In This Article:
Tryg will conduct pre-close analyst calls and meetings during the week commencing on December 16, ahead of the Q4 2024 results, which will be released on January 23. Additionally, Tryg has decided to publish a quarterly newsletter prior to the pre-silent period. This newsletter aims to inform capital market participants of the key factors influencing the company's financial performance.
Insurance revenue
Tryg maintains a balanced distribution of insurance revenue across the Scandinavian countries, with approximately 50% of revenue generated in Denmark, 30% in Sweden, and 20% in Norway. In Q3 2024, Tryg reported insurance revenue of DKK 9,786m. The retail business remains broadly stable on a quarterly basis; however, we anticipate the year-over-year declining trend in the corporate business to persist, with a continuous expected reduction in the Corporate segment in Q4. When converting earnings from local currencies to DKK, Tryg’s reporting currency, the expected average exchange rates are DKK/SEK at 65.0 (64.3 Q4 2023) and DKK/NOK at 63.2 (64.3 Q4 2023).
Weather, large claims and discounting
On an annual basis, Tryg provides guidance for large claims amounting to DKK 800m, evenly distributed across quarters. Occasionally, information about large claims may be available in mass media or local press.
For Q4, weather-related claims are projected to constitute 30% of the annual DKK 800m guidance, equating to DKK 240m. As a reminder the annual expectations for weather claims are split as follows (in percentages terms), 40% in Q1, 10% in Q2, 20% in Q3 and 30% in Q4.
For Q4, we expect an approximate discount rate of 2.0%, this was 2.2% in Q3 2024. Bear in mind that the impact of discounting is more prominent on Group figures than Private figures as most of the impact from discounting comes from the long tail Corporate business.
Underlying claims development
Tryg operates a stable business, with approximately 93% of insurance premiums derived from the retail business. Consequently, recent trends in underlying performance should be considered reliable indicators for short-term trends. The group's underlying claim ratio was 69.5% in Q4 2023. Tryg at its recent CMD on December 4 has mentioned that it expects a broadly stable underlying performance in the new strategy period towards 2027.
Investment activities
Tryg has divided its investment activities into a match portfolio (approximately DKK 44bn as per Q3 2024) and a free portfolio (approximately DKK 19bn as per Q3 2024). As communicated during the Capital Markets Day on December 4, Tryg decided to de-risk its free portfolio during the months of October and the beginning of November. The sale of corporate bonds and diversifying alternatives resulted in a loss of approximately 80m, the realized loss should be included in the expected free portfolio return for Q4, the return of these assets before the sale has been in line to market returns. Additionally long-term inflation expectations came down especially in Sweden resulting in a negative inflation hedge result.