Tryg reports record technical result despite storms and volatile markets

Leading Scandinavian insurance group Tryg reported a record underwriting result for the first quarter of this year, despite an exceptionally stormy period in Denmark and Norway and financial market turbulence caused by Russia’s invasion of Ukraine. The insurer also said the integration of Tryg, Trygg-Hansa and Codan Norway into one entity to become the biggest non-life insurer in Scandinavia can now truly get underway. However, profit before tax is down from last year, largely as a result of the RSA Scandinavia acquisition that was completed in 2020. The change officially took place on 1 April, after the original announcement last year that Tryg had issued shares of DKK37bn (€4.97bn) to acquire Codan Norway, Trygg-Hansa and 50% of Codan Denmark. Tryg reported this week premium growth of 5.1% (6.2% in Q1 2021), primarily driven by the private and commercial segments, which helped deliver a highest-ever first-quarter technical result of €101m. The Danish group said the result was boosted by the positive top-line growth and improved underlying business, but partly offset by higher large and weather claims compared to the prior-year period. The new Swedish business, Trygg-Hansa, reported premium growth of approximately 3% and a “highly satisfactory” technical result of €83.46m. This was driven by a combined ratio of 73.3% and a “slightly improving” underlying performance, said the group. However, profit before tax of €27.4m, compared with just over €134m at this stage last year, was burdened by capital markets volatility that hit the overall investment result and to a lesser extent integration costs due to the €8bn RSA Scandinavia acquisition. Group CEO Morten Hübbe said: “In Q1 2022, Tryg reported positive developments in the core insurance business in terms of premiums growth and technical result. Tryg premiums growth was 5.1% and positively impacted by the profitable business segments in private and commercial. Growth was driven by cross-selling to existing customers, partner agreements and continued good sales from the direct channels. “Denmark and Norway have experienced an unusually high number of stormy days. Twenty-six consecutive days of storm in Norway and two different storms in Denmark left many of our customers dependent on our help. Our help was also needed when a large fire raged in Copenhagen, and our customers represented 50% of the people who were left homeless. It is when our customers need us the most that we can make the biggest impact on their peace of mind,” added Hübbe. Hübbe said the transformation of Tryg into Scandinavia’s biggest non-life insurer was a historic day in regional insurance history. “1 April 2022 marked the day of demerger, and the separation of Codan Denmark from Trygg-Hansa in Sweden and Codan in Norway was therefore completed. We will remember this day in Scandinavian insurance history as the day where Tryg, Trygg-Hansa and Codan Norway merged into one entity, and consequently became the largest non-life insurance company in Scandinavia. “Now, the integration process can truly begin and we look very much forward to sharing knowledge and learning from each other. It is important to note that the new group (Tryg and Trygg-Hansa, and Codan Norway) would have shown a technical result just below DKK1.4bn in Q1, looking at fully consolidated figures. This underscores the very strong earnings power of the enlarged group,” he said. Hübbe also announced a quarterly dividend per share of €0.21, up some 45% compared to the prior-year period, a result of higher insurance earnings in 2022, full consolidation of Trygg-Hansa and Codan Norway, and expected delivery of €47m in synergies in 2022 related to the RSA Scandinavia acquisition. “The solvency ratio is expected to remain between 195 and 205 as per H1 2022, a very healthy level to start the new journey and ensure strong capital returns to our shareholders,” he concluded.

Tryg reports record technical result despite storms and volatile markets

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