Custom er exchange ratio – exam ple GF I nsurance Capital Markets Day 2009 31 GF I nsurance DKKm 50 40 30 20 10 0 H1 07 H1 08 H1 09 GF - gross intake from TrygVesta TrygVesta - gross intake from GF
Total custom er exchange ratio – Denm ark and Norw ay Capital Markets Day 2009 32 P&E Denm ark P&E Norw ay DKKm DKKm 800 800 600 600 400 400 200 200 0 0 H1 08 H1 09 H1 07 H1 08 H1 09 Total gross intake from TrygVesta Total gross intake from TrygVesta TrygVesta - gross intake from other companies TrygVesta - gross intake from other companies
Sum m ary Capital Markets Day 2009 33 W e have a solid m arket platform and strong distribution netw ork W e have taken the steps needed to im prove profitability going forw ard Price increases com ing through bode w ell for 2 0 1 0 and 2 0 1 1 profitability W e are proactive on how clim ate changes im pact our business Focus on high retention supports profitability
Capital Markets Day 2009 Questions please 34
TrygVesta Corporate business Capital Markets Day 2009 Truls Holm Olsen 35
Capital Markets Day 2009 TrygVesta Corporate 36
Nordic insurance m arket – Corporate m arket 37 Capital Markets Day 2009 Total corporate insurance market estimated to be DKK 30-35bn I nternational players Nordic players
TrygVesta’s Corporate business 38 Capital Markets Day 2009 Gross prem ium s in DDKm Group prem ium s 2 0 0 8 Corporate, Other, 5 7 5 5,512 in DKKm 5,512 P&C NO, 4,636 5,285 4,921 4,801 4,666 P&C DK, 2004 2005 2006 2007 2008 6,6 05
The Corporate portfolio end 2 0 0 8 39 Capital Markets Day 2009 Products Other Motor Marine 5% 17% 7% Workers' comp 19% Liability 9% Personal lines 20% Property 23%
TrygVesta’s corporate distribution channels 40 Capital Markets Day 2009 Portfolio in DKKm * 6,000 4,603 4,603 4,800 5,193 5,335 4,500 2,373 2,355 45 % 2,049 1,759 1,896 3,000 55 % 2,838 38 1,500 2,751 2,962 38 2,844 2,707 62 0 2004 2005 2006 2007 2008 Direct Broker 45 Brokers: * Excludes TrygVesta Garanti
Solid underw riting leads to good results 41 Capital Markets Day 2009 Our good risk selection and prudent underw riting have provided a good background for earnings grow th Technical result Com bined ratio in DKKm 94.6 1,092 92.4 86.7 11.7 84.9 11.4 83.6 83.4 842 842 80.0 9.5 11.0 10.7 11.3 636 10.3 464 463 390 82.9 81.0 77.2 73.9 72.7 72.3 69.7 2004 2005 2006 2007 2008 H1 08 H1 09 2004 2005 2006 2007 2008 H1 08 H1 09 Claims ratio Cost ratio
One area w here recession is likely to im pact 42 Capital Markets Day 2009 Norway Denmark Num ber of unem ployed Num ber of unem ployed ( adjusted for seasonallity) 120,000 200,000 160,000 90,000 120,000 60,000 80,000 30,000 40,000 0 0 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 2003 2004 2005 2006 2007 2008 2009 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 2003 2004 2005 2006 2007 2008 2009 W orkers’ com pensation insurance – num ber of insured W orkers’ com pensation insurance – num ber of insured 400,000 300,000 300,000 200,000 200,000 100,000 100,000 0 0 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 Jun- 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 Jun- 0 9 0 9
Underw riting discipline 43 Capital Markets Day 2009 Preferred sectors Consultancy services/ Companies focusing on Service providing industries architects and engineers environment and climate Food industry Mail and telecommunications • Chemical industry • Public sector • Mining Deselected sectors • Heavy industry • Furniture- and wood • Energy/ oil and gas manufacturing industry
Risk m anagem ent 44 Capital Markets Day 2009 Risk mapping Risk assessment Risk strategy Reduce/ eliminate Keep risk Transfer risk risk
Strong custom er team 45 Capital Markets Day 2009 Underwriting Sales Team RM Claims
Focus on insuring the energy sector Capital Markets Day 2009 46
Sum m ary 47 Capital Markets Day 2009 The Nordic Corporate business is stable and profitable Good risk selection Prudent underw riting and risk m anagem ent lead to profitability Focus on insuring the energy sector
Capital Markets Day 2009 Questions please 48
Partner Sales, Sw eden & Finland Kjerstin Fyllingen 31.08.2009
