DKKm 2006 2007 2008 2009 2010
Claims ratio, net 67.9 66.5 70.1 74.2 81.3
Expense ratio, net 17.2 17.1 17.5 17.6 17.4
Combined ratio, net 85.1 83.6 87.6 91.8 98.7
Expense ratio, net without adjustment 17.2 17.1 17.9 17.5 17.4
Gross profit ratio 16.2 18.6 14.3 8.7 1.9
Profit ratio, net of reinsurance 17.2 19.6 15.0 9.2 2.0
Gross technical interest ratio 2.1 3.0 2.9 0.9 0.7
Technical interest ratio, net of reinsurance 2.3 3.2 3.0 0.9 0.7
Return on equity before tax on continuing business (%) 41.3 33.3 15.3 29.3 10.4
Return on equity after tax on continuing business (%) 34.4 24.3 9.7 22.3 7.5
Average provisions for unearned premiums 5,178 5,288 5,252 5,654 6,514
Average provisions for claims 20,887 20,808 20,454 21,110 23,677
Average reinsurers’ share of provisions for insurance contracts 2,096 1,574 1,312 1,178 1,454
Reserve ratio, provisions for unearned premiums (%) 32.9 33.2 30.0 34.8 35.0
Reserve ratio, provisions for claims (%) 130.2 130.1 116.3 125.8 127.8
Reserve ratio, total 163.1 163.3 146.3 160.6 162.8
Number of full-time employess, end of period,
discontinued and divested business 25 26 26 26 1
Share performance
Earnings per share (DKK) 47.3 33.5 12.8 31.7 9.5
Diluted earnings per share (DKK) a) 31.7 9.5
Average number of shares (1,000) 67,824 67,648 66,184 63,334 62,362
Diluted average number of shares (1,000) a) 63,448 62,444
Share price 31.12 (DKK) 431.5 388.0 328.0 342.8 257.5
Quoted price/net asset value 3.0 2.6 2.6 2.3 1.8
a) There has been no dilution of earnings or equity in the period 2006-2008
The expense ratio, net without adjustment is calculated as the ratio of actual insurance operating expenses, net of reinsurance to earned premiums, net of reinsurance. Other key ratios are calculated in accordance with ‘’Recommendations & Financial Ratios 2010’’ issued by the Danish Society of Financial Analysts.
The adjustment, which is made pursuant to the Danish Financial Supervisory Authority’s and the Danish Society of Financial Analysts’ defi- nition of expense ratio and combined ratio, involves the addition of a calculated expense (rent) concerning owner-occupied property based on a calculated market rent and the deduction of actual depreciation and operating costs on owner-occupied property.
Glossary
The financial highlights and key ratios of Tryg have been prepared in accordance with the executive order issued by the Danish Financial Supervisory Authority on the presentation of financial reports by in- surance companies and profession-specific pension funds and also comply with “Recommendations & Financial Ratios 2010” issued by the Danish Society of Financial Analysts.
Business ceded as a percentage of gross premiums
Net result of business ceded x 100 Gross earned premiums
Capital base
Shareholders’ equity plus subordinated debt/subordinated loan capi- tal less intangible assets/goodwill and tax asset.
Claims ratio, net of ceded business
Gross claims ratio + business ceded as % of gross premiums.
Combined ratio
Calculated as the sum of the gross claims ratio, the net result of business ceded as a percentage of gross earned premiums and the gross expense ratio.
Danish general insurance
Comprises the legal entities Tryg Forsikring A/S
(excluding the Norwegian, Finnish and Swedish branches) and Tryg Garantiforsikring A/S.
Diluted earnings per share (continuing business)
Diluted earnings from continuing business after tax Diluted average number of shares
Diluted number of shares
Average number of shares adjusted for number of share options which may potentially dilute.
Discounting
Expresses recognition in the financial statements of expected future payments at a value below the nominal amount, as the recognised amount carries interest until payment. The size of the discount de- pends on the market based discount rate applied and the expected time to payment.
