Today, Tryg is hosting a Capital Markets Day in London to launch its new strategy “Leveraging scale to drive technical and commercial excellence” and setting new, ambitious, financial targets for 2027. Tryg expects to meet all the 2024 financial targets set at the previous Capital Markets Day in 2021.
New financial targets and launch of DKK 2bn share buyback program
Tryg has set new financial targets for 2027. The company targets an insurance service result between DKK 8.0bn – 8.4 bn in 2027 driven by a Combined ratio around 81. These targets are based on the current level of interest rates, currency levels, and normalized levels of large and weather claims. The return on own funds is targeted between 35-40% in 2027, supported by a de-risking of the investment portfolio. During October and November 2024, Tryg sold DKK 7.4 bn of equities, corporate bonds, and diversified alternatives. Those have been replaced by covered bonds with a short duration that attract a much lower capital charge.
Tryg is launching a DKK 2bn share buyback program starting today, which will be described in a separate company announcement.
Strategic themes and targets
To deliver on the strategic ambitions, three strategic pillars have been defined: Scale & Simplicity, Technical Excellence, and Customer & Commercial Excellence. Moreover, four strategic enablers have been identified as pivotal for delivering on the 2027 targets: tech, data, people and sustainability. Hence, three strategic 2027 targets have been set in addition to the financial targets.
Having worked with customer satisfaction for several strategy periods, Tryg believes in a strong correlation between customer experiences and higher retention, and has set a target for Customer Satisfaction at 83 for the Group, now also including the entire Swedish business. Additionally, Tryg is targeting straight through processing for digitally reported claims of more than 55%. Lastly, Tryg will continue to address carbon emissions in claims handling and in its supply chain with a target of a 6% average emission reduction per claim.
Solvency and shareholders remuneration
Tryg continues to have a robust solvency position, also supported by the lower capital requirement following the derisking of the investment portfolio. The company aims to distribute a total of around DKK 17bn – 18n to shareholders via an ordinary dividend range of DKK 15 – 16bn in the period between 2025 and end of 2027 and the announced DKK 2bn share buy-back. The DKK 17 -18bn represents almost 20% of the current market capitalization. The solvency ratio is expected to be around 195 as per end of 2024 already deducting the announced share buy-back. Long-term, the solvency ratio is expected to gravitate towards a less conservative level.
Johan Kirstein Brammer, Group CEO, Tryg, says:
“Tryg has the size, commercial momentum, and capacity to raise its ambitions and embark on a new strategy towards 2027. Our focus is to further strengthen our position by taking advantage of our Scandinavian presence and opportunities to scale, and by continuing to exploit technological opportunities. This represents the perfect foundation for continuing to deliver leading customer experiences.”
“At the same time, we will continue to strengthen the core of our insurance operations delivering the highest ever insurance service result driven by our most ambitious combined ratio target. This will be characterized by increased earning stability and a clear and attractive dividend going forward. In a world that is constantly and rapidly changing, Tryg must be a robust and resilient insurance company for the benefit of customers, shareholders and society.”
Today’s presentation is available on Tryg.com, and the capital markets day will be webcasted live from 10:30 to 13:30 GMT. The webcast will subsequently be available on tryg.com.
