaard AB, Irisande Care
Group AB, Jovinum Food&Beverage AB, Nedvi Fastigheter
AB, Picsmart AB, Wonderbox AB and Ywonne Media
Group AB
Commitee memberships IT-Data Committee (Chair) and
Remuneration Committee in Tryg A/S
Experience More than 30 years as CEO and Managing
Director in local and international environment in listed
companies as well as banks. Experience from the fol-
lowing industries: manufacturing, logisticts, insurance,
finance and banking
Competencies Solid background from the insurance
industry, non-life as well as life. Business know-how and
judgement, banking and finance know-how, understand-
ing of digitalisation and risk management
Number of shares 3,080
Change in portfolio since 2019 450

IR associations for a number of years and received the
Women’s Board Award for Norway
Competencies Business know-how from experience with
the financial sector and energy as well as risk manage-
ment, strategy, restructuring, business development, M&A,
IR and financial communication and working with regula-
tory authorities
Number of shares 4,300
Change in portfolio since 2019 0

Experience Top management experience as the owner of
HASLE Refractories A/S since 2003 as well as 10 years of
experience as member of various supervisory boards
Competencies Business know-how and judgement,
experienced in business development with an analytical
approach to problem-solving
Number of shares 269
Change in portfolio since 2019 269

CarlViggo Östlundb)
Born in 1955. Joined the Supervisory Board in 2015.
Swedish citizen.

Career CEO of Allert Östlund AB, professional board mem-
ber and investor. Former CEO of Swedish banks SBAB and
Nordnet and the insurance company SalusAnsvar
Education BSc in International Business and Finance &
Accounting
Board seats, Chair FCG Fonder AB, Fondo Solutions AB,

Commitee meeting overview 2020

Lene Skoleb)
Born in 1959. Joined the Supervisory Board in 2010.
Danish citizen.

Career CEO of Lundbeckfonden (+ Lundbeck Invest A/S)
Education The A. P. Møller Group International Shipping
Education, Graduate Diploma in Finance and various inter-
national management programmes
Board seats, Deputy Chair Ørsted A/S, H. Lundbeck A/S,
ALK Abelló A/S and Falck A/S
Board member Tryg A/S and Tryg Forsikring A/S
Commitee memberships Audit Committee and Risk Com-
mittee in Tryg A/S, Audit Committee, Scientific Committee
and Nomination Committee in ALK-Abelló A/S, Scientific
Committee, Nomination Committee and Remuneration
Committee in H. Lundbeck A/S, Audit Committee and
Remuneration Committee in Falck A/S and Nomination
Committee and Remuneration Committee in Ørsted A/S
Experience Top management experience from various
positions in the AP Moller-Maersk Group, CFO in Coloplast
and currently CEO of Lundbeckfonden
Competencies Solid business know-how and judgement,
risk management, business development, finance, strate-
gy, M&A and understanding of business models
Number of shares 7,025
Change in portfolio since 2019 0

Mari Thjømøeb)
Born in 1962. Joined the Supervisory Board in 2012.
Norwegian citizen.

Career Professional board member and independent
advisor
Education MSc in Economy and Business Administra-
tion, Chartered Financial Analyst (CFA), Senior Executive
Programme from London Business School and Effective
Board Management from Harvard Business School
Board seats, Chair Bilington Process Technology A/S, Seil-
sport Maritimt Forlag A/S and ThjømøeKranen A/S
Board member Tryg A/S and Tryg Forsikring A/S, TF Bank
AB, FCG Fonder AB, Norconsult A/S and Norconsult Hold-
ing A/S, Hafslund E-CO ASA and ICE ASA
Commitee memberships Audit Committee and Risk Com-
mittee in Tryg A/S
Experience Senior management experience from large
cap companies, insurance and real estate. Extensive ex-
perience from board of directors within finance, IT, energy
and renewables and is engaged in developing sustainable
businesses and good governance. Headed the Norwegian

Claus Wistoftb)
Born in 1959. Joined the Supervisory Board in 2019.
Danish citizen.

Career 1st Deputy Mayor, Municipality of Syddjurs and
member of the finance committee. Agriculturalist, wind
energy production, tenanted properties and project devel-
opment of building sites. CEO in Demex Holding A/S and
C.W. Holding A/S
Education Agricultural education at Bygholm Agricultural
College and various business courses
Board seats, Chair Midttrafik I/S
Board member Tryg A/S and Tryg Forsikring A/S, Trygheds-
Gruppen smba, Seidelmann Holding ApS, Houmarken
A/S, Lyngfeldt A/S, Lyngfeldt Finansiering A/S, Lyngfeldt
Maskinudlejning ApS, K/S Prinz Carl Anlage l and Syddjurs
udviklingspark
Experience Top management experience from operating
his own business for 35 years
Competencies Analytical approach to problem-solving,
solid business know-how and business development, un-
derstanding of risk management and succession
Number of shares 2,500
Change in portfolio since 2019 0

Karen Bladtb)
Born in 1967. Joined the Supervisory Board in 2019.
Danish citizen.

Career Director/owner of HASLE Refractories A/S
Education MSc.(Eng) in Operations and Supply Chain
Management, Aalborg University
Board seats, Chair Business Center Bornholm
Board seats, Deputy Chair Erhvervshus Hovedstaden –
Bornholm
Board member Tryg A/S and Tryg Forsikring A/S, HASLE
Refractories A/S, HASLE Refractories India Pvt. Ltd, Born-
holmstrafikken Holding A/S and TryghedsGruppen smba

Name

Jukka Pertola
Torben Nielsen
Elias Bakk
Charlotte Dietzer
Gert Ove Mikkelsen
Tina Snejbjerg
Ida Sofie Jensen
Lene Skole
Mari Thjømøe
Claus Wistoft
Karen Bladt
Carl-Viggo Östlund

Supervisory
Board

Audit
Committee

Risk
Committee

Nomination
Committee

Remuneration
Committee

ITData
Committee

22/22
22/22
22/22
20/22
21/22
22/22
22/22
22/22
22/22
22/22
22/22
22/22

7/7

15/15

15/15
15/15

7/7
7/7

8/8
8/8

8/8

11/11
11/11

10/11
10/11

4/4

3/4

4/4

10/11

4/4

Members of the Supervisory Board are elected for a term of one year. Employee representatives are, however,
elected for a term of four years.
a) Dependent member of the Supervisory Board.
b)
c) Joined the Supervisory Board in March 2020

Independent member of the Supervisory Board, as per the definition in Recommendations on Corporate Governance.

Annual report 2020 | Tryg A/S | Executive Board

Management’s review - Contents

Lars Bonde
Group COO

Barbara Plucnar Jensen
Group CFO

Morten Hübbe
Group CEO

Johan Kirstein Brammer
Group CCO

Born in 1965. Joined Tryg in 1998.
Joined the Executive Board in 2006.

Born in 1971. Joined Tryg in 2019.
Joined the Executive Board in 2019.

Born in 1972. Joined Tryg in 2002.
Joined the Executive Board in 2003.

Born in 1976. Joined Tryg in 2015.
Joined the Executive Board in 2018.

Education: Insurance training, LL.M.
Board seats, Chair: P/F Betri Trygging,
Tryg Livsforsikringsselskab A/S and
Forsikrings akademiet
Board member: Danish Employers’
Association for the Financial Sector and Cph-
business (Copenhagen Business Academy)
Number of shares held: 81,960
Change in portfolio in 2020: +11,552

Education: MSc in Economics,
University of Copenhagen
Board member: J. Lauritzen, Nordsøenheden
and Kapitalforeningen Tryg Invest Funds
Committee memberships: Audit Committee
in J. Lauritzen (Chair)
Number of shares held: 13,532
Change in portfolio in 2020: +7,775

Education: BSc in International Business
Administration and Modern Languages, MSc in
Finance and Accounting (CBS), management
programme at Wharton
Board seats, Chair: Conscia and Siteimprove
Board seats, Deputy Chairman: Simcorp A/S
Number of shares held: 230,812
Change in portfolio in 2020: +34,523

Education: LL.M., MBA, Graduate Diploma in
Finance.
Board member: Insurance & Pension
Denmark (IPD).
Number of shares held: 37,405
Change in portfolio in 2020: +13,009

Annual report 2020 | Tryg A/S | Corporate Responsibility in Tryg

Tryg has been a signatory member to the UN
Global Compact since 2008. In addition to this
section on Corporate Responsibility, Tryg pub-
lishes its independent Corporate Responsibility
report on tryg.com. Our Corporate Responsibili-
ty report is our statutory statement on corporate
social responsibility and gender diversity at
management level presented in accordance with
Sections 132 and 132a of the Danish Executive
Order on Financial Reports for Insurance Com-
panies and Lateral Pension Funds (Nationwide
Occupational Pension Funds). Our Corporate
Responsibility report also includes extensive En-
vironmental, Social and Governance (ESG) data.

Download Corporate Responsibility report
See ESG data on pages 35-37 in our Corporate
Responsibility report

Tryg’s Corporate Responsibility strategy for
2020 focused on four areas: Actively creating
peace of mind, Climate and environment,
Responsible workplace and Business ethics.
Our Corporate Responsibility efforts are linked
to Tryg’s business model and core business (see
page 13). As an insurance provider, Tryg pro-
vides a safety net for its customers across the
Nordics in case of a claim and offers prevention
initiatives to reduce and limit claims. Hence, Tryg
creates peace of mind before, during and after
a claim. The Corporate Responsibility Board,
chaired by the CFO, supervises Tryg’s Corporate
Responsibility efforts.

Download Terms of reference for Corporate
Responsibility Board
Download Corporate Responsibility policy

In 2020, Tryg conducted an extensive materi-
ality assessment to identify the environmental,
social, economic and governance issues that
are perceived to be most important to Tryg and
its stakeholders. The results of the materiality
assessment form the basis of our corporate
responsibility approach, which ensures that we
focus on the opportunities and risks in relation
to Corporate Responsibility that matter most to
our stakeholders.

Actively creating peace of mind
Actively creating peace of mind is one of the
strategic elements of Tryg’s Corporate Responsi-
bility strategy, through which Tryg is contributing
to society as well as offering relevant products
with a preventive element to our customers.

In 2020, Tryg launched the Tryg Sund app, which
consolidates the health of our commercial
customers in one app. During our busy everyday
lives, it can be difficult to prioritise one’s health.
Via Tryg Sund, we are able to push messages to
inform our customers about the health initi-
atives we offer through our health portal. To
increase the safety of our customers and their
cars, we have launched Tryg Bilpleje, which is
our new car service product that we offer to our
car insurance customers. The purpose of the
product is to ensure that our customers’ cars

are safe and ready for the seasonal changes in
weather.

The Nightravens and lifebuoys are two initia-
tives, which create peace of mind in society in
Norway. The Nightravens prevent crimes from
happening by being present and making people
feel safe in the night life, while the lifebuoys pro-
vide safety along the coastlines, lakes, rivers and
near harbours in Norway. The lifebuoy is a vitally
important rescue tool, and for decades, Tryg has
provided lifebuoys to Norwegian society. Today,
Tryg owns more than 47,000 lifebuoys.

Read more on pages 11-14 in our Corporate
Responsibility report

Climate and environment
Tryg is not an energy-intensive company, since
its carbon emissions are mainly associated
with heating and electricity use at the offices
in addition to car and air travel. However, we
acknowledge that we are part of the solution
when it comes to minimising carbon emissions.
We support the Danish government’s ambition
to reduce carbon emissions by 70% in 2030
compared to 1990 as well as the efforts to min-
imise climate change and its negative impacts
addressed in the Paris Agreement.

Tryg has a direct impact on the climate and the
environment through its own internal operations
and an indirect impact through its business
activities. Tryg’s climate and environmental

Management’s review - Contents

policy sets out our commitment to minimising
the carbon footprint and negative impact of our
own operations and creating a positive impact
through our business activities such as product
development and claims handling.

Download the Climate and environmental policy
Read more on pages 15-18 in our Corporate
Responsibility report

Climate risks and opportunities
Environmental and climate-related issues such
as climate change and natural disasters are
material issues for Tryg and for our stakeholders.
The changing climate is causing harm and con-
cern to our customers and society. Also, extreme
weather events potentially represent a risk to
Tryg. Yet, it also represents several opportunities.

Physical risks and oppotunities
Extreme weather events such as flooding, cloud-
bursts and storms as well as changing weather
patterns such as milder winters represent a
physical risk to Tryg, since environmental and
climate-related events can cause an increase in
the frequency of climate-related claims.

A potential increase in the frequency of cli-
mate-related claims gives rise to insurance and
underwriting risks. Therefore, Tryg monitors data
available on material climate changes and seeks
to mitigate the risk of such possible changes
by working to prevent claims by advising its
customers on how to protect their homes from

Annual report 2020 | Tryg A/S | Management’s review - Contents

Carbon emissions
Tonnes

Employee satisfaction
Index

Employee mix
%

5,127

54%

53%

46%

2,443

2,502

852

880

474

354

453

128

30%

17%

Air and
train travel

Car
travel

District
heating

Waste

Total

Tryg

Nordic

2020

2019

Nordic financial
market

Men

Women

Age
<30
years

Age
30-49
years

Age
>50
years

0,5%

Flexi job

1,109

687

Electricity

2020

2019

113

Stationary
combustion

climate-related risks and by including it in our un-
derwriting and reinsurance. Also, insurance risk is
controlled by limiting the size of single exposures,
through geographical limitations and by refraining
from offering certain types of insurance.

By contributing to the prevention of climate-re-
lated claims, Tryg is able to support society and
the transition to a low-carbon economy, offer
relevant products and services to our customers
and increase our customers’ peace of mind.

Transitional risks and opportunities
One of the main transitional risks is the potential
development in climate-related policy and regula-
tion. Future policy actions, both at a national and
at EU level, may seek to either constrain actions
which contribute to the adverse effects of climate
change or promote adaptation. Even though
Tryg’s direct carbon footprint is limited, the imple-
mentation of such initiatives still represents a risk
to Tryg, which calls for adaptation. Also, regula-
tory developments that include new disclosure

or reporting requirements introduced within the
financial sector to address climate-related issues
represent a transitional risk, to which Tryg has to
adapt to stay compliant as well as competitive.

The transition to a low-carbon economy also
represents several opportunities for Tryg. We are
able to utilise new technology, knowledge and
data to improve our claims prevention meas-
ures as well as implement more sustainable
claims handling processes. Sustainable claims
handling is a key area, in which we can become
more sustainable and contribute to a low-car-
bon economy, while offering our customers a
more sustainable claims handling process. Also,
sustainable claims handling reduces the use of
materials, benefitting both the environment and
Tryg’s claims costs.

Carbon emissions
In 2020, Tryg’s total carbon emissions de-
creased by 51% compared to 2019, correspond-
ing to a decrease of 2,626 tonnes of CO2 in total.

However, 2020 was an unusual year due to the
COVID-19 pandemic, which significantly affect-
ed Tryg’s carbon emissions.

Tryg calculates carbon emissions based on
the Greenhouse Gas Protocol Initiative (GHG
protocol).

From March 2020, except for business-critical
travel, almost all business travel across national
borders was cancelled to limit transmission of
the virus, which led to an 81% decrease in car-
bon emissions from air travel compared to 2019.

Most of our employees in Denmark, Norway and
Sweden were asked and advised to work from
home. As a result, the electricity consumption
at all our offices decreased by 36% in total
compared to 2019, while total waste produc-
tion decreased by 45%, all contributing to the
decrease in Tryg’s total carbon emissions.

Yet, Tryg initiated several initiatives in 2020,
which have also contributed to the decrease in
our total carbon emissions. Read more under on
page 17 in our Corporate Responsibility report.

Eco-Lighthouse in Norway
Eco-Lighthouse is a Norwegian certification
scheme for companies seeking to document
their environmental efforts and demonstrate
social responsibility. In 2020, Tryg initiated the
recertification of its offices in Norway according
to the specific criteria applicable to the insur-
ance industry. We expect to meet the updated
reporting deadlines and to obtain recertification
in the first half of 2021.

Responsible workplace
Providing a healthy and safe working environ-
ment and securing the well-being of our employ-
ees are vital to Tryg. Our materiality assessment
indicated that there is a risk that Tryg can have
adverse impacts on its employees through,
for example, dissatisfaction, discrimination or
the physical or psychosocial working environ-

Annual report 2020 | Tryg A/S | ment. To mitigate this risk, we are continuously
working to improve working conditions for our
employees.

towards our target of 41% women in man-
agement positions in our next strategy period
towards 2023.

Read more on pages 19-23 in our Corporate
Responsibility report

Employee satisfaction
The annual employee satisfaction survey is
key to measuring employee satisfaction and
a starting point for talking about well-being in
the workplace. In 2020, Tryg’s overall employee
satisfaction score increased to 80, up from 78 in
2019. Despite 2020 being a different year for all
employees in Tryg due to COVID-19, the score
for 2020 is record-high.

Diversity and inclusion
We believe that a diverse representation of
employees and, more importantly, diversity of
thought are key elements to the success of Tryg.
In 2020, Tryg increased the number of women in
management positions from 35% in 2019 to 38%
through a successful high focus on improving
gender balance. As a result, a 50/50 balance for
managerial recruitments was achieved in 2020.

While we have made significant progress in
recent years, we still have some way to go before
reaching our 2020 group target of 41% women
in management positions.

We realise there are no quick or easy solutions,
and the cultural change required to meet our
target will take time. Hence, further actions
are needed to realise our target. This involves
looking at the barriers and focusing on the
underlying structures, HR processes and our
organisational culture. We will continue to work

Tryg’s Supervisory Board is composed of six
men and six women, and under Danish law as
well as Tryg’s own policy, there is equality among
the genders.

In 2020, Tryg expanded its diversity agenda to
include a broader focus by promoting diversity
of thought in management teams. We will be
focusing on increasing diversity for three factors:
gender, age and industry/experience.

Activities to increase diversity and inclusion
To attract, hire and retain female leaders as well
as increase diversity in management teams, Tryg’s
action plan for diversity for 2023 focuses on elimi-
nating bias in our recruitment and HR process.

Tryg will recruit the candidate with the best
competencies and skills for the team, and we
are striving to hire candidates who will increase
diversity of thought in our management teams.
We are also reducing unconscious bias in our
recruitment process through data collection and
through training of our recruitment managers.
By raising awareness and training our leaders
on how to lead diverse teams in our leadership
programmes, we are focusing on building an
inclusive culture.

Download General action plan for diversity
including women in management

Business ethics
Tryg is committed to run an ethical, transpar-
ent and responsible business. Our materiality

assessment shows that business ethics, data
privacy and cyber security are material matters
to Tryg. Building knowledge and capacity on
these issues, not only internally among our
employees through for example e-learning, but
also throughout our business relations, requires
continuous attention.

Our commitment to ethical and strong corporate
governance is the foundation on which we build
our business. Tryg’s Code of Conduct defines
the rules, which all employees are required to
adhere to. Our tax policy and anti-corruption
policy further outline our commitment to acting
as a responsible company. Our Supplier Code
of Conduct sets out minimum requirements for
our suppliers and partners to operate in accord-
ance with responsible business principles and
in full compliance with all applicable laws and
regulations. Tryg’s responsible investment policy
outlines the principles we follow to ensure that
our investments are conducted in accordance
with our values.

Download Code of Conduct
Download Tax policy
Download Anti-corruption policy
Download Supplier Code of Conduct
Download Responsible investment policy
Read more on pages 24-28 in our Corporate
Responsibility report

Security
As an insurance company, for which digitalisa-
tion and innovation are high priorities, Tryg is
exposed to several security threats that we need
to mitigate. Security is crucial to Tryg and essen-
tial for us to secure our business. A high security
level creates a safe workplace as well as the ba-

Management’s review - Contents

sis for a successful and adaptive business. This
includes cyber security, as we are dependent on
well-functioning IT systems to perform our work
and run our business. This was especially impor-
tant during 2020, as most of our employees had
to work from home for long periods of time.

To uphold our security level, we test our em-
ployees in their knowledge of our security rules
once a year, including rules on cyber security,
confidential material, press enquiries and access
to our offices.

Data
Tryg deals with personal data on a daily basis,
and it is of high priority to us that our customers’
personal data are stored and handled in a lawful,
secure and compliant manner. Through our per-
sonal data policy, we seek to create transparen-
cy for our customers on how we collect, process
and use their personal data.

Download Personal data policy

We require all new employees to do a manda-
tory e-learning programme on GDPR and IT
security as part of their onboarding programme.
Over the course of the year, all new employees
completed the online training.

Data ethics
The use of data, including personal data, is
essential for Tryg’s business model. Hence, using
data in a responsible and ethical way is a key
issue for us.

Our data ethical principles form part of Tryg’s
Code of Conduct, are based on industry stand-
ards in the form of the Danish trade association,

Annual report 2020 | Tryg A/S | Insurance & Pension Denmark’s Data Ethical
Codex, relevant legal requirements as well as
internationally agreed standards, and outline
three main principles.

• Through transparency we communicate our

use of data.

• We care for personalisation and prevention.
• We strive to ensure a strong data security.

Read more about data ethics on pages 25-26 in
our Corporate Responsibility report

Whistleblower cases
Tryg’s whistleblower hotline is available for all its
stakeholders to report violations or potential vi-
olations of our Code of Conduct or other issues
falling within the scope of Tryg's whistleblower
hotline and is reviewed by the chair of the Audit
Committee, assisted by Tryg’s Legal and Compli-
ance Director. In 2020, two cases were reported
and investigated compared to three cases in
2019. One case led to a warning.

Read more about Tryg’s whistleblower hotline

Responsible investments
Tryg wants to ensure that its assets are invested
in a responsible manner. Our materiality as-
sessment has identified responsible investment
as a material issue to Tryg, as we are at risk of
violating international standards when investing.
Tryg wants to be transparent about its efforts to
mitigate this risk.

Ethical screening process
In 2020, we updated our responsible investment
policy to reflect our focus on especially cli-
mate-related and environmental issues as mate-
rial for our investments. Our manager selection
process focusses on choosing external portfolio
managers with a similar responsible mindset
as Tryg. However, a screening of our holdings
is carried out each year based on controversial
behaviour and controversial weapons to ensure
that individual holdings do not deviate from
expectations. Furthermore, we have formulated
a formal escalation process, which guides the
process after a screening of investments.

In 2020, the screening led to three companies
being flagged for controversial behaviour. In
line with the escalation process, dialogue was
initiated with the relevant external managers,
which have yielded satisfactory explanations
and actions. Thus, no companies were excluded.

Download Responsible investment policy
Download Process for ethical screening

Active source management
Tryg’s initiatives on active ownership are
primarily directed towards managing and
monitoring its external managers’ responsible
investment processes. The process related to
ensuring compliance by external managers with
Tryg’s responsible investment policy is called
Active source management. Our primary focus
is selecting external managers who share our
principles and have policies in place to ensure
that investments are managed responsibly.
External asset managers are UN PRI signatories
or in the process of becoming signatories and

Management’s review - Contents

are expected to incorporate ESG considerations
in their investment processes.

Download Policy for execution of active
ownership

Climate risk and carbon footprint monitoring
To mitigate risk in Tryg’s investment portfolio, we
monitor the carbon footprint and climate risk
associated with our investments. We currently
monitor our equity portfolio and parts of our
credit bond portfolio and focus especially on
transition risks and opportunities that arise from
the transition to a low-carbon economy. Our
equity portfolio is characterised by having a low
exposure to climate transition risks.

Responsible supply chain management
Tryg is committed to driving positive environmen-
tal and social progress and impact in the socie-
ties, in which we operate and to respect human
rights as described in the Universal Declaration
of Human Rights. Our commitment is enforced
through our signatory membership of the UN
Global Compact and is outlined in our Corporate
Responsibility policy as well as in Tryg’s Code of
Conduct and Supplier Code of Conduct.

Our materiality assessment indicates that there
is a risk of violations of human and labour rights
in our supply chain through our outsourcing
activities. To mitigate any violations, we actively
monitor our outsourcing suppliers for compli-
ance with the Ten Principles outlined in the UN
Global Compact.

In 2020, we strengthened our commitment by
updating our Code of Conduct regarding suppli-

Annual report 2020 | Tryg A/S | ers and partners, implemented a Supplier Code
of Conduct and designed a systematic follow-up
procedure via an external supplier evaluation
platform provider.

Our new Supplier Code of Conduct sets out
minimum requirements for our suppliers and
partners to operate in accordance with respon-
sible business principles and in full compliance
with all applicable laws and regulations.

With the implementation of a new external plat-
form for the evaluation of suppliers on sustainabil-
ity performance in 2020, we initiated an enhanced
systematic ESG risk-screening and supplier perfor-
mance evaluation process of our suppliers.

Download Supplier Code of Conduct

Corporate Responsibility strategy 2023
Tryg’s new Corporate Responsibility strategy for
2023, 'Driving sustainable impact', is based on,
how Tryg as a company and the employees can
contribute to a more sustainable society, and how
Tryg can support suppliers and help our custom-
ers to make more sustainable choices. The strat-
egy is characterised by a strategic, commercial
and holistic approach, the purpose of which is to
integrate sustainability into every corner of the
company. Hence, the strategy rests on three pil-
lars: Responsible company, Green workplace and
Sustainable insurance. For each strategic pillar,
we have set ambitious targets for both 2023 and
2030, as we want to contribute to an actual and
measurable impact as well as monitor progress.

Management’s review - Contents

Corporate Responsibility strategy 2023

The strategic pillar, Responsible company,
focuses on how Tryg can raise the bar for its
work with responsible procurement, responsible
investment as well as diversity and inclusion. We
seek to reduce the carbon intensity of our equity
portfolio by at least 50% in 2030 compared to
2020. Also, we want to contribute to the green
transition by divesting all our investments in fos-
sil fuel production companies with no strategy
for a green transition before 2030.

Tryg wants to be a green workplace and have set
the target of achieving carbon neutrality in 2023
in relation to the carbon emissions deriving from
scope 1, scope 2 and from waste, air and train
travel in scope 3*. We want to reduce our carbon
footprint by 30% in 2023 and 50% in 2030 com-
pared to 2019 and will compensate for the rest
of our carbon emissions. However, our goal is to
compensate less and reduce more over time.

The strategic pillar Sustainable insurance
focuses on how Tryg can support and motivate
its customers on their own sustainability journey
by offering sustainable products and services as
well as incorporating sustainability in our claims
handling process. Our ambition is to increase
our sustainable claims spend by 20% compared
to 2020 and achieve a total CO2 reduction
effect of 10,000-15,000 tonnes of CO2 in 2023
through climate-friendly claims handling.