Value proposition in partner sales, Sw eden and Finland Capital Markets Day 2009 50 • High growth in Sweden and Finland dominated by Nordea partner sales Sw eden & Premiums in Q2 2 0 0 9 Finland • More channels in 2009 and forward 7 % • Expanding partner sales in Denmark and Norway Rest of TrygVesta 9 3 %
The Nordic TrygVesta partner m arket Capital Markets Day 2009 51 Norw ay Finland Brands: Brands: Premiums: approx. DKK 2bn Premiums: approx. DKK 500m Sw eden Denm ark Brands: Brands: Premiums: approx. DKK 2.5bn Premiums: ~ DKK 1.8bn annual run- rate
Our partner strategy has three w inners Capital Markets Day 2009 52 TrygVesta Partner concepts Partner End custom er
Distribution - Nordea branches and m arket share Capital Markets Day 2009 53 Finland: Branches: 345 Market share: 32% 2006 Annual sale of private insurances via Nordea 2007 Sw eden: 8 0 ,0 0 0 2008 Branches: 341 H1 2009 Market share: 18% 6 0 ,0 0 0 Denm ark: 4 0 ,0 0 0 Branches: 319 Market share: 21% 2 0 ,0 0 0 Norw ay: 0 Branches: 124 Denm ark Norw ay Finland Sw eden Market share: 9% TrygVesta and Nordea have a strategic partnership Nordea market shares are based on ”Household deposits” Source: Nordea Annual Report 2008
Our bancassurance m odel Capital Markets Day 2009 54 2 . Paym ent and registration TrygVesta Custom er 4 . Products and services 3 . Com m ission and support Nordea 1 . I nitial insurance proposition Sales Risk taker Easy w ay of doing business Financial advice Product developm ent I nsurance need satisfied Frequent custom er After sales service contact I T system s Claim s handling TrygVesta ”ow ns” the custom er once insurance is bought TrygVesta sells Nordea life products and w e are their largest asset m ng. custom er
Partner agreem ents Capital Markets Day 2009 55 Ensuring More new high agreements retention rate Utilise existing agreements
Finland Capital Markets Day 2009 56 Market share, private* Vahinkovakuutus Others, 16% Finland Distribution channel If…, 25% TrygVesta, 4.7% Customer centre Call centre Fennia, 10% Bancassurance Car dealers Pohjola, Tapiola, 27% Insurance brokers 18% Affinity groups TrygVesta Portfolio Real estate agents Other 8% Accident & Nordea online bank health 11% E-business/ self-service Franchise (tied agent) Motor 52% House & content 29% * TrygVesta estimate
Finland – recent developm ent Capital Markets Day 2009 57 Developm ent 2 0 0 8 / 2 0 0 9 Developm ent 2 0 0 8 / 2 0 0 9 Private policies custom ers 140,000 150,000 100,000 120,000 50,000 100,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 80,000 2008 2009 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Q2 08 adjusted for Gross prem ium Com bined ratio reserve releases DKKm 109 110 97 150 93 86 78 140 67 66 62 130 57 120 110 100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 07 07 07 07 08 08 08 08 09 09
Sw eden – com petitors, distribution and business lines Capital Markets Day 2009 58 Market shares TrygVesta, Folksam, 2.7% Sw eden Distribution channel 13.9% Länsforsk., Customer centre 30.3% Codan, Call centre 17.2% Bancassurance Car/ boat dealers Other, 18.6% If, 19.6% Insurance brokers Affinity groups TrygVesta portfolio Other, Real estate agents 16.9% Motor, 38.5% Nordea online bank E-business/ self-service SME, Franchise 24.5% Moderna = House, 20%
Sw eden perform ance Capital Markets Day 2009 59 Developm ent 2 0 0 9 ( excl. Moderna) Developm ent 2 0 0 8 / 2 0 0 9 ( excl. Moderna) custom ers Privat e policies 120,000 150,000 100,000 120,000 80,000 90,000 60,000 60,000 40,000 30,000 20,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 2008 2009 Q4 06 Q4 07 Q1 09 Q2 09 Q3 09 Q4 08 Q1 09 Q2 09 Com bined ratio Gr oss pr e m ium s ( incl. Mode r na ) Sw eden ( incl. Moderna in Q2 0 9 ) DKKm 322 300 250 Moderna 200 67 64 58 150 54 45 100 37 27 50 17 9 0 3 1 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09
Moderna – acquired in Q1 2 0 0 9 Capital Markets Day 2009 60 • Moderna complements and strengthens position and distribution power in Sweden • Eases expansion of commercial and corporate insurance • Opens for reverse sales synergies in DK, NO and FI I ncrease TrygVesta EPS by 5 % in 2 0 1 0 and onw ards
