Nordea Private Banking Aarhus, 28 September 2012 Tryg A safe harbour in turbulent times Lars Bonde Group Executive Vice President, Private

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1 Nordea Private Banking Aarhus, 28 September 2012 Tryg A safe harbour in turbulent times Lars Bonde Group Executive Vice President, Private Download presentation on tryg.com 1

2 Disclaimer Certain statements in this presentation are based on the beliefs of our management as well as assumptions made by and information currently available to the management. Forward-looking statements (other than statements of historical fact) regarding our future results of operations, financial condition, cash flows, business strategy, plans and future objectives can generally be identified by terminology such as targets, believes, expects, aims, intends, plans, seeks, will, may, anticipates, continues or similar expressions. A number of different factors may cause the actual performance to deviate significantly from the forward-looking statements in this presentation including but not limited to general economic developments, changes in the competitive environment, developments in the financial markets, extraordinary events such as natural disasters or terrorist attacks, changes in legislation or case law and reinsurance. We urge you to read our annual report available on tryg.com for a discussion of some of the factors that could affect our future performance and the industry in which we operate. Should one or more of these risks or uncertainties materialise or should any underlying assumptions prove to be incorrect, our actual financial condition or results of operations could materially differ from that described herein as anticipated, believed, estimated or expected. We are 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. 2

3 Tryg at a glance Tryg goes back to 18th century The current Tryg was formed in 2002 by sale of Nordea s non-life activities with a continuing strategic partnership Non-life insurance in the Nordics Gross premium split by products Motor - TPL Motor - casco Workers' comp. Health & accident 4.4 Liability 12.5 Fire & property - private 10.7 Fire & property - comm Other IPO Oct on Nasdaq OMX Cph Majority owner: TryghedsGruppen (60%) a mutual foundation rooted in DK Turnover 2011: DKK 20.6bn (~EUR 2.8bn) CEO: Morten Hübbe 4,318 employees Gross premium split by geography Norway Market position: #3 Market share: 16.1% CR in 2011: 93.4 Sweden Market position: #5 Market share: 3.9% CR in 2011: Finland Market share: 2.2% CR in 2011: Denmark Norway Sweden Finland Denmark Market position: #1 Market share: 20.7% CR in 2011:

4 Structure of the Nordic insurance markets Denmark DKK 47.8bn/ EUR 6.4bn (Q2 11) Norway NOK 46.5 bn/ EUR 6.0bn (Q1 12) If 5.8 Other 27.4 Other 19.6 Tryg 16.1 Gjensdige 5.7 Tryg 20.7 Sparebank1 Percent 11.3 Alm. Brand Nordic 9.8 EUR 21.6bn (Q4 10) Codan 12.6 Topdanmark 18 Topdanmark 5.3 Other 38.5 Gjensidige 26 Percent If 25 Sweden SEK 63.4bn/ EUR 7.0bn (Q1 12) Other 15.8 Gjensidige 1.2 Moderna 3.9 Länsförsäkringar 8.5 Gjensidige 9.1 Codan 9.4 Percent If 17.4 Tryg 11.8 Finland EUR 3.7bn (Q4 11) Other 17.6 Tryg 2.2 Folksam Länsforsäkringar Fennia Percent 28.4 Percent If 23.9 Codan 15.9 If 18.8 Tapiola 18 Pohjola

5 5 Short term results - Q2 2012

6 Premiums Insurance and key ratios Expenses Claims Return to investors Investment return 6

7 Highlights Q Pre-tax profit up by 45% and technical result up by 65% Pre-tax profit of DKK 708m (DKK 487m). Technical result of DKK 835m (DKK 507m). Positive impact from weather and large claims and reinsurance. CR improvement of 6.6 pp to DKKm 1,500 1, Pre-tax profit ,429 Lower interest rate level affected CR negatively by 1.4 pp. Premium growth of 0.3% (1.3% in DKK). Return of DKK 41m in match portfolio. Return of 0.8% in the free portfolio. Revaluation of own domiciles. Return on equity of 21.5% after tax. S&P reconfirmed A-/stable rating DKKm Q Q H H Combined ratio Q Q H H Investment after technical interest Q Q H H

8 Moderate premium growth better balanced technical result Moderate growth as expected of 0.3% in local currency (1.3% in DKK). Positive impact from price increases - negative impacted from a reduction in Commercial portfolio. Private up 1.6% in local currency (2.9% in DKK). Positive impact from price increases and higher retention level in Norway. Technical result grew from DKK 507m to DKK 835m; positively impacted by price increases and better balanced contribution from all areas. Gross earned premiums, DKKm Technical result, DKKm 6,000 5,000 4,000 3,000 2,000 1, ,313 1, ,338 2,405 Q2 11 Q2 12 1, Total Total Q2 11 Q2 12 Private Commercial Corporate Sweden/Finland Privat Corporate Commercial Sweden/Finland 8