Read more about Tryg’s Corporate Responsibili-
ty strategy 2023 on pages 31-34 in our
Corporate Responsibility report

Tryg has published an independent Corporate
Responsibility report with extended Environ-
mental, Social and Governance (ESG) data.

Download the report

* Tryg's carbon emission reduction targets are based on the Greenhouse Gas Protocol Initiative (GHG Protocol).

Annual report 2020 | Tryg A/S | Contents – Financial statements 2020

Tryg’s Group consolidated financial statements are prepared in accordance with IFRS

Financial statements - Contents

Tryg Group
Note

Statement by the Supervisory Board
and the Executive Board
Independent auditor’s reports
Financial highlights
Income statement
Statement of comprehensive income
Statement of financial position
Statement of changes in equity

Cash flow statement

Risk and capital management

1
2 Operating segments
2 Geographical segments
2

3
4

Technical result, net of reinsurance,
by line of business
Premium income, net of reinsurance
Insurance technical interest,
net of reinsurance
5 Claims, net of reinsurance
Insurance operating costs,
6
net of reinsurance

Interest and dividends

6 Matching shares and conditional shares
7
8 Value adjustments
9 Other costs

50
51
54
55
56
57
58
59
60
70
72

74
76

76
76

76
78
79
79
79

Tax
Intangible assets
Property, plant and equipment
Investment property
Equity investments in associates
Financial assets
Reinsurers’ share

Note
10
11
12
13
14
15
16
17 Current tax
Equity
18
19
Premium provisions
19 Claims provisions
20
21 Deferred tax
22 Other provisions
23 Other debt
24
25

Pensions and similar liabilities

Earnings per share
Contractual obligations, collateral
and contingent liabilities
Acquisition of activities
Related parties
Financial highlights
Accounting policies

26
27
28
29

Tryg A/S (parent company)
Income statement
Statement of financial position
Statement of changes in equity
Notes

Reporting for Q4
Quarterly outline
Geographical segments

Information
Other key figures
Group chart
Glossary
Product overview
Disclaimer

107
108
109
110

114
116

117
118
119
121
122

79
80
83
84
84
85
89
89
89
90
90
91
93
94
94
94

94
97
97
98
99

Annual report 2020 | Tryg A/S |

4949

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

Statement by the Supervisory
Board and the Executive Board

The Supervisory Board and the Executive Board
have today considered and adopted the annual
report for 2020 of Tryg A/S and the Tryg Group.

The consolidated financial statements are
prepared in accordance with the International
Financial Reporting Standards (IFRS) as adopted
by the EU and the additional Danish disclosure
requirements of the Danish Financial Business
Act on annual reports prepared by listed financial

services companies and the requirements of
NASDAQ Copenhagen for the presentation of the
financial statements of listed companies. The an-
nual report of the parent company is prepared in
accordance with the executive order on financial
reports presented by insurance companies and
lateral pension funds issued by the Danish FSA.

true and fair view of the Group’s and the parent
company’s assets, liabilities and financial posi-
tion at 31 December 2020 and of the results of
the Group’s and the parent company’s opera-
tions and the cash flows of the Group for the
financial year 1 January - 31 December 2020.

In our opinion, the accounting policies applied
are appropriate, and the annual report gives a

Furthermore, in our opinion the management’s
review gives a true and fair view of developments
in the activities and financial position of the

Group and the parent company, the results for
the year and of the Group’s and the parent com-
pany’s financial position in general and describes
significant risk and uncertainty factors that may
affect the Group and the parent company.

We recommend that the annual report be adopt-
ed by the shareholders at the annual general
meeting.

Ballerup, 26 January 2021

Executive Board

Morten Hübbe
Group CEO

Barbara Plucnar Jensen
Group CFO

Lars Bonde
Group COO

Johan Kirstein Brammer
Group CCO

Supervisory Board

Jukka Pertola
Chairman

Torben Nielsen
Deputy Chairman

Elias Bakk

Gert Ove Mikkelsen

Charlotte Dietzer

Karen Bladt

Claus Wistoft

Ida Sofie Jensen

Lene Skole

Tina Snejbjerg

Mari Thjømøe

Carl-Viggo Östlund

Annual report 2020 | Tryg A/S | Financial statements - Contents

Independent
auditor’s report

To the shareholders of Tryg A/S

Opinion
We have audited the consolidated financial
statements and the parent financial statements
of Tryg A/S for the financial year 1 January to 31
December 2020, pages 54-113, which comprise
the income statement, statement of compre-
hensive income, balance sheet, statement
of changes in equity and notes, including the
summary of significant accounting policies, for
the Group as well as the Parent and the consol-
idated cash flow statement. The consolidated
financial statements are prepared in accordance
with International Financial Reporting Standards
as adopted by the EU and additional Danish
disclosure requirements for listed financial
companies, and the parent financial statements
are prepared in accordance with the Danish
Financial Business Act.

In our opinion, the consolidated financial state-
ments give a true and fair view of the Group’s
financial position at 31 December 2020 and
of its financial performance and cash flows for
the financial year 1 January to 31 December
2020 in accordance with International Financial
Reporting Standards as adopted by the EU and

additional Danish disclosure requirements for
financial companies.

Also, in our opinion, the parent financial state-
ments give a true and fair view of the financial
position of the Parent at 31 December 2020 and
of its financial performance for the financial year
1 January to 31 December 2020 in accordance
with the Danish Financial Business Act.

Our opinion is consistent with our audit book
comments issued to the Audit Committee and
the Board of Directors.

Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (ISAs) and
additional requirements applicable in Denmark.
Our responsibilities under those standards and
requirements are further described in the Audi-
tor’s responsibilities for the audit of the consoli-
dated financial statements and the parent finan-
cial statements section of this auditor’s report.
We are independent of the Group in accordance
with the IESBA Code of Ethics for Professional
Accountants and additional requirements appli-

Key audit matters
Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the consolidated financial statements and
the parent financial statements for the financial year
1 January to 31 December 2020. These matters were
addressed in the context of our audit of the consol-
idated financial statements and the parent financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.

Claims provisions
Management’s estimates of the claims provisions are
based on actuarial methods and involve complex sta-
tistical methods as well as estimates of future events.
Changes in methods and assumptions may result in a
material impact on the size of the claims provisions.
Consequently, the audit of the claims provisions is
considered a key audit matter.

The claims provisions amount to DKK 24,957m at 31
December 2020 (DKK 24,859 m in 2019).

Management has specified the risks etc. related to the
estimates of the claims provisions in note 1 ”Risk and
capital management” on pages 60-69 and in ”Account-
ing policies”, note 29 on pages 99-106. The principles
of estimating the claims provisions have been specified
in ”Accounting policies”, note 29 on page 105, and
further specified in note 1 on pages 63-66 and in note
19 on pages 90-91.

The estimates of the claims provisions depend on
accurate and complete insurance data of current and
historical claims, including the development in claims
and payment patterns, as these data are used to estab-
lish the expectations for future claims for the purpose
of the statistical models.

•

How the matter was adressed in the audit
Assessment and test of controls related to the
•
processes of claims handling and the recognition
and measurement of provisions for known claims.
In cooperation with our own internationally qualified
actuaries, we have tested controls related to the ac-
tuarial estimates of the claims provisions of selected
lines of business.
We have tested the accuracy and the complete-
ness of the data that are included in the actuarial
estimates of the claims provisions.
In cooperation with our own internationally quali-
fied actuaries and based on our knowledge of the
industry, experience and historical observations,
we have assessed the statistical models applied to
estimate the claims provisions and we have tested
significant estimates and assumptions focusing on
consistency and possible changes.
Based on the actuarial estimates of the claims
provisions and analyses, and in cooperation with
our own internationally qualified actuaries, we
have assessed the development in the claims
provisions, including run-off gains/losses and the
development in the size of the margin included in
Management’s estimate of the claims provisions.

•

The most important assessments and
assumptions of future events relate to:
Estimated future claims payments, which are
•
based on the completeness and the accuracy of
historical claims and payment patterns, among
other factors.
Expectations for future inflation.
Determination of the margin included in Manage-
ment’s estimate of the claims provisions to address
the uncertainty related to the actuarial estimates.

•
•

Annual report 2020 | Tryg A/S | Financial statements - Contentscable in Denmark, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to
provide a basis for our opinion.

To the best of our knowledge and belief, we have
not provided any prohibited non-audit services
as referred to in Article 5(1) of Regulation (EU)
No 537/2014.

We were appointed auditors of Tryg A/S on 28
January 2002 for the financial year 2002 as
part of the formation of the Company. However,
we have been the appointed auditors of the
underlying subsidiaries since before 1995. We
have been reappointed annually by decision
of the general meeting for a total contiguous
engagement period of more than 19 years up to
and including the financial year 2020.

Statement on the management’s review
Management is responsible for the manage-
ment’s review.

Our opinion on the consolidated financial state-
ments and the parent financial statements does
not cover the management’s review, and we do
not express any form of assurance conclusion
thereon.

In connection with our audit of the consolidated
financial statements and the parent financial
statements, our responsibility is to read the
management’s review and, in doing so, consider
whether the management’s review is materially
inconsistent with the consolidated financial

statements and the parent financial statements
or our knowledge obtained in the audit or other-
wise appears to be materially misstated.

Moreover, it is our responsibility to consider
whether the management’s review provides the
information required under the Danish Financial
Business Act.

Based on the work we have performed, we
conclude that the management’s review is in
accordance with the consolidated financial
statements and the parent financial statements
and has been prepared in accordance with the
requirements of the Danish Financial Business
Act. We did not identify any material misstate-
ment of the management’s review.

Management’s responsibilities for the consoli-
dated financial statements and the parent finan-
cial statements
Management is responsible for the preparation
of consolidated financial statements that give
a true and fair view in accordance with Interna-
tional Financial Reporting Standards as adopted
by the EU and additional Danish disclosure
requirements for listed financial companies, and
for the preparation of parent financial state-
ments that give a true and fair view in accord-
ance with the Danish Financial Business Act,
and for such internal control as Management de-
termines is necessary to enable the preparation
of consolidated financial statements and parent
financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the consolidated financial state-
ments and the parent financial statements,
Management is responsible for assessing the
Group’s and the Parent’s ability to continue
as a going concern, for disclosing, as applica-
ble, matters related to going concern, and for
using the going concern basis of accounting in
the preparation of the consolidated financial
statements and the parent financial statements
unless Management either intends to liquidate
the Group or the Parent or to cease operations,
or has no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the
consolidated financial statements and the
parent financial statements
Our objectives are to obtain reasonable
assurance about whether the consolidated
financial statements and the parent financial
statements as a whole are free from material
misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs and
additional requirements applicable in Denmark
will always detect a material misstatement when
it exists. Misstatements can arise from fraud or
error and are considered material if, individually
or in the aggregate, they could reasonably be
expected to influence the economic decisions of
users taken on the basis of these consolidated
financial statements and these parent financial
statements.

As part of an audit in accordance with ISAs and
additional requirements applicable in Denmark,

we exercise professional judgement and main-
tain professional scepticism throughout the
audit. We also:

•

Identify and assess the risks of material
misstatement of the consolidated financial
statements and the parent financial state-
ments, whether due to fraud or error, design
and perform audit procedures responsive to
those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a
material misstatement resulting from fraud
is higher than for one resulting from error, as
fraud may involve collusion, forgery, inten-
tional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal con-
trol relevant to the audit in order to design
audit procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness of
the Group’s and the Parent’s internal control.
Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by Management.
Conclude on the appropriateness of Man-
agement’s use of the going concern basis
of accounting in the preparation of the
consolidated financial statements and the
parent financial statements, and, based on
the audit evidence obtained, whether a ma-
terial uncertainty exists related to events or
conditions that may cast significant doubt on
the Group’s and the Parent’s ability to contin-
ue as a going concern. If we conclude that a

Annual report 2020 | Tryg A/S | Financial statements - Contentsmaterial uncertainty exists, we are required to
draw attention in our auditor’s report to the
related disclosures in the consolidated finan-
cial statements and the parent financial state-
ments or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are
based on the audit evidence obtained up to
the date of our auditor’s report. However,
future events or conditions may cause the
Group and the Entity to cease to continue as
a going concern.
Evaluate the overall presentation, structure
and content of the consolidated financial
statements and the parent financial state-
ments, including the disclosures in the notes,
and whether the consolidated financial state-
ments and the parent financial statements
represent the underlying transactions and
events in a manner that gives a true and fair
view.
Obtain sufficient appropriate audit evidence
regarding the financial information of the en-
tities or business activities within the Group
to express an opinion on the consolidated
financial statements. We are responsible for
the direction, supervision and performance
of the group audit. We remain solely respon-
sible for our audit opinion.

•

We communicate with those charged with
governance regarding, among other matters, the
planned scope and timing of the audit and sig-
nificant audit findings, including any significant
deficiencies in internal control that we identify
during our audit.

Copenhagen, 26 January 2021

Deloitte
Statsautoriseret Revisionspartnerselskab
Business Registration No 33 96 35 56

We also provide those charged with govern-
ance with a statement that we have complied
with relevant ethical requirements regarding
independence, and to communicate with them
all relationships and other matters that may
reasonably be thought to bear on our independ-
ence, and where applicable, related safeguards.

From the matters communicated with those
charged with governance, we determine those
matters that were of most significance in the
audit of the consolidated financial statements
and the parent financial statements of the
current period and are therefore the key audit
matters. We describe these matters in our audi-
tor’s report unless law or regulation precludes
public disclosure about the matter or when, in
extremely rare circumstances, we determine
that a matter should not be communicated in
our report because the adverse consequences
of doing so would reasonably be expected to
outweigh the public interest benefits of such
communication.

JENS RINGBÆK
State Authorised Public Accountant,
MNE no 27735

KASPER BRUHN UDAM
State Authorised Public Accountant,
MNE no 29421

Annual report 2020 | Tryg A/S | Financial statements - ContentsFinancial highlights

DKKm

NOK/DKK, average rate for the period
SEK/DKK, average rate for the period
Gross premium income
Gross claims
Total insurance operating costs
Profit/loss on gross business
Profit/loss on ceded business
Insurance technical interest, net of reinsurance
Technical result
Investment return after insurance technical interest
Other income and costs
Profit/loss before tax
Tax
Profit/loss on continuing business
Profit/loss on discontinued and divested business after tax
Profit/loss
Run-off gains/losses, net of reinsurance

Statement of financial position
Total provisions for insurance contracts
Total reinsurers' share of provisions for insurance contracts
Total equity
Total assets

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio

Operating ratio
Relative run-off gains/losses
Return on equity after tax (%)

2020

69.63
70.95
22,653
-15,437
-3,202
4,014
-499
-20
3,495
311
-265
3,541
-768
2,773
0
2,773
1,145

32,488
1,377
12,264
60,916

68.1
2.2
70.3
14.1
84.5

84.6
4.9
22.5

2019

75.80
70.62
21,741
-14,857
-3,081
3,803
-566
1
3,237
579
-188
3,628
-783
2,845
-2
2,843
1,194

32,224
1,501
12,085
59,059

68.3
2.6
70.9
14.2
85.1

85.1
5.1
24.6

2018

77.53
72.67
18,740
-12,636
-2,704
3,400
-624
-10
2,766
-332
-172
2,262
-529
1,733
-2
1,731
1,221

31,948
1,415
11,334
56,545

67.4
3.3
70.7
14.4
85.1

85.2
5.4
14.9

2017

79.99
77.24
17,963
-11,865
-2,516
3,582
-779
-14
2,789
527
-77
3,239
-720
2,519
-2
2,517
972

30,018
1,366
12,616
51,367

66.1
4.3
70.4
14.0
84.4

84.5
4.1
28.8

2016

80.09
78.93
17,707
-11,619
-2,737
3,351
-951
-10
2,390
987
-157
3,220
-748
2,472
-1
2,471
1,239

31,527
2,034
9,437
49,861

65.6
5.4
71.0
15.7
86.7

86.5
5.5
26.2

Note: Tryg´s acquisition of Alka affects the Financial Statement from closing the 8 November 2018.

Annual report 2020 | Tryg A/S | Financial statements - ContentsIncome statement

DKKm

Note General insurance

Gross premiums written
Ceded insurance premiums
Change in premium provisions
Change in reinsurers' share of premium provisions
Premium income, net of reinsurance

Insurance technical interest, net of reinsurance

Claims paid
Reinsurance cover received
Change in claims provisions
Change in the reinsurers' share of claims provisions
Claims, net of reinsurance

Bonus and premium discounts

Acquisition costs
Administration expenses
Acquisition costs and administration expenses
Reinsurance commissions and profit participation from reinsurers
Insurance operating costs, net of reinsurance

Technical result

2020

2019

DKKm

2020

2019

23,652
-1,552
-187
85
21,998

-20

-15,542
987
105
-187
-14,637

-812

-2,532
-669
-3,202
170
-3,032

3,495

Note Investment activities
14

Profit/Loss from associates
Income from investment property
Interest income and dividends
Value adjustments
Interest expenses
Administration expenses in connection with investment activities

7
8
7

Total investment return

Return on insurance provisions

Total investment return after insurance technical interest

22,563
-1,259
-143
38
21,198

-15,419
388
562
40
-14,429

-679

Other income
Other costs

-2,458
-623
-3,081
227
-2,854

3,237

Profit/loss before tax
Tax

Profit/loss on continuing business

Profit/loss on discontinued and divested business

Profit/loss for the year

Earnings per share, DKK

-47
49
506
110
-126
-145

348

-37

311

88
-354

3,541
-768

2,773

9.19

-10
58
534
457
-178
-117

744

-166

579

168
-356

3,628
-783

2,845

-2

2,843

9.42

Annual report 2020 | Tryg A/S | Financial statements - ContentsStatement of comprehensive income

DKKm

Note Profit/loss for the year

Other comprehensive income

Other comprehensive income which cannot
subsequently be reclassified as profit or loss
Actuarial gains/losses on defined-benefit pension plans
Tax on actuarial gains/losses on defined-benefit pension plans

Other comprehensive income which can subsequently
be reclassified as profit or loss
Exchange rate adjustments of foreign entities for the year
Hedging of currency risk in foreign entities for the year
Tax on hedging of currency risk in foreign entities for the year

Total other comprehensive income
Comprehensive income

2020

2,773

-68
6
-62

-51
127
-28
48
-14
2,759

2019

2,843

-76
19
-57

32
-19
4
18
-39
2,804

Annual report 2020 | Tryg A/S | Financial statements - ContentsStatement of financial position

DKKm

Note Assets

13
14

19
16

Intangible assets
Operating equipment
Owner-occupied property
Total property, plant and equipment

Investment property
Equity investments in associates

Total investments in associates

Equity investments
Unit trust units
Bonds
Other lending
Derivative financial instruments
Total other financial investment assets
Total investment assets

Reinsurers' share of premium provisions
Reinsurers' share of claims provisions
Total reinsurers' share of provisions for insurance contracts

Receivables from policyholders
Total receivables in connection with direct insurance contracts
Receivables from insurance enterprises
Other receivables
Total receivables

17 Current tax assets

Cash at bank and in hand
Other
Total other assets

Interest and rent receivable
Other prepayments and accrued income
Total prepayments and accrued income

Total assets

2020

2019

DKKm

2020

2019

7,124
147
630
777

1,117
16
16

2,611
6,878
34,339
80
1,840
45,748
46,881

291
1,087
1,377

1,674
1,674
270
685
2,628

51
1,390
1
1,442

131
555
686

7,364
155
730
885

1,151
0

1,223
6,916
34,896
75
1,128
44,239
45,390

216
1,285
1,501

1,727
1,727
240
588
2,555

52
868
1
921

147
296
443

60,916

59,059

Note
18

Equity and liabilities
Equity

Subordinate loan capital

Premium provisions

19
19 Claims provisions

Provisions for bonuses and premium discounts
Total provisions for insurance contracts

Pensions and similar obligations

20
21 Deferred tax liability
22 Other provisions
Total provisions

Debt relating to direct insurance
Debt relating to reinsurance
Amounts owed to credit institutions
Debt relating to repos

15 Derivative financial instruments
23
Debt to group undertakings
17 Current tax liabilities
23 Other debt
Total debt

Accruals and deferred income

Total equity and liabilities

Risk and capital management

1
25 Contractual obligations, collateral and contingent liabilities
26 Acquisition of activities
27 Related parties
28
Financial highlights
29 Accounting policies

12,264

2,801

6,036
24,957
1,495
32,488

130
851
57
1,038

516
56
1,191
3,259
897
0
357
5,979
12,255

12,085

2,875

5,996
24,859
1,370
32,224

303
911
86
1,300

577
252
711
2,601
800
300
125
5,178
10,543

60,916

59,059

Annual report 2020 | Tryg A/S | Financial statements - Contents
Statement of changes in equity

DKKM

Share
capital

Reserve for
exchange rate
adjustment

Other
reservesa)

Retained
earnings

Proposed
dividend

Noncontrolling
interest

Equity at 31 December 2019

1,511

-23

1,677

7,906

1,013

2020
Profit/loss for the year
Other comprehensive income
Total comprehensive income
Dividend paid
Dividend own shares
Purchase and sale of own shares
Share based payments
Total changes in equity in 2020
Equity at 31 December 2020

0
1,511

48
48

48
25

29
1,706

629
-62
567

4
-13
29
586
8,492

2,115

2,115
-2,599

-484
529

Equity at 31 December 2018

1,511

-41

1,617

7,748

499

2019
Profit/loss for the year
Other comprehensive income
Total comprehensive income
Dividend paid
Dividend, own shares
Purchase and sale of own shares
Share based payments
Non-controlling interest
Total changes in equity in 2019
Equity at 31 December 2019

18
18

18
-23

60
1,677

230
-57
173

1
-43
27

158
7,906

2,553

2,553
-2,040

514
1,013

0
1,511

0
1

1
1
1

Total

12,085

2,773
-14
2,759
-2,599
4
-13
29
179
12,264

11,334

2,843
-39
2,804
-2,040
1
-43
27
1
751
12,085

Proposed dividend per share is calculated as the total
dividend proposed by the Supervisory Board after the
end of the financial year divided by the total number of
shares at the end of the year (302,147,991 shares).

The possible payment of dividend from Tryg Forsikring
A/S to Tryg A/S is influenced by contingency fund
provisions of DKK 1,706m (DKK 1,677m in 2019).
The contingency fund provisions can be used to cover
losses in connection with the settlement of insurance
provisions or otherwise for the benefit of the insured.

a) Other reserves contains Norwegian Natural Perils

Pool and contingency fund provisions.

Annual report 2020 | Tryg A/S | Financial statements - ContentsCash flow statement

DKKm

2020

2019

DKKm

Note Cash flow from operating activities

Premiums
Claims
Ceded business
Costs
Change in other debt and other amounts receivable
Cash flow from insurance activities
Interest income
Interest expenses
Dividend received
Taxes
Other income and costs
Total cash flow from operating activities

Cash flow from investment activities
Sale of property
Purchase/sale of equity investments and unit trust units (net)
Purchase/sale of bonds (net)
Purchase/sale of operating equipment (net)
Sale of associates
Hedging of currency risk
Total cash flow from investment activities

Cash flow from financing activities
Sharebased payments/purchase of own shares (net)
Dividend paid
Change in lease liabilities
Change in amounts owed to credit institutions
Total cash flow from financing activities

22,884
-15,400
-634
-2,961
468
4,358
359
-126
66
-599
-126
3,932

13
-5,502
4,339
-37
0
48
-1,139

-13
-2,599
-139
480
-2,271

21,736
-15,557
-651
-3,210
1,849
4,167
467
-169
24
-827
-31
3,631

357
49
-1,978
-69
246
18
-1,376

-43
-2,040
-147
217
-2,013

Change in cash and cash equivalents, net
Exchange rate adjustment of cash and cash
equivalents, 1 January
Change in cash and cash equivalents, gross
Cash and cash equivalents at 1 january
Cash and cash equivalents at 31 December

Liabilities arising from financing activities

2020
Carrying amount at 1 January
Exchange rate adjustments
Amortisation
Cash flow
Carrying amount at 31 December

2019
Carrying amount at 1 January
Exchange rate adjustments
Amortisation
Cash flow
Carrying amount at 31 December

2020

522

0
522
868
1,390

Subordinated
loans
2,875
-76
2
0
2,801

Amounts owed
to credit
institutions
711
0
0
480
1,191

2,868
6
2
0
2,875

494
0
0
217
711

2019

241

-1
241
627
868

Total
3,586
-76
2
480
3,992

3,362
6
2
217
3,586

Annual report 2020 | Tryg A/S | Financial statements - Contents1 Risk and capital management

Risk management in Tryg
The Supervisory Board defines the basis for the risk
appetite through the business model and the current
strategy. The Supervisory Board has regulated the
management of risk activities through policies and
guidelines to the business supported by underlying
business processes and a power of attorney structure.
The company’s risk management forms the basis for
the risk profile being in line with the specified risk
appetite at all times. Tryg’s risk profile is continuously
measured, quantified and reported to the manage-
ment and the Supervisory Board.

In Tryg, we have adopted a three lines of defence go-
vernance model across the organisation. This is to en-
sure robust governance and effective communication
between the business areas, key functions and internal
audit as well as reporting to the Supervisory Board and
the Supervisory Board’s Risk Committee (“RiU”).

1st line of defence is the Business Management

2nd line of defence is Compliance-, Actuarial- and Risk
Management function

3rd line of defence is Internal Audit and Internal Audit
function

The 1st line consists of the Business Management: The
business areas are responsible for the daily risk man-
agement and for carrying out every day work based on
Tryg’s policies and instructions regarding the manage-
ment of risks and are responsible for being compliant
with both internal and external requirements. This
means that there must be procedures and guidelines
in place for vital areas, and that internal controls are
carried out in such a way that risks are identified in a
timely manner and necessary risk mitigation activities
are implemented.

The 2nd line consists of the Compliance, Actuarial
and Risk Management function: The compliance
function has the overall responsibility for overseeing

and monitoring compliance with applicable laws and
legislation as well as internal policies and guidelines.
The key responsibility of the actuarial function is to
ensure and assess the adequacy of the provisions. The
risk management function is responsible for the facil-
itation, monitoring and implementation of effective
risk management practices and reporting of adequate
risk-related information throughout the organisation.
The risk management function ensures a consistent
approach to risk identification across the organisation,
risk assessment of the most significant risks at Group
level and reporting to the Supervisory Board.

