Release Date: October 11, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tryg AS (FRA:T2V1, Financial) reported a solid insurance revenue growth of 3.9%, driven by price increases across all segments.
- The company achieved a strong insurance service result of DKK2.13 billion, aided by lower large-in-weather claims.
- The combined ratio improved to 78.2% in the quarter, with a 30 basis points improvement in the group underlying claims ratio.
- The investment result was robust at DKK444 million, with positive returns across virtually all asset classes.
- Tryg AS (FRA:T2V1) maintained a very robust solvency ratio of 202%, supporting future capital repatriation.
Negative Points
- The corporate segment reported a decline in revenue, aligning with the strategic rebalancing efforts.
- The private segment experienced an underlying claims ratio deterioration of 20 basis points, indicating ongoing challenges.
- Interest rates were approximately 100 basis points lower than the previous year, impacting the combined ratio by around 1%.
- The company faces challenges in reaching its customer satisfaction target of 88 by year-end.
- The expense ratio, although slightly lower than guidance, remains a focus area for cost control and efficiency improvements.
Q & A Highlights
Q: Can you elaborate on the discrepancy between your motor frequency data and sector statistics, and discuss your expectations for Q4 and 2025 regarding underlying improvements in private lines?
A: Mikael Karrsten, Group CTO, explained that there is no clear short-term correlation between external statistics and Tryg's data. The company is comfortable with its actions, particularly in Norway, and expects these to support financial targets for 2024 and beyond. The composition of profitability improvements will shift as earnings impact from personal lines materializes.
Q: How do you reconcile the price increases in property and motor with the reported top-line growth in private lines?
A: Johan Brammer, Group CEO, noted that while price is the predominant growth driver today, the growth numbers are influenced by various product categories. The company expects a more balanced growth profile as inflationary pressures taper off.
Q: What is Tryg's outlook on the combined ratio, and how low could it potentially go in the long term?
A: Johan Brammer, Group CEO, stated that while there is potential for optimization, the combined ratio is influenced by competition and customer reactions. The current target is at or below 82% for the strategy period, with further discussions expected at the Capital Markets Day.
Q: Why is Tryg waiting until December 4 to discuss its solvency position, and what impact could reinsurance price increases have?
A: Allan Thaysen, Group CFO, explained that the Capital Market Day is an ideal time to elaborate on the solvency position. The company feels robust with its current level and does not foresee significant impacts from reinsurance price increases, as these are factored into their planning.
Q: How does Tryg plan to balance improving the underlying claims ratio in private lines with targeting volume growth?
A: Mikael Karrsten, Group CTO, emphasized that the focus remains on the bottom line. While current initiatives may modestly affect retention rates, the company is confident in its actions and expects growth composition to shift as inflationary pressures decrease.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