9 Large claims, weather claims and run-off - Run-off impacted by extraordinary reinsurance recovery Large claims, gross DKKm Weather claims, DKKm 1, ,800 1, Expected full year level H1 11 H (Gross) 2011(Net) H1 11 H1 12 Q1 Q2 Q1 Q2 1, Expected full year level Run-off net, DKKm Run-off net, effect on combined ratio 1, H1 11 H1 12 Q1 Q2 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 4.9% 4.7% 4.6% 4.6% 4.2% 3.8% Q1 12 Q % 5.0% Excl. extraordinary impact from sidways reins. recovery 9

10 10 Longer term development

11 New value drivers Premium increases Size/influence Cost reductions Premium increases Commercial initiatives Premium increases Cost reductions New House Insurance Commercial initiatives New House Insurance Premium increases New Nordic Contents Next Level Sourcing Next Level Sourcing

12 Retention remains high and average premiums going up Private - retention rate Car insurance average premium (index 2005 = 100) 92% 90% Average premium growth in past 12 months 0% 6.3% 88% % 84% 90 82% Q3 05 Q2 06 Q1 07 Q4 07 Q3 08 Q2 09 Q1 10 Q4 10 Q3 11 Q Commercial - retention rate House insurance average premium (index 2005 = 100) 12 92% 90% 88% 86% 84% 82% Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q Average premium growth in past 12 months 8.7% 6.2%

13 Combined ratio performance Premium hikes Premium hikes Annual impact from price increases 2012 DKK ~1.0bn Smaller adjustments * H H price increases of DKK 2.1bn implemented. Reduced combined ratio from 107 to 94 (DK GAAP). Reductions in costs and claims expenses will improve combined ratio going forward. *IFRS from Previous years are Danish GAAP. Data before 2009 is not corrected for the sale of Marine Hull business. 13

14 Follow up on cost reduction programme - Q Next level sourcing starting to deliver No. of employees 5,000 4,000 3,000 4, ,4 50 4,310 4,291 4,318 4, , , , ,3 13 Targeted and achieved savings in expenses DKKm From FTE reductions in Group Finance ,000 1,000 2,356 2,293 2,342 2,308 2, Q Denmark Norway Sweden Finland Group Total savings expenses Achieved Target % Car - Claims repair and referrals DK 75 Increased from 47 to 65% Targeted and achieved savings on claims DKKm Jan- 11 Apr - 11 Jul- 11 Okt 11 Jan- 12 Apr - 12 Jul- 12 Total savings on claims Achieved Target 14

15 Assets allocation Total assets Q Equities 7 Percentage Real estate Cov. Bonds Govt. Bonds 71 Bank deposits/bonds High yield Free portfolio Q Match portfolio Q Equities Percentage Real estate Bank deposits/bonds Govt. Bonds High yield Cov. Bonds 8 Percentage 80 Cov. Bonds Govt. Bank deposits/bonds 15

16 Capitalisation S&P model IS model Capital buffer based on S&P s capital model increased to 13% (Q1: 9%) and impacted by: DKKm 12,000 10,000 13% buffer Strong Q result Strengthening of pension obligation in Norway of DKK 143m post tax. 8,000 6,000 TAC S&P A-level Available capital S&P A-level Buffer (5%) Surplus capital 37% buffer IS requirement Lower capital requirement related reallocation of bond portfolio to better rating classes. Capital buffer based on the Individual Solvency (IS) model increased to 37% (Q1: 26%). Pension scheme Norway - discounting rate % Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q

17 Growth consumes capital DKKm 21,000 20,000 19,000 18,000 17,000 16,000 15,000 Gross earned premiums DKKm Capital 11,000 10,000 9,000 8,

18 Combined ratio target % < < 90 CR at 90 or below from Q ROE 20% CR target Uncertainty CR target Q Expense/claims initiatives Claims inflation above CPI Weather and large claims Legislation etc (WC, taxes..) Interest ROE after tax 40% 30% 20% 10% 0% ROE target H H1 2012

19 Discounting effect lower in Q2 12 vs. Q2 11 % % increase in interest rate level will: Increase pre-tax result by around DKK 300m. Improve combined ratio by approx. 1 pp. Lower NO pension obligation affecting capital base by around DKK 300m. 19

20 Payout model - transparent but unstable Tryg s payout model has been transparent, but has also been vulnerable to: Fluctuations in technical and investment result Change in interest rates (effect on Norwegian pension scheme) DKK per share Shareholder remuneration Average Payout DKK 1.3bn Payout ratio 76% Per share DKK Cash dividend Share buy back

21 Summary From growth to profitability focus Claims costs - Reductions of DKK 700m and claims ratio target, net <75% Expenses Reductions of DKK 300m and expense ratio target <15% in 2015 Combined ratio at 90 or below from Q Strong capital position Aiming for a more stable payout model 21

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