Sum m ary Capital Markets Day 2009 61 W e have strong and self-sufficient bridgeheads in Sw eden and Finland W e have advanced and expandable partnership platform s W e focus on profitable grow th in Sw eden and Finland Moderna strengthens our position, distribution pow er and earnings ability W e leverage the operating know -how pan-Nordic
Capital Markets Day 2009 Questions please 62
Major initiatives – Moderna and self-service Peter Falkenham , COO Capital Markets Day 2009 63
Capital Markets Day 2009 64
I ntegration of Moderna Capital Markets Day 2009 65 The Moderna acquisition in a strategic setting Vahinkovakuutus Vahinkovakuutus Distribution channel Distribution channel Sw eden Sw eden Denm ark Denm ark Norw ay Norw ay Finland Finland Custom er centre Custom er centre Local service centre Local service centre (Moderna) (Moderna) Call centre Call centre Franchise Franchise Bancassurance Bancassurance Nordea online bank Nordea online bank E-business/ Self-service E-business/ Self-service (Moderna) (Moderna) Insurance brokers Insurance brokers (Moderna) (Moderna) Car dealers Car dealers (Moderna) (Moderna) Real estate agents Real estate agents Affinity groups Affinity groups (Moderna) (Moderna) • Ensure profitable grow th and giving TrygVesta a m arket share of 2 .7 % • Com plem ents existing distribution channels to a full service offering • Moderna has a proven financial track record and attractive custom er segm ents • Com plem ents the Corporate business line in Sw eden
Moderna im pact on Q2 num bers Capital Markets Day 2009 66 TrygVesta in Sw eden break-even in Q2 after acquisition of Moderna • 10% premium growth for Moderna itself from H1 08 to H1 09 • Vesta grew the net number of insurances with 57,000 in Q2 09 • 63% growth in premiums in P&C Sweden (Vesta Forsäkring) Technical result - total Sw eden Key figures - Q2 2009 DKKm 0 -2 -6 DKKm Vesta Moderna Consolidated -10 -10 -11 Gross premium incom e 73 249 322 -16 -18 -18 Technical result -20 -23 21 -2 -22 -23 -25 -26 -26 -30 Claim s ratio 97.3 69.1 75.8 -35 -40 Expense rat io 35.6 22.5 25.5 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Com bined rat io 132.9 92.0 101.3 06 06 06 07 07 07 07 08 08 08 08 09 09
Potential in the Moderna acquisition Capital Markets Day 2009 67 PHASE 1 PHASE 2 FUTURE 2 0 0 9 2 0 1 0 -2 0 1 1 I nvestm ents Reinsurance One branch Locations Corporate grow th I T/ product developm ent Market share 6 -8 % Motor expansion Tax Yacht expansion One Corporate division Scale efficiency One organisation Process tow ards one branch Realised one off effect at half-year: Synergies: SEK 5 0 m + annually DKK 5 1 m
Capital Markets Day 2009 Self-service 68
Self-service Capital Markets Day 2009 69 The Self-service in a strategic setting Grow th • Self-service complements existing distribution channels - not a substitution Grow th Grow th • Fits to the “peace-of-mind” mindset Claims costs Customer satisfaction Administration costs Cost • No commission costs Time to market Cost • Reduced back-office staffing Time to respond to Cost customer requests
Self-service – an innovative step Capital Markets Day 2009 70 • Straight through processes • Automation and digitalisation – efficiency improvement also in back- office • “The paperless insurance company” • Self-service and digitalisation helps reducing CO2 Focus on processes
Self-service – the deliveries Capital Markets Day 2009 71 From the customers’ point of view From the employees’ point of view My-page SMS
Self-service - results Capital Markets Day 2009 72 • Target to sell 10,000 policies in Denmark in 2009 No. of No. of policies • 1.7m visitors to home page January to July policies 350 1,600 • 142,000 visitors to ”My-Page” in January to July. 1,400 Increased by over 150% this year 300 1,200 • Branding campaign not launched yet 250 1,000 • 180,000 signed up for electronic communication 200 (DK+ NO) 800 150 • Web solution (“Bedrifts-net”) launched for 600 commercial and corporate customers. 25% 100 400 penetration target by end 2009 50 200 0 0 January February March April May June July Monthly sale (LHS) Accumulated sale (RHS) No com m issions or com pensation in the sales process No expenses in back-office and m ailing