The risk management function consists of a Group
risk management department and decentralized risk

Lines of defence

Executive Board

Supervisory Board

Supervisory Board’s
Risk Committee

Supervisory Board’s
Audit Committee

Reporting

Right to be heard,
cf. draft for
Executive order
on Management

What risk profile does Tryg want?
- Business model
- Strategy
- Policies

How is this supported?
Tactically
- Policies
- Capital plan
- Contingency plan

Operationally
- Frameworks
- Limitations
- Instructions
- Allocated capital
- Contingency plans

How is the actual risk profile measured?
Tactically
- Risk reports
- Internal controls
- Capital model
- Stress tests
- Reassurance

1st line of defence

2nd line of defence

3rd line of defence

External audit

• Business Management

• Compliance function
• Actuarial function
• Risk management
function

• Internal audit
• Internal audit function

Tryg’s risk management environment

Supervisory
Board

• Risk appetite
• Capital
• Strategy
• Crisis
management

Supervisory Board’s
Risk Committee

Risk management environment

Business areas

Policies

Executive Board

Policies
and guidelines

Risk Committee

Risk reporting
recommen-
dations

Insurance
risk

Model
risk

Compliance
risk

Market
risk

Operational
risk

Systematic risk
assessment
reporting

• Contingency
• Control
• Risk
identification
• Risk
management

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contentsmanagers in the individual business areas. The decen-
tralized risk managers are anchored in the respective
business areas, and also have a dotted reporting line
into the Group risk management. The decentralized
risk managers are responsible for carrying out the
activities of the risk management function in their
respective business areas including the monitoring
and reporting of second line internal controls.

Furthermore, the function prepares specific recommen-
dations in relation to capital management, reinsurance,
investment risk management and more. Tryg’s risk man-
agement function is also responsible for determining
the company’s solvency capital requirement.

The functions in the second line of defence must have
an overview of business processes and risks across the
organisation.

The 3rd line consists of internal audit: The third line
must ensure an independent and objective audit of
the organization’s internal controls, risk management
and governance processes. Internal audit reports
independently to the Supervisory Board and to its
Audit Committee.

The Supervisory Board has organised their own Risk
Committee consisting of 4 members of the Supervi-
sory Board. In addition to these 4 members, the Chief
Financial Officer, Chief Risk Officer and the General
Counsel (in Capacity as overseeing the Compliance
function) are part of the Committee. The Supervisory
Board’s Risk Committee was established to ensure
that all risk and capital related topics are discussed
thoroughly before discussed in the Supervisory Board.
The Supervisory Board meets minimum 4 times
annually.

Capital management
Tryg’s capital management is based on the key busi-
ness objectives:
•

A solid capital base, supporting both the statutory
requirements and a single ‘A’ rating from Moody’s.
Support of a steadily increasing nominal dividend
per share, with a payout ratio in the interval 60-90%.

•

Tryg’s capital base currently consist of Tier 1 and 2 capi-
tal, such as shareholders’ equity and subordinated loans.

See table Subordinate loan capital on page 68.

The capital base is continuously measured against
the capital requirement calculated on the basis of
Tryg’s partial internal model, where insurance risks are
modelled using an internal model, while other risks are
described using the standard formula.

The model calculates Tryg’s capital requirement with
99.5% solvency level with a 1-year horizon, which
means that Tryg will be able to fulfil its obligations in
199 out of 200 years. The partial internal model has
been used for a number of years, and was approved by
the Danish Financial Supervisory Authority (DFSA) in
December 2015. A major model change was approved
by DFSA in April 2020.

Monitoring of the capital base also involves capital
projections based on expected business plans within
the strategic planning period and stress on selected
scenarios.

Company’s Own Risk and
Solvency Assessment (ORSA)
ORSA is the company’s own risk assessment based
on the Solvency II principles, which implies that Tryg
must assess all material risks that the company is or
may be exposed to. The ORSA report also contains an
assessment of whether the calculation of solvency
capital requirement is reasonable and is reflecting
Tryg’s actual risk profile.

Tryg’s risk activities are implemented via continuous risk
management processes, where the main results are re-
ported to the Supervisory Board and its Risk Committee
during the year. Therefore, the ORSA report is an annual
summary document assessing all these processes.

Insurance risk
Insurance risk comprises two main types of risks:
Underwriting risk and reserving risk.

Underwriting risk
Underwriting risk is the risk that insurance premiums
will not be sufficient to cover the compensations and
other costs associated with the insurance business.
Underwriting risk is managed primarily through the
company’s insurance policy defined by the Super-
visory Board, and administered through business
procedures, underwriting guidelines etc. Underwriting
risk is assessed in Tryg’s capital model, determining
the capital impact from insurance products.

Reinsurance is used to reduce the underwriting risk
in situations where this cannot be achieved to a
sufficient degree via ordinary diversification. In case
of major events involving damage to buildings and
contents, Tryg’s reinsurance programme provides
protection for up to DKK 7.25bn, which statistically is
sufficient to cover at least a 250-year event. Retention
for such events is DKK 182.5m.

In the event of a frequency of natural disasters, Tryg
is covered for up to DKK 600m, after total annual
retention of DKK 300m. Tryg has also taken out rein-
surance for the risk of large claims occurring in sectors
with very large sums insured. Tryg’s largest individual
building and contents risks are covered by up to DKK
2bn. Retention for large claims is DKK 100m, gradually
dropping to DKK 25m. Single risks exceeding DKK 2bn
are covered individually.

associated with the calculation of claims reserves
affects Tryg’s results through the run-off on reserves.

Long-tailed reserves in particular are subject to inter-
est rate and inflation risk. Interest rate risk is hedged by
means of Tryg’s match portfolio which corresponds to
the discounted claims reserves. In order to manage the
inflation risk of Danish workers’ compensation claims
reserves, Tryg has bought zero coupon inflation swaps.
Tryg determines the claims reserves via statistical
methods as well as individual assessments.

At the end of 2020, Tryg’s claims reserves net of
reinsurance totalled DKK 23.870m with an average
duration of approximately 4,6 years.

Investment risk
The overall framework for managing investment risk is
defined by the Supervisory Board in Tryg’s investment
policy. In overall terms, Tryg’s investment portfolio
is divided into a match portfolio and a free portfolio.
The match portfolio corresponds to the value of the
discounted claims reserves and is designed to hedge
the interest rate sensitivity of these as closely as pos-
sible. Tryg carries out daily monitoring, follow-up and
risk management of the Group’s interest rate risk. The
swap and bond portfolio is thus adjusted conti nuously
to minimise the net interest rate risk.

Tryg has combined the minimum cover of other
sectors into a joint cover with retention of DKK 100m
for the first claim and DKK 25m for subsequent
claims. For the individual sectors, individual cover has
subsequently been taken out as needed. The use of re-
insurance creates a natural counterparty risk. This risk
is handled by applying a wide range of reinsurers with
a suitable rating and adequate capital level as defined
by the Supervisory Board.

In 2021, the first steps toward phasing out IBOR-rates
will start. For Tryg this has a small impact on existing
as well as on new interest rate swaps used for hedging
the interest rate risk. Shortly said: Euribor / Eionia –
rates will be replaced by a ESTR-rate. The change of
IBOR rates is expected to imply that Euribor in existing
contracts will be measured as ESTR plus af fixed inter-
est rate spread. Future contracts will incorporate ESTR
rates instead of Euribor.

Reserving risk
Reserving risk relates to the risk of Tryg’s insurance
provisions being inadequate. The Supervisory Board
lays down the overall framework for the handling of
reserving risk in the insurance policy, while the overall
risk is measured in the capital model. The uncertainty

The corresponding development in Denmark/Norway
has justed started for instance Cibor is supposed to
change to DESTR, but this will happen later since the
preliminary study of this will starts in the beginning of
2021.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
The free portfolio is subject to the framework defined
by the Supervisory Board through the investment pol-
icy. The purpose of the free portfolio is to achieve the
highest possible return relative to risk. Tryg’s property
portfolio constitutes the company’s largest investment
risk. The Property portfolio comprises investment
properties, the value of which is adjusted based on the
conditions on the property market through internal
valuations backed by external valuations. At the end
of 2020, investment properties accounted for 6.75%
(including property funds) and Tryg’s equity portfolio
accounted for 6.12% of the total investment assets.

Tryg does not want to speculate in foreign currency,
but since Tryg invests and operates its insurance busi-
ness in other currencies than Danish kroner, Tryg is
exposed to currency risk. Tryg is primarily exposed to
fluctuations in the other Scandinavian currencies due
to its ongoing insurance activities. Premiums earned
and claims paid in other currencies create a natural
currency hedge, for which reason other risk mitigation
measures are not required in this area. However, the
part of equity held in other currencies than Danish kro-
ner will be exposed to currency risk. This risk is hedged
on an ongoing basis using currency swaps.

In addition to the above-mentioned risks, Tryg is
exposed to credit, counterparty and concentration risk.
These risks primarily relate to exposures in high-yield
bonds, emerging market debt exposures as well as
Tryg’s investments in AAA-rated Nordic and European
government and mortgage bonds. These risks are also
managed through the investment policy and the frame-
work for reinsurance defined in the insurance policy.

For a non-life insurance company like Tryg, liquidity
risk is practically non-existent, as premium payments
fall due before claims payments. The only significant
assets on Tryg’s balance sheet, which by nature is
somewhat illiquid, are the property portfolio.

Operational risk
Operational risk relates to errors or failures in internal
procedures, fraud, breakdown of infrastructure, IT secu-

rity and similar factors. As operational risks are mainly
internal, Tryg focuses on an adequate control environ-
ment for its operations. In practice, this work is organ-
ised by means of procedures, controls and guidelines
covering the various aspects of the Group’s operations.
The Supervisory Board defines the overall framework
for managing operational risk in Tryg’s Operational risk
policy and in the Information Security Policy.

A special crisis management structure is set up to deal
with the eventuality that Tryg is hit by major crises.
This comprises a Crisis Management Team at Group
level, national contingency teams at country level and
finally business contingency teams in the individual
areas. Tryg has prepared contingency plans to address
the most important areas. In addition, comprehensive
IT contingency plans have been established, primarily
focusing on the business critical systems.

Other risks
Strategic risk
The strategic risk is the risk of loss as a result of Tryg’s
chosen strategic position. The strategic position
covers both business transactions, IT strategy, choice
of business partners and changed market conditions.
Tryg’s strategic position is determined by Tryg’s Super-
visory Board in close collaboration with the Executive
Board. Before determining the strategic position, the
strategic decisions are subject to a risk assessment,
explaining the risk of the chosen strategy to Tryg’s
Supervisory Board and Executive Board.

Compliance risk
Compliance risk is the risk of loss as a result of lack of
compliance with rules, regulations, market standards
or internal guidelines. The handling of compliance risk
is coordinated centrally via the Compliance function,
which, among other things, sits on industry commit-
tees in connection with legislative monitoring, ensures
implementation of regulation in Tryg through business
procedures, provides ongoing training in compliance
matters and performs compliance controls within the
organisation. Compliance risks and the result of the

Sensitivity analysis

DKKm

Insurance risk
Effect of 1% change in:
Combined ratio (1% percentage point)

Major events
Catastrophe event up to DKK 7,250m

Reserving risk
1% change in inflation on person-related lines of business a)
10% error in the assessment of long-tailed lines of business
(workers' compensation, motor liability, liability, accident)

Investment risk
Interest rate market
Effect of 1 % increase in interest curve:
Impact of interest-bearing securities
Higher discounting of claims provisions
Net effect of interest rate rise
Impact of Norwegian pension obligation b)

Equity market
15% decline in equity market
Impact of derivatives and related thereto

Real estate market
15% decline in real estate markets

Currency market
Equity:
15% decline in exposed currency (exclusive of EUR) relative to DKK
Impact of derivatives
Net impact of exchange rate decline

2020

2019

+/-226

+/- 217

-100
-183

-100
-168

+/- 411

+/- 412

+/- 1,753

+/- 1,755

-1,159
1,071
-88
2

-471
-11

-294

-1,485
1,486
1

-1,150
1,028
-122
189

-367
25

-361

-883
898
15

Technical result per year:
Impact of 15% change in NOK and SEK exchange rates relative to DKK

+/- 121

+/- 95

a) Including the effect of the zero coupon inflation swap
b) Part of the pension obligation has been terminated as of 1 January 2020. Additional sen-
sitivity information in note 20 ’Pensions and similar obligations’.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contentsperformed compliance controls are reported to the
Supervisory Board’s Risk Committee.

Emerging risk
Emerging risk covers both new risks and already
known risks, with changing characteristics. The
management of this type of risk is handled in the

individual business areas, which monitor the market
and adapt the products as the conditions change. In
the event of a change in insurance terms, it is ensured
that Tryg’s reinsurance cover is consistent with the
new conditions.

Emerging risk is also a part of the systematically imple-
mented risk identification process in Tryg.

Claims provisions – estimated accumulated claims – DKKm

Gross

2010

2011

2012

2013

2014

2015

2016

2017

2018 a)

2019 a)

2020 a)

Estimated accumulated claims
End of year
1 year later
2 year later
3 year later
4 year later
5 year later
6 year later
7 year later
8 year later
9 year later
10 year later

Cumulative payments to date
Provisions before discounting,
end of year
Discounting
Reserves from 2009 and prior years
Gross provisions for claims, end of year

15,157
15,254
15,209
15,133
15,047
14,975
14,952
14,863
16,077
15,905
15,829
15,829
-15,171

658
-14

15,504
15,875
15,939
15,894
15,722
15,749
15,617
17,094
17,169
16,876

13,076
13,158
13,116
12,933
12,680
12,596
13,786
13,717
13,620

13,501
13,765
13,426
13,265
13,245
14,553
14,341
14,199

12,334
12,655
12,478
12,395
13,704
13,547
13,289

14,307
14,246
14,204
15,577
15,512
15,494

12,504
12,374
13,843
13,812
13,794

12,392
14,067
13,976
13,888

15,151
15,133
15,109

15,868
15,879

16,657

16,876
-16,141

13,620
-12,766

14,199
-13,294

13,289
-12,351

735
-18

854
-15

905
-19

938
-19

15,494
-14,402

1,092
-21

13,794
-12,486

1,308
-26

13,888
-12,270

1,618
-28

15,109
-12,900

2,209
-35

15,879
-12,050

3,829
-40

16,657
-8,648

8,009
-44

a) The diagonal for 2018 to 2020 is affected by the Alka acquisition

The amounts in foreign currency in the table are translated to Danish kroner using the exchange rate at 31 December 2020 to prevent the impact of exchange rate fluctuations.

164,634
-142,478

22,156
-281
3,082
24,957

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsClaims provisions – estimated accumulated claims – DKKm

Ceded business

2010

2011

2012

2013

2014

2015

2016

2017

2018 a)

2019 a)

2020 a)

Estimated accumulated claims
End of year
1 year later
2 year later
3 year later
4 year later
5 year later
6 year later
7 year later
8 year later
9 year later
10 year later

Cumulative payments to date
Provisions before discounting,
end of year
Discounting
Reserves from 2009 and prior years
Provisions for claims, end of year

639
714
705
683
691
695
697
689
747
746
746
746
-744

2
0

1,435
2,105
2,226
2,262
2,210
2,204
2,209
2,595
2,588
2,588

2,588
-2,589

-1
0

209
238
274
268
256
246
259
258
332

332
-255

77
1

1,123
1,455
1,240
1,233
1,250
1,284
1,332
1,287

1,287
-1,219

68
1

259
306
299
295
316
313
314

314
-301

13
0

2,052
1,857
1,890
1,867
1,897
1,910

1,910
-1,884

27
0

195
244
239
238
234

234
-228

6
0

277
382
376
387

387
-324

62
0

599
646
673

673
-603

71
0

357
434

706

434
-274

161
-1

706
-200

506
2

9,612
-8,620

992
2
93
1,087

a) The diagonal for 2018 to 2020 is affected by the Alka acquisition.

The amounts in foreign currency in the table are translated to Danish kroner using the exchange rate at 31 December 2020 to prevent the impact of exchange rate fluctuations.

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsClaims provisions – estimated accumulated claims – DKKm

Net of reinsurance

2010

2011

2012

2013

2014

2015

2016

2017

2018 a)

2019 a)

2020 a)

Estimated accumulated claims
End of year
1 year later
2 year later
3 year later
4 year later
5 year later
6 year later
7 year later
8 year later
9 year later
10 year later

Cumulative payments to date
Provisions before discounting,
end of year
Discounting
Reserves from 2009 and prior years
Provisions for claims, net of reinsurance, end of the year

656
-14

14,517
14,540
14,504
14,451
14,357
14,280
14,255
14,174
15,330
15,159
15,083
15,083
-14,427

14,070
13,769
13,713
13,631
13,512
13,545
13,408
14,499
14,581
14,288

12,866
12,919
12,842
12,666
12,424
12,350
13,528
13,459
13,288

12,378
12,310
12,186
12,032
11,995
13,270
13,009
12,912

12,075
12,349
12,180
12,100
13,388
13,234
12,975

12,255
12,390
12,314
13,710
13,615
13,584

12,309
12,130
13,604
13,574
13,560

12,115
13,685
13,600
13,501

14,551
14,487
14,436

15,511
15,445

15,951

14,288
-13,551

13,288
-12,511

12,912
-12,075

12,975
-12,050

736
-18

777
-16

837
-20

925
-19

13,584
-12,518

1,065
-22

13,560
-12,258

1,302
-26

13,501
-11,946

1,556
-28

14,436
-12,297

2,139
-35

15,445
-11,777

3,668
-39

15,951
-8,449

7,503
-46

a) The diagonal for 2018 to 2020 is affected by the Alka acquisition.

The amounts in foreign currency in the table are translated to Danish kroner using the exchange rate at 31 December 2020 to prevent the impact of exchange rate fluctuations.

155,022
-133,858

21,164
-281
2,988
23,871

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsClaims provisions (continued)

DKKm

2020
Premium provisions, gross
Premium provisions, ceded
Claims provisions, gross
Claims provisions, ceded

2019
Premium provisions, gross
Premium provisions, ceded
Claims provisions, gross
Claims provisions, ceded

Expected cash flow, not discounted

01 year

12 years

23 years

> 3 years

Total

5,900
-291
8,301
-610
13,300

5,851
-216
8,207
-695
13,147

74
0
3,930
-223
3,781

72
0
4,012
-226
3,859

41
0
2,489
-118
2,412

45
0
2,611
-172
2,485

21
0
10,546
-135
10,432

28
0
10,927
-201
10,755

6,036
-291
25,266
-1,086
29,925

5,996
-216
25,758
-1,293
30,245

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents2020

DKKm

33,515
274
587
868
476
828
36,548

969
178
1,147

91.7
0.8
1.6
2.4
1.3
2.3
100.0

84.5
15.5
100.0

2019

DKKm

34,281
261
692
1,023
547
604
37,408

1,242
89
1,331

DKKm

2020

2019

DKKm

Investment risk
The notes below are based on Tryg's investment portfolio without the external customers share.
Bond portfolio including interest derivatives
Duration 1 year or less
Duration 1-5 years
Duration 5-10 years
Duration more than 10 years
Total
Duration

14,216
13,820
6,571
3,152
37,760
3.8

Credit risk

Bond portfolio by ratings

13,067
15,747
5,975
2,856
37,645
3.4

AAA
AA
A
BBB
BB
B or lower
Total

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.

Shares
Nordic countries
EU ex. Nordic countries
North America
Others
Total

79
314
2,162
643
3,196

250
566
2,674
213
3,702

The share portfolio includes exposure from share derivatives of DKK 69m (DKK 167m in 2019)
Unlisted equity investments are based on an estimated market price. UK is included in EU ex. Nordic countries

Exposure to exchange rate risk

Assets
and debt

5,318
2,287
230
3,740
497
446

2020

Hedge

-5,314
-2,658
-221
-3,749
-496
-454

Exposure

Assets
and debt

3
372
9
9
1
9
403

3,762
2,872
262
1,403
133
324

2019

Hedge

-3,794
-1,543
-265
-1,446
-111
-370

Exposure

32
1,328
4
43
22
46
1,476

USD
EUR a)
GBP
NOK
SEK
Other
Total

a) Due to correlation between DKK and EUR the exposure limit is higher than all other currencies.

Reinsurance balances
AAA to A
Not rated
Total

Liquidity risk
Maturity of the Group’s financial obligations including interest

2020

01 years

15 years

> 5 years

Subordinate loan capital
Amounts owed to credit institutions
Debt relating to unsettled funds transactions and repos
Derivative financial instruments
Other debt
Total

2019

Subordinate loan capital
Amounts owed to credit institutions
Debt relating to unsettled funds transactions and repos
Derivative financial instruments
Other debt
Total

95
1,191
3,259
281
6,907
11,733

108
711
2,601
86
6,131
9,638

382
0
0
325
0
707

433
0
0
496
0
930

3,756
0
0
359
0
4,115

3,959
0
0
135
0
4,093

Interest on loans for a perpetual term has been recognised for the first fifteen years.

91.6
0.7
1.8
2.7
1.5
1.6
100 .0

93.3
6.7
100.0

Total

4,233
1,191
3,259
965
6,907
16,555

4,500
711
2,601
717
6,131
14,661

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

Subordinate loan capital

DKKm
Amortised cost value of the loan recognised in sta-
tement of financial position
The fair value of the loan at the statement
of financial position date
The fair value of the loan at the statement of finan-
cial position date is based on a price of
Total capital losses and costs at the statement of
the financial position date
Interest expenses for the year
Effective interest rate

Loan terms:
Lender
Principal
Issue price
Issue date
Maturity year
Loan may be called by lender as from

Repayment profile
Interest structure

Bond loan
NOK 800m

Bond loan
NOK 1,400m

Bond loan
SEK 1,000m

2020

563

589

105

1
26
4.6%

2019

605

642

106

2
32
5.3%

2020

985

1,027

104

2
36
3.6%

2019

1,059

1,108

104

3
45
4.3%

2020

738

745

101

2
21
2.8%

Listed bonds
NOK 800m
100
March 2013
Perpetual
2023

Listed bonds
NOK 1,400m
100
November 2015
2045
2025

2019

713

730

102

3
19
2.6%

Listed bonds
SEK 1,000m
100
May 2016
2046
2021

The share of capital included in the calculation of the
own funds totals DKK 2,663m (DKK 2,744m in 2019)

The loans are initially recognised at fair value on the
date on which a loan is entered and subsequently
measured at amortised cost.

The loans are taken by Tryg Forsikring A/S. The credi-
tors have no option to call the loans before maturity or
otherwise terminate the loan agreements. The loans
are automatically accelerated upon the liquidation or
bankruptcy of Tryg Forsikring A/S.

Prices used for determination of fair value in respect
of the loans are based on actual traded prices from
Bloomberg.

Interest-only
3.75 % above NIBOR 3M (until 2023)
4.75 % above NIBOR 3M (from 2023)

Interest-only
2.75 % above NIBOR 3M (until 2025)
3.75 % above NIBOR 3M (from 2025)

Interest-only
2.75 % above STIBOR 3M (until 2026)
3.75 % above STIBOR 3M (from 2026)

DKKm

Amortised cost value of the loan recognised in statement of financial position
The fair value of the loan at the statement of financial position date
The fair value of the loan at the statement of financial position date is based on a price of
Total capital losses and costs at the statement of the financial position date
Interest expenses for the year
Effective interest rate

Loan terms:
Lender
Principal
Issue price
Issue date
Maturity year
Loan may be called by lender as from
Repayment profile
Interest structure

Bond loan
SEK 700m

2020

516
521
101
2
14
2.6%

2019

499
501
100
2
13
2.4%

Listed bonds
SEK 700m
100
April 2018
Perpetual
2023
Interest-only
2.5 % above STIBOR 3M

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsThe impact of the outbreak of COVID-19
Following the outbreak of COVID-19, a period of
high uncertainty and volatility has characterised
financial markets developments. For that reason
it has been relevant to update the valuation
of level 3 investments assets in the Fair Value
Hierarchy. At the same time, it has also been
deemed relevant to reconfirm assumptions in
the valuation of claims provisions and also how
exchange rate fluctuations will affect Tryg.

Valuation of investments assets
Total financial investment assets are measured
at fair value with value adjustment in the income
statement. Listed bonds and shares, parts of unit
trusts as well as derivative financial instruments
are measured at quoted market prices or consol-
idated references prices at the balance sheet
date.

The valuation of the investment assets can be
distributed in the fair value hierarchy model,
which is determined in accordance with IFRS 13.
The model distributes the total investments as-
sets based on the price at which the investment
assets are set. Reference is made to note 15 for
further description of the fair value hierarchy.

The main part of Tryg’s investment assets are
classified as level 1 and 2 and are valuated based
on quoted market prices or consolidated refer-
ences prices. This involves the bonds portfolio,
the main part of shares and unit trust units as
well as the statement of financial instruments.
Assets, which can be classified as level 3, can be
attributed to unlisted assets, specific unlisted
Unit trusts and investment property. As these
investment assets are not valued based on
observable input, there will be a discretionary
element in this hierarchy.

On 31 December 2020, the value amounts to
DKK 1,186m (DKK 1,375m on 31 December
2019).

Claims provisions
The volatility introduced by the outbreak of COV-
ID-19 affects some of Trygs claims provisions,
particularly travel insurance but also several oth-
er insurance products due to significant changes
in behavior. The effects are incorporated in Trygs
reserving models. The statistical uncertainty re-
lated to these changes is insignificant compared
to the total provisions and balance sheet.

Exchange rates
Tryg has business in three different Nordic
countries meaning that Tryg is exposed to fluc-
tuations in the local currencies (NOK and SEK) in
regard to the financial results.

Tryg has chosen to implement a currency hedge
strategy that focuses on mitigating the curren-
cies impact on the financial results. This means
that the impact on the P/L of changes in local
currencies is limited.

The shareholders’ equity, due to the currency
hedge strategy, is not sensitive to changes in the
local currencies.

Impairment of intangiblens
COVID-19 has not have any affect on the
assumptions related to impairment of Goodwill,
Trademarks and Brand. Reference is made to
note 11 for further description on Impairment
test.