Dividends per share
Proposed dividend Number of shares year end
Earnings per share
Profit for the year x 100 Average number of shares
Equity margin
Premiums earned, net of reinsurance x 100 Tier 1 capital
Finnish general insurance
Comprises Tryg Forsikring A/S, Finnish branch and the Finnish branch of Tryg Garantiforsikring A/S.
Gross claims ratio
Gross claims incurred x 100 Gross earned premiums
Gross earned premiums
Calculated as gross premiums written adjusted for change in gross pro- visions for unearned premiums, less bonuses and premium rebates.
Gross expense ratio
Calculated as the ratio of gross insurance operating expenses with adjustment to gross earned premiums. The adjustment involves the deduction of depreciation and operating costs on the owner-occu- pied property and the addition of a calculated cost (rent) concerning the owner-occupied property based on a calculated market rent.
Gross insurance operating expenses w. adjustment x 100 Gross earned premiums
Gross expense ratio without adjustment
Gross insurance operating expenses x 100 Gross earned premiums
Gross insurance interest ratio
Technical interest, net of reinsurance x 100 Gross premiums earned
Gross profit margin
Technical result x 100 Gross premiums earned
Glossary
Individual Solvency
New Danish solvency requirements for insurance companies. With ef- fect from the 1 January 2008, companies are required to make their own determination of their capital requirements applied with own methods. The Individual Solvency shall be reported four times a year.
Net asset value per share
Year-end equity number of shares year end
Norwegian general insurance
Comprises Tryg Forsikring A/S, Norwegian branch, Enter Forsikring AS and the Norwegian branch of Tryg Garantiforsikring A/S.
Operating ratio
Calculated like the combined ratio but adding technical interest in the denominator.
Claims incurred + insurance
operating expenses + result of reinsurance x 100 Gross earned premiums + technical interest
Price earnings
Quoted price Earnings per share
Quoted price/net asset value
Quoted price Net asset value per share
Relative run-off gains/losses
Run-off result relative to provisions for claims, beginning of year.
Reserve ratio, provisions for claims
Provisions for claims x 100 Gross premiums earned
Reserve ratio, provisions for unearned premiums
Provisions for unearned premiums x 100 Gross premiums earned
Return on equity
Profit for the year x 100 Average equity
Run-off result
The difference between provisions for claims at the beginning of the financial year (adjusted for currency translation differences and dis- counting effects) and the sum of claims paid in the financial year plus the part of the provisions for claims at the end of the financial year that relates to claims incurred in prior financial years.
Solvency II
New solvency requirements for insurance companies issued by EU Commission. The new rules are expected to come into effect in 2012.
Solvency margin
Premiums earned, net of reinsurance x 100 Capital base
Solvency ratio
Ratio of capital base to capital requirement
Swedish general insurance
Comprises Tryg Forsikring A/S, Swedish branch and the Swedish branch of Tryg Garantiforsikring A/S.
Tier 1 capital
Shareholders’ equity less intangible assets/goodwill and tax asset
Total reserve ratio
Reserve ratio, provisions for claims + provisions for unearned premiums
Unwinding
Unwinding of discounting takes place with the passage of time as the expected time to payment is reduced. The closer the time of payment, the smaller the discount. This gradual increase of the pro- vision is not recognised under claims, but in technical interest in the income statement.
Disclaimer
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 results of operations, financial condition, cash flows, business strategy, plans and future objectives other than statements of historical fact can generally be identified by terminology 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 envrironment, devel- opments in the financial markets, extra ordinary events such as natural disasters or terrorist atttacks, changes in legislation or case law and reinsurance.
Tryg urges readers to refer to the section on risk management for a description of some of the factors that could affect the Group’s future performance or the insurance industri. Should one or more of these risks or uncertainties 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 anticipart- ed, 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.