Self-service – the potential Capital Markets Day 2009 73 The self-service solutions will complement the existing distribution channels regarding: new sales, add-on sale, customer service and claims handling Long-term: • Solution launch will be based on “straight through processing” releasing back-office personal. • 80% of back-office personal will be affected by self-service • Other medias will be supported such as extended use of PDAs, GPS facilities etc. • Integration with partners • Nordea already in place (common login, view your insurances) • More to come
Sum m ary Capital Markets Day 2009 74 Moderna is a perfect strategic fit Moderna acquisition increased earning per share Self-service im proves custom er service, claim s handling and sales Self-service creates huge potential and high am bitions W e constantly strive to im prove efficiency, product quality and processes, w hich w ill im prove profitability in the m edium to longer term
Capital Markets Day 2009 Questions please 75
Reserves and run-off Ole Hesselager, Head of Group Risk
Reserves - overview Capital Markets Day 2009 77 Reserves consist to a great extent of Bodily I njury related claim s BI – duration 3.94 years Status as of Q2 2 0 0 9 : Property & other • Total reserves of DKK 29.4bn short tail • Loss reserves 21.3bn Workers' comp 36% • Duration 3.2 years Motor TPL 29% 71% • Premium reserves 8.1bn 17% Accident 8% 9% Bodily Injury, other Other – duration 1.25 years Loss reserves include m argin DKKm • Run-off risk is mainly related to long-tailed 25,000 lines involving BI claims Margin 20,000 15,000 10,000 Reserves 5,000 0 Q2 2009
Review Capital Markets Day 2009 78 Group reserves are review ed regularly Internal review on annual basis – as Q3 • Supported by occasional external Annually/ reviews. Latest of its kind in 2005 in Review quarterly connection with IPO Tillinghast look-alike Fast track Monthly production m odel • Framework dictated by Group Detailed internal m odels by LoB Reserving Policy Ongoing Ongoing risk analysis • Standard actuarial methods are applied • This process is defined as an adequacy test and points to a margin in held reserves Margin in reserves verified quarterly and thorough review carried out once a year
Changes in estim ated required reserves Capital Markets Day 2009 79 Changes in estim ates can be caused by adverse developm ent or altered assum ptions • This illustration shows how estimates change when new information is amended Traditional run-off pattern Changes in ultim ate estim ates NOKm NOKm 250 180 160 200 Run-off 140 120 150 100 80 100 60 1998 1999 2000 2001 40 2005 Model per Q3 2006 50 2002 2003 2004 2005 Model per Q4 2006 Model per Q1 2008 2006 2007 20 0 0 0 4 8 12 16 20 24 28 32 36 40 0 4 8 12 16 20 24 28 32 36 40 Quarters Quarters Changed estim ates occur frequently and lead to run-off
Margin in reserves Capital Markets Day 2009 80 Favourable historic developm ent in m argin • TrygVesta target ratio ~ 7% 10% 8% • Consistent with Solvency II methodology 6% Workers’ comp, Development can be caused by Legislation, 2004 two separate drivers: 4% Auto, Legislation, Changes in estimated 2002 2% required reserves 0% Adding to held reserves 2002 2003 2004 2005 2006 2007 2008 2009 (strengthening) -2% Mainly Norwegian workers’ comp. -4% The aim is to keep m argin around 7 % going forw ard
Run-off results Capital Markets Day 2009 81 Run- off results have im proved significantly Estim ated Extraordinary changes 9% m argin in % of total 7% reserves • During the early part of this decade 5% the weak reserving position was 3% strengthened leading to run-off losses 1% - 1% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 - 3% - 5% Run-off in % of premium The good reserving cycle • Sustained margin generates run-off • Run-off results will still fluctuate (stochastically), but now gains when old buffers are released and around an elevated level recycled to current year Margin on new business leads to sustainable run-off gains w hile total results rem ain unaffected