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Private

Commercial

Corporate

Sweden

Other a)

Group

Operating segments

2020
Gross premium income
Gross claims
Gross operating expenses
Profit/loss on ceded business
Insurance technical interest, net of reinsurance
Technical result
Other items
Profit/loss
Run-off gains/losses, net of reinsurance

Intangible assets
Equity investments in associates
Reinsurers' share of premium provisions
Reinsurers' share of claims provisions
Other assets
Total assets
Premium provisions
Claims provisions
Provisions for bonuses and premium discounts
Other liabilities
Total liabilities

12,743
-8,883
-1,727
-76
-12
2,045

120

5,677

50
140

2,747
6,348
1,303

4,430
-2,786
-758
-147
-5
735

336

0
114

1,322
6,829
118

3,876
-2,692
-440
-277
-2
464

448

240
821

984
8,884
5

1,604
1,067
-269
1
-1
268

249

533

0
12

983
2,896
69

0
-9
-7
0
0
-16

-9

854
16
0
0
52,398

0
0
0
16,164

22,653
-15,437
-3,202
-499
-20
3,495
-723
2,773
1,145

7,124
16
291
1,087
52,398
60,916
6,036
24,957
1,495
16,164
48,651

Description of segments
Please refer to the accounting policies for a descrip-
tion of operating segments.

Costs are allocated according to specific keys, which
are believed to provide the best estimate of assessed
resource consumption.

a) Amounts relating to one-off items. Please refer to
note 2 ‘Geographical segments’ for details. Other
assets and liabilities are managed at Group level
and are not allocated to the individual segments
but are included under ‘Other’.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
a) Amounts relating to eliminations and one-off

items. Please refer to note 2 'Geographical seg-
ments' for details. Other assets and liabilities are
managed at Group level and are not allocated to the
individual segments but are included under ‘Other’

DKKm

Private

Commercial

Corporate

Sweden

Other a)

Group

Operating segments (continued)

2019
Gross premium income
Gross claims
Gross operating expenses
Profit/loss on ceded business
Insurance technical interest, net of reinsurance
Technical result
Other items
Profit/loss
Run-off gains/losses, net of reinsurance

Intangible assets
Reinsurers' share of premium provisions
Reinsurers' share of claims provisions
Other assets
Total assets
Premium provisions
Claims provisions
Provisions for bonuses and premium discounts
Other liabilities
Total liabilities

12,021
-8,185
-1,650
-231
-3
1,951

238

5,807
42
15

2,691
6,201
1,195

4,274
-2,867
-749
-94
1
566

310

67
4
149

1,351
6,844
114

3,979
-2,816
-415
-255
2
496

407

0
170
1,114

1,035
9,055
27

1,521
-1,014
-267
-10
0
231

246

539
0
7

919
2,758
34

-54
24
0
23
0
-7

-7

951
0
0
50,193

0
0
0
14,750

21,741
-14,857
-3,081
-566
1
3,237
-394
2,843
1,194

7,364
216
1,285
50,193
59,059
5,996
24,859
1,370
14,750
46,974

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Geographical segments

2020

2019

2018

2017

2016

a) Includes Danish general insurance and German,

Dutch, Austrian and Finnish guarantee insurance.
The gross premium income related those branches
amounts to DKK 106m (DKK 78m in 2019).

Danish general insurance a)
Gross premium income
Technical result
Run-off gains/losses, net of reinsurance

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Run-off, net of reinsurance (%)
Number of full-time employees 31 December

Norwegian general insurance
NOK/DKK, average rate for the period
Gross premium income
Technical result
Run-off gains/losses, net of reinsurance

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Run-off, net of reinsurance (%)
Number of full-time employees 31 December

14,007
2,707
633

13,204
2,606
712

10,430
2,007
710

65.2
1.4
66.5
13.9
80.5
-4.5
2,859

69.63
6,411
473
247

75.3
3.4
78.7
14.1
92.7
-3.9
1,099

64.7
1.7
66.4
13.7
80.1
-5.4
2,650

75.80
6,472
469
283

73.7
5.1
78.8
14.4
93.1
-4.4
1,083

61.2
5.5
66.7
13.9
80.6
-6.8
2,520

77.53
6,302
791
520

72.6
1.2
73.8
13.9
87.7
-8.3
1,105

9,606
1,783
449

64.2
3.7
67.9
13.4
81.3
-4.7
1,933

79.99
6,272
770
422

67.9
5.3
73.2
14.7
87.9
-6.7
1,042

9,467
1,587
509

63.7
6.0
69.7
13.4
83.1
-5.4
1,839

80.09
6,371
1,013
678

63.9
5.1
69.0
15.2
84.2
-10.6
1,040

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Geographical segments

2020

2019

2018

2017

2016

In 2020, amounts primarily relates to one-
off items. In 2019 - 2016, amounts primarily
relates to eliminations and one-off items.

Swedish general insurance
SEK/DKK, average rate for the period
Gross premium income
Technical result
Run-off gains/losses, net of reinsurance

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Run-off, net of reinsurance (%)
Number of full-time employees 31 December

Other a)
Gross premium income
Technical result

Tryg
Gross premium income
Technical result
Investment return
Other income and costs
Profit/loss before tax
Run-off gains/losses, net of reinsurance

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Run-off, net of reinsurance (%)
Number of full-time employees, continuing business at 31 De-
cember

70.95
2,234
331
274

65.8
4.0
69.9
15.3
85.1
-12.3
441

0
-16

22,653
3,495
311
-265
3,541
1,145

68.1
2.2
70.3
14.1
84.5
-5.1

70.62
2,120
169
205

74.0
2.0
75.9
16.1
92.0
-9.7
419

-54
-6

21,741
3,237
579
-188
3,628
1,194

68.3
2.6
70.9
14.2
85.1
-5.5

72.67
2,073
94
-9

82.3
-1.7
80.6
14.6
95.2
0.4
402

-65
-126

18,740
2,766
-332
-172
2,262
1,221

67.4
3.3
70.7
14.4
85.1
-6.5

77.24
2,121
236
101

69.0
5.0
74.0
14.5
88.5
-4.8
398

-36
0

17,963
2,789
527
-77
3,239
972

66.1
4.3
70.4
14.0
84.4
-5.4

78.93
1,888
40
52

76.4
3.3
79.7
17.8
97.5
-2.8
385

-19
-250

17,707
2,390
987
-157
3,220
1,239

65.6
5.4
71.0
15.7
86.7
-7.0

4,400

4,151

4,027

3,373

3,264

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

2 Technical result, net of reinsurance, by line of business

DKKm

Accident and health

Health care

Workers’
compensation

Motor TPL

Motor comprehensive
insurance

Marine, aviation and
cargo insurance

Gross premiums written
Gross premium income
Gross claims
Gross operating expenses
Profit/loss on ceded business
Insurance technical interest,
net of reinsurance
Technical result
Gross claims ratio
Combined ratio
Claims frequency a)
Average claims DKK b)
Total claims

2020
2,736
2,565
- 1,400
- 378
- 7

- 3
777
54.6
69.6
3.8%
21,326
78,286

2019
2,591
2,466
- 1,460
- 340
- 15

- 1
650
59.2
73.6
3.8%
22,950
73,735

2020
574
543
- 467
- 53
0

- 1
22
86.0
95.8
68.8%
5,111
94,689

2019
461
445
- 483
- 52
- 1

0
- 91
108.5
120.4
93.2%
5,390
84,348

2020
921
934
- 496
- 88
- 22

- 1
327
53.1
64.9
18.1%
77,053
10,742

2019
951
935
- 755
- 106
- 14

0
60
80.7
93.6
21.9%
71,146
12,776

2020
1,917
1,874
- 1,468
- 287
- 36

- 1
82
78.3
95.6
5.4%
22,505
79,347

2019
1,876
1,828
- 1,194
- 296
- 12

1
327
65.3
82.2
6.0%
18,794
87,595

2020
5,136
4,897
- 3,380
- 691
- 53

- 4
769
69.0
84.2
20.5%
9,201
364,832

2019
4,823
4,617
- 3,127
- 652
- 44

1
795
67.7
82.8
21.8%
9,320
342,983

2020
201
219
- 67
- 34
- 37

0
81
30.6
63.0
15.8%
52,837
1,882

2019
231
222
- 153
- 33
4

0
40
68.9
82.0
18.9%
77,416
2,213

Fire and contents
(Private)

Fire and contents
(Commercial)

Change of
ownership

Liability insurance

Credit and guarantee
insurance

Tourist assistance
insurance

2020
5,788
5,589
- 3,976
- 791
- 194

- 6
622
71.1
88.8
9.9%
8,984
442,157

2019
5,444
5,330
- 3,562
- 751
- 216

- 4
797
66.8
85.0
9.7%
8,743
427,228

2020
2,816
2,769
- 1,568
- 430
- 344

- 2
425
56.6
84.6
16.8%
47,636
34,352

2019
2,758
2,656
- 1,894
- 413
- 129

3
223
71.3
91.7
16.9%
55,018
33,861

2020
0
59
- 17
- 7
0

0
35
28.8
40.7
5.6%
41,969
1,060

2019
8
74
- 11
- 7
0

0
56
14.9
24.3
10.6%
22,639
2,689

2020
1,179
1,163
- 968
- 192
41

- 2
42
83.2
96.2
11.2%
78,017
11,500

2019
1,100
1,088
- 828
- 168
8

0
100
76.1
90.8
12.5%
70,030
12,545

2020
553
547
- 384
- 81
- 1

2019
527
527
- 95
- 69
- 131

0
81
70.2
85.2
0.0%
7,653,673
55

0
232
18.0
56.0
0.0%
1,872,000
49

2020
996
890
- 788
- 125
142

- 1
118
88.5
86.6
22.3%
5,014
156,604

2019
941
886
- 775
- 119
- 1

1
- 8
87.5
101.0
17.5%
6,390
121,236

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 in the year.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents2 Technical result, net of reinsurance, by line of business

DKKm

Other insurance

Total exclusive of
Group Life

Group Life
oneyear policies a)

Total

a) Group Life, one-year policies related to Norwegian

Group Life and Alka Group Life.

Gross premiums written
Gross premium income
Gross claims
Gross operating expenses
Profit/loss on ceded business
Insurance technical interest, net of reinsurance
Technical result
Gross claims ratio
Combined ratio
Total claims

2020
52
54
4
5
9
0
72
-7.4
-33.3
8

2019
49
55
- 14
- 1
- 15
- 1
24
25.5
54.5
130

2020
22,869
22,103
- 14,975
- 3,152
- 502
- 21
3,453
67.8
84.3

2019
21,760
21,129
- 14,351
- 3,007
- 566
0
3,205
67.9
84.8

2020
783
550
- 462
- 50
3
1
42
84.0
92.5

2019
803
612
- 506
- 74
0
1
33
82.7
94.8

2020
23,652
22,653
- 15,437
- 3,202
- 499
- 20
3,495
68.1
84.5

2019
22,563
21,741
- 14,857
- 3,081
- 566
1
3,237
68.3
85.1

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Premium income, net of reinsurance
Direct insurance
Indirect insurance

Unexpired risk provision

Ceded direct insurance

Direct insurance, by location of risk

2020

Denmark
Other EU countries
Other countries a)

a) Mainly Norway

Gross
14,606
2,363
6,443
23,412

Ceded
-632
-282
-553
-1,467

Insurance technical interest, net of reinsurance
Return on insurance provisions
Discounting transferred from claims provisions

Claims, net of reinsurance
Claims
Run-off previous years, gross

Reinsurance cover received
Run-off previous years, reinsurers' share

2020

2019

DKKm

2020

2019

23,388
53
23,441
24
23,465
-1,467
21,998

Gross
13,649
2,172
6,547
22,368

2019

22,353
52
22,405
15
22,420
-1,221
21,198

Ceded
-524
-229
-468
-1,221

2020

2019

37
-57
-20

-16,567
1,130
-15,437
785
15
-14,637

166
-165
1

-16,031
1,173
-14,857
408
20
-14,429

Insurance operating costs, net of reinsurance

Commissions regarding direct insurance contracts
Other acquisition costs
Total acquisition costs
Administration expenses
Insurance operating costs, gross
Commission from reinsurers

Fees to the auditors appointed by the annual general meeting:
Deloitte, included in administrative expenses
Deloitte, included in balance sheet

The fee is divided into:
Statutory audit
Other audit assignments
Tax advice
Other services

Expenses have been incurred for
the Group´s Internal Audit Department.

-290
-2,243
-2,532
-669
-3,202
170
-3,032

-9
-78
-87

-5
0
-1
-81
-87

-9

-265
-2,193
-2,458
-623
-3,081
227
-2,854

-8
0
-8

-3
-1
-1
-3
-8

-10

Fees for non-audit services provided by Deloitte Statsautoriseret Revisionspartnerselskab (Deloitte
Denmark) and other member firms of Deloitte Touche Tohmatsu Limited to Tryg Group amounts to
DKK 82m (DKK 4m in 2019). The fee includes and consists of varius declaration tasks, objective tax
advice, financial due diligence and transaction advice as well as general accounting and consulting
services. Deloitte has complied with the cap for non-audit services as referred to in Article 4(2) of
Regulation (EU) No 537/2014.

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

2020

2019

Insurance operating costs, gross, classified by type (continued)
Commissions
Staff expenses
Other staff expenses
Office expenses, fees and headquarter expenses
IT operating and maintenance costs, software expenses
Depreciation, amortisation and impairment losses and write-downs
Other income

-290
-1,971
-137
-739
-287
-106
328
-3,202

Please refer to note 12 and 23 regarding lease recognised costs according to IFRS 16.

Insurance operating costs and claims include the following
staff expenses:
Salaries and wages
Commision
Allocated share options and matching shares
Pension plans a)
Other social security costs
Payroll tax

-2,776
-2
-38
-259
-7
-528
-3,610

-265
-2,043
-187
-649
-255
-71
388
-3,081

-2,747
-4
-27
-351
-6
-491
-3,625

a) In 2020 defined benefit plans were included with DKK -128m (DKK 35m in 2019).

Remuneration for the Supervisory Board and Executive Board is disclosed in note 27 'Related parties'.

Average number of full-time employees during the year
(continuing business)

4,278

4,148

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Matching shares and conditional shares
Matching shares

Total numbers

2020

Matching shares allocated in
2020

Allocated in 2011-2019
Cancelled
Exercised
Total 31.12.2020

2019

Matching shares allocated
2019

Allocated in 2011-2018
Category changes and addition
Cancelled
Exercised
Total 31.12.19

Conditional shares

2020

Executive board
Risk-takers
Other
2020 in total
2018
2019
Total

Executive
Board

Risk
takers

Other

Total

52,015

809

37,897

90,721

243,053
-14,328
-108,059
120,666

89,050
-7,476
-12,287
69,287

168,983
-40,572
-109,356
19,055

501,086
-62,376
-229,702
209,008

53,308

189,745
0
-14,328
-90,826
84,591

53,308

89,473
-423
-7,476
-9,960
71,614

168,560
423
-40,525
-85,561
42,897

447,778
0
-62,329
-186,347
199,102

Maximum obligation
Shares

Recognised in income
statement
DKKm

27,096
128,936
3,802
159,834
61,833
83,528
305,195

-5
-9
-1
-15
-3
-6
-24

Fair value

Average per
matching
share
at grant date
DKK

Total value
at time of
allocation
DKKm

Average per
matching
share
at 31.12
DKK

Total fair
value at
31.12
DKKm

203

120
120
120
120

166

114
114
114
114
114

60
-7
-28
25

51
0
-7
-21
23

192

192
192
192
192

198

198
198
198
198
198

96
-12
-44
40

89
0
-12
-37
39

Matching shares
In 2011-2020, Tryg entered into an agreement on
matching shares in accordance with the Group’s
remuneration policy.

Executive Board, Risk-takers and Other employees are
allocated one share in Tryg A/S for each share they
acquires in Tryg A/S at market rate for liquid cash at a
contractually agreed sum over the 3- or 4-year deferral
period.

In 2020, the recognised fair value of matching shares
for the Group amounted to DKK 14m (DKK 11m in
2019). At 31 December 2020, a total amount of DKK
54m was recognised for matching shares.

Conditional shares
In 2018, 2019 and 2020, Tryg allocated conditional
shares in accordance with the Group’s remuneration
policy. The beneficiaries will receive shares in Tryg A/S
if certain conditions are fulfilled over a period of up to
4 years.

In 2020, the fair value of Conditional shares is prorat-
ed relative to the deferral period and recognised in the
income statement amounted to DKK 24m (DKK 16m
in 2019). The shares allocated in 2020 had an average
weighted rate of 169 at grant date.

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Interest and dividends
Interest income and dividends
Dividends
Interest income, cash at bank and in hand
Interest income, bonds

Interest expenses
Interest expenses subordinate loan capital, credit institutions
and cash at bank
Interest expenses, other

Value adjustments
Value adjustments concerning financial assets or liabilities
at fair value with value adjustment in the income statement:
Equity investments
Unit trust units
Bonds
Derivatives (Equity, Interest, Currency)

Value adjustments concerning assets or liabilities
that cannot be attributed to IAS 39:
Investment property
Owner-occupied property
Discounting
Other statement of financial position items

2020

2019

DKKm

2020

2019

66
2
437
506

-95
-30
-126
380

-153
-358
-233
769
25

4
0
-530
611
85
110

24
1
509
534

-117
-61
-178
356

463
117
120
-103
598

62
-10
-351
159
-140
457

Other income and costs

Other Income
Other income amounts to DKK 88m (DKK 168m in 2019) and primarily relates to
the sale of pensions products. In 2019 other income encompassed a one-off allow-
ance regarding VAT of DKK 45m.

Other costs
Other costs amounts to DKK 354m (DKK 356m in 2019) and primarily relates to
depreciations of customer relations and trademarks, cost related to the sale of pen-
sions products and cost which is not ascribed to the insurance portfolio.

Depreciations related to trademarks and customer relationships amounts to DKK
135m (DKK 157m in 2019).

Tax
Tax on accounting profit/loss
Difference between Danish and foreign tax rates
Tax adjustment, previous years
Adjustment of non-taxable income and costs
Change in valuation of tax assets
Other taxes

Effective tax rate
Tax on accounting profit/loss
Difference between Danish and foreign tax rates
Tax adjustment, previous years
Adjustment of non-taxable income and costs
Valuation of tax assets

-779
15
12
-56
53
-13
-768

%
22.0
-0.5
0.0
1.5
-1.5
21.5

-798
-40
-45
100
0
0
-783

%
22.0
1.0
1.5
-3.0
0.0
21.5

Exchange rate adjustments concerning financial assets or liabilities which cannot be stated at fair value
total DKK -104m (DKK -97m in 2019).

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Intangible assets

DKKm

Intangible assets (continued)

2020
Cost
Cost at 1 January
Exchange rate adjustments
Transferred from assets
under construction
Additions for the year

Disposals for the year

Cost at 31 December

Amortisation and write-downs
Amortisation and write-downs
at 1 January
Exchange rate adjustments
Amortisation for the year
Impairment losses and
write-downs for the year

Reversed amortisation
Amortisation and write-downs
at 31 December

Trade
marks and
customer
relations

Assets
under con
struction a)

Software a)

Goodwill

4,876
9

1,861
4

0
0
0

2,066
-26

249
112
-280

4,885

1,864

2,122

-104
0
0

0
0

-236
-5
-135

0
0

-1,391
13
-193

-147
229

-104

-376

-1,490

292
-6

-249
188
-3

222

0
0
0

0
0

Total

9,094
-19

0
300
-282

9,093

-1,731
8
-328

-147
229

-1,969

2019
Cost
Cost at 1 January
Exchange rate adjustments
Transferred from assets
under construction
Additions for the year

Disposals for the year

Cost at 31 December

Amortisation and write-downs
Amortisation and write-downs
at 1 January
Exchange rate adjustments
Amortisation for the year
Impairment losses and
write-downs for the year

Reversed amortisation
Amortisation and write-downs
at 31 December

Trademarks
and custo
mer
relations

Assets
under con
struction a)

Software a)

Goodwill

4,881
-5

1,863
-2

0
0

1,452
2

459
174

-21

4,876

1,861

2,066

-104
0
0

-81
2
-139

-18

-1,277
-2
-122

-7

-104

-236

-1,391

504
2

-459
244

292

-2
0
0

-0

Total

8,700
-3

1
418

-21

9,094

-1,464
0
-261

-24

-1,731

Carrying amount at 31 December

4,781

1,488

632

222

7,124

Carrying amount at 31 December

4,772

1,625

675

292

7,364

a) Hereof proprietary software DKK 366m (DKK 494m at 31 December 2019)

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Intangible assets (continued)

Impairment test

Goodwill

The value in use method is used when testing the Goodwill for impairment.

Primary assumptions for impairment test:

When assessing the cash flow management has based its estimates of premiums earned on the insurance
portfolio adjusted to reflect the expected effect of business decisions and market development from
past experiences. The portfolio is indexed with the wage and salary index. Claims incurred are based on
expected claims ratios, which corresponds to normalised large- and weather claims. Reinsurance is taken
into account when looking at the overall technical result together with the expected cost ratio. Required
returns are based on management’s own requirements for returns of the individual cash generation units
and are not expected to change significantly in the near future.

COVID-19 has not have any affect on the assumptions related to impairment of Goodwill, Trademarks and
Brand.

Alka

In 2018, Tryg acquired Forsikrings- Aktieselskabet Alka . The insurance activities were incorporated into
the Tryg Group's business structure from 8 November 2018.

Comprises the sale of insurance products to private and commercial customers under the ‘Alka’ brand.

At 31 December 2020, 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.

The cash flows appearing from the latest prognosis approved by management for the next 6 quarters are
used when calculating the value in use of Private DK. The cash flows in the latest prognosis period have
been extrapolated for financial years after the prognosis periods (terminal period) and adjusted for expec-
ted growth rates determined on the basis of expectations for the general economic growth. The required
return is based on an assessment of the risk profile of the tested business activities compared with the
market’s expectations for the Group.

The impairment test shows a calculated value in use of approximately DKK 31.1bn (26.4bn) relative to a
recognised goodwill of DKK 4.2bn (4.2bn) and does not indicate any impairment in 2020. According to
the sensitivity informations below a change in the required return rate will have the highest effect on the
equity. An increase in the required return of approx. 4.6% will result in a write down of goodwill.

DKKm

Intangible assets (continued)
- Earned premium assumed CAGR 0-10 years
- Earned premium assumed CAGR > 10 years
- Required return before tax
- Expected level of Combined ratio

Sensitivity information
Impact on the calculated present value from the following
changes:
CAGR +1.0 percentage point (0-10 years)
CAGR -1.0 percentage point (0-10 years)
Required return +1.0 percentage point
Required return -1.0 percentage point
Combined ratio +1.0 percentage point
Combined ratio -1.0 percentage point

The above changes have no impact on equity.

2020

2019

3%
2%
7%
81%

1.4bn
-1.3bn
-5.6bn
8.6bn
-1.6bn
1.6bn

3%
2%
8%
81%

1.2bn
-1.0bn
-4.1bn
6.0bn
-1.2bn
1.2bn

Obos

In 2017, Tryg acquired Obos' insurance portfolio. The insurance activities were incorporated into
the Tryg Group's business structure from 1 June 2017.

Comprises the sale of insurance products to private and commercial customers under the ‘Obos’ brand.

At 31 December 2020, 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.

The cash flows appearing from the latest prognosis approved by management for the next 6 quarters are
used when calculating the value in use of Obos. The cash flows in the latest prognosis period have been
extrapolated for financial years after the prognosis periods (terminal period) and adjusted for expected
growth rates determined on the basis of expectations for the general economic growth. The required
return is based on an assessment of the risk profile of the tested business activities compared with the
market's expectations for the Group.

The impairment test shows a calculated value in use of approximately DKK 0.5bn (0.3bn) relative to a
recognised goodwill of DKK 46m (49m) and does not indicate any impairment in 2020. According to the
sensitivity informations below a change in the required return rate will have the highest effect on the
equity. An increase in the required return of approx. 5.3% will result in a write down of goodwill.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

DKKm

Intangible assets (continued)
- Earned premium assumed CAGR 0 - 10 years
- Earned premium assumed CAGR > 10 years
- Required return before tax
- Expected level of Combined ratio

Sensitivity information
Impact on the calculated present value from the following
changes:
CAGR +1.0 percentage point (0 - 10 years)
CAGR -1.0 percentage point (0 - 10 years)
Required return +1.0 percentage point
Required return -1.0 percentage point
Combined ratio +1.0 percentage point
Combined ratio -1.0 percentage point

The above changes have no impact on equity.

2020

2019

DKKm

2020

2019

5%
2%
10%
87%

25
-23
-93
135
-47
47

4%
2%
13%
87%

14
-13
-48
58
-30
30

Intangible assets (continued)
- Earned premium assumed CAGR 0 - 10 years
- Earned premium assumed CAGR > 10 years
- Required return before tax
- Expected level of Combined ratio

Sensitivity information
Impact on the calculated present value from the following
changes:
CAGR +1.0 percentage point (0 - 10 years)
CAGR -1.0 percentage point (0 - 10 years)
Required return +1.0 percentage point
Required return -1.0 percentage point
Combined ratio +1.0 percentage point
Combined ratio -1.0 percentage point

The above changes have no impact on equity.

2%
2%
10%
90%

81
-77
-337
480
-77
81

3%
2%
11%
91%

45
-42
-211
288
-177
177

Moderna
In 2016, Tryg acquired Skandia's child and adult accident insurance portfolio. The insurance activities were
incorporated into the Tryg Group's business structure from 1 September 2016.

In 2014, Tryg acquired Securator A/S, Optimal Djurförsäkring i Norr AB. The insurance activities were
incorporated into the Tryg Group's business structure and merged into Tryg in 2015.

At 31 December 2020, 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. Moderna portfolio consists
from 1 January 2017 of Moderna, Securator and Skandia, which was prior to this date three separate
cash-generating units. The reasons behind the merger of Securator and Skandia into Moderna, is that they
are managed together as part of the Swedish business and reported under the segment “Sweden”

Comprises the sale of insurance products to private customers under the ‘Moderna’ brand. Moreover, in-
surance is sold under the brands Atlantica, Bilsport & MC and Moderna Djurförsäkringar. Sales take place
through its own sales force, call centres and online.

The cash flows appearing from the latest prognosis approved by management for the next 6 quarters are
used when calculating the value in use of Moderna. The cash flows in the latest prognosis period have
been extrapolated for financial years after the prognosis periods (terminal period) and adjusted for expect-
ed growth rates determined on the basis of expectations for the general economic growth. The required
return is based on an assessment of the risk profile of the tested business activities compared with the
market’s expectations for the Group.

The impairment test shows a calculated value in use of approximately DKK 2.2bn (1.5bn) relative to a
recognised goodwill of DKK 0.5bn (0.5bn) and does not indicate any impairment in 2020. According to
the sensitivity informations below a change in the required return rate will have the highest effect on the
equity. An increase in the required return of approx. 4.1% will result in a write down of goodwill.

Trademarks and customer relations
As at 31 December 2020 management performed a test of the carrying amounts of customer relations as
an integral part of the Moderna, Obos and Alka portfolio goodwill test.

An agricultural portfolio acquired in 2014 was impaired and written down in 2019 DKK 18m.

Software and assets under construction
As at 31 December 2020 management performed a test of the carrying amounts of software and assets
under construction.

The impairment test compares the carrying amount with the estimated present value of future cash flows.
The test did indicate an impairment of DKK 147m (DKK 7m) due to revaluation of the Groups IT-systems.
The write-down is due to related system development costs will be higher, while for some of the systems
benefits are also expected to be lower. The cost is recognised as write-downs under depreciations in the
income statement.

Assets under construction are not depreciated but tested once a year for impairment or when there is any
indication of a decrease in value. Amortised software is assessed for impairment at the balance sheet date
or when there are indications that the future cash flow cannot justify the carrying amount.

In the event that the recoverable amount is lower than the carrying amount, the difference is recognised in
the income statement.

The recoverable amount is the higher of fair value less sales costs and value in use.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

12 Property, plant and equipment

DKKm

2020
Cost
Cost at 1 January
Exchange rate adjustments
Additions for the year
Disposals for the year
Cost at 31 December

Accumulated depreciation and value adjustments
Accumulated depreciation and value adjustments at 1 January
Exchange rate adjustments
Depreciation for the year
Reversed depreciation and value adjustments
Accumulated depreciation and value adjustments at 31 December
Carrying amount at 31 December

2019

Cost
Cost at 1 January
Exchange rate adjustments
Additions for the year
Disposals for the year
Cost at 31 December

Accumulated depreciation and value adjustments
Accumulated depreciation and value adjustments at 1 January
Depreciation for the year
Value adjustments for the year at revalued amount in
income statement
Reversed depreciation
Accumulated depreciation and value adjustments at 31 December
Carrying amount at 31 December

Operating
equipment

Leases ROU
equipment a)

Owneroccupied
property

Leases ROU
’Groupoccupied
property’ b)

360
-4
37
-146
246

-235
3
-22
128
-126
120

320
1
69
-29
360

-219
-26

0
10
-235
125

76
0
15
-3
88

-46
0
-18
2
-62
27

64
0
29
-17
76

-20
-26

0
0
-46
30

0
0
0
0
0

0
0
0
0
0
0

112
0
0
-112
0

0
0

-10
10
0
0

912
-14
10
-4
904

-182
3
-99
4
-274
630

762
2
175
-27
912

-84
-98

0
0
-182
730

Total

1,348
-18
62
-153
1,239

-463
6
-140
135
-462
777

1,258
3
272
-185
1,348

-323
-150

-10
20
-463
885

a) Lease assets (Right of use-assets(ROU)) equipment
only consists of leases of vehicles with a lease
term of three to four years. The monthly amounts
are fixed and there are no option for purchase or
extension. Short term leases are not recognised as
Right of use-assets.

b) Lease assets (Right of use-assets), Group occupied
property concists of leases of offices buildings.
Contract terms are from 1 to 16 years and with
yearly rent adjustments. Tryg has no lease contracts
with variable lease payments based on sale or
similar.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents2020

2019

DKKm

2020

2019

DKKm

Investment property
Fair value at 1 January
Exchange rate adjustments
Additions for the year
Disposals for the year
Value adjustments for the year
Reversed on sale
Fair value at 31 December
Total rental income for 2020 is DKK 65m (DKK 74m in 2019).

1,151
-30
7
-15
1
4
1,117

1,345
6
9
-272
59
3
1,151

Total expenses for 2020 are DKK 13m (DKK 12m in 2019). External experts were involved in valuing the
majority of the investment properties.

Return percentages, weighted average
Business property
Office property
Residential property
Total

2020
7.5
5.8
2.4
5.3

2019
5.4
5.4
2.3
5.1

Sensitivity
Tryg’s property valuations are based on the market-based rental income and operating expenses of
the individual property relative to the required rate of return. The most important factors impacting
the valuations are the applied rates of return, annual net rental income and occupancy rates.
The average rates of return applied are stated above.

Impacts on the fair value of properties:
Increase in applied rate of return of 0.25%
Decrease in applied rate of return of 0.25%
Decrease in net rental income of 3%
Decrease in occupancy rate of 3%

2020
-39
42
-33
-7

2019
-37
39
-34
-8

Equity investments in associates
Cost
Cost at 1 January
Additions for the year
Disposals for the year a)
Cost at 31 December

Revaluations at net asset value
Revaluations at 1 January
Reversed on sale
Value adjustments for the year
Revaluations at 31 December

Carrying amount at 31 December

a) Ejendomsselskabet af 1. marts 2006 P/S, Denmark was sold in January 2019.

34
62
0
96

-34
0
-47
-81

226
10
-202
34

16
-40
-10
-34

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Financial assets
Financial assets at fair value with value adjustments in
the income statement
Receivables measured at amortised cost with value
adjustment in the income statement
Total financial assets

2020

2019

15 Financial assets (Continued)

45,748

44,239

The Fair value hierarchy

4,070
49,819

3,476
47,715

”Quoted market prices and consolidated reference prices” (level 1) consists of financial instruments that
are quoted and traded in a principal and active market (markets generally accessable and with substantial
volume and trade frequency).

Financial assets at amortised cost only deviate to a minor extent from fair value.

Financial liabilities
Derivative financial instruments at fair value with value
adjustments in the income statement
Derivative financial instruments at fair value with value
adjustments in other comprehensive income
Financial liabilities at amortised cost with value adjustment
in the income statement
Total financial liabilities

990

-93

14,159
15,056

728

12,618
13,418

Information on valuation of subordinate loan capital at fair value is stated in note 1. Other financial liabi-
lities measured at amortised cost only deviate to a minor extent from fair value.

Valuation based on observable input (level 2) consists of financial instruments that are valued substantially
on the basis of observable input other than quoted price or consolidated reference price for the instru-
ment itself. If a financial instrument is quoted in a market that is not active, Tryg bases its measurement on
the most recent transaction price. Adjustment is made for subsequent changes to market conditions, for
instance, by including transactions in similar financial instruments that are assumed to be motivated by
normal business considerations. For a number of financial assets and liabilities, no market exists.

In such cases, Tryg uses recent transactions in similar instruments and discounted cash flows or other
generally accepted estimation and valuation techniques based on market conditions at the balance sheet
date to calculate an estimated value. This category covers instruments such as derivatives valued on the
basis of observable yield curves and exchange rates and illiquid mortgage bonds valued by reference to
the value of similar liquid bonds.

Valuation based on significant non-observable input (level 3) consist of certain financial instruments
based substantially on non-observable input. Such instruments include unlisted shares, unit trust invest-
ments, some unlisted bonds and Deal Contingent Forwards. The fair value of Investment property is also
based on non-observable input. Please refer to note 13 and accounting policies section Investment pro-
perty.

If, at the balance sheet date, a financial instrument’s classification differs from its classification at the
beginning of the year, the classification of the instrument changes. Changes are considered to have taken
place at the balance sheet date. Developments in the financial markets can result in reclassifications bet-
ween the categories. Some bonds have become illiquid and have therefore been moved from ”Quoted pri-
ces or consolidated reference prices” to the ”Observable input” category, while other bonds have become
liquid and have been moved from ”Observable input” to the ”Quoted prices or consolidated reference
prices” category.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

Financial assets (Continued)
Financial instruments measured at fair value in the statement
of financial position on the basis of non-observable input:
Carrying amount at 1 January
Exchange rate adjustments
Gains/losses in the income statement a)
Purchases
Sales
Transfers to/from the group 'non-observable input'
Carrying amount at 31 December
Gains/losses in the income statement for assets held at the state-
ment of financial position date recognised in value adjustments

2020

2019

1,375
-29
48
111
-89
-231
1,186

1,522
5
66
192
-410
0
1,375

-1

a) Hereof realised DKK 53 (DKK 5m in 2019)
Inflation derivatives are measured at fair value on the basis of non-observable input and are included
under claims provisions at a fair value of DKK-709m (DKK -723m in 2019).

DKKm

Financial assets (Continued)
Fair value hierarchy for financial instruments and investment property
measured at fair value in the statement of financial position

DKKm

Quoted market prices
or consolidated
references price a)

Observable
input

Non
observable
input

2020
Investment property
Equity investments
Unit trust units
Bonds
Other lendings
Derivative financial instruments, assets
Derivative financial instruments, debt

0
177
6,843
31,619
0
6
0
38,645

0
2,399
0
2,720
80
1,834
-897
6,136

a) Consolidated reference prices means Nasdaq consolidated reference prices

2019
Investment property
Equity investments
Unit trust units
Bonds
Other lendings
Derivative financial instruments, assets
Derivative financial instruments, debt

0
204
2,387
36,385
0
1
0
38,978

0
1,401
6
2,429
75
1,127
-800
4,237

1,117
35
35
0
0
0
0
1,186

1,151
194
31
0
0
0
0
1,375

Total

1,117
2,611
6,878
34,339
80
1,840
-897
45,968

1,151
1,798
2,424
38,814
75
1,128
-800
44,590

Bonds measured on the basis of observable inputs consist of Norwegian bonds issued by banks and to
some extent Danish semi-liquid bonds, where no quoted prices or consolidated reference prices based
on actual trades are available.

DKKm

2020

2019

Financial instruments transferred from ”Quoted market prices or conso-
lidated reference prices” to ”Observable input”

1,021

Financial instruments transferred from ”Observable input” or ”Non-obser-
vable input” to ”Quoted market prices or consolidated reference prices”

Financial instruments transferred from "Non-observable input" to
"Observable input"

3,559

878

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents15 Financial assets (continued)

Reconciliation of Tryg's Investment portfolio

DKKm

2020

Bond

Equity and
unit trust units

Investment
property

Derivatives and
other items

Other lending

Total

Investment assets according to balancesheet

34,339

9,505

1,117

1,840

Investment assets according to investment activities
Other, hereof financial instrument in liabilities
Classified according to investment strategy
External customers a)
Tryg’s investment portfolio a)
Match portfolio
Free portfolio

-3,259
4,398
-1,274
34,204
-27,169
7,035

0
-6,390
-451
2,664
-76
2,588

0
2,518
-829
2,806
0
2,806

-629
-445
83
849
-849
0

2019

Investment assets according to balance sheet

38,814

4,222

1,151

1,128

Investment assets according to investment activities
Other, hereof financial instrument in liabilities
Classified according to investment strategy
External customers a)
Tryg's investment portfolio a)
Match portfolio
Free portfolio

-2,458
83
-1,407
35,033
-27,901
7,132

0
-1,517
-520
2,185
-21
2,164

0
1,756
-766
2,141
0
2,141

-800
-246
200
282
-282
0

0
-80
0
0
0
0

0
-75
0
0
0
0

46,881

-3,888
0
-2,470
40,523
-28,094
12,429

45,390

-3,257
0
-2,493
39,639
-28,203
11,436

a) The setup of Tryg invest is impacting Tryg’s balance sheet as external customers investments are booked under “total other financial investments” with opposing

liabilities entries such as “debt to group undertakings” and “other debt”.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents15

Financial assets (continued)

Derivative financial instruments
Derivatives with value adjustments in the income statement at fair value:

DKKm

Financial assets (Continued)
Derivative financial instruments used in connection with
hedging of foreign entities for accounting purposes
Gains and losses on hedges charged to other comprehensive income:

2020

2019

Fair value
in statement
of financial
position

645
12
286

943

-709
234

303
-693
624

Nominal

29,420
69
12,562

42,052

7,280
49,331

12,860
24,356
12,116

Fair value
in statement
of financial
position

304
3
20

328

-724
-396

-26
2,572
-2,942

Nominal

17,163
167
7,531

24,861

7,741
32,602

7,833
20,323
4,445

Interest derivatives
Share derivatives
Exchange rate derivatives
Derivatives according to statement of
financial position
Inflation derivatives, recognised
in claims provisions
Total derivative financial instruments

Due after less than 1 year
Due within 1 to 5 years
Due after more than 5 years

Derivatives, repos and reverses are used continuously as part of the cash and risk management carried
out by Tryg and its portfolio managers.

2020

Gains and losses at 1 January
Value adjustments for the year
Gains and losses at 31 December

2019

Gains and losses at 1 January
Value adjustments for the year
Gains and losses at 31 December

Gains

3,291
463
3,753

Gains

3,100
191
3,291

Losses

-3,099
-336
-3,435

Losses

-2,890
-209
-3,099

Value adjustments
Value adjustments of foreign entities recognised in other comprehensive income in the amount of:

Value adjustments at 1 January
Value adjustment for the year
Value adjustments at 31 December

2020

-170
-55
-225

Net

191
127
318

Net

210
-19
191

2019

-202
32
-170

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
DKKm

Financial assets (Continued)
Receivables
Total receivables in connection with direct insurance contracts
Receivables from insurance enterprises
Unsettled transactions
Other receivables

Specification of write-downs on receivables from insurance contracts:

Write-downs at 1 January
Exchange rate adjustments
Write-downs and reversed write-downs for the year
Write-downs at 31 December

2020

2019

DKKm

2020

2019

1,674
270
120
565
2,628

136
-4
-13
118

1,727
240
401
187
2,555

139
1
-3
136

17 Current tax

Net current tax at 1 January
Exchange rate adjustments
Current tax for the year
Current tax on equity entries
Adjustment of current tax in respect of previous years
Tax paid regarding previous year
Tax paid for the year
Net current tax at 31 December

Current tax is recognised in the statement of financial position as follows:
Under assets, current tax
Under liabilities, current tax
Net current tax

-73
6
-907
-28
97
0
599
-306

51
-357
-306

-118
-2
-734
4
-50
-3
830
-73

52
-125
-73

Receivables are written down in full when submitted for debt collection. The write-down is reversed if
payment is subsequently received from debt collection and amounts to DKK 37m (DKK 39m in 2019).

Other receivables do not contain overdue receivables

Due to IFRIC 23, uncertain tax positions should be valuated and recognized in the tax balance.

Tryg Forsikring A/S has asked the Danish Tax Authorities for a repayment of tax for unused tax loss in the clo-
sed Finnish branch in 2012. 80% of the expected tax repayment has been included in the balance of cur-
rent tax.

16 Reinsurer's share

Impairment test
As at 31 December 2020, management performed a test of the carrying amount of total reinsurers’
share of provisions for insurance contracts and receivables. The impairment test resulted in impairment
charges totalling DKK 0m (DKK 0m in 2019).

The use of reinsurance creates a natural counterparty risk. The Risk will be handled by applying a wide
range of reinsurers with at least an ’A’ rating.

Equity
Number of shares

Number of shares of DKK 5 (1,000)

Number of shares at 1 January
Bought during the year
Used in connection with exercise
of incentive programme

Number of shares at 31 December
Number of shares as a percentage of
issued shares at 31 December
Nominal value at 31 december (DKKm)

Shares outstanding
2019
2020

301,700
-535

301,743
-500

585

457

301,750
99.87

301,700
99.85

1,509

Own shares

2020

448
535

-585

398
0.13

2019

405
500

-457

448
0.15

Pursuant to the authorisation granted by the shareholders, Tryg may acquire up to a total face value
151m DKK of the share capital in the period up until 31 December 2021.
Own shares are acquired for use in the Group’s incentive programme.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

DKKm

Solvency II – Own funds (continued)
Equity according to annual report
Proposed dividend
Intangible assets
Profit margin, solvency purpose
Taxes
Subordinate loan capital
Solvency II – Own funds

19 Premium provisions

Premium provision at 1 January
Value adjustments of provisions, beginning of year
Paid in the financial year
Change in premiums in the financial year
Exchange rate adjustments
Premium provisions at 31 December

2020

2019

DKKm

19 Claims provisions

12,264
-529
-7,124
1,408
201
2,663
8,884

5,996
-52
23,820
-23,714
-13
6,036

12,085
-1,013
-7,364
1,408
260
2,744
8,119

5,861
2
22,660
-22,530
4
5,996

Gross

Ceded

Net of
reinsurance

2020
Claims provisions at 1 January
Value adjustments 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 adjustments
Claims provisions at 31 December

24,859
-402
24,457

-8,691
-7,005
-15,695

16,650

-1,071
15,579

616
24,957

-1,285
37
-1,248

199
808
1,006

-711

-91
-802

-43
-1,087

23,574
-365
23,210

-8,492
-6,197
-14,689

15,940

-1,162
14,777

573
23,871

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

DKKm

2020

2019

19 Claims provisions (continued)

20 Pensions and similar obligations

Gross

Ceded

Net of
reinsurance

2019
Claims provisions at 1 January
Value adjustments 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 adjustments
Claims provisions at 31 December

24,847
65
24,912

-8,414
-7,082
-15,496

16,050

-1,117
14,933

510
24,859

-1,234
-7
-1,241

158
262
420

-397

-65
-462

-1
-1,285

23,613
58
23,671

-8,255
-6,820
-15,076

15,653

-1,182
14,471

509
23,574

Jubilees
Compensation liability
Recognised liability
Defined-benefit pension plans:
Present value of pension obligations funded through operations
Present value of pension obligations funded through
establishment of funds
Pension obligation, gross
Fair value of plan assets
Pension obligation, net

Specification of change in recognised pension obligations:
Recognised pension obligation at 1 January
Adjustment regarding the terminated part of the plan
termination recognised in the income statement*
Exchange rate adjustments
Present value of pensions earned during the year
Capital cost of previously earned pensions
Actuarial gains/losses
Paid during the period
Recognised pension obligation at 31 December

Change in carrying amount of plan assets:
Carrying amount of plan assets at 1 January
Adjustment regarding the terminated part of the plan
termination recognised in the income statement*
Exchange rate adjustments
Investments in the year
Estimated return on pension funds
Paid during the period
Carrying amount of plan assets at 31 December

Total pensions and similar obligations at 31 December
Total recognised obligation at 31 December

45
51
96

0
34
0
34

1,190

-1,059
-84
0
1
-6
-7
34

940

-874
-66
0
0
0
0

34
130

53
0
53

1,139
1,190
940
250

1,105

0
16
31
22
73
-57
1,190

875

0
13
72
18
-37
940

250
303

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

2020

2019

DKKm

2020

2019

20 Pensions and similar obligations (continued)

Specification of pension cost for the year:
Present value of pensions earned during the year
Adjustment regarding the terminated part of the plan
termination recognised in the income statementa)
Interest expense on accrued pension obligation
Expected return on plan assets
Accrued employer contributions
Total year's cost of defined-benefit plans

The premium for the following financial years is estimated ata)
Number of active personsa)
Number of pensioners
Average expected remaining service time (years)a)

Estimated distribution of plan assets:
Shares
Bonds
Property
Other
Average return on plan assets
Weighted average duration of the defined benefit obligation (years)

Assumptions used
Discount rate
Estimated return on pension funds
Salary adjustments
Pension adjustments
G adjustments
Turnover
Employer contributions
Mortality table

-128
1
0
0
-128

1
0
127
0

%
0
0
0
0
0.0
8

%
1.2
1.2
2.3
0.0
2.0
7.0
19.1
K2013

0
21
-17
5
35

35
407
581
6.29

%
10
75
13
2
1.9
13

%
1.6
1.6
2.3
0.7
2.0
7.0
19.1
K2013

Sensitivity information (continued)
The sensitivity analysis is based on a change in one of the assumptions, assuming that all other assump-
tions remain constant. In reality, this is rarely the case, and changes to some assumptions may be sub-
ject to covariance. The sensitivity analysis has been carried out using the same method as the actuarial
calculation of the pension provisions in the statement of financial position.

Impact on equity from the following changes:
Interest rate increase of 0.3 percentage point
Interest rate decrease of 0.3 percentage point
Pay increase rate, increase of 1 percentage point
Pay increase rate, decrease of 1 percentage point
Turnover, increase of 2 percentage point
Turnover, decrease of 2 percentage point

1
-1
0
0
0
0

57
-61
-83
74
38
-45

Due to the termination of the largest part of the plan only minor sensitivities are left.

Description of the Norwegian plan
a) In the Norwegian part of the Group, about half of the employees had a defined-benefit pension plan.

The plans were based on the employees’ expected final pay, The secured employee part of the plan has
been terminated as of 01 January 2020. Tryg agreed with the Norwegian employees to replace the defi-
ned benefit pension scheme (for employees with a high seniority) with a market based pension scheme
in a life insurance company, this had a total positive net impact of DKK 128m. The pension funds and
liability was transferred to Livsforsikringsselskapet Nordea Liv AS as of the terminationdate.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents20

Sensitivity information (continued)

Description of the Swedish plan
Moderna Försäkringar, a branch of Tryg Forsikring A/S, complies with the Swedish industry pension agree-
ment, the FTP plan, which is insured with Försäkringsbranschens Pensionskassa - FPK.

Under the terms of the agreement, the Group’s Swedish branch has undertaken, along with the other
businesses in the collaboration, to pay the pensions of the individual employees in accordance with the
applicable rules.

The FTP plan is primarily a defined-benefit plan in terms of the future pension benefits. FPK is unable to
provide sufficient information for the Group to use defined-benefit accounting. For this reason, the Group
has accounted for the plan as if it were a defined-contribution plan in accordance with IAS 19.30.

This years premium paid to FPK amounted to DKK 10m (DKK 12m in 2019), which is about 2,2 % of the
annual premium in FPK(2019). FPK writes in its Annual report for 2019 that it had a solvency ratio of 137
at 31 December 2019 (Solvency ratio of 134 at 31 December 2018).

The Solvency Ratio is defined as the own funds relativ to the solvency capital requirement.

DKKm

2020

2019

21 Deferred tax

Tax asset
Operating equipment
Debt and provisions
Capitalised tax loss

Tax liability
Intangible rights
Land and buildings
Bonds
Contingency funds

Deferred tax

Development in deferred tax
Deferred tax at 1 January
Exchange rate adjustments
Change in deferred tax relating to change in tax rate
Change in deferred tax previous years
Purchase or sale of activity
Change in capitalised tax loss
Change in deferred tax recognised in income statement
Change in deferred tax taken to equity
Deferred tax at 31 December

Tax value of non-capitalised tax loss
Denmark

11
77
0
88

416
79
-42
487
939
851

911
-29
-2
32
0
0
-82
22
851

14
65
1
80

429
77
-59
544
991
911

912
5
0
34
5
-1
-26
-18
911

The loss in Tryg A/S cannot be utilised in the Danish joint taxation scheme. The loss can be carried forward
indefinitely. Loss determined according to Swedish and Finnish, German and Austria rules can be carried
forward indefinitely. In Netherlands tax can be carried forward 6 years

The losses are not recognised as tax assets until it has been substantiated that the company can generate
sufficient future taxable income to offset the tax loss. The total current and deferred tax relating to items
recognised in equity is recognised in the statement of financial position in the amount of DKK 50m (DKK
22m at 31 December 2019).

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
DKKm

2020

2019

DKKm

2020

2019

22 Other provisions

Other provisions at 1 January
Exchange rate adjustment
Change in provisions
Other provisions 31 December

86
-1
-28
57

111
0
-26
86

Other provisions relate to provisions for the Group’s own insurance claims and restructuring costs.
Additions to the provision for restructuring costs and own insurance claims during the year amounts to
DKK 14m and use of existing restructuring provisions amounts to DKK 42m.

The balance as at 31 December 2020 excluding own insurances amounts to DKK 47m (DKK 80m at 31
December 2019).

23 Other debt and debt to group undertakings

Debt related to external customers investments amounts to DKK 2,470m please refer to note 15
Tryg’s investment portfolio.

Earnings per share
Profit/loss from continuing business
Profit/loss on discontinued and divested business
Profit/loss for the year
Depreciation on intangible assets related to Brands and Custo-
mer relations after tax
Operating Profit/loss for the year

Average number of shares (1,000)
Diluted number of shares (1,000)
Earnings per share, continuing business, DKK
Diluted earnings per share, continuing business, DKK
Earnings per share, DKK
Diluted earnings per share, DKK
Operating earings per share, DKK

25 Contractual obligations, collateral and contingent liabilities

2,773
0
2,773

105
2,878

301,678
301,678
9.19
9.19
9.19
9.19
9.54

Other debt
Maturity of undiscounted lease liabilities
Due 1 year or less
Due 1-5 years
Due more than 5 years
Total Lease liabilities 31 December

Lease liabilities included in the statement of financial position
Hereof future cashflow options

Amounts recognised in statement of cash flow
Total cash out-flow for leases

Amounts recognised in income statement
Interest on lease liabilities

134
345
411
890

139

-36

155
489
476
1,121

147

-39

Contractual obligations

Obligations due by period

2020

<1 year

13 years

35 years

> 5 years

Other contractual obligations a)

2019

Other contractual obligations a)

581
581

616
616

532
532

497
497

303
303

141
141

4
4

a) Other contractual obligations mainly consists of investment commitments, IT and outsourcing

agreements. Please refer to note 12 for lease agreements recognised as ROU.

There are no short team-leases recognised in the financial statement.
Debt related to Leasing are included in Other debt. Please refer to note 12 for specification of ROU
assets.

2,845
-2
2,843

122
2,965

301,954
301,954
9.42
9.42
9.42
9.42
9.82

Total

1,420
1,420

1,258
1,258

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

2020

2019

25 Contractual obligations, collateral and contingent liabilities (continued)

2020
Tryg has signed the following contracts with amounts above DKK 50m:

The Danish companies in the Tryg Group are jointly taxed with TryghedsGruppen smba. The companies
and the other jointly taxed companies are liable for any obligations to withhold taxes at source on inte-
rest, royalties, dividends and income taxes etc. in respect of the jointly taxed companies.

Tryg is comitted to invest in some investment funds. The commitment amounts to DKK 934m.
DKK 265m are expected called during 2021 and additionally DKK 535m within 5 years. Tryg has signed
IT infrastructure agreements with commitments amounting to DKK 357m within 5 years.

2019
Tryg is comitted to invest in some investment funds. The commitment amounts to DKK 1,015m.
DKK 399m are expected called during 2020 and additionally DKK 525m within 5 years.

Tryg Livsforsikring A/S and Forsikrings-Aktieselskabet Alka Liv II
have registered the following assets as having been held as secu-
rity for the insurance provisions:
Bonds
Interest and rent receivable
Total

1,141
4
1,145

1,096
5
1,101

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

25 Contractual obligations, collateral and contingent liabilities (continued)

Offsetting and collateral in relation to financial assets and obligations

Gross amount
before offsetting

According to the
statement of
financial position

Bonds as colla
teral for repos/
reverse repos

Offsetting

Collateral
in cash

Net amount

Collateral which is not offset in
the statement of financial position

2020
Assets
Derivative financial instruments
Inflation derivatives, recognised in claims provisions

Liabilities
Repo debt
Derivative financial instruments
Inflation derivatives, recognised in claims provisions

2019
Assets
Derivative financial instruments

Liabilities
Repo debt
Derivative financial instruments
Inflation derivatives, recognised in claims provisions

1,840
3
1,843

3,259
897
712
4,869

1,128
1,128

2,601
800
724
4,125

0
0
0

0
0
0
0

0
0

0
0
0
0

1,840
3
1,843

3,259
897
712
4,869

1,128
1,128

2,601
800
724
4,125

0
0
0

-3,259
0
0
-3,259

0
0

-2,602
0
0
-2,602

-1,850
-3
-1,852

-2
-916
-710
-1,628

-1,247
-1,247

-1
-676
-656
-1,332

-9
0
-9

-2
-19
2
-18

-119
-119

-2
124
68
190

Contingent liabilities
Price adjustments 2016-2020
At the end of October (2020) Tryg received the Forbru-
gerombudsmand’s (FO or Consumer Ombudsman) as-
sessment of the case. In FO’s opinion, Tryg was not
complying with regulations on price adjustments for
residential customers when increasing prices above
indexation between March 2016 and February 2020.
The case is related to a part of the private portfolio in
Denmark.

Based on this assessment the FO is concluding that
certain customers may have a recovery claim against
Tryg.

Tryg does not agree with the FO’s assessment as the
company believes it has followed the guidelines stated
by the Danish FSA in terms of price increases. Tryg is in
a process with the FO in order to gain a better under-
standing of the FO assessment of the case.

Other
Companies in the Tryg Group are party to a number of
disputes.

Management believes that the outcome of these dis-
putes will not affect the Group’s financial position sig-
nificantly beyond the obligations recognized in the sta-
tement of financial position at 31 December 2020.

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
26 Acquisition of activities

2020
There have been no acquisions in 2020.

Recommended cash offer for RSA

In November 2020 Tryg made a recommended cash offer together with Intact (a leading Canadian Insu-
rer), to acquire RSA Insurance Group plc. As part of the transaction, Tryg will take over RSA’s Swedish and
Norwegian businesses and co-own RSA’s Danish business on a 50/50 economic basis for a considera-
tion of £4.2bn to be paid by Tryg.

The offer is provided in GBP and thus the consideration for the business taken over by Tryg is fixed in
GBP. This foreign currency exposure will persist from the time of the offer and until closing of the acqu-
isition.

In order to eliminate the foreign currency exposure related to the acquisition Tryg enters into derivatives
to buy GBP and sell DKK that mirrors the possibility of non-occurrence of the acquisition, i.e. the deri-
vatives have a knock-out option that is automatically triggered if the acquisition does not occur. Such
derivatives are often referred to as deal contingent derivatives (DCF). If the acquisition is not concluded
the forwards will lapse without any payments.

The transaction is expected to be closed during H1 2021, following shareholders’ and regulatory ap-
proval. During 2020, some transaction costs in the amount of DKK 323m related to the acquisition have
been recognized in the balance sheet and will be included in the purchase price upon completion of the
acquisition as the acquired business initially will be accounted for under the equity method until the
Swedish and Norwegian businesses will be separated from the Danish business through a demerger
expected to be completed in Q1 2022. Please refer to the management’s review for further information
on the recommended cash offer.

The DCF contracts have a notional value of £4.2bn and will be settled upon closing of the acquisition at
any time in the period from 17 May to the end of November 2021. The cost of the contracts being DKK
1.3bn is built into the contracts as additional forward points compared to marked based forward rates
and thus is only paid if the acquisition is concluded.

DKKm

27 Related parties

2020

2019

The Group has no related parties with a decisive influence other than the parent company, TryghedsGrup-
pen smba and the subsidiaries of TryghedsGruppen smba (other related parties). Related parties with sig-
nificant influence include the Supervisory Board, the Executive Management and their members’ family.

Premium income
- Parent company (TryghedsGruppen smba)
- Key management
- Other related parties

Claims payments
- Parent company (TryghedsGruppen smba)
- Key management
- Other related parties

0.5
0.5
3.4

0.1
0.2
0.4

0.5
0.4
3.1

0.0
0.2
0.5

Specification of remuneration

2020

Supervisory Board
Executive Board
Risk-takers investment functions
Risk-takers staff functions
Risk-takers independent
control functions
Risk-takers other functions

Number of
persons

Share based
variable
salary a)

Cash
variable
salary

Base
salary

Pension

Total

14
4
9
20

5
20
72

9
29
13
36

9
42
138

0
11
1
5

0
7
25

0
0
2
8

1
7
18

0
7
2
6

1
7
24

9
47
18
56

11
63
205

a) Total expenses recognised in 2020 for matching shares and conditional shares allocated in 2020 and

previous year.
For matching shares and conditional shares allocated to Executive Board in 2020, please refer to
”Corporate governance” in Management review.

The DCFs are measured at fair value and have a fair value of nil at initial recognition. The basis for the
estimate of the fair value is the change in the marked based forward rates, assessment of the probability
of the acquisition being concluded and the cost of the contracts. Tryg has assessed that as at 31 Decem-
ber 2020 the fair values were immaterial.

Of which retired:
Supervisory Board

Risk-takers

Number
of
persons
2
4

Seve
rance
pay
0
2

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

DKKm

27 Related parties (continued)

2019

Supervisory Board
Executive Board b)
Risk-takers investment
functions
Risk-takers staff functions
Risk-takers independent
control functions
Risk-takers other functions

Number of
persons

Base
salary

Share based
variable
salary a)

Cash
variable
salary

Pension

Total

14
4

7
20

5
19

9
27

10
31

8
43

0
5

0
4

0
0

1
4

0
6

0
7

1
6

1
7

9
39

12
45

9
60

127

175

a) Total expenses in 2019 for matching shares programs allocated in 2019 and previous year.
b) Barbara Plucnar Jensen took up the position as CFO on 1 March 2019.

Of which retired:

Supervisory Board
Risk-takers

Number of
persons

Severance
pay

2
4

0
0

Base salary are charges incurred during the financial year. Variable salary includes the charges for
matching shares and conditional shares, which are recognised over 4 years. Reference is made to se-
ction 'Corporate governance' of the management's review on the corresponding disbursements. The
Executive Board and risk-takers are included in incentive programmes. Please refer to note 6 for infor-
mation concerning this.

The members of the Supervisory Board in Tryg A/S are paid with a fixed remuneration and are not
covered by the incentive schemes. The members of the Executive Board is paid a fixed remuneration, car
allowance and pension. The variable salary is awarded in the form of share-based remuneration. Please
refer to 'Corporate governance'.

Each member of the Executive Board is entitled to 12 months' notice and severance pay equal to 12
months’ salary plus pension contribution except Group CEO who is entitled to severance pay equal to
18 months' salary. If a change of control clause is actioned CEO and COO are entitled to severance pay
equal to 36 months´salary.

Risk-takers are defined as employees whose activities have a significant influence on the company’s
risk profile. The Supervisory Board decides which employees should be considered as risk-takers.

Parent company
TryghedsGruppen smba
TryghedsGruppen smba controls 53% of the shares in Tryg A/S.

2020
In 2020 Tryg Forsikring A/S paid Tryg A/S DKK 2,599m and Tryg A/S paid TryghedsGruppen smba DKK
1,559m in dividends.

TryghedsGruppen smba has provided an irrevocable subscribtion undertaking to Tryg, to subscribe for
new shares in the coming Tryg Rights Issue for an amount totalling DKK 6.0bn.

2019
In 2019 Tryg Forsikring A/S paid Tryg A/S DKK 2,039m and Tryg A/S paid TryghedsGruppen smba DKK
1,224m in dividends.

The transactions between TryghedsGruppen smba and Tryg A/S is conducted on an arm’s length basis.

Intra-group transactions with Parent company
Administration fee, etc. is fixed on a cost-recovery basis.

Intra-group accounts are offset and carry interest on market terms.

The companies in the Tryg Group have entered into reinsurance contracts on market terms.

Transactions with Group undertakings have been eliminated in the consolidated financial statements in
accordance with the accounting policies.

Financial highlights
Please refer to page 54

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

29 Accounting policies
The consolidated financial statements are prepared in
accordance with the International Financial Report-
ing Standards (IFRS) as adopted by the EU on 31
December 2020 and the additional Danish disclosure
requirements of the Danish Financial Business Act on
annual reports prepared by listed financial services
companies The annual report of the parent company
is prepared in accordance with the executive order on
financial reports presented by insurance companies
and lateral pension funds issued by the Danish FSA.
The deviations from the recognition and measurement
requirements of IFRS are:

•

The Danish FSA’s executive order does not
allow provisions for deferred tax of contin-
gency reserves allocated from untaxed funds.
Deferred tax and the other comprehensive
income of the parent company have been
adjusted accordingly on the transition to IFRS.

Change in accounting policies
Tryg has not implemented any new significant ac-
counting policies or IFRS standards in 2020.

The accounting policies have been applied consist-
ently with last year.

Accounting regulation
Implementation of changes to accounting standards
and interpretation in 2020
The International Accounting Standards Board (IASB)
has issued several changes to the international
accounting standards, and the International Financial
Reporting Interpretations Committee (IFRIC) has also
issued a number of interpretations.

No standards have been implemented for the first time
for the accounting year that began on 1 January 2020
that will have a significant impact on the group. See
below regarding IFRS 9 ‘Financial instruments’

There has not been implemented any new or amended
standards and interpretations that have affected the
group significantly.

Tryg Group’s financial position, including in relation to
its technical result or profit/loss after tax.

Future orders, standards and interpretations that
the group has not implemented, and which have
still not entered into force but could affect the group
significantly:

•
•

IFRS 9 ‘Financial Instrumentsa)
IFRS 17 ‘Insurance Contractsb)

a) enters into force for the accounting year commencing
1 January 2018 - Insurance companies are allowed to
postpone the implementation to 1 January 2023 if certain
criteria are met.

b) Expected to enter into force for the accounting year com-

mencing 1 January 2023.

The implementation of IFRS 9 ‘financial instruments’
is not expected to significantly change the group’s
financial position.

Regarding IFRS 9 the assessment of no significant
impact on the statement of financial position or profit
and loss is based on the assumption that Tryg already
carry all financial instruments at fair value through
profit and loss. The implementation of IFRS 9, will
not affect Tryg’s recognition and measurement. Tryg
has postponed the implementation of IFRS 9 to 1
January 2023 when IFRS 17 Insurance Contracts will
be applicable. Tryg can postpone IFRS 9 due to the fact
that our activities are predominantly connected with
insurance and that our liabilities connected with insur-
ance is relatively greater than 80 per cent of the total
liabilities. The impact of IFRS 17 (Insurance Contracts)
is currently being assessed in a structured and formal
manner and is expected to be concluded in due course
ahead of the implementation date. Whilst the Tryg
Group anticipates minor changes in certain of its key
figures, such as premiums growth and claims ratio as
a result of changes to the defintions of premiums and
costs under IFRS 17 (Insurance Contracts), Tryg Group
currently expects that the implementation of IFRS
(Insurance Contracts) will not significantly change the

The changes will be implemented going forward from
the effective date.

Significant accounting estimates and assess-
ments
The preparation of financial statements under IFRS re-
quires the use of certain critical accounting estimates
and requires management to exercise its judgement
in the process of applying the Group’s accounting
policies. The areas involving more judgement or
complexity, or areas where assumptions and estimates
are significant to the consolidated financial statements
are:

•
•
•
•
•
•

•

Liabilities under insurance contracts
Valuation of defined benefit plans
Fair value of financial assets and liabilities
Valuation of property
Business Combinations
Measurement of Goodwill, Trademarks and
Customer relations
Control of subsidiaries

Liabilities under insurance contracts
Estimates of provisions for insurance contracts repre-
sent the Group’s most critical accounting estimates, as
these provisions involve several uncertainty factors.

Claims provisions are management’s best estimate
based on actuarial and statistical projections of claims
and administration of claims including a margin
incorporating the uncertainty related to the range of
actuarial scenarios and other short and long-term
risks not reflected in standard actuarial models. The
projections are based on Tryg’s knowledge of historical
developments, payment patterns, reporting delays,
duration of the claims settlement process and other
factors that might influence future developments in
the liabilities.

The Group makes claims provisions, in addition to
provisions for known claims, which cover estimated
compensation for losses that has incurred, but are not
yet reported to the Group (known as IBNR reserves)
and future developments in claims which are known to
the Group but are not finally settled. Claims provisions
also include direct and indirect claims settlement costs
or loss adjustment expenses that arise from events
that have occurred up to the statement of financial
position date even if they have not yet been reported
to Tryg.

The calculation of the claims provisions is therefore
inherently uncertain and, by necessity, relies upon the
making of certain assumptions about factors such as
court decisions, amendments to legislation, social in-
flation and other economic trends, including inflation.
The Group’s actual liability for losses may be subject
to material positive or negative deviations relative to
the initially estimated claims provisions.

Claims provisions are discounted. As a result, initial
changes in discount rates or changes in the duration of
the claims provisions could have positive or negative
effects on earnings. Discounting affects the motor
third-party liability, general third-party liability, work-
ers’ compensation classes, including sickness and
personal accidents, in particular.

The Financial Supervisory Authority’s discount curve,
which is based on EIOPA’s yield curves, is used to
discount Danish, Norwegian and Swedish claims provi-
sions in relation to the relevant functional currencies.

Several assumptions and estimates underlying the
calculation of the claims provisions are mutually de-
pendent. This has the greatest impact on assumptions
regarding interest rates and inflation.

Defined benefit pension schemes
The Group has terminated our defined-benefit plan in
Norway as of 01 January 2020. 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 salary.

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsAs part of the termination of the defined-benefit plan,
an agreement of compensation to the employees
covered by the plan was agreed. A liability has been
established to cover the expected compensation to
be paid to the employees upon retirement from the
company. If the employee leaves before retirement
only a part of the compensation is paid.

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 accepted models with observa-
ble market data are not subject to material estimates.
For securities that are not listed on a stock exchange,
or for which no stock exchange price is quoted that
reflects the fair value of the instrument, the fair value
is determined using a current OTC price of a similar
financial instrument or using a model calculation. The
valuation models include the discounting of the instru-
ment cash flow using an appropriate market interest
rate with due consideration for credit and liquidity
premiums. The fair value of deal contingent deriva-
tives (DCF) that Tryg has entered into in connection
with a recommended cash offer together with Intact
(a leading Canadian Insurer), to acquire RSA Insurance
Group plc is further explained in note 26.

Valuation of property
The fair value is calculated based on a market-deter-
mined rental income, as well as operating expenses
in proportion to the property’s required rate of return
in per cent. Investment property is recognised at fair
value. The calculation of fair value is based on market
prices, taking into consideration the type of property,
location and maintenance standard, and based on a
market- determined rental income as well as operating
expenses in proportion to the property’s required rate
of return. Cf. note 12, 13 and 15.

Business Combinations
In Business Combinations, significant assessments
are made when considering the fair value of the assets
required and liabilities assumed and when identifying
intangible assets, such as Trademarks, Customer
relations and goodwill as part of the transactions.

Measurement of Goodwill, Trademarks and
Customer relations
Goodwill, Trademarks and Customer relations was
acquired in connection with acquisition of businesses.
Goodwill is allocated to the cash-generating units un-
der which management manages the investment. The
carrying amount is tested for impairment at least an-
nually. Impairment testing involves estimates of future
cash flows and is affected by several factors, including
discount rates and other circumstances dependent
on economic trends, such as customer behaviour and
competition. Cf. note 11.

Control of subsidiaries
Control of subsidiaries is assessed yearly. Hence
whether a subsidiary should still be part of the consol-
idation on line by line basis or as a single line item in
the balance sheet.

Description of accounting policies
Recognition and measurement
The annual report has been prepared under the his-
torical cost convention, as modified by the revaluation
of owner-occupied property, where increases are
recognised in other comprehensive income, and re-
valuation of investment property, financial assets held
for trading and financial assets and financial liabilities
(including derivative instruments) at fair value are
recognised in 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, and the value of such
assets can be measured reliably. Liabilities are recog-
nised 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 econom-
ic benefits will flow out of the Group, and the value of
such liabilities can be measured reliably.

On initial recognition, assets and liabilities are meas-
ured at cost, with the exception of financial assets,
which are recognised at fair value. Measurement
after initial recognition is affected as described below

for each 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 statement of financial position 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 recognised in the
income statement unless otherwise described below.

All amounts in the notes are shown in millions of DKK,
unless otherwise stated.

Consolidation
Consolidated financial statements
The consolidated financial statements comprise the
financial statements of Tryg A/S (the parent company)
and the enterprises (subsidiaries) controlled by the
parent company. The parent company is regarded as
controlling an enterprise when it
i) exercises a controlling influence over the relevant

activities in the enterprise in question,

ii) is exposed to or has the right to a variable return on

its investment, and

iii) can exercise its controlling influence to affect the

variable return.

Enterprises in which the Group directly or indirectly
holds between 20% and 50% of the voting rights
and exercises significant influence but no controlling
influence are classified as associates.

Basis of consolidation
The consolidated financial statements are prepared
based on the financial statements of Tryg A/S and its
subsidiaries. The consolidated financial statements
are prepared by combining items of a uniform nature.

The financial statements used for the consolidation
are prepared in accordance with the Group’s account-
ing policies.

On consolidation, intra-group income and costs,
intra-group accounts and dividends, and gains and
losses arising on transactions between the consolidat-
ed enterprises are eliminated.

Items of subsidiaries are fully recognised in the con-
solidated financial statements.

Business combinations
Newly acquired or newly established enterprises are
recognised in the consolidated financial statements
from the date of acquisition and the date of forma-
tion, respectively. The date of acquisition is the date
on which control of the acquired enterprise actually
passes to Tryg. Divested or discontinued enterpris-
es are recognised in the consolidated statement of
comprehensive income up to the date of disposal or
the settlement date. The date of disposal is the date
on which control of the divested enterprise actually
passes to a third party.

The purchase method is applied for new acquisitions
if the Group gains control of the acquired enterprise.
Subsequently, identifiable assets, liabilities and con-
tingent liabilities in the acquired enterprises are meas-
ured at fair value at the date of acquisition. Non-cur-
rent assets which are acquired with the intention of
selling them are, however, measured at fair value less
expected selling costs. Restructuring costs are recog-
nised in the pre-acquisition balance sheet only if they
constitute an obligation for the acquired enterprise.
The tax effect of revaluations is taken into account.
The acquisition price of an enterprise consists of the
fair value of the price paid for the acquired enterprise.
If the final determination of the price is conditional
upon one or more future events, such events are rec-
ognised at their fair values at the date of acquisition.
Costs relating to the acquisition are recognised in the
income statement as incurred.

Any positive balances (goodwill) between the acqui-
sition price of the acquired enterprise, the value of
minority interests in the acquired enterprise and the
fair value of previously acquired equity investments, on
the one hand, and the fair value of the acquired assets,

100

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
liabilities and contingent liabilities, on the other hand,
are recognised as an asset under intangible assets, and
are tested for impairment at least once a year. If the
carrying amount of the asset exceeds its recoverable
amount, it is impaired to the lower recoverable amount.

In the event of negative balances (negative goodwill),
the calculated fair values, the calculated acquisition
price of the enterprise, the value of minority interests
in the acquired enterprise and the fair value of previ-
ously acquired equity investments are revalued. If the
balance is still negative, the amount is recognised as
income in the income statement.

If, at the date of acquisition, there is uncertainty as to
the identification or measurement of acquired assets,
liabilities or contingent liabilities or the determination
of the acquisition price, initial recognition is based on
a preliminary determination of values. The preliminar-
ily determined values may be adjusted or additional
assets or liabilities may be recognised up to 12 months
after the acquisition, provided that new information
has come to light regarding matters existing at the
date of acquisition which would have affected the
determination of the values at the date of acquisition,
had such information been known.

Generally, subsequent changes in estimates of condi-
tional acquisition prices are recognised directly in the
income statement.

Currency translation
A functional currency is determined for each of
the reporting entities in the Group. The functional
currency is the currency used 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 curren-
cies are translated into the functional currency using
the exchange rate applicable at the transaction date.
Assets and liabilities denominated in foreign curren-
cies are translated using the exchange rates applicable
at the statement of financial position date. Translation

differences are recognised in the income statement
under price adjustments.

On consolidation, the assets and liabilities of the
Group’s foreign operations are translated using
the exchange rates applicable at the statement of
financial position date. Income and expense items are
translated using the average exchange rates for the
period. Exchange rate 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 activities are
divested. All other foreign currency translation gains
and losses are recognised in the income statement.

The presentation currency in the annual report is DKK.

Segment reporting
Segment information is based on the Group’s man-
agement and internal financial reporting system and
supports the management decisions on allocation
of resources and assessment of the Group’s results
divided into segments.

The operational business segments in the Tryg are Pri-
vate, Commercial, Corporate and Sweden. Private en-
compasses the sale of insurances to private individuals
in Denmark and Norway. Commercial encompasses
the sale of insurances to small and medium sized
businesses, in Denmark and Norway. Corporate sells
insurances to industrial clients primarily in Denmark,
Norway and Sweden. In addition, Corporate handles
all business involving brokers. Sweden encompasses
the sale of insurance products to private individuals
in Sweden as well as sale of Product insurances in the
Nordic region.

Geographical information is presented based on the
economic environment in which the Tryg Group op-
erates. The geographical areas are Denmark, Norway
and Sweden.

Segment income and segment costs as well as seg-
ment 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 activity managed at Group level.

Key ratios
Earnings per share (EPS) are calculated according
to IAS 33. This and other key ratios are calculated in
accordance with Recommendations and Ratios issued
by the The Danish Finance Society and the Executive
Order on Financial Reports for Insurance Companies
and Multi-Employer Occupational Pension Funds
issued by the Danish Financial Supervisory Authority.

Income statement
Premiums
Premium income represents gross premiums written
during the year, net of reinsurance premiums and ad-
justed for changes in premium provisions, correspond-
ing to an accrual of premiums to the risk period of the
policies, and in the reinsurers’ share of the premium
provisions.

Premiums are calculated as premium income in ac-
cordance with the risk exposure over the cover period,
calculated separately for each individual insurance
contract. The calculation is generally based on the pro
rata method, although this is adjusted for an unevenly
divided risk between lines of business with strong
seasonal variations or for policies lasting many years.

The portion of premiums received on contracts that
relate to unexpired risks at the statement of financial
position date is reported under premium provisions.

The portion of premiums paid to reinsurers that
relate to unexpired risks at the statement of financial
position date is reported as the reinsurers’ share of
premium provisions.

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
an actual interest from the present yield curve for each
individual group of risks. The interest is applied accord-
ing to the expected run-off pattern of the provisions.

Insurance technical interest is reduced by the portion
of the increase in net provisions that relates to un-
winding.

Claims
Claims are claims paid during the year adjusted for
changes in claims provisions less the reinsurers’ share.
In addition, the item includes run-off gains/losses in
respect of previous years. The portion of the increase
in provisions which can be ascribed to unwinding is
transferred to insurance technical interest.

Claims are shown inclusive of direct and indirect
claims handling costs, including costs of inspecting
and assessing claims, costs to combat and mitigate
damage and other direct and indirect costs associated
with the handling of claims incurred.

Changes in claims provisions due to changes in yield
curve and exchange rates are recognised as a price
adjustment.

Tryg hedges the risk of changes in future pay and price
figures for provisions for workers’ compensation. Tryg
uses zero coupon inflation swaps acquired with a view
to hedging the inflation risk. Value adjustments of
these swaps are included in claims, thereby reducing
the effect of changes to inflation expectations under
claims.

Bonus and premium discounts
Bonuses and premium discounts represent anticipat-
ed and refunded premiums to policyholders, where
the amount refunded depends on the claims record,
and for which the criteria for payment have been de-
fined prior to the financial year or when the insurance
was taken out.

101

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
Insurance operating costs
Insurance operating costs represent acquisition costs
and administration expenses less reinsurance com-
missions received. Expenses relating to acquiring and
renewing the insurance portfolio are recognised at the
time of writing the business. Underwriting commission
is recognised when a legal obligation occurs. Admin-
istration expenses are all other expenses attributable
to the administration of the insurance portfolio.
Administration expenses are accrued to match the
financial year.

Share-based payment
The Tryg Group’s incentive programmes comprise an
employee bonus scheme and incentive programmes
for executive board, risk takers and other employees.

Employee bonus scheme
According to the remuneration policy, the Group’s
employees can be granted a bonus in the form of
free shares. When the bonus is granted, employees
can choose between receiving shares or cash. The
expected value of the shares will be expensed over the
performance period. The scheme will be treated as a
complex financial instrument, consisting of the right
to cash settlement and the right to request delivery
of shares. The difference between the value of shares
and the cash payment is recognised in equity and is
not remeasured. The remainder is treated as a liability
and is remeasured until the time of exercise, such that
the total recognition is based on the actual number of
shares or the actual cash amount.

Conditional shares
Other risk takers have been allotted conditional shares in
accordance with the incentive programme for risk takers.

Equity-settled conditional shares are measured at the
fair value at the allotment date and recognised under
staff costs over the period from the allotment date
until the end of the deferral period (the transfer date),
where the holder receive free shares.

The shares are recognised at market value and are
accrued from one to four years.

Matching shares
As part of the matching shares-program for the ex-
ecutive board members, members of the board have
bought investment shares in Tryg A/S at market price,
using taxed funds, for up to the amount decided by the
Supervisory Board.

Other incentive program participants who are not risk
takers have also bought investment shares as part of
their incentive program.

The purchase of investment shares entitles the holder
to a number of matching shares, corresponding to the
number of investment shares which the holder has
bought. The shares (matching shares) are provided
free of charge, four (Executive Board) or three years
(other participants) after the time of purchase of the
investment shares. The holder may not sell the shares
until six months after the matching date.

The shares are recognised at market value and are
accrued over the four and tree year maturation
period, based on the market price at the time of
acquisition. Recognition is from the end of the month
of acquisition under staff expenses with a balancing
entry directly in equity. If the holder retires during the
maturation period but remains entitled to shares,
the remaining expense is recognised in the current
accounting year.

Investment activities
Income from associates includes the Group’s share of
the associates’ net profit.

Income from investment properties before fair value
adjustment represents the profit from property opera-
tions 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 adjustment of investment property, foreign
currency translation adjustments and the effect of

movements in the yield curve used for discounting, are
recognised as value adjustments.

Investment management charges represent expenses
relating to the management of investments including
salary and management fees on the investment area.
The external investors share of the result in Kapital-
foreningen Tryg Invest Funds and Tryg Invest Real
Estate are either deducted (in case of a profit) from or
added (in case of a loss) to the investment result.

Other income and costs
Other income and costs include income and expenses
which cannot be ascribed to the Group´s insurance
portfolio or investment assets, including the sale
of products for Velliv, Pension & Livsforsikring A/S,
Danske Bank and depreciations of intangibles assets
identified in Business combinations.

cated to the cash-generating units under which man-
agement manages the investment and is recognised
under intangible assets. Goodwill is not amortised but
is tested for impairment at least once per year.

Trademarks and customer relations
Trademarks and customer relations have been identi-
fied as intangible assets on acquisition. The intangible
assets are recognised at fair value at the time of
acquisition and amortised on a straight-line basis over
the expected economic lifetime of 5–15 years.

Software
Acquired computer software licences are capitalised
on the basis of the costs incidental to acquiring and
bringing to use the specific software. The costs are
amortised based on an estimated economic lifetime of
up to 8 years.

Discontinued and divested business
Discontinued and divested business is consolidated
in one item in the income statement. Discontinued
and divested business includes gross premiums, gross
claims, gross costs, profit/loss on ceded business,
insurance technical interest net of reinsurance, invest-
ment return after insurance technical interest, other
income and costs and tax in respect of the discontin-
ued business. Any reversal of earlier impairment is
recognised under other income and costs.

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 continuously charged
as expenses.

The statement of financial position items concerning
discontinued activities are reported unchanged under
the respective entries whereas assets and liabilities
concerning divested activities are consolidated under
one item as assets held for sale and liabilities held for
sale.

Statement of financial position
Intangible assets
Goodwill
Goodwill is acquired in connection with acquisition of
business. Goodwill is calculated as the difference be-
tween the cost of the undertaking and the fair value of
acquired identifiable assets, liabilities and contingent
liabilities at the time of acquisition. Goodwill is allo-

After completion of the development work, the asset is
amortised according to the straight-line method over
the assessed economic lifetime, though over a maxi-
mum of 8 years. The amortisation basis is reduced by
any impairment and 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.

102

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsFixed assets
Operating equipment
Fixtures and operating equipment are measured at
cost less accumulated depreciation and any accu-
mulated impairment losses. Cost encompasses the
purchase price and costs directly attributable to the
acquisition of the relevant assets until the time when
such assets are ready to be brought into use.

Depreciation of operating equipment is calculated
using the straight-line method over its estimated
economic lifetime as follows:

•
•
•

IT, 4 years
Vehicles, 5 years
Furniture, fittings and equipment, 5-10 years

Leasehold improvements are depreciated over the
expected economic lifetime, however maximally the
term of the lease.

Gains and losses on disposals and retired assets are
determined by comparing proceeds with carrying
amounts. Gains and losses are recognised in the
income statement. When revalued assets are sold,
the amounts included in the revaluation reserves are
transferred to retained earnings.

Leasing
Right-of-use assets
At inception of a contract, Tryg assesses whether a
contract is, or contains, a lease. It has the following
prerequisites:

•
•

•

The underlying asset is identifiable
The group has the right to obtain substantially
all the economic benefits from use of the asset
throughout the period of use
The group has the right to direct the use of the
asset

Tryg recognises a right-of-use asset and a correspond-
ing lease liability with respect to all lease agreements

in which it is the lessee, excluding short-term leases
(defined as leases with a lease term of 12 months or
less) and leases of low value assets.

Investment property
Properties held for renting yields that are not occupied
by the Group are classified as investment properties.

At inception or on reassessment of a contract that
contains lease components, Tryg allocates the consid-
eration in the contract to each lease component based
on their relative stand-alone prices.

Right-of-use asset (ROU asset) and lease liability are
recognised at the lease commencement date. The
ROU asset is initially measured the cost, which com-
prises the initial amount of the lease liability adjusted
for

•

•
•

•

lease payments made at or before the com-
mencement date
any initial direct cost incurred
estimate of costs to dismantle and remove the
underlying asset or to restore the underlying
asset
lease incentives received

ROU assets are tested for impairment.

Lease liability
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted by using the rate
implicit in the lease. If this rate cannot be readily
determined, Tryg uses its incremental borrowing
rate. Subsequently, the lease liability is measured at
amortised cost using the effective interest method and
is presented as part of other debt. It is remeasured
when there is a change in future lease payments. A
corresponding adjustment is made to the carrying
amount of the ROU asset.

Land and buildings
Land and buildings are divided into owner-occupied
property and investment property. The Group sold the
owner-occupied property in Høje Taastrup and have
no longer any owner occupied properties. All remai-
ning properties are classified as investment property.

Investment property is recognised at fair value. Fair
value is based on market prices, adjusted for any
differences in the nature, location or maintenance
condition of specific assets. If this information is not
available, the Group uses alternative valuation meth-
ods such as discounted cash flow projections and
recent prices in the market.

The fair value is calculated on the basis of market-spe-
cific rental income per property and typical operating
expenses for the coming year. The resulting operating
income is divided by the required return on the proper-
ty in per cent, which is adjusted to reflect market inter-
est rates and property characteristics, corresponding
to the present value of a perpetual annuity. The value
is subsequently adjusted with the value in use of the
return on prepayments and deposits and adjustments
for specific property issues such as vacant premises or
special tenant terms and conditions. Cf. note 15.

Changes in fair values are recorded in the income
statement.

Impairment test for intangible assets, property and
operating equipment
Operating equipment and intangible assets are
assessed at least once per year to ensure that the
depreciation method and the depreciation period
that is used are connected to the expected economic
lifetime. This also applies to the salvage value. Write-
down is performed if impairment has been demon-
strated.

Goodwill is tested annually for impairment, or more of-
ten if there are indications of impairment, and impair-
ment testing is performed for each cash-generating
unit to which the asset belongs. The present value is
normally established using budgeted cash flows based
on business plans. The business plans are based on
past experience and expected market developments.

Equity investments in Group undertakings
The parent company’s equity investments in subsid-
iaries are recognised and measured using the equity
method. The parent company’s share of the enter-
prises’ profits or losses after elimination of unrealised
intra-group profits and losses is recognised in the in-
come statement. In the statement of financial position,
equity investments are measured at the pro rata share
of the enterprises’ equity.

Subsidiaries with a negative net asset value are
recognised at zero value. Any receivables from these
enterprises are written down by the parent compa-
ny’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 re-
maining amount is recognised under provisions if the
parent company has a legal or constructive obligation
to cover the liabilities of the relevant enterprise.

Net revaluation of equity investments in subsidiaries is
taken to reserve for net revaluation under equity if the
carrying amount exceeds cost.

The results of foreign subsidiaries are based on trans-
lation of the items in the income statement using aver-
age exchange rates for the period unless they deviate
significantly from the transaction day exchange rates.
Income and costs in domestic enterprises denomi-
nated in foreign currencies are translated using the
exchange rates applicable on the transaction date.

Statement of financial position items of foreign
subsidiaries are translated using the exchange rates
applicable at the statement of financial position date.

When it is assessed that the parent company no longer
has control over the subsidiary, it will be transferred
to either assets held for sale or unquoted shares and
when sold, it will be derecognised.

Equity investments in associates
Associates are enterprises in which the Group has signif-
icant influence but not control, generally in the form of
an ownership interest of between 20% and 50% of the

103

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
voting rights. Equity investments in associates are meas-
ured using the equity method and the carrying amount
of the investment represents the Group’s proportionate
share of the enterprises’ net assets. Significant transac-
tion costs are recognised as part of the acquisition price.

Profit after tax from equity 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 con-
structive obligation to cover the associate’s negative
balance, such obligation is recognised under liabilities.

Investments
Investments include financial assets at fair value
which are recognised in the income statement. The
classification depends on the purpose for which the
investments were acquired. Management determines
the classification of its investments on initial recogni-
tion and re-evaluates this at every reporting date.

Financial assets measured at fair value with recog-
nition of value adjustments in the income statement
comprise assets that form part of a trading portfolio
and financial assets designated at fair value with value
adjustment via the income statement.

Financial assets at fair value recognised in income
statement
Financial assets are recognised at fair value on initial
recognition if they are entered in a portfolio that is
managed in accordance with fair value. Derivative
financial instruments are similarly classified as finan-
cial assets held for sale, unless they are classified as
security.

Realised and unrealised profits and losses that may
arise because of changes in the fair value for the cate-
gory 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 assets have ex-
pired, 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.

The fair values of quoted securities are based on stock
exchange prices at the statement of financial position
date. For securities that are not listed on a stock ex-
change, or for which no stock exchange price is quot-
ed that reflects the fair value of the instrument, the
fair value is determined using valuation techniques.
These include the use of similar recent arm’s length
transactions, reference to other similar instruments or
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 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 statement of financial
position items. Interest rate derivatives in the form
of futures, forward contracts, repos, swaps and FRAs
are used to manage cash flows and interest rate
risks related to the portfolio of bonds and insurance
provisions. Share derivatives in the form of futures
and options are used from time to time to adjust share
exposures.

Derivative financial instruments are reported from
the trading date and are measured in the statement
of financial position at fair value. Positive fair values
of derivatives are recognised as derivative financial
instruments under assets. Negative fair values of
derivatives are recognised under derivative financial
instruments under liabilities. 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 based on
rates supplied by Danske Bank with relevant informa-
tion providers and is checked by the Group’s valuation
technicians. Discounting based on market interest
rates is applied in the case of derivative financial
instruments involving an expected future cash flow.

Recognition of the resulting gain or loss depends on
whether the derivative is designated as a hedging
instrument and, if so, the nature of the item being
hedged. The Group designates certain derivatives as
hedges of investments in foreign entities. Changes in
the fair value of derivatives that are designated and
qualify as net investment hedges in foreign entities
and which provide effective currency hedging of the
net investment are recognised in other comprehensive
income. The net asset value of the foreign entities
estimated at the beginning of the financial year is
hedged 90-100% by entering into short-term forward
exchange contracts according to the requirements of
hedge 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 entity.

Reinsurers’ share of provisions for insurance contracts
Contracts entered into by the Group with reinsurers
under which the Group is compensated for losses on
one or more contracts issued by the Group and that
meet the classification requirements for insurance
contracts are classified as reinsurers’ share of 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 receivable 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 insurance
technical interest. Changes due to changes in the yield
curve or foreign exchange rates are recognised as
price adjustments.

The Group continuously assesses its reinsurance as-
sets 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 re-
coverable amount. Impairment losses 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 connection with property.

Receivables that arise because of insurance contracts
are classified in this category and are reviewed for im-
pairment as a part of the impairment test of accounts
receivable.

Receivables are recognised initially at fair value and
are subsequently assessed at amortised cost. The in-
come statement includes an estimated reservation for
expected unobtainable sums when a clear indication
of the asset impairment is observed. The reservation
entered is assessed as the difference between the
carrying amount of an asset and the present value of
expected future cash flows.

Other assets
Other assets include current tax assets and cash at
bank and in hand. Current tax assets are receivables
concerning tax for the year adjusted for on-account
payments and any prior-year adjustments. Cash at
bank and in hand is recognised at nominal value at the
statement of financial position date.

Prepayments and accrued income
Prepayments include expenses paid in respect of
subsequent financial years and interest receivable.
Accrued underwriting commission relating to the sale
of insurance products is also included.

104

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsEquity
Share capital
Shares are classified as equity when there is no obliga-
tion to transfer cash or other assets. Costs directly at-
tributable to the issue of equity instruments are shown
in equity as a deduction from the proceeds, net of tax.

Revaluation reserves
Revaluation of owner-occupied property is recognised
in other comprehensive income unless the revaluation
offsets a previous impairment loss.

Foreign currency translation reserve
Assets and liabilities of foreign entities are recognised
using the exchange rate applicable at the statement of
financial position date. Income and expense items are
recognised using the average monthly exchange rates
for the period. Any resulting 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 currency risk in respect
of foreign entities is also offset in other comprehensive
income in respect of the part that concerns the hedge.

Contingency fund reserves
Contingency fund reserves are recognised as part of
retained earnings under equity. The reserves may only
be used when so permitted by the Danish Financial
Supervisory Authority and when it is for the benefit of
the policyholders. The Norwegian contingency fund
reserves include provisions for the Norwegian Natural
Perils Pool and security reserve. The Danish and
Swedish provisions comprise contingency fund pro-
visions. Deferred tax on the Norwegian and Swedish
contingency fund reserves is allocated.

Dividends
Proposed dividend is recognised as a liability at the
time of adoption by the shareholders at the annual
general meeting (date of declaration).

Own shares
The purchase and sale sums of own shares and
dividends thereon are taken directly to retained

earnings under equity. Own shares include shares
acquired for incentive programmes and share buyback
programme.

Proceeds from the sale of own shares in connection
with the exercise of share options or matching 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 transac-
tion costs) and the redemption value is recognised in
the income statement over the borrowing period using
the effective interest method.

Provisions for insurance contracts
Premiums written are recognised in the income
statement (premium income) proportionally over the
period of coverage and, where necessary, adjusted to
reflect any time variation of the risk. The portion of
premiums written on in-force contracts that relates to
unexpired risks at the statement of financial position
date is reported as premium provisions. Premium
provisions are generally calculated according to a best
estimate of expected payments throughout the agreed
risk period; however, as a minimum as the part of the
premium calculated using the pro rata temporis princi-
ple until the next payment date. Adjustments are made
to reflect any risk variations. This applies to gross as
well as ceded business.

Claims and claims handling costs are expensed in the
income statement as incurred based on the estimat-
ed liability for compensation owed to policyholders
or third parties sustaining losses at the hands of
the policyholders. They include direct and indirect
claims handling costs that arise from events that have
occurred up to the statement of financial position date
even if they have not yet been reported to the Group.
Claims provisions are estimated using the input of as-
sessments 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 fac-
tors (such as court decisions). The provisions include
claims handling costs.

Claims provisions are discounted. Discounting is
based on a yield curve reflecting duration applied to
the expected future payments from the provision.
Discounting affects the motor liability, professional
liability, workers’ compensation and personal accident
and health insurance classes, in particular.

Provisions for bonuses and premium discounts etc.
represent amounts expected to be paid to policy-
holders in view of the claims experience during the
financial year.

Claims provisions are determined for each line of
business based on actuarial methods. Where such
business lines encompass more than one business
area, short-tailed claims provisions are distributed
based on number of claims reported while long-tailed
claims provisions are distributed based on premiums
earned. The models currently used are Chain-Lad-
der, Bornhuetter-Ferguson, the Loss Ratio method.
Chain-Ladder techniques are used for lines of business
with a stable run-off pattern. The Bornhuetter-Fergu-
son method, and sometimes the Loss Ratio method,
are used for claims years in which the previous run-off
provides insufficient information about the future run-
off performance.

The provision for annuities under workers’ compensa-
tion insurance is calculated on the basis of a mortality
corresponding to the G82 calculation basis (official
mortality table).

mining the change in the level of claims. Subsequently,
this estimate is maintained until new loss history
materialises which can be used for re-estimation.

Several assumptions and estimates underlying the
calculation of the claims provisions are mutually
dependent. Most importantly, this can be expected to
be the case for assumptions relating to interest rates
and inflation.

Workers’ compensation is an area in which explicit
inflation assumptions are used, with annuities for
the insured being indexed based on the workers’
compensation index. An inflation curve that reflects
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 assump-
tions, because present only implicitly in the actuarial
models, will cause a certain lag in predicting the level
of future losses when a change in inflation occurs. On
the other hand, the effect of discounting will show
immediately as a consequence of inflation changes to
the extent that such changes affect the interest rate.

Other correlations are not deemed to be significant.

Liability adequacy test
Tests are continuously performed to ensure the
adequacy of the insurance provisions. In performing
these tests, current best estimates of future cash flows
of claims, gains and direct and indirect claims handling
costs are used. Any deficiency results in an increase
in the relevant provision, and the adjustment is recog-
nised in the income statement.

In some instances, the historic data used in the actuar-
ial models is not necessarily predictive of the expected
future development of claims. For example, this is
the case with legislative changes where an a priori
estimate is used for premium increases related to the
expected increase in claims. In connection with leg-
islative changes, the same estimate is used for deter-

Employee benefits
Pension obligations
The Group operates various pension schemes.
The schemes are funded through contributions to
insurance companies or trustee-administered funds.
In Norway, the Group operated a defined-benefit plan
which was closed at 01 January 20. In Denmark, the

105

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
Group operates a defined-contribution plan. A de-
fined-contribution plan is a pension plan under which
the Group pays fixed contributions into a separate
entity (a fund) and will have no legal or constructive
obligation to pay further contributions. In Sweden, the
Group complies with the industry pension agreement,
FTP-Planen. FTP-Planen is primarily a defined-ben-
efit plan as regards the future pension benefits.
Försäkringsbranschens Pensionskassa (FPK) is unable
to provide sufficient information for the Group to use
defined-benefit accounting. The plan is on that basis
accounted for as a defined-contribution plan. As part
of the termination of the defined-benefit plan in Nor-
way, an agreement of compensation to the employees
covered by the plan was agreed. A liability has been
established to cover the expected compensation to
be paid to the employees upon retirement from the
company. If the employee leaves before retirement
only a part of the compensation is paid. There is no
future actuarial assumptions related to the liability,
only uncertainty is whether the employees stays to
retirement or not.

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 at the time of
signing the contract of employment.

In special instances, the employee can enter into a
contract with the Group to receive compensation for
loss of pension benefits caused by reduced working
hours. The Group recognises this liability based on
statistical models.

Income tax and deferred tax
The Group expenses current tax according to the tax
laws of the jurisdictions in which it operates. Current
tax liabilities and current tax receivables are recog-
nised in the statement of financial position as estimat-
ed tax on the taxable income for the year, adjusted for
change in tax on prior years’ taxable income and for
tax paid under the on-account tax scheme.

Deferred tax is measured according to the statement
of financial position liability method on all timing
differences between the tax and accounting value of
assets and liabilities. Deferred income tax is measured
using the tax rules and tax rates that apply in the rele-
vant countries on the statement of financial position
date when the deferred tax asset is realised, or the
deferred income tax liability is settled.

Deferred income tax assets, including the tax value
of tax losses carried forward, are recognised to the
extent that it is probable that future taxable profit will
be realised against which the temporary differences
can be offset.

Deferred income tax is provided on temporary differ-
ences concerning investments, except where Tryg con-
trols 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
Provisions are recognised when the Group has a legal
or constructive obligation because of an event prior
to or at the statement of financial position date, and
it is probable that future economic benefits will flow
out of the Group. Provisions are measured at the best
estimate by management of the expenditure required
to settle the present obligation. Provisions for restruc-
turings are recognised as obligations when a detailed
formal restructuring plan has been announced prior
to or at the statement of financial position date at the
latest to the persons affected by the plan.

Own insurance is included under other provisions. The
provisions apply to the Group’s own insurance claims
and are reported when the damage occurs according
to the same principle as the Group’s other claims
provisions.

instruments are assessed at fair value according to the
same practice that applies to financial assets. Other
liabilities are assessed at amortised cost based on the
effective interest method.

Debt related to leasing and the external investors
share of Kapitalforeningen Tryg Invest Funds and TI
Real Estate KL are included in other debt. The external
investors share of Kapitalforeningen Tryg Invest Funds
relates to shares, bonds and investment properties.

Cash flow statement
The consolidated cash flow statement is presented
using the direct method and shows cash flows from
operating, investing and financing activities as well
as the Group’s cash and cash equivalents at the
beginning and end of the financial year. No separate
cash flow statement has been prepared for the parent
company because it is included in the consolidated
cash flow statement.

Cash flows from operating activities are calculated
whereby major classes of gross cash receipts and
gross cash payments are disclosed.

Cash flows from investing activities comprise
payments in connection with the purchase and sale
of intangible assets, property, plant and equipment
as well as financial assets and deposits with 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, repay-
ments of interest-bearing debt and the payment of
dividends.

Cash and cash equivalents comprise cash and de-
mand deposits.

Debt
Debt comprises debt in connection with direct
insurance and reinsurance, amounts owed to credit
institutions, current tax obligations, debt to group
undertakings and other debt. Derivative financial

Other
The amounts in the report are disclosed in whole num-
bers of DKKm, unless otherwise stated. The amounts
have been rounded and consequently the sum of the
rounded amounts and totals may differ slightly.

106

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents
Income statement for Tryg A/S (parent company)

2020

2019

DKKm

2020

2019

2,843

2,903

Note

Statement of comprehensive income
Profit/loss for the year
Other comprehensive income

2,773

2,843

DKKm

Note
1

Investment activities
Income from Group undertakings
Administration expenses in connection with investment
activities

Total investment return

Other expenses

Profit/loss before tax

Tax

-2

2,841

-88

2,753

-5

2,899

-74

2,825

Profit/loss for the year

2,773

2,843

Proposed distribution for the year:
Dividend
Transferred to reserve for net revaluation according to
the equity method
Transferred to retained earnings

2,115

235
423
2,773

2,553

865
-575
2,843

Other comprehensive income which cannot subsequently
be reclassified as profit or loss
Actuarial gains/losses on defined-benefit pension plans
Tax on actuarial gains/losses on defined-benefit pension plans

Total other comprehensive income
Comprehensive income

-68
6
-62

-51
127
-28
48
-14
2,759

-76
19
-57

32
-19
4
18
-39
2,804

107

Annual report 2020 | Tryg A/S | Financial statements - ContentsStatement of financial position for Tryg A/S
(parent company)

2020

2019

DKKm

2020

2019

0
12,475
1
12,475

1
12,234
0
12,234

Note

Equity and liabilities
Equity

Debt to Group undertakings
Other debt

12,475

12,234

Total debt

12,264

12,085

513
46

559

163
7

170

DKKm

Note Assets

4
5

Intangible assets
Equity investments in Group undertakings
Equity investments in associates
Total investments in associates and Group undertakings

Total investment assets

Current tax assets
Other
Total other assets

Total prepayments and accrued income

20
2
21

326

17
1
18

Total assets

12,823

12,255

Total equity and liabilities

12,823

12,255

7 Deferred tax assets
8 Own funds
9 Contractual obligations, contingent liabilities and collateral

10 Related parties
11 Reconciliation of profit/loss and equity
12 Accounting policies

108

Annual report 2020 | Tryg A/S | Financial statements - ContentsStatement of changes in equity (parent company)

Proposed dividend per share is calculated as the
total dividend proposed by the Supervisory Board
after the end of the financial year divided by the total
number of shares at the end of the year (302,147,991
shares).

DKKm

Share
capital

Revaluation
reserves

Retained
earnings

Proposed
dividend

Noncontrolling
interest

Equity at 31 December 2019

1,511

3,238

6,323

1,013

2020
Profit/loss for the year
Other comprehensive income
Total comprehensive income
Dividend paid
Dividend own shares
Purchase and sale of own shares
Issue of share options and matching shares
Total changes in equity in 2020
Equity at 31 December 2020

235
-14
220

0
1,511

220
3,458

423

4
-13
29
442
6,765

2,115

2,115
-2,599

-484
529

Equity at 31 December 2018

1,511

2,412

6,912

499

2019
Profit/loss for the year
Other comprehensive income
Total comprehensive income
Dividend paid
Dividend own shares
Purchase and sale of own shares
Issue of share options and matching shares
Non-controlling interest
Total changes in equity in 2019
Equity at 31 December 2019

865
-39
826

0
1,511

826
3,238

-575

1
-42
27

-589
6,323

2,553

2,553
-2,040

514
1,013

0
1

1
1
1

Total

12,085

2,773
-14
2,758
-2,599
4
-13
29
179
12,264

11,334

2,843
-39
2,804
-2,040
1
-42
27
1
751
12,085

109

Annual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Income from Group undertakings
Tryg Invest A/S
Alka Fordele A/S
Tryg Forsikring A/S

Other expenses
Administration expenses

Remuneration for the Executive Board is paid partly by Tryg
A/S and partly by Tryg Forsikring A/S and is charged to Tryg A/S
via the cost allocation. Refer to Note 6 in the Tryg Group for a
specification of the audit fee.

Average number of full-time employees for the year

Tax
Reconciliation of tax costs
Tax on profit/loss for the year
Tax adjustments, previous years

Effective tax rate
Tax on profit/loss for the year
Adjustment of non-taxable income and costs

2020

2019

DKKm

2020

2019

11
-5
2,837
2,843

-88
-88

20
0
20

%
22
1
23

9
0
2,895
2,903

-74
-74

17
1
18

%
22
1
23

Intangible assets
Assets under construction
Cost at 1 January
Cost at 31 December

Amortisation and write-downs
Amortisation and write-downs at 1 Januray
Amortisation for the year
Amortisation and write-downs at 31 December

Carrying amount at 31 December

Equity investments in Group undertakings
Cost
Cost at 1 January
Additions for the year
Cost at 31 December

Revaluation and impairment to net asset value
Revaluation and impairment at 1 January
Revaluations for the year
Dividend paid
Revaluation and impairment at 31 December

1
1

0
-1
-1

8,995
10
9,005

3,238
2,830
-2,598
3,470

1
1

0
0
0

8,995
0
8,995

2,412
2,866
-2,039
3,238

Carrying amount at 31 December

12,475

12,234

110

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

DKKm

2020

2019

Equity investments in Group undertakings (continued)

Name, registered office and activity
2020
Tryg Invest A/S, Ballerup
Alka Fordele A/S, Ballerup
Tryg Forsikring A/S, Ballerup

2019
Tryg Invest A/S, Ballerup
Tryg Forsikring A/S, Ballerup

Ownership
share in %

Profit/loss

Equity

100
100
100

100
100

11
-5
2,837

9
2,895

31
5
12,438

20
12,214

Current tax assets
Tax receivable at 1 January
Current tax for the year
Adjustment of current tax in respect of previous years
Tax paid for the year
Tax receivable at 31 December

Deferred tax assets
Capitalised tax losses
Tryg A/S

Tax value of non-capitalised tax losses
Tryg A/S

The loss in Tryg A/S can only be utilised in Tryg A/S.
The loss can be carried forward indefinitely.

17
20
0
-17
20

14
17
1
-14
17

The losses are not recognised as tax assets until it has been substantiated that the company can gene-
rate sufficient future taxable income to offset the tax losses.

Own funds
Tryg A/S calculates solvency ratio and own funds on Group level according to Solvency II rules.
Please refer to note18 in the Tryg Group on Solvency II own funds.

Contractual obligations, contingent liabilities and collateral
The Danish companies in the Tryg Group are jointly taxed with TryghedsGruppen smba. The companies
and the other jointly taxed companies are liable for any obligations to withhold taxes at source on inte-
rest, royalties, dividends and income taxes etc. in respect of the jointly taxed companies.

Companies in the Tryg Group are party to a number of disputes in Denmark, Norway and Sweden.
Management believes that the outcome of these disputes will not affect the Group’s financial position
over and above the receivables and liabilities recognised in the statement of financial position at
31 December 2020.

111

NotesAnnual report 2020 | Tryg A/S | Financial statements - ContentsDKKm

Related parties
Tryg A/S has no related parties with a controlling influence other than the parent company, Trygheds-
Gruppen smba. Related parties with a significant influence include the Supervisory Board, the Executive
Board and their members’ related family.

Specification of remuneration

2020

Supervisory Board
Executive Board

Risk-takers b)

Number of
persons
14
4

Base salary
incl. car
allowance
9
29

Share based
variable
salary a)
0
11

Cash
variable
salary
0
0

Pension
0
7

Total
9
47

a) Total expenses recognised in 2020 for matching shares and conditional shares allocated in 2019

and previous year. For matching shares and conditional shares allocated to Executive Board in 2020,
please refer to ”Corporate governance” in Management review.

b) Risk-takers in Tryg A/S includes only one employee, wherefore salary and pension is not presented.

The amounts are included in note 27 for Tryg Group.

DKKm

Related parties (continued)

2019

Supervisory Board
Executive Board b)

Risk-takers c)

Number of
persons

Base salary
incl. car
allowance

Share based
variable
salary a)

Cash
variable
salary

Pension

Total

14
4

9
27

0
5

0
0

0
7

9
39

a) Total expenses recognised in 2019 for matching shares and conditional shares allocated in 2019

and previous year. For matching shares and conditional shares allocated to Executive Board in 2019,
please refer to ”Corporate governance” in Management review.

b) Barbara Plucnar Jensen took up the position as CFO on 1 March 2019.
c) Risk-takers in Tryg A/S includes only one employee, wherefore salary and pension is not presented.

The amounts are included in note 27 for Tryg Group.

Of which retired

Supervisory Board

Number of
persons

Severance
pay

Of which retired

Supervisory Board

Number of
persons

Severance
pay

112

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents10

Related parties (continued)

Fees are charges incurred during the financial year. Variable salary includes the charges for matching sha-
res and conditional shares, which are recognised over 4 years.

Reference is made to section ’Corporate governance’ of the management’s review on the corresponding
disbursements.
The Executive Board and risk-takers are included in incentive programmes. Please refer to note 6 in the
Tryg Group annual report for information concerning this.

The members of the Supervisory Board in Tryg A/S are paid with a fixed remuneration and are not covered
by the incentive schemes.

The Executive Board is paid a fixed remuneration, car allowance and pension.
The variable salary is awarded in the form of share-based remuneration and cash. see ’Corporate gover-
nance’.

Each member of the Executive Board is entitled to 12 months’ notice and severance pay equal to 12
months’ salary plus pension contribution (Group CEO is entitled to severance pay equal to 18 months’
salary). If a change of control clause is actioned CEO and COO are instead entitled to Severance pay equal
to 36 months’ salary.

Risk-takers are defined as employees whose activities have a significant influence on the company’s risk
profile.
The Supervisory Board decides which employees should be considered to be risk-takers.

Parent company
TryghedsGruppen smba
TryghedsGruppen smba controls 53% of the shares in Tryg A/S.

Transactions with Group undertakings and associates
Tryg A/S exercises full control over Tryg Forsikring A/S, Alka Fordele A/S and Tryg Invest A/S.
In 2020 Tryg Forsikring A/S paid Tryg A/S DKK 2,599m and Tryg A/S paid TryghedsGruppen smba DKK
1,559m in dividends.

TryghedsGruppen smba has provided an irrevocable subscibtion undertaking to Tryg A/S, to subscribe for
new shares in the coming Tryg Rights Issue for an amount totalling DKK 6.0bn.

DKKm

2020

2019

Related parties (continued)

Intra-group trading involved
- Providing and receiving services
- Intra-group accounts

The intra-group trading is primarily against Tryg Forsikring A/S.
Administration fee, etc. is settled on a cost-recovery basis.
Intra-group accounts are offset and carry interest on market
terms.

36
513

18
163

Reconciliation of profit/loss and 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.

There is no difference in profit/loss or equity recognised after Danish FSA and IFRS.

12 Accounting policies

Please refer to Tryg Group's accounting policies.

113

NotesAnnual report 2020 | Tryg A/S | Financial statements - Contents

Download a further detailed version of the
presentation at tryg.com > Downloads

Q4 2020 Quarterly outline

DKKm

Private
Gross premium income
Technical result

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of reinsurance
Gross expense ratio
Combined ratio
Combined ratio exclusive of run-off

Commercial
Gross premium income
Technical result

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of reinsurance
Gross expense ratio
Combined ratio
Combined ratio exclusive of run-off

Corporate
Gross premium income
Technical result

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of reinsurance
Gross expense ratio
Combined ratio
Combined ratio exclusive of run-off

Q4
2020

Q3
2020

Q2
2020

Q1
2020

Q4
2019

Q3
2019

Q2
2019

Q1
2019

Q4
2018

3,245
537

3,167
588

3,169
607

3,162
313

3,059
494

3,055
458

3,010
593

2,897
406

2,679
531

68.1
2.5
70.5
12.8
83.3
83.7

66.8
0.4
67.3
14.1
81.3
82.3

65.0
2.1
67.1
13.7
80.8
82.2

79.1
-2.7
76.4
13.7
90.1
91.1

67.9
2.5
70.4
13.4
83.8
84.9

69.2
1.8
71.0
13.9
84.9
85.4

64.8
1.8
66.5
13.8
80.3
83.1

70.7
1.6
72.3
13.8
86.1
89.8

64.2
2.4
66.6
13.5
80.1
83.0

1,132
153

1,118
194

1,068
212

1,112
176

1,079
105

1,083
154

1,062
196

1,050
111

1,044
270

64.9
3.3
68.2
18.2
86.4
98.2

973
-6

79.9
7.1
87.0
13.5
100.5
109.1

61.8
4.2
66.0
16.5
82.5
88.7

990
130

52.2
24.3
76.5
10.3
86.8
98.3

60.1
3.4
63.5
16.5
80.0
83.3

945
195

59.4
8.9
68.3
11.0
79.3
87.1

64.6
2.4
67.0
17.2
84.1
92.8

968
145

86.5
-12.1
74.4
10.6
85.0
103.3

69.1
3.8
72.8
17.4
90.3
93.6

987
73

86.1
-5.7
80.4
12.1
92.6
100.7

70.6
-2.3
68.3
17.4
85.7
94.3

1,032
204

59.7
11.6
71.3
8.9
80.2
92.2

60.8
3.4
64.2
17.5
81.7
89.7

994
130

62.0
14.2
76.2
11.1
87.2
93.5

67.6
4.0
71.6
17.8
89.4
98.4

966
89

76.0
5.2
81.2
9.6
90.8
105.3

52.2
4.5
56.7
17.5
74.2
89.6

987
-117

92.7
8.8
101.5
10.3
111.9
106.3

114

Annual report 2020 | Tryg A/S | Financial statements - ContentsQ4 2020 Quarterly outline

DKKm

Sweden
Gross premium income
Technical result

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of reinsurance
Gross expense ratio
Combined ratio
Combined ratio exclusive of run-off

Other a)
Gross premium income
Technical result

Tryg
Gross premium income
Technical result
Investment return
Other income and costs
Profit/loss before tax
Profit/loss

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of reinsurance
Gross expense ratio
Combined ratio
Combined ratio exclusive of run-off

Q4
2020

Q3
2020

Q2
2020

Q1
2020

Q4
2019

Q3
2019

Q2
2019

Q1
2019

Q4
2018

a) In 2020 Amounts primarily relates to one-off

items. In 2019 - 2018 amounts primarily relates to
eliminations and one-off items.

Download a further detailed version of the
presentation at tryg.com > Downloads

393
96

61.3
0.3
61.6
13.9
75.5
96.8

0
0

5,744
780
513
-70
1,223
1,038

69.0
3.3
72.3
14.0
86.3
91.8

443
69

67.9
-0.3
67.6
16.6
84.2
96.8

0
0

5,719
980
237
-67
1,150
930

63.4
5.2
68.6
14.1
82.7
87.4

415
67

64.0
1.0
65.1
18.6
83.7
97.4

0
-18

5,595
1,063
541
-64
1,539
1,246

63.2
3.4
66.6
14.3
80.9
84.6

353
35

73.5
-1.6
71.9
18.1
90.0
105.1

0
2

5,595
672
-980
-64
-372
-442

77.1
-3.2
73.9
14.1
88.0
94.4

364
90

53.1
0.8
53.8
21.5
75.3
104.8

-11
0

5,479
762
198
-20
940
705

70.3
1.2
71.5
14.6
86.1
90.7

422
54

70.5
0.3
70.8
16.5
87.3
98.8

-9
0

5,583
870
-29
-62
779
599

67.8
2.7
70.5
13.9
84.4
89.4

392
61

66.5
1.3
67.8
16.6
84.4
98.2

-6
0

5,451
979
57
-57
979
782

63.6
4.3
67.9
14.2
82.1
87.4

343
26

76.4
0.3
76.7
15.7
92.4
102.9

-28
-6

5,228
626
353
-49
930
757

71.8
2.2
74.0
14.0
88.0
95.1

361
38

71.7
0.3
72.0
17.2
89.2
95.3

-18
-126

5,053
596
-330
-117
149
110

69.0
3.6
72.6
15.6
88.2
92.3

115

Annual report 2020 | Tryg A/S | Financial statements - Contents

Q4 2020 Geographical segments

DKKm

Q4 2020

Q4 2019

2020

2019

DKKm

Q4 2020

Q4 2019

2020

2019

Danish general insurance a)
Gross premium income
Technical result
Run-off gains/losses, net of reinsurance

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Run-off, net of reinsurance (%)
Number of full-time employees 31 December

Norwegian general insurance
NOK/DKK, average rate for the period
Gross premium income
Technical result
Run-off gains/losses, net of reinsurance

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Run-off, net of reinsurance (%)
Number of full-time employees 31 December

3,540
711
238

64.0
2.0
66.0
13.8
79.7
-6.7

68.26
1,640
40
50

72.6
10.5
83.1
14.5
97.6
-3.0

3,341
544
118

69.2
1.6
70.8
12.7
83.5
-3.5

74.07
1,636
153
44

70.0
4.2
74.2
16.8
91.0
-2.7

14,007
2,707
633

13,204
2,606
712

65.2
1.4
66.5
13.9
80.5
-4.5
2,859

69.63
6,411
473
247

75.3
3.4
78.7
14.1
92.7
-3.9
1,099

64.7
1.7
66.4
13.7
80.1
-5.4
2,650

75.80
6,472
469
283

73.7
5.1
78.8
14.4
93.1
-4.4
1,083

Swedish general insurance
SEK/DKK, average rate for the period
Gross premium income
Technical result
Run-off gains/losses, net of reinsurance

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Run-off, net of reinsurance (%)
Number of full-time employees 31 December

Other b)
Gross premium income
Technical result

Tryg
Gross premium income
Technical result
Investment return
Other income and costs
Profit/loss before tax
Run-off gains/losses, net of reinsurance

Key ratios
Gross claims ratio
Net reinsurance ratio
Claims ratio, net of ceded business
Gross expense ratio
Combined ratio
Run-off, net of reinsurance (%)

71.83
564
30
28

90.0
-9.6
80.3
14.3
94.6
-4.9

0
0

5,744
780
513
-70
1,223
314

69.0
3.3
72.3
14.0
86.3
-5.5

70.14
512
66
93

79.2
-11.2
68.0
19.2
87.2
-18.2

-10
1

5,479
762
198
-20
940
256

70.3
1.2
71.5
14.6
86.1
-4.7

70.95
2,234
331
274

65.8
4.0
69.9
15.3
85.1
-12.3
441

0
-16

22,653
3,495
311
-265
3,541
1,145

68.1
2.2
70.3
14.1
84.5
-5.1

70.62
2,120
169
205

74.0
2.0
75.9
16.1
92.0
-9.7
419

-54
-6

21,741
3,237
579
-188
3,628
1,194

68.3
2.6
70.9
14.2
85.1
-5.5

Number of full-time employees, continuing business at 31 December

4,400

4,151

a) Includes Danish general insurance and German, Dutch, Austrian and Finnish guarantee insurance. The gross

premium income related those branches amounts to DKK 106m (DKK 78m in 2019)

b) In 2020, Amounts primarily relates to one-off items. In 2019 amounts primarily relates to eliminations

and one-off items.

116

Annual report 2020 | Tryg A/S | Financial statements - ContentsOther key figures

2020

2019

2018

2017

2016

Key ratios are calculated in accordance with ‘’Recom-
mendations & Financial Ratios’’ issued by the Danish
Society of Financial Analysts.

Share performance
Earnings per share (DKK)
Diluted earnings per share (DKK)
Earnings per share of continuing business (DKK)
Operating earnings per share (DKK)
Number of shares (1,000)
Average number of shares (1,000)
Diluted average number of shares (1,000)
Share price (DKK)
Net asset value per share (DKK)
Market price/net asset value
Ordinary dividend per share (DKK)
Extraordinary dividend per share (DKK)
Price/Earnings

Number of full-time employees, continued business, at 31 December

9.19
9.19
9.19
9.54
301,750
301,678
301,678
192.10
40.64
4.7
7.00

20.9

4,400

9.42
9.42
9.42
9.82
301,700
301,954
301,954
197.50
40.05
4.9
6.80
1.65
21.0

4,151

5.73
5.73
5.74
5.84
301,743
302,043
302,043
163.90
37.56
4.4
6.60

28.6

4,027

9.12
9.12
9.12
9.12
301,945
276,080
276,080
155.20
41.78
3.7
6.40
3.31
17.0

8.84
8.84
8.84
8.84
274,595
279,399
279,399
127.70
34.37
3.7
6.20
3.54
14.4

3,373

3,264

117

Annual report 2020 | Tryg A/S | Financial statements - ContentsGroup chart

Scandi JV Co 2 A/S
(50%)
(Denmark)

Scandi JV Co A/S
(50%)
(Denmark)

Chopin Newco A/S
(100%)
(Denmark)

Tryg A/S
(Denmark)

Tryg Forsikring A/S
(Denmark)

Tryg
Invest A/S
(Denmark)

Alka Fordele A/S
(Denmark)

Tryg Forsikring
(Branch Germany)

Tryg Forsikring
(Branch Finland)

Moderna
Försäkringar
(Branch Sweden)

Tryg Forsikring
incl. Enter
(Branch Norway)

Tryg
Livsforsikring A/S
(Denmark)

Forsikrings-
Aktieselskabet
Alka Liv II
(Denmark)

Kapitalforeningen
Tryg Invest Funds
(85%)
(Denmark)

TI Short Term
Placement KL
(Denmark)

Tryg Forsikring
(Branch Austria)

Tryg Forsikring
(Branch Netherland)

Tryg Forsikring
(Branch Switzerland)

Respons
Inkasso AS
(Norway)

Kapitalforeningen
Tryg Invest
(Denmark)

Tryg
Ejendomme A/S
(Denmark)

TI Real Estate KL
(Denmark)

Tryg Real Estate
Invest Holding A/S
(Denmark)

Tryg Real Estate
Fund 2 A/S
(Denmark)

Group chart at 1 January 2021. Companies and branches are wholly owned
by Danish owners and domiciled in Denmark, unless otherwise stated.

Company

Branch

Tryg Real Estate
Invest Norway AS
(Norway)

Tryg Real Estate
Invest Denmark A/S
(Denmark)

118

Annual report 2020 | Tryg A/S | Financial statements - ContentsGlossary, Key Ratios and
alternative performance measures

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 financial reports for insurance companies and multi-employer
occupational pension funds, and also comply with ‘Recommendations & Ratios’ issued by the CFA Society Denmark.

Claims ratio, net of ceded business
Gross claims ratio + net reinsurance ratio.

Combined ratio
The sum of the gross claims ratio, the net reinsurance
ratio and the gross expense ratio.

Danish general insurance
Comprises the legal entities Tryg Forsikring A/S
(including Finnish, Netherlands, Austria and German
guarantee branch and Tryg Livsforsikring A/S and
excluding the Norwegian and Swedish branches).

Diluted average 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 nomi-
nal amount, as the recognised amount carries interest
until payment. The size of the discount depends on the
market-based discount rate applied and the expected
time to payment.

Dividend per share

Market price/net asset value

Price/Earnings

Proposed dividend
Number of shares at year-end

Share price

Net asset value per share

Share price
Earnings per share

Earnings per share

Net asset value per share

Profit or loss for the year x 100
Average number of shares

Equity at year-end
Number of shares at year-end

Relative run-off result
Run-off gains/losses net of reinsurance divided by
claims provisions net of reinsurance beginning of year.

Earnings per share of continuing business
Diluted earnings from continuing business after tax
Diluted average number of shares

Net reinsurance ratio

Return on equity after tax (%)

Profit or loss from reinsurance x 100
Gross premium income

Profit for the year after tax x 100
Average equity

Gross claims ratio

Gross claims x 100
Gross premium income

Gross expense ratio without adjustment

Gross insurance operating costs x 100
Gross premium income

Gross premium income
Calculated as gross premium income adjusted for
change in gross premium provisions, less bonuses and
premium discounts.

Norwegian general insurance
Comprises Tryg Forsikring A/S, Norwegian branch.

Operating ratio
Calculated as the combined ratio plus insurance tech-
nical interest in the denominator.

Claims + insurance operating costs +
profit or loss from reinsurance x 100
Gross premium income + insurance technical interest

Own funds
Equity plus share of qualifying solvency debt and profit
margin (solvency purpose), less intangible
assets, tax asset and proposed dividend.

Run-off gains/losses
The difference between the claims provisions at the
beginning of the financial year (adjusted for foreign
currency translation adjustments and discounting
effects) and the sum of the claims paid during the
financial year and the part of the claims provisions at
the end of the financial year pertaining to injuries and
damage occurring in earlier financial years.

Solvency II
Solvency requirements for insurance companies is-
sued by the EU Commission. The new rules came into
force at 1 January 2016.

119

Annual report 2020 | Tryg A/S | Financial statements - ContentsSolvency ratio
Ratio between own funds and capital requirement.

Swedish general insurance
Comprises Tryg Forsikring A/S, Swedish branch.

Large claims, net of reinsurance
Large claims, net of reinsurance is defined as single
claims or claims events gross above 10m in local
currencies adjusted for reinsurance.

Large claims, net of reinsurance, as calculated by the
Tryg Group, represents

Total reserve ratio
Reserve ratio, claims provisions + premium provisions
divided by premium income.

Large claims, net of reinsurance
Premium income

Unwinding
Unwinding of discounting takes place with the passage
of time as the expected time to payment is reduced.
The closer the time of payment, the smaller the
discount. This gradual increase of the provision is not
recognised under claims, but under technical interest
in the income statement.

Weather claims, net of reinsurance
Weather claims, net of reinsurance, is defined as
claims related to Storm, Cloudbursts, Natural perils
and Winter, adjusted for reinsurance.

Weather claims, net of reinsurance, as calculated by
the Tryg Group, represents

Alternative performance measures
Until the sale of certain owner occupied properties
by the Tryg Group in 2016, pursuant to the executive
order issued by the Danish Financial Supervisory Au-
thority on the financial reports for insurance compa-
nies and multi-employer occupational pension funds,
the Tryg Group has calculated the gross expense ratio,
the combined ratio and the operating ratio by adding a
hypothetical market rent to and deducting the actual
depreciation from operating expenses. Previously, in
addition the Tryg Group has in its financial statements
presented a gross expense ratio without these adjust-
ment as an alternative performance measure, howev-
er, subsequent to 2016 this alternative performance
measure is not relevant and not presented as the Tryg
Group does not have owner occupied properties.

The following financial measures included in this
Annual report are not measures of financial perfor-
mance or liquidity under IFRS, as adopted by the EU or
in accordance with the executive order issued by the
Danish Financial Supervisory Authority on the financial
reports for insurance companies and multi-employer
occupational pension funds but are defined by man-
agement as follows:

Weather claims, net of reinsurance
Premium income.

Run-off, net of reinsurance
Run-off, net of reinsurance, as calculated by the Tryg
Group, represents

Run-off, net of reinsurance
Premium income.

Premium growth excluding Alka in local
currencies
Premium Growth excluding Alka in local currencies, as
calculated by the Tryg Group, represents

(Premium income excluding Alka in local
currencies in year X - Premium income excluding
Alka in local currencies in year X-1)
Premium income excluding Alka in local
currencies in year X-1

Impact from COVID-19 claims, Gross
The impact from COVID-19 on claims, Gross is defined
as the impact calculated by comparing normalised
claims frequencies and average claims levels for spe-
cific lines of business and the same for 2020.

Impact from COVID-19 technical result, Gross
Impact from COVID-19 on technical result, Gross
is defined as the impact from COVID-19 on claims,
gross added by costs in relation to COVID-19 due to IT
(employees working from home) and extra cleaning of
premises etc.

Impact from COVID-19 claims, net of
reinsurance
The impact from COVID-19 on claims, net of reinsur-
ance is defined as impact from COVID-19 on claims,
gross adjusted for reinsurance.

Impact from COVID-19 claims, Gross as calcu-
lated by the Tryg Group, represents

Impact from COVID-19 claims, net of reinsurance
Premium income

Impact from COVID-19 technical result, net of
reinsurance
The impact from COVID-19 on technical result, net of
reinsurance is defined as impact from COVID-19 on
technical result, gross adjusted for reinsurance.

120

Annual report 2020 | Tryg A/S | Financial statements - Contents

Product overview

Being one of the largest insurance companies in
the Nordic region, Tryg offers a broad range of
insurance products to both private individuals
and businesses. Tryg continuously develops
new products and adapts existing peace of
mind solutions to customer requirements and
developments in society. Also, Tryg focuses
strongly at all times on striking a better balance
between price and risk.

Tryg sells its products primarily via its own sales
channels such as call centres, the Internet, tied
agents, franchisees (Norway), interest organisa-
tions, car dealers, real estate agents, insurance
brokers and Nordea branches. Moreover, Tryg
engages in international cooperation with the
AXA Group. It is an important element of Tryg’s
distribution strategy to be available in places
where customers want it and that most
distribution takes place via the company’s own
sales channels.

Motor insurance
Motor insurance accounts for 30% 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.

Fire and contents – Commercial
Commercial fire and contents insurance, which includes building insurance,
represents 12% of total premium income and covers the loss of or damage to
the buildings, stock or equipment of commercial customers. Moreover, Tryg
provides cover for operating losses in connection with covered claims.

In Denmark, motor insurance taken out by concept customers includes
Tryg’s roadside assistance, such as towing and battery jump-start.

Fire and contents – Private
Fire and contents insurance for private customers represents 25% of total
premium income and includes, for example, house and contents insurance.

House insurance covers damage to properties caused by, for example, fire,
storm or water, legal assistance and the customer’s liability as owner of the
property.
The contents insurance covers loss of or damage to private household con-
tents and covers in and outside of the home. Moreover, the insurance includes
liability and legal assistance, to which can be added a number of supplemen-
tary covers, for example cover of sudden damage and damage to electronic
equipment.

Personal accident insurance
Personal accident insurance accounts for 11% of total premium income and
covers accidental bodily injury and death resulting from accidents.

Compensation takes the form of a lump sum intended to help the customer
cope with the financial consequences of an accident, thereby making their
daily lives easier. The insurance can include a number of supplementary
covers, including treatment by a physiotherapist or chiropractor.

Workers’ compensation insurance
Workers’ compensation insurance accounts for 4% of total premium income
and covers employees against bodily injury sustained at work (in Norway, also
occupational diseases). Workers’ compensation insurance is mandatory and
covers a company’s employees (except for public sector employees and
persons working for sole proprietors).

General third-party liability insurance
General third-party liability insurance represents 5% of total premium income
and covers various types of liability, including claims incurred by a company
arising from the conduct of its business or in connection with its products,
and third-party liability for professionals.

Health insurance
Health insurance represents 2% of total premium income. The insurance
covers
the costs of examinations, treatment, medicine, surgery and rehabilitation at
a private health facility.

121

Annual report 2020 | Tryg A/S | Financial statements - ContentsDisclaimer

Certain statements in this annual report are
based on the beliefs of our management as
well as assumptions made by and information
currently available to management. Statements
regarding Tryg’s future operating results, finan-
cial position, cash flows, business strategy, plans
and future objectives other than statements
of historical fact can generally be identified by
the use of words such as ‘targets’, ‘believes’,
‘expects’, ‘aims’, ‘intends’, ‘plans’, ‘seeks’, ‘will’,
‘may’, ‘anticipates’, ‘would’, ‘could’, ‘continues’ or
similar expressions.

A number of different factors may cause the
actual performance to deviate significantly
from the forward-looking statements in this
annual report, including but not limited to
general economic developments, changes in the
competitive environment, developments in the
financial markets, extraordinary events such as
natural disasters or terrorist attacks, changes in
legislation or case law and reinsurance.

Should one or more of these risks or uncer-
tainties materialise, or should any underlying
assumptions prove to be incorrect, Tryg’s actual
financial condition or results of operations could
materially differ from that described herein as
anticipated, believed, estimated or expected.
Tryg is not under any duty to update any of the
forward-looking statements or to conform such
statements to actual results, except as may be
required by law.

Read more in the chapter Solvency and dividend
on pages 31-32, and in Note 1 on page 60-69,
for a description of some of the factors which
may affect the Group’s performance or the
insurance industry.