Building m argin or unloading reserves Capital Markets Day 2009 82 How to determ ine w hether m argin is increasing or decreasing? • Paid to incurred ratio (P/ I ratio) is used to identify build-up or release of margin • Below “100% ” = > Built-up. • Above “100% ” = > Release W arning 100% Break-even level 100% affected by 80% • Discounting (increase) 60% • Portfolio growth (decrease) 40% • Large (reserved) claims (decrease) • Claims inflation (decrease) Previous years 20% Present 0% 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 TrygVesta Topdanm ark Alm .Brand I f.. Historically P/ I ratio has been able to detect built-up of m argin
Sum m ary Capital Markets Day 2009 83 Currently a positive m argin ( 7 % ) in held reserves. Supported by internal and external review s Consistent w ith expected future Solvency I I requirem ents – as stipulated in QI S4 Margin has been built up during the period 2 0 0 2 -2 0 0 7 Margin is intended to be m aintained at present level ( P/ I ratio’s around 1 0 0 % ) Current level of m argin w ill in the long run generate positive run-off in the area of DKK 5 0 0 m
Capital Markets Day 2009 Questions please 84
Capital, investm ents and financial targets Capital Markets Day 2009 Morten Hübbe, CFO 85
Capital m anagem ent and planning Capital Markets Day 2009 86 Changing regulatory Solvency I environm ent • Capital requirements • Governance • Disclosure I ndividual solvency Dynam ic capital planning • Moving target • Financial markets conditions • Rating • Modeling of risks Solvency I I
Financial crisis creates upw ard pressure Capital Markets Day 2009 87 Dividend policy: Capital strategy • 5 0 % of net earnings Considerations • share buy backs in addition Capitalisat ion Capital needed to Buffer fulfill strategy Self-im posed buffer Capital needed to TAC Rating Regulatory Capital S&P Capital obtain target rating I ndividual Regulatory solvency requirements Capital planning instrum ents 1 9 7 0 ’s 2 0 0 5 2 0 0 7 2 0 1 2 • Solvency I • S&P CAR model • S&P RBC model • S&P RBC model • Individual capital • Internal model (ALM) assessment • Solvency II standardised model • QIS models
Capital planning – a m oving target Capital Markets Day 2009 88 Quantitative im pact Solvency II impact S&P RBC “A” model: 52 - 56% of premiums Financial crisis Operational risk Capital add-ons QIS 4 TrygVesta: 38% of premiums I nternal m odeling Diversifica- Solvency I : tion 16% of premiums Solvency I I issues Modeling Tier capital Modeling Large vs. Tier capital Large vs. and data and data structure sm all structure sm all com panies com panies
I ntegration of internal m odel Capital Markets Day 2009 89 Quantitative im plem entation 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 … 2 0 1 1 Reinsurance Renewal Property Marine/ Cargo All main programmes Reinsurance Policy Target Setting Investment Policy Individual Capital Assessment (quarterly) Solvency II Use test Directive FSA approval of Solvency I I approved internal model • Sum m er 2 0 0 9 • October 2 0 1 2
TrygVesta – m odeling stochastic Capital Markets Day 2009 90 The ALM m odel is a m athem atical description of TrygVesta’s risk profile Storm Large claim s 1 U − X = Φ ( ) The mathematical F ( x ) ∞ descriptions are π ( d ) = dx d F ( d ) Sm all claim s N used to simulate 50- t X Y = t i 100,000 i = 1 outcome/ scenarios dr = a ( b − r ) dt + σ r dW t t t t I nvestm ent of the coming years return results Economic Scenario Generator Prem ium s Nominal Interest Rate Curves for DK and NO Exchange Rates ALM model includes types of risk we have statistical data to describe
I nternal risk evaluation Capital Markets Day 2009 91 Recession scenario e.g.: Risk identification in ERM environm ent • Equity risk • Spread risk • Real estate risk • Concentration risk • Down grading risk 7 0 Risk ow ners Scenarios – Total m odel Risk database I m pact Strategisk valg Bortfald af partnerskaber Bl ødt m arked Priss æ tning Om d ø m m e Bortfald af partnerskaber I T strategi Risk report Sverige, Finland I nternet Tim e - to - m arket M&A Brancheglidning and Risk m ap Sandsynlighed Risk identification process leads to the quantification of 5 risk scenarios updated quarterly
I nvestm ents – ”breaking the w aves”
Conservative approach and new split by portfolio purpose Capital Markets Day 2009 93 Today: pct. 3.5 3.0 Current: 2.5 2.0 1.5 Total 1.0 0.5 DKK 38bn 0.0 -0.5 -1.0 May May May Jan 06 Mar Jul Nov Jan 07 Mar Jul Nov Jan 08 Mar Jul Nov Jan 09 Sep Sep Sep Tomorrow: pct. 3.5 3 Matching: 2.5 2 DKK 28bn 1.5 1 0.5 0 -0.5 -1 May May May Jan 06 Nov Jan 07 Jan 08 Jan 09 Mar Jul Sep Mar Jul Sep Nov Mar Jul Sep Nov pct. 4.0 Free: 3.0 2.0 DKK 10bn 1.0 0.0 -1.0 -2.0 May May May Jan 06 Jul Nov Jan 07 Jan 08 Jul Nov Jan 09 Mar Sep Mar Jul Sep Nov Mar Sep Real estate Bonds Equities
Match / free investm ent portfolio split Capital Markets Day 2009 94 • The matching portfolio, all bonds, is managed in order to maximise negative correlation to the discounting curve/ reserves • The managing of the free portfolio is done by means of absolute return and risk optimisation. Basically without any interest rate risk • Mandates are more efficiently designed Interest rate risk - after split Interest rate risk - before split DKKm DKKm 300 300 250 250 200 200 150 150 100 100 50 50 0 0 2 5 10 30 Year 2 5 10 30 Year Asset s Provisions Asset s Provisions
The route to im proving com bined ratio
Behind the curve but catching up Capital Markets Day 2009 96 Developm ent since 2 0 0 5 … … and m ore recently Houses Denm ark Prem ium increases: 150 Houses Denm ark 140 110 Houses Denmark: 130 100 120 New product Q4 2008 90 110 2008 2009 up 11% 100 90 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2005 2006 2007 2008 2009 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09 Average premium Average risk Private cars Norway 110 Privat cars Norway: Private cars Norw ay 1 Jul 07: 4.8% 105 1 Jan 08: 1.6% 110 100 100 1 Jul 08: 1.0% 90 1 Jan 09: 5.0% 95 2008 2009 1 Jul 09: 6.6% 90 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2005 2006 2007 2008 2009 05 05 05 05 06 06 06 06 07 07 07 07 08 08 08 08 09 09
Underlying claim s developm ent Capital Markets Day 2009 97 Underlying is adjusted for large claim s, w eather claim s, run-off and change in interest rates Underlying claim s ratio im proved from Q1 0 9 to Q2 0 9 , w hile gross claim s ratio rose Claim s ratio 80% 75% 70% 65% * 60% * TrygVesta starts communicating premium increases 55% 50% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 06 06 06 06 07 07 07 07 08 08 08 08 09 09 Reported gross claims ratio Underlying claims ratio
Catching up – and tim ing Capital Markets Day 2009 98 Lower interest rate level I ndex/ price I ndex/ price increases in 2010 increases in 2009 I ndex/ price increases in 2011 I ndex/ price increases in 2012 Price increases prior years Price increases Price prior year Price increases increases prior year prior year Underlying Underlying Underlying Underlying Underlying 2008 2009 2010 2011 2012 Claims ratio Claims inflation
I m pact from interest rates Capital Markets Day 2009 99 Discounting interest rate - 2 0 0 6 - 2 0 0 9 6% "Flat interest rate" 5% 4% 3% Sensitivity of interest rate changes 2% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 DKKm 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 1,500 1,286 Change in com bined ratio 2.1% 971 1,000 2.7% 1.1% 500 329 -1.0% 0 -3.0% -334 -500 -4.0% -673 -844 -1,000 1.0% 1.5% 2.5% 4.5% 6.5% 7.5% I nterest rate level Claims Pre-tax result ≈ 1% increase in interest level DKK 300m higher pre-tax result
Costs Capital Markets Day 2009 100 Cost ratio 17.0 16.8 16.7 17.3 16.7 0.6 0.4 0.8 1.3 1.5 1.5 Segm entation 16.6 16.0 15.4 15.2 15.2 2005 2006 2007 2008 2008* Self-service Danmark & Norge Finland & Sweden ”The Living House” * Cost ratio excl. ”The Living House